ORGANIZATIONAL AND OPERATIONAL REGULATIONS OF THE FLAVON MAX CLUB

Transcription

1 ORGANIZATIONAL AND OPERATIONAL REGULATIONS OF THE FLAVON MAX CLUB DATA: Name: Flavon International Ltd. Headquarters: Hova House, 1 Hova Villas, Brighton & Hove, BN3 3DH, UK Company Number: Director: Mr. Laszlo Gaal VAT number: GB address: info@flavongroup.com Central phone number: Fax number: Information Commissioner s Office registration reference: ZA These regulations form an integral part of the Flavon max Club Membership Agreement and Contract of Agency. I. Introduction Flavon International Ltd. as part of the Flavon company group distributes its products for independent Club Members of the Flavon max Club s network with the purposes: a) that the Members of the Flavon max Club improve their dietary habits with the high-quality dietary supplements distributed by Flavon company group and in this way improve their quality of life. The Club Members provide products primarily for their families, friends, and can recruit new Club Members. b) that the Club Members who take part actively 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 company 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. II. Definitions 1.1. 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 registers to the Flavon max Club at the website or sends a signed Membership Agreement of the Flavon max Club via post. A welcome letter and an identification number are sent to the new Club Member by Flavon company group after 1

2 her/his entry. Flavon company group divides Club members into two different groups: Consumer and Network builder Consumer: A Club Member who joined our system only to buy Flavon products for himself/herself and/or his/her family, but she/he does not build network and does not work as a sponsor, so she/he does 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 VIP Club Member/VIP pack: In case of purchasing 8 cartons of products at the same time the Club Member can purchase Flavon products for a favourable price of a VIP pack. The prevailing price list contains the price of a VIP pack. A Club Member that buys a VIP pack is called a VIP Club Member. During the 12 months following the month of achieving this status the VIP Club Member is entitled to receive and use a VIP badge; a dedicated place in the first row at the central events of Flavon company group; use his/her own website under the name she/he chooses, according to the conditions set in point 14.2.; have his/her own.@flavonmax.com address chosen by him/her according to the conditions set in point 14.3.; see the his/her own turnover and the turnover of his/her complete network have access to the Flavon Training Centre for 3 months from the date of purchasing the pack request further special reports in the online office; The VIP Club Member can be entitled to a leadership business position as well. There is no rebate for personal turnover after the VIP pack Leadership business position: Exclusively VIP Club Members are entitled to it, it is a second position, its ID number starts with L and it belongs to the VIP Club Member s position. The VIP Club Member s position and the Leadership business position together mean the Unified Club Membership. The leadership business position will be in the same status as the VIP Club Member s position which means that if the VIP Club Member s position is terminated for any reason, the belonging leadership business position will be terminated as well. Activity carton cannot be purchased for the leadership business position, the conditions of activating the position are on one hand that an activation carton was purchased for the VIP Club Member s position and on the other, that the turnover of the VIP Club Member s network reach at least 500 points on 6 levels in the given month apart from the turnover generated under the leadership business position. 2

3 1.6. Partner Club Member: The Club Member is entitled at registration to indicate a natural person with whom he/she will together participate at his/her Club Membership position. The indicated person is the Partner Club Member of the Club Member whose name will be displayed during qualifications, events together with the name of the Club Member. The conditions of commission payment must be fulfilled by the Club Member; he/she will receive the commission according to the rules set in chapter 3 of the current Organizational and Operational Regulations. The Club Member is responsible for the lawful activity of the Partner Club Member. The Partner Club Member is not an independent contracting partner of Flavon therefore an independent legal relationship is not formed Sponsor: a Club Member who helps others to join the Flavon max Club network properly through his/her 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 his/her network as much as possible, to assist and support his/her present group in proportion to his/her current commission, cooperation with Flavon and his/her group Sponsor line: a chain of Club Members; a particular Club Member, her/his active sponsor, the active sponsor of his/her sponsor, and so on. All sponsor lines start from Flavon company group. The sponsor line is not broken even if any of its members is inactive, quits or should be excluded from the network. In this case the sponsor line continues to function by leaving out the inactive Club Member Group: a consumer network started/sponsored by a Network Builder Activity carton: the first carton, equalling 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 the Club Member who fulfils actively his/her sponsorship obligations and will do everything reasonable to market the products and enlarge his/her group. This implies that she/he will participate, at periodic intervals, in the manifestations and events organized by the Flavon company group; holds presentations if he/she is asked to, will recruit new Club Members to Flavon max Club and will keep in touch with the Flavon company group. via telephone, or in person. The expected degree of activity is 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, and which has signed the Contract of Agency with Flavon International Ltd or a natural person who has signed a Membership Agreement with Flavon International Ltd Performance in a given month: total purchases of an active Club Member, for which their related orders and remittance are submitted to Flavon company group by the closing business day of the month which can be viewed on the website under the Monthly closing 3

4 dates link. Provided a report, sum of money, membership agreement, etc. arrives at Flavon International Ltd. after the above mentioned monthly closing time (punctually to the hour), it will be accounted and taken into consideration by Flavon International Ltd. 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 or the activity carton in a given month Qualification points/quick Start points: The calculation method of the necessary amount of qualification points defined in Leadership positions and other type of regulations: the points gained based on the Quick- Starters on the first 3 active levels of the Club Member in question Carton: Flavon International Ltd. sells the Flavon products in cartons which contain 3 or 4 jars depending on the type of the Flavon product Commission: an allowance given to the active Club Member after his/her performance in the given month after the given month-closing, in the form of basic or leadership commission. There are two types of commission in the Flavon max Club: differential bonus and extra differential bonus Commission base: The base of commission payment is not equal with the consumer price of the Flavon products. The prevailing price list of Flavon International Ltd. contains the amount of commission base. Based on the sale of 1 carton product the Club Member is entitled for commission calculated on 1 commission base Monthly closing dates: The month-closing dates listed under the Monthly closing dates menu on the website of Flavon Price for Club Members: the current sale price of one carton of product for Club Members can be found in the prevailing product price list of Flavon International Ltd. which can be viewed on the official website of Flavon Preferential price: The Club Member based on his/her decision can purchase products at a preferential price instead of taking out his/her commission generated on the commission statement. The preferential prices can be found in the prevailing price list of Flavon International Ltd 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 1. is entitled for a commission which is at least a price of one carton of products multiplied by 12 times, in two successive months, or 4

5 2. is given a guaranty of payment by the Elite Club Member above him/her, whose group has reached at least Elite level turnover in the previous month. The CP owner and Flavon International Ltd. 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 and pays for after they are sold. The methods of reporting to Flavon International Ltd are either an account template send by the owner or reporting through his/her online office. The CP owner transfers the remittance of sold products to the bank account of Flavon International Ltd. 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 cannot use it as his/hers. If the CP owner does not transfer the received money to Flavon International Ltd. without delay, she/he will commit a serious breach of contract, which will entail the termination of the CP Agreement and any other contract between the CP owner and Flavon International Ltd with immediate effect. Flavon International Ltd. will make out and send invoice to customers who are reported by the CP owner. 3. A new Club Member can also become CP owner without the fulfilment of above conditions provided she/he pays in the consideration money of 12 cartons of product to Flavon International Ltd. as caution when ordering Online office: The Club Member with the help of his/her ID number and password which was given at registration can sign into the on-line office which is available under the link The Club Member can get up to date information about his/her own and his/her network s work, order product, manage his/her CPs, download the necessary documents and get timely information of Flavon company group through the online 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 International Ltd. in a written form that the details of their own network - including the name of the Club Member, his/her purchases, and the date of joining should be unavailable for their upper sponsors. In case of a positive decision about that Flavon company group can inform the upper leaders without any explanation about the restriction of use of their on-line office. Flavon International Ltd. can revoke the use of the on-line office any time without any explanation, as ensuring the use of the on-line office is not an obligation of Flavon International Ltd. Flavon International Ltd. only would like to help and make the work of the Club Members easier with it. The Club Member is liable for taking all the information she/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; his/her close relatives and anyone who lives in the same household and the immediate termination of their contracts with Flavon International Ltd. 5

6 III. Rules of using up the commission 1.) Commission: A commission to the Club Member is paid out by Flavon International Ltd only if there is a personal purchase above the activity carton, or there is purchase in his/her group. 2.) Commission statement: Flavon International Ltd. 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 International Ltd will send the net 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 to inform Flavon International Ltd about the discrepancy/discrepancies encountered. We will not take into consideration any complaint received thereafter. The payment of commission follows this according to the regulations in this document. 3.) Deadline for collecting commissions: It is not possible to collect commission retrospectively after the given business year (1st January 31st December) of Flavon International Ltd is closed. The commissions realized in December can be collected until 31 December the following year. 4.) Types of Commissions: 65% of the sum derived from the commission base can be paid back to Club Members as commission, 60% as basic commission and 4%+1% as leadership bonus. Basic commission cannot be blocked, while leadership differential bonus can be blocked. 5.) Methods of using up the commission: A) Commission payment: If the Club Member does not wish to purchase products at a preferential price then the remaining amount will be paid out to the Club Member by Flavon group accordingly to the regulations set in section III. B) Preferential price: If the Club Members does not want to receive his/her commission then she/he can decide to purchase Flavon products at a preferential price set in the price list of Flavon International Ltd. 6

7 A) Commission payment 6. Entitled for commission payment: 6.1. Network builders who do not live in the United Kingdom and sign a Membership Agreement with Flavon International Ltd. and send the correctly filled and signed Commission Payment Form back to Flavon International Ltd. (in which they agree to the payment of taxes and contributions and fulfilment of other obligations according to the regulations of their own country); 6.2. Network builders who live in the UK and sign a Membership Agreement with Flavon International Ltd. and send the correctly filled and signed M9 Form (signed by 2 witnesses as well) back to Flavon International Ltd. (in which they take notice of the fact that payment of all taxes and contributions is based on the sent commission statement and they will receive the amount of commission lowered by those); 6.3. The agent/company of the Club Member which has signed a Contract of Agency with Flavon International Ltd. and the company a. is a business organization with or without legal personality, a self-employed person, or another form of association named in the Civil Code verifiable via entrepreneur s license, registration form, Company s Registry or court registration b. the Club Member has a right of membership or right of representation in the company defined in point 1; c. takes a proper professional activity that enables it to work as an agent; d. does not work for any other company with the same commercial agent activity Further requirements for Agents with seats abroad: 1. in case of agents registered inside the community, having a community VAT number and 2. full compliance with the rules of the country of the seat is required. 7. The requirement for paying out commissions of the reference months: a. The Club Member purchases the activity carton in the reference month; in case of Club Member with Quick Start till the last working day of the month, in case of other Club Member till the 25 th day of the reference month; b. Active (cf. above for the definition of active Network Builder) and regular participation in the network of the Flavon max Club. c. fulfilment of other conditions indicated at certain types of commission. If the deadline of purchasing the activity carton (25 th day of the reference month) is a weekend, or a public holiday or national holiday then the deadline of purchasing the activity carton is the first working day following that. Activity cartons purchased after deadline will be automatically registered by Flavon International Ltd. for the next month as activation. 7

8 Exception to the rule of purchasing activity carton till the 25 th of the reference month (besides the Club Member with Quick Start) is the Club Member who registers for autoship in the reference month; in that case the deadline of purchasing his/her activation carton is the last working day of the reference month 8. The amount of the commission: 8.1. To Network builders who do not live in the UK: the amount indicated on the Commission Payment Form will be transferred 8.2. To Network builders who live in the UK: Flavon International Ltd pays the emerging taxes, contributions indicated on the Commission payment form to the authorities and transfers the commission lowered by these payments to the Network builders 8.3. To Agents: the Network builder is entitled to his/her commission according to the Commission account sent to him/her by an invoice issued by the agent to Flavon International Ltd. B) Preferential price An active Club Member who is entitled for commission is entitled for purchasing products at a preferential price if he/she would not like to receive his/her commission: In case of purchasing products at a preferential price Flavon International Ltd. sells Club Members the Flavon products at a preferential price which is listed in the price list. At the same time Flavon International Ltd. reduces the Club Member s commission with the amount of net commission belonging to the preferential price listed in the price list. Club Members can purchase a maximum of 3 cartons of products at a preferential price in a given month. If a Club Member does not wish to take advantage of the possibility of a preferential price and also does not wish to receive his/her commission, then he/she is entitled to purchase products at a preferential price any time within 6 months. 8. 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, can purchase 2 cartons of products for the price of 1 carton in the given month. 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, can purchase 3 cartons of products for the price of 1 carton in the given month. 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, can purchase 4 cartons of products for the price of 1 carton in the given month. 8

9 /These products are intended for personal consumption, giving samples, they cannot be sold and receive points after them. / IV. Rights and liabilities 1.) Liabilities of the Network builder or Agent entitled to commission: - to fully comply with the content of the, Membership Agreement, current Organizational and Operational Regulations, General Terms of Use for the Use of the Online Office, Code of Ethics and other regulations in concern; - should there be any change in his/her or the Agent s personal or private data, s/he is liable for sending a written notification of that without delay (while respecting data protection rules) to Flavon International Ltd - if the o Network builder or o Agent or its attached company, or any member or representative of the Agent wishes to directly or indirectly join another direct selling company and aims at signing a contract similar to the present one with another company, she/he will have to obtain the prior written consent of Flavon International Ltd. 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. - to make any rational, expectable efforts for the fulfilment of his/her job. 2.) Termination/Cancellation of the Membership Agreement and Contract of Agency: - any party can denounce the agreement by the end of the reference month, by submitting a written denouncing declaration. Its notice is 1 month in the first year of the contract, 2 months in the second year, 3 months in the third year and above that; - if a breach of contract occurs, one of the parties can terminate the Membership Agreement and 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, the current Organizational and Operational Regulations, or the existing legislations. From the side of the Club Member or 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 company group; 9

10 o if the Network builder, 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 International Ltd. If the contract of Agency has been terminated, the Membership Agreement of those Club Member(s) will also be terminated who have representation right or membership in the concerned Agent. A) Types of basic commission: V. Types of Income 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 except a VIP pack-, 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. 2. Quick Start: in the entry month of the new Club Member and the month following that after his/her activation carton (3 points) the sponsor line is entitled to % commission on 3 active levels. Flavon International Ltd pays 20% individual rebate to the quick-starting Club Member for every carton purchase except the VIP pack - above the activity carton. In this case, 40% is divided on the sponsor line, since Flavon International Ltd has already paid 20% as personal rebate from the 60% basic payback. 3. Income by levels: every active Club Member is entitled for a commission of 5% by levels after the activity cartons of Club Members in his/her group who got through their Quick Start period on 12 active levels. Flavon International Ltd 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. VI. Leader ranks and leadership bonuses 2. Leader ranks: There are 8 different leadership ranks in the Flavon max Club and the 7th rank Presidency Club Member- 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. 10

11 In case of qualifications when counting points, Flavon company group. takes into account the group turnover on 6 active levels of the Club Member, plus 25 points of the first 12 cartons in case of personal purchases. 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 company group for free of charge 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, 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 and 2% leadership bonus for the turnover of her/his 12 active levels, apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. 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, 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 and for 3% leadership bonus for the turnover of her/his 12 active levels, apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. 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, apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. 11

12 The condition of paying out the leadership bonuses and participation on national events is collecting 40 qualification points on 3 active levels in the given month or months. 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 and for 4% leadership bonus for the turnover of her/his 20 active levels apart from the part which is blocked by a Club Member of leader rank who also qualified in the given month. In the case of Presidency Club Member ranks it is not necessary to collect quick start points on 3 levels in order to pay 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 fulfils 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 or 12 active levels depending on the fulfilment of the conditions fixed in point 5.2), 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 fulfils the requirements of Presidency Club Membership and has at least 3 Presidency Club Members on her/his 6 levels on different lines (considering the closest to him on 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, which is not blocked by a Member qualifying for a leader rank in the given month. d. Sapphire Presidency Club Member: an active Network Builder who fulfils the requirements of Presidency Club Membership and has at least 5 Presidency Club Members on her/his 6 levels on different lines (considering the closest to him on 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 12

13 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, 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 fulfils 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), which is not blocked by a Member qualifying for a leader rank in the given month. 3. Losing a leader rank: Those Elite, Diamond Elite, Presidency leaders lose their leader ranks after the monthly closing who are inactive in two consecutive months between 1st January and 31st December of the year following the qualification or do not buy their personal activity carton four times between 1st January and 31st December of the year following the qualification. 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. 4. Blocking leadership bonus: The leadership bonuses (4% + 1%) can be blocked. 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 company group s partners of leading ranks, who make a major contribution with their behaviour in the network to the appearance and image of Flavon max Club and its good reputation. In case a Club member of any leading rank harms the good reputation of the Flavon max Club by statements or behaviour, or violates the Company s Code of Ethics, Flavon International Ltd is entitled to deprive the leading rank from the Leader for a period of 1 to 6 months depending on the seriousness of the given behaviour, during which the Leader is not entitled for the leadership bonus of that period. 13

14 The minimum order is one carton of product. VII. Product Ordering a. Methods of Ordering: 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 International Ltd. The ordered products are shipped by Flavon International Ltd via a courier service. Current delivery costs can be found on Information on the conditions of home delivery to countries of the European Union is available on the central telephone numbers of Flavon International Ltd: , on the fax number, or on our website ( The ordered products are shipped only after their price arrives into the bank account of Flavon International Ltd. If the price arrives on a given working day till 5pm, 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 International Ltd, 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 company group closes the month. For further information please visit our website and click on Monthly closing dates. Provided a report, sum of money, Membership Agreement, etc. arrives at Flavon company group after the above mentioned monthclosing time (punctually to the hour), it will be accounted and taken into consideration by Flavon company group for the following opened month. If the Flavon max Club Membership Agreement is concluded or the Flavon max products and other products are purchased outside of the offices/shops of Flavon International Ltd, or it is made between parties in distance (via CP, online office or phone) the Club Member is eligible for withdrawing from the contract or order in the next 14 working days after having signed the contract or receiving the product without giving a reason by sending a written confirmation on her/his withdrawal to Flavon International Ltd (Hova House. 1 Hova Villas, Brighton & Hove, UK, GB-ENG BN3 3DH, info@flavongroup.com). The Club Member can practice his/her right to withdraw by using the sample withdrawal form or with a clear statement. The Club Member practices his/her right of withdrawal on time if she/he sends his/her statement before the above mentioned deadline. After Flavon International Ltd. received the statement in case of mails after receiving it will confirm the arrival of the confirmation. In this case Flavon Group will delete this Club Member in the database. The Club Member is obliged to give the products back to Flavon International Ltd. in undamaged conditions within 14 days in case of withdrawal. After receiving the product or the proof of that it has been sent back within 14 days the price and other services (delivery cost) will be refunded the same method as the payment was made to the Club Member. Due to the method of refund the Club Member can t be charged with any extra costs. The Club Member pays the cost of resending the product. The Club Member loses his/her right to withdrawal if 14

15 he/she cannot give the product completely back to Flavon International Ltd. in undamaged, unopened conditions. 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. VIII. Guarantee, Warranty Flavon International Ltd. guarantees and warrants to its Club Members that the products distributed by Flavon company 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 right, Flavon International Ltd. exchanges the product free of charge. If the quality complaint is submitted after the expiry date of the product, we cannot exchange the product. IX. 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. a. The principle of one member one position : Every Club Member can only have one position in the Flavon max Club system. The positions of spouses, life partners, or relatives living in the same household can consistently be handled as one position (Unified Club Membership) and they can be placed exclusively on the same sponsor line, sponsoring each other. The regulations on the Unified Club Membership of the present Organizational and Operational Regulations must be applied as it would be one position. In case of any of these positions of Club membership will be terminated for any reason the Club membership will be terminated automatically regarding the side position too and the Contract(s) of Agency with the Club Member s enterprise(s) of all positions will be terminated as well. If it comes to the notice of Flavon International Ltd. that the spouse, life partner or relative living in the same household of any of our Club Members registered to a different sponsor line then the mentioned Club Member will be transferred below the position of his/her spouse, life partner, or relative living in the same household. b. 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 International Ltd, which the Club Member must apply for in writing. The condition of approving a position transfer is that the new Owner commits to purchase his/her activity carton on his/her position in the first three months after the position transfer (he/she registers for autoship). If the new Owner fails to comply with this obligation then he/she commits a serious breach of contract and the second point of chapter 4 in the present Organizational and Operational Regulation will come into force. Flavon International Ltd. will decide in 30 days after the submission of the request. Unified Club memberships can only be transferred together. When the club membership status is transferred, the position of the former Club Member is terminated, 15

16 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 after the transfer. 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. c. 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 International Ltd. may reject any membership status exchange request. If there are grounds for assuming that the underlying intention is sponsor shift, structural modification or regrouping, the Club Membership terminates. d. Sponsor change: a Club Member can change her/his sponsor only with the permission of Flavon International Ltd. The Club Member should submit a written request on the sponsor shift, for which she/he attaches the signatures of his/her up-line sponsors on 12 levels. If the sponsor line is not that long, the signatures must be collected up to Flavon company group inclusively. Unified Club Memberships can only request sponsor change together. The change-requesting Club Member will be deleted from his/her earlier position and will be allowed to join his/her 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 International Ltd. may reject any sponsor shift request when there are grounds for assuming that the underlying intention is structural modification or regrouping. e. 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 International Ltd. 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 does not have the chance to get it back, but s/he can become a Sponsor again by building a new group. X. Termination of Membership Agreement a. Any party can denounce the Club Membership Agreement with the end of the month 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 re-join 16

17 her/his former Sponsor exclusively as a new Club Member, but she/he cannot get her/his group back. b. Exclusion: If a breach of contract occurs, Flavon International Ltd. may, at any time and with immediate effect, terminate the Membership Agreement and/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 International Ltd. terminates the Contract of Agency concluded with the Company represented by the Club Member with immediate effect and can terminate concluded with those Club Members who are representatives of the Agent. 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 Member will not fulfil her/his obligations, will not maintain relations with Flavon company group or will not cooperate. c. Automatic termination: A Club Member who is inactive in 12 consecutive months, i.e. does not have a minimum monthly purchase of 1 carton (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 International Ltd. 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. XI. 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. XII. Other MLM networks If a Club Member or a company at which the Club Member is representative, member or employee wishes to join directly or indirectly another direct selling company and aims at 17

18 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 International Ltd. 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. XIII. Discounting It harms the interests of Flavon International Ltd. if the Club Member or anyone who can be connected to him/her sells or promotes the products purchased by him/her on a lower price than in the price list. XIV. Advertising, promotional materials 1.) Advertising, promotional materials: Club Members can only use publications, prospectuses, information sheets, brochures, books, DVDs and websites released by Flavon company group. These materials cannot be altered and must be applied for proper use and purposes. Creation of own materials and advertisements should be approved by Flavon company group in any case. It is forbidden for Club Members to state that the product has healing or preventive effect and provide misleading information. Everyone is free to speak about her/his own experiences in connection with the products. Any kind of statement to the press or media (either in written or electronic form) in connection with the products or the network is forbidden without the written permission of Flavon International Ltd. Club Members take all consequences of their unfair market behaviour. With regard to this behaviour, Flavon International Ltd. or the Flavon max Club holds no responsibility. 2.) Club Member webpage: Club Members are given the possibility to create a general presentational webpage (Club Member webpage) through the Online Office. The content of the Club Member webpage can be edited in the settings of the Online Office. Web pages of this sort can be accessed under the domain. (e.g. Flavon International Ltd. shall assume no responsibility for the contents of Club Member web pages. Provided a Club Member publishes website contents that are contrary to law or the Flavon International Ltd. Organizational and Operational Regulations, Flavon International Ltd. is eligible for modifying the website content. In the event of serious or repeated infringements Flavon International Ltd. shall delete the presentational webpage from the system and terminate the Member s membership status. 3.) Flavon Address: Network Builders of leader rank have the opportunity for undefined period, VIP Club Member for 1 year to conclude an Address Licensing Contract with Flavon International Ltd., according to which contract it operates an electronic 18

19 mail address starting with anything and ending with flavonmax.com (e.g. XV. Cross-line sponsoring A) If a Sponsor is aware of the fact that her/his potential new Club Member is already a Club Member of the Flavon Max Club in another sponsor line, and in spite of it she/he sponsors her/him as a new Club Member, she/he violates the company s interests. The sponsor who takes part in cross-line sponsoring and with that in fictional contracting, will lose his/her right for commission for 1-6 months depending on how many cross-line sponsoring she/he takes part in, after Flavon International Ltd. becomes aware of the breach. In serious cases Flavon International Ltd. has the right to exclude the sponsor from the Club, so the Membership Agreement and the Contract of Agency will terminate because of breach of contract. B) Should a Club Member join the system more times by a new, fictional contract, she/he can retain her/his first position exclusively, and as soon as the Flavon International Ltd. notices the irregularity, the company will delete him/her from her/his other positions and the Club Member loses his/her group and commission on that line. If the Club Member violates this point again, Flavon International Ltd can rightfully terminate his/her Membership Agreement and Contract of Agency due to serious breach of contract. XVI. Trainings Participating in the trainings organized by Flavon company group is free in every case. Conditions of participating in certain special trainings are published by Flavon company group. at the website. Costs of travel to and staying at the trainings are covered by participants themselves, unless the Flavon International Ltd. takes these costs over according to the fulfilment of the conditions defined in the announcements. Applying to the trainings and booking rooms are possible through Flavon International Ltd. s Customer service, through telephone, in form, or personally until the last work day of the week before the event the latest (depending on the amount of free accommodation). Accommodation booked related to the trainings are ordered by Flavon company group under its own name from the provider of accommodation, and they are invoiced further on to the participants. Therefore, participants are obligated to pay the price of the accommodation to Flavon company group. on the day of the last working day of the week before the event the latest. In case the above mentioned liabilities are not fulfilled, Club Members will be excluded with all of its other conclusions. 19