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  1. #51
    Join Date
    Jun 2010
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    Default Re: Syndicate Agreement Legal Question

    List of definitions?
    I am old and wise because i was young and stupid.

  2. #52
    Join Date
    May 2007
    Posts
    37,694

    Default Re: Syndicate Agreement Legal Question

    Would there be a parallel path in the flow chart, where the boat is offered at brokerage either to sell the whole boat or the share depending who comes along?

    The shares I have been involved with, the existing members might well want a right of veto over new share owners.

    Some people form syndicates to run for a limited period, then the boat will be sold or a new syndicate formed. Happens with racing boats, people agree to campaign a boat for a couple of seasons. Sometimes the running costs are met by the syndicate while the capital remains with one owner.
    Sorry, I'm off at a bit of a tangent, but thanks for the info in this thread.

  3. #53
    Join Date
    May 2001
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    ation, Loc: ation, Loc: ation.
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    16,318

    Default Re: Syndicate Agreement Legal Question

    Thanks everyone for their additional comments. I'll reply to JFM's detailed comments later via an v0.2 version of my flow chart .

    Anyhow, regarding right of veto over new syndicate members, as JFM very eloquently puts it, you need to make sure which way the gun is pointing before inserting this into the syndicate agreement. As some may be aware, due to personal reasons, one of my partners has unfortunately decided to sell his share. I could leave it entirely to him to find a buyer (other syndicates, such as the Sq52 in Alcudia, have members selling their shares on eBay). However, as I have a vested interest in finding a suitable person to join our syndicate I have taken an active role in finding a buyer for his share.

    Also, as JFM alludes to above, if you need to resort to the terms of a syndicate agreement, the syndicate is probably doomed.

    Foy anyone considering joining or setting up a syndicate, it's really important that you like your fellow sharers and also that everyone is pretty laid back. If you're running the boat, you will have a lot of contact with them!

    Regarding a minimum term for a new partner, this is something that we have already discussed and happily agreed to.

  4. #54
    Join Date
    May 2001
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    Jersey/Antibes
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    22,529

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by petem View Post
    ... it's really important that you like your fellow sharers and also that everyone is pretty laid back.
    Hit nail on head Pete. When I was in a syndicate I was v lucky that the other two guys were super nice/gentleman/laid back. It's the most important thing.

  5. #55
    Join Date
    May 2001
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    Jersey/Antibes
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    22,529

    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by petem View Post
    Also, as JFM alludes to above, if you need to resort to the terms of a syndicate agreement, the syndicate is probably doomed.
    Yes but that doesnt mean good syndicate agreements aren't v useful. If you have a good agreement, then the fact it is there, and is clear and forceful, is part of the reason it never gets referred to. Nuclear deterrent.

  6. #56
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    May 2001
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    Default Re: Syndicate Agreement Legal Question

    Quote Originally Posted by Assassin View Post
    List of definitions?
    Thanks and thanks for your PM too. I'm not convinced a list of definitions will add any value. I think the "determining partner" definition is obvious.

  7. #57
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    May 2001
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    Default Re: Syndicate Agreement Legal Question

    OK JFM / Benjenbav, here's my attempt at re-drafting clause 6. I don't know how to draft the PoA bit nor the ongoing obligations so you might need to help me with those bits.

    ----------------------

    6. Termination of agreement

    6.1 If either of the Parties has reasonable cause or desire to sell his share of the Boat, he may, by individual notice in writing to the other Parties, indicate his desire to sell.

    6.2 Upon such notice in writing being delivered, the remaining Parties shall be given the opportunity to purchase the share of the determining Party at such price as the Parties may agree. If the remaining Parties do not wish to purchase the determining Party’s share then the determining Party shall obtain agreement by another to take on the share of the determining Party.

    6.3 Where another takes on the share of the determining Party it shall be the responsibility of the determining Party to pay for any advertising or other such expenses incurred in relation to the sale. The determining Party hereby agrees to defray or settle his share of the disbursements, payments or accounts for the Boat up to and including the date of the sale of his share.

    6.4 If, within six months, the determining Party is unable to obtain agreement by another to take on his share then trade price valuations shall be obtained from one or more recognised Boat brokers and the entirety of the Boat shall be sold at the best price obtained above. Each of the Parties shall be at liberty to purchase the Boat outright for the trade price obtained above. Each of the Parties on receiving his share of the sale money shall execute the necessary Bill of Sale of his share in the Boat to the purchaser and deliver up possession of the Boat [PoA clause?]. The proceeds and costs of such sale shall be calculated according to their respective shares.

    6.5 This agreement will end following the completion of the sale of a share or the sale of the Boat in its entirety [Ongoing obligations?].

    6.6 In the event of the death of one of the Parties the Deceased’s share of the Boat shall pass in accordance with the Deceased’s Will or the Intestate Rules. If the Beneficiary of the Deceased Party’s share elects to sell his share in the Boat he shall do so in accordance with Clause 6 of this Agreement.

    ----------------------

    Be gentle with me!

  8. #58
    Join Date
    May 2001
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    Jersey/Antibes
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    Default Re: Syndicate Agreement Legal Question

    Pete, it’s awful. Every sentence. Too much to deal with by listing corrections in a forum post. Fundamentally the language is writing a commentary about what you’d like to happen (eg first sentence of 6.6) whereas you should be specifying peoples rights and obligations and what trigger events bring those things into play. As bjb already said, if you want to get there don’t start here.

  9. #59
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    May 2001
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    Default Re: Syndicate Agreement Legal Question

    #disheartened!

    OK, if I take 6.2 ...

    Upon such notice in writing being delivered, the remaining Parties shall be given the opportunity to purchase the share of the determining Party at such price as the Parties may agree. If the remaining Parties do not wish to purchase the determining Party’s share then the determining Party shall obtain agreement by another to take on the share of the determining Party.

    Rights:
    Remaining parties have the right to purchase the sellers share
    Selling party has right to sell his share on the open market

    Obligations:
    Selling party is obliged to offer his share to the remaining parties

    Triggers:
    Party wishes to sell his share

    Is my understanding correct?

  10. #60
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    May 2001
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    Default Re: Syndicate Agreement Legal Question

    Pete we are polishing a turd here. Almost every sentence of the RYA doc is awful.

    You have to start at 6.1.
    Why is the “if” condition included? Do you think the (important) word “reasonable” qualifies just “cause”, or “desire” as well? What precise function does the word “individual” do?
    In 6.2
    The “determining Party” expression is horrible and clumsy.
    The second sentence imposes an obligation. By when, on what terms, and what if he doesn’t?
    There is danger of dispute as to whether the important “do not wish” trigger is pulled so that should be by notice in writing. And anyway this should not be drafted as a matter of mere wishing but one of actually getting chequebook out and buying.
    I hate the “take on” expression but in any case it needs to involve D buying the share and executing a deed of adherence (in agreed form) to the syndicate agreement.

    And so on. I have to stop there because as noted above this is a turd/Mr Sheen situation. Bjb was right. You might think I’m being pedantic but these are divorce not marriage clauses.

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