This legal contract Agreement is for use by the joint owners of a glider or sailplane, who are already the owners or who intend to purchase one together to form a new syndicate.
This eight page contract contains 16 clauses covering
- terms of ownership of the glider
- terms of ownership of the equipment
- operational regulations
- syndicate monies
- formal meeting
- pre-emption right
- the option to purchase shares
- owners’ liability and insurance
- owners’ obligations
- determination of the purchase price of a share in the glider and equipment
- arbitration and law
- change of ownership or address
Schedules are included, allowing parties to set out details of ownership, equipment, regulation and events triggering option.
This agreement is for a situation when the glider is used for leisure, rather than commercial purposes.
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This Syndicate Agreement is designed for use by the joint owners of a glider or sailplane, who are already the owners of it in a syndicate or who intend to purchase one together to form a new syndicate. It also covers the ownership of any equipment belonging to the aircraft, but which is not part of it.
It deals with the terms of ownership and how the aircraft is to be operated with reference to regulations, some of which have a statutory basis. It includes provisions for a formal meeting of the owners to deal with important matters, but you may think that this is too formal and that a discussion on the airfield is acceptable. In this event, the relevant provisions should be deleted.
There is a pre-emption right so that members of the syndicate can purchase the share of a member who wants to sell it. This would involve the exercise of a veto.
There are also provisions which give an option to members of the syndicate to purchase the share of a member if certain events should occur. The Agreement deals with how the price should be determined in both cases.
In the unlikely event of there being a dispute between the aviators, then there would be a reference to an arbitrator to find a solution.
THE FORM OF THE AGREEMENT
THE PARTIES AND OWNERSHIP
The full name of the owners and their addresses should be given in the Ownership Schedule along with their percentage shares as to ownership. If the Equipment is owned in different shares, then clause 5.1 should be amended and a separate note should be made in the Ownership Schedule.
The aircraft may, of course, be registered with the Civil Aviation Authority in the name of one or more of the syndicate. In some cases, perhaps it is registered in the name of just one owner with the others being mentioned as owners. This Agreement should be completed on the basis that all the owners are mentioned in the Ownership Schedule.
All these should be checked and blanks completed. You will also need to complete the details in the Equipment Schedule as well.
4. TERMS OF OWNERSHIP OF THE GLIDER
These are what most owners will want, but you may want to adapt them to any particular case.
6. OPERATIONAL REGULATIONS
These are set out in clause 6 and there is also the Regulations Schedule. Additional requirements can be added to the Schedule. There are also the obligations set out in clause 12. You will need to complete clause 12.1.5 to deal with what you have all agreed.
7. SYNDICATE MONIES
There will no doubt be a syndicate bank account with one or more of the owners being responsible for it. You will need to complete the blank in clause 7.2. Under clause 7.4 accounts will be kept of all expenditure and income and the Syndicate may want to agree an annual budget.
9. PRE-EMPTION RIGHT
Clauses 9 and 10 will ensure that the members can in effect block an unacceptable outsider joining the syndicate. At the end of the day, the members of the syndicate want to ensure that they can enjoy their leisure activity with others they get on with. Clause 12 sets how the purchase price of a share being purchased by the other members would be determined.
11. OWNERS’ LIABILITY AND INSURANCE
It may be that unfortunately a member accidentally causes damage to the aircraft or equipment. In this event, should that member have to pay for the repairs and other losses? If there is an insurance claim, then the premium may be increased on the next renewal and the no claims bonus may be lost. You will have to decide if the member concerned should pay for the increases. There are two options in clause 11.5, one of which you may want to use.
COMPLETION OF THE AGREEMENT
Once the Agreement has been finalised, it should be signed by all the members of the syndicate and dated. The original Agreement should be kept with the other aircraft documents with each member having a copy.