Compensation Chart at a Glance

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1 Our goal is your success! We ve designed a competitive compensation plan that rewards our Coloring Consultants for introducing Color Happy coloring pages to customers and Coloring Consultants and for building a team of Coloring Consultants who do the same. Our desire is that through coloring you will experience positive changes in your life, and that you will inspire positive changes in the lives of others, when you share Color Happy with enthusiasm and excitement. The Color Happy Compensation Plan outlines all the different ways Coloring Consultants are able to receive commissions in our Career Plan. For easy reference, here is a quick summary at a glance. Coloring Consultants enroll by completing a Coloring Consultant Application & Agreement and purchasing a $25 Starter Kit. There is an annual renewal fee of $20 (12 months after enrollment). A Coloring Consultant in good standing, having paid for a Starter Kit or annual renewal, is considered Active. To be eligible to earn monthly compensation in the Color Happy Compensation Plan, all Coloring Consultants either make a personal purchase of $10 or have a personally sponsored Customer who is not a Coloring Consultant make a personal purchase of $10 or more in that month. When you do either, you are Bonus Qualified. Active & Bonus Qualified Coloring Consultants are paid compensation on the sales made to 1 personally sponsored Customers and Coloring Consultants. These commissions start at 20% and there are various opportunities to earn even more. For example, when a First Order is placed by each of your 1 personally enrolled Customers and Coloring Consultants, when you are Active & Bonus Qualified you will earn 40% on these orders. Also, when the purchase of your 1 personally enrolled Customers and Coloring Consultants together meet or exceed specific targets, you can earn an additional 5% or 10% upon their purchases. Active & Bonus Qualified Coloring Consultants are also paid commissions upon sales made to Customers and Coloring Consultants in their downline (amount varies by rank and by level see the At A Glance chart) Active & Bonus Qualified Coloring Consultants have the ability to achieve new ranks and earn rank & team bonuses as they grow their business Active & Bonus Qualified Coloring Consultants with a paid-as rank of Orange or higher may qualify for a monthly Coloring Book Bonus Pool. Compensation Chart at a Glance Rank Paid-As Rank First Order Bonuses Rainbow Bonuses Team Bonuses Expanded Team Bonuses Orange Dreamsicle Bonus Rank Promotion Bonuses L5 L6 L7 ORANGE PROMO 1 Red (RED) 40% 10% - 5% 10% Orange (ORANGE) 40% 10% 5% 5% 10% 20% 5% $25-3 Yellow (YELLOW) 40% 10% 5% 5% 10% 20% 10% $25 4 Green (GREEN) 40% 10% 5% 5% 10% 20% 10% 5% $50 5 Blue (BLUE) 40% 10% 5% 5% 10% 20% 10% 5% 5% 3% $100 6 Indigo (INDIGO) 40% 10% 5% 5% 10% 20% 10% 5% 5% 3% 3% - - $200 7 Violet (VIOLET) 40% 10% 5% 5% 10% 20% 10% 5% 5% 3% 3% 3% - $400

2 Terms and Definitions Customer a person who has enrolled as a Color Happy Customer and has placed a personal order. Customers are not eligible to receive commissions or bonuses, but may upgrade to become a Coloring Consultant if/when desired, by completing a Coloring Consultant Application & Agreement and purchasing a Starter Kit. Coloring Consultant - a person who has completed a Coloring Consultant Application & Agreement and purchased a $25 Starter Kit that includes a free one-year subscription to a Personal Website. Unlike Customers, Coloring Consultants may sponsor Customers and other Coloring Consultants. Rank - every Coloring Consultant has a rank. The rank is a title that signifies the highest position attained in the Color Happy Career Plan, unless the rank was lowered. If a Coloring Consultant does not maintain rank requirements for 6 months, the rank title is lowered. A Coloring Consultant will always be paid her paid-as rank. Paid-As Rank - while a Coloring Consultant may have previously earned a rank title, her paid-as rank is the highest rank for which a Coloring Consultant is qualified in a commission period. The paid-as rank may be the same as or lower than the Coloring Consultant s actual rank. Sponsor - the term given to the current sponsor (immediate upline) of a Coloring Consultant. A Coloring Consultant is personally sponsored by her current sponsor. - a level is a positional relationship in the placement genealogy between Coloring Consultants or Customers based on enrollment. If A enrolls B who enrolls C, then B is on A s first level and C is on A s second level and B s first level. Downline - a term used to describe the Coloring Consultants personally sponsored by a Coloring Consultant and all of the Coloring Consultants sponsored by them, etc. Upline - a term used to describe the Coloring Consultant who is the sponsor of the Coloring Consultant, her sponsor, and all of the sponsors of these sponsors until reaching the Company. Commission Period - commissions are calculated monthly. A commission period is a calendar month. Bonus Volume - a measure of points (one point per dollar) given to products that help qualify a Coloring Consultant to meet personal activity requirements, and rank promotion and maintenance requirements. For commissionable products, Bonus Volume is 100% of the price paid. Bonus Volume is not generated from Consultant Sales Aids, including Starter Kits. Personal Bonus Volume (PBV) - the sum of the Bonus Volume generated by a Coloring Consultant s personal orders and orders placed by her personal Customers in a monthly commission period. Downline Bonus Volume (DBV) - the sum of the Bonus Volume generated by a Coloring Consultant and her personal Customers, plus the Bonus Volume generated by each of the Coloring Consultants in her downline and their personal Customers, for a monthly commission period. Adjusted Downline Bonus Volume (ADBV) - the Downline Bonus Volume for a Coloring Consultant that is counted for qualification for a Coloring Consultant s paid-as rank each month. This qualification affects Green, Blue, Indigo and Violet ranks only. Adjusted Downline Bonus Volume is Downline Bonus Volume with the limitation that at most 50% of the paid-as rank requirement can be counted from any one leg. 1 (Not First Order) Bonus Volume - is the sum of the Bonus Volume generated by orders placed by a Coloring Consultant s 1 personally sponsored Customers and Coloring Consultants, not including their first orders, in a monthly commission period.

3 Active Status: A Coloring Consultant is active if (a) she joined Color Happy within this monthly commission period or within the previous 11 monthly commission periods or (b) she paid a Coloring Consultant annual renewal fee of $20 within this monthly commission period or the previous 11 monthly commission periods. Inactive - the term used to describe a Coloring Consultant who is not active. Inactive Coloring Consultants are reclassified as Customers if they did not join Color Happy or pay a Coloring Consultant annual renewal fee of $20 within the previous 12 monthly commission periods. Bonus Qualified - A Coloring Consultant is Bonus Qualified when she has 10 points of Personal Bonus Volume (PBV) within the current monthly commission period. (one point per dollar) Consultant Sales Aids - tools available for purchase to help Coloring Consultants promote their business, including Starter Kits. These products do not offer commissions. They are available to Coloring Consultants only, not to customers. Starter Kits do not payout commissions. Autoship term used to describe a monthly subscription product that a Customer or Coloring Consultant may enroll in. This subscription can be canceled anytime. Pricing - For each digital commissionable product, there are two types of prices, Regular Prices and Autoship- Participation prices. These prices are the same for Customers and Coloring Consultants. Print-for-Me products are not offered at a Regular Price or at an Autoship-Participation price. They are only available as an Autoship product. Autoship Participation Prices - autoship orders and non-autoship orders placed by Customers and Coloring Consultants when an autoship order was generated for a Customer or a Coloring Consultant within the last 30 days. Participation in any autoship grants access to Autoship Participation Prices on all other digital products, which is the same price as the Autoship price. For example, if someone who is on autoship for any product purchases another product, they get the discounted Autoship-Participation price for that additional product without needing to subscribe to an additional autoship. If they are not on autoship for any product whatsoever, they pay the Regular Price. Regular Prices - Non-autoship orders placed by Customers and Coloring Consultants who have not had an autoship order generated within the last 30 days will be charged the Regular Prices. Active and Bonus Qualified Consultant: A Coloring Consultant is considered Active & Bonus Qualified when she has 10 points of Personal Purchase Volume in the current monthly commission period. To earn any compensation through this compensation plan, a Coloring Consultant is Active & Bonus Qualified. In months where a Coloring Consultant is not Active & Bonus Qualified, she is ineligible to earn compensation. Leg - includes either (a) a 1 personally sponsored Customer or (b) a 1 personally sponsored Coloring Consultant and all of her downline Coloring Consultants. Active and Bonus Qualified Leg - a leg that contains at least one Coloring Consultant who is Active & Bonus Qualified, or at least one Customer with $10 in monthly purchases.

4 COLOR HAPPY CAREER PLAN RANKS & RANK PROMOTIONS The Color Happy Compensation Plan is designed to reward business builders, and as such, offers Career Plan Rank Advancement. Each month, right before commissions are run, Color Happy promotes qualified Coloring Consultants to new ranks. Once promoted to a new rank, a Coloring Consultant meets that rank s maintenance requirements to be paid at that rank in subsequent monthly commission runs. If a Coloring Consultant does not meet the rank maintenance requirements for her rank at the end of the month, she will be paid at the highest rank for which she meets the requirements. If a Coloring Consultant fails to meet the requirements of her rank at least once in a rolling 6-month period, at the end of the commission run for the 6 th period her rank title will be lowered to be the highest rank she was paid at during the 6 month period. She will continue to be paid-as the highest rank she qualifies for, but will no longer be able to claim the higher title. CUSTOMER A person can become a Customer by meeting the following requirements: a. Enrolling as a Customer. b. Placing a personal order. Customers are not Coloring Consultants, do not have a rank, and can never promote. They can become a RED Coloring Consultant when they upgrade by completing a Coloring Consultant Application & Agreement and purchasing a $25 Starter Kit that includes a free one-year subscription to a Personal Website. (1) RED RED is the initial rank for every Coloring Consultant. A person can become a RED Coloring Consultant by meeting the following requirements: a. Complete a Coloring Consultant Application & Agreement and purchase a $25 Starter Kit that includes a free one-year subscription to a Color Happy Personal Website. RED Coloring Consultants are not demoted. They will be reclassified as Customers if they do not pay an annual renewal fee of $20 to remain a Coloring Consultant. While they will not lose their rank of RED, in order to earn compensation as a RED Coloring Consultant, a Coloring Consultant is Active & Bonus Qualified with 10 PBV ($10 or more autoship) in a commission month.

5 (2) ORANGE To be promoted to the ORANGE rank or to be paid as an ORANGE, a Coloring Consultant will meet the following requirements in the monthly commission period: a. Be or become a RED Coloring Consultant b. Be Active & Bonus Qualified with 10 PBV this month c. Have 3 Active & Bonus Qualified and paid-as legs (3) YELLOW To be promoted to YELLOW or to be paid as YELLOW, a Coloring Consultant will meet the following requirements in the monthly commission period: a. Be or become an ORANGE b. Be Active & Bonus Qualified with 10 PBV this month c. Have 4 Active & Bonus Qualified legs, one of which is a paid-as Orange leg or higher

6 (4) GREEN To be promoted to GREEN or to be paid as GREEN, a Coloring Consultant will meet the following requirements in the monthly commission period: a. Be or become a YELLOW b. Be Active & Bonus Qualified with 10 PBV this month c. Have 500 points of ADBV this month, with at most 250 DBV per leg. d. Have 5 Active & Bonus Qualified legs, one of which is a paid-as Yellow or higher leg and one of which is a paid-as Orange leg or higher.

7 (5) BLUE To be promoted to BLUE or to be paid as BLUE, a Coloring Consultant will meet the following requirements in the monthly commission period: a. Be or become a GREEN b. Be Active & Bonus Qualified with 10 PBV this month c. Have 1,500 points of ADBV this month, with at most 750 DBV per leg. d. Have 6 Active & Bonus Qualified legs, one of which is a paid-as Green or higher leg and one of which a paid-as Yellow leg or higher.

8 (6) INDIGO To be promoted to INDIGO or to be paid as INDIGO, a Coloring Consultant will meet the following requirements in the monthly commission period: a. Be or become a BLUE b. Be Active & Bonus Qualified with 10 PBV this month c. Have 4,500 points of ADBV this month, with at most 2,250 DBV per leg. d. Have 7 Active & Bonus Qualified legs, one of which is a paid-as Blue or higher leg and one of which is a paid-as Green leg or higher.

9 (7) VIOLET To be promoted to VIOLET or to be paid as VIOLET, a Coloring Consultant will meet the following requirements in the monthly commission period: a. Be or become an INDIGO b. Be Active & Bonus Qualified with 10 PBV this month c. Have 15,000 points of ADBV this month, with at most 7,500 DBV per leg. d. Have 8 Active & Bonus Qualified legs, one of which is a paid-as Indigo or higher leg and one of which is a paid-as Blue leg or higher.

10 HOW MONTHLY BONUSES WORK First Order Bonuses The first order a new Coloring Consultant or a Customer places with her referring Coloring Consultant is special. It s the beginning of a beautiful friendship, and Color Happy would like to honor that relationship with a special First Order Bonus. No matter a Coloring Consultant s rank, she will earn double commissions (40%) on the very first order a personally sponsored 1 Customer or Coloring Consultant makes, so long as she is Active & Bonus Qualified. And the next two upline Coloring Consultants, when they are Active and Bonus Qualified, will each earn a First Order Bonus, too ( 2 and 3). See the chart for specific commission amounts based on rank. It doesn t matter if that first order is an autoship enrollment, a regular priced item, or a combination of items. A Coloring Consultant (who is Active & Bonus Qualified) gets the First Order Bonus on the entire order. The First Order Bonuses are paid only on the first order a new Customer or Coloring Consultant places. All other orders are eligible for Team Bonuses. If a Customer or Coloring Consultant makes an additional purchase after their first purchase in the same day, it will not generate First Order Bonuses. It would generate Team Bonuses instead. Since Coloring Consultants earn double commissions with the First Order Bonus, First Order Bonuses are not double dipped with the Team Bonus or Rainbow Bonuses. First orders qualify for the First Order Bonuses only. If a Coloring Consultant is not Active & Bonus Qualified, no First Order Bonus is earned. Earning a First Order Bonus qualifies Coloring Consultants at an Orange level and above for a share in the Coloring Book Bonus Pool (described later). Reminder: No bonuses are paid on Starter Kits. Starter Kits are a Consultant Sales Aid purchase, and are not eligible for commissions. The Color Happy Compensation Plan pays eligible Coloring Consultants commissions on sales of products, not on enrolling other Coloring Consultants.

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13 Team Bonuses As a Coloring Consultant sponsors other Coloring Consultants and works with them to learn the business, her team will grow. It only makes sense that as her leadership role increases, so does her bonus income. That is why Color Happy has established Team Bonuses the meat and potatoes of the Color Happy Compensation Plan. Team Bonuses are paid upon the personal orders of downline Coloring Consultants and Customers (excluding First Orders) to active and bonus qualified Coloring Consultants. If a Coloring Consultant is not active and bonus qualified, or is active and bonus qualified but is not eligible to earn a specific Team Bonus, the Team Bonus will not be paid. Expanded Team Bonuses After the four Team Building Bonuses are paid out, Expanded Team Building Bonuses are paid on Bonus Volume (excluding First Orders) to upline Coloring Consultants with a paid-as rank of Blue, Indigo, and Violet. If a Coloring Consultant is inactive or not bonus qualified or is not qualified to earn an Expanded Team Bonus, the Expanded Team Bonus will roll-up to the next eligible Coloring Consultant. While Team Building Bonuses (s 1-4) are paid on four downline levels, the three Expanded Team Bonuses (s 5-7) can be earned on more than three downline levels because of the roll-up rule, allowing Expanded Team Bonuses to be earned on unlimited levels.

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15 Rainbow Bonuses Color Happy wants to reward and encourage Coloring Consultants to build organizations made up of happy coloring enthusiasts. To this aim, we present the Rainbow Bonus. All Coloring Consultants with 200 or more in 1 (Not First Order) Bonus Volume in a calendar month will earn a Rainbow Bonus, when they are Active & Bonus Qualified. This is calculated and paid upon a Coloring Consultant s monthly 1 (Not First Order) Bonus Volume. These bonuses are in addition to Team Bonuses. Example: In January, Jill s 1 (Not First Order) Bonus Volume was 350. Jill is Active & Bonus Qualified, so she earns a Rainbow Bonus of 5% of $350 = $ In February, Jill s 1 (Not First Order) Bonus Volume was 400. Jill is Active & Bonus Qualified, so she earns a Rainbow Bonus of 10% of $400 = $40.

16 Orange Dreamsicle Bonus Color Happy wants to reward you for fast coloring! If you promote to Orange within your first 14 days after you enroll as a Coloring Consultant, you will earn a $25 Orange Dreamsicle Bonus. If a person starts as a Customer and later upgrades to Coloring Consultant, she will have 14 days from the date of her upgrade to a Coloring Consultant to earn the Orange Dreamsicle Bonus. If a Coloring Consultant is downgraded to a Customer and later upgrades to Coloring Consultant, she will be eligible to earn an Orange Dreamsicle Bonus only if she did not previously earn one. Rank Promotion Bonuses Color Happy recognizes that promoting to a new level is a major accomplishment, and one that should be celebrated. As such, Coloring Consultants who promote to the ranks of Yellow or higher for the first time will earn a one-time Rank Promotion Bonus for each such rank promotion. This is our way of showing appreciation and sending best wishes to Coloring Consultants who are passionate about building their business.

17 Coloring Book Bonus Pool Color Happy offers physical coloring books for sale at various outlets as a source of generating new leads for its digital subscription services. When a customer purchases a physical coloring book at one of the various outlets, they are gifted with a special offer code to encourage them to become Color Happy digital customers. When they do so, commissions are generated. Color Happy wishes to distribute the commissions these book customers generate to qualified Coloring Consultants in the form of the Coloring Book Bonus Pool. In this way, the efforts Color Happy makes to generate new leads from physical coloring books directly benefits Coloring Consultants who are committed to growing their business. The amount of this Coloring Book Bonus Pool will vary monthto-month, depending on the total commissions generated from these customers. The Coloring Book Bonus is split equally between two Builder Pools. Orange Builder Pool In order to qualify for the Orange Builder Pool, a Coloring Consultant: Is Paid-As ORANGE or above Is Active & Bonus Qualified with 10 PBV this month ($10 or more Autoship) Has earned at least one First Order Bonus in the qualifying month For each First Order placed by a 1 personally sponsored Customer or Coloring Consultant, the sponsor, when qualified, will earn 1 share of this pool. A maximum of 10 shares in this pool may be earned by each participant. Yellow Builder Pool In order to qualify for the Yellow Builder Pool, a Coloring Consultant: Is Paid-As YELLOW or above Is Active & Bonus Qualified with 10 PBV this month ($10 or more Autoship) Has earned at least one First Order Bonus in the qualifying month For each First Order placed by a 1 personally sponsored Customer or Coloring Consultant, the sponsor, when qualified, will earn 1 share of this pool. A maximum of 10 shares in this pool may be earned by each participant. Participants may double dip from both the Orange and Yellow Builder Pools if they are Paid-As a Yellow or above, since they qualify for both pools.

18 Compensation Summary Charts Rank Qualification Requirements Rank Paid-As Rank PBV ADBV Total Active and Bonus Qualified Legs 1 Coloring Consultant (RED) Orange (ORANGE) 10-3 * This is DBV with a maximum 50% per leg Rewards Types of Paid As Legs 3 Yellow (YELLOW) Orange 4 Green (GREEN) * 5 1 Yellow, 1 Orange 5 Blue (BLUE) 10 1,500* 6 1 Green, 1 Yellow 6 Indigo (INDIGO) 10 4,500* 7 1 Blue, 1 Green 7 Violet (VIOLET) 10 15,000* 8 1 Indigo, 1 Blue Rank Paid-As Rank First Order Bonuses Rainbow Bonuses Team Bonuses Expanded Team Bonuses Orange Dreamsicle Bonus Rank Promotion Bonuses L5 L6 L7 ORANGE PROMO 1 Red (RED) 40% 10% - 5% 10% Orange (ORANGE) 40% 10% 5% 5% 10% 20% 5% $25-3 Yellow (YELLOW) 40% 10% 5% 5% 10% 20% 10% $25 4 Green (GREEN) 40% 10% 5% 5% 10% 20% 10% 5% $50 5 Blue (BLUE) 40% 10% 5% 5% 10% 20% 10% 5% 5% 3% $100 6 Indigo (INDIGO) 40% 10% 5% 5% 10% 20% 10% 5% 5% 3% 3% - - $200 7 Violet (VIOLET) 40% 10% 5% 5% 10% 20% 10% 5% 5% 3% 3% 3% - $400