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EXHIBIT 10.8
ASSET SALE AGREEMENT
PARTIES:
Agreement made and entered into this 31st day of December, 2002, by and
between BALLANTYNE OF OMAHA, INC., a Delaware corporation with its principal
place of business at 4350 McKinley Street, Omaha, Nebraska 68112, ("Seller"),
and STRONG AUDIOVISUAL INCORPORATED, a Florida corporation ("Purchaser"), with
its principal place of business at 901 Central Florida Parkway, Orlando, Florida
32824.
RECITALS:
This Agreement is made with reference to the following facts and
objectives:
A. Seller owns and operates an audiovisual rental division under the
trade name of "Strong Communications."
B. Seller desires to sell all of the furniture, fixtures, equipment and
other operating assets of the Strong Communications division as a
going concern owned by it on the terms and conditions set forth in
this Agreement.
C. Purchaser desires to purchase all of the furniture, fixtures,
equipment and other operating assets of the Strong Communications
division as a going concern owned by Seller on the terms and
conditions set forth in this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the recitals and the mutual agreements,
provisions and covenants herein contained, Seller and Purchaser hereby agree as
follows:
1. SALE OF ASSETS. Subject to the terms and conditions of this Agreement,
Seller agrees to sell, assign, transfer and deliver to Purchaser, and
Purchaser shall buy, accept and receive from Seller on the closing
date the following described property and assets (collectively the
"Assets"), free and clear of all liens and encumbrances.
1.1 FURNITURE, FIXTURES AND EQUIPMENT. All items of machinery,
equipment, furniture, fixtures, maintenance supplies, and other
tangible personal property used in connection with the operation
of the Strong Communications division and owned by Seller
(collectively the "Equipment"), including, but not limited to,
those listed on Exhibit "1" which shall be prepared jointly by
Seller and Purchaser as a post-execution matter, as provided in
Section 11, and shall be attached hereto and incorporated by this
reference.
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1.2 LEASES, SERVICE AGREEMENTS, AND OTHER CONTRACTS. Purchaser shall
assume all of Seller's right, title, interest in, to and under
the Leases, Service Agreements and Contracts, written or oral,
express or implied, and all amendments, modifications,
supplements and extensions thereof, currently in effect with
respect to the operation of the Strong Communications division,
and as listed on Exhibit "2", which shall be prepared by Seller
and Purchaser as a post-execution matter, as provided in
Section 11, and shall be attached hereto and incorporated herein
by this reference. At closing, Purchaser shall, in writing,
assume such Leases, Services Agreements and Contracts.
1.3 INTELLECTUAL PROPERTY. All (a) trademarks, trade names,
service marks, logos, licenses and labels, together with all
translations, adaptions, derivations and combinations thereof
and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection
therewith, (b) copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection
therewith, (c) trade secrets and confidential business
information (including ideas, know-how, technical data,
customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (d) computer
software, and (d) other proprietary rights owned by Seller in
connection with the operation of the Strong Communications
division, including, but not limited to, the U.S. trademark
"Strong Communications."
1.4 BOOKS AND RECORDS. Copies, and to the extent reasonably
necessary or appropriate, originals, of those books, records
and other documents pertaining to the Assets or the Strong
Communications division, as Purchaser may reasonably request,
whether at Closing or at any time thereafter.
1.5 GOODWILL; ALL OTHER PROPERTY. All of the goodwill of the
Strong Communications division as a going concern, and all
other property, whether personal or real, tangible or
intangible, wherever located, to the extent not referred to in
Sections 1.1 through 1.4 above, and to the extent in existence
and pertaining or attributable to the Strong Communications
division; provided, however, that Purchaser shall not assume
or otherwise acquire any contracts or leases not expressly
listed on Exhibit "3".
2. CONSIDERATION PAYABLE TO SELLER BY PURCHASER FOR ASSETS.
2.1 PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, and in reliance upon the representations and
warranties of Seller herein contained, and in consideration of
the sale, assignment, transfer and delivery of the Assets by
Seller to Purchaser, pursuant to Section 1 hereof, Purchaser
agrees to purchase the Assets from Seller and to pay to Seller
the sum of Two Hundred Thousand Dollars ($200,000.00).
2.2 PAYMENT OF PURCHASE PRICE. The Purchase Price is to be paid by
means of wire transfer.
2.3 ADDITIONS TO AND REDUCTIONS OF THE PURCHASE PRICE.
2.3.1 All prepaid items of income and expense, including, but
not limited to, rental payments or deposits under leases,
utility charges, service contracts and prepaid
maintenance charges shall be prorated based upon portions
of particular periods following before and after the
Closing Date.
2.3.2 All personal property taxes which are applicable to the
purchased Assets shall be prorated to the date of
closing.
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2.3.3 Utilities shall be read and transferred to Purchaser as
near as practicable to the Closing Date. All utility or
other deposits previously made by Seller will remain the
property of Seller, and Purchaser will have no interest
therein unless Purchaser reimburses Seller for such
deposits at closing.
2.3.4 The net proration as determined in accordance with
Sections 2.3.1, 2.3.2, and 2.3.3 shall be paid or
credited at the closing.
2.4 ASSUMPTION OF LIABILITIES. Notwithstanding any other provision of
this Agreement, Purchaser does not assume and shall not be deemed
to have assumed any liability or obligation of Seller not listed
on Exhibit "2", unless expressly assumed pursuant to written
instruments executed and delivered by Purchaser at the closing
(collectively the "Assumed Liabilities"). Purchaser will not
assume or have any responsibility, however, with respect to
any other obligation or liability of Seller not included
within the determination of Assumed Liabilities, including,
but not limited to:
2.4.1 Any liability or obligation of Seller for any taxes
(including interest and penalties thereon) or deferred
taxes imposed on or measured by Seller's income for any
period or periods ending before or after the closing
date, including federal, state and local income taxes,
withholding taxes, Social Security taxes, and other
similar taxes.
2.4.2 Any liability or obligation of Seller for any sales, use
or gross receipts tax payable by Seller with respect to
any period or transaction ending or occurring before the
Closing Date.
2.4.3 Any liability or obligation of Seller for any accounts
payable or under any loan agreement or lease agreement,
except as otherwise specifically provided for herein.
2.4.4 Any liability or obligation of Seller relating to any
employee salaries, wages, benefits, commissions,
bonuses, insurance claims, payroll taxes or the like
with respect to any period or transaction ending or
occuring before the Closing Date.
3. CLOSING.
3.1 CLOSING. Subject to the terms and conditions contained in this
Agreement, the transfer of the Assets to Purchaser by Seller and
the consummation of the transactions contemplated by this
Agreement (the "Closing") will take place by means of exchanging
of documents and a wire transfer of funds on a date to be
mutually determined, but no later than December 30, 2002, (such
date of closing, or if the closing is advanced or postponed under
this Section 3.1, then the date to which it is advanced or
postponed, being herein referred to as the "Closing Date").
3.2 PURCHASER'S OBLIGATIONS AT CLOSING. At the closing, Purchaser
shall:
3.2.1 PAYMENT. Pay to Seller by wire transfer the purchase
price due, pursuant to Section 2.2.1 of this Agreement.
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3.2.2 INSTRUMENTS OF ASSUMPTION. Deliver such instruments as
may be reasonably required for Purchaser to assume all of
Seller's obligations that Purchaser has agreed to assume
as set forth on Exhibit "2".
3.2.3 RESOLUTION. Deliver a copy of the Resolution of the Board
of Directors of Purchaser authorizing the transactions
contemplated by this Agreement, certified by the
Secretary.
3.2.4 CERTIFICATE OF GOOD STANDING. Deliver a Certificate of
Good Standing from the Florida Secretary of State.
3.3 SELLER'S OBLIGATIONS AT THE CLOSING. At the closing, Seller shall
deliver or cause to be delivered to Purchaser:
3.3.1 INSTRUMENTS OF CONVEYANCE.Assignments, bills of sale with
covenants of warranty, notices, consents, assurances and
such other instruments of transfer as counsel for
Purchaser shall reasonably request and as shall be
effective to vest in Purchaser good and sufficient title
to all of the Assets of which Seller has agreed to sell,
assign, transfer and deliver to Purchaser, pursuant to
this Agreement, free and clear of all security interests,
claims, liens and encumbrances.
3.3.2 ASSIGNMENTS OF LEASE. Execute and deliver to Purchaser an
Assignment of lease, assigning Seller's interest in the
Lease for the premises located at 901 Central Florida
Parkway, Orlando, Florida, and I-595 Business Plaza,
Broward County, Florida, in the form of Exhibits "3" and
"4" attached hereto and incorporated herein by this
reference.
3.3.3 RESOLUTION. A copy of the Resolution of the Board of
Directors of Seller authorizing the transactions
contemplated by this Agreement, certified by the
Secretary.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Purchaser that each of the following is true and complete:
4.1 ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Seller is a
corporation duly organized, validly existing and is in good
standing under the laws of the State of Delaware, and is
qualified to do business in each State in which it is presently
conducting business, and has the corporate power to own, operate
and lease its property and carry out the Strong Communications
division's business as now being conducted.
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4.2 CORPORATION AUTHORIZATION; BINDING EFFECT. The execution,
delivery and performance of this Agreement and the transactions
contemplated hereby by Seller have been duly authorized by the
Board of Directors of Seller. A Corporate resolution reflecting
the foregoing shall be delivered to Purchaser at closing. This
Agreement and the other Agreements or instruments executed or to
be executed in connection with the transactions contemplated
hereby to which Seller is a party, and the consummation of the
transactions as contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of
Seller, and constitutes the valid and legally binding obligations
of Seller enforceable against Seller in accordance with their
respective terms.
4.3 TITLE AND CONDITION OF ASSETS. Seller has good and marketable
title to all of the Assets and will deliver the Assets to
Purchaser at the closing, free and clear of any liens,
encumbrances, restrictions, defects, claims and security
interests whatsoever. The Assets are being sold in "as-is"
condition without any representation or warranty as to their
condition.
4.4 DISCLOSURE AND RELIANCE. Seller has disclosed to Purchaser all
adverse matters actually known to Seller which would materially
effect the operation of the Strong Communications division.
Representations and warranties made by Seller herein have been
made with the knowledge and expectation that Purchaser is placing
reliance thereon.
4.5 CUSTOMER LISTS. Seller has the right to use, free and clear of
any claims or rights of others, all customer lists employed by it
in carrying on the business of the Strong Communications division
in the manner presently conducted.
5. COVENANTS OF SELLER. Seller covenants and agrees that:
5.1 CONDUCT OF BUSINESS. At all times as of the date hereof and up to
the Closing Date, except to the extent Seller obtains the
specific written approval of Purchaser, Seller will operate the
Strong Communications division only in the usual, regular and
ordinary manner and, to the extent consistent with such
operations, use its best efforts to preserve its present business
intact, keep available the services of its present employees, and
preserve its present relationships with persons having business
dealings with it.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser to purchase the Assets from Seller is subject to
satisfaction, on or before the Closing Date, of all of the following
conditions, which conditions may be waived in writing by Purchaser:
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6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller contained in this Agreement shall have
been true, in all material respects when made and, in addition,
shall be true in all material respects on and as of the Closing
Date with the same force and effect as is made on and as of the
Closing Date.
6.2 PERFORMANCE OF AGREEMENTS. Seller shall have performed all
obligations and agreements hereunder and shall have complied with
all covenants and conditions contained in this Agreement to be
performed and complied with by it at or prior to the Closing
Date.
6.3 DAMAGE TO PROPERTY. If, prior to the Closing Date, any material
part of the Assets is damaged by fire, or other casualty, or in
any cause or activity, Seller shall forthwith give Purchaser
written notice thereof and Purchaser may, at its option,
terminate this Agreement by written notice to Seller not later
than five (5) days after receipt of Seller's notice and upon
giving such notice, both parties shall be fully discharged from
all duties hereunder and all obligations hereof. However, if
Purchaser shall not so elect, or if an immaterial part of the
Assets is damaged, then Seller hereby assigns to Purchaser all of
its right, title and interest in and to any and all insurance
proceeds payable by reason of such destruction or damage to the
Assets, and Seller hereby agrees to pay to Purchaser a sum equal
to the deductible amount provided in such policies to the extent
necessary to correct such damage.
6.4 NO MATERIAL ADVERSE CHANGES. There should not have been, between
the date of this Agreement and the Closing Date, any material
adverse change in any of the Assets or the current operations of
the Strong Communications division.
7. EXPENSES. Except as otherwise provided in this Agreement, each party
shall pay its respective expenses, taxes, charges and liabilities
incurred in connection with or arising out of this Agreement,
including, without limitation thereto, counsel fees, accounting fees,
and other expenses related to the assignment and delivery of the
Assets to Purchaser.
8. POSSESSION. Possession of the Assets shall be delivered to Purchaser
at closing.
9. EMPLOYEES. Prior to closing, Purchaser shall have the right to
interview Seller's employees for purposes of determining which of the
employees will be retained by Purchaser. Purchaser shall have no
obligation to retain any such employees, except to the extent any
agreement that Purchaser, in its sole discretion, may make with any
particular employees. Seller agrees to pay all salaries, wages,
commissions and bonuses due to all of its employees up to closing, and
shall make all payroll tax payments or deposits required with respect
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thereto. Seller agrees to hold Purchaser harmless as to any liability
related to such employees while in the employ of Seller prior to
closing, including, but not limited to, insurance claims for workman's
compensation benefits or medical claims under Seller's group and
accident insurance plan.
10. ACCOUNTS RECEIVABLE. Purchaser shall assist Seller in the collection
of all accounts receivable due and owing from the operation of the
Strong Communications division through the Closing Date. All amounts
collected by Purchaser on Seller's behalf shall be applied to the
oldest outstanding invoices on said account due and owing Seller on
the Closing Date. Purchaser shall remit said collections weekly to
Seller. Seller shall have access to Purchaser's cash receipts journal
and bank deposits until the balance of said accounts receivable have
been collected.
11. POST-EXECUTION MATTERS. Within five (5) days of the execution of this
Agreement, each party responsible for the preparation of Exhibits "1"
and "3" hereto shall deliver such exhibits to the other party, and
such exhibits shall be attached to this Agreement and incorporated
herein by this reference.
12. MISCELLANEOUS. The following miscellaneous provisions shall apply to
this Agreement:
12.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings,
oral and written, among the parties, with respect to the subject
matter of this Agreement.
12.2 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and
assigns. Except as otherwise specifically provided herein, no
person shall take any act which would allow any right hereunder
to be assigned or held by any other person without the written
consent of the other party hereto.
12.3 NOTICES. All notices which are required or may be given pursuant
to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and delivered in
person or mailed by registered, certified or express mail,
postage-prepaid, as follows:
To Seller: Ballantyne of Omaha, Inc.,
Attention: John P. Wilmers
4350 McKinley Street
Omaha, Nebraska 68112
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with a copy to:
Marks Clare & Richards, L.L.C.
Attention: Myron J. Kaplan
11605 Miracle Hills Drive, Suite 300
Omaha, Nebraska 68154
and if to Purchaser:
Strong Audiovisual Incorporated
901 Central Florida Parkway
Orlando, Florida 32824
or at such other address as either party hereto shall designate
by notice in writing to the other party hereto.
12.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants made in or pursuant to
this Agreement shall survive the closing hereunder.
12.5 GOVERNING LAW. This Agreement shall be construed, interpreted and
the rights of the parties are determined in accordance with the
laws of the State of Nebraska. (Without reference to "choice of
law" provisions in Nebraska law.)
12.6 FURTHER ASSURANCES. Each of the parties hereto agree that they
shall sign such additions and supplemental documents as may be
necessary to implement the transactions contemplated pursuant to
this Agreement when requested to do so by any party to this
Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto at the place and date specified immediately adjacent to their respective
names.
BALLANTYNE OF OMAHA, INC., ("Seller")
Executed at Omaha NE, By: /s/ John P. Wilmers
on 12-27, 2002. ------------------------------------------
Its President
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STRONG AUDIOVISUAL INCORPORATED
("Purchaser")
Executed at Orlando FL, By: /s/ Thomas R. Wilmers
on 12-19, 2002. ------------------------------------------
Its President & CEO
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(Exhibit "4")
ASSIGNMENT OF LEASE
FOR VALUE RECEIVED, the undersigned, BALLANTYNE OF OMAHA, INC., a Delaware
corporation, hereby assigns to STRONG AUDIOVISUAL INCORPORATED, a Florida
corporation, all of its right, title and interest in and to that certain Lease
Agreement dated March 28, 1998, (the "Lease"), for the lease of certain real
property located at 901 Central Florida Parkway, Orlando, Florida, between
Charles Frazee, (as "Lessor"), and Ballantyne of Omaha, Inc., (as "Lessee. Said
Assignment is subject to the Sublease of Skytracker of Florida, L.L.C.
IN WITNESS WHEREOF, the undersigned has executed this Assignment this
31st day of December, 2002.
BALLANTYNE OF OMAHA, INC.,
a Delaware corporation
By: /s/ John Wilmers
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Its President
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ACCEPTANCE AND ASSUMPTION AGREEMENT
The undersigned hereby accepts the foregoing Assignment and hereby assumes
and agrees to perform all of the obligations of Ballantyne of Omaha, Inc., a
Delaware corporation, under the Lease, including, but not limited to, payments
of rent and other charges under the Lease arising from and after the date
hereof, and to indemnify and hold Ballantyne of Omaha, Inc. harmless therefrom.
IN WITNESS WHEREOF, the undersigned has executed this Acceptance and
Assumption Agreement this 31st day of December, 2002.
STRONG AUDIOVISUAL INCORPORATED
By: /s/ Thomas R. Wilmers
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Its: President & CEO
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GUARANTY
The undersigned, in consideration of and as an inducement for Ballantyne of
Omaha, Inc.'s execution of this Assignment of Lease, and being financially
interested in the success of Strong Audiovisual Incorporated, hereby
unconditionally guarantees to Ballantyne of Omaha, Inc., its successors and
assigns, the timely payment of all sums due Lessor under said Lease and the
prompt and full performance of all covenants and conditions to be performed by
the lessee under said Lease. The undersigned acknowledges and agrees that he
shall remain bound hereunder regardless of any waiver, release, forbearance,
extension of time or other action taken or permitted by Ballantyne of Omaha,
Inc., or the Lessor and regardless of any permitted subletting or assignment
hereof by Strong Audiovisual Incorporated.
Dated this 31st day of December, 2002.
/s/ Thomas R. Wilmers
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Thomas R. Wilmers
CONSENT OF LESSOR TO ASSIGNMENT
The undersigned Lessor hereby consents to the above Assignment upon the
expressed terms and conditions that the original Lessee, Ballantyne of Omaha,
Inc., shall remain liable for the prompt payment of the rent and the performance
of all conditions and covenants of the Lease by the Lessee to be kept and
performed. Lessor does not hereby consent to any further assignment or to any
subletting of the premises, without the written consent of Lessor.
Dated this 31st day of December, 2002.
/s/ Charles Frazee
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Charles Frazee