POLICIES, PROCEDURES AND COMPENSATION … Eligibility to Earn Compensation ... 2.1 Concept of Sales Volume ... The Policies, Procedures and Compensation Plan

i|P a g e AdvoCarePolicies,Procedures&CompensationPlan–Effective09/14/2016

POLICIES,PROCEDURESANDCOMPENSATIONPLAN

When you become an AdvoCare® Independent Distributor, you are joining forces with one of themost exciting anddynamicdirectsellingcompanies in theworldtoday.Notonlyarewecommittedtoproducingandsellingworldclassnutritionalproducts,wearealsocommittedtoprovidinganexceptionalopportunityforDistributorstobuildtheirownindependent businesses. Towards that end, the Policies and Procedures in Section I outline rules that AdvoCareIndependentDistributorsmustfollowtoprotectthatopportunityforeveryoneandtoensurethattheAdvoCarebusinessis conducted with integrity. The outstanding Compensation Plan in Section II is designed so Distributors have theopportunitytoearnincomebybuyingandsellingAdvoCareproductsanddevelopingdownlineDistributorteamsthatsellAdvoCareproducts.ThatisthefoundationoftheAdvoCarebusiness.WhateveryourreasonforbecomingaDistributor–whetheryouwishtodevelopanAdvoCarebusinesssellingAdvoCareproductsor simplybuyAdvoCareproductsatadiscount– it isoursinceredesire thatyousucceed.Yoursuccessandsatisfactionareattheheartofoursuccess.

ii|P a g e AdvoCarePolicies,Procedures&CompensationPlan–Effective09/14/2016

TABLEOFCONTENTSSECTIONI:POLICIESANDPROCEDURESCHAPTER1:INTRODUCTION1.1PoliciesIncorporatedintoDistributorAgreement..........11.2Purpose............................................................................11.3IntegratedContract.........................................................11.4NoWaver.........................................................................11.5PoliciesandProvisionsSeverable....................................11.6NoticesandOtherCommunications...............................1CHAPTER2:BECOMINGANADVOCAREINDEPENDENTDISTRIBUTOR2.1DefinitionofIndependentDistributor.............................22.2RequirementstoBecomeanIndependentDistributor...22.3RightsandPrivilegesofDistributors...............................22.4RenewalofDistributorship..............................................22.5ChangeofContactInformation.......................................32.6ChangingSponsors.........................................................32.6.1ChangingSponsorsasaDistributor........................32.6.2ChangingSponsorsasaPreferredCustomerorWhenaPreferredCustomerUpgradestoDistributor...............................................................32.7PositionRoll-Ups.............................................................3CHAPTER3:INDIVIDUALLIMITEDTOONEADVOCAREACCOUNT3.1OneAdvoCareAccountperIndividual.............................43.2DeterminationandPenaltyforMultipleAccounts..........43.3OnlyIndividualsMayBeDistributors..............................4CHAPTER4:MARRIEDCOUPLESLIMITEDTOONEADVOCAREACCOUNT4.1OneAdvoCareAccountperMarriedCouple...................44.2IncomeTaxandCompensationforMarriedDistributors.....................................................................44.3Co-Applicant....................................................................44.4MarriedCouplesMayOnlyHaveOneDistributorship................................................................44.5MarriageBetweenDistributors(Goldlevelandbelow)..44.6MarriageBetweenDistributors(Gold3Starlevelandabove).............................................................................54.7LiabilityofMarriedDistributorship.................................54.8ResponsibilityofMarriedDistributor..............................5CHAPTER5:SEPARATIONANDDIVORCE5.1HandlingofCompensationChecksintheEventofDivorceorSeparation.....................................................55.2ResigningSpouseorFormerSpouse...............................5CHAPTER6:PROTECTINGYOURDISTRIBUTORSHIP6.1DistributorshipasaCorporationorLimitedLiabilityCompany(LLC)................................................................56.2Insurance.........................................................................6

6.2.1DistributorMayObtainInsurance...........................66.2.2ProductLiabilityCoverage.......................................6

6.3AssumptionofRisk..........................................................6

CHAPTER7:DISTRIBUTORCONDUCT7.1DistributorsareIndependentContractors......................67.2DistributorsMustIdentifyThemselvesasanAdvoCareIndependentDistributor.................................................77.3DistributorsMustFollowAllLaws...................................77.4TruthfulandEthicalConduct...........................................77.5DisruptiveorUnethicalConduct....................................77.6ActionsofHouseholdMembers......................................77.7NewsorMediaInquiries..................................................77.8CominglingAdvoCarewithAnotherEnterprise,Product,ServiceorOtherActivity.................................................77.9ConflictsofInterestandProhibitedRecruiting...............87.10ConfidentialInformation...............................................8CHAPTER8:BUYINGANDSELLINGPRODUCTS8.1ReasonstoPurchaseProducts........................................98.2SellingProducts...............................................................98.3ManipulationoftheCompensationPlan.........................98.4RetailSalesReceipts......................................................108.5UnauthorizedSales........................................................108.6OrderingProducts.........................................................108.7SalesTax........................................................................118.8ShippingorPickingUpProducts....................................118.9InsufficientFunds..........................................................118.10PayPeriods..................................................................118.11ExcessivePurchaseofInventory..................................118.12ReportingAdverseReactionsorConsumerComplaints...................................................................11CHAPTER9:RETURNINGOREXCHANGINGPRODUCTS9.1RetailCustomerReturn,ExchangeandCancellationPolicies.........................................................................119.1.1RegisteredRetailCustomerReturnorExchangePolicy(SatisfactionGuarantee)............................119.1.2RetailCustomerReturnPolicyforPurchasesDirectfromaDistributor(SatisfactionGuarantee)........129.1.3RetailCustomer’sRighttoCancelaTransaction...129.2PreferredCustomerandDistributorReturnPolicies.....139.2.1PreferredCustomerandDistributorProductReturnorExchangePolicy(SatisfactionGuarantee)........139.2.2DistributorReturnPolicyforSalesAids................139.3ExclusionsfromReturnandExchangePolicies..............139.4AdjustmentsforRefunds..............................................14CHAPTER10:ADVERTISINGANDMARKETINGOFADVOCAREPRODUCTSANDTHEBUSINESSOPPORTUNITY10.1DistributorAdvertisinginGeneral...............................1410.2Company-CreatedAdvertisingMaterials....................1410.3UseofLogos,TrademarksandCopyrightedMaterial.1410.4UseofDistributor’sName,LikenessorImage.............1510.5InternetPolicy.............................................................1510.6SocialMedia................................................................1510.7SearchEngineMarketing.............................................1510.8EndorsersandSponsorships........................................15

iii|P a g e AdvoCarePolicies,Procedures&CompensationPlan–Effective09/14/2016

10.9Claims..........................................................................1610.9.1ProductClaims.................................................1610.9.2IncomeClaims..................................................1610.10ProhibitedFormsofAdvertising................................1610.11MarketingProductsthroughProfessionalServiceEstablishments..........................................................16

10.11.1DefinitionofEstablishment..............................1710.11.2Exhibitions,FairsorTradeShows.....................17

10.12InternationalSalesandAdvertising...........................17CHAPTER11:DISCIPLINARYACTIONANDDISPUTERESOLUTION11.1NoticeofDisciplinaryAction.......................................17 11.2FormsofDisciplinaryAction........................................17 11.3ProceduresforAppeal................................................18 11.4RepurchasesAssociatedwithaTerminatedDistributorship.............................................................18 11.5Pre-CancellationandPost-CancellationSlander,LibelorDisparagement........................................................1911.6Post-TerminationReapplication..................................19 11.7LimitationofRemedies................................................1911.8MandatingArbitrationandDisputeResolution..........19 11.9GoverningLaw,JurisdictionandVenue......................21 CHAPTER12:ASSIGNMENTORSALEOFDISTRIBUTORSHIP12.1AssignmentorSaleofDistributorshipAgreementProhibited....................................................................21 CHAPTER13:DISPOSITIONOFADISTRIBUTORSHIP–DEATHORLEGALINCAPACITY13.1PassingonYourDistributorship..................................21 13.2SurvivingorCapableSpouse.......................................2213.3EligibilityRequirementstoInheritorOperateanExistingDistributorship...............................................2213.4DistributorshipLefttoaSingleBeneficiaryinaValidWill.....................................................................2213.5DistributorshipLefttoMultipleBeneficiariesinaValidWill.....................................................................22 13.6DistributorshipsLeftinTrust.......................................2213.7ProcedureforBeneficiaryorTrusteetoOperateaDistributorship.............................................................22 13.8DistributorLeavesNoValidWill..................................23 13.9LegalIncapacity...........................................................2313.10Bankruptcy.................................................................23CHAPTER14:RESIGNATIONOFADISTRIBUTOR14.1ResigningYourDistributorship....................................23 14.2RefundsAssociatedwithaResignation.......................23 SECTIONII:COMPENSATIONPLANCHAPTER1:OVERVIEWOFTHECOMPENSATIONPLAN1.1HowCompensationisEarned........................................24 1.2FiveWaystoEarnIncome.............................................24 1.3EligibilitytoEarnCompensation....................................24

CHAPTER2:UNDERSTANDINGSALESVOLUME2.1ConceptofSalesVolume...............................................24 2.2PersonalVolume(PV)....................................................25 2.3GroupVolume(GV).......................................................25 2.4Personal/GroupVolume(P/GV)....................................25 2.5BusinessVolume............................................................25 CHAPTER3:UNDERSTANDINGYOURDISCOUNT3.1TheBasicDiscountSchedule.........................................25 3.2HowYourDiscountWorks.............................................25 CHAPTER4:EARNINGINCOMEFROMRETAILSALES4.1RetailSalesDefined.......................................................26 CHAPTER5:EARNINGINCOMEFROMWHOLESALECOMMISSIONS5.1WholesaleCommissionsDefined..................................26 5.2WholesaleCommissionsEarnedfromSalestoPreferredCustomers.....................................................265.3WholesaleCommissionsEarnedfromPurchasesandSalesMadebyDistributorsYouSponsor......................265.4HowWholesaleCommissionsWork..............................27 CHAPTER6:THEADVISORLEVEL6.1HowtoQualifyfortheAdvisorLevel.............................27 6.2Re-QualifyingfortheAdvisorLevel...............................27 CHAPTER7:EARNINGINCOMETHROUGHOVERRIDES7.1HowOverridesWork.....................................................27 7.2TheOverrideSchedule..................................................277.3SalesRequirementsforEarningOverrides,LeadershipBonuses,OtherBonusesorIncentives..........................27 7.4Overrides,LeadershipBonusesandExcessiveInventory.......................................................................28CHAPTER8:EARNINGINCOMETHROUGHLEADERSHIPBONUSES8.1LeadershipBonusesDefined.........................................28 8.2LevelsofLeadershipBonuses........................................28 8.3CompliancewithPolicies...............................................30 8.4HowLeadershipBonusesAreEarned............................30 8.5LeadershipPins..............................................................30 8.6LeadershipBonusCompensationProcedure(DiamondandBelow)....................................................30 8.7LeadershipBonusCompensationProcedure(PlatinumandAbove)....................................................30 8.8LeadershipBonusSchedule...........................................31 CHAPTER9:PAYINGYOURTAXES9.1ReportingYourIncome..................................................31 9.2PayingSalesTax.............................................................31GLOSSARYOFTERMS............................................................31

1|P a g e AdvoCarePolicies,Procedures&CompensationPlan–Effective09/14/2016

SECTIONI:POLICIESANDPROCEDURESCHAPTER1:INTRODUCTION1.1PoliciesIncorporatedintoDistributorAgreementThe Policies, Procedures and Compensation Plan(“Policies”), in their current form and as amendedperiodically at the sole discretion of AdvoCareInternational, L.P. (“AdvoCare”), are incorporated intothe AdvoCare Distributor Agreement. It is theresponsibilityofeachAdvoCareIndependentDistributor(“Distributor”) to read, understand, adhere to, andensure thatheor she isawareofandoperatingunderthe most current version of these Policies. The mostcurrentversionofthePoliciesisavailableonlinethroughyourAdvoCareDistributorWebsite.Anyamendmentstothe Policies shall apply only prospectively, notretrospectively. AdvoCare reserves the right to amendthe Policies in its sole discretion. By executing theAdvoCare Distributor Agreement, each Distributoragrees to abide by all amendments or modificationsAdvoCare makes. The continuation of a Distributor’sAdvoCare business following the effective date ofamended Policies, including but not limited to aDistributor’s acceptance of compensation under theCompensation Plan, shall constitute acceptance of allamendmentstothePolicies.

1.2PurposeThePurposeofthePoliciesistodefinetherelationshipbetweenAdvoCareandtheDistributor,tosetstandardsof acceptable business practices, and to supportDistributors in building and protecting their AdvoCaredirect selling businesses in a manner that is incompliance with these Policies. Any violation of thePolicies may result in disciplinary action includingprobation, suspension and/or termination at the solediscretionofAdvoCare.

1.3IntegratedContractTogethertheDistributorAgreementandthePolicies,asthey may be amended, constitute the contractualagreement (“Contract”) between AdvoCare and eachDistributor.TheContractsetsforththeentireagreementbetweenAdvoCareand theDistributorandsupersedesany and all prior oral or written agreements orunderstandingsbetweenAdvoCareandtheDistributor,including any representations by AdvoCare or itsDistributors not explicitly made in the Contract or inofficialAdvoCarepublications.TheContractmaynotbealteredoramended,exceptasprovidedinthePolicies,

asamendedfromtimetotime,orbyotherwrittennoticebyAdvoCare.ShouldanydiscrepancyexistbetweenthetermsoftheContractandverbalrepresentationsmadetoanyDistributorbyanyAdvoCareemployee,thetermsandrequirementsoftheContractwillprevail.Shouldanydiscrepancy exist between the terms of the AdvoCareDistributorAgreementandthePolicies,thetermsofthePolicieswillprevail.1.4NoWaiverAdvoCare never forfeits its right to require thecompliance of a Distributor with the terms of theContract, or with applicable laws and regulationsgoverningbusinessconduct.No failurebyAdvoCare toexerciseany rightunder theContractor to insistuponstrictcompliancebyaDistributorwithanyobligationorprovision of the Contract shall operate as a waiver ofAdvoCare’srighttodemandexactcompliancewiththeContract.Theexistenceofanyclaimorcauseofactionofa Distributor against AdvoCare shall not constitute adefense to AdvoCare’s enforcement of any term orprovisionoftheContract.

1.5PoliciesandProvisionsSeverableAnyprovisionoftheContractthatisjudiciallyinvalidatedorotherwiserenderedunenforceableinanyjurisdictionis ineffectiveonly to theextentof such invalidationorunenforceabilityinthatjurisdiction,andonlywithinthatjurisdiction. Any prohibited, judicially invalidated orunenforceableprovisionoftheContractisseverableandwill not invalidate or render unenforceable any otherprovisionoftheContract,norwillsuchprovisionoftheContract be invalidated or rendered unenforceable inanyotherjurisdiction.IntheeventanyprovisionoftheContract is deemed invalid or unenforceable in anyparticularproceeding,suchprovisionshallbereformedtoeffectuateitsoriginalintentandpurposetothefullestextentpossible.1.6NoticesandOtherCommunicationsAny notice or other written communication requiredunder this Contract shall be delivered personally, byemailormail.UnlessotherwiseprovidedintheContract,such notice shall be deemed given when deliveredpersonallyor, iftransmittedbyemail,one(1)dayafterthedateofsuchemailor,ifmailed,five(5)daysafterthedateofmailing,totheprincipaladdressoftheAdvoCareCorporateOfficeortotheDistributor’saddress.NoticetoaDistributorwillbemailed tohisorheraddressoremailaddressofrecordwithAdvoCare.AdvoCareshallhavetheright,asanalternativemethodofnotice,touse


mailers or other normal channels of masscommunicationwithitsDistributors.ThisprovisiondoesnotapplytonoticeofamendmentstothePolicies,whichare effective upon posting as described in Section 1.1above. It is the sole responsibilityof theDistributor tomaintain their correct address, email address, phonenumber and other contact information on file withAdvoCare.CHAPTER2:BECOMINGANADVOCAREINDEPENDENTDISTRIBUTOR2.1DefinitionofIndependentDistributorAdvoCare Independent Distributors are the exclusivedistribution channel for AdvoCare’s products(“Products”). Distributors have the ability to purchaseProducts directly from AdvoCare and personallyconsume or sell the Products to their customers.Throughout the Policies, the terms “Distributor,”“Independent Distributor,” “you,” “Sponsor” and“Advisor” shall refer to any person whose DistributorAgreementhasbeen signed, receivedandacceptedbyAdvoCareinitssoleandabsolutediscretion.

2.2RequirementstoBecomeanIndependentDistributorInordertobecomeaDistributor,youmust:

(1) Beatleast18yearsofage;(2) Reside in a geographic area where AdvoCare

conductsitsdirectsellingbusiness;(3) SubmitasignedDistributorAgreementandsign

upunderanexistingAdvoCareDistributorasaSponsor;and

(4) PurchaseaDistributorKit.A signed Distributor Agreement constitutes youragreement with AdvoCare, and acknowledges yourunderstanding that youmust adhere to the AdvoCarePolicies, which are incorporated into the DistributorAgreement as part of the Contract. Providing falseinformationinyourDistributorAgreementmayresultinimmediate termination of your Distributorship.Additionally,AdvoCare reserves the right to refuseanyapplicationinitssolediscretion.2.3RightsandPrivilegesofDistributorsOnce AdvoCare receives and accepts a DistributorAgreement,theDistributorenjoysthefollowingrightsandprivileges:

(1) TopurchaseProductsdirectlyfromAdvoCareatadiscountedprice;

(2) To participate in the AdvoCare CompensationPlan (receive commissions and bonuses, ifeligible);

(3) TosponsorotherindividualsasDistributors,andbuildadownlineorganization;

(4) To receive AdvoCare communications andliterature;

(5) To participate in AdvoCare-sponsored training,motivational and recognition events uponmeeting qualifying criteria and payment ofappropriatecharges,ifapplicable;

(6) Toparticipate inAdvoCare-sponsored incentivetripsandprograms,ifeligible;

(7) Toearnaprofitonretailsales,ifeligible;(8) ToearnaprofitfromWholesaleCommissions,if

eligible;and(9) TohaveanopportunitytoqualifyfortheAdvisor

level and be eligible to earn Overrides andLeadership Bonuses upon fulfilling therequirements set forth in Section II:CompensationPlan.

2.4RenewalofDistributorshipADistributormustrenewhisorherDistributorshiponanannualbasisbypaying thecurrent renewal feeof$50,subjecttochange,andagreeingtobeboundbythethen-currentPolicies.AdvoCare reserves the right to reviewandacceptorrejectanyrenewalofanyDistributorship.Theduedatefortherenewalfeewillbetheanniversarydate of the Distributor’s execution of his or herDistributor Agreement, unless the Distributor joinedAdvoCareonorbeforeOctober4,2004, forwhomtheanniversary date is set atDecember 31. Each year theDistributor wants to renew, he or she must do so bypaying the current renewal fee and agreeing to thecurrent Policies on or before such anniversary date.Paying the renewal fee constitutes the Distributor’sacceptance of all terms and conditions of his or herContract with AdvoCare, including the then-currentPolicies.Arenewalapplicationisnotrequired.AdvoCare currently offers, at its discretion, an “AutoRenewal”optionthatallowsaDistributortoenrollandhave their renewal fees automatically charged to theircredit cardon file on the first dayof their anniversarymonth,automaticallyrenewingtheirDistributorshipforanotheryear.


If a Distributor is not automatically renewed throughAuto Renewal and fails to pay the renewal fee by therenewal date, AdvoCare may, in its sole discretion,either: (1) cancel the Distributorship; or (2) waive therenewal fee (without waiver of AdvoCare’s right tocollect or insist on payment of future renewal fees).WhileAdvoCareencouragesallDistributorstorenewonor before their anniversary date, AdvoCare generallyprovides (but is under no contractual obligation toprovide)a60-daygraceperiodbeforetheDistributorshipispurgedfornon-renewal.If at any time the individualwishes toagainbecomeaDistributor after his or her Distributorship has beenpurgedfornon-renewal,theindividualmustsignupasanew Distributor and enter into a new DistributorAgreementandContractwithAdvoCare,receivinganewDistributorKit,receivinganewIDnumberandstartingatthe twenty percent (20%) discount level unlesspurchases qualify the Distributor for a higher discountlevel.2.5ChangeofContactInformationYou may change your contact information (includingyour mailing address, phone number and/or emailaddress)onlinethroughyourDistributorWebsiteorbycontactingAdvoCareCustomerService.2.6ChangingSponsors 2.6.1ChangingSponsorsasaDistributor

AdvoCaredoesnotpermitDistributorstochangeSponsors.However,aDistributormaychoosetoeither:(1)resignfromhisorherDistributorship,subjecttoallthetermsandconditionsthatapplytoaresignation,waitsixmonthsfromthedateof resignation and start over as a newDistributor,enrollingundertheSponsorofhisorherchoice;or(2)choosetonotrenewduringhisor her renewal period, and enroll under theSponsorofhisorherchoiceasanewDistributor.

2.6.2 Changing Sponsors as a PreferredCustomer or When a Preferred CustomerUpgradestoDistributorA “Preferred Customer” is a non-Distributorcustomer who has joined the PreferredCustomerProgramthroughaDistributor,andisabletopurchaseProductsfromthatDistributor’sAdvoCarewebsite at a discount. ThePreferredCustomer’s discount ranges from twenty tothirty percent (20-30%) depending on the

amount of purchases made. The PreferredCustomer isnot permitted to resell Product(s),sponsor Distributors or receive compensationfromAdvoCare.

If a Preferred Customer chooses to become aDistributor, their Preferred Customer Sponsorwill remain their Sponsorwhen they completetheupgradeprocesstobecomeaDistributor.IfthePreferredCustomerwouldprefertohaveadifferent Sponsor when they transition to aDistributor, then the Preferred Customermustcancel their Preferred Customer account for aminimum of sixty (60) days before signing aDistributor Agreement under a differentSponsor.

2.7PositionRoll-UpsDistributorpositionsdonotautomaticallyrollupwhentheyarevacated.Rather,whenapositionisvacatedforany reason, either voluntarily or involuntarily, thevacatedpositionwillremaininitscurrentpositionintheAdvoCare organization, and its downline organizationwillremainintact,untilatleastthetimethatAdvoCarehas recouped all costs and losses, including attorney’sfees,associatedwith the reason thepositionhasbeenvacated, such as a Distributor’s termination and theeventsthatareconnectedwithorledtothetermination.This provision includes all costs, fees, and expensesassociated with litigation that may result from or beconnectedwithsuchtermination.OnceAdvoCaredetermines,initssolediscretion,thatishas recouped all such costs and losses, the vacatedDistributor positionmay be removed from AdvoCare’sorganization,andthedownlineorganizationmayrollupto the immediate upline Distributor, all in the solediscretion of AdvoCare. No Distributor shall have anyvested right or claim in the roll-up of any vacatedposition in AdvoCare’s organization, regardless ofwhether the position has been vacated throughvoluntary resignation or non-renewal, involuntarytermination,orotherwise.ThedecisionwhetherornottorollupaparticularpositionafteritisvacatedisalwayswithinthesolediscretionofAdvoCare.If a vacating Distributor sponsored any PreferredCustomer(s),thosePreferredCustomer(s)mayrolluptothe immediateuplineDistributor, inthesolediscretionofAdvoCare.


CHAPTER3:INDIVIDUALLIMITEDTOONEADVOCAREACCOUNT3.1OneAdvoCareAccountperIndividualADistributormayonlyparticipatedirectlyorindirectlyinthe operation and development of one account withAdvoCare,whetheritisaDistributorshiporaPreferredCustomer membership. A Distributor may not retail,recruit,promote,train,educateorotherwiseassistinthedevelopment of any other AdvoCare Distributorshipother than their own, except to assist their downlineorganization,asisappropriateforaSponsorortoassistotherDistributors. An exception to this restriction is ifthe Distributor is serving as a trustee on anotherDistributorship (refer to Chapter 13: Disposition of aDistributorship–Deathor Legal Incapacity fordetails).Likewise, a PreferredCustomermaynot havemultiplePreferred Customer accounts, and may not have aDistributorship in addition to a Preferred Customermembership.3.2DeterminationandPenaltyforMultipleAccountsIfanindividualisfoundtobeenrolledorparticipatingintwo or more Distributorships simultaneously, the firstDistributorship will be considered the validDistributorship. If AdvoCare determines that anindividual is operating two or more activeDistributorships, AdvoCare has sole and absolutediscretion todetermine thedispositionof the affectedDistributorships,aswellasanypenaltiesorsanctionsitdeems necessary and appropriate for theDistributorship.An individual thatsignsmorethanoneDistributor Agreement, or operates in more than oneDistributorship, may have any and all DistributorshipssuspendedorterminatedinAdvoCare’ssolediscretion.

3.3OnlyIndividualsMayBeDistributorsAdvoCarewillonlyacceptaDistributorAgreementinthenameoftheindividual(s).Applicationsinthenameofacorporation, partnership or business entitywill not beaccepted.CHAPTER4:MARRIEDCOUPLESLIMITEDTOONEADVOCAREACCOUNT4.1OneAdvoCareAccountperMarriedCoupleBothspousesinacouplemayonlyparticipatedirectlyorindirectly in the operation and development of oneaccountwithAdvoCare,whetheritisaDistributorshipora Preferred Customer membership. A Distributor may

notretail,recruit,promote,train,educateorotherwiseassist in the development of any other AdvoCareDistributorship other than their own, except to assisttheir downline organization, as is appropriate for aSponsorortoassistotherDistributors.AnexceptiontothisrestrictionisiftheDistributorisservingasatrusteeon another Distributorship (refer to Chapter 13:Disposition of a Distributorship – Death or LegalIncapacity for details). If one spouse has an AdvoCareDistributorship,thentheotherspousemaynothaveanAdvoCare Preferred Customer membership, or viceversa.4.2 Income Tax and Compensation for MarriedDistributorsAdvoCare will issue one IRS Form 1099 perDistributorship to the primary Applicant on eachaccount.However,ifaspouseislistedasaCo-ApplicantontheDistributorship,thenallcompensationcheckswillbe issued inboth theApplicant and theCo-Applicant'snames.4.3Co-ApplicantOnly the spouse of a Distributor may become a Co-ApplicantontheDistributorship.Ifanindividualenrollsas a Distributor and his or her spouse also wishes tobecome aDistributor, the spousemust enroll as a Co-ApplicantontheDistributorship.Spousesmaybeaddedas a Co-Applicant at the same time the individualbecomes a Distributor, or at a later date. Both thePrimaryApplicantand theCo-Applicanthave thesamerightsandaccesstotheDistributorship.

4.4MarriedCouplesMayOnlyHaveOneDistributorshipMarried couples may have only one AdvoCareDistributorship,unlesstheircircumstancesqualifythemfor the limited-time exception laid out in Chapter 4.6:Marriage Between Distributors (Gold 3 Star level andabove).

4.5MarriageBetweenDistributors(Goldlevelandbelow)IftwoDistributorssubsequentlymarry,andoneofthemis not at the level of Gold 3 Star or above, then onespousemustresignhisorherDistributorshipwithinonepayperiodfromthedateofmarriage.Atthattime,thedownline fromtheresigningspousemayrollup to thenextuplineDistributorinAdvoCare’ssolediscretion.TheDistributorwhoresignedhisorherDistributorshipdue


to marriage may then immediately enroll as a Co-Applicantonthenon-resigningspouse'sDistributorship.

4.6MarriageBetweenDistributors(Gold3Starlevelandabove)IftwoDistributorssubsequentlymarryandatleastoneofthemhasattainedthelevelofGold3Starorabove,thenthecouplemayoperatebothDistributorshipsforaperiodofsix(6)monthsfromthedateofmarriageiftheychoose to do so. After six months, one spouse mustresign his or her Distributorship. At that time, thedownline fromtheresigningspousemayrollup to thenextuplineDistributorinAdvoCare’ssolediscretion.TheDistributorwhoresignedhisorherDistributorshipmaythenenroll immediately as aCo-Applicanton thenon-resigningspouse'sDistributorship.Anexception to thissix-monthgraceperiodappliesifaDistributorwishestoparticipate in an AdvoCare incentive, training or eventearnedbyhisorherspouse’sDistributorship.Inordertoattend,thespousemustresignpriortothedateoftheevent and enroll as a Co-Applicant on the earningspouse’sDistributorship.

4.7LiabilityofMarriedDistributorshipTheliabilityoftwo(2)marriedDistributorswhooperatea Distributorship together shall be joint so that bothDistributorsshallberesponsible,acceptliabilityfor,andbeboundby,anyactoromissionofeitherDistributor.AnypaymentbyAdvoCaretoonesuchDistributorshallbedeemedaspaymenttobothsuchDistributors.

4.8ResponsibilityofMarriedDistributorADistributorshipshallberesponsiblefortheactivitiesofaspouse,whetherornotthespouseparticipatedintheDistributorship. As explained further in Chapter 7:DistributorConduct, ifaspouseengages inanyactivitywhich,ifperformedbytheDistributor,wouldviolatethePolicies,theactivitywillbeconsideredaviolationbytheDistributorshipandAdvoCaremaytakeactionpursuantto the Contract as well as any other legal remediesagainsttheDistributorship.CHAPTER5:SEPARATIONANDDIVORCE5.1HandlingofCompensationChecksintheEventofDivorceorSeparationIn the event of divorce or legal separation betweenspouses who are Co-Applicants in a Distributorship,AdvoCarewillcontinuetoissuecompensationchecksin

the joint names of the Co-Applicants until AdvoCarereceivesoneofthefollowingitems:

(1) Acopyofacourtorderordecreewhichstatesthatthecoupleislegallyseparatedordivorced,anddesignatesownershipoftheDistributorshiptooneindividual;or

(2) If the parties to a divorce or legal separationchooseamongstthemselveswhoistoremainonthe Distributorship, then the resigning spousemaysubmitaresignationformtoremovehisorhernamefromtheDistributorship.

Divorced Distributors may not remain on the sameDistributorship. Once a court renders a final divorcedecree, a temporary hold may be placed on theDistributorshipuntilAdvoCareis inreceiptofeither(1)or (2) listed above designating ownership of theDistributorshiptooneparty.Anyactiontakenbyeitherparty to the Distributorship that is disruptive to thebusiness of AdvoCare or to the business of otherAdvoCare Distributorsmay result in disciplinary actiontakenagainstthatparty.Neither AdvoCare nor its employees shall be liable forany loss, damage or injury resulting from AdvoCare’scompliancewithacourtorderordecreepursuanttothissection.AnycourtorderaddressingtheownershipofaDistributorship in the event of a separation or divorcemust adhere to the AdvoCare Policies in order to beenforceablebyAdvoCare.5.2ResigningSpouseorFormerSpouseIf a former spouse has resigned or has completelyrelinquished all rights in his or her originalDistributorship, he or she is thereafter free to enrollunderanySponsoroftheirchoosingandneednotwaitsix (6) months before reapplying. However, therelinquishing spouse shall have no rights to anyDistributors in their former organization. They mustbegin the new Distributorship in the samemanner aswouldanyothernewDistributor.

CHAPTER6:PROTECTINGYOURDISTRIBUTORSHIP6.1DistributorshipasaCorporationorLimitedLiabilityCompany(LLC)AdvoCare recognizes that there may be certainadvantages to operating a Distributorship as acorporationorasa limited liabilitycompany (LLC).AnyDistributorwhowishes tooperatehisorherAdvoCare


Distributorship as a corporation or LLC must get priorapprovalfromAdvoCareandcomplywiththefollowingrequirementsandconditions:

(1) SubmitarequesttoassignyourDistributorshipto the AdvoCare Legal Department ([email protected]);

(2) As of the date of the request, the DistributormusthavebeenattheAdvisorlevelforatleastsix(6)months;

(3) The corporation or LLC must be owned 100percent by the individual Distributor (andCo-Applicant,ifapplicable);

(4) ThesolebusinesspurposeofthecorporationorLLC must be the operation of an AdvoCareDistributorship pursuant to the Policies. ADistributorshipmay not be transferred into anexisting corporation or LLC that conducts anyotherbusiness;

(5) No change in the ownership structure of thecorporation or LLC may be made without theprior written approval of the AdvoCare LegalDepartment;

(6) ThenameofthecorporationorLLCmaynotbethesameorsimilartoanyAdvoCaretrademarks,service marks, product names, logos, slogans,taglines, or any other proprietary name orphrase owned or used by AdvoCare (forquestionsconcerningthis requirement,contacttheAdvoCareLegalDepartment);

(7) The Distributorship must remain in anindividual’s name (and Co-Applicant’s name, ifapplicable),andthename(s)oftheindividual(s)must be present on all marketing materials,businesscards,websites,advertisingandcontactinformation.ThenameofthecorporationorLLCmay not be used on any of the items listedabove;and

(8) Must receive approval by the AdvoCare LegalDepartment.

Upon forming such an entity, the Distributorship willremaininthenameoftheindividual(s).TheearningsoftheDistributorshipwillbereportedinthenameandtaxidentificationnumberoftheLLCorcorporationfromthedate the Distributorship was assigned to the LLCorcorporation.IftheDistributorshipwasassignedtoanindividualforaportionoftheyear,thentheearningswillbereportedpartiallytotheindividualandpartiallytothecorporation.AbusinessentityformedinconnectionwithaDistributorship,aswellasallshareholders,members,managers,partners, trustees,orotherpartieswithany

ownership interest in, or management responsibilitiesfor, the business entity are individually, jointly andseverally liable for any indebtedness to AdvoCare,compliancewith the Contract, including these Policies,andallotherobligationsoftheDistributortoAdvoCare.6.2Insurance

6.2.1DistributorMayObtainInsuranceA Distributormay obtain third party insurancecoverage for Distributor business activities.Please refer to theDistributorWebsite for themost current information about insurancecoverageofferingstoprotectaDistributorship.6.2.2ProductLiabilityCoverageAdvoCare maintains product liability insurancetoprotectagainstcertainproductliabilityclaims,as long as theDistributor is storing,marketingand selling Products in accordance withapplicable laws, regulations and the Policies.Productliabilitypolicycoverageexcludesclaimsthat arise as a result of a Distributor’smisconduct in storing, marketing or sellingProducts. Additionally, claims that arise out ofanyProductspurchasedonawebsiteotherthanan official AdvoCare Distributor Website areexcludedfromthiscoverage.

6.3AssumptionofRiskADistributorunderstandsthatwhiletravelingtoorfromAdvoCare-related meetings, events, activities,workshops,retreats,incentivetrips,orothergatherings,the Distributor does so as a part of his or her ownindependent business and not in any manner as anemployee, agent, or functionary of AdvoCare. ThisassumptionofriskisnotaffectedbywhetherornottheDistributor’s attendance may be based in whole or inpartbyinvitationfrom,oragreementwith,AdvoCaretoattend.TheDistributorassumesallriskandresponsibilityforsuchtravel.CHAPTER7:DISTRIBUTORCONDUCT7.1DistributorsareIndependentContractorsDistributorsareindependentcontractors,notemployeesof AdvoCare. Distributors may not do anything thatwould lead someone to believe that they are anemployeeoranagentofAdvoCare.Asan independentcontractor, Distributors are responsible for thefollowing:


(1) Setting retail prices for Products sold to RetailCustomers (although, in order to maintainAdvoCare’s premium brand image, businessgoodwill, and the integrityof its sales channel,AdvoCare strongly encourages Distributors tocharge Retail Customers the suggested retailprice – to do otherwise has an impact on thelegitimate business interest of otherDistributors);

(2) Establishingworkinghours;(3) Conductingtheday-to-daybusiness;and(4) ReportingtotheIRSanyincomeearnedfrom

theDistributorship(SeeSectionII:CompensationPlanformoredetails).

The services performed by you, as an AdvoCareIndependentDistributor,areperformedpursuanttotheContractbetweenyouandAdvoCare,andsuchContractprovides that you will not be treated as an employeewithrespecttosuchservicesforFederaltaxpurposes.7.2DistributorsMustIdentifyThemselvesasanAdvoCareIndependentDistributorWhen a Distributor uses his or her name on businesscards,checks,advertising,socialmedia,websites,emailcorrespondence, on the telephone or any othercommunicationsrelatedtohisorherAdvoCarebusiness,it must be stated as follows: “[John Doe], AdvoCareIndependentDistributor.”7.3DistributorsMustFollowAllLawsDistributorsareresponsibleforcomplyingwithalllocal,state and federal laws and regulations concerning theoperation of a Distributorship, marketing and sellingpractices,andthedistributionofProducts.Distributorsshould familiarize themselves with the applicablefederal,stateandlocallawsthataffecttheoperationoftheir Distributorships. AdvoCare shall not be liable forany conduct of Distributors contrary to such laws andregulations.

7.4TruthfulandEthicalConductAllstatementsmadebyDistributorsregardingAdvoCare,thebusinessopportunity,theProducts,pastearnings,orproduct resultsmust be truthful, ethical, accurate andnotmisleading. Distributors shall always conduct theirbusinessinanethicalmannerandincompliancewiththeDirect Selling Association’s Code of Ethics (Seewww.dsa.org/code-of-ethics)andallapplicable federal,state,andlocallawsandregulations.

7.5DisruptiveorUnethicalConductDistributors are prohibited from engaging in high-pressure selling or recruiting. Distributorsmust alwaysconduct themselves in a courteous and consideratemannerwhenrepresentingAdvoCare.Allpresentationsand communications regarding Products and theAdvoCare business opportunitymust be complete andtruthful,includingbutnotlimitedto,instructionsontheusagedirectionsandprecautionsandproductintendedbenefits included on the product label and anyaccompanying AdvoCare-published literature andpresentationoftheAdvoCareofficialIncomeDisclosureStatementandaverageincomeearned.If a Distributor behaves in a manner that, in the soleopinionofAdvoCare,causesdisruptiontotheconductofthe normal business of AdvoCare or that of any otherDistributor,orthatisinjurioustotheimageorreputationofAdvoCareorthatofanyotherDistributor,disciplinaryactionmaybetakenagainsttheDistributorshipincludingprobation, suspension and/or termination, at the solediscretion of AdvoCare. Any compensation that wouldhave been earned during the suspension or followingterminationmaybeforfeited.7.6ActionsofHouseholdMembersEveryDistributorisresponsiblefortheactionsofhisorher immediate household members. If any suchhousehold member engages in any activity which, ifperformed by the Distributor, would violate theDistributor Agreement and/or the Policies, the activitywill be considered a violation by the Distributor andAdvoCaremay takeactionpursuant to theContract aswellasanyotherlegalremediesagainsttheDistributor.

7.7NewsorMediaInquiriesDistributors must refer all media inquiries relating toAdvoCare,Products, anyDistributor, representative,oremployee of AdvoCare to the AdvoCare LegalDepartment at [email protected]. Thismay include,butisnotlimitedto:programsairedontelevision,radio,podcastsandprintedmaterialwithnationalcirculation.Failure to complywith this provisionmay result in theimmediate suspension or termination of yourDistributorship,atthesolediscretionofAdvoCare.

7.8CominglingAdvoCarewithAnotherEnterprise,Product,ServiceorOtherActivityDistributors may participate in other direct selling orbusinessventuresiftheychoose.However,Distributorsare prohibited from mixing the AdvoCare business


opportunity or Products with another businessopportunity, product, service or other activity (forexample, offering a free gym membership with thepurchase of an AdvoCare 24-Day Challenge® isprohibited).7.9ConflictsofInterestandProhibitedRecruitingDuring the termof theContract, andunlessotherwiseagreedtobyAdvoCareinwriting,AdvoCareDistributorsare free to participate in othermultilevel, direct sales,network marketing business ventures or marketingopportunities (collectively “Network Marketing”).However,during the termof theContract,Distributorsmay not directly or indirectly recruit other AdvoCareDistributors for anyotherNetworkMarketingbusinessor opportunity (a “Competing Activity”). The term“recruit” means the actual or attempted sponsorship,solicitation, enrollment, encouragement, or effort toinfluence in any other way, either directly, indirectly(includingbutnotlimitedtotheuseofawebsiteorsocialmedia), or through a third party, another AdvoCareDistributor to enroll or participate in a CompetingActivity. This conduct constitutes recruitingeven if theDistributor’s actions are in response to an inquiry orcontactmadebyanotherDistributor.

During the term of the Contract, Distributors are alsoprohibited from associating their AdvoCare businessactivitieswithanynon-AdvoCarebusinessopportunity,products,services,andothercompetingorinappropriateactivities.Forexample,DistributorsareprohibitedfromofferingAdvoCareProductsorpromotingtheAdvoCareopportunity and/or Compensation Plan in conjunctionwith any non-AdvoCare business plan, opportunity,product, activity or incentive. Distributors are similarlyprohibited from offering or promoting any non-AdvoCare products or business opportunities at anyAdvoCare-related meeting, seminar, convention,conference call, AdvoCare-related website or socialmediapage,andotherbusinessfunctions.

Following the cancellation or termination of aDistributor’sContract,whethervoluntaryorinvoluntaryand regardless of the reason for cancellation ortermination, a former Distributor may not recruit anyAdvoCareDistributorforanyCompetingActivitiesforaperiod of twelve (12) calendar months thereafter.Notwithstanding thisprohibition, it ispermissible foraDistributor to recruit his or her immediate familymembers during this 12-month period for CompetingActivities,evenifthoseimmediatefamilymembersarecurrentAdvoCareDistributors.Distributorsstipulatethat

becauseCompetingActivitiesareconductedworldwide,often through networks of independent contractorsdispersed across the entire United States andinternationally,andbusinessiscommonlyconductedviathe internetand telephone,aneffort tonarrowly limitthe geographic scope of this non-solicitation provisionwould render it wholly ineffective. Therefore,Distributors agree that this non-solicitation provisionshallapply inallcountries inwhichAdvoCareconductsbusiness at the time the restriction is applicable.Distributorsagreethatthegeographicscopeapplicableto this provision is reasonable and further waive anyclaim or defense that the non-solicitation provision isvoidorvoidablebasedonthebreadthofitsgeographicscope.

EachDistributorstipulatesthatifheorsheviolatesanypartofthissection,AdvoCarewillbeirreparablyharmedandcalculationofthefullextentofAdvoCare’sdamageswill be difficult. Distributor therefore stipulates thatAdvoCare shall be entitled to immediate temporary,preliminary, and permanent injunctive relief againstDistributorandallthoseactinginconcertwithhimorhertopreventandenjoinanyviolationofthissection.Thisremedy is in addition to any other legal remedies towhichAdvoCaremaybe entitled, including disciplinarysanctionsunder theContractandrecoveryofdamagescausedbyaDistributor’sbreach.Theprovisionsof thissectionshallsurviveterminationoftheContract.7.10ConfidentialInformationIn connection with a Distributor’s AdvoCare business,AdvoCare may make available to Distributors certaininformationandreportsregardingAdvoCare’sbusiness,Products, trade secrets, intellectual property, itsnetwork, identity and contact information ofDistributors,PreferredCustomersandRetailCustomers,a Distributor’s personal and/or group sales volume(s),Distributor rank and achievement levels, and otherinformation needed to run and grow the Distributor’sbusiness, such as Distributor lists (collectively,“Confidential Information”). Distributors herebystipulate and agree that Confidential Informationbelongs solely and exclusively to AdvoCare andconstitutes its proprietary business trade secrets.Distributors have no claim, right, or title to anyConfidentialInformation.SuchConfidentialInformationisprovidedtoDistributorsinstrictestconfidenceandismade available to Distributors for the sole purpose ofassisting Distributors in their AdvoCare businesses.Distributors hereby agree to the disclosure of their


information to other Distributors for this purpose.Distributorsacknowledgethat,butforthisagreementofconfidentiality and nondisclosure, AdvoCarewould notprovideConfidentialInformationtoDistributors.To protect Confidential Information, Distributors shallnot,onhisorherownbehalforonbehalfofanyotherperson or entity, directly or indirectly: (1) disclose ordisseminate any Confidential Information to any otherperson or entity; (2) provide access to any password-protected section of the AdvoCare website containingConfidential Informationtoanyotherpersonorentity,includingprovidinganypasswordtosuchsectiontoanyotherpersonorentity;(3)useConfidentialInformationforanypurposeotherthantheconductandpromotionoftheDistributor’sAdvoCarebusinessascontemplatedin these Policies and the Contract, including but notlimited to recruiting any AdvoCare Distributor for anyCompeting Activities or competing in any way withAdvoCare;or(4)useConfidentialInformationtoattemptto influence or induce any Distributor, PreferredCustomer,RetailCustomer,oremployeeofAdvoCaretocease or alter his or her business relationship withAdvoCare.Upon the cancellation or termination of the Contract,regardless of the reason for such cancellation ortermination,aDistributorshallimmediatelyreturntotheCompanyanyandallConfidential Information inhisorherpossession,custody,orcontrol, includingallcopiesof documents, files, or other media containing anyConfidentialInformationandanyderivativethereof.ThisrequirementappliesautomaticallyandisnotdependentondemandbeingmadebyAdvoCare.EachDistributorstipulatesthatifheorsheviolatestheterms of this section, AdvoCare will be irreparablyharmedandcalculationofthefullextentofAdvoCare’sdamageswillbedifficult.DistributorthereforestipulatesthatAdvoCareshallbeentitledtoimmediatetemporary,preliminary, and permanent injunctive relief againstDistributorandallthoseactinginconcertwithhimorhertopreventandenjoinanyviolationofthissection.Thisremedy is in addition to any other legal remedies towhichAdvoCaremaybe entitled, including disciplinarysanctionsunder theContractandrecoveryofdamagescausedbyaDistributor’sbreach.Theprovisionsof thissectionshallsurviveterminationoftheContract.

CHAPTER8:BUYINGANDSELLINGPRODUCTS8.1ReasonstoPurchaseProductsDistributors may purchase Products for their own useandthatoftheirfamilies,aswellasforresaletoRetailCustomerswhoarepurchasingProductfortheirownuseandthatoftheirfamilies.DistributorsmaynotpurchaseProductsforthepurposeofqualifyingforincentives,bonuses,pinlevelordiscountlevel advancement and/or compensation paid byAdvoCare,ortosellinamannernotinaccordancewiththePolicies(SeeChapter8.5:UnauthorizedSales).Distributors are not required to carry inventory ofProducts for their ownuse or in order to service theircustomers, but they may choose to do so as aconvenience for themselves and their customers.However, Distributorsmay notmaintain inventories inamountswhich are in excess ofwhat they themselvesreasonablydetermineisnecessaryforthosepurposes.8.2SellingProductsOnlyDistributorsmaysellProducts.Productsmayonlybe sold person-to-person or through the AdvoCareDistributor Website. As many Products have agerecommendationsanddosageinstructionsbestadheredto by adults, Distributors are prohibited from sellingProductsdirectlytominors(oranyoneundertheageof18).Distributorscannotrepackage,tamperwith,relabel,misbrandoradulterateProducts.DistributorsmuststoreProductsinacool,dryplace.DistributorsareresponsibleforproperstorageandProductconditionpriortosale.8.3ManipulationoftheCompensationPlanAdvoCare strictly prohibits conduct and actions whichare, or may be perceived as, manipulation of theCompensation Plan primarily for the purpose ofqualifying for incentives,bonuses,pin levelordiscountlevel advancement and/or compensation paid byAdvoCare. This prohibited conductmay include, but isnotlimitedto:(1)purchasingand/orpayingforProductsunder a Distributor’s account in your downline; (2)encouraging other Distributors to purchase Productsunder a Distributor’s account in your downline; or (3)placing,orencouragingtheplacementof,ordersundercustomer accounts in a fraudulent, manipulative ordeceptivemanner.

If, at the sole discretion of AdvoCare, it is determinedthataDistributorhasviolatedanypolicyrelatingtothe


purchaseorsaleofProducts,AdvoCarereservestherightto take disciplinary action against the Distributorship,includingsuspensionortermination.Anycompensation,bonus or incentive earned during this period will beforfeited, andAdvoCare reserves the right to sanction,deduct from compensation and adjust qualificationswhenever it is deemed to be the necessary andappropriateaction(SeeChapter11:DisciplinaryAction).8.4RetailSalesReceiptsA“RetailCustomer” isanon-Distributorcustomerwhopurchases AdvoCare Product(s) directly from aDistributororfromaDistributor’sWebsite.FederallawrequiresthatDistributorsprovideeachRetailCustomerwithaRetailSalesReceiptatthetimeofsale.IfyouselldirectlytoaRetailCustomer,youmustprovideaRetailSales Receipt. AdvoCare requires the use of officialAdvoCareRetailSalesReceipts,whichareincludedintheDistributorKitandcanbeobtainedby logging into theAdvoCarewebsite.

Inaddition,DistributorsmustkeepcopiesofeachRetailSalesReceipt issued foroneyearafter thedateof thesale.AdvoCaremay,atanytime,requestsubmissionofRetailSalesReceiptsinordertoverifyretailsalesforanygiven pay period. Distributors must fully complete allinformation for each Retail Sales Receipt, includingcustomer contact information, Product(s) sold, price,andDistributorinformation.Failuretoprovideaccurate,verifiable, and complete Retail Sales Receipts toAdvoCarewithinten(10)daysofarequestmayresultindisciplinaryaction,includingsuspensionortermination,atthesolediscretionofAdvoCare.SubmissionoffalsifiedRetail Sales Receipts will be grounds for immediatetermination (see Section II, Chapter 7.3: SalesRequirements for Earning Overrides, LeadershipBonuses,OtherBonusesorIncentivesformoredetails).8.5UnauthorizedSalesAdvoCare places some limitations on the manner inwhichDistributorsmaysellProductsinordertoprotectthesafetyofconsumersandthereputationofAdvoCare.Theseunauthorizedsalesinclude,butarenotlimitedtothefollowing:

(1) UnauthorizedPaymentMethods: Allpaymentsmadebycreditcard,debitcardorpersonalcheckmustbeauthorizedbythecustomeratthetimeof the purchase. Unauthorized usage of acustomer’screditcardorotherformofpaymentwillnotbetolerated;

(2) E-commerceSitesorAuctionSites: InordertomaintainAdvoCare’spremiumbrandimageandbusiness goodwill, as well as to preserve theunique aspects of the sales channels in whichAdvoCare’sProductsaresold,includingperson-to-person interaction, Distributors areprohibitedfromsellingoradvertisingthesaleofProductsone-commerce sitesorauction sites,websites trading in products or services usingtheinternet.Someexamplesoftheseprohibitedwebsites include, but are not limited to: eBay,Amazon or Craigslist. AdvoCare cannotguaranteetheauthenticity,freshness,safety,orqualityofProductssoldonthesesites,therefore,such Products are not eligible for AdvoCare’sSatisfactionGuarantee;

(3) SocialMediaorPersonalWebsites:Distributorsare prohibited from selling Products on socialmediasitesortheirpersonalwebsite(s);and

(4) SupplyingProductstobeSoldinanUnauthorizedManner:DistributorsareprohibitedfromsupplyinganyotherpersonorentitywithProductsthattheDistributorknowsorshouldreasonablyknowarelikelytobesoldinanunauthorizedmanner.

TheDistributorherebyagreesthatifthereisaviolationof this provision the Distributor shall forfeit, and berequired to return all compensation paid (whether byauthorizedorunauthorizedmeans)duringtheperiodinwhichanysaleismadethroughimpropermeans,whichincludes but is not limited to the sales listed above.DistributoragreesthatitwouldbeextremelydifficultforAdvoCaretoestimatetheamountofdamagesincurredfrom their time of entry because of the difficulty ofdistinguishing between compensation from legitimateandillegitimatesales.Therefore,Distributoragreesthatforfeiture of compensation is appropriate. DistributorfurtheragreesthatAdvoCareshallbeentitledtorecoverattorneys’ fees incurredrelating to the investigationofsuch a breach, and in recovery any compensationforfeitedhereunder.8.6OrderingProductsDistributorsmayorderProductsdirectlyfromAdvoCareandmaypayfororderswithacreditordebitcard,cash(ifpayingatWillCall),checkormoneyorder.ToplaceaProductorderaDistributormay:

(1) PlaceanorderonlineatAdvoCare.com;


(2) Contact AdvoCare Customer Service at800-542-4800;or

(3) VisitWillCallattheAdvoCareCorporateOffice.For frequently asked questions, such as hours ofoperationorProductpricing,pleasevisitAdvoCare.com.

Once an order is entered, it cannot be changed. It isimmediatelytransmittedtotheDistributionCentertobefilledandshipped.

8.7SalesTaxAdvoCare charges sales tax on the retail value of theProductorderbasedon theshippingdestination.Salestaxchargeswillvarybyproductandbystate.AdvoCareremitsthesalestaxtoeachstateinwhichProductsareshipped.Distributors should compute and collect salestaxontheirretailsalestoreimbursethemselvesforthisexpense.AdvoCareshallnotbeliableorresponsibleforDistributors’owncollectionandremittanceofsalestaxonDistributors’retailsales.

8.8ShippingorPickingUpProductsProductsmaybepickedupatWill Call anytimeduringregular Will Call hours. When an order is shipped, itincursshippingandhandling.PleaseseeAdvoCare.comor contact Customer Service for current shipping ratesandinformation.FailuretonotifyAdvoCareofanyshippingdiscrepancyordamagewithin thirty (30) daysof shipmentwill canceltheDistributor’srighttorequestacorrection.Ifanordermustbererouted,itwillbeattheDistributor’sexpense.PleasecontactAdvoCareCustomerServiceat1-800-542-4800tocorrectashippingdiscrepancy.8.9InsufficientFundsIf a Distributor issues a check that is returned toAdvoCareduetoinsufficientfunds,thatDistributorshipwill be suspended until the debt on the Distributor’saccountispaid.ADistributormayreplaceaninsufficientfundscheckwithacashier'scheck,moneyorder,debitcardorcreditcardissuedinthenameoftheDistributor,however,theDistributorwillbechargeda$25feeforthereturned check. If any insufficient funds paymentremainsoutstandingatthecloseofbusinessforanypayperiod, all compensation for that pay period will beforfeited.

8.10PayPeriodsFor the purpose of paying Wholesale Commissions,OverridesandLeadershipBonuses,thecalendaryearisdivided into twenty-four (24) pay periods. Pay periodsendonthefirstandthirdTuesdaysofeachmonth,withtheclosingofthepayperiodeffectivethatWednesdayat12amPacificStandardTime.Mostpayperiodsaretwoweekslong,butafewarethreeweekslong.

8.11ExcessivePurchaseofInventoryDistributors are not required to carry inventory ofProductsor salesaidsother than the initialDistributorKit. AdvoCare prohibits the excessive purchasing andstockpiling of Products in order to: (1) qualify forincentives, bonuses, pin level or discount leveladvancement and/or compensation paid by AdvoCare;or(2)sellinamannernotinaccordancewithAdvoCare’sPolicies.ToensurethattheProductspurchasedarebeingconsumed or sold in compliance with the Policies,AdvoCaremayrequestatanytimeverifiableRetailSalesReceiptsandotherdocumentationtoreviewalongsideaDistributor’s order history of up to one year. If aDistributor is unable to provide documentation andconfirm that he or she has consumed or sold at leastseventy percent (70%) of all Products previouslypurchased,thendisciplinaryactionmaybetakenagainsttheDistributorship,includingsuspensionortermination,atthesolediscretionofAdvoCare.

8.12ReportingAdverseReactionsorConsumerComplaintsIfaDistributor,PreferredCustomerorRetailCustomerexperiences,orbecomesawareof,anyadversereactionto an AdvoCare Product or receives a consumercomplaint,theyshouldcontactCustomerServiceassoonaspossibleat1-800-542-4800.CHAPTER9:RETURNINGOREXCHANGINGPRODUCTS9.1RetailCustomerReturn,ExchangeandCancellationPolicies

9.1.1RegisteredRetailCustomerReturnorExchangePolicy(SatisfactionGuarantee)A “Registered Retail Customer” is a RetailCustomer who is registered on the AdvoCareWebsiteandisabletopurchaseProductsonlinefrom their Distributor’s microsite as a RetailCustomer. Neither Retail Customers norRegistered Retail Customers are permitted tosell/resellProduct(s),sponsorotherDistributors,


Preferred Customers or Registered RetailCustomers, or receive compensation fromAdvoCare.IfaRegisteredRetailCustomerisnotcompletelysatisfiedwiththeProduct(s)theypurchased,theRegistered Retail Customer may request arefundorexchangewithinthirty(30)daysfromthe date of purchase by returning the unusedportionoftheProductandacopyoftheRetailSalesReceipt. IftheRetailCustomerpurchasedthe Products directly from a Distributor, seeSection 9.1.2. However, if the Retail Customerpurchased the Products on a Distributor’sWebsite,thentheyareconsideredaRegisteredRetailCustomerandtherefundwillbeprocessedby AdvoCare Customer Service. The refund orexchangeamountisbasedupontheretailprice,sales tax (if applicable) and shipping costs.*Product refundsaremade in thesame formofpaymentastheProductpurchase.

*Refunded shipping costs are calculatedas thelesserof5%retailvalueoftheitemsreturnedor$75, but no less than the current standard flatshippingrate.

To be entitled to a refund, the followingrequirementsmustbemet:(1) The returned Products must be

accompaniedbyaninventorylistandproofthat the Products were purchased from aDistributor;

(a) If purchased online through aDistributor Website, the returnedProductsmustbeaccompaniedbyaReturnedMerchandiseAuthorization(RMA)numberprovidedbyAdvoCareCustomerService;

(2) The returned Products must beaccompaniedbyaRetailSalesReceipt;and

(3) The returned Products must have beenpurchasedwithinthirty(30)daysprecedingthedateofthereturn.

ReturnedProductthatdoesnotmeetthecriterialistedaboveshallnotbeeligibleforarefundorexchange.AllProductreturnedtoAdvoCareshallberetainedbyAdvoCare,regardlessofwhetherthe return meets the criteria for receiving arefundorexchange.

9.1.2RetailCustomerReturnPolicyforPurchasesDirectfromaDistributor(SatisfactionGuarantee)ARetailCustomerisentitledtoarefundonanyProduct purchased in the last thirty (30) days.Distributors must refund a Retail Customer'smoneyimmediatelyifaskedtodoso.Failuretodosomayresultindisciplinaryaction,includingsuspensionortermination,atthesolediscretionof AdvoCare. After issuing a refund to a RetailCustomer,Distributorsmust return theunusedportionoftheProductalongwithacopyoftheRetail Sales Receipt and a completed RetailCustomer Product Return form in order toreceive a replacement for the Product fromAdvoCare. Retail Customer Product ReturnformsareavailableonlinebyloggingontoyourDistributorWebsiteorinpersonattheAdvoCareWill Call desk. Distributors must request thereplacement Productwithin thirty (30) days oftherefund.If a Retail Customer calls AdvoCare CustomerServicetorequestarefundforProductsoldbyaDistributor,AdvoCarewillnotifytheappropriateDistributor.IftheDistributorfailstorefundtheRetailCustomerwithinten(10)days,disciplinaryaction may be taken, including suspension ortermination,atthesolediscretionofAdvoCare.9.1.3RetailCustomer’sRighttoCancelaTransactionA Retail Customer may cancel a transaction,withoutanypenaltyorobligation,withinTHREE(3)BUSINESSDAYS from thedateof theRetailSalesReceipt.If a Retail Customer cancels a transaction, anypaymentsmadebytheRetailCustomeraspartof the sale shall be returned within TEN (10)BUSINESSDAYSfollowingreceiptbythesellerofthecancellationnotice.IfaRetailCustomercancelsatransaction,heorshemustmakeavailabletotheDistributorattheRetail Customer's residence, any ProductsdeliveredtotheRetailCustomeraspartofthissale,insubstantiallyasgoodconditionaswhenreceived, or the Retail Customer may complywiththeinstructionsoftheDistributorregardingthe return shipment of the goods at the


Distributor's expense and risk. If the RetailCustomermakes the Products available to theDistributor and the Distributor does not pickthemupwithintwenty(20)daysofthedateofthe Notice of Right to Cancel, the RetailCustomer may retain or dispose of the goodswithout any further obligation. If the RetailCustomer fails tomake the goods available totheDistributor,oriftheRetailCustomeragreestoreturnthegoodstotheDistributorandfailstodo so, then theRetail Customer remains liablefortheProduct.

To cancel a transaction, the Retail CustomermustmailordeliverasignedanddatedcopyoftheRetailReceiptoranyotherwrittennotice,orsendacertified letter, totheDistributorat theaddresson the frontof theRetailReceiptNOTLATER THAN MIDNIGHT OF THE 3RD BUSINESSDAY.

9.2PreferredCustomerandDistributorReturnPolicies

9.2.1PreferredCustomerandDistributorProductReturnorExchangePolicy(SatisfactionGuarantee)If a Preferred Customer or Distributor is notcompletely satisfied with the Products theypurchased, they may request an exchange orrefundwithin thirty (30)days fromthedateofpurchasebyreturningtheunusedportionoftheProductbacktoAdvoCare.TherefundamountisbaseduponthepricethePreferredCustomerorDistributorpaidatthetimeofsale,salestax(ifapplicable)andshippingcosts.*Productrefundsaremade in the same formofpayment as theProductpurchase.ProductexchangeswillbeforaProduct(s)ofequalorlesservalueofthepricethePreferredCustomerorDistributorpaidatthetimeofsale.

*Refunded shipping costs are calculatedas thelesserof5%retailvalueoftheitemsreturnedor$75, but no less than the current standard flatshippingrate.

To be entitled to a refund or exchange, thefollowingrequirementsmustbemet:(1) The returned Product(s) must be

accompanied by a Returned MerchandiseAuthorization(“RMA”)numberprovidedby

AdvoCareCustomerService,aninventorylistof the Product(s) returned, and proof thatthe Products were purchased fromAdvoCare;

(2) The returned Productsmust appear in thePreferredCustomer’sorDistributor’sorderhistory;and

(3) The returned Products must have beenpurchasedwithinthirty(30)daysprecedingthedateofthereturn.

ReturnedProductthatdoesnotmeetthecriterialistedaboveshallnotbeeligibleforarefundorexchange. In addition, all Product returned toAdvoCare shall be retained by AdvoCare,regardless of whether the return meets thecriteriaforreceivingarefundorexchange. 9.2.2DistributorReturnPolicyforSalesAidsSales aids such as IMPACTMagazine, Solutionsfor Your Success DVD, and other trainingmaterials for purchase from AdvoCare areeligible for a refund if purchased within thirty(30)daysprecedingthedateofthereturnwithproof of purchase from AdvoCare. A record ofthe purchase must also be reflected in theDistributor’sorderhistory.Salesaidspurchasedfromthird-partyvendorsofAdvoCarearenon-refundable.

9.3ExclusionsfromReturnandExchangePoliciesOnly Products and sales aids purchased directly fromAdvoCare, a Distributor Website or a Distributor areeligibleforarefundorexchange.Productspurchasedonany non-AdvoCare website (i.e., eBay, Amazon, orCraigslist)arenoteligible fora refund.Due to the factthat AdvoCare cannot guarantee the authenticity,freshness, safety, or quality of Products sold byunauthorized sellers of its Products, such Products arenot eligible for AdvoCare’s SatisfactionGuarantee. Merchandise, print materials, and othersalesaidspurchasedthroughthirdpartiesareexcludedfromrefundbyAdvoCare.

Product returnsorexchangesmade for thepurposeofmaximizingcompensation,qualifyingfordiscountlevels,incentives, bonuses or pin level advancement areprohibited, and may subject the Distributorship todisciplinaryaction,includingsuspensionortermination,within the sole discretion of AdvoCare. AdvoCaremay


refusetoissuearefundifitfindsinitssolediscretionthatanyoftheconditionsinthissectionhavebeenmet.9.4AdjustmentsforRefundsThereturningofProductpurchasedbyyou,yourRetailCustomers,PreferredCustomersandyourdownlinecanreduce your compensation, pin level or discount level,Overrides, LeadershipBonuses and/or other incentivesearnedpreviouslyfromtheinitialsellingofthatreturnedProduct. AdvoCare will adjust compensation oradvancement,deductinganyamountsowedasaresultofthereturnedProductfromanycompensationpayableto theDistributor, and/or any incentives forwhich theDistributornolongerqualifies.CHAPTER10:ADVERTISINGANDMARKETINGOFADVOCAREPRODUCTSANDTHEBUSINESSOPPORTUNITY10.1DistributorAdvertisinginGeneralDistributors,asindependentcontractors,arefreetoruntheirrespectiveAdvoCarebusinesseshowevertheyseefit, including through various forms of advertising, solongastheirbusinessactivitiescomplywithalltermsofthesePoliciesandall federal, state,and local lawsandregulations. Failure to follow this requirement maysubjecttheDistributortodisciplinaryactionatthesolediscretionofAdvoCare.AdvoCareshallnotbeliableforany actions of its Distributors in violation of thisrequirement and/or these Policies. What follows aregeneral principles to help guide Distributors in thedecisions they may make regarding advertising andpromotion of the AdvoCare opportunity (for moreresources on how to advertise and promote yourAdvoCarebusiness,logintoyourDistributorWebsite).ItistheobligationofeachDistributortoensurethatalladvertisementactivitiesaretruthful,notdeceptiveanddonotmisleadcustomersorpotentialDistributorsinanyway.Advertisementsandmarketingactivitiesshouldbeprofessional and appropriate. Any Distributor whoengages in abusive language or inappropriate conductthat causes disruption to the normal business ofAdvoCareorthatofanyDistributor,orthatisinjurioustothe image or reputation of AdvoCare or that of anyDistributor, may be subject to disciplinary actionincluding suspension or termination at the solediscretionofAdvoCare.Distributors must clearly identify themselves as an“AdvoCare Independent Distributor” in all

advertisements, including but not limited to, socialmedia posts andwebsites. Distributorsmay not underany circumstances represent themselves, eitherexplicitly or implicitly, as an agent or employee ofAdvoCare as a company. All advertisements andmarketing,includingtelephonecalls,websites,oremails,must not indicate or suggest that the recipient hasreachedtheAdvoCareCorporateOffice.AlthoughDistributors alone are responsible for settingretail prices for Products, in order to maintainAdvoCare’s premium brand image, business goodwill,and the integrity of its sales channel, all AdvoCare-related marketing must advertise Products at thesuggested retail price. Advertising Product discounts,freeProductorfreesamplesisstrictlyprohibited.Advertisements and marketing may not be combined,comingled,orinanywaycross-promotedwithanyotherproducts or business ventures that are not officiallyassociated with AdvoCare. Advertising other directselling companies, opportunities, supplements orweight-loss products while advertising AdvoCare isstrictlyprohibited.10.2Company-CreatedAdvertisingMaterialsOn occasion AdvoCare may itself produce materials,videosorsalesaidsandmakethemavailableforusebyDistributors. Generally, if a logo, graphic or AdvoCareSalesAidisintendedforDistributoruse,itwillbepostedor made available for download on the DistributorWebsite after login. These company-created materialsmaynotbeeditedormanipulatedinanywayotherthanto add contact information for the Distributor or anevent.10.3UseofLogos,TrademarksandCopyrightedMaterialAdvoCareownsallAdvoCaretrademarks, tradenames,logosandcopyrightedimagesandcontent.Distributorsmay not use AdvoCare trademarks, trade names orcorporate logoswithoutexpresswrittenapproval fromAdvoCare.Distributors are prohibited from recording orreproducing materials, presentations or copies ofrecordingsfromanyAdvoCareCorporatefunction,eventor speech by any AdvoCare spokesperson,representative, speaker, officer, director or otherDistributor.


10.4UseofDistributor’sName,LikenessorImageDistributors consent to AdvoCare’s use of his or hername,testimonial,andimageor likeness inconnectionwith advertising, promoting and publicizing theAdvoCare opportunity, Products or any AdvoCare-relatedevent.Unless otherwise published in official AdvoCarepublications,Distributorsareprohibitedfromusingthename, testimonial and image or likeness of otherDistributors, Preferred Customers, or Retail CustomerswithoutexpresswrittenconsentfromthoseDistributors.10.5InternetPolicyIngeneral, contentor communicationson the internetusedtoencourage,informorinfluencecustomersaboutProducts and theAdvoCare business opportunitymustcomply with all terms of the Policies, including thisChapter.It istheDistributor’sobligationtoensurethatallcontenttheypostontheinternetiscurrentandthatanyoldcontentthatisoutofcompliancewithanytermsofthePoliciesisimmediatelyandpermanentlyremoved.Failure to comply with this policy may subject theDistributortodisciplinaryactionatthesolediscretionofAdvoCare.

Distributorsarenotpermittedtoown,createormaintaindomain names, email addresses and/or online aliasesthatcouldcauseconfusion,bemisleadingordeceptivetoconsumers,inthattheyappeartobeconnectedwiththe AdvoCare Corporate Office. AdvoCare willdetermine, in its sole discretion, whether such couldcause confusion or are misleading or deceptive. Inaddition, unsolicited email, text, social media, and faxblastmessagesareexpresslyprohibited.

10.6SocialMediaPosts, communications or content shared on socialmedia sites used to encourage, inform or influencecustomers about Products and the AdvoCare businessopportunitymustcomplywithalltermsofthePolicies,including this Chapter. Socialmedia sitesmay include,but are not limited to, Facebook, Pinterest, Tumblr,Reddit,Instagram,Twitter,LinkedInandYouTube.IfaDistributorissharingcontentregardingAdvoCareonsocialmedia,whetherinapersonalprofileorinagroup,the Distributor must clearly identify themself as an“AdvoCare Independent Distributor.” The contentsharedshouldbeprofessionalandappropriate.Abusivelanguage or inappropriate conduct that causes

disruptiontothenormalbusinessofAdvoCareorthatofanyDistributor,orconductthatisinjurioustotheimageorreputationofAdvoCareorthatofanyDistributor,maysubjecttheDistributortodisciplinaryaction.Cross-promoting other business opportunities andcompeting activities or negatively discussing otherdirect-sellingcompanies,opportunities,supplementsorweight loss products while communicating aboutAdvoCareisstrictlyprohibited.Socialmediamaybeusedto share informationaboutAdvoCare, itsProductsandthebusinessopportunity.However,thesesitesmaynotbe used to sell Products or advertise free Productsamples or Product discounts. Sales may only beconductedin-personorontheDistributorWebsite.

10.7SearchEngineMarketingDistributors may choose to use paid search enginemarketing (suchasGoogleAdWords)asawaytobuildtheir businesses. However, Distributors may not useAdvoCare trademarks or other information thatwouldlead a consumer to believe that they are accessingAdvoCare’s website and not a Distributor’s personalwebsiteortheirDistributorWebsite.Beforepurchasinga search enginemarketing advertisement, Distributorsmust register with AdvoCare by sending theadvertisement content to [email protected]. At anytime, AdvoCare may request immediate removal ofsearchenginemarketingthatisconfusing,misleading,ordeceptive to consumers. All search engine marketingmustcomplywithalltermsofthePolicies,includingthisChapter.

10.8EndorsersandSponsorshipsAdvoCare Endorsers and Sponsorships are subject tochange.Forthemostcurrentandaccurateinformation,pleaseconsulttheAdvoCarewebsite.DistributorsmaynotuseanEndorser’simageorlikeness,upload or add any videos, photos, commercials, orinformation about anyAdvoCare Endorserwithout theexpresswritten consentofAdvoCare, unlesspublishedby AdvoCare specifically for Distributor use or sharingpurposes.Endorsers receive free Product in exchange for theirendorsement and are compensated for their time andappearances.


10.9Claims10.9.1ProductClaimsWhen discussing or promoting Products,Distributors may make only those claims orrepresentations found in current literaturepublished by AdvoCare. Distributorsmay statethattheProductsaresafewhenusedasdirectedontheproductlabels.DistributorsmaynotstatethatanyProducthasbeenapprovedbytheU.S.FoodandDrugAdministration(“FDA”).Product claims and statements suggesting thatProductscanbeusedtodiagnose,treat,cure,orpreventanyillness,diseaseormedicalconditionareprohibitedbyAdvoCareandbythelawsandregulations of jurisdictions in which AdvoCareoperates.Suchstatementsshallbegroundsfordisciplinary action, including suspension ortermination,atthesolediscretionofAdvoCare.

TestimonialsregardingAdvoCareProductsmustreflect typical results under the circumstancesshown in the advertisement, or must disclosethe generally expected performance in thecircumstances shown in the advertisement.Under no circumstances shall a testimonial beused tomake a claimnototherwisepermittedwithrespecttotheProduct.Ifsuchtestimonialsare made on the internet or on social media,AdvoCarerecommendsprovidinga linkdirectlyto the current product and weight-lossdisclaimerontheAdvoCarewebsite.Weight loss varies with individual effort, bodycomposition,eatingpatternsandexercise.Ifanindividualhasamedicalconditionorispregnantor nursing, AdvoCare recommends that theindividual consult his or her healthcareprofessional before starting an AdvoCareProductregimen.Individualsshouldalwaysreadtheproductlabelbeforeuse.

10.9.2IncomeClaimsDistributors may not make future incomeprojections or income claims regarding theamountofmoneytheyorothersmayexpecttoearnthroughtheAdvoCareCompensationPlan.Distributorsmaynotmakeanystatementabouttheir AdvoCare income or the AdvoCareCompensationPlanthatisuntrue,misleadingor

based upon any experience other than theDistributor’s personal experience. Distributorsmust provide the complete, current AdvoCareIncome Disclosure Statement found on theAdvoCare website to all individuals to whomthey promote the AdvoCare opportunity,provide income information, or share lifestyleclaims that imply income from AdvoCarecontributed.DistributorsmustclearlydisclosethatsuccessinAdvoCare depends on a number of factors,including effort exerted by the Distributor inselling Products and in helping train thoseDistributorswhomheorshesponsors.AdvoCaresells sales aids, such as IMPACT magazine andSolutionsforyourSuccessDVD,that, ifcurrent,may be used to illustrate the businessopportunity,providedthecompleteandcurrentAdvoCare Income Disclosure Statement issimultaneouslyprovidedtotherecipient.Ifsuchclaimsortestimonialsaremadeontheinternetor on social media, AdvoCare recommendsproviding a link directly to the current IncomeDisclosureStatementontheAdvoCarewebsite.

10.10ProhibitedFormsofAdvertisingInordertoprotecttheAdvoCarebrandandreputation,andinadditiontotheotherrestrictionsandprohibitionson advertising contained in these Policies, Distributorsareprohibitedfromadvertisinginthefollowingmanner:

(1) AdvertisementsfeaturingminorsusingProducts;(2) Advertisements placed on television, radio, in

printwithcity-wideor largercirculation,withinpublishednewsstoriesorarticles,viaunsolicitedemails, one-commerce sites, throughpersonalor third party leads generation sites, in webapplications (“Apps”), or sponsored links onwebsitesandsocialmediasites;

(3) Any advertisement that is inappropriate orwould otherwise negatively affect the publicimageorreputationofAdvoCare,inAdvoCare’ssolediscretion;or

(4) Any advertisement that violates any law orregulation.

10.11MarketingProductsthroughProfessionalServiceEstablishmentsDistributorsmaybeapprovedtosellProductsincertain“brick and mortar” establishments where professionalservicesaretheprimarysourceofrevenue(seeChapter


10.11.1:DefinitionofEstablishment).However,inordertoprotectthebrandimageanduniquesaleschannelofAdvoCare, a Distributor must seek prior approval andmuststrictlyadheretotheguidelinessetforthbelow,orthey will be subject to disciplinary action, at the solediscretionofAdvoCare.InordertosellordisplayProductsinanEstablishmentaDistributormustadheretothefollowingguidelines:

(1) Distributors must obtain written authorizationfrom the AdvoCare Legal Department prior toselling any Products in an establishment, andAdvoCare retains the sole discretion to restrictitsProductsfrombeingsoldanywherewhich itdoesnotdeemacceptable.Tobeconsideredforapproval,Distributorsmustsubmitthefollowinginformationtolegal@advocare.com:

(a) NameandaddressoftheEstablishment;(b) PurposeoftheEstablishment;(c) DistributorIDoftheindividualmakingthe

requestforapproval;and(d) Signature of an authorized agent or

representativeoftheEstablishment.(2) TheDistributormustownorbeemployedbythe

EstablishmentandspecificallyauthorizedtosellormarketProductsintheEstablishment;

(3) Products must not be marketed or sold toanyoneundertheageof18;

(4) Competingbrandsofnutritionalsupplementsorfood products may not be offered for sale ordisplayedintheEstablishment;

(5) AdvoCaresalesmustbeseparateandapartfromthe primary business transactions of theEstablishment. Productsmay not be combinedwithanyotheroffers (forexample, a freegymmembershipmaynotbegivenwiththepurchaseofa24-DayChallenge®);

(6) Only the Distributor may conduct the sale ofProducts;

(7) Products must be offered at the AdvoCaresuggestedretailprice;and

(8) The Distributor must provide each customerwithanAdvoCareRetailSalesReceiptseparateandapartfromanyreceiptoftheEstablishment.

10.11.1DefinitionofEstablishmentEstablishmentsmayinclude:healthclubs,gyms,spas,hairornailsalonsandhealthprofessional’soffices.Establishmentsmaynotinclude:productretail stores, internetauctionsites,mallkiosks,departmentstores,smoothieorjuiceshops,gas

stations,conveniencestores,chainorfranchisedretail outlets, mass-merchandising outlets orpharmacies(Note:this isnotanexhaustivelist.AdvoCare reserves the right to evaluate anEstablishment on a case-by-case basis, and,should it become necessary, take disciplinaryactioniftheDistributorisnotincompliancewiththisChapter).

10.11.2Exhibitions,FairsorTradeShows

Fairs, home shows, trade shows and otherseasonalorannualeventsarenotconsideredtobe“establishments,”andarenotsubjecttothispolicy. For these events, an ExhibitionRequestFormseekingapprovaltosellordisplayProductsatanexhibitioneventmustbesubmittedtotheAdvoCare Legal Department at least 7-10businessdayspriortotheexpectedevent.

10.12InternationalSalesandAdvertisingYoumaynotsellanyProducts,distributeanyliterature,place any advertisement or conduct any other activitytowardthepromotionorestablishmentoftheAdvoCarebusiness or Products in any country other than theUnitedStates.CHAPTER11:DISCIPLINARYACTIONANDDISPUTERESOLUTION11.1NoticeofDisciplinaryActionShould it become necessary for AdvoCare to place onprobation,suspend,or terminateaDistributorship, theprobation,suspensionorterminationbecomeseffectiveon the date AdvoCare sends notice to the Distributoragainstwhomdisciplinaryactionistaken.ThenoticewillbesenttotheDistributor’smailingaddressand/oremailaddressof record (SeeChapter 1.6:Notices andOtherCommunications).

11.2FormsofDisciplinaryActionThe Policies are in place to protect AdvoCare and thebusiness opportunity for all Distributors. Violations ofthePolicies are consideredextremely serious andmaysubject a Distributor to disciplinary action, at the solediscretion of AdvoCare. AdvoCare may attempt toaddress a violation by counseling the Distributor;however, depending on the particular situation, moreseveredisciplinarymeasuresmayberequiredincluding,butnotlimitedto,thefollowing:


(1) Legal Hold: a period of time in which aDistributor’s account is frozen during aninvestigation of a possible Policy violation.Duringthistime,theDistributormaynotbuyororderProducts,signupnewDistributorsorearncompensation through theCompensationPlan.AdvoCare agrees to investigate the violationwithinareasonableamountoftimeandreleasethe legalholduponthedeterminationthat theDistributor’s conduct is not subject to furtherdisciplinaryaction.Withheldcompensationthatwould have been earned by the DistributorduringthelegalholdperiodisforfeitedandmayberetainedbyAdvoCarewhiletheLegalHoldispending investigation unless and until theDistributor is found not at fault and then thecompensation may be returned to theDistributoruponrequest;

(2) Warning: issued to clarify the meaning andapplication of a specific Policy and advise thatcontinued violation will result in furtherdisciplinaryaction;

(3) Probation:adefinedperiodoftimeinwhichtheDistributor is considerednot in good standing,butmaycontinuetoconductcertainaspectsoftheir Distributorship, unless otherwisecommunicated by AdvoCare, including buyingProducts,placingordersonhisorherDistributorWebsite, earning compensation through theCompensation Plan and signing up newDistributors. However, while a Distributor isconsiderednot ingood standing heor shewillnotbeeligibleforcertainDistributorprivileges,includingbutnot limited toearning incentives,participating in Leadership or Diamond andaboveevents,receivingrecognitionforpinleveladvancement, or taking part in the Leadsprogram. It is within the sole discretion ofAdvoCaretorestrictorallowcertainDistributorrights and privileges within the probationaryperiod;

(4) Suspension:adefinedperiodoftimewhere,oruntil certain specified conditions are met, aDistributor is considerednot in good standing.DuringasuspensiontheDistributor’saccountisfrozen and all rights to conduct the AdvoCarebusiness and participate in Distributor events,alongwith any eligibility for earning incentivesand compensation are revoked. Withheldcompensationthatwouldhavebeenearnedby

theDistributor during the suspensionperiod isforfeitedandmayberetainedbyAdvoCare;or

(5) Termination: the complete cancellation of aDistributor Agreement and revocation of theDistributor’srights,includingtherighttoreceiveany further compensation whether accruingbefore or after the termination date. Upontermination, the Distributor must immediatelycease to represent himself or herself as aDistributor.

AdvoCare reserves the right to take disciplinary actionagainstaDistributoratanytime,withorwithoutpriornotice,whenever it is determined to be the necessaryand appropriate action. Upon disciplinary action, aDistributor’searningsandincentivesmaybeforfeitedatthesolediscretionofAdvoCare.AdvoCarereservestheright to recoup damages and pursue legal action forviolationofitsPoliciesoritsDistributorAgreement.

Notwithstanding the foregoing section, any probation,suspension or termination invoked by AdvoCarebecomeseffectiveonthedateAdvoCaresendsnoticetothe affected Distributor(s). The notice will be mailedand/or emailed to the Distributor’s physical addressand/or email of recordwithAdvoCare. Legal holds aretheexceptiontothisnotificationprocessastheyarethemost minor forms of disciplinary action, and will beeffectiveimmediatelywithorwithoutnotification.11.3ProceduresforAppealA Distributor may appeal the withholding ofcompensation,probation,suspensionorterminationbysending a written explanation to the AdvoCare LegalDepartment addressing why the disciplinary actionshouldnotbetaken.Inordertobeconsidered,appealsmust be sent by certified or registered mail to theAdvoCare Corporate Office (attention: LegalDepartment) or by email to [email protected] must be received by AdvoCare no later thantwenty (20) days from the date of the notice ofdisciplinaryaction.Anysanction(s)shallremaininplaceduring the appeals process. AdvoCare will review alltimely appeals and notify the Distributor of the finaldecision.Theappealdecisionisfinalandisnotsubjecttofurtherreview.11.4RepurchasesAssociatedwithaTerminatedDistributorshipA Distributor whose Distributorship is involuntarilyterminated by AdvoCare may request, at the time of


termination,thatAdvoCarerepurchaseunusedProductsin the Distributor’s possession. Any request forrepurchase must be sent to the AdvoCare LegalDepartment via email at [email protected] andwillneed tobeable tomeet the requirements set forth inChapter14.2:RefundsAssociatedwithaResignation.11.5Pre-CancellationandPost-CancellationSlander,LibelorDisparagementADistributoror formerDistributor shall not slanderorlibel AdvoCare at any time. A Distributor or formerDistributor also shall not disparage AdvoCare or itscurrentDistributorsduringtheperiodofanydisciplinaryactionspendingagainsttheDistributor,andforaperiodof one (1) year following the conclusion of theirDistributorship.Thisprovisionshall survive terminationoftheContract.

11.6Post-TerminationReapplicationIf a former Distributor who has been terminated byAdvoCare seeks to become a Distributor again, thatindividualmust firstwait twelve (12)months from thedateof terminationtobeconsidered for reapplication.At that time, theApplicantmustsubmita letter to theAdvoCare Legal Department at [email protected] he or she should be allowed to operate aDistributorshiponceagain.ItiswithinthesolediscretionofAdvoCarewhetherornottopermittheindividualtocontract into a new Distributorship. If approved, theindividual will have no right to his or her originaldownline or discount level, and must execute a newDistributor Agreement as well as purchase a newDistributorKit. Ifa formerDistributor’s reapplication isdenied, then the former Distributor must wait a fullcalendar year before following the same reapplicationprocesssetforthabove.11.7LimitationofRemediesTothefullestextentpermissibleunderapplicablelaw,neither AdvoCare nor any of its officers, directors,managers, employees, agents, or affiliates shall beliabletoanyDistributororanyoneelseforanyindirect,consequential,incidental,special,orpunitivedamagesthatariseoutoforrelatetotheContract,includingbutnot limited to: alleged damages relating to delays orfailures with regard to the ordering, delivery, andquality of AdvoCare Products; the payment or non-payment of compensation under the CompensationPlan; and any information provided by AdvoCare toDistributors, including information relating todownlines, uplines,Distributor lists and earnings, and

othersimilarinformation.NeitherAdvoCarenoranyofitsofficers,directors,managers,employees,agents,oraffiliates shall be liable under any theory for anycondition or circumstance caused by force majeure,including but not limited to strikes, labor difficulties,riots,war, fire, natural disasters, death, curtailmentorinterruption of a source of supply, or governmentdecreesororders.11.8MandatoryArbitrationandDisputeResolutionEXCEPTASMAYBEEXPRESSLYPROVIDEDOTHERWISEBYTHESEPOLICIES,ANYCLAIMORCONTROVERSYARISINGOUT OF OR RELATING TO THE CONTRACT, WHETHERSUCH CLAIM ARISES IN TORT, CONTRACT, EQUITY, OROTHERWISE, SHALL BE RESOLVED BY BINDING ANDCONFIDENTIAL ARBITRATION ADMINISTERED BY THEAMERICANARBITRATIONASSOCIATIONINACCORDANCEWITH ITS THEN EXISTING COMMERCIAL ARBITRATIONRULESBEFOREASINGLEARBITRATOR.THEARBITRATORSHALL HAVE EXCLUSIVE AUTHORITY TO DETERMINEWHETHERANYPARTICULARCLAIMORCONTROVERSYISARBITRABLE AND COVERED BY THIS PROVISION.DISTRIBUTORSHEREBYWAIVE THEIR RIGHTS TO TRIALBY JURY OR BY ANY COURT EXCEPT AS EXPRESSLYPROVIDED HEREIN. THE HEARING SHALL OCCUR NOTLATER THAN ONE HUNDRED AND EIGHTY (180) DAYSFROM THE DATE THE DEMAND IS MADE, ABSENTAGREEMENT BY THE PARTIES OR EXTRAORDINARYCIRCUMSTANCES,WITHA JUDGMENTONTHEAWARDENTERED WITHIN THIRTY (30) DAYS AFTER THECONCLUSIONOFTHEHEARING.THEARBITRATIONSHALLBE CONDUCTED IN COLLIN COUNTY, TEXAS, WHICHSHALL BE THE EXCLUSIVE LOCATION OF THEARBITRATIONABSENTAGREEMENTBYTHEPARTIESOREXTRAORDINARY CIRCUMSTANCES. HOWEVER, THEJUDGMENTONTHEAWARDMAYBE ENTERED INANYCOURTHAVINGJURISDICTIONTHEREOF.

EACHPARTYTOTHEARBITRATIONPROCEEDINGSHALLBE ENTITLED TO NO MORE THAN TWENTY (20)REQUESTS FOR PRODUCTION, TEN (10)INTERROGATORIES, AND FIVE (5) DEPOSITIONS. ALLRESPONSES TO REQUESTS FOR PRODUCTION ANDINTERROGATORIES ARE DUE WITHIN TEN (10) DAYSFROM THE DATE THEY ARE SERVED. ALL DOCUMENTSMUSTBEPROVIDEDWITHINTHREE(3)DAYSAFTERTHERESPONSESTOREQUESTSFORPRODUCTIONAREDUE.THE FOREGOING DISCOVERY LIMITATIONS ANDDEADLINES MAY BE MODIFIED OR EXPANDED AT THEDISCRETION OF THE ARBITRATOR FOR GOOD CAUSESHOWN. THE ARBITRATOR HAS THE DISCRETIONARY


AUTHORITY TO AWARD THE COSTS OF THEARBITRATION, THE ARBITRATOR’S FEES, AND ANYREASONABLEANDNECESSARYLEGALFEESINCURREDINCONNECTIONWITHADISPUTERESOLVEDINFAVOROFTHEPREVAILINGPARTY.THECOSTSOFINITIATINGTHEARBITRATIONSHALLBEBORNEBYTHEPARTYINITIATINGARBITRATION. THE COSTS OF BRINGING ANYCOUNTERCLAIMS SHALL BE BORNE BY THE PARTYALLEGINGTHECOUNTERCLAIMS.ALLREMAININGCOSTSAND FEES SHALL BE SPLIT EQUALLY BETWEEN THEPARTIES UP THROUGH ISSUANCE OF A FINAL AWARD.WITHOUT GIVING EFFECT TO ANY CHOICE OF LAWANALYSIS,THEPARTIESAGREETHECONTRACT,ANDANYMATTERARISINGOUTOF,RELATINGTO,ORINVOLVINGTHE CONTRACT, INCLUDING TORT CLAIMS, WILL BEGOVERNEDBYTHELAWSOFTHESTATEOFTEXASANDINACCORDANCEWITHU.S.C.A.,TITLE9,UNITEDSTATESARBITRATION ACT (THE “FAA”), AND/UNLESSOTHERWISE CONFLICTING,WITH THE TAA, THE TEXASARBITRATION ACT, TEX. CIV. PRAC. & REM. CODE§171.001 ET SEQ. THE ARBITRATOR SHALL HAVEEXCLUSIVE AUTHORITY TO RESOLVE ANY DISPUTERELATING TO THE ENFORCEABILITY OF THISARBITRATION PROVISION, INCLUDING, BUT NOTLIMITED TO, ANY CLAIM THAT ALL OR PART OF THISPROVISIONISVOIDORVOIDABLE.

UNLESS OTHERWISE STIPULATED BY ALL PARTIESTHERETO, THE PARTIES AND THE ARBITRATOR SHALLMAINTAINTHECONFIDENTIALITYOFTHEARBITRATIONPROCEEDINGSANDSHALLNOTDISCLOSETOANYTHIRDPARTY: THE SUBSTANCE OF, OR BASIS FOR, THECONTROVERSY,DISPUTE,ORCLAIM;THESUBSTANCEORCONTENT OF ANY SETTLEMENT OFFER, SETTLEMENTDISCUSSIONS, OR OFFERS ASSOCIATED WITH THEDISPUTE; THE PLEADINGS, OR THE CONTENT OF ANYPLEADINGS, OR EXHIBITS THERETO, FILED IN ANYARBITRATION PROCEEDING; THE CONTENT OF ANYTESTIMONY OR OTHER EVIDENCE PRESENTED AT ANARBITRATION HEARING OR OBTAINED THROUGHDISCOVERY IN AN ARBITRATION; THE TERMS ORAMOUNT OF ANY ARBITRATION AWARD; AND THERULINGS OF THE ARBITRATOR ON ANY PROCEDURALAND/ORSUBSTANTIVEISSUESINVOLVEDINTHECASE.THE PARTIES FURTHER AGREE THAT NO ARBITRATORHASTHEAUTHORITYTO: (1)AWARDRELIEF INEXCESSOF WHAT THIS AGREEMENT PROVIDES; (2) AWARDCONSEQUENTIAL OR PUNITIVE DAMAGES OR ANYOTHERDAMAGESNOTMEASUREDBYTHEPREVAILINGPARTY'S ACTUAL, DIRECT DAMAGES; OR (3) ORDER

CONSOLIDATIONORCLASSARBITRATION,CONSOLIDATEMORE THAN ONE PERSON'S CLAIMS, AND MAY NOTOTHERWISE PRESIDE OVER ANY FORM OF AREPRESENTATIVE OR CLASS PROCEEDING. IN THISREGARD THE PARTIES SPECIFICALLY AGREE THAT THEYMAYBRINGDISPUTESAGAINSTTHEOTHERPARTYONLYIN AN INDIVIDUAL CAPACITY AND NOT AS A CLASSMEMBER IN ANY PURPORTED CLASS ORREPRESENTATIVE PROCEEDING INCLUDING WITHOUTLIMITATIONANYCLASSACTIONORCLASSARBITRATION.ANARBITRATORSHALLNOTCOMBINEORCONSOLIDATEMORE THAN ONE PARTY’S CLAIM WITHOUT THEWRITTEN CONSENT OF ALL AFFECTED PARTIES TO ANARBITRATIONPROCEEDING.

NOTWITHSTANDING THE FOREGOING, NOTHING INTHESE POLICIES OR THE CONTRACT SHALL PREVENTADVOCAREFROMAPPLYINGTOANDOBTAININGFROMANY COURT HAVING JURISDICTION A WRIT OFATTACHMENT, TEMPORARY RESTRAINING ORDER,PRELIMINARY OR PERMANENT INJUNCTION, RELIEFPURSUANTTOTEXASRULEOFCIVILPROCEDURE202,OROTHER RELIEF TO SAFEGUARD AND PROTECTADVOCARE’S INTERESTS AND RIGHTS, INCLUDINGWITHOUT LIMITATION, RIGHTS WITH RESPECT TOCONFIDENTIAL INFORMATION, LOGOS, TRADEMARKSANDCOPYRIGHTEDMATERIALSATANYTIMEPRIORTO,DURING, OR FOLLOWING THE FILING OF ANYARBITRATIONPROCEEDING.

THE INSTITUTION OF ANY ACTION FOR EQUITABLERELIEF UNDER THIS PROVISION OR TO ENFORCE ANAWARDORORDER,SHALLNOTCONSTITUTEAWAIVEROF THE RIGHT OR OBLIGATION OF ANY PARTY TOSUBMITALLCLAIMSTOARBITRATION.

IFANYDISTRIBUTORINITIATESLITIGATIONOUTSIDEOFARBITRATIONINVIOLATIONOFTHEPROVISIONSOFTHISSECTION,ANDUPONDEMANDBYADVOCAREFAILSTOSUBMIT THE MATTER TO ARBITRATION, THEDISTRIBUTORSHALLBE LIABLETOADVOCAREFORALLCOSTS, EXPENSES, AND LEGAL FEES INCURRED INCOMPELLINGARBITRATIONOFTHEMATTER.ANY AMENDMENTS TO THIS ARBITRATION PROVISIONSHALL APPLY ONLY PROSPECTIVELY, NOTRETROSPECTIVELY,ANDSHALLBEEFFECTIVEFOURTEEN(14) DAYS AFTER POSTING BY ADVOCARE. ANYAMENDMENTSTOTHISARBITRATIONPROVISIONSHALLNOT APPLY TO ANY CLAIM OR CONTROVERSY FORWHICH A DISTRIBUTOR HAS PROVIDED ADVOCARE


ACTUAL, EXPRESS, WRITTEN NOTICE PRIOR TO THEEFFECTIVEDATEOFTHEAMENDMENTS.

THIS SECTION SHALL INURE TO THE BENEFIT OFADVOCARE AND ALL OF ITS PARENTS, SUBSIDIARIES,AFFILIATES, OFFICERS, DIRECTORS, MEMBERS,MANAGERS, AGENTS, EMPLOYEES, ATTORNEYS,SUCCESSORS,ANDASSIGNS,ANYOFWHOMSHALLBEENTITLEDTOINVOKEORSEEKENFORCEMENTOFTHESEPROVISIONS,ANDSHALLCOVERALLCLAIMSASSERTEDAGAINSTANYOFTHEMTHATARISEOUTOFORRELATETOTHECONTRACT.

TOTHEEXTENTTHISARBITRATIONPROVISIONORANYPORTIONTHEREOFISDETERMINEDTOBEINVIOLATIONOF,ORUNENFORCEABLETOANYEXTENTUNDER,ANYSTATEORFEDERALLAW,THEPARTIESAGREETHATSUCHPROVISION OR PORTION IS SEVERABLE AND MAY BEREVISED TO BE CONSISTENT WITH APPLICABLE LAW,AND TO EFFECTUATE TO THE MAXIMUM EXTENTPOSSIBLE THE ORIGINAL TERMS AND INTENT OF THISPROVISION.11.9GoverningLaw,JurisdictionandVenueTheContract,itsinterpretationandenforcement,andallclaimsarisingoutoforrelatingtotheContract,whetherassertedinlaworequity,contract-based,tort-based,orotherwise,andincludingsubstantiveclaimsordefensesasserted within any arbitration proceeding, shall begoverned by the laws of the State of Texas withoutregard to choice of law or conflicts of law principles.Proceduralmattersinanyarbitrationproceedingshallbegoverned by the FAA and, unless otherwise conflictingwith the FAA, the TAA. Mandatory and exclusivejurisdiction and venue of any claim, dispute, matter,controversy, or action between AdvoCare and anyDistributor(s)thatisnotsubjecttoarbitrationshallbeinthe courts of Collin County, Texas and/or the UnitedStatesDistrictCourt,NorthernDistrict of Texas, to theexclusionofallothervenuesandforums,andDistributorhereby waives any and all objections to such venue,including personal jurisdiction and forum nonconveniens.Theinstitutionofanactionorproceedingbya Distributor against AdvoCare in another venue orforum in violation of this provision shall be amaterialbreach of the Contract causing AdvoCare irreparableharm, and Distributor agrees and stipulates thatAdvoCare shall be entitled to temporary, preliminary,andpermanentanti-suitinjunctiverelieftoenforcethisprovision.

CHAPTER12:ASSIGNMENTORSALEOFDISTRIBUTORSHIP12.1AssignmentorSaleofDistributorshipAgreementProhibitedNoDistributormaysell,assignorencumberanyinterestin itsDistributorship,withoutthepriorwrittenconsentby the AdvoCare Legal Department, which may bedenied in the sole discretion of AdvoCare. If aDistributorship is inherited or held in trust or held onbehalfofalegallyincapacitatedDistributor,asspecifiedinChapter13:DispositionofaDistributorship–DeathorLegal Incapacity,anewDistributorAgreementmustbesignedbythebeneficiary,trusteeorpersonholdingtheDistributorship on behalf of a legally incapacitatedDistributorandissubjecttotheapprovalorrejectionofAdvoCareinitssolediscretion.CHAPTER13:DISPOSITIONOFADISTRIBUTORSHIP–DEATHORLEGALINCAPACITY13.1PassingonYourDistributorshipSubject to the automatic rights of a surviving spouse(who is an Applicant or Co-Applicant) as set out inChapter 13.2, a Distributor may choose to pass theirDistributorship on to a beneficiary(ies) in the event oftheirdeathinavalidwillortestamentarydocument.ADistributorship does not automatically pass down to aDistributor’s beneficiary(ies) without it being expresslywritteninavalidwillorothertestamentarydocument.Instead, all Distributorships that are not included in avalid will or testamentary document (including atestamentary trust) may be terminated, deemedvacated, and/or may roll up to the next uplineDistributor,allinthesolediscretionofAdvoCare.NoticeofaDistributor’sdeathmustbeprovidedtotheAdvoCare Legal Department (email [email protected]) within thirty (30) days of the date of death topreventtheDistributor’saccountfrombeingpurged.Acertifiedcopyofthedeathcertificatemustbeprovideduponrequest.Distributors are encouraged to seek professional legalassistance from an attorney to ensure the propertransfer of the Distributorship. Inheritance of aDistributorshipdoesnotguaranteethatabeneficiarywillreceive any earnings at any particular level. Success inAdvoCare is dependent upon successful sales efforts,whichrequirehardwork,diligenceand leadership.The


successofabeneficiarywilldependuponhoweffectivelyheorsheexercisesthesequalities.13.2SurvivingorCapableSpouseWhen a Distributorship consists of a married couple(Applicant and Co-Applicant) and one person dies orbecomes legally incapacitated, the Distributorship willremaininthenameofthesurvivingorcapablespouse.Thesurvivingorcapablespousemustforwardacertifiedcopy of the death certificate or declaration of legalincapacity,as thecasemaybe, toAdvoCare tochangetheownershipoftheDistributorship.13.3EligibilityRequirementstoInheritorOperateanExistingDistributorship(pursuanttoChapter13)

(1) Mustbeleast18yearsofage;(2) Must not be a current AdvoCare Independent

DistributororPreferredCustomer;**(3) Must reside in a geographic area where

AdvoCareoperatesitsdirectsellingbusiness;(4) MustreadandacceptthePolicies;and(5) Must agree to and submit a signedDistributor

Agreement.

**If a beneficiary has an existing Distributorship orPreferred Customer membership, the beneficiary maydecide within a reasonable amount of time whichaccount to operate, and which to terminate. Thisrequirement does not apply to a trustee designated tooperateaDistributorshiponbehalfofabeneficiary.13.4DistributorshipLefttoaSingleBeneficiaryinaValidWillWhen a Distributorship is disposed of in a willtransferring it to a single beneficiary, AdvoCare willtransferownershipoftheDistributorshipinaccordancewith the terms of the will. In order to inherit aDistributorship,thebeneficiarymustmeettheeligibilityrequirements in Chapter 13.3. Failure of the singlebeneficiary tomeet the eligibility requirements withinsixty (60)days,or completionofprobate following thedeath of the original Distributor, may result in thetermination of the Distributorship unless theDistributorshipisheldintrust.13.5DistributorshipLefttoMultipleBeneficiariesinaValidWillIfawilldesignatesmorethanonebeneficiary,AdvoCarewillplacetheDistributorshipinonenameasdecidedbyallnamedbeneficiaries.Ifallnamedbeneficiariescannotagree among themselves in whose name to place the

Distributorship,AdvoCareshallmakethatdecisioninitssole discretion. The chosen named beneficiary mustmeettheeligibilityrequirementsinChapter13.3withinsixty(60)daysofthedeathoftheoriginalDistributororuponcompletionofprobate.ADistributorshipcannotbedivided. Upon earning compensation, AdvoCare willissue one compensation check per Distributorship.AdvoCare will not divide funds earned from theDistributorship.Thebeneficiariesshallhavenoclaimorrecourse against AdvoCare for how any compensationpaid to the Distributorship is allocated among thebeneficiaries.13.6DistributorshipsLeftinTrustA trust created in the will of the Distributor may beestablished in order to leave a Distributorship tobeneficiariesat thetimeof theDistributor'sdeath.Forexample,atestamentarytrustmaybeestablishedforthebenefitofminorchildrenorincapacitatedadults.The termsof the trust shoulddesignatea trusteewhowilloperatetheDistributorshiporappointathirdpartytodoso.AdvoCarereservestherighttodenythetransferofaDistributorshiptoatrustcreatedunderthewillofaDistributorifitdeterminesthetrusteedoesnotmeettheeligibility requirements in Chapter 13.3, or is notsufficiently authorized or capable of operating theDistributorshipincompliancewiththePolicies.UponthetransferofaDistributorship,thebeneficiaryiseligible toearncompensationpursuant to thePolicies.Upondissolutionofthetrust, ifapplicable,pursuanttothe will of the Distributor that created the trust, thebeneficiariesandtrusteemustdecidewhowillbenamedon the Distributorship in order for it to continueoperating. AdvoCare will continue to issue onecompensationcheckperDistributorship.13.7ProcedureforBeneficiaryorTrusteetoOperateaDistributorshipIn order for a beneficiary or trustee to operate aDistributorship, he or she must satisfy the followingrequirements:

(1) Provide AdvoCare with a certified copy of thedeathcertificateandanotarizedcopyofthewillor other instrument establishing thebeneficiary's valid right to the AdvoCarebusiness;

(2) The single beneficiary or trustee must sign aDistributorAgreement;


(3) The beneficiary or trustee must meet theeligibility requirements in Chapter 13.3 of thePolicies;

(4) ThebeneficiaryortrusteemustcomplywiththeDistributorAgreementandthePolicies;

(5) If a Distributorship is left to more than onebeneficiary or if it is left tominor(s), then thebeneficiariesortrusteemustestablishabusinessentity and acquire a Federal Tax ID Number.AdvoCare will issue compensation checks andone IRS Form 1099 to the business entity orsinglepersondesignated;and

(6) ProvideAdvoCarewithanaddressoraccountofrecordtowhichallcompensationchecksshallbesent.

13.8DistributorLeavesNoValidWillWhen a Distributorship has no Co-Applicant and theDistributorhasnotexpresslyprovidedforthetransferoftheDistributorshipinavalidwill,theDistributorshipshallterminateuponnoticeoftheDistributor'sdeath.Insuchevent,theDistributorshipmayrolluptothenextuplineDistributorinAdvoCare’ssolediscretion.13.9LegalIncapacitySubjecttotheautomaticrightsofasurvivingspousewhoisanApplicantorCo-ApplicantassetoutinChapter13.2,ifaDistributorbecomeslegallyincapacitatedandhasavalidPowerofAttorneyforPropertyorsimilarMandateinplaceorapersonhasbeenappointedastheguardianof the Distributor by a court of competent authority,suchAttorney appointedunder the Power ofAttorneydocument or similar Mandate or court appointedguardian (hereinafter “Personal Representative”) maycontinuetooperatetheDistributorshiponbehalfofthelegallyincapacitatedDistributorforthedurationofsuchlegalincapacity.NoticeofaDistributor’slegalincapacitymustbeprovidedbythePersonalRepresentativetotheAdvoCare Legal Department ([email protected])withinthirty(30)daysofthedateof the declaration of legal incapacity to prevent theDistributor’saccountfrombeingpurged.Acertifiedcopyof thedeclarationof legal incapacitymustbeprovidedbythePersonalRepresentativeuponrequest.AdvoCarereservestherighttodenythecontinuedoperationoftheDistributorship by the Personal Representative if itdeterminesthePersonalRepresentativedoesnotmeetthe eligibility requirements in Chapter 13.3 or is notsufficiently authorized or capable of operating theDistributorshipincompliancewiththePolicies.

13.10BankruptcyThe prohibition on the sale or assignment of aDistributorship applies if a Distributor files forbankruptcy and his or her Distributor position orDistributorAgreementwouldotherwisebecomepartofanestateinbankruptcyoranassetforsaleordispositionaspartoftheproceedings.UndernocircumstancesmayaDistributorshipbetransferredtoanyotherpersonorentityaspartofabankruptcyproceeding,eitherbytheDistributor, the bankruptcy trustee, a court, orotherwise.UnlessaDistributorispermittedtoretainhisor her Distributorship as part of the resolution of thebankruptcy proceedings, such Distributorship shall bedeemedcancelledand theDistributorpositionvacatedasofthedateofthebankruptcyfiling.CHAPTER14:RESIGNATIONOFADISTRIBUTOR 14.1ResigningYourDistributorshipADistributormayresignhisorherDistributorshipatanytimeby submitting a signed andnotarizedResignationForm (available on the Distributor Website or bycontactingCustomerService).IfaDistributorshiphasanApplicantandaCo-Applicant,theResignationFormmustbesignedandnotarizedbybothpartiesunlessonepartydesirestocontinuetheDistributorship.Ifonlyoneparty(eitherApplicantorCo-Applicant)wishestoresign,thatpartyneedstosubmitaResignationFormtohavehisorhernameremovedfromtheaccount.Distributorswhoresignarenoteligibletore-enrollasaDistributorforaperiodofsix(6)monthsfollowingthedateofresignation(exceptions apply if you are a resigning spouse, seeChapter5.2).However,aresigningDistributormayenrollas a Preferred Customer without a waiting period,provided that they are in good standing andmeet therequirementsofthePreferredCustomerProgram.14.2RefundsAssociatedwithaResignationDistributors who choose to resign may be entitled toreceivearefundforthecostofhisorherDistributorKit,plusshippingandhandling*,salestax(ifapplicable)**aswell as a refund or credit for the unused portion ofProductspurchasedfromAdvoCare.Tobeentitledtoarefund,thefollowingrequirementsmustbemet:

(1) Productsmustbe returned toAdvoCareat thetimetheResignationFormissubmitted;

(2) Returned Productsmust be accompanied by aReturned Merchandise Authorization (RMA)number provided by AdvoCare Customer


Service,aninventorylistofProduct(s)returned,andproofofpurchase;and

(3) ReturnedProductsmustalsoappearintheorderhistory of the Distributor to be eligible for arefund.

Any Product returned that does not meet the criterialistedaboveshallnotbeeligibleforarefund.AllProductreturned to AdvoCare with a resignation shall beretainedbyAdvoCare,regardlessofwhetherthereturnmeetsthecriteriaforreceivingarefund.Unlessspecificallytraceablefromtheorderhistory,therefundamountisbasedupontheretailpriceatthetimethe Product is repurchased minus the applicableDistributor discount, plus shipping and handling* andsalestax(ifapplicable).**ProductrefundsareprocessedinthesameformofpaymentastheProductpurchase.Ifthecreditcardusedforthepurchaseisnolongervalid,AdvoCare will refund any amount owed with a check.AnyfundsowedtoAdvoCareatthetimeofresignationwill be deducted from any potential refund orcompensation.Compensationincludesanycommission,Override,LeadershipBonusorotherbonusorincentive.*Refundedshippingcostsarecalculatedasthelesserof5%retailvalueoftheitemsreturnedor$75,butnolessthanthecurrentstandardflatshippingrate.**This requirement is not applicable to residents ofMaryland, Wyoming, Georgia, Massachusetts andPuertoRico.

SECTIONII:COMPENSATIONPLAN

CHAPTER1:OVERVIEWOFTHECOMPENSATIONPLAN1.1HowCompensationisEarnedAt AdvoCare, compensation is earned as Products arepurchased and sold, and as a Distributor develops anetworkofadditionalDistributorswhointurnpurchaseand sell Products. Sales to Retail Customers andPreferredCustomersarethefoundationofasuccessfulDistributorship.TheCompensationPlan isaworkplan,andyourcompensationwilldependonhowmucheffortyou expend, and to some extent, what area of thecountryyoulivein.1.2FiveWaystoEarnIncomeTherearefivewaysforDistributorstoearnincomewithAdvoCare:

(1) RetailProfits;(2) WholesaleCommissions;(3) Overrides;(4) LeadershipBonuses;and(5) Incentives,trips,andotherbonuses.

In addition, AdvoCare offers other promotionalincentives and bonuses through which Advisor-levelDistributorsmayearncompensation.1.3EligibilitytoEarnCompensationTobeeligibletoearncompensationfromAdvoCareyoumust provide your Social Security number. You mayprovide thisnumberatany timeandwillbeeligible toearn compensation from that point forward. If yourDistributorship is suspended or terminated due todisciplinary action, then your right to compensation isrevoked.CHAPTER2:UNDERSTANDINGSALESVOLUME2.1ConceptofSalesVolumeBefore explaining in depth the ways Distributors mayearn income, it is necessary to define the concept ofvolumeandhowitisusedtocalculatecompensation.Allvolumeiscalculatedperpayperiod.PayperiodsendonthefirstandthirdTuesdaysofeachmonthwiththeclosing of the pay period effective thatWednesday at12amPacificStandardTime.DistributorsearnWholesaleCommissions from sales and purchases by Preferred


CustomersanddownlineDistributorswhoareatalowerdiscountlevelthantheirown.OnceDistributorsqualifyfortheAdvisorlevel,theyareeligibletoearnOverrideson Products sold by other Distributors at the Advisorlevelsignedupunderthem.2.2PersonalVolume(PV)PersonalVolume(“PV”)isdefinedasthetotalsuggestedretail value of Product(s) purchased and sold by you,purchased by your Retail Customers and/or PreferredCustomers, and, in somecases,purchasedand soldbyyour downline Distributors. Personal Volume excludesthevolumeofdownlineDistributorswhoareatthefortypercent(40%)discountlevelandthevolumeofdownlineAdvisors.WhenanyfrontlineDistributorhasatotalP/GVoflessthan$500inasinglepayperiod,thatvolumewillbe included in your PV. However,when your frontlineDistributor(s)haveaccumulatedatotalP/GVof$500ormore in a single pay period, then that volumewill beincludedinyourGroupVolume(“GV”).2.3GroupVolume(GV)GroupVolume (“GV”) isdefinedas the total suggestedretail value of Product(s) purchased and sold by yourdownline Distributors who have accumulated $500 ormoreinP/GVduringapayperiod.WhenyourfrontlineDistributor(s)haveaccumulatedatotalP/GVof$500ormoreinasinglepayperiod,thatvolumewillbeincludedinyourGV.However,whenyourfrontlineDistributor(s)have accumulated a total P/GV of less than $500 in asinglepayperiod, then thatvolumewillbe included inyourPV.GroupVolumeexcludesanyvolumeofdownlineDistributorswhoareatthefortypercent(40%)discountlevelandvolumeofdownlineAdvisors.2.4Personal/GroupVolume(P/GV)Personal/Group Volume (“P/GV”) is the sum of yourPersonalVolumeandyourGroupVolume.ThefollowingchartrepresentsPersonalVolumeonly.Intheexample,there are no Distributors who have reached $500 insuggested retail value Product purchases and salesduringthepayperiod.

2.5BusinessVolumeBusinessVolumeisavalueassignedbyAdvoCaretoeachProduct for the purpose of calculatingOverrides. TheBusiness Volume value is equal to approximately fiftypercent (50%) of the suggested retail price on eachProduct.BusinessVolumeisnotassignedtosalesaidsorDistributorKits.CHAPTER3:UNDERSTANDINGYOURDISCOUNT3.1TheBasicDiscountScheduleThebasicDiscountScheduledetermineswhatdiscountyou receivewhenpurchasingProducts fromAdvoCare.The discount is based on the volume of Productspurchased, or purchased and sold in one to sixconsecutive pay periods. As a new Distributor, youqualify for a twenty percent (20%) discount on thesuggestedretailvalue.TheP/GVgeneratedbyyouoranydownlineDistributordeterminesyourdiscount.ThegreateryourP/GVduringany six consecutive pay periods, the greater yourdiscount.Toqualifyforthegreatestdiscountlevel(40%)youmustmeettheAdvisorqualifications(SeeSectionII,Chapter6:TheAdvisorLevel).


3.2HowYourDiscountWorksThischartreflectstheprofitsavailablewhenyouselltheProduct(s)atthesuggestedretailprice,dependentuponyourcurrentdiscountlevel.

CHAPTER4:EARNINGINCOMEFROMRETAILSALES4.1RetailSalesDefinedRetail sales are the simplest way to earn incomewithAdvoCare. As a Distributor, you purchase Productsdirectly from the company at a discount ranging fromtwenty to forty percent (20-40%). You then sell theProducts to your Retail Customers. The differencebetween what you paid for the Products (at yourdiscount)andwhatyousell themfor (whatyourRetailCustomerpaysyou)isyourimmediateprofit,otherwiseknown as Retail Profits. AdvoCare publishes suggestedretail prices for all Products. However, these aresuggested prices only and you are not obligated tocharge these prices. Each Distributor is entitled todetermine independently the prices at which they sellProductstotheirRetailCustomers.A“retailsale”isdefinedasthesaleofasingleunopenedProduct in its original packaging purchased by aDistributor and sold to a Retail Customer at acommercially reasonable price. A “Retail Customer” isdefined as a non-Distributor customer who purchasesProduct(s)directlyfromaDistributoreitherinpersonorthrough the Distributor’s AdvoCare Website (as a“RegisteredRetailCustomer”).ARetailCustomerisnotpermittedtoresellproductandisunabletoparticipateintheCompensationPlan.AsexplainedinChapter7below,inordertoqualifyforOverrides, Leadership Bonuses, other bonuses and/or

incentives, the Distributormust comply with the salesrequirementsofaminimumoffive(5)RetailCustomerand/orPreferredCustomerSalesperpayperiod.CHAPTER5:EARNINGINCOMEFROMWHOLESALECOMMISSIONS5.1WholesaleCommissionsDefinedWholesale commissions may be earned from sales toyourPreferredCustomersorpurchasesandsalesofyourdownline Distributors. All Distributors are eligible topotentiallyearnWholesaleCommissions.TheWholesaleCommission is calculated by the difference in yourdiscountlevels,andispaiddirectlyfromAdvoCaretotheDistributor.5.2WholesaleCommissionsEarnedfromSalestoPreferredCustomersWholesale Commissions are earned by a Distributorwhen their Preferred Customers purchase Product(s)from their AdvoCare website. These WholesaleCommissions, which AdvoCare pays directly to theDistributor, isthedifferencebetweenthatDistributor’sdiscountandthediscountoftheirPreferredCustomer(s).Forexample, if theDistributor’sdiscount level is thirtypercent (30%) and they have a Preferred Customer intheirdownlinewhohasatwentypercent(20%)discount,theDistributorreceivesatenpercent (10%)WholesaleCommissiononthatPreferredCustomer’spurchases.5.3WholesaleCommissionsEarnedfromPurchasesandSalesMadebyDistributorsYouSponsorWholesaleCommissionsarealsoearnedbyaDistributorbasedonthepurchasesand/orsalesofaDistributortheypersonally sponsor, who is at a lower discount level.These Wholesale Commissions, which AdvoCare paysdirectlytotheDistributor,isthedifferencebetweentheDistributor’sdiscountandthediscountoftheDistributortheysponsor.Forexample, iftheDistributor’sdiscountlevelisthirtypercent(30%)andtheyhaveaDistributorin their downline who has a twenty percent (20%)discount, the Distributor receives a ten percent (10%)WholesaleCommissiononthatDistributor’spurchases.


5.4HowWholesaleCommissionsWork

Note:AdvoCaredoesnotpayWholesaleCommissionsorOverridesonsalesaidsorDistributorKits.CHAPTER6:THEADVISORLEVEL6.1HowtoQualifyfortheAdvisorLevelTo qualify for the Advisor level, you have two optionsavailable:

(1) Accumulate $2,000 in P/GV, including at least$500 inPV, inone to six (1-6) consecutivepayperiods;or

(2) Accumulate $3,000 in P/GV, including at least$500inPV,intwenty-four(24)consecutivepayperiods.

ADistributor iscalleda“QualifyingAdvisor”duringthefinalpayperiodinwhichthe$2,000OR$3,000P/GVisaccumulated, so long as the $500 PV requirement hasbeensatisfiedwithinuptosix (6)oruptotwenty-four(24) consecutive pay periods, respectively. Once aDistributorisaqualifyingAdvisor,heorsheiseligiblefora forty percent (40%) discount on subsequent orders.Uponthefollowingpayperiod,theDistributoriseligibleto earn Overrides and Leadership Bonuses, incentivesandotherbonusesavailabletotheAdvisorlevel.6.2Re-QualifyingfortheAdvisorLevelAfter initiallyqualifying for theAdvisor level, youmustre-qualify annually to continue enjoying eligibility forOverridesandLeadershipBonuses.To re-qualify as an Advisor, you have two optionsavailable:

(1) Accumulate $2,000 in P/GV, including at least$500 inPV, inone to six (1-6) consecutivepayperiods;or

(2) Accumulate $3,000 in P/GV, including at least$500inPV,duringthecalendaryear.

You may re-qualify for the Advisor level at any timewithinthecalendaryear.Thecalendaryearisdefinedasthe twenty-four (24) pay periods that begin during a

traditionalcalendaryear. Ifyoudonotre-qualifyasanAdvisor on an annual basis, you will retain your fortypercent (40%) discount level, frontline Distributors,ability to earn Wholesale Commissions and RetailCommissions, and remain a Distributor. However, youwillloseyoureligibilitytoearnOverridesandLeadershipBonuses, andyourdownlineAdvisorswill permanentlyrolluptothenextuplineAdvisorinyourorganization.CHAPTER7:EARNINGINCOMETHROUGHOVERRIDES7.1HowOverridesWorkUponqualifyingforAdvisorlevel,youwillbeeligibletoreceive Overrides of up to seven percent (7%) on theBusiness Volume of Distributors through threegenerations of Advisors down line from you. ThepercentageOverrideforwhichyouareeligibleisbasedonyourP/GV.7.2TheOverrideSchedule

7.3SalesRequirementsforEarningOverrides,LeadershipBonuses,OtherBonusesorIncentivesTo qualify for any Override, Leadership Bonus or anyother bonus or incentive, you must complete a SalesComplianceformeachpayperiodbyloggingontoyourDistributorWebsiteorcontactingCustomerService.Youmustshowthatyoumadeatleastfive(5)salestoatleastfive (5) different Retail Customers and/or PreferredCustomersineachpayperiodduringwhichanyOverride,LeadershipBonusorotherbonusorincentiveisearned.The Retail Customer’s contact information must beincluded by you, however the Registered RetailCustomer’sandthePreferredCustomer’spurchasesandcontact information will be automatically tracked byAdvoCare as those sales are completed on yourAdvoCare website. AdvoCare must receive your SalesComplianceformnolaterthantheseventhdayfollowingthe close of each pay period. Failure to meet thisdeadlinemayresultintheforfeitureofallcompensationfor that pay period. Failure to submit the SalesCompliance formwithin ninety (90) days will result inautomaticforfeiture.


From time to time, AdvoCare may contact the RetailCustomerslistedonyourSalesComplianceformtoverifythatthesaletookplaceasreported.Ifyouprovidefalseor inaccurate information, disciplinary action may betakenagainstyourDistributorship,includingsuspensionortermination,atthesolediscretionofAdvoCare.7.4Overrides,LeadershipBonusesandExcessiveInventoryAdvoCarepaysOverridesandLeadershipBonuses, andother bonuses and incentives based on the sale ofProductwhichispurchasedforconsumptionorforresaletoRetailCustomers,contingentuponthecompletionofyour Sales Compliance form every pay period. IfAdvoCare later discovers that you are in violation ofSectionI,Chapter8.11:ExcessivePurchaseofInventory,thenAdvoCaremayadjustanddeducttheamountoftheOverride,LeadershipBonusorotherbonusorincentivepreviously paid from compensation due to you insubsequent pay periods. Or AdvoCare may denypayment of any Override, Leadership Bonus or otherbonusorincentiveinadditiontoanydisciplinaryactionthatmaybetaken,includingsuspensionortermination.CHAPTER8:EARNINGINCOMETHROUGHLEADERSHIPBONUSES8.1LeadershipBonusesDefinedLeadership Bonuses are a way to further recognizeAdvisorswhobuildandsupportdownlineteammemberswhosuccessfullysellProduct.Thesebonusesarepaidinaddition to other income earned. To be eligible for aLeadership Bonus, you must achieve criteria thatcombine at least $1,000 P/GV plus qualifyingOverrideand,startingatGold3Star,qualifying“legs.”Further,theLeadershipBonusreachesallthewaydownthroughtheleguntilyoureachanotherDistributorwhohasachievedthesameorgreaterLeadershiplevel.A leg consists of a Distributor whom you personallysponsor,aswellasallDistributorssponsoreddownlinefrom him or her. To be a qualifying leg for you, theDistributor(s)attheAdvisorlevelmustgenerateatleast$100 in Override. As the Leadership Bonus Schedulechart shows in Chapter 8.8 below, the Silver andGoldLeadershipBonuseshavenolegrequirements.However,beginningattheGold3Starlevel,youmusthavethreequalifying legs. At the Diamond level, you must havetwelve.AtthePlatinumlevel,youmusthaveeighteen.

In addition, if you earn a Leadership Bonus, it is paiddown through the Business Volume of the nextLeadership Bonus earner, where it is adjusted. Forexample,onlyoneDistributorattheAdvisorlevel(atanyone time) may earn a Gold Leadership Bonus on theBusiness Volume of any other given Distributor at theAdvisor level. The same is true of all other LeadershipBonusesuptoandincludingtheDiamond,PlatinumandTripleDiamondLeadershipBonuses.Leadership Bonuses must be earned in the followingsequence: Silver,Gold,Gold 3 Star, Ruby, Ruby6 Star,Emerald, Emerald 9 Star, Diamond, Platinum, Double-DiamondandTriple-Diamond.Following isanexplanationof theLeadershipBonuses.Youearn thepercentageof theBusinessVolumeofalldownline Distributors, EXCEPT if any downline AdvisorearnsaLeadershipBonus, thenyourLeadershipBonuswillbeadjustedinaccordancewiththeLeadershipBonuspayabletothedownlineLeadershipBonusearner.8.2LevelsofLeadershipBonuses

SilverLeadershipBonusASilverLeadershipBonusisearnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GVandatleast$100inOverrideinasinglepayperiod.Youearnthreepercent(3%)oftheBusinessVolumeofalldownlineAdvisors,withtheadjustmentnotedatthebeginningofthissection.

GoldLeadershipBonusAGoldLeadershipBonusisearnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV and at least $500 in Override in asingle pay period. You earn five percent(5%)oftheBusinessVolumeofalldownlineAdvisors,withtheadjustmentnotedatthebeginningofthissection.


Gold3StarLeadershipBonusAGold 3 Star Leadership Bonus is earnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GVandatleast$500inOverrideand you have at least three (3) qualifyinglegs, each generating at least $100 of the$500Override, ina singlepayperiod.Youearn seven percent (7%) of the BusinessVolumeof all downlineAdvisors,with theadjustment noted at the beginning of thissection.

RubyLeadershipBonusARubyLeadershipBonusisearnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV, at least $1,000 inOverride and youhaveatleastthree(3)qualifyinglegs,eachgenerating at least $100 of the $1,000Override, in a single pay period. You earnninepercent(9%)oftheBusinessVolumeofalldownlineAdvisors,withtheadjustmentnotedatthebeginningofthissection.

Ruby6StarLeadershipBonusARuby 6 Star Leadership Bonus is earnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV,atleast$1,000inOverrideandyouhaveatleastsix(6)qualifyinglegs,eachgeneratingatleast$100ofthe$1,000Override, in a single pay period. You earneleven percent (11%) of the BusinessVolumeof all downlineAdvisors,with theadjustment noted at the beginning of thissection.

EmeraldLeadershipBonusAn Emerald Leadership Bonus is earnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV,atleast$2,000inOverrideand you have at least six (6) legs, eachgenerating at least $100 of the $2,000Override, in a single pay period. You earnthirteen percent (13%) of the BusinessVolumeof all downlineAdvisors,with theadjustment noted at the beginning of thissection.

Emerald9StarLeadershipBonusAn Emerald 9 Star Leadership Bonus isearnedwhen,asanAdvisor,yougenerateat least $1,000 inP/GV, at least $2,000 inOverride and you have at least nine (9)qualifying legs, each generating at least$100ofthe$2,000Override,inasinglepayperiod. You earn fifteen percent (15%) ofthe Business Volume of all downlineAdvisors,withtheadjustmentnotedatthebeginningofthissection.

DiamondLeadershipBonusA Diamond Leadership Bonus is earnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV,atleast$4,000inOverrideandyouhaveatleasttwelve(12)legs,eachgenerating at least $100 of the $4,000Override, in a single pay period. You earnnineteen percent (19%) of the BusinessVolumeof all downlineAdvisors,with theadjustment noted at the beginning of thissection.

PlatinumLeadershipBonusA Platinum Leadership Bonus is earnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV,atleast$8,000inOverrideand you have at least eighteen (18) legs,eachgeneratingatleast$100ofthe$8,000Override, in a single pay period. You earn19.25% of the Business Volume of alldownline Advisors, with the adjustmentnotedatthebeginningofthissection.

Double-DiamondLeadershipBonusA Double-Diamond Leadership Bonus isearnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV,atleast$12,000inOverrideandyouhaveatleasttwenty-four(24) legs,eachgeneratingat least$100ofthe$12,000Override,inasinglepayperiodYouearn19.5%oftheBusinessVolumeofalldownlineAdvisors,withtheadjustmentnotedatthebeginningofthissection.


Triple-DiamondLeadershipBonusA Triple-Diamond Leadership Bonus isearnedwhen,asanAdvisor,yougenerateatleast$1,000inP/GV,atleast$24,000inOverride and you have at least thirty-six(36) legs,eachgeneratingat least$100ofthe$24,000Override,inasinglepayperiod.Youearn19.75%oftheBusinessVolumeofalldownlineAdvisors,withtheadjustmentnotedatthebeginningofthissection.

8.3CompliancewithPoliciesThepurposeoftheLeadershipBonusistorecognizeandrewardAdvoCare leaders,thosethatbuildandsupportdownline teams selling AdvoCare Products. A criticalcomponentofleadershipistoprotecttheknowledgeofand relationships with other AdvoCare Distributors.Compliance with the Policies and other terms of theContractisessentialtoachievingthesegoals.If, in the sole discretion of AdvoCare, it is determinedthataDistributorhasviolatedoneormoretermsofthePoliciesortheContract,includingbutnotlimitedtotheprovisions regarding Conflicts of Interest andConfidential Information, AdvoCare may withhold aDistributor’s Leadership Bonus for any pay period inwhichitcouldhavebeenearned,inadditiontoanyotherdisciplinarysanctionsauthorizedbythePoliciesandanyotherlegalremedies.8.4HowLeadershipBonusesAreEarned

Example: An Advisor qualifies for a Ruby 6 StarLeadershipBonus(elevenpercent[11%]oftheBusinessVolumeofalldownlineAdvisors).

ThefirstAdvisorundertheRuby6StarhasaBusinessVolume of $600; the Ruby 6 Star earns elevenpercent(11%)of$600.ThesecondAdvisordownisaGold3Starearnerwith$1,200 Business Volume; the Ruby 6 Star earnselevenpercent(11%)of$1,200.The third Advisor down is a Silver earner with aBusinessVolumeof$500.TheRuby6Starearnsfourpercent(4%),andtheGold3Starearnsseven(7%)percent.ThefourthAdvisordownhasaBusinessVolumeof$900.Theadjustmentkicksinagain.TheSilverearnsthree percent (3%), the Gold 3 Star earns fourpercent(4%)andtheRuby6Starearnsfourpercent(4%).

8.5LeadershipPinsWhen you reach and sustain a leadership pin level(including Silver through Emerald 9 Star) for two (2)consecutivepayperiods,youearnaleadershippinstatusreflecting thatachievement. Inorder toqualify for theDiamondpinstatusorabove,youmustreachandsustainthat leadership pin level for three (3) consecutive payperiods.Pin recognitiondoesnotaffect thebonusyouearn. Your actual earnings in a given pay period aredeterminedbythenormalcriteriaandnotbyanypinyoumayhavepreviouslyearned.8.6LeadershipBonusCompensationProcedure(Diamondandbelow)All Leadership Bonuses earned in a pay period areincluded in the compensation check for that particularpayperiod.8.7LeadershipBonusCompensationProcedure(Platinumandabove)PlatinumandaboveLeadershipBonusesmustbeearnedforthree(3)consecutivepayperiodsbeforethePlatinumand above Leadership Bonus compensation is earned.Oncethisqualificationisachieved,youwillbeeligibleforthePlatinumandaboveLeadershipBonussolongasyousustainthePlatinumleadershiplevelorabove.


8.8LeadershipBonusSchedule

CHAPTER9:PAYINGYOURTAXES9.1ReportingYourIncomeItisimportantforyoutokeeprecordsofyourearningsfromretail sales.Youareresponsible forreportingthisincometotheInternalRevenueService.Further,youaresolelyresponsibleforpayinganyandalltaxes due on compensation in the form of Overrides,Leadership Bonuses or Wholesale Commissions youreceivefromAdvoCare.Annually,AdvoCarewillprovidea Form 1099 to the federal government reflecting thetotalamountofsuchpaymentsmadebyAdvoCareto

you,providedyouearn$600ormoreincompensation.Inadditiontoanycompensationearned,AdvoCarewillreport as required by law any other benefits received,including,butnotlimitedto,thefollowing:thevalueofany incentives, bonuses, prizes or other recognitionawardsearnedduringthecalendaryear.9.2PayingSalesTaxAdvoCare adds sales tax to your original order basedupon shipping destination and suggested retail value.AdvoCarethenpaystheapplicablesalestaxineachstateforyou.Therefore, it isalso important thatyoucollectthesalestax,ineffect,toreimburseyourself.


GLOSSARYOFTERMS:

Advisor – Distributors who have satisfied the Advisorqualificationorrequalificationrequirementsandareentitledtothehighestdiscount(40%)onAdvoCareProductsandareeligibletoearnOverridesandLeadershipBonusesandotherbonusesandincentives(seeSectionII:CompensationPlan).Applicant–anindividualwhohascompletelyandaccuratelyfilledout,executedand submitted the requisite informationand application to become an AdvoCare IndependentDistributor.OnceacceptedbyAdvoCare,theApplicantistheprimaryindividuallistedontheDistributorship.AutoRenewal– anoption that allowsDistributors to enrollandhavetheirannualrenewalfeesautomaticallychargedtotheir credit cardon file on the first dayof their anniversarymonth, automatically renewing their Distributorships foranotheryear.Business Volume – a value assigned by AdvoCare to eachProductforthepurposeofcalculatingOverrides.TheBusinessVolumevalueisequaltoapproximatelyfiftypercent(50%)ofthesuggestedretailpriceoneachProduct.Co-Applicant – an individual who has completely andaccurately filled out, executed and submitted the requisiteinformation and application to become an AdvoCareIndependent Distributor on an Applicant’s Distributorship.OnceacceptedbyAdvoCare,theCo-Applicantisthesecondaryindividual listed on the Distributorshipwith the same rightsand access to the Distributorship as the Applicant. Only aspouseoftheApplicantiseligibletobeaCo-Applicant.Contract – together the Distributor Agreement and thePolicies,astheymaybeamended,constitutethecontractualagreement (“Contract”) between AdvoCare and eachDistributor.Distributor– refers toanypersonwhoseContracthasbeenexecuted,receivedandacceptedbyAdvoCareinitssoleandabsolutediscretion.Distributor Kit – the starter materials and sample ProductsincludedattheonsetofanewDistributorship.DistributorWebsite–anAdvoCare-personalizedwebsite foreachDistributor.Downline – Your downline consists of all Distributors youpersonallysponsorandtheirteams.E-commerce–websitesprohibitedfrombeingusedtoselloradvertise the sale of AdvoCare Products including but notlimitedtoeBay,Amazon,Craigslist,auctionsites,garagesalesetc.

FrontlineDistributor–Distributorsyoupersonallysponsor.GroupVolume–thetotalsuggestedretailvalueofProduct(s)purchasedandsoldbyyourdownlineDistributorswhohaveaccumulated$500ormoreinP/GVduringapayperiod.WhenyourfrontlineDistributor(s)haveaccumulatedatotalP/GVof$500 or more in a single pay period, that volume will beincludedinyourGV.WhenyourfrontlineDistributor(s)haveaccumulated a total P/GV of less than $500 in a single payperiod, then thatvolumewillbe included inyourPV.GroupVolumeexcludesanyvolumeofdownlineDistributorswhoareat the forty percent (40%) discount level and volume ofdownlineAdvisors.Leadership Bonus – after qualifying for the Advisor level, aDistributormaybeeligibleforthistypeofcompensationbasedonP/GVplusqualifyingOverride.Leg–consistsofaDistributorwhomyoupersonallysponsor,aswellasallDistributorssponsoredbythatDistributor.Override–afterqualifyingfortheAdvisorlevel,aDistributormay be eligible for this type of compensation based on theBusinessVolumeofDistributorsthroughthreegenerationsofAdvisorsintheirdownlineandthatDistributor’sP/GV.P/GV(Personal/GroupVolume)–isthesumofyourPersonalVolumeandyourGroupVolume.Policies – the AdvoCare Policies, Procedures andCompensationPlan.Preferred Customer – a Preferred Customer is a non-DistributorcustomerthathasjoinedthePreferredCustomerProgramthroughaDistributor,andistherebyabletopurchaseProducts at a discount; the Preferred Customer’s discountstartsattwentypercent(20%)andmayincreaseuptothirtypercent(30%)dependingontheamountofpurchasesmade;the Preferred Customer is not permitted to sell/resellProduct(s),sponsorotherDistributors,PreferredCustomersorRegistered Retail Customers, or receive compensation fromAdvoCare.PV(PersonalVolume)–PersonalVolume(“PV”)isdefinedasthe total suggested retail valueofProduct(s)purchasedandsoldbyyou,purchasedbyyourRetailCustomersandPreferredCustomers, and, in some cases, purchased and sold by yourdownlineDistributors.PersonalVolumeexcludesthevolumeofdownlineDistributorswhoareat the fortypercent (40%)discount level and the volume of downline Advisors.Additionally,whenanyfrontlineDistributorhasatotalP/GVofless than $500 in a single pay period, that volume will beincluded inyourPV.Whenyour frontlineDistributor(s)haveaccumulated a total P/GV of $500 or more in a single payperiod,thenthatvolumewillincludedinyourGV.


Qualifying Advisor – a Distributor who has met therequirementsfortheAdvisorlevelandisinthefinalpayperiodinwhichtherequirementshavebeenmet.QualifyingAdvisorsreceiveafortypercent(40%)discountonsubsequentordersand upon the following pay period, are eligible to earnOverrides and Leadership Bonuses, incentives and otherbonusesavailabletotheAdvisorlevel.QualifyingLeg(StarLeg)–tobeaqualifyinglegforyou,theAdvisor(s)inthatlegmustgenerateatleast$100inOverride.Beginning at the Gold 3 Star level, you must have threequalifyinglegsinordertoqualifyfortheGold3StarLeadershipBonus. At theDiamond level, youmust have twelve. At thePlatinumlevel,youmusthaveeighteen(SeeChapter8intheCompensationPlanformoredetail).Registered Retail Customer – a Retail Customer whoregistered on the AdvoCareWebsite as a “Registered RetailCustomer”andthusisabletopurchaseProductsonlinefromtheir Distributor’s microsite as a Retail Customer. NeitherRetail Customers nor Registered Retail Customers arepermittedtosell/resellProduct(s),sponsorotherDistributors,Preferred Customers or Registered Retail Customers, orreceivecompensationfromAdvoCare.RetailCustomer–anon-DistributorcustomerwhopurchasesAdvoCare Product(s) directly from a Distributor either inperson or through the Distributor’s AdvoCare Website.NeitherRetailCustomersnorRegisteredRetailCustomersarepermittedtosell/resellProduct(s),sponsorotherDistributors,Preferred Customers or Registered Retail Customers, orreceivecompensationfromAdvoCare.Retail Profits – profits earned from your retail sales; theseprofitsarethedifferencebetweenwhatyoupaidforaProductwithyourdiscountlevel,andwhatyousellthatProductfortoyourRetailCustomerRetail Sale – the sale of Product(s) in its original unopenedpackaging purchased by a Distributor and sold to a RetailCustomeratacommerciallyreasonableprice.RetailSalesReceipts–receiptsthatyouprovidetoyourRetailCustomersdocumentinganyretail salecompleted;copiesofthese receipts should be retained by Distributors for SalesCompliance; these receipts may be obtained from yourDistributorwebsite.Sponsor–theDistributorwhoyousignupunderwhenyoujoinAdvoCareasanewDistributor.WholesaleCommissions–commissionsearnedfromthesalesto your Preferred Customers and to Distributors in yourdownlinethatareatalowerdiscountlevelthanyou.

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POLICIES, PROCEDURES AND COMPENSATION … Eligibility to Earn Compensation ... 2.1 Concept of Sales Volume ... The Policies, Procedures and Compensation Plan