3ROLFLHV 3URFHGXUHV HQ SGI · Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation...

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Transcript of 3ROLFLHV 3URFHGXUHV HQ SGI · Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation...

Page 1: 3ROLFLHV 3URFHGXUHV HQ SGI · Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation (referred to as “Nikken”), of the Consultant in the sale of Nikken products by Nikken

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Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.

1. The purpose of the Independent Nikken Consultant Application/Agreement, Policies & Procedures and compensation plan(collectively referred to as the Agreement), is to establish theIndependent Nikken Consultant (referred to as “Consultant”) asan authorized Consultant for the sale of Nikken products. It setsforth the respective duties, obligations and responsibilities ofNikken Inc. or Nihon Kenko Zoushin Kenkyukai CanadaCorporation (referred to as “Nikken”), of the Consultant in thesale of Nikken products by Nikken to the Consultant, and of thesale of these products by the Consultant to the consumer.

2. The Consultant has elected to enter into this Agreement withNikken with confidence in its integrity and with the expressedintention of dealing fairly with its Consultants.

3. Nikken enters into this Agreement with Independent NikkenConsultants with an awareness that the success of Nikkendepends upon responsible, efficient, vigorous and successfulConsultants, whose business conduct is free of false, deceptive,or misleading advertising, marketing, pricing and servicepractices. Nikken enters into this Agreement with confidence inthe Consultant’s integrity, ability, duties, obligations andresponsibilities.

4. Each Consultant, apart from purchasing the basic BusinessSuccess Suite available electronically online may build their Nikkenbusiness without purchasing product at wholesale as inventory.The Consultant may work his/her way up the ranks of the salesorganization by two non-inventory methods of achieving volume.First, the Consultant can send customers to his/her NikkenPersonal Web Page to order products directly. Second, theConsultant can act as an order taker and register an order fordirect drop-ship to customer.

B. Eligibility to Become a North AmericaNikken Consultant

1. Any individual residing in a state or territory of the United Statesor province of Canada with a valid tax identification number whois of legal age to enter into a contract therein and at least 18years of age, is eligible to become a North America IndependentNikken Consultant. A Consultant’s tax identification number isrequired for tax reporting purposes only. Tax identificationnumbers are kept confidential and are not used for any otherpurposes.

2. An individual can have only one distributorship in Nikken. He/shemay not own any other Nikken distributorship, either individuallyor jointly nor may he/she participate as a partner, owner,stockholder, trustee, director or association member in morethan one distributorship in any form.

3. No individual, partnership, corporation or other business entityoperating under a fictitious name may become a NikkenConsultant without submitting a “doing business as” (DBA) formfollowing enrollment as a Consultant. Legal verification ofproprietorship, corporation, limited liability corporation (LLC),trust or partnership will be required, including the completion ofall necessary DBA forms.

a. Proprietorship: A copy of fictitious name filing must besubmitted plus a W9 form in the United States.

b. Corporation: Copies of articles of incorporation are required,

including the page with state seals and notarization. Thesearticles will show who the principals are and prove validationof federal ID number/business number/E.I.N./F.E.I.N./ CanadaCustoms and Revenue Agency by way of IRS acceptance, plusa W9 form in the United States.

c. LLC: IRS acceptance only. The name on the IRS acceptance isrequired to state the LLC in order to use it as an LLC, plus aW9 form in the United States.

d. Trust: An affidavit of trust with the notarized copy of the powerof attorney is necessary. If a federal ID number is to be usedand is not noted in the affidavit, an IRS acceptance will berequired, plus a W9 form in the United States.

e. Partnership: To register as a partner, complete thepartnership portion of the DBA form, along with all signaturesthat apply, plus a W9 form in the United States.

f. Entity guarantee for owners: Although Nikken has offeredConsultants the opportunity to conduct their distributorship ascorporate, LLC, trust or partnership entities, it is agreed thatsince the distributorship entity is under the control of itsowners or principals, the actions of individual owners orbeneficiaries as they may affect Nikken and thedistributorship are also critical to the business of Nikken.Therefore, it is agreed that actions of the ownership entityshareholders, officers, directors, trustees, beneficiaries,agents, employees or other related or interested parties andthe actions of such parties, which are in contravention toNikken Policies, shall be attributable to the corporate, LLC,trust or partnership entity.

In the event that any of the ownership entity shareholders,officers, directors, trustees, beneficiaries, agents, employees orother related parties shall terminate ownership interests in thedistributorship, any breaching actions by such parties thatcontinue to have a beneficial financial interest, directly orindirectly, in the distributorship (for example, members of thesame household) shall be attributable to the distributorship.

4. Members of a Consultant’s household may operate together asone Nikken distributorship, but may not become separateConsultants. Household is defined as husband, wife anddependents. Note: Children of legal age to contract and at least18 years of age are not considered a part of their parents’household.

5. Nikken recognizes that members of the same household maybelong to competing direct selling opportunities. Although theactions of the parties are normally in good faith, in somecircumstances, there is an abuse of relationships in which the non-Nikken household member is engaged in recruitment, solicitationor raiding of the Nikken sales organization. Since the householdmember who has an ownership interest in the Nikkendistributorship is in the best position to be responsible to preventraiding or cross-sponsoring activity by their co-household member,the cross-recruiting activity of the non-Nikken household membershall be attributed to the Nikken distributorship, subjecting thedistributorship to discipline or termination.

6. Consultants who have citizenship in more than one country arenevertheless restricted to one distributorship, in one country, withone home market unit. All Consultants are to have just oneaccount with Nikken for the issuance of any and all commissionand bonus checks.

Policies & Procedures E F F E C T I V E J A N U A R Y 2 0 1 8

I.�GENERALA. Basic Principles

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C. Rights Granted

1. Nikken hereby grants to the Consultant a non-exclusive rightupon the terms and conditions contained in the Agreement, topurchase, promote and resell Nikken products in theterritories of the United States and Canada.

2. A Consultant may sponsor persons who reside in territories of theUnited States, Canada, Guam and Puerto Rico to become NikkenConsultants. It is the Consultant’s responsibility to give thesenewly sponsored Consultants an opportunity to fully review themost current version of the Nikken Policies & Procedures andcompensation plan, before they complete and sign the ConsultantApplication/Agreement, and to purchase a Business SuccessSuite.

3. A Consultant may only sponsor persons or entities whounderstand the network marketing philosophy and express anintention to build their business based on that philosophy.

D. Change in Distributorship Status

1. MARRIAGE: Two Nikken Consultants who marry after havingestablished their own individual distributorships may continue tooperate their existing distributorships, as long as they do notoriginate from the same line. If they originate from the same line,then the married couple has the choice of either selling orresigning from one of their distributorships, at their discretion.Please fill out and submit a Consultant Information Change form.

2. DIVORCE: Should a married couple in a joint distributorshipbecome divorced, they agree to notify Nikken as to who willassume responsibility for the distributorship in one of thefollowing manners:

a. Written notarized agreement signed by both partiesindicating who will retain the distributorship.

b. A court order delineating who receives custody over thedistributorship.

Alternately, both parties may choose to retain their jointdistributorship and operate it as a partnership. Please fill out and submit Consultant Information Change form.

The six-month waiting period is waived for the divorced non-custodial Consultant, who is permitted to apply for a newdistributorship immediately.

3. DEATH: Upon the death of a Consultant, the rights andresponsibilities of the distributorship may be passed on to therightful legally documented heir as long as that person has filledout a new Consultant Application and completed the requiredtraining. A copy of the death certificate must be provided.

4. DISABILITY: Should a Consultant become disabled to theextent that he/she can no longer fulfill the required duties of aNikken Consultant, such disabled Consultant’s legalrepresentative or conservator shall:

a. Contact Nikken within thirty (30) days of the disability andadvise Nikken of the Consultant’s status and the plans forfuture management or cancellation of the distributorship.

b. Provide a notarized or court-confirmed copy of appointmentas legal representative or conservator.

c. Provide a notarized or court-confirmed copy of documentestablishing right to administer the Nikken business.

d. Should the legal representative or conservator plan tocontinue the business of the distributorship, then he/she shallfill out a new Consultant Application and receive the requiredtraining consistent with the disabled Consultant’s level at thetime of the disability. These requirements shall be satisfiedwithin a time deadline of six months.

E. Independent Business Relationship

&# The Consultant is an independent contractor whose results�depend on his/her independent efforts. The Consultant, his/her�agents and employees shall under no circumstances be deemed�agents or representatives of Nikken. The Consultant shall not�modify Nikken products in any way. Neither the Consultant nor�Nikken shall have any right to enter into contract or�commitment in the manner of, or on behalf of, the other or to�bind the other in any way whatsoever.

'# The Nikken Consultant may set his/her own hours anddetermine his/her own method of sale as long as he/shecomplies with the Policies & Procedures and compensationplan.

(# The Consultant shall indemnify and hold Nikken harmless�fromand against any claim, demand, liability, loss, cost or�expense(including, but not limited to, reasonable attorneys’�fees)�arisingor alleged to arise in connection with the�Consultant’soperations.

)# Each Consultant shall be familiar and comply with all specificlaws, regulations and requirements applicable to theirdistributorship business.

*# Consultants who reside in Manitoba�VcY Prince Edward Islandmust obtain a direct seller’s license. Each�individual listed onthe distributorship must have their own�direct seller’s license.Any Consultant who wishes to sell�products in Manitoba�VcYPrince�Edward Island�must also obtain a direct seller’s license.

+# Independent Nikken Consultants understand that they areresponsible for their own business and the transactions thatoccur under their distributorship, including but not limited tosales, returns, chargebacks, etc.

,# Nikken utilizes email as the primary method of communicationwith the Consultant. Information such as renewal notices,�orderand shipping confirmations, newsletters,�announcements, etc.are sent by email. It is the Consultant’s�responsibility tomaintain a current email address and ensure�[email protected]; [email protected]; [email protected] are added to their “safe senders” list.

F. Compliance by Nikken Consultants with All ApplicableIncome Tax and Other Sales Laws

&# At the end of each calendar year, Nikken will automaticallyprovide a statement of earnings (1099/T4A form) for taxpurposes�to each distributorship with an annual income at orover the�minimum required to be reported to the United StatesInternal�Revenue Service or the Canada Customs and RevenueAgency.�Note: Any contest, incentive or prize items may beincluded in the�1099/T4A form.

'# The Consultant accepts sole responsibility for all self-employment and income taxes due to income earned as aNikken�Consultant. The Consultant will not be treated as anemployee of�Nikken with respect to such services for federal taxpurposes.

(# For all orders�gZ\VgYaZhh�^[�^i�h�l]daZhVaZ�dg�gZiV^a! Nikken willcharge sales tax WVhZY�on the�suggested retail price of allproducts,�according to tax rates�applicable in the state orprovince to�which products are�shipped�by Nikken. To be eligiblefor tax�exemption, please see�the Tax�Exemption FAQ located atmyNikken.com in the�document�library.�Sales tax may becharged on shipping costs�in some�states and provinces whereapplicable.Note: Consultants are not exempt from taxes when productsare sold to tax-exempt customers.

)# Nikken will comply and cooperate with all tax laws, treaties,regulatory agencies and the directives of such agencies of themultiple jurisdictions within which it operates. In the case ofa�nonresident alien Consultant or a foreign entity Consultant

Pol ic ies & Procedures

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earning commissions/bonuses as a result of trade or business inthe United States, Nikken will withhold a portion ofcommission/bonus checks in an amount as required by theapplicable Internal Revenue Codes unless eligibility for a legal taxexemption can be demonstrated.

G. Authorized Sales Region

A Consultant may sell Nikken products only in the country inwhich those products were purchased. A Consultant shall notsponsor any individuals or entities as Nikken Consultants in anystate, country or province wherein Nikken is not legally licensed todo business.

H. International Consultant

&# Nikken Consultants have the opportunity to�gZ\^hiZg�gZiV^aXjhidbZgh�VcY� develop Consultants�in�markets throughout theworld in countries where Nikken�operates. To sponsor Consultantsin countries outside the North�American market unit, the NikkenConsultant must qualify as an�Executive or above in their homemarket.�C^``Zc�8dchjaiVcih�bVn�WZ\^c�gZ\^hiZg^c\�gZiV^aXjhidbZgh�^c�di]Zg�bVg`Zi�jc^ih�Vh�hddc�Vh�i]Zn�h^\c�je�Vh�VC^``Zc�8dchjaiVci#

'# Laws, regulations and requirements - Each Consultant should befamiliar and comply with all specific laws, regulations andrequirements applicable to their business.

(# International bonuses will be calculated in the currency of thecountry in which they are earned, and paid in the Consultant’shome�country currency. The Nikken bonus payout exchange rate isupdated monthly according to the Oanda.com�rate on the lastbusiness day of each month. The currency exchange ratefluctuation may cause the Consultant’s international bonus payoutto vary from time to time. Please note that the currency exchangerate used for a particular country’s bonus payout may not be theactual exchange rate of that country. At the time a new market�unitis established, Nikken determines which currency exchange�ratewill be used for that particular country with regards to bonuspayout.

I. Pricing

1. Consultants may purchase products directly from Nikken. AllConsultants pay the same price (Consultant price) regardless ofrank achieved. Nikken shall be free to change prices from time totime without advance notice.

2. Nikken reserves the right to place selected products at adiscounted price, less than the Consultant price. This discountedprice can be for closeouts, promotions, introductions or othersimilar events. Nikken has no obligation to continue the sale ofan item at a discounted price and may discontinue the discountedprice at any time without advance notice.

3. Nikken only suggests what it believes to be a desirable retailprice for the sale of Nikken products. Nikken Consultants are freeto sell product at any price.

4. An International Consultant may place orders in other marketunits, strictly for personal use or promotional purposes, if theyabide by the ordering and shipping policies of each market unit.

J. Representations Made by Nikken Consultants

1. Each Nikken Consultant shall truthfully and fairly describe Nikkenproducts and programs in all discussions with customers, otherConsultants or potential Consultants. This obligation of fair andcomplete discussion shall include, without limitation, the following:

a. A Consultant shall neither misstate nor omit any significantmaterial fact about the Nikken program. The Consultant shallprovide each potential Consultant with a copy of the currentNikken Policies & Procedures and compensation plan prior toor when giving such person a ConsultantApplication/Agreement.

b. A Consultant shall make clear that the Nikken compensationplan is based upon sales of Nikken products, and that

Consultants will not be successful merely by sponsoring otherConsultants without regard to sales. Monies are earned only onthe sale of products to consumers.

c. A Consultant shall not state that profits are guaranteed for anyNikken Consultant. He/she shall make clear that NikkenConsultants can expect to be successful only throughsubstantial efforts.

d. Income claims: No false or misleading income projections maybe made to prospective Consultants. Average Consultantincome sheets are available on myNikken.com.

e. A Consultant shall not claim that any state’s or province’sattorney general’s office, the Better Business Bureau, theCompetition Bureau of Canada or any regulatory agency hasapproved or endorsed Nikken’s plan or products. Theseagencies do not permit the use of their names in any mannerin connection with the advertising or sale of merchandise,services or securities. Use of any agency name as a referenceis never authorized. Also, the use of these agency namescannot be used in the advertising or sales material of anycommercial organization.

f. A Consultant shall not make claims for any Nikken productsother than those found in current authorized Nikken salessupport material for the country in which the product will besold. All statements regarding product description and use willconform in every way to the written company policies.

g. No claims as to therapeutic or curative properties about theproducts may be made except those officially approved inwriting by Nikken or as contained in the official Nikkenliterature for the country in which the product is sold. Inparticular, no Consultant may make any claim that Nikkenproducts are useful in the treatment or cure of any disease.Such statements can be perceived as medical claims, which isagainst company policy and the policies of such governmentalagencies as the United States Food and Drug Administrationand Health Canada.

h. The basic Consultant relationship would be undermined if NikkenConsultants marketed competing health products. Therefore, solong as a Nikken Consultant desires to maintain Consultantstatus, he/she may not sell or market any health-relatedproducts that are similar to the products sold by Nikken.Consultants who achieve the rank of Platinum and above areexpected to demonstrate leadership qualities and teach theNikken business and philosophy to downline consultants. In thisregard, Consultants at Platinum rank and above are expected tobuild a network marketing business exclusively with Nikken inorder to receive Leadership Bonus. Accordingly, Nikken reservesthe right to not pay Leadership Bonuses to a Consultant atPlatinum rank or above who, directly or indirectly through anyperson, entity, or artifice, participates in or promotes theproducts, services or earnings opportunity associated with anyother multi-level marketing or direct sales company.

i. The Nikken Lifestyle Bonus program is available toConsultants who are building a network organizationexclusively with Nikken. This rule may not be circumvented byremoving a co-applicant from the distributorship.

j. "Confidential information" means information about theCompany, its Consultants, Customers, Customer Prospects,and/or Vendors that is not generally known outside of theCompany, which you may learn of in connection with yourstatus as a Nikken Consultant. Confidential Information mayinclude, without limitation: (1) the identity of Consultants,Customers, Customer Prospects, and/or Vendors (includingnames, addresses, email addresses and telephone numbers);(2) reports showing rank, title and/or performance level orvolume of Consultants, including Consultants in a particularConsultant's downline organization; (3) the names andaddresses of the Company's employees and other businesscontacts of the Company; and (4) the techniques, methods,

Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.4

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and strategies by which the Company develops, manufactures,markets, distributes, and/or sells its products. Consultantagrees that Confidential Information is proprietary to Nikkenand that he or she will maintain such Confidential Informationin a confidential manner and not disclose such information toany third party directly or indirectly, nor use such informationto compete with Nikken directly or indirectly, during or aftertermination of the Consultant Agreement. Consultantacknowledges that but for his or her agreement to maintainConfidential Information in a confidential manner, Nikkenwould not provide Confidential Information to Consultant.Consultant further acknowledges that Nikken would beirreparably harmed by the improper or unauthorizeddisclosure of such Confidential Information.

k. Nikken takes its Consultants’ right to privacy very seriously.Nikken does not sell, show or otherwise share informationabout its Consultants with third parties. Nikken may, however,release Consultant information when it is believed that suchrelease is reasonably necessary to comply with the law,enforce or apply the terms of this Agreement or protect therights, property or safety of other Consultants.

l. A Consultant shall not interfere with, harass or undermineanother Consultant but, at all times, shall respect the privacyof other Consultants.

K. Labeling and Packaging

Nikken Consultants shall not relabel or repackage any Nikkenproducts. Any modification to Nikken products for resale isprohibited and regarded by Nikken as an alteration of theproduct, subjecting the Consultant to cancellation.

L. Advertising and Use of Name and Nikken Logo

1. Nikken Consultants may create their own advertisements,literature, posters, etc. by using Nikken’s product images and theIndependent Nikken Consultant logo produced by Nikken.Consultants may only use Nikken product descriptions andinformation from the Nikken website and marketing materials. Allproduct descriptions and information must be used verbatim. Allself-created advertisements must be reviewed and approved bythe Nikken Compliance department prior touse/publication/printing. Consultants must clearly identifythemselves as an Independent Nikken Consultant in all self-created advertisements, literature, posters, etc.

2. A Consultant shall not make purchases or enter into anytransaction in the name of Nikken or hold himself/herself out asan employee, representative or agent of Nikken or an agent ofany manufacturer of Nikken products.

3. Any Consultant may decide to select a business name. Thisbusiness name should not imply that the Consultant is anemployee or agent of Nikken, but instead state that he/she is anIndependent Consultant. In addition, this business name shall notrefer to therapies or imply that the Consultant is marketingproducts that have medical or therapeutic applications nor may itcontain the word Nikken, its product names or trademarks.

4. A Consultant shall not display for sale or sell any Nikken products atany retail business such as a retail store, gym, spa, hair salon orthrough any other media, including magazines, television or theInternet (i.e. online shopping sites or online auctions sites).Consultants are only permitted to display Nikken brochures or otherpromotional materials at retail establishments, and products are tobe sold through individual Consultants. However, Nikken will allow adedicated room within the premises of a retail site that is termed a“Nikken Training Center” and must be completely out of the view ofthe public area of the premises. Consultants with a professionalbusiness offering professional services (i.e. doctor’s office,chiropractic office, etc.) may have Nikken products displayed for saleprovided that the owner or principal of the business is a Nikken

Consultant and the sale of Nikken products is not the primarybusiness.

*# Consultants may have a booth or kiosk in a mall, trade show orfair�provided that it is a one-time temporary site. Nikken does notapprove this type of visible booth or kiosk anywhere on a recurringbasis. Note: Flea markets are not an approved venue forConsultants to operate from a booth or table. Nikken allowsoperating at the above sites with the understanding that theConsultant is responsible for presenting a high quality look tomaintain the Nikken image and will conduct this operation in anhonorable and professional manner. Any literature, signage,banners or flyers created for the event site (that were not obtainedfrom the Nikken media kit or Nikken promotional catalog) must besubmitted for approval to the Nikken Compliance Department wellin advance of the event. Allow one week for the approval processto�be completed. Consultants may have products displayed andmay�make sales from these approved sites. Please note that theConsultant’s primary objective at such a site is to gather leads andbook appointments for follow-up. A Consultant may performNikken�Rollouts and product demonstrations at these sites. AConsultant�may also show video presentations at these sites,provided they are�Nikken Inc. or Nikken University-produced. Noothers are�authorized.

+# Nikken Consultants may advertise their Nikken business and sellNikken products over the internet (world wide web) through theirNikken Personal Web Page (PWP). Outside websites arepermissible�only if a Consultant has a Nikken PWP. All outsidewebsites must�clearly identify a Consultant as an IndependentNikken Consultant.�Outside websites must be Nikken-specific andmay not advertise,�promote or link to any other network marketingproduct or�opportunity or competing product.

V# Outside websites must follow all advertisement guidelines andPolicies & Procedures. It is the sole responsibility of eachConsultant to ensure that its website content is accurate andthat it fully complies with all applicable federal and state rulesand regulations, and all Nikken Policies & Procedures.

W# Outside web sites may only display product images, productnames and the Independent Nikken Consultant logo producedby�Nikken.

X# For product descriptions/information, the outside website mayonly have a brief product description and only have a link to theConsultant's PWP for further detailed description /informationsuch as product technology and benefits. Consultants may placeone or more hyperlinks (advertising banners, buttons and textlinks) on its web site, directing internet users to the Nikken PWPweb site. The back function of the page where the hyperlink isplaced must be activated, allowing the user to return to theprevious page at any time by clicking the back button of theuser’s browser. The Nikken website shall not be framed withinthe Consultant's website.

Y# Consultants may not have a shopping cart feature on theiroutside websites. All Nikken products must be sold through aConsultant’s Nikken PWP.�8dchjaiVcih�bVn�cdi�hZaa�C^``ZcegdYjXih�dc�Vcn�dca^cZ�gZiV^a�h^iZh�dg�VjXi^dc�h^iZh�hjX]�Vh6bVodc�dg�Z7Vn#

Z# Consultant’s Nikken PWP may be registered on search engines.Banner and display ads may only contain a Consultant’s nameand the words “Independent Nikken Consultant.” The word“Nikken, Inc.” or product names may not be used in banner ordisplay ads.

[# Consultants may not use the word Nikken, its product names ortrademarks in their email address or web site address. Theusername for any social media account may use words “NikkenIndependent Consultant” along with their name, but may not usethe word Nikken, its product name or trademarks in any othercontext. Consultants may purchase and/or register Nikkentrademarks or derivatives thereof in any search, referral oradvertising service (such as Google AdWords program) provided

5Pol ic ies & Procedures

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that the phrase “Independent Nikken Consultant” appears in thefirst line of the advertisement.

\# Consultants may not use any key words or metatags to advertiseany web site on the >ciZgcZi if the search key words or metatagsexplicitly or implicitly present illegal, unsubstantiated or non-approved medical, health or income claims.

]# Bulk or mass email communication: Bulk or mass emailcommunications are defined as communications intended toreach 50 or more Consultants in the sender’s sales�organizationor three or more Consultants who are cross-line,�within a sevenday period. For all bulk or mass email�communications sent bya Consultant, those Consultants who�are to receive thecommunications must have knowingly “opted�in” to receive thebulk or mass email communication through�registration and/orthrough an affirmative request if the bulk or�mass emailcommunication is delivered through an email or on�a web site. Ifby e-mail, there must be an “opt out” feature�prominentlydisplayed in the bulk or mass email�communication, and allrequests to “opt out” or be removed�from any email list must behonored. All emails must be�compliant with the CAN-SPAM Actof 2003.

^# Consultant acknowledges that compiling databases ofConsultant�information for bulk or mass email communications,or for any�other purposes constitutes the use of confidentialNikken�information, which information is the Company’s tradesecrets,�and such use can be a substantial financial benefit tothe�Consultant. Consultant acknowledges that he/she is subjectto the�Confidential Information obligations set forth in SectionI.J.1._�above with respect to this information. This section shallsurvive�the termination of the Agreement.

_# The use of any material that, at the sole discretion of Nikken, isdeemed to be pornographic, discriminatory or otherwiseoffensive�is strictly prohibited and will subject the Consultant totermination.�Links from a web page containing informationconcerning Nikken�or its products to a page containing suchinappropriate information�will also subject the Consultant totermination. The content of your�web site must not promote,advocate, facilitate or otherwise�include any of the following:racial, or ethnic hate-speech,�discriminatory speech, politicalendorsements or otherwise�objectionable content; material thatdefames, is tortious or�threatens physical harm to others;promotion of illegal substances�or activities (e.g., illegalnarcotics, bomb building, counterfeiting,�etc.); content thatinfringes upon the intellectual property rights of�any third party.Consultant web sites shall not contain bogus�reviews ofcompeting products and services, used as a marketing�device.

`# The outside web site must have a header and footer on eachpage with the words “Independent Nikken Consultant”prominently displayed. Consultant’s outside web site may notbe an exact copy of any Nikken, Inc. company web site and mustbe visually distinguishable.

a# Consultants must post a privacy policy on any and all web sites,home pages, confirmation pages and other web pages fromwhich consumer information is collected in connection with�his/her Nikken business. The privacy policy must comply with allfederal and state privacy laws and meet the test of reasonablecommercial best practices applicable to privacy policies. Dataprotection, use and privacy practices must adhere to the privacypolicy, in both letter and in spirit, in all respects and with noexceptions. The privacy policy must be available for viewing via aclickable link. Such link must include the term “privacy” or“privacy policy".

b# Consultants may not use any software to advertise, marketor�promote the Nikken business that: surreptitiously gathers auser's personally identifiable information without the user'sexplicit consent; displays pop-up or pop-under advertisements;diverts the user to another site not requested by the user;

initiates or terminates a user's connection to the Internet; logskeystrokes; or that removes or disables security, pop-up-blocking, anti-virus, anti-adware or anti-spyware programs onthe user's computer.

n. Nikken Consultant web sites shall not contain links to third partyweb sites that include medical and therapeutic claims relating,directly or indirectly, to specific company products or specificingredients in company products. Nothing in this subsection shallbe construed to prohibit links to third party web sites that containgeneral health information unrelated to specific company productsor specific ingredients in company products.

o. The above Policies and Procedures shall apply to social networkingweb sites such as myspace.com, youtube.com, facebook.com, Blogger,etc. Consultants must adhere to all Nikken Policies & Procedures andadvertising guidelines with respect to use of such services, and mustnot include content containing income claims, health or medicalclaims, or other content prohibited by these rules. Nikken Consultantsusing such services shall prominently identify themselves on the pageas Independent Nikken Consultants.

7. A consultant’s personal web page may contain a personal statement,testimonial or personal greeting video link. Such statement, testimonialand video link must abide by all advertisement guidelines listed in thePolicies and Procedures and be approved by Nikken prior toposting/linking. Personal statements, testimonials and personalgreeting video links may be sent to [email protected] for reviewand approval. Please allow up to 10 business days for review andapproval. Approved personal greeting videos must be uploaded to apublic media site such as YouTube.com, to which you may post a link toyour PWP. Nikken will conduct random audits of PWPs. Any PWP foundto be in violation of Nikken Policies and Procedures will result in theimmediate removal or disabling of the content in violation. Thesubscribing consultant will receive a violation notice along withinstructions on revising and resubmitting the personal statement,testimonial or video to comply with Nikken terms and conditions. Failureto respond by the stated deadline will result in a three-month suspensionof the consultant’s PWP. The content in question must be removed fromthe PWP or revised, resubmitted and approved by Nikken to qualify forreinstatement of the PWP at the end of the three-month suspension.

NIKKEN DISCLAIMS ANY AND ALL LIABILITY ARISING OUT OF ORRELATED IN ANY WAY TO CONSULTANTS’ OUTSIDE WEB SITES.CONSULTANTS SHALL INDEMNIFY AND HOLD NIKKEN HARMLESSFROM ANY AND ALL CLAIMS AND LOSSES OF ANY AND ALL TYPESSUSTAINED BY THE CONSULTANT RELATING TO THE OPERATION OFTHEIR OUTSIDE WEB SITE.

M. General Advertising

&# Neither Nikken nor its Consultants are permitted to use the wordsor phrases “bio-magnetic,” “therapy,” “therapeutic,” “increased�circulation,” “cures,” “heals,” “healing,” “healing power,” etc.

'# Consultants understand that the products are NOT considered tobe — and are NEVER offered or intended as — medicines ormedical treatments for any disease or disorder, either physical ormental.

(# Nikken and its Consultants are prohibited from suggesting anydiagnosis, prognosis, evaluation, treatment, description,management or remedy of illness, ailment or disease. Nikken andits�Consultants are further prohibited from creating or compilingany�testimonials that imply or suggest any diagnosis, prognosis,evaluation, treatment, description, management or remedy ofillness,�ailment or disease through the use of any Nikkenproducts.

)# Neither Nikken nor its Consultants will state that Nikkenproducts are sold as medical products in other countries, unlessasked. In North America, all Nikken products are consumeritems only.

Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.6

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Page 8: 3ROLFLHV 3URFHGXUHV HQ SGI · Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation (referred to as “Nikken”), of the Consultant in the sale of Nikken products by Nikken

O .�Telephone Directory Listing

For a telephone directory listing, a Consultant is only authorized�to use the Nikken name if it is accompanied by the words“Independent Nikken Consultant.” Any telephone directory ads other�than those in the Nikken Media Kit require pre-approval from Nikken�regarding text or wording, before the ad is placed.

All Nikken Consultants are independent contractors and areprohibited from answering the telephone in any way that would give�callers a reason to believe they have reached the Nikken home�office. Consultants may not answer the telephone saying “Nikken” or�any form of the word.

Q. Media Advertising

1. Nikken has created an online media kit containing Nikken-approved, predesigned advertising pieces, for Consultants todownload and use for print media such as newspapers,magazines or the Yellow Pages. These advertising pieces arecomplete and may not be altered, except for the addition of theConsultant’s personal information where indicated.

2. The media kit includes instructions on how to place advertisingand Nikken rules and guidelines regarding contact with themedia. To assure an accurate and consistent public image,compliance with Nikken print media rules is mandatory. Nikkenhas also created an Advertising Compliance web site to furtherassist Consultants with advertising concerns and questions. Allself-produced advertisements must receive documented approvalfrom Nikken prior to use.

3. The online media kit can be accessed in the Information Centerat www.myNikken.com.

R.�Sponsoring Policy1. In the event that more than one Consultant approaches the same

prospect, it is an understood courtesy that the prospect willgenerally sign up with the first Consultant who presented “the wholestory,” but each new Consultant has the right to ultimately choosehis/her own sponsor.

2. Nikken recognizes the sponsor as the name shown on the firstConsultant Application/Agreement that is completed, dated, signedand received at the Nikken corporate office.

3. If a Consultant chooses to re-sponsor a former NikkenConsultant who was not originally sponsored by him/her, in orderfor the sponsorship to be accepted, the Consultant will first callDistributor Relations to verify that the potential new Consultanthas been inactive for a minimum of six consecutive months aftera resignation or expiration of the distributorship. The six-monthwaiting period may not be circumvented through the use of aspouse, surrogate or other proxy.

S.� Transferring Sponsorships

To effect a sponsorship change, the Consultant desiring the�change shall send the request in writing to the Nikken corporate�office, explaining the reason for the request.

F$�J[b[f^ed[�7dim[h_d]

V# Cd�hjX]�gZfjZhi�XVc�WZ�VXXZeiZY�jcaZhh�^i�^h�gZXZ^kZY�Wni]Z�C^``Zc�XdgedgViZ�d[[^XZ�l^i]^c�i]Z�hVbZ�EK�bdci]i]Vi�i]Z�8dchjaiVci�6eea^XVi^dc$6\gZZbZci�^h�ZciZgZY^cid�i]Z�C^``Zc�XdbejiZg^oZY�hnhiZb#

W# C^``Zc�bVn�Vaadl�V�8dchjaiVci�l]d�]Vh�cdi�nZi�gZVX]ZYi]Z�gVc`�d[�H^akZg�id�X]Vc\Z�hedchdgh�Vh�adc\�Vh�i]Z�cZlhedchdg�VcY�i]Z�daY�hedchdg�VgZ�^c�i]Z�hVbZ�H^akZg8dchjaiVciÉh�EZghdcVa�<gdje�Vi�i]Z�i^bZ�i]Z�lg^iiZcgZfjZhi�^h�gZXZ^kZY�Vi�i]Z�C^``Zc�XdgedgViZ�d[[^XZ#

&# C^``Zc�YdZh�cdi�Vaadl�hedchdg�X]Vc\Zh!�ZmXZei�jcYZg�i]Z[daadl^c\�Xg^iZg^V/

The transferring Consultant, the new sponsor and the current�sponsor, shall all approve and sign the request.The transfer is valid only upon approval from Nikken.

The existing downline of any transferring Consultant will roll up�to his/her previous sponsor.Nikken will charge a US $25 / current CN price transfer fee to the�igVch[Zgg^c\�8dchjaiVci�[dg�i]^h�egdXZhh#�

T. Cancellation of Distributorship by Nikken&# A distributorship may be cancelled for the following reasons:

V# Any violation of the Policies & Procedures or thecompensation plan.

W# A breach of any promise made in the ConsultantApplication/Agreement or any misstatement ormisrepresentation by the Consultant.

X# Any disparagement of Nikken, its subsidiaries, other NikkenConsultants, Nikken products and/or services, the marketingand compensation plan or Nikken employees.Nikken will take swift action against any Consultant whopublicaly�(e.g. via emails, Facebook, Twitter, wellnesspreviews, all conference calls, etc.) makes negative commentswithin the field that are both damaging to the Nikken brandand counter-productive to the Nikken business, as determinedby the Company. Discussion and debate of Company decisionsis encouraged and may be directed to Nikken, but personalattacks, falsehoods, defamation and malicious statements willnot be condoned.In addition to cancellation, Nikken is entitled to take legalaction�against the Consultant for any damages entitled by law.

'# Disciplinary actions: A Consultant’s violation of any policies andprocedures, the agreement, terms and conditions or any illegal,fraudulent, deceptive or unethical business conduct may result,at the discretion of Nikken, in one or more of the followingdisciplinary actions:

V# Issuance of a written warning or admonition.

W# Imposition of a fine, which may be imposed immediatelyor withheld from future commission checks.

X# Reassignment of all of a Consultant’s organizationto next upline.

Y# Suspension, which may result in cancellation or reinstatementwith conditions or restrictions.

Z# Cancellation of the Consultant’s distributorship.

(# Disciplinary actions may be initiated by three written, detailedcomplaint letters from individuals who witnessed the violation oractual proof of the violation (i.e. a copy of a recruiting letter or anadvertisement in violation of Policies & Procedures).

)# When a decision is made to cancel a distributorship, Nikken willinform the Consultant in writing that the distributorship iscancelled immediately, effective as of the date of the writtennotification. The cancellation notice will be sent by certified mailto the Consultant’s address on file with Nikken. The Consultantwill have 15 days from the date of the mailing of the certifiedletter in which to appeal the cancellation in writing. No appealwill be considered unless such correspondence is received byNikken within 15 days of a Nikken cancellation letter. If the�appealis not received within the 15-day period, the cancellation�will beautomatically deemed final.

CZZY�]Zae4�8Vaa�JH�-%%"++."--*.!�dei^dc�)0��8C�-%%"++."--.%!�dei^dc�)#-

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Page 9: 3ROLFLHV 3URFHGXUHV HQ SGI · Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation (referred to as “Nikken”), of the Consultant in the sale of Nikken products by Nikken

If a Consultant files a timely appeal of cancellation, Nikken will�review and reconsider any other appropriate action, and notify the�Consultant of its decision. The decision of Nikken will be final and�subject to no further review. In the event of cancellation, it will be�effective as of the date of the original cancellation notice.

Immediately upon the cancellation of a distributorship, the�affected Consultant will remove and discontinue use of and will�not thereafter use, the names, marks or any signs, labels,�stationery, advertising or reading materials referring to or�relating to any Nikken products. Where applicable state law on�cancellation of a distributorship is inconsistent with company�policy, such state law cancellation procedures shall be in force.

A cancelled Consultant’s excess, unused product in resalable�XdcY^i^dc�bVn�WZ�gZijgcZY�id�C^``Zc�^c�VXXdgYVcXZ�l^i]�i]Z�egdYjXi�gZijgc�eda^Xn#�

-# With the exception of Platinum and above distributorships, thedownline of a cancelled Consultant will roll up to the directsponsor. No downline rollup will occur for cancelleddistributorships at the rank of Platinum and above. The�cancelleddistributorship position will be held by Nikken for anindeterminate period and maintained at the same pin rank prior�tocancellation for upline monthly qualification purposes. After�theholding period concludes, the position of the cancelled�Platinumor above will be turned over to the active upline�sponsor�of thecancelled distributorship. The active upline�sponsor has�theoption to allow the cancelled distributorship to�roll up one�level tohis/her current distributorship or sell the�cancelled�distributorship(pending Nikken’s approval of the sale).�The�proceeds sale mustbe divided equally between the active�sponsor�and 5 activeuplines. A distributorship is considered�active if a�purchase of 100QPPV or more has been made within�6 months�prior to the sale ofthe cancelled distributorship.�GZ\^hiZgZY�gZiV^a�XjhidbZgh�d[�i]ZXVcXZaaZY�Y^hig^Wjidgh]^e�l^aa�gdaa�Y^gZXian�id�C^``Zc#

.# A Consultant who is cancelled by Nikken under this provision mayreapply to be a Consultant after a minimum of one year with noactivity. The new application requires consent of an authorizedofficer of Nikken.

&%#Service upon Nikken of a petition for bankruptcy by a Consultantis grounds for immediate cancellation. Nikken will pursuewhatever means are legally and reasonably available to recoversums owed to Nikken by petitioner.

X# I]Z�h^m"bdci]�lV^i^c\�eZg^dY�bVn�cdi�WZ

6�8dchjaiVci�gZVeean^c\�V[iZg�gZh^\cVi^dc�l^aa�cdi�gZXdkZgprevious downline or retain prior rights to bonuses, rank or�position in any former line of descent.

Immediately upon resignation of a distributorship, the affected�Consultant will remove and discontinue the use of and will not�thereafter use, the names, marks and/or any signs, labels,hiVi^dcZgn!�VYkZgi^h^c\�dg�gZVY^c\�bViZg^Va�gZ[Zgg^c\�id�dg�gZaVi^c\�id�Vcn�C^``Zc�egdYjXih#�

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K$ Resignation of the Distributorship�by Consultant Request

&# 6cn�8dchjaiVci�bVn�gZh^\c�]^h$]Zg�Y^hig^Wjidgh]^e�jedclg^iiZc�cdi^XZ�id�C^``Zc#��C^``Zc�gZfj^gZh�i]Z�h^\cVijgZh�d[Wdi]�i]Z�Veea^XVci�VcY�i]Z�Xd"Veea^XVci#��L^i]�i]Z�ZmXZei^dcd[�EaVi^cjb�VcY�VWdkZ�Y^hig^Wjidgh]^eh!�i]Z�Ydlca^cZ�d[�VgZh^\cZY�8dchjaiVci�l^aa�gdaa�je�id�i]Z�Y^gZXi�hedchdg#��;dggZh^\c^c\�EaVi^cjb�VcY�VWdkZ�Y^hig^Wjidgh]^eh!�i]Z�hedchdgd[�i]Z�gZh^\c^c\�XdchjaiVci!�bVn�Vhh^\c�i]Z�Y^hig^Wjidgh]^eid�V�(gY�eVgin#�>c�i]Z�ZkZci�i]Z�Y^hig^Wjidgh]^e�^h�cdiVhh^\cZY!�i]Z�Ydlca^cZ�l^aa�gdaa�je�id�i]Z�hedchdg#��>[�VcVhh^\cbZci�dXXjgh!�^i�bjhi�WZ�XdcXajYZY�l^i]^c�dcZXVaZcYVg�bdci]�V[iZg�i]Z�bdci]�^c�l]^X]�i]Z�gZh^\cVi^dcidd`�Z[[ZXi#��6hh^\cbZci�eda^X^Zh�^c�HZXi^dc�>#N#�Veea^Zh#GZ\^hiZgZY�gZiV^a�XjhidbZgh�d[�i]Z�gZh^\cZY�Y^hig^Wjidgh]^el^aa�gdaa�Y^gZXian�id�C^``Zc#

V# 6�8dchjaiVci�l]d�]Vh�gZh^\cZY�^h�Za^\^WaZ�idgZVeean�[dg�V�Y^hig^Wjidgh]^e�V[iZg�V�b^c^bjb�d[�h^mbdci]h#�9jg^c\�i]Z�i^bZ�WZilZZc�i]Z�gZh^\cVi^dcVcY�]^h$]Zg�gZVeea^XVi^dc!�]Z$h]Z�^h�cdi�eZgb^iiZY!VXi^kZan�dg�eVhh^kZan!�id�eVgi^X^eViZ�^c�i]Z��Wj^aY^c\dg�YZkZadebZci�d[�Vcn�C^``Zc�Y^hig^Wjidgh]^e!^cXajY^c\�i]Z�dgYZg^c\�dg�ejgX]Vh^c\�d[�egdYjXi�di]Zg�i]Vc�[dg�eZghdcVa�jhZ��VcY�i]Z�gZXgj^i^c\�d[8dchjaiVcih#

W# I]Z�h^m"bdci]�lV^i^c\�eZg^dY�bVn�cdi�WZX^gXjbkZciZY�i]gdj\]�jhZ�d[�V�hedjhZ!�hjggd\ViZdg�di]Zg�egdmn�l]d�h^\ch�je�jcYZg�V�Y^[[ZgZcihedchdg#

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V. Expiration of Distributorship

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'# 6�Y^hig^Wjidgh]^e�^h�Vji]dg^oZY�id�Veean�[dg�gZcZlVa�je�id�.%�YVnheg^dg�id�i]Z�Vcc^kZghVgn�YViZ�d[�i]Z^g�dg^\^cVa�Veea^XVi^dc�Vh�adc\�VhVaa�8dchjaiVci�dWa^\Vi^dch�VgZ�[ja[^aaZY#�I]^h�^cXajYZh�]Vk^c\�i]ZY^hig^Wjidgh]^e�^h�^c�\ddY�hiVcY^c\!�XaZVg^c\�Vaa�YZWih�VcY�eVn^c\�i]ZgZcZlVa�[ZZ#�C^``Zc�gZhZgkZh�i]Z�g^\]i�id�VXXZei�dg�gZ_ZXi�i]ZVeea^XVi^dc�[dg�gZcZlVa�d[�i]Z�Y^hig^Wjidgh]^e#�>c�i]Z�ZkZci�d[�VY^hejiZ�gZ\VgY^c\�V�Y^hig^Wjidgh]^e�l]^X]�]Vh�cdi�WZZc�gZcZlZY�dgVc�^ckdajciVg^an�XVcXZaZY�Y^hig^Wjidgh]^e!�i]Z�8dbeVcnÉh�a^VW^a^in�[dgYVbV\Zh�h]Vaa�WZ�a^b^iZY�id�i]Z�gZbV^c^c\�bdci]h�d[�i]Z�dcZ"nZVgiZgb�d[�XdcigVXi#

(# 8dchjaiVcih�l]d�[V^a�id�gZcZl�i]Z^g�Y^hig^Wjidgh]^e�dc�dg�WZ[dgZ�i]ZVcc^kZghVgn�YViZ�l^aa�WZ�eaVXZY�dc�]daY�VcY�l^aa�]VkZ�V�\gVXZ�eZg^dYd[�.%�YVnh�V[iZg�i]Z^g�Vcc^kZghVgn�YViZ�l^i]^c�l]^X]�id�Veean�[dggZcZlVa#�DcXZ�V�Y^hig^Wjidgh]^e�^h�eaVXZY�dc�]daY!�Vaa�Vjidh]^eh�VgZhjheZcYZY�VcY�hjWhXg^ei^dch�VgZ�XVcXZaZY#�6jidh]^eh�l^aa�WZgZ^chiViZY�l^i]�gZcZl^c\�Y^hig^Wjidgh]^eh#�8dchjaiVcih�l]d�gZcZlYjg^c\�i]Z�.%"YVn�\gVXZ�eZg^dY�bjhi�WZ�^c�\ddY�hiVcY^c\!�XaZVg�VaaYZWih�dc�i]Z�VXXdjci�VcY�eVn�i]Z�gZcZlVa�[ZZ#�8dchjaiVcih�gZcZl^c\l^i]^c�i]Z�.%�YVn�\gVXZ�eZg^dY�l^aa�]VkZ�i]Z^g�gVc`�VcY�Ydlca^cZgZ^chiViZY#

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*# 6�8dchjaiVci�l]d�[V^ah�id�gZcZl�Yjg^c\�i]Z�.%"YVn�\gVXZ�eZg^dY�V[iZg]^h$]Zg�Vcc^kZghVgn�YViZ�l^aa�WZ�XdckZgiZY�id�V�gZiV^a�XjhidbZg#�I]Z8dchjaiVci�bVn�gZ^chiViZ�i]Z^g�Y^hig^Wjidgh]^e�Wn�XdbeaZi^c\�VcYhjWb^ii^c\�V�GZ^chiViZbZci�;dgb�XaZVg^c\�Vaa�YZWih�dc�i]Z�VXXdjci#I]Z�8dchjaiVciÉh�gVc`�l^aa�WZ�gZ^chiViZY�Wji�cdi�i]Z�Ydlca^cZ#;dgbZg�HZc^dg�VcY�7gdcoZ�8dchjaiVcih�l]d�l^h]�id�gZ^chiViZ�i]Z^gY^hig^Wjidgh]^e�l^aa�WZ�gZ^chiViZY�Vi�i]Z�:mZXji^kZ�VcY�H^akZg�aZkZah^cXZ�i]Z�HZc^dg�VcY�7gdcoZ�aZkZa�]VkZ�WZZc�gZbdkZY#�6�8dchjaiVcil]d�[V^ah�id�gZcZl�dc�dg�WZ[dgZ�]^h$]Zg�Vcc^kZghVgn�YViZ�dg�l^i]^c�i]Z.%"YVn�\gVXZ�eZg^dY�VcY�l^h]Zh�id�gZVeean�[dg�V�cZl�Y^hig^Wjidgh]^ejcYZg�V�Y^[[ZgZci�hedchdg�bjhi�lV^i�h^m�bdci]h�[gdb�i]Z�Vcc^kZghVgnYViZ!�VcY�bjhi�cdi�VXi^kZan�dg�eVhh^kZan�eVgi^X^eViZ�^c�i]Z�Wj^aY^c\�dgYZkZadebZci�d[�Vcn�C^``Zc�Y^hig^Wjidgh]^e!�^cXajY^c\�i]Z�ejgX]Vh^c\d[�egdYjXih��di]Zg�i]Vc�[dg�eZghdcVa�jhZ��VcY�i]Z�gZXgj^i^c\�d[8dchjaiVcih�Yjg^c\�i]Vi�i^bZ#�6�cZl�Veea^XVi^dc�^h�gZfj^gZY#

+# 6�8dchjaiVci�l]d�]Vh�gZijgcZY�jchdaY�egdYjXi�^c�XdccZXi^dc�l^i]]^h$]Zg�Y^hig^Wjidgh]^e�Zme^gVi^dc�^h�cdi�Za^\^WaZ�id�gZVeean�id�WZ�V8dchjaiVci�eg^dg�id�h^m�bdci]h�[gdb�i]Z�YViZ�d[�]^h$]Zg�egdYjXigZijgc#�9jg^c\�i]Z�h^m"bdci]�eZg^dY!�i]Z�8dchjaiVci�^h�cdi�eZgb^iiZY!VXi^kZan�dg�eVhh^kZan!�id�eVgi^X^eViZ�^c�i]Z�Wj^aY^c\�d[�Vcn�C^``ZcY^hig^Wjidgh]^e!�^cXajY^c\�i]Z�dgYZg^c\�dg�ejgX]Vh^c\�d[�egdYjXi�di]Zg�i]Vc�[dg�eZghdcVa�jhZ��VcY�i]Z�gZXgj^i^c\�d[�8dchjaiVcih#

3ROLFLHV�3URFHGXUHV���������HQ�SGI

Page 10: 3ROLFLHV 3URFHGXUHV HQ SGI · Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation (referred to as “Nikken”), of the Consultant in the sale of Nikken products by Nikken

,# Once the distributorship has expired, the affected Consultant willremove and discontinue use of, and will not thereafter use, thenames, marks or any signs, labels, stationery, advertising orreading material referring to or relating to any Nikken products.

-# If a distributorship is expired, the downline Consultants andtheir�organization will move to the sponsor of the terminateddistributorship.

.# At the expiration of a distributorship’s one-year term, a Consultant�shall have the option of applying to renew as a Nikken Consultant�with attendant benefits of both product purchasing and sales�opportunity or, in the alternative, of becoming a Nikken retail�customer with opportunities to continue purchasing Nikken product.

W.�Lead Assignment Policy

A Consultant should plan carefully whether organizing a largelead campaign or casually collecting leads one at a time. Any time aConsultant plans to mail or hand out literature, he/she shouldalways include a contact name, address and/or phone number onthe materials. This action helps assure that the Consultant’s activityis rewarded when leads develop from his/her efforts. If the prospectcontacts Nikken directly, then he/she is considered an unsolicitedprospect and will be handled according to the Nikken leaddistribution system policy.

X.�Excuse for Non-PerformanceNeither Nikken nor any Consultant shall be responsible for delays

and failures in performances where performance is made�commercially impracticable due to circumstances beyond the party’s�reasonable control. This includes, but is not limited to, strikes, labor�difficulties, riots, wars, fires, deaths, curtailments of the party’s usual�source of supply or government decrees or orders.

Y.� Sell, Assign, Delegate, or Merge

1. A Consultant may sell, assign, delegate or merge his or her

rights under the Nikken Independent Consultant Agreement only�upon written approved by the Consultant's upline as set forth�below and upon written approval by Nikken. In general, if the�sale, assignment, delegation or merger is to a Nikken Consultant,�the purchaser's pin rank leval cannot be more than two levels�below the seller's pin rank level (except Silver rank and below#�For example, a Royal Diamond can be sold to a Platinum or�above. A Diamond distributorship can be sold to a Gold or above.

6�EaVi^cjb�Y^hig^Wjidgh]^e�XVc�WZ�hdaY�id�V�H^akZg�dg�VWdkZ!�Wji�V�<daY�Y^hig^Wjidgh]^e�XVc�dcan�WZ�hdaY�id�V�H^akZg�dg�VWdkZ#��6�H^akZg�XVc�WZ�hdaY�id�Vc�:mZXji^kZ�dg�VWdkZ#��

Pol ic ies & Procedures� &%

Consultants who failed to renew during Consultants who have not renewed by the 90-day grace period are now Retail

Consultants can renew up to 90 days their anniversay date are placed on Customers and may request to prior to their anniversary date. a hold status for a 90-day grace period reinstate their account - Rank

will be restored but not downline

REQUIREMENTS To renew your distributorship To renew an account that is on hold To reinstate your account

X XDistributor must be in good standing.

Pay renewal fee X X XClear all debts on the account X X XComplete and submit Reinstatement Form X

Distributorship Renewal/Reinstatement Summary Chart

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9ZaZ\Vi^dc/�CdiVg^oZY�Xde^Zh�d[�Vaa�YdXjbZciVi^dc�ZhiVWa^h]^c\�V�YZaZ\Vi^dc�d[�edlZgh�[dg�V�Y^hig^Wjidgh]^e�VgZ�id�WZ�hjWb^iiZY�id�C^``Zc�[dg�^ih�gZXdgYh#�6�aZiiZg�Veegdk^c\�i]Z�YZaZ\Vi^dc�bjhi�WZ�egdk^YZY�id�C^``Zc�[gdb�i]Z�Y^gZXi�H^akZg�dg�VWdkZ�jea^cZ#

BZg\Zg/�I]Z�eVgi^Zh�id�V�bZg\Zg�bjhi�dWiV^c�i]Z�VeegdkVa�d[�i]Z�Y^gZXi�H^akZg�dg�VWdkZ�jea^cZ�VcY�egdk^YZ�V�aZiiZg�id�C^``Zc�cVb^c\�i]Z�eVgi^Zh�VcY�djia^c^c\�i]Z�iZgbh�d[�i]Z�bZg\Zg#�8de^Zh�d[�Vaa�YdXjbZciVi^dc�ZhiVWa^h]^c\�V�bZg\Zg�d[�Y^hig^Wjidgh]^eh�VgZ�id�WZ�hjWb^iiZY�id�C^``Zc�[dg�^ih�gZXdgYh#

I]Z�ejgX]VhZg!�Vhh^\cZZ!�eZghdc�id�l]db�YZaZ\Vi^dc�^h�bVYZ�dg�i]Z�eVgi^Zh�id�V�bZg\Zg!�^[�cdi�VagZVYn�V�C^``Zc�8dchjaiVci!�bjhi�bZZi�i]Z�gZfj^gZbZcih�id�WZXdbZ�V�C^``Zc�8dchjaiVci!�bjhi�XdbeaZiZ�V�XjggZci�8dchjaiVci�6eea^XVi^dc$6\gZZbZci�VcY�l^aa�WZ�^ciZgk^ZlZY�Wn�C^``Zc�id�YZiZgb^cZ�]^h$]Zg�fjVa^[^XVi^dch�VcY�V�gZVhdcVWaZ�VW^a^in�id�hVi^h[VXidg^an�eZg[dgb�i]Z�dWa^\Vi^dch�d[�i]Z�Y^hig^Wjidgh]^e#

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Page 11: 3ROLFLHV 3URFHGXUHV HQ SGI · Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation (referred to as “Nikken”), of the Consultant in the sale of Nikken products by Nikken

Nikken reserves the right to disapprove any sale, assignment,�delegation or merger, but approval shall not be unreasonably�withheld if conditions herein are satisfied. Grounds for the�disapproval of any sale, assignment, delegation or merger may�include, but are not limited to, Policies and Procedures violation,�suspension of distributorship within the last 12 months, or lack of�providing qualified buyers.

Approval shall not be unreasonably withheld by upline sponsors�or other upline parties if conditions herein are satisfied.

No Consultant shall sell, assign, delegate or merge a�distributorship or interest in an ownership entity of a�distributorship for purposes of, or where the result is,�circumvention of Nikken Policies and Procedures, including,�but not limited to, cross-sponsoring rules and/or multiple�company distributorships or sales of substantially similar�products. No Consultant shall act to facilitate the sponsorshipof another Consultant for the benefit of an unrelated upline,nor actively contribute to the termination of a distributorshipfor purposes of reapplication to an unrelated Consultant upline.

C^``Zc�gZhZgkZh�i]Z�g^\]i�id�gZk^Zl�Vcn�hVaZ!�Vhh^\cbZci!�YZaZ\Vi^dc�dg�bZg\Zg!�VcY�id�^bedhZ�gZVhdcVWaZ�XdcY^i^dch�dc�i]Z�hVaZ!�Vhh^\cbZci!�YZaZ\Vi^dc�dg�bZg\Zg�id�^chjgZ�Xdbea^VcXZ�l^i]�i]ZhZ�eda^X^Zh#�

>[�i]Z�ejgX]VhZg!�Vhh^\cZZ�dg�eVgi^Zh�id�V�bZg\Zg�^h�VagZVYn�V�8dchjaiVci!�]Z$h]Z�XVc�ejgX]VhZ!�Vhh^\c�dg�bZg\Z�Y^hig^Wjidgh]^eh�i]Vi�VgZ�^c�i]Z�hVbZ�H^akZg�8dchjaiVciÉh�EZghdcVa�<gdje�dcan#

To be eligible to sell or purchase, the distributorship must have�been�actively maintained for the past 6 months, and must not have�been�suspended for any reason during the past 12 months.“Actively�maintained” is defined as placing an order of 100 QPPV�or�more in�any month during a 6�month period. Therefore, the�eligibility rule�would require placement of an order for at least�100 QPPV�during�the 6�months prior to the month of sale or�purchase.

A Consultant may not add a co-applicant to their distributorship�and thereafter, remove his/her own name from the�distributorship, as an effort to circumvent the Nikken sale,�assignment, delegation or merger procedure. The primary�Consultant must wait one year after adding a co-applicant to the�distributorship before he/she is allowed to remove his/her own�name from the distributorship.

A sale/assignment/delegation/merger fee will be charged to the�purchaser/assignee/person whom delegation is made/ parties to�the merger for each transaction as follows:

$100.00$200.00

Silver and below Gold Platinum and above $500.00

Z.� Non-Waiver Provision

The failure of Nikken to exercise any rights stated in the Policiesand Procedures, compensation plan or ConsultantApplication/Agreement (or to insist upon strict compliance by aConsultant with any obligation or provision thereunder) shall notconstitute a waiver of the rights of Nikken to demand exactcompliance therewith. Waiver by Nikken can only be effected inwriting by an authorized officer of Nikken.

AA. Infringement

Nikken disclaims and excludes all warranties regarding possible�infringement of any United States, Canadian or foreign patent,�trademark, trade name, copyright or the like caused by the Consultant’s�operation. The Consultant shall have no claim in connection therewith.�Upon learning of any claim or suit relating to any of the matters�discussed, the Consultant shall immediately notify Nikken.

BB. Exclusive Rules

The Policies and Procedures, compensation plan, Consultant�Application/Agreement and the instruments and documents referred�to herein constitute the entire understanding of the parties with�respect to the subject matter. The Policies and Procedures,�compensation plan and Consultant Application/ Agreement may be�amended at any time by any instrument in writing signed by an officer�of Nikken. Should any inconsistencies arise, all of the terms and�conditions of these Policies and Procedures shall be controlling.�Receipt of notice of such changes shall be conclusively presumed�when Nikken has posted such changes on its web site,www.myNikken.com

CC. Personal Purchases (Personal Point Volume (PPV)

&# Purchases over A5,000 PPV�within a calendar month will beaccompanied by the Consultant retail sales receipt or PointVolume/ product purchase verification as proof of the retail salestransaction. Consultant should carefully document all retail sales,maintain all retail receipts for a period of two years and make thisdocumentation available to Nikken upon request.

'# It is the Nikken policy and philosophy that inventory productsshould�be purchased in reasonable amounts in the ordinary courseof�business for purposes of either actual personal use or sale tothe�jai^bViZ�XdchjbZg#�EgdYjXi�^ckZcidgn�ejgX]VhZh�bVYZeg^bVg^an�[dg�ejgedhZh�d[�fjVa^[^XVi^dc�dg�gVc`�VYkVcXZbZci�[dg�i]ZWZcZ[^i�d[�V�8dchjaiVci�dg�]^h$]Zg�jea^cZ�dg�Ydlca^cZ�VgZ�hig^Xianegd]^W^iZY#�8dchjaiVcih�bVn�cdi�^ckZcidgn"adVY�cdg�ZcXdjgV\Zdi]Zg�8dchjaiVcih�id�^ckZcidgn"adVY#

(# I]Z�XdbeVcn�hVaZh�VcY�bVg`Zi^c\�eda^Xn�^h�WVhZY�jedc�gZiV^ahVaZh�id�i]Z�jai^bViZ�XdchjbZg#�6�gZiV^a�hVaZ�^h�YZ[^cZY�Vh�V�hVaZ�idV�gZiV^a�XjhidbZg#��L]daZhVaZ�ejgX]VhZh�Wn�V�8dchjaiVci!�ZkZc�^[^ciZcYZY�[dg�hdbZdcZ�di]Zg�i]Vc�i]Z�8dchjaiVci�VgZ�cdiXdch^YZgZY�Vh�V�gZiV^a�hVaZ#�>i�^h�XdbeVcn�eda^Xn!�]dlZkZg!�idhig^Xian�egd]^W^i�i]Z�ejgX]VhZ�d[�egdYjXih�dg�aVg\Z�fjVci^i^Zh�d[^ckZcidgn�^c�jcgZVhdcVWaZ�Vbdjcih�hdaZan�[dg�i]Z�ejgedhZ�d[fjVa^[n^c\�[dg�WdcjhZh�dg�VYkVcXZbZci�^c�i]Z�bVg`Zi^c\�egd\gVb#8dchjaiVcih�bVn�cdi�^ckZcidgn"adVY�cdg�ZcXdjgV\Z�di]Zgh�^c�i]Zegd\gVb�id�^ckZcidgn"adVY#�8dchjaiVcih�bjhi�[ja[^aa�ejWa^h]ZYeZghdcVa�VcY�Ydlca^cZ�gZiV^a�hVaZh�gZfj^gZbZcih!�^cXajY^c\gZfj^h^iZ�gZiV^a�hVaZh�id�cdcY^hig^Wjidgh!�Vh�lZaa�Vh�hjeZgk^hdgngZhedch^W^a^i^Zh!�id�fjVa^[n�[dg�WdcjhZh!�dkZgg^YZh�dg�VYkVcXZbZcih#

V# ,%"eZgXZci�gjaZ/�JcYZg�i]^h�gjaZ!�8dchjaiVcih�bVn�cdidgYZg�VYY^i^dcVa�egdYjXi�jcaZhh�i]Zn�]VkZ�hdaY�dg�jhZY�[dgeZghdcVa�dg�[Vb^an�jhZ�Vi�aZVhi�,%�eZgXZci�d[�egZk^djhanejgX]VhZY�^ckZcidgn"ineZ�egdYjXi#

W# GZiV^a�hVaZh$,%"eZgXZci�gjaZ�kZg^[^XVi^dc�egd\gVb/�>c�VcZ[[dgi�id�hjeedgi�VcY�Zc[dgXZ�i]Z�gZiV^a�hVaZh$,%"eZgXZcigjaZ!�C^``Zc�l^aa�dc�V�bdci]an�WVh^h�XdcYjXi�gVcYdb�VjY^ikZg^[^XVi^dc�[daadl"jeh#�GZegZhZciVi^kZh�d[�i]Z�XdbeVcn�l^aaXdciVXi�8dchjaiVcih�id�[jgi]Zg�kZg^[n�Xdbea^VcXZ�l^i]�i]ZgZiV^a�hVaZh$,%�eZgXZci�gjaZ#�8dchjaiVcih�h]djaY�bV^ciV^cgZXdgYh�VcY�WZ�egZeVgZY�id�Vhh^hi�XdbeVcn�gZegZhZciVi^kZh^c�i]^h�iVh`

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::$�Literature and Sales Aids Nikken Consultants may not produce, use or distribute any

a^iZgVijgZ�dg�^c[dgbVi^dc�gZaVi^kZ�id�i]Z�XdciZcih�dg�i]Z�egdeZgi^Zh�d[�C^``Zc�egdYjXih�l]^X]�]Vh�cdi�WZZc�Y^gZXian�egdk^YZY�Wn�C^``Zc!�>cX#$C^]dc�@Zc`d�Odjh]^c�@Zc`nj`V^!�8VcVYV�8dgedgVi^dc�[dg�i]Z�Xdjcign�^c�l]^X]�i]Z�egdYjXi�l^aa�WZ�hdaY#�I]^h�egd]^W^i^dc�^cXajYZh�Wji�^h�cdi�a^b^iZY�id�eg^ci!�VjY^d�dg�k^YZd�bZY^V#�

EE. Termination of Breaching Party in an Ownership Entity Distributorship

Where there are joint ownership interests in a distributorship and one�or more of the principal owners or interested parties in the ownership�entity, whether partnership, corporation, LLC or trust, is in violation of�Nikken policies, Nikken may elect to terminate the ownership interest of�the breaching party and continue the distributorship solely with the�nonbreaching party or, at the election of Nikken, terminate the�distributorship and substitute a new distributorship in which the�principal owner is the nonbreaching party.

FF. Judgment and Tax Liens

Nikken will comply fully with any court order orinstruction/demand by any government taxing authorities within the�United States and Canada that orders, instructs or demands the�withholding of a Consultant’s earnings from his/her distributorship�with Nikken.

GG. Subpoenas Duces Tecum (Demands for Records)

Assuming proper jurisdiction, Nikken will comply with all subpoenas�duces tecum demanding financial compensation records of a Consultant�in his/her capacity as an independent contractor with Nikken.

HH. Requests for Records

Nikken will comply fully with all requests for records�accompanied by a properly prepared and signed authorization by the�person whose records are being sought. Nikken will comply fully�with all requests for records by government agencies with the�Vji]dg^in�id�gZfjZhi�hjX]�gZXdgYh�l]Zc�VXXdbeVc^ZY�Wn�i]Z�gZfj^h^iZ�aZ\Va�YdXjbZciVi^dc#�

II. Noninterference

During the term of the Consultant Agreement and for a period of18 months following termination of the Consultant Agreement, a�Consultant shall not (i) directly or indirectly solicit or recruit other�Nikken Consultants or Nikken customers to join any other direct�sales, network marketing or multi-level marketing company or�purchase products from any such company or assist or encourage�others to do so; (ii) promote any other direct sales, network�marketing or multilevel-marketing company or products offered by�such company(ies) at any Nikken event or in connection or in�combination with Consultant’s promotion of Nikken and Nikken�products; (iii) promote or post information about any other direct�sales, network marketing or multilevel marketing company or�business opportunity on any social network sites in which a�Consultant has other Nikken Consultants in their network group�unless Consultant restricts the ability of other Nikken Consultants�from viewing such posts.  

LL. Dispute Resolution

Any controversy, claim or dispute of whatever nature arisingbetween a Consultant, on the one hand, and Nikken, Inc. or Nihon�Kenko Zoushin Kenkyukai, Canada Corp. and/or the Related Parties�(as defined below), on the other, including but not limited to those�arising out of or relating to the Independent Nikken Consultant�Agreement (including these Policies and Procedures and the Nikken�Compensation Plan), whether such claim is based on rights,�privileges or interests recognized by or based upon statute, contract,�tort, common law, or otherwise (the “Dispute”), shall be settled�through negotiation, mediation or arbitration, as provided below.

CC$�Negotiation

If a Dispute arises, the parties shall first attempt in good faith toresolve it promptly by negotiation. Any of the parties involved in the�Dispute may initiate negotiation by providing notice (the “Dispute�Notice”) to each involved party setting forth the subject of the�Dispute and the relief sought by the party providing the Dispute�Notice, and designating a representative who has full authority to�negotiate and settle the Dispute. Within ten (10) business days after�the Dispute Notice is provided, the recipient shall respond to the�party providing the Dispute Notice and all other known recipients of�the Dispute Notice with a description of the recipient’s response to�the Dispute Notice, and designating a representative who has full�authority to negotiate and settle the Dispute. Within twenty (20)�business days after the Dispute Notice is provided, the�representatives designated by the parties shall confer either in�person at a mutually acceptable time and place or by telephone, and�thereafter as often as they reasonably deem necessary to attempt to�resolve the Dispute.

DD$�Mediation

Pol ic ies & Procedures� 1'

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�������6i�Vcn�i^bZ�ilZcin��'%��Wjh^cZhh�YVnh�dg�bdgZ�V[iZg�i]Z�9^hejiZ�Cdi^XZ�^h�egdk^YZY!�Wji�eg^dg�id�i]Z�^c^i^Vi^dc�d[�VgW^igVi^dc!�gZ\VgYaZhh�d[�l]Zi]Zg�cZ\di^Vi^dch�VgZ�Xdci^cj^c\!�Vcn�eVgin�bVn�hjWb^i�i]Z�9^hejiZ�id�?6BH��?jY^X^Va�6gW^igVi^dc�VcY�BZY^Vi^dc�HZgk^XZh�"]iie/$$lll#_VbhVYg#Xdb��[dg�bZY^Vi^dc�Wn�egdk^Y^c\�cdi^XZ�d[�hjX]�gZfjZhi�id�Vaa�di]Zg�XdcXZgcZY�eVgi^Zh�VcY�egdk^Y^c\�hjX]�cdi^XZ�VcY�V�Xden�d[�Vaa�gZaZkVci�9^hejiZ�Cdi^XZh�VcY�gZhedchZh�id�?6BH#��>c�hjX]�XVhZ!�i]Z�eVgi^Zh�h]Vaa�XddeZgViZ�l^i]�?6BH�VcY�l^i]�dcZ�Vcdi]Zg�^c�hZaZXi^c\�V�bZY^Vidg�[gdb�i]Z�?6BH�eVcZa�d[�cZjigVah�VcY�^c�egdbeian�hX]ZYja^c\�i]Z�bZY^Vi^dc�egdXZZY^c\h!�VcY�h]Vaa�eVgi^X^eViZ�^c�\ddY�[V^i]�^c�i]Z�bZY^Vi^dc�Z^i]Zg�^c�eZghdc��dg�Wn�iZaZe]dcZ#��I]Z�eVgi^Zh�h]Vaa�ViiZbei�id�V\gZZ�dc�V�bjijVaan�XdckZc^Zci�adXVi^dc�[dg�i]Z�bZY^Vi^dc!�jcaZhh�V�eVgin�X]ddhZh�id�eVgi^X^eViZ�Wn�iZaZe]dcZ#�6WhZci�V�h^\cZY�V\gZZbZci�Wn�i]Z�eVgi^Zh�heZX^[n^c\�V�Y^[[ZgZci�bZY^Vi^dc!�i]Z�bZY^Vi^dc�h]Vaa�iV`Z�eaVXZ�^c�Adh�6c\ZaZh!�8Va^[dgc^V#�I]Z�Xdhi�[dg�i]Z�bZY^Vi^dc�h]Vaa�WZ�h]VgZY�ZfjVaan�Wn�i]Z�eVgi^Zh#��

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EE$�Arbitration

Any Dispute not resolved in writing by negotiation or mediation�shall be subject to and shall be settled exclusively by final binding�arbitration before a single arbitrator in accordance with the then-prevailing Commercial Arbitration Rules of the American Arbitration�Association (“AAA”). No party may commence Arbitration with�respect to any Dispute unless that party has first pursued�negotiation and if requested, mediation, provided, however, that no�party shall be obligated to continue to participate in a negotiation or�mediation if the parties have not fully resolved the Dispute in writing�within sixty (60) business days after the Dispute Notice was provided�to any partyor such longer period as may be agreed by the parties in�writing.Unless otherwise agreed by the parties, the mediator shall�bedisqualified from serving as arbitrator in the case.�Notwithstandingany contrary rules promulgated by the AAA, the�following shall applyto all Arbitration actions:

• The Federal Rules of Evidence shall apply in all cases;

• The parties shall be entitled to all discovery rightspermitted by the Federal Rules of Civil Procedure;

• The parties shall be entitled to bring motions underRules�12 and/or 56 of the Federal Rules of CivilProcedure;

• The arbitration shall occur within one hundred eighty(180) days from the date on which the arbitrator isappointed,�and shall last no more than five (5) businessdays;

• The parties shall be allotted equal time to present theirrespective cases, including cross-examinations

• The parties shall attempt to agree on a mutuallyconvenient location for the arbitration. Unless otherwiseagreed upon by the parties in writing, the arbitrationshall�take place in Los Angeles, California.

The arbitrator shall not have the power to alter, modify, amend,�add to or subtract from any provision of the Independent Nikken�Consultant Agreement, or to rule upon or grant any extension,�renewal or continuance of the Independent Nikken Consultant.�Moreover, the arbitrator shall not have the power to award special,�incidental, indirect, punitive, exemplary, or consequential damages�of any kind or nature, however caused.

All communications, whether oral, written or electronic, in any�negotiation, mediation or arbitration pursuant to this Section shall�be treated as confidential and those made in the course of�negotiation or mediation, including any offer, promise or other�statement, whether made by any of the parties, their agents,�employees, experts, or attorneys, or by the mediator or any JAMS�employee, shall also be treated as compromise and settlement�negotiations for purposes of applicable rules of evidence and shall�be inadmissible for any purpose, including impeachment, in any�arbitration or other proceeding involving the parties, provided that�Zk^YZcXZ�i]Vi�^h�di]Zgl^hZ�VYb^hh^WaZ�dg�Y^hXdkZgVWaZ�h]Vaa�cdi�WZ�gZcYZgZY�^cVYb^hh^WaZ�dg�cdc"Y^hXdkZgVWaZ�Vh�V�gZhjai�d[�^ih�jhZ�^c�cZ\di^Vi^dc�dg�bZY^Vi^dc#

The costs of negotiation, mediation, and arbitration, including�fees and expenses of any mediator, arbitrator, JAMS, the American�Arbitration Association, or other persons of all parties acting with�the consent of the parties to facilitate settlement, shall be shared in�equal measure by the Consultant, on the one hand, and Nikken and�any Related Parties involved, on the other. The parties shall bear�their own legal fees and expenses of negotiation, mediation and�arbitration. The arbitrator, however, shall have the power to award�attorney’s fees and costs to the prevailing party in the arbitration if�requested to do so and if such an award is appropriate under the�governing law.

Although the Independent Nikken Consultant Agreement is�made and entered into between an Independent Consultant and�Nikken, Inc. and/or Nihon Kenko Zoushin Kenkyukai, Canada Corp,�the companies’ affiliates, owners, members, managers and�employees (“Related Parties”) are intended third-party beneficiaries�of the Independent Nikken Consultant Agreement, including this�agreement to negotiate, mediate and arbitrate. The parties�acknowledge that nothing in these policies is intended to create any�involvement by, responsibility of, or liability of the Related Parties�with respect to any dealings between a Consultant and Nikken, Inc.�and/or Nihon Kenko Zoushin Kenkyukai, Canada Corp, and the�parties further acknowledge that no provision of the Independent�Nikken Consultant Agreement shall constitute any waiver by the�Related Parties of any defense which the Related Parties may�otherwise have concerning whether they can properly be made a�party to any dispute between a Consultant and Nikken, Inc. and/or�Nihon Kenko Zoushin Kenkyukai, Canada Corp.

Any party may seek specific performance of this Dispute�Resolution Section and any party may seek to compel each other�party to comply with the provisions of this Section by petition to any�court of competent jurisdiction. The pendency of mediation shall not�preclude a party from seeking provisional remedies in aid of the�arbitration from a court of appropriate jurisdiction, and the parties�agree not to defend against any application for provisional relief on�the ground that mediation is pending. The prevailing party in any�proceeding initiated to enforce the provisions of this Section shall be�entitled to recover from the other party the reasonable attorneys’�fees and costs incurred by the petitioning party in obtaining the�requested relief. If any portion of this Section is held to be�unenforceable for any reason, the remainder shall remain in full�force and effect.

Nothing in this Section shall preclude any party from seeking�interim or provisional relief concerning the Dispute, including a�temporary restraining order, a temporary or preliminary injunction,�or an order of attachment, in any court of competent jurisdiction�either prior to or during negotiation, mediation or arbitration.

II. ORDERING, PAYMENT AND SHIPPINGPOLICIES

A.�Ordering Methods1. By Phone: toll-free order lines

800-669-8859, option 2 English (US)

800-669-8890, option 2 English (Canada)888-2NIKKEN Customer line (888-264-5536)800-669-8897 Spanish800-669-8898 Frencha. A Consultant should be prepared to present all information

requested on the Consultant order form. The order clerk will

Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.1(

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review the order, allowing changes to be made. If a Consultantfails to make corrections prior to the conclusion of the call, nochanges, additions or cancellations will be permitted at a latertime.

b. Acceptable payment is by credit card, for all phone orders.

2. By Autoship: A standing order to make regularly scheduledproduct purchases. Consultants may make changes to theirAutoship order in two ways:

a. By phone

b. Through myNikken a retail Autoship program is available forretail customers.

B. Payment Methods

Nikken will accept the following form of payment for an order:

1. Debit and Credit Cards: Nikken accepts VISA, MasterCard,Discover Card, and American Express (Discover Card accepted inthe U.S. only); The name of the cardholder must appear on theConsultant’s account or on the “ship to” address of the order. Allcredit card charges will be verified and authorized through a creditcard service. In the event that the charge is declined, the order willnot be accepted. Note: Nikken does not tolerate, and will cooperatewith law enforcement in the prosecution of, fraudulent users of creditcards.

C. General Order Policies

&# On mail orders with invalid or incorrect payment, Nikken willattempt to contact the Consultant to obtain a replacement oradditional payment. If the attempt is unsuccessful, the order willbe returned unprocessed.

'# A Consultant may not place new orders unless at least 70 percentof�previously purchased inventory has been sold or consumed.

(# No Cash On Delivery (COD) orders will be accepted.

)# Consultants are responsible for all sales, returns andchargebacks made by their customers. Nikken is not responsiblefor any fraudulent charges that take place between a Consultantand his/her customer.

D. Shipping Policies

1. Consult the current price list and Consultant order forms forshipping charges.

2. Standard orders will be shipped within 24 hours of the time theorder is received, excluding holidays, weekends and duringscheduled physical inventory. Nikken will put its best effort intofulfilling this policy; however, Nikken is not responsible for anyproblems occurring from failure to meet this deadline.

3. Rerouting of shipments-in-transit will be billed at current carrierrates and is permissible only within the state or province of theoriginally specified address. Shipments cannot be rerouted to adifferent state or province. Carrier re-routes are not guaranteed.

4. There will be an additional charge for each delivery attempt as aresult of an incorrect address or invalid phone number.

5. Consultants will be charged for any additional shipping chargesincurred due to the return of a refused shipment.

E. Backorder Policy

1. Nikken will expeditiously ship any part of an order that is in stock.Out-of-stock items (unless discontinued) will be placed onbackorder and distributed upon Nikken receiving additionalinventory of that item. Point Volume will be credited onbackordered items at the time of purchase.

2. Backorder: Nikken has no obligation to honor the previously

discounted price of a backordered item. Nikken reserves the rightto discontinue the discounted price of an item at any time withoutadvance notice.

F. Discrepancy of Order

A Consultant and/or recipient of an order has the responsibility to verifythat the product received matches the product listed on the shippinginvoice. Failure to notify Nikken of any shipping discrepancy within 10 daysof receipt will cancel the Consultant’s right to request a correction.

G. Distributor Services

Consultant inquiries may be made by telephone,�mail or email. Acomplete list of corporate email addresses can be found on myNikken.com.

&# By phone:

• English:In the U.S. call: 800-669-8859, option 4In Canada call: 800-669-8890, option 4

• Spanish: 800-669-8897• French: 800-669-8898

'# By mail: 2 Corporate Park Irvine, CA 92606

(# By email: [email protected]

H. Internet Support Department (myNikken and ISP issues)

Inquiries may be made:

&# By phone: 888-645-5363

'# By mail: 2 Corporate Park Irvine, CA 92606

(# By e-mail: [email protected]

-III. PRODUCT RETURN POLICYNikken stresses the importance of good business inventory

management to all Consultants. Nikken discourages Consultants frommaintaining excess inventory. Consultants should only order itemsthat have been pre-sold or have been ordered by retail customers.

A. Returns

1. A Consultant may return products for credit to his/herdistributorship account only if the products are in resalablecondition and currently stocked and sold by Nikken. The credit isacceptable if effected within one year of the original purchase date.For US send to Nikken, Inc. 190 W. Crowther Avenue, Unit C,Placentia, CA 92870. For Canada send to Nihon Kenko, C/O Stalco,89 St. Regis Crescent North Toronto, CN M3J 1Y9. All returnsmust be addressed to the attention of Nikken RMA with freight andinsurance prepaid. A. handling fee of 10% will be charged and anycommissions or rebates paid will be deducted. The originalshipping fee will not be refunded. To return products for credit to adistributorship account, the Consultant shall first call the Nikkencorporate office to request an RMA number. The Consultant mustwrite the RMA number on the outside of each package beingreturned. Products not labeled with an RMA number on theoutside of the package will be returned to the Consultant at theirexpense. An RMA number is valid for 30 days. A new RMA numbermust be requested after 30 days. Nikken will not accept the returnof individual items from a multiple-item kit or pack. Allow 10business days for processing.

2. Any products that are defective in workmanship, Nikken will repairor replace at no charge for the same products originallypurchased. The defective product must be within the warrantyperiod and the Consultant must request an RMA (Return

1)Pol ic ies & Procedures

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Merchandise Authorization) in order to return a defective product�in exchange for a new one. For product(s) damaged in shipping,�Consultant must request a Return Merchandise Authorization(RMA) upon receipt of the product in order to receive a�replacement of the same product originally purchased. Product�under warranty must be shipped to Nikken by theconsultant/customer at their expense. If product is deemed�defective by Nikken, UPS Ground shipping for the return will be�reimbursed with proof of receipt (excluding insurance and�additional costs). Returned products that are not determined to be�defective will not receive a return shipping reimbursement. Allow�10 business days for processing. The handling fee will not apply to�RMAs for defective products.

(# A Consultant may cancel an order within 3 business days from the�date of purchase by calling the Nikken corporate office to obtain�an�RMA number. The RMA must be written on the outside of the�returning package with freight and insurance prepaid. Products�not�labeled with an RMA number on the outside of the package�will be�returned to the Consultant at their expense. An RMA�number is�valid for 30 days. A new RMA number must be�requested after 30�days. Consultant will receive a refund in the�original form of�payment, less shipping fees. The handling fee�will not apply.�Allow 10 business days for processing.

)# Return of inventory for refund: Request for return of inventory by a�Consultant for any reason, other than damage claim, will be�treated�as a request to voluntarily cancel that distributorship. If a�Consultant�desires to cancel his/her distributorship, he/she may�qualify for a�refund of unopened, resalable inventory with current�labels, less all�commissions and rebates paid to such Consultant�and less a 10%handling fee, provided the products are currently�stocked and sold by�Nikken, and are returned within one year of�the initial purchase date,�with freight and insurance prepaid. The�original shipping fee will not�be refunded. To return inventory for�refund, the Consultant shall first�call the Nikken corporate office�to request an RMA number. The�Consultant must write the RMA number on the outside of each�package to be returned. Products�not labeled with an RMA number�on the outside of the package will�be returned to the Consultant at�their expense. An RMA number is�valid for 30 days. After 30 days, a�new RMA number must be�requested. Nikken will not accept the�return of individual items�from a multiple-item kit or pack. The�Consultant shall allow a�minimum of 10 business days processing�time from the date the�products are received. All refunds will be�tendered in the same�form as original payment. Nikken has no�obligation to refund�products verified as sold under the 70 percent�rule. Consultant’s�distributorship will be immediately cancelled upon�issuance of the�refund.

*# Nikken will inspect all returned inventory pursuant to this�section. If it is determined that the product is in resalable�condition and all other requirements have been met,credits/refunds will be processed accordingly.

+# Products not eligible for return (products deemed used or not�defective) will be returned to the Consultant at their expense.

,# Consignee (shipment recipient) shall be liable for handling fees�incurred upon refusal of product deliveries. Consignee shall also�be liable for handling fees incurred after repeated and�unsuccessful attempts by carrier to deliver products.

-# The return of inventory referred to herein may reduce the current�Qualified Personal Group Point Volume of upline Consultants.

.# Refund on electronic Business Success Suites�are permissible if�refund and account termination is requested within 30 days of�sign up and no products have been placed under the�distributorship account.

Note: All upline Consultants related to such returns are subjected to�deductions based on overrides and/or bonuses paid to them on the�product’s volume. In addition, all upline Consultants may be subject�to further clawback of Leadership bonuses as a result of a lower pay�rank qualification from the returned volume that reduces QOPV, non-

primary Leg QOPV and non-secondary Leg QOPV.�

B. Limited Warranty

&# General product limited warranty: Nikken offers a limited warrantyon�all of its products to retail customers of Nikken Consultants.Nikken�guarantees these products to be free from defects inworkmanship.�Each product carries its own limited warranty, aslisted in the�l]daZhVaZ�8dchjaiVci�eg^XZ�a^hi#�Nikken Consultantsshall handle all retail returns. If a retail�customer of a NikkenConsultant experiences a manufacturer defect�in a product duringthe limited warranty period for that product, the�product should bereturned to the Consultant for repair or�replacement. Consultantsmay return the defective product after first�calling DistributorServices to request and receive an RMA number.�Consultant will beresponsible for any incurred charges. Compliance�with theseprocedures is necessary to provide continued quality service�andproducts to retail customers. Misuse of or tampering with anyproducts will render the limited warranty void and Nikken will notbe�liable for any resulting damages or injuries.

'# Nutrition and skin care 30-day money-back guarantee: Nikkenguarantees the quality of all nutritional and skin care productsthat carry the Nikken name. If a retail customer is not satisfied,he/she may return the product to the Nikken Consultant within 30days of purchase. The Consultant may then complete the returnfollowing the RMA procedure above.

C. Nutritional Product Freshness Guidelines

Nutritional items may be expected to retain potency andfreshness for two years, if stored with container tightly sealed, ina cool, dry place out of direct sunlight.

IV. COMMISSIONS, REBATES,OVERRIDES AND BONUSES

A. Payment of Commissions, Rebates, Overrides and Bonuses

&# Monthly commissions, rebates, overrides and bonuses areelectronically disbursed on the 15th of the following month unlessthe 15th falls on a weekend, in which case deposits are made onthe next business day.

'# A Consultant has the responsibility to review his/her bonus recapand Nikken Lifestyle Bonus statement and report anydiscrepancies to Distributor Relations within 20 days. Any bonusrecap and/or Nikken Lifestyle Bonus discrepancies not reportedwithin 20 days will be deemed final and no adjustments will bemade.

(# All Consultants must enroll in direct bank deposit of commissionearnings. To activate or edit a direct deposit account in a givenmonth, the application must be received by the 8th of the monthfor the 15th electronic disbursement date. Commission earningsof $5 US/CN or greater are direct deposited to the Consultant'sbank account. Earnings less than $5 UC/CN, returned directdeposits or commission earnings on a distributorship with noestablished direct deposit are credited to the Consultant'sdistributorship account.

)# Nikken will assess the following processing fees for issuance ofpaper�checks:

* $20 US/CN for court mandated levies or withholdings, such as spousalor child support;

* $15 US/CN for Consultant paper check request for distributorshipaccount credit balance accrued from commissions earnings;

* $5 for terminating Consultant paper check request for distributorship

Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.1*

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account credit balance or current Consultant paper check request foraccount credit balance from non-commission source. Lost ordestroyed checks may be replaced upon request within 12 months ofissue date only. A fee will be charged for reissued checks.

Sales volume qualifications by order taking: As with other�leading direct-selling companies, Nikken has adopted minimum�qualified personal and group sales volume requirements. With�respect to tangible products which may be offered for resale,�minimum sales volume requirements may also be fulfilled by�taking orders from retail customers which will be fulfilled or�drop-shipped by the company directly to the retail customer.

Distributorships suspended at the volume month of commissions�calculation will not receive commissions, rebates, overrides�and/or bonuses on volume generated during the calculation�volume month. The volume of the suspended distributorship will,�however, count towards the next qualified upline’s commissions�calculation.

Any Consultant’s fraudulent activities that help them qualify or�earn greater commissions, bonuses, rebates, overrides or other�rewards or to advance in rank will be regarded as a breach of�trust and contract. Such fraudulent activities include, but are not�limited to:

Consultants in violation of this policy will be put on notice to�remedy the situation, and will also be subject to a 1 month�suspension which includes the forfeit of any commission earnings�during the month of suspension. Multiple violations of this policy�will result in termination of the Consultant’s Contract. Nikken also�reserves the right to take further legal action and to seek damages�from the Consultant.

B.� Monthly Accounting Service Fee

Nikken assesses a monthly accounting service fee on all monthly�commission net earnings of $5 US/CN or more, which is deducted from�monthly earnings according to the following:

Amount $)

$11$14 $17 $25

Title (Qualified) Executive Consultant Silver Consultant Gold Consultant Platinum Consultant Diamond Consultant Royal Diamond and above $30

C. Responsibility to Train, Supervise, and Communicate with Downline

&# Any Consultant who sponsors other Consultants accepts theresponsibility to fulfill the obligation of performing a bona fidesupervisory, distributing and selling function in the sale or deliveryof�product to the ultimate consumer and in the training of thosesponsored. Consultants are to maintain continuous contact,communication and management supervision within their salesorganizations. Examples of such supervision may include, but arenot limited to newsletters, written correspondence, personalmeetings, telephone contacts, voice mail, electronic mail, trainingsessions, accompanying individuals to company training andsharing�genealogy information with those sponsored. Consultantsshould be�able to provide evidence to Nikken semi-annually ofcontinued�fulfillment of sponsor responsibilities. Additionally,Consultants�qualify to receive overrides, bonuses or advancementin the�compensation plan, by fulfilling the 70 percent rule, and thepreviously�stated supervisory responsibilities.

'# Should a Consultant violate Nikken policy, his/her upline sponsorhas the responsibility to use best efforts to bring the Consultantinto compliance.

(# Silver (or above) Consultants will maintain, and make available toNikken upon request, proof of continuing communication andcontact with downline distributorships on whom they receiveoverrides and/or bonuses. Failure to supply this proof can beused as grounds for cancellation.

V. DEFINITION OF TERMSFor purposes of this Nikken marketing/compensation program,

the following terms shall have the definitions set forth below:

A�(Symbol for Nikken Points) Signifies points used to calculate the qualifications for the Nikken�

compensation plan.

Active Consultant

Any Consultant who places A100 QPPV in any month during one�six-month period.

Breakaway

The point at which a Consultant reaches the qualification to�become a Silver Consultant. From this point on, his/her Qualified�Personal Group Point Volume no longer counts toward the Qualified�Personal Group Point Volume of his/her upline but is used in�calculating the upline Consultant’s Leadership Bonus.

Bypass Provision

A Consultant can bypass his/her sponsor when an upline�Consultant is advancing to Silver and has a downline Consultant who�also qualifies to advance to Silver, but if the upline Consultant does�not have the�minimum requirements to advance to Silver,�the upline�Consultant must complete the�Silver rank�requirements of 6,000�QPGPV in one, two or three consecutive months with 1,000 QOPV�outside the primary leg and 500 QOPV outside the primary and�secondary leg by the end of the next calendar month. If the upline�sponsor has not fulfilled the requirements during the time period

Pol ic ies & Procedures� 1+

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specified above, then the new downline Silver Consultant will roll upto the next upline Silver or above and cannot be recovered by theoriginal sponsor.

Clawback

The process of commission deduction based on commission/bonus paid to any distributor (including upline) on the volume of thereturned product(s).

Consultant

Refers to any person or legal entity currently authorized to distributeNikken products and participate in the compensation plan.

Note: Consultants should read and understand all NikkenPolicies and Procedures and keep updated on all amendments.

Downline

All Consultants sponsored, directly or indirectly, by a givenConsultant. For example, if A sponsors B, who sponsors C, whosponsors D, who sponsors E, then B, C, D and E are all downlinefrom A.

Downline Roll Up

Any expired, resigned or cancelled distributorship (with theexception of Diamond and above distributorships) will forfeit itsdownline, which automatically rolls up to the upline sponsor of theexpired, resigned or cancelled distributorship.

Duplicate the Process

The term “duplicate the process” means: (1) to promote the sales and use of Nikken products and (2) building and supporting a sales organization. This term does not include “front loading,”“investment,” the purchase of large amounts of unneeded product orunnecessary expenditures for the purpose of qualifying in the Nikkencompensation plan. The product purchased by Consultants shouldbe in amounts as may reasonably be expected for resale, personaluse or demonstration only.

Leadership Bonus

A bonus that is based on a percentage of the Qualified PersonalGroup CV of the Silver or above Consultants in a Consultant’s downlinethrough as many as six qualified levels — not merely the first sixdownline levels, but the first six levels on which qualified SilverConsultants or above are found. Meaning if a downline leg has 20 levels,all 20 levels will be assessed, until the appropriate number of qualifiedSilver or above Consultants are found.

Leadership Downline

All Consultants in a Consultant’s downline who have attained therank of Silver Consultant or above.

Leg

See Primary Leg, and Secondary Leg.

Level

A relative term referring to specific positions in a Consultant’sdownline. A Consultant’s first level is the group of Consultants directlysponsored by him/her. The second level consists of the Consultantsdirectly sponsored by those first-level Consultants, and so on.

Market Unit or Market Area

The area in which a Consultant is qualified to operate.�International Consultant may add other market units or areas�outside his/her headquarters country.

Personal Commission Volume (PCV) Rebates

The monies returned to a Consultant on the monthly earnings�statement based on a percentage of Personal Commission Volume.

Personal Group

All Direct and Executive Consultants in a downline, excluding�breakaways.

Personal Group CV Override

An override earned on the Personal Group CV of all the�Consultants in the Personal Group. The override equals the�difference between the rebate percentage that the individual�Consultant earns and the rebate percentage earned by the�personally-sponsored Consultant.

Example: A Qualified Silver Consultant (20 percent) would receive�10 percent override on the Personal Group CV of a personally�sponsored Executive Consultant (10 percent; because 20 percent�less 10 percent equals 10 percent). The Executive�Consultants would�receive 0 percent on the Personal Group CV of a personally-sponsored Executive�Consultant (10 percent less 10 percent equals 0�percent), thus creating added incentive for that Executive�Consultant�to reach the Silver level.

Pin Rank

Consultants advance in the Nikken compensation plan from one�level up to the next. The Direct and Executive pin ranks are achieved�based on Qualified Personal Group Point Volume. The leadership pin�ranks, Silver through Royal Diamond, are achieved based on QPPV,�QPGPV, QOPV, and QOPV outside the primary and secondary legs. For�example, a Silver Consultant advances to the Gold pin rank by doing�100 QPPV, 1,500 QPGPV, 15,000 QOPV and with specific QOPV outside�the primary and secondary legs; a Gold Consultant may advance to�Platinum by doing 100 QPPV, 1,000 QPGPV, 30,000 QOPV and with�specific QOPV outside the primary and secondary legs.

Primary Leg (Hi-Leg)

A primary leg is identified as the leg that contains the highest�QOPV�in a Consultant’s organization.

Qualified Buyer

A buyer, who among other things, has equivalent experience in�network marketing or has similar sales and leadership experience�as the selling Nikken Consultant.

Qualified Consultant

There are monthly qualification requirements for a Consultant to�earn income from Nikken. All Consultants at Direct and above ranks�must have A100 in Qualfied Personal Point Volume (QPPV) each�month to be eligible for rebates and overrides. If a Consultant fails to�achieve A100 QPPV�in any month, the Consultant is considered�inactive for that month and will not be qualified to receive any rebates�and overrides.

For leadership pin ranks (Silver through Royal Diamond) there are

Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.1,

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minimum QPPV Qualified Personal Point Volume, Qualified Personal�Group Point Volume (QPGPV), Qualified Organization Point Volume(QOPV), and for Gold and above pin levels, QOPV outside the primary�leg and QOPV outside the primary and secondary leg requirements�to earn leadership bonuses. (See compensation plan.)

For example, a Silver level Consultant must have 100 QPPV, 1,500�QPGPV and 4,000 QOPV each month to be eligible to receive the�Leadership Bonus.

Silver and above Consultants who meet the pin rank QPPV and�QPGPV requirements are considered as qualified Consultants and�count toward leadership bonus pay level in the leadership�compression.

Retail Profit

The difference between the retail price and the Consultant cost of�products.

When products are drop-shipped to retail customers, Nikken will�include the retail profit based on suggested retail in the monthly�compensation check.

Retail Sale

The Nikken program is built on retail sales to the ultimate�consumer. Products are offered to Consultants only for sale to�consumers and, at the Consultant’s election, personal use. Nikken�recognizes that Consultants may wish to purchase products for�personal or family use. However, personal use product purchases do�not count toward the QPPV requirements for rank advancement and�monthly qualifications. Only orders placed as a retail order will count�towards the QPPV requirements for rank advancement and monthly�qualifications.

70-Percent Rule

To satisfy regulatory agencies and to observe the DSA code ofethics, Nikken periodically screens Consultants whose orderingpatterns are deemed unreasonable or excessive (at the company'ssole discretion) to submit documentation providing evidence that aConsultant has sold or used 70 percent of previously purchasedproducts before a new order may be placed. Nikken reviews allorders and seeks verification based upon two criterias: Does theorder or ordering pattern appear to be unreasonable; and Does thepattern or order quantity appear to be excessive.

70-Percent Rule Enforcement

Suspension and/or cancellation may result from nonadherence tothe 70-percent rule if verification is not submitted upon request by�the fifth day of the following month. Adherence may be substantiated�by retail sales receipts or a personal use statement.

Secondary Leg (2nd Hi-Leg)

A secondary leg is identified as the leg that contains the 2nd�highest QOPV in a Consultant's organization.

Sponsor

Someone who enrolls a new Consultant into the Nikken business�and accepts the responsibility for properly informing and training the�new Consultant about Nikken products, the compensation plan,�Policies and Procedures, and the professional guidelines of the�network-marketing industry.

Upline

Refers to a person’s sponsor, his/her sponsor’s sponsor and so on.

Volume

Point Volume (PV) Point value assigned to each Nikken product purchase which is used�to determine Qualified Personal Point Volume, Qualified Personal�Group Point Volume, and Qualified Organizational Point Volume.�These volumes are used to determine rank advancement and�monthly qualification.

Qualified Personal Point Volume (QPPV)Qualified Personal Point Volume is used to determine rank�advancement and monthly qualifications. It is the accumulated�Personal Point Volume of retail orders. Personal purchases do not�count toward rank advancement and monthly qualification�requirements.

Qualified Personal Point Volume Requirements The monthly Qualified Personal Point Volume required of individual�Consultants is at least 100 QPPV in order to receive earnings for�personal commission volume rebates and personal group commission�volume override bonuses.

Qualified Personal Group Point Volume Requirement The monthly Qualified Personal Group Point Volume required from�Silver and higher rank individual Consultants in order to receive a�leadership bonus from breakaway downlines. Compression volume�from unqualified breakaways does not count toward QPGPV�requirements. The minimum monthly requirement for each rank is�as follows:

Silver A1,500Gold A1,500 Platinum A1,000 Diamond A1,000 Royal Diamond A1,000

Consultants who meet monthly QPPV and QPGPV requirements willreceive up to 20% PGCV Override. Otherwise Consultants will receiveup to 15% PGCV Override if monthly QPPV is met and QPGPV is notmet.

Pol ic ies & Procedures� 1-

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Qualified Personal Group Point Volume (QPGPV)Consultant's QPPV plus all point volume contributed by the Direct�and Executive�Consultants in a downline excluding breakaways�within a calendar month that is used to calculate monthly QPGPV�qualification. Compression volume from unqualified breakaways�does not count toward Qualified Personal Group Point Volume.

Commission Volume (CV) Volume upon which all bonuses, rebates and overrides are paid.

Personal Commission Volume (PCV)The sum of the commission value that is assigned to the products�personally purchased by a Consultant within a calendar month.

Personal Group Commission Volume (PGCV)The sum of the commission value that is assigned to the products�personally purchased by a Consultant plus the products purchased�by the Direct and Executive�Consultants�in a downline excluding�breakaways within a calendar month.

Qualified Organizational Point Volume (QOPV) A Consultant’s Qualified Personal Group Point Volume (QPGPV) plus�the point volume from his/her breakaway downline organization.

Primary Leg Qualified Organizational Point Volume The leg that contains the highest aggregated Qualified�Organizational Point Volume in a Consultant’s organization.

Non-Primary Leg Qualified�Organizational VolumeA Consultant’s Qualified Organizational Point Volume minus Primary�Leg Qualified Organizational Point Volume.

Non-primary Leg & Secondary Leg Qualified Organization�Point VolumeA Consultant's Qualified Organizational Point Volume (QOPV) minus�Primary Leg Qualified Organizational Point Volume and Secondary�Leg Qualified Organization Point Volume.

Rollup VolumeWhen a breakaway Silver or above Consultant fails to satisfy�monthly qualification requirements, his/her personal and group�volume will roll up to the next qualified leadership upline. Rollup�volume does not count toward breakaway Consultant’s monthly�QPGPV qualification requirement.

Volume Month

The calendar month for which an order’s volume is assigned for�purposes of computing commissions, rebates, overrides and�bonuses. "The month" is defined as the first day of the calendar�month through the last day of the same calendar month.

1.

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PROVEN RESULTS. UNLIMITED POTENTIAL. The Nikken marketing opportunity has been designed to help

Consultants achieve financial well-being on their road to totalwellness.

Our generous compensation plan permits you to rise to the top while encouraging others to rise with you. The income opportunity isunlimited and makes each step along the way financially rewarding.

The Nikken marketing opportunity has opened the doors to a newworld of self-fulfillment and prosperity for hundreds of thousands ofConsultants worldwide. It can do the same for you. The financialopportunity and compensation plan we are about to describe can beyour key to the life you and your loved ones have always wanted.

NETWORK MARKETING: A DYNAMIC FORCE Network marketing is an opportunity for success that is open to

anyone. It requires neither a large investment nor a college degree— just the desire and the willingness to get out and make thingshappen.

It provides an individual with the chance to climb to the peak ofsuccess based on his or her own merits and efforts. There are nosupervisors or managers to evaluate performance. Your desire anddedication are what determine your rewards, not the opinions of others.

It allows you to work according to your own rules regarding hoursor scheduling. You are free to contribute as much as you desiretoward your success.

And in network marketing, the results of your efforts accrue toyou. In other businesses, sales revenues are used to cover highoperating costs — advertising agencies, distribution companies,retailers and layers of corporate management. With networkmarketing, you are the company. You pay yourself, instead of tradingto someone else your hours for dollars.

THE MULTIPLICATION PRINCIPLE AT WORK By bringing new Consultants into the Nikken network, you can

qualify to earn income on their sales volumes, as well as on thesales volumes of the people they bring in, and so on.

The individuals you sponsor as Consultants become the first levelof your sales organization, called your first-level Consultants. Thepeople these first-level Consultants enroll in turn become yoursecond-level Consultants. Eventually, as you continue to sign up newConsultants, and they do the same, there will be many levels inmany branches of your downline organization. This is where anexplosively powerful principle comes into play, called themultiplication principle.

LEVERAGE YOUR TIME The multiplication principle is a powerful force working for you. It

magnifies the effort you invest to provide exponentially greaterreturns. Suppose that you launch your Nikken distributorship with acommitment of 10 hours per week. This moderate beginning allowsyou to get started without sacrificing a lot of time from your currentlivelihood or other interests, while you build toward future success.

As you grow your business, let's say you sponsor seven people asConsultants, who also each commit 10 hours per week. Now you’veexpanded your Nikken business network to an organization operating70 hours per week. You help each of these Consultants in turn tosponsor seven others. Your Nikken network has increased to 57

people — with a combined productivity of 570 hours per week!

How hard would you have to work on your own, to reap the benefitof 570 hours worth of effort every seven days? It’s not possible. But themultiplication principle has leveraged your 10 hours into a weeklyoutput equal to a single individual working full time for more thanthree months. What a tremendous return on 10 hours! This is themultiplication principle and the power of leveraging. (Theseprojections are for evaluation purposes only and do not constitute aguarantee or an indicator of performance.)

WAYS TO EARN Through its generous compensation plan, Nikken offers different

ways to earn. Your success and the income you earn from yourNikken business is determined by the number of customers youhave, the amount that each customer purchases and youreffectiveness in building a sales organization that includes otherConsultants who help you expand your customer base as they buildtheir own sales organizations. This compensation plan is available toNikken Consultants and International Consultants.

1. Retail Sales Profits

As a Consultant, you order products directly from Nikken at theConsultant price. Your retail profit is the difference between theretail and the Consultant price. For example, if your retail customerorders a product worth $1,250 retail ($1,000 Consultant price), youcan make a retail profit of $250, which is 20 percent of the retailprice.

2. Personal Commission Volume (PCV) Rebate

As you advance up the Consultant ranks, you will qualify forprogressively larger Personal Commission Volume rebates, ranging�from�10 to 20 percent of the amount of products you order from�Nikken at Consultant prices.

3. Personal Group Commission Volume (PGCV) Override

This is an override, or bonus, that you may earn on thecommission�volume of your Personal Group, which includes all the Direct and�Executive�and Consultants in your downline excluding breakaways,�depending on your rank and the ranks of those you have directly�sponsored.

4. Entrepreneurs Club

Designed to help newer Consultants gain valuable experience byutilizing the ABC method, the Entrepreneurs Club is an incentive to�achieve a minimum of 6,000 QPGPV�and develop at least 3 frontline�Executives�by delivering product demonstrations to new prospects within�30 days. Those who successfully meet the requirements will earn�recognition and an award check.

5. Paragon Award

A Nikken Consultant at any rank who develops three or morefrontline�Silvers�(or higher) in a period of three consecutive months may be eligible�for the prestigious Paragon award, which includes a valuable prize or�award check.

6. Leadership Bonus

This powerful bonus is based on a percentage of the Personal GroupCommission Volumes of the Silver or above Consultants in yourorganization. Nikken allows you to earn six percent bonuses on eachdescending line (leg) down through as many as six qualified leadershiporganization (Silver or above) levels.

Compensation Plan

Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.'%

*Canada pricing is periodically adjusted to reflect variations in currency exchange rates. For prices in Canada refer to nikken.com or myNikken.com.

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7. Lifestyle Bonus Program

The Nikken Lifestyle Bonus Program is designed to help you balance yourlifestyle through your Nikken business. If you want to use your bonus for amotor vehicle great! If you want to use it to spend more time with your familyon a vacation, for your child’s education, a boat, a motorcycle, donate it to acharity and increase your society volume — the choice is yours. Your life, yourlifestyle and your decision on what is most important to you will determinehow you apply this bonus. Additional information regarding thisprogram can be found online at mynikken.com in the Lifestyle BonusProgram.

How to Qualify • Must be a Gold Consultant or above

• Be paid as Gold or above for three consecutive months (thequalification period) to be enrolled in Lifestyle Bonus program

• After fulfillment of the qualification period, Consultant will beeligible to be paid the Lifestyle Bonus

• Build a network organization exclusively with Nikken.Circumvention of this policy by removing one spouse from thedistributorship is not allowed.

Monthly Qualification Requirement • If a Consultant meets QPPV, QPGPV but fails to satisfy other

requirements to be paid as a Gold, he/she will only receive onepercent of his/her QPGPV.

• Consultants must meet QPPV, QPGPV, QOPV, non-primary QOPVand�non-primary and secondary QOPV requirements and be paid asa�Gold or above in order to receive the Lifestyle Bonus on thebreakaway volume in leadership levels.

Benefits

• The amount of the Lifestyle Bonus is based on your leadership andinternational volume. After leadership downline has beencompressed, it is calculated using the following formula:

Pay Rank Pay Level Calculation AmountMeet QPPV & QPGPVQualification PGCV level __________ x 1% = __________Gold (up to) First level __________ x .5% = __________Gold (up to) Second level __________ x .5% = __________Gold (up to) Third level __________ x .25% = __________Platinum (up to) Fourth level __________ x .25% = __________Diamond (up to) Fifth level __________ x .25% = __________Royal Diamond (up to) Sixth level __________ x .25% = __________

Total Lifestyle Bonus = $_________

Lifestyle Bonus Payout by RankPay Rank Gold Platinum Diamond R. DiamondLifestyle Bonus Up to $500* Up to $1000* Up to $1500* Up to $2000** US values shown. Payout in Canada will be rendered according to the applicable currency exchange rate.

PROMOTIONS AND CONTESTSPeriodically, Nikken will hold promotions and contests for its�

Consultants. For anyone to participate in any Nikken promotion or�contest, he/she needs to qualify with a minimum of 100 QPPV�monthly during the contest/promotion period. Consultants must�also be in good standing with the company in order to be eligible for�any prizes or rewards. Incentive benefits, such as awards and prizes�for winning sales contests or promotions, are intended for the�primary owner(s) of Nikken distributorships. Individuals, who in the�Company’s judgment, ostensibly are added to an existing�distributorship for the sole purpose of redeeming additional�incentive benefits, and who do not demonstrate active participation�in the Nikken business, will not be eligible.

THE PATH TO FINANCIAL WELLNESSSuccess with Nikken takes dedication, but the criteria for moving up�

in the organization are simple and straightforward. The levels you attain�in Nikken are based on your Qualified Personal Point Volume, your�Qualified Personal Group Point Volume, and the success of the�Consultants in your downline. Your Qualified Personal Point Volume and�Qualified Personal Group Point Volume are measured in A�(Nikken�Points). A�is used to calculate the qualifications in the Nikken�compensation plan. Additionally, each point has a corresponding�commission volume, the basis upon which commissions are paid.

Independent Nikken Consultants shall be paid in their homecountry currency calculated at the current volume month’s exchange�rate according to Oanda.com�on the last business day of the month.

For a definition of Qualified�Personal Point Volume, Qualified�Personal Group Point Volume, and the other terms used in this section,�see the Nikken Policies and Procedures definition of terms, beginning on�page &+#

Direct Consultant How to Qualify

• Read, understand and accept Nikken Policies & Procedures andthe compensation plan.

• Complete a Consultant Application/Agreement and send it toNikken headquarters. (Corporate approval is necessary before youofficially become a Direct Consultant.)

• Purchase a Business Success Suite which contains everythingneeded to start your distributorship (except where mandatorypurchase is prohibited by law). Business Success Suite is availableelectronically online.

Benefits

• Order products directly from Nikken at Consultant prices.

• Order through myNikken.com and Autoship for efficient,economical order processing.

• Sell to customers for a 20% retail profit.

• Begin to build a personal sales group by sponsoring otherConsultants into the Nikken opportunity.

Executive�Consultant Rank Advancement

• First, be a Direct Consultant• Achieve at least 1,500 QPGPV in up to three (3)�8dchZXji^kZbdci]h#

• Achieve at least 100 QPPV in order for the QPGPV to be counted fora given month during the multi-month qualification period.

Monthly Qualification Requirement

• Achieve A100 QPPV

Benefits • 20 percent retail profit on customer sales (when sold at suggested

retail prices).• A rebate equal to�10�percent of your total Personal CV. This is

called a Personal CV rebate.• An override of up to 10 percent of the CV generated by the

downline in your Personal Group. This is called a Personal GroupCV�override.

THE LIMITLESS REALM OF THE LEADERSHIP BONUS

When you attain the rank of Silver Consultant, you jump into anexciting new area of income potential. In this and all higher ranks, youcan qualify to earn the highly rewarding Leadership Bonus. This bonusis based on the productivity of the Silver or above Consultants in yourdownline and their Personal Groups. As Consultants in your PersonalGroup rise to the Silver rank, they take their own Personal Groups

Pol ic ies & Procedures� 2&

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with them and they receive Qualified Personal Group Point Volumecredit for their efforts. You will earn something even better – theLeadership Bonus! This bonus equals six percent of the PersonalGroup CV down through as many as two levels of qualified Silver andabove Consultants.

Silver Consultant

Rank Advancement (See Note 1)

• Achieve at least 6,000�QPGPV in up to three (3) consecutivemonths.

• Achieve at least 100 QPPV in order for QPGPV to be counted for agiven month during the multi-month qualification period.

• During the month of rank advancement, achieve a QualifiedOrganizational Point Volume (QOPV) of at least 1,000 outside theprimary leg and at least 500 of the minimum QOPV requirementbeing met by legs outside the primary and secondary legs.

Monthly Qualification Requirements• Achieve 100 QPPV .••

Maintain a QPGPV of 1,500Maintain a Qualified Organization Point Volume (QOPV) of�)%%%ZVX]�bdci]�id�WZ�Za^\^WaZ�[dg�AZVYZgh]^e�7dcjh�Vi�e^c�gVc`#

Benefits• 20 percent retail profit on customer sales (when sold at suggested

retail prices).• 20 percent Personal CV rebate.• Up to 20 percent Personal Group CV override if Consultant meetsmonthly QPPV and QPGPV requirements, otherwise Consultant�will receive up to 15% Personal Group CV Override if monthly�QPPV is met and QPGPV is not met.

• Six percent Leadership Bonus on Personal Group CV down throughtwo levels of qualified Silver or above Consultants.

Gold Consultant

Rank Advancement (See Note 1)

• Achieve 100 QPPV and a QPGPV of 1,500.

• Achieve Qualified Organizational Point Volume (QOPV)of 15,000with at least 5,000 of the minimum QOPV requirement being metby legs outside the primary leg and at least 1,500 of the minimumQOPV requirement being met by legs outside the primary andsecondary legs.

Monthly Qualification Requirements

• Achieve 100 QPPV.• Maintain a QPGPV of 1,500.• Maintain a Qualified Organizational Point Volume of at least 15,000

each month with at least 5,000 of the minimum QOPV requirementbeing met by legs outside the primary leg and at least 1,500 of theminimum QOPV requirement being met by legs outside theprimary and secondary legs to be eligible for a Leadership Bonusat pin rank. (See Note 2)

Benefits

• 20 percent retail profits on customer sales (when sold atsuggested retail prices).

• 20 percent Personal CV rebate.• Up to 20 percent Personal Group CV override if Consultant meets

monthly QPPV and QPGPV requirements, otherwise Consultantwill receive up to 15% Personal Group CV Override if monthlyQPPV is met and QPGPV is not met.

• Six percent Leadership Bonus on Personal Group CV down throughthree levels of qualified Silver or above Consultants.

• Eligible to qualify for Lifestyle Bonus.

Platinum Consultant

Rank Advancement (See Note 1)

• Achieve 100 QPPV and a QPGPV of 1,000.• Achieve Qualified Organization Point Volume of at least 30,000 with

at least 10,000 of the minimum QOPV requirement being met bylegs outside the primary leg and at least 3,000 of the minimumQOPV requirement being met by legs outside the primary andsecondary legs.

Monthly Qualification Requirements

• Achieve 100 QPPV• Maintain a QPGPV of 1,000• Maintain a Qualified Organizational Point Volume of at least 30,000

each month with at least 10,000 of the minimum QOPVrequirement being met by legs outside the primary leg and at least3,000 of the minimum QOPV requirement being met by legs�outsidethe primary and secondary legs to be eligible for a�LeadershipBonus at pin rank. (See Note 2)

Benefits

• 20 percent retail profits on customer sales (when sold atsuggested retail prices).

• '%�eZgXZci�EZghdcVa�8K�gZWViZ#• Je�id�'%�eZgXZci�EZghdcVa�<gdje�8K�dkZgg^YZ�^[8dchjaiVci�bZZih�bdci]an�FEEK�VcY�FE<EKgZfj^gZbZcih!�di]Zgl^hZ�8dchjaiVci�l^aa�gZXZ^kZ�je�id&*��EZghdcVa�<gdje�8K�DkZgg^YZ�^[�bdci]an�FEEK�^h�bZiVcY�FE<EK�^h�cdi�bZi#

• H^m�eZgXZci�AZVYZgh]^e�7dcjh�dc�EZghdcVa�<gdje�8KYdlc�i]gdj\]�[djg�aZkZah�d[�fjVa^[^ZY�H^akZg�dg�VWdkZ8dchjaiVcih#

• :a^\^WaZ�id�fjVa^[n�[dg�A^[ZhinaZ�7dcjh#

Pol ic ies & Procedures� 2(

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Diamond Consultant

Rank Advancement�(See Note 1)

••

Achieve 100 QPPV and a QPGPV of 1,000.Achieve a Qualified Organization Point Volume of at least 100.000with at least 33,000 of the minimum QOPV requirement being metby legs outside the primary leg and at least 10,000 of the minimumQOPV requirement being met by legs outside the primary andsecondary legs.

Monthly Qualification Requirements

• Achieve 100 QPPV.• Maintain a QPGPV of 1,000• Maintain a Qualified Organization Point Volume of at least 100,000

each month with at least 33,000 of the minimum QOPVrequirement�being met by legs outside the primary leg and at least10,000 of the�minimum QOPV requirement being met by legsoutside the primary�and secondary legs to be eligible for aLeadership Bonus at pin rank.(See Note 2)

Benefits • 20 percent retail profits on customer sales when sold at suggested

retail prices.• '%�eZgXZci�EZghdcVa�8K�gZWViZ#• Je�id�'%�eZgXZci�EZghdcVa�<gdje�8K�dkZgg^YZ�^[�8dchjaiVci�bZZihbdci]an�FEEK�VcY�FE<EK�gZfj^gZbZcih!�di]Zgl^hZ�8dchjaiVci�l^aagZXZ^kZ�je�id�&*��EZghdcVa�<gdje�8K�DkZgg^YZ�^[�bdci]an�FEEK�^hbZi�VcY�FE<EK�^h�cdi�bZi#

• H^m�eZgXZci�AZVYZgh]^e�7dcjh�dc�EZghdcVa�<gdje�8K�Ydlc�i]gdj\][^kZ�aZkZah�d[�fjVa^[^ZY�H^akZg�dg�VWdkZ�8dchjaiVcih#

• Eligible to qualify for Lifestyle Bonus.

Royal Diamond Consultant�

Rank Advancement (See Note 1)• Achieve 100 QPPV and a QPGPV of 1,000.• Achieve Qualified Organization Point Volume of at least 300,000

with at least 100,000 of the minimum QOPV requirement being metby legs outside the primary leg and at least 30,000 of the minimumQOPV requirement being met by legs outside the primary andsecondary legs.

Monthly Qualification Requirements

• Achieve 100 QPPV.• Maintain a QPGPV of 1,000 .• Maintain a Qualified Organization Point Volume of at least 300,000

each month with at least 100,000 of the minimum QOPVrequirement being met by legs outside the primary leg and at least30,000 of the minimum QOPV requirement being met by legsoutside the primary and secondary legs to be eligible for aLeadership Bonus at pin rank. (See Note 2)

Benefits• 20 percent retail profits on customer sales (when sold at suggested

retail prices).

• 20 percent Personal CV rebate.• Up to 20 percent Personal Group

CV override if Consultant meetsmonthly QPPV and QPGPVrequirements, otherwiseConsultant will receive up to 15%Personal Group CV Override ifmonthly QPPV is met and QPGPVis not met.

• Six percent Leadership Bonus onPersonal Group CV down throughsix levels of qualified Silver orabove Consultants.

• Eligible to qualify for LifestyleBonus.

SPECIAL FEATURES OFTHE NIKKENCOMPENSATION PLAN Compression of Downline Silver

Consultants or above

In order to maximize theLeadership Bonuses for all active,productive Silver or aboveConsultants, the Nikkencompensation plan has acompression feature.

If a downline Silver or aboveConsultant fails to qualify in a givenmonth, and if he/she occupies aposition on any downline level forwhich the upline Consultantqualifies for a Leadership Bonus,then the next downline qualifyingConsultant (if one exists) will bemoved up into the place of the non-qualifying Consultant.

Each Silver or above Consultantwho is qualified for LeadershipBonuses is paid through thequalified levels for that pay level, and is paid on any unqualified Silver

or above distributorships in between.

Note 1: International Consultant can combine QPPV, QPGPV, QOPV, non-primaryQOPV and non-primary and secondary QOPV requirement in other market�units for pin and pay rank.

Note 2: Should Gold and above rank Consultant meet QPPV�and QPGPV�requirementsof pin rank but fail to meet the QOPV non-primary, QOPV and non-primary and�secondary QOPV requirement, Gold and above rank Consultant may qualify for�Leadership Bonus at a lower rank provided that he/she satisfies the Qualified�Organization Point Volume , non-primary QOPV and non-primary and secondary�QOPV requirements of the particular lower rank.

Need help? Call US 800-669-8859, opt ion 4; CN 800-669-8890, opt ion 4.2)

You

FirstLevel

FourthLevel

Qual i f ied Consultant

Unqual i f ied Consultant

SecondLevel

ThirdLevel

C O M P R E S S I O N

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CONTACT INFORMATIONSupport Departments (all hours are Pacific Time)

Department Phone HoursEmail Address

Retail Customers 888-264-5536 7 a.m. – 4 p.m.

Distributor Services 800-669-8859 X4 7 a.m. – 4 p.m. XdchjaiVcihZgk^XZh5c^``Zc#Xdb

Internet Support 888-645-5363 7 a.m. – 4 p.m. [email protected]

Order EntryEnglish (US) 800-669-8859 X2 7 a.m. – 5 p.m. English (CN) 800-669-8890 X2 7 a.m. – 5 p.m. Spanish 800-669-8897 7 a.m. – 4 p.m. [email protected] French 800-669-8898 7 a.m. – 4 p.m. [email protected]

Corporate Speakers 949-789-2000 9 a.m. – 5 p.m. [email protected]

Other Resources

Compliance Department [email protected]

Special Events Division [email protected]

Pol ic ies & Procedures� 2*

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