Article Xxv – Professional Standards

BUSINESS BROKERS of FLORIDA - MLS (BBF)

ORGANIZATIONAL OVERVIEW

A STATE WIDE ORGANIZATION CONSISTING OF:

ASSOCIATES

DISTRICT(S) (AFFILIATES) (BRANCH OFFICES) (MEMBER FIRMS)

EXECUTIVE COMMITTEE (REPRESENTATIVE FROM EACH DISTRICT)

Revised 05/19/2014 1 ARTICLE I - ORGANIZATION

The name of the Association shall be Business Brokers of Florida Inc., hereinafter called the "Association," and will have its principal office in the State of Florida. The State Executive Committee may change the principal office from one location to another within the State of Florida, and such change will not be deemed an amendment to these bylaws. The Association may establish Districts at such places within the State of Florida as its business may require and as the State Executive Committee may designate from time to time. The Association may change its name by a vote of the State Executive Committee and ratification of 2/3 of the active membership who cast a ballot.

ARTICLE II – PURPOSES

A. To provide an association that is driven by and for its participating members.

B. To facilitate the transfer of businesses from sellers to buyers through specialized knowledge, continuing goodwill and guidance of Professional Business Brokers.

C. To promote a high standard and Code of Ethics among those members of the Real Estate Profession who primarily deal in the purchase and sale of businesses.

D. To educate its members in better methods and techniques by which to practice their profession.

E. To promote harmony and mutual cooperation among its members and cooperating organizations.

F. To adopt and promote a Code of Ethics for Business Brokers commensurate with being members in the Business Brokerage Profession.

G. To promote a greater understanding and awareness by its membership as to their duties and responsibilities as Licensed Business Brokers.

H. To adopt and operate a Grievance Procedure and Arbitration System to judge infractions of its rules and/or to resolve disputes amicably.

I. To promote cooperation and exchange of information between and among members.

J. To standardize procedures and forms.

Revised 05/19/2014 2 ARTICLE III – STATE EXECUTIVE COMMITTEE

The duty of the State Executive Committee will be to provide guidance, review and direction for its Districts and members. The State Executive Committee may provide such rules and regulations, for the conduct of its business and for carrying out its purposes as it may deem necessary from time to time. Representatives will serve without compensation, except for out-of-pocket expenses or reimbursed expenditures approved by the State Executive Committee.

A. The State Executive Committee shall consist of three accepted and registered, Representatives from each District who will represent the District’s views and opinions and shall consist of the current District President, the Immediate Past President and one elected District Representative at Large from each District. If a District does not have an Immediate Past President then the person elected pursuant to Article XV subparagraph D. will fill the office of Immediate Past President.

If any of the aforementioned State Executive Committee members cannot fulfill their obligations of the office the District should elect a replacement.

B. MEETINGS

The annual meeting of the State Executive Committee will be held during the first quarter of each year at such time and place as the State Executive Committee designates. Tele-conferencing will be an acceptable form of meeting. Any two member of the State Executive Committee may request special meetings.

C. OFFICERS

State Executive Committee members will hold office for one year beginning the first day of January or until a duly authorized successor has been elected.

1. The State Executive Committee may elect members to serve as Chairperson, Vice- Chairperson, Secretary and Treasurer of the State Executive Committee as necessary. The chairperson must be a past District Officer and/or District Representative to the State Executive Committee who has served on the State Executive Committee for prior Two consecutive years and also must have five years experience in BBF as a business broker being the authorized representative of their office from the Active Membership.

Revised 05/19/2014 3 D. LIABILITY

Neither the Representatives nor their respective companies will be held personally or corporately liable for the debts, liabilities, obligations or activities of the Association.

E. EMPLOYEES

The State Executive Committee may hire an Executive Administrator to administer the functions of the Association. The State Executive Committee will determine and set the salary, benefits, responsibilities and duties to be performed. The Executive Administrator will be responsible for the performance of such functions and will report to the Chairperson of the State Executive Committee. Upon approval of the State Executive Committee, the Executive Administrator may hire and supervise additional staff employees, and will make recommendations to the State with respect to the terms and conditions of employment.

F. DUTIES OF REPRESENTATIVES

1. CHAIRPERSON: The Chairperson will be the Chief Executive Officer of the Association and will perform all duties incidental to this office or as required by law. The Chairperson will preside at all meetings of the State Executive Committee and will appoint all committee chairpersons. The Chairperson will have a vote on all Association matters not withstanding Robert’s Rules of Order. The Chairperson shall have the power to spend or authorize the expenditure of a maximum of $500.00 (per quarter) without State Executive Committee approval on anything that has not been approved in advance by the State Executive Committee.

2. VICE-CHAIRPERSON: In the absence of the Chairperson, the Vice-Chairperson will preside at meetings of the State Executive Committee. He/she will perform such other duties as may be prescribed by the State Executive Committee or by law. He/she will have a vote on all Association matters.

3. SECRETARY: The Secretary will be the custodian of all records and BYLAWS. He/she will keep a book of minutes of all meetings of the Representatives and will make such records and books available at reasonable times to any member. The Secretary will perform all duties generally incidental to the office or as may be required by the Committee or by law. He/she will have a vote on all Association matters.

4. TREASURER: The Treasurer will receive, deposit and disburse all funds of the Association and will maintain correct accounts of all transactions. He/she will render reports to the Representatives upon their request and will prepare financial Statements

Revised 05/19/2014 4 to be presented to the Representatives and to the District Committees at the annual meetings or as requested by the Representatives. The Treasurer will perform all duties incidental to the office or as may be required by the State Executive Committee or by law. He/she will have a vote on all Association matters.

ARTICLE IV – STATE QUORUM AND VOTING

A. The presence of not less than three-fifths of the Representatives will constitute a quorum, and will be necessary to conduct the business of the Association at any duly called meeting.

B. Each Representative will have one vote. Other than BYLAW Amendments should a District Representative be unable to attend a duly called meeting voting may be done by written proxy to vote. The local district board of directors may appoint from its board a non current State Executive committee member the right to exercise the proxy on all matters requiring a vote. The appointee must be present to exercise this proxy vote.

C. Multiple offices of same ownership located in the State of Florida with the same broker of record as registered with FREC shall only have one vote for all combined offices for any State business requiring a vote.

D. Robert’s Rules of Order will govern the conduct at all meetings.

ARTICLE V – STATE COMMITTEES

All committee Chairpersons of the State Executive Committee will be appointed by the State Executive Committee Chairperson and their term of office will not exceed the tenure of his/her office. The Committee Chairperson will serve as an ex-officio member of any committee. No committee will incur any financial obligation to the Association without authorization from the State Executive Committee.

ARTICLE VI - FISCAL YEAR

The fiscal year of the Association will begin on the first day of January and will end on the last day of December of the current year.

Revised 05/19/2014 5 ARTICLE VII - TERM OF EXISTENCE AND PROPERTY

Dissolution. Upon the dissolution of the Association, assets shall be distributed to another exempt organization or to the federal or local government for a public purpose.

ARTICLE VIII – STATE DUES AND FEES

A. State Executive Committee District assessments and payment schedules will be determined by the State Executive Committee and shall be based on the budget approved by the State Executive Committee at the start of the fiscal year.

ARTICLE IX - BYLAWS

The BYLAWS will become effective immediately upon their adoption or amendment. The BYLAWS may be amended by:

1. The affirmative votes of a simple majority of the State Executive Committee Members voting.

AND 2. The ratification by all Active Association member firms. Balloting will be conducted by E-mail or facsimile and will require two-thirds of all members responding to approve such amendment. The State Secretary must receive votes within fifteen (15) days from the date of mailing by the State Executive Committee Secretary who has notified the members who are qualified to vote.

ARTICLE X - INDEMNIFICATION OF REPRESENTATIVES

Any person who is or has been a Representative of this Association and each employee of the Association acting in a managerial capacity will be indemnified by the Association against expenses, including attorneys’ fees, necessarily incurred by such person in connection with the defense or settlement of any action, suit or proceeding to which he/she is a party, alone or together with others, by reason of his/her been or having been a Representative or an employee acting in a managerial capacity in this Association.

Each person will also be reimbursed by the Association for any amounts paid by such person in the satisfaction of any judgment or settlement agreed upon by the Association in writing in connection with any such action, suit or proceeding, unless the amount of such judgment or settlement is payable to the Association itself, or unless such person will be

Revised 05/19/2014 6 adjudged in such action, suit or proceeding to be liable for misconduct in the performances of Association duties. The foregoing right of indemnification will be in addition to any other rights to which such person may be entitled as a matter of law.

ARTICLE XI - DISTRICT ORGANIZATION

Districts may be organized in any metropolitan or contiguous multi-county area within the State of Florida through the direction of the State Executive Committee or upon the request of twenty five or more business broker’s offices. New District applications will be reviewed and approved by the State Executive Committee. New Districts will not be recognized as new until a majority of their members have attended any required Orientation / Educational Courses.

Should an established District fall below 25 in the number of its members offices, for a period of 180 days the District shall lose their voting rights on the State Executive Committee and the State Executive Committee may reassign its members to another District.

ARTICLE XII - BBF MEMBERSHIP APPLICATION

A. Application for membership will be made in writing to the District on a form approved and supplied by the State Executive Committee. The initiation fee will accompany applications. An applicant must apply in the District where the office is located according to FREC records.

B. An applicant for Active Membership must have at least one of the following, unless waived by the District Committee:

1. Closing documents from no less than three business closings that the broker or associates have performed under his/her brokerage within the past three years.

2. Proof of completion of International Business Brokers Association Course number 101 “Introduction to Business Brokerage.” OR

3. Proof of other business brokerage training that the District Committee deems appropriate.

C. Notice of the application will be forwarded to the District membership chairperson.

Revised 05/19/2014 7 The District membership will have an opportunity to inform the District Membership Chairperson of any knowledge, qualifications or other information concerning the applicant. The application will be reviewed by the District Membership chairperson and presented to the District Board of Directors together with recommendations. The District Board of Directors will then vote on the application. A two-thirds majority of those members voting will be required for approval of the applicant. Upon approval and upon the receipt of all dues and fees and upon the completion of the any required Orientation / Educational Courses by all members of the new applicant’s office who will be participating in Business Brokerage, the applicant will be considered a member of the Association.

However, prior to completing the Orientation / Educational Courses and if in the opinion of the District membership chairperson, the applicant is qualified; a temporary membership can be granted until the next scheduled orientation. If the applicant does not attend the next scheduled orientation then the temporary membership shall be terminated until the applicant is in full compliance with all requirements pertaining to orientation. A copy of the application will be forwarded to the MLS Provider. Applicants not accepted as members may reapply for membership after 60 days from date of rejection unless waived by the District Committee.

D. All new members will be on probation for a period of one year from the granting of membership. During this initial year the member and all members of the office may have their membership terminated by the District Committee for any violation of association rules. The decision of the District Committee shall be final and will not be subject to appeal.

E. An applicant for Affiliate Member, Branch Office Member, Non Florida Branch Office, Associate Member and Honoree Member is exempt from paragraph B. Membership application and requirements will be handled by the District Committee of each District.

ARTICLE X111 – ORIENTATION / EDUCATION

A. All Active, Associate, Branch and Non Florida Branch Members who engage in the Business Brokerage profession will be required to attend any required Orientation / Education Courses as authorized by the State Executive Committee or District board.

B. The Course will be held a minimum of once per quarter at a place, date and time specified by the Executive or District Committee.

Revised 05/19/2014 8 C. No Active, Associate or Branch Member may enter a listing on the MLS system or be active in selling other members listings unless they are on the active roster of Business Brokers of Florida. To be placed on the active roster the broker of record of the member entity and all Associates involved in business brokerage must have paid all dues and fees and completed any required Orientation / Educational Course. There will be a grace period for associate members who join Active or Branch members which will be the date of the second scheduled required Orientation / Educational Course after being accepted as a member and the receipt of all dues and fees by the Association. However, before a new agent can be given a BBF ID number and before they are given access to the BBF MLS Program, they must state that they have read both the BBF ByLaws and the BBMS Co-Brokering Rules & Regulations. This statement shall appear on the Agent Profile and the Broker or responsible party for the office will certify that the Agent has fulfilled this requirement.

D. Failure to attend any required Orientation / Educational Courses within the time limits will result in the following Professional Standards action.

1. The individual member will be dropped from Membership, without good cause, as determined by the District Committee. All Multiple Listing Service, MLS and all co- brokering privilege with other members will be suspended. All listings on the Multiple Listing Service, MLS with the individual will be deleted until the individual complies with the rules and regulations of the Business Brokers of Florida or is reinstated by the District and/or

2. The individual’s office will be suspended, unless the District excuses such suspension, until the District reinstates the individual. During this time all of the listings belonging to that office will be deleted from the Multiple Listing Service, M.L.S. system and co-brokering privileges for that office will be suspended until reinstated by the District Committee of Representatives.

E. If the office membership is suspended, then the Broker and the individual that caused the suspension must appear before the District and the District may impose any fines or penalties as it deems necessary within the guide lines as set forth in the Professional Standards section of the BYLAWS.

ARTICLE XIV – DISTRICT MEMBERSHIP

Revised 05/19/2014 9

A. Membership in the District will consist of five classifications:

1. ACTIVE MEMBER: A business brokerage firm or a business brokerage department of a real estate firm whose main office of business is in the Local District’s Designated Territory. Active Members will have representation in the Local District through a Representative as specified in Article XV paragraph A, appointed by the member firm who is registered and approved by the District Board. A designated alternative Representative approved by the District Board may represent the firm when the Representative is unable to attend a designated meeting of the membership. All Associates working under the Active Member who participates in any way with the Listing, Sale or Showing of Business Opportunities must be a member of the Business Brokers of Florida

2. ASSOCIATE MEMBER: An Independent Contractor who has his/her Florida Real Estate License placed with an Active or Branch Member. Associate Members must have on file with the Association an application and must have paid all dues and fees as determined by the State Executive Committee and/or the District. Associate Members will only have representation in the District through their Active or Branch Members’ Representative.

3. AFFILIATE MEMBER: A professional or an organization whose business is related to the transfer of businesses from seller to purchaser. The classification may include, but is not limited to, attorneys, accountants, title companies, lending institutions, business appraisers, associations, franchisors, etc. Affiliate Members will not have representation in the District, but will be entitled to attend meetings of the Association. The Affiliate Member will have the right to receive limited services and information available to Active Members upon payment of the applicable fees. They specifically are not entitled to access the Multiple Listing Service, MLS data except on a limited basis as set forth by the State Executive Committee. They will be entitled to place information in the Multiple Listing Service; MLS database upon payment of such dues and/or fees s as may be decided from time to time. They will not be entitled to equal split of the compensation as provided by the Bylaws and will negotiate the split of compensation in each particular situation where allowed by law.

4. BRANCH OFFICE: A Branch Office shall mean an office, which is in addition to the Principal Office and is 100% owned and operated by the same corporation or same management as the Active Member or is registered by FREC as a Branch Office (BR state designation). The Branch Office is required to join the District in the territory in which the Branch Office is located. Such Branch Office will appoint a Representative as specified in Article XV paragraph A, to attend meetings of membership and will be subject to the same requirements as an Active Member. If the Branch Member is a member of the District in which the Main Office is the Active Member, then the Branch Revised 05/19/2014 10 Member will not have any voting rights. If the Branch Member is situated outside of the territory of its Main Office, then such Branch Member will have full voting rights in District issues. The Branch Member will pay such membership fees and dues as may be decided from time to time by the State Executive Committee and District in which such Branch Member is a member. The Branch Member will not have voting rights in State Executive Committee issues but will otherwise be subject to all requirements for Active Members. All Associates or agents working under the Branch Member who participates in any way with the Listing, Sale or Showing of Business Opportunities must be a member of the Business Brokers of Florida.

5. NON FLORIDA BRANCH OFFICE: A non Florida branch is an office 100% owned by a licensed Florida real estate broker and located outside the State of Florida. The office will pay all dues and fees as set forth by the State Executive Committee. All agents must attend all the required BBF Florida Orientation / Educational Courses as set forth in Article XIII. Fees will be deposited in the State Account.

6. HONORARY MEMBERSHIP: Honorary Membership in BBF is awarded to individuals who In the opinion of their local District Committee have contributed significantly over several years to the growth, expansion, guidance and leadership of the Business Brokers of Florida. Nominees must be nominated by their local Committee of Representatives and then be approved by the State Executive Committee. However, the individuals given this recognition may be exempt from paying dues, assessments, or attendance requirements or any of the requirements of the BBF Bylaws or BBF Rules and Regulations. Honorary Members will have the right to attend all BBF meetings but may have the right to vote under another type of Membership.

7. MEMBERSHIP TRANSFER OF OWNERSHIP: When the business of a member is sold or 25% or more of the shares of a member corporation are sold or transferred so/or that control of the existing management changes, the existing membership will be suspended forthwith. The entity may reapply for transfer of membership in the same manner as a new application, except that no application fee will be imposed. However the entity may continue to operate until the next District Committee meeting. If the application is approved by the District Committee then the entity may continue to operate until the next District meeting at which time the Active Members will vote to approve or reject the application for membership.

8. There is no limit on the number of members the District may admit.

9. All members, except Affiliate Members Non Florida Branch office and Honorary Members, will be required to hold a valid and current Florida Real Estate License.

Revised 05/19/2014 11 ARTICLE XV – DISTRICT REPRESENTATIVES

A. Any Representative of an Active or voting Branch Member of the District who has paid their current dues and has an active Florida Broker License is qualified to hold the office of Representative.

B. The District Representatives will exercise the powers of the District and conduct its affairs.

C. The District will consist of one voting member from each Active Member who will be accepted and registered with the District Board and posted on the MLS System.

D. The District Representatives shall elect one President, one Vice President, one Secretary, and one Treasurer to serve as the District Officers. The President must have been a member of the District Board of Directors for the immediate year prior to his/her election. The District Board of Directors shall consist of the current District Officers and shall include the Immediate Past-President, for a total of five persons shall make up the District Board of Directors. Districts not having an immediate Past-President may elect a delegate from the active Representatives of that District in lieu of the immediate past President to serve on the District Board of Directors and shall elect a Representative at large to serve on the State Executive Committee

E. The District Representatives will meet as needed. Special meetings may be requested by any 5 Active Members. The meetings will be presided over by the President, or in his/her absence, by the Vice President. The Secretary will take minutes of all meetings of the District Committee which, upon approval, will be forwarded to all District Representatives and to the State Executive Committee.

F. A presence of not less than one half of the District Board of Director members shall constitute a quorum for a board meeting or one half of the Active Members will constitute a quorum for a general meeting.

G. All of the District Officers or any individual District Officer may be removed from office at any time at a duly constituted membership meeting and by a vote of two-thirds of those present who are entitled to vote. If any or all of the District Representatives are so removed, new District Representatives may be elected at the same meeting and they will hold office for the remainder of the term.

H. Each Active Member will have one vote in all District issues. The representative of each Active Member and each branch voting member attending any duly scheduled District meeting will be entitled to vote.

I. Neither the District Representatives nor their respective companies will be held Revised 05/19/2014 12 personally or corporately liable for the debts, liabilities or other obligations of the District.

ARTICLE XVI - DISTRICT OFFICERS

A. The Officers of the District shall be the President, Vice President, Secretary, Treasurer and the Immediate Past President (or Delegate at Large). One person may not hold more than one District Office at a time.

B. The duties of the Officers will be as follows:

1. PRESIDENT: The President will be the Chief Executive Officer of the District and will perform all duties incidental to this office or as required by law. He/she will preside at all meetings of the District Representatives and membership and will appoint all committee chairpersons. He/she will have a vote on all District matters. The President shall have the power to spend or authorize the expenditure of a limit as determined by the District Committee of Representatives. If for any reason the President does not complete his term then his/her name will not be considered to hold the title or office of Immediate Past President. Upon notice of a vacancy in this office and election will be held for the balance of the term within 30 days of notification.

2. VICE PRESIDENT: In the absence of the President, the Vice-President will preside at meetings of the District Representatives and the membership. The Vice President will be responsible for the programs and arrangements for the meetings. He/she will perform such other duties as may be prescribed by the District Representatives or by law. He/she will have a vote on all Association matters. Upon notification to the board that the Vice President will not be able to complete his term for any reason then an election will be held within 30 days from that notification from the balance for that term.

3. SECRETARY: The Secretary will be the custodian of all records and a membership book of members, which book will show dates of acceptance and termination, the official mailing addresses of the members. He/she will keep a book of minutes of all meetings of the District Representatives and will make such records and books available at reasonable times to any District member or the State Executive Committee. The Secretary will perform all duties generally incidental to the office, or as may be required by the District Representatives or by law.

Upon notification to the board that the Secretary will not be able to complete his term for any reason then an election will be held within 30 days from that notification from the balance for that term.

4. TREASURER: The Treasurer will receive, deposit and disburse all funds of the Revised 05/19/2014 13 District and will maintain correct accounts of all transactions. He/she will render reports to the District Representatives and the Members upon their request, and will prepare financial Statements to be presented to the membership at the annual meetings and a quarterly financial Statement to the State Executive Committee. The Treasurer will perform all duties incidental to the office, or as may be required by the State Executive Committee or by law. Upon notification to the board that the Treasurer will not be able to complete his term for any reason then an election will be held within 30 days from that notification from the balance for that term.

ARTICLE XVII - DISTRICT MEETINGS

A. Meetings of the membership will be held at the principal office of the District or at such other place or places within the Local District’s Territory or as may be designated from time to time by the District Representatives.

B. Nomination of District Officers will be held in the 4th Quarter of each year, election of officers, and installation will be on or after January 1st of the following year.

1. Nomination ballots for each district will be sent out by the BBF Administrator at the direction of the District Board of Directors. These ballots will be returned to a third party (non board member) as designated by the District Board of Directors.

2. Election ballots for officers of the district will be sent out by the BBF Administration upon instructions from the district Board of Directors and the ballot will be returned to a disinterested third party (non board member) for tabulation.

C. Special meetings may be requested by any three (3) or more Representatives. Such meetings are to be held at a time and place as may be designated by the District Representatives. D. Printed notices of the time, date and place of every annual or special meeting will be delivered by the MLS provider via e-mail or posted bulletin on the MLS, U.S. Mail or Facsimile at least fifteen (15) days prior to such meeting.

E. Each Active and Branch Member which does not have another office in the same District is entitled to one vote on each matter through its Representative. Voting will be by voice unless twenty percent of the members entitled to vote demand voting by ballot. Voting by proxy, by mail or fax will be permitted.

F. The presence of not less than the majority of the District Representatives or one half of

Revised 05/19/2014 14 the Active Membership will constitute a quorum and will be necessary to conduct the business of the District. A quorum will be required for election of District Officers.

G. Members are encouraged and welcome to attend meetings of other Districts.

ARTICLE XVIII - DISTRICT DUES AND FEES

A. District dues, due’s payment schedules, and special assessments will be determined from time to time by the District Committee of Representatives.

B. Any member failing to pay District dues, fees or special assessments, without good cause, within 45 days after the due date of payment will forfeit their rights to membership and will be removed from the roll of membership, provided that prior to such removal the member shall have been sent a notice that such dues are in arrears and that failure to pay such amounts will cause such members removal. The District Representatives shall determine such forfeiture of membership at the next District Representatives meeting.

C. Districts will be responsible for billing and collecting State Executive Committee and District membership dues and fees and special assessments. State Executive Committee

D. Annual dues will be pro-rated for new member firms accepted by the District Committee of Representatives and approved by the District Active and voting Branch Members. Depending on the month of entry, dues will be pro-rated as follows: April, May, June - 75% July, August, September - 50% October, November, December 25% January, February, March - 100%

ARTICLE XIX - DISTRICT COMMITTEES

The District Committee Representatives may create any committee deemed necessary or desirable to serve the purposes of the District. The President will appoint the chairperson and will be an ex-officio member of any such committee. No committee will incur any financial obligation to the District without authorization of the District Representatives. Any member of the organization, in good standing, may serve on a committee.

ARTICLE XX – DISTRICT QUORUM AND VOTING Revised 05/19/2014 15

A. The presence of not less than the majority of the District Officers or one half of the Active Membership will constitute a quorum and will be necessary to conduct the business of the District at any duly called meeting of the District.

B. Each Active and Branch Member, which does not have another office in the same District, are entitled to one vote on each matter through its Representative. Voting will be by voice unless twenty percent of the members entitled to vote demand voting by ballot. Voting by proxy, by mail or fax will be permitted.

C. Multiple offices located in the same District with the same Broker of Record as registered with FREC shall only have 1 vote for all combined offices on all District businesses requiring a membership vote.

D. Robert’s Rules of Order will govern the conduct at all meetings.

ARTICLE XXI - INDEMNIFICATION OF DISTRICT REPRESENTATIVES AND OFFICERS Each person, who is or has been a Representative of a District, will be indemnified by the Association against expenses, including attorney's fees, necessarily incurred by such person in connection with the defense or settlement of any action, suit or proceeding to which he/she is a party, alone or together with others, by reason of his/her been or having been a Representative or Officer acting in a managerial capacity in this District. Each person will also be reimbursed by the Association for any amounts paid by such person in the satisfaction of any judgment or settlement in connection with any such action, suit or proceeding, unless the amount of such judgment or settlement is payable to the Association itself, or unless such person will be adjudged in such action, suit or proceeding to be liable for misconduct in the performances of his/her duties to the State Executive Committee or District. The foregoing right of indemnification will be in addition to any other rights to which such person may be entitled as a matter of law.

ARTICLE XXII - BY LAW AMENDMENTS

No District will be entitled to alter or amend any or all of these Bylaws, but may make written suggestions to the State Executive Committee for such alterations or amendments through the District Representatives. The aforementioned will also apply to all forms and documents approved by the State Executive Committee for use by the members. No member will be entitled to use any form or document approved by the State Executive Committee unless it is in the exact form as is handed down by the State Executive

Revised 05/19/2014 16 Committee and they will bear the State Executive Committee name and are to be used with and/or between Association members.

ARTICLE XXIII - CODE OF ETHICS

The Code of Ethics was enacted by the State Executive Committee as a means of establishing a uniform standard of conduct. Additions may be made to the Code, from time to time by the State Executive Committee, so long as the new provisions are consistent with the existing Code. We adhere to the ethical principles involved in the transfer of businesses, and believe that the investment, risk and effort required to build a profitable business deserve a fair evaluation and a straightforward, professional and honest presentation to both sellers and buyers.

A. Members should keep themselves informed as to trends affecting business opportunities.

B. Members will make a reasonable effort to protect the public and all parties to a transaction against fraud, misrepresentation or unethical practice.

C. Members will recommend that clients and customers use attorneys and tax accountants for independent advice on transactions.

D. Members will use their best efforts to see that financial obligations and commitments of all parties to a transaction are in writing and that all parties have received copies of agreement(s).

E. Members will not receive compensation from more than one party without the full knowledge of all parties to the transaction.

F. The exclusive listing of businesses should be urged and practiced by members.

G. Members will not serve as principal and/or broker or appraiser of a transaction unless full disclosure is made in writing to all principals involved.

H. Members should not undertake to make business appraisals that are outside or beyond the scope of their experience without first obtaining the assistance of an authority on such types of businesses.

I. Members should seek no unfair advantage over their fellow members and should willingly share with them the lessons of their experience and study.

J. Members will cooperate with other members on businesses listed. Revised 05/19/2014 17 K. Members will not deny equal professional services to any person(s) for reasons of race, color, religion, gender, or country of national origin.

ARTICLE XXIV - COOPERATION AGREEMENT BETWEEN MEMBERS

A. Active, Associate and Branch Members will at all times maintain on file with the BBF-MLS system, data pertaining to all exclusive right-of-sale, exclusive agency listings, and exclusive transaction listings, unless excused by the guidelines set by the State Executive Committee from time to time. New franchises (not opened) in which a BBF member is authorized to sell by the franchisor on an open listing basis will be allowed to post these listings in the (new franchise section) in the BBF MLS System.

B. Active Associate and Branch Members will furnish the BBF-MLS system, information about their listings as specified by the State Executive Committee within seven (7) days from the date of initial advertising.

C. The Association will make available to all Active, Associate and Branch Members listing information submitted by its members through the BBFBBMS-MLS system.

D. Members will cooperate in the showing of businesses listed under Paragraph A above with other members through the listing office, who may, in their sole discretion, elect whether or not they wish to be present for said showings.

E. Members will submit all bona fide written offers received on any business listed with another member directly to the listing broker, and will not, under any circumstances, present any offer directly to the owner of said business without the prior written approval of the listing broker.

F. Members will, in a timely manner, present to the owner of any business listed by them, all bona fide written offers received from other members, and will immediately notify said members upon acceptance or rejection of any offers submitted. The decision to accept or reject an offer remains with the seller at all times.

G. Members will not disclose one buyer's offer to another buyer as a sales technique.

H. The total compensation earned (including commission, on the business and or real estate, lender payments and lease commission fees, that are part of the transaction) on the sale of any business made pursuant to the provisions of this Agreement will be divided equally between the listing broker and the selling broker, unless otherwise agreed to in writing. Either broker may reduce or alter its share of the compensation as long as the Revised 05/19/2014 18 share of the other broker remains unchanged.

I. No listing broker can specify the form a selling broker may use in the presentation of an offer.

J. Members will not advertise any business, which is not listed by them without the prior written consent and approval of the listing broker unless it is through the MLS provider. K. Failure of the member to comply with any of the provisions of this Agreement will be grounds for Professional Standards action against said member.

L. Members agree to share information and co-broker, with other members, any advertised listing, whether it is in the MLS system or not.

M. Commission referral fees to third party. The listing office will be allowed to post into the MLS a listing for the sale of a business or property listed by a BBF member that requires a referral fee to be paid to a third party and reduce the amount of the commission to be split by the listing and selling BBF office members if it meets the following criteria;

a. The listing agreement used for listing the business or property must be on the BBF members listing agreement. No assignments of a listing agreement or the referring entity’s listing agreement can be used.

b. The original amount of the commission must be a minimum of $100,000.00 before it is adjusted or reduced either by contract or agreement. Any referral fees paid on commissions with the original commission being under $100,000 shall be paid from the listing broker’s commission proceeds.

c. The third party recipient must be properly licensed and or in compliance with any applicable laws to receive the referral fee.

d. The third party receiving the referral fee must have no connection, affiliation, cannot be related to any of the principles or the person or entity that is either the listing or selling office, or have any kind of ownership or anticipated ownership in the listing or selling offices involved in the transaction. The relationship between the listing office, the selling office, and the referring office must be arms length.

N. In the absence of a prior written agreement, fees or compensation for completing a transaction will be split on a fifty-fifty basis between member firms and other association as set forth by the State Executive Committee, such fees or compensation to be paid promptly upon receipt of same. Selling office must attend the first showing with their buyer prospect or lose the right to a fifty/fifty split. A 20% referral fee of the selling side

Revised 05/19/2014 19 of the commission will be set as the default.

Listing broker must give the selling broker sufficient time to attend such meeting. The listing broker also has the right to cancel such meeting if the selling broker cannot attend, waive the attendance requirement, or obtain the acceptance of another fee arrangement in writing

If selling broker does not attend first showing after agreeing to, and was given ample opportunity to attend, listing broker must notify the selling broker in writing of the loss of their fifty-fifty split rights within 7 days after such showing. If selling broker disputes such loss, the dispute should be handled immediately. Absence of action by the listing broker will be construed as a waiver of the attendance requirement and the split will be fifty-fifty.

Brokers are highly encouraged to get any arrangement in writing prior to the presentation of an offer.

ARTICLE XXV – PROFESSIONAL STANDARDS

A. All members of the Association, regardless of class of membership, are subject to the rules and regulations as are herein set forth or may be made from time to time.

B. The responsibility of disciplining any member shall be the responsibility of the District where such member holds their primary membership.

C. The procedure for handling Professional Standards problems will be as follows:

1. Where any person, whether a member of the Association or the public alleges that a member has violated any rules or regulations and bylaws of the Association, whether contained herein or otherwise and including “The Code of Ethics”, including when a member has been convicted, adjudged or otherwise recorded as guilty of a felony, or a crime involving moral turpitude, or has:

2. Violated a provision of the Florida Real Estate Commission or an order of Florida Real Estate Commission, a complaint shall be recorded in writing, duly notarized, and mailed to the District President by prepaid, certified mail or handed personally to the District President. A copy shall likewise be mailed to the alleged offender. Complaints filed later than 180 days after the complainant knows the facts shall not be considered.

3. Within 30 days of the receipt of such notification, the President shall forward a copy of the complaint to the “Professional Standards Committee”. Such panel shall at all times consist of an uneven number of members “a minimum of five”. Should any Revised 05/19/2014 20 member resign or is unable to fulfill his/her duties the President shall appoint another member to fill such vacancy. Each party to the Professional Standards problem shall have an opportunity to remove one of the appointed members of the Professional Standards Committee. If one member is removed then the other party shall also remove one member in order to keep the panel in an odd number.

4. The “Professional Standards Committee” shall review such complaint and documentation and should it find that a hearing is not warranted, it shall notify the Complainant thereof and except for an appeal, as hereinafter specified, such action shall dismiss the complaint.

5. A copy of such complaint shall be handed to each member of the Professional Standards Committee and the Chairperson of the Committee (who is appointed by the District President) shall call upon the respondent to answer such complaint in writing within 15 days after the date of mailing such complaint to the respondent by prepaid, certified mail.

6. Within 15 days after receipt by the Chairperson of the Respondent’s answer, the Chairperson shall convene a meeting of the Professional Standards Committee and shall notify the parties of such hearing date by prepaid, certified mail. A copy of the Respondent’s answer shall be immediately distributed to all members of the Professional Standards Committee. The Professional Standards Committee shall keep all complaints, replies and other documents confidential.

8. Counsel or other authorized Representative may represent the parties.

9. Only persons with a direct interest in the hearing shall be entitled to attend. The Chairperson shall have the power to require the exclusion of any witness, other than a party or other essential person, during the testimony of any other witness.

10. The Chairperson for good cause may postpone any hearing upon the request of any party or the Chairperson’s own decision.

11. The Committee shall hear the complaint under oath in such order as it may decide and upon completion shall make a decision by a majority decision.

12. The Committee shall be the judge of the relevance and materiality of the evidence submitted. Any evidence may be given by affidavit but it shall only have the weight of evidence that the Committee so decides, after giving consideration to all circumstances.

11. The Committee may proceed in the absence of any party, who after due notice, fails to attend.

Revised 05/19/2014 21 13. The parties may also use facsimile transmissions or other forms of electronic communication to give notices required hereunder.

14. The decision of the Professional Standards Committee shall be in writing and signed by all members who shall sign their signature on the decision thereto.

15. The Professional Standards Committee may enforce the following penalties:

a. A warning by the Professional Standards Committee with documentary information placed in the member’s file.

b. A written letter of reprimand with a copy placed in the member’s file.

c. An appropriate and reasonable fine not to exceed $500.00 per infraction, the proceeds whereof shall be placed to the benefit of the General Fund.

d. Membership of such person, or his/her partnership or company, being placed on probation for a period not to exceed one year. The District Committee of Representatives shall determine the conditions of probation.

e. The membership of such person, partnership or corporation may be suspended for a period not exceeding one year with an automatic reinstatement of membership in good standing at the end of the specified period of suspension.

f. Expulsion from membership of the Association.

16. An Active Member shall be responsible for any act of all associate members of their firm and a person who is not a member of the association and who may be employed or affiliated with an Active Member. Lack of knowledge of such person’s conduct may only mitigate the decision of the Professional Standards Committee.

17. The decision of the Professional Standards Committee can be subject to an appeal to the State Executive Committee who shall, through its Chairperson, appoint an Appeals Committee the appeal shall be lodged within 21 days after the decision is delivered in terms of paragraph (12) above. The appeal shall be in writing setting forth the grounds of appeal and shall include $200.00 as a fee for the Appeals Committee’s expenses. An Appeal Committee shall be appointed by the Chairperson of the State Executive Committee and shall consist of five members, including a Chairperson, of the Appeals Committee over which this Chairperson shall preside. Its members shall elect such Chairperson.

18. All membership privileges will stay in effect during the review and appeals Revised 05/19/2014 22 procedure. The Appeals Committee Chairperson shall at his/her convenience cause a hearing to be held at such place and time as he/she may decide and shall notify the parties thereof. No further evidence shall be submitted unless the Appeals Committee Chairperson, after receiving in writing from the parties, a valid reason why such evidence was not submitted at the hearing and rules that such evidence will be accepted. The Chairperson may rule that the evidence shall be submitted to the original Professional Standards Committee who shall reopen the hearing and may revise their decision based thereon or he/she may decide to accept evidence in affidavit form. The Appeals Committee shall make whatever decision it thinks fit and such decision shall be final and binding on all parties thereto.

19. Disputes between members who belong to different Districts shall be settled by the Professional Standards Committee of an independent District appointed by the State Chairperson with all rights of appeal and hearings as set out in this Article.

20. All rights of a member in the Association shall cease upon expulsion and the member shall not be entitled to a reimbursement of any fees or dues.

ARTICLE XXVI-Arbitration

Should any dispute arise between any member, other than is dealt with in the Professional Standards Section above, the Rules of Arbitration shall be based on the Rules for Commercial Arbitration of the American Arbitration Association except that the arbitrator or arbitrators shall be a member of the Business Brokers of Florida and all hearings shall be held by the local District. Wherever in such rules “AAA” appears there shall be substituted therefore “BBF.”

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