Date: [DATE OF SIGNING]
Oliver James Bunce of 2/14b Kahu Road, Paremata, Wellington ("Oliver"); and
Paul Harris as trustee of the Paul & Stacey Harris Investment Trust of [ADDRESS] ("Paul").
Oliver and Paul are together referred to as the "Shareholders."
A. The Shareholders intend to procure the incorporation of a company under the name Quoflow Limited (or such other name as is available and agreed) under the Companies Act 1993 ("the Act").
B. Quoflow Limited will develop and commercialise a software-as-a-service platform for the building supply and construction industry, including AI-powered plan analysis tools and related software products ("the Business").
C. The Shareholders have agreed to hold shares in the company and govern their relationship on the terms set out in this agreement.
D. This agreement is intended to be read alongside the Constitution of the company. In the event of any inconsistency between this agreement and the Constitution, this agreement prevails as between the Shareholders.
1.1 In this agreement, unless the context otherwise requires:
1.2 References to a "Shareholder" mean a party to this agreement for so long as that party holds shares in the Company.
1.3 Headings are for convenience only and do not affect interpretation.
1.4 The singular includes the plural and vice versa.
1.5 A reference to a statute includes all regulations made under it and all amendments and substitutions to it.
2.1 The Shareholders will procure the incorporation of the Company as soon as practicable following execution of this agreement, and will take all steps necessary to give effect to the terms of this agreement on incorporation.
2.2 On incorporation, shares will be issued to the Shareholders as follows, in exchange for the non-cash consideration described in clause 4. No cash subscription price is payable by either Shareholder for the shares issued under this clause:
| Shareholder | Shares | Percentage |
|---|---|---|
| Oliver James Bunce | 70 | 70% |
| Paul & Stacey Harris Investment Trust | 30 | 30% |
2.3 All shares issued under clause 2.2 are ordinary shares carrying equal voting rights (one vote per share) and equal rights to dividends and distributions.
2.4 The shareholding described in clause 2.2 is unconditional and takes immediate effect on incorporation. It is not subject to any vesting schedule, milestone, or condition subsequent.
2.5 The registered office of the Company will be at the offices of Allott Reeves & Co Limited, Unit 1b, 55 Epsom Road, Sockburn, Christchurch 8443, unless otherwise agreed in writing by the Shareholders.
2.6 The Shareholders will adopt the Constitution on incorporation substantially in the form agreed between them.
3.1 On incorporation, both Oliver and Paul will be appointed as Directors.
3.2 Each Shareholder holding not less than 20% of the issued shares of the Company has the right to appoint and remove one Director by written notice to the Company. A Director so appointed holds office until removed by the Shareholder who appointed them.
3.3 If a Shareholder's shareholding falls below 20%, the Director appointed by that Shareholder is deemed to have resigned with effect from the date the shareholding falls below that threshold, unless the other Shareholder agrees otherwise in writing.
3.4 The Board may appoint additional independent directors by unanimous resolution, provided that independent directors do not hold voting rights on Reserved Matters unless both Shareholders agree.
3.5 Oliver is appointed as the sole executive Director responsible for day-to-day management and operations of the Company. This authority includes, without limitation:
(a) product development, engineering, and technology infrastructure;
(b) hiring, engaging, and managing contractors and employees;
(c) sales, marketing, and customer management;
(d) financial management within approved budgets;
(e) entering into contracts in the ordinary course of business; and
(f) all other operational decisions not expressly reserved to the Board or Shareholders under this agreement.
3.6 Paul is a non-executive Director. Paul's role is to provide strategic guidance, industry relationships, and business development support as agreed between the parties from time to time.
3.7 Board meetings may be held by any means that allows all participants to communicate simultaneously, including video conference or telephone. A resolution in writing signed by all Directors is as valid as if passed at a properly convened meeting.
3.8 The quorum for Board meetings is two Directors, one of whom must be Oliver (or his nominee, if applicable) provided Oliver remains a Shareholder.
4.1 Oliver's contribution to the Company comprises:
(a) full-time executive service as the working Director, including product development, DevOps, sales, marketing, and all day-to-day operations;
(b) assignment to the Company of all Intellectual Property relating to the Quoflow platform, as further described in the IP Assignment Deed to be executed on or about the date of incorporation; and
(c) any further contributions as agreed by the Board from time to time.
4.2 Paul's contribution to the Company comprises:
(a) access to industry relationships and introductions to potential customers, partners, and investors;
(b) business development support and strategic guidance; and
(c) any further contributions as agreed by the Board from time to time.
4.3 Neither Shareholder is required to make any cash investment in the Company as a condition of receiving the shares described in clause 2.2, unless separately agreed in writing.
5.1 The following matters ("Reserved Matters") require the prior written approval of both Directors (or, where the matter is properly a shareholder resolution under the Act, approval of both Shareholders):
(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, leasing, 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 commitments incurred in the ordinary course of business);
(e) entering into any single contract or commitment with a value exceeding $50,000 NZD, other than in the ordinary course of business;
(f) making any acquisition, investment, or joint venture that is outside the ordinary course of the Business;
(g) amending this agreement or the Constitution; and
(h) any other matter that is required by the Act or the Constitution to be approved by special resolution.
5.2 Oliver's executive authority under clause 3.5 does not extend to Reserved Matters.
6.1 The Shareholders agree to the following indicative milestones for the first six months following incorporation:
Months 1–2: - Oliver to complete any remaining features required for commercial readiness of the platform; - Oliver to visit Christchurch for a first in-person meeting with Paul to review progress and align on immediate priorities.
Months 3–4: - Quoflow to have secured at least one paying customer on a commercial subscription; - The platform to be in active use with that customer.
Months 5–6: - The platform to be in a commercially demonstrable condition suitable for further sales; - Oliver to visit Christchurch for a second in-person meeting with Paul; - The Shareholders to conduct a formal six-month review of MRR, growth trajectory, and business priorities.
6.2 At the six-month review, the Shareholders will agree in writing:
(a) whether the milestones have been met and the reasons for any shortfall;
(b) director remuneration going forward;
(c) business priorities for the following period; and
(d) whether to extend or vary any interim arrangements.
6.3 Milestones are a framework for accountability and review, not conditions precedent to any right under this agreement. Failure to meet a milestone does not automatically trigger any penalty, change in shareholding, or breach of this agreement, but will form part of the context for the six-month review.
7.1 Subject to the Act and the Constitution, dividends will only be declared by resolution of the Board.
7.2 All profits of the Company will be reinvested into the Business until the Shareholders jointly agree otherwise in writing.
7.3 No dividend or distribution may be declared or paid without the prior written approval of both Directors.
7.4 Any dividend or distribution must be made pro-rata to shareholding in accordance with clause 2.2, as adjusted for any subsequent share issue agreed by the Shareholders.
8.1 Oliver, as the working executive Director, may receive remuneration from the Company at a level that is reasonable and consistent with market rates for his role as a full-time technology founder and operator.
8.2 Oliver may set his own remuneration within the limit in clause 8.3 without requiring Paul's approval, on the basis that Oliver has sole operational authority under clause 3.5.
8.3 Any change to Oliver's remuneration that would result in his total annual director's fees or salary from the Company exceeding $150,000 NZD requires prior written approval of both Directors.
8.4 The parties acknowledge that interim founder compensation arrangements agreed between them separately (including any founder salary payable during the pre-incorporation period or in the early months of the Company) are not recorded in this agreement and are governed by the terms agreed between them at that time.
8.5 Paul's directorship is non-executive. Paul will not receive director's fees or other remuneration from the Company unless separately agreed in writing by both Shareholders.
9.1 A Shareholder who wishes to Transfer any or all of their shares ("Selling Shareholder") must first offer those shares to the other Shareholder ("Offeree Shareholder") 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 Offeree Shareholder has 20 Business Days from receipt of the Transfer Notice to accept the offer by written notice. If accepted, the Offeree Shareholder must complete the purchase within 15 Business Days of acceptance, on the terms set out in the Transfer Notice.
9.3 If the Offeree Shareholder does not accept the offer within the period in clause 9.2, the Selling Shareholder may proceed with a transfer to a third party on terms no more favourable to the third party than those set out in the Transfer Notice, within 60 days of the expiry of the offer period. If the transfer to the third party does not complete within that period, the Selling Shareholder must repeat the process in clauses 9.1 to 9.3 before making any further transfer.
9.4 No Transfer of shares by a Shareholder is effective without the prior written consent of the other Shareholder, which must not be unreasonably withheld once the right of first refusal process in clauses 9.1 to 9.3 has been followed.
9.5 If Oliver proposes to transfer shares to a third party in circumstances that would result in that third party holding more than 50% of the Company's issued shares ("Change of Control Transfer"), Paul has the right ("Tag-Along Right") to require the third party to purchase all of Paul's shares on the same terms and at the same price per share as offered to Oliver.
9.6 Oliver must give Paul not less than 20 Business Days' written notice of any proposed Change of Control Transfer, including the identity of the proposed purchaser, price per share, and other material terms. Paul must exercise the Tag-Along Right within that notice period by written notice to Oliver and the proposed purchaser.
9.7 If Paul exercises the Tag-Along Right, Oliver may not proceed with the Change of Control Transfer unless the third party also agrees to purchase Paul's shares on the same terms.
9.8 If Oliver receives a bona fide written offer from a third-party purchaser to acquire 100% of the issued shares of the Company at the same price per share for all Shareholders ("Drag-Along Sale"), Oliver may require Paul to sell all of Paul's shares to that purchaser at the same price per share and on the same terms ("Drag-Along Right").
9.9 Oliver must give Paul not less than 20 Business Days' written notice of any proposed exercise of the Drag-Along Right, including the identity of the proposed purchaser, price per share, and other material terms.
9.10 On receipt of a valid Drag-Along notice, Paul is obliged to execute all documents and do all things necessary to complete the sale of Paul's shares to the purchaser on the terms set out in the notice.
9.11 No Shareholder may Transfer any shares:
(a) to a minor or to any person who lacks legal capacity;
(b) to a competitor of the Company, without the prior written consent of both Shareholders; or
(c) in contravention of any applicable law.
9.12 A Transfer of shares in breach of this clause 9 is void and the Company will not register such a Transfer.
10.1 Paul agrees that during the term of this agreement he will not, without Oliver's prior written consent, directly or indirectly:
(a) invest in, operate, control, or be materially involved in any business that competes directly with the Quoflow SaaS platform in the building supply or construction quoting/scheduling market; or
(b) solicit or attempt to solicit any customer, supplier, or employee of the Company for the benefit of any competing business.
10.2 Oliver agrees that during the term of this agreement he will not, without Paul's prior written consent, directly or indirectly develop or commercially exploit a competing SaaS platform targeting the same building supply and construction industry use case as the Quoflow platform.
10.3 The following are expressly excluded from the restriction in clause 10.2 and are not subject to any non-compete obligation:
(a) Oliver's existing and ongoing freelance web design, development, and digital marketing services to clients in any industry;
(b) Drafter — an agricultural and cattle management platform developed by Oliver, which operates in a separate and unrelated industry; and
(c) any software product, service, or business operating outside the building supply and construction industry.
10.4 Nothing in this clause prevents either Shareholder from holding shares in a publicly listed company as a passive financial investment, provided that shareholding does not exceed 5% of the issued shares of that company.
10.5 The Shareholders agree that the restrictions in this clause are reasonable in scope, duration, and geography given the nature of the Business and the interests being protected. If any restriction is found by a court to be unenforceable, the court is invited to reduce it to the minimum extent necessary to make it enforceable.
11.1 Oliver will provide Paul with a written update on business progress at least once per calendar month, covering revenue, key metrics, material developments, and any matters requiring Paul's input or approval.
11.2 Each Shareholder is entitled to inspect the Company's accounting records on reasonable written notice to Oliver.
11.3 The Company's annual financial statements will be prepared by Allott Reeves & Co Limited (or such other accountant as the Shareholders agree) and provided to both Shareholders within 90 days of the end of each Financial Year.
11.4 The Shareholders agree to use Allott Reeves & Co Limited as the Company's accountant unless otherwise agreed in writing.
12.1 Each party agrees to keep confidential all information of a confidential nature relating to the other party or the Company that is disclosed to or obtained by them in connection with this agreement or the Business ("Confidential Information"), and will not disclose Confidential Information to any third party without the prior written consent of the disclosing party, except:
(a) to professional advisers (including lawyers and accountants) on a need-to-know basis and subject to confidentiality obligations;
(b) as required by law or by any regulatory authority; or
(c) to the extent that the information has entered the public domain through no fault of the recipient.
12.2 The obligations in clause 12.1 continue for a period of three years following termination of this agreement or the relevant party ceasing to be a Shareholder, whichever occurs first.
13.1 This clause 13 applies if Paul ceases to be a Director or otherwise ceases to be involved in the Company ("Cessation Event").
13.2 Paul is a "Good Leaver" if the Cessation Event arises from:
(a) death; or
(b) permanent incapacity due to illness or injury preventing Paul from fulfilling his obligations under this agreement.
13.3 In any other case where a Cessation Event occurs within 12 months of the date of incorporation, Paul is a "Bad Leaver."
13.4 If Paul is a Bad Leaver:
(a) Oliver has the option (but not the obligation) to purchase all or any of Paul's shares by written notice to Paul within 30 Business Days of the Cessation Event; and
(b) the price payable for each share is the lower of: (i) the nominal value of $1.00 per share; or (ii) the Fair Market Value of each share at the date of the Cessation Event.
13.5 If Paul is a Good Leaver, or if a Cessation Event occurs after the first 12 months of incorporation:
(a) Oliver has the right of first refusal over Paul's shares in accordance with clause 9; and
(b) any transfer of shares is at Fair Market Value.
13.6 "Fair Market Value" means the value of a share as agreed between the Shareholders, or failing agreement within 20 Business Days, as determined by an independent chartered accountant appointed by Allott Reeves & Co Limited, whose decision is final and binding. The cost of the determination is borne equally by the Shareholders unless the accountant determines otherwise.
13.7 For clarity, this clause 13 does not restrict Paul from transferring his shares to a third party in accordance with clause 9, and it does not apply to Oliver.
14.1 Any dispute, controversy, or claim arising out of or in connection with this agreement, including any question regarding its existence, validity, or termination, must first be referred to the Shareholders for good-faith discussion.
14.2 If the dispute is not resolved within 30 days of it being raised in writing (or such longer period as the Shareholders agree), either Shareholder may refer the matter to mediation administered by a mutually agreed mediator, or failing agreement on a mediator within 10 Business Days, a mediator appointed by the President of the New Zealand Law Society.
14.3 Mediation is a condition precedent to commencing any legal proceedings in respect of the dispute, except where a party seeks urgent interlocutory relief.
14.4 The costs of mediation are borne equally by the Shareholders unless the mediator determines otherwise.
15.1 This agreement is governed by and is to be construed in accordance with the laws of New Zealand.
15.2 The parties submit to the non-exclusive jurisdiction of the courts of New Zealand.
16.1 Entire Agreement. This agreement (together with the Constitution and the IP Assignment Deed) constitutes the entire agreement between the Shareholders with respect to the subject matter hereof and supersedes all prior negotiations, representations, warranties, and agreements, whether oral or written. No Shareholder has relied on any representation or warranty not expressly set out in this agreement.
16.2 Amendment. This agreement may only be amended by a written instrument signed by both Shareholders.
16.3 Waiver. A waiver of any right or remedy under this agreement is only effective if given in writing and is not to be treated as a waiver of any other right or remedy. No delay or failure to exercise any right or remedy constitutes a waiver of that right or remedy.
16.4 Severability. If any provision of this agreement is or becomes invalid, illegal, or unenforceable in any jurisdiction, that will not affect the validity, legality, or enforceability of any other provision of this agreement in that or any other jurisdiction.
16.5 Further Assurance. Each Shareholder agrees to execute such documents and do such further acts and things as may be reasonably required to give full effect to this agreement.
16.6 Counterparts. This agreement may be executed in any number of counterparts, each of which when executed and delivered constitutes a duplicate original, but all counterparts together constitute one and the same instrument. Execution by electronic signature is acceptable.
16.7 No Partnership. Nothing in this agreement creates a partnership, joint venture, or agency relationship between the Shareholders.
16.8 Costs. Each party bears its own costs in connection with the negotiation, preparation, and execution of this agreement, unless otherwise agreed.
16.9 Notices. Any notice under this agreement must be in writing and delivered by hand, courier, or email to the recipient's address or email address last known to the sender. A notice sent by email is deemed received on transmission, provided no delivery failure notification is received by the sender.
This agreement is entered into on the date written above.
SIGNED by Oliver James Bunce:
Signature: _________
Full Name: Oliver James Bunce
Date: _________
Witness Signature: _________
Witness Name: _________
Witness Address: _________
SIGNED by Paul Harris (as trustee of the Paul & Stacey Harris Investment Trust):
Signature: _________
Full Name: Paul Harris
Date: _________
Witness Signature: _________
Witness Name: _________
Witness Address: _________
Each party acknowledges they have had the opportunity to obtain independent legal advice before signing this agreement.