In addition to negotiating the appointment sheet, the federal investor is generally responsible for representing the union in the preparation of the shareholder contract and the investment contract. Effective communication between the parties is the key to building trust that helps create successful startups. While communication between the startup and investors is in the shareholders` pact, the syndication agreement can determine how union members communicate with each other. A syndication contract is a contract between the arranger and the other participants in the syndication of a lease agreement relating to the structure of the union, how the transaction should be marketed, the distribution of rights between the participants and the relationship, rights and responsibilities of the union members – not the terms of the lease itself. The syndication agreement also covers priorities in the event of the taker`s default, insolvency, bankruptcy, accident and validity of the underlying rental documents during the syndication. Once the basis of the credit transaction, credit documentation and other business matters has been negotiated, it is necessary to specify the terms and others in a comprehensive syndication agreement. For most credits, a leading financial institution is used to coordinate the transaction. The first financial institution is often referred to as a union agent. This agent is often responsible for the initial transaction, fees, compliance reports, repayments for the duration of the loan, credit monitoring and the overall report for all lenders.
During an IPO, a number of investment banks and brokers form a consortium to sell new offers of stocks or bonds to investors. The insurance group shares the risk and supports the successful distribution of the new securities issue. Since the members of the equity consortium have committed to sell all of the proposed shares, they must purchase shares from the issuer and sell them to the public. The practice exposes them to the risk of falling prices. They reduce this risk by spreading the risk among all union members.