petem
Well-Known Member
Thanks for the moral support!
Yes, we could buy the remaining partner out and sell his former share ourselves.
Syndicate Agreement Legal Question
- Thread starter petem
- Start date
Thanks for the moral support!
Yes, we could buy the remaining partner out and sell his former share ourselves.
jfm
Well-Known Member
That's a good formula. Alas it isn't what the RYA agreement says!
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jfm
Well-Known Member
Pete is going through a sale by an exiting partner to a new partner, all happy. His question is what does the agreement mean, because he happens to be at a point where he can change/correct the agreement before the 3 partners sign the new agreement. My comments are that the agreement is a turd and he should change it. A proper high end lawyer on here agreed. That's constructive not negative in my book.
Would you rather I just said "hey it's all ok?" Or said nothing. So Pete missed his chance to get rid of the turd, and the next reader wanting to boat-share used the same turd? And this forum became a place where everyone just said "ooh yes that's great" regardless of the truth?
Wait a minute. The turd clause was never posted up in that discussion. Were the negative folks supposed to know by magic what it said? If it had been posted up then, Pete would have got exactly the same replies as he is getting now.
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MrB
Well-Known Member
I don't see any negativity in this thread just good advice from people in the know with law and contracts, I have no doubt that is why Pete posted it in the first place.
petem
Well-Known Member
OK, turning this on its head, if I had a single "nuclear" clause that said....
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X.XX A Sale Owner may terminate this agreement by giving to the other Owners six months’ notice of his intention to sell the Boat. Such notice having been given, all Owners shall consider and agree a route to sale which will achieve the best price .... .... ....
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If I am a Remaining Owner and I wish the syndicate to continue then I would say to the Sale Owner:
"I don't want to sell the boat / end the syndicate so would like to wait six months before we sell it. Alternatively, I can (a) buy you out for £xx,xxx (with or without the other Remaining Owner) or (b) find a buyer for to take on your share."
The Sale Owner would be happy with this as he gets his money quicker and / or potentially saves on brokerage costs.
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X.XX A Sale Owner may terminate this agreement by giving to the other Owners six months’ notice of his intention to sell the Boat. Such notice having been given, all Owners shall consider and agree a route to sale which will achieve the best price .... .... ....
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If I am a Remaining Owner and I wish the syndicate to continue then I would say to the Sale Owner:
"I don't want to sell the boat / end the syndicate so would like to wait six months before we sell it. Alternatively, I can (a) buy you out for £xx,xxx (with or without the other Remaining Owner) or (b) find a buyer for to take on your share."
The Sale Owner would be happy with this as he gets his money quicker and / or potentially saves on brokerage costs.
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jfm
Well-Known Member
Pete that would be terrible
"A Sale Owner may terminate this agreement by giving to the other Owners six months’ notice of his intention to sell the Boat". Just read that carefully. What you have written is that the very act of giving notice terminates the agreement. So now you own a boat with 2 other guys, and you have no agreement about access, hours, usage, paying expenses, how/when to exit partners, or anything. I know that isn't what you intended, but it is exactly what you have written.
"Such notice having been given, all Owners shall consider and agree a route to sale which will achieve the best price". That is what a lawyer calls an agreement to agree. Meaningless, and unenforceable in English law.
I realise I'm saying the drafting is rubbish without giving you alternative drafting. That's because drafting takes time that I don't have. Somewhere on an old PC I think I have my 1999 boat share agreement in word, and I'll try to find it but don't hold out too much hope. Also I think you should try the £20 job.
"A Sale Owner may terminate this agreement by giving to the other Owners six months’ notice of his intention to sell the Boat". Just read that carefully. What you have written is that the very act of giving notice terminates the agreement. So now you own a boat with 2 other guys, and you have no agreement about access, hours, usage, paying expenses, how/when to exit partners, or anything. I know that isn't what you intended, but it is exactly what you have written.
"Such notice having been given, all Owners shall consider and agree a route to sale which will achieve the best price". That is what a lawyer calls an agreement to agree. Meaningless, and unenforceable in English law.
I realise I'm saying the drafting is rubbish without giving you alternative drafting. That's because drafting takes time that I don't have. Somewhere on an old PC I think I have my 1999 boat share agreement in word, and I'll try to find it but don't hold out too much hope. Also I think you should try the £20 job.
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petem
Well-Known Member
That drafting was from the £20 job - see my email to you!
jfm
Well-Known Member
Update. Pete showed me the £20 job and it was worth £20 tops. More like £5. Full of basic schoolboy errors. Not as bad as RYA, so could have worked with it in the sense it needed less polishing.
BUT I just searched deep on hard drive and found my 3-person syndicate agreement from 2004 for squadron 58. I quite like the drafting, tho say so myself! I've just emailed to Pete in Word. So that's some progress.
Pete I don't mind you sharing it further if you wish - fully anonymised version please.
For anyone still awake here is the divorce clause, with a bit of formatting lost. The dates reflect the fact this agreement was executed at beginning of 2004 season, so would need amending now obvs.
8. SALE OF THE YACHT OR SHARES IN THE YACHT
8.1 Any of A&BC, D&EF and G&HI may after 31 August 2005 (or earlier where provided by clause 8.4) give written notice (referred to herein as a “Sell Notice”) to all (but not some only) of the other parties hereto of an intention to dispose of all (but not some only) of their Shares (such interest being referred to in this clause 8 as the “Offered Shares”). In this clause 8 the parties giving such notice are referred to as the “Leavers” and the other parties are referred to as the “Stayers”. Within one month of the date of such notice:
(a) the Stayers may (individually or between them) offer to purchase all (but not some only) of the Offered Shares following which the relevant Stayers and the Leavers shall attempt in good faith to agree a price (the “Transfer Price”) for the Offered Shares, and in the absence of such agreement within 3 months of the date of the Sell Notice either the Leavers or the Stayers may require that the Transfer Price be determined by an Expert (as defined in clause 8.2 below) who shall promptly thereafter be instructed in accordance with clause 8.2 below;
(b) if the relevant Stayers and Leavers agree a Transfer Price without reference to an Expert the Leavers shall promptly sell and the Stayers shall promptly buy the Offered Shares for the agreed Transfer Price;
(c) if the Transfer Price is determined by an Expert then after the Expert has made his determination and notified all the parties hereto of it the Stayers who offered to purchase the Offered Shares under clause 8.1(a) above shall promptly advise all the parties as to whether they still wish to purchase the Offered Shares or not. If they still wish to purchase the Offered Shares, they shall promptly buy them and the Leavers shall promptly sell them for the Transfer Price;
(d) in the event no Stayers have purchased the Offered Shares upon exhaustion of the procedure provided above, the Leaver may offer them to a third party and provided such third party agrees to be bound by this agreement and signs a deed of adherence in a form reasonably acceptable to the Stayers to that effect and is acceptable as a syndicate member to all the Stayers (such acceptance not to be unreasonably withheld) the Leavers may agree to sell the Offered Shares to the third party subject to the right of pre-emption in clause 8.1(e) below; and
(e) immediately prior to selling the Offered Shares to a third party (or, if earlier, contracting unconditionally so to sell them) the Leavers shall disclose in writing to all of the Stayers the price at which the Offered Shares are proposed to be sold to the third party and the terms of such proposed sale, and the Stayers shall have a period of 10 days from such disclosure during which they may make a binding written offer to buy the Offered Shares at that price and on the same terms as the third party. In the event they make such an offer the Leavers shall promptly sell the Offered Shares to the relevant Stayers (and not to the third party) subject to the rule in the next sentence and the relevant Stayers shall promptly buy them at that price and on those terms. In the event that more than one Stayer makes such offer as is described in the preceding sentence the Leavers shall promptly sell the Offered Shares to the relevant Stayers, and the relevant Stayers shall promptly buy them, in whatever proportions those Stayers shall all notify in writing to the Leavers, or in the absence of such notification then in the proportions one half jointly to each of whichever two out of the three couples A&BC, D&EF and G&HI constitute the Stayers.
8.2 In this clause 8 “Expert” means a reputable yacht surveyor or broker of at least five years standing, agreed upon by all the parties hereto (or, in the absence of such agreement, by the president for the time being of the Royal Yachting Association upon request by any of the parties hereto). The Expert shall act as expert not arbitrator. Any Transfer Price determined by an Expert shall be determined as the open market value of the Yacht in pounds sterling net of selling commissions and expenses multiplied by the number of shares being valued and divided by 64, without any reduction or increase in the open market value of the Yacht for the fact that the Shares being valued represent less than a 100% interest in the Yacht. The Expert shall be instructed accordingly, and all of the Stayers and Leavers shall be given a reasonable opportunity to be a party to the terms of instruction and engagement of the Expert. The Expert’s fees shall be paid by the relevant Leavers.
8.3 Any Leavers who have in good faith been unable to sell their Shares after having followed the procedures specified in clause 8.1 above may after 31 December 2006 (or earlier where provided by clause 8.4) require that all the Shares are offered for sale together in the open market and in that case if a buyer is found all the Stayers shall be required to sell their Shares at the best available price in the open market.
8.4 In the event of the death of GI , AC or DF , their surviving wife may alone give the written notice referred to in clause 8.1 at any time (even if before 31 August 2005) and may at any time after the procedures in clause 8.1 have been followed (even if before 31 December 2006) require that all the Shares are offered for sale in the open market as provided in clause 8.3.
8.5 No party shall sell or transfer or dispose of any Shares or any interest in any Shares other than as provided herein.
BUT I just searched deep on hard drive and found my 3-person syndicate agreement from 2004 for squadron 58. I quite like the drafting, tho say so myself! I've just emailed to Pete in Word. So that's some progress.
Pete I don't mind you sharing it further if you wish - fully anonymised version please.
For anyone still awake here is the divorce clause, with a bit of formatting lost. The dates reflect the fact this agreement was executed at beginning of 2004 season, so would need amending now obvs.
8. SALE OF THE YACHT OR SHARES IN THE YACHT
8.1 Any of A&BC, D&EF and G&HI may after 31 August 2005 (or earlier where provided by clause 8.4) give written notice (referred to herein as a “Sell Notice”) to all (but not some only) of the other parties hereto of an intention to dispose of all (but not some only) of their Shares (such interest being referred to in this clause 8 as the “Offered Shares”). In this clause 8 the parties giving such notice are referred to as the “Leavers” and the other parties are referred to as the “Stayers”. Within one month of the date of such notice:
(a) the Stayers may (individually or between them) offer to purchase all (but not some only) of the Offered Shares following which the relevant Stayers and the Leavers shall attempt in good faith to agree a price (the “Transfer Price”) for the Offered Shares, and in the absence of such agreement within 3 months of the date of the Sell Notice either the Leavers or the Stayers may require that the Transfer Price be determined by an Expert (as defined in clause 8.2 below) who shall promptly thereafter be instructed in accordance with clause 8.2 below;
(b) if the relevant Stayers and Leavers agree a Transfer Price without reference to an Expert the Leavers shall promptly sell and the Stayers shall promptly buy the Offered Shares for the agreed Transfer Price;
(c) if the Transfer Price is determined by an Expert then after the Expert has made his determination and notified all the parties hereto of it the Stayers who offered to purchase the Offered Shares under clause 8.1(a) above shall promptly advise all the parties as to whether they still wish to purchase the Offered Shares or not. If they still wish to purchase the Offered Shares, they shall promptly buy them and the Leavers shall promptly sell them for the Transfer Price;
(d) in the event no Stayers have purchased the Offered Shares upon exhaustion of the procedure provided above, the Leaver may offer them to a third party and provided such third party agrees to be bound by this agreement and signs a deed of adherence in a form reasonably acceptable to the Stayers to that effect and is acceptable as a syndicate member to all the Stayers (such acceptance not to be unreasonably withheld) the Leavers may agree to sell the Offered Shares to the third party subject to the right of pre-emption in clause 8.1(e) below; and
(e) immediately prior to selling the Offered Shares to a third party (or, if earlier, contracting unconditionally so to sell them) the Leavers shall disclose in writing to all of the Stayers the price at which the Offered Shares are proposed to be sold to the third party and the terms of such proposed sale, and the Stayers shall have a period of 10 days from such disclosure during which they may make a binding written offer to buy the Offered Shares at that price and on the same terms as the third party. In the event they make such an offer the Leavers shall promptly sell the Offered Shares to the relevant Stayers (and not to the third party) subject to the rule in the next sentence and the relevant Stayers shall promptly buy them at that price and on those terms. In the event that more than one Stayer makes such offer as is described in the preceding sentence the Leavers shall promptly sell the Offered Shares to the relevant Stayers, and the relevant Stayers shall promptly buy them, in whatever proportions those Stayers shall all notify in writing to the Leavers, or in the absence of such notification then in the proportions one half jointly to each of whichever two out of the three couples A&BC, D&EF and G&HI constitute the Stayers.
8.2 In this clause 8 “Expert” means a reputable yacht surveyor or broker of at least five years standing, agreed upon by all the parties hereto (or, in the absence of such agreement, by the president for the time being of the Royal Yachting Association upon request by any of the parties hereto). The Expert shall act as expert not arbitrator. Any Transfer Price determined by an Expert shall be determined as the open market value of the Yacht in pounds sterling net of selling commissions and expenses multiplied by the number of shares being valued and divided by 64, without any reduction or increase in the open market value of the Yacht for the fact that the Shares being valued represent less than a 100% interest in the Yacht. The Expert shall be instructed accordingly, and all of the Stayers and Leavers shall be given a reasonable opportunity to be a party to the terms of instruction and engagement of the Expert. The Expert’s fees shall be paid by the relevant Leavers.
8.3 Any Leavers who have in good faith been unable to sell their Shares after having followed the procedures specified in clause 8.1 above may after 31 December 2006 (or earlier where provided by clause 8.4) require that all the Shares are offered for sale together in the open market and in that case if a buyer is found all the Stayers shall be required to sell their Shares at the best available price in the open market.
8.4 In the event of the death of GI , AC or DF , their surviving wife may alone give the written notice referred to in clause 8.1 at any time (even if before 31 August 2005) and may at any time after the procedures in clause 8.1 have been followed (even if before 31 December 2006) require that all the Shares are offered for sale in the open market as provided in clause 8.3.
8.5 No party shall sell or transfer or dispose of any Shares or any interest in any Shares other than as provided herein.
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petem
Well-Known Member
J, thanks for this, it takes us forwards greatly. What I'd like to do when I get back from the boat is mark up the relevant areas so that anyone else using it can choose whether to include an end date or not (as our syndicate is mature, we don't need one).
You kindly sent me the whole of your agreement which I think I will combine with some additional owner obligations from my existing agreement. Unless I've missed it. your agreement seems to be lack terms relating to an owner defaulting on his maintenance payment? It's interesting that we both have a fair use policy / restriction in hours, which I haven't seen elsewhere. Great minds think alike!
One question, when you wrote this many years ago I think you knew "which way the gun was pointing" and consequently included the bit "and in the absence of such agreement within 3 months of the date of the Sell Notice either the Leavers or the Stayers may require that the Transfer Price be determined by an Expert". In other words, your preference was to buy the Leavers share rather than have it sold to a 3rd party. Do you agree that in my case, where this is not a strong preference for me, the clause could be omitted? I guess there's no harm leaving it in.
What I'd also suggest is that the the sample agreement is given a "Creative Commons" copyright license so that it can be shared freely without people trying to profit from it.
You kindly sent me the whole of your agreement which I think I will combine with some additional owner obligations from my existing agreement. Unless I've missed it. your agreement seems to be lack terms relating to an owner defaulting on his maintenance payment? It's interesting that we both have a fair use policy / restriction in hours, which I haven't seen elsewhere. Great minds think alike!
One question, when you wrote this many years ago I think you knew "which way the gun was pointing" and consequently included the bit "and in the absence of such agreement within 3 months of the date of the Sell Notice either the Leavers or the Stayers may require that the Transfer Price be determined by an Expert". In other words, your preference was to buy the Leavers share rather than have it sold to a 3rd party. Do you agree that in my case, where this is not a strong preference for me, the clause could be omitted? I guess there's no harm leaving it in.
What I'd also suggest is that the the sample agreement is given a "Creative Commons" copyright license so that it can be shared freely without people trying to profit from it.