Distributorship Terms and Policies

LIC DISTRIBUTORSHIP

 

1.         Prerequisites to become an LIC Distributor

a.         The LIC Distributor should be of legal age as of the date of application and hereby declares that s/he has not been convicted of any crime hereby declares that s/he is of legal age as this application is executed. Applicants below the age of 18 years old may be accepted provided that parent’s consent is secured and submitted.

b.         Business entities in the form of a corporation, partnership or association, duly registered with the Securities and Exchange Commission (SEC) may become an LIC Distributor provided they are legally authorized and compliant to do business in the Philippines.

c.         Has attended and understood the Goodness Riceing Presentation (GRP), Distributor Terms and Conditions, and Compensation Plan.

d.         Commits to attend supplementary service knowledge seminars and product trainings, which are conducted by LIC-accredited speakers.

e.         Submitted an accomplished original and signed Distributorship Application Form and/or has encoded their account in the LIC portal.

f.      Have a valid Tax identification Number (TIN) which should be presented upon application or during the first commission encashment.

g.         Purchase any of an LIC Prestige Product Package.

h.         If LIC determines that the Distributorship Application Form contains inaccurate or false information, it may immediately terminate the distributorship or declare the application form null and void from the beginning. Further, it is the obligation of the distributor to report to LIC on an ongoing basis any changes, which affect the accuracy of the Distributorship Application Terms and Conditions.

i.       LIC reserves the right to accept or reject any application for any reason.

j.       The accomplished Distributorship Application Form and/or registration in the LIC online Portal shall signify their acceptance of the policies and procedures of the Company. This shall serve as the contract between the Distributor and LIC.

k.         Placement of product orders and receipt of commission checks with LIC shall serve as reaffirmation of commitment to abide by the company policies and procedures including future amendments.

l.       Encashment is the Distributor’s final step towards a full agreement to the terms and policies set forth.

 

2.         Prestige Product Package Starter Kit and Marketing

a.         The LIC Prestige Product Package starter kit includes a set of LIC products, 24/7 Online Distributor Portal Access Code, lifetime product discounts, distributor business kit, Healthcare Emergency Fund Card, among others. Distributors have the option of claiming the actual products upon purchase, or a set of gift certificates (GC). The released GCs are governed by the following rules:

                   i.         Can be redeemed without a set deadline;

                  ii.         Are temporary and will be discontinued once all the product lines of LIC are deemed complete; and

                iii.         Once received by the distributor or his/her authorized representative, they are fully accountable for its safekeeping and use.

b.         The package starter kit also includes marketing materials like folders, flyers, pricelist, and distributorship application forms which may be used by the new distributor in building and growing their business.

 

3.         Distributor’s RFID Card - Once the Distributorship Application has been accepted, the new distributor will be entitled to his/her Identification Card. The Distributor must be registered first in the LIC portal for the User ID.The Distributor’s RFID Card will be used in all LIC transactions. The rights and privileges that come with the Identification Card is not transferrable to another person.

a.     RFID Card Application Process

                   i.         The Distributor should completely accomplish the ID request form and attach a 1x1 picture with white background.

                  ii.         Distributor submits the ID request form to any LIC branch and a claim stub shall be released once the information submitted has been validated.

                iii.         The RFID card may be claimed at the transacting branch on the date specified and upon presentation of the claim stub. If claim stub is lost, a valid ID shall be presented. If a representative would be claiming the Distributor’s RFID, s/he must present an authorization letter, 2 valid IDs of the distributor with specimen signature, and the representative’s valid ID.

                iv.         The same process shall be followed for corporate accounts.

                 v.         Lost RFID shall be replaced at a cost upon application for a new card and upon submission of a duly notarized Affidavit of Loss

 

4.         Distributor’s Privilege

a.         Once LIC has accepted the Distributorship Application, the benefits of being a Distributor are now available to the new member. These include the right to:

                   i.         Purchase at distributor price and engage in the direct selling (retail)of LIC products;

                  ii.         Participate in the LIC compensation plan and receive earned commissions, rebates, discounts, and other privileges that may be determined by the company from time to time;

                iii.         Sponsor other individuals to be Distributors, build a team, and progress, through LIC Trainings and Compensation Plan;

                iv.         Receive LIC marketing materials, communications, and other publications which may be used for the selling of products and growing the distributor’s team; and

                 v.         Participate in all LIC events, activities, promotions, trainings, and other programs upon payment of appropriate charges, if applicable.

                vi.         A Distributor’s acceptance of earnings pursuant to the compensation plan, and/or acceptance of any other benefits confirms his/her agreement to the Distributorship Policies and Procedures, Terms and Conditions, and all amendments thereto.

 

5.         Responsibilities of Distributor and Sponsor

a.         The LIC Distributor

                   i.         Management of Account Information. The LIC distributor is responsible in keeping his/her account accurate.

                  ii.         Spouse Distributorship. The spouse of the Distributor shall automatically be under his/her sales team when the former decides to be a Distributor of LIC, otherwise this will be a violation of LIC’s Policies and Procedures.

1.         If the spouses have already been previously registered under different groups, each spouse is required to transfer to the Sales Group where the spouse who first joined the Company belongs. The spouses shall be given a period of 30 days to transfer. During the period where transfer is being done, the transferring spouse is not permitted to have any pending downlines. Failure to transfer within the period allowed shall give the Company the right to exercise its discretion to protect the interest of the Company.

                iii.         Relationship and Representation. The Distributor is an independent contractor under the terms and conditions specified herein, and not an agent, employee, or legal representative of LIC. Given this, s/he has no power to bind LIC for all his/her activities hereunder.

                iv.         Proxy. A distributorship created or operated by proxy, whether intentionally or inadvertently, is not allowed and shall be acted upon by the company for compliance.

                 v.         Maximum Number of Accounts. All distributors shall be allowed to purchase up to a maximum of 31 accounts registered under his/her name.

                vi.         Account Re-selling. The reselling of accounts to any individual is strictly not allowed.

               vii.         Succession. In case of death, the account/s may only be transferred to the distributor’s immediate family or to the beneficiary indicated in the application form. The immediate family member has a maximum of six (6) months to report the said death to the company and present a request letter accompanied by the certified true copy of the death certificate and proof of relationship between the deceased distributor and the beneficiary. The company reserves the right to approve such transfers.

              viii.     Reporting Violations. Distributors have the responsibility of reporting any observed violations under this Policies and Procedures to the LIC Ethics Department.

b.    The Sponsor

                   i.         Leading, Training, and Selling. It is the responsibility of the sponsor to ensure that new distributors under his/her group are oriented and trained with LIC’s Goodness Riceing Presentation, Policies and Procedures, Code of Conduct and Ethical Standards, Product Knowledge, and other Trainings which LIC provides. The Sponsor must also supervise and monitor distributors in their team that they conduct their business professionally and in accordance to the Policies and Procedures of LIC.

                 ii.         Non-Disparagement. Sponsors must set proper examples for their team. To do this, they must not disparage other distributors, LIC products, LIC marketing plan, or the company’s employees. Such disparagement shall constitute a material breach of these Policies and Procedures.

                iii.         Holding Applications or Orders. All sponsors must forward to LIC all application forms, product orders, and payments they receive from other distributors or applicants no later than the next business day after which the forms are signed and payments forwarded. LIC encourages all sponsors to advise applicants to directly pay at any LIC branch or deposit the said payment to the LIC bank account.

c.     Change of Sponsorship / Transferring to Another Group

                   i.         Unauthorized transfers of sponsorship constitute a violation of LIC Policies. LIC will only consider the first valid account registration and any subsequent account registrations will not be allowed. A change in sponsorship may only be allowed if the following conditions are met:        

  1. S/he must be inactive for at least six (6) months;
  2. S/he must submit a resignation letter to LIC with intent to transfer to another sponsor. Any existing downline of the transferring distributor will automatically roll up to the former sponsor and cannot be transferred to the next sponsor.
  3. LIC will only entertain complaints from active distributors affected by the transfer stated before the actual transfer has been approved and implemented.
  4. LIC strictly prohibits distributors from engaging in any activity that involves the solicitation of any distributor to transfer or move to a different group by making offers such as, but is not limited to, free slots, marketing support, and/or financial support.

d.     Account Inactivity and Cancellation

                   i.         Inactivity. A distributor account is considered inactive when no activity is seen in terms of product purchase, sponsoring, or commission encashment for a period of six (6) months. LIC reserves the right to deactivate inactive accounts in the distributor portal.

                 ii.         Voluntary Cancellation. A Distributor may terminate his/her distributorship with LIC by submitting a written notice to the Head Office and addressed to the President of the company.

                iii.         Involuntary Cancellation. LIC reserves the right to cancel or terminate the account of any Distributor found to have violated the company’s policies and procedures, terms and conditions stated in the distributorship application form, and the Code of Conduct and Ethical Standards or for other just cause. The termination is effective and final when the distributor receives actual notice of the termination.

                iv.         Terminated distributors may re-apply after two (2) years by complying with all        application requirements and upon the purchase of the LIC Prestige Product Package.

e.     Misrepresentation, Deceptive Practices, and Detrimental Conduct

                   i.         LIC Distributors must fairly and truthfully explain the company’s policies and procedures, business opportunity, compensation plan, and other programs to prospective applicants. They should be thorough and honest in presenting the company and its compensation plan. It should also be made clear that earnings are based on product sales and not merely on sponsorships.

                 ii.         Distributors shall not offer any business option and opportunity unapproved by the company, such as, but is not limited to:

1.     Being investors of Leads International Corporation and/or the other companies under the Malveda Holdings Corporation. LIC is not engaged in an Investment scheme wherein distributors / members will earn interest on their money without the need to do something;

2.     Profit sharing options. LIC does not sell its corporate stocks. The Lotus Membership Program provides move out support depending on the qualifying package availed and the set terms and conditions of the said program. Applications for the Lotus Membership Program is subject to the approval of the LIC management; and

3.     Other ways to earn not included in the approved Marketing Plan of the Company.

                iii.         Violations conducted in this section are the full accountability of the direct sponsor and all other distributor/s who have benefitted from the deceptive and misinterpreted sale/practice. LIC shall not be liable for any transaction entered by any distributor or prospective distributor violating this section.

                iv.         A distributor found to have committed any act in violation with the Company’s Terms and Conditions shall be dealt with based on LIC’s Code of Conduct and Ethical Standards.

 

Lotus Distributorship Program. The company reserves the right to manage its earnings. As the company grows, it is also the intent of the company that the members or distributors will also benefit from its growth. The Lotus Membership Program is not an investment instrument, but a rewards program for the distributors who have:

Silver. Purchased an accumulated 15 prestige product packages,

Gold. Purchased an accumulated 31 prestige product packages, and

Platinum. Purchased an accumulated 7 prestige product packages and an additional amount of retail products set by the company.  

 

The following are the specific terms and conditions of the Lotus Membership Program:

 

A.        All Lotus Members are automatically part of the Annual Rebate Program (or Move-out Support) given as reward or appreciation for the product move-out efforts of all qualified distributor.

B.        An LIC Distributor qualifies to become part of the Lotus Membership program upon confirmation of the following:

a.         Purchase of the number of packages specific to the Lotus Category applied for;

b.         Submission of an accomplished Lotus Membership Program Form and Product Request Form specifying the products intended to be availed; and

c.         Having both signed approvals of their Direct Sponsor and an LIC Management Representative.

C.        The Annual Move-out Support will be available for claiming every April 30 of each fiscal year.

D.        The computation of the Annual Move-out Support for each Lotus Category is as follows:

a.         Silver: Net Income After tax (as reflected in LIC’s latest BIR-audited Income Statement) multiplied by 2%, divided by the total population of Silver and Golden Lotus Package Distributors

b.         Golden: Net Income After tax (as reflected in LIC’s latest BIR-audited Income Statement) multiplied by 2%, divided by the total population of Silver and Golden Lotus Package Distributors, plus Net Income After tax (as reflected in LIC’s latest BIR-audited Income Statement) multiplied by 1%, divided by the total population of Golden Lotus Package Distributors.

c.         Platinum: Sales Net of VAT (as reflected in LIC’s latest BIR-audited Income Statement) multiplied by 1.2%, divided by the total population of Platinum Package Distributors.

E.        To maintain the Lotus Membership, the Lotus Member must have a minimum monthly purchase of LIC products amounting to one thousand five hundred pesos (Php 1,500.00) for Silver Lotus Partners and two thousand five hundred pesos (Php 2,500) for Golden Lotus Partners, based on Distributor’s Price. Currently, the maintenance requirement for Platinum is waived for their first year. The minimum purchase amount is subject to change depending on the Company’s discretion.

F.        Gift certificate redemption can also be used as maintenance in the program: a) 20 points for Silver and b) 30 points for Gold.

G.        All Lotus Members may opt to pay for their monthly purchase requirement in advance. Should the Lotus Member purchase their monthly requirement in advance and the preferred products are not yet available, a Product Request Form must be submitted to the Branch.

H.        Products distributed through the Lotus Membership Program, which are already encoded in the system, are considered sold and will be under a no refund policy. However, the Lotus Member may opt to exchange it with a different product or set of products that have the same value.

I.          If the Lotus Member fails to purchase on a monthly basis, the Company will allow a grace period of six (6) months, which should allow the Lotus Member ample time to fulfill their maintenance requirements. Since the distribution of the incentive is every April 30 of each year, the deadline for meeting the maintenance requirements will be every March 31 of the same year.

J.         Any Lotus Member who wishes to claim the incentive must present the monthly purchase receipt/s showing the fulfillment of the maintenance requirements.

K.        Lotus Members should be in good standing and has consistently abided with the company policies and procedures. Any Lotus Member who is deemed to have violated the LIC Code of Ethics automatically loses his/her membership rights and privileges.

L.         Members who are awarded lotus membership are allowed to be part of other networking / Multi-level marketing (MLM) companies for as long as they do not recruit or actively develop their sales network in the Company and product sold are not in direct competition with LIC products.

M.   The Company reserves the right to change its Policies and Procedures, Terms and Conditions, and Code of Conduct and Ethical Standards.

N.        The Lotus Membership Program is NOT an Investment Instrument and members who consistently abide by the Company Policies and have bought or agree to buy the set amount of products stated in the Program will be qualified for the Move-out Support Incentive.

a.         Upon availing the Lotus Packages, the LIC Distributor confirms that he or she has been properly informed of the terms and conditions by their direct sponsor or upline. The direct sponsor or upline becomes solely responsible for any misinformation and will hold the Company free and harmless against any and all claims, demand, liability, loss, cost or expense including but not limited to legal fees, cost of suit that may arise from, relating to or in connection with the sponsor or upline’s conduct of business of transactions.

ENCODING POLICY

PURPOSE

Encoding refers to the online registration of the Membership Account. This policy aims to guide Leads International Corporation (LIC) Partners to register in our online portal successfully without violating any Code of Conduct and Ethical Standards.

SCOPE

This policy applies to new and current LIC Partners as well as the IT Support Team, Ethics Department and Customer Service Team of the company.

DEFINITION OF TERMS

Online Account

Online account is acquired once the Partner registers in the online system. One online account also means that the Partner has only one pair of Username and Password  under one name.

Package Account

Package Account is acquired when buying a Prestige Package. One Activation Code is equivalent to one Package Account.

Online Account Credential

        This is the Partner’s Username and Password that will be used to log in to the online system.

POLICY STATEMENT

  1. ON INCORRECT POSITIONING AND SPONSORSHIP:

        Once encoded, the positioning and sponsorship of an account cannot be changed.

  1. ON INCORRECT NAME SPELLING

        The Partner can request for change name if he/she misspelled the following:

  1. First Name
  2. Middle Name
  3. Last Name

If there are incorrect name spelling, the following procedure will apply:

  1. Visit a branch near you and get a Profile Update Form (ITF-4) from the cashier or customer service personnel.
  2. On the form, please provide the membership ID, current name of the account and the correct spelling of your name.
  3. Accomplish any other required fields on the form and submit it to the cashier/counter or customer service personnel.
  4. Also provide a photocopy/scanned copy of your valid ID with 3 specimen signature.
  5. A customer service personnel will talk to you if there are additional process to be accomplished.

        This process usually takes three to five days. Email/Call notifications will be sent to update you on the status of your request.

  1. ON ACCOUNT TRANSFER

There are two types of account transfer:

  1. Transfer of one or more single Package Account

This usually happens when a Partner encoded to his/her online account the package account that is originally for another Partner.
Transfer of one or more single Package Account is not yet available as of the moment.

  1. Transfer of the Online Account

Transferring the Partner’s Online Account means that he/she will transfer his/her account details (username and password) to another Partner together with all of his/her registered package accounts. This will also include a change of name.

Online Account transfer to another LI Partner is possible but it must not violate any statement in the Code of Ethics and Rules of Conduct.

        To process the account transfer:

  1. The current owner should create a request letter stating the reason for transfer. This should be endorsed by the direct sponsor/leader. The letter should be addressed to the Administration Officer. The following should be included in the letter:
  1. Full name of the current owner,
  2. User ID/s (AAA-1234),
  3. Full name of the recipient,
  4. Recipient‘s preferred username
  5. Recipient’s email address and/or contact number
  6. Photocopy of Valid IDs of both parties
  1. The recipient should also sign the request letter for acknowledgement.
  2. The recipient should also fill up the LIC Application Form.
  3. Submit the request letter and LIC Application form to customerservice@leads-international.com or in any of the LIC branches.

        Note on account transfer and change name requests:

Please observe that account transfer and change name are two different requests.

  1. ON ENCODING CORPORATION (Team) ACCOUNTS

Before encoding the corporation account, please make sure to submit to the management the following:

  1. Application Form for Corporation Accounts
  2. Full name, Tin number and Commission percentage of individual partners
  3. Memorandum of Agreement between Member of the Team Account

For the online platform registration, please follow the instructions below:

  1. First Name - Please enter the name of your Corporation Account
  2. Middle Name - Please enter again the name of your Corporation Account
  3. Last Name - Please enter “Corporation”
  4. Tin Number - Please enter the TIN number of your Corporation Account leader

CODE OF CONDUCT AND ETHICAL STANDARD

1. POLICY FRAMEWORK

Pursuant to company’s core values of Love of God and Country, Excellence, Accountability, Dynamism, Loyalty, Integrity, Family Orientation, and Empathy, all Partners are strictly bound and enjoined to respect and follow its Code of Conduct and Ethical Standard.

2. APPLICATION AND SCOPE

This policy hereby applies to all Leads International Partners and Employees. The code of conduct and ethical standard shall serve as the guiding principle on how a partner and employee should conduct and implement the business within Leads International, thereby serving as the company’s culture platform.

3. SPECIFIC POLICIES

A. GRAVE OFFENSES:

CODE NO. 1 – LOYALTY

All Partners shall at all times remain loyal to the company, its policies, training materials, intellectual property, marketing and promotions, incentive schemes (and the like) being issued from time to time by not committing acts which are not limited to associating, representing, sponsoring, conspiring in any mode and form for the benefit or advantage directly or indirectly of competing companies, partnership or individual, either domestic or abroad, neither introduce, present, promote, offer or sell, in any form nor manner their products, services and marketing programs and/or plans or a combination thereof, whether tangible or intangible.

Special Code No. 1 Provision:

New Partners are allowed to be connected to other networking companies provided that they do not commit acts, which are not limited to:

i. Inviting other existing partners/employees of Leads International to their other network company affiliation.

ii. Doing presentations, selling of products, doing events or any of the like and/or doing promotions of their other network company affiliate within the premises of any Leads International offices (domestic or abroad).

A new Leads International Partner is defined in any of the following:

        i. A person who has just joined or purchased a package of Leads International without any existing accounts and downlines with Leads International.

ii. An existing Partner of Leads International but has less than 50 downlines regardless of network tree position or level.

iii. An existing Partner of Leads International with monthly earnings of less than thirty thousand pesos (PhP 30,000.00) inconsistently for the first six (6) months.

If in any event that any of the Special Code No.1 Provision is violated, the appropriate penalties for Code No. 1 shall apply.

PENALTIES

FIRST OFFENSE: Written Reprimand and one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions, and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

SECOND OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 2 – HONESTY

All Partners are strictly enjoined to be honest in all conducts and dealings, locally and abroad, by not making, agitating, encouraging written or oral derogatory or defamatory remarks, utterances or any statement in any form that discredit and disgrace the company, its branches, satellite offices or any centers, which at the same time malign the credibility of its officers, employees, and management as a whole.

PENALTIES

FIRST OFFENSE: Written Reprimand and one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions, and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

SECOND OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions, and other remunerations either monetary or in kind in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 3 – INTEGRITY AND CREDIBILITY

All Partners are strictly enjoined to be honest and credible in all deeds by not committing acts against the company or fellow Partners which are but not limited to:

i. Imitating or counterfeiting any handwriting, or signature;

ii. Causing it to appear that a Partner has participated in any act or activity when he did

       not in fact so participate;

iii. Alluding or pointing to Partner/s who have participated in an act, activity or statements

       other than those made by them;

iv. Inserting untruthful statements in a narration of facts such as those in the affidavit,

       deed and other documents similar thereto;

v. Altering true dates;

vi. Making any alteration or intercalation in a genuine document, which changes its

       meaning; and

vii.Issuing in authenticated form a document purporting to be a copy of an original

      document when no such original actually exists.

PENALTY

FIRST OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 4 – FRAUD

All Partners are strictly enjoined not to commit any fraudulent act or false pretenses to the prejudice directly or indirectly of the company or fellow Partners by not committing acts, which are not limited to:

i. using a fictitious name, falsified documents or dummy, or by means of other similar

   deceits purportedly to obtain personal gain and interest;

ii. by altering the quality, fineness or weight of the product or any products pertaining to

    the business of the company or imitating any of those products; and

iii. any acts done to fellow Partner or to the company, which constitute estafa, and other

                forms of swindling under the Revised Penal Code

PENALTIES

FIRST OFFENSE: Written Reprimand with two (2) months deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

SECOND OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

In the imposition of penalties, every fraudulent act is considered as one offense.

CODE NO. 5 – LIMITATION OF NUMBER OF ACCOUNTS

No Partner shall exceed 31 local accounts per name. The illegal stacking of accounts to manipulate in purpose the compensation program of the Company is strictly prohibited. This shall comprise also using a fictitious name, or dummy, or by means of other similar deceits purportedly to obtain personal gain and interest.

PENALTIES

FIRST OFFENSE: Written Reprimand with two (2) months deactivation of all the accounts including accounts in question with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

SECOND OFFENSE: Perpetual deactivation of all the accounts including accounts in question, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 6 – EMPLOYEES’ RECRUITMENT LIMITATION

It is prohibited to recruit any Leads International Corporation employee and relatives up to the 3rd degree level of affinity of consanguinity. It is unethical that an employee of the Company shall earn directly or indirectly from its compensation plan. The penalty shall apply to both the employee and the sponsor, except when the affinity occurs after the membership of the qualified person.

PENALTIES

FIRST OFFENSE: For the employee, all the accounts will be perpetually deactivated with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to administrative sanction of possible termination of employment.

For the sponsor, one month deactivation of all accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation.

SECOND OFFENSE: For the sponsor, perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor of the company which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 7 – ILLEGAL PAYMENT SCHEMES

All Partners are strictly prohibited to encourage the acts of pawning, selling of any material objects such as laptop, cellphone, jewelries, and the likes to defray necessary expenses for the cost of the product package of any prospective partners.

This shall include demanding reservation and/or “down payment scheme” either in cash or in the form of items (such as laptop, cellphone, jewelries, and the likes) to guaranty an alleged “slot” to encourage prospective partners.

It is also prohibited to offer access CODES without the product package.

All members are expected to sell the products or packages of the company based on the management approved price and avoid selling them at a lower price.

PENALTIES

FIRST OFFENSE: One (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

SECOND OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor of the company which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 8 – UNAUTHORIZED TRANSFER OF MEMBERS

All members are strictly prohibited to transfer and encourage the acts of transferring from one group to another.

PENALTIES

FIRST OFFENSE: One (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

SECOND OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor of the company which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 9 - PROHIBITION ON CROSSLINING

All liners who are produced from a Direct Sponsor through Crosslining shall be reverted to their original sponsor. All required CODES will be paid by the sponsor who violated the prohibition. Any penalty shall be imposed on the person who induced another to crossline and the liner who transferred to another line because they both violated the prohibition. A husband and wife are considered as one and conjugal, so they should be in one structure or group. In case of noncompliance, it will be considered as a cross lining by act.

PENALTIES

FIRST OFFENSE: Affected account/s shall be recalled and will be placed under one networking group together with all their respective fruits and/or growth. Written Reprimand with one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

SECOND OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

B. MINOR OFFENSES:

CODE NO. 10 – MISREPRESENTATION

All Partners are strictly enjoined to be professionals in all acts and bearings, dealings or transactions by not committing any false statements, such as, but not limited to misrepresentation, exaggeration, disinformation, vane promises, introducing spurious products, or circumventing the marketing plans or programs of the company that contravene the tenor and purposes thereof.

PENALTIES

FIRST OFFENSE: Written Reprimand.

SECOND OFFENSE: Stern warning with one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions, and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

THIRD OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 11 – RESPECT

All Partners are strictly enjoined to observe mutual respect towards fellow Partners, Officers and Employees of the company, by not committing directly or indirectly any inimical or malevolent acts, which are but not limited to rudeness, retaliation, coercion, bullying, disrespect, and discourtesy.

PENALTIES

FIRST OFFENSE: Written Reprimand.

SECOND OFFENSE: Stern warning with one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

THIRD OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor of the company which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 12 – RELATIONSHIP BETWEEN PARTNERS

All Partners are strictly enjoined to have sense a of equality and sincerity toward fellow Partners by observing the one (1) month rule. Under this rule, a sponsor/direct partner has one (1) month immunity period from presentation of the marketing plan or program of the company and signing of an application form by the prospective partner, within which fellow partners shall not interfere, recruit, intervene or alienate said prospective partner at the prejudice of the first partner.

The requirement of signing an application form can be dispensed if the prospective partner admits that the original sponsor has presented the marketing plan or program of the company or can be supported by other competent evidence.

CODE NO. 12 – RELATIONSHIP BETWEEN PARTNERS

All Partners are strictly enjoined to have sense a of equality and sincerity toward fellow Partners by observing the one (1) month rule. Under this rule, a sponsor/direct partner has one (1) month immunity period from presentation of the marketing plan or program of the company and signing of an application form by the prospective partner, within which fellow partners shall not interfere, recruit, intervene or alienate said prospective partner at the prejudice of the first partner.

The requirement of signing an application form can be dispensed if the prospective partner admits that the original sponsor has presented the marketing plan or program of the company or can be supported by other competent evidence.

CODE NO. 12-A. BAD FAITH AND CIRCUMVENTION OF THE PROVISION

Even after the lapse of the one (1) month period, if it can be proved by competent evidence that the sponsor influenced or convinced the prospective partner to wait for the lapse of the 1- month period, this provision is violated and the penalty hereunder still applies.

PENALTIES

FIRST OFFENSE: The partner who interfered, intervened, or alienated the prospective member within the one (1) month period at the prejudice of the first partner shall suffer the penalty of one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions, and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation. On the other hand, the account of the prospective partner who later became partner shall be placed at the networking group of the first partner/sponsor. The violator shall also pay the expenses for the transfer of the recruited member to the original sponsor.

SECOND OFFENSE: Six (6) months deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution. The violator shall also pay the expenses for the transfer of the recruited partner to the original sponsor.

THIRD OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 13 – DECENCY

All Partners are strictly enjoined to be at all times clothe with integrity by not committing any immoral act or conduct, which tends to debase company policies, goodwill, integrity and transgress decency, morals, and good behavior, while inside or within the company premises, its branches, trading hubs (satellite offices), or mobile hubs.

PENALTIES

FIRST OFFENSE: Written Reprimand.

SECOND OFFENSE: Stern warning with one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

THIRD OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions, and other remunerations either monetary or in kind, in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 14 – MEMBERSHIP RIGHTS & USE OF ACCESS CODE CARDS

Every new Partner is entitled to receive the following after payment: a) Product Package, b) Access CODE Card, and c) Marketing Kit.

The new Partner should encode the access code within (3) three days. In case the Partner requested the direct sponsor to pay on his/her behalf, the direct sponsor is obligated to:

        i. secure authorization from the Partner to receive the product package and access code

              card and submit a copy of their valid identification cards;

        ii. inform the new Partner of the existence of the access code card;

        iii. encode the access card in the name of the Partner within three (3) days from the date

                of purchase.

Any contravention of the above is a violation and punishable with the following penalties.

PENALTIES

FIRST OFFENSE: Written Reprimand.

SECOND OFFENSE: Stern warning with one (1) month deactivation of all the accounts including accounts in question with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

THIRD OFFENSE: Perpetual deactivation of all the accounts including accounts in question, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE NO. 15 – UNAUTHORIZED USE OF LEADS INTERNATIONAL CORPORATION TRADEMARK/ TRADENAME

Partners shall not use the trademark or tradename of the Company in any mode or form without the prior written approval of the Company. The use of website, Facebook and other similar means that is confusingly similar with LEADS INTERNATIONAL CORPORATION’s website or Facebook official account, or other online marketing tool are strictly prohibited. Partners are obliged to abide by the digital guidelines of the Company.

PENALTIES

FIRST OFFENSE: Written Reprimand.

SECOND OFFENSE: Stern warning with one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

THIRD OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor of the company which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

CODE 16. CONFIDENTIALITY

A partner shall not disclose any information or agreement between parties (company, group, and/or partners) that are not yet finalized and not yet officially announced by the company via company online bulletin, memorandum, official website and facebook page). Disclosures are either in the form of, but not limited to:

        a. Posting in any social media platform like Facebook, Tweeter, and the likes and

b. Verbal discussion (oral, sms, online messaging).

All partners are expected not to violate the confidentiality code. Severe sanctions may be enforced according to the discretion of the company especially when such act creates hyping, misinterpretation, misinformation, and between and among individual partners and groups. If such an act results to company losses, damages, and risk to the partners and other stakeholders of the company, penalties may be elevated to a grave offense.

PENALTIES

FIRST OFFENSE: Written Reprimand.

SECOND OFFENSE: Stern warning with one (1) month deactivation of all the accounts with forfeiture in favor of the company of all the benefits, privileges, commissions and other remunerations either monetary or in kind, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

THIRD OFFENSE: Perpetual deactivation of all the accounts, as well as forfeiture of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor of the company, which accrued at the time of the commission of the violation, without prejudice to criminal prosecution.

        C. SPECIAL PROVISIONS

CODE NO. 1 – PERMISSIBLE SPONSORHIP OF DORMANT ACCOUNTS

Partners with no maintenance or sponsor for at least one (1) year can be sponsored by any other partner in good standing provided that a written approval is secured from LEADS INTERNATIONAL CORPORATION management. This privilege should not be circumvented or exercised in bad faith because the partner and the sponsor will be both penalized with the penalties in cross-lining, if found liable.

CODE NO. 2 – FILING FOR AN APPEAL AFTER EXECUTION OF PENALTIES

PENALTIES FOR MULTIPLE VIOLATIONS:

        i. Two (2) or more Grave offenses – Perpetual deactivation of all the accounts, as well as forfeiture

               of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor

               of the company, which accrued at the time of the commission of  the violation, without prejudice

               to criminal prosecution.

ii. Up to Three (3) Minor offenses – Stern warning with one (1) month deactivation of all the

   accounts including accounts in question with forfeiture in favor of the company of all the benefits,

               privileges, commissions and other remunerations either monetary or in kind, which accrued at

               the time of the commission of the violation, without prejudice to criminal prosecution.

        iii. Four (4) or more Minor offenses – Perpetual deactivation of all the accounts, as well as forfeiture

                of all benefits, privileges, commissions and other remunerations either monetary or in kind, in favor

                of the company, which accrued at the time of the commission of the violation, without prejudice

                to criminal prosecution.

        iv. One (1) Grave offense and up to Two (2) Minor offenses – Stern warning with two (2) months

                deactivation of all the accounts including accounts in question with forfeiture in favor of the

                company of all the benefits, privileges, commissions and other remunerations either monetary

                or in kind, which accrued at the time of the commission of the violation, without prejudice to

                criminal prosecution.

v. One (1) Grave offense and Three (3) or more Minor offenses – Perpetual deactivation of all

    the accounts, as well as forfeiture of all benefits, privileges, commissions and other

    remunerations either monetary or in kind, in favor of the company, which accrued at the time of

    the commission of the violation, without prejudice to criminal prosecution.

4. STANDARD PROCESS

If a Partner/Employee of Leads International files a complaint in violation of the Code of Conduct and Ethical Standards, the whole investigation process will start no later than three (3) days after filing the complaint and will take seven (7) business days for a decision to be made.

4.1 Important Notes:

i. The Company, may in its sole and absolute discretion, take whatever actions or measures it deems

   necessary and appropriate, including but not limited to, suspension, forfeiture of earnings,

   monetary fines, obligation to reimburse Leads International Corporation’s legal fees, permanent

   loss of lineage, or perpetual deactivation of membership.

ii. The Company has the sole and absolute discretion to determine the appropriate penalty/sanction   based on the severity of the violation and damage that resulted or could result from the action/s made.

iii. The Company has the right to impose a heavier penalty depending on the gravity of the violation/s.

v. LEADS INTERNATIONAL CORPORATION may hold the direct partner/s or sponsor/s of the

   violator responsible for violations of these Ethical Standards if investigations find they have

   knowledge of them or were a party to them.

v. The Company reserves the right to amend, suspend in whole or in part the implementation

    of this policy/guidelines.

5. MONITORING AND EVALUATION

5.1 The Training and Ethics Department serves as the implementing arm with the help of the

       Ethics Committee.

5.2 The adherence of members to this code of conduct and ethical standard shall be the

      responsibility of all partners and employees of the company.

6. DISSEMINATION

This Code of Conduct and Ethical Standard will be disseminated through memo and via the company bulletin. New and existing partners are responsible for being updated on the existing terms and policies of the Company.