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INTRODUCTION

1. The TIENS Policies & Procedures (hereinafter referred to as TPP) will be effective from May 1, 2015

and will supersede all earlier versions.

2. The TPP is aimed at maintaining a disciplined and systematic management of the direct-selling market

and safeguarding the rights and interests of Independent Distributors. Therefore, every Independent

Distributor must carefully read the TPP and understand their obligations, responsibilities as well as their

rights and interests.

3. If any of the provisions in the TPP is in contradiction with any local laws, regulations or administrative

rules, the latter will prevail.

4. The TPP may be reviewed and revised, as and when itis deemed necessary. Amendments shall become

effective after 7 days from publication of notice that the TPP has been modified. Notification of

amendments shall be published by one or more of the following methods: (1) posting on the TIENS official

web site; (2) electronic mail (e-mail); (3) inclusion in TIENS periodicals and handouts; (4) inclusion in

product orders; or (5) special mailings. The continuation of an Independent Distributor’s activity after the

modification of the TPP means that Independent Distributor had accepted of any and all amendments of the

TPP.

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SECTION I. DEFINITIONS OF TERMS USED

All terms and expressions used in the TPP and Independent Distributors’applications or contractsand other

written documents ofTIENS are defined as follows, unless otherwise stipulated:

1. TIENS or TIANSHI

TIENS refers to TIENS Group and all the subsidiaries it sets up globally under the name of TIENS or

Tianshi.

2. TIENS in Lithuania and Head Offices (“HQ”)

TIENS/TIENS - “KorporacijaTjanši“, address Ulonu 5, , Republic of Lithuania, tel. +370 8 5 212 22 12,

e-mail info@tiens.lt, including HQ.

HQ - TIENS Head Offices established at No.18 Xinyuan Road, Wuqing Development Area, New-Tech

Industrial Park, Tianjin, China.

3. TIENS Independent Distributor(s)

TIENS Independent Distributors refers to natural or legal persons who have applied and upon becoming

eligible according to these TPP and TIENS Independent Distributor Compensation Plan, are authorized to

buy the products that TIENS manufactures and distributes, to sell products to ultimate customers that

TIENS manufactures and distributes, and to encourage and sponsor others to become the same.

Natural or legal persons seeking to become TIENS Independent Distributor apply through submission of

application and/or signature of the relevant contract.

4. TIENS Independent Distributor Compensation Plan/TCP

TIENS Independent Distributor Compensation Plan comprises all compensation, reward plans and

sponsoring procedures stipulated by TIENS, including all governing methods, rules, regulations and

measures specified by TIENS to its Independent Distributors in their business related to TIENS

(presentation and sale of products, sponsorship and etc.). TCP is included in the TIENS Starter Kit for the

new Independent Distributor. TIENS reserves the right to make revisions to the TCP and the TIENS Starter

Kit as and when it deems necessary.

5. Sponsorship

Any TIENS Distributor, under whose introduction other persons apply to join TIENS business, i.e. submit

the application or contract to become and become independent distributor, is regarded as having sponsored

the new Independent Distributor and, as such, must perform their duties of providing training and support

for the new Independent Distributors.

6. TPP

The TPP is an integral part of TIENS Compensation Plan as well as of the Independent Distributor

application or contract.

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7. TIENS Products

TIENS Products refer to products manufactured or supplied by TIENS or its suppliers and distributed by

TIENS, including products, sales materials, video/audio materials. “Services” refer to all kind of services

provided and sold by TIENS.

8. Levels of the ranks, honorable ranks Distributors,

TIENS may introduce and determine the level of the ranks, applicable for TIENS independent distributors,

by TPP and other TIENS documents, including the TCP.

Honorable ranks’ distributors are Independent distributors, which were assigned with one of the honorable

ranks: Bronze Lion, Silver Lion, Gold Lion (GL), Gold Lion 1*-5*, Honor Director, TIENS Laureat.

SECTION II. TIENS INDEPENDENT DISTRIBUTORSHIP

1. Eligibility to apply for TIENS Independent Distributorship

1) Any adult citizen who is aged 18 and over and legally capable, is eligible to apply for becoming a TIENS

Independent Distributor.

2) Any person(s) who is not permitted to engage in direct-selling or business operations according to local

laws will be deemed ineligible to apply for TIENS Distributorship or to continue the activity of TIENS

Independent Distributor.

3) Regular employees of TIENS Group and their direct relatives are not eligible to become TIENS

Independent Distributor. A direct relative refers to the person(s) related to the TIENS employee or his/her

spouse by direct consanguinity up to the second degree of consanguinity inclusively e.g. parents and

children, grandparents and grandchildren and persons related in the second degree of kinship by collateral

consanguinity (brothers and sisters).

4) TIENS Independent Distributors who are no longer eligible as such according to local laws or TPP rules

will have their TIENS Distributorship terminated.

5) TIENS Distributorship comprises the eligibility, rank, rights and obligations of TIENS Independent

Distributors as they are set in these TPP. At any given time, a person can only enjoy one single TIENS

Distributorship. TIENS strictly prohibits anyone to apply for and hold two or more TIENS Distributorships.

In cases of violations of this rule, the first approved ID number of the offender will be retained while all

other ID(s) will automatically become invalid. TIENS right not to pay any bonuses for the violator .

6) No Independent Distributor is permitted to transfer or sell his/her TIENS Distributorship. In cases of

violations of this rule, TIENS will regard the sale or transfer as invalid, and all legal liabilities and losses

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incurred hence will be borne by the offender.

7) TIENS Distributorship number is the only way to identify a TIENS Distributor; in other words, each

Independent Distributor carries one unique TIENS Distributorship number.

8) A TIENS Independent Distributor is not permitted to be in direct-selling business of any other company

competing with TIENS, or to engage in any other direct-selling activities competing with TIENS other than

those organised by TIENS. In cases of violations of this rule, TIENS reserves the right to refuse to

recognise and to cancel the offender’s TIENS Distributorship.

9) TIENS reserves all rights to accept or reject the application of any person for TIENS Distributorship as it

deems appropriate.

10) Validity and renewal of TIENS Distributorship:

a. A TIENS Distributorship is valid from date when the Distributorship ID is granted and expires on the

last day of the 12th accounting month.

b. TIENS Independent Distributors must perform the prerequisite actions for renewal before their

Distributorship expires.

c. In cases of failure to renew the Distributorship within the validity period, or when TIENS rejects an

application for renewal within or outside the validity period, the TIENS Distributorship becomes invalid.

d. In case of violations of the provisions or other rules of the TPP or other rules within the validity

period, TIENS reserves the right to reject application for renewal of Distributorship.

e. For TIENS Independent Distributors who fail to renew their Distributorship within the validity period,

the following rules will apply to rejoin TIENS:

i) if the Independent Distributor did not place any order within the 12 months of the validity period, he/she

may apply for TIENS Distributorship in the month following the month of expiration;

ii) otherwise, he/she may apply for TIENS Distributorship 6 months after the month of expiration.

2. Procedures to apply for TIENS Independent Distributorship

1) Those who wish to become a TIENS Distributor must be recommended by an authorised TIENS

Independent Distributor.

2) The applicant shall confirm that he/she has read the TPP and has completely understood all contents of

the TIENS Starter Kit before filling out his/her TIENS Independent Distributor Agreement. He/she must

also abide by all the regulations and stipulations governing TIENS Independent Distributors.

3) The applicant’s represented information must be true and fair; it’s forbidden to apply in on behalf of

another person’s name or use other illegal manners for applying to become TIENS Independent Distributor;

TIENS any time has a right to ask for the applicant (Independent Distributor to-be) to come to the location

indicated TIENS or to the Authorized Representative of TIENS and to require for the applicant to present

an evidence of the applicant’s indicated person’s information and if he doesn’t come or doesn’t apply such

evidence TIENS has a right do not approve the applicant as TIENS Independent Distributor, also do not pay

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bonuses for Distributor (including bonuses for Sponsors).

4) The application or agreement must be sent immediately to TIENS after completion. The TIENS

Distributorship ID number and card will be issued upon approval and acceptance by TIENS, whereby the

applicant can become a TIENS Independent Distributor.

3. Rules regarding TIENS Distributorship for spouses

1) When a legitimate couple apply to join TIENS:

a. If both spouses are willing to become TIENS Distributors, they can register under one single

Distributorship. By signing jointly on one application, both the husband and wife will have the same rights,

interests and obligations of a TIENS Distributorship, and they must abide by the TPP accordingly; violation

of any rules in the TPP by any single party will be considered liable by both parties and corrective measures

will be administered to the Distributorship accordingly;

b. If one of the spouse does not intend, or according to TIENS requirements he/she I snot eligible, to be a

TIENS Distributor, then he/she does not need to sign the TIENS Independent Distributor Agreement. If

he/she intends to join his/her spouse to build TIENS business together thereafter, he/she shall obtain formal

consent in writingfrom the spouse, and then apply formally to TIENS. The TIENS Distributorship will be

considered as a valid joint Distributorship upon approval by TIENS;

c.The spouses are allowed to be in the same network, and either of them is permitted to have separate

TIENS Distributorships, provided that they are in direct downline / upline linkage and that the same has

been reported to TIENS. In case each spouse is willing to go in direct downline / upline linkage, they

should both sign on their applications accordingly, so that they will enjoy the rights and obligations of

TIENS Distributorship in order to build their TIENS business.

2) If two TIENS Independent Distributors get married, they can either:

a. Retain both their original TIENS Distributorships, or

b. Either of them can relinquish his/her current status to become a direct down-line of their spouse.

3) When divorce occurs between a couple who possess a single TIENS Distributorship, the following

regulations shall be complied with:

a. Upon mutual agreement between the ex-spouses, the ownership of the TIENS Distributorship shall be

continued by the elected party and the other party may apply for a new TIENS Distributorship;

b. Should the ex-spouses be unable to reach an agreement, TIENS will temporarily freeze all bonuses and

monies associated with the Distributorship until an agreement is reached.

c. All agreements to the above must be formally sent to TIENS for approval.

4. Inheritance and Continuance of TIENS Distributorship

1) If a TIENS Distributorship belongs to spouses and when one spouse passes away, the other spouse will

be considered as possessing the TIENS Distributorship and will inherit all rights and obligations associated

with the TIENS Distributorship of the deceased spouse.

2) In the case when a TIENS Distributorship belongs to a deceased individual who has nominated a

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designated inheritor, legal inheritor, (including Legatee) eligible for TIENS Distributorship, after approval

of TIENS the heir of TIENS Independent Distributor have a right to submit the request to become TIENS

Independent Distributor from the date of the acceptance of succession.

3) If a deceased Independent Distributor has a designated inheritor, legal inheritor who is in possession of

a TIENS Distributorship, the latter must choose between the two Distributorships thereby forfeiting the

other Distributorship and inform TIENS formally regarding the final decision.

4) If there is no designated inheritor, legal inheritor for a deceased Independent Distributor within 6

month of his/her passing away, or the former gives up the inheritance/gift of the deceased, TIENS regards

the Independent Distributor as dropping out of TIENS business.

1) In the case when a TIENS Independent Distributor loses his/her ability to operate his/her TIENS

Distributorship or is 65 or older, TIENS may, with a view of continuing to expand the TIENS network,

permit the Distributorship to be passed from one generation to the next; the TIENS Independent Distributor

is allowed to designate in advance, according to his / her own wishes, a direct relative (parents, children,

couple or siblings) eligible for TIENS Distributorship, so as to pass on the Distributorship; the original

Independent Distributor loses his/her Distributorship and all associated rights and obligations from the date

when it is transferred; if the person who receives the Distributorship is already a TIENS Distributor, the

person must choose between the two Distributorships and cancel the other Distributorship, informing

TIENS formally regarding the final decision.

5. Termination and Re-Application of TIENS Distributorship

1) Termination of TIENS Distributorship means TIENS terminates all contracts with the TIENS

Independent Distributor concerned. From the date of issuance of the termination notice, the terminated

TIENS Independent Distributor will immediately lose his TIENS Distributorship, rights and interests.

2) A TIENS Independent Distributor (one party in the case of a joint Distributorship) will be notified in

writing from TIENS of corrective actions taken by TIENS under the following circumstances. These

include, but are not limited to, monitoring &disciplinary measures and extraordinary dismissal of the

TIENS Distributorship:

a. Providing false information in the TIENS Independent Distributor application or agreement (including

non-original signature(s)).

b. Independent Distributors are found to have repeatedly violated the rules in the TPP.

c. Independent Distributors who have violated rules in the TPP and failed to effect corrective actions after

receiving a notice of correction from TIENS.

d. Those who violated the local laws, have been sentenced to imprisonment or have become fugitives from

justice.

e. Distributors are found to have seriously violated the TPP. 3) When a TIENS Distributorship is terminated, the former Independent Distributor loses all his/her

positions in the network, including, but not limiting to, bonuses, bonus ranks and other eligibilities.

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4) TIENS reserves the right to terminate a TIENS Distributorship and compress his/her downline network to

his/her line of sponsorship: If his/her qualifying rank is 7 –staror above locally, the structure will be

maintained and the Distributorship will be renamed TIENS/TIANSHI; If his/her highest qualifying rank is

below 7 –star, the Distributorship will be terminated and the downlines /network will be compressed

upwards accordingly.

5) Where the TIENS Distributorship is terminated by proper notice of termination by the Distributor(s), the

ex-Independent Distributor is not allowed to re-apply for a TIENS Distributorship until six months after the

termination.

6) Where the TIENS Distributorship is terminated by extraordinary dismissal by TIENS/TIANSHI the ex-

Independent Distributor is not permitted to re-apply for approval until twelve months after the termination.

SECTION III. RIGHTS & INTERESTS AND RESPONSIBILITIES OF TIENS DISTRIBUTORS

1. Rights & Interests of TIENS Distributors

A TIENS Independent Distributor is entitled to the following rights & interests:

1) As a Distributor he/she has a right to buy TIENS products for retail.

2) Sell TIENS products for retail profits to ultimate customers

3) Use of products for personal consumption.

4) Participation in TIENS Compensation Plan and other Incentive Plans and receive relevant bonuses and

awards.

5) Sponsor other eligible persons to join TIENS to build direct-selling activity.

6) Participation in other events organised under authorisation from TIENS.

2. Observance of local laws and regulations

Independent Distributors must abide by all local laws and regulations, especially those laws, rules and

commercial regulations related to direct-selling operations; Independent Distributors must not make any

transactions ruled by local government as fraudulent or illegal, nor should they participate in any kind of

activity that might compromise the reputation of TIENS.

TIENS Distributor is an independent subject, which bears all the risk related to the engagement into the

relevant activity.

All duties in relation to engagement into relevant activity, if such are applicable (including but not limited to

the duties to register individual activity, to properly perform accounting, to timely and in due manner file

returns, to timely and in due manner perform tax, social and health insurance obligations (including

payment of taxes, contributions or other levies )) are the sole responsibility of the TIENS distributor.

3. Observance of TIENS rules and policies

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When carrying out any activities related to TIENS business (including retailing, sponsoring and meetings,

etc.) and TIENS (its products and etc.)TIENS Independent Distributors must identify themselves as such by

producing their TIENS Distributorship ID card. Independent Distributors must always completely abide by

the TPP, TIENS Compensation Plan and other relevant rules, policies, procedures, in conducting TIENS

business.

TIENS has no responsibility for the liabilities of Independent Distributor or the breaches of the liabilities,

made by Independent Distributor.

4. Observance of product ordering & selling rules and guarantee of service quality

1) TIENS Independent Distributors may order their products either directly from TIENS affiliates, TIENS

branches, its authorized stockist or online via TIENS website.

2) TIENS Independent Distributors must offer product demonstrations and provide verbal explanation of

usage and notes shown on product tags.

5. Observance of rules governing TIENS sales materials

1) All journals/magazines and video/audio materials created and published by TIENS are intellectual

property of TIENS (including under the protection of copyright laws); neither TIENS Independent

Distributors nor any person may reproduce, reprint, produce and copy the above-mentioned materials in

whole or in part in any form without prior written permission by TIENS. Accordingly, all legal liabilities

thus incurred must not be held against TIENS, and therefore should only be borne by the TIENS

Independent Distributors themselves; TIENS further reserves all rights against those who have used

TIENS’ copyrights without authorisation.

2) TIENS Independent Distributors may only use the words in the audio/video materials published by

TIENS for the sole purpose of helping to build the TIENS business.

3) Without prior authorisation by TIENS, TIENS Independent Distributors may not create, publish or sell in

any form sales materials related to TIENS.

4) TIENS Independent Distributors are not permitted to make audio/video recordings of all kinds at

meetings held by TIENS, provided that they obtained the written consent of TIENS persons participating on

such meeting must be notified of recording, with this sole copy being used only by the Independent

Distributor himself/herself for his personal (non commercial) benefit and it may not be reproduced, sold or

used or publicized for other purposes. TIENS Distributor bears all responsibility in relation to making and

using such recordings.

6. Observance of rules pertaining to TIENS meetings

1) A meeting must be organised according to the meeting rules as laid down by TIENS. A meeting

organised by TIENS Independent Distributors must have a theme or purpose, such as training Distributors,

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promoting TIENS business and TIENS products manufactured and sold by TIENS. The organiser of the

meeting may not receive any personal benefits beyond the TIENS Compensation Plan through such

meetings, directly or otherwise.

2) The TIENS Independent Distributor who owns network names/online names, domain addresses in which

they want to use „TIENS“ or „Tianshi“ names/trademarks must get a written consent from TIENS to use

such names/trademarks. These names/trademarks cannot be used until TIENS submits the written consent.

A TIENS Independent Distributor, without the prior consent from TIENS, is not permitted to use such

names/trademarks to carry out direct-selling or related activities.

3) A TIENS Independent Distributor or network, when being engaged in activities that need to be

named/marked for identification as „TIENS“ or „Tjanshi“, must bear the name “TIENS Independent

Distributor” as the main identification, with the name of the network as an auxiliary identification.

Example: TIENS Independent Distributors XX Network Training Session

7. TIENS Independent Distributors must correctly promote and use the name and trademarks of

TIENS®

1) All TIENS trademarks, medals, symbolic badges, designs, layout of books/magazines, audio and visual

materials, as well as all industrial and property rights, copyrights and other rights related to TCP as well as

all products manufactured, represented and used by TIENS are the assets.They are an exclusive property of

TIENS (irrespective of registration).

2) In particular, TIENS Independent Distributors shall not misuse the TIENS and/or Tianshi’s name, brands

and trademarks in the following ways:

a. Produce or obtain and sell any goods printed with 天狮/ TIENS/Tianshi name or TIENS symbols and

trademarks through other sources than TIENS.

b. Print any TIENS name, brands and trademarks for use on his/her vehicle(s) except using those

distributed by TIENS.

c. Advertise or broadcast TIENS business activities or TIENS products in any media, on-air, print, online

or otherwise.

d. Use the name 天狮, Tianshi or TIENS as the name for any organisation/business, nor authorise others

to similarly use such names.

e. Without prior permission of TIENS, it is not permitted to use TIENS name or trademarks.

f. It is not permitted to register the TIENS and/or Tianshi’s name, brands or trademarks with any

organisations, nor to raise objections in any form or claim any rights about them. Where registrations have

been applied for, objections raised or rights claimed, special instructions from TIENS must strictly be

followed without exception.

8. Responsibilities of TIENS Independent Distributors in the promotion of TIENS products and

TIENS business

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1) In case of all major claims, complaints or disputes made by TIENS Independent Distributors from his/her

network, the Independent Distributor must promptly report to TIENS and provide to TIENS all written

documents, dialogues and materials so as to provide a foundation for investigation by TIENS.

2) TIENS Independent Distributors can only with prior authorisation by TIENS display or sell TIENS

products in agencies, persons authorised by TIENS or TIENS replicated websites; they may not by

themselves nor delegate others to sell or display, publicize TIENS products during any public occasions or

in any public domains, online shops, other profile website. Independent Distributors may not advertise on

the Internet by purchasing space on any other Web page such as a search engine or common website.

TIENS products may not be marketed in conjunction with competing products from any other company.

Competing products are any products, which the characteristic, usage, species, containing are alike or

analogous. This includes web-based catalogues, marketplaces or Ebay. Outside TIENS replicated website

Independent Distributors are not permitted to use the internet to promote the TIENS opportunity and

products by either creating or commissioning a Web page. This does not fit to the selective and service-

driven Direct Selling Business of TIENS.

3) TIENS Independent Distributors are not permitted to create, publish in public places or release

advertisements in any form promoting products, recruiting Independent Distributors or similar purposes,

except those with the prior written permission from TIENS.

4) TIENS Independent Distributors are not permitted to represent, products produced or distributed by

TIENS in any exaggerated, unfounded or misleading means.

5) TIENS Independent Distributors are not permitted to distort the information about the prices,

specifications, quality, functions, grades, ingredients, variety, models, places of origins or supplier details,

etc. of products produced or distributed by TIENS.

6) TIENS Independent Distributors are not permitted to provide any kind of false or misleading information

about sponsors of TIENS products or products distributed by, functions, auxiliary parts, purposes or merits

whenthe reality is to the contrary.

7) Independent Distributors bear in mind the recommended prices for TIENS products or products

distributed by TIENS. Any unfair competitions, as well as market monopolies, through reducing the

product price, are not allowed.

8) TIENS Independent Distributors are not permitted to import any TIENS’\products or products distributed

by TIENS from other countries, export them to other countries nor to help others to export TIENS products

or products distributed by TIENS;

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9) TIENS Independent Distributors are not permitted to represent and promote, distribute non-TIENS

products or services, to distribute, represent, promote or demonstrate in other waysto the ultimate consumer

as TIENS products (goods) and/or services.

10) TIENS Independent Distributors, irrespective of their level(-s) of rank(-s) in TIENS network, may not

use any TIENS networks for the purpose to sell products/services which are not related, manufactured or

distributed by TIENS (e.g. insurance, taxes, real estate, investment, etc.).

11) Without prior written permission by TIENS, TIENS Independent Distributors are not permitted to

register or set up websites related to TIENS and use them to release TIENS-related information, products’

description, business promotion materials, or similar.

12) While engaging in marketing/sales/promotion of TIENS products, business or services, TIENS

Independent Distributors are not permitted to make any charges in any other form than the rules and

regulations laid down by TIENS.

13) TIENS Independent Distributors are not permitted to disparage, vilify nor make such verbal attacks on

TIENS, other TIENS Independent Distributors or other lines of business or trades.

14) TIENS Independent Distributors are not permitted to make fraudulent claims, hoard products for market

speculation/other reasons, manipulate sales volumes or disrupt market orders.

15) While acting as TIENS Independent Distributor, TIENS independent distributoris not permitted to

engage intoactivity, related tocompeting direct sales company (or such company’s products) or other

company, competing with TIENS in direct sales sphere, also to encourage to engage into such activity (for

instance, to distribute competing products and/or services or use the relations with other TIENS distributors

for the purpose to represent other similar with or competing product and/or services TIENS products and

services).

16) While being engaged in marketing/sales/promotion of TIENS products, business or services, TIENS

Independent Distributors must uphold the practice what they preach and deliver on their promises,

including not participating in any form to viciously spread in the market any negative remarks that are not

conducive to TIENS development or which might negatively affect TIENS reputation.

17) TIENS Independent Distributors must ensure that TIENS is free from any actions, claims, demands or

law suits that any individual(s), group(s) or organisation(s) may take against him/her/them as a result of any

distortion, fraudulent representation, counterfeiting, threats or intimidation that they as TIENS Independent

Distributors may present regarding TIENS Compensation Plan or products. The offending Distributor(s)

must make due compensation to TIENS and/or parties concerned for any pecuniary losses, damages to

reputation and image, mental distress, etc., including but not limited to costs for law suits and other legal

actions that TIENS may take against the offender(s).

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18) TIENS Independent Distributors are not permitted to accept media interviews or reports in their

personal capacity of TIENS Independent Distributor nor as a representative spokesperson of TIENS

without prior written permission from TIENS.

19) Under no circumstance should any TIENS Distributor:

a. Represent themselves either as the employee or commercial partner of TIENS or organisations related

to TIENS;

b. Represent themselves as the representative go-between, business representative, delegate, manager,

etc. of TIENS

c. Take and/or make slandering, threatening or intimidating actions or remarks in any form against

TIENS or its employees for the official activities that TIENS and its employees embark on.

20) TIENS Independent Distributors are not permitted to participate in any political or religious activities

while pursuing TIENS business nor represent TIENS in any such activities regardless when or where it

happens, or to make such behaviors as personal idolism, collusion and association etc. Independent

Distributors with the rank of 5-star or above are invited to complete their training sessions according to

their ranks in line with TIENS rules and to the satisfaction of TIENS regulations.

a. Its recommended for 5* distributors and 6* distributors to complete the courses of the Primary

Training Course organised by TIENS branches.

b. Its recommended for TIENS 7* and 8* DS to complete the courses of the Secondary Training Course

organised by TIENS overseas regional offices.

c. Its recommended for TIENS Honorable ranks DS to complete the courses of the Advanced Training

Course.

9. Responsibilities of sponsorship

1) When sponsoring others to become TIENS Independent Distributor, TIENS Independent Distributor must

present the TCP and TPP truthfully and honestly. During the presentation, the TIENS Independent

Distributor may notice the following points:

TIENS Compensation Plan (TCP)

The qualifications of becoming a TIENS Distributor

TPP

Importance of attending various meetings organised by TIENS – TPP

Obligations and responsibilities of TIENS Distributors

Categories, prices, indications, quality and purposes of TIENS products

Resignation of Independent Distributors and related procedures

2) The TIENS Independent Distributor must clearly determine whether the potential Independent

Distributor and his/her spouse were previous TIENS Independent Distributors. If one spouse happened to

be a TIENS Independent Distributor (current or ex), the Independent Distributor can only sponsor the

person six months after the termination of TIENS Distributorship.

3) The sponsoring Independent Distributor is invited to fulfill the following responsibilities:

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a. Provide their downlines with regular training in retailing, guidance and encouragement, keeping in

touch with all members of their network and settle their problems whenever needed.

b. Provide supplementary trainings to ensure that all Independent Distributors in the direct-selling

network operate according to TCP.

c. In case of any disputes among the downlines, mediate and resolve their disputes ina prompt and

friendly manner.

d. Supervise the performance of their downline Independent Distributors to ensure professional operation

and compliance with professional ethical standards, including proper promotion of TIENS business,

products and services.

4) Under no circumstance TIENS Independent Distributors shouldn’t attempt to unscrupulously recruit

Independent Distributors by directly or indirectly assisting, instigating, intervening or persuading other

Independent Distributors to leave their sponsoring line or network.

5) TIENS is dedicated to maintaining the integrity of the various TIENS network lines and will not permit

any TIENS Independent Distributor to shift his/her line arbitrarily; TIENS reserves all rights to withhold

approval of application to change lines of sponsorship.

10. Conduct and responsibilities of Honorable rank Distributors

1) Aside from the responsibilities as TIENS Independent Distributor and sponsor, Honorable ranking

Distributors and above are invited to:

a. Ensure that all Independent Distributors in his/her network provide services to consumers in

compliance with the TCP;

b. Ensure that he/she serves as a role model by strictly abiding by the TPP and all the rules laid down by

TIENS; to organize adequate and standard trainings to all Independent Distributors in his/her network so

that the latter understand theessentials of properly operating TIENS business and the rules laid down by

TIENS and in the TPP.

c. In cases where the Independent Distributors in his/her network are located indifferent regions, the

Honorary ranking Independent Distributor must either schedule trainings for these Independent Distributors

in various localities and/or help them to participate in the relevant meetings that will help support/boost

their TIENS business.

2) Honorableranking Distributors and above are invited to keep up a positive and constructive attitude while

operating his/her network, focusing on cultivating and guiding the comprehensive growth of their network;

should they fail to fulfill the following key responsibilities or to play an active role in network leadership,

TIENS reserves the right to withhold any bonuses, ranks, access to travel seminars or any other rewards or

honours related to the Distributor:

a. When discovering his/her downline Distributor(s) being engaged in the spreading of negative remarks

in the market that are not conducive to the development of TIENS or damages the reputation of TIENS, a

Honorable ranking Distributor or above, must provide guidance immediately, help his/her downline

Distributor(s) to rectify their erroneous understanding and thereafter report the matter to TIENS.

b. Honorable ranking Distributors and above are invited to make an inspection trip at least once every

two months, at his/her own cost, to the local markets where they have sponsorship networks to organise

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education and training events and provide consultation services to their networks.

c. In case of cross-border market operations, a Honorable ranking Distributor or above should make an

inspection trip at least twice every year, at his/her own cost, to these overseas markets where they have

sponsorship networks to organise education and training events and providing consultation services to their

overseas networks.

d. Honorable ranking Distributors and above are invited to actively organise systematic network

education activities and vigorously assist in the growth of these activities.

e. Bronze and Silver rank DS should conduct a business presentation or family party atleast once every

month.

a. GoldenLionorup-levelrankdistributormusthelpforTIENS to

organizetrainings/seminarsortrainings/konferenceincreasingthebusinessatleasttwiceeverymonth, exchange

his own experience and if necessary to execute the trainings.

b. Honorable distributor is invited to participate actively implementing the TIENS strategy and policy,

encouriging the business of TIENS, giving a case in point to the independent distributors.

SECTION IV. PENALTY AND CORRECTIVE MEASURES FOR VIOLATIONS

1. Contract Penalty for Violations by Distributors

1) When any Independent Distributor is found in violation of the provisions of the TPP, TIENS reserves the

right to warn, terminate the contract or sue the Independent Distributor.

2) TIENS reserves the right to decide how to issue a warning regarding violations in the form of a notice,

circular, memo, newsletter, on the TIENS website, internal journals, emails, at meetings or a combination

of the above; the statement may include, but will not be limited to, such information about the offending

Independent Distributor as name, Independent Distributor number, rank, details of violation and Penalty

meted out.

3) In the case when a TIENS Independent Distributors receive sales rewards for activities which violate

TIENS rules, TIENS reserves the right to recalculate and subsequently deduct and/or cancel the bonuses

and ranks of the offending parties.

4) Penalties for violations are graded on a scale from one to nine, that is, Penalties are meted out according

to the grade which measures the severity and extent of damage caused by the violations. As involving two

or more violations，the higher or the highest violation level determines the final punishment scale

5) Contractual Penalty scale:

Grade 1: informal warning in writing.

Grade 2: formal warning in writing with cease and desist.

Grade 3: Any recognition award, if due otherwise, will be offset against TIENS damages.

Grade 4: 50% of bonuses deducted in the offending month, concurrently inclusive of measures in grade 3.

Grade 5: 100% of bonuses deducted in the offending month, with concurrently inclusive of measures in

grade 3.

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Grade 6: 100% of bonuses deducted for 3 months starting from the offending month, concurrently inclusive

of measures in grade 3.

Grade 7: 100% of bonuses deducted for 6 months starting from the offending month, concurrently inclusive

of measures in grade 3.

Grade 8: 100% of bonuses deducted for 12 months starting from the offending month, concurrently

inclusive of measures in grade 3 plus all honour rewards cancelled for the year.

Grade 9: TIENS Independent Distributorship, all bonuses and rewards will be cancelled.

6) If Independent Distributors are found as the major or potential parties involved in any investigation

TIENS reserves the right to withhold any requisition to update or change personal details until the

investigation is completed.

7) TIENS reserves the right to review and limit the admission of Independent Distributors under measures

mentioned above to travel seminars, annual conference and/or other rewards.

8) In the case of intervention by local government departments into cases of violations or in case of pending

law suit(s) TIENS may deal with the alleged case with due consideration and decide on the grade of Penalty

according to the adverse effect, extent and influence of the violation on the local market and TIENS overall

business, reputation and image.

9) Should TIENS decide not to mete out and enforce judgment for certain cases of TPP violation or

negligence at that time, TIENS reserves the right to enforce these judgments at a later date; this will in no

way affect the future judgments over the same violations by other Independent Distributors.

2. Procedures for handling violations

1) Independent Distributors may lodge a complaint with TIENS within 6 months of the infringement over

his/her rights (violation of rules).

2) In the case where an Independent Distributor makes a complaint over any violations past the 6 months

deadline, TIENS reserves the right to refuse acceptance of the case.

3) Any Independent Distributor who wishes to lodge a complaint must fill out the Independent

Distributor Complaint Against Network Disputes Form, if such egzist, and submit a written complaint duly

signed by the complaining Distributor, with the original and a copy of the TIENS Distributor’s ID and

TIENS Distributor ID card attached.

4) Independent Distributors may submit their complaints through TIENS branches or authorized

representatives. Thereafter, the Independent Distributor must constantly keep in touch and involved himself

with the case, to collaborate with TIENS, including but not limited to remain contactable at the registered

address as much as possible, accept enquiries/investigation and provide further support materials as and

when required. The independent distributor is responsible for any of the violation, mentioned in this article.

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5) Upon receiving and accepting the complaint from a TIENS Distributor, TIENS will commence the

investigation within a specific time. During the investigation, the complaining Independent Distributor and

the alleged offending Independent Distributor must actively work together with TIENS to resolve the

matter. TIENS reserves the right to freeze the bonuses of the Independent Distributors concerned until the

dispute will be clarified.

6) During the investigation, TIENS will take all necessary actions, precautions and measures to collect

evidence as it deems fit.

7) TIENS will handle the submitted complaint, investigation, collection of evidence and eventual

decision according to TIENS rules and inform both the complaining Independent Distributor and alleged

offending Independent Distributor of its decisions accordingly.

8) The complaining Independent Distributor may appeal to HQ for a review of the decisions on his/her

case within 10 working days of the notification of decision, with supplement of new evidence, after which,

it will interpreted as full acceptance of Tiens decision by the Independent Distributor.

9) Upon receiving the appeal and new evidence, the HQ will launch a review of the decisions on the case.

10) The decisions made by Tiens HQ after reviewing the appeal will be taken as final and no further

appeals being entertained.

3. Measures to ensure corrections (MEC)

1) If TIENS has reason to believe that one or more Independent Distributors has misrepresented the TCP

or has seriously violated the TPP within the network of a leading Distributor, TIENS reserves the right to

enforce MEC against all or part of the members of the network.

2) Before enforcing MEC, TIENS will inform the affected Independent Distributors of the reasons to

ensure that they are aware of the necessity of the actions taken.

3) When TIENS has informed the Independent Distributors accordingly, they are permitted to make a

statement encompassing the whole incident and conduct an investigation into his/her network within a

specific period.

4) Independent Distributors who have been subject to MEC are invited to complete a thorough training to

relearn how to correctly represent and implement the TCP and how to educate other Independent

Distributors within the network. The retraining sessions will be hosted by the leading Independent

Distributor and/or other designated Independent Distributors under the supervision of TIENS.

5) The leading Independent Distributor or other designated Independent Distributors are invited to submit

the schedule of the retraining sessions, which should contain the date, time, venue, expected number of

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attendees and names of lecturers of the TCP.

6) During the retraining sessions, each attending Independent Distributor should sign in on the attendance

form, which must be submitted to TIENS by the leading Independent Distributor or other designated

Distributors.|

7) TIENS may delegate representatives to attend the retraining sessions in order to stay abreast of the

proceedings and place special emphasis on the essential parts of the TCP; the representatives may host the

sessions instead of the original hosts when necessary.

8) If the Independent Distributor or relevant sponsors are slow or fail to take proper and effective

measures within the prescribed period, TIENS reserves the right to take further MECs against them.