MELILEA Rules & Regulations

01 Becoming A MELILEA ENTREPRENEUR (ME)

1.1 This Agreement applies to all MEs of the Company. All MEs are bound by the terms and conditions appearing in all the Company documents which cumulatively shall be called the ‘Terms and Conditions’. They encompass and apply to all the terms and conditions contained in the ME’s Application and Agreement, Business Manual, Business Plan, International Distribution and Sponsorship Agreement, Preliminary Application and Agreement For MEship Application and Agreement and any other agreements that may arise and as modified from time to time. The terms of each of those documents are incorporated by reference into this Agreement and the terms of this Agreement are incorporated by reference into the said agreements. The ME must comply fully with all terms of this Agreement.

1.2 MELILEA (M) SDN BHD (hereinafter referred to as the Company) are companies incorporated in their respective companies under the laws of the respective countries. To be an authorised Distributor (hereinafter referred to as MELILEA Entrepreneur, ME) of the Company, the applicant shall submit to the Company a duly completed and signed copy of the Company ME’s Application and Agreement form for the respective country together with the stipulated payment for an official Business Manual. A ME agreement must be filed in the country of residence, and if required, a ME must provide proof of residency and Distributorship (hereinafter referred to as MEship). An incomplete agreement or one with false and inaccurate information or agreement for the wrong country will be considered invalid. Changes of information must be informed to the Company immediately. The ME must thereafter provide the Company with their bank account number and branch which must be either the Malayan Banking Berhad, Hong Leong Bank Berhad or Public Bank Berhad. The Company will not issue any bonuses should the ME fail to do so. No other purchases are necessary.

1.3 The Company reserves the right at its sole discretion to accept or reject any application for MEship without having to provide reasons for acceptance or rejection. Accepted applicants will be issued with a ME Authority Card.

1.4 No one who has had a bankruptcy petition presented on him or is a bankrupt or who is under the age of eighteen (18) shall be accepted as a ME.

1.5 The Company only accepts Official ME’s Application and Agreement for MEships in the name of individuals. Applications in the names of corporations or partnerships will not be accepted unless expressly authorised in writing by the Company but will not be permitted in any event if it has as its proprietors, partners, shareholders or directors, a person who is already a ME with the Company.

1.6 A husband and wife team shall apply collectively as one ME. If both husband and wife are MEs prior to marriage, they can decide which MEship to retain, or operate both the MEships, each of which will be maintained in its original line of sponsorship, provided that their individual MEship has not lapsed or been terminated. The restriction of obtaining separate MEship by married couples as set out above shall not apply to the lawful second, third or fourth wives of the ME.

1.7 The duration of MEship is for a period of 12 months as stated in the authority card. The Agreement may be renewed annually for a period of 12 months. Renewal is not automatic and must be made not later than three (3) months before the expiry of the term. The Company is entitled in its absolute discretion to refuse to renew any such renewal. No renewal fee shall be charged. In the event of non-renewal, the MEship is deemed to be automatically terminated at the expiry of the term of MEship. The ME shall not then deal with the Company’s products in any manner whatsoever.

1.8 A person is not entitled to hold more than one (1) MEship in the Company at any one time nor have or own any financial or beneficial interest (directly or indirectly) in the MEship of another in the Company.

1.9 A person registered as a ME becomes an independent Contractor/businessman and is not and neither can represent himself as an employee, partner, agent, franchisee, joint venturer or legal representative of the Company.

1.10 In order for the Company to provide support for the MEship and in the promotion of the Company name, the ME authorises the Company to transfer and disclose confidential and/or personal information in connection with the ME and his MEship to all the Company’s group and affiliated companies, the Company’s MEs, the Company Lifestyle Magazine and mass media. The ME authorises the Company to disclose information, even of a confidential nature relating to the ME and his MEship to government agencies or regulatory bodies upon their request or if required by law. This right shall continue after termination of the MEship. All such copyright shall belong to the Company which shall have the right to publish the same free of hindrance or obstruction from the ME.

02 General Guidelines for MELILEA ENTREPRENEUR (ME)

2.1 The retail prices of all the Company products are fixed and no ME shall undercharge or overcharge customers.

2.2 Price undercutting, price overcharging and/or double sponsoring of MEs shall not be allowed and can cause the termination of the ME. The Company shall investigate upon receipt of such written complaints. In the event that a complaint is found to be true the following further courses of action may be taken:

2.2.1 The ME who signs up other MEs or spouses of other groups may have his/her MEship terminated or he/she may be given a stern and final warning.

2.2.2 All MEs involved shall be transferred back to their original sponsors/lines.

2.2.3 All bonuses, incentives or benefits previously paid to the wrongful ME will not be repaid to the rightful ME.

2.2.4 The offender shall sign a good conduct declaration should a warning be given. The decision of the Company management committee on undercutting, overcharging and/or double sponsoring shall be final.

2.6 A ME shall not have simultaneous interest, whether directly or indirectly or be involved in any activities of any other Direct Selling company or non-Direct Selling company that sells similar or competing products. A ME is deemed to be directly or indirectly involved in the activities of any other Direct Selling or a non-Direct Selling company if he and/or his spouse is/are;

2.6.1 Employees, proprietors, partners, shareholders or directors of another Direct Selling or a non-Direct Selling company selling similar or competing products; or

2.6.2 MEs of another Direct Selling or a non-Direct Selling company; or

2.6.3 Are involved in selling, distributing or promoting products or recruiting MEs for another Direct Selling or non-Direct Selling company selling similar or competing products either as a member or non-member of the other company or inducing MEs of the Company to attend or join the other company.

A breach of this provision is considered a serious breach and will result in termination of the MEship.

2.7 A ME must not make use of or carry out any activities in any of the Company’s functions, seminars, meetings, programs, offices, distribution centers, Inner and Outer Beauty Centers or service centers to promote or sell his own products or the products of another company or person.

2.8 The ME shall not declare, imply or represent that he is an employee and/or has any employment relationship with the Company.

2.9 The ME shall have no authority or power to bind the Company or make an agreement in the name of and create a liability against the Company in any way or for any purpose.

2.10 A ME may only conduct business in a country which has been officially approved and officially opened for business by the Company. A ME residing in one country can market products and only recruit new MEs residing in the same country. There are no territorial limits within an approved country. A ME should not declare or represent to anyone that he/she has exclusive MEship or franchise rights for any territory.

2.11 A ME shall present the Company's products and Business Plan to potential customers or MEs in an honest and truthful manner and shall not make any false or misleading representations in his/her enthusiasm to sell the Company's products and on no account whatsoever shall the ME use racial, political, religious or other sensitive issues to sell the Company's products. A ME shall not use external literature in connection with the Company. Any liability arising from non-compliance thereof will not be the responsibility of the Company.

2.12 A ME must demonstrate and explain clearly to the customer and his downline the proper usage and effects of the Company's products and shall not on any account whatsoever make any false or misleading statements regarding the description, usage and efficacy of the products. In the event the ME makes any false or misleading statements, the ME shall be liable to indemnify and keep the Company indemnified against any losses or damages suffered by the Company.

2.13 A ME shall not provide any gifts, discount vouchers or other promotional gimmicks in the sales of the Company's products other than those approved by the Company.

2.14 A ME shall not on any account or under any guise whatsoever sell, distribute or enter into any agreement to sell or distribute the Company products under the name of another ME whether or not the other ME consents to such sale or distribution under his name. A ME shall not entice or make any arrangement with his downline or the downline of another ME whereby the sales of his downline or the downline of the other ME is passed off as sales of the ME.

2.15 A ME may not, either when a ME with the Company or not, induce any other MEs to leave the Company or join another company as described in clause 2.6 above. This includes but is not limited to causing one ME to terminate his agreement with one sponsor and then taking up MEship with another sponsor. The Company reserves the right to terminate the MEship without requesting the ME to show cause and in addition may claim damages from a ME that causes such inducement.

2.16 A ME shall not use the Company network to promote the sale or use of any products, programs or services other than those offered through the Company network.

2.17 A ME shall not sell or distribute any of the Company's products where the shelf life of the products has expired.

2.18 A ME shall not purchase the Company’s products from one country and thereafter resell the said products in a different country. This applies whether or not the product is in the product list of the Company in the country concerned and whether or not the ME makes a profit from the sale. This clause applies to all related companies of the Company.

2.19 A ME shall not, whether orally or in writing, state negative facts about the Company, its shareholders, directors, officers, agents, products or engage in unethical conduct prejudicial to the interest, image or reputation of the Company and its products. This prohibition applies even after his MEship with the Company has ended.

2.20 The ME shall at all times work diligently to protect and promote the interests of the Company and to assist and co-operate with the Company to maintain price stability of the products in the market and to act loyally and faithfully toward the Company in all matters.

2.21 The ME shall not at any time during or after the term of his MEship, divulge, communicate or allow to be divulged to any person, firm or Company, the use or exploitation for any purpose whatever any of the trade secrets, confidential information, knowledge, financial or trading information relating to the Products, Business Affairs or method of carrying on business which the ME may receive or obtain as a result of entering into this Agreement other than to persons who have signed with the Company in a similar capacity.

2.22 The restriction contained in Clause 2.21 hereof shall continue to apply after the expiration or sooner termination of this Agreement without limit in point of time but shall cease to apply to information or knowledge, which may properly come into the public domain through no fault of the ME.

2.23 Not to permit any person to act or assist in the Business until such person has signed a letter of undertaking pertaining to matters mentioned in Clause 2.21 above.

03 Corporate/Partnership/Firm MEships

3.1 Applications in the forms of Corporate, Partnership or Firm names will not be accepted unless expressly authorised in writing by the Company. In the case of a corporation, such approval, whether provided in writing in the approval form or not, will always be conditional upon the Directors and shareholders of the company being personally liable to the Company in the event of any claim, by way of legal suit or otherwise, by the Company against them.

This personal liability applies even though the said Directors and shareholders have not provided any written undertaking or personal guarantee. For this purpose, previous and present Directors and shareholders of the company shall be liable in so far as they held such positions as at the date of the commission of the wrongful act. A personal guarantee is required from the directors of the company, without which the MEship agreement may be voidable at the discretion of the Company.

3.2 If approved, the application forms must be signed by an authorised officer of the corporation or as required by the company’s articles of association, or in the case of a partnership, all partners of the firm.

3.3 In the event that any director, shareholder, partner or sole proprietor breaches any terms and conditions, the breach will also be deemed to be that of the company, partnership or firm. Both the individual ME’s MEship and the MEship of the company, partnership or firm to which he belongs to will be terminated.

04 Termination, Resignation & Suspension of MEship

4.1 The terms of this Agreement creates a purely contractual relationship between the Company and the ME and under no circumstances creates any quasi-contractual relationship nor any equity in the Company. The contract may be terminated by either the Company or the ME. The use of the words ‘termination’ or ‘resignation’ by the Company or the ME indicate the same meaning and carry the same consequences as stated in this agreement. Any letters of resignation of the MEship by the ME will be deemed to be a letter of termination of the MEship.

4.2 The Company reserves the right to suspend, demote or transfer the entire downline or part thereof to another group and terminate the MEship of any individual and in all cases may do so without any compensation and without assigning any reason and may withold the rights, privileges, bonuses, positions, benefits, commission, monies or incentives or take any action deemed appropriate in the event a ME breaches any of the terms and conditions contained in the ME’s Application and Agreement, Business Manual, Business Plan, International Distribution and Sponsor Agreement, Preliminary Application and Agreement for MEship, the Direct Sales Act 1993 and any other Agreement that may arise and as modified from time to time. Any termination or action taken shall be final and not challengeable in any court of law. The Company reserves the right to terminate without requesting the ME to show cause and in addition may claim damages from a ME.

4.3 A ME may terminate his MEship with the Company at any time.

4.4 Where the spouse of the ME does or carries out any act which would result in a breach of any law or regulation governing direct sales or would result in a breach of any provisions in this Agreement which would entitle the Company to suspend, demote or terminate the appointment of the ME, then the actions of the spouse shall be deemed to be the actions of the ME and all rights and remedies that the Company may have against the ME under the terms and conditions, in law or equity shall be enforceable against the ME as if the actions of the ME's spouse were that of the ME.

4.5 In the following cases Clause 4.2 above will strictly apply;

4.5.1 If the ME fails to pay any amount due under this Agreement on the due date or on demand if so payable.

4.5.2 If the ME commits an act of bankruptcy or being a firm, if any member of the firm commits an act of bankruptcy or being a Company, a petition for winding up is presented (except voluntary liquidation for the purpose of reconstruction).

4.5.3 If the ME enters into any composition or arrangement with or for the benefit of the creditors of the ME or allow any judgment against the ME to remain unsatisfied within fourteen (14) days thereof or has any distress, execution or other process of a Court of competent jurisdiction levied upon or issued against any property of the ME and such distress, execution or other process as the case may be is not satisfied by the ME within seven (7) days from the date thereof.

4.5.4 If the ME engages in any conduct which in the opinion of the Company is prejudicial to the Company’s interest or business.

4.5.5 If a Receiver and/or Manager is appointed to receive and/or manage the assets, undertakings or properties of the ME or any part thereof.

4.5.6 If the ME shall become mentally ill or is unable or prevented through any cause or reason from carrying out his duties as herein provided for any period exceeding four (4) weeks.

4.5.7 If the ME shall be convicted of any criminal offence and sentenced to a term of imprisonment exceeding three (3) months or a fine exceeding RM500.00 or both.

4.5.8 If the ME fails to qualify for Performance Bonus for a period of three (3) consecutive months during his term of appointment.

4.5.9 If the conduct and actions of the ME adversely affects or is likely to adversely affect the interests, image and reputation of the Company and its product.

4.5.10 If in the opinion of the Company, the ME is not a fit or proper person to hold a MEship.

4.5.11 If the ME's application form was found to contain statements, information or declarations which were false, misleading or inaccurate.

4.6 In any event and without prejudice to this Agreement, the Company reserves the right to immediately terminate the ME as the Company deems fit. This will be necessary if in the Company’s sole opinion the damage caused by the ME’s action is serious and has caused or is causing the Company extensive damage.

4.7 Any termination or prior determination of this Agreement shall be without prejudice to any claim or right of action the Company may have against the ME in respect of any antecedent breach of the terms and conditions herein contained.

4.8 Upon termination or resignation of the ME either by the Company or by the ME, he will not be allowed to use any information whether of a confidential nature or not, pertaining to the Company. The ME cannot use any of the Company’s company records, ME list or other information for any other purpose whatsoever. The ME may also not induce any ME from the Company into leaving the Company or be involved in other direct selling or non-direct selling companies. The ME herein understands and agrees that any such conduct will render the ME liable to termination of his MEship and also damages against the Company.

4.9 In the event that the Company terminates a ME or a ME terminates or resigns from his MEship, his individual MEship and all other MEships in which he has a pecuniary interest will simoultaneously be terminated.

4.10 A ME whose agreement expires can apply to rejoin as a new ME.

4.11 A ME who resigns may reapply to rejoin as a ME after 3 months of inactivity from the date of resignation. Inactivity means non-involvement in any of the Company's direct or indirect business or conduct.

05 Termination and Suspension Consequences

5.1 Upon the termination of this Agreement either by effluxion of time, notice, breach or otherwise:-

5.1.1 The ME shall forthwith surrender his Authority Card to the Company and shall not conduct, sell or distribute or otherwise deal with the Company's products in any manner and on any account whatsoever.

5.1.2 All unfulfilled orders for the Products to the ME shall automatically be deemed to be cancelled;

5.1.3 All rights granted by the Company to the ME shall immediately be relinquished;

5.1.4 The ME shall immediately settle all debts due to the Company;

5.1.5 The ME shall forthwith cease carrying on the Business.

5.1.6 The ME shall not be entitled to any claims for rights, privileges, bonuses, positions, benefits, commission, monies or incentives which may or would have been accrued to the ME from the time of the misconduct till the period of termination and thereafter, whether by the ME or by the Company. This is without prejudice to any right of legal action the Company may have against the ME. In the event the benefit is accumulated and is to be paid only on year end, the ME will also not be entitled to such benefit for the year in which the misconduct is established.

5.1.7 In the event of suspension, any bonus, commission, incentive, money or other benefits accrued to the ME during the term of suspension will not be payable. The same will not be payable in the event of the suspension being uplifted.

5.2 In the event that a ME has been terminated, his downline MEs (if any) shall be transferred upwards to his immediate upline or any upline as the Company deems fit, subject always that the Company shall be entitled to withold or suspend the transfer of the ME's downline to his upline until such time as the Company deems fit. No recalculation of bonus during the transition period will be allowed. In the event that any such termination is found to be invalid for any reason, the Company reserves the right to reverse the above transfer and all such MEs benefiting from the said earlier transfer are required to relinquish any benefits obtained.

06 Transferring of MEship

6.1 If the ME dies, the legal spouse or any nominated beneficiary shall be entitled at his/her option to continue the MEship, unless notice to the contrary is received and acknowledged to be received by the Company in writing. Where the legal spouse shall predecease or die simultaneously with the ME or fail to survive the ME for a period of one (1) month from the ME's death, the benefits enjoyed by the ME (other than the rank) shall pass to the person nominated as the beneficiary. If no such beneficiaries are named or nominated by the ME, all the rights, privileges, bonus, commission, incentive, money or other benefits of the ME shall cease upon the death or insanity of the ME.

6.2 In the event of a divorce in the case of a joint MEship, unless the parties shall have both agreed on the mode of sharing the bonus, commission, incentive, money or other benefits, the same shall be distributed equally.

6.3 A ME may not transfer or assign any rights or liabilities in the MEship agreement to any other party without the prior written approval of the Company. An application must be made in writing to the Company which must be duly signed by both the transferor, transferee and affirmed before a commisioner for oaths. In any event, the ME that transfers will still be responsible for ensuring compliance with the agreement and will be jointly and severally liable for any liability arising from breaches thereof.

6.4 No change in the status of MEship is allowed from an individual MEship to a different entity such as a firm, partnership or company and vice-versa or from one such entity to a similar entity with a different name unless with the prior approval of the Company which must be submitted in writing in accordance with the above paragraphs together with the relevant approvals from the ME, sole proprietor, partners and directors of both the transferror and the transferee.

07 Sale of MEship

7.1 The Company does not allow the ME to sell his MEship unless with the prior approval in writing by the President of the Company.

08 Training and Self Development

8.1 A ME shall wherever possible attend all training courses organised or conducted by the Company. The Company shall conduct training at the Company's premises on the products and Business Plan of the Company at no charge. However, the Company is entitled to impose a fee on other courses organised or conducted by the Company from time to time for self development.

8.2 All MEs are automatically subscribed to the Company Lifestyle Magazine to further their product knowledge and be informed of activities of the Company and the network business. A subscription fees as determined by the Company will be levied for this magazine which is payable through the Automatic Subscription Service whereby the Company is authorized to deduct the subscription directly from the ME’s bonus. This deduction is not refundable.

8.3 A ME must obtain prior approval from the Company in order to conduct any courses or seminar. A violation of this rule may cause the MEship to be terminated.

09 Sponsoring A New MELILEA ENTREPRENEUR (ME)

9.1 A ME may sponsor any person who satisfies the requirements stipulated in the Terms and Conditions to be a ME. However, where the person being sponsored is a non-citizen, the ME must ensure that the said person has the necessary documents from the relevant authorities to stay and conduct business in Malaysia. Upon sponsoring, the ME must immediately submit the prescribed form and any other relevant documents to the Company for processing.

9.2 A ME must not procure or induce any person to become a ME of the Company by:

9.2.1 force or threats, or

9.2.2 making or providing false or misleading information or representations, including the false representation that a ME would obtain financial gain by merely sponsoring a person to be a ME of the Company, or

9.2.3 providing or promising to provide gifts, monies or other forms of incentives, or

9.2.4 falsely or fraudulently using the Company's name or logo to induce or entice the person to become a ME.

9.3 A ME must forthwith provide proper business training and guidance to the new MEs sponsored by him/her immediately upon appointment by the Company.

9.4 A ME must at all times maintain an independent and professional relationship with his/her downline .

9.5 The ME must immediately fill up the sponsor’s information in the MEship Application and Agreement form so as to avoid conflicts by the MEs over the same prospect. This process enables the determination of who was the first person to reach the prospect. If more than one application is made, the first in time officially registered with the Company will be recognised.

9.6 Changing sponsors is strictly prohibited unless with the prior approval in writing by the President of the Company.

9.7 Any proprietor, partner, shareholder or Director may only become a ME of the Company 3 months after the firm, partnership or company has been terminated as a ME with the Company.

9.8 Any firm, partnership or company may only become a ME of the Company 3 months after its proprietor, partner, shareholder or director has been terminated as a ME with the Company.

9.9 In the event of non-compliance with the above, the offending ME and the entire downline will be replaced, in the Company’s sole discretion, under the proper upline.

9.10 Double sponsoring which is the sponsorship of the same individual or entity by two existing MEs is not allowed. Complaints must be brought within 6 months from the date of the second MEship.

9.11 The breach of any of the above clauses is a serious violation of this Agreement and the ME may be subject to any action as MELILEA in its sole discretion deems fit or may result in the termination of this Agreement.

10 Duties as a Sponsor

10.1 A ME sponsoring a downline shall be responsible for implementing and ensuring the compliance their downlines of all terms and conditions, active training, participation, counseling and supporting his downline and undertakes to perform his duties in a bona fide manner. A ME also agrees to train, participate and support their sponsored downline in the performance of their functions as it is necessary to maintain continuing communication with and supervision over the ME’s network. This responsibility is a continuing one and is aimed at preventing the upline ME from enjoying benefits of his downline without providing the corresponding training to his downline that is crucial to the development of the downline. Non-performance of these duties is a ground for termination of MEship.

11 Bonuses

11.1 No incentives will be calculated for ME Cash Bill/Sales Invoice that do not have the ME code or ME Application Form number for new MEs or unidentified MEs on computation of bonus. All MEs must keep a copy of the ME Cash Bill/Sales Invoice for record or for claim in the case of dispute or discrepancy.

11.2 Any dispute or discrepancy in the computation of bonuses or incentives or claim of non-receipt must be brought to the attention of the Company in writing within 14 days after the official date of issuance of bonuses, supported by the ME Cash Bill/Sales Invoice. Any dispute or discrepancy after this 14 days period will not be entertained and the ME will be deemed to have accepted any such dispute or discrepancy, if any.

11.3 The official date of issuance of monthly bonuses is before the 25th of the following month, by on-line banking. Bonus will be witheld for MEs without a bank account and will only be released when provided with ME's bank account.

11.4 A ME is neither guaranteed a specific income nor assured any level of profit or success. A ME's profit and success can come only through the successful retail sale of products and the retail sales of other MEs within his/her downline network.

11.5 A ME's promotion in rank and entitlement to bonuses is as described in the Business Plan section of the Business Manual.

11.6 A ME may only transfer or assign his bonus at his own cost and expense and with prior written approval of the Company. In any event, the Company reserves the right to reverse the above transfer in the Company’s sole and exclusive discretion. All such MEs benefiting from the said earlier transfer are required to relinquish any benefits obtained by the earlier transfer.

12 Buy Back Policy

12.1 Upon a written request from a ME, the Company is obliged to buy back its products from the ME at the price paid by the ME less all commissions, bonuses or benefits paid by the Company in respect of the sales of the said products and such processing fees of up to 10% of the price of the products paid by the ME. The Company is obliged to buy back its products should the ME's appointment cease by its own accord or was terminated by the Company, provided always that:

12.1.1 The said products are in a good and saleable condition, and

12.1.2 The period from the date of purchase of the said products (supported by the relevant ME Cash Bill/Sales Invoice) to the date of request by the ME to the Company to buy back the said products does not exceed one hundred eighty (180) days, and in any event the date of expiry of the product shall not be less than one hundred eighty days before expiry at the date of return of the product.

12.1.3 The appropriate BV, PV and other benefits earned by the ME from the sale of the said products are deducted from the ME's sales, and the commissions and benefits accruing to the ME adjusted accordingly, and

12.1.4 The said products are returned directly to the Company's Head Office or any of its Branch Offices.

12.1.5 A written request to buy back is given to the Company within thirty (30) days from the date the ME ceases to be a ME of the Company whether by termination or otherwise.

12.2 If the Company buys back or is required to buy back its products from a ME for any reason whatsoever, the Company is entitled to re-evaluate and/or re-adjust the commissions, bonuses, funds, points, rank and other benefits paid to/enjoyed by the ME in respect to the sale of the said products.

12.3 The price paid by the Company for the products returned shall be paid to the ME concerned within one (1) month from the date of the said products having been returned to the Company.

13 Stock-piling & Dumping

13.1 The Company Business Plan is based upon product sales to consumers and personal use of MEs. Therefore stock-piling orders or purchasing in large/unreasonable quantities for inventory solely for the purpose of qualifying for the bonuses or rank advancements in the Business Plan are strictly prohibited by the Company.

13.2 A ME must have sold 80% of his existing stock before re-ordering new stock to prevent stockpiling.

13.3 Dumping of the products at below recommended retail price is strictly prohibited. The Company's management committee reserves the absolute right to terminate any ME found doing so.

14 Confidential Information

14.1 All information, in particular ‘ME Organisation Chart and Analysis’, ‘Breakaway Leader Report’ and ‘ME Address List’ that are provided to MEs is for their exclusive and limited use only and are the confidential and proprietory rights of the Company as they contain trade secrets.

14.2 A ME shall not disclose the said lists to any third party including other Company MEs not entitled to such lists.

14.3 A ME may not misuse any of the Company’s property, opportunity, corporate information or trade secrets for the benefit of themselves or any third party. Any such misuse will be viewed strictly and the Company may institute disciplinary proceedings and/or cause the immediate termination of the ME’s MEship as the Company deems fit. In addition, the Company may institute legal action against the ME. Any delay or failure to pursue any action will not be construed as a waiver of the Company’s rights.

14.4 The obligations under this paragraph will continue even after the termination of the ME’s contract.

15 Advertising

15.1 A ME of the Company may only promote the products of the Company and the business opportunity with the Company and not the products or business opportunity of any other company, whether a Direct Selling company or non-Direct Selling company but selling products similar to the Company’s products.

15.2 A ME may only promote the Company, its products and business opportunity through personal contact and by the Company’s approved promotion channels as requested and approved by the Company. A ME may not promote the Company, its products, or its business opportunity through the media. Consultations by media representatives should be referred to the President or Vice-President of the Company. The following actions by the ME are prohibited and the Company reserves the right to be indemnified of any costs incurred in preventing such actions or defending any actions, legal or otherwise, which may be faced by the Company;

15.2.1 Claims that are unreasonable or misleading in relation to potential earnings.

15.2.2 That profits or revenue can be made due to a connection with a ME or with the Company.

15.2.3 Mass distribution of brochures, name cards, flyers etc by way of electronic mail, mail, placing in mail boxes, public places, vehicles or similar means.

15.3 A ME is prohibited from using trademarks, service marks, copyrights, trade names, product names, or logos belonging to the Company or any company associated with MELILEA and their products, in any form of advertising unless with prior written permission from the Company. Non-compliance with this clause is considered a serious violation of this Agreement and may result in disciplinary action which may include immediate termination of the ME.

15.4 The Company’s logos or names shall not be used or displayed on any area visible to the public.

15.5 No celebrity endorsement may be used unless with prior written approval of the celebrity.

15.6 A ME may only use business cards and personalised sales aids that are produced by the Company.

15.7 Business cards used by all MEs must be of the same type in terms of colour, size, text, font and contents as per the sample contained in the ME’s manual. The exact content as stated above is allowed in different languages. Before use, a ME must submit for approval to the Company a sample of the business card. Non-compliance will render the ME subject to a displinary action. Thereupon, a new sample for approval by the Company will have to be submitted.

15.8 A ME may not use Intellectual Property and Proprietary information belonging to the Company without prior authorisation from the Company. Any unauthorised breach constitutes a material breach of this Agreement. All unauthorised use of such material becomes the property of the Company and must be immediately assigned to the Company. A ME may not use or reserve domain names belonging to the Company and agrees to renounce his rights to such names if found to be similar with the Company’s even though the ME may have had a prior right to the Company.

15.9 A ME may only use websites and website addresses as approved by the Company and on templates specified by the Company.

15.10 A ME is prohibited from placing advertisements in newspapers, magazines, or other publications, promoting himself/herself or the Company's products without the prior written consent of the Company. A ME is also prohibited from bringing to the attention of the media any disputes between the ME and another ME or between the ME and the Company. The ME agrees that this prohibition will also apply even after the ME leaves the Company. A breach of this provision is viewed very seriously and the Company reserves the right to immediately terminate the ME and commence legal action for damages against the ME.

16 Retail Sale

16.1 The promotion of the Company’s opportunity and the sale of its products are only to be done through its authorised MEs and its products shall not be sold/displayed at retail outlets, day/night markets, pharmacies, departmental stores, trade shows, conventions or any other such gatherings without prior permission of the Company. Any ME doing so for his own benefit shall have his MEship terminated.

16.2 Any ME selling the Company products to the proprietors of the above businesses shall be liable to the Company for losses including but not limited to loss of reputation and consequential losses.

16.3 A ME is also prohibited from selling to any person who will ultimately sell products through retail stores.

17 Product Claims

17.1 A ME may only make product claims and representations as approved by the Company. Product claims must be limited to claims that the products are safe to use and for the general well being and appearance of the person.

17.2 No claims can be made as to medicinal values of the product.

18 Income Tax Returns & Expenditures

18.1 It is expressly understood that all MEs shall be solely responsible for the submission of their annual Income Tax returns and payment of same. The Company does not condone any acts of tax evasion.

18.2 A ME is responsible for all his/her own business decisions and expenditures arising out of operating the business.

19 Contract and Price Variations

19.1 The Company reserves the right to change prices, amend, alter, vary, add or update the terms and conditions of the ME’s Application and Agreement, Business Manual, Business Plan, International Distribution and Sponsor Agreement, Preliminary Application and Agreement For MEship and other rules and regulations (hereinafter referred to as the said Rules) at any time, and whenever it is deemed necessary and without consent of the ME. The variations will be published in the Company’s official magazine or website and the ME agrees that this will be deemed to serve as notice of change to the ME.

19.2 The ME shall be bound by any such future changes, amendments, variations or additions. By continuing to act as a ME after the said modifications, the ME’s acts shall be deemed to constitute acceptance of any such amendment to the agreement.

19.3 The Company may vary the price and Products either by making such changes in design, production or packaging of the Products as the Company thinks fit or by the withdrawal of Products which the Company proposes to withdraw from its product range or by the addition to the Products.

19.4 This contract is to be treated as the final agreement between the ME and the Company and supersedes all prior or inconsistent agreements, whether written or oral, between the parties. However, the Company reserves the right to impose additional terms and conditions specific to a ME or generally to all MEs.

20 International MEs/Sponsors

20.1 Each country has different forms and agreements. A ME agreement must be filed in the country of residence. Agreements used for a wrong country will be invalid. The agreement becomes binding if approved by the Company.

20.2 A ME must inform the Company’s office in the country of origin of intention to practice in a different country.

20.3 A ME must enter into an International Distribution and Sponsor Agreement with the Company before sponsoring MEs in a country other than the first mentioned ME’s country of MEship.

20.4 A ME may order products and sales aids for his given country which can only be sold in the said given country.

20.5 A ME may neither import any of the Company’s products nor facilitate its importation for Distribution or for any other reason.

20.6 A ME shall not take any steps in another country which is not yet officially opened, with the intention of commencing the Company’s business. He may not solicit for clients, advertise, and apply for trademarks or trade names including reserving the Company’s name (including website names and addresses). Neither may the ME secure the approval for any of the Company’s products or business practices. Any costs incurred by any action by the Company necessary to remedy the above will have to be indemnified by the ME.

20.7 Any ME who does not comply with the above will be terminated or be barred from participating in the new international market for two (2) years from the date of the official opening of the new international market.

21 Representations

21.1 A ME shall not make any statement in any form about any person, company or products, whether of the Company or its competitors whether written or oral, which is misleading, false or inaccurate.

22 General Issues & Amendments

22.1 The Company strictly prohibits the participation by its MEs in any pyramid scheme or having the appearance of a pyramid scheme. The Company's management committee reserves the absolute right to terminate any ME found to do so.

22.2 A ME shall be deemed to have knowledge of all the Terms and Conditions appearing in all the Company documents for the time being in force and it shall be incumbent upon the ME to check the latest Terms and Conditions as set out in the official and definitive copy as kept at the Company's Head Office. It is also the responsibility of the ME to update his downlines. New Terms and Conditions and Forms will replace the old.

22.3 If any provision of any Terms and Conditions or Procedures or Code of Ethics or any part thereof contravenes any:

22.3.1 Act of Parliament or subsidiary legislation, or

22.3.2 Orders of Governmental policy, or 22.3.3 Terms and conditions of the license granted by the relevant authority pursuant to the Direct Sales Act, 1993, or

22.3.4 Terms and conditions as may be imposed by the relevant authority from time to time;

the contravening provision of such terms and conditions shall be rendered invalid and unenforceable without affecting the other provisions of these Terms and Conditions, Policies & Procedures or the Code of Ethics.

22.4 In the event of any dispute arising between a ME and a customer or prospective customer or Company’s MEs, to immediately inform the Company and provide the Company with details of the circumstances of the dispute and not to institute proceedings in respect of it or to enter into any compromise in respect of it or to release any debt without the prior written consent of the Company.

22.5 The ME hereby agrees that the Company and its officers or agents shall not be liable for any third party claim for any consequential, incidental, special or punitive damages, or claim for loss of profits. Any such claim by the third party will be indemnified by the ME to the Company or the third party.

22.6 The ME shall indemnify and keep the Company fully indemnified from and against any and all loss, damage or liability (whether criminal or civil) suffered and legal fees and costs incurred by the Company resulting from a breach of this Agreement by the ME including but not limited to:

22.6.1 Any act of fraud, neglect, dishonesty or default on the part of the ME or his agents, employees, licensees or customers;

22.6.2 Breaches resulting in any successful claim by any third party alleging libel or slander in respect of any matter arising from the supply of the products or conduct of the ME.

22.6.3 Breaches in connection with any unauthorised Warranty issued by the ME and also for any alteration, removal, tampering or modification of any of the Products.

22.7 The ME acknowledges that he/she has read and understood and agree to the terms set forth in this Agreement.

22.8 This Agreement supersedes any previous agreement between the parties hereto in relation to the matters dealt with herein and represents the entire Agreement between the parties hereto.

22.9 Reference to any statute or statutory provisions includes a reference to that statute or statutory provision as from time to time amended, extended or re-enacted.

22.10 Unless the context otherwise requires, reference to any clause or schedule or appendix is to a clause or schedule or appendix of or to this Agreement.

22.11 The headings in this Agreement are inserted for convenience only and shall not affect the construction hereof.

22.12 All agreements on the part of either of the parties which comprise more than one person or entity shall be joint and several.

23 Notice

23.1 Any demand, request or notice requiring to be given under this Agreement shall be deemed to be sufficiently served in the case of a notice given by;

23.1.1 The Company, upon being addressed and despatched by electronic mail, facsimile, ordinary post, registered post, A. R. Registered Post or personal service or service as deemed fit by the Company, to the ME at the address provided on the ME application form or the last known place of business or residence of the ME. A notice is deemed served, in the case of service by facsimile, immediately upon being faxed, and in any other case, five (5) days after the date of posting.

23.1.2 The ME, upon being addressed and despatched by personal service or A. R. Registered post to the Company at their office in Melaka as set out below. In the event of service by A. R. Registered post, evidence of receipt by the Company is to be proved by way of proof of the Company’s company stamp indorsement on the A. R. return card.

23.2 All forms and notices which under this Agreement require to be signed by or on behalf of the Company shall be sufficiently signed by its Directors or by its Secretary or by its duly authorized officer and all forms and notices which under this Agreement is required to be signed by or on behalf of the ME shall be signed by some responsible person(s) authorized by the ME, a specimen of whose signature authenticated by the ME shall previously have been lodged with the Company.

24 Time

24.1 Time wherever mentioned shall be the essence of this Agreement.

25 Beneficiaries

25.1 This Agreement shall be binding on the beneficiaries, personal representatives and permitted assigns of the parties hereto.

26 Severability

26.1 If any of the provisions of this Agreement is found by any court or other competent authority to be void or unenforceable in any jurisdiction, such provision shall be deemed to be deleted from this Agreement and the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement and all other provisions shall remain in full force and effect. Notwithstanding the foregoing, the parties hereto shall negotiate in good faith in order to agree to a mutually satisfactory term in substitute for the provision so found to be void or unenforceable.

27 Waiver

27.1 No failure or delay on the part of the Company in exercising nor any omission to exercise any right, power or privilege accruing to the Company upon any default on the part of a ME shall affect or impair any such right, power or privilege to be construed as a waiver thereof or any acquiescence to such default. No waiver by the Company in respect of any breach shall operate as a waiver in respect of any subsequent breach. Any waiver must be given in writing.

28 Governing Law

28.1 In the event of any dispute pertaining to the formation, construction, validity or performance of this Agreement or as to the rights and liabilities arising between the Company and the ME which cannot be resolved between the parties, both parties hereby agree that the dispute shall only be resolved in the High Court of Malaya at Melaka or any other court of competent jurisdiction in Melaka or by way of arbitration as the Company deems fit. A ME shall not seek redress with any department, Ministry or any other adjudicating body.

28.2 If by arbitration, a sole arbitrator to be agreed between the parties shall be appointed. The forum and type of arbitration shall be solely decided by the Company.

28.3 The formation, construction, validity and performance of this Agreement shall be governed in all respects by Malaysian Law.

29 Cost

29.1 All costs, legal or otherwise shall be borne by the ME on a solicitor-client basis.

30 Definitions & Interpretations

30.1 The word "ME" as mentioned throughout this Agreement shall include Star Leaders.

30.2 The English Version of all the Company issued materials shall be deemed to be the official interpretation. In the event of any conflicts between different versions of materials, the English Version shall prevail.

30.3 Unless the context otherwise requires, the following interpretations shall be used in the Agreement:

30.3.1 Words referring to the masculine gender shall include the feminine and neuter genders and vice versa;

30.3.2 Words referring to a singular object/person shall include the plural number and vice versa;

30.3.3 The section headings are included for the convenience of reference only and shall not affect the interpretation of the Agreement;

30.3.4 Where any word or expression is defined in the Agreement, the definition shall extend to all grammatical variations and cognate expressions of the word or expression so defined;

Important Notice

Pursuant to the Direct Sales Act 1993, all MEs operating the the Company business are to observe and adhere to the following regulations or face prosecution by the relevant authorities:

A. Identification Card

• MEs must display their the Company MEship Authority Card (MID) and carry along their National Registration Identity Card whenever operating the business, and duly produce them whenever requested to do so.
• The Company MEship Authority Card must be affixed with your recent photograph which must be 3.8cm x 3.2cm and without the borders. Your full face must be shown and the image from chin to the top of the head must not be less than 2.54cm in a vertical position.
• No head or face coverings must be worn, except when such coverings are in accordance to your religious beliefs and provided the main features of your face are not hidden.

B. Hours of Call

Unless with prior appointment, the ME is not allowed to call on customers/prospects:

• on Sundays (in areas where Sunday is a Public Holiday)
• on Fridays (in areas where Friday is a Public Holiday)
• on other Public Holidays
• between 7.00pm and 9.00am daily on other days

C. Contract of Sales

For any transactions or product sales above the value of RM300.00 the following must be observed:

• a. The Contract of Sales form must be used and signed by both buyer and seller. The buyer must be provided a copy of the signed form. The form must carry the message that a cooling-off period of 10 working days is allowed for the customer to change his/her mind about buying the product. The message must be printed in wordings not less than 10 points Times.
• b. No delivery of goods may be made before the 10 days period is over, and no payment/ down-payment may be collected during the period.
• c. A customer who requires the product earlier than the stated 10 working days may request for early delivery through a Notice of Waiver to be served to you before the end of the 10 days cooling-off period but not earlier than 72 hours from the time the Contract of Sales was signed.
• d. In the course of the 10 days cooling-off period, the customer may cancel his/her order(s) by terminating the Contract of Sales in writing by mail or delivered in person to you. The termination of Agreement of Sales form may be used for this purpose.

All the Company MEs are reminded that non-compliance with the requirements of the Direct Sales Act 1993 carries a heavy penalty besides attracting negative and unwarranted publicity.

Important Notice

In order to simplify and overcome any misunderstandings which could occur particularly in the MEs early stages with the Company, we have defined the terms used in the Business Manual/Plan.

ME
MELILEA Entrepreneur.

MESHIP
MELILEA Entrepreneur-ship.

BREAKAWAY
This refers to a qualifying Star Leader line which has separated itself from the main group.

BONUS VALUE or BV
This is the value attached to the products sold. This value will be taken for calculation of all bonuses.

COMPANY or MELILEA
Throughout this manual the term "Company" or "MELILEA INTERNATIONAL" refers to: MELILEA (M) SDN BHD co.reg. No: 256079-U.

GROUP PV
This is the total PV of the Company products sold within any given month by your groups downline including breakaway Star Leaders and their groups.

LEADERSHIP BONUS
This is the leadership bonus paid to Qualifying Star Leaders on monthly qualification according to the Company Business Plan.

MONTHLY VOLUME
This is the volume generated in a calendar month. The business month closes at midnight on the last day of the calendar month.

QUALIFYING STAR LEADER LINE
This is a line which has a Star Leader with monthly personal group sales PV (PGPV) of 800.

PERSONAL GROUP
This refers to all MEs in line of descent, excluding breakaway Star Leaders and their groups.

PERSONAL GROUP SALES PV (PGPV)
This is the personal group sales PV of products sold by all MEs in line of descent excluding breakaway Star Leaders and their groups.

PERSONAL SALES (PPV)
This is the PV of products sold by the ME personally within the given month.

POINT VALUE (PV)
This is the value attached to the product sold. This value will be taken for calculation of rank advancement and qualification for bonuses.

QUALIFYING STAR LEADER
This is an active Star Leader with a monthly personal group sales PV (PGPV) of at least 30 PPV and of at least 800 PGPV or a Star Leader who qualifies for leadership bonus for a particular month.

RETAILING PROFIT
This is the difference between the ME price and the suggested customer or retail price.

RETAIL OR CUSTOMER PRICE
This is the price that is quoted on the order form and represents a suggested retail currency figure which the customer pays for the products. The Company reserves the right to adjust this suggested customer or retail price, depending on the market situation.

STAR LEADER
This refers to any ME who is promoted to the level of Star Manager and above.