POLICIES &

Policies & Procedures

E F F E C T I V E J U L Y 2 0 1 3

I. GENERAL
A. Basic Principles
1. The purpose of the Independent Nikken Consultant Application/ Agreement, Policies & Procedures and compensation plan (collectively referred to as the Agreement), is to establish the Independent Nikken Consultant (referred to as Consultant) as an authorized consultant for the sale of Nikken products. It sets forth the respective duties, obligations and responsibilities of Nikken Inc. or Nihon Kenko Zoushin Kenkyukai Canada Corporation (referred to as Nikken), of the Consultant in the sale of Nikken products by Nikken to the Consultant, and of the sale of these products by the Consultant to the consumer. 2. The Consultant has elected to enter into this Agreement with Nikken with confidence in its integrity and with the expressed intention of dealing fairly with its Consultants. 3. Nikken enters into this Agreement with Independent Nikken Consultants with an awareness that the success of Nikken depends upon responsible, efficient, vigorous and successful Consultants, whose business conduct is free of false, deceptive, or misleading advertising, marketing, pricing and service practices. Nikken enters into this Agreement with confidence in the Consultants integrity, ability, duties, obligations and responsibilities. 4. Each Consultant, apart from purchasing the basic Business Success Kit (English version is available in hard copy and electronically online; French and Spanish versions are only available electronically online), may build their Nikken business without purchasing product at wholesale as inventory. The Consultant may work his/her way up the ranks of the sales organization by two non-inventory methods of achieving volume. First, the Consultant can send customers to his/her Nikken Personal Web Page to order products directly. Second, the Consultant can act as an order taker and register an order for direct drop-ship to customer.

a. Proprietorship: A copy of fictitious name filing must be submitted plus a W9 form in the United States. b. Corporation: Copies of articles of incorporation are required, including the page with state seals and notarization. These articles will show who the principals are and prove validation of federal ID number/business number/E.I.N./F.E.I.N./ Canada Customs and Revenue Agency by way of IRS acceptance, plus a W9 form in the United States. c. LLC: IRS acceptance only. The name on the IRS acceptance is required to state the LLC in order to use it as an LLC, plus a W9 form in the United States. d. Trust: An affidavit of trust with the notarized copy of the power of attorney is necessary. If a federal ID number is to be used and is not noted in the affidavit, an IRS acceptance will be required, plus a W9 form in the United States. e. Partnership: To register as a partner, complete the partnership portion of the DBA form, along with all signatures that apply, plus a W9 form in the United States. f. Entity guarantee for owners: Although Nikken has offered Consultants the opportunity to conduct their distributorship as corporate, LLC, trust or partnership entities, it is agreed that since the distributorship entity is under the control of its owners or principals, the actions of individual owners or beneficiaries as they may affect Nikken and the distributorship are also critical to the business of Nikken. Therefore, it is agreed that actions of the ownership entity shareholders, officers, directors, trustees, beneficiaries, agents, employees or other related or interested parties and the actions of such parties, which are in contravention to Nikken Policies, shall be attributable to the corporate, LLC, trust or partnership entity. In the event that any of the ownership entity shareholders, officers, directors, trustees, beneficiaries, agents, employees or other related parties shall terminate ownership interests in the distributorship, any breaching actions by such parties that continue to have a beneficial financial interest, directly or indirectly, in the distributorship (for example, members of the same household) shall be attributable to the distributorship. 4. Members of a Consultants household may operate together as one Nikken distributorship, but may not become separate Consultants. Household is defined as husband, wife and dependents. Note: Children of legal age to contract and at least 18 years of age are not considered a part of their parents household. 5. Nikken recognizes that members of the same household may belong to competing direct selling opportunities. Although the actions of the parties are normally in good faith, in some circumstances, there is an abuse of relationships in which the non-Nikken household member is engaged in recruitment, solicitation or raiding of the Nikken sales organization. Since the household member who has an ownership interest in the Nikken distributorship is in the best position to be responsible to prevent raiding or cross-sponsoring activity by their co-household member, the cross-recruiting activity of the non-Nikken household member shall be attributed to the Nikken distributorship, subjecting the distributorship to discipline or termination.

B. Eligibility to Become a North America Nikken Consultant

1. Any individual residing in a state or territory of the United States or province of Canada with a valid tax identification number who is of legal age to enter into a contract therein and at least 18 years of age, is eligible to become a North America Independent Nikken Consultant. A Consultants tax identification number is required for tax reporting purposes only. Tax identification numbers are kept confidential and are not used for any other purposes. 2. An individual can have only one distributorship in Nikken. He/she may not own any other Nikken distributorship, either individually or jointly nor may he/she participate as a partner, owner, stockholder, trustee, director or association member in more than one distributorship in any form. 3. No individual, partnership, corporation or other business entity operating under a fictitious name may become a Nikken Consultant without submitting a doing business as (DBA) form following enrollment as a Consultant. Legal verification of proprietorship, corporation, limited liability corporation (LLC), trust or partnership will be required, including the completion of all necessary DBA forms.

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

time of the disability. These requirements shall be satisfied within a time deadline of six months.

E. Independent Business Relationship

1. The Consultant is an independent contractor whose results depend on his/her independent efforts. The Consultant, his/her agents and employees shall under no circumstances be deemed agents or representatives of Nikken. The Consultant shall not modify Nikken products in any way. Neither the Consultant nor Nikken shall have any right to enter into contract or commitment in the manner of, or on behalf of, the other or to bind the other in any way whatsoever. 2. The Nikken Consultant may set his/her own hours and determine his/her own method of sale as long as he/she complies with the Policies & Procedures and compensation plan. 3. The Consultant shall indemnify and hold Nikken harmless from and against any claim, demand, liability, loss, cost or expense (including, but not limited to, reasonable attorneys fees) arising or alleged to arise in connection with the Consultants operations. 4. Each Consultant shall be familiar and comply with all specific laws, regulations and requirements applicable to their distributorship business. 5. Consultants who reside in Manitoba, Prince Edward Island or Nova Scotia must obtain a direct sellers license. Each individual listed on the distributorship must have their own direct sellers license. Any Consultant who wishes to sell products in Manitoba, Prince Edward Island and/or Nova Scotia must also obtain a direct sellers license. 6. Independent Nikken Consultants understand that they are responsible for their own business and the transactions that occur under their distributorship, including but not limited to sales, returns, chargebacks, etc. 7. Nikken utilizes email as the primary method of communication with the Consultant. Information such as renewal notices, order and shipping confirmations, newsletters, announcements, etc. are sent by email. It is the Consultants responsibility to maintain a current email address and ensure that support@nikken.com; consultantservices@nikken.com; and newsletters@nikken.com are added to their safe senders list.

C. Rights Granted
1. Nikken hereby grants to the Consultant a non-exclusive right upon the terms and conditions contained in the Agreement, to purchase, promote and resell Nikken products in the territories of the United States and Canada. 2. A Consultant may sponsor persons who reside in territories of the United States, Canada, Guam and Puerto Rico to become Nikken Consultants. It is the Consultants responsibility to give these newly sponsored Consultants an opportunity to fully review the most current version of the Nikken Policies & Procedures and compensation plan, before they complete and sign the Consultant Application/Agreement, and to purchase a Business Success Kit. 3. A Consultant may only sponsor persons or entities who understand the network marketing philosophy and express an intention to build their business based on that philosophy.

D. Change in Distributorship Status

1. MARRIAGE: Two Nikken Consultants who marry after having established their own individual distributorships may continue to operate their existing distributorships, as long as they do not originate from the same line. If they originate from the same line, then the married couple has the choice of either selling or resigning from one of their distributorships, at their discretion. Please fill out and submit a Consultant Information Change form. 2. DIVORCE: Should a married couple in a joint distributorship become divorced, they agree to notify Nikken as to who will assume responsibility for the distributorship in one of the following manners: a. Written notarized agreement signed by both parties indicating who will retain the distributorship. b. A court order delineating who receives custody over the distributorship. Alternately, both parties may choose to retain their joint distributorship and operate it as a partnership. Please fill out and submit Consultant Information Change form. The six-month waiting period is waived for the divorced noncustodial Consultant, who is permitted to apply for a new distributorship immediately. 3. DEATH: Upon the death of a Consultant, the rights and responsibilities of the distributorship may be passed on to the rightful legally documented heir as long as that person has filled out a new Consultant Application and completed the required training. A copy of the death certificate must be provided. 4. DISABILITY: Should a Consultant become disabled to the extent that he/she can no longer fulfill the required duties of a Nikken Consultant, such disabled Consultants legal representative or conservator shall: a. Contact Nikken within thirty (30) days of the disability and advise Nikken of the Consultants status and the plans for future management or cancellation of the distributorship. b. Provide a notarized or court-confirmed copy of appointment as legal representative or conservator. c. Provide a notarized or court-confirmed copy of document establishing right to administer the Nikken business. d. Should the legal representative or conservator plan to continue the business of the distributorship, then he/she shall fill out a new Consultant Application and receive the required training consistent with the disabled Consultants level at the

F. Compliance by Nikken Consultants with All Applicable Income Tax and Other Sales Laws
1. At the end of each calendar year, Nikken will automatically provide a statement of earnings (1099/T4A form) for tax purposes to each distributorship with an annual income at or over the minimum required to be reported to the United States Internal Revenue Service or the Canada Customs and Revenue Agency. Note: Any contest, incentive or prize items may be included in the 1099/T4A form. 2. The Consultant accepts sole responsibility for all selfemployment and income taxes due to income earned as a Nikken Consultant. The Consultant will not be treated as an employee of Nikken with respect to such services for federal tax purposes. 3. Nikken will charge sales tax on the suggested retail price of all products regardless of how an order is placed (with the exception of Autoship), according to tax rates applicable in the state or province to which products are shipped by Nikken. To be eligible for tax exemption, prior to placing an order the Consultant must submit a completed Sales Tax License Holders Agreement with a copy of a current sales tax license from the state or province in which they reside and/or do business. Sales tax may be charged on shipping costs in some states and provinces where applicable. Note: Consultants are not exempt from taxes when products are sold to tax-exempt customers.

Po l i c i e s & P ro ce d u re s

G. Authorized Sales Region

A Consultant may sell Nikken products only in the country in which those products were purchased. A Consultant shall not sponsor any individuals or entities as Nikken Consultants in any state, country or province wherein Nikken is not legally licensed to do business.

d. Income claims: No false or misleading income projections may be made to prospective Consultants. Average Consultant income sheets are available on myNikken.com. e. A Consultant shall not claim that any states or provinces attorney generals office, the Better Business Bureau, the Competition Bureau of Canada or any regulatory agency has approved or endorsed Nikkens plan or products. These agencies do not permit the use of their names in any manner in connection with the advertising or sale of merchandise, services or securities. Use of any agency name as a reference is never authorized. Also, the use of these agency names cannot be used in the advertising or sales material of any commercial organization. f. A Consultant shall not make claims for any Nikken products other than those found in current authorized Nikken sales support material for the country in which the product will be sold. All statements regarding product description and use will conform in every way to the written company policies. g. No claims as to therapeutic or curative properties about the products may be made except those officially approved in writing by Nikken or as contained in the official Nikken literature for the country in which the product is sold. In particular, no Consultant may make any claim that Nikken products are useful in the treatment or cure of any disease. Such statements can be perceived as medical claims, which is against company policy and the policies of such governmental agencies as the United States Food and Drug Administration and Health Canada. h. Nikken Consultants, as independent contractors, are permitted to sell or market consumer products or services other than Nikken products with certain restrictions; however, a Nikken Consultant shall not engage in any recruiting or promotion activity that targets Nikken Consultants for other direct selling companies or business opportunities, either directly or indirectly, by themselves or in conjunction with others, nor shall a Consultant participate, directly or indirectly, in interference, raiding or solicitation activity of Nikken Consultants for other direct selling companies or business opportunities. This includes posting information about other direct selling companies or business opportunities on social network sites where the Nikken Consultant has other Nikken Consultants in their network group. If the Nikken Consultant wishes to post information about other direct selling companies or business opportunities, he/she must create a separate account that does not have any Nikken Consultants in their social network group or restrict the ability of other Nikken Consultants from viewing such posts. Additionally, no recruiting for other business ventures is authorized at any Nikken function, nor shall any recruiting or cross-sponsoring activities for other business ventures be disguised as a Nikken function. Failure to comply with this recruiting and cross-sponsoring policy shall cause a Nikken Consultants distributorship to be subject to cancellation. i. The basic Consultant relationship would be undermined if Nikken Consultants marketed competing health products. Therefore, so long as a Nikken Consultant desires to maintain Consultant status, he/she may not sell or market any healthrelated products that are similar to the products sold by Nikken. j. The Nikken Lifestyle Bonus program is available to Consultants who are building a network organization exclusively with Nikken. This rule may not be circumvented by removing a co-applicant from the distributorship. k. Periodically, Nikken will supply data processing information and reports to the Consultant, which will provide information concerning the Consultants downline sales organization, product purchases and product mix. The Consultant agrees that such information is proprietary and confidential to Nikken and is transmitted to the Consultant in confidence.

H. International Consultant
1. Nikken Consultants have the opportunity to develop Consultants in markets throughout the world in countries where Nikken operates. To sponsor Consultants in countries outside the North American market unit, the Nikken Consultant must qualify as a Senior or above in their home market. 2. Laws, regulations and requirements - Each Consultant should be familiar and comply with all specific laws, regulations and requirements applicable to their business. 3. International bonuses will be calculated in the currency of the country in which they are earned, and paid in the Consultants home country currency. The Nikken bonus payout exchange rate is updated monthly according to the Oanda.com rate on the last business day of each month. The currency exchange rate fluctuation may cause the Consultants international bonus payout to vary from time to time. Please note that the currency exchange rate used for a particular countrys bonus payout may not be the actual exchange rate of that country. At the time a new market unit is established, Nikken determines which currency exchange rate will be used for that particular country with regards to bonus payout.

I. Pricing
1. Consultants may purchase products directly from Nikken. All Consultants pay the same price (Consultant price) regardless of rank achieved. Nikken shall be free to change prices from time to time without advance notice. 2. Nikken reserves the right to place selected products at a discounted price less than Consultant price. This discounted price can be for closeouts, promotions, introductions or other similar events. Nikken has no obligation to continue the sale of an item at a discounted price and may discontinue the discounted price at any time without advance notice. 3. Nikken only suggests what it believes to be a desirable retail price for the sale of Nikken products. Nikken Consultants are free to sell product at any price. 4. An International Consultant may place orders in other market units, strictly for personal use or promotional purposes, if they abide by the ordering and shipping policies of each market unit.

J. Representations Made by Nikken Consultants

1. Each Nikken Consultant shall truthfully and fairly describe Nikken products and programs in all discussions with customers, other Consultants or potential Consultants. This obligation of fair and complete discussion shall include, without limitation, the following: a. A Consultant shall neither misstate nor omit any significant material fact about the Nikken program. The Consultant shall provide each potential Consultant with a copy of the current Nikken Policies & Procedures and compensation plan prior to or when giving such person a Consultant Application/Agreement. b. A Consultant shall make clear that the Nikken compensation plan is based upon sales of Nikken products, and that Consultants will not be successful merely by sponsoring other Consultants without regard to sales. Monies are earned only on the sale of products to consumers. c. A Consultant shall not state that profits are guaranteed for any Nikken Consultant. He/she shall make clear that Nikken Consultants can expect to be successful only through substantial efforts.

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The Consultant agrees that he or she will not disclose such information to any third party directly or indirectly, nor use the information to compete with Nikken directly or indirectly during or after the term of the agreement. The Consultant and Nikken acknowledge that, but for this agreement of confidentiality and non-disclosure, Nikken would not provide the above confidential information to the Consultant. A Consultant seeking to sell his/her distributorship must acknowledge and agree to this provision prior to the finalization of the sale of their distributorship. l. Nikken takes its Consultants right to privacy very seriously. Nikken does not sell, show or otherwise share information about its Consultants with third parties. Nikken may, however, release Consultant information when it is believed that such release is reasonably necessary to comply with the law, enforce or apply the terms of this Agreement or protect the rights, property or safety of other Consultants. m. A Consultant shall not interfere with, harass or undermine another Consultant but, at all times, shall respect the privacy of other Consultants.

for Consultants to operate from a booth or table. Nikken allows operating at the above sites with the understanding that the Consultant is responsible for presenting a high quality look to maintain the Nikken image and will conduct this operation in an honorable and professional manner. Any literature, signage, banners or flyers created for the event site (that were not obtained from the Nikken media kit or Nikken promotional catalog) must be submitted for approval to the Nikken Compliance Department well in advance of the event. Allow one week for the approval process to be completed. Consultants may have products displayed and may make sales from these approved sites. Please note that the Consultants primary objective at such a site is to gather leads and book appointments for follow-up. A Consultant may perform Nikken Rollouts and product demonstrations at these sites. A Consultant may also show video presentations at these sites, provided they are Nikken Inc. or Nikken University-produced. No others are authorized. 6. Nikken Consultants may advertise their Nikken business and sell Nikken products over the internet (world wide web) through their Nikken Personal Web Page (PWP). Outside web sites are permissible only if a Consultant has a Nikken PWP. All outside web sites must clearly identify a Consultant as an Independent Nikken Consultant. Outside web sites must be Nikken-specific and may not advertise, promote or link to any other network marketing product or opportunity or competing product. a. Outside web sites must follow all advertisement guidelines and Policies & Procedures. It is the sole responsibility of each Consultant to ensure that its web site content is accurate and that it fully complies with all applicable federal and state rules and regulations, and all Nikken Policies & Procedures. b. Outside web sites may only display product images, product names and the Independent Nikken Consultant logo produced by Nikken. c. For product descriptions/information, the outside website may only have a brief product description and only have a link to the Consultant's PWP for further detailed description /information such as product technology and benefits. Consultants may place one or more hyperlinks (advertising banners, buttons and text links) on its web site, directing internet users to the Nikken PWP web site. The back function of the page where the hyperlink is placed must be activated, allowing the user to return to the previous page at any time by clicking the back button of the users browser. The Nikken web site shall not be framed within the Consultant's web site. d. Consultants may not have a shopping cart feature on their outside web sites. All Nikken products must be sold through a Consultants Nikken PWP. e. Consultants Nikken PWP may be registered on search engines. Banner and display ads may only contain a Consultants name and the words Independent Nikken Consultant. The word Nikken, Inc. or product names may not be used in banner or display ads. f. Consultants may not use the word Nikken, its product names or trademarks in their email address or web site address. Consultants may not purchase or register in any search, referral or advertising service (such as Google AdWords program) any Nikken trademarks or derivatives thereof. g. Consultants may not use any key words or metatags to advertise any web site on the internet if the search key words or metatags explicitly or implicitly present illegal, unsubstantiated or nonapproved medical, health or income claims. h. Bulk or mass email communication: Bulk or mass email communications are defined as communications intended to reach 50 or more Consultants in the senders sales organization or three or more Consultants who are crossline, within a seven day period. For all bulk or mass email communications sent by a Consultant, those Consultants who are to receive the communications must have knowingly
Po l i c i e s & P ro ce d u re s

K. Labeling and Packaging

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

L. Advertising and Use of Name and Nikken Logo

1. Nikken Consultants may create their own advertisements, literature, posters, etc. by using Nikkens product images and the Independent Nikken Consultant logo produced by Nikken. Consultants may only use Nikken product descriptions and information from the Nikken website and marketing materials. All product descriptions and information must be used verbatim. All self-created advertisements must be reviewed and approved by the Nikken Compliance department prior to use/publication/printing. Consultants must clearly identify themselves as an Independent Nikken Consultant in all selfcreated advertisements, literature, posters, etc. 2. A Consultant shall not make purchases or enter into any transaction in the name of Nikken or hold himself/herself out as an employee, representative or agent of Nikken or an agent of any manufacturer of Nikken products. 3. Any Consultant may decide to select a business name. This business name should not imply that the Consultant is an employee or agent of Nikken, but instead state that he/she is an Independent Consultant. In addition, this business name shall not refer to therapies or imply that the Consultant is marketing products that have medical or therapeutic applications nor may it contain the word Nikken, its product names or trademarks. 4. A Consultant shall not display for sale or sell any Nikken products at any retail business such as a retail store, gym, spa, hair salon or through any other media, including magazines, television or the Internet (i.e. online shopping sites or online auctions sites). Consultants are only permitted to display Nikken brochures or other promotional materials at retail establishments, and products are to be sold through individual Consultants. However, Nikken will allow a dedicated room within the premises of a retail site that is termed a Nikken Training Center and must be completely out of the view of the public area of the premises. Consultants with a professional business offering professional services (i.e. doctors office, chiropractic office, etc.) may have Nikken products displayed for sale provided that the owner or principal of the business is a Nikken Consultant and the sale of Nikken products is not the primary business. 5. Consultants may have a booth or kiosk in a mall, trade show or fair provided that it is a one-time temporary site. Nikken does not approve this type of visible booth or kiosk anywhere on a recurring basis. Note: Flea markets are not an approved venue

opted in to receive the bulk or mass email communication through registration and/or through an affirmative request if the bulk or mass email communication is delivered through an email or on a web site. If by e-mail, there must be an opt out feature prominently displayed in the bulk or mass email communication, and all requests to opt out or be removed from any email list must be honored. All emails must be compliant with the CAN-SPAM Act of 2003. i. Consultant acknowledges that compiling databases of Consultant information for bulk or mass email communications, or for any other purposes constitutes the use of confidential Nikken information, which information is the Companys trade secrets, and such use can be a substantial financial benefit to the Consultant. Consultant acknowledges that he/she is subject to the Confidential Information obligations set forth in Section I.J.1.k above with respect to this information. This section shall survive the termination of the Agreement. j. The use of any material that, at the sole discretion of Nikken, is deemed to be pornographic, discriminatory or otherwise offensive is strictly prohibited and will subject the Consultant to termination. Links from a web page containing information concerning Nikken or its products to a page containing such inappropriate information will also subject the Consultant to termination. The content of your web site must not promote, advocate, facilitate or otherwise include any of the following: racial, or ethnic hate-speech, discriminatory speech, political endorsements or otherwise objectionable content; material that defames, is tortious or threatens physical harm to others; promotion of illegal substances or activities (e.g., illegal narcotics, bomb building, counterfeiting, etc.); content that infringes upon the intellectual property rights of any third party. Consultant web sites shall not contain bogus reviews of competing products and services, used as a marketing device. k. The outside web site must have a header and footer on each page with the words Independent Nikken Consultant prominently displayed. Consultants outside web site may not be an exact copy of any Nikken, Inc. company web site and must be visually distinguishable. l. Consultants must post a privacy policy on any and all web sites, home pages, confirmation pages and other web pages from which consumer information is collected in connection with his/her Nikken business. The privacy policy must comply with all federal and state privacy laws and meet the test of reasonable commercial best practices applicable to privacy policies. Data protection, use and privacy practices must adhere to the privacy policy, in both letter and in spirit, in all respects and with no exceptions. The privacy policy must be available for viewing via a clickable link. Such link must include the term privacy or privacy policy". m. Consultants may not use any software to advertise, market or promote the Nikken business that: surreptitiously gathers a user's personally identifiable information without the user's explicit consent; displays pop-up or pop-under advertisements; diverts the user to another site not requested by the user; initiates or terminates a user's connection to the Internet; logs keystrokes; or that removes or disables security, pop-up-blocking, anti-virus, anti-adware or anti-spyware programs on the user's computer. n. Nikken Consultant web sites shall not contain links to third party web sites that include medical and therapeutic claims relating, directly or indirectly, to specific company products or specific ingredients in company products. Nothing in this subsection shall be construed to prohibit links to third party web sites that contain general health information unrelated to specific company products or specific ingredients in company products. o. The above Policies & Procedures shall apply to social networking web sites such as myspace.com, youtube.com, facebook.com, Blogger, etc. Consultants must adhere to all Nikken Policies &

Procedures and advertising guidelines with respect to use of such services, and must not include content containing income claims, health or medical claims, or other content prohibited by these rules. Nikken Consultants using such services shall prominently identify themselves on the page as Independent Nikken Consultants. 7. A consultants personal web page may contain a personal statement, testimonial or personal greeting video link. Such statement, testimonial and video link must abide by all advertisement guidelines listed in the Policies and Procedures and be approved by Nikken prior to posting/linking. Personal statements, testimonials and personal greeting video links may be sent to PWPapproval@nikken.com for review and approval. Please allow up to 10 business days for review and approval. Approved personal greeting videos must be uploaded to a public media site such as YouTube.com, to which you may post a link to your PWP. Nikken will conduct random audits of PWPs. Any PWP found to be in violation of Nikken Policies and Procedures will result in the immediate removal or disabling of the content in violation. The subscribing consultant will receive a violation notice along with instructions on revising and resubmitting the personal statement, testimonial or video to comply with Nikken terms and conditions. Failure to respond by the stated deadline will result in a three-month suspension of the consultants PWP. The content in question must be removed from the PWP or revised, resubmitted and approved by Nikken to qualify for reinstatement of the PWP at the end of the three-month suspension. NIKKEN DISCLAIMS ANY AND ALL LIABILITY ARISING OUT OF OR RELATED IN ANY WAY TO CONSULTANTS OUTSIDE WEB SITES. CONSULTANTS SHALL INDEMNIFY AND HOLD NIKKEN HARMLESS FROM ANY AND ALL CLAIMS AND LOSSES OF ANY AND ALL TYPES SUSTAINED BY THE CONSULTANT RELATING TO THE OPERATION OF THEIR OUTSIDE WEB SITE.

M. General Advertising
1. Neither Nikken nor its Consultants are permitted to use the words or phrases bio-magnetic, therapy, therapeutic, increased circulation, cures, heals, healing, healing power, etc. 2. Consultants understand that the products are NOT considered to be and are NEVER offered or intended as medicines or medical treatments for any disease or disorder, either physical or mental. 3. Nikken and its Consultants are prohibited from suggesting any diagnosis, prognosis, evaluation, treatment, description, management or remedy of illness, ailment or disease. Nikken and its Consultants are further prohibited from creating or compiling any testimonials that imply or suggest any diagnosis, prognosis, evaluation, treatment, description, management or remedy of illness, ailment or disease through the use of any Nikken products. 4. Neither Nikken nor its Consultants will state that Nikken products are sold as medical products in other countries, unless asked. In North America, all Nikken products are consumer items only. 5. Although Consultants are free to sell Nikken products at any price, Consultants may not advertise the sale of Nikken products at or less than Consultant price. 6. Neither Nikken nor its Consultants will say or imply that Nikken products are FDA approved. In regard to the Nikken support wraps, Nikken Consultants will only use the terminology used in the Nikken Inc. literature. 7. No publications may link Nikken products to any claims of cures, healing or any other medical claims for specific ailments related to the application of magnets. 8. Consultants may create product-related material as long as it is truthful and accurate in content. All self-created promotional material must receive documented approval from Nikken prior to use and must have the following disclaimer This material has been produced by ___Consultant Name__, an Independent

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Nikken Consultant, and is not official material prepared or provided by Nikken, Inc. Consultants may not create and sell any tools or marketing materials for profit to other Consultants. 9. Anti-spam policy: Nikken has a zero tolerance anti-spam policy and any Consultant discovered spamming will face immediate disciplinary action. Spamming is defined as flooding the internet with unsolicited messages in an attempt to force the message on people or entities that would not otherwise choose to receive it. Use of email to other Consultants should be limited to Nikken-related business. Consultants must offer an opt out feature that allows recipients to remove their names from any mailing list. Any opt out requests must be honored. 10.Community crises: a. A Consultant may not issue a press release associated with a community crisis. A Consultant may not do blind advertising regardless of whether the Nikken name and logo are used. A Consultant may not issue a press release using the words clean, safe, or any other words designated to capitalize on a community tragedy. A Consultant may only use the materials provided in the media kit (see policy Q). b. Nikken Consultants may participate in philanthropic efforts to help persons and communities respond to crises. Consultants are welcome to contribute Nikken products and their time. 11.Newspaper advertisements: When Consultants use classified advertising in newspapers to find prospects, the following rules apply: a. No newspaper advertisement can imply that a job or position is available. b. No specific income can be promised. c. Advertisements must contain no misleading facts or distortions of the Nikken opportunity or product line.

Nikken has also created an Advertising Compliance web site to further assist Consultants with advertising concerns and questions. All self-produced advertisements must receive documented approval from Nikken prior to use. 3. The online media kit can be accessed in the Information Center at www.myNikken.com.

R. Sponsoring Policy
1. In the event that more than one Consultant approaches the same prospect, it is an understood courtesy that the prospect will generally sign up with the first Consultant who presented the whole story, but each new Consultant has the right to ultimately choose his/her own sponsor. 2. Nikken recognizes the sponsor as the name shown on the first Consultant Application/Agreement that is completed, dated, signed and received at the Nikken corporate office. 3. If a Consultant chooses to re-sponsor a former Nikken Consultant who was not originally sponsored by him/her, in order for the sponsorship to be accepted, the Consultant will first call Distributor Relations to verify that the potential new Consultant has been inactive for a minimum of six consecutive months after a resignation or expiration of the distributorship. The six-month waiting period may not be circumvented through the use of a spouse, surrogate or other proxy.

S. Transferring Sponsorships
1. Nikken does not allow sponsor changes, except under the following criteria: a. No such request can be accepted unless it is received by the Nikken corporate office within the same PV month that the Consultant Application/Agreement is entered into the Nikken computerized system. b. Nikken may allow a Consultant who has not yet reached the rank of Silver to change sponsors as long as the new sponsor and the old sponsor are in the same Silver Consultants Personal Group at the time the written request is received at the Nikken corporate office. 2. To effect a sponsorship change, the Consultant desiring the change shall send the request in writing to the Nikken corporate office, explaining the reason for the request. 3. The transferring Consultant, the new sponsor and the current sponsor, shall all approve and sign the request. 4. The transfer is valid only upon approval from Nikken. 5. The existing downline of any transferring Consultant will roll up to his/her previous sponsor. 6. Nikken will charge a US $25 / CN $26 transfer fee to the transferring Consultant for this process.

N. Copyrighted Materials
All Nikken literature and programs are copyrighted by Nikken and may not be duplicated without written consent from the Nikken Compliance Department. Nikken will cancel the distributorship of any Consultant found to be making or distributing unauthorized copies of literature or programs that violate this Agreement.

O. Telephone Directory Listing

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

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

T. Cancellation of Distributorship by Nikken

1. A distributorship may be cancelled for the following reasons: a. Any violation of the Policies & Procedures or the compensation plan. b. A breach of any promise made in the Consultant Application/Agreement or any misstatement or misrepresentation by the Consultant. c. Any disparagement of Nikken, its subsidiaries, other Nikken Consultants, Nikken products and/or services, the marketing and compensation plan or Nikken employees. Nikken will take swift action against any consultant who publically (e.g. via emails, Facebook, Twitter, wellness previews, all conference calls, etc.) makes negative comments within the field that are both damaging to the Nikken brand and counter-productive to the Nikken business, as determined by the Company. Discussion and debate of Company decisions is encouraged and may be
Po l i c i e s & P ro ce d u re s

Q. Media Advertising
1. Nikken has created an online media kit containing Nikkenapproved, predesigned advertising pieces, for Consultants to download and use for print media such as newspapers, magazines or the Yellow Pages. These advertising pieces are complete and may not be altered, except for the addition of the Consultants personal information where indicated. 2. The media kit includes instructions on how to place advertising and Nikken rules and guidelines regarding contact with the media. To assure an accurate and consistent public image, compliance with Nikken print media rules is mandatory.

directed to Nikken, but personal attacks, falsehoods, defamation and malicious statements will not be condoned. In addition to cancellation, Nikken is entitled to take legal action against the Consultant for any damages entitled by law. 2. Disciplinary actions: A Consultants violation of any policies and procedures, the agreement, terms and conditions or any illegal, fraudulent, deceptive or unethical business conduct may result, at the discretion of Nikken, in one or more of the following disciplinary actions: a. Issuance of a written warning or admonition. b. Imposition of a fine, which may be imposed immediately or withheld from future commission checks. c. Reassignment of all of a Consultants organization to next upline. d. Suspension, which may result in cancellation or reinstatement with conditions or restrictions. e. Cancellation of the Consultants distributorship. 3. Disciplinary actions may be initiated by three written, detailed complaint letters from individuals who witnessed the violation or actual proof of the violation (i.e. a copy of a recruiting letter or an advertisement in violation of Policies & Procedures). 4. When a decision is made to cancel a distributorship, Nikken will inform the Consultant in writing that the distributorship is cancelled immediately, effective as of the date of the written notification. The cancellation notice will be sent by certified mail to the Consultants address on file with Nikken. The Consultant will have 15 days from the date of the mailing of the certified letter in which to appeal the cancellation in writing. No appeal will be considered unless such correspondence is received by Nikken within 15 days of a Nikken cancellation letter. If the appeal is not received within the 15-day period, the cancellation will be automatically deemed final. 5. If a Consultant files a timely appeal of cancellation, Nikken will review and reconsider any other appropriate action, and notify the Consultant of its decision. The decision of Nikken will be final and subject to no further review. In the event of cancellation, it will be effective as of the date of the original cancellation notice. 6. Immediately upon the cancellation of a distributorship, the affected Consultant will remove and discontinue use of and will not thereafter use, the names, marks or any signs, labels, stationery, advertising or reading materials referring to or relating to any Nikken products. Where applicable state law on cancellation of a distributorship is inconsistent with company policy, such state law cancellation procedures shall be in force. 7. A cancelled Consultants excess, unused product in resalable condition may be returned to Nikken in accordance with the product return policy. 8. With the exception of Diamond and above distributorships, the downline of a cancelled Consultant will roll up to the direct sponsor. No downline rollup will occur for cancelled distributorships at the rank of Diamond and above. The cancelled distributorship position will be held by Nikken for an indeterminate period and maintained at the same pin rank prior to cancellation for upline monthly qualification purposes. After the holding period concludes, the position of the cancelled Diamond or above will be turned over to the active upline sponsor of the cancelled distributorship. The active upline sponsor has the option to allow the cancelled distributorship to roll up one level to his/her current distributorship or sell the cancelled distributorship (pending Nikkens approval of the sale). The proceeds sale must be divided equally between the active sponsor and 5 active uplines. A distributorship is considered active if a purchase has been made within 6 months prior to the sale of the cancelled distributorship. 9. A Consultant who is cancelled by Nikken under this provision

may reapply to be a Consultant after a minimum of one year with no activity. The new application requires consent of an authorized officer of Nikken. 10.Service upon Nikken of a petition for bankruptcy by a Consultant is grounds for immediate cancellation. Nikken will pursue whatever means are legally and reasonably available to recover sums owed to Nikken by petitioner.

U. Resignation of the Distributorship by Consultant Request

1. Any Consultant may resign his/her distributorship upon written notice to Nikken. The downline of a resigned Consultant will roll up to the direct sponsor. (Nikken requires the signatures of both the applicant and the co-applicant.) a. A Consultant who has resigned is eligible to reapply for a distributorship after a minimum of six months. During the time between the resignation and his/her reapplication, he/she is not permitted, actively or passively, to participate in the building or development of any Nikken distributorship, including the ordering or purchasing of product (other than for personal use) and the recruiting of Consultants. b. A Consultant who has returned unsold product in connection with his/her resignation is not eligible to reapply to be a Consultant prior to six months from the date of his/her resignation. During the six-month period, the Consultant is not permitted, actively or passively, to participate in the building or development of any Nikken distributorship, including the ordering or purchasing of product (other than for personal use) and the recruiting of Consultants. c. The six-month waiting period may not be circumvented through use of a spouse, surrogate or other proxy who signs up under a different sponsor. 2. A Consultant reapplying after resignation will not recover previous downline or retain prior rights to bonuses, rank or position in any former line of descent. 3. Immediately upon resignation of a distributorship, the affected Consultant will remove and discontinue the use of and will not thereafter use, the names, marks and/or any signs, labels, stationery, advertising or reading material referring to or relating to any Nikken products. 4. When a Consultant resigns, excess product in unused, restockable condition may be returned to Nikken in accordance with the product return policy.

V. Expiration of Distributorship
1. Consultants will be advised in writing via email of their need to apply for renewal at 30 days prior to their anniversary date. 2. A distributorship is authorized to apply for renewal up to 90 days prior to the anniversary date of their original application as long as all Consultant obligations are fulfilled. This includes having achieved in personal volume (PV) a sales volume of 100 PV amount and paying the renewal fee. The 100 PV sales volume must have been accumulated throughout the previous 12 months prior to the anniversary date. Nikken reserves the right to accept or reject the application for renewal of the distributorship. In the event of a dispute regarding a distributorship which has not been renewed or an involuntarily cancelled distributorship, the Companys liability for damages shall be limited to the remaining months of the one-year term of contract. 3. Consultants who fail to renew their distributorship on or before the anniversary date will be placed on hold and will have a grace period of 90 days after their anniversary date within which to apply for renewal. Once a distributorship is placed on hold, all autoships and subscriptions are cancelled. Consultants who renew during the 90-day grace period must have a minimum A100 PV in the previous 12 months prior to their anniversary date or place a new

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

Distributorship Renewal/Reinstatement Summary Chart

Consultants who have not renewed by Consultants can renew up to 90 days their anniversay date are placed on prior to their anniversary date. a hold status for a 90-day grace period REQUIREMENTS Have 100PV within 12 months of anniversary date or place a new order to meet this requirement Pay renewal fee Clear all debts on the account Complete and submit Reinstatement Application To renew your distributorship X To renew an account that is on hold X Consultants who failed to renew during the 90-day grace period are now Retail Customers and may request to reinstate their account - Rank will be restored but not downline To reinstate your account X

X X

X X

X X X

order to meet this requirement. Consultants must also clear all debts on the account and pay the renewal fee. Consultants renewing within the 90 day grace period will have their rank and downline reinstated. 4. (Effective March 1, 2013) A Consultant who fails to renew during the 90-day grace period after his/her anniversary date will be converted to a retail customer. Within six months from the anniversary date, the Consultant may complete a new Consultant Application, clearing all debts on the account and paying the renewal fee. The Consultant must also have a minimum 100 PV in the previous months prior to his/her anniversary or place a new order to meet this requirement. The Consultants rank will be reinstated but not the downline. Former Bronze Consultants who wish to reinstate their distributorship will be reinstated at the Executive level since the Bronze level has been removed. A Consultant who fails to renew on or before his/her anniversary date or within the 90day grace period and wishes to reapply for a new distributorship under a different sponsor must wait six months from the anniversary date, and must not actively or passively participate in the building or development of any Nikken distributorship, including the purchasing of products (other than for personal use) and the recruiting of Consultants during that time. A new application is required. 5. A Consultant who has returned unsold product in connection with his/her distributorship expiration is not eligible to reapply to be a Consultant prior to six months from the date of his/her product return. During the six-month period, the Consultant is not permitted, actively or passively, to participate in the building of any Nikken distributorship, including the ordering or purchasing of product (other than for personal use) and the recruiting of Consultants. 6. Once the distributorship has expired, the affected Consultant will remove and discontinue use of, and will not thereafter use, the names, marks or any signs, labels, stationery, advertising or reading material referring to or relating to any Nikken products. 7. Nikken provides three methods for applying to renew a Consultant contract: a. By mail: Submit a written request. b. By phone: Renew through the order desk. c. By internet: myNikken.com subscribers will receive renewal reminders via email. 8. If a distributorship is expired, the downline Consultants and their organization will move to the sponsor of the terminated distributorship. 9. At the expiration of a distributorships one-year term, a Consultant shall have the option of applying to renew as a Nikken consultant with attendant benefits of both product purchasing and sales opportunity or, in the alternative, of becoming a Nikken retail customer with opportunities to continue purchasing Nikken product at a discount.

W. Lead Assignment Policy

A Consultant should plan carefully whether organizing a large lead campaign or casually collecting leads one at a time. Any time a Consultant plans to mail or hand out literature, he/she should always include a contact name, address and/or phone number on the materials. This action helps assure that the Consultants activity is rewarded when leads develop from his/her efforts. If the prospect contacts Nikken directly, then he/she is considered an unsolicited prospect and will be handled according to the Nikken lead distribution system policy.

X. Excuse for Non-Performance

Neither Nikken nor any Consultant shall be responsible for delays and failures in performances where performance is made commercially impracticable due to circumstances beyond the partys reasonable control. This includes, but is not limited to, strikes, labor difficulties, riots, wars, fires, deaths, curtailments of the partys usual source of supply or government decrees or orders.

Y. Sell, Assign, Delegate, or Merge

1. A Consultant may sell, assign (transfer to another), delegate (give authority to act in anothers stead), merge (absorb one into another), or otherwise transfer his or her distributorship, marketing position or other Consultant rights with written application, written approval by upline as designated below and written approval by Nikken. This paragraph is also applicable to the transfer of any interest in an entity that owns a distributorship, including but not limited to corporation, partnership, trust or other non-individual entity. 2. Purchase: The terms and conditions of an offer to purchase require an offer to the upline sponsor in writing at the same terms. Should the upline sponsor decline in writing to purchase or to find a purchaser for the distributorship, an original purchase offer may be accepted if all company requirements are satisfied and written approval by the upline sponsors is obtained. Copies of all written documentation regarding the sale are to be submitted to Nikken for its records. The purchase/sale of the distributorship will not be final until the selling Consultant acknowledges and signs the Nikken nondisclosure agreement and non-interference/non-raiding agreement in writing. A Consultant who sells his/her distributorship shall not be eligible to reapply as a Consultant for a minimum of six consecutive months after the sale. 3. Assignment: The assignee gives up his/her old position and rank in the companys line of descent (if assignee is already a Consultant). Any existing organization of the assignee will default to his/her upline sponsor and the assignee assumes the position and rank of the assignor in the assignors organization, with the written approval of assignors direct Silver or above upline. Copies of all written documentation regarding the assignment are to be submitted to Nikken for its records. 4. Delegation: Notarized copies of all documentation establishing a delegation of powers for a distributorship are to be submitted to Nikken for its records. A letter approving the delegation must be
Po l i c i e s & P ro ce d u re s

provided to Nikken from the direct Silver or above upline. 5. Merger: The parties to a merger must obtain the approval of the direct Silver or above upline and provide a letter to Nikken naming the parties and outlining the terms of the merger. Copies of all documentation establishing a merger of distributorships are to be submitted to Nikken for its records. 6. The purchaser, assignee, person to whom delegation is made or the parties to a merger, if not already a Nikken Consultant, will first complete a current Agreement and possess a reasonable ability to satisfactorily perform the obligations of the distributorship. 7. Nikken reserves the right to disapprove any sale, assignment, delegation or merger, but approval shall not be unreasonably withheld if conditions herein are satisfied. Grounds for the disapproval of any sale, assignment, delegation or merger may include, but are not limited to, Policies & Procedures violation, suspension of distributorship within the last 12 months, or lack of providing qualified buyers. 8. Approval shall not be unreasonably withheld by upline sponsors or other upline parties if conditions herein are satisfied. 9. No Consultant shall sell, assign, delegate or merge a distributorship or interest in an ownership entity of a distributorship for purposes of, or where the result is, circumvention of Nikken Policies & Procedures, including, but not limited to, cross-sponsoring rules and/or multiple company distributorships or sales of substantially similar products. No Consultant shall act to facilitate the sponsorship of another Consultant for the benefit of an unrelated upline, nor actively contribute to the termination of a distributorship for purposes of reapplication to an unrelated Consultant upline. 10.Nikken reserves the right to review any sale, assignment, delegation or merger, and to impose reasonable conditions on the sale, assignment, delegation or merger to insure compliance with these policies. 11.The purchaser, assignee, person to whom delegation is made, and the parties to a merger shall complete the necessary training prior to the purchase of the distributorship. Any training credited to the purchasing distributorship and rank will not be transferred to the purchaser. 12. If the purchaser, assignee or parties to a merger is already a Consultant, he/she can purchase, assign or merge distributorships that are in the same Silver Consultants Personal Group only. 13. To be eligible to sell or purchase, the distributorship must have been actively maintained for the past 6 months, and must not have been suspended for any reason during the past 12 months. Actively maintained is defined as placing an order of 100 PV or more in any month during a 6 month period. Therefore, the eligibility rule would require placement of an order for at least 100 PV during the 6 months prior to the month of sale or purchase. 14. A Consultant may not add a co-applicant to their distributorship and thereafter, remove his/her own name from the distributorship, as an effort to circumvent the Nikken sale, assignment, delegation or merger procedure. The primary Consultant must wait six months after adding a co-applicant to the distributorship before he/she is allowed to remove his/her own name from the distributorship. 15. A US / CN $500 assignment fee will be charged to the assignee Consultant for each transaction.

compliance therewith. Waiver by Nikken can only be effected in writing by an authorized officer of Nikken.

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

BB. Jurisdiction and Venue

Jurisdiction over any legal action involving these Policies & Procedures, compensation plan and Consultant Application/Agreement shall be proper only in the state and federal courts located in Orange County, California, and no other venue shall have jurisdiction.

CC. Exclusive Rules

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

DD. Personal Purchases (Personal Volume - PV)

1. Purchases over A5,000 PV within a calendar month will be accompanied by the Consultant retail sales receipt or Personal Volume/ product purchase verification as proof of the retail sales transaction. 2. It is the Nikken policy and philosophy that inventory products should be purchased in reasonable amounts in the ordinary course of business for purposes of either actual personal use or sale to the ultimate consumer. Product inventory purchases made primarily for purposes of qualification or rank advancement for the benefit of a Consultant or his/her upline or downline are strictly prohibited. Consultants may not inventory-load nor encourage other Consultants to inventory-load. 3. The company sales and marketing policy is based upon retail sales to the ultimate consumer. a. Five retail customer rule: The companys program is built upon retail sales to the ultimate consumer. The company also recognizes that Consultants may wish to purchase product in reasonable amounts for their own personal or family use. For this reason, a retail sale for bonus purposes shall include sales to nondistributors as well as sales to Consultants for personal or family use which are not made for purposes of qualification or advancement. It is company policy, however, to strictly prohibit the purchase of products or large quantities of inventory in unreasonable amounts solely for the purpose of qualifying for bonuses or advancement in the marketing program. Consultants may not inventory-load nor encourage others in the program to inventory-load. Consultants must fulfill published personal and downline retail sales requirements, including requisite retail sales to nondistributors, as well as supervisory responsibilities, to qualify for bonuses, overrides or advancements. A Consultant will not be eligible for bonuses or overrides unless he/she has made at least five sales per month to non-distributor retail customers. Consultants should carefully document all retail sales, maintain all retail receipts for a period of two years and make this documentation available to Nikken upon request.

Z. Non-Waiver Provision
The failure of Nikken to exercise any rights stated in the Policies & Procedures, compensation plan or Consultant Application/Agreement (or to insist upon strict compliance by a Consultant with any obligation or provision thereunder) shall not constitute a waiver of the rights of Nikken to demand exact

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

b. 70-percent rule: Under this rule, Consultants may not order additional product unless they have sold or used for personal or family use at least 70 percent of previously purchased inventory-type product. c. Retail sales/70-percent rule verification program: In an effort to support and enforce the retail sales/70-percent rule, Nikken will on a monthly basis conduct random audit verification follow-ups. Representatives of the company will contact Consultants to further verify compliance with the retail sales/70 percent rule. Consultants should maintain records and be prepared to assist company representatives in this task.

Any change in distributorship information must be made in writing and signed by all parties listed on the account.

II. ORDERING, PAYMENT AND SHIPPING POLICIES

A. Ordering Methods
1. By Phone: toll-free order lines 800-669-8859, option 2 English (US) 800-669-8890, option 2 English (Canada) 888-2NIKKEN Customer line (888-264-5536) 800-669-8896 Japanese 800-669-8897 Spanish 800-669-8898 French a. A Consultant should be prepared to present all information requested on the Consultant order form. The order clerk will review the order, allowing changes to be made. If a Consultant fails to make corrections prior to the conclusion of the call, no changes, additions or cancellations will be permitted at a later time. b. Acceptable payment is by credit card or bank wire transfer by telephone, for all phone orders. 2. By internet: Receive a 3% discount with Advanced myNikken. See Nikken systems and services guide for more options. 3. By Autoship: A standing order to make regularly scheduled product purchases. Consultants may make changes to their Autoship order in three ways: a. By mail b. By fax c. Through myNikken subscription (a retail Autoship program is available for retail customers. Please see the form included in your Business Success Kit.)

EE. Literature and Sales Aids

Nikken Consultants may not produce, use or distribute any literature or information relative to the contents or the properties of Nikken products which has not been directly provided by Nikken, Inc./Nihon Kenko Zoushin Kenkyukai, Canada Corporation for the country in which the product will be sold. This prohibition includes but is not limited to print, audio or video media.

FF. Termination of Breaching Party in an Ownership Entity Distributorship

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

GG. Judgment and Tax Liens

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

HH. Subpoenas Duces Tecum (Demands for Records)

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

B. Payment Methods
Nikken will accept the following forms of payment for an order: 1. Credit Cards: Nikken accepts VISA, MasterCard, Discover Card, and American Express (Discover Card accepted in the U.S. only); The name of the cardholder must appear on the Consultants account or on the ship to address of the order. All credit card charges will be verified and authorized through a credit card service. In the event that the charge is declined, the order will not be accepted. Note: Nikken does not tolerate, and will cooperate with law enforcement in the prosecution of, fraudulent users of credit cards. 2. Cashiers checks or money orders: Make payable to Nikken for the full amount of the order including applicable sales tax, shipping and handling charges. 3. Personal checks: Personal checks are accepted, provided: a. All personal checks will be verified. Canadian orders paid by personal check require the Canadian drivers license number written on the face of the check. b. The personal check of the Consultant is imprinted by his/her bank with the Consultants correct name and permanent address. c. All orders paid by check for amounts over $500 US will be released to the purchaser after the check has cleared payment. 4. Bank wire transfers: Wire transfer process for Consultants is as follows: Step 1: Call Nikken toll-free order lines to place an order and receive the sales order amount and order number. Step 2: State the destination of the wire transfer and Consultants bank account number. A wire transfer should be made from the Consultants bank.

II. Requests for Records

Nikken will comply fully with all requests for records accompanied by a properly prepared and signed authorization by the person whose records are being sought. Nikken will comply fully with all requests for records by government agencies with the authority to request such records when accompanied by the requisite legal documentation.

JJ. Noninterference
For the term of the Consultant Agreement and for three years thereafter, a Consultant agrees that he/she shall not disrupt, damage, impair or interfere with the business of Nikken, whether by way of interfering with, or raiding its employees or Consultants, disrupting its relationship with customers, agents, representatives, Consultants, suppliers, vendors or manufacturers or otherwise. Disrupting or interfering shall include, but not be limited to, direct or indirect solicitation or recruitment for other direct selling business opportunities or products or services of other direct selling companies. A Consultant seeking to sell his/her distributorship must acknowledge and agree to this provision prior to the finalization of the sale of their distributorship.

KK. Distributorship Information

It is the Consultants responsibility to keep all information on their distributorship updated and to notify Nikken of any changes.

Po l i c i e s & P ro ce d u re s

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Step 3: (For Canada bank wire transfers only) Consultant must fax a copy of the bank transfer receipt and reference his/her Nikken order number. * US Bank Wire Transfer: Transfer to: Nikken, Inc. Bank Name: Bank of the West Branch: Japanese corporate banking south Address: 300 South Grand Avenue, Los Angeles, California 90071 Telephone: (800) 488-2265 Bank Routing Number: 121100782 Bank Account Number: 865010664 * Canada Bank Wire Transfer: Transfer to: Nihon Kenko Zoushin Kenkyukai, Canada Corporation Bank Name: Royal Bank of Canada Branch: Main branch Address: 1025 West Georgia Street, Vancouver, BC V6E 3N9 Telephone: (800) 769-2535 Bank Transit Number: 00010 Bank Account Number: 000101656602

to discontinue the discounted price of an item at any time without advance notice. 3. For will call/pick up backordered items, Consultant will be notified via telephone when the item is ready for pick up. Shipping rates will apply should the Consultant decide to have backordered item(s) shipped instead.

G. Discrepancy of Order
A Consultant and/or recipient of an order has the responsibility to verify that the product received matches the product listed on the shipping invoice. Failure to notify Nikken of any shipping discrepancy within 10 days of receipt will cancel the Consultants right to request a correction.

H. Distributor Services
Consultant inquiries may be made by telephone, fax, mail or email. A complete list of corporate email addresses can be found on myNikken.com. 1. By phone: English: In the U.S. call: 800-669-8859, option 4 In Canada call: 800-669-8890, option 4 Spanish: 800-669-8897 Japanese: 800-669-8896 French: 800-669-8898 2. By fax: All languages: 888-5NIKKEN (888-564-5536) 3. By mail: 52 Discovery, Irvine CA 92618 4. By email: consultantservices@nikken.com

C. General Order Policies

1. On mail orders with invalid or incorrect payment, Nikken will attempt to contact the Consultant to obtain a replacement or additional payment. If the attempt is unsuccessful, the order will be returned unprocessed. 2. A Consultant may not place new orders unless at least 70 percent of previously purchased inventory has been sold or consumed. 3. No Cash On Delivery (COD) orders will be accepted. 4. Consultants may place orders by fax using a standard order form. 5. Consultants are responsible for all sales, returns and chargebacks made by their customers. Nikken is not responsible for any fraudulent charges that take place between a Consultant and his/her customer.

I. Internet Support Department (myNikken and ISP issues)

Inquiries may be made: 1. By phone: 888-645-5363 2. By fax: 888-5NIKKEN (888-564-5536)

D. Shipping Policies
1. Consult the current price list and Consultant order forms for shipping charges. 2. Standard orders will be shipped within 24 hours of the time the order is received, excluding holidays, weekends and during scheduled physical inventory. Nikken will put its best effort into fulfilling this policy; however, Nikken is not responsible for any problems occurring from failure to meet this deadline. 3. Rerouting of shipments-in-transit will be billed at current carrier rates and is permissible only within the state or province of the originally specified address. Shipments cannot be rerouted to a different state or province. 4. There will be an additional charge for each delivery attempt as a result of an incorrect address or invalid phone number. 5. Consultants will be charged for any additional shipping charges incurred due to the return of a refused shipment.

3. By mail: 52 Discovery, Irvine, CA 92618 4. By e-mail: internetsupport@nikken.com

III. PRODUCT RETURN POLICY

Nikken stresses the importance of good business inventory management to all Consultants. Nikken discourages Consultants from maintaining excess inventory. Consultants should only order items that have been pre-sold or have been ordered by retail customers.

A. Returns
1. A Consultant may return products for credit to his/her distributorship account only if the products are in resalable condition and currently stocked and sold by Nikken. The credit is acceptable if effected within one year of the original purchase date and sent to Nikken with freight and insurance prepaid. A handling fee of 10% will be charged and any commissions or rebates paid will be deducted. To return products for credit to a distributorship account, the Consultant shall first call the Nikken corporate office to request an RMA number. The Consultant must write the RMA number on the outside of each package being returned. Products not labeled with an RMA number on the outside of the package will be returned to the Consultant at their expense. An RMA number is valid for 30 days. A new RMA number must be requested after 30 days. Nikken will not accept the return of individual items from a multiple-item kit or pack. Allow 10 business days for processing. 2. Any products that are defective in workmanship, Nikken will repair or replace at no charge for the same products originally purchased. The defective product must be within the warranty period and the Consultant must request an RMA (Return Merchandise Authorization) in order to return a defective product

E. Will Call/Pick Up Orders

Will call/pick up orders will be held for 10 business days. Orders not picked up within 10 business days will be shipped to Consultants shipping address via standard carrier at the Consultants expense.

F. Backorder Policy
1. Nikken will expeditiously ship any part of an order that is in stock. Out-of-stock items (unless discontinued) will be placed on backorder and distributed upon Nikken receiving additional inventory of that item. Personal Volume will be credited on backordered items at the time of purchase. 2. Backorder: Nikken has no obligation to honor the previously discounted price of a backordered item. Nikken reserves the right

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

in exchange for a new one. For product(s) damaged in shipping, Consultant must request a Return Merchandise Authorization (RMA) upon receipt of the product in order to receive a replacement of the same product originally purchased. Allow 10 business days for processing. The handling fee will not apply to RMAs for defective products. 3. A Consultant may cancel an order within 3 business days from the date of purchase by calling the Nikken corporate office to obtain an RMA number. The RMA must be written on the outside of the returning package with freight and insurance prepaid. Products not labeled with an RMA number on the outside of the package will be returned to the Consultant at their expense. An RMA number is valid for 30 days. A new RMA number must be requested after 30 days. Consultant will receive a refund in the original form of payment, less shipping fees. The handling fee will not apply. Allow 10 business days for processing. 4. Return of inventory for refund: Request for return of inventory by a Consultant for any reason, other than damage claim, will be treated as a request to voluntarily cancel that distributorship. If a Consultant desires to cancel his/her distributorship, he/she may qualify for a refund of unopened, resalable inventory with current labels, less all commissions and rebates paid to such Consultant and less a 10% handling fee, provided the products are currently stocked and sold by Nikken, and are returned within one year of the initial purchase date, with freight and insurance prepaid. To return inventory for refund, the Consultant shall first call the Nikken corporate office to request an RMA number. The Consultant must write the RMA number on the outside of each package to be returned. Products not labeled with an RMA number on the outside of the package will be returned to the Consultant at their expense. An RMA number is valid for 30 days. After 30 days, a new RMA number must be requested. Nikken will not accept the return of individual items from a multiple-item kit or pack. The Consultant shall allow a minimum of 10 business days processing time from the date the products are received. All refunds will be tendered in the same form as original payment. Nikken has no obligation to refund products verified as sold under the 70 percent rule. Consultants distributorship will be immediately cancelled upon issuance of the refund. 5. Nikken will inspect all returned inventory pursuant to this section. If it is determined that the product is in resalable condition and all other requirements have been met, credits/refunds will be processed accordingly. 6. Products not eligible for return (products deemed used or not defective) will be returned to the Consultant at their expense. 7. Consignee (shipment recipient) shall be liable for handling fees incurred upon refusal of product deliveries. Consignee shall also be liable for handling fees incurred after repeated and unsuccessful attempts by carrier to deliver products. 8. The return of inventory referred to herein may reduce the current Personal Group Volume of upline Consultants. 9. Return of Business Kits are permissible for account termination requests if the kits have not been opened and are in resalable condition. Refund on electronic Business Kits are permissible if refund and account termination is requested within 30 days of sign up and no products have been placed under the distributorship account. Note: All upline Consultants related to such returns are subjected to deductions based on overrides and/or bonuses paid to them on the products volume.

defect in a product during the limited warranty period for that product, the product should be returned to the Consultant for repair or replacement. Consultants may return the defective product after first calling Distributor Services to request and receive an RMA number. Consultant will be responsible for any incurred charges. Compliance with these procedures is necessary to provide continued quality service and products to retail customers. Misuse of or tampering with any products will render the limited warranty void and Nikken will not be liable for any resulting damages or injuries. 2. Clothing exchange policy: All Nikken clothing items are designed around the Nikken standard industry sizing chart. If the fit is not as the retail customer expected or a product defect is experienced, the item will be exchanged by Nikken. The retail customer should return the product to the Consultant within 30 days of purchase, in restockable condition, in the original package with the retail receipt. The Consultant may then complete the exchange following the RMA procedures noted above. 3. Nutrition and skin care 30-day money-back guarantee: Nikken guarantees the quality of all nutritional and skin care products that carry the Nikken name. If a retail customer is not satisfied, he/she may return the product to the Nikken Consultant within 30 days of purchase. The Consultant may then complete the return following the RMA procedure above.

C. Nutritional Product Freshness Guidelines

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

D. New Product Warranty Coverage

PRODUCT WARRANTY COVERAGE

Products Air Wellness Power5 Pro fan motor (excludes filters) components Air Wellness Power5 filter Air Wellness Traveler Air Wellness Traveler filter Biaxial PowerMag KenkoAir Purifier fan motor components Kenko Classic Collection Stainless Steel Jewelry Kenko Dream Comforter Kenko Dream Light Comforter KenkoLight II Kenko MagDuo Kenko MagFlex Kenko Naturest Custom Pillow Kenko Naturest Demo Pad Kenko Naturest Mattress Topper Kenko Naturest Travel Pillow Kenko Perfect Link Necklace Kenko PetPad Kenko PowerBand with TriPhase Technology Kenko PowerChip Kenko PowerPatch Kenko PowerSleep Mask KenkoSeat II (Warranty voided if cover removed) KenkoTherm Wraps Kenko Travel Comforter MagCreator Magna-Charger MagSteps MagStrides PiMag Deluxe Countertop Water System PiMag MicroJet Shower System PiMag replacement component/filter PiMag Sport Bottle PiMag Ultra Shower System PiMag Waterfall Sport Socks True Elements Skin Care
30 days 60 days 90 days 6 mos 1 yr 2 yrs 3 yrs

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

B. Limited Warranty
1. General product limited warranty: Nikken offers a limited warranty on all of its products to retail customers of Nikken Consultants. Nikken guarantees these products to be free from defects in workmanship. Each product carries its own limited warranty, as listed in the chart on this page. Nikken Consultants shall handle all retail returns. If a retail customer of a Nikken Consultant experiences a manufacturer

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IV. COMMISSIONS, REBATES, OVERRIDES AND BONUSES

A. Payment of Commissions, Rebates, Overrides and Bonuses
1. Monthly commissions, rebates, overrides and bonuses are mailed out on the 15th of the following month unless the 15th falls on a weekend, in which case checks are issued on the Friday before. Lost or destroyed checks may be replaced upon request within 12 months of issue date only. A fee will be charged for reissued checks. 2. A Consultant has the responsibility to review his/her bonus recap and Nikken Lifestyle Bonus statement and report any discrepancies to Distributor Relations within 20 days. Any bonus recap and/or Nikken Lifestyle Bonus discrepancies not reported within 20 days will be deemed final and no adjustments will be made. 3. All Consultants are eligible for direct bank deposit of commission earnings. To activate a direct deposit account in a given month, the application must be received by the 20th of the preceding month. 4. Commission earnings issued via paper check will incur a $5 US/CN processing fee. Net commission earnings must be at least $25 US/CN or greater in order for a paper check to be issued. Otherwise the commission earnings will be credited to the Consultants distributorship account. 5. Sales volume qualifications by order taking: As with other leading direct-selling companies, Nikken has adopted minimum personal and group sales volume requirements. With respect to tangible products which may be offered for resale, minimum sales volume requirements may also be fulfilled by taking orders from retail customers which will be fulfilled or drop-shipped by the company directly to the retail customer. 6. Distributorships suspended at the volume month of commissions calculation will not receive commissions, rebates, overrides and/or bonuses on volume generated during the calculation volume month. The volume of the suspended distributorship will, however, count towards the next qualified uplines commissions calculation.

responsibility to fulfill the obligation of performing a bona fide supervisory, distributing and selling function in the sale or delivery of product to the ultimate consumer and in the training of those sponsored. Consultants are to maintain continuous contact, communication and management supervision within their sales organizations. Examples of such supervision may include, but are not limited to newsletters, written correspondence, personal meetings, telephone contacts, voice mail, electronic mail, training sessions, accompanying individuals to company training and sharing genealogy information with those sponsored. Consultants should be able to provide evidence to Nikken semi-annually of continued fulfillment of sponsor responsibilities. Additionally, Consultants qualify to receive overrides, bonuses or advancement in the compensation plan, by fulfilling the 70 percent rule, the five retail customer rule, the requirement that his/her downline has retailed product which has been purchased at wholesale, and the previously stated supervisory responsibilities. 2. Should a Consultant violate Nikken policy, his/her upline sponsor has the responsibility to use best efforts to bring the Consultant into compliance. 3. Silver (or above) Consultants will maintain, and make available to Nikken upon request, proof of continuing communication and contact with downline distributorships on whom they receive overrides and/or bonuses. Failure to supply this proof can be used as grounds for cancellation.

V. NIKKEN UNIVERSITY
The Nikken sales department offers various training programs through Nikken University, the training arm of Nikken. Included in the curriculum are Silver training 1, 2 and 3, Humans Being More training, Gold training, and various leadership workshops. These programs may be offered in the field, at the company headquarters in Irvine, California or on the internet. The Nikken University web link, NikkenU.com includes detailed course information, course schedules, access to a master calendar and links to other online Nikken services.

A. Silver training 1, 2 and 3

A targeted, three-part curriculum for Consultants on the leadership track, Silver training sheds light on the basics of network marketing while teaching budding business builders how to create a simple, duplicatable and proven system for success. A Silver Training voucher is included as part of the Business Success Kit and is redeemable up to one year from the date of purchase.

B. Monthly Accounting Service Fee

Nikken assesses a monthly accounting service fee on all monthly commission net earnings of $5 US/CN or more, which is deducted from monthly earnings according to the following: Title (Qualified) Senior Consultant Executive Consultant Bronze Consultant Silver Consultant Gold Consultant Platinum Consultant Diamond Consultant Royal Diamond and above Amount $2 $4 $8 $11 $14 $17 $25 $30

B. Humans Being More training

This two-day seminar is open to all Consultants and their guests. Discover the heart of the Nikken philosophy and learn how to take action in five key areas of life through a system designed to enhance your personal and professional success. Humans Being More training is required to advance to the rank of Silver or above.

C. Gold training
For more experienced Nikken Consultants, Gold training delivers relevant, advanced business strategy content designed to show leaders how to manage a growing organization, taught by the very pacesetters who have already been there. Gold training is required to participate in the Lifestyle Bonus.

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

1. Any Consultant who sponsors other Consultants accepts the

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VI. DEFINITION OF TERMS

For purposes of this Nikken marketing/compensation program, the following terms shall have the definitions set forth below:

Downline
All Consultants sponsored, directly or indirectly, by a given Consultant. For example, if A sponsors B, who sponsors C, who sponsors D, who sponsors E, then B, C, D and E are all downline from A.

A (Symbol for Nikken Points)

Signifies points used to calculate the qualifications for the Nikken compensation plan.

Downline Roll Up
Any expired, resigned or cancelled distributorship (with the exception of Diamond and above distributorships) will forfeit its downline, which automatically rolls up to the upline sponsor of the expired, resigned or cancelled distributorship.

Active Consultant
Any Consultant who places A100 PV in any month during one six-month period.

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

Duplicate the Process

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

Bypass Provision
There are three instances in which a Consultant can bypass his/her sponsor: 1. An individual in a Direct downline qualifies to become a Senior Consultant (1,500 PGV and 500 PV in one month), and the Direct Consultant has not achieved 500 PV by month end. In this case, the new Senior will move past the Direct to the next Senior or above in the upline. Once this happens, he/she cannot be recovered by the original sponsor. 2. If a Senior downline qualifies to become an Executive (4000 PGV and 100 PV in one month), the upline Senior Consultant must have a minimum 100 PV in the same month in order to avoid the new Executive from moving past the him/her to the next qualified Executive or above. Once a bypass has occurred, he/she cannot be recovered by the original sponsor. 3. When an upline Consultant is advancing to Silver and has a downline Consultant who also qualifies to advance to Silver, but the upline Consultant does not have a minimum 100 PV in the same month or enough legs to qualify for Silver, the upline Consultant must complete the requirements for Silver rank by 12,000 PGV in one, two or three consecutive months with three frontline Senior legs (or above) by the end of the next calendar month. If the upline sponsor has not fulfilled the requirements during the time period specified above, then the new downline Silver Consultant will roll up to the next upline Silver or above and cannot be recovered by the original sponsor.

Five Retail Customer Rule

To be eligible for ongoing overrides, bonuses, or advancement, a Consultant shall make, on a monthly basis, at least one sale to each of five retail customers.

Leadership Bonus
A bonus that is based on a percentage of the Personal Group CV of the Silver or above Consultants in a Consultants downline through as many as six qualified levels not merely the first six downline levels, but the first six levels on which qualified Silver Consultants or above are found. Meaning if a downline leg has 20 levels, all 20 levels will be assessed, until the appropriate number of qualified Silver or above Consultants are found.

Leadership Downline
All Consultants in a Consultants downline who have attained the rank of Silver Consultant or above.

Leg
See Primary Leg, Qualified Leg and Qualified Certified Leg.

Level
A relative term referring to specific positions in a Consultants downline. A Consultants first level is the group of Consultants directly sponsored by him/her. The second level consists of the Consultants directly sponsored by those first-level Consultants, and so on.

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

Market Unit or Market Area

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

Commission Volume (CV) See Volume. Consultant

Refers to any person or legal entity currently authorized to distribute Nikken products and participate in the compensation plan. Note: Consultants should read and understand all Nikken Policies & Procedures and keep updated on all amendments.

Organizational Volume (OV) See Volume. Personal Group

All Direct, Senior and Executive Consultants in a downline.

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Personal Group CV Override

An override earned on the Personal Group CV of all the Consultants in the Personal Group. The override equals the difference between the rebate percentage that the individual Consultant earns and the rebate percentage earned by the personally-sponsored Consultant. Example: A Qualified Silver Consultant (20 percent) would receive 10 percent override on the Personal Group CV of a personally sponsored Executive Consultant (10 percent; because 20 percent less 10 percent equals 10 percent). The Executive Consultants would receive 0 percent on the Personal Group CV of a personally-sponsored Executive Consultant (10 percent less 10 percent equals 0 percent), thus creating added incentive for that Executive Consultant to reach the Silver level.

ranks must have A100 in Personal Volume (PV) each month to be eligible for rebates and overrides. If a Consultant fails to achieve A100 PV in any month, the Consultant is considered inactive for that month and will not be qualified to receive any rebates, overrides and leadership bonuses. For leadership pin ranks (Silver through Royal Diamond) there are minimum Personal Group Volume (PGV) Organization Volume (OV) and OV outside the primary leg requirements to earn leadership bonuses. (See chart.) For example, a Silver level Consultant must have A2,000 PGV and 4,000 OV each month to be eligible to receive the Leadership Bonus.

Personal Commission Volume (PCV) Rebates

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

Personal Group Volume (PGV) See Volume. Personal (sales) Volume (PV) See Volume. Personal Volume Requirements See Volume. Personal Group Volume Requirements See Volume. Pin Rank
Consultants advance in the Nikken compensation plan from one level up to the next. The Direct, Senior and Executive pin ranks are achieved based on Personal Group Volume. The leadership pin ranks, Silver through Royal Diamond, are achieved based on the pin rank of qualified Consultant legs, PV, PGV, OV, and OV outside the primary leg (except Silver and Gold rank). For example, a Silver Consultant advances to the Gold pin rank by having three qualified Silver legs, 100 PV, 1500 PGV and 10,000 OV; a Gold Consultant may advance to Platinum by having three qualified Gold legs or six qualified Silver legs, 100 PV, 1000 PGV and 30,000 OV with at least 10,000 OV outside the primary leg and so on. Terminated Consultants do not count toward pin rank advancement.

Retail Profit
The difference between the retail price and the Consultant cost of products. When products are drop-shipped to retail customers, Nikken will include the retail profit based on suggested retail in the monthly compensation check.

Retail Sale
The Nikken program is built on retail sales to the ultimate consumer. Products are offered to Consultants only for sale to consumers and, at the Consultants election, personal use. Nikken recognizes that Consultants may wish to purchase products for personal or family use. Therefore, a retail sale includes both sales to non-Consultants as well as purchases by Consultants in reasonable amounts for personal or family use which are not made solely for purposes of bonus, override or advancement qualification.

Primary Leg
A primary leg is identified as the leg that contains the highest aggregate PGV in a Consultants organization.

Rollup Volume See Volume. 70-Percent Rule

To satisfy regulatory agencies and to observe the DSA code of ethics, Nikken periodically requires randomly chosen Consultants to submit signed sales receipts providing evidence that a Consultant has sold or used 70 percent of previously purchased products before a new order may be placed.

Primary Leg Organizational Volume See Volume. Qualified Buyer

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

70-Percent Rule Enforcement

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

Qualified Leg
In a downline configuration, a leg is begun when a new Consultant is sponsored. All other Consultants sponsored under this Consultant are considered to be in the same leg. That is, a directly sponsored Consultant is the beginning of a leg. For a leg to be qualified, any qualified Silver or above in that downline leg may qualify the leg. The highest qualified rank within a leg will determine the qualified rank for that particular leg.

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

Qualified Consultant
There are monthly qualification requirements for a Consultant to earn income from Nikken. All Consultants at Direct and above

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Upline
Refers to a persons sponsor, his/her sponsors sponsor and so on.

Volume
Commission Volume (CV) Volume upon which all bonuses, rebates and overrides are paid. Organizational Volume (OV) A Consultants Personal Group Volume (PGV) plus the point volume from his/her breakaway downline organization. Personal Group Volume (PGV) The volume contributed by the Direct, Senior and Executive Consultants in an organization. Personal Group Volume will determine rank, qualifying volume and pay level. Personal (sales) Volume (PV) The volume of products personally purchased by a Consultant within a calendar month. Personal Volume Requirements The monthly Personal Volume required of individual Consultants in order to receive a check for rebates, overrides and bonuses. The monthly Personal Volume requirement for Nikken is currently A100. Personal Group Volume Requirement The monthly Personal Group Volume required from Silver and higher rank individual Consultants in order to receive a leadership bonus from breakaway downlines. Compression volume from unqualified breakaways does not count toward PGV requirements. The minimum monthly requirement for each rank is as follows: Silver Gold Platinum Diamond Royal Diamond A2,000 A1,500 A1,000 A1000 A1000

Consultants who meet monthly PV and PGV requirements will receive up to 20% PGCV Override. Otherwise Consultants will receive up to 15% PGCV Override if monthly PV is met and PGV is not met. Primary Leg Organizational Volume The leg that contains the highest aggregated Organizational Volume in a Consultants organization. Rollup Volume When a breakaway Silver or above Consultant fails to satisfy monthly qualification requirements, his/her personal and group volume will roll up to the next qualified leadership upline. Rollup volume does not count toward breakaway Consultants monthly PGV qualification requirement.

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

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Compensation Plan
PROVEN RESULTS. UNLIMITED POTENTIAL.
The Nikken marketing opportunity has been designed to help Consultants achieve financial well-being and freedom on their road to total wellness. As a Nikken Consultant, you can choose your lifestyle and make your dreams come true. Our generous compensation plan permits you to rise to the top while encouraging others to rise with you. The income opportunity is unlimited and makes each step along the way financially rewarding. The Nikken marketing opportunity has opened the doors to a new world of self-fulfillment and prosperity for hundreds of thousands of Consultants worldwide. It can do the same for you. The financial opportunity and compensation plan we are about to describe can be your key to the life you and your loved ones have always wanted. operating 70 hours per week. You help each of these Consultants in turn to sponsor seven others. Your Nikken network has increased to 57 people with a combined productivity of 570 hours per week! How hard would you have to work on your own, to reap the benefit of 570 hours worth of effort every seven days? Its not possible. But the multiplication principle has leveraged your 10 hours into a weekly output equal to a single individual working full time for more than three months. What a tremendous return on 10 hours! This is the multiplication principle and the power of leveraging. (These projections are for evaluation purposes only and do not constitute a guarantee or an indicator of performance.)

SIX WAYS TO EARN

Through its generous compensation plan, Nikken offers six different ways to earn. Your success and the income you earn from your Nikken business is determined by the number of customers you have, the amount that each customer purchases and your effectiveness in building a sales organization that includes other Consultants who help you expand your customer base as they build their own sales organizations. This compensation plan is available to Nikken Consultants and International Consultants.

NETWORK MARKETING: A DYNAMIC FORCE

Network marketing is an opportunity for success that is open to anyone. It requires neither a large investment nor a college degree just the desire and the willingness to get out and make things happen. It provides an individual with the chance to climb to the peak of success based on his or her own merits and efforts. There are no supervisors or managers to evaluate performance. Your desire and dedication are what determine your rewards, not the opinions of others. It allows you to work according to your own rules regarding hours or scheduling. You are free to contribute as much as you desire toward your success. And in network marketing, the results of your efforts accrue to you. In other businesses, sales revenues are used to cover high operating costs advertising agencies, distribution companies, retailers and layers of corporate management. With network marketing, you are the company. You pay yourself, instead of trading to someone else your hours for dollars.

1. Retail Sales Profits

As a Consultant, you order products directly from Nikken at the Consultant price. Your retail profit is the difference between the retail and the Consultant price. For example, if your retail customer orders a product worth $1,250 retail ($1,000 Consultant price), you can make a retail profit of $250, which is 25 percent of the Consultant price. A retail sale can take place in the following ways: Consultants may purchase products for resale and sell directly to the retail customer Consultants may place orders for retail customers and drop ship to those customers Retail customers may order by phone, mail or fax, or online at www.nikken.com by entering the Consultants ID number.

THE MULTIPLICATION PRINCIPLE AT WORK

By bringing new Consultants into the Nikken network, you can qualify to earn income on their sales volumes, as well as on the sales volumes of the people they bring in, and so on. The individuals you sponsor as Consultants become the first level of your sales organization, called your first-level Consultants. The people these first-level Consultants enroll in turn become your second-level Consultants. Eventually, as you continue to sign up new Consultants, and they do the same, there will be many levels in many branches of your downline organization. This is where an explosively powerful principle comes into play, called the multiplication principle.

2. Personal Commission Volume (PCV) Rebate

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

3. Personal Group Commission Volume (PGCV) Override

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

LEVERAGE YOUR TIME

The multiplication principle is a powerful force working for you. It magnifies the effort you invest to provide exponentially greater returns. Suppose that you launch your Nikken distributorship with a commitment of 10 hours per week. This moderate beginning allows you to get started without sacrificing a lot of time from your current livelihood or other interests, while you build toward future success. As you grow your business, let's say you sponsor seven people as Consultants, who also each commit 10 hours per week. Now youve expanded your Nikken business network to an organization

4. Leadership Bonus
This powerful bonus is based on a percentage of the Personal Group Commission Volumes of the Silver or above Consultants in your organization. Nikken allows you to earn six percent bonuses on each descending line (leg) down through as many as six qualified leadership organization (Silver or above) levels.

5. Lifestyle Bonus Program

The Nikken Lifestyle Bonus Program (which replaces the Auto Incentive Program) is designed to help you balance your lifestyle through your Nikken business. If you want to use your bonus for a motor vehicle great! If you want to use it to spend more time with your family on a

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

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vacation, for your childs education, a boat, a motorcycle, attend Humans Being More training again with a guest, donate it to a charity and increase your society volume the choice is yours. Your life, your lifestyle and your decision on what is most important to you will determine how you apply this bonus. Additional information regarding this program can be found online at mynikken.com in the Lifestyle Bonus Program and Home Incentive program guide.

Monthly Qualification Requirement Achieve A100 PV Benefits

25 percent retail markup profit on personal sales (when sold at

suggested retail prices).

A rebate equal to five percent of your total Personal CV. This is

called a Personal CV rebate.

6. Home Bonus Program

Lifestyle Bonus Program participants are also eligible to earn the Home Bonus when they qualify consistently at Gold pin rank or above. Recipients can use this generous bonus to pay down their mortgage, purchase a new home or refinance an existing home! Additional information regarding this program can be found online at mynikken.com in the Lifestyle Bonus Program and Home Incentive program guide.

An override of up to five percent of the CV generated by the

downline in your Personel Group. This is called a Personal Group CV override.

Executive Consultant
Rank Advancement First, be a Senior Consultant Achieve 100 PV Achieve 4,000 PGV in one calendar month Monthly Qualification Requirement

PROMOTIONS AND CONTESTS

Periodically, Nikken will hold promotions and contests for its Consultants. For anyone to participate in any Nikken promotion or contest, he/she needs to qualify with a minimum of 100 PV monthly during the contest/promotion period. Consultants must also be in good standing with the company in order to be eligible for any prizes or rewards.

Achieve 100 PV
Benefits

25 percent retail markup profit on personal sales (when sold at

suggested retail prices). 10 percent Personal CV rebate. Up to 10 percent Personal Group CV override.

THE PATH TO FINANCIAL WELLNESS

Success with Nikken takes dedication, but the criteria for moving up in the organization are simple and straightforward. The levels you attain in Nikken are based on your Personal Volume, your Personal Group Volume, and the success of the Consultants in your downline. Your Personal Volume and Personal Group Volume are measured in A (Nikken points). A is used to calculate the qualifications in the Nikken compensation plan. Additionally, each point has a corresponding commission volume, the basis upon which commissions are paid. Independent Nikken Consultants shall be paid in their home country currency calculated at the current volume months exchange rate according to Oanda.com on the last business day of the month. For a definition of Personal Volume, Personal Group Volume, and the other terms used in this section, see the Nikken Policies & Procedures definition of terms, beginning on page 15.

THE LIMITLESS REALM OF THE LEADERSHIP BONUS

When you attain the rank of Silver Consultant, you jump into an exciting new area of income potential. In this and all higher ranks, you can qualify to earn the highly rewarding Leadership Bonus. This bonus is based on the productivity of the Silver or above Consultants in your downline and their Personal Groups. As Consultants in your Personal Group rise to the Silver rank, they take their own Personal Groups with them and they receive Personal Group Volume credit for their efforts. You will earn something even better the Leadership Bonus! This bonus equals six percent of the Personal Group CV down through as many as two levels of qualified Silver and above Consultants.

Direct Consultant
How to Qualify

Lifestyle Bonus Program

The Nikken Lifestyle Bonus (which replaces the Auto Incentive Program) is designed to help you balance your lifestyle through your Nikken business. If you want to use your bonus for a motor vehicle great! If you want to use it to spend more time with your family on a vacation, for your childs education, a boat, a motorcycle, attend Humans Being More training again with a guest, donate it to a charity and increase your society volume the choice is yours. Your life, your lifestyle and your decision on what is most important to you will determine how you apply this bonus. Additional information regarding this program can be found online at mynikken.com in the Lifestyle Bonus Program and Home Incentive program guide. How to Qualify

Read, understand and accept Nikken Policies & Procedures and

the compensation plan. Complete a Consultant Application/Agreement and send it to Nikken headquarters. (Corporate approval is necessary before you officially become a Direct Consultant.) Purchase a Business Success Kit which contains everything needed to start your distributorship (except where mandatory purchase is prohibited by law). English version of the Business Success Kit is available in hard copy and electronically online. French and Spanish versions are only available electronically online. Benefits Order products directly from Nikken at Consultant prices. Order through myNikken.com and Autoship for efficient, economical order processing. Sell to customers for a 25-percent retail markup profit. Begin to build a personal sales group by sponsoring other Consultants into the Nikken opportunity.

Must be a Gold Consultant or above Maintain three qualified leadership legs and be paid as Gold or
above for three consecutive months (the qualification period) to be enrolled in Lifestyle Bonus program After fulfillment of the qualification period, Consultant will be eligible to be paid the Lifestyle Bonus Build a network organization exclusively with Nikken. Circumvention of this policy by removing one spouse from the distributorship is not allowed. Register for Gold Training Monthly Qualification Requirement

Senior Consultant
Rank Advancement First, be a Direct Consultant Achieve A500 PV in a calendar month Achieve 1,500 PGV in the same calendar month

If a Consultant meets PV, PGV but fails to satisfy other

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requirements to be paid as a Gold, he/she will only receive one percent of his/her PGV.

* US values shown. Payout in Canada will be rendered according to the applicable currency exchange rate.

Consultants must meet PV, PGV, OV, non-primary OV and leg structure
requirements and be paid as a Gold or above in order to receive the Lifestyle Bonus on the breakaway volume in leadership levels. Benefits

Silver Consultant
Rank Advancement (see note 1 on page 22) Achieve at least 12,000 PGV in up to three (3) consecutive months if 12,000 PGV is not achieved in a single month. Develop and retain three Senior (or above) legs. Register for Humans Being More training. Achieve at least 100PV in order for PGV to be counted for a given month during the single and multi-month qualification period. Monthly Qualification Requirements Achieve 100 PV. Maintain a PGV of 2,000 Maintain an Organization Volume (OV) of 4,000 each month to be eligible for Leadership Bonus at pin rank. Benefits 25 percent retail markup profit on personal sales (when sold at suggested retail prices). 20 percent Personal CV rebate. Up to 20 percent Personal Group CV override if Consultant meets monthly PV and PGV requirements, otherwise Consultant will receive up to 15% Personal Group CV Override if monthly PV is met and PGV is not met. Six percent Leadership Bonus on Personal Group CV down through two levels of qualified Silver or above Consultants.

The amount of the Lifestyle Bonus is based on your leadership and

international volume. After leadership downline has been compressed, it is calculated using the following formula: Pay Rank Meet PV & PGV Qualification Gold (up to) Gold (up to) Gold (up to) Platinum (up to) Diamond (up to) Royal Diamond (up to) Pay Level PGCV level First level Second level Third level Fourth level Fifth level Sixth level Calculation __________ x 1% __________ x .5% __________ x .5% __________ x .25% __________ x .25% __________ x .25% __________ x .25% Total Lifestyle Bonus Amount = __________ = __________ = __________ = __________ = __________ = __________ = __________ = $_________

Lifestyle Bonus Payout by Rank Pay Rank Gold Platinum Diamond R. Diamond Lifestyle Bonus Up to $500* Up to $1000* Up to $1500* Up to $2000*

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Gold Consultant
Rank Advancement (see note 1 on page 22) Develop and maintain three qualified Silver or above legs. Achieve 100 PV. Achieve a PGV of 1,500. Achieve Organizational Volume of 10,000. Monthly Qualification Requirements Achieve 100 PV. Maintain a PGV of 1,500. Maintain an Organizational Volume of at least 10,000 each month to be eligible for a Leadership Bonus at pin rank. (See Note 3) Maintain three qualified Silver or above legs. Benefits 25 percent retail markup profits on personal sales (when sold at suggested retail prices). 20 percent Personal CV rebate. Up to 20 percent Personal Group CV override if Consultant meets monthly PV and PGV requirements, otherwise Consultant will receive up to 15% Personal Group CV Override if monthly PV is met and PGV is not met. Six percent Leadership Bonus on Personal Group CV down through three levels of qualified Silver or above Consultants. Eligible to qualify for Lifestyle Bonus

Achieve a PGV of 1,000. Achieve an Organization Volume of at least 100.000 with at least 33,000 of the minimum OV requirement being met by legs outside the primary leg. Monthly Qualification Requirements

Achieve 100 PV.

Maintain a PGV of 1,000 Maintain an Organization Volume of at least 100,000 each month with at least 33,000 of the minimum OV requirement being met by legs outside the primary leg to be eligible for a Leadership Bonus at pin rank. (See Note 3) Maintain three qualified Platinum or above legs or six qualified Gold or above legs. Benefits 25 percent retail markup profits on personal sales when sold at suggested retail prices. 20 percent Personal CV rebate. Up to 20 percent Personal Group CV override if Consultant meets monthly PV and PGV requirements, otherwise Consultant will receive up to 15% Personal Group CV Override if monthly PV is met and PGV is not met. Six percent Leadership Bonus on Personal Group CV down through five levels of qualified Silver or above Consultants. Eligible to qualify for Lifestyle and Home Bonus

Platinum Consultant
Rank Advancement (see note 1 on page 22) Develop and maintain three qualified Gold or above legs, or six qualified Silver or above legs. Achieve 100 PV. Achieve a PGV of 1,000. Achieve an Organization Volume of at least 30,000 with at least 10,000 of the minimum OV requirement being met by legs outside the primary leg. Monthly Qualification Requirements Achieve 100 PV Maintain a PGV of 1,000 Maintain an Organizational Volume of at least 30,000 each month with at least 10,000 of the minimum OV requirement being met by legs outside the primary leg to be eligible for a Leadership Bonus at pin rank. (See Note 3) Maintain three qualified Gold or above legs, or six qualified Silver or above legs Benefits 25 percent retail markup profits on personal sales (when sold at suggested retail prices). 20 percent Personal CV rebate. Up to 20 percent Personal Group CV override if Consultant meets monthly PV and PGV requirements, otherwise Consultant will receive up to 15% Personal Group CV Override if monthly PV is met and PGV is not met. Six percent Leadership Bonus on Personal Group CV down through four levels of qualified Silver or above Consultants. Eligible to qualify for Lifestyle and Home Bonus

Royal Diamond Consultant

Rank Advancement (see note 1 on page 22) Develop and maintain three qualified Diamond or above legs or six qualified Platinum (or above) legs. Achieve 100 PV Achieve a PGV of 1,000. Achieve an Organization Volume of at least 300,000 with at least 100,000 of the minimum OV requirement being met by legs outside the primary leg. Monthly Qualification Requirements Achieve 100 PV. Maintain a PGV of 1,000 Maintain an Organization Volume of at least 300,000 each month with at least 100,000 of the minimum OV requirement being met by legs outside the primary leg to be eligible for a Leadership Bonus at pin rank. (See Note 3) Maintain three qualified Diamond or above legs, or six qualified Platinum or above legs. Benefits 25 percent retail markup profits on personal sales (when sold at suggested retail prices). 20 percent Personal CV rebate. Up to 20 percent Personal Group CV override if Consultant meets monthly PV and PGV requirements, otherwise Consultant will receive up to 15% Personal Group CV Override if monthly PV is met and PGV is not met. Six percent Leadership Bonus on Personal Group CV down through six levels of qualified Silver or above Consultants. Eligible to qualify for Lifestyle and Home Bonus

Diamond Consultant
Rank Advancement (see note 1 on page 22) Develop and maintain three qualified Platinum or above legs or six qualified Gold or above legs. Achieve 100 PV.

Royal Ambassador
Those who achieve the position of Royal Ambassador are compensated for past and current accomplishments and for working with all Nikken Consultants, regardless of rank, level or line of sponsorship. Compensation includes a $1 million check and other very special rewards, making this achievement one that is simply unmatched in the industry.

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Rank Advancement (see note 1)

met, the Consultant cannot fall back to a lower rank in the future.*

Be a qualified Royal Diamond Consultant. Maintain three qualified Diamond or above legs. Achieve 100 PV Maintain a PGV of 1,000 Accumulate a minimum NEW Organizational Volume of
100,000,000 with at least 33,000,000 of the minimum OV requirement being met by legs outside the primary leg within a 36month period. Benefits Same as Royal Diamond, plus... A one-time award of a $1 million-dollar check. Exclusive dinner meeting with Nikken President/CEO. Royal Ambassador diamond pin. Invitation to world convention with airfare and hotel accommodations arranged and paid for by the Consultants home market unit.

Compression of Downline Silver Consultants or above

In order to maximize the Leadership Bonuses for all active, productive Silver or above Consultants, the Nikken compensation plan has a compression feature. If a downline Silver or above Consultant fails to qualify in a given month, and if he/she occupies a position on any downline level for which the upline Consultant qualifies for a Leadership Bonus, then the next downline qualifying COMPRESSION Consultant (if one exists) will be moved up into the place of the nonqualifying Consultant. You Each Silver or above Consultant who is qualified for Leadership Bonuses is paid through the qualified levels for that pay level, and is paid on any unqualified Silver or above distributorships in First Level between.

Duties Royal Ambassadors represent the pinnacle of achievement within Nikken. In their role, these industry leaders work very much like ambassadors representing nations. They are charged with helping all Nikken Consultants, so that they and their customers may fully enjoy the benefits of the 5 Pillars of Health. Royal Ambassadors work diligently to spread the Nikken philosophy throughout the world. The qualifications for this impressive rank are demanding and the rewards are impressive.
Note 1: International Consultant can combine PV, PGV, OV, non-primary OV and leg structure requirement in other market units for pin and pay rank. Note 2: Following receipt of a Royal Ambassador rank and a one million-dollar benefit check, a second one million-dollar benefit check for attaining Double Royal Ambassador rank shall be issued no sooner than 24 months subsequent to the first benefit check. During this 24-month period, a Royal Ambassador shall comply with all duties particular to the position of Royal Ambassador. Note 3: Should Gold and above rank Consultant meet PV and PGV requirements of pin rank but fail to meet the OV requirement, Gold and above rank Consultant may qualify for Leadership Bonus at a lower rank provided that he/she satisfies the Organization Volume and qualified leg requirements of the particular lower rank.

Second Level

Third Level

Fourth Level Qualified Consultant Unqualified Consultant

SPECIAL FEATURES OF THE NIKKEN COMPENSATION PLAN

Permanent Ranks
Once all of the requirements for attaining a pin rank have been

*Note: A Consultants distributorship may fall back to a lower rank for various reasons such as the return of products purchased for the purpose of rank advancement, a Policies & Procedures violation, or any other inappropriate rank advancement.

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Nikken Directory & Resources

SUPPORT DEPARTMENTS
Distributor Services
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Allow 48 hours to resolve new Autoship inquiries

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For specific training schedules, please see myNikken.com/ Nikken University or www.NikkenU.com

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CONTACT INFORMATION
Support Departments (all hours are Pacific Time)
Department Retail Customers Distributor Services Phone 888-264-5536 800-669-8859 X4 Hours 7 a.m. 4 p.m. 7 a.m. 4 p.m. dist-rel@nikken.com Email Address

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