AGREEMENT
AGREEMENT
This
AGREEMENT entered into on December 5, 2007, by and between ARBOC GROUP, LLC
("The ARBOC Group" herein) and Consolidated Leisure Industries, LLC ("CLI"); a
limited liability company organized and existing under the laws of the State of
Indiana.
WHEREAS,
CLI owns certain subsidiaries that are engaged in the designing, manufacturing,
marketing and selling recreational vehicles ("RVs") for a number of
years:
WHEREAS,
members of The ARBOC Group, through an entity known as ARBOC Technologies, LLC,
have developed a unique and patented design of a handicapped-accessible vehicle
commonly referred to as a Low Floor Light Duty Bus ("The Product");
WHEREAS,
CLI is a wholly owned subsidiary of Coachmen Industries, Inc., a publicly traded
company in the United States;
WHEREAS,
CLI must comply with all applicable United States regulatory and statutory
restrictions, including compliance with the Xxxxxxxx-Xxxxx Act and must take any
action deemed necessary by its parent company, Coachmen Industries,
Inc.;
WHEREAS,
CLI and The ARBOC Group wish to combine their efforts to manufacture, market and
sell The Product through a company, ARBOC MOBILITY, LLC, a limited liability
company formed under the laws of the State of Michigan.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements and
covenants herein contained, the parties hereby agree as follows:
ARTICLE
1-ORGANIZATION AND CAPITALIZATION OF ARBOC MOBILITY, LLC
Section 1.01. ARBOC MOBILITY, LLC.
By mutual consent and acting in concert, the parties have caused to be
formed a new limited liability company formed under the laws of the State of
Michigan named ARBOC MOBILITY, LLC. The Articles of Organization and Operating
Agreement shall be as mutually agreed by CLI and The ARBOC Group. The principal
office of ARBOC MOBILTY shall initially be located in Middlebury, Indiana, and
ARBOC MOBILITY, LLC shall have such other offices as determined by its Board of
Directors.
Section 1.02. Purpose of ARBOC MOBILITY, LLC.
The purpose of ARBOC MOBILITY, LLC shall be to establish and expand a
market for The Product which shall be manufactured exclusively by CLI, subject
to the terms and provisions of this Agreement, and to engage in other business
consistent with this Agreement as may be determined by its Board of
Directors.
Section 1.03. Initial
Contributions. The authorized membership units of ARBOC MOBILITY, LLC
initially shall be 1000 membership units. ARBOC MOBILITY, LLC shall issue thirty
percent (30%) of the units to CLI and seventy percent (70%) to The ARBOC Group.
Notwithstanding the disparity in ownership of units, the Membership units issued
to CLI and The ARBOC Group shall give fifty percent (50%) of the voting units in
ARBOC MOBILITY, LLC to CLI and to The ARBOC Group respectively. As full
consideration for such shares, CLI and The ARBOC Group shall provide the
services, capital and other benefits identified in this Agreement.
Section 1.04. Additional Capital
Contributions. In addition to the initial capital contributions, the
Members may determine from time to time that additional capital is needed to
enable the Company to conduct its business and affairs including but not limited
to the expenses or xxxxxxx money deposits associated with the acquisition of
real property. After making such a determination, and upon approval of at least
75% of the Membership Interests, notice shall be given to all Members in writing
at least 30 days before the date on which the additional contributions are due.
The notice shall describe, in reasonable detail, the purposes and uses of the
additional capital, the amounts of additional capital required, and the date by
which payment of the additional capital is due. Each Member's percentage of the
total additional capital due shall equal the percentage of each Member's
Membership Interest in the Company.
Section
1.05. Transferability of Membership Units.
(a) Transfer
to a Third Party. Neither party shall voluntarily transfer, sell, assign,
pledge, hypothecate, give or otherwise dispose of all or any portion of its
Membership Units without the prior written approval of ,the other party, except
in connection with a termination of the parties' relationship pursuant to
Article 5.
(b) Purpose.
Each party acknowledges and agrees that the restrictions on transfer of units of
ARBOC MOBILITY, LLC herein are reasonable in view of the purpose and intent of
the parties.
(c) Non-Dissolution.
Each party hereby agrees not to petition any authority for the involuntary
dissolution of ARBOC MOBILITY, LLC in the event that (1) the other party refuses
to approve the transfer or other disposition of Membership Units pursuant to
subsection 2.07(a) hereof, or (ii) the other party defaults in any obligation
under this Agreement to purchase any Membership Units of the first
party.
ARTICLE
2-FINANCING OF ARBOC MOBILITY, LLC
Section 2.01. General Financing
Requirements for ARBOC MOBILITY, LLC. Subject to the conditions stated in
this Agreement, it is intended that funding for operating costs as outlined in
Exhibit 1 hereto shall be provided by CLI. As consideration for such funding,
ARBOC MOBILITY, LLC shall execute a line of credit promissory note in the form
substantially similar to Exhibit 2 hereto. Interest shall accrue on all
indebtedness owed by ARBOC MOBILITY, LLC under said Line of Credit Promissory
Note at the rate 1% per month on the principal balance without compounding
interest. CLI agrees to provide up to Five Hundred Thousand Dollars
($500,000.00) up to and through January 31, 2008. In the event that ARBOC
MOBILITY, LLC is unable to finance its own operating expenses after January 31,
2008, then the provisions of Section 2.03 hereof shall govern.
Section 2.02. Conditions To CLI's
Financing. Upon the issuance of five (5) days written notice of
termination, CLI shall have no further obligation to finance the operations of
ARBOC MOBILITY, LLC. Upon issuance of the notice of termination hereunder, CLI
shall remain obligated to complete the manufacture of any units that are in
process within a timely manner. If such notice of termination is issued by CLI,
then CLI shall transfer its equity ownership in ARBOC MOBILITY, LLC to The ARBOC
Group upon receipt of payment of any outstanding balances on the Line of Credit
note issued in accordance with this Agreement, and CLI shall forfeit its
exclusivity in any intellectual property rights granted hereunder.
Section 2.03. Financing of
Administrative Expenses after January 31, 2008. In the event that ARBOC
MOBILITY, LLC is unable to finance its own operating expenses after January 31,
2008, then CLI, may at its option, elect to continue to finance such operating
expenses on a month-by-month basis in accordance with the terms hereof without
further commitment until such time as cash flow of ARBOC MOBILITY, LLC enables
it to finance its own operating expenses. Notwithstanding CLI's rights
hereunder, it shall have no obligation to continue to fund operating expenses
after January 31,2008.
Section 2.04. Outside
Financing. No additional financing shall be obtained by ARBOC MOBILITY,
LLC without the written consent of the parties hereto.
ARTICLE
3-ENTITLEMENTS TO PROFITS
The
parties shall be entitled to distribution of the profits of the company in
accordance with their equity ownership in ARBOC MOBILITY, LLC up to the amount
of the projected Pre-Tax Profitability as stated in Exhibit 3 hereof. To the
extent that ARBOC MOBILITY, LLC shall generate profits in excess of said
projected amounts, then CLI and The ARBOC GROUP shall share equally in any such
excess profits. After year 3, the profits will be split in accordance with the
parties equity ownership interest in the ARBOC MOBILITY, LLC (30% to CLI and 70%
to The ARBOC Group) up to a maximum profit of the lesser amount of the year
three (3) profitability from the Projections or the actual profitability of
ARBOC MOBILITY, LLC from year three of operations provided that CLI meets the
production demand of the lesser of 669 units or the actual sales orders with
reasonable lead time submitted that calendar year. For any profits realized in
an amount greater than the lesser of these two figures, the profits shall be
shared equally without consideration to the equity ownership of the parties
hereto.
ARTICLE
4-MANAGEMENT OF ARBOC MOBILITY, LLC
Section 4.01. General. The
powers, responsibilities and procedures of the members, the Board of Directors,
the Operating Management, and officers, managers and deputy managers of ARBOC
MOBILITY, LLC shall be as specified in this Agreement and in the Articles of
Organization and Operating Agreement (or By-Laws) of ARBOC MOBILITY,
LLC.
Section 4.02. Meetings of Members.
Annual and special meetings of the members shall be conducted as provided
in the Articles of Organization and Operating Agreement.
Section 4.03. Member
Issues. Neither party shall petition any authority for the
involuntary dissolution of ARBOC MOBILITY, LLC on the grounds of division or
dissension of the members or the Board of Directors.
Section 4.05. Operating Management.
The Operating management of ARBOC MOBILTY, LLC is made up of the
Executive Management.
The
Executive Management shall be comprised of a total of four (4) members, (2)
assigned by each of CLI and The ARBOC Group.
Section 4.06. Audit of ARBOC
MOBILITY, LLC. At the request of Executive Management, CLI may conduct an
internal audit to monitor the financial performance of ARBOC MOBILITY, LLC and
shall report the findings from all such audits to the Executive Management and
the Members of the Board of Directors. ARBOC and CLI agree to cooperate with
such internal auditors fully and to provide access to all information and
records necessary for the conduction of such audit(s). All findings and working
papers of the auditors shall be available to CLI and ARBOC. ARBOC MOBILITY, LLC
shall be responsible for paying all costs associated with the internal audit
including the time and expense incurred by CLI in completing the
audit.
Additionally,
CLI shall have the right to conduct such an internal audit at its own expense at
anytime.
Section 4.07. External Audit.
Executive Management shall have the authority to retain external
auditors.
Section 4.08. Reporting
Obligations. As determined by the Executive Management, ARBOC MOBILITY,
LLC shall report to the Executive Management, the daily, weekly, monthly,
quarterly and annual financial performance numbers.
Section 4.09. Administrative
Services. Executive Management shall have the authority to arrange for
the outsourcing of the administrative functions of the ARBOC MOBILITY, LLC.
Initially, these functions will be performed CLI.
ARTICLE
5-CONTRACTS WITH CLI
Section 5.01. Contracts with
CLI. ARBOC MOBILITY, LLC shall purchase products made by CLI in
accordance with the terms of the Long Term Supply Agreement and Long Term
Services Agreement that are attached hereto as Exhibits 1 and 4 provided that
CLI shall reasonably satisfy the production requirements of ARBOC MOBILITY,
LLC.
Section 5.02. Other Contracts
Prohibited. ARBOC MOBILITY, LLC will exclusively sell, market and
distribute only products made or licensed by CLI, except with the prior written
consent of CLI, which consent may be withheld for any reason.
Section 5.03. Exclusive Patent
Rights. ARBOC MOBILITY, LLC has the exclusive license for certain
patent(s) necessary for the design and manufacture of The Product. Said Patents
are more fully depicted in Schedule 1 hereto. ARBOC MOBILITY, LLC agrees to
obtain the consent of the patent holder to license and/or assign its rights
under such exclusive license to CLI for the manufacture, design, sale and other
related matters of The Product at no cost or royalty fee to CLI, and to execute
appropriate agreements to document such entitlements. Further, the parties
hereto agree that CLI shall have the right to issue any necessary sub-license of
the patents for the specific purpose of enabling third parties to provide
services in relation to CLI's manufacture of The Product. CLI shall further have
the exclusive right to obtain further license of the technology for use with
unrelated products. The terms of any such further license, including the license
fee to be paid to ARBOC MOBILITY, LLC, shall be the subject of a separate,
independent agreement.
Section 5.04. Improvements,
Innovations, Designs or Inventions. Any improvements, innovations,
designs or inventions developed, discovered or acquired by ARBOC MOBILITY, LLC
applicable to the manufacture, design, or distribution of The Product shall be
exclusively licensed to CLI, royalty free, for use in the North American Free
Trade Agreement area.
ARTICLE
6-TERMINATION
Section 6.01. Events of
Termination. The parties' relationship, but not necessarily ARBOC
MOBILITY, LLC, shall be terminated by mutual agreement of the parties or upon
the occurrence of any of the following events:
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i.
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If
ARBOC MOBILITY, LLC requires capital to fulfill its agreed upon objectives
in an amount in excess of the amount CLI has agreed to provide pursuant to
Article 2 hereof, and CLI and ARBOC after discussions, are unable to reach
agreement on the further capital financing of ARBOC MOBILITY,
LLC;
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ii.
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If
a deadlock occurs in the Executive Management (subject to the provisions
of Article 9).
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iii.
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In
the event that CLI purchases the equity interests of The ARBOC Group in
accordance with paragraph 6.02
hereof.
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iv.
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Five
(5) days after issuance of a notice of termination or intent not to fund
issued under paragraph 2.02 hereof;
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v.
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Five
(5) days upon CLI's issuance of written Notice of Termination upon the
failure of ARBOC MOBILITY, LLC to meet the following minimum firm sales
orders on a cumulative basis:
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i.
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March
31,2008: 45
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ii.
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June
30, 2008: 75
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iii.
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September
30, 2008: 105
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iv.
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December
31,2008: 135
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v.
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The
failure to procure a minimum of thirty (30) sales in any subsequent fiscal
quarter.
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For the
purposes of this subsection, a "sale" shall mean receipt of a firm, irrevocable
purchase order.
Section
6.02. CLl's Right to Purchase Interests of The ARBOC Group.
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i.
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(a) after
the completion of the second fiscal year of ARBOC MOBILITY, LLC, CLI shall
have the exclusive right to purchase the ownership interest of The ARBOC
Group if and only if the Pre-Tax Profit Projections are met or exceeded.
In the event that Pre-Tax Profit projections are not met or exceeded, then
CLI shall have the absolute right to assume control of the management of
ARBOC MOBILITY, LLC and shall have the exclusive right to purchase the
ownership interests of The ARBOC Group at the conclusion of the third
fiscal year of operation.
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ii.
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(b) Valuation.
The parties shall agree upon the value of the ownership interest, taking
fully into account CLI's thirty percent (30%) interest in profits up to
the Projections and fifty percent (50%) interest in profits that exceed
the Projections. In the event that the parties are unable to agree upon a
valuation. Then, each party shall select a single business valuation
expert ("valuator") who must have automotive industry experience. The
parties agree that the method of valuation shall be a discounted projected
cash flow valuation. The determinative value shall be the mean of the two
valuator's opinions provided that the valuator's opinions are within
twenty percent (20%) of the other's opinion. In the event that they are
not within twenty (20%), then a third business valuator who shall be
selected jointly by the valuators shall reach a final, determinative
opinion of the value of The ARBOC's Group's ownership
interest.
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iii.
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(c) Timing
of Exercise of Option. CLI may exercise its option within 30 days of the
end of any fiscal year or 30 days within the end of any mid-fiscal year by
providing written notice of the intent to exercise to The ARBOC
Group.
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iv.
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(d) Terms
of Purchase. The terms of CLI's purchase hereunder shall be cash up to a
maximum of Two (2) million dollars with any remaining balance payable on a
five year term with a two year balloon at the Prime Rate minus one
provided that CLI shall pledge the acquired membership units as collateral
for the repayment of any such balance. Payments under such obligation
shall be made on a monthly basis.
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Section 6.03. Rights and
Obligations. If the relationship is terminated pursuant to written
notification from CLI, then CLI shall transfer to The ARBOC Group one hundred
percent (100%) of CLI's ownership interest in ARBOC MOBILITY, LLC upon the
satisfaction of all indebtedness owed to CLI by ARBOC MOBILITY, LLC and for no
additional consideration. ARBOC MOBILITY, LLC shall pay any balances owing under
the Line of Credit note provided for herein shall be due and payable within one
hundred eighty (180) days of any notice of termination. In the event that ARBOC
MOBILITY, LLC shall be terminated upon any other basis contained in this
ARTICLE, ARBOC MOBILITY, LLC shall satisfy all outstanding liabilities and the
remaining assets shall be distributed in accordance with the then existing
ownership interests of CLI and The ARBOC Group.
Section
6.04. Release, Discharge and Indemnification
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vi.
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Release
and Discharge. Upon a termination of the parties' relationship pursuant to
this Section, ARBOC MOBILITY, LLC and its successors and assigns shall
release and forever discharge CLI and The ARBOC Group and their respective
successors and assigns and their respective employees and directors
assigned to ARBOC MOBILITY, LLC from any and all claims, demands, costs,
expenses, or compensation for or on account of any damages, loss, or
injury, whether developed or undeveloped, resulting or to result, known or
unknown, past, present or future, in any way arising out of, relating to,
or concerning liabilities and/or violations of the ARBOC MOBILITY, LLC
that have occurred on or before such
termination.
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vii.
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Indemnification
of CLI and The ARBOC Group. ARBOC MOBILITY, LLC and its successors and
assigns shall indemnify and hold harmless CLI and The ARBOC Group from and
against all liabilities incurred by them as a sole result of the events
specified in paragraph (i) of this subsection unless CLI or The ARBOC
Group to any extent, as independent entities, caused the liability or
violation. If an action, suit, or proceeding shall be commenced, or any
claim, demand or assessment be asserted against CLI or The ARBOC Group in
connection with such events and in respect of which CLI and The ARBOC
Group, as the case may be, proposes to demand indemnification, such party
may be, proposes to demand indemnification, such party demanding
indemnification shall notify ARBOC MOBILITY, LLC of such demand promptly,
and ARBOC MOBILITY, LLC shall have the right to assume the entire control
of the defense, compromise, or settlement thereof, including at its own
expense employment of counsel, and, in connection therewith, the party
demanding indemnification shall cooperate fully in such defense and make
available to the ARBOC MOBILITY, LLC all pertinent information under its
control.
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viii.
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Indemnification
of Employees, Officers and Directors of CLI and The ARBOC Group. ARBOC
MOBILITY, LLC and its successors and assigns shall, to the fullest extent
permitted by law, indemnify and hold harmless the employees, officers and
directors of CLI and The ARBOC Group assigned to ARBOC MOBILITY, LLC from
and against liabilities incurred by them as a result of the events
specified in paragraph (i) of this
subsection.
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ARTICLE
7-OPTION TO PURCHASE INTEREST
CLI shall
have the exclusive option to purchase the interest of the remaining members of
ARBOC MOBILITY, LLC in accordance with the provisions of Article 6
hereof.
ARTICLE
8 -CONFIDENTIALITY
Without
the other's prior written consent, the parties hereto agree to keep the
existence of this Agreement confidential and agree not to disclose the same
generally to the public except and unless as required by law.
ARTICLE
9-DISPUTE RESOLUTION
Other
than injunctive relief to enforce specific performance or the prohibitions under
this Agreement or the licenses and contracts contemplated hereunder, any
dispute, controversy or claim arising out of or relating to this Agreement or
the operation of ARBOC MOBILITY, LLC which has not been resolved in the normal
course through friendly discussions shall be settled first through discussions
to be conducted by personal meeting of the Chief Executive Officers of CLI and
The ARBOC Group in Middlebury, Indiana. In the event the parties are unable to
reach resolution within thirty (30) days following such discussions, then the
matter shall be submitted to non-binding mediation to be held in Elkhart,
Indiana. In the event that non-binding mediation is unsuccessful in reaching a
resolution, then either party may submit this matter to final and binding
arbitration to be held in Chicago, Illinois and to be conducted in accordance
with the Commercial Rules of the American Arbitration Association. If the
parties agree upon an arbitrator, then the matter may be scheduled and conducted
without the use of the administration of the American Arbitration Association.
If the parties cannot agree upon an arbitrator, the matter shall be submitted to
the American Arbitration Association for administration of the claim(s) in
accordance with the rules of this Agreement.
Each
party shall be solely responsible for its own costs. The arbitrator shall not
draft an opinion regarding his / her arbitral award. The arbitral award shall be
recognized and may be filed in and enforced by any court of competent
jurisdiction. The parties may use equitable and injunctive powers of any court
of competent jurisdiction to enforce compliance with this dispute settlement
procedure.
ARTICLE
10-COVENANTS
Section 10.01. Restrictive
Covenants. The parties agree that during the term of this Agreement and
for a period of two (2) years thereafter if CLI purchases ARBOC's interest
herein, neither party shall directly or indirectly
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(1)
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solicit
for employment or contract any employee of the other;
or
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(2) solicit
any of the others' or ARBOC MOBILITY, LLC'S customers or suppliers in relation
to sales of The Product or any similar products manufactured by any other other
vehicle manufacturer.
The ARBOC
Group further agrees that in the event that CLI shall terminate this
relationship or cease funding that for a period of two (2) years from such
termination or cessation of funding, The ARBOC Group will refrain
from:
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(1)
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solicitation
of any CLI employee;
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(2)
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solicitation
of any of CLI's (or its subsidiaries) recreational vehicle
customers.
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This
restrictive covenant specifically applies to all entities in which The ARBOC
Group possesses any ownership interest or employment relationship, including
ARBOC TECHNOLOGIES, LLC. The ARBOC Group agrees to deliver a restrictive
covenant in favor of ARBOC Mobility, LLC prohibiting ARBOC TECHNOLOGIES, LLC
from competing against it.
Section 10.02. Accurate
Records. ARBOC MOBILITY, LLC shall maintain complete and accurate books
and financial records, correctly reflecting all of its business transactions in
accordance with generally accepted accounting principles. CLI and The ARBOC
Group shall have complete and open access to such books and financial records.
The Chief Financial Officer and Controller of ARBOC MOBILITY, LLC shall serve at
the unanimous pleasure of The ARBOC Group and CLI.
Section 10.03. Disputes Concerning
Financial or Accounting Matters. In the event of any dispute concerning
the financial or accounting of ARBOC MOBILITY, LLC, the dispute shall be
referred an This restrictive covenant specifically applies to all entities in
which The ARBOC Group possess any ownership interest or employment relationship,
including ARBOC TECHNOLOGIES, LLC. The ARBOC Group agrees to deliver a
restrictive covenant in favor of ARBOC Mobility, LLC prohibiting ARBOC
TECHNOLOGIES, LLC from competing against it.
independent
accounting firm, whose decision and findings shall be final and binding. The
fees of said accounting firm shall be borne entirely by ARBOC MOBILITY, unless
the accounting firm also finds that either party was clearly in error, in which
case the party in error shall pay the fees of said accounting firm or, if
already paid, shall reimburse ARBOC MOBILITY, LLC all amounts paid for said
fees.
Section 10.04.
Confidentiality. The parties recognize that each may provide confidential
information, know-how, technology or other form of data in furtherance of the
objectives of ARBOC MOBILITY, LLC. The parties, therefore, agree to be bound by
the Confidentiality Agreement previously executed by the parties which is
attached hereto as Exhibit 5.
ARTICLE
11-REPRESENTATIONS AND WARRANTIES OF The ARBOC Group
Section 11.01 Validity of Patent
licenses. The ARBOC Group represents that the patents depicted herein in
Schedule 1 are valid and existing patents and further that the license of such
patents to ARBOC MOBILITY, LLC and subsequently to CLI is the only existing
license of said patents and shall remain exclusive in accordance with the
express terms of said license agreements. The ARBOC Group further agree to take
all necessary action to defend the rights in said patents to maintain current
protection of the technologies protected thereby.
Section 11.02 Absence of
Conflicts. The execution and delivery of this Agreement by The ARBOC
Group and the consummation of the transactions required hereunder (1) do not and
will not violate or conflict with any statute, regulation, judgment, order,
writ, decree or injunction currently applicable to The ARBOC Group or any of its
property or assets, and (ii) at and after the Closing will not violate or
conflict with any charter provision or bylaw of The ARBOC Group or any of its
business entities in which any member of The ARBOC Group possesses ownership
interests or any existing mortgage, indenture, contract, licensing agreement,
financing statement or other agreement binding on ARBOC.
Section 11.03. Survival of
Representations and Warranties. These representations and warranties
shall continue from date of execution of this Agreement and shall survive the
termination of this Agreement.
ARTICLE
12 -REPRESENTATIONS AND WARRANTIES OF CLI
Section 12.01 Organization and
Standing. CLI is a limited liability company duly organized, validly
existing, and in good standing under the laws of the State of Indiana with the
requisite power to enter into and perform its obligations under this Agreement
in accordance with its terms.
Section 12.02 Authority. CLI
has full right, power, and authority to execute and deliver this Agreement and
to perform its terms. CLI has taken all required corporate actions to approve
and adopt this Agreement. This Agreement is a duly authorized, valid and binding
agreement of CLI enforceable against it in accordance with its terms, subject as
to enforcement to bankruptcy, insolvency and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
Section 12.03. Absence of
Conflicts. The execution and delivery of this Agreement by CLI and the
consummation of the transactions required hereunder (1) do not and will not
violate or conflict with any statute, regulation, judgment, order, writ, decree
or injunction currently applicable to CLI or any of its property or assets, and
(ii) at and after the Closing will not violate or conflict with any charter
provision or bylaw of CLI or any of its subsidiaries or any existing mortgage,
indenture, contract, licensing agreement, financing statement or other agreement
binding on CLI.
Section 12.04. Survival of
Representations and Warranties. These representations and warranties
shall continue from date of execution of this Agreement and shall survive the.
termination of this Agreement.
ARTICLE
13-TAXATION AND INSURANCE
Section 13.01. Income Tax and Other
Taxes. ARBOC MOBILITY, LLC shall pay all taxes required under laws and
regulations of any governing bodies.
Section 12.02. Insurance.
ARBOC MOBILITY, LLC shall at all times maintain insurance coverage of the
types and in the amounts determined and approved by the Board of
Directors.
ARTICLE
14-FORCE MAJEURE
Neither
Party shall be liable for failure to perform its obligations hereunder due to
causes beyond its control, including but not limited to labor disputes, acts of
God, fire, flood or other catastrophes; any law, order, regulation or request of
governmental authority of competent jurisdiction, national emergencies,
insurrections, riots, wars, acts of terrorism, power failures, severe weather
conditions or acts or omissions of transportation common carriers.
ARTICLE
15 -MISCELLANEOUS PROVISIONS
Section 15.01. Duration of
Agreement. This Agreement shall continue in full force and effect unless
terminated in accordance with the provisions of Section 8.06 of Article 9
hereof.
Section 15.02. No Assignment.
Neither party to this Agreement may assign, transfer or otherwise convey any or
all of its rights or obligations hereunder without the prior written consent of
the other party, which may be withheld for any reason. Any attempt to assign,
transfer or otherwise convey such rights or obligations without the requisite
consents shall be void and of no effect.
Section 15.03. Entire Agreement:
Amendment. This document with the annexed Exhibits sets forth the entire
understanding between the parties relating to the subject matter contained
herein and merges all prior discussions between them. No amendment to this
Agreement shall be effective unless it is in writing and executed by the parties
hereto.
Section 15.04. Severability.
If anyone or more of the provisions contained in this Agreement or in any
document executed in connection herewith (other than provisions constituting a
material consideration to a party's entering into this Agreement or such other
document) shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired;
provided, however, that in such case the parties shall use their best efforts to
achieve the purpose of the invalid provision.
Section 15.05. Governing Law.
This Agreement and all actions contemplated hereby shall be governed by and
construed and enforced in accordance with the laws of the State of Indiana,
including the principles of conflict of laws thereof.
Section 15.06. Compliance with
Laws. ARBOC MOBILITY, LLC will strictly comply with all provisions of the
Xxxxxxxx-Xxxxx Act and other applicable laws. ARBOC MOBILITY, LLC shall defend,
indemnify and hold harmless ARBOC and CLI and any related companies for any
loss, action or damage incurred as a result of any noncompliance by ARBOC
MOBILITY, LLC with any such law.
Section 15.07 Notices. All
notices, certificates, requests, demands, and other communications hereunder
shall be in writing and may be personally served or sent by telex or certified
or registered mail. All such notices, certificates, requests, demands and other
communications shall be delivered to the party to receive same at the addresses
indicated below (or at such other addressees) as a party may specify in a
written notice).
If to
CLI:
Xxxxxxx
X. Xxxxxx
000 Xxxxx
Xxxx Xxxxxx
Xxxxxxxxxx,
XX
With copy
to:
Xxxxxxxx
Xxx
000 Xxxxx
Xxxx Xxxxxx
Xxxxxxxxxx,
XX
X.X. Xxx
00
000 Xxxxx
Xxxx
Xxxxxxxxxx,
XX 00000
If to The
ARBOC Group:
Xxxxx
Xxxxxx
0000 Xxx
Xxxxx
Xxxxxxxx
Xxx, XX 00000
With copy
to:
Xxxxxx
Xxxxxxxxx
0000
Xxxxx Xxxxxxx
Xxxxx
Xxx, XX
Section 15.08. Exhibits. The
Exhibits are an integral part of this Agreement and all references herein to
this Agreement shall encompass such Exhibits.
Section 15.09. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 15.10. Headings. The
inserted headings are for convenience only and should not be used to construe or
interpret this Agreement.
Section 15.11. Precedence. In
the event of a discrepancy or inconsistency between (i) this Agreement, and (ii)
the Articles of Organization, Bylaws or the procedures of ARBOC MOBILITY, LLC,
the provisions of this Agreement shall control to the extent permitted by
law.
Section 15.12. Drafting. This
Agreement and the Exhibits hereto have been negotiated at arms length, and the
parties hereto agree that neither shall be deemed responsible for the authorship
thereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
[SIGNATURES
ON NEXT PAGE]
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THE
ARBOC GROUP
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CONSOLIDATED
LEISURE INDUSTRIES, LLC
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/s/
Xxxxx X. Xxxxxx
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/s/
Xxxxxxx X. Xxxxxx, Xx.
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Member
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Xxxxxxx
X. Xxxxxx, Xx.
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Printed Name: Xxxxx X. Xxxxxx
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President
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Consolidated
Leisure Industries, LLC.
Long
Term Purchase/Supply Agreement
ADMINISTRATIVE
SERVICES AGREEMENT
This
agreement, dated the 5th day of
December 2007, is entered by and between Consolidated Leisure Industries, LLC an
Indiana limited liability company, hereinafter "CLI," and ARBOC MOBILITY, LLC.,
a Michigan Limited Liability Company, hereinafter "ARBOC".
Now
therefore, the parties hereto agree as follows:
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1
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Term. The term of this
agreement shall be from December 5,2007 to December
31,2012.
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2
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Purchase and sale of
Administrative Services. ARBOC commits to the purchase from CLI"
certain administrative services, including but not limited to human
resources, accounting, payroll, benefits, IT, legal and other
administrative services in accordance with the terms of this
Agreement.
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3
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Purchase Price. The
purchase price for Services covered by this Agreement shall be equal to
Twenty-Two Thousand Dollars ($22,500.00) per month. CLI shall have the
right to seek an annual adjustment of the amount paid hereunder based upon
experience.
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4
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Payment. Payment to CLI
shall be due within fifteen (15) days of submission of monthly statements
for the provision of such services. Interest on the any outstanding
balances shall accrue at the rate of 1% per
month.
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5
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Termination. In the
event that CLI shall terminate the Agreement executed by and between the
parties on even date herewith, then this Agreement shall immediately
terminate.
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THE
ARBOC GROUP
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CONSOLIDATED
LEISURE INDUSTRIES, LLC
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By: /s/
Xxxxx X. Xxxxxx
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By: /s/
Xxxxxxx X. Xxxxxx, Xx.
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Member
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Xxxxxxx
X. Xxxxxx, Xx. President
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Date: 12/5/07
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Date: 12/5/07
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Consolidated
Leisure Industries, LLC.
Long Term
Purchase/Supply Agreement
This
agreement, dated the 5th day of
December 2007, is entered by and between Consolidated Leisure Industries, LLC an
Indiana limited liability company, hereinafter "CLI," and ARBOC MOBILITY, LLC.,
a Michigan Limited Liability Company, hereinafter "ARBOC".
Now
therefore, the parties hereto agree as follows:
1. Term. The term of this
agreement shall be from December 5,2007 to December 31,2012.•
2. Purchase and Sale of Low Profile,
handicap accessible buses. In accordance with the terms of this
Agreement, ARBOC commits to the purchase from CLI the low profile, handicap
accessible buses to be sold by ARBOC (collectively, "The Products"
).
3. Purchase Price. The purchase
price for Goods covered by this Agreement shall be equal to CLI's cost to
manufacture (hereafter referred to as "cost of sales") The Products plus nine
percent (9%). CLI's "cost of sales· is comprised of material costs, factory
overhead costs and labor costs. CLI shall establish a standard cost of sales
based on established standard material, standard labor and standard overhead
costs. The parties hereto agree that for the Initial five production units, the
"cost of sales· shall be equal to the actual Incurred costs to manufacture.
Thereafter, the parties agree that, relying upon the data establishing the cost
to manufacture the initial five units, CLI shall establish a standard cost of
sales at a fixed figure for a period of calendar year quarters, subject to
adjustments due to variances from established standard costs only as
specifically provided herein. At the conclusion of each calendar year quarter
period, the established standard costs shall be republished by CLI
accounting for any deviations in the costs realized during the prior three (3)
month period that are not practically controllable by CU. Specific variances to
the pricing shall be allowed for certain commodities as provided in paragraph 4
hereof and for any deviation that is not practically controllable by CLI from
any single applicable Xxxx of Material item that is in excess of twenty percent
(20%). For any deviation that is not practically controllable by CLI in excess
of twenty percent (20%) ("The Recoverable Excess"), CLI shall be entitled to
charge ARBOC an amount equal to The Recoverable Excess and the same shall be
paid within thirty (30) days of receipt of a verified statement establishing the
same. Additionally, CLI will conduct a cost review at the end of each quarter
and within the first fifteen (15) days of each quarter, shall provide a verified
statement of any deviations that are not practically controllable by CLI from
the prior quarter's Xxxx of Materials. Any and all product changes made at
the request of ARBOC that result in a change to the standard cost of sales will
be passed through when the product change is implemented. Product changes
resulting in ongoing design, process or material changes will result in changes
to standard costs at time of Implementation.
For the
initial five (5) production units only, any amount of cost of sales in excess of
Fifty-Five Thousand Dollars ($55,000.00) per unit shall be charged to ARBOC as
an additional line item on invoices issued for the next one hundred (100) units
in equal proportion.
4. Adjustments for Steel, Aluminum and
Resin-based materials. The purchase price of Steel, Aluminum and
Resin-based materials shall be fixed for each calendar month and subject to
adjustment based upon published commodity prices for the same. For purposes of
this agreement, the initial baseline cost of steel, aluminum and resin-based
materials shall be as published by CLI. If pricing is adjusted, a new baseline
price will be established based on the "spot settlement price" of the commodity
as reported by NYMEX at the close of business on the last day of the month
preceding the month that prices are adjusted.
5. Payment. Payment to CLI shall
be made simultaneously upon receipt of payment from ARBOC's customer but in no
event in excess of thirty (30) days after sale to customer Any balances due
after thirty (30) days from the date of sale shall accrue interest at the rate
of 1% per month.
6. Inventory. CLI shall be under
no obligation to maintain a finished goods inventory of The Product sold
hereunder. Further, it Is understood that The Products sold by CLI to ARBOC
shall be subject to irrevocable purchase orders placed by ARBOC's
customers.
[SIGNATURES
ON PAGE 2]
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THE
ARBOC GROUP
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CONSOLIDATED
LEISURE INDUSTRIES, LLC
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By: /s/
Xxxxx X. Xxxxxx
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By: /s/
Xxxxxxx X. Xxxxxx, Xx.
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Member
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Xxxxxxx
X. Xxxxxx, Xx. President
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Date: 12/5/07
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Date: 12/5/07
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Line of
Credit Note
$1,000,000.00
On
December 5, 2007 the undersigned (the "Borrower"), who, if two (2) or more,
jointly and severally promises to pay to the order of CONSOLIDATED LEISURE
INDUSTRIES, LLC ("CLI'), at its main office, the lesser of ($1,000,000.00) or
the amount of advances made by CLI to Borrower under the terms and conditions of
the Long Term Supply Agreement and Long Term Services Agreement and the
Agreement all executed by and between CLI and Borrower on even date herewith
(said documents are attached to this instrument and marked as exhibits 1,2 and 3
respectively) (the "Agreements"). This Note may be declared forthwith due and
payable in the manner and with the effect provided in the Agreements or upon
termination of any one or more of the Agreements. This Note is the Note
described in the Agreement.
Interest
shall accrue hereon at the rate of one percent per annum, compounded
annually.
The
Borrower may prepay this note in whole or in part at any time.
CLI is
authorized to make, from time to time and based upon CLI's records, notations on
its records as to the date and amount of each advance, the date and amount of
each payment of principal and interest received by CLI, the principal balance of
this note, and the date to which interest has been paid. On a monthly basis, CLI
will provide to Borrower a Borrowing Certificate that shall state the principal
and accrued interest outstanding on this Note.
Borrow~
shall be in default under this Note if, upon termination of any of The
Agreements, Borrower fails to pay the entire amount due hereunder within one
hundred eighty (180) days of issuance of such written notice of
termination.
Borrower
shall promptly reimburse CLI for all reasonable costs and expenses (including,
but not limited to, attorney fees) incurred by CLI in pursuing its rights
hereunder.
Any
request, notice, or demand by or on behalf of CLI, when delivered, or deposited
for delivery, postage prepaid, by certified or registered United States mail to
Borrower at Borrower's address set forth below, shall constitute, but shall not
preclude other means of, an effective request, notice, or demand. Borrower
waives all notices and demands in connection with the delivery, acceptance,
performance, default or enforcement of this note(including, without limitation,
presentment and notice of dishonor). All provisions of this note shall be
governed by and interpreted in a manner consistent with applicable Indiana and
United States law. Unenforceability of any provision or any application of any
provision of this note in any jurisdiction shall not affect the enforceability
of such provision or such application in any other jurisdiction or of any other
provision or any other application of any other provision of this note in any
jurisdiction.
“BORROWER”:
ARBOC MOBILITY, LLC
By: /S/ Xxxxx X
Xxxxxx
Member
Printed Name: Xxxxx X
Xxxxxx
(Printed Name and Title)
Borrower's
address:
NONDISCLOSURE
AND CONFIDENTIALITY AGREEMENT
Between
CONSOLIDATED
LEISURE INDUSTRIES, LLC
and
ARBOC
1. This
Agreement is entered into by Consolidated Leisure Industries, LIC , an Indiana
limited liability company ("CLI") and ARBOC ("ARBOC"). CLI and ARBOC desire to
discuss certain information relating to a possible creation of a Joint Venture.
During the course of such discussions, ARBOC and CLI will have access and
exposure to technical, confidential and proprietary knowledge and information
owned by the other party. The parties hereto stipulate and agree that such
disclosure and said discussions in contemplation of a possible business
relationship are each, separately, sufficient valuable consideration for this
Agreement.
2. ARBOC
recognizes that CLI's business involves confidential and proprietary knowledge
and information, including methods, processes, techniques, financial data,
customer lists, equipment designs, and skills ("Information") vital to its
security and growth. ARBOC recognizes that CLI has researched, investigated,
advertised, solicited, rendered services, obtained customers and expended large
sums of money developing and supporting its Information, and acknowledges that
any disclosure of Information would substantially injure its business, impair
its investments and goodwill, injure the business of CLIs representatives and
jeopardize CLI's relationships with its representatives, suppliers, and
customers. ARBOC understands that any Information revealed by CLI to ARBOC in
contemplation of performance of a contract or relationship between CLI and ARBOC
remains the exclusive property of CLI unless expressly stated
otherwise.
3. CLI
recognizes that ARBOC's business involves confidential and proprietary knowledge
and information, including methods, processes, techniques, financial data,
customer lists, equipment designs, and skills ("Information") vital to its
security and growth. CLI recognizes that ARBOC has researched, investigated,
advertised, solicited, rendered services, obtained customers and expended large
sums of money developing and supporting its Information, and acknowledges that
any disclosure of Information would substantially injure its business, impair
its investments and goodwill, injure the business of ARBOC's representatives and
jeopardize ARBOC's relationships with its representatives, suppliers, and
customers. CLI understands that any Information revealed by ARBOC to CLI in
contemplation of performance of a contract or relationship between CLI and ARBOC
remains the exclusive property of ARBOC unless expressly stated
otherwise.
4. The
parties hereto will not use, except for the above purposes, or disclose or
communicate to any third party, or to any of its employees who do not need to
know in the performance of their duties, any Information received from the
other, except with the prior written permission from the other party and only
after signing an agreement binding them to the protection and non-disclosure of
the Information to the same extent as hereunder. The parties hereto will, upon
request by the other, surrender any and all originals, copies, data, drawings,
notes, extracts, summaries and other records of, or concerning, the requesting
party's Information. The parties further agree to use their best efforts to
regain any such materials that have been transmitted to any third
party.
5. The
parties, on behalf of themselves, their employees, and their subsidiaries and
related organizations, acknowledge and agree that all Information received from
the other during any preliminary negotiations prior to the date of execution of
this Agreement is subject to this Agreement.
6. The
parties agree to take all reasonable and necessary steps to protect the
confidentiality of the Information and data disclosed, and will use at least the
same degree of care with respect to the Information as it does with their own
confidential information.
7. Restrictions
on use and obligations of confidentiality and nondisclosure shall remain in
effect for five (5) years after the last date written below, provided that such
restrictions and obligations will not apply to information which:
(a) is
already known by the recipient party, as shown by written records in its
possession at the time such information is received;
(b) is
already part of the public domain at the time of disclosure, or subsequently
becomes part of the public domain through no fault of party owning the
Information;
(c)
becomes available to a party hereto from a third party who is not under
obligation to party owning the Information with respect thereto;
or,
(d) is
independently developed
by an
employee or consultant of a party hereto who had no knowledge of or access to
the Information.
All
Information disclosed hereunder shall be presumed to be confidential and
proprietary unless shown otherwise. The restrictions and obligations apply to
non-patented novel combinations or applications of known processes or methods
that are not as a whole known to the parties or to those persons ordinarily
skilled in the art
8. The
mere furnishing of any Information by the parties hereto is not a grant by
implication. estoppel, or otherwise, of any license under any invention. trade
secret, patent, trademark, or copyright now or hereafter owned or controlled by
CLI. Any such right shall be the subject of a definitive agreement establishing
its existence.
9. This
Agreement shall be interpreted under the laws of the State of Indiana, and both
parties stipulate that venue is proper in the state and federal courts located
in Indiana for any controversy or claim arising out of this Agreement of the
disclosures made hereunder. The parties acknowledge that, in the event of a
breach of this Agreement, the non-breaching party shall be entitled to
injunctive and other equitable relief to protect its Information; as well as
damages. reasonable attorney's fees, and expenses of litigation.
10. In
the event that any provision of this Agreement is found to be void or
unenforceable by a court of competent jurisdiction. such finding shall be valid
only in that jurisdiction, and no other provision shall be
affected.
11. No
waiver of any restriction or obligation in any instance shall be deemed to be a
continuing waiver or a waiver in any other instance.
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ARBOC
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CONSOLIDATED
LEISURE INDUSTRIES, LLC
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By: /s/
Xxxxx X. Xxxxxx
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By: /s/
Xxxxxxx X. Xxxxxx, Xx.
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Xxxxx X
Xxxxxx
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Xxxxxxx
X. Xxxxxx, Xx.
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(Printed
Name)
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(Printed
Name)
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Title: President
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Title: President
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Date: 12/5/07
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Date: 12/5/07
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