Adopted: [DATE OF INCORPORATION]
1.1 The name of the company is Quoflow Limited ("Company").
2.1 The registered office of the Company is at the offices of Allott Reeves & Co Limited, Unit 1b, 55 Epsom Road, Sockburn, Christchurch 8443, or such other address as the Board may determine from time to time by resolution and notify to the Registrar of Companies.
3.1 In this Constitution, unless the context otherwise requires:
3.2 Terms defined in the Act and not otherwise defined in this Constitution have the meanings given to them in the Act.
3.3 Headings are for convenience only and do not affect interpretation.
3.4 A reference to a statute or statutory provision includes all regulations made under it and all amendments and substitutions.
3.5 The singular includes the plural and vice versa.
3.6 In the event of any inconsistency between this Constitution and the Shareholders Agreement, the Shareholders Agreement prevails as between the shareholders for so long as that agreement remains in force.
4.1 The Company has one class of shares, being ordinary shares. All ordinary shares carry the same rights, including:
(a) the right to one vote per share at any meeting of shareholders on any question;
(b) the right to an equal share in any dividend authorised by the Board; and
(c) the right to an equal share in the distribution of surplus assets of the Company on winding up.
4.2 The Board may, with the prior approval of all shareholders, issue shares of a different class carrying different rights, provided that the terms of any new class are approved by Special Resolution.
5.1 The Company will maintain a share register in accordance with the Act recording the names and addresses of all shareholders and the number of shares held.
5.2 Share certificates will not be issued unless a shareholder requests one in writing. The Board may charge a reasonable fee for the issue of a share certificate.
5.3 The Company will recognise only the registered holder of shares as the owner of those shares. The Company is not obliged to take notice of any trust or equitable interest in any shares.
6.1 Subject to this Constitution and the Act, the Board may issue shares at any time to any person at a price and on terms determined by the Board.
6.2 Before issuing new shares, the Board must offer those shares to existing shareholders on a pro-rata basis at the same price and on the same terms as the proposed issue ("Pre-emptive Offer"), by written notice giving shareholders not less than 15 Business Days to accept.
6.3 Any shares not taken up under a Pre-emptive Offer may be offered to third parties at no less than the price set in the Pre-emptive Offer, within 60 days of the expiry of the offer period.
6.4 The issue of new shares, or the grant of any option over shares, is a Reserved Matter under clause 18 and requires the prior approval of all Directors.
7.1 The Company has no lien over any share.
8.1 No shareholder may Transfer any shares without complying with this Part 3, the Shareholders Agreement, and obtaining the prior written consent of the Board (not to be unreasonably withheld once the right of first refusal process has been followed).
8.2 Any purported Transfer in breach of this Part 3 is void and the Board will not register it.
9.1 A shareholder wishing to Transfer shares must first offer those shares to the other shareholder(s) by written notice ("Transfer Notice") specifying:
(a) the number of shares proposed to be transferred;
(b) the proposed price per share; and
(c) any other material terms of the proposed transfer.
9.2 The non-transferring shareholder(s) have 20 Business Days from receipt of the Transfer Notice to accept the offer in writing. If accepted, the purchase must be completed within 15 Business Days of acceptance.
9.3 If the offer is not accepted within the period in clause 9.2, the transferring shareholder may proceed with the transfer to a third party on terms no more favourable than those in the Transfer Notice, within 60 days of expiry of the offer period, subject to Board approval of the transferee.
9.4 A Transfer to a third party following completion of the right of first refusal process must be registered by the Board within 5 Business Days of receiving all required documentation, provided the transfer complies with this Constitution.
10.1 The following transfers are permitted without triggering the right of first refusal in clause 9, but remain subject to Board approval:
(a) a transfer by a shareholder to a family trust of which the shareholder is a trustee or beneficiary, provided the shareholder retains effective control of the trust; or
(b) any other transfer unanimously approved by all shareholders.
11.1 The Board consists of a minimum of one and a maximum of five Directors.
11.2 Each shareholder holding not less than 20% of the Company's issued shares has the right to appoint and remove one Director by written notice to the Company signed by that shareholder.
11.3 If a shareholder's shareholding falls below 20%, the Director appointed by that shareholder vacates office with immediate effect, unless all remaining shareholders agree otherwise in writing.
11.4 Any Director appointed by a shareholder may be removed by that shareholder at any time by written notice to the Company.
11.5 A Director may also be removed from office by Special Resolution of shareholders.
12.1 A Director vacates office if:
(a) the Director gives written notice of resignation to the Company;
(b) the Director is removed in accordance with clause 11;
(c) the Director becomes bankrupt, insolvent, or enters into a scheme of arrangement with creditors;
(d) the Director is prohibited from acting as a director under the Act or any other applicable law;
(e) the Director dies; or
(f) the Director becomes of unsound mind or otherwise incapable of managing their affairs.
13.1 The Board may meet for the dispatch of business, adjourn, and otherwise regulate its meetings as it thinks fit.
13.2 A Director may convene a Board meeting at any time by giving reasonable written notice (ordinarily not less than 2 Business Days) to all other Directors, specifying the agenda items.
13.3 The quorum for a Board meeting is all Directors then in office. No business may be transacted at a Board meeting unless a quorum is present.
13.4 Questions arising at a Board meeting are decided by a majority of votes of the Directors present and entitled to vote. In the event of an equality of votes, the matter is not carried.
13.5 Each Director has one vote. No Director has a casting vote.
13.6 Board meetings may be held by any technology that allows all Directors to hear and communicate with each other simultaneously, including telephone or video conference. A Director participating in such a meeting is deemed present in person.
13.7 A written resolution signed by all Directors is as valid and effective as if passed at a properly convened Board meeting. Such a resolution may consist of several documents in identical form, each signed by one or more Directors.
13.8 A Director who has a material interest in a matter to be considered by the Board must disclose that interest to the Board in accordance with the Act. Subject to the Act, a Director who has disclosed a material interest may not vote on that matter.
14.1 Subject to this Constitution, the Act, and the Shareholders Agreement, the Board has authority to exercise all the powers of the Company that are not required to be exercised by the shareholders.
14.2 Without limiting clause 14.1, the Board may:
(a) engage employees and contractors and determine their terms of engagement;
(b) borrow money and grant security over the Company's assets, subject to Reserved Matter thresholds;
(c) enter into contracts and arrangements on behalf of the Company in the ordinary course of business;
(d) open and operate bank accounts;
(e) approve the annual budget and financial plan;
(f) appoint officers, agents, and committees and delegate Board powers to them, provided that such delegation does not extend to Reserved Matters; and
(g) do all other things necessary or desirable for the management of the Company and the achievement of its business objectives.
14.3 The Board may delegate day-to-day management authority to the executive Director (currently Oliver James Bunce) to act on behalf of the Company without the need for prior Board approval, within the limits of approved budgets and except in respect of Reserved Matters.
15.1 The following matters require the unanimous approval of all Directors:
(a) issuing, allotting, or granting any option over shares or other securities in the Company, or varying the rights attaching to any existing shares;
(b) selling, transferring, or otherwise disposing of all or substantially all of the assets or undertaking of the Company;
(c) winding up, liquidating, or placing the Company in voluntary administration;
(d) incurring any debt, borrowing, or financial obligation in excess of $50,000 NZD in aggregate (excluding trade payables and operational expenditure in the ordinary course of business);
(e) entering into any single contract or commitment with a value exceeding $50,000 NZD outside the ordinary course of business;
(f) making any acquisition, investment, or joint venture outside the ordinary course of business;
(g) amending this Constitution or the Shareholders Agreement; and
(h) any other matter required by the Act to be approved by Special Resolution.
15.2 Any resolution purporting to approve a Reserved Matter without the unanimous approval of all Directors is void.
16.1 The Company will hold an annual meeting of shareholders in accordance with the Act. The Board will call the annual meeting within 6 months after the balance date of each Financial Year.
16.2 The annual meeting will consider and, if appropriate, resolve:
(a) the annual financial statements;
(b) director remuneration (if applicable);
(c) any other business put forward by the Board or a shareholder.
17.1 The Board may convene a special meeting of shareholders at any time.
17.2 A shareholder or shareholders holding not less than 5% of the votes entitled to be cast at a meeting may require the Board to convene a special meeting by written notice specifying the business to be considered. The Board must call such a meeting within 15 Business Days of receiving the requisition.
18.1 Not less than 10 Business Days' written notice of a shareholders' meeting must be given to every shareholder entitled to attend and vote.
18.2 Notice must set out:
(a) the date, time, and place (or remote access details) of the meeting; and
(b) the nature of the business to be transacted in sufficient detail to enable a shareholder to decide whether to attend.
18.3 A meeting may be called on shorter notice if all shareholders agree in writing.
19.1 A shareholders' meeting may not proceed unless a quorum is present. The quorum is all shareholders entitled to vote.
19.2 If a quorum is not present within 30 minutes of the appointed time, the meeting is adjourned to the same day in the following week at the same time and place (or as directed by the Chair). If a quorum is not present at the adjourned meeting within 30 minutes, the shareholders present constitute a quorum.
20.1 Except as otherwise provided in this Constitution or the Act, all questions at a shareholders' meeting are decided by Ordinary Resolution.
20.2 Voting is by show of hands unless a poll is demanded by any shareholder before or on the declaration of the result. On a poll, each share carries one vote.
20.3 The following matters require a Special Resolution:
(a) alteration of this Constitution;
(b) approval of major transactions under section 129 of the Act;
(c) amalgamations;
(d) any other matter required by the Act to be approved by Special Resolution.
20.4 Shareholders may vote in person or by proxy. A proxy must be in writing signed by the appointing shareholder. A shareholder may appoint any person as proxy.
21.1 A resolution of shareholders that could be passed at a meeting may instead be passed by a written resolution signed by shareholders holding sufficient voting rights to pass that resolution at a duly convened meeting.
21.2 A written resolution may be signed in counterparts. Electronic signature is acceptable.
22.1 Subject to the Act and this Constitution, the Board may authorise dividends at such times and in such amounts as it thinks fit.
22.2 No dividend may be authorised if, after its payment, the Company would not satisfy the solvency test under the Act.
22.3 All dividends must be distributed pro-rata to the shares held by each shareholder at the record date for the dividend.
22.4 The Board may determine that a dividend is payable by way of additional shares in lieu of cash, provided that all shareholders have the option of receiving cash.
23.1 The Board will ensure that the Company keeps accounting records in accordance with the Act and prepares annual financial statements.
23.2 Annual financial statements will be prepared in accordance with generally accepted accounting practice in New Zealand.
23.3 Annual financial statements will be completed within 90 days of the end of each Financial Year and provided to all shareholders.
24.1 The Company is not required to have its financial statements audited unless required by the Act or unless all shareholders agree otherwise.
24.2 Any shareholder may request an audit at their own expense by notice to the Board.
25.1 Any shareholder may inspect the Company's accounting records on reasonable written notice to the Board.
26.1 Subject to the Act, the Company will indemnify each Director and officer of the Company against any liability arising from any act or omission in their capacity as a Director or officer, other than:
(a) criminal liability;
(b) liability arising from breach of duty under sections 131 to 138 of the Act; or
(c) liability to the Company.
26.2 The indemnity in clause 26.1 extends to costs and expenses incurred by a Director in defending proceedings in which judgment is given in their favour or in which they are acquitted.
27.1 The Board may, with the prior approval of shareholders, effect insurance for Directors and officers against certain liabilities as permitted by the Act.
28.1 The decision to wind up the Company is a Reserved Matter and requires the unanimous approval of all Directors, in addition to any shareholder approval required by the Act.
28.2 On a winding up, after payment of all creditors, any surplus assets will be distributed to shareholders pro-rata to their shareholding.
29.1 The Company will not have a common seal unless the Board resolves otherwise. Deeds may be executed without a seal by authorised signatories in accordance with the Act.
30.1 The Company may execute any document (including a deed) by two Directors signing, or one Director signing in the presence of a witness.
31.1 A notice under this Constitution must be in writing and may be given to a shareholder or Director by:
(a) delivery in person;
(b) posting to the address recorded in the share register or Board records; or
(c) email to the email address last notified by the recipient.
31.2 A notice sent by email is deemed received on transmission, provided no delivery failure notification is received by the sender.
32.1 This Constitution is governed by and construed in accordance with the laws of New Zealand.
33.1 This Constitution may be altered by Special Resolution of shareholders, except that any alteration that affects the rights of an individual shareholder in a manner different from other shareholders requires the written consent of that shareholder in addition to the Special Resolution.
33.2 Any alteration of this Constitution must be notified to the Registrar in accordance with the Act.
Adopted by resolution of the shareholders of Quoflow Limited on [DATE].
Oliver James Bunce _____ Date: _______
Paul Harris (as trustee of the Paul & Stacey Harris Investment Trust) _____ Date: _______