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Policies

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Cloud 9 Life Policy and Procedures

Table of Contents

SECTION 1: INTRODUCTION1.1 Cloud 9 Life Overview .................................................. 41.2 Purpose of Policies .........................................................41.3 Independent Contractor Status ..........................41.4 Code of Ethics ....................................................................4 1.4.1 Integrity and Accountability ................4 1.4.2 Deceptive and Unlawful Practices ...4 1.4.3 Honesty in Representing Cloud 9 Life .........................................................................4 1.4.4 Compliance with Standards of Practice .................................................................. 5 1.4.5 Compliance with Code of Ethics ........ 51.5 Application, Policies and Compensation Plan Constitute the Agreement .......................... 5 1.6 Changes to the Agreement .................................... 5 1.7 Delays........................................................................................ 5 1.8 Agreement and Provisions Severable .............6 1.9 Waiver .......................................................................................6

SECTION 2: BECOMING AN C9 LIFEEXECUTIVE2.1 Requirements to Become an C9 Life Executive ................................................................................. 72.2 Term and Renewal of a Cloud 9 Life Business .................................................................................. 7 2.2.1 C9 Executive Pass (“Kit”) ........................... 7 2.2.2 Annual Renewal Fee ................................... 72.3 Sponsoring ........................................................................... 72.4 Change of Sponsor ........................................................ 7 2.4.1 Incorrect Sponsor ..........................................8 2.4.2 Reassignment of Sponsor .......................82.5 Cross-Sponsoring ............................................................8 2.6 Assignment of Advisor ................................................9 2.7 Cancellation and Reapplication ..........................9 2.8 Business Entities ..............................................................9 2.8.1 One C9 Life Account Per Individual ..............................................................9 2.8.2 Two C9 Life Accounts Per Household ...........................................................9

2.8.3 Three C9 Life Accounts per Business Entity ................................................9 2.8.4 Corporations .................................................... 10 2.8.5 LLCs ........................................................................ 10 2.8.6 Partnerships .................................................... 10 2.8.7 Trusts .......................................................................11 2.8.8 Changes to a Business Entity ..............11 2.9 Actions of Household Members or Affiliated Individuals .....................................................11

SECTION 3: OPERATING AN INDEPENDENT CLOUD 9 LIFE BUSINESS3.1 General Marketing Standards .............................. 123.2 Adherence to the C9 Life Marketing and Compensation Plan.......................................... 123.3 “Warm Market” ................................................................ 123.4 Prohibited Marketing Methods and Practices ............................................................................... 13 3.4.1 Unauthorized Transactions.................. 13 3.4.2 Door-to-Door Sales ..................................... 13 3.4.3 Telemarketing/Cold Calling ................. 13 3.4.4 Unsolicited Facsimile Transmission (Fax) ...................................... 13 3.4.5 Email Solicitation (SPAM) ...................... 14 3.4.6 Flyers/Pamphlets ......................................... 14 3.4.7 Flea Markets/Garage Sales/ Swap Meets ...................................................... 14 3.4.8 TV/Radio Advertising ................................ 14 3.4.9 Job/Employment Advertising ........... 143.5 Permitted Marketing Practices and Methods ................................................................................ 14 3.5.1 Emails ................................................................... 14 3.5.2 Social Media ..................................................... 14 3.5.3 Websites .............................................................. 14 3.5.4 Links and Banner Ads .............................. 15 3.5.5 Search Engine Advertising ................... 15 3.5.6 Trade Shows ..................................................... 15 3.5.7 Craigslist .............................................................. 16 3.6 Advertising ......................................................................... 16

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3.6.1 Sale Aids and Support Materials ...... 16 3.6.2 Domain Names and Email Addresses ........................................................... 16 3.6.3 Trademarks and Copyrights ................ 16 3.6.4 Reassignment of Trade Names ........ 17 3.7 Unauthorized Claims and Actions ................... 17 3.7.1 Indemnification ............................................ 17 3.7.2 Income Claims ............................................... 17 3.8 Conflicts of Interest ...................................................... 17 3.8.1 Targeting Other Direct Sellers ........... 18 3.8.2 C9 Life Executive Participations in Other Direct Selling Program ...... 183.9 Executive Back Office Access .............................. 18 3.9.1 Organizational Activity (Genealogy) Reports ................................. 193.10 Governmental Approval or Endorsement ................................................................... 193.11 Insurance ............................................................................. 193.12 Markets .................................................................................. 193.13 Adherence to Laws and Ordinances.............203.14 Media Inquiries ..............................................................203.15 Income Claims ...............................................................203.16 Product and Weight Loss Claims ....................20

SECTION 4: CLOUD 9 LIFE PRODUCTS4.1 Purchasing Cloud 9 Life Products .................... 214.2 Inventory Purchases ................................................... 214.3 Payments and Payment Authorization ....... 214.4 Order Confirmation ..................................................... 214.5 Autoship Order Program ....................................... 22 4.6 Resale of Products ....................................................... 22 4.7 Sales Tax .............................................................................. 22 4.8 Satisfaction Guarantee ............................................ 22 4.9 Cancellation Buy-Back Policy ............................ 22

SECTION 5: RESPONSIBILITIES OF C9LIFE EXECUTIVES5.1 Continuing Development Obligations .......24 5.1.1 Ongoing Training .......................................24

5.1.2 Increased Training Responsibilities.............................................24 5.1.3 Ongoing Sales Responsibilities .......245.2 Non-Disparagement .................................................245.3 Providing Documentation to Applicants ..245.4 Reporting Violations of the Agreement ..... 255.5 Vendor Confidentiality/ Communications .......................................................... 25

SECTION 6: BONUSES AND COMMISSIONS6.1 Bonus and Commission Qualifications ....... 266.2 Reports ................................................................................. 266.3 Income Taxes ................................................................... 276.4 Errors or Questions ..................................................... 27

SECTION 7: DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS7.1 Disciplinary Sanctions ..............................................28 7.1.1 Violation Appeals ........................................287.2 Grievances and Complaints .................................287.3 Mediation............................................................................ 297.4 Arbitration .......................................................................... 297.5 Governing Law, Jurisdiction and Venue ..... 29

SECTION 8: SELLING ORTRANSFERRING YOUR C9 LIFE BUSINESS8.1 Sale, Transfer, or Assignment of C9 Life Business ................................................................................ 318.2 Separation of a C9 Life Business ....................... 318.3 Succession ......................................................................... 328.4 Transfer Upon Incapacitation of an C9 Life Executive ................................................................... 338.5 Transfer Upon Death of an C9 Life Executive ............................................................................. 33

SECTION 9: INACTIVITY ANDCANCELLATION

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Table of Contents

9.1 Effect of Cancellation ................................................. 349.2 Cancellation Due to Inactivity ............................349.3 Involuntary Cancellation ........................................34 9.3.1 Involuntary Termination Due to Violation of Terms .......................................34 9.3.2 Involuntary Termination Due to Change in C9 Life Business ..................359.4 Voluntary Cancellation ..............................................359.5 Non-Renewal ....................................................................35

SECTION 10: C9 LIFE EXECUTIVE REFUNDS UPON CANCELLATION OF THE AGREEMENT Refund of the Initial Sponsorship .................... 36

SECTION 11: DEFINITIONS .................................37

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1.1 CLOUD 9 LIFE OVERVIEWCloud 9 Life LLC (“the Company”) is involved in the business of providing digestive health products at affordable prices and allowing customers (“Customers”) and Independent Cloud 9 Life Executives (“C9 Life Executives”) to make a difference in their personal lives by sharing digestive health products. The Company employs a Direct Sales model.

1.2 PURPOSE OF POLICIESThe Company employs a Direct Sales model to reach customers in the United States of America and Canada. Throughout the Policies, and the Agreement generally, such digestive health products are referred to as the “Products.” It is important that C9 Life Executives understand that their success and the success of their fellow C9 Life Executives depend on the integrity of the men, women, and businesses that market the Products. To clearly define the relationship that exists between the C9 Life Executives and the Company, and to explicitly set a standard for acceptable business conduct, the Company has established the Policies.

C9 Life Executives shall comply with all of the terms and conditions set forth in the Agreement, including, in particular, the Policies, all of which the Company may amend from time to time at its sole and absolute discretion. C9 Life Executives shall review the information in the Policies carefully, as they explain and govern the relationship between C9 Life Executives and the Company. If C9 Life Executives have any questions or require clarification regarding the Policies, they should contact their Executive or the Company for more information.

1.3 INDEPENDENT CONTRACTOR STATUSC9 Life Executives are independent contractors and are not purchasers of a franchise or a business opportunity. The Agreement between the Company and its C9 Life Executives does not create an employer/employee relationship, agency, partnership, or joint venture between the Company and the C9 Life Executive. A C9 Life Executive shall not be treated as an employee for his/her services or for tax purposes. C9 Life Executives are responsible for paying applicable taxes due from all compensation earned as a C9 Life Executive of the Company. The C9 Life Executive has no authority (express or implied) to bind the Company to any obligation. Each C9 Life Executive shall establish his/her hours of work, and goals for advancement under the Compensation Plan.

1.4 CODE OF ETHICS1.4.1 Integrity and AccountabilityC9 Life Executives shall conduct themselves with integrity and professionalism in all matters related to the Company. C9 Life Executives shall be accountable for their conduct when interacting with the Company, Customers and other C9 Life Executives.

1.4.2 Deceptive and Unlawful PracticesC9 Life Executives shall not engage in any deceptive, unlawful, or unethical conduct, including, but not limited to, any Customer acquisition or C9 Life Executive recruitment practice that may be detrimental to or reflect poorly on the Company or its affiliates, the Direct Selling industry, or other C9 Life Executives.

1.4.3 Honesty in Representing Cloud 9 LifeC9 Life Executives shall read and understand the Independent Cloud 9 Life Executive Application and Agreement (the “Application”), the Cloud 9 Life Statement of Policies and Procedures (the “Policies”), the Cloud 9 Life Compensation Plan (the “Compensation Plan”), the Terms and Conditions of any applications or agreements provided to Customers and information about Company products and services. C9 Life Executives shall truthfully and

Section 1Introduction

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accurately represent the rights and obligations of C9 Life Executives with these documents, without providing misleading information or false expectations to potential Customers or C9 Life Executives. Any claims, representations, or statements that C9 Life Executives make regarding the Company shall be consistent with those included in the literature and materials provided by the Company.

1.4.4 Compliance with Standards of PracticeC9 Life Executives shall abide by all applicable laws and regulations, including without limitation, any and all local, state, and federal laws that govern their independent business, in which the Company operates (collectively, the “Standards of Practice”). C9 Life Executives agree that it is their responsibility to learn about, understand, and comply with the Standards of Practice and remain informed regarding the same, as they may change or be amended from time to time.

1.4.5 Compliance with Code of EthicsC9 Life Executives shall uphold this Code of Ethics and recognize that its effectiveness will require diligence and persistence to create awareness among all C9 Life Executives. C9 Life Executives shall not, in any way, attempt to persuade, induce, or coerce another party to breach this Code of Ethics. Any such action shall be considered by the Company as a violation of this Code of Ethics and thereby a violation of the Policies.

1.5 APPLICATION, POLICIES AND COMPENSATION PLAN CONSTITUTE THE AGREEMENTThe Policies, in their present form and as amended at the sole and absolute discretion of the Company, are incorporated into, and form an integral part of, the Application. Throughout the Policies, when the term “Agreement” is used, it collectively refers to the Application, the Policies, the Compensation Plan, and the Business Entity Registration Form (where appropriate), all in their current form and as amended by the Company in its sole and absolute discretion. It is the responsibility of C9 Life Executives to read, understand, adhere to, and ensure

that they are aware of and operating under the most current version of the Agreement. When sponsoring a new C9 Executive, it is the responsibility of the sponsoring C9 Executive (the Sponsor) who is to ensure that the prospective C9 Executive is provided with, or has online access to, the most current version of the Agreement prior to the prospective C9 Executive’s execution of the Application. It is also the responsibility of the Sponsor to place the new Executive on either the Sponsor’s first-level or on the first-level of a personally sponsored, existing C9 Executive (the “Advisor”).

1.6 CHANGES TO THE AGREEMENTBecause the Standards of Practice, as well as the business environment, may periodically change, the Company reserves the right to amend the Agreement at its sole and absolute discretion. By submitting the Application, the prospective C9 Life Executive agrees to abide by all amendments or modifications to the Agreement that the Company elects to make. Amendments shall take effect thirty (30) days after publication of notice that the Agreement has been modified. Notice, as described above, shall be made by one or more of the following methods:

a. Posting on the Company’s official website http://www.cloud9life.com; b. Electronic mail (email); c. Inclusion in Company communications; d. Special mailings; e. Open conference calls to the C9 Executives;

The continuation of a C9 Executive’s business or a C9 Executive’s acceptance of bonuses or commissions constitutes acceptance of any and all amendments to the Agreement.

1.7 DELAYSThe Company shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond the Company’s reasonable control. This includes, without limitation, strikes, labor difficulties, riot,

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war, fire, death, curtailment of supply of a product, or government decrees or orders. Additionally, the Company does not control or influence independent system operators, vendors, or government agencies. These dependencies can affect commission payments, among other things. The Company shall be held harmless for delays in commissions or other consequences of circumstances beyond its reasonable control.

1.8 AGREEMENT AND PROVISIONS SEVERABLEIf any provision of the Agreement, in its current form or as amended, is found to be invalid or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed, and the remaining terms and provisions shall remain in full force and effect. The severed provision, or portion thereof, shall be reformed to reflect the purpose of the provision as closely as possible.

1.9 WAIVERThe Company never gives up its right to insist on strict compliance with the Agreement and the Code of Ethics. No failure of the Company to exercise any right or power under the Agreement or to insist upon strict compliance by an C9 Life Executive with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of the Company’s right to demand exact compliance with the Agreement. Waiver by the Company can be of the Company. The Company waiver of any particular breach by a C9 Life Executive shall not affect or impair the Company’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other C9 Life Executive. Nor shall any delay or omission by the Company to exercise any right arising from a breach affect or impair the Company’s rights as to that or any subsequent breach.

The existence of any claim or cause of action of a C9 Life Executive against the Company shall not constitute a defense to the Company’s enforcement of any term or provision of the Agreement.

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2.1 REQUIREMENTS TO BECOME AN C9 LIFE EXECUTIVETo become a C9 Life Executive, each applicant must:

a. Be at least eighteen (18) years of age; b. Reside in the United States or Canada; c. Have a valid: i. US Social Security Number or Federal Tax Identification Number, or

ii. CAN Social Insurance Number and GST Number if applicable; d. Purchase a C9 Life Executive Pass (the “Kit”) e. Submit a properly completed Application to the Company, to be evaluated and approved at the Company’s sole discretion;

Employees of Cloud 9 Life, its affiliates, their Immediate Household members, and employees of vendors of Cloud 9 Life are not permitted to be sponsored as a C9 Life Executive by other C9 Life Executives.

2.2 TERM AND RENEWAL OF A CLOUD 9 LIFE BUSINESS2.2.1 C9 Executive Pass (“Kit”)All C9 Life Executives are required to pay a one-time Executive Pass fee of $59.99 or $49.99 at time of sponsorship with EZ Ship selection.

2.2.2 Annual Renewal FeeThe term of the Agreement is one (1) year from the date of the Company’s acceptance of the C9 Life Executive’s Application (subject

to prior termination pursuant to Section 8). C9 Life Executives wishing to continue their Independent C9 business following the expiration of the term of the Agreement must renew the Agreement for subsequent one (1) year terms by paying an annual renewal fee of $49.99 and continuing to comply with the Agreement. Unless a C9 Life Executive requests otherwise by submitting in writing to the Company at its principal business address at least thirty (30) days prior to the renewal date, the annual renewal fee will be automatically charged to the credit card provided by the C9 Life Executive at the time of sponsoring. If the Company is unable to process the credit card on file, the C9 Life Executive will have until the first monthly commission payment after the expiration of the current term of their Agreement to make payment or their Agreement will be automatically terminated.

2.3 SPONSORINGAll Active C9 Life Executives in good standing have the right to sponsor others into the Company (limited to the criteria listed in section 2.1). Each prospective C9 Life Executive has the ultimate right to choose his/her own Sponsor. If two C9 Life Executives claim to be the Sponsor of the same new C9 Life Executive, the Company shall regard the first C9 Life Executive Application received by the Company as controlling.

A C9 Life Executive may not represent that he/she will provide any customers, or C9 Life Executives to a prospective C9 Life Executive. This means that C9 Life Executives may not offer to furnish a prospective C9 Life Executive with existing or potential customers, or C9 Life Executives.

Advertising and general advice about business development and training shall not be considered as providing customers, or C9 Life Executives. In addition, C9 Life Executives may offer to furnish a prospective C9 Life Executive with potential customers or C9 Life Executives after (but not before) an C9 Life Executive is sponsored.

2.4 CHANGE OF SPONSOR

Section 2BECOMING AN C9 LIFE EXECUTIVE

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Maintaining the integrity of sponsorship is critical for the success of every C9 Life Executive and Marketing Organization. Accordingly, the transfer of a C9 Executive business from one Sponsor to another is not permitted except as provided in this section.

2.4.1 Incorrect SponsorIn cases in which new C9 Life Executives are sponsored by someone other than the individual they were led to believe would be their Sponsor, C9 Life Executives may request that they be transferred to another organization with their entire Marketing Organization intact. Requests for transfer under this policy will be evaluated on a case- by-case basis and must be made, in writing to the Company ([email protected]), within five (5) business days from the date of being sponsored. C9 Life Executives requesting the change have the burden of proving that they were placed beneath the wrong Sponsor.

2.4.2 Reassignment of SponsorC9 Life Executives may request a change in sponsorship under the following circumstances:

a. C9 Life Executives can be re-assigned to another Sponsor within the lesser of i. 5 business days from being sponsored, or

ii. Prior to the end of the first weekly commission period

Written approval for the change in sponsorship is required from the current Sponsor, the new Sponsor, and the Company ([email protected]);

C9 Life Executives may request a change of sponsorship after the lesser of 5 business days or the end of the first commission period with written proof of any of the following:

a. Misrepresentation of income potential or facts about the company; b. Sponsor has violated policies to recruit new C9 Life Executive; c. Sponsor has cancelled or been terminated from company; or d. Sponsor has cross-recruited new C9 Life Executives for another business venture.

Written proof or other evidence will need to be sent to the company within 30 days of being sponsored. The company will then research the information submitted and will make a decision within 60 days of submitting documentation. 30 days after being sponsored and if there are no challenges made to the sponsoring process, the new C9 Life Executive can only change Sponsors upon fulfillment of all of the following requirements:

a. The C9 Life Executive seeking the organization change has submitted an Organization Change form with the original signatures of the Advisor, Sponsor, and generation upline above the C9 Life Executive with the exception of any C9 Life Executives that have asked to not be contacted; b. The C9 Life Executive seeking the organization change was sponsored 30 days ago or less; is at the status of C9 Life 1 Star Executive or below AND has less than twenty (20) Group customers; c. The requested change does not trigger any changes to “Rank” or “Paid As” title or compensation; d. The C9 Life Executive seeking the organization change has paid to the Company the applicable fee of $100 charged by the Company for organization changes; e. The Company has approved the change in writing, which the Company may withhold in its sole discretion.

C9 LIFE EXECUTIVES WAIVE ANY AND ALL CLAIMS AGAINST THE COMPANY THAT RELATE TO OR ARISE FROM CHANGES IN THE LINES OF SPONSORSHIP.

2.5 CROSS-SPONSORINGActual or attempted Cross-Sponsoring is strictly prohibited. “Cross-Sponsoring” is defined as the sponsoring of an individual who, or entity that, already has a current C9 Life Executive Agreement on file with the Company, or who has had such an agreement within the preceding six (6) calendar months, within a different line of sponsorship. The use of a spouse’s or relative’s name, trade names, DBAs,

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assumed names, corporations, partnerships, trusts, federal identification numbers, fictitious identification numbers or any strawman, or other artifice to circumvent this policy is prohibited. C9 Life Executives shall not demean, discredit, or defame other C9 Life Executives in an attempt to entice another C9 Life Executive to become part of the first C9 Life Executive’s Marketing Organization. This policy shall not prohibit the transfer of a C9 Executive business in accordance with the C9 Life Executive Handbook.

If a C9 Life Executive discovers Cross-Sponsoring, that C9 Life Executive shall bring it to the Company’s attention immediately. The Company may take disciplinary actions against the C9 Life Executive that changed organizations and/or those C9 Life Executives who encouraged or participated in the Cross-Sponsoring. The Company may also move all or part of the offending C9 Life Executive’s Marketing Organization to his/her original Marketing Organization if the Company deems it equitable and feasible to do so. However, the Company is under no obligation to move the Cross-Sponsored C9 Life Executive’s Marketing Organization, and the ultimate disposition of the organization remains within the sole discretion of the Company.

C9 LIFE EXECUTIVES WAIVE ALL CLAIMS AND CAUSES OF ACTION AGAINST CLOUD 9 LIFE ARISING FROM OR RELATING TO THE DISPOSITION OF THE CROSS-SPONSORED C9 LIFE EXECUTIVE’S MARKETING ORGANIZATION.

2.6 ASSIGNMENT OF ADVISORSponsors of new C9 Life Executives may request that new Executives be placed on either their first-level or an Advisor. Assignment of a new C9 Executive must take place before the end of the calendar month in which the new C9 Life Executive was sponsored. The Sponsor may transfer C9 Executive from one Advisor to another Advisor until the end of the calendar month in which the new C9 Life Executive was sponsored. Transfer of the new C9 Life Executive after the end of the calendar month in which the new C9 Life Executive was sponsored is strictly prohibited. Transfers before the end of the

month can be facilitated through the Sponsor’s Executive Back Office.

2.7 CANCELLATION AND REAPPLICATIONC9 Life Executives may legitimately change Marketing Organizations by voluntarily canceling the Agreement and remaining inactive (e.g., no sales of the Products, no sponsoring, no attendance at any Company functions, and no participation in any other form of C9 Life Executive activity or operation of any other C9 Life Executive business) for :

a. six (6) calendar months, if the C9 Life Executive holds a Career Title of 2 Star or lower, or b. twelve (12) calendar months if the C9 Life Executive holds a Career Title of 3 Star or higher

Following the period of inactivity, the former C9 Life Executive may reapply under a new Sponsor; however, the former C9 Life Executive’s Marketing Organization will remain in the original line of sponsorship. The Company will consider waiving the waiting period under exceptional circumstances. Such requests for waiver must be submitted in writing to the Company ([email protected]).

2.8 BUSINESS ENTITIESA corporation, Limited Liability Company (LLC), partnership, or trust (collectively, a “Business Entity”) may apply to be a C9 Life Executive.

2.8.1 One C9 Life Account Per IndividualAn individual may open and operate a maximum of one (1) C9 Life Executive Customer or Business Account. A Social Security number may be on file with only one (1) C9 Life business.

2.8.2 Two C9 Life Accounts Per HouseholdA household may open and operate a maximum of two (2) C9 Life Executive Customer or Business Accounts. A Social Security number may be on file with only one (1) C9 Life business.

2.8.3 Three C9 Life Accounts Per Business EntityAn individual may open, operate or have an

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ownership interest, legal or equitable, as a sole proprietorship, shareholder, partner, trustee, beneficiary, or member in three (3) C9 Life Ex-ecutive Customer or Business Accounts. A Social Security number or Federal Tax Identification Number may be on file with up to three (3) C9 Life businesses.

2.8.4 CorporationsIn order for a corporation to become an C9 Life Executive, the corporation shall provide the Company with the following:

a. A completed Application submitted by an authorized officer of the corporation; b. A copy of the corporate Articles of Incorporation that has been file stamped by the Secretary of State in the state of incorporation; c. A completed Business Entity Registration Form, including the full name, address, and Social Security number of (1) each shareholder of the corporation who owns more than 5% of the outstanding stock of the corporation; (2) each officer of the corporation; and (3) each director of the corporation; d. A copy of the official notification from the Internal Revenue Service issuing the Employer Identification Number (EIN) for the corporation; e. A copy of the corporate resolution authorizing the corporation to enter into the Agreement; and f. A letter from the corporation designating one individual, who must be at least eighteen (18) years of age, as the responsible party for the corporation’s operations and sales.

It is not permissible for any shareholder, officer, or director of a corporation that is applying to be an C9 Life Executive to have been within six (6) calendar months preceding the execution of the Application an C9 Life Executive: (1) as an individual, (2) as a partner of another C9 Life Executive partnership, (3) as a stockholder, officer, or director of an C9 Life Executive

corporation, (4) as a member of another C9 Life Executive limited liability company, or (5) as a trustee or a beneficiary of an C9 Life Executive trust.

2.8.5 LLCsIn order for a LLC to become an C9 Life Executive, the LLC shall provide the Company with the following:

a. A completed Application submitted by a member or manager of the LLC with authority to enter into the Agreement; b. A copy of the Articles of Organization that has been file stamped by the Secretary of State in the state of organization; c. A completed Business Entity Registration Form, including the full name, address, and Social Security number of each member, manager and officer of the LLC along with a copy of the LLC Operating Agreement; d. A copy of the official notification from the Internal Revenue Service issuing the Employer Identification Number (EIN) for the LLC; and e. A letter from the LLC designating one individual, who must be at least eighteen (18) years of age, as the responsible party for the LLC’s operations.

It is not permissible for any member or manager of a limited liability company that is applying to be an C9 Life Executive to have been within six (6) calendar months preceding the execution of the Application an C9 Life Executive: (1) as an individual, (2) as a partner of another C9 Life Executive partnership, (3) as a stockholder, officer, or director of an C9 Life Executive corporation, (4) as a member of another C9 Life Executive limited liability company, or (5) as a trustee or a beneficiary of an C9 Life Executive trust.

2.8.6 PartnershipsIn order for a partnership to become an C9 Life Executive, the partnership shall provide the Company with the following:

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a. A completed Application submitted by a partner with authority to enter into the Agreement; b. A copy of the partnership agreement executed by all partners; c. A completed Business Entity Registration Form, including the full name, address, and Social Security number of each partner; d. A copy of the official notification from the Internal Revenue Service issuing the Employer Identification Number (EIN) for the partnership; e. A copy of the consent of the partnership to enter into the Agreement; and f. A letter from the partnership designating one individual, who must be at least eighteen (18) years of age, as the responsible party for the partnership’s operations.

It is not permissible for any partner or limited partner of a partnership that is applying to be an C9 Life Executive to have been within six (6) calendar months preceding the execution of the Application an C9 Life Executive: (1) as an individual, (2) as a partner of another C9 Life Executive partnership, (3) as a stockholder, officer, or director of an C9 Life Executive corporation, (4) as a member of another C9 Life Executive limited liability company, or (5) as a trustee or a beneficiary of an C9 Life Executive trust.

2.8.7 TrustsIn order for a trust to become a C9 Life Executive, the trust shall provide the Company with the following:

a. A completed Application submitted by all trustees of the trust; b. A complete copy of the trust agreement; c. A completed Business Entity Registration Form, including the full name, address, and Social Security number of each trustee and beneficiary; d. A copy of the official notification

from the Internal Revenue Service issuing the Employer Identification Number (EIN) for the trust; and e. A letter from the trustees designating one individual, who must be at least eighteen (18) years of age, as the responsible party for the trust’s operations and sales.

It is not permissible for any trustee or beneficiary of a trust applying to be a C9 Life Executive trust to have been an C9 Life Executive: (1) as an individual; (2) as a partner of a C9 Life Executive partnership; (3) as a stockholder, officer, or director of an C9 Life Executive corporation; or (4) as a trustee or a beneficiary of another C9 Life Executive trust, within six (6) calendar months pre ceding the trust’s execution of the Application.

2.8.8 Changes to a Business EntityC9 Life Executives may change their status under the same Advisor from an individual to a corporation, partnership, LLC, trust, or from one type of entity to another. C9 Life Executives seeking such a change must comply with Section 2.6. There is a $100.00 fee for each change requested, which must be included with a new Application in a new name. Such changes shall be processed only once per year and must be submitted by November 30 to become effective on January 1 of the following year.

2.9 ACTIONS OF HOUSEHOLD MEMBERS OR AFFILIATED INDIVIDUALSIf any member of an C9 Life Executive’s immediate household engages in any activity which, if performed by the C9 Life Executive, would violate any provision of the Agreement, such activity will be deemed a violation by the C9 Life Executive and the Company may take disciplinary sanctions pursuant to the Policies against the C9 Life Executive. Similarly, if any individual C9 Life Executive in any way with a corporation, partnership, LLC, or trust (“Affiliated Individual”) violates the Agreement, such action(s) will be deemed a violation by the entity, and the Company may take disciplinary sanctions against the entity.

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3.1 GENERAL MARKETING STANDARDSWhen promoting the Company to any prospective Customer, C9 Life Executives must adhere to the following general marketing standards:

a. Identify himself or herself as an Independent C9 Life Executive of the Company, who is not an employee of Cloud 9 Life, nor acting on behalf of the Company; b. Provide clear and accurate information about C9 Life Products including disclosures about pricing and ingredients; c. Be professional and courteous to all potential and current Customers of C9 Life; d. When signing up customers, you AGREE TO DISCLOSE THE COMPANY’S POLICIES REGARDING DEPOSIT OPTIONS (IF APPLICABLE). PRIOR TO THE EXECUTION OF THE CUSTOMER SUBSCRIPTION FORM BY THE CUSTOMER, YOU MUST ORALLY INFORM THE CUSTOMER OF APPLICABLE TERMS AND CONDITIONS AND YOU MUST DIRECT THE CUSTOMER TO THE TERMS AND CONDITIONS PRESENTED ON THE CUSTOMER APPLICATION.

3.2 ADHERENCE TO THE C9 LIFE MARKETING AND COMPENSATION PLAN

C9 Life Executives shall adhere to the terms of the Compensation Plan as set forth in official Company literature. C9 Life Executives shall not:

a. Offer the C9 Life Opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official Company literature; b. Require or encourage other current or prospective Customers or C9 Life Executives to participate in the C9 Life Opportunity in any manner that varies from the program as set forth in official Company literature; c. Require or encourage other current or prospective Customers or C9 Life Executives to execute any agreement or contract other than official Company agreements and contracts; and d. Require or encourage other current or prospective Customers or C9 Life Executives to make any purchase from, or payment to, any individual or other entity to participate in the Compensation Plan other than those purchases or payments identified as recommended or required in official Company literature.

The Company will investigate customer inquiries and complaints concerning a C9 Life Executive’s marketing practices. Disciplinary Sanctions as provided in Section 6.1 shall be taken when deemed appropriate by the Company.

3.3 “WARM MARKET”C9 Life Products and the C9 Life Opportunity are designed primarily to be marketed through an C9 Life Executive’s “Warm Market”. For the purpose of this document, “Warm Market” is defined as an individual with whom the C9 Life Executive has an “established business or personal relationship”. This means a prior or existing relationship formed by a voluntary two way communication between an C9 Life Executive and a person, on the basis of:

a. The prospect’s purchase, rental, or lease of goods or Products from the C9 Life Executive, or a financial transaction between the prospect and

Section 3OPERATING AN INDEPENDENT CLOUD 9 LIFE BUSINESS

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the C9 Life Executive, within the eighteen (18) months immediately preceding the date of a solicitation to induce the prospect’s purchase of C9 Life products or being sponsored in the C9 Life Opportunity; b. An inquiry, application, purchase or transaction by the person regarding products offered by such C9 Life Executive; or c. A personal or familial relationship, which relationship has not been previously terminated by either party;

3.4 PROHIBITED MARKETING METHODS AND PRACTICESCertain methods and practices may not be employed at any time to market, offer, promote, or advertise the products, Products, or opportunity of Cloud 9 Life products, its compensation plan, or any other aspect of the company. C9 Life Executives who fail to comply with Section 3.4 will be subject to the Disciplinary Sanctions set forth in Section 6.1.

3.4.1 Unauthorized Transactions An “Unauthorized Transaction” is any purchase of a product or service which is unauthorized by a customer. Unauthorized Transactions at Cloud 9 Life is strictly prohibited by the Policies and Procedures and will result in the immediate termination of the Independent C9 Life Executive Agreement and forfeiture of all commissions, bonuses and other payments. In addition, the Company may take legal action against the C9 Life Executive to recover actual and consequential damages, fines, penalties, costs, attorney’s fees, and other expenses and relief. The Federal Trade Commission (FTC), State Attorneys General and other governing regulatory agencies have rules that govern, and violations may carry criminal penalties.

3.4.2 Door-to-Door Sales“Door-to-Door” sales are prohibited for the purpose of acquiring Customers or C9 Life Executives.

3.4.3 Telemarketing/Cold CallingThe term “telemarketing” means the placing

of one or more telephone calls to an individual or entity to induce the purchase of a C9 Life product or service, or to recruit them for the C9 Life opportunity. Furthermore, “cold calling” is defined as calls placed to prospects that are not in the C9 Life Executive’s “Warm Market”.

C9 Life Executives must not engage in telemarketing and/or cold calling in the operation of their C9 Life businesses. The Federal Trade Commission and the Federal Communications Commission each have laws that restrict telemarketing practices. Both federal agencies (as well as a number of states and territories) have “do not call” regulations as part of their telemarketing laws. Although the Company does not consider C9 Life Executives to be “telemarketers” in the traditional sense of the word, these government regulations broadly define the term “telemarketer” and “telemarketing” so that your inadvertent action of calling someone whose telephone number is listed on the federal “do not call” registry could cause you to violate the law. Moreover, these regulations must not be taken lightly, as they carry significant penalties.

However, a telephone call(s) placed to a prospective customer or C9 Life Executive (a “prospect”) in the C9 Life Executive’s “Warm Market” is not considered a cold call and is therefore permissible, as long as the calls are on an occasional basis only and not a routine practice. Door-to-Door sales are prohibited for the purpose of acquiring Customers or C9 Life Executives.

In addition, C9 Life Executives shall not:

a. Use automatic telephone dialing systems or software relative to the operation of their C9 Life businesses; b. Place or initiate any outbound telephone call to any person that delivers any pre-recorded message (a “robocall”) regarding or relating to the C9 Life products or opportunity;

3.4.4 Unsolicited Facsimile Transmissions (Fax)“Unsolicited Faxes” means the transmission via telephone facsimile or computer to any person not known to the C9 Life Executive. Faxes may

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be sent to:

a. Any person with that person’s prior express invitation or permission; b. Any person with whom the C9 Life Executive has an established business or personal relationship;

3.4.5 Email Solicitation (SPAM)C9 Life Executives are prohibited from sending emails outside of their Warm Market for the purpose of acquiring Customers or C9 Life Executives.

3.4.6 Flyers/PamphletsThe distribution of flyers or pamphlets not produced by Cloud 9 Life (as outlined in 3.6.1) for the purpose of acquiring customers or C9 Life Executives is prohibited.

3.4.7 Flea Markets/Garage Sales/Swap MeetsC9 Life Executives are prohibited from marketing at these events, as they are not conducive to the professional image the Company wishes to portray.

3.4.8 TV/Radio AdvertisingC9 Life Executives shall not utilize radio or television media for the advertising or promotion of the Products or the C9 Life Opportunity.

3.4.9 Job/Employment AdvertisingC9 Life Executives are strictly prohibited from marketing the C9 Life Opportunity on employment and/or job board resources, including but not limited to monster.com, careerbuilder.com, and simplyhired.com.

3.5 PERMITTED MARKETING PRACTICES AND METHODSMarketing Practices and Methods described in this section are permitted by the Company. However, C9 Life Executives must adhere to the stated procedures for each practice when marketing the C9 Life Opportunity or its Products. C9 Life Executives who fail to comply with Section 3.5 will be subject to the Disciplinary Sanctions set forth in Section 6.1.

3.5.1 EmailsC9 Life Executives are permitted to use Email to market, sell, advertise, promote, or discuss

the C9 Life Opportunity and the Products. Mass emails/ SPAM as described in section 3.4.6 above are not permitted.

In addition to the General Marketing Standards in Section 3.1, a C9 Life Executive using email solicitation must comply with the following:

a. Have a functioning return email address to the sender; b. Include a notice in the email that advises the recipient that they may reply or that future email solicitations have an “opt- out” notice. All “opt-out” requests must be honored; c. Include their physical mailing address; d. Clearly disclose that the message is an advertisement or solicitation; and e. Use of deceptive subject lines or false header information is prohibited.

3.5.2 Social MediaSocial Media sites are relationship-building sites, and the Company recognizes their importance to the sales process. As such, C9 Life Executives may use social media (e.g., blogs, glogs, chat rooms, etc.) or social networks (e.g., Instagram, Facebook, Snapchat, MySpace, Bebo, Friendster, Linkedln, etc.) to market, sell, advertise, and promote C9 Life Opportunity and the Products. Ultimately, social media sites should lead prospective Customers and C9 Life Executives to a C9 personalized website, or a website authorized by the Company.

3.5.3 WebsitesC9 Life Executives of Career Title 3 Star and above are permitted to create their own internet web page to promote their C9 Life business. Websites created by C9 Life Executives must be reviewed and approved by the Company ([email protected]) prior to deployment.

All other C9 Life Executives must use the Company’s personalized website program only. This program permits C9 Life Executives to advertise on a website that can be personalized with the C9 Life Executive’s message and contact information. These websites seamlessly link directly to the official C9 Life website giving the C9 Life Executive a professional and Company-approved presence on the Internet.

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Except as specifically provided in this section, the use of any other internet website or web page to in any way promote the sale of the Products or to promote the C9 Life Opportunity or the Compensation Plan is a breach of the Agreement and may result in any of the Disciplinary Sanctions set forth in Section 6.1.

3.5.4 Links and Banner AdsC9 Life Executives may place banner ads and links to their C9 Life Personalized Websites on third-party websites, provided the C9 Life Executive uses Company created and approved banner ads, templates, and images. The third-party website shall not:

a. Contain links or banner ads for any other Direct Selling company; b. Promote in any way another Direct Selling company; c. Contain any content or material that could be construed as offensive, controversial, or distasteful; and d. Contain content and materials that are inappropriate for all age groups.

In addition, C9 Life Executives may not use “blind” ads on the Internet that make claims or representations that are ultimately advertisements of the Products, the C9 Life Opportunity, or the Compensation Plan.

Prior to placing a link or banner ad on a third-party website, the C9 Life Executive must submit the Uniform Resource Locator (URL) of the third-party website for review to the Company ([email protected]). If the Company determines that the third-party website is acceptable for display of a C9 Life banner ad or link, the Company will notify the C9 Life Executive in writing. Unless a C9 Life Executive receives written approval from the Company, the request shall be deemed denied. If following approval, the Company at its sole discretion, determines that the third-party website does not meet the above standards, the C9 Life Executive shall immediately remove the banner ad(s) or link(s) upon demand by the Company.

All banner ads must link to C9 Life.

C9 Life Executive’s Personalized Website, or personally created website (as described in Section 3.5.3). When directing readers to an C9 Life Personalized or personally created website, it must be evident to a reasonable reader, from a combination of the link and the surrounding content that the link will go directly to a C9 Life Personalized Website. Attempts to mislead internet traffic into believing they are going to a C9 Life Personalized Website, when in fact they land at another website is prohibited. The determination as to what is misleading or what constitutes a reasonable reader will be at the Company’s sole discretion.

3.5.5 Search Engine AdvertisingC9 Life Executives of Career Title 3 Star or higher and above are permitted to utilize search engine advertising (e.g., Google, Bing, etc.) to market the C9 Life Opportunity. However, the use of the Company’s trade names, trademarks, service names, product names, the Company’s name, or any derivative thereof for a search keyword is prohibited.

3.5.6 Trade ShowsC9 Life Executives of Career Title 1 Star and above are permitted to market the C9 Life Opportunity at Trade Shows. All C9 Life Executives must receive written approval from the Company prior to attending a Trade Show to solicit Customers or C9 Life Executives. A “Trade Show” means an event or exhibition where the C9 Life Executive displays Company information to potential Customers or C9 Life Executives. It is the Company’s policy to authorize only one (1) C9 Life Executive per Trade Show. The process for receiving approval to attend a Trade Show is as follows: (1) submit a completed Trade Show Application to the Company ([email protected]); (2) receive written confirmation from the Company that the Trade Show is available to be reserved; (3) within fourteen (14) calendar days of written confirmation that the Trade Show is available to be reserved, provide an official advertisement of the event, a copy of the signed contract by both the C9 Life Executive and event official and a receipt of a paid deposit. In the event that the C9 Life Executive does not provide the required information within fourteen (14) calendar days, the Company will

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open the Trade Show for other C9 Life Executives to attend. C9 Life Executives marketing through Trade Shows will be required to purchase an official C9 Life Identification Badge by contacting the C9 Life Success Team at www.Cloud9Life.com prior to engaging in these activities.

In addition to the General Marketing Standards in Section 3.1, C9 Life Executives with a display at a Trade Show must adhere to the following standards:

a. Visibly display the official C9 Life Identification Badge at all times when soliciting Customers or C9 Life Executives; b. Provide the potential Customer with approved written materials regarding Company Products immediately upon request; and c. Provide [email protected] for inquiries, verification, and complaints.

As indicated above, the Company will not provide approval for: (1) flea markets; (2) garage sales; or (3) swap meets, as these events are not conducive to the professional image the Company wishes to portray. In addition, the Company further reserves the right to refuse authorization to participate in any function that it does not deem suitable for the Company.

3.5.7 CraigslistIf an C9 Life Executive wishes to utilize Craigslist, they must first receive prior written approval from the Company. Written approval can be attained by submitting the proposed Craigslist post to the Company at [email protected]. Unless a C9 Life Executive receives written approval from the Company, the request shall be deemed denied. If following approval, the Company determines at its sole discretion that the Craigslist post is no longer in compliance, the C9 Life Executive shall immediately remove the Craigslist post upon receipt of written notification from the Company.

3.6 ADVERTISINGThe Company has carefully designed the

Compensation Plan and promotional materials intending that they be promoted in a fair and truthful manner, that they are substantiated, and that the materials comply with the requirements of applicable laws.

C9 Life Executives shall safeguard and promote the good reputation of the Company and the Products. The marketing and promotion of the Company, the C9 Life Opportunity, the Compensation Plan, and the Products shall be consistent with the public interest, and must avoid all inflammatory, defamatory, discourteous, deceptive, misleading, unethical, or immoral conduct or practices. Failure to comply with the provisions of this section constitute a material breach of the Policies and Procedure and may result in the imposition of the Disciplinary Sanctions set forth in Section 6.1.

3.6.1 Sales Aids and Support MaterialsC9 Life Executives of Career Title 3 Star and above are permitted to create their own sales aids and support materials. Sales materials created by C9 Life Executives must be reviewed and approved by the Company ([email protected]) prior to deployment.

All other C9 Life Executives must exclusively use the sales aids and support materials produced by the Company. Company approved and produced sales aids and support materials are available in the Executive Back Office.

3.6.2 Domain Names and Email AddressesC9 Life Executives shall not use or attempt to register any of the Company’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, for any internet domain name. Nor shall C9 Life Executives incorporate or attempt to incorporate any of the Company’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, into any email address.

3.6.3 Trademarks and CopyrightsThe Company will not allow the use of its trade names, trademarks, designs, or symbols by any person, including C9 Life Executives, without its prior, written permission. C9 Life Executives may not produce for sale or distribution any recorded

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Company events and speeches without express written permission from the Company. Nor may C9 Life Executives reproduce for sale or for personal use any recording of Company-produced audio or video presentations.

The name of Cloud 9 Life and other names as may be adopted by the Company are proprietary trade names, trademarks, and service marks of the Company. As such, these marks are of great value to the Company and are supplied to C9 Life Executives for their use only in an expressly authorized manner. Use of Company name on any item not produced by the Company is prohibited except as follows:

C9 Life Executive’s Name Independent C9 Life Executive #0723

C9 Life Executives may list themselves as an “C9 Life Executive” in the white, yellow or online pages of a telephone directory under their own name. C9 Life Executives shall not identify themselves as a C9 Life consultant, distributor, broker, or any Career Title other than C9 Life Executive. C9 Life Executives shall not place telephone directory display ads using the Company’s names or logos. C9 Life Executives shall not answer the telephone by saying “Cloud 9,” “Cloud 9 Life,” or in any other manner that would lead the caller to believe that he/she has reached the Company offices.

3.6.4 Reassignment of Trade NamesC9 Life Executives agree to immediately re assign to the Company any registration of the Company names, trade names, trademarks, or Internet domain names registered or reserved in violation of this policy. The provisions of this section survive the termination of the Agreement. Failure to do so will result in immediate termination of the Agreement.

3.7 UNAUTHORIZED CLAIMS AND ACTIONS3.7.1 IndemnificationC9 Life Executives are fully responsible for all of their verbal and written statements made regarding the Company, the Products, the Compensation Plan and the Agreement that are not expressly contained in official C9 Life

materials. C9 Life Executives agree to indemnify the Company and the Company’s affiliates, members, directors, officers, employees, and agents, and hold them harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by the Company as arising out of or related to the Executive’s actions or omissions. This provision shall survive the termination of the Agreement.

3.7.2 Income ClaimsBecause C9 Life Executives do not have the data necessary to comply with the legal requirements for independently making claims regarding income level or income potential, C9 Life Executives shall not make such claims or statements beyond what is specifically and expressly authorized by the Company. C9 Life Executives shall not make other income projections, income claims, or disclosure of C9 Life Executive income (including the showing of checks, copies of checks, bank statements, or tax records). Moreover, the Federal Trade Commission and several states have laws or regulations that regulate or even prohibit certain types of income claims and testimonials made by persons engaged in Direct Selling. Thus, when discussing the income potential available through the C9 Life Opportunity, C9 Life Executives may use only those materials produced by the Company and may not make any claims inconsistent with such materials.

3.8 CONFLICTS OF INTERESTC9 Life Executives are free to participate in other Direct Selling business ventures or marketing opportunities. However, during the term of the Agreement, C9 Life Executives shall not directly or indirectly recruit other C9 Life Executives or Customers for any other Direct Selling business. The term “recruit” means the actual or attempted sponsorship, solicitation, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another C9 Life Executive or Customer to be sponsored or participate in another Direct Selling opportunity. The conduct described in the preceding sentence constitutes recruiting even if the C9 Life Executive’s actions

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are in response to an inquiry made by another C9 Life Executive or Customer.

Following the cancellation of an C9 Life Executive’s Agreement, and for a period of six (6) calendar months thereafter, a former C9 Life Executive shall not recruit any active C9 Life Executive or Customer for another Direct Selling business.

C9 Life Executives and the Company under stand and agree that because Direct Selling is conducted through networks of independent con tractors dispersed across the entire United States and internationally, and because business is commonly conducted via the Internet and telephone, an effort to narrowly limit the geographic scope of this non-solicitation provision would render it wholly ineffective. Therefore, C9 Life Executives and the Company agree that this non-solicitation provision shall apply to all markets in which the Company conducts business.

3.8.1 Targeting Other Direct SellersThe Company does not condone C9 Life Executives consciously targeting the sales force of another specific Direct Selling company to sell the Products or to become C9 Life Executives. Nor does the Company condone the solicitation or enticement of members of the sales force of another Direct Selling company to violate the terms of their contract with such other company. Should an C9 Life Executive engage in such activity, the C9 Life Executive bears the risk of being sued by the other Direct Selling Company. If any lawsuit, arbitration, or mediation is brought against C9 Life Executives alleging that they engaged in inappropriate recruiting activity of its sales force or customers, the Company will not pay any of the C9 Life Executive’s defense costs or legal fees and will not indemnify the C9 Life Executive for any judgment, award, or settlement.

3.8.2 C9 Life Executive Participation in Other Direct Selling ProgramsIf C9 Life Executives are engaged in other non-C9 Direct Selling programs, it is the responsibility of those C9 Life Executives to ensure that their C9 business is operated entirely separate and apart

from any other program in which the C9 Life Executives participate. To this end, the following must be adhered to:

a. C9 Life Executives shall not display C9 promotional materials or sales aids with or in the same location as any non-C9 Life promotional materials, sales aids, products or Products; b. C9 Life Executives shall not offer the Products or promote the C9 Life Opportunity to prospective or existing Customers or C9 Life Executives in conjunction with any non-C9 Life program, opportunity, product, or service; c. If C9 Life Executives are participants in any competing Direct Selling program that sells or distributes nutritional products, C9 Life Executives shall not discuss or attempt to sell such Products to other C9 Life Executives or d. C9 Life Executives shall not offer any non-C9 Life Opportunity, products, or Products at any C9 Life related meeting, seminar, or convention, or within two (2) hours and a five (5) mile radius of the C9 Life event. If the C9 Life meeting is held telephonically or via the Internet, any non-C9 Life meeting must be at least two (2) hours before or after the C9 Life meeting, and on a different conference telephone number or internet web address from the C9 Life meeting; and e. Any C9 Life Executives that achieve the Career Title of 3 Star must disclose any other Direct Selling company with which they are involved by sending an e-mail to the Company ([email protected]).

3.9 EXECUTIVE BACK OFFICE ACCESSThe Company’s online Executive Back Office provides C9 Life Executives access to confidential and proprietary information that may be used solely and exclusively to promote the

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development of a C9 Life Executive’s business and to increase sales of the Products. However, access to the Executive Back Office is a privilege, and not a right. The Company reserves the right to deny C9 Life Executives’ access to the Back Office at its sole discretion.

Buying or selling or inducing others to buy or sell C9 Life Executive, Customer, prospective C9 Life Executive, or prospective Customer information is always strictly prohibited. C9 Life Executives shall not provide any type of incentive for any action or proposed action to induce a C9 Life Executive or third party to sell any information pertaining to a C9 Life Executive, Customer, prospective C9 Life Executive, or prospective Customer.

3.9.1 Organizational Activity (Genealogy) ReportsOrganizational Activity Reports are available for C9 Life Executive access and viewing in the Executive Back Office. Access to online Organizational Activity Reports is password protected. All Organizational Activity Reports and the information contained therein are confidential and constitute proprietary information and trade secrets belonging to the Company. Organizational Activity Reports are provided to C9 Life Executives in strictest confidence and are made available to C9 Life Executives for the sole purpose of assisting C9 Life Executives in working with their respective Marketing Organizations in the development of their C9 Life business. C9 Life Executives should use their Organizational Activity Reports to assist, motivate, and train their Organization C9 Life Executives. The C9 Life Executive and the Company agree that, but for this agreement of confidentiality and nondisclosure, the Company would not provide Organizational Activity Reports to the C9 Life Executive. C9 Life Executives shall not, on their own behalf, or on behalf of any other person, partnership, association, corporation, or other entity: Directly or indirectly use or disclose any information contained in any Organizational Activity Report to any third party;

a. Directly or indirectly disclose the password or other access code to their Organizational Activity Report; b. Use the information contained in any

Organizational Activity Report to compete with the Company or for any purpose other than promoting or supporting their C9 Life business; or c. Recruit or solicit any C9 Life Executive or Customer listed on any Organizational Activity Report or in any manner attempt to influence or induce any C9 Life Executive or Customer to alter their business relationship with the Company.

3.10 GOVERNMENTAL APPROVAL OR ENDORSEMENTDirect Selling companies or programs are not approved or endorsed by Federal or State regulatory agencies (or their officials). Therefore, C9 Life Executives shall not represent or imply that the Company or the Compensation Plan have been approved, endorsed, or otherwise sanctioned by any government agency.

3.11 INSURANCEAs independent contractors of Cloud 9 Life, C9 Life Executives are not covered by the Company’s insurance. C9 Life Executives may wish to arrange insurance coverage for their business. Even if a C9 Life Executive has homeowner’s insurance, renter’s insurance, or automobile insurance, certain events or accidents may not be covered if they occur within the scope of commercial activities, such as those involved in building, operating, or managing a C9 Life business. Accordingly, you should review your business insurance needs with a qualified insurance agent.

3.12 MARKETSC9 Life Executives may only promote, offer, or sell the Products in certain markets. The promotion, offer, marketing, or sale of the Products in any other markets other than those permitted by the Company, as indicated on Cloud9Life.com is strictly prohibited. In some markets, not all of the Products will be available. As additional markets are opened for the sale of the Products, the Company will announce such markets and availability to all C9 Life Executives. The Company makes no representation, warranty, or

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guarantee that the Products will be available in any additional markets.

3.13 ADHERENCE TO LAWS AND ORDINANCESC9 Life Executives shall comply with all international, federal, state, and local laws and regulations in the conduct of their businesses. Many countries, cities and counties have laws regulating certain home-based businesses. In most cases these ordinances are not applicable to C9 Life Executives because of the nature of their business. However, C9 Life Executives must obey those laws that do apply to them. If a city or county official tells a C9 Life Executive that an ordinance applies, the C9 Life Executive shall be polite and cooperative, and immediately send a copy of the ordinance to the Company ([email protected]). In many cases there are exceptions to the ordinance that may apply to C9 Life Executives. In addition, the Company provides information about and links to applicable international and state laws and regulations in the Back Office.

3.14 MEDIA INQUIRIESC9 Life Executives shall not attempt to respond to media inquiries regarding the C9 Life Opportunity, the Products, or their Independent C9 Life business. All inquiries by any type of media must be immediately referred to the Company ([email protected]). This policy is designed to assure that accurate and consistent information is provided to the public.

3.15 INCOME CLAIMS C9 Life Executives shall not misrepresent the actual or potential income that may be earned under the Compensation Plan. Any representation about earnings must be based on documented facts, placed in the appropriate context, and accompanied by the appropriate disclosures. It is the responsibility of the C9 Life Executive to include all relevant information to ensure that any representation made is not misleading.

3.16 PRODUCT AND WEIGHT LOSS CLAIMS When describing Cloud 9 Life products and a C9 Life Executive’s experience with C9 Life, including the use of testimonials, C9 Life Executives shall only describe Cloud 9 Life products in a manner that is consistent with the product claims contained in official Cloud 9 Life marketing materials or as otherwise approved in advance in writing by Cloud 9 Life. When making any approved product claim or weight loss claim, a C9 Life Executive agrees to accompany the claim with any required disclaimers, copies of which can be obtained in your Executive Back Office. It is the responsibility of the C9 Life Executive to include all relevant information to ensure that any representation made is not misleading. C9 Life Executives shall not represent that any Cloud 9 Life product is intended to diagnose, treat, prevent or cure any condition or disease.

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4.1 PURCHASING CLOUD 9 LIFE PRODUCTS There is no requirement to be sponsored in the Compensation Plan or commit to a minimum order to purchase Cloud 9 Life products. Retail Customers may purchase Cloud 9 Life products directly from C9 Life Executives, either in person or by placing an order through an C9 Life Executive’s Personalized Website. In exchange for an annual membership fee, C9 Life Executives may purchase Cloud 9 Life products directly from Cloud 9 Life at a discount. C9 Life Executives are also eligible to earn compensation pursuant to the Compensation Plan based on sales of Cloud 9 Life products to Retail Customers and C9 Life Executives. Cloud 9 Life reserves the right to adjust the price of its products or services at any time. Although C9 Life Executives are required to achieve certain levels of personal sales (which may include retail sales) to earn compensation under the Compensation Plan, C9 Life Executives are not required to purchase any Cloud 9 Life products or participate in the product subscription service to become or remain a C9 Life Executive.

4.2 INVENTORY PURCHASES The Cloud 9 Life Compensation Plan is based on sales of Cloud 9 Life products to end consumers. To help ensure that C9 Life Executives are purchasing the amount of product that can be consumed or sold within a reasonable amount of time, only orders equal to or less than $700 will be accepted and processed. Before an order will be accepted, an C9 Life Executive must certify that products representing at least 70% of his or her prior purchases have been consumed by or

sold to end consumers (which may include the C9 Life Executive and his or her family). Product subscription service Customers may purchase products only for personal use, and not for resale. Cloud 9 Life prohibits any scheme to purchase products, either directly or through others, for the primary purpose of qualifying any Title, for commissions, or bonuses.

4.3 PAYMENTS AND PAYMENT AUTHORIZATION All orders must be accompanied by proper payment, including all applicable shipping and handling fees and sales taxes. We accept payment in various forms, including cashier’s checks, money orders, Visa, MasterCard, American Express, Discover Card, electronic checking, Cloud Cash and C9 Gift Cards, to the extent such payment methods are available. If paying by check, please allow three to five business days for your check to process. Orders will be shipped upon our actual receipt and clearance of payment. When ordering directly or through the product subscription service, C9 Life Executives authorize Cloud 9 Life to withdraw payment according to the method of payment on file (including any and all sales taxes and all shipping and handling charges). If payment is not made within a timely manner, C9 Life Executives authorize Cloud 9 Life to withhold the amount owed from commission and bonus

4.4 ORDER CONFIRMATIONS For each order placed, an order confirmation email will be sent to the email address on file and the product will be shipped to the designated shipping address. It is a C9 Life Executive’s responsibility to ensure that Cloud 9 Life has a current email address and shipping address. Cloud 9 Life is not responsible for non-receipt of order confirmations due to invalid email addresses or non-delivery of product orders due to invalid or incorrect shipping addresses. Orders must be received by Cloud 9 Life before 3:59 a.m. Pacific Standard Time to ensure that they are counted toward the previous day’s or month’s Business Volume. Standard orders will ship the following business day.

Section 4Cloud 9 Life Products

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4.5 AUTOSHIP ORDER PROGRAMFor a C9 Life Executive’s convenience, they may subscribe in Cloud 9 Life’s product EZ Ship, depending on market availability. This service can ensure that a C9 Life Executive receives Cloud 9 Life products on a recurring schedule every 28 days. EZ Ship orders are delivered automatically every 28 days unless they are deferred. C9 Life Executives can choose from a wide variety of pre-selected product bundles, or C9 Life Executives can combine any variation of individual products to suit their needs. C9 Life Executives can also change or cancel their EZ Ship at any time. Changes must be received by Cloud 9 Life at least five days in advance of the processing date or it will not be implemented until the next month. If a C9 Life Executive wants to cancel their EZ Ship, they can contact our Success Team online at www.Cloud9Life.com during normal business hours at least 24 hours prior to the order processing date or update product shipment preferences in their account. Any C9 Life Executive who sets up an account to order for another person will be subject to corrective action, up to and including termination of his or her Position and other action as appropriate.

4.6 RESALE OF PRODUCTS Only C9 Life Executives are eligible to purchase Cloud 9 Life products for resale. Customers may purchase Cloud 9 Life products for their own use but may not resell Cloud 9 Life products to others. Cloud 9 Life products shall not be displayed or sold on a retail basis (including, but not limited to, online auctions, retail websites, infomercials and television salons, spas, offices, health clubs, and weight clinics) or in any jurisdiction where resale is not permitted.

4.7 SALES TAXIf a C9 Life Executive is a resident of a state or jurisdiction where Cloud 9 Life collects sales taxes, we will collect and remit sales taxes on behalf of the C9 Life Executive, based on the tax rate in the jurisdiction where the product will be shipped. The tax collected is typically calculated as follows: (a) C9 Life Executive and EZ Ship orders for personal use will be taxed on the

wholesale cost; (b) C9 Life Executive orders for resale will be taxed on the suggested retail price; (c) Retail Customer orders will be taxed on the actual sales price; and (d) for all orders, the price subject to sales tax will include the shipping charge if the jurisdiction where the products are shipped requires sales tax be charged on this cost. As an independent contractor, C9 Life Executives are responsible for declaring and paying all applicable taxes. As a C9 Life Executive, you agree to indemnify Cloud 9 Life and hold Cloud 9 Life harmless for any liability that we may incur as a result of your failure to properly declare whether certain product sales are for personal or retail use, or any failure on your part to properly declare or pay applicable taxes.

4.8 SATISFACTION GUARANTEEIf for any reason a C9 Life Executive is not completely satisfied with any Cloud 9 Life product that is purchased directly from Cloud 9 Life, C9 Life Executive’s may receive a full refund, credit, or an exchange if the product(s) is returned with proof of purchase to Cloud 9 Life within 30 days of the original invoice date, or to the applicable C9 Life Executive if the product(s) were purchased directly from an C9 Life Executive on a retail basis. Commissions previously paid for the sale of such products will be deducted from future commission payments to those who received such commissions. Marketing materials and other sales-aids are not returnable under this policy unless otherwise required by law. Shipping and handling costs are not refundable. Cloud 9 Life may consider accepting additional returns on a case-by-case basis, but reserves the right to deny any refund, credit, or exchange and/or cancel the Position of anyone who abuses this Satisfaction Guarantee. Please allow at least 30 days for any refund to be processed.

4.9 CANCELLATION BUY-BACK POLICY To protect C9 Life Executives who decide to cancel their EZ Ship order to prevent accumulating more Cloud 9 Life products than they can sell or use within a reasonable time, Cloud 9 Life will

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buyback, on reasonably commercial terms (at a price of not less than 90% of the original net cost less appropriate set offs, including shipping and handling, and legal claims, if any), all currently marketable inventory purchased by that C9 Life Executive for resale within the 12 months prior to the date of cancellation. “Currently marketable inventory” does not typically include items that have been discontinued or are within six months of expiring, seasonal items, and special promotional items. Cloud 9 Life reserves the right not to repurchase products or issue refunds on products that have been falsely certified as having been consumed or sold. Cloud 9 Life will charge back all commissions and bonuses paid relating to the purchase of any returned products. In jurisdictions that require a different buy-back policy, Cloud 9 Life will conform to that jurisdiction’s policy. To initiate a buy-back request, please send a written request to Cloud 9 Life or contact the Success Team at www.Cloud9Life.com for more information.

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5.1 CONTINUING DEVELOPMENT OBLIGATIONS5.1.1 Ongoing TrainingAny C9 Life Executive who sponsors another C9 Life Executive is responsible for providing a bona fide assistance and training function to ensure that his/her Marketing Organization is properly operating his/her C9 Life business. C9 Life Executives must have ongoing contact and communication with the C9 Life Executives in their Marketing Organizations. Examples of such contact and communication may include, but are not limited to: Newsletters, written correspondence, personal meetings, telephone contact, voice mail, email, and the accompaniment of Organization C9 Life Executives to Company meetings, training sessions, and other functions. Support Team C9 Life Executives are also responsible to motivate, train, and educate new C9 Life Executives regarding the Products, effective sales techniques, the Agreement, the Compensation Plan, and compliance with the Agreement. However, communication with and the training of Organization C9 Life Executives must not violate Section 3.C9 Life Executives should monitor their teams.C9 Life Executives in their Marketing Organizations to guard against Organization C9 Life Executives making improper income or business claims or engaging in any illegal or inappropriate conduct.

5.1.2 Increased Training ResponsibilitiesAs C9 Life Executives progress through the various levels of leadership, they will become more experienced in sales techniques,

knowledge of the Products, and understanding of the C9 Life Opportunity. They will be called upon to share this knowledge with lesser experienced C9 Life Executives within their organization.

5.1.3 Ongoing Sales ResponsibilitiesRegardless of their level of achievement, C9 Life Executives have an ongoing obligation to continue to personally promote sales through the generation of new Customers and through servicing their existing Customers. In order to be eligible to receive commission payment, C9 Life Executives must remain Active (see section 10 for Active definition).

5.2 NON-DISPARAGEMENTThe Company values constructive criticisms and comments from C9 Life Executives. All such comments should be submitted in writing to the Company ([email protected]). While the Company welcomes constructive input, negative comments and remarks made by C9 Life Executives about the Company, the Products, Customers, the C9 Life Opportunity, or the Compensation Plan serve no purpose other than to sour the enthusiasm of other C9 Life Executives. For this reason, and to set the proper example for their Marketing Organizations, C9 Life Executives shall not disparage, demean, or make negative remarks about the Company, other C9 Life Executives, the Products, the C9 Life Opportunity, the Agreement, or the Company’s directors, officers, employees, or Customers. Additionally, C9 Life Executives shall not disparage vendors of the Company.

5.3 PROVIDING DOCUMENTATION TO APPLICANTSThe C9 Life Executive Back Office website will always have the most current version of the documents that comprise the Agreement. C9 Life Executives are prohibited from translating any and all Company related materials from English into other languages. If it becomes clear to you that a prospective C9 Life Executive or Customer does not understand the Company’s marketing materials for any reason, including a language barrier, the C9 Life Executive must

Section 5RESPONSIBILITIES OF C9 LIFE EXECUTIVES

25


cease any marketing efforts to the prospective C9 Life Executive/Customer.

5.4 REPORTING VIOLATIONS OF THE AGREEMENTC9 Life Executives observing a violation of the Agreement by another C9 Life Executive should submit a written report of the violation by email to the Company ([email protected]). Details of the incident(s) such as dates, number of occurrences, persons involved, and any supporting documentation should be included in the report. All reports received by corporate will remain anonymous until such time as the C9 Life Executive who made the report authorizes the Company to disclose his/her identity or the Company is compelled to do so by subpoena, court order, or arbitrator’s instruction.

5.5 VENDOR CONFIDENTIALITY/ COMMUNICATIONSThe Company’s business relationships with its marketing alliances, vendors, suppliers, company C9 Life Executives, or former employees within or outside the corporate workplace are confidential, proprietary, and not to be circumvented by either the C9 Life Executive or the vendor. A C9 Life Executive shall not contact, directly or indirectly, or speak to or communicate with any representative of any supplier or vendor of the Company except at an Company-sponsored event at which the representative is present at the request of the Company or as otherwise expressly permitted in writing by the Company. Violation of this policy may result in termination of the C9 Life Executive and possible claims of damages against the C9 Life Executive and/or the vendor. Questions regarding any of these businesses should be directed to the Company ([email protected]).

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6.1 BONUS AND COMMISSION QUALIFICATIONSA C9 Life Executive must be in full compliance with the Agreement in order for sales to qualify as earned bonuses and commissions. To be commission qualified, a C9 Life Executive must purchase or have a Qualified Customer who purchases at least 50 Points worth of products in a calendar month. The Company shall pay earned commissions and bonuses to such C9 Life Executive in accordance with the Compensation Plan. Weekly commissions are paid on the Friday following the week in which they were earned. Monthly commissions are paid on the 15th of the month following the month they are earned. If a particular Friday is a holiday or the 15th of the month is on a holiday or weekend, then commissions will be paid on the last business day before the holiday or weekend. The Company pays all commissions and bonuses through a global payment platform called EZ Pay that allows Cloud 9 Life to make instant and secure online commission payouts to our Executives in local currencies around the world.

The minimum amount for which the Company will issue an EZ Pay payment to a C9 Life Executive is $20.00 (minus a one-time administrative fee of $5.00 for US Executives and $7.50 for Canadian Executives which will be withdrawn from the first commission payment). There is a one-time administrative fee of $5.00 for US Executives and $7.50 for Canadian Executives which will be withdrawn from the first commission payment. Transfer and other account fees may apply, consult the EZ Pay Commission Account Benefits and Fees schedule during account set-up for additional details. All Executives must earn a minimum of US $20 in order for an

initial account to be set-up and the one-time administrative fee will be withdrawn at the time of account set-up. If a C9 Life Executive’s bonuses and commissions do not equal or exceed $20.00, the Company will accrue the bonuses and commissions until they total $20.00. Payment will be issued once $20.00 has been accrued or as otherwise required by applicable law. Once Executives are issued their first commission or bonus payment they have 6 months from the time the commission was earned to set-up their EZ Pay account and claim their earnings. Cloud 9 Life EZ Pay is a commission payment system that makes instant and secure commission payouts to Executives in local currencies to an online federally insured (FDIC) bank account and issues funds on a virtual and plastic debit card allowing for bank transfers and mobile wallets.

6.2 REPORTSAll information provided by the Company in online Organizational Activity Reports, including but not limited to personal Customer subscription information and Organization sponsoring activity, is believed to be accurate and reliable. Nevertheless, due to various factors including, but not limited to, the inherent possibility of human and mechanical error; denial of credit card and electronic check payments; Service refunds; credit card and electronic check charge-backs; the information is not guaranteed by the Company or any persons creating or transmitting the information.

TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE CLOUD 9 LIFE AND/OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION WILL IN NO EVENT BE LIABLE TO ANY C9 LIFE EXECUTIVE OR ANYONE ELSE FOR ANY DIRECT; INDIRECT; CONSEQUENTIAL; INCIDENTAL; SPECIAL; OR PUNITIVE DAMAGES THAT ARISE OUT OF THE USE OF OR ACCESS TO PERSONAL SALES INFORMATION (INCLUDING BUT NOT LIMITED TO LOST PROFITS BONUSES OR COMMISSIONS LOSS OF OPPORTUNITIES AND DAMAGES THAT MAY RESULT FROM INACCURACY, INCOMPLETENESS INCONVENIENCE DELAY OR LOSS OF THE USE OF THE INFORMATION) EVEN IF CLOUD 9 LIFE OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. TO THE FULLEST EXTENT PERMITTED BY CLOUD 9 LIFE AND OTHER

Section 6BONUSES AND COMMISSIONS

https://cloud9life.com/ez-pay

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PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE NO RESPONSIBILITY OR LIABILITY TO YOU OR ANYONE ELSE UNDER ANY TORT; CONTRACT; NEGLIGENCE LIABILITY; PRODUCTS LIABILITY OR OTHER THEORY WITH RESPECT TO THAT INFORMATION.

Access to and use of the Company’s online reporting and Products, and the C9 Life Executives reliance upon such information is at the C9 Life Executive’s own risk. All such information is provided to the C9 Life Executive “as is.” If the C9 Life Executive is dissatisfied with the accuracy or quality of the information, the C9 Life Executive’s sole and exclusive remedy is to discontinue use of and access to the Company’s online reporting Products and their reliance upon the information.

6.3 INCOME TAXESEach C9 Life Executive is responsible for paying local, state and federal taxes on any income generated as an Independent C9 Life Executive. If a C9 Life’s Executive business is tax exempt, the Federal tax identification number must be provided to Cloud 9 Life. Every year, Cloud 9 Life will provide a T4A to Canadian residents and an IRS form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who:

a. Had earnings of over CAD$500/US$600 in the previous calendar year; or b. Made purchases during the previous calendar year in excess of USD$5,000.

The Company will withhold all commissions and bonuses once CAD$500/US$600 has been earned by a C9 Life Executive if a properly completed IRS Form W-9 (TD1ON in Ontario and TD1 in all other Canadian Provinces and Territories) is not on file with the Company. C9 Life Executives should consult with their own tax accountant, tax attorney, or other tax professional.

6.4 ERRORS OR QUESTIONSIf an C9 Life Executive has questions about or believes any errors have been made regarding bonuses, commissions, Organizational Activity Reports, or charges the C9 Life Executive must complete the Commission Audit Form and submit it to the Company: by e-mail ([email protected]); or by mail;

Cloud 9 Life Attn: Commissions405 Fifth Avenue SouthNaples, FL 34102

within thirty (30) calendar days of the date of the purported error or incident in question. The Company will not be responsible for any errors, omissions, or problems not reported to the Company within thirty (30) calendar days.

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7.1 DISCIPLINARY SANCTIONSViolation of the Agreement, including these Policies, the Standards of Practice, any common law duty, including but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by an C9 Life Executive that, in the sole and exclusive discretion of the Company may damage its reputation or goodwill (such act or omission need not be related to the C9 Life Executive’s business), may result, at the Company’s discretion, in one or more of the following Disciplinary Sanctions:

a. Issuance of a written warning or admonition; b. Requiring the C9 Life Executive to take immediate corrective measures; c. Loss of rights to one (1) or more bonus and commission checks; d. Withholding of all or part of the C9 Life Executive’s bonuses and commissions during the period that the Company is investigating any conduct allegedly in contradiction to this Agreement. If a C9 Life Executive’s business is cancelled for Disciplinary Sanctions, the C9 Life Executive will not be entitled to recover any commissions withheld during the investigation period; e. Suspension of the C9 Life Executive Agreement for one (1) or more pay periods; f. Transfer of a portion or all of the C9 Life Executive’s Marketing Organization; g. Involuntary termination of the C9 Life Executive’s Agreement;

h. Issuance of a monetary fine i. Any other measure expressly allowed within any provision of the Agreement or which the Company deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the C9 Life Executive’s violation of the Agreement; and j. In situations deemed appropriate by the Company, the Company may institute legal proceedings for monetary and/or equitable relief.

Each C9 Life Executive agrees to cooperate with the Company’s investigation of potential violations identified above. An C9 Life Executive’s duty to cooperate shall include, without limitation: (1) responding completely, and truthfully to any inquiries or requests for information or documents (including, but not limited to, books, records, correspondence, and electronically-stored information); (2) furnishing requested documents and information within three (3) business days of any request; (3) authenticating documents; and (4) testifying completely and truthfully. Each C9 Life Executive agrees that this duty to cooperate with the Company also applies to any mediation, arbitration, civil litigation, or administrative proceeding.

7.1.1 Violation AppealsIf an C9 Life Executive believes the company has issued a Disciplinary Sanction in error, the C9 Life Executive may appeal the decision to the Appeals Board by emailing a copy of the compliance incident notification and the reason for appeal to [email protected]. Upon receipt of an appeal, the Appeal Board will review the incident in question and respond to the C9 Life Executive in writing within 10 days. Unless and until the C9 Life Executive receives written notification that the Disciplinary Sanction has been withdrawn by the Company, the incident will continue to be deemed in violation and subject to the Disciplinary Sanctions outlined in section 6.1.

7.2 GRIEVANCES AND COMPLAINTS

Section 7DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS

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When an C9 Life Executive has a grievance or complaint with another C9 Life Executive regarding any practice or conduct in relationship to their respective THE COMPANY business, the complaining C9 Life Executive should first report the problem to his/her Advisor who should review the matter and try to resolve it with the other party’s Support Team Advisor. If the matter involves interpretation or violation of Company policy, it must be reported in writing to the Company ([email protected]). The Company will review the facts and attempt to resolve it.

7.3 MEDIATIONPrior to instituting any arbitration as provided in Section 6.4, the parties shall meet in good faith and attempt to resolve any dispute arising from or relating to the Agreement through non-binding mediation. One (1) individual who is mutually acceptable to the parties shall be appointed as mediator. The mediator’s fees and costs, as well as the costs of holding and conducting the mediation, shall be divided equally between the parties.

Fees and costs at least ten (10) business days in advance of the mediation. Each party shall pay its own attorney fees, costs, and individual expenses with conducting and attending the mediation. Mediation shall be held in Collier County, Florida and shall last no more than two (2) business days.

7.4 ARBITRATIONIf mediation is unsuccessful, any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be resolved by arbitration administered by the American Arbitration Association under its CommerciaI Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. C9 Life Executives waive all rights to trial by jury or by any court. Claims made and remedies sought as part of a class action, private attorney general or other representative action (hereafter all included in the term “class action”) are subject to arbitration on an individual basis, not on a class

or representative basis. No class actions, joinder or consolidation of any claim with a claim of any other person or entity shall be allowable in arbitration, without the written consent of both you and us.

C9 LIFE EXECUTIVES WAIVE ALL RIGHTS TO TRIAL BY JURY OR BY ANY COURT. IF AN C9 LIFE EXECUTIVE FILES A CLAIM OR COUNTERCLAIM AGAINST THE COMPANY HE OR SHE MAY ONLY DO SO ON AN INDIVIDUAL BASIS AND NOT WITH ANY OTHER C9 LIFE EXECUTIVE OR AS PART OF A CLASS OR CONSOLIDATED ACTION.

All arbitration proceedings shall be held in Collier County, Florida, unless the laws of the state or territory in which a C9 Life Executive resides expressly require the application of its laws, in which case the arbitration shall be held in the capital of that state. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure. There shall be one (1) arbitrator, an attorney at law, who shall have expertise in business law with a strong preference being an attorney knowledgeable in the Direct Selling industry, selected from the panel which the American Arbitration Association provides. The prevailing party shall be entitled to receive from the losing party costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction. This agreement to arbitration shall survive any termination or expiration of the Agreement.

Notwithstanding the foregoing, nothing in the Policies shall prevent the Company from applying to and obtaining from any court having jurisdiction a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction or other relief available to safeguard and protect the Company’s interest prior to, during or following the filing of any arbitration or other proceeding or pending the rendition of a decision or award in connection with any arbitration or other proceeding.

7.5 GOVERNING LAW, JURISDICTION AND VENUE

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Jurisdiction and venue of any matter not subject to arbitration shall reside exclusively in Collier County, Florida. The Federal Arbitration Act shall govern all matters relating to arbitration. The substantive laws of the State of Florida shall govern all other matters relating to or arising from the Agreement without regard to the principles of conflicts of law.

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8.1 SALE, TRANSFER, OR ASSIGNMENT OF C9 LIFE BUSINESSIndependently operated business, the sale, transfer, or assignment of a C9 Life business and the sale, transfer, or assignment of an Affiliated Party’s interest in a Business Entity that owns or operates a C9 Life business is subject to certain procedures that are designed to facilitate the transfer, assignment or sale. If C9 Life Executives wish to sell their C9 Life business, or an Affiliated Party wishes to sell his/her interest in a Business Entity that owns or operates a C9 Life business, the following criteria must be met:

a. Protection of the existing line of sponsorship advisor-ship must always be maintained so that the C9 Life business continues to be operated in that line of Sponsor and Advisor; b. The buyer or transferee must become a qualified C9 Life Executive. If the buyer is an active C9 Life Executive, he/she must first terminate his/her C9 Life business and wait six (6) calendar months before acquiring any interest in a different C9 Life business; c. Before the sale, transfer, or assignment can be finalized and approved by the Company, any debt obligations the selling party has with the Company must be satisfied; and d. The selling party must be in good standing and not in violation of any of the terms of the Agreement in order to be eligible to sell, transfer, or assign a C9 Life business or his/her interest

in a Business Entity that owns or operates a C9 Life business.

Prior to selling a C9 Life business or an interest in a Business Entity, the selling party must: (1) remit $399 for the payment of the Transfer/Assignment Fee; and (2) notify the Company (compliance@ cloud9life.com) in writing and advise of his/her intent to sell the C9 Life business or his/her, or its interest in the Business Entity. The Company reserves the right to request additional documentation that may be necessary to analyze the transaction between the buyer and seller. The Company will, in its sole and absolute discretion, approve or deny the proposed sale, transfer, or assignment within thirty (30) calendar days after its receipt of all necessary documents from the parties.

The selling party must receive written approval from the Company before proceeding with the sale. If the parties fail to obtain the Company’s approval for the transaction, the transfer shall be voidable at the Company’s option. The purchaser of the existing C9 Life business will assume the obligations and position of the selling C9 Life Executive. An C9 Life Executive who sells his/her, or its C9 Life business shall not be eligible to reapply as an C9 Life Executive for a period of at least six (6) calendar months after the date of the sale. No changes in line of sponsorship or advisor-ship can result from the sale or transfer of an C9 Life business.

8.2 SEPARATION OF A C9 LIFE BUSINESSC9 Life Executives sometimes operate their C9 Life business as husband-wife corporations, partnerships, LLCs, or trusts. At such time as a marriage may end in divorce or an entity may dissolve, arrangements must be made to assure that any separation or division of the business is accomplished so as not to adversely affect the interests and income of other businesses up or down the line of sponsorship. If the separating parties fail to provide for the best interests of other C9 Life Executives and the Company in a timely fashion, the Company may involuntarily terminate the C9 Life Executive’s Agreement.

During the divorce or entity dissolution process,

Section 8SELLING OR TRANSFERRING YOUR C9 LIFE BUSINESS

32


the parties must adopt one of the following methods of operation:

a. One of the parties may, with consent of the other(s), operate the C9 Life business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners, or members authorize the Company to deal directly and solely with the other spouse or non-relinquishing shareholder, partner or member; or The parties may continue to operate the C9 Life business jointly on a “business-as- usual” basis whereupon all compensation paid by the Company will be paid according to the status quo as it existed prior to the divorce filing or dissolution proceedings. This is the default procedure if the parties do not agree on the format set forth above. b. Under no circumstances will the Marketing Organization of divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will the Company split bonus and commission checks between divorcing spouses or members, shareholder or partner of dissolving entities. The Company will recognize only one (1) Marketing Organization and will issue only one (1) commission check per C9 Life business per commission cycle. Commission checks shall always be issued to the same individual or entity. In the event that parties to a divorce or dissolution proceeding are unable to resolve a dispute over the disposition of commissions and ownership of the business in a timely fashion as determined by the Company, the Agreement may be involuntarily terminated by the Company. c. If a former spouse has completely relinquished all claims and rights in the original C9 Life business pursuant to a divorce, he/she is thereafter free to be sponsored under any advisor of his/ her choosing without waiting six (6)

calendar months. In the case of business entity dissolutions, the former shareholder, member, or other entity affiliate who retains no interest in the business must wait six (6) calendar months from the date of the final dissolution before being sponsored again as an C9 Life Executive. In either case, the former spouse or business affiliate shall have no rights to any C9 Life Executives in their former organization or to any former Customer. They must develop the new business in the same manner as would any other new C9 Life Executive.

8.3 SUCCESSIONUpon the incapacitation or death of a C9 Life Executive, his/her business may be passed to his/ her heirs. Appropriate legal documentation must be submitted to the Company ([email protected]) to ensure the transfer is valid. Accordingly, a C9 Life Executive should consult an attorney to assist him/her in the preparation of a will or other testamentary instrument. Whenever a C9 Life business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased C9 Life Executive’s Marketing Organization provided the following qualifications are met. The successor(s) must:

a. Complete and execute an Application; b. Comply with terms and provisions of the Agreement; and c. Meet all of the qualifications for the deceased C9 Life Executive’s status.

Bonuses and commissions of a C9 Life business transferred pursuant to this Section will be paid in a single payment jointly to the devisees. The devisees must provide the Company with an “address of record” to which all bonus and commission checks will be sent. If the business is bequeathed to joint devisees, they must form a business entity and acquire a Federal Taxpayer Identification Number. The Company will issue all bonus and commission checks and one (1) IRS Form 1099-MISC (Non employee compensation) to the business entity.

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8.4 TRANSFER UPON INCAPACITATION OF AN C9 LIFE EXECUTIVETo effectuate a transfer of a C9 Life business because of incapacity, the trustee, conservator, or guardian of the incapacitated C9 Life Executive must provide all necessary documentation to establish the right of the subject trustee, conservator, or guardian to the subject C9 Life business, complete and execute the Application, and meet the other requirements in Section 2.

8.5 TRANSFER UPON DEATH OF AN C9 LIFE EXECUTIVETo effectuate a testamentary transfer of a C9 Life business, the estate of the deceased C9 Life Executive must provide all necessary documentation to establish the successor’s or successors’ right to the subject C9 Life business, complete and execute the Application, and meet the other requirements in Section 2.

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9.1 EFFECT OF CANCELLATIONSo long as an C9 Life Executive remains active and complies with the terms of the Agreement, the Company shall pay earned commissions and bonuses to such C9 Life Executive in accordance with the Compensation Plan. An C9 Life Executive’s bonuses and commissions constitute the entire consideration for the C9 Life Executive’s efforts in generating sales and all activities related to generating sales (including building a Marketing Organization). Following an C9 Life Executive’s non-renewal of his/her C9 Life Executive Agreement, voluntary or involuntary cancellation of his/her C9 Life Executive Agreement (all of these methods are collectively referred to as “Cancellation”), the former C9 Life Executive shall have no right, title, claim or interest to the Marketing Organization which he/she operated, or any bonus or commission from the sales generated by the organization. A C9 Life Executive whose business is cancelled will lose all rights as a C9 Life Executive. This includes the right to sell the Products and the right to receive future bonuses, commissions, or other income resulting from the sales and other activities of the C9 Life Executive’s former Marketing Organization. In the event of cancellation, C9 Life Executive agrees to waive all rights he/she may have, including but not limited to property rights, to his any bonuses, commissions, or other remuneration derived from the sales and other activities of his/her former Marketing Organization.

Following Cancellation of an C9 Life Executive’s Agreement, the former C9 Life Executive shall not hold himself/herself out as a C9 Life

Executive and shall not have the right to promote the sale of the Products. An C9 Life Executive whose Agreement is cancelled shall receive bonuses and commissions only for the last full pay period he/she was active prior to Cancellation (less any amounts withheld during an investigation preceding an involuntary Cancellation).

9.2 CANCELLATION DUE TO INACTIVITYIf an C9 Life Executive fails to maintain Active status (see Section 10 for Active definition), the C9 Life Executive will become an Inactive C9 Life Executive. The C9 Life Executive’s Customer Agreement for any of the Products shall remain in full force and effect. Any C9 Life Executive who is inactive for one (1) full month after becoming Inactive will be removed from the Marketing Organization. Any C9 Executive who is Inactive for three (3) consecutive months during any twelve-month period will forfeit all Cloud Cash and Sample Credits on account and may be cancelled by the Company, at its sole and absolute discretion.

9.3 INVOLUNTARY CANCELLATIONA C9 Life Executive’s violation of any of the terms of the Agreement, including any amendments that may be made by the Company in its sole discretion, may result in any of the Disciplinary Sanctions listed in Section 6.1, including the involuntary cancellation of the Agreement.

9.3.1 Involuntary Termination Due to Violation of TermsGenerally, when a decision is made to cancel a C9 Life Executive, the Company will inform the C9 Life Executive in writing that his or her C9 Life Executive position is subject to cancellation immediately, effective as of the date of the written notification or other specified date. The C9 Life Executive will have ten (10) days from the date of mailing of the letter in which to respond to cancellation. The C9 Life Executive’s written appeal must be received or postmarked within ten (10) days of his or her receipt of the cancellation letter. If the appeal is not received or post marked within this ten (10) day period,

Section 9INACTIVITY AND CANCELLATION

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this failure to respond in a timely fashion will be considered acceptance of the cancellation, and/or any other sanction or penalty that the Company may impose.

If an C9 Life Executive files a timely appeal of cancellation, the Company will review the cancellation, consider any other appropriate information and notify the C9 Life Executive of its decision. The decision will be final and subject to no further review or appeal. In the event the cancellation is not rescinded, cancellation will be effective as of the date of the Company’s original designated cancellation date. In the Company’s sole discretion to protect itself, Cloud 9 Life, its C9 Life Executives and/or customers, the Company may suspend some or all of an C9 Life Executive’s access to information and Products and with hold checks during the pendency of an C9 Life Executive Compliance investigation without prior notice to the C9 Life Executive. All reasonable efforts will be made to complete the investigation or restore access in an expeditious manner. The Company reserves the right to suspend or terminate any C9 Life Executive without following these aforementioned procedures.

9.3.2 Involuntary Termination Due to Change in C9 Life BusinessThe company reserves the right to terminate an C9 Life Executive’s agreement upon thirty (30) days written notice in the event that the company: (1) elects to cease business operations; (2) is dissolved as a business entity; (3) elects to terminate distribution of the Products via direct selling;

9.4 VOLUNTARY CANCELLATIONA participant in this Direct Selling plan has a right to cancel at any time, regardless of reason.

Cancellation must be submitted in writing to the Company at its principal business address:

Cloud 9 Life 405 Fifth Avenue SouthNaples, FL 34102

The written notice must include the C9 Life Executive’s signature, printed name, address, and C9 Life Executive Identification Number.

If an C9 Life Executive is also a Customer, the C9 Life Executive’s Customer Agreement shall continue in full force and effect, unless cancelled.

9.5 NON-RENEWALA C9 Life Executive may also voluntarily cancel the Agreement by failing to renew the Agreement on its anniversary date. The Company may also elect not to renew an C9 Life Executive’s Agreement upon its anniversary date, at the Company’s sole discretion.

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REFUND OF THE INITIAL SPONSORSHIPUpon the cancellation of a C9 Life Executives Agreement, the C9 Life Executive may request a refund of the initial Sponsorship Fee, also known as an “Executive Pass.” Note: $25.00 of the initial Executive Pass is attributable to the Sponsorship Fee and is refundable as provided in Sections 9.1; the balance is for the initial set-up fees for the C9 Life Executives Back Office and Online Tools and is based on a one (1) year term. In the event the former C9 Life Executive requests a refund and is not in violation of any of the terms of the Agreement, the Company will issue a 100% refund of the Sponsorship Fee within the first 3 business days of being sponsored, a 50% refund within 4-45 days of being sponsored, and no refund will be granted if an C9 Life Executive was sponsored 46 or more days ago. Monthly Replicated Website fees and Annual Renewal fees paid by the C9 Life Executive are not refundable under any circumstances.

Section 10C9 LIFE EXECUTIVE REFUNDS UPON CANCELLATION OF THE AGREEMENT

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ACTIVE C9 LIFE EXECUTIVE – A C9 Life Executive who: a) purchases a $59.99 Executive Pass or $49.99 Executive Pass with EZ Ship; and b) purchases Back office and Reporting Support Package (if applicable); and c) is in good standing with the Company by performing all obligations under the Agreement. A C9 Life Executive who does not meet all of these requirements is an “Inactive C9 Life Executive.”

ACTIVE CUSTOMER – A Customer is considered active in a period in which a Payment Record has been received. A “Payment Record” is an electronic transmission received from a merchant processor containing Customer payment information.

ADVISOR – An Advisor may or may not be the “Sponsor” of the C9 Life Executive. The Advisor is a C9 Life Executive who is either the Sponsor or is on the first-level of the Sponsor, who supervises, motivates and trains a new C9 Life Executive in the Company, and is listed as the Advisor on the C9 Life Back Office of the new C9 Life Executive. An Advisor always follows the Support Team line of sponsorship, meaning that an Advisor can never be outside of a sponsor’s Marketing Organization.

AGREEMENT – Collectively, the Application, the Policies, the Compensation Plan, and the Business Entity Registration Form (where appropriate), all in their current form and as amended by the Company in its sole and absolute discretion.

AUTHORIZED OFFICER – The President of the company.

BUSINESS VOLUME – Commissionable points upon which all awards of Cloud Cash and payments of commissions and bonuses are based.

C9 LIFE OPPORTUNITY – The sales and marketing opportunity afforded to C9 Life Executives under the Agreement.

CANCEL – The termination of an C9 Life Executive’s business.

CAREER TITLE – An C9 Life Executive’s Career Title is their recognition title of the highest title they have achieved. Career Title does not change unlike a Paid-as Title, which may vary from month to month.

CLOUD CASH – Vouchers a Customer or Executive can use to purchase retail products. The Executive Pass, tax, shipping charges, certain fees and certain products are excluded and are not eligible for purchase using Cloud Cash. Orders where Cloud Cash was used, even in part, to purchase retail products are excluded for purposes are ineligible and will not be considered for purposes of earning incentives, additional Cloud Cash and bonuses/commissions.

COMPLIANCE DEPARTMENT – The C9 Life Compliance Department.

CUSTOMER – An individual or business that has applied for or has an account at Cloud 9 Life.

CUSTOMER AGREEMENT – The sponsorship form submitted by the Customer that authorizes Cloud 9 Life to supply them with a product subscription service.

CUSTOMER SPONSORSHIP FORM – An official multipart form provided by the Company used to refer new Customers in the Service.

DIRECT SELLING – A retail channel for the distribution of goods and Products directly to the consumer.

DIRECT SELLING BUSINESS VENTURE OR MARKETING OPPORTUNITY – Any entity, association, organization, or program that offers, promotes, or sells consumer goods or Products on a person-to-person basis, by an independent salesperson directly to consumers, generally in their homes or the homes of others, at their workplace, and other places away from permanent retail locations.

EXECUTIVE BACK OFFICE – A web-based application provided to each C9 Life Executive that includes business building tools, information and reporting about monthly commissions, graphical genealogy, news about events and periodic updates.

EXECUTIVE PASS (“KIT”) – A selection of C9 Life training materials and business support literature made available online that each new C9 Life Executive is required to purchase.

IDENTIFICATION BADGE – An official identification badge provided by the Company.

IDENTIFICATION NUMBER – A unique identification number assigned by the Company to each new C9 Life Executive.

IMMEDIATE HOUSEHOLD – Heads of household and dependent family members residing in the same house.

LEVEL – The layers of C9 Life Executives in a particular C9 Life Executive’s Marketing Organization. This term refers to the relationship of an C9 Life Executive relative to a particular Support Team C9 Life Executive, determined by the number of C9 Life Executives between them who are related by sponsorship and/or advisor-ship. For example, if

Section 11DEFINITIONS

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A sponsors B (where A is also the Advisor), who sponsors C (where B is also the Advisor), then C is A’s 3rd level.

LINE – Each C9 Life Executive/Business sponsored immediately underneath an C9 Life Executive and their respective Marketing Organizations represents one “line” in an C9 Life Executive’s Marketing Organization.

MARKETING ORGANIZATION – The Customers and C9 Life Executives sponsored or placed below a particular C9 Life Executive.

OFFICIAL C9 LIFE MATERIAL – Literature, audio or video tapes, and other materials developed, printed, published and distributed by the Company to C9 Life Executives.

ORGANIZATIONAL ACTIVITY REPORT – An online report generated by the Company that provides critical data relating to the identities of C9 Life Executives, sales information, and sponsorship activity of each C9 Life Executive’s Marketing Organization. This report contains confidential and trade secret information which is proprietary to the Company.

PAID-AS TITLE – The current Title of a C9 Life Executive, as determined by the Compensation Plan, for any month. To be paid at a particular Title, an C9 Life Executive must meet the criteria set forth in the Compensation Plan for that Title in that month.

PAYMENT PROCESSOR – Third party vendor that processes all Weekly and Monthly commission payments.

PERSONALIZED WEBSITE –The Company-approved web presence that allows the C9 Life Executive to create a personal message and post their contact information. All Customer and C9 Life Executive sponsors completed on the Personalized Website will be automatically credited to the sponsored C9 Life Executive.

QUALIFIED CUSTOMER – An individual who has submitted a 50 point order to C9 Life and whose request has been approved by the Company.

SOCIAL MEDIA – Any type of online media that invites, expedites or permits conversation, comment, rating, and/or user generated content, as opposed to traditional media, which delivers content but does not allow readers/viewers/listeners to participate in the creation or development of content, or the comment or response to content. Examples of Social Media include, but are not limited to, blogs, chat rooms, Instagram, Facebook, Snapchat, MySpace, Twitter, LinkedIn, Delicious, and YouTube.

SPONSOR – An individual who: a) Engages in the act of signing up as a new C9 Life Executive; and b) is listed as the Sponsor on the new C9 Life Independent Marketing Executive Agreement form. The acts of sponsoring a new Executive and placing a new Executive with an Advisor, help train them to become C9 Life Executives, is called “sponsoring.”

SUCCESS TEAM – During business hours, Cloud 9 Life provides customer care Products for C9 Life Executives and Customers. The Success Team can be contacted at www.Cloud9Life.com.

SUPPORT TEAM – This term refers to the C9 Life Executive or C9 Life Executives above a particular C9 Life Executive in a sponsorship line up to the Company. Conversely stated, it is the line of sponsors that links any particular C9 Life Executive to the Company.

WARM MARKET – An individual with whom the C9Life Executive has an “established business or personal relationship”. This means a prior or existing relationship formed by a voluntary two-way communication between an C9 Life Executive and a person, on the basis of:

The prospects purchase, rental, or lease of goods or Products from the C9 Life Executive, or a financial transaction between the prospect and the C9 Life Executive, within the eighteen (18) months immediately preceding the date of a solicitation to induce the prospects purchase of C9 Life Products or sponsorship in the C9 Life Opportunity;

An inquiry, application, purchase or transaction by the person regarding products offered by such C9 Life Executive; or

A personal or familial relationship, which relationship has not been previously terminated by either party;

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