Terms & Conditions Referral

Affiliate Agent & Reseller Agreement

Policies & Procedures

1) Purpose

These Policies & Procedures (the “P&P”) spell out the rights and obligations between Virtual Era Sdn Bhd (the ”Company”) and its Independent Representatives (“Representatives”). The P&P, the Representative Application Form that is accepted by the Company, and the Compensation Plan together govern the total contractual relationship between the Company and its Representatives.

2) Definitions

“Agreement” means the completed online Representative Application Form that was submitted by a Representative and subsequently accepted by the Company.

“Anniversary Date” means the anniversary of the date on which a Representative was accepted as a Representative.

“Annual Reseller Fee” means the non-refundable annual administration fee a Representative has to pay to renew his/her contractual relationship as a Representative with the Company.

“Starter Kit” means a kit that includes training materials and the Company’s information.

“Company” means Virtual Era Sdn Bhd, which is a company incorporated with limited liability under the laws of Malaysia and having its registered office at 4398, Jln Dato Sellathevan, Kampung Jawa, 40460 Shah Alam, Selangor, Kampung Jawa, 40460 Shah Alam, Selangor

“VIRTUAL ERA SDN BHD Compensation Plan” or “Compensation Plan” or “ComPlan” means the VIRTUAL ERA SDN BHD Marketing and Compensation Plan where an IR can earn commissions/bonuses based on his/her sales of VIRTUAL ERA SDN BHD products/services and services.

“Compensation Summary” means a periodic statement issued by the Company to its Representatives that lists the value of commissions and/or bonuses each Representative has earned within the relevant period.

“Customer” or “Retail Customer” means a person who purchases the Company’s products/services but does not register as a Representative.

“Downline” means the TCs or the Customers/Representatives below a specific TC or Representative respectively in the Genealogy as the context requires.

“Genealogy” means the relationship or relative positioning of TCs in the Company’s database.

“IRship Package”  is  the  welcome  pack  comprising  of  an  online  Starter  Kit  and  Product

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Portfolio consisting of an array of multimedia presentations, videos and brochures and many other valuable business-building tools for new Representatives;

“Merger” means the combination of two (2) or more into one (1).

“OTP Form” means Offer to Purchase Form, by which a person can offer to purchase the Company’s products/services.

“P&P” means the Policies & Procedures as stated herein.

“Person” includes anybody of persons, corporate (for example a limited company) or unincorporated (for example a club or an association).

“Business Partner ID” means the first ID a Representative is given when s/he first becomes a Representative.

“Product/Service Portfolio” means a kit that includes an array of multimedia presentations, videos and brochures and many other valuable business building tools.

“Products/services ” mean any products/services/services including services, unless the context otherwise requires.

“VIRTUAL ERA SDN BHD Account” means an accounting record inside the Company’s accounting system

“Representative” or “Independent Representative” or “IR” means a person who has enrolled to build a business organisation by selling products/services/services and referring others.

“Representativeship” means all the TCs that a Representative has and all other interests s/he has as a Representative.

“Independent Representative Identification Number” (“IR ID No.”) means the identification number that the Company assigns to a Representative when the Company accepts that person as its Representative. It is a unique number for each Representative and will be used to identify that Representative through his/her Representative business relationship with the Company.

“Referrer” means an IR who refers Retail Customers or prospective Independent Representatives to VIRTUAL ERA SDN BHD.

“Social Media Policy” means the Company’s policy and guidelines on how IRs can discuss and promote their business on social media platforms such as blogs, Facebook, YouTube, LinkedIn, MySpace, etc. and this can be found on the IR’s Virtual Office.

“Tracking Centre” or “TC” means a position in the Company’s database. Commissions and/or bonuses are calculated with reference to each Tracking Centre.

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“Upline” means the TCs or Representatives above a specific TC or Representative respectively in the Genealogy as the context requires.

“MYR” or “RM” or “Ringgit Malaysia” means the official currency of Malaysia.

3) Independent Representatives

3.01  How to become an Independent Representative

To become an Independent Representative you shall:

• Be of legal age in the state, territory or country of Malaysia;

• Have a Referrer;

• Complete the online Representative Application Form on the official website of the Company;

• Purchase an “IRship Package”, the price of which includes the first year Annual Reseller Fee, which is payable by Representative upon joining.

3.03  Business Entity

For applications other than for a natural person, all legal documents along with stockholder details for applying legal entity shall be produced. They shall be submitted within ten (10) days from the date of application to the Company’s office in Malaysia. Failure to produce such documents may cause the application to be rejected.

3.04  Changes in Directorships or Shareholder

In the event of any changes in Directorships or Shareholder in said entities in subclause 3.03, they shall immediately inform the Company of the change(s) and the Company shall have the right at its sole discretion to terminate or confirm their Representativeship.

3.05  Multiple online Representative Application Forms

If an applicant submits multiple online Representative Application Forms that list different Referrers only the first completed application received by the Company will be accepted. This

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subclause shall not apply to a Representative who initially registers in the VIRTUAL ERA SDN BHD Compensation Plan and subsequently submits application for participation in the Local Compensation Plan, provided that the application for participation in the Local Compensation Plan does not change the line of referralship of the Representative under the VIRTUAL ERA SDN BHD Compensation Plan.

3.06  Customer’s Referrer

For a Customer of the Company who later applies to become a Representative, his/her last Referrer for his/her purchase shall also be his/her Referrer of his/her Representativeship, unless the Customer’s last purchase from the Company was more than six (6) months before his/her Representative application and in his/her application s/he states another Representative as his/her Referrers.

3.07  Acceptance

The applicant will only be a Representative if his/her application is received and accepted by the Company. The Company has the right to accept or decline any application at its sole discretion. In the case of rejection, a notice will be given to the applicant with a complete refund including those listed in sub-clause 3.01(d).

3.08  Fictitious or assumed name

A person or entity may not apply as a Representative using a fictitious or assumed name.

3.09  Refund and Buy Back Guarantee

Customers and/or Representatives are hereby notified that Products/services/services are subject to the refund and buy back guarantee stipulated in the Terms and Conditions found online, which apply accordingly to them.

4) Appointment

4.01    Representative status

Once the Company accepts an applicant’s Representative Application Form, the Company will grant to the applicant a Representative status within the Compensation Plan by sending to him/her a notice and thereafter the applicant becomes a Representative. The Company will give the Representative a Representative Identification Number. The Representative shall include his/her Representative Identification Number in all his/her orders and correspondences with the Company.

4.02    Rescind

The Company reserves the right to rescind the said acceptance at its sole discretion within sixty

• days after receipt of the application. Upon rescission of the acceptance, the Company shall give notice to the applicant to notify him/her of the rescission. However, the Company is not obliged to give any reason to the applicant for the Company’s decision to rescind.

4.03 Renewal and Termination

• The appointment of a Representative is for a term of one (1) calendar year only. A Representative must renew his/her Representativeship annually on or before the Anniversary Date. Subject to any relevant requirements under the Compensation Plan, a Representative has the right to renew the Agreement by paying the non-refundable Annual Reseller Fee on or before the Anniversary Date. If a Representative fails to renew

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the Agreement on or before the Anniversary Date, s/he will thereafter have a grace period of thirty (30) days to pay the Annual Reseller Fee. If the Annual Reseller Fee is paid within the thirty (30) days, s/he will be deemed to have renewed his/her Agreement on his/her Anniversary Date in that year.

• If a Representative does not renew his/her Representativeship on or before his/her Anniversary Date and before the expiry of the 30-day grace period, his/her Representativeship shall be terminated with effect from the Anniversary Date. Once a Representativeship is terminated, the IR concerned shall not be entitled to enjoy any IRs’ rights provided for in this P&P.

4.04  Maintenance of Terminated IR’s VIRTUAL ERA SDN BHD Account

• The Company reserves the right to charge a reasonable fee to maintain a terminated IR’s VIRTUAL ERA SDN BHD Account. This maintenance fee shall be a standard amount chargeable on a monthly basis through the VIRTUAL ERA SDN BHD Account system.

• The maintenance fee will be charged regardless of the amount of balance or credit left in the terminated IR’s VIRTUAL ERA SDN BHD Account until the said VIRTUAL ERA SDN BHD Account is zeroed. If the IRship in respect of the VIRTUAL ERA SDN BHD Account has been terminated for seven (7) years and above, the credit or balance left in the said VIRTUAL ERA SDN BHD Account may be forfeited in total to the Company.

• The maintenance fee will be deducted from any balance in the relevant terminated IR’s VIRTUAL ERA SDN BHD Account and will be shown in the relevant terminated IR’s VIRTUAL ERA SDN BHD Account report/statement.

• The Company reserves the right to amend the terminated IR’s maintenance fee from time to time and at any time without prior notice to the IR.

4.05 Independent contractor

A Representative is an independent contractor having the rights and obligations conferred by the P&P to promote or market the products/services/services of the Company.

4.06 No right to represent Company

A Representative is not a franchisee, partner, employee, agent or representative of the Company. S/he has no right to, and shall not, represent himself/herself as such. The relationship between a Representative and the Company is wholly governed by this P&P. Any breach of this clause on the part of the Representative is a serious breach of the P&P and may result in the immediate termination of his/her Representativeship.

4.07 Non-employee

As a Representative is not an employee of the Company, any costs s/he incurs in the development of his/her business are at his/her own expenses. S/he shall not be entitled to seek reimbursement from the Company.

4.08. Claim of workmen’s compensation

Similarly, the Company is not responsible for payment or co-payment of any employee benefits for its Representatives. Representatives are responsible for their own liability, health, disability

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and workmen’s compensation insurance, etc.

5) Representative’s Rights and Obligations

5.01    Non-exclusivity

A Representative has a non-exclusive right to market and promote products/services/services of the Company. There are no geographical limitations existing on the referring or selling country, provided, however, that the Company reserves the right not to sell products/services/services or services in any states, territories or countries.

5.02   Right to refer

Only a Representative has a right to refer Customers and/or refer another new Representative to the Company.

5.03   Right to purchase at discounted prices

The first qualifying purchase of products/services/services by a Representative of the Company shall be at Retail Price(s) if the Representative has not been able to promote any product of the Company successfully to a Customer before his/her own first purchase. Subject to the aforesaid, the Representative shall have a right to purchase products/services/services of the Company at a discounted price known as the “IR Discounted Price”.

5.04   Rights to Company literatures and communication, etc.; Rights to participate in Company functions

Representatives may receive periodic literature and other communication from the Company. They will also be invited to, and upon payment of appropriate charges if applicable, participate in Company-sponsored support, service, training, motivational and recognition functions. They may also be invited to participate in promotional and incentive contests and programmes sponsored by the Company for its Representatives.

5.05   No right to represent the Company as an agent or an employee

A Representative has no right to negotiate or conclude any contract on behalf of the Company. Nor shall s/he hold himself/herself out as having such a right. S/he shall not represent himself/herself as an agent or an employee of the Company.

5.06   Obligation for personal promotion

Regardless of their rank of achievement, Representatives have an ongoing obligation to continue to personally promote sales through the introduction of new Customers to the Company and through servicing their existing Customers.

5.07   Obligations to Downlines

Any Representative who introduces another Representative to the Company is highly recommended to perform a bona fide assistance and training function to ensure that his/her Downline is properly operating and conducting his/her Representative business. It is both to the advantage of Referrers and their Downlines to have ongoing contact and communication. Representatives must truthfully and fairly describe the Compensation Plan. No past, potential or actual income claims may be made to prospective Representatives. Nor may Representatives use their own incomes, or other Representatives’ incomes, as indication of the success assured to others. Commission cheques shall not be used as marketing materials. Representatives shall

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not guarantee commissions or estimate expenses to prospects.

5.08    Cross Lining

Subject to subclause 9.01 and subclause 9.03, no Representative may refer or attempt to refer another Representative from a different line of referralship to ‘switch’ to another line of referralship. Examples of Cross Lining are:

• Placing additional TCs of his/her own in lines of referralship not below his/her Business Partner ID;

• Placement of a new Representative using anyone’s name known to the Referrer and placing it in lines of referralship not below the Referrer’s Business Partner ID while intending to profit from the proceeds of the said new Representative;

• A Representative owning an interest in an entity that is a Representative in lines of referralship not below his/her Business Partner ID;

• Entering in other lines of referralship under the same name as an existing Representative using a valid Representative Identification Number other than the one used previously. Any situation (whether the above examples or others) found to be in violation of this subclause shall be met with the greatest scrutiny and may result in termination of the newly placed Representative, as well as the Representative having instigated the said situation.

5.09    60-Day Non-Compete Clause

If a Representative who attempted and successfully procured a prospective Customer/Representative to sign any written document evidencing that the Representative attempted, successfully or unsuccessfully, to refer that prospective Customer/Representative to the Company, the prospective Customer/Representative shall not within sixty (60) days from the date of the written document register himself/herself under the referralship of another Representative. The Company shall have the right to suspend, terminate or switch the TC or Representativeship for any breach of this subclause.

5.11   Breach of security

All Representatives have a responsibility to maintain the network integrity of the Company. Any Representative who is found ‘hacking’ into or interfering or tampering with the Company’s database or any part of the Company’s computer system (hardware and/or software) or attempting to do any of the aforesaid acts without the proper authorisation shall be liable to immediate termination of his/her Representativeship. S/he shall also be liable for all consequential damages and losses of the Company.

5.12    Legal compliance

Representatives must comply with all laws, statutes, regulations and ordinances concerning the operation of their Representative business.

5.13    Tax, expenditures, etc.

Representatives are personally responsible for paying local, state, provincial and federal taxes on any income they generate as Representatives. Unless required by laws, regulations or rules in any relevant countries, the Company shall have no obligation to provide tax information about the commissions and/or bonuses it’s Representatives earned on behalf of Representatives to any government authorities or to withhold any commissions and/or bonuses for paying its Representatives taxes.

Any commissions and/or bonuses paid by the Company are gross profits with no taxes of any kind withheld by the Company. If subsequent to payment of commissions and/or bonuses to a Representative, the Company is found liable for not withholding tax relating to those commissions and/or bonuses, the Representative shall indemnify the Company for such a liability.

5.14    Obligation to the Company

A Representative shall, at all times, remain loyal to the Company and shall not publish any written and/or verbal disparaging or adverse information/statement/s against the Company. S/he shall hold the Company’s management in high esteem at all times, failing which, s/he may be terminated notwithstanding that s/he may also be liable for libel or slander.

6) Commissions and Bonuses

6.01    Qualification for commissions and/or bonuses

A Representative must be active and in compliance with the Agreement, P&P and the Compensation Plan and have paid the Annual Reseller Fee to qualify for commissions and/or bonuses. So long as a Representative is entitled under the Compensation Plan to receive commissions and/or bonuses, the Company shall pay commissions and/or bonuses to the Representative in accordance with the Compensation Plan. Representatives must consult the Compensation Plan for a detailed explanation of the benefits, commissions and/or bonuses structure and the corresponding requirements.

Commissions and/or bonuses are paid ONLY on the sale of the Company’s products/services/services. No commission or bonus is paid on the purchase of the Company’s sales materials, literatures,

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Starter Kit, Product Portfolio, or for referring other Representatives and/or Customers.

In order to receive commissions on products/services/services sold, a Representative has to complete a Representative Application Form that has to be received and accepted by the Company prior to the end of the Commission Period in which the sale is made.

Commissions and/or bonuses are calculated for each individual Tracking Centre. A Representative is entitled to have more than one (1) Tracking Centre. For details of acquisition of additional TCs and placement of TCs, please see the Compensation Plan as detailed in Appendix 1.

6.03    Adjustments to commissions and/or bonuses and/or referral credits

Representatives receive commissions, bonuses , referral credits and other benefits under the Compensation Plan based on the actual sales of products/services/services to Customers. When a product is returned to the Company for a refund or is repurchased by the Company or the transaction is in any way not successfully completed, the commissions, bonuses , referral credits and/or other benefits attributable to the returned or repurchased product or the unsuccessful transaction will be deducted in the Commission Period in which the refund or repurchase occurs, and continuing every Commission Period thereafter until the commissions, bonuses , referral credits and/or other benefits are fully recovered from the Representatives who received commissions and/or bonuses on the sales of the refunded or repurchased product.

In addition, if the Company has already paid commissions and/or bonuses , referral credits to a Representative for a returned product, the Company shall have the right to request the Representative for the return of the said commissions and/or bonuses and the Representative shall have the obligation to return such commissions and/or bonuses , referral credits to the Company.

6.04    Compensation Summary

The Company reserves the right to charge a processing fee when issuing an electronic or paper Compensation Summary requested by Representatives.

6.05   Payment of commission / referral credits

All commissions and/or bonuses , referral credits that a Representative earns will be credited to his/her VIRTUAL ERA SDN BHD ( SpanarBOY ) Account.

6.06    Unclaimed commissions and/or bonuses , referral credits

Representatives must deposit or cash commission cheques , referral credits within 12 months from their date

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of issue.

6.07    Back order policy

The Company will expeditiously ship all products/services/services currently in stock. Any out-of-stock items (unless discontinued) will be placed on back order and distributed upon the Company receiving additional inventory. Referring Representatives will be granted commissions on back-ordered items once they are shipped unless, notified of the discontinuance of such product. Back orders may be cancelled upon the Customer’s or IR’s request.

6.08   Set off

The Company shall have the right to set off any debt(s) a Representative owes to the Company against his/her commissions and/or bonuses.

7) Resignation, Suspension and Termination

7.01   Resignation

A Representative may voluntarily resign from and/or terminate his/her Representativeship by tendering a thirty (30)-day written notice of such voluntary resignation or termination to the Company. Acceptance of voluntary resignation and/or termination upon the receipt of such notice is at the sole discretion of the Company.”

7.02   Suspension

A Representative may be suspended for violating any terms of the Agreement, P&P, the Compensation Plan, and/or any other relevant documents produced by the Company. When a decision is made to suspend a Representative, the Company will inform the Representative in writing of the decision, the effective date of the suspension, the reason(s) for the suspension, and the steps necessary to remove such suspension (if any). The suspension notice will be sent to the Representative’s address on file pursuant to the notice provisions contained in the P&P. Such suspension may or may not lead to termination of the Representative as so determined by the Company at its sole discretion. If the Representative wishes to ask the Company to review the decision, s/he shall make such a request in writing to the Company within fifteen (15) days from the date of the suspension notice. The Company will review and consider the suspension and notify the Representative in writing of its decision within thirty (30) days from the date of the receipt of the Representative’s written request. The Company will thereafter not further review its own decision. The Company may take certain action(s) during the suspension period, including, but not limited to, the following:

• Prohibiting the Representative from holding himself as Representative or using any of the Company’s proprietary marks and/or materials;

• Withholding and/or forfeiting any commissions and/or bonuses due to the Representative;

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• Prohibiting the Representative from purchasing services and products/services/services from the Company;

• Prohibiting the Representative from referring new Representatives, contacting current Representatives, or attending meetings of Representatives;

• If the Company, at its sole discretion, determines that the violation that caused the suspension is continuing, and has not satisfactorily been resolved, or a new violation involving the suspended Representative has occurred, the suspended Representative may be terminated.

7.03    Termination

Dependent upon the seriousness of the violation, a Representative may be immediately terminated for violating the terms of the Agreement, P&P, Compensation Plan, and/or any other relevant documents produced by the Company. The Company may, at its sole discretion, terminate a violating Representative without placing the Representative on suspension. When the decision is made to terminate a Representative, the Company will inform the Representative in writing to the address in the Representative’s file that the termination has occurred.

If a Representative wishes to ask the Company to review the decision to terminate, s/he shall make such a request to the Company in writing within fifteen (15) days from the date of notice of termination. If no such request is received by the Company within the fifteen (15) days period, the termination will automatically be deemed final. If a Representative files a timely written request, the Company will review the decision and notify the Representative of the result of the review within thirty (30) days after receipt of the Representative’s request. Thereafter, the Company will not further review its own decision. In the event the termination decision is not reversed, the termination will remain effective as of the date stated in the original termination notice.

7.04    Effects of resignation, suspension and termination

After resignation, the former Representative shall not further represent himself/herself as a Representative of the Company, and shall cease to use any materials bearing the trademarks, service marks, trade names and any signs, labels, stationery or advertising referring to or relating to any products/services/services, plan or programme of the Company. S/he shall have no rights to enjoy any benefits under the Agreement, P&P, and/or the Compensation Plan.

If a Representative is suspended, s/he shall not before the removal of his/her suspension, further represent himself/herself or hold himself/herself out as a Representative of the Company. Nor shall s/he use any materials bearing the trademarks, service marks, trade names and any signs, labels, stationery or advertising referring to or relating to any products/services/services, plan or programme of the Company. S/he shall have no rights to enjoy any benefits under the Agreement, P&P and/or the Compensation Plan. But s/he shall be allowed to retain his/her TCs pending the final resolution of his/her case. Any commissions and/or bonuses payable to him/her should s/he be suspended shall be retained by the Company. If the suspension of the Representative is subsequently removed, all outstanding commissions and/or bonuses may be paid to the Representative at the Company’s sole discretion.

If  a  Representative  is  terminated,  then  immediately  upon  termination,  the  terminated

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Representative:

• Must remove and permanently discontinue the use of the trademarks, service marks, trade names and any signs, labels, stationery or advertising referring to or relating to any product, plan or programme of the Company;

• Must cease representing himself/herself as a Representative of the Company;

• Loses all rights to his/her Representative position in the Compensation Plan and to all commissions and earnings payable to him/her by the Company;

• Must take all actions reasonably required by the Company relating to protection of the Company’s confidential information. The Company has the right to set off any amounts owed by the Representative to the Company including, without limitation, those incurred pursuant to any indemnity obligation under subclause 11.15 herein, from commissions and/or bonuses or other compensation due to the Representative.

7.05   Reapplication

A Representative who resigns or has his/her Representativeship terminated due to non-renewal of his/her Representativeship may reapply as a new Representative, but such reapplication will only be considered twelve (12) months after resignation or termination due to non-renewal. However, a Representative who has been terminated due to a violation of the P&P and/or the Code of Ethics as determined by the Company may only re-apply as a Representative twelve (12) months from the date of termination, and the acceptance of which will be subject to the approval of the Company.

8) Transfer of Representativeship

8.01  Acquisition of Representativeship

• Except as expressly set forth herein, a Representative may not sell, assign or otherwise transfer his/her Representativeship (or any rights thereof) to another Representative or to any person. Notwithstanding the foregoing and clause 8.01(c) but subject to subclause 8.01(d), a Representative may transfer his/her Representativeship to his/her personal Referrer or the personal Referrer of his/her personal Referrer up to five (5) personal Referrer levels. In such an event, the Referrer’s Representativeship and the transferring Representative’s Representativeship shall be merged into one entity.

• No transfer of Representativeship shall be allowed within a six (6) calendar month period from the date of the enrolment of the Representative. In the event of a transfer, a Representative has to transfer all his/her TCs, i.e. the entire Representativeship, to the transferee without exception.

• Any Representative desiring to acquire the Representativeship of another Representative or any interest therein must first terminate his/her Representativeship and wait twelve (12) months before becoming eligible for such a purchase. All such transactions must be fully disclosed and must be approved by the Company in advance.

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• Representatives may not sell, assign, merge or transfer their Representativeship (or any right thereto) without the prior written approval of the Company and compliance with the following conditions:

(d.1) The Company possesses the right of first refusal with respect to any sale, assignment, transfer or merger of any Representativeship. A Representative wishing to sell, assign, or transfer his/her Representativeship must first offer it to the Company in writing on the same terms and conditions as any outstanding or intended offer. The Company will advise the Representative within fifteen (15) business days after receipt of such notice of its decision to accept or reject the offer. If the Company fails to respond within the fifteen (15) days period or declines such offer, the Representative may make the same offer or accept any outstanding offer that is on the same terms and conditions as the offer to the Company to any person who is not a Representative;

(d.2) The selling Representative and/or the prospective purchaser must provide the Company with a copy of all documents that detail the transfer, including, without limitation, the name of the purchaser, the purchase price, and terms of purchase and payment;

(d.3) An office administration transfer fee must accompany the transfer documents;

(d.4) The Representativeship transfer agreement must contain a condition made by the selling Representative for the benefit of the proposed purchaser not to compete with the proposed purchaser or attempt to divert or refer any existing Representative for a period of one (1) year from the date of the sale or transfer;

(d.5) Upon a sale, transfer or assignment being approved in writing by the Company, the purchaser must assume the position and terms of the agreement of the selling Representative and must execute a current Representative Application Form and all such other documents as required by the Company;

(d.6) The Company reserves the right, at its sole discretion, to stipulate additional Terms and Conditions prior to approval of any proposed sale or transfer. The Company reserves the right to disapprove any sale or transfer.

8.02   Change of Terms or Conditions

If a Representative changes the Terms or Conditions of the offer at any time, the process of offering must start over, beginning with offering it to the Company.

8.03   Complying with Company requirements

Any sale, assignment, or transfer of Representativeship, or any interest therein not complying with the above requirements, will not be accepted or recognised by the Company.

8.04   Products/services/services not settled in full

No transfer, assignment or sale of Representativeship will be allowed if the transferor, assignor or selling Representative has not fully paid for products/services/services s/he has ordered from the Company.

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8.05   Transfer to one’s Downline

Transfer of a Representativeship to one’s own Downline is not allowed.

8.06    Circumvent compliance

If it is determined, at the Company’s sole discretion, that a Representativeship was transferred in an effort to circumvent compliance with the Agreement, the P&P and/or the Compensation Plan, the transfer will be declared null and void. The Company may, at its sole discretion, take appropriate action(s), including, without limitation, terminating the transferring Representative’s Representativeship.

9) Devolution

9.01    Death

A Representative has a right to nominate a person as his/her nominee to whom the Company will transfer the Representative’s Representativeship upon the death of the Representative. The Representative has a right to change his/her nominee in his/her lifetime by giving written notice to the Company. However, the Company will not accept such a transfer unless the nominee or the last nominee has executed a current Representative Application Form and submitted certified copies of the death certificate of the Representative to the Company. The nominee will then be entitled to take over the Representativeship of the late Representative and entitled to all the commissions, bonuses or other benefits accrued thereafter and all the rights, and/or be subject to all the obligations as a Representative of the Company. If a Representative did not make any nomination in his/her lifetime, his/her Representativeship shall be terminated immediately upon his/her death. Any cross lining as a consequence of the devolution of Representativeship under this clause shall not be treated as a breach of the P&P.

9.02    Dissolution of a partnership

If a Representativeship is registered by two (2) or more persons, they will be deemed as a partnership under the Agreement and the P&P. In the event that the partnership is dissolved, unless the Company receives a valid and legally enforceable agreement signed by all the partners regarding the arrangement of their Representativeship within thirty (30) days of being notified of the dissolution of the partnership, their Representativeship will be automatically terminated after the expiry of the said thirty (30) day period.

9.03   Marriage and divorce

In the case that two (2) Representatives in separate lines of referralship get married, they may maintain their own individual Representativeship. They are also allowed to merge their Representativeships into one (1) but they are not allowed to transfer or change the positions of their TCs in the Genealogy. This shall not be treated as cross lining under subclause 5.08. should a married couple opt to create a single Representativeship reflecting both as equal owners and these two (2) individuals subsequently divorce or separate, the Company will continue to pay earned commission as before the divorce or separation until the Company receives written notice, signed and notarised by both parties or by a court decree, specifying how future commissions are to be paid.

• Proprietary Information

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10.01 Confidential information

During the term of the Agreement, the Company may supply to Representatives confidential information, including, but not limited to, genealogical and Downline reports, Customer lists, Customer information developed by the Company or developed for and on behalf of the Company by Representatives (including, but not limited to, credit data, Customer and Representative profiles, and product purchase information), Representative lists, manufacturer and supplier information, business reports, commission or sales reports, and such other financial and business information that the Company may designate as confidential. All such information (whether in written or electronic format) is proprietary and confidential to the Company and is transmitted to Representatives in strictest confidence on a ‘need-to-know’ basis for use solely in the Representatives’ business with the Company.

Representatives must use their best efforts to keep such information confidential and must not disclose any such information to any third party, or use such information for any non-Company activity directly or indirectly while a Representative and thereafter. Representatives must not use the information to compete with the Company or for any purpose other than promoting the Company’s programme and its products/services/services and services. Upon determination, nonrenewal or termination of the Agreement, Representatives must discontinue the use of such confidential information and promptly return any confidential information in their possession to the Company.

10.02 Online and telephonic reports

Upon a Representative’s request, the Company may provide information such as online or telephonic downline activity reports, including, but not limited to, personal and group sales volume (or any part thereof), and downline referring activity, to the Representative. Nevertheless, due to any of the various factors, including but not limited to the inherent possibility of human and mechanical error; information technology failures; the accuracy, completeness, and timeliness of orders; denial of credit card and electronic cheque payments; returned products/services/services; and credit card and electronic cheque charge-backs; the information and/or the accuracy, completeness, adequacy, timeliness or otherwise thereof is not guaranteed by the Company or any persons creating or transmitting the information.

10.03 Use of Company name, logo, or trade names, etc.

• The Company name, logo, trade name, trademarks, product names, brochures, catalogues, sales material, contracts and sales training sessions, literature, audio or video material, presentations or events are copyright-protected property of the Company worldwide and the Company retains ownership rights or exclusive licenses to the entire contents.

• Representatives shall not reproduce or distribute privately reproduced versions of such materials under any circumstances. Representatives shall not use the Company name, logo, trade name, trademarks, programme names, or product names in any manner or form.

10.04 Copyright restrictions

With respect to product purchases from the Company, Representatives must abide by all manufacturers’ use restrictions and copyright protections.

Without prior written approval from the Company, no Representative shall video and/or audio record the Company’s meetings, conferences and/or training sessions or any speeches (including conference calls) given therein.

10.05 Vendor confidentiality

The Company’s business relationships with its vendors, manufacturers and suppliers are confidential. Representatives must not contact, directly or indirectly, or speak to, or communicate with any supplier or manufacturer of the Company except at the Company-sponsored events at which the supplier or manufacturer is present at the request of the Company.

• Promotion of Representative’s Business

11.01 Promotional and advertising materials

Only the promotional and advertising materials produced or approved in advance in writing by the Company may be used to advertise or promote a Representative’s business or to sell products/services/services and services of the Company. Company literature and materials may not be duplicated, reprinted or personalised without prior written permission.

All promotional items that bear the Company’s name or logo must be purchased solely from the Company unless prior written permission is obtained from the Company.

A Representative may affix his/her name, address, Independent Representative title, phone number and Representative Identification Number to any promotional materials that the Company approved or sold to him/her.

11.02 Income claims

No income projections, including those based solely on mathematical projections or ‘ideal projections’ of the Compensation Plan may be made to prospective Independent Representatives. No Independent Representative may represent his/her own incomes as indications of the success assured to others, since income success is dependent on many variables. Independent Representatives shall not guarantee salaries, draws, expenses, allowances, etc. No Independent Representative shall show or display an original or a copy of his/her earned commission or bonus cheque as enticement to any prospective Independent Representative.

11.03 Title of Representatives

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Representatives shall only present themselves as “an Independent Representative of the Company”.

11.04 Stationery and business cards

• Only the approved Company graphics version and wording are permitted to be used.

• Unless prior approval has been obtained from the Legal Affairs Department of the Company, Representatives are not permitted to ‘create’ their own stationery, business cards or letterhead graphics, where the Company’s trade name or trademarks are used.

• Representatives are not allowed to insert the address, contact phone number or emails of any office of the Company or its associated companies in their business cards, stationery or letterheads.

11.05 Electronic advertising

Representatives may not advertise or promote the Company’s business, products/services/services or marketing plan or use the Company’s name in any public media including electronic media or transmission, on the Internet via websites or otherwise, without the prior written approval of the Company’s legal department. Upon obtaining such approval, Representatives are required to comply with the Social Media Policy. Spamming and use of automatic telephone dialling systems are prohibited. Breach of this clause is a serious breach of the P&P and could lead to the immediate suspension or even termination of the Representativeship of the Representative who is in breach.

11.06 Telephone listing

Representatives are not permitted to use the Company’s trade name in advertising their telephone and telecopy numbers on materials not produced and approved by the Company without first obtaining the prior written approval from the Company’s Legal Affairs Department.

11.07 Media interviews

Representatives are prohibited from granting radio, television, newspaper, tabloid or magazine interviews or using public appearances, public speaking engagements, or making any type of statement to the public media to publicise the Company, its products/services/services or Company businesses, without the express prior written approval of the Company. All media enquiries should be referred to the Company’s Office .

11.08 Endorsement

No endorsements by a Company officer or administrator or third party may be asserted, except as expressly communicated in the Company literature and communication. Country, Federal and State regulatory agencies do not approve or endorse direct selling programmes. Therefore, Representatives shall not represent or imply, directly or indirectly, that the Company’s programmes, products/services/services or services have been approved or endorsed by any country or governmental agency.

11.09  Independent communication

Representatives,  as  independent  contractors,  are  encouraged  to  distribute  information  and

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direction to their respective Downlines. However, Representatives must identify and distinguish between their personal communication and the official communication of the Company when they communicate with their own Downlines.

11.10 Display of Company products/services/services

The integrity of the Compensation Plan is built upon person-to-person, one-on-one and in-door presentation methods of sale. Representatives shall not knowingly sell any Company product to, or display any Company product, Company name, trademarks, literatures, or promotional materials at any retail outlet, including, but not limited to, supermarkets or food stores, flea markets or swap meets, permanent restaurant displays, bars or nightclubs, or any such similar establishment, convenience stores or gas stations. Exemptions must be approved in writing by the Legal Affairs Department of the Company.

Representatives may promote the Compensation Plan at their office, fairs and trade shows on the condition that it is not shown or displayed with any other plan associated with any direct selling company or networking company.

11.11 Product and services claims

Representatives shall make no claim, representation or warranty concerning any product of the Company, except those expressly approved in advance in writing by the Company or contained in official Company materials, such as P&P.

11.12 Fax blasts and spamming

Fax blasting and unsolicited emailing (spamming) is prohibited.

11.13 Record keeping

The Company encourages all Representatives to keep complete and accurate records of all their business dealings.

11.14 Legal conformity

Any tool or presentation technique used by a Representative whilst promoting the Company’s business concept, products/services/services and/or the Compensation Plan must be within the scope of a Representative’s rights in his/her respective country/state/providence. It is the Representative’s responsibility to ensure that any statements made, or any demonstration techniques performed, are, in fact, lawfully permitted in his/her country/state/providence. If a special licence or professional degree is required in a certain location to legally make such statements or perform such presentations, or to conduct business, then it is the Representative’s responsibility to secure the necessary licence, degree or permit.

11.15 Indemnity agreement

Each and every Representative shall indemnify and hold harmless the Company, its shareholders, officers, directors, employees and agents from and against any claim, demand, liability, loss, cost or expense including, but not limited to, court costs and attorneys’ fees, asserted against or suffered or incurred by any of them, directly or indirectly arising out of or in any way related to or connected with allegedly or otherwise, the Representative’s:

(a) Activities as Representative;

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• Breach of the terms of the Agreement;

• Violation of or failure to comply with any applicable laws, regulations or rules.

• General Provisions

13.01 Company’s employee prohibition

Employees of the Company and their immediate family members (for example spouse, mother, father, brother, sister, etc.) who are domiciled at the same household as the employee are prohibited to take part in the Compensation Plan. Breach of this policy shall be deemed serious, and could result in the dismissal of the employee and the removal of his/her entire network to the credit of the Company. Representatives being transferred to a paid position or taking up an employment with the Company shall, prior to their acceptance of the employment or paid position, file ownership transfer notice to the Company and give up their ownership rights and privileges of their TCs.

13.02 Liability

Representatives agree and acknowledge that they are making use of the Company’s websites, services, software, functions, information, applications and tools (herein after referred to collectively as the “Services”) at their own risk, and that the Services are provided “AS IS” “AS AVAILABLE” “WITH ALL FAULTS” without any warranty of any kind, whether express or implied, including without limitation, that the Services will be provided uninterrupted and continuously at all times.

To the fullest extent permitted by law, the Company shall not be liable for, and each Representative releases the Company from, and waives all claims for any loss of profits, indirect, direct, special, incidental, punitive or consequential damages or any other losses and/or damages whatsoever incurred or suffered by Representative as a result of:

• the breach by another Representative of his/her Agreement, any Term or Condition of the P&P, and/or the Compensation Plan;

• the operation of other Representatives’ business;

• any inadvertent, incorrect or wrong data or information provided by the Company;

• the Company’s failure to maintain complete and accurate records of Representatives’ business dealings;

• any system, server or connection failure, breach of security, error, tampering, unauthorised intervention, fraud, deletion, defect, omission, interruption, delay in operation or transmission, computer virus, bug or other malicious, destructive or corrupting code, agent programme or macros, or any other technical or other malfunction;

• Representatives’ access, use or inability to access or use the Services; and

• the Company’s failure to provide any information or data necessary for Representatives to operate their business, including, without limitation, the marketing and promoting of products/services/services of the Company and/or the introducing or referring of persons as

Customers/Representatives to the Company,

regardless of whether the Company has been advised or should have been aware of the possibility of such losses and/or damages.

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In the event any of the above exclusion on remedies, damages or liability is prohibited or restricted by law, and the Company is held liable to any Representative for any reason, the Representative shall limit the liability of the Company to the Representative for any and all losses, damages, costs (including attorneys’ fees), expenses, claims, demands, suits, actions, proceedings, orders or judgments whatsoever, so that the total aggregate liability of the Company to the Representative shall not exceed the sum of MYR 1,000.

13.03 Force majeure

The Company shall not be responsible for delays or failure in performance caused by circumstances beyond the Company’s control, such as strikes, labour difficulties, fire, floods, earthquakes, Acts of God and other natural disasters, war, government decrees or orders, information technology (including hardware and software) failures arising out of zero-day vulnerabilities or curtailment of a party’s usual source of supply.

13.04 Violations

It is the obligation of every Representative to abide by and maintain the integrity of the P&P. If a Representative observes another Representative committing a violation, s/he should discuss the violation directly with the violating Representative. If the Representative wishes to report such violation to the Company, s/he should detail the violation in writing or complete the Company’s Complaint Form, which is downloadable from the official Company website at www.VIRTUAL ERA SDN BHD.asia and mark the correspondence “Attention: Network Compliance Department” or by email to support@Virtual Era Sdn Bhd.asia.

13.05 Amendments

The Company reserves the right to amend/change the P&P, its retail prices, products/services/services and services availability, and/or the Compensation Plan at any time without prior notice as it deems appropriate. Amendments will be communicated to Representatives through official Company publications or the Company website at www.Virtual Era Sdn Bhd.asia. Amendments are effective and binding upon submission to the Company website. In the event any conflict exists between the original documents or policies and any such amendment, the amendment shall prevail.

13.06 Assignment / Novation / Transfer

The Company may at any time, without the consent of the Representative, assign, novate or transfer all or part of its benefit, rights and obligations under this Agreement to a third party and the Representative undertakes to execute and do all such things as the Company may require for perfecting and completing such assignment, novation or transfer.

13.07 Non-waiver provision

No failure of the Company to exercise any power under the P&P or to insist upon strict compliance by Representative with any obligation or provision herein, and no custom or practice of the parties at variance with the P&P, shall constitute a waiver of the Company’s right to demand exact compliance with the Agreement and/or the P&P.

The Company’s waiver of any particular default by a Representative shall not affect or impair the Company’s rights with respect to any subsequent default. Nor shall it affect in any way the rights or obligations of any other Representative. No delay or omission by the Company to exercise any right arising from a default affect or impair the Company’s rights as to that or any

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subsequent or future default. Waiver by the Company can be effected only in writing by an authorised officer of the Company.

13.08 Governing law

The Agreement, the P&P and the Compensation Plan shall be governed by the laws of Malaysia.

13.09 Jurisdiction and Arbitration

Any dispute, controversy or claim arising from or in connection with the Agreement, the P&P and/or the Compensation Plan or the breach, termination or invalidity thereof (herein after referred to as the “Matter”) shall first be sought to be resolved amicably between the Representative concerned and the Company.

If the Representative and the Company cannot resolve the Matter within sixty (60) days from the date the Matter was first brought to the attention by one party to the other, the Matter shall be referred to and finally resolved by arbitration administered within the laws of Malaysia.

13.10 Entire Agreement

The Agreement, the P&P and the Compensation Plan together constitute the entire Agreement between a Representative and the Company.

13.11 Severability

If at any time any provision of the Agreement and/or P&P is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of the Agreement and/or P&P under the law of that or any other jurisdiction, nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.

13.12 Notices and communication

Each notice, demand or other communication to be given or made under the Agreement, the P&P and/or the Compensation Plan by the Company to a Representative shall be in writing and delivered or sent to the relevant party at his/her last known address or email address designated by the Representative and recorded in the file. Any notice, demand or other communication to the Company shall be sent or delivered to the support office in Malaysia or by email to support@Virtual Era Sdn Bhd.asia. Any notice, demand or other communication so addressed to the relevant party physically shall be deemed to have been delivered after fifteen (15) days it is given or made, provided that, if such day is not a working day in the place to which it is sent, such notice, demand or other communication shall be deemed delivered on the next following working day at such place. In

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the event of such notice, demand or communication is sent by email, it shall be deemed to have been received by the other party when the email enters the recipient’s mail server without any undelivered message sent back to the sender

13.13 Headings and Table of Contents

Headings and Table of Contents in the Agreement, the P&P and the Compensation Plan are provided for convenience only and they are not part of those documents. They are not to serve as a basis for interpretation or construction of those documents or as evidence of intention of the parties.

13.14 Gender, etc.

Unless the context otherwise requires, words importing the singular number shall include the plural number and words importing the masculine gender shall include the feminine or neuter gender and vice versa, and references to persons shall include companies and bodies, corporate or unincorporated.

13.15 English Language Prevails

In the event that the Policies & Procedures (“P&P”) is translated into another language and there exists any inconsistencies in any provision between the English-language version and the translated version of the P&P, the English-language version shall always prevail.

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POLICIES & PROCEDURES

APPENDIX 1 – COMPENSATION PLAN

01 Title

This is the “VIRTUAL ERA SDN BHD Compensation Plan” or “CompPlan as referred to in Virtual Era Sdn Bhd Ventures LLP’s Policies & Procedures (“P&P”). This Compensation Plan provides for the entitlement and calculation of commissions and/or bonuses of Independent Representatives of Virtual Era Sdn Bhd Ventures LLP.

02 Definitions and Interpretation

Unless specified herein below, all terms in this Compensation Plan have the same meanings as defined in the P&P.

“Active IR” means any IR who achieves the minimum Monthly RSP maintenance requirements from his/her personal purchase or retail sale of any VIRTUAL ERA SDN BHD products/services/services

“Activated” means when a Qualified IR has achieved and allocated a minimum of 500 BV on each side of any of his/her Tracking Centres (TC).

“Business Volume” or “BV” means the point value of a product used to qualify TCs and calculate Step Commissions.

“BV Bank” means a place which stores the BV earned by IR.

“Commission Period” or “Commission Week” means the period or week when commission is calculated and paid based on the preceding week’s sales.

“Compensation Level” means the pay level of an Independent Representative. Commissions and/or bonuses are paid out according to an IR’s Compensation Level and as provided for in Schedule 1 of this Appendix 1.

“Compression” means when an IR does not meet the minimum Monthly RSP Maintenance requirement for his/her current rank, Active IRs below that IR will move up to temporarily fill his/her position for earning Repeat Sales Points (“RSP”) from Downlines within his/her network or line of referralship.

“Counter” means a calculating mechanism for a TC and it is on the left and right of each TC, the record of which reflects the balance of BV its Downline Group has accumulated for the purpose of calculating Step Commission. The Counters are either on or off based on the rules described in subclause 8.03.

“Commission Cycle” means six (6) Commission Steps.

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“Commission Step” or “Step” means one (1) part of the Commission Cycle, which is equivalent to 3,000 GBV on the Lower Volume Team.

“Customer” or “Retail Customer” means a person who purchased the Company’s products/services/services at a retail price but does not enrol as a Representative.

“Demotion Policy” means that in the event that an IR fails to meet the minimum Monthly Rank Maintenance requirements for his/her current Rank, he/she will retain his/her current Title Rank but shall be Paid As the Pay Rank corresponding to his/her achievement in that particular month.

“Direct BV” means the BV that an IR earns when he/she sells VIRTUAL ERA SDN BHD Products/services/services to directly referred retail customers or direct referrals.

“Direct Referral” means a person who is directly referred to join the VIRTUAL ERA SDN BHD business by an existing Independent Representative (IR) and is placed within the line of referralship of the IR who refers him/her.

“Downline Group” has the same meaning as provided in subclause 7.02 hereunder.

“Early Payout Option” or “EPO” means the partial payment of the First Step Commission payable in advance to the new Qualified and Activated IR upon achieving the required Group Business Volume (GBV) in any of the Lower Volume Team of his/her Business Partner ID within the given time frame. This Payout only applies to the Business Partner ID at the First Step, Commission Cycle 1, irrespective of whichever rank the new IR is placed, and the total payout will be in accordance to Schedule 1. The Early Payout procedure is explained under subclause 7.03.

“eVoucher Points (EP)” means points earned at every Step 6 of any given Commission Cycle, which are used to redeem products/services/services available on the VIRTUAL ERA SDN BHD Redemption eStore.

“First Purchase Profit” means Retail Profit earned by the Referrer from the first qualifying purchase of his/her new direct referral.

“Flushing” or “Flushed” means the elimination of excess BV when an IR has exceeded the Maximum Payout of the Compensation Level he/she is in, for the Commission Period.

Group Business Volume or “GBV” means the total BV accumulated in both left and right Downline Groups of a TC

“Group Performance” means the number of downlines who advanced in rank to Gold Star and above.

“Group Repeat Sales Points” or “Group RSP” means the RSP that the IR earns from the repeat sales and personal purchases made by his/her Downlines within his/her network or line of referralship

“Inside Leg” means the left Downline branch of a TC if that TC is on the right Downline branch of its immediate Upline or the right Downline branch of a TC if that TC is on the left

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Downline branch of its immediate Upline. It means the opposite side of the Leg below which the TC is placed.

“IR Discounted Price” or “IR Price” means the price of the Company’s products/services/services at which the Company sells to the IRs after they have made their first qualifying personal purchase.

“Lower Volume Team” means the weaker leg or the leg with the lesser volume on which the Step Commissions are calculated.

“Rank Maintenance” means an IR is required to achieve or maintain the minimum requirements of his/her current Rank as provided in Schedule 3 of Appendix 1.

“Month/Monthly” means a minimum of four (4) Sales Periods.

“Outside Leg” means the Downline branch of a TC other than its Inside Leg.

“Paid As” means that if an IR fails to fulfill his/her Rank Maintenance, he/she shall be paid in accordance to the Pay Rank in which he/she is qualified for during that period. In this connection, if the IR’s current Rank is, for instance, Diamond Star but he/she is unable to fulfill the Maintenance for Diamond Star and he/she has only managed to fulfill the Maintenance of Gold Star, he/she shall be paid in accordance to the Pay Rank which is Gold Star (the Rank in which he/she is qualified for). This shall apply to each Rank and the corresponding Rank for avoidance of doubt.

“Pay Rank” is the recognition title given to an IR, when he/she achieves the Rank Advancement and/or Maintenance requirements within a fixed Month period. Pay Rank is subject to Demotion based on his/her achievement in a particular month.

“Pay Rank Maintenance” means the number of months that an IR is required to achieve the monthly rank requirements to get promoted to Platinum Star rank and above.

“Personal Business Volume” or “PBV” means the BV that an IR is personally responsible to produce or achieve, whether it is through retail sale to a customer or his/her personal purchase of VIRTUAL ERA SDN BHD products/services/services for personal consumption.

“Personal Purchase” means an IR’s own purchase of VIRTUAL ERA SDN BHD products/services/services that are for personal consumption.

“Personal RSP” means RSP that an IR earns from his/her personal purchase or retail sales.

“Placement” means the way the TCs are placed in the database of the Company as shown in the Genealogy.

“Business Partner ID” means the first TC given to the new IR upon successful enrolment. It is usually identified as the extension ‘001’ after the Representative Identification Number (IR ID No)

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“VIRTUAL ERA SDN BHD eStore” means the place accessible from the VIRTUAL ERA SDN BHD website and IR’s Virtual Office (VO) where Products/services/services are offered for sale to customers and IRs for their personal consumption.

“VIRTUAL ERA SDN BHD Redemption eStore” means the redemption store available and accessible from the IR’s Virtual Office (VO) where IR can redeem products/services/services using the IR’s earned eVoucher Points (EPs).

“Qualified” means a TC has achieved and been allocated with the minimum required BV. An IR must have at least one TC with the minimum 500 BV from a retail sale or personal purchase.

“Rank” is the recognition title given to an IR, which is based on the compensation level that he/she achieved. There are two types of Rank assigned to each IR; namely, Title Rank and Pay Rank.

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“Referralship” means the activity of referring retail Customers or new IRs to participate in the Compensation Plan.

“Repeat Sales” means recurrent purchase or sale of products/services/services and services of the Company.

“Repeat Sales Points” or “RSP” means points assigned to each VIRTUAL ERA SDN BHD product that an Active IR earns from a maximum of ten (10) Pay Levels based on his/her current Rank.

“Repeat Sales Commission” means commission derived from accumulated Repeat Sales Points.

“Retail Price” means the price of the Company’s products/services/services at which the Company sells to Customers and the new IRs on their first qualifying personal purchase.

“Retail Profit” means the difference between the Retail Price and the IR Discounted Price of a product of the Company. It is awarded only to an IR who sells the Company’s products/services/services to retail customers and new direct referrals.

“Retail Sale/s” means a sale or sales of the Company’s products/services/services to Customers.

“RSP Pay Level” refers to a position in the genealogy from which the Active IR is eligible to earn RSP. An IR can earn RSP from a maximum of ten (10) Pay Levels based on his/her current Rank.

“Sales Period” or “Sales Week” means a one-week period commencing from 00:01 on Saturday until 23:59 on the following Friday, Malaysia Standard Time.

“Secondary Tracking Centres” means the left and right Tracking Centres that are directly connected to the Business Partner ID given to the new IR upon successful enrolment. The left TC is usually identified as the extension ‘002’ and the right TC is identified as the extension ‘003’ after the Representative Identification Number (IR ID No.).

“Self-Activation” is a method of activating Representativeship with BV that the IR achieved from his/her retail sale or purchase of VIRTUAL ERA SDN BHD products/services/services for personal consumption.

“Step Commission” means the commission paid to a Qualified and Activated IR according to his/her GBV on the Lower Volume Team and Compensation Level.

“Tracking Centre” or “TC” means a position in the Company’s database. Commissions and/or bonuses are calculated with reference to each Tracking Centre.

03 Acquisition of TCs

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3.01 Tracking Centres

An IR will be granted TCs when s/he is first accepted as an IR. The TC shall appear in the Genealogy in the following configuration: the Business Partner ID-001 .

3.02 Qualifying all TCs

An IR has to qualify all his/her TCs before s/he can acquire additional TCs.

04 Placement

4.01 Right of placement

A Referrer has the right to place the Business Partner ID of an IR whom s/he personally referred or any additional TCs that are allocated to him/her (meaning the IR decides the placement location of his/her own 004 and subsequent TC extensions as described under subclause 3.04 herein) subject to the Rules of Placement as stated herein below.

05 Rules of Placement

5.01 Limit of connected TCs

Only two (2) TCs can directly be connected to the Business Partner ID.

5.02 Immediate Upline TC

Each TC can only have one (1) TC as its immediate Upline.

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5.03 Placement rights of a Referrer

Subject to subclause 5.08, a Referrer shall have the sole right to place the Business Partner ID of an IR whom he/she personally referred. Subject to the aforesaid, an IR shall have the right to place any secondary TCs that are allocated to him/her.

5.04 Placement rights of an IR

Subject to subclause 5.07, an IR can place any TC, which s/he has a right to place under existing TCs in his/her Downline, beginning anywhere under his/her Business Partner ID (TC-001). But s/he cannot place a TC in a position that is already occupied by another TC.

5.05 Placement above the Business Partner ID

An IR is not allowed to place any TC above his/her own Business Partner ID.

5.06 Placement under the Business Partner ID

An IR cannot place any TC, which s/he has a right to place in a position that is not under his/her Business Partner ID. In other words, s/he cannot place a TC in contravention to subclause 5.08.

5.07 Subsequent TC extensions to TC-003

Pursuant to subclause 5.01, all TC extensions belonging to an IR subsequent to TC-003 (i.e. TC-004 and onwards) shall not be placed/connected directly to the same IR’s existing TCs

5.08 Default placement

If the Referrer fails to place his/her newly registered Direct Referral(s) within the 5-day Grace Period from the registration date, default placement as stipulated under clause 6 of the Default Placement Method shall apply.

06 Default Placement Method

6.01 Default placing of a TC

If the Referrer fails to place his/her newly registered Direct Referral(s) within the 5-Day Grace Period, the system will automatically place them on the Lower Volume Leg of the Referrer’s TC-001.

In the event of the Referrer having a balanced volume on both legs, the system will automatically place the newly registered Direct Referral(s) on the position opposite of the placement of his/her Referrer’s TC-001.

07 Commissions and/or Bonuses

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• All IRs are entitled to Retail Profit. No Customer is eligible for any commissions and/or bonuses although a TC will be placed for their purchase.

• Only Qualified and Activated TCs are eligible for earning Step Commissions and/or bonuses other than Retail Profit

• Any BV accumulated before Activation is not commissioned to the IR unless it occurs in the same Commission Period of Activation.

• All commissions and/or bonuses payable under this Compensation Plan are based on the sale of the Company’s products/services/services, not based on the introduction of persons into the Company.

7.01 Retail Profit

• An IR shall be entitled to the Retail Profit for every product that he/she personally and successfully promoted to a Customer who thus purchases it from the Company.

• A Referrer is also entitled to the Retail Profits from the first qualifying personal purchase (which may include more than one product) at Retail Price by his/her personally referred Downlines.

7.02 Step Commission

• Step Commissions are paid to IRs based on BV accumulated from the purchases of products/services/services made by Customers or IRs. Only Qualified and Activated IR is eligible for Step Commission.

• BV is assigned to each type of product and the same types of products/services/services may be assigned with different units of BV.

• Upon the sale of a product, the Company shall credit a certain number of BV, which shall be equal to the BV of that product, to one (1) of the TCs or the BV Bank of an IR who either purchased the product himself/herself or successfully promoted the sale of the product to a Customer. In the case of any product sold to a Customer, the Company shall credit the BV assigned to that product to a BV Bank of the IR who successfully promoted the sales of the product and the IR shall allocate the BV so obtained within seven (7) days to his/her TC.

• In the Genealogy, the TCs in the Inside Leg of a particular TC represent a Downline Group of that particular TC. The TCs in its Outside Leg represent another Downline Group. In other words, every TC should have one (1) Downline Group in its Inside Leg and one (1) in its Outside Leg.

• For every TC, there is one (1) Counter recording the accumulation of BVs of each Downline Group.

• Step Commission shall be calculated for each TC based on the total BV accumulated in

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both Downline Groups of a TC as shown in its Counters and according to Schedule 1.

• Step Commission is calculated daily and paid on a weekly basis. Commission payable to a TC shall be calculated at the end of the Commission Period and any remaining balance for non-commissioned BV shall be carried forward to the following Commission Period.

• A maximum weekly step commission is capped for each Compensation Level of Independent Representatives as prescribed in Schedule 1. Any BVs accumulated within a single week in a Commission Period after corresponding weekly maximum Step Commission for that Commission Period has been reached shall be forfeited and shall not be taken into consideration for the calculation of any Step Commission payable to the IR.

7.05 Change of Commissions and/or Bonuses

The Company may, at its sole discretion, replace the Schedules to this Compensation Plan or amend them to change the method or amount therein or may add or remove anything to or from the Schedules.

Where the Company intends to replace, change or delete the Schedules to the Compensation Plan, it shall give a reasonable time of prior notice to IRs by publishing the said change on its official website. The new replacement, change or deletion shall take effect immediately upon the expiry of the reasonably timed notice period.

08 Activation and Qualification

8.01 Qualification

• For qualifying a TC, an IR can only use the BV assigned to a product that s/he purchased personally or that s/he successfully promoted to a Customer.

• An IR has to qualify his/her Business Partner ID (TC-001) .

8.02 Activation

A Qualified IR can activate his/her Representativeship by achieving and allocating a minimum of five hundred (500) BV on each side of his/her Business Partner ID or on any of his/her Secondary TCs.

A Qualified IR can activate his/her Representativeship in three (3) ways.

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• Retail Sale – IR achieves BV from his/her retail sale and allocate five hundred (500) BV each on each side of any of the IR’s TCs or ;

(b) Combination of Retail Sale, and Personal Purchase/s or Qualified Direct Referral – Allocate a minimum of five hundred (500) BV each on each side of any of the IR’s TC through combination of BV from Retail Sales and IR’s purchases of VIRTUAL ERA SDN BHD products/services/services for personal consumption or Qualified direct referral.

• Direct Referral – Place at least one (1) Qualified Direct Referral per side on any of the IR’s TCs.

8.03 Turning on TC Counters

The Counters of a TC will only be turned on after the TC is qualified and the Representativeship is activated.

10. Extinguishment of BV for Specific IR Status

If an IR’s status is marked as one of the following, all his/her BV in the left and right volume counters and in the BV Bank are deemed expired and set to a value of zero (0):

• “Terminated”;

• “Nullified”; or
• “Cancelled”.

No deduction will be made from the volume that has been counted for the uplines of the concerned IR.

For the purposes of this clause:

1. A “Terminated” IR is one whose Representativeship has been terminated by VIRTUAL ERA SDN BHD due to his/her violation of the VIRTUAL ERA SDN BHD Policies and Procedures or Code of Ethics;

1. A “Nullified” IR is one whose Representativeship has ceased by his/her voluntary cancellation of his/her purchase orders and registration fee; and

1. A “Cancelled” IR is one whose Representativeship has been terminated by his/her voluntary cancellation of his/her partially paid product within 12 months from the registration date

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