EXHIBIT 10.21
MANAGEMENT AGREEMENT
THIS AGREEMENT made as of July 1, 1999
BETWEEN:
VIBRO-TECH INDUSTRIES, INC., a corporation subsisting under the laws of the
state of Delaware, having a place of business at Xxxxx 000-00000 Xxxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0 ("Vibro-Tech") on its own behalf and on
behalf of Shantou Vibro-Tech Industries Inc. (China), Vibro-Tech Holdings Ltd.
(Hong Kong) and Vibro-Tech Industries Ltd. (Hong Kong) (collectively, the "China
Subsidiaries")
AND:
XXX XXXXX, Businessman, having a place of business at X0 Xxxxx Xxxxx, 00 Xxxxxx
Xxxx, Xxx-Xxxxx, Xxxx Xxxx
("Xxxxx")
WHEREAS:
A. Vibro-Tech and its subsidiaries, Vitech Industries Inc, Cansun Management
Ltd., Shantou Vibro-Tech Industries Inc. (China), Vibro-Tech Holdings Ltd. (Hong
Kong) and Vibro-Tech Industries Ltd. (Hong Kong) (collectively, the
"Subsidiaries") are engaged in the business of the design, manufacture,
marketing and sales of seismic vibration bearings for use in the construction
industry;
B. Vibro-Tech wishes to engage Xxxxx as, and Xxxxx has agreed to be, executive
vice-president in charge of the manufacture, operations, product development,
marketing, sales and management of Shantou Vibro-Tech Industries Inc. (China),
Vibro-Tech Holdings Ltd. (Hong Kong) and Vibro-Tech Industries Ltd. (Hong Kong)
(collectively, the "China Subsidiaries") on the terms and conditions of this
Agreement;
WITNESSES THAT the parties mutually covenant and agree as follows:
ARTICLE I APPOINTMENT AND DECLARATION
1.01 The China Subsidiaries appoint and engage Xxxxx as executive vice-president
of the China Subsidiaries and Xxxxx accepts such appointment, on the terms and
other conditions of this Agreement.1.02 During the term of this Agreement, Xxxxx
will be a member of the board of directors of such of the China Subsidiaries as
are from time to time designated by the president of Vibro-Tech.
1.03 As executive vice-president of the China Subsidiaries, Xxxxx will be
responsible for the manufacturing, operations, product development, marketing,
sales and management of the China Subsidiaries in China and in such other Asian
countries as are designated from time to time by the president of Vibro-Tech and
in ensuring that the China Subsidiaries are, and continue to be, in compliance
with the laws of China and such other Asian countries in which the China
Subsidiaries carry on business.
1.04 Xxxxx will work with, assist and in all ways cooperate with Foo Xxx Xxxx in
the design, modification, patenting and any other activity connected with the
development of seismic vibration bearings for use in the construction industry.
1.05 The China Subsidiaries will contract in compliance with applicable local
laws with such persons, firms and corporations qualified under applicable local
laws as Xxxxx may select to provide personnel and office services, accounting
services, legal and accounting advice and such other activities as Xxxxx, in
consultation with the president of Vibro-Tech, considers should be done by third
parties but Xxxxx will continue to make the day-to day business and management
decisions for the China Subsidiaries..
1.06 Except for the liability for the payment of the monthly fees of Xxxxx, the
China Subsidiaries will be fully and solely liable and responsible for the
activities and remuneration of the persons, firms and corporations employed by,
or contracting with, the China Subsidiaries and Xxxxx will ensure that all
contracts are made between any person, firm or corporation with the China
Subsidiary involved.
ARTICLE II MANAGEMENT OF BUSINESS BY XXXXX
2.01 Without limiting the generality of the provisions of article one, at and
with the direction of, and in consultation from time to time with, the president
of Vibro-Tech, Xxxxx will subject to paragraph 2.02:
(a) take, on behalf of the China Subsidiaries, all such action to give effect to
any investment or business decision of the president of Vibro-Tech;
(b) use his best efforts to present and recommend from time to time a continuing
and suitable business program consistent with the business policies, objectives
and restrictions of Vibro-Tech to establish and expand the business of the China
Subsidiaries in accordance with the analysis, advice and recommendations of
persons qualified under applicable legislation, and to present business
opportunities of a character consistent with the business program adopted by the
president of Vibro-Tech; and
(c) generally advise Vibro-Tech about any matter which Xxxxx considers relevant
or material in connection with the administration, business or investments of
Vibro-Tech and its Subsidiaries.
2.02 Subject to direction from the president of Vibro-Tech, Xxxxx will select
such persons, firms or corporations as Xxxxx considers appropriate to provide
services required in connection with the operation of the business of the China
Subsidiaries.
2.03 Xxxxx will forthwith provide Vibro-Tech with information concerning any
change in the business objectives, policies of, or restrictions on, the China
Subsidiaries and with such further information concerning the affairs of the
China Subsidiaries as the president of Vibro-Tech may from time to time request.
ARTICLE III ADMINISTRATION OF THE CHINA SUBSIDIARIES
3.01 Xxxxx will, as executive vice-president of the China Subsidiaries, in
consultation with the president of Vibro-Tech:
(a) determine the business plan and strategy of the China Subsidiaries from time
to time;
(b) retain qualified and appropriate legal, accounting and business advisers for
the China Subsidiaries as are required to maintain the China Subsidiaries
pursuant to applicable law and to ensure that Vibro-Tech is able to comply with
the securities laws of the United States of America; and
(c) provide to the board of directors of Vibro-Tech any information which the
members of such board may from time to time reasonably request in connection
with the day to day business operations of Vibro-Tech or its Subsidiaries.
ARTICLE IV STANDARD OF CARE
4.01 Xxxxx will exercise the powers and perform the duties assumed hereunder
honestly, in good faith and in the best interests of Vibro-Tech and its
Subsidiaries and will exercise the degree of care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
ARTICLE V MANAGEMENT FEE, OTHER COMPENSATION AND VACATIONS
5.01 To July 31, 2000 Xxxxx will charge to, and collect from, the China
Subsidiaries in such proportions from each of the China Subsidiaries as the
president of Vibro-Tech considers appropriate a monthly management fee of
US$2,500.
5.03 On July 31, 2001 and on July 31 in each subsequent year of this Agreement
and during any renewal of the term of this Agreement, the monthly management fee
to be paid to Xxxxx will be increased by ten percent of the monthly management
fee paid in the previous period.
5.04 The management fee in respect of each calendar month will be paid to Xxxxx
on the first business day of each calendar month.
5.05 Xxxxx will be entitled in each year to a paid, two week holiday to Canada
with all travel expenses from China to Canada, including air line tickets on an
airline and in a class of seat approved by the president of Vibro-Tech, to be
paid by the China Subsidiaries.
5.06 Vibro-Tech grants to, and vests in, Xxxxx an option to purchase 250,000
shares of Vibro-Tech on or before the earlier of six months after the
termination of this Agreement or June 30, 2003 for US$0.15 per share and will
execute and deliver a form of agreement acceptable to Xxxxx evidencing the grant
of such share purchase option.
5.07 Xxxxx will be paid from time to time a annual discretionary bonus
determined by the president of Vibro-Tech based on operations at the factory and
from operations in China and other Asian countries.5.08 Any change in the
management fee or in the basis of calculating the management fee or other
expenses which would result in increased charges to the China Subsidiaries may
be made only after approval of such matter by the president of Vibro-Tech.
ARTICLE VI EXPENSES OF XXXXX
6.01 The expenses and disbursements of Xxxxx incurred from time to time in
directing and managing the business of the China Subsidiaries will be paid from
time to time by the China Subsidiary designated by the president of
Vibro-Tech.
ARTICLE VII NO OTHER ACTIVITIES OF XXXXX
7.01 Xxxxx may have no other business interests and may engage in no other
activities similar or in addition to those relating to the activities to be
performed for the China Subsidiaries.
ARTICLE VIII RELATIONSHIP OF PARTIES
8.01 Xxxxx will perform his duties as an independent contractor and none of
Vibro-Tech, its Subsidiaries, their respective directors, officers or employees
is for the purposes of this Agreement employees or agents of or co-venturers
with Xxxxx and nothing in this Agreement will be construed so as to make them
employees, agents or co-venturers of Xxxxx or to impose any liability on Xxxxx
as an employer, principal or co-venturer.
8.02 Each of the China Subsidiaries will bear the sole and complete
responsibility and liability for the employment, conduct and control of its
employees, agents and contractors and for the injury of such persons or injury
to others through the actions or omissions of such persons.
ARTICLE IX INDEMNITY
9.01 Each of the China Subsidiaries agrees to indemnify and save harmless Xxxxx
for any loss (other than loss of profits), liability, claim, damages or expense,
including the reasonable cost of investigating, settling or defending any
alleged loss, liability , claim, damages or expense and reasonable counsel fees
incurred in connection therewith, incurred as a result of or in connection with
the execution of his office and duties under this Agreement or otherwise in
respect of the affairs of each of the China Subsidiaries if Xxxxx has exercised
his powers and performed his duties in accordance with the standard of care
stipulated in Article IV.
ARTICLE X TERM AND TERMINATION
10.01 This Agreement will be effective on July 1, 1999 and will continue in
force until July 31, 2003.
10.02 After July 31, 2003, this Agreement will be automatically renewed for an
additional term of one year on the terms and other conditions of this Agreement,
including this condition.
10.03 This Agreement may be terminated by Xxxxx on not less than 90 days'
written notice to any of the China Subsidiaries in the event of:
(a) the commission by ant of the China Subsidiaries of any material fraudulent
act in performing any of its obligations or any material deliberate
misrepresentation to Xxxxx or to its directors, officers or shareholders; or
(b) the malfeasance of misfeasance of any of the China Subsidiaries in the
performance of its duties.
10.04 This Agreement may be terminated by Vibro-Tech and the Subsidiaries on not
less than 30 days' written notice to Xxxxx in the event of:
(a) the commission by Xxxxx of any material fraudulent act in performing any of
his obligations or any material deliberate misrepresentation to any of
Vibro-Tech, its Subsidiaries or to their respective directors, officers or
shareholders;
(b) failure of Xxxxx to perform his duties and discharge its obligations; or
(c) the malfeasance of misfeasance of Xxxxx in the performance of his duties.
10.05 The Agreement will terminate forthwith with respect to Xxxxx if he becomes
or acknowledges that he is insolvent or makes a voluntary assignment or proposal
under any bankruptcy laws or applicable legislation or if a bankruptcy petition
is filed or presented against Xxxxx.
10.06 From and after the effective date of termination of this agreement, Xxxxx
will not be entitled to compensation for any further services but will be paid
all compensation accruing to such date.
10.09 Upon the termination of this agreement, Xxxxx will: (a) pay over to
Vibro-Tech and its Subsidiaries all moneys which may be held by Xxxxx for the
account of Vibro-Tech and its Subsidiaries pursuant to this Agreement after
deducting any accrued compensation to which Xxxxx is then entitled;
(b) deliver to Vibro-Tech and its Subsidiaries a full accounting, including a
statement of all moneys collected by Xxxxx, a statement of all moneys held by
Xxxxx, and a statement of all moneys paid by Xxxxx, covering the period
following the date of the last accounting furnished to Vibro-Tech and its
Subsidiaries; and
(c) deliver to and, where applicable, transfer into the name of Vibro-Tech and
its Subsidiaries ( or as it may direct in writing ) all property and documents
of Vibro-Tech and its Subsidiaries held in the name or custody of Xxxxx.
10.07 Upon termination of this Agreement, Vibro-Tech will assume all contracts
and obligations entered into or undertaken by Xxxxx (other than with any
affiliate of Xxxxx) within the scope of its authority and indemnify Xxxxx
against any liability by reason of anything done or required to be done under
any such contract or obligation after the date of termination of this Agreement.
ARTICLE XI AMENDMENTS
11.01 This Agreement may not be modified or amended except by an instrument in
writing signed by the parties to this Agreement or, where applicable, by their
successors or permitted assigns, but no material provision in this Agreement may
be amended unless approved by resolution of the boards of directors of
Vibro-Tech and each of the China Subsidiaries and receipt, where necessary, of
approvals of applicable regulatory authorities.
ARTICLE XII WAIVER
12.01 No condoning, excusing or waiver by any party of any default, breach or
non-observance by any other party at any time or times in respect of any
covenant, proviso or condition will operate as a waiver of that party's rights
in respect of any continuing or subsequent default, breach or non-observance,
and no waiver will be inferred from or implied by anything done or omitted to be
done by the party having those rights.
ARTICLE XIII NOTICE
13.01 Any notice to be given by any party to any other party will be deemed to
be given when in writing and delivered or communicated by telex or telecopier on
any business day to the address for notice of the intended recipient.
13.02 The address for notice of each of the parties will, until changed, be:
(a) Xxxxx:
Xx. Xxx Xxxxx
X0 Xxxxx Xxxxx
00 Xxxxxx Xxxx
Xxx-Xxxxx
Xxxx Xxxx
(x) Vibro-Tech
Vibro-Tech Industries, Inc.
201-11240 Bridgeport Road
Richmond, B.C. V6X IT2
Attention: Xx. Xxxxxxx Xxxx, Chairman
Fax: 000-000-0000
13.03 A party may by notice to the other party change its address for notice to
some other address and shall so change its address for notice whenever the
existing address for notice ceases to be adequate for delivery by hand or
communication by telex or telecopier.
ARTICLE XIV HEADINGS
14.01 The headings appearing in this agreement have been inserted for reference
and as a matter of convenience only, and in no way define, limit or enlarge the
scope or meaning of this agreement or any of its provisions.
ARTICLE XV GOVERNING LAW
15.01 This agreement will be governed by and construed in accordance with the
laws of British Columbia and any proceeding commenced or maintained in respect
of this Agreement will be so commenced or maintained in the court of appropriate
jurisdiction in the County of Vancouver to which jurisdiction the parties
irrevocable attorn..
ARTICLE XVI ENTIRE AGREEMENT
16.01 The provisions of this Agreement and the share purchase option agreement
to be entered into by the parties constitute the entire agreements between the
parties and supersede all previous communications, representations and
agreements, whether verbal or written, between the parties with respect to the
subject matter hereof.
ARTICLE XVII ASSIGNMENT
17.01 This agreement may not be assigned in whole or in part by any party
without the written consent of the other party.
ARTICLE XVIII ENUREMENT
18.01 This Agreement will enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto on the
day and year first above written. VIBRO-TECH INDUSTRIES, INC. on its own behalf
and on behalf of the China Subsidiaries
By: /s/ Xxxxxxx Xxxx
Xxxxxxx Xxxx, Chairman of the Board
Signed, Sealed and Delivered by Xxx )
Xxxxx in the presence of: )
/s/ In Chinese Characters /s/ Xxx Xxxxx
XXX XXXXX
30071002/1-7
