Flavon max Organizational and Operational Regulations of the Flavon max Club

Transcription

1 Flavon max Organizational and Operational Regulations of the Flavon max Club These regulations form an integral part of the Flavon max Club Membership Agreement and Contract of Agency. 1) Introduction Flavon Group Kft. hereinafter referred to as Flavon Group distributes its products for personal use of independent Club Members of the Flavon max Club with the purposes: a) that the Members of the Flavon max Club improve their dietary habits with the highquality dietary supplements distributed by Flavon Group and in this way prolong their quality of life. The Club Members provide products primarily for their families, friends, and can recruit new Club Members. These products may not be marketed at retail except if the Flavon Group Kft. has previously authorized it. b) that the Club Members who take part in the building of the network receive the most financial recognition possible, and the successful Club Members reach financial independence. Neither the employees of Flavon Group, nor the Club Members can promise any concrete income to anyone, as it depends on each Club Member s and agent s personal aptness, efficiency and invested work. 2) Definitions 2.1. Club Member/Registration Carton: A natural person who purchases one carton of product (this is the Club Member s registration carton) and at the same time she/he signs the Membership Agreement of the Flavon max Club which is accepted/approved by Flavon Group. A welcome letter and an identification number are sent to the new Club Member by Flavon Group after her/his entry. Flavon Group divides Club members into two different groups: Consumer; and Network builder VIP Member/VIP carton: A natural person who purchases 6 cartons of products (this is the member s VIP carton) at the same time as signing the membership Agreement, which purchase is accepted/countersigned by the Flavon Group Kft.; or a previously registered Club Member who purchases at least 6 cartons for personal use at once when ordering. During the 12 months counted from the month following the month of the achievement of this status, the VIP Member is entitled to receive and use a VIP badge; a dedicated place in the first row at the national events of the Flavon Group Kft.; use his/her own website under the name s/he chooses, according to the conditions referred to in the paragraph Advertising, promotional materials; have his/her own.@flavonmax.com address chosen by him/her according to the conditions referred to in the paragraph Advertising, promotional materials; consult the complete turnover of his/her own network; request further special reports in the online office; use the group sending function of the online office to send s to his/her own team. 1

2 2.3. Consumer: A Club Member who joined to our system only to buy Flavon products for himself/herself and/or his/her family, but s/he does not build network and does not work as a sponsor, so s/he has not have any Club members who joined to the Flavon max Club through her/his group Network Builder: A Club Member who besides buying Flavon products for himself/herself and/or his/her family wishes to build network and to work as a sponsor, so there is at least one person who joined to the Flavon max Club through the Club Member s group Sponsor: a Club Member who helps others to join the Flavon max Club network properly through her/his group. The sponsor is the individual who has directly recruited the Member. A sponsor s obligations include the following: to be as active as she/he is expected to, to recruit new members in order to enlarge her/his network as much as possible, to assist and support her/his present group in proportion to her/his current commission GPS sponsor: In the case of the GPS system, a GPS sponsor is the Club Member who has directly recruited the Club Member in question to the GPS system. The Club Member recruited by the GPS sponsor belongs to the GPS sponsor s first organic tree level, but the GPS sponsor is not necessarily the Member s actual sponsor (in most cases he/she is not) Sponsor line: a chain of Club Members; a particular Club Member, her/his active sponsor, the active sponsor of her/his sponsor, and so on. All sponsor lines start from Flavon Group. The sponsor line is not broken even if any of its members is inactive, quits or should be suspended or excluded from the network. In this case the sponsor continues to function by leaving out the inactive Club Member Organic tree: In the case of the GPS system the sponsor line referred to as concentric circles in this case and the organic tree levels differ from each other. The organic tree is the chain of those Club Members who were actually recruited to the system by the Club Member in question. The Club Member recruited by the GPS sponsor is the GPS sponsor s first organic tree level, the Club Member recruited by the Club Member is the GPS sponsor s second organic tree level, etc. Therefore the organic tree is the actual recruiting structure Group: a consumer network started/sponsored by a Network Builder Activity carton: the first carton, equaling 3 points, purchased in a given month. This is the Club Member s activity carton, which is one of the requirements for paying out the commission for the monthly turnover. The mere purchase of the activity carton does not mean active participation in Club work Active Network Builder will be the Club Member who fulfills actively her/his sponsorship obligations and will do everything reasonable to market the products and enlarge her/his group. This implies that she/he will participate, at periodic intervals, in the manifestations and events organized by the Flavon Group Kft.; will recruit new Club Members and will keep in touch with the Flavon Group Kft. via telephone, or in person. Flavon Group expects the degree of activity to be proportional to the current commissions and bonuses Agent: A business organization with or without legal personality, a self-employed person, or another form of association named in the Civil Code in which the Club Member has representation right or membership, who has signed the Contract of Agency with Flavon Group Kft Performance in a given month: total purchases of active Club Members, for which orders and their related remittance are submitted to Flavon Group by the closing business day of the month 2

3 which can be viewed on the website under the Month-closing dates link. Provided a report, sum of money, membership agreement arrives, etc. arrives at Flavon Group after the above mentioned month closing time (punctually to the hour), it will be accounted and taken into consideration by Flavon Group for the following opened month Points: a) 3 points: for the registration carton, and the activity cartons. b) 2 points: for every carton purchased above the registration and the activity carton in a given month Qualification points: The calculation method of the necessary amount of qualification points defined in Leadership and other type of regulations: A) In the case of the traditional system: The points gained based on the quick-starters on the first 3 active levels of the Club Member in question; B) In case of the GPS system: The points gained based on the quick-starters in the first 3 organic tree levels of the the Club Member in question; Carton: 4 jars of Flavon max or Flavon kids or Flavon Green or Flavon Active ; or Flavon Protect ; or 3 jars of Flavon max Plus+. Flavon Group offers the opportunity to purchase mixed cartons Payback: an allowance given to the active Club Member after her/his performance in the given month after the given month-closing, in the form of purchase discount or commission (basic or leadership). There are two types of commission in the Flavon max Club: a) Basic commission b) Leadership bonus (differential bonus and extra differential bonus) Basis of commission payment/base price: The base price of one carton of product is 100 EUR / 86,61 GBP + VAT. (In the case of transactions that are subject to legislation on VAT the base price of a carton is the same as its tax base). The base price of one carton of product is the basis of commission payment Monthly closing dates: The month-closing dates listed under the Monthly closing dates menu at the website of Flavon Group Price for Club Members: the current sale price of one carton of Flavon max or Flavon kids or Flavon max Plus+ or Flavon Green or Flavon Active or Flavon Protect is 106,3 EUR/ 94,5 GBP + VAT for Club Members. If the Club Member has EU VAT number, she/he will purchase one carton of product for the net price (without 27% VAT), 106,3 EUR/ 94,5 GBP. The prevailing product price list can be viewed on the official website of Flavon Group ( at all times Consumer price: The consumer price which concerns consumers who are not members of the Flavon max Club of one carton of Flavon max, Flavon kids, Flavon Green, Flavon Active, Flavon Protect or Flavon max Plus product is 127,6 EUR/ 113,39 GBP +VAT Personal turnover: every purchase registered under the given Club Member s name in a month. Types of cartons: registration carton, activity carton, carton above the activity carton CP owner: CP, i.e. Coordination Point, owner can be any Club Member who 3

4 1. is entitled for at least 1309,09 EUR / 1133,85 GBP +VAT commission in two successive months, or 2. who is given a guaranty of payment by the Elite Club Member and respective Company above him/her, whose group has reached at least Elite level turnover in the previous month. The CP owner and Flavon Group make a separate agreement with each other with the purpose that the CP owner supplies products directly to current or future Club Members. The CP owner can order/collect 12 cartons of product at once that she/he reports/pays for after they are sold. The CP owner sends an account template or reports through her/his online office to Flavon Group. The CP owner transfers the remittance of sold products to the bank account of Flavon Group on the day of selling. The price of sold products paid to the CP owner is not the property of the CP owner, thus she/he will not use it as his/hers. If the CP owner does not transfer the received money to Flavon Group without delay, she/he will commit a serious breach of contract, which will entail the termination of the CP Agreement, the Contract of Agency and the Membership Agreement with immediate effect. Flavon Group will make out and send invoice to customers who are marked on the account template by the CP owner. 1. Any Club Member can become CP owner without the fulfillment of above conditions provided she/he pays in the consideration money of 12 cartons of product to Flavon Group when ordering. Provided the Flavon max Club Membership Agreement is concluded or the Flavon max products are purchased outside of the offices/shops of Flavon Group Kft. apart from orders placed by telephone or on the Internet the Club Member is eligible for withdrawing from the contract in the next 8 working days after having signed the contract without giving a reason by sending a written confirmation on her/his withdrawal to Flavon Group (19 Veres Péter utca, H 4033 Debrecen, HUNGARY). In this case Flavon Group will inactivate this Club Member in the database. Products purchased outside the official offices/shops of Flavon Group Kft. apart from orders placed by telephone or on the Internet will only be taken back if the Club Member gives back the total amount of products to Flavon Group without having decreased their value. It is forbidden to sell the products in shops or market them in via the Internet. Club Members may only distribute the Flavon max products via direct selling On-line office: The Club Member with the help of his/her ID number and password which was given at registration can sign in the on-line office which is available under the link The Club Member get an up to date information about his/her own and their network s work, they can order product, manage their CPs, download the necessary documents and they can get the actual information of Flavon Group through the on-line office. Club Members can see the purchases of their network on 6 levels, VIP Club Members can see the purchases on 12 levels, and Presidency Club Members or Club Members with higher qualifications can see the purchases on 20 levels. Presidency or Club Members with higher qualifications can request Flavon Group in a written form that the details of their own network - including the name of the Club Member, his/her purchases, the date of joining to be unavailable for their upper sponsors. In case of a positive decision about that Flavon Group can inform the upper leaders without any explanation about the restriction of use of their on-line office. Flavon Group Kft. can revoke the use of the on-line office any time without any explanation, to ensure the use of the online office is not an obligation of Flavon Group Kft. with it Flavon Group Kft. only would like to help and make the work of the Club Members easier. 4

5 The Club Member is liable for taking all the information s/he got to know through the online office as business secrets, these information may not be revealed to any third party. The breach of this obligation will imply the immediate exclusion of the Member and the immediate termination of the Contract of Agency in accordance of the business organization in which the Member has representation right or membership. 3) Commission Payment 3.1. For collecting commission the agent or the company of the Club Member is entitled with who Flavon Group Kft. has signed the Contract of Agency. Requirements for the Agent: 1. to be verifiable as a business organization with or without legal personality, a self-employed person, or another form of association named in the Civil Code through entrepreneur s licence or Company s Registry; 2. to have a right of membership or right of representation in the company defined in point 1.; 3. to take a proper professional activity that enables the Club Member to work as an agent; 4. the Agent is not able to work for any other company with the same commercial agent activity Further requirements for Agents with seats abroad: 5. in case of agents registered inside the community, having a community VAT number and 6. full compliance with the rules of the country defining by the seat is required. The Agent can only collect the commissions indicated on the monthly commission account sent to the Club Member against an invoice. The amount of commissions to be transferred has to exceed the amount of the purchase discount specified in the given country as the maximum purchase discount usable when buying one carton of product. If it is lower than that, the sum of the commissions coming from different months adds up, and the commissions will be paid in one sum, after it exceeds the specified threshold. The requirement for paying out commissions of the reference months: 1. The Club Member purchases the activity carton in the given month; 2. A Contract of Agency has to be made between Flavon Group and the Member s company; 3. The Club Member can issue an invoice on behalf of her/his company/undertaking.; 4. Active (cf. above for the definition of active Network Builder) and regular participation in the network of the Flavon max Club A Commission to the Club Member is paid out by Flavon Group only if there is a personal purchase above the activity carton, or there is purchase in the group. The payment procedure is the following: Commission account: Flavon Group will make the commission accounts based on the sales of the given calendar month for each Club Member/Agent eligible for commission. These commission accounts are for information only. Flavon Group will send the commission accounts electronically to the address given by the Club Member/Agent on the 15th day in the month following the month of purchase. Provided the Club Member/Agent does not agree with the content of the commission account or it does not correspond to her/his calculations, she/he has 15 days following the date of receipt at her/his disposal to inform Flavon Group about the discrepancy/discrepancies encountered. We will not take into consideration any complaint received thereafter. The payment of 5

6 commissions starts from the 15th day in the month following the month of purchase, after the commission invoice arrives. Deadline for collecting commissions: It is not possible to collect commission retrospectively after the given business year (1st January 31st December) of Flavon Group Kft. is closed. The commissions realized in December can be collected until 31 December the following year. Registering Commissions: 65% of the sum derived from the value of base points, which is distributed after the purchased cartons, can be paid back to Club Members, 60% as basic commission and 4%+1% as leadership bonus. Basic commission cannot be blocked, while leadership bonus can be blocked. The sum of a commission is divided into 2 parts by Flavon Group: a) Purchase discount: - Flavon Group gives a purchase discount of maximum 59 EUR/ 52 GBP +VAT (75 EUR/ 66 GBP gross) per carton to the active Club Member eligible for commission, and this discount is counted from the Club Member s commission; - In a given month it is possible to use up to three purchase discounts for buying three cartons of products at the most, that is a Club Member can use up to 3x59 EUR+VAT, 3x52 GBP +VAT as purchase discount in a given month; - If the commission of a given month is not used as purchase discount and the Club Member does not want to collect it in return for an invoice, the commissions can be added up and used as purchase discount within 6 months; - The purchase discount can only be used within 6 months after it was realized, by the realizing Club member exclusively; - A Club Member is free to decide whether she/he uses the purchase discount or wants to get the amount (or part of the amount) in money through his/her Agent, in return for an invoice; - The purchase discounts realized in different months can be combined into a single sum of purchase discount up to 60 EUR/52 GBP + VAT (76 EUR/66 GBP gross) per carton. If the Club Member s Agent can give an invoice and decides that she/he wants it in currency, she/he has to put 60 EUR/52 GBP net price on the invoice. b) Commission: If a Club Member decides not to use her/his realized commission in the form of purchase discount, the amount of the commission will be paid to the Agent by Flavon Group Kft. only after receiving an invoice. Undertakings apart from Hungary get the net amount of commission (not including 25% VAT). The Agent can only collect her/his commission in the given year, till 31 st of December. Requirements for the Agent: - to fully comply with the content of the Contract of Agency and current Organizational and Operational Regulations; - should there be any change in the private data of the Agent, s/he is liable for sending a written notification of that without delay (while respecting data protection rules); - if the Agent or its attached company, or any member or representative of the Agent wishes to join another direct selling company and aims at signing a contract similar to the present one (as a commercial agent) with another company, she/he will have to obtain the prior written consent of Flavon Group Kft. Should a Club Member or his/her Agent fail to observe the provisions laid down above, she/he will commit a serious breach of contract, which will result in immediate exclusion. - the Agent must make any rational, expectable efforts for the fulfillment of his/her job. 6

7 Termination of the Contract of Agency: - any party can denounce the agreement by the end of the reference month, by submitting a written denouncing declaration; - if a breach of contract occurs, one of the parties can terminate the Contract of Agency with immediate effect by sending a written notification to the other party, if the other party has seriously violated the content regarding his/her duties of the Contract of Agency, current Organizational and Operational Regulations, or the CXVII. law of the year 2000.) From the side of the Agent it is particularly a violation of contract: o to illegally advertise the products on the Internet or in pharmacies; o discounting; o the evasion of the network structure, or the attempt for such evasion by fake contracts; o to make curing statements regarding the products; o to make statements violating the reputation of Flavon Group Kft.; o if the Agent or its attached company, or any member or representative of the company, or their close relatives join to a company working with direct sales system directly or through an enterprise, without the prior written consent of Flavon Group Kft. If the contract of Agency has been terminated, the Membership agreement of those Club Members will also be terminated who have representation right or membership in the case of the concerned Agent. Basic commission types: 4. Income types 1. Rebate for personal turnover: there is no rebate on the first carton of products (i.e. the activity carton) purchased in the given month. If the Club Member purchases more cartons in a given month, s/he gets 20% personal rebate per carton from the base price of each carton above the activity carton after the closing of the given month, irrespective of the date of joining the network. In the case of purchasing a VIP carton, the payback after the personal purchase is 86,61 GBP + VAT. 2. Quick Start: the new Club Member is entitled to: % commission (17,32 GBP + VAT) on three active levels for every new Club Member of the sponsor line registered in the traditional system 10-10% commission on six active levels (8,66 GBP + VAT) for every new Club member of the sponsor line registered in the GPS system when fulfilling the conditions fixed in point 4) in the month of joining and the following month after purchasing the activity carton (3 points). Flavon Group pays 20% individual rebate to the quick-starting Club Member for every carton purchase above the activity carton. In this case, 40% is divided on the sponsor line, since the Flavon Group has already paid 20% as personal rebate from the 60% basic payback. Therefore, every Sponsor is entitled to a commission of 11,54 GBP + VAT for each Member registered in the traditional system on three levels, and to a commission of 5,77 GBP + VAT for each Members registered in the GPS system. 3. Income by levels: the commission is paid on 12 active levels depth to all those active Club Members who fulfill actively their sponsorship obligations (for the calculation of commission of Club Members registered in GPS system, see the conditions laid down in point 4). These sponsors are eligible for getting 5% commission (5 EUR/4,33 GBP +VAT, i.e EUR/5,5 GBP gross) on 12 active levels (depth) for the purchased activity cartons of those Club Members who are not in their Quick Start period any more whether they are registered in the traditional system or in the GPS system. 7

8 Flavon Group pays a 20% personal rebate on each Club Member s purchases above the activity carton, so in this case the sponsor line is eligible for 40% commission on 12 active levels in total. 4. GPS commission types: Flavon Group pays commission based on the turnover of the Club Members registered in the GPS system to the Club Members on the sponsor line regardless of whether they are registered in the traditional or in the GPS system under the following conditions: CONSUMER GPS COMMISSION : Every active Club Member gets a Consumer GPS commission, regardless of the activity of the Club Members registered by him/her. Calculation of the Consumer GPS commission : the commission is calculated from the turnover of active Flavon GPS Club Members placed in the first 3 levels (10% in the case of quick-start, and 5% in the case of commission by levels). So, the Club Member is entitled to the Consumer GPS commission even if none of the Members registered by him/her is active. MEMBERSHIP GPS COMMISSION : If the active sponsor has a turnover of at least 6 points based on the Club Members registered by him/her in the traditional or the GPS system (on his/her first organic tree level), and thus he/she supports the development of the system actively, he/she is entitled to a Membership GPS commission. Calculation of the Membership GPS commission : the commission is calculated from the turnover of active Flavon GPS Club Members placed in the first 6 levels (10% in the case of quick-start, and 5% in the case of commission by levels). Consequently, the Club Member is entitled to a Membership GPS commission even when having two directly sponsored, active Members. LEADERSHIP GPS COMMISSION : If the active sponsor has a turnover of at least 18 points based on the Club Members registered in the traditional or the GPS system through his/her own recommendation, and thus with his/her active support he/she enables others to obtain the advantages offered by the system, he/she is entitled for Leadership GPS commission. Calculation of the Leadership GPS commission : the commission is calculated based on the turnover of active Flavon GPS Club Members placed in the first 12 levels. Consequently, the Club Member is entitled to a Leadership GPS commission when having 6 directly sponsored, active members. The regulations specified above are the conditions for receiving commission generated in the GPS system in the whole sponsor line, regardless of whether sponsors are registered in the traditional or the GPS system. 5. Recruitment Incentive Program: a) The Club Member, in whose 3 active levels the points given for the new Club Members (i.e. the Quick Start points) reach 40 points in a given month, is eligible for 1 gift carton of Flavon max products. b) The Club Member, in whose 3 active levels the points given for the new Club Members (i.e. the Quick Start points) reach 80 points in a given month, is eligible for 2 gift cartons of Flavon max products. c) The Club Member, in whose 3 active levels the points given for the new Club Members (i.e. the Quick Start points) reach 120 points in a given month, is eligible for 3 gift cartons of Flavon max products. /These are not counted as purchased cartons. They should be used for Club Members own consumption or for promotion. Therefore they do not have any point values./ 8

9 5. Leader ranks and leadership bonuses There are 7 different leadership ranks in the Flavon max Club and the 7th rank comprises 5 further ranks. A given leader rank is achieved by the Club Member, who achieved the given amount of turnover belonging to the given qualification in a reference month, defined below. In case of qualifications when counting points, Flavon Group Kft. takes into account the group turnover on 6 active levels of the Club Member plus the 3 points of the first carton in case of personal purchase. The base of counting leadership bonuses is the same as of commissions point counting system leadership bonuses are counted after 3 points in case of first cartons and after 2 points in case of any additional carton purchase. A) Team Leader: an active Network Builder whose group on 6 active levels reaches 100 points in a given month. She/he is eligible for the Flavon max Team Leader title and badge, and can participate with her/his partner (adult family member) in one of the national events of the Flavon Group after she/he first qualified for this rank. B) Team Leader Plus: an active Network Builder whose group reaches 250 points on 6 active levels in a given month. She/he is eligible for the Flavon max Team Leader Plus title and 1% leadership bonus for the turnover of her/his 12 active levels (on 3, 6, or 12 active levels depending on the fulfillment of the conditions fixed in point 4.4), If the Club Member is registered in the GPS system) apart from the part which is blocked by a Club Member of leader rank (i.e. Team Leader Plus, Elite, Elite Plus, Diamond Elite, Diamond Elite Plus, or Presidency ) who also qualified in the given month. C) Elite Club Member: an active Network Builder whose group reaches 500 points on 6 active levels in a given month. She/he is eligible for the Flavon max Elite Club Member title and golden badge, a gift training in Hungary paid by Flavon Group, and 2% leadership bonus for the turnover of her/his 12 active levels (on 3, 6, or 12 active levels depending on the fulfillment of the conditions fixed in point 4.4), If the Club Member is registered in the GPS system) apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. An Elite Club Member can take part in the gift training in Hungary exclusively with her/his adult family member and can use it only in the next training following the first qualification. D) Elite Plus Club Member: an active Network Builder whose group reaches 750 points on 6 active levels in a given month. She/he is eligible for the Flavon max Elite Plus Club Member title, and 2% leadership bonus for the turnover of her/his 12 active levels (on 3, 6, or 12 active levels depending on the fulfillment of the conditions fixed in point 4.4), If the Club Member is registered in the GPS system) apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. E) Diamond Elite Club Member: an active Network Builder whose group reaches 1000 points on 6 active levels in a given month. She/he is eligible for the Flavon max Diamond Elite Club Member title, a golden badge with a diamond an all-inclusive one-week holiday abroad for two persons paid by Flavon Group, and for 3% leadership bonus for the turnover of her/his 12 active levels (on 3, 6, or 12 active levels depending on the fulfillment of the conditions fixed in point 4.4), If the Club Member is registered in the GPS system) apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. The Club Member can take part in the gift training in Hungary exclusively with her/his adult family member and can use it only in the next training following the first qualification. 9

10 F) Diamond Elite Plus Club Member: an active Network Builder whose group reaches 1750 points on 6 active levels in a given month. She/he is eligible for the Flavon max Diamond Elite Plus Club Member title, and a 3% leadership bonus for the turnover of her/his 12 active levels (on 3, 6, or 12 active levels depending on the fulfillment of the conditions fixed in point 4.4), If the Club Member is registered in the GPS system) apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. The condition of paying out the leadership bonuses in the above cases and participation in above mentioned trainings is collecting 40 qualification points on 3 active levels in the given month or months. In the case of the GPS system, the conditions for paying leadership bonuses and the method of calculation are similar to the conditions fixed in point 4.4). Flavon Group Kft. shall publish all conditions of current announcements on G) Presidency Club Member: a. an active Network Builder whose group reaches 2500 points on 6 active levels in a given month. She/he is eligible for the Flavon max Presidency Club Member title, a golden badge with two diamonds, a one-week holiday for two persons abroad paid by Flavon Group, and for 4% leadership bonus for the turnover of her/his 20 active levels apart (on 3, 6, or 20 active levels depending on the fulfillment of the conditions fixed in point 4.4), If the Club Member is registered in the GPS system)from the part which is blocked by a Club Member of leader rank who also qualified in the given month. The Club Member can take part in the gift training in Hungary exclusively with her/his adult family member and can use it only in the next training following the first qualification. In the case of Presidency Club Member ranks it is not necessary to collect quick start points on 3 levels in order that Presidency Club Members be paid out their leadership bonuses. Ruby, Emerald, Sapphire and Platinum Presidency Club Members are furthermore entitled for 1% bonus monthly, after the turnover in unlimited depth of that part of their group which is not blocked by a Club Member with leader rank who is also qualifying in the given month. b. Ruby Presidency Club Member: an active Network Builder who fulfills the requirements of Presidency Club Membership and has at least one Presidency Club Member on her/his 6 levels (considering the closest to him in each line) and the network apart from the Presidency Club Member s line has a turnover of at least 1000 points on 6 levels in a given month. She/he is eligible for the Flavon max Ruby Presidency Club Member title, a ruby gold ring and 4% extra leadership bonus on the turnover of her/his 20 active levels (on 3, 6, or 20 active levels depending on the fulfillment of the conditions fixed in point 4.4), which is not blocked by a Member qualifying for a leader rank in the given month. c. Emerald Presidency Club Member: an active Network Builder who fulfills the requirements of Presidency Club Membership and has at least 3 Presidency Club Members on her/his 6 levels in different lines (considering the closest to him in each line) and the network apart from the Presidency Club Member s line has a turnover of at least 1000 points on 6 levels in a given month. She/he is eligible for the Flavon max Emerald Presidency Club Member title, an emerald gold ring and 4% extra leadership bonus on the turnover of her/his 20 active levels (on 3, 6, or 20 active levels depending on the fulfillment of the conditions fixed in point 4.4), which is not blocked by a Member qualifying for a leader rank in the given month. 10

11 d. Sapphire Presidency Club Member: an active Network Builder who fulfills the requirements of Presidency Club Membership and has at least 5 Presidency Club Members on her/his 6 levels in different lines (considering the closest to him in each line) and the network apart from the Presidency Club Member s line has a turnover of at least 1000 points on 6 levels in a given month. She/he is eligible for the Flavon max Sapphire Presidency Club Member title, a sapphire gold ring and 4% extra leadership bonus on the turnover of her/his 20 active levels (on 3, 6, or 20 active levels depending on the fulfillment of the conditions fixed in point 4.4), which is not blocked by a Member qualifying for a leader rank in the given month. e. Platinum Presidency Club Member: an active Club Member who fulfills the requirements of Presidency Club Membership and has at least 10 Presidency Club Members on her/his 6 levels in different lines (considering the closest to him in each line) and the network apart from the Presidency Club Member s line has a turnover of at least 1000 points on 6 levels in a given month. She/he is eligible for the Flavon max Platinum Presidency Club Member title, a platinum ring with a diamond and 4% extra leadership bonus on the turnover of her/his 20 active levels (on 3, 6, or 20 active levels depending on the fulfillment of the conditions fixed in point 4.4), which is not blocked by a Member qualifying for a leader rank in the given month. Losing a leader rank: Those Elite, Diamond Elite, Presidency leaders lose their leader ranks after the monthly closing who are inactive in two months in a row before the closing or do not buy their personal activity carton for the fourth time between 1 June 31 May during the qualification period of Flavon. The day when the Club Member loses their leader rank they also lose all the entitlements relating to the rank including those trainings, trips which the Club Member already qualified for and to own, achieve the leader rank was a condition of those -, but they have not participated yet and the prizes associated with other tenders as well. Blocking leadership bonus: The degree of blocking is the degree of the leadership bonus that is given to the leader after his/her rank (e.g. If blocked by a qualifying Elite Club Member, a Diamond Elite Club Member is given 1% leadership bonus for the blocked line instead of 3%. For the unblocked line(s) she/he still receives 3%). Leaders are Flavon Group Kft. s partners of leading ranks, who make a major contribution with their behavior in the network to the appearance and image of Flavon max Club and to its good reputation. In case a Club member of any leading rank harms the good reputation of the Flavon max Club by statements or behavior, or violates the Company s Code of Ethics, Flavon Group Kft. is entitled to deprive the leading rank of the reference month from the Leader for a period of 1 to 6 months, during which the Leader is not entitled for the leadership bonus of that period. 11

12 6. Flavon Global Partner System Joining the GPS system: A) If the Club Member is wishing to join the Flavon max Club system to build his/her network according to the method adopted in the Flavon Global Partner System (hereinafter: GPS system) he/she can only do so by joining the system within the framework of the GPS system; B) Club Members of the Traditional Flavon max Club are also entitled to join the GPS system. In this case, the network of the Club Member built up the Traditional system should be handled completely separated from the network built in the GPS system. The Club Member will also be entitled to the commission according to the Traditional system based on the purchases of the Club Members belonging to his/her network in the Traditional system. Club Members belonging to the GPS system can build their network below them recruiting two by two, i.e. 2 people can join his/her first level, 2-2 people a total of 4 can join the second, then 8, 16, 32 and 64 Members can join further levels (further on: circles). Every circle starts with two legs. The basic rules of building a network system (circle): Definition of the current position of the Sponsor of the Club Member joined by the GPS Sponsor (see definition in point 2): a) the closest available position to the GPS Sponsor; if there are more available positions on the same level below the GPS Sponsor: b) the Club Member will be placed below the Sponsor who has an activity carton for the reference month (the first unclosed month); if there are several Club Members who have purchased their activity carton for the reference month, c) the Sponsor will be the one, who has the most carton purchases since joining; if there are several Club Members with the same purchase amount, d) the Sponsor will be the one, who has been registered for the longest time by date; if there are several Club Members with the same registration date, e) the Sponsor will be the one with the lowest Flavon ID-number. Conditions for starting a new circle: The Club Member, a) whose networks from both legs are completely filled to 6 levels of depth (i.e. there are 126 people below him/her) b) and has at least 6 Club Members on his/her first organic tree level, so among the Club Members in the network below him/her to an unlimited depth there are at least 6 Club Members who were recruited to the GPS system directly by him/her is entitled to start a new circle. 7. Product Ordering The minimum order is one carton of Flavon max, Flavon kids, Flavon Green, Flavon Active, Flavon Protect, or Flavon max Plus+ product. Methods of Ordering: a) In person purchase: the products can be purchased in person in the shops, in the opening hours, after customers have filled in a product order form. b) One-off order: orders can be placed by telephone, fax, or on the online office. The price of the products together with the delivery cost should be paid or transferred into the bank account of Flavon Group. The ordered products are shipped by Flavon Group via a courier service. 12

13 Current delivery costs (for 1-10 cartons) can be found on (In case of orders of more than 10 cartons: delivery is free of charge.) Information on the conditions of home delivery to countries of the European Union is available on the central telephone numbers of Flavon Group: or , on the fax number, or on our website ( The ordered products are shipped only after their price arrives into the bank account of Flavon Group. If the price arrives on a given working day, the parcels are given to the courier service on the following day. If the delivery address is not the same as the one registered at Flavon Group, please notify the change to the company in each case when you place the order. If an order is placed at the end of the month, it counts as an order for that particular month only if its price arrives into the bank account of the company before Flavon Group closes the month. For further information please visit our website and click on Month-closing dates. Provided a report, sum of money, Membership Agreement, etc. arrives at Flavon Group after the above mentioned month closing time (punctually to the hour), it will be accounted and taken into consideration by Flavon Group for the following opened month. 8. Guarantee, Warranty Flavon Group guarantees and warrants to its Club Members that the products distributed by Flavon Group meet all requirements of the official product specification. If there is a complaint on the quality of the product during the warranty period and it proves to be rightful, Flavon Group exchanges the product free of charge. If the quality complaint is submitted after the expiry date of the product, we cannot exchange the product. 9. Club members Every Flavon max Club Member is an independent contracting party who is obliged to run her/his business according to the Flavon max Club Membership Agreement and the laws of the particular country. A Club Member should be an adult natural person Club Member and her/his enterprise: If the Club Member requires commission payment, she/he should make out an invoice to the Flavon Group through the company she/he represents, which company will be the Agent of Flavon Group this way. It is required for commission payment and invoicing that the undertaking and Flavon Group Kft. make a contract to each other. Should there be any change in the Club Member s company, or her/his private data, s/he or his/her Agent is liable for sending a written notification of that without delay. Provided no written notification is sent, Flavon Group shall not assume any liability for any resulting undue payment or transfer. In the absence of such notification Flavon Group Kft. is free to terminate the contract immediately The principle of One member one position : Every Club Member can be member of the system only once (and only as a natural person). Spouses, life partners, or relatives living in the same household can be separate contracting parties, but they can exclusively be on the same sponsorline, sponsoring each other. Spouses are responsible for each other s position and should be treated together. If information about any Club Member violating current point comes to the notice of Flavon Group Kft., the mentioned Club Member will be transferred below the position of his/her spouse, life partner, or relative living in the same household. 13

14 9.3. Position transfer: The Club Member status in the Flavon Max Club is bound to the person. It can only be transferred after receiving a written consent of Flavon Group, which the Club Member must apply for in writing, on which Flavon Group will decide in 30 days after its submission. When the club membership status is transferred, the position of the former Club Member is terminated, the group is lost, and she/he cannot join any other Club Member within 1 calendar year. However, she/he can join her/his former sponsor any time as a new club member. Only the original owner is eligible for collecting the commission accumulated on the actual position before the transference. The new owner of the position can only collect the commission accumulated a posteriori. Commissions cannot be collected retrospectively. The conclusion of false, fictitious transference containing malicious intentions is strictly forbidden. If a Club Member or her/his company concludes such an agreement or contributes to its conclusion, it shall result in her/his immediate exclusion Position exchange: Rules related to transference are decisive for exchange of club membership statuses as well. The only exception is that exchange will not result in the termination of Club Membership positions because they are simply exchanged. Flavon Group Kft. may reject any membership status exchange request when there are grounds for assuming that the underlying intention is sponsor shift, structural modification or regrouping Sponsor change: a Club Member can change her/his sponsor only with the permission of Flavon Group. The Club Member should submit a written request on the sponsor shift, for which he attaches the signatures of her/his upline on 12 levels. If the sponsor line is not that long, the signatures must be collected up to Flavon Group inclusively. The shift requesting Club Member will be deleted from her/his earlier position and will be allowed to join her/his new sponsor immediately. However, she/he cannot take any of her/his recruited Club Members, neither her/his network with him/her. They will be taken over by the requesting Club Member s former direct sponsor. Flavon Group Kft. may reject any sponsor shift request when there are grounds for assuming that the underlying intention is structural modification or regrouping Losing one s group: If the Sponsor does not buy his/her activity carton of the reference month during 6 months, s/he will be downgrade to a Consumer by the Flavon Group Kft. and lose his/her whole group (in unlimited depth) after the closing of the 6th inactive month. In this case the group goes up by one level in the sponsor line, to the next actual Network Builder. After losing his/her group, the Club Member has not have the chance to get it back, but s/he can become a Sponsor again by building a new group Exclusion or termination of Membership: Any party can denounce the Club Membership Agreement at any time by submitting a written denouncing declaration. If the former Club Member intends to become member of the Club again, she/he is free to join anyone if one calendar year has passed after denunciation. If she/he wishes to join again within one year, she/he can rejoin her/his former Sponsor exclusively as a new Club Member, but she/he cannot get her/his group back. Exclusion: If a breach of contract occurs, Flavon Group Kft. may, at any time and with immediate effect, terminate the Membership Agreement or the Contract of Agency by sending a written notification to the Club Member and the Agent (or its representative). Simultaneously with the exclusion, Flavon Group terminates the Contract of Agency concluded with the Company represented by the Club Member with immediate effect. Immediate exclusion can be a result of seriously breaching the provisions laid down in the Membership Agreement, the Contract of Agency, the Organizational and Operational Regulations, especially if the Club 14

15 Member will not fulfill her/his obligations, will not maintain relations with Flavon Group or will not cooperate. Automatic termination: A Club Member who is inactive in 12 consecutive months, i.e. does not have a minimum monthly purchase of 106,3 EUR/ 94,48 GBP + VAT (activity carton) will lose his/her membership status in the Flavon max Club and will be deleted from the system. The Contract of Agency signed between Flavon Group Kft. and the company represented by the deleted member will also be ceased. The Contract of Agency is also ceased if the insolvency of the company has been proved or the assigned company has been ceased. The network of the deleted position according to the deletion - goes up by one level in the sponsor line. Neither a Club Member nor any relative of a Club Member who was excluded due to breach of contract can join the Club within one year after the exclusion, her/his Membership status lapses. Security of delivery: If notification has proved to be impossible because the addressee failed or refused the receipt of the document or the address of the addressee cannot be established, the exclusion letter shall be deemed to have been notified on the 5 th working day after the second attempt of delivery of the notification by post. In the Club the violation of any obligation implies the obligation of penalty payment and damage refund. The penalty is ten times the commission of the previous month, or if the starting time of the violation of any obligation cannot be determined, the penalty is ten times the average of the commissions generated in the last 12 months. The entitled party can claim refund on her/his damage over the penalty Other MLM networks: If a Club Member or a company at which the Club Member is representative, member or employee carries out similar commercial agent activity (i.e. direct selling), the Club Member shall inform Flavon Group Kft. in advance, before signing the Membership Agreement or the Contract of Agency, about her/his direct selling activity. Having taken into consideration the information supplied, Flavon Group Kft. is entitled to refuse to sign any contract. If a Club Member or a company at which the Club Member is representative, member or employee wishes to join another direct selling company and aims at signing a contract similar to the present one (as a commercial agent) with another company, she/he will have to obtain the prior written consent of Flavon Group Kft. Should a Club Member or his/her Agent fail to observe the provisions laid down above, she/he will commit a serious breach of contract, which will result in immediate exclusion. It also results in disqualification if the Club Member or the Agent is owner or senior official in any other company that works in MLM-system and/or distributes dietary supplements Discounting: If a Club Member or any other person of whom it can be verified that s/he is in connection with the Club Member distributes the products she/he purchased under the suggested selling price (26,57 EUR/ 23,62 GBP + VAT for a jar of Flavon max or Flavon kids or Flavon Green or Flavon Active or Flavon Protect or 35,45 EUR/ 31,49 GBP + VAT for a jar of Flavon max Plus+ ), she/he violates the interests of Flavon Group. 15