This agreement is made as of (date)by and among the undersigned (each of the persons executing the signature page of any counterpart of this Agreement), hereinafter referred to as the "Shareholders".
WHEREAS the Shareholders deem it in their best interests and for the welfare of the corporation, to impose certain restrictions on Bath & Kitchen Business Group, Inc. (hereinafter referred to as "BKBG" or the "Corporation") stock and its Shareholders, and to adhere to the Bylaws of the Corporation and Articles of Incorporation all as are presently written and as they may be amended, mo dified, and supplemented from time to time, and:
WHEREAS the Shareholders mutually agree that it is to their mutual benefit and in the best interest of the Corporation to provide for the orderly transition of ownership stock a nd to facilitate 'the procurement and marketing services.
NOW THEREFORE, it is agreed as follows:
I.REDEMPTION AGREEMENT
1.01 This agreement is int ended to be a redempti on agreement and all offers required to be made hereunder shall first be made to the Corporation. If the Corporation is willing to accept the offer but does not have a financial means to accomplish the acceptance, then the Continuing Shareholders shall have the right but not the duty to provi de the Corp orati on sufficient funding, in the a mounts and in the m an ner agreed upon betw een themselves so th at the Corporation may accept the offer in the first instance.
If the Corporation is for any reason unable or unwilling to accept the offer, the offer shall next be made to the C ontinuing Shareholders who shall acce pt the sam e on the terms and conditions as pro vided herein.
"Continuing Shareholders" refer to those Shareholders who are not terminating their interests in the Corporation or who are n ot making an a ssignment or other transfer of their ownership interest.
II.GENERAL TERMS
2.1 Status of the Signees, Transferees, Etc.
All (i) assignees, transferees, trustees, receivers, or others who obtain an interest in the shares, whether by attachment, execution, bankruptcy law, receivership law, or otherwise by operation of law, and (ii) assignees, transferees, secured parties, creditors, and others who obtain an interest in the shares, whether or not said Assignment or other transfer occurred with the consent of the continuing
Shareholders, take subject to the terms and conditions of the agreement. Any such act of assignment or other transfer, whether by operation of law, voluntarily or involuntarily, or by act of a Shareholder if not consented to, shall constitute an event of default, so that the terms and conditions of this agreement shall apply.
2.2 Duration and Renewal
This agreement shall commence on the execution date hereinafter (December 31 of the year following entrance into this agreement) and terminate one year from the execution date. Thereafter, it shall automatically renew each year for one-year periods, subject to cancellation at any time, by either party with 90-days noticebefore the end of a renewal period; however, the cancellation shall not relieve the Shareholder of payment and/or the confidentiality responsibility to BKBG or its Shareholders.
2.3 Purchases and Payments
The Shareholder agrees that all purchases of all items from BKBG Preferred Vendors shall be through the BKBG organization in accordance with the group’s procurement and payment procedures. The Shareholder shall remit payment directly to BKBG Preferred Vendors for any and all items purchased from BKBGPreferred Vendors within 35 days of the date of invoice from the procurement vendor or assessments billed through the Corporation or by such other terms as the Board of Directors my specify, at its option, and any payment not received by BKBG or BKBG Preferred Vendors by the date herein specified, shall be deemed in default. The Shareholder specifically agrees that, in the event of a dispute with the manufacturer, procurement vendor or Corporation, whether with regard to the items purchased or otherwise, the Shareholder upon request of BKBG, must nevertheless remit payment, as specified herein and may not withhold payment. It is further agreed that the obligation to remit the payments as specified herein is not subject to any defenses, set off, counterclaim or recoupment related to any claims it may have against the manufacturer, BKBG, BKBG’s vendors or any other third party. The Shareholder shall not be limited in the number or amount of purchases made during the term of this agreement but the shareholder is required to limit its outstanding accounts payable to an amount set by the Board of Directors.
III. SELECTION OF PRODUCT AND RELEASE FROM LIABILITY
3.01 It is specifically understood that the Shareholder shall exercise its own complete discretion inthe selection of bath and kitchen product purchases and all terms of the purchase, including but not limited to price, quality and delivery, with absolutely no representations, influence or control by BKBG. The purchases made by BKBG will be at the request of the Shareholder, for resale to that Shareholder, and BKBG agrees to make the purchases but BKBG shall not be liable for specific performance of the purchase or for any damages whatsoever including, but not limited to, the vendor's delay or failure to deliver the items ordered, and the Shareholder hereby releases BKBG from any and all liability in connection with the purchases made by BKBG on behalf of the Shareholder.
IV.WAIVER OF WARRANTIES AND INDEMNIFICATION
4.1 Each Shareholder specifically agrees that BKBG is not an agent of the manufacturers and BK.BG has made no representations or warranties of any nature, directly or indirectly, express or implied, as to the design, suitability, durability, fitness for use, merchantability, condition, compliance with specification, workmanship, operation or quality of the products purchased through it with allitems to be purchased "as is", and the Shareholder disclaims any implied warranties including warranties of merchantability or fitness of the particular items or its components, for any purpose.
4.2The Shareholder agrees to indemnify and hold BKBG harmless from any and all claims against BKBG for loss, liability or damage arising out of or in connection with any products or their components purchased by the Shareholder through BKBG.
V.CONFIDENTIALITY AGREEMENT
5.01 Shareholder agrees that all information relative to the discount process, rebateprograms and other details, general as well as specific, of the marketing and procurement techniques, procedure and programs of BKBG are confidentialand will not be shared with any party or entity. Breaches of confidentiality are subject to termination.
VI. DEFAULT
6.1The following are events of default under this agreement:
(a)If by majority vote of the Board of Directors, the Shareholder's conduct or that of its representatives, within or without the Corporation, is such as is deemed to be detrimental to the best interest of the Corporation.
(b)If the Shareholder fails to pay any amount payable by the Shareholder to the Corporation or to vendors (a "Payment Obligation"), as and when due.
(c)If it is determined by a majority of the Executive Committee that the Shareholder has failed to maintain an adequate credit relationship with its vendors, or the Corporation, in the operation of its business.
(d)If the Shareholder makes a general assignment for the benefit of creditor or shall petition or apply to any tribunal for the appointment of (or there shall be an appointment of) a trustee, custodian, receiver, or liquidator, assignee, sequestrator, or other similar official of all or any substantial part of its business, estate or assets.
(e)If the Shareholder commences any proceeding as debtor under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, or liquidation law of any jurisdiction, including without limitation, the Bankruptcy Code, whether now or hereafter in effect or consent now or acquiesces to the commencement of a case under any suchlaw.
(f)If the Shareholder fails to maintain a good reputation in the industry and generally to pay its debts as they become due or is dissolved, liquidated, or terminated, or takes any corporate action in furtherance of any such action.
(g)If an order is entered appointing a trustee, custodian, receiver, liquidator, assignee, sequestrator, or other similar official of all or any substantial part of the assets of the Shareholder or any petition shall be filed against or shall grant relief to the Share under anybankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, or liquidation law of any jurisdiction, including, without limitation, the Bankruptcy Code, and such order shall remain in effect or such petition shall not be withdrawn for more than 30 days after entry or filing thereof, or at any time after such entry of filing any person shall assert in any such proceeding that any payment made by or on behalf of Shareholder in respect of the purchases is recoverable as a preferential payment.
(h)If any representation or warranty made in, or in connection with the execution and delivery of, this Shareholder Agreement or any related documents or any certificate, financial statement, or other instruments furnished pursuant thereto proves to have been, given the assumptions stated therein, materially incorrect, false, or misleading when made.
(i)If a default occurs in the punctual and complete performance or observance of any of the covenants, conditions, or agreements contained in this Shareholder's Agreement, any related documents or in any other transaction involving BKBG and the Shareholder.
(j)If the Shareholder discloses any information, deemed by the Corporation to be confidential in nature and against the best interest of the Corporation in violation of the confidentiality agreement described above or as amended from time to time.
(k)If the Shareholder fails to participate in at least one BKBG conference per calendar year.
(l)If taking into account the size of BKBG’s members business, it is determined by a majority of the Board of Directors that the Shareholder has failed to put forth a reasonable effort to purchase a reasonable amount of products from a reasonable number of BKBG Preferred Vendors and/or participate in BKBG to a reasonable degree. Shareholders are required to purchase a minimum volume annually from BKBG Preferred Vendors as established by the Board of Directors.
(m)If Shareholder initially purchases products through BKBG Vendors and transfers that volume of purchases to another buying group.
(n)If a Shareholder serves on the Board of Directors, committees or in a leadership position of a competing buying group.
VII.REMEDIES
7.01 If any one or more events of default has occurred the Board of Directors of the Corporation may, after notice of default to the Shareholder, cancel the membership of any Shareholder in the procurement division and such Shareholder may be required, at the option of the Board of Directors of BKBG, to surrender its shares inthe Corporation, properly endorsed and stamped for transfer, and return all requested procurement and/or marketing division materials and any copies thereof, including all materials as described in subparagraphs above to BKBG's offices. The Corporation shall thereupon re-purchase the said share at the repurchase value, $100.00 per share, deducting as an offset any indebtedness to the Corporation by the Shareholder.
5VIII. ASSIGNMENT OR OTHER TRANSFER
8.01 If a Shareholder receives a bonafide offer for all or any part of his Ownership Interest froman unaffiliated third party and he desires to sell andmake an assignment or other transfer of his Ownership Interest pursuant to such offer, he shall first obtain the 'Written consent of the Board of Directors. If said consent cannot be obtained, the Corporation shall purchase saidshares pursuant to Section VIII.
IX.LEGEND
9.01 The share certificates shall bear the following legend or a legend to the following effect:
"The transfer of these shares is restricted. These shares may be restricted under the Securities Act of 1933, the Securities and Exchange Act of 1934, or the Securities Act of Texas (collectively called "Securities Acts"). The restriction may involve limitations required under an exemption from said Security Acts, such as an investment representation, a residency requirement, or a holding period requirement under the Intrastate Offering exemption.
"The transfer of these shares is restricted under the terms of a Shareholders Redemption Agreement between the holder of this certificate and the Corporation or other Shareholders, or both. Said shares may not be sold, transferred, assigned, given away, pledged, encumbered, or otherwise disposed of, except in strict accordance with the terms of that agreement and no transfer will be recognized by the Corporation until, as the case may be, counsel to the Corporation is satisfied that there is no violation of the Security Acts, the Directors consent to the transfer, or both."
"A copy of said Shareholders Agreement will be furnished without charge to the holder of this certificate upon receipt by the Corporation at its principal place of business or registered office of a written request from the holder hereof."
The Corporation shall repurchase said shares at the purchase price of $100.00 per share deducting as an offset any indebtedness to the Corporation by the Shareholder.
X.RESTRICTIONS ON REPRESENTATION ON THE BOARD OF DIRECTORS
10.01 The Shareholders understand and agree that any Shareholder(s) that share common ownership or management, multiple locations or branches, whether independent or not, or which are affiliated with one another in any manner, shall vote only one share amongst all such related Shareholders and specifically agree to forfeit the remaining voting rights the related Shareholders may have. Each Shareholder is to be limited in eligibility to not more than one representative on the Board of Directors.
XI. OFFSET
11.01 In the event that any Shareholder or formerShareholder is in default in the payment of any amounts due to the Corporation or its vendors, the Corporation shall have the right to offset the amounts past due against any other rebates otherwise due to the Shareholders.
XII. MISCELLANEOUS
All notices, including offers, acceptances and communications between the parties hereof required or agreed to be given hereunder by any party shall be in writing and shall be sent by United States mail, return receipt requested, or express courier, addressed to the party intended to be at the address of the respective parties hereinafter set forth, the date of mailing to be deemed the date of giving of the notice. Notice given as aforesaid shall be sufficient service thereof.
12.1 All of the terms, covenants, agreements, and conditions herein contained shall be binding upon all the parties hereto, and their respective heirs, executors, administrators and assigns.
12.3 No delay on the part of BKBG in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude other or further exercise thereof, or the exercise of any other right, power or privilege. These rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies which BKBG would otherwise have.
12.4 If any provision or provisions of this agreement are found to be void or unenforceable, the remaining provisions of this agreement and any agreements or instruments delivered pursuant hereto shall, nevertheless, be binding, and this agreement and such agreements and instruments shall be enforceable as ifthe void and unenforceable provision or provisions had been included.
12.5 Neither this agreement nor anyprovision hereof may be changed, waived, discharged or terminated orally, or in any manner other than by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought or otherwise