177
EXHIBIT 10.24
USER AGREEMENT
THIS AGREEMENT made as of August 25, 1998
BETWEEN:
VIBRO-TECH INDUSTRIES, INC., a body corporate subsisting under the laws of
Delaware, with a place of business at Suite 201-11240 Bridgeport Road, Richmond,
B.C. V6X IT2
("VTI")
AND:
SHANTOU VIBRO-TECH INDUSTRIAL AND DEVELOPMENT CO. LTD., a corporation subsisting
under the laws of the People's Republic of China, having a place of business at
Long Xxx Xxx Xxxx, Xxxxxxx Xxxx, Xxxxxxxxx Xxxxxxxx, 000000 People's Republic of
China
(the "Company")
WHEREAS:
A. Pursuant to an agreement dated August 25, 1998 between VTI and Zhou, Zhou set
over, assigned and sold to VTI all right title and interest in and to a patent
and certain applications for patents under the Paten Law of the People's
Republic of China described by numbers patent right registration ZL 95 22
200198, application no. 95 1 09348.7, 1. application no. 95 2 20019.8 and
application no. 95 1 09347.9 and any improvements and modifications to such
rights relating to the design, manufacture and use of Bearings for consideration
paid by VTI;
B. The Company wishes to obtain a license to use such patent and applications
for patents for the purposes of manufacturing, and marketing and selling in the
People's Republic of China, Bearings on the terms and conditions of this
Agreement;
C. By an agreement dated Xxxxx 00, 0000 xxxxx Xxxx, Xxxxxx Xxxx. and the
Company, the Company, Zhou and Fujita Corp. agreed to provide for the continuing
research and development of a type of bearing suitable for use in Japan and in
particular to test and improve the 300 and 600 type rubber bearings and agreed
that the rights in Japan to such bearings and any improvements and modifications
to such bearings is held one-third each by the Company, Zhou and Fujita Corp;
and
X. Xxxx wishes to be engaged as an advisor to the Company;
WITNESSES that the parties mutually covenant and agree as follows:
ARTICLE 1 DEFINITIONS AND INTERPRETATION
1.01 In this Agreement, including the recitals and schedules to this Agreement,
unless the context otherwise requires:
178
Bearings means the patent right registration ZL 95 22 200198 and applications
for patents no. 95 1 09348.7, 1. no. 95 2 20019.8 and no. 95 1 09347.9 under the
Patent Law (China) related to the invention, manufacture, sale and use, in the
People's Republic of China, either on VTI's own behalf or on behalf of, or
through, third parties with which VTI or any affiliate of VTI has contracted, of
isolated seismic rubber bearings invented by Zhou, assigned to VTI and used
under license granted by VTI to the Company and includes all related
Enhancements and Documentation.
Company means Shantou Vibro-Tech Industrial and Development Co Ltd.
Confidential Information means all information relating to the Bearings,
Enhancements and the Documentation and any other data and information now or
hereafter existing during the date of this Agreement relating to the invention,
design, modification, improvement, manufacture and installation of the Bearings
done or caused to be done by the Company or done on advice given by Zhou
relating to the Bearings but does not include any data or information which:
(a) is or becomes generally known or to the public, without breach or violation
of any confidentiality or other obligation;
(b) was known by VTI or the Company at the time of disclosure by Zhou, and was
not subject to any obligation of confidence; or
(c) is rightfully communicated to the Company by another person, free of any
obligations of confidence.
Documentation means the user manuals and other written materials relating to the
Bearings and the Enhancements that are provided to, the Company by, or on the
advice of, Zhou or developed by the Company, as modified from time to time.
Enhancements means any modifications, improvements or additions to the Bearings
and the Documentation done by the Company or by, or on the advice of, Zhou.
Fujita Agreement means the agreement dated Xxxxx 00, 0000 xxxxx Xxxx, Xxxxxx and
the Company providing for the continuing research and development of a type of
isolated seismic rubber bearing suitable for use in Japan and in particular
relates to the 300 and 600 type rubber bearings and to the rights in Japan to
such bearings and any improvements and modifications to such bearings.
Fujita means Fujita Corporation of 0-0-00, Xxxxxxxxx, Xxxxxxx-xx, Xxxxx 000,
Xxxxx.
Fujita Property means the one-third interest of each of Fujita, Zhou and the
Company to all right title and interest in and to the continuing research and
development of a type of isoalted seismic rubber bearing suitable for use in
Japan and in particular relates to the 300 and 600 type rubber bearings and to
the rights in Japan to such bearings and any improvements and modifications to
such bearings.
000
Xxxxxx'x Xxxxxxxx of China means the mainland of the People's Republic of China
and does not include the Hong Kong Special Administrative Region.
Royalty means the amount to be paid from time to time by the Company to Zhou
from the sale of Bearings in the People's Republic of China.
VTI Property means all right title and interest under the Patent Law (China) in
and to a patent and certain applications for patents in the Republic of China
described by numbers patent right registration ZL 95 22 200198, application no.
95 1 09348.7, 1. application no. 95 2 20019.8 and application No. 95 1 09347.9
and any improvements and modifications to such rights owned by VTI.
VTI means Vibro-Tech Industries, Inc., a corporation subsisting under the laws
of Delaware, with an office at of 000-00000 Xxxxxxxxxx Xxxx, Xxxxxxxx, X.X.
Xxxxxx X0X 0X0.
Zhou means Dr. Fu Xxx Xxxx, professor and vice-president of the South China
Construction University, of Xx. 000 Xxxxx Xxxx Xxxxx Xxxx, Xxxxxxxxx 000000
People's Republic of China.
1.02 This Agreement and all matters arising under this Agreement will be
governed by, construed and enforced in accordance with the laws of the People's
Republic of China and any proceeding commenced or maintained in connection with
this Agreement will be so commenced and maintained in the City of Shantou,
Guangdong Province, China to which jurisdiction the parties irrevocably attorn.
1.03 All amounts determined under, or referred to in, this Agreement will be in
renminbi and any conversion is necessary such conversion will be done at the
rate or rates published by the Bank of China from time to time.
ARTICLE 2 GRANT OF LICENSE
2.01 VTI grants to the Company on the terms and other conditions of this
Agreement a non-exclusive license to use the VTI Property in the People's
Republic of China to manufacture, and to market and to sell in the People's
Republic of China, Bearings.
2.02 The Company acknowledges that all dealings with, agreements entered into,
and proprietary rights acquired under the Fujita Agreement in dealing with
Fujita are done or acquired for and on behalf of VTI.
2.03 At the request of VTI, the Company will from time to time execute such
documents and obtain such consents as are necessary to set over, assign and
transfer absolutely to VTI the Fujita Property in accordance with the terms and
conditions of the Fujita Agreement.
2.04 It is a condition of this Agreement that the Company enter into an
agreement with Zhou providing for the engagement of Zhou as an advisor and the
payment to Zhou of a royalty of five percent of gross sales of the Company in
the People's Republic of China, to be paid in reminbi according to Chinese law,
as defined in the agreement between the Company and Zhou and that the Company
pay the Royalty to Zhou from time to time in accordance with the conditions of
such agreement.
180
2.05 If considered required, the Company will at its own cost translate and file
under the Patent Law (China) either this Agreement or such other documentation
as is required under the Patent Law (China) to record the grant of this license
and its ownership by the Company.
ARTICLE 3 CONFIDENTIALITY AND THIRD PARTIES
3.01 The Company will provide, and will continue to provide, all Confidential
Information relating to the Bearings, the Enhancements and the Documentation to
VTI.
3.02 All right, title and interest in and to the Confidential Information is
will remain, the exclusive worldwide property of VTI held for and on behalf of
VTI and will be held in trust and confidence by the Company for VTI and no
immunity, license or right respecting the Confidential Information is granted to
the Comapny under this Agreement by implication or otherwise to deal with the
Confidential Information with any party except as expressly provided in this
Agreement.
3.03 Except for the dealings with Fujita, the Company will not without the prior
written consent of VTI directly or indirectly, other than through or with VTI,
deal with or contact any other person, firm or corporation regarding the
Confidential Information and will not except through the acquisition of rights
on constitution of a venture with the Company or its successors directly or
indirectly acquire any proprietary interest in or to, use, distribute, license
or otherwise disclose the Confidential Information or any other matter
containing or based, in whole or in part, on the Confidential Information and in
particular will not use the Confidential Information, or suffer or permit any
associate or affiliate to use the Confidential Information, in any way except in
the constitution of a venture with the Company.
3.04 The Company will use its best efforts, and will use its best efforts to
cause its directors officers, employees and agents, to keep confidential and
protect the Confidential Information and the interests of the Company in and to
the Confidential Information and the standard of best efforts will be no less
than the degree of care that VTI would be reasonably expected to employ for its
own trade secret, proprietary or confidential information.
3.05 Nothing will prevent the Company from disclosing Confidential Information
if required under any agreement to which the Company is a party providing for
the sale of Bearings or by applicable securities laws to which the Company or
any parent or affiliate of the Company is subject.
ARTICLE 4 DEALINGS WITH AFFILIATES OF VTI AND ACCOUNTING
4.01 The Company will from time to time at the request of VTI manufacture
Bearings for affiliates of VTI for sale outside of the People's Republic of
China in such quantity and of such type and dimensions as are specified by such
affiliate.
181
4.02 The Company will establish and maintain books of account in accordance with
local and United States generally accepted accounting principles and will on
request provide to VTI access to such books of account at such places and such
times as VTI may designate.
4.03 The Company will adopt and maintain a fiscal year ending on December 31.
4.04 Within two months of the end of each fiscal year, the Company will prepare
or cause to be prepared, and provide to VTI, an audited balance sheet, a
statements of income and comprehensive income, statements of cash flow, a
statement of changes in stockholders' equity and such other statements and
information as is requested by VTI, all prepared in accordance with United
States generally accepted accounting principles.
ARTICLE 5 ASSIGNMENT NOT PERMITTED
5.01 Except for dealings with Fujita done for and on behalf of VTI and such
agreements with affiliates of VTI as are from time to time designated by VTI,
the Company may not set over, assign or transfer, in all or in part, the right
to use the VTI Property to manufacture or sell Bearings.
ARTICLE 6 TERMINATION OF AGREEMENT
6.01 This Agreement will terminate on the earlier of December 31, 2050 or:
(a) on the liquidation of the Company under the Foreign Investment Enterprises
Liquidation Procedures of the People's Republic of China;
(b) if the Company fails to enter into an agreement as described with Zhou and
maintain that agreement in good standing;
(c) if the Company should do any act which may result in the set over,
assignment or transfer to a third party not designated by VTI of the VTI
Property licensed to be used under this Agreement;
(d) if the Company should become insolvent, make under applicable law an
assignment for the benefit of its creditors or petition a court in bankruptcy
for relief from its creditors or the appointment of a receiver, trustee or other
such person to manage the affairs of the Company or liquidate the affairs of the
Company for the benefit of its creditors; or
(b) the time at which VTI determines that any of the Comapny or its legal
representative is in breach of any condition in this Agreement.
ARTICLE 7 ARBITRATION
7.01 All disputes under this Agreement will be settled by the parties in the
spirit of equality and cooperation and if not agreed between the parties will be
settled by reference to a single arbitrator under the Supplementary Regulations
of the Shantou Special Economic Zone for Encouragement of Foreign Investment as
agreed upon by the parties, or if not agreed upon within four weeks of either
party giving notice of a dispute, then as designated by VTI.
182
ARTICLE 8 GENERAL PROVISIONS
8.01 Time is of the essence of the performance of every obligation under this
Agreement, and no failure or lack of diligence by any party in proclaiming or
seeking redress for any violation of, or insisting on strict performance of, any
provision of this Agreement will prevent a subsequent violation of that
provision, or of any other provision, from giving rise to any remedy that would
be available if it were an original violation of that provision or another
provision.
8.02 This Agreement will be binding upon and enure to the benefit of the
respective heirs, executors, administrators and other legal representatives and,
to the extent permitted hereunder, the respective successors and assigns, of the
parties.
8.03 Unless otherwise provided herein, any notice, payment or other
communication to a party under this Agreement may be made, given or served by
delivery, telecopy or email and addressed as follows:
(a) if to VTI:
Vibro-Tech Industries, Inc.
201-11240 Bridgeport Road
Richmond, B.C. V6X IT2
Attention: Xx. Xxxxxxx Xxxx, President
Fax: 000-000-0000
Email: xxxxxxx@xxxxx-xxxx.xxx
----------------------
(b) if to the Company:
Shantou Vibro-Tech Industrial and Development Co Ltd.
Long Xxx Xxx Xxxx
Xxxxxxx Xxxx, Xxxxxxxxx Xxxxxxxx, 000000 Xxxxx
Tel/Fax: 000-00000-0000-0000
8.04 Any notice, payment or other communication so delivered, telecopied or
emailed will be deemed to have been given or served at the time of delivery or
transmission by telecopy or email.
8.05 A party may by notice change its address for service.
8.06 This Agreement constitutes the entire agreement between the parties and
supercedes all previous agreements or understandings between the parties in any
way relating to its subject matter and the Company has made not representations,
inducements, warranties or promises concerning this Agreement or the matters
referred to herein which are not embodied in this Agreement.
183
IN WITNESS WHERE OF this Agreement has been executed by the parties as at the
date first above written.
VIBRO-TECH INDUSTRIES, INC.
By: /S/ Xxxxxxx Xxxx
Print Name: Xxxxxxx Xxxx
SHANTOU VIBRO-TECH INDUSTRIAL AND DEVELOPMENT CO. LTD.
By: /s/ Xxx Xxxxx
Print Name: Xxx Xxxxx
30071108/1-6
