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1. Example of a 50:50 shareholders' agreement with deadlock provisions

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 Example of a 50:50 shareholders' agreement with deadlock provisions

Butterworths Company Secretarial Procedures > Part 7 Secretarial administration >

Precedents

This agreement is dated [ ]

Parties

1[ ] of [ ] ('Shareholder A]').

2[ ] of [ ] ('Shareholder B').

3[ ] LIMITED registered number [ ] whose registered

office is situate at [ ] (the 'Company').

Background
A The Company is a private company limited by shares incorporated in England and Wales with the
registered number [ ]. The company has an authorised issued share capital of
£[ ] divided into [ ] [ordinary] shares of [ ] each
[all of which are fully paid].
B The parties below are the registered owners of the following [ordinary] shares of £
[ ] each in the capital of the Company:
[Name of shareholder] [Number of shares held]
[Name of shareholder] [Number of shares held]
C The parties have agreed to enter into this agreement for the purposes of regulating their affairs as
shareholders of the Company.

Agreed terms

1. Interpretation
1.1 The following definitions shall apply to this agreement:
Act means the Companies Act 2006.
A Director means any director appointed to the Board by Shareholder A.
B Director means any director appointed to the Board by Shareholder B.
Articles means the Company's articles of association in force at the time of entering into this agreement
and as subsequently amended from time to time.
Board means the Company's board of directors, as constituted from time to time.
Business means the business of the Company as described in clause 2.1.
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Example of a 50:50 shareholders' agreement with deadlock provisions

Business Day means any day (other than a Saturday, Sunday or recognised public holiday in England and
Wales) on which clearing banks in the City of London are generally open for business.
Business Plan has the meaning given in clause 5.
Continuing Shareholder means the other party referred to in clause 9.4.
[Deadlock Notice means a notice served pursuant to clause 7.3.]
[Deadlock Resolution Notice has the meaning given in clause 8.1.]
Encumbrances includes any mortgage, charge (fixed or floating), pledge, lien, hypothecation, guarantee,
trust, right of set-off or other third party right or interest (legal or equitable) including any assignment by
way of security, reservation of title or other security interest of any kind, howsoever created or arising, or
any other agreement or arrangement (including a sale and repurchase agreement) having similar effect.
Expert means a person nominated in accordance with clause 12 to resolve a matter under this agreement
Fair Value means the value of any shares determined in accordance with clause 11.
Notice of Obligatory Transfer Event means a notice given pursuant to clause 11.1.
Obligatory Transfer Event means in relation to a party, any event specified in clause 10 that happens to
that party.
Seller means a party wishing or obliged to transfer its shares in accordance with clauses 9.4 and 11.1.
Shares means the [ordinary] shares of £[ ] each in the capital of the Company.
Transfer Notice means irrevocable notice given by one party to the other in accordance with clause 9.4.
1.2 Clause headings do not affect the interpretation of this agreement.
1.3 A reference to a person includes a natural person, a corporate or unincorporated body (whether or
not having a separate legal personality).
1.4 A reference to a particular law is a reference to it as it is in force for the time being taking account of
any amendment, extension, application or re-enactment, and includes any subordinate legislation for the
time being in force made under it.
1.5 Words in the singular include the plural and vice versa.
1.6 Unless the context otherwise requires, reference to a clause or schedule is to a clause or schedule
to this agreement.

2. Business of the company

2.1 The business of the Company is to [ ], subject to such variation as may be
agreed from time to time in accordance with clause 3.1.
2.2 Each Shareholder shall use his reasonable endeavours to promote (so far as is lawfully possible)
the success of and, subject to clause 2.1, develop the Business, in each case for the benefit of the
Shareholders as a whole.

3. Matters requiring consent

3.1 For as long as he holds any Shares in the capital of the Company, each Shareholder shall use his
reasonable endeavours to procure that the Company shall not, without the prior written consent of all
Shareholders:
3.1.1 change its name;
3.1.2 amend its articles of association or adopt new articles of association;
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Example of a 50:50 shareholders' agreement with deadlock provisions

3.1.3 cease to be a private company or change (by whatever means) the nature of the Business, as
varied from time to time in accordance with this clause 3.1;
3.1.4 sell, lease assign or otherwise dispose of the whole or any part of the undertaking, property or
assets of the Company (or any interest in them) or contract to do so whether or not for valuable
consideration;
3.1.5 alter any rights attaching to any class of share in the capital of the Company, or create any
option, warrant or other right to acquire or subscribe for any shares in the capital of the Company;
3.1.6 enter into any contract or transaction except in the ordinary course of business on an arm's
length basis;
3.1.7 hold any meeting of Shareholders or purport to transact any business at any such meeting
unless each Shareholder is present, whether in person or by their duly authorised representative or
proxy;
3.1.8 merge or amalgamate with any other company or undertaking, or acquire directly or indirectly
any interest in any shares or other security convertible into shares of any other company, or form or
acquire any subsidiary; or
3.1.9 do, permit or allow to be done any act or thing whereby the Company may be wound-up, or
enter into any compromise or arrangement under the Insolvency Act 1986.

4. Directors and management

4.1 The Board has responsibility for the supervision and management of the Company and its Business,
subject to the provisions of clause 3.1 being observed.
4.2 There shall be a minimum number of [two] directors and no more than [six] directors made up of an
equal number of A Directors and B Directors.
4.3 The post of chairman shall be held in alternate years by an A Director and a B Director. The
chairman shall not have a casting vote.
4.4 Shareholder A and Shareholder B may each nominate up to [three] directors, and may remove any
director whom he or she has nominated, by giving notice to the Company and the other shareholder. Each
such notice shall specify the date on which the appointment or removal shall take effect.
4.5 The parties intend there to be a meeting of the directors at least once a [month/quarter] [to be held at
[location]].
4.6 The parties shall ensure that at least 7 Business Days' notice of a meeting of directors is given to all
directors entitled to receive notice accompanied by (i) an agenda and (ii) copies of any papers to be
discussed. A meeting of the directors may be held on shorter notice than prescribed in this clause provided
that at least one A Director and one B Director give their consent in writing.
4.7 Every director agrees to use every reasonable endeavour to ensure his or her attendance at a
directors' meeting of which due notice has been given.
4.8 The quorum for any meeting of the directors (including an adjourned meeting) is one A Director (or
his alternate) and one B Director (or his alternate).
4.9 No business shall be conducted at a meeting of directors unless a quorum is present. If a quorum is
not present within 30 minutes after the scheduled start time of the meeting, it shall be adjourned to the
same day in the next week at the same time and place or to such time and place as all the directors may
agree.
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Example of a 50:50 shareholders' agreement with deadlock provisions

4.10 Decisions shall be taken at meetings of the directors by passing resolutions. A resolution is passed
if more directors vote for it than against it and provided that at least one A Director and one B Director have
voted in favour of the resolution.
4.11 At a meeting of the directors each director shall have one vote.
4.12 A person ceases to be a director as soon as:
4.12.1 he or she is prohibited from being a director by law, or ceases to be a director by virtue of any
provision of this agreement, the Articles or the Act;
4.12.2 a registered medical practitioner who is treating the director gives a written opinion to the
Company stating that the director has become physically or mentally incapable of acting as a director
and may remain so for more than 3 months;
4.12.3 a court, by reason of the director's mental health, makes an order which wholly or partly
prevents the director from personally exercising any powers or rights which he or she would otherwise
have;
4.12.4 notification is received by the Company from the director that he or she is resigning from
office, and such resignation has taken effect in accordance with its terms;
4.12.5 he or she has been absent from two or more consecutive board meetings without permission
or has, without permission, been absent from board meetings for six consecutive months, whichever is
the sooner and the directors resolve that his or her office as a director be vacated; or
4.12.6 he or she, after reasonable investigation carried out by or on behalf of the director, is found to
have committed an act of fraud or gross misconduct in relation to the Company.

5. Business plan
5.1 The Business Plan is an annual business plan for the Company prepared by the directors and shall
include the following in respect of the financial year to which it relates:
5.1.1 a cashflow statement giving an estimate of the Company's working capital requirements and
an indication of the amount (if any) of the sum it considers prudent to retain out of the profits of the
previous financial year that are available for distribution to Shareholders to meet those cashflow
requirements;
5.1.2 a monthly projected profit and loss account;
5.1.3 an operating budget (including capital expenditure requirements) and a [balance sheet/
statement of financial position] forecast;
5.1.4 a management report giving business objectives for the year; and
5.1.5 a financial report which shall include an analysis of the Company's estimated results for the
previous financial year compared with the Business Plan for that year identifying variations in revenue,
costs and other material items.

5.2 For each financial year save the Company's first, the Business Plan shall be prepared within 45 days
of the end of the previous financial year and shall be approved by [the Board/ the Shareholders] as soon
as possible after it has been prepared.

6. Accounting
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Example of a 50:50 shareholders' agreement with deadlock provisions

6.1 The Company shall at all times maintain accurate and complete accounting and other financial
records in accordance with all applicable laws and generally accepted accounting principles in the United
Kingdom.
6.2 Each Shareholder (or their authorised representatives) shall, upon reasonable notice, and at
reasonable times, be granted access to examine the Company's books and records.

[7. Deadlock
7.1 There is a deadlock if a resolution is proposed and one of the following applies:
7.1.1 at a properly convened meeting of Shareholders or of the Board there is no quorum at the
meeting when it is reconvened following an adjournment;
7.1.2 on a directors' resolution, all A Directors or all B Directors vote against or abstain from voting
on the resolution (unless one of their number proposed the resolution);
7.1.3 on a Shareholders' resolution, all the Shareholders of the A Shares or all the Shareholders
of the B Shares vote against or abstain from voting on the resolution (unless one of their number
proposed the resolution).

7.2 There is no deadlock if a meeting, or adjourned meeting, is inquorate because the person who
proposed the resolution does not attend.
7.3 Either party may within 28 days of the meeting at which the deadlock arises or within 28 days of the
date of the resolution in respect of which the deadlock arises (as the case may be) (the first day being the
day after the meeting or the date of the resolution, as the case may be) serve notice on the other party:
7.3.1 stating that in its opinion a deadlock has occurred; and
7.3.2 identifying the matter giving rise to the deadlock.

7.4 The parties undertake that they shall:

7.4.1 on the date of service of the Deadlock Notice refer the matter giving rise to the deadlock to
[ ] for resolution; and
7.4.2 use all reasonable endeavours in good faith to resolve the dispute.]

7.5 If a deadlock occurs before the first anniversary of this agreement and cannot be resolved in
accordance with this clause 7 within [14] days from the date the deadlock matter is referred to the person
nominated under clause 7.4, either party may transfer its shares in accordance with clause [9] at a price
determined by the Expert to be Fair Value for the shares in accordance with clause
[ ] to [ ] (save that for the purposes of clause
[ ] the date of sale shall be the date the deadlock occurred.]

[8. Resolution of deadlock

8.1 A Deadlock Resolution Notice is a notice served by one part on the other in which the server offers,
at the price for each share specified in the notice (in cash and not on deferred terms), either to sell all its
shares to the Company to the other party or to buy all the other party's shares in the Company.
8.2 A Deadlock Resolution Notice:
8.2.1 may not be revoked; and
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Example of a 50:50 shareholders' agreement with deadlock provisions

8.2.2 may not be served before the first anniversary of the date of this agreement.

8.3 If the parties are unable to resolve a deadlock within [14] days from the sate the deadlock matter is
referred to the person nominated under clause 7.4, then either party may within 28 days of the expiry of the
14 day period (the first day is the day after he day of expiry) serve a Deadlock Resolution Notice on the
other.
8.4 The recipient of a Deadlock Resolution Notice may choose to do either of the following, at the price
for each share specified in the Deadlock Resolution Notice, by serving a counter-notice within 28 days of
receiving the Deadlock Resolution Notice (the first day is the day after the day of receipt):
8.4.1 buy all the other party's shares in the Company; or
8.4.2 sell to the other party all its shares in the Company.

8.5 If no counter-notice is served within the period of 28 days available, the recipient of the Deadlock
Resolution Notice is deemed to have accepted the offer in the Deadlock Resolution Notice at the expiry of
that period.
8.6 The service of a counter-notice, or deemed acceptance of the Deadlock Resolution Notice, shall bind
the parties to buy and sell the shares (as the case may be) on the terms set out in clause 8.4.
8.7 If both parties serve a Deadlock Resolution Notice under clause 8.3 only the first Deadlock
Resolution Notice to be served shall be effective.
8.8 If at the end of the 28 day period specified in clause 8.3 neither party has served a Deadlock
Resolution notice, either party may elect by written notice served on the other party for the Company to be
wound up in accordance with clause 13.
8.9 References in this clause to shares held by a party in the Company are to all the shares in the
Company held by that party and not to some only of those shares.]

9. Transfer of shares
9.1 Neither party shall transfer, grant any security interest over, or otherwise dispose of or give any
person any rights in or over any share or interest in any share in the Company unless it is permitted or
required under this agreement and carried out in accordance with the terms of this agreement.
9.2 A party may do anything prohibited by this clause if the other party has consented to it in writing.
9.3 A party may transfer all its shares in the Company to any person for cash and not on deferred terms
if the party follows the steps in this clause.
9.4 The party wishing to transfer its shares shall give an irrevocable notice to the other party of the
details of the proposed transfer including:
9.4.1 if it wishes to sell its shares to a third party, the name of the proposed transferee; and
9.4.2 the price (in cash) at which it wishes to transfer its shares.

9.5 If the Continuing Shareholder gives notice to the Seller within 28 days if receiving the Transfer
Notice (the first day being the day after it receives the Transfer Notice that it wishes to buy all the Seller's
shares in the Company, the Continuing Shareholder shall have the right to do so at the price specified in
the Transfer Notice.
9.6 The Continuing Shareholder is bound to buy all the Seller's shares when it gives notice to the Seller
under clause 9.5 that it wishes to do so. The sale and purchase of shares shall take place on the terms set
out in clause 14.
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Example of a 50:50 shareholders' agreement with deadlock provisions

9.7 If at the expiry of the period specified in clause 9.5 the Continuing Shareholder has not notified the
Seller that It wants to buy the shares, the Seller may transfer all its shares in the Company to the buyer
identified in the Transfer Notice at a price not less than the price specified in that notice provided that it
does so within [ ] months of the expiry of the period specified in clause 9.5.
9.8 Each party undertakes (in respect of the shares it holds) to give the approvals required for the
transfer of shares under this clause.
9.9 The Seller shall procure that, in relation to the shares being sold in the Company, any buyer of the
shares who is not already a Shareholder and therefore a party to this agreement, shall enter into a deed
of adherence binding them to the terms of this agreement before completion of the transfer of shares.
9.10 Reference in this clause to shares held by a party in the Company are to all the shares in the
Company held by that party and not to some only of those shares.

10. Obligatory transfer event

[Details of Obligatory Transfer Events to be agreed by all parties, details of which to be included in this clause 10.]

11. Procedure following obligatory transfer event

11.1 Where an Obligatory Transfer Event happens to a party (the 'Seller'), it shall give notice of it to the
other party (the 'Buyer') as soon as possible and, if it does not, it is deemed to have given such notice on
the date on which the Buyer becomes aware of such Obligatory Transfer Event.
11.2 As soon as practicable after service, or deemed service, of the Notice of Obligatory Transfer Event,
the parties shall appoint an Expert to determine the Fair Value of the Seller's shares in the Company ('Sale
Shares').
11.3 The Buyer has the right, within [ ] days of receiving notification of the Fair Value determined by the
Expert (the first day being the day after the Buyer receives the Fair Value notification) to serve a notice on
the Seller to buy all of the Sale Shares at the Fair Value.
11.4 In this clause the Fair Value of the Sale shares shall be the value that the Expert certifies to be the
fair market value in his opinion based on the following assumptions:
11.4.1 the value of the shares in question in that proportion of the fair market value of the entire
issued share capital of the Company that the Sales Shares bear to the then total issued share capital
of the Company (with no premium or discount for the size of the Seller's shareholding or for the rights
or restrictions applying to the shares under this agreement of the Articles);
11.4.2 the sale of shares is between a willing buyer and a willing seller on the open market;
11.4.3 the sale is taking place on the date that the Obligatory Transfer Event occurred;
11.4.4 if the Company is then carrying on its Business as a going concern, on the assumption that it
shall continue to do so; and
11.4.5 the shares are sold free of all Encumbrances.

11.5 If any problem arises in applying any of the assumptions set out in clause 11.4, the Expert shall
resolve the problem in whatever manner he shall, in his absolute discretion, think fit.
11.6 The Expert shall be requested to determine the Fair Value of the Sale Shares within
[ ] Business Days of his appointment and notify the Buyer and Seller in writing of his
Determination.
11.7 The service of a notice to buy under clause 11.3 shall bind the parties to buy and sell the shares, as
the case may be, in accordance with clause 14.
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Example of a 50:50 shareholders' agreement with deadlock provisions

12. Expert
12.1 An Expert is a person appointed in accordance with this clause to resolve a matter under this
agreement.
12.2 The parties shall endeavour to agree the identity of an independent Expert and such independent
Expert shall be jointly appointed by the parties
12.3 If the parties are unable to agree on the identity of an Expert within [ ] Business
Days of either party serving details of a suggested expert on the other, either party shall then be entitled to
request the then President of the Institute of Chartered Accountants in England and Wales to appoint an
Expert who is an accountant of repute with experience in the valuation of private companies limited by
shares.
12.4 Subject to clause 11.6, the Expert is required to prepare a written decision and give notice
(including a copy) of the decision to the parties within a maximum of three months of the matter being
referred to the Expert.
12.5 If the Expert dies or becomes incapable of acting, or does not deliver the decision within the time
required by this clause then:
12.5.1 either party may apply to the then President of the Institute of Chartered Accountants in
England and Wales to discharge the Expert and to appoint a replacement Expert with the required
expertise; and
12.5.2 this clause applies in relation to the new Expert as if he were the first Expert appointed.

12.6 All matters under this clause shall be conducted, and the Expert's decision shall be written, in the
English language.
12.7 The parties are entitled to make submissions to the Expert and shall provide (or shall procure that
others within the Company provide) the Expert with such assistance and documents as the Expert
reasonably requires for the purpose of reaching a decision, subject to the Expert agreeing to give such
confidentiality undertakings as the parties may reasonably require.
12.8 To the extent not provided for by this clause, the Expert may, in his reasonable discretion,
determine such other procedures to assist with the conduct of the determination as he considers just or
appropriate, including instructing other professional advisers to assist him in reaching his determination.
12.9 Each party shall with reasonable promptness supply (and procure that others supply) each other
with all information and given each other access to all documentation and personnel as the other party
reasonably requires to make a submission under this clause.
12.10 The Expert shall act as an expert and not as an arbitrator. The Expert's written decision on the
matters referred to him shall be final and biding on the parties in the absence of manifest error or fraud.
12.11 Each party shall bear its own costs in relation to the reference to the Expert. The Expert's fees and
any costs properly incurred by him in arriving at his determination (including any fees and costs of any
advisers appointed by the Expert) shall be borne equally by the parties.

13. Termination
13.1 Except for the provisions which this clause states shall continue in full force after termination, this
agreement shall terminate:
13.1.1 when one party ceases to hold any shares in the Company; or
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Example of a 50:50 shareholders' agreement with deadlock provisions

13.1.2 when a resolution is passed by Shareholders or creditors, or an order made by a court or

other competent body or person instituting a process that shall lead to the Company being wound up
and its assets being distributed among the Company's creditors, Shareholders or other contributors.

13.2 The following provisions of this agreement remain in full force after termination:
13.2.1 Clause 1 – Interpretation
13.2.2 This clause
13.2.3 Clause 15 – Confidentiality
13.2.4 Clause 16 – Whole agreement
13.2.5 Clause 18 – Variation and waiver
13.2.6 Clause 19 – Costs
13.2.7 Clause 22 – Notice
13.2.8 Clause 23 – Language
13.2.9 Clause 24 – Severance
13.2.10 Clause 26 – Governing law and jurisdiction

13.3 Termination of this agreement shall not affect any rights or liabilities that the parties have accrued
under it.
13.4 Where the Company is to be wound up and its assets distributed, the parties shall agree a suitable
basis for dealing with the interests and assets of the Company and shall endeavour to ensure that:
13.4.1 all existing contracts of the Company are performed to the extent that there are sufficient
resources;
13.4.2 the Company shall not enter into any new contractual obligations;
13.4.3 the Company is dissolved and its assets are distributed as soon as practical.

13.5 Where any party is required by any law, regulation or governmental or regulatory authority to retain
any information (or copies of such information) of the other party or of the Company, it shall notify the other
party in writing of such retention giving details of the information that I has been required to retain.

14. Status of agreement

14.1 Each party shall, to the extent that it is able to do so, exercise all its voting rights and other powers
in relation to the Company to procure that the provisions of this agreement are properly and promptly
observed and given full force and effect according to the spirit and intention of the agreement.
14.2 If any provision in the Articles conflicts with any provision of this agreement, this agreement shall
prevail as between the parties.
14.3 The parties shall, when necessary, exercise their powers of voting and any other rights and powers
they have to amend, waive or suspend a conflicting provision in the Articles to the extent necessary to
permit the Company and its business to be administered as provided in this agreement.

15. Confidentiality
15.1 In this clause Confidential Information means any information which:
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Example of a 50:50 shareholders' agreement with deadlock provisions

15.1.1 either party may have or acquire (whether before or after the date of this agreement) in
relation to the customers, suppliers, business, assets or affairs of the Company (including, without
limitation, any information provided pursuant to clause 6);
15.1.2 either party may have or acquire (whether before or after the date of this agreement) in
relation to the customers, suppliers, business, assets or affairs of the other party, as a consequence of
the negotiations relating to this agreement or any other agreement or document referred to in this
agreement or the performance of the agreement or any other agreement or document referred to in
this agreement; or
15.1.3 relates to the contents of this agreement (or any agreement or arrangement entered into
pursuant to this agreement,

but excludes the information in clause 15.2.

15.2 Information is not Confidential Information if:
15.2.1 it is or becomes public knowledge other than as a direct or indirect result of the information
being disclosed in breach of this agreement;
15.2.2 either party can establish to the reasonable satisfaction of the other party that it found out the
information from a source not connected with the other party and that the source is not under any
obligation of confidence in respect of the information;
15.2.3 either party can establish to the reasonable satisfaction of the other party that the information
was known to the first party before the date of this agreement and that it was not under any obligation
of confidence in respect of the information; or
15.2.4 the parties agree in writing that it is not confidential.

15.3 Each party shall at all times use all reasonable endeavours to keep confidential any Confidential
Information and shall not use or disclose any such Confidential Information except:
15.3.1 with the written consent of such of the Company or the party that the information relates to;
15.3.2 as may be required by law or by the rules of any governmental or other regulatory body,
when the party concerned shall, if practicable, supply a copy of the required disclosure to the other
before it is disclosed and incorporate any amendments or additions reasonably required by the other
and which would not thereby prevent the disclosing party from complying with its legal obligations;
15.3.3 to any tax authority to the extent reasonably required for the purposes of the tax affairs of the
party concerned; or
15.3.4 if the information comes within the public domain (otherwise than as a result of the breach of
this clause 15.3).

15.4 Each party shall inform any agent or professional adviser advising it in relation to the matters
referred to in this agreement or to whom it provides Confidential Information that such information is
confidential and shall require them:
15.4.1 to keep it confidential; and
15.4.2 not to disclose it to any third party (other than those persons to whom it has already been
disclosed in accordance with the terms of this agreement).

15.5 Upon termination of this agreement, either party may demand from the other and the Company the
return of any documents containing Confidential Information in relation to the first party by notice in writing,
whereupon the other party shall:
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Example of a 50:50 shareholders' agreement with deadlock provisions

15.5.1 return such documents; and

15.5.2 destroy any copies of such documents and any other document or other record reproducing,
containing or made from or with reference to the Confidential Information,

save, in each case, for any submission to or filings with governmental, tax or regulatory authorities. Such
return or destruction shall take place as soon as practicable after the receipt of any such notice.
15.6 The obligations of the parties in this clause 15 shall continue without limit in time and
notwithstanding termination of this agreement for any cause.

16. Whole agreement

16.1 This agreement, and any documents referred to in it, constitute the whole agreement between the
parties and supersede all previous arrangements, understandings and agreements between them,
whether oral or written, relating to their subject matter.
16.2 Each party acknowledges that in entering into this agreement, and any documents referred to in it,
it does not rely on, and shall have no remedy in respect of, any representation or warranty (whether made
innocently or negligently) that is not set out in this agreement or those documents.
16.3 Nothing in this clause 16 shall limit or exclude any liability for fraud.

17. Assignments
17.1 No person may assign, or grant any Encumbrance over or deal in any way with, any of its rights
and obligations under this agreement or any document referred to in it without the prior written consent of
all the parties (such consent not to be unreasonably conditioned, withheld or delayed).
17.2 Each person that has rights under this agreement is acting on his own behalf.

18. Variation and waiver

18.1 A variation of this agreement shall be in writing and signed by or on behalf of all parties.
18.2 A waiver of any right under this agreement is only effective if it is in writing and it applies only to the
person to which the waiver is addressed and the circumstances for which it is given.
18.3 A person that waives a right in relation to one person, or takes or fails to take any action against
that person does not affect its rights against any other person.
18.4 No failure to exercise or delay in exercising any right or remedy provided under this agreement or
by law constitutes a waiver of such right or remedy or shall prevent any future exercise in whole or in part
thereof.
18.5 No single or partial exercise of any right or remedy under this agreement shall preclude or restrict
the further exercise of any such right or remedy.
18.6 Unless specifically provided otherwise, rights and remedies arising under this agreement are
cumulative and do not exclude rights and remedies provided by law.

19. Costs

Unless otherwise provided, all costs in connection with the negotiation, preparation, execution and performance of
this agreement, shall be borne by the party that incurred the costs.
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Example of a 50:50 shareholders' agreement with deadlock provisions

20. No partnership

The parties to this agreement are no in partnership with each other and there is no relationship of principal and
agent between them.

21. Third party rights

21.1 A person who is not a party to this agreement shall not have any rights under or in connection with
it by virtue of the Contracts (Rights of Third Parties) Act 1999.
21.2 The rights of the parties to terminate, rescind or agree any amendment, variation, waiver or
settlement under this agreement is not subject to the consent of any person that is not a party to the
agreement.

22. Notice
22.1 A notice given under this agreement:
22.1.1 shall be in writing in the English language (or be accompanied by a properly prepared
translation in to English);
22.1.2 shall be sent for the attention of the person, and to the postal or email address notified by
them from time to time to the other party for the purpose of this clause;
22.1.3 shall be delivered by hand, sent by post or email.

22.2 If a notice has been properly sent or delivered in accordance with this clause, it will be deemed to
have been received as follows:
22.2.1 if delivered by hand, at the time of delivery;
22.2.2 if sent by pre-paid United Kingdom first class post to an address in the United Kingdom or by
recorded deliver, [24] hours after it was posted, or [five] Business Days after posting either to an
address outside the United Kingdom or from outside the United Kingdom to an address within the
United Kingdom provided that delivery in no more than [five] Business Days was guaranteed at the
time of sending and the sending party receives a confirmation of delivery from the postal service
provider;
22.2.3 if sent or supplied by electronic means, [one] hour after the notice was sent or supplied.

22.3 To prove delivery it is sufficient to prove that the envelope containing the notice was properly
addressed and posted or that the email was sent by email to the email address notified by the relevant
party.

23. Language

If this agreement is translated into any language other than English, the English language text shall prevail.

24. Severance
24.1 If any provision of this agreement (or part of a provision) is found by any court or administrative
body of competent jurisdiction to be invalid, unenforceable or illegal, the other provisions shall remain in
force.
 Page 14 of 14
Example of a 50:50 shareholders' agreement with deadlock provisions

24.2 If any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of
it were deleted or modified, the provision shall apply with whatever modification is necessary to give effect
to the commercial intention of the parties.

25. Counterparts

This agreement may be executed in any number of counterparts, each of which is an original and which together
have the same effect as if each party had signed the same document.

26. Governing law and jurisdiction

26.1 This agreement and any disputes or claims arising out of or in connection with its subject matter or
formation (including non-contractual disputes or claims) are governed by and construed in accordance with
the law of England.
26.2 The parties irrevocably agree that the courts of England had exclusive jurisdiction to settle any
dispute or claim that arises out of or in connection with this agreement or its subject matter or formation
(including non-contractual disputes or claims).

This agreement has been entered into on the date stated at the beginning of it.

Signed as a deed and delivered by the said [ ]

in the presence of:

[NAME]

[ADDRESS]

Signed as a deed and delivered by the said [ ]

in the presence of:

[NAME]

[ADDRESS]

Signed by [DIRECTOR]

For and on behalf of [COMPANY NAME]

[7.63]

End of Document