INCORPORATION AGREEMENT
This Incorporation Agreement ("Agreement") is entered into on [Date], by and between the
undersigned Parties:
BJOERN PIETRUSCHKA, Identity Number [ID Number] residing at [Address]
(“BJOERN”)
And
THEO PISTORIUS, Identity number 8606045156086, residing at 10 Villa Classica, Botterblom Road,
Cape Town, South Africa
(“THEO”)
And
MARC LEWIS Identity Number 7611235011084, residing at 11 Sydney Road, Mowbray, Cape Town,
South Africa
(“MARC”)
Collectively referred to as “the Founders”.
BACKGROUND:
WHEREAS, the Founders intend to incorporate a private company with limited liability under the
laws of the United Kingdom under the name "Regenol8" ("Entity").
WHEREAS, the Founders intend that the Entity will develop a hydrolysis batch reactor based on the
hydrolysis trials that were undertaken between 2022 and 2023.
WHEREAS, the Founders wish to establish their respective rights, responsibilities, and obligations
concerning the formation, management, and operation of the Entity as laid out in this Incorporation
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the
parties agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1. The following words and expressions shall bear the meaning assigned to them below and
cognate expressions shall bear corresponding meanings:
1.1.1.“Agreement” means this Incorporation Agreement and its associated schedules,
annexures and/or appendices, as amended from time to time;
1.1.2.“Business Day” means any day of the week which is not a Saturday, or Sunday or official
public holiday in South Africa and “Business Days” shall have a corresponding meaning
as the context may indicate;
1.1.3.“Effective Date” means the date of signature of the Party signing thus Agreement last
in time;
1.1.4.“Entity” means Regenol8, the private company with limited liability incorporated
under the laws of the United Kingdom;
1.1.5.“Fair Market Value” means the fair market value as determined by a duly qualified and
independent third-party valuation expert, as agreed by the Parties.
1.1.6.“Intellectual Property” means any patent, trademark, registered design or any
application for registration of the same, any copyright or related rights, database right,
design right, rights in trade, business or domain names, rights in trade dress, rights in
Inventions, rights in confidential information or know how, whether registered or
unregistered, or any similar or equivalent rights in any part of the world;
1.1.7. “Party/ies” means the parties to this Agreement being BJOERN, THEO and MARC.
1.2. Where any term Is defined within the context of any particular clause in this Agreement, the
term so defined, unless it is clear from the clause in question that the term so defined has
limited application to the relevant clause, shall bear the meaning ascribed lo it for all
purposes in terms of this Agreement, notwithstanding that the term has been defined in this
definitions clause,
1.3. This Agreement shall be interpreted in accordance with the following principles:
1.3.1.The headings appearing in this Agreement are for reference purposes only and shall not
affect the interpretation hereof;
1.3.1.1. the terms of this Agreement having been negotiated, they shall not be interpreted
against the Party who procured its preparation and drafting, it being specifically
agreed that the conta proferentem rule shall not apply;
1.3.1.2. unless expressly otherwise stated, no provision of this Agreement shall constitute a
stipulation for the benefit of any person (stipulation alteri) who is not a party to this
Agreement.
2. ESTABLISHMENT OF ENTITY:
2.1. the Founders intend to incorporate a private company with limited liability under the laws of
the United Kingdom and shall take all such action and sign such documents required to legally
establish the Entity.
2.2. the shareholding of the Entity shall be allocated as follows: Bjoern Pietruschka 26% (twenty
six percent) shareholding, Theo Pistorius 26% (twenty six percent) shareholding, and Marc
Lewis 26% (twenty six percent) shareholding, totalling 78% (seventy eight percent)
collectively. The remaining 22% (twenty two percent) shall be held by the Entity.
2.3. To give effect to the said structure, the Parties will conclude the following documents:
2.3.1. a Shareholders Agreement in terms of the Entity between BJOERN, THEO and MARC
2.3.2. A share subscription agreement in terms of which BJOERN subscribes for 26% (twenty
six percent) of the shares in the Entity, THEO subscribes for 26% (twenty six percent) of
the shares in the Entity and MARC subscribes for 26% (twenty six percent) of the shares
in the Entity for ₤1 (one pound) per share;
2.3.3.Stipend payment for MARC based on his preliminary concept development and trial
work done;
2.3.4. Employment agreement with the Entity for key personnel at the time;
2.3.5. Any other ancillary documents/agreements required to implement the structure as
decided in 2.2.
2.3.6. Should any Party be unable to follow its participation rights pro rata in the Entity, the
other Parties or their nominated affiliate/s, shall have a right of first refusal on any
shortfall, also on a proportional basis;
2.3.7. Should any shortfall remain thereafter, the inclusion of appropriate third parties, as well
as alternative financing structures shall be considered to find an optimal capital
structure.
2.3.8. Should the inclusion of such third parties adversely affect the shareholding and/or
economic participation of any Party, the Parties agree to explore alternative
participation mechanisms for the affected Party/ies, in good faith, such that all Parties
remain fairly incentivised.
3. RECIPROCAL EXLUSIVITY:
3.1. The Parties agree that the Entity shall be for each of the Parties and each of their affiliated
entities, the exclusive venture/s that develops, creates, produces, sells or is otherwise
involved in any manner whatsoever in a hydrolysis batch reactor plant or business model. To
this effect, more specifically, the Parties agree that:
3.1.1. Without the written approval from the Entity, none of the Parties is allowed to develop,
create, produce or sell a hydrolysis batch reactor plant or business model.
3.1.2. Furthermore, the Parties as the case maybe agree to notify the Entity in writing, of any
potentially competitive activity being considered in a hydrolysis batch reactor plant or
business model.
3.1.3. For the avoidance of any doubt, reciprocal exclusivity does not include the developing
and commercialising of a process that utilizes the Black Soldier Fly to produce high value
products.
4. INTELLECTUAL PROPERTY
4.1. The Parties agree that any Background Intellectual Property which is defined as all Intellectual
Property that each Party owns or has created or developed and which it brings into the
Parties’ co-operation in terms of this Agreement and at the Effective Date, for the duration
of this agreement only, shall remain the sole and exclusive property of such Party and this
Agreement shall not operate to transfer ownership or any interest whatsoever therein.
4.2. The Parties agree that any Foreground Intellectual Property which is defined as all Intellectual
Property as may be created or developed by a Party in the course of the Parties’ co-operation
in terms of this Agreement acquired or developed by either one of them, its employees,
consultants or agents during the course of this Agreement shall be the sole and exclusive
property of the Entity. The Parties agree that the creator of such intellectual property shall
be granted the first right to cede or purchase that specific property at fair market value.
5. CONTRIBUTIONS OF PARTIES TO THE ENTITY
5.1. Each Party commits to actively participate and provide valuable insights to the Entity's
projects and operations whilst fostering a collaborative environment.
5.2. The Parties agree that each Party shall promote the Entity in a positive light and shall not
engage in any conduct that may harm the Entity's reputation.
6. NEGOTIATIONS IN GOOD FAITH
6.1. All negotiations, decisions, and actions related to the Entity's projects and operations shall
be conducted in utmost good faith, prioritizing the collective best interests of the Parties
over individual interests.
7. PROFIT DISTRIBUTION
7.1. Expense Reimbursement: Prior to profit distribution, all legitimate expenses and input costs
shall be reimbursed.
7.2. Dividend Distribution: Profits and dividends shall be calculated and distributed after the
completion of each project. The Entity may establish an association markup for this purpose.
8. DECISION-MAKING AND OWNERSHIP
8.1. Majority Decisions: Significant decisions shall require the approval of a majority vote of 51%
(fifty one percent) among the Shareholders.
8.2. Tag-Along Provision: If a decision involves the sale of a substantial portion of the Entity's
assets or a change in control, a 70% (seventy percent) majority of the Shareholders can opt
to join the transaction and sell their equity proportionally.
8.3. Drag-Along Provision: A 90% (ninety percent) majority of Shareholders can require the
remaining minority Shareholder to sell their equity in the Entity and fair market value as part
of a larger equity sale.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION
9.1. The Parties acknowledge that the Confidential Information is a valuable, special and unique
asset proprietary to the disclosing party which, if certain parts of the Confidential Information
is disclosed, would be likely to cause harm to the commercial or financial interests of the
disclosing party and/or could reasonably be expected to put the disclosing party at a
disadvantage in contractual or other negotiations and/or prejudice the disclosing party in
commercial competition.
9.2. The Parties agree that they will not, during the course of their association with one another,
or thereafter, disclose the Confidential Information to any third party for any reason or
purpose whatsoever without the prior written consent of the disclosing party, save in
accordance with the provisions of this agreement.
9.3. The receiving party agrees:
9.3.1.that the Confidential Information disclosed by the disclosing party may consist of trade
secrets of the disclosing party;
9.3.2.not to utilise, employ, exploit or in any other manner whatsoever use the Confidential
Information disclosed pursuant to the provisions of this agreement for any purpose
whatsoever other than for the purposes contemplated in clause 6, without the prior
express written consent of the disclosing party;
9.3.3.that the unauthorised disclosure of the Confidential Information to a third party may
cause irreparable loss, harm and damage to the disclosing party.
9.3.4.Accordingly, the receiving party indemnifies and holds the disclosing party harmless
against any loss, action, claim, harm, damage, or other liability of whatever nature,
suffered by the disclosing party pursuant to a breach by the receiving party of the
provisions of this agreement.
9.3.5.The receiving party acknowledges that monetary damages may not be a sufficient
remedy for unauthorised disclosure of the Confidential Information and that the
disclosing party shall be entitled, without waiving other rights or remedies, to such
injunctive or equitable relief as may be deemed proper by a court of competent
jurisdiction or arbitration panel including, without limitation, direct and consequential
damages.
10. REPRESENTATIONS AND WARRANTIES
10.1.
Each Party represents and warrants that it has the authority necessary to enter into this
agreement and to do all things necessary to procure the fulfilment of its obligations in
terms of this Agreement.
11. MISCELLANEOUS
11.1. No amendment, interpretation or waiver of any of the provisions of this agreement shall be
effective unless reduced to writing and signed by all the Parties.
11.2. The failure to enforce or to require the performance at any time of any of the provisions of
this agreement shall not be construed to be a waiver of such provision and shall not affect
either the validity of this agreement or any part hereof or the right of any party to enforce
the provisions of this Agreement.
11.3. This agreement contains the entire agreement of the Parties with respect to the subject
matter of this agreement and supersedes all prior agreements between the Parties, whether
written or oral, with respect to the subject matter of this agreement.
11.4. Each of the Parties shall have a period of 14 (fourteen) days in which it shall take all steps
reasonably possible to remedy any breach by it of this Agreement.
12. GOVERNING LAW
12.1. The Parties agree that all agreements (whether verbally or in writing) in relation to this
Agreement including but not limited to any ancillary agreements shall be governed by and
construed in accordance with the laws of the United Kingdom.
13. DISPUTE RESOLUTION
13.1. If the Parties are unable to resolve any dispute within 10 (ten) Business Days after either
Party in writing requests that the dispute be resolved, then the dispute shall be submitted
to and decided on by the Parties or their nominated representatives of each of the Parties
to the dispute.
13.2. If the Parties or their nominated representatives of each of the parties are unable to
resolve the dispute within a further 15 (fifteen) Business Days after one or more of them
requests, in writing, for the dispute to be resolved, then the dispute shall be submitted to
and decided by arbitration in the manner described below.
13.3. A dispute which arises with regards to
13.3.1. The interpretation of;or
13.3.2. The carrying effect of; or
13.3.3. Any of the Parties rights and obligations arising from; or
13.3.4. The termination or purported termination of arising from the termination of;or
13.3.5. The rectification or proposed rectification of, this Agreement shall be submitted to
and decided by arbitration.
13.4. The arbitration shall be held:
13.4.1. With only the Parties or their representatives present thereat; and
13.4.2. In Cape Town as agreed by the Parties
13.5. It is the intention of the Parties that the arbitration shall, where possible, be held and
concluded within 21 (twenty-one) days after it has been demanded. The Parties shall use
their best endeavours to procure the expeditious completion of the arbitration.
13.6. The arbitration shall be subject to the arbitration legislation for the time being in force in
the United Kingdom.
13.7. The arbitration shall be conducted by:
13.8. If the matter in issue is an accounting matter only, an independent auditor agreed to by
the Parties, and failing agreement by the President of the South African Institute of
Chartered Accountants; and
13.9. If the matter is anything other than an accounting matter, an arbitrator or arbitrators
appointed by the Arbitration Foundation of Southern Africa.
13.10. The Parties shall keep the evidence in the arbitration proceedings and any order made by
the arbitrator confidential, unless otherwise contemplated herein or as is needed to
enforce rights in a court of law.
13.11. The arbitrator shall be obliged to give his award in writing, fully supported by reasons and
shall make such order as to costs as he deems just.
13.12. The provisions of this clause are severable from the rest of the Agreement and shall remain
in effect even if this Agreement is terminated for any reason.
14. DOMICILIA AND NOTICES
14.1. The Parties choose as their domicilia citandi et executandi for all purposes under this
Agreement, whether in respect of the court process, notices or other documents or
communications of whatsoever nature, the following addresses:
14.1.1. BJOERN PIETRUSCHKA
Address
Email:
14.1.2. THEO PISTORIUS
Address: 10 Villa Classica, Botterblom Road, Cape Town
Email:
14.1.3. MARC LEWIS
Address:
Email:
14.2. Any notice or communication required or permitted to be given in terms of this
Agreement shall be valid and effective only if in writing.
IN WITNESS WHEREOF, the Founders have executed this Incorporation Agreement on the date first
above written.
_________________________
BJOERN PIETRUSCHKA
_________________________
THEO PISTORIUS
_________________________
MARC LEWIS