1. OWNERSHIP. U:\Stallions\Pluck (USA)\PLUCK Syndicate Agreement August FINAL.docx

Transcription

1 - 1 - PLUCK (USA) SYNDICATE AGREEMENT, made and entered into as of August by and among Vinery Stud (Australia) Pty Ltd, Segenhoe Road, Scone NSW 2337 ( Syndicate Manager ) and Vinery Stallions (Australia) Pty Ltd, PO Box 436, Scone NSW 2337 ( Owner ) refers to the thoroughbred stallion PLUCK (USA) (Aus) by More Than Ready (USA) from Secret Heart (USA), foaled OWNERSHIP 1.1. Shareholding. At the time this Agreement becomes effective, ownership of PLUCK (USA) shall be partitioned and divided into and represented by fourty (40) equal fractional ownership interests ("Shares"), which Shares are numbered 1 through 40. Shares shall be evidenced by a copy of this Syndicate Agreement, attached to and made a part of a Certificate to be issued by the Syndicate Manager. A Share shall be transferable as provided herein, shall otherwise be entitled to equal rights and privileges and subject to equal duties and obligations with every other Share, and shall be subject to all of the terms and conditions of this Agreement. The owner of a Share, hereinafter sometimes called an "Owner. Ownership of each Share and transfers thereof shall be recorded in syndicate books to be kept and maintained by the Syndicate Manager Risk of Loss. For the period to 31 December 2012 insurance for mortality, first season infertility and loss of income will be placed and administered by the Syndicate Manager and charged proportionately to each Owner. If in December 2012 it is not possible to obtain renewal free of the exclusion for colic, then the current policy will be extended on behalf of all shareholders. Additional cover for Loss of Income will be the responsibility of the individual shareholders for the 2013 season and beyond Joint and Entity Ownership. Each Share shall be indivisible, but may be owned jointly by two or more parties in which event the Owners and the Syndicate Manager shall be entitled to deal with and to accept and rely upon and act upon any information, instructions or facts represented by any one of such persons. If a Share is held by a company, partnership or similar entity, the Owners and the Syndicate Manager shall be entitled to deal with and accept and rely upon any information, instructions or facts represented by any officer of the company, partner of a partnership, manager of the entity, or other person having authority to act for the entity. Only a full Share shall have any rights hereunder Relationships. The Owners agree that (a) their relationship shall be that of owners of Shares in a chattel, and shall be held as provided herein, and (b) the relationship of the Owners to the Syndicate Manager shall be that of principal and agent, with the agency of the Syndicate Manager being one that is coupled with an interest in PLUCK (USA). The Owners waive any right which they may otherwise have to demand the further partition, or sale for partition, of PLUCK (USA) and agree that the sole and adequate means by which any Owner may divest himself of his interest in PLUCK (USA) shall be by the transfer of his Share Breeding Rights. The Owners agree that should the level of industry support indicate that the issue of Breeding Rights in PLUCK (USA) warrants consideration that, in consultation with the Syndicate Manager the decision to offer Breeding Rights and the terms and conditions of the offer will be decided by the affirmative vote of the Owners of 75% of Shares.

2 2. EXPENSES Advertising. For the first four (4) seasons all advertising costs will be borne proportionately by the Owners by way of deduction from the pool of nominations sold. In the fifth (5 th ) and subsequent seasons the Syndicate Manager will expend up to the value of twice the advertised fee for advertising expenses Expenses. The Syndicate Manager shall be obligated to pay the costs and expenses incurred in connection with care and keep, including stabling, farrier and routine veterinary costs of PLUCK (USA). All other costs will be borne proportionately by the Owners, including but not limited to Insurance, BOBS, Australian Stud Book fees, surgery and/or extraordinary veterinary treatment Donations. The Syndicate Manager may, at his absolute discretion donate up to two (2) nominations from the pool of funds per year to industry related research programmes, charity organizations or promotional opportunities. 3. BREEDING 3.1. Owner Nominations. During each Southern Hemisphere breeding season that PLUCK (USA) stands at stud, each Owner shall be entitled to one (1) Nomination (as hereinafter defined), subject to the provisions governing a reduced book. Such Nomination will be at nil service fee and be governed by the terms and conditions of the Vinery Stud (Australia) Pty Ltd Stallion Service Agreement. If an Owner does not use his Nomination then the Nomination is considered to be lost for that breeding season. If the mare covered on his nomination fails to deliver a live foal then the nomination shall be the subject of a free return for the following season. During the first four (4) seasons only an Owner wishing to use in excess of one (1) nomination per share may do so at a chargeable fee, being fifty percent (50%) of the advertised service fee of PLUCK (USA) for that breeding season Nomination. A "Nomination" is the right to breed one Thoroughbred mare to PLUCK (USA) in a Southern Hemisphere breeding season. Once a Nomination has first been used in any one breeding season for a mare to be covered by PLUCK (USA), no other mare may be substituted for breeding in that breeding season unless the Syndicate Manager, in its sole discretion, approves substitution for a mare certified to be dead or certified by a veterinarian to be both barren and unsound for breeding for the remainder of the breeding season. Without the consent of the Syndicate Manager, no mare may be covered on more than five (5) occasions in any breeding season Normal Book. The Syndicate Manager shall determine after advice from the attending veterinarian the number of mares to which PLUCK (USA) may be safely bred in each breeding season. Nominations additional to those used by Owners and those attributed to Standing Rights will go into the pool of excess nominations and distributed proportionately to the Owners after recovery of any expenses referred to in clause 2.2 hereof.

3 Reduced Book. In the event the Syndicate Manager shall determine that PLUCK (USA) cannot be bred safely to a normal book of mares during any breeding season, all available nominations shall be sold on a best efforts basis by the Syndicate Manager and the proceeds thereof shall be first allocated to Standing Rights, Advertising and expenses and the balance paid proportionately among the Owners. If any such person had, as of the time of the declaration of a reduced book, already bred a mare owned by him with respect to his Nomination, such party shall be entitled to retain and register any resulting offspring from such mating without payment of any stud fee and having the value of this nomination excluded from his share of the distribution of proceeds by the Syndicate Manager Northern Hemisphere. During each Northern Hemisphere breeding season that the health and libido of PLUCK (USA) so permits, the Syndicate Manager may, with the approval of the majority of Owners, (a) allow PLUCK (USA) to cover mares at the Syndicate Manager's farm in Scone, NSW for the account of the Owners, (b) arrange for PLUCK (USA) to be shipped to the Northern Hemisphere to cover mares for the account of the Owners under the supervision of stud farms affiliated with the Syndicate Manager, and (c) arrange for PLUCK (USA) to be shipped to the Northern Hemisphere under a lease or similar arrangement to stand at independent stud farms, all on such terms as shall be approved by the Syndicate Manager in consultation with the Owners. In the event that PLUCK (USA) does shuttle to the Northern Hemisphere on an arrangement administered and controlled by the Syndicate Manager, the Syndicate Manager will receive an additional five (5) nominations from the Northern Hemisphere pool of funds Transport and Quarantine Costs. The Syndicate Manager will arrange transport and quarantine in the event PLUCK (USA) is transported between the Southern and Northern hemispheres. Unless otherwise agreed all costs associated with transporting and quarantining PLUCK (USA) will be borne proportionately by the Owners. 4. SYNDICATE MANAGER 4.1. Location; Successor. PLUCK (USA) shall stand at Vinery Stud, Scone, NSW, under the supervision and management of Vinery Stud (Australia) Pty Ltd., as Syndicate Manager. The Syndicate Manager may be removed or PLUCK (USA) moved to stand elsewhere only with the affirmative vote of the Owners of 75% of Shares. The Syndicate Manager may resign upon 60 days written notice to the Owners, provided that such resignation shall not become effective during the period commencing on July 1 and ending on January 15 of any year. Upon the resignation or removal of the Syndicate Manager, a successor may be elected by Owners having a majority of the Shares voting on a resolution to that effect Authority. The Syndicate Manager shall have the general supervision and management of PLUCK (USA), including supervision and control of all breeding activities. The Syndicate Manager shall select and employ a veterinarian to attend PLUCK (USA), shall determine when, on a fair and equitable basis, the mares to be serviced shall be so serviced and whether the mares and PLUCK (USA) are in suitable condition for breeding, shall keep, or cause to be kept, such records as are appropriate and shall select such solicitors and accountants as may be required in the administration hereof. The Syndicate Manager shall expend on behalf of the syndicate such sums as may be appropriate for the promotion and advertising of PLUCK (USA); including, without limitation, stakes race sponsorships either independently or with other stallions standing under the management of the Syndicate Manager. The Syndicate Manager shall nominate PLUCK (USA) as a stallion standing in NSW to the program established by BOBS, the cost of which will be met proportionately by the Owners. In connection with sales of Nominations, the Syndicate

4 - 4 - Manager may utilize the services of bloodstock agents and consultants and pay customary fees and commissions. The Syndicate Manager shall be entitled to determine the dates for the commencement and ending of each breeding season Standard of Care. The Syndicate Manager will provide proper stabling, fodder, equipment and skilful handling of PLUCK (USA), maintaining a standard employed in NSW by persons who keep and breed Thoroughbred stallions. The Syndicate Manager will not be responsible for illness, injury or death of PLUCK (USA) or for injury, disease or death of any mare (or her progeny) resulting from breeding or attempting to breed to PLUCK (USA). The Owners waive hereby all potential claims against the Syndicate Manager. The Syndicate Manager shall provide Owners with veterinary certificates and or reports which may be required to satisfying the requirements of the insurer Indemnities. The Owners hereby agree that all expenses and liabilities incurred under this Agreement are to be borne proportionately by them. Each Owner agrees to indemnify all other Owners against all expenses and liabilities to the extent that such expenses and liabilities are borne otherwise than in the proportions stated here provided nothing in this clause requires any Owner to indemnify any other Owner in respect of expenses and liabilities incurred as a result of a particular Owner s negligence, debt, breach or default under this Agreement or contravention of any statute. The Owners agree that liabilities incurred by the Syndicate Manager in the course of complying with the terms of this Agreement are to be borne by the Owners and paid accordingly. 4.5 Standing Rights and Advertising Costs. The Syndicate Manager will receive fifteen (15) nominations as Standing Rights and a reimbursement of expenses incurred each Southern Hemisphere breeding season Public Liability. The Syndicate Manager shall keep and maintain a policy of public liability insurance in a reasonable amount insuring the Owners and the Syndicate Manager against loss or liability to any persons by reason of negligence of the Syndicate Manager, its agents, servants and employees, in the keep, maintenance, and standing of PLUCK (USA) Records; Reports. The Syndicate Manager shall keep books and records of account which shall accurately reflect all receipts and disbursements for and on behalf of the Owners. The Syndicate Manager shall furnish to each Owner a statement reflecting the receipts and disbursements by and on behalf of the syndicate, which statement shall be either included with each quarterly statement for expenses or furnished on an annual basis. The Syndicate Manager shall furnish to each Owner, as soon as practical after the end of each breeding season, a statement showing the results of the breeding season. The Syndicate Manager shall make available for inspection at its offices in Scone, NSW or at the premises where PLUCK (USA) is kept on any business day between the hours of 10:00 a.m. and 4:00 p.m., local time, the books and records of this syndicate to any Owner who so requests by seventy-two (72) hour s prior written notice.

5 Registration of Ownership. The Syndicate Manager shall maintain syndicate records indicating ownership of each Share. Upon receipt of written evidence of transfer of ownership of a Share and such other evidence as the Syndicate Manager shall reasonably request, which shall include the agreement of the transferee to be bound by all the terms of this Agreement and which may be on forms specified by the Syndicate Manager, the Syndicate Manager shall record on the syndicate records transfers of ownership determined by the Syndicate Manager, acting in good faith, to have been made in compliance with the terms of this Agreement. The Syndicate Manager may refuse to make any such transfer if the Syndicate Manager has been notified that the Share is subject to a security interest unless the Syndicate Manager is also furnished evidence that the transfer does not violate the terms of the security agreement creating such security interest. Upon request, the Syndicate Manager shall certify to any Owner or any insurance, bank, or trust company specified by such Owner, to the effect that the Owner is the registered Owner of a Share and specifying the number of such Share Australian Stud Book Documentation. The Syndicate Manager shall maintain all records required by The Australian Stud Book relating to stallions and shall promptly submit to The Australian Stud Book all required reports as they become due. The Syndicate Manager shall also cause to be issued, in form acceptable to The Australian Stud Book, documents required for the registration of foals out of mares bred to PLUCK (USA) to persons entitled thereto Allocation of Monies. The Syndicate Manager shall allocate to the account of each Owner such Owner's proportionate share of any receipts from the sale by the Syndicate Manager of Nominations on behalf of the syndicate in a bonus book. Funds will be invoiced and collected according to the terms of Vinery s Stallion Service Agreement and distributed within 30 days of the due date and late payments monthly thereafter. The Syndicate Manager may deduct the amount of expenses incurred during the calendar quarter in which funds are received prior to distributing monies to the Owners Powers of Attorney. Each Owner authorises and empowers the Syndicate Manager, and constitutes and appoints the Syndicate Manager as his agent and attorney-in-fact to execute requirements of the taxing authorities of Australia. In the event any authority shall require any Owner to take action individually or to obtain any licenses specifically provided for herein, each Owner agrees to do so promptly upon the request of the Syndicate Manager Other Activities. The Syndicate Manager shall not be required to devote itself exclusively to its duties hereunder, and the Syndicate Manager shall be expressly permitted to conduct any other business activities and to accept any other engagements, including, without limitation, the management of other stallions, the purchase, sale, racing and breeding of Thoroughbreds, or any one or more of them Control. Certain insurance policy provisions purchased by the Owners may provide that the insurance carriers shall have the right to exercise sole and absolute discretion concerning the control of PLUCK (USA) (including control of the treatment, location, use, retention and/or disposal of PLUCK (USA)) in the event of potential infertility or sickness of, or accident to, PLUCK (USA). The Syndicate Manager shall not be bound by, and shall have no obligation or liability from failing to abide by, any such provisions so long as the Syndicate Manager is acting in good faith to achieve the best interests of PLUCK (USA) or Owners having a majority of the Shares. The Syndicate Manager may, however, in its sole and absolute discretion, nevertheless allow the insurance carriers to exercise such policy provisions relating to control and shall have no liability for or obligation with respect to any action taken by such carriers or their representatives. Nothing in this paragraph shall be construed to divest any Owner of his Share.

6 TRANSFERS 5.1 Auctions. Without the consent of the Syndicate Manager, in its sole discretion, no Share and no Nomination may be offered for sale at an auction sale. For purposes of this Agreement, an auction sale shall include all auctions (whether public, private or otherwise) and similar sales at which items are sold to the highest bidder, whether or not an auctioneer is present and whether the bidders are present or participate through telecommunications, electronic communications, or make written bids. With respect to the auction sale of Nominations and Shares, when permitted, only one Nomination and only one Share may be offered for sale by any one sales company (including all affiliates thereof) during any calendar month. Any Owner desiring to sell a Nomination or Share at auction shall notify the Syndicate Manager of the time, date and place of auction at least 30 days prior to the sale and shall designate the particular Share or Nomination to be sold. Only Owners so notifying the Syndicate Manager shall be entitled to sell at auction, and should the Syndicate Manager receive notice with respect to more than one Share or Nomination, the Syndicate Manager shall determine by lot which Share and which Nomination may and which may not be sold at each auction sale Nominations. Subject to the provisions of the preceding paragraph, Nominations may be sold, exchanged or otherwise transferred or assigned, provided that (a) Nominations may not be accumulated from one breeding season to another, (b) written notice of such transfer must be given to the Syndicate Manager within ten days of sale, and (c) any sale or transfer by an Owner who has not made payment in full of indebtedness secured by his Share and payable to the Initial Owner or the Syndicate Manager is subject to the conditions set forth in the security agreement creating the security interest. In the event the Syndicate Manager shall have been notified that a Share is subject to a security interest, the Syndicate Manager may, but shall not be required to, refuse to record the transfer of any Nomination without the written approval of the person holding the security interest Shares; First Right to Purchase. Notwithstanding anything contained in this Agreement any transfer, sale or disposal of a Share shall be conditional upon a) the transferee being able to be or being registered under the Australian Rules of Racing, b) the transferee of the Share entering into an agreement with the Syndicate Manager and the Owners agreeing to be bound by the terms of this Agreement, c) the transferor and transferee of the Share completing a Share Transfer Form as specified by the Syndicate Manager. Shares may (a) pass by inheritance or will, (b) be transferred by gift or sale to a member of the Owner's immediate family, or (c) be transferred to or from any firm, partnership or other entity controlled by, or of which a thirty percent or greater interest is owned by the Owner and his immediate family or any of them, all without being subject to the first right to purchase; provided, however, that in each case the Syndicate Manager shall be furnished with affidavits or other information acceptable to it that any proposed transfer is not subject to the first right to purchase within the terms of this paragraph. Except as specifically provided herein, no other Share shall be sold without offering the other Owners and the Syndicate Manager the first right to purchase such Share. Any Owner who receives an offer to purchase a Share which he is willing to accept shall notify the Syndicate Manager in writing, stating the name of the proposed purchaser and the terms of the offer. In the event consideration other than money is to be paid, the Owner desiring to sell shall also specify the monetary fair market value of the consideration, subject to the approval of the Syndicate Manager, which any other Owner or the Syndicate Manager may elect to pay. Prior to close of business on the business day following receipt of such notice, the Syndicate Manager shall notify all other Owners of the proposed purchaser and the price and terms, if any. The notice shall constitute an offer to each other Owner and to the Syndicate Manager to purchase the Share. Any Owner desiring to accept

7 - 7 - such offer shall, within seven days of the sending of the notice by the Syndicate Manager, notify the Syndicate Manager in writing of his desire so to do. The Syndicate Manager shall determine by lot the person entitled to purchase the Share, which determination shall be made on the first business day which is seven or more days after sending of notice by the Syndicate Manager. An Owner or the Syndicate Manager electing to purchase the Share shall be required to purchase the same within five (5) business days following the determination by the Syndicate Manager if, and only if, at such time PLUCK (USA) is in the same or better state of general health and insurability as on the date the Syndicate Manager sent notice of the offer to the Owners, at which point risk of loss shall pass. If no other Owner or the Syndicate Manager elects to purchase the Share, the Syndicate Manager shall promptly notify the Owner desiring to sell who shall have thirty (30) days in which to close the sale on the terms and at the price specified in the notice. If the sale is not closed within the thirty (30) day period, the Share must be offered to the Owners as set out above before any further sale. In the event the original notice given by the Owner desiring to sell shall specify that more than one Share is to be sold, any other Owner may elect to purchase the number of Shares specified in one line. 6. OPERATION OF THE SYNDICATE; MISCELLANEOUS 6.1. Meetings. The Syndicate Manager or the Owners of ten (10) or more Shares may call a meeting of Owners upon not less than 10 days written notice, to be held at Scone, NSW. The notice must state the date, time, place and purpose of the meeting. Each Owner shall be entitled to one vote for each Share owned by him which may be cast in person or by agent or proxy, duly authorized in writing, an original of which shall be presented at the meeting for inspection. No subject matter shall be considered at any meeting unless notice thereof is included in the notice of such meeting. Except as otherwise provided herein, a majority vote shall decide all questions properly submitted, provided the Owners of a majority of all Shares are present in person or represented by proxy at such meeting. Any action which may be taken at a meeting may be taken without a meeting if Owners of the required number of Shares vote by written instrument so to do Termination; Modification. This Agreement and the syndicate created hereunder may be terminated, cancelled, altered, amended or modified with the affirmative vote of the Owners holding 75% of the Shares; provided, however, that no amendment, modification, sale or termination shall affect the rights of the holders of the breeding rights or nominations created under the provisions of this Agreement without the consent of such holders. If not sooner terminated, the syndicate will terminate automatically on December 31, By Lot. In those instances where a determination is to be made by lot, the Syndicate Manager shall either notify the Owners that drawings will be held at a designated time and place within Scone, NSW or that all drawings will be held by an accounting firm or attorney pursuant to written instructions from the Syndicate Manager. Each person participating shall be entitled to a number of lots equal to the number of Nominations to which such person would be entitled in a normal book. In the case of a determination by lot of those entitled to participate in an excess book, once a Share shall have been entitled to one Nomination it shall not be included in subsequent drawings until all other Shares shall have been drawn, at which time the procedure may be repeated.

8 Binding Effect. This Agreement and each and every provision hereof shall be binding upon and shall inure to the benefit of the parties to this Agreement, and all other persons who acquire a Share or the right thereto, the respective partners thereof where any such party or person is a partnership, and their respective heirs, personal representatives, administrators, successors, assigns and transferees, whether with or without consideration Goods and Services Tax (GST). In accordance with the Goods and Services Tax Act 1999 all parties to this Agreement acknowledge that a) any charge under this Agreement shall be increased by the amount payable at the time for providing a supply within the meaning of the act, b) the Owners are carrying on an enterprise as described in the Act when selling Nominations, c) that if required by GST legislation each party be registered and evidence of such registration to be provided upon request, d) all invoices rendered in connection with this Agreement will be GST compliant Controlling Law. This Agreement, as well as all the instruments executed with respect to or pertaining to any right or interest created hereunder, shall be governed by and construed in accordance with the prevailing law of the state of NSW. This Agreement is governed by the law of NSW and the venue for all disputes will be the Supreme Court of NSW to the authority of and which any appellate jurisdiction thereof the parties submit and confine themselves and submit themselves to the jurisdiction of the Courts of NSW for proceedings arising from this Agreement Breach; Venue. No action for the breach of any provision of this Agreement or in connection with PLUCK (USA) or the operation hereof may be commenced more than one year after the event giving rise to such cause of action shall have occurred. Each Owner agrees to hold harmless each other Owner and the syndicate created hereby from any costs, expenses and liabilities resulting from a breach or alleged breach of one or more representations or warranties made in connection with the sale or transfer of a Share by such Owner. The Syndicate Manager shall be entitled to recover reasonable attorneys fees in defending any action on behalf of the syndicate and in any action brought to enforce the terms hereof or collect sums due. Venue for any action brought hereunder or otherwise in connection with PLUCK (USA) shall be in NSW court, and such action may be commenced by service by mail to the last address shown on the syndicate books maintained by the Syndicate Manager or by any other method permitted by law. IN WITNESS WHEREOF each of the parties has signed, or caused to be signed on its behalf, this Agreement all as of the day and year first written above. SYNDICATE MANAGER: VINERY STUD (AUSTRALIA) PTY LTD. By Peter C Orton, Managing Director THE OWNER Date: 2012.

9 1. OWNERSHIP Shareholding Risk Of Loss Joint and Entity Ownership Relationships Breeding Rights EXPENSES Advertising Expenses Donations BREEDING Owner Nominations Nomination Normal Book Reduced Book Northern Hemisphere Transport and Quarantine Costs SYNDICATE MANAGER Location; Successor Authority Standard of Care Indemnities Standing Rights and Advertising Costs Public Liability Records; Reports Registration of Ownership Australian Stud Book Documentation Allocation of Monies Powers of Attorney Other Activities Control TRANSFERS Auctions Nominations Shares; First Right to Purchase OPERATION OF THE SYNDICATE; MISCELLANEOUS Meetings Termination; Modification By Lot Binding Effect Goods and Services Tax (GST) Controlling Law Breach; Venue i -

10 PLUCK (USA) SYNDICATE AGREEMENT 1 August 2012

11