1. ARTICLES
OF THE TianDe BUSINESS SYSTEM
The purpose of these Articles is to regulate the fundamental organizational and legal
matters relating to cooperation among the primary participants in TianDe business based on
the common use of trademarks, patents, licences and the business management system of
TianDe.
The main objective of this document is to inform interested parties and participants
in TianDe business of the organization of our activities, the structure of relationships and
the optimization of the participants’ business processes.
1. Basic concepts and terms
TianDe Corporation (TianDe Partnership) - is a voluntary partnership of business
entities that are joined by working together, that is distributing products and services with
trademarks to which business entities that are part of this partnership are entitled. The aim
of the partnership is to satisfy consumer demand for products and services with TianDe
trademarks and to achieve material gain.
Franchising - a form of relationship between independent market entities in which
one party (the Licensor) grants the other party (the User) the right to establish and run a
business under TianDe trademarks for a royalty.
Franchising Agreement - a legal agreement concluded between the Dealer Centre
(the User/Franchisee) and the Licensor (Franchisor) that governs the mutual rights and
obligations regarding the establishment and operation of business under TianDe
trademarks, and also liability for a failure to meet the respective obligations.
Licensor - a legal entity with the exclusive rights to the intellectual property and the
business management system of TianDe.
User - a party granted the right to use the exclusive rights to the intellectual property
and the business management system of TianDe.
Service Centre (SC) - a business entity that has received special permission
(certificate) from the Licensor, distributes products with TianDe trademarks and provides
consultants and consumers with the full range of products and printed publications of
TianDe.
Dealer Centre (DC) - a business entity that has entered into a Franchising Agreement
or a similar agreement (in accordance with the law of the country in whose territory the
Dealer Centre conducts its business and with the standards of international law) with the
Licensor and that organizes the logistics and distribution of products with TianDe
trademarks and supplies Service Centres, consultants and consumers with the full range of
products and printed publications of TianDe.

2. Consumer - a person who buys products with TianDe trademarks for personal
consumption.
Consultant - a consumer of TianDe products who is registered in the Integrated
Information Service of the Licensor and who is entitled to a discount.
Agent - a consultant, Dealer Centre or Service Centre that has entered into an
agent/sub-agent agreement and that distributes products with the TianDe trademark.
Agent activities of TianDe - activities of consultants, Service Centres and Dealer
Centres focused on the acquisition of consumers of TianDe products and the distribution of
goods and services with TianDe trademarks for remuneration or on contractual basis
(agent/sub-agent agreement).
Distribution - a form of activity related to the wholesale purchase and subsequent
sale of goods to the end consumer on the regional market.
Logistics - planning, control and management of the transportation, storage and
distribution of goods carried out in the process of delivering finished products to the
consumer in accordance with their interests and requirements; this also involves the
transmission, keeping and processing of relevant information and related cash flows.
Services with TianDe trademarks - services related to information, technical and
consulting support, aiming at the distribution of goods with TianDe trademarks.
Marketing Plan (Unified Sales Stimulation System) - a document describing a
mathematical model for the calculation of agent remuneration.
Brandbook - a guidebook on the correct location of the company identifiers
(corporate identity elements) on various support panels; the description of the permissible
and impermissible display of visual identifiers (colour, graphic elements, fonts); the
description of components of business documentation; modular grid, style solutions for
presentations and advertising materials; Point of Sale components; and instructions for the
preparation of complex identifiers, such as websites, immovable objects, interiors,
corporate culture (serving standards, dress code), etc.
2. General provisions
2.1. TianDe Partnership consists of the following business entities:
2.1.1. The Licensor with the exclusive right to the intellectual property and the
business management system of TianDe;
2.1.2. TianDe Dealer Centres (franchisees);
2.1.3. TianDe Service Centres (warehouses);
2.1.4. Manufacturers of TianDe products;
2.1.5. Suppliers of TianDe products;
2.1.6. TianDe agents.

3. 2.2. Any business entity that is a member of the partnership is a separate
business entity and shall bear all risks associated with its business activities and full
responsibility.
2.3. Any business entity that is a member of TianDe Partnership shall be governed
by the law of the country in whose territory it is registered as a business entity and where it
conducts its business.
3. Forms of activities carried out using the intellectual property of TianDe
3.1. The sale of products and services with TianDe trademarks to consumers.
3.2. The distribution of products and services with TianDe trademarks on the
market.
3.3. The manufacture of products using TianDe trademarks, formulas and
technologies.
3.4. The use of the Unified Sales Stimulation System (TianDe Marketing Plan) and
the system of relationships in the implementation of individual stages of manufacture,
logistics and sale to independent members of TianDe Partnership.
3.5. Other forms of activities not prohibited by law using the intellectual property
of TianDe.
4. Forms of partnerships in TianDe Corporation
4.1. Purchase of products for personal consumption.
4.1.1. Purchase of TianDe products for personal consumption, without the intention
of resale, is not considered a business activity and does not require any legislation.
4.2. Business and purchase activities.
4.2.1. In the framework of business and purchase activities, Dealer and Service
Centres of TianDe conclude supply agreements (purchase-sale agreements) with higher-
ranking Dealer and Service Centres of TianDe - suppliers recommended by the Licensor.
4.3. Agent activities
4.3.1. Agent activities may be pursued by those Dealer and Service Centres and
consultants of TianDe whose income is created not only through business and purchase
activities but also through the personal purchases of other consultants brought by the
above Dealer and Service Centres and consultants.
4.4. Manufacture of goods and services with TianDe trademarks.
4.4.1. Manufacturers of TianDe products are independent business entities that
manufacture products according to the orders placed by the Licensor or its partners. The
relations between the Licensor and the Manufacturers of TianDe products are governed by
special agreements.
4.5. Franchising.
4.5.1. TianDe franchising is a form of distributing goods and services and
technologies on the market using an integrated business system based on close and long-

4. term cooperation among all participants in the system and the cooperation between the
parties to the Franchising Agreement - the franchisor (Licensor) and the franchisee (TianDe
Dealer Centre).
5. Pricing
5.1. The manufacture, logistics and sale of products using TianDe trademarks are
carried out by mutually independent business entities. The income of each participant of
these follow-up stages represents a portion of the added value of the goods. A sum equal to
the difference between the sales price for the end consumer and the actual production
costs (taking the taxation of all participants into account) is subject to distribution among
the participants. In the TianDe business system, portions of the added value of the goods
are distributed among the manufacturers, logistics companies, suppliers, agents and the
Licensor of the intellectual property of TianDe.
5.2. The Licensor recommends a method of distribution of the added value
among participants based on the conjuncture of the market, its specialized knowledge,
technologies and ideas on the best ways for distributing goods and services using TianDe
trademarks on the market. These recommendations are provided in the form of sales price
for logistics companies agreed upon with the manufacturer, the recommended prices for
Dealer and Service Centres, agents and consultants, final retail prices for consumers, and
remuneration for agents calculated using the Unified Sales Stimulation System (TianDe
Marketing Plan). Abiding by the Licensor’s recommendations regarding pricing is mandatory.
6. Activities of TianDe Dealer and Service Centres
6.1. Activities of TianDe Dealer and Service Centres are governed by special
normative provisions of the Licensor - the Articles of TianDe Dealer and Service Centres.