The Management Ordinance of Health House

Overview
Merro Health House is a whole new business model based on franchising system, which is the core of its management. The multi-channel sales channel provide a two-way interaction between the Health House and the customers. Merro Health House must first abide by the government regulations. It is under the control of respective government departments, at the same time, by the market mechanism and social moral system, and abides by the company regulations. It is a better platform for agent to open up new market and provide customer service, in order to fulfill the Merro mission "to propagate the cultivation of well-being tradition, to exist only for the health of mankind".

Principle Functions of a Health House
1. Marketing Function
Product marketing is the main function of Merro Health House. Through research in the bio-tech, wellness and nutrition technology, Dalian Merro International Biology Co., Ltd.,（Merro International after this）has received the New Resource Certificate of the China Ministry of Health, especially for the modern technology used in cultivating polysaccharide from lingzhi mycelium, and the stringent production process, can be quickly translated to satisfy the vast growing demand for the society in health care product.

2. Product and Corporate Showcase
The appearance, service, staff manner, and product, are representative of the enterprise's image and the image of products. At the same time, housing a complete products system of health, information and service; customers can understand the information in the Health House in order to promote the Merro brand and laid a good foundation for market operations.

3. Health consultation and education advisory.
Health House carries the role of providing education and consultation to a wider audience, in terms of health, health management and health rehabilitation service.

4. Market Management
Health House is an extension of the business management in the market. From the service perspective, it facilitates the administration of agents (purchasing, recruiting new agent, sales performance reporting) and provide advisory of new product, and professional training. From the regulatory perspective, it standardizes the agent practices and timely processing of market contingencies, for which, the latest policies and strategies are conveyed.

5. Health Membership Management
Health House will provide to members the assistance in application procedures, archives management, Health House priority service, after-sales service, organization of public health charity activities. Health House will provide to its agent, business knowledge training, companies conduct regulation and supervision in terms of product marketing.

6. Logistics and distribution
Health House is the transitory station of goods, payment, invoices, etc between the company and the agent, and it carries with it the capital cash flow, logistics and distribution functions.

7.Information collection and feedbacks
As the Health House is close to the market, it is able to provide timely feedback to the company, on customers demand, industry information, market dynamics, from which timely strategies could be planned, saturated and adopted by all agent in time.

Health House Joining Procedures
A. Eligibility
1. Patriotic, supportive of the CPC, and discipline.
2. Love the Merro International career, abide to the company's marketing philosophy, and willing to comply with the regulations.
3. Aged 18 years or above and have the full civil capacity as a Chinese citizens.
4. A qualified Merro International agent, and have product marketing income amounted to more than 3,000 RMB
5. Have owned or leased, above 50 square meters business establishments that could be formally registered and in the local industrial and commercial administration departments.
6. Have a certain management capabilities.
7. Honest and trustworthy, with no record of commercial mistrust.
8. Moral integrity, and good public relation skill.
9. Applicants must not be a civil servants, medical personnel, military personnel, full-time school students, cult members, official Merro International staffs, or are serving sentences for crime and other personnel not eligible to doing a part-time business according to the state's laws and regulations.
B. Approving Process
1. An agent eligible to the Health House franchising business, recommended by a referral, can complete a Health House joining applications.
2. Fax the completed Health House application form to the company marketing
3. After the initial approval, the applicant will be informed within five working days.
4. The applicant to remit money and purchase within three days.
5. Applicants for business licenses in the local (its name to use "Merro Health House x x Shops" name and logo, and the legal person must be the applicant), and merchandise to include : health food, daily provisions, cosmetics sales and advisory services. Procedures of license processing are listed at the Annex.
6. The franchisee to mail copies of business license, health permits, tax registration certificates to the company marketing department.
7. After the formal approval by the company, a franchise contract is signed with the franchisee, a certificates of authorization is issued,and the Health House is officially in operation.

Health House Business Management
A.Health House Stock Replenishment
1. The initial purchase of the Health House must be less than twenty thousand RMB(excluding sales support material, information, and Health Membership Kit
2. Health House must remit full purchase price to the designated company account, goods released with payment on sight.
3. Each purchase amount is not less than five thousand RMB, otherwise inadmissible.
4. Goods are only deliverable to Health House.
5. The company is responsible for the selection and shipment of free delivery of goods purchased by Health House. For delivery designated by Health House, which exceeded the normal cost, the Health House themselves is responsible for the extra cost.
6. Health House is to inspect the received goods. In the event of package damaged, or parcels locks and parcel record incompatible, or shortage of goods, it should be clarify with the delivery person, to take or reject on spot.
7. Errors found in intact packages, must make inquiries to the company within 24 hours of delivery, otherwise inadmissible.
8. Health food, nutritional supplements and other food products, sold by Party A, of not more than 30 days, in good packaging and with sales value, can provide a goods replacement or return for Party B based on the invoices.
9. Apart from defected product, goods sold by Party A, of more than 30 days, is not replaceable or refundable.

B. Health House Training Management
1. Health House Managers must attend professional training by the company at the time and place designated.
2. Training Content : Relevant management knowledge as a Health Housing Manager, as in the "Merro International Education and Training Program".
3. Training venues are mostly company head quarters and locations designated by company

C. Health House Operation Subsidies（shop cost）Assessment
1. Health House may receive, on the first operating month, 4% operating subsidies.
2. On the second operating month, Health House must have obtained business license to be eligible to the operating subsidies.
3. Health House with turnover below RMB 20,000 (not including the 20,000 yuan), the company would remit 4% operating subsidies for the month's turnover.
4. Health House with turnover over RMB 20,000 (including the 20,000 yuan), the company would remit 6% operating subsidies for the month's turnover

D. Exit and Change of Address of Health House
1. If the Health House cannot continue to operate, it may apply for termination of the contract. After completing an application form fax to the company marketing department; the company, upon approval, will inform the Health House Manager.
2. Health House changing addresses, the Health House manager to make application of changes to the company; and at the same time will submit by fax, the changed address, telephone, to the company, and to wait for its reply, before the relocation is performed. Otherwise, the company will not deliver goods to the new address.

E. Health House Information Management
1. The company implements unified advertising. Any Health House, without the permission of the company, shall not advertise in the name of Merro International Bio Limited, in any advertising.
2. Health House shall co-operated with the company to do market research, provide accurate and timely market information to the company. Timely dissemination of information of the company, and the latest information should be posted in time on its notice column.
3. To ensure the timely transmission of information, Health House should submit to the company its agent's name, phone and fax numbers accurately and timely, to facilitate the company to disseminate the latest information to every agent through text messaging.

Health House management requirements
1. Health House Managers must fulfill their duty and truly represent the company's services in the market and in serving customers.
2. Apart from the designated holiday, a Health House is to operate 8:30-17:00 daily.
3. The company has a unified Health House decoration policy, which, all operators are required to abide by the unified design standards.
4. Health House must be operated legally, and fulfill all license procedures.
5. Health House shall maintain cleanliness, and samples to be eye-catchingly display.
6. Each agent must not simultaneously possess above two (including 2) Health Houses
7. Health House, two months before its annual due date, shall facilitate the company with copies of the national annual business license o apply for a renewal of contract.
8. Not to sell within the Health House, other companies' products.

Health House Rules Violation Management
Health House Managers in violation of the provisions of the Health House management practices, depend on the specific circumstances, penalty of different degrees is incurred by the company. And if at the same time the "Code of Practice for the Merro International Agent" is violated, the company will according to the "Punishment Ordinance" and as regulation 6 "Health House Rules Violation", incur a double punishment.
(1) Degrees and contents of penalty
Specific actions include penalty of degree 1 to 4 ; of which degree 1: a warning (oral or written form); degree 2: withholding operation subsidies of 1 month; degree 3: withholding operation subsidies of 3 months; degree 4: cancellation of the manager's Health House business qualifications.

(A) Health House Acts of Violation.
1. Violate the regulations of the relevant provisions.
2. Violations of its name, logo and trademark use.
3. Did not comply with the company's pricing, and price adjustments.
4. Display and sale of merchandise not of Merro International Bio Limited.
5. Operating any business whose interests is to the detriment of the company's financial or credibility.
6. Divulge company trade secrets.
7. To harm the interest and image of other Merro Health House through improper competitive means.
8. Alteration in reporting, deliberately delay the submission of performance report to the company.
9. Fail to timely and accurately disseminate company's information, which affects the market operation.
10. Other acts of violation not mentioned.
Dalian Merro International Bio Ltd reserves the right to amend and interpret the rules mentioned.