Specimen shareholders' agreement (Scotland)

This Shareholders' Agreement is made this [  ] day of [insert month] [insert year] between:

(a)[PARTY 1 NAME] LIMITED, a company incorporated in Scotland with company number [number], whose registered office is at [address] (the “[Short name]”)

(b)[PARTY 2 NAME] LIMITED, a company incorporated in Scotland with company number [number], whose registered office is at [address] (the “[Short name]”)

together herein referred to as the “Parties” or individually as a Party

(A)The Company is a private company limited by shares.

(B)The Shareholders have agreed to regulate their relationship as shareholders on the terms of this Agreement.

The Parties agree as follows:

In this Agreement, the following definitions apply:

“Agreement” means this agreement including its Schedule.

“Board” means the board of directors of the Company.

“Reserved Matters” means the matters listed in the Schedule.

“Shares” means the ordinary shares in the capital of the Company.

The Company shall not do any of the Reserved Matters without the prior written consent of Shareholders holding at least 75% of the Shares.

3.1No Shareholder shall transfer any Share except in accordance with this clause.

3.2A Shareholder wishing to transfer Shares shall first offer them to the other Shareholders in proportion to their holdings, at a price agreed or, failing agreement, at fair value determined by an independent accountant.

4.1If the Board or the Shareholders are unable to agree on a matter of material importance on two consecutive occasions, the parties shall refer the matter to mediation.

4.2If mediation does not resolve the matter within 30 days, either Shareholder may serve a notice offering to buy the other's Shares at a stated price, and the recipient shall either sell at that price or buy the offeror's Shares at the same price.

5.1Either party may terminate this Agreement immediately by written notice if the other party commits a material breach which, if capable of remedy, it fails to remedy within 30 days of written notice requiring it to do so.

5.2Termination does not affect any rights or remedies which have accrued as at the date of termination.

Any notice under this Agreement shall be in writing and delivered by hand, by pre-paid first-class post or by email to the address of the recipient set out in this Agreement, or such other address as it notifies.

This Agreement constitutes the entire agreement between the parties and supersedes all previous agreements, promises and understandings between them relating to its subject matter.

No variation of this Agreement shall be effective unless it is in writing and signed by or on behalf of each of the parties.

Nothing in this Agreement confers, or is intended to confer, any third-party right on any person under the Contract (Third Party Rights) (Scotland) Act 2017.

This Agreement may be executed in any number of counterparts and by each of the parties on separate counterparts. Where executed in counterparts, this Agreement shall not take effect until each of the counterparts has been delivered in accordance with the Legal Writings (Counterparts and Delivery) (Scotland) Act 2015.

11.1If a dispute arises out of or in connection with this Agreement, the parties shall first attempt to resolve it by negotiation between senior representatives.

11.2If the dispute is not resolved within 30 days, the parties shall attempt to settle it by mediation.

11.3If the dispute is not settled by mediation within 60 days of the mediator's appointment, either party may refer it to the Scottish courts.

This Agreement shall be governed by and construed in accordance with the law of Scotland.

IN WITNESS WHEREOF these presents, consisting of this and the preceding pages together with the Schedule annexed, are executed as follows:

[Details of the shareholders' agreement: parties' particulars, description, price and timetable.]