Document:

Exhibit
10.4

Prepared by and Record
and Return to:

Lindquist & Vennum P.L.L.P. (RKV)

4200 IDS Center

80 South Eighth Street

Minneapolis, MN 55042

Telephone:  (612) 371-3211

THIRD AMENDMENT

TO

FUTURE ADVANCE MORTGAGE

AND SECURITY AGREEMENT

AND FIXTURE FINANCING STATEMENT

AND ASSIGNMENT OF LEASES AND RENTS

THIS AMENDMENT is made effective as of June       ,
2006, by and between EAST KANSAS AGRI-ENERGY, L.L.C., a Kansas limited
liability company, with an address at 1304 South Main, Garnett, Kansas 66032
(the “Mortgagor”) and HOME FEDERAL
SAVINGS BANK, a federal savings bank, with an address at 1016 Civic Center
Drive N.W., Rochester, Minnesota 55903 (the “Mortgagee”).

RECITALS:

A.            Mortgagee has provided Mortgagor
with loans in the aggregate, original principal amount of $26,000,000.00
pursuant to two promissory notes dated as of November 23, 2004 made by
Mortgagor in favor of Mortgagee, and Mortgagee will provide additional
financing to the Mortgagor pursuant to one or more additional notes made by
Mortgagor in favor of Mortgagee (the existing notes and all future notes issued
by Mortgagor to Mortgagor are collectively referred to as the “Notes”) in connection with the construction
of a dry milling fuel ethanol plant near Garnett, Kansas (the “Project”).

B.            Mortgagor’s obligations under the
Notes are secured by, among other things, a Future Advance Mortgage and
Security Agreement and Fixture Financing Statement and Assignment of Leases and
Rents dated November 23, 2004 and recorded in the office of the Anderson County,
Kansas Register of Deeds on November 30, 2004, in Book 210 of Mortgages, Page
10, covering that certain property located in Anderson County, Kansas, as
described therein, as amended by a First Amendment to Future Advance Mortgage
and Security Agreement and Fixture Financing Statement and Assignment of Leases
and Rents, dated June 21, 2005, and recorded in the office of the Anderson
County, Kansas, Register of Deeds on July 6, 2005, in Book 78-MCL of Mortgages,
Page 24, and as amended by a Second Amendment to Future Advance Mortgage and
Security Agreement and Fixture Financing Statement and Assignment of 

 

Leases and Rents, dated
December 20, 2005, and recorded in the office of the Anderson County, Kansas,
Register of Deeds on December 27, 2005, in Book 79-MCL of Mortgages, Page 103
(collectively, as amended from time to time, the “Mortgage”), secured by the real estate legally described on Exhibit
A.

C.            The parties desire to clarify that
the Notes and this Mortgage provide that $4,000,000 of the loan from Mortgagee
to Mortgagor shall be a revolving amount and the remaining $22,000,000 of the
loan shall be payable as a fixed term amount.

D.            The parties desire to amend the
terms and conditions of the Mortgage to incorporate the changes set forth in
this Amendment.

E.             The parties hereto have the
authority to enter into this amendment pursuant to section (g) of the Warranty
Deed dated December 20, 2005 and recorded in the office of the Anderson County,
Kansas, Register of Deeds on December 27, 2005, in Book 164 of Deeds, Page 88
between the Mortgagor and the City of Garnett, Kansas.

F.             Mortgagor hereby certifies that it
is the Owner of 100% of the aggregate maximum principal amount of the Bonds (as
defined in the Trust Indenture).

NOW, THEREFORE, for good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, the parties
agree that the Mortgage is amended as follows:

1.                                       Upon
the request of Mortgagor, delivered to Mortgagee prior to the Maturity Date,
Mortgagee may advance and re-advance up to $4,000,000 of the amount due under
the Notes and secured by this Mortgage. 
Any such advance shall be superior to the rights of the holder of any
intervening lien or encumbrance.  This
Mortgage secures all future advances by Mortgagee to Mortgagor and all future
obligations of Mortgagor to Mortgagee pursuant to the Credit Agreement, the
Notes, and this Mortgage up to and including the maximum stated principal
indebtedness of $26,000,000.

2.                                       Mortgagor
confirms the continuing accuracy of all representations and warranties set
forth in the Mortgage.

3.                                       This
Amendment shall be binding upon, and inure to the benefit of the Mortgagor and
the Mortgagee and their respective successors and assigns.

4.                                       Except
as expressly amended and modified by this Amendment, all of the terms and
conditions of the Mortgage remain unchanged and in full force and effect
according to their terms and are hereby ratified by the Mortgagee and
Mortgagor.  All capitalized terms not
separately defined herein shall have the meanings assigned to them in the
Mortgage. On and after the effectiveness of this Amendment, each reference in
the Mortgage to “this Mortgage,” “hereunder,” “hereof” or words of like import
referring to the Mortgage, and each reference in the Loan Documents to the
Mortgage, shall mean the Mortgage as amended by this Amendment.

 2
 

 

5.                                       IN
WITNESS WHEREOF, this Amendment is executed as of the date first shown above.

	
  

  	
  MORTGAGEE:

  
	
   

  	
   

  
	
   

  	
  HOME FEDERAL SAVINGS BANK

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Oftedahl

  
	
   

  	
  Name:

  	
  Eric Oftedahl

  
	
   

  	
  Its:

  	
  Vice President

  

 

	
  STATE OF MINNESOTA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  

 

On this           
day of June, 2006, before me personally appeared Eric Oftedahl, to me known,
who being by me duly sworn, did say that he is the Vice President of HOME
FEDERAL SAVINGS BANK, a federal savings bank, that said instrument was signed
on behalf of said federal savings bank, and acknowledged said instrument to be
the free act and deed of said federal savings bank.

IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my notarial seal the day and year last above written.

	
  

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Stephanie W. Scott

  
	
   

  	
  Print Name:  Stephanie W. Scott

  
	
   

  	
  Notary Public in and for said County and State

  
	
   

  	
  My Commission Expires:  1-31-2010

  

 

[Remainder of this page intentionally left blank.]

[Additional signature page follows.]

 3
 

 

 

	
  

  	
  MORTGAGOR:

  
	
   

  	
   

  
	
   

  	
  EAST KANSAS AGRI-ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Pracht

  
	
   

  	
  Name:

  	
  William R. Pracht

  
	
   

  	
  Its:

  	
  President

  

 

	
  STATE OF KANSAS

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF
  ANDERSON

  	
  )

  

 

On this           
day of June, 2006, before me personally appeared William R. Pracht, to me
known, who being by me duly sworn, did say that he is the President of EAST
KANSAS AGRI-ENERGY, L.L.C., a Kansas limited liability company, that said
instrument was signed on behalf of said limited liability company, and
acknowledged said instrument to be the free act and deed of said limited
liability company.

IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my notarial seal the day and year last above written.

	
   

  	
   

  
	
   

  	
   

  
	
  

  	
  /s/ Carol Foltz

  
	
   

  	
  Print Name:  Carol Foltz

  
	
   

  	
  Notary Public in and for said County and State

  
	
   

  	
  My Commission Expires:  10-31-07

  

 

 4

 

EXHIBIT A

LEGAL DESCRIPTION

Tract 1 (Parcel “A”):

All of Lots One (1), Two (2), Three (3) and Four (4),
except the West 450 feet of said Lot Two (2) and Lot Three (3), in the Golden
Prairie Industrial Park Addition to the City of Garnett, Anderson County,
Kansas.

A strip of land described as the South 50 feet of the
West 450 feet of Lot Two (2), in the Golden Prairie Industrial Park Addition to
the City of Garnett, Anderson County, Kansas;

together with the southern half of vacated NE 1700
Road abutting the northern boundary of the land described above.

Tract 2 (Parcel “B”):

Beginning at a 1/2” rebar at the Southwest corner of
the Southeast Quarter (SE1/4) of Section Thirty (30), Township (20) South,
Range Twenty (20) East of the Sixth Principal Meridian, THENCE North 02o14’48”
West for a distance of 925.52 feet to a 1/2” rebar on the West line of said
Southeast Quarter (SE1/4), THENCE South 68o39’56” East for a distance of 896.17
feet to a 1⁄2” rebar; THENCE South 74o03’04” East for a distance of 428.02 feet to
a 1/2” rebar; THENCE South 02o14’48” East for a distance of 444.00 feet to a
1/2” rebar on the South line of said Southeast Quarter (SE1/4); THENCE South
88o15’01” West for a distance of 1228.00 feet along said South line to the
point of beginning;

together with the northern half of vacated NE 1700
Road abutting the southerly boundary of the land described above.

Tract 3:

Lot Five (5) and Lot Six-A (6-A), less the North 100
feet of said Lot Six-A (6-A), in Golden Prairie Industrial Park Addition to the
City of Garnett, Anderson County, Kansas.

Tract 4:

Grant of Easement and Right of Way dated April 5, 2005
recorded April 7, 2005 in Book 77 of MCL, page 59, in the office of the
Register of Deeds, Anderson County, Kansas, covering the following property:

Commencing at a 1/2” rebar at the Southeast Corner of
the Southwest Quarter of Section 30, Township 20 South, Range 20 East of the
Sixth Principal Meridian, City of Garnett, Anderson County, Kansas; THENCE
North 02 degrees 14 minutes 48 seconds West for a distance of 798.23 feet along
the East line of said Southwest Quarter; THENCE North 70 degrees 59 minutes 38
seconds West for a distance of 51.33 feet to the East line of the Rail Road
Depot as described in Deed Book 16, Page 605 the POINT OF BEGINNING; THENCE
North 70 degrees 

 A-1
 

 

59 minutes 38 seconds West for a distance of 301.01
feet to the West line of said Rail Road Depot; THENCE North 12 degrees 22
minutes 55 seconds East for a distance of 60.40 feet along said West line;
THENCE South 70 degrees 59 minutes 38 seconds East for a distance of 305.09
feet to the East line of said Rail Road Depot; THENCE South 16 degrees 15
minutes 12 seconds West for a distance of 60.06 feet to the POINT OF
BEGINNING.  Together with and subject to
covenants, easements, and restrictions of record.

Note:      Tract
designations are for convenience of reference only and do not constitute an
integral part of the legal description.

 

 A-2Exhibit
4.1

ASSET
PURCHASE AGREEMENT

PARTIES:

This
Agreement is made and entered into as of the 30th day of June, 2006, by and
between NATIONAL CINEMA SERVICE CORP., a Louisiana corporation (hereinafter
referred to as the “Seller”), CHRISTOPHER J. PIERCE, a resident of Destrehan,
Louisiana (hereinafter referred to as “Pierce”) and STRONG TECHNICAL SERVICES,
INC., a Nebraska corporation (the “Buyer”).

RECITALS:

This Asset
Purchase Agreement is made with reference to the following facts and objectives:

A.            Seller
is engaged in the business of a cinema services company.

B.            Seller
owns certain Assets which it uses in its cinema service business.

C.            Pierce
is the sole shareholder of Seller.

D.            Buyer
desires to purchase from Seller, and Seller desires to sell to Buyer,
substantially all of the assets and business of Seller upon the terms and
conditions hereinafter set forth.

AGREEMENT:

NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:

I.              DEFINITIONS

For all purposes
of this Agreement, the following terms shall have the following definitions:

1.1           Accounts Receivable.  “Accounts Receivable” shall mean all open,
unpaid invoices and unapplied credit memos of Seller and all amounts due from
customers to Seller (whether billed or unbilled) as of the effective date of
Closing.  A true and correct list of Accounts
Receivable items as of May 31, 2006, specifically identifying any accounts or
amounts in dispute, is attached hereto as Exhibit “1” and by this reference
incorporated herein.  Seller shall
provide to Buyer at Closing a true and correct list of Accounts Receivable
items as of the effective date of Closing, specifically identifying any
accounts or amounts known to be in dispute.

 

1.2           Assumed
Liabilities.  “Assumed Liabilities”
shall mean:

1.2.1        All open purchase orders of Seller as of
the effective date of Closing; provided, however, that Buyer shall not assume
any open purchase orders for equipment, parts, or supplies entered into after
May 31, 2006, not in the ordinary course of business.  A true and correct list of such current
purchase orders is set forth in Exhibit “2” and attached hereto and by this
reference incorporated herein.

1.2.2                        All
express Warranty obligations.

1.2.3        All trade accounts payable of Seller as
of the effective date of Closing.  Seller
shall provide Buyer with a true and correct list of its trade accounts payable
as of the effective date of the Closing.

1.2.4        All loans on motor vehicles that are
assumable at closing.

1.2.5        All employee accrued vacation time as of
June 30, 2006.

1.2.6        Notwithstanding any other provision
contained herein, Assumed Liabilities shall not include:

1.2.6.1     Any federal, state, or local income, sales,
use, franchise, employment, or any other tax payable with respect to the
Purchased Assets (as hereinafter defined), or operations of Seller.

1.2.6.2     Any liability or obligation related to any
Assets of Seller not being purchased by Buyer.

1.2.6.3     Any liability or obligation of the Seller
or Pierce arising in connection with the negotiation, preparation, or execution
of this Agreement, in the transactions contemplated hereby.

1.2.6.4     Any liability or obligation with respect to
any of Seller’s employees, agents or independent contractors, whether or not
subsequently employed by Buyer.

1.2.6.5     Any claim for injury to persons or property
of any nature whatsoever in connection with the business or operations of
Seller, or relating to any products sold or services provided by Seller.

1.2.6.6     Any liability or obligation arising out of
any breach by Seller or Pierce of any provision of any agreement, contract, or
other commitment.

 2
 

 

1.2.6.7     Any liability, obligation, cost, expense,
or claim owed by Seller or claimed to be owed by Seller to Pierce.

1.2.6.8     Any liabilities other than those expressly
assumed by Buyer hereby.

1.2.6.9.    Any liability for accrued overtime earned by
employees for any period prior to the effective date of closing.

1.3           Balance Sheet.  “Balance Sheet” shall mean the unaudited
Balance Sheet of Seller as of December 31, 2005, a copy of which is attached
hereto as Exhibit “3” and by this reference incorporated herein, which balance
sheet has been prepared in accordance with generally accepted accounting
principals applied on a consistent basis.

1.4           Contract.  “Contract” shall mean only any of Seller’s
open purchase orders and service orders that shall exist as of the effective
date of Closing.  A true and correct list
of Seller’s contracts as of May 31, 2006, is attached hereto as Exhibit “4” and
by this reference incorporated herein. 
At Closing, Seller will provide Buyer with a complete list of its
Contracts existing as of the effective date of Closing.

1.5           Fixtures and Equipment.  “Fixtures and Equipment” shall mean all of
the furniture and fixtures, office equipment, service equipment, and all other
special equipment used in the service business of Seller, a true and correct
list of which is attached hereto as Exhibit “5” and by this reference
incorporated herein.

1.6           Inventory.  “Inventory” shall mean all of Seller’s
inventory of parts, materials, and supplies, which are used to service Seller’s
customers in the ordinary course of Seller’s business, which together aggregate
the amount listed as Inventory on Seller’s Balance Sheet, as adjusted to the
effective date of Closing, in the ordinary course of business.  Said inventory includes, but is not limited
to, that set forth on Exhibit “A” attached hereto.

1.7           Purchased Assets.  “Purchased Assets” shall mean all of the
following Assets of Seller as of the effective date of Closing, except those
assets specifically excluded herein:

1.7.1        All Accounts Receivable.  Seller and Buyer shall escrow for all
accounts receivable more than 90 days old. 
A copy of said Escrow Agreement is attached hereto, marked Exhibit “6”
and by this referenced incorporated herein;

1.7.2        All contract rights of Seller, including
all cash deposits received by Seller in connection with its open orders;

1.7.3        All Fixtures and Equipment;

1.7.4        All Inventory;

1.7.5        All motor vehicles;

 3
 

 

1.7.6.       All books and records of Seller
pertaining to the Purchased Assets including, but not limited to:  accounting records, invoices, customer lists,
customer contracts, customer files, and marketing materials pertaining to
present and prospective customers;

1.7.7.       All trademarks, trade names, patents,
patent applications, improvements thereto and interests thereunder, licenses,
including patent licenses, copyrights, copyright licenses and all other
intellectual property of Seller, including all modifications and additions
thereto pertaining to Seller’s business and the Purchased Assets, a true and
correct list of which is attached hereto as Exhibit  “7” and by this reference incorporated
herein;

1.7.8.       All inventions, processes, know-how,
formulas, drawings, blueprints, specifications, flow-sheets, manuals, data,
trade secrets, plans, files, software, computer programs, related documentation,
and all other intangible Assets of any nature whatsoever, all of which pertain
to Seller’s business;

1.7.9        All cash;

1.7.10      The goodwill of Seller; and

1.7.11      Any and all other of Seller’s assets of
any kind or nature whatsoever related to the business of Seller, except any
assets specifically excluded herein.

1.8           Warranty.  “Warranty” shall mean all warranty
obligations of Seller, pertaining to any services provided by Seller which are
based on express warranties only.  Buyer
does not assume any liability with respect to any implied warranty or liability
which shall be in the nature of personal injury or property damage or other
consequential damages, except as herein stated.

1.9           Financial Statements.  “Financial Statements” shall mean the Balance
Sheet, Income Statement, and all other exhibits and representations herein
containing financial information pertaining to the Purchased Assets.

II.            SALE OF ASSETS

2.1           Transfer of Assets.  At Closing, Seller shall sell, assign,
transfer, convey and deliver to Buyer the Purchased Assets, free and clear of
all liabilities, obligations, liens, security interests and encumbrances of any
kind, except those liabilities expressly assumed by Buyer herein.

2.2           Assumption of Liabilities.  At Closing, Buyer agrees that it will accept
and assume the Assumed Liabilities.

2.3           Payment
of Purchase Price.  At Closing, Buyer
shall wire transfer the Purchase Price, less all applicable escrow amounts, to
Seller’s bank account, subject to any amounts 

 4
 

 

required
to discharge any liens or encumbrances against the Purchased Assets, escrowed
pursuant to the terms of this Agreement, or required by law to be withheld to
pay any obligations of Seller.

III.           CLOSING

The
closing of the sale (the “Closing”) shall take place at Buyer’s offices on or
before June  30, 2006, or soon
thereafter, as all the conditions of this Agreement shall be complied with by
the parties; provided, however, that the effective date of Closing shall be May
31, 2006 (the “Effective Date”).   All
risks and rewards of ownership of Seller transfer as of May 31, 2006.  At the Closing, Seller shall deliver to Buyer
such bills of sale, endorsements, assignments, and other good and sufficient
instruments of transfer and conveyance as shall be effective to vest in the
Buyer good and marketable title to the Purchased Assets as provided in this
Agreement.

IV.           PURCHASE PRICE

The
Purchase Price shall be $2,282,556.00. 
Said Purchase Price is based upon the value of the Purchased Assets as
reflected on Seller’s December 31, 2005, financial statements.  If the aggregate value of such Purchased
Assets at the time of Closing is more or less than the value shown on the
December 31, 2005, financial statements, an appropriate adjustment shall be
made to the Purchase Price.

V.            ALLOCATION OF PURCHASE PRICE

Buyer
and Seller shall allocate the Purchase Price among the Purchased Assets in such
manner as they shall determine, subject to approval of Buyer’s auditors.  If Buyer’s auditors shall post closing
require an adjustment to said allocation, Seller agrees to report said
allocation in accordance with the requirements of Buyer’s auditors. Such
allocation shall be made at or prior to the date of Closing.  Such allocation shall be made in accordance
with the provisions of Section 1060 of the Internal Revenue Code of 1986, as
amended (the “Code”), and shall be binding upon Buyer and Seller for all
purposes (including financial accounting purposes, financial and regulatory
reporting purposes, and tax purposes).  A
copy of Buyer’s Allocation of the Purchase Price is attached hereto, marked
Exhibit “8” and by this reference incorporated herein.  Buyer and Seller also agree to file IRS Form
8594 consistent with the foregoing and in accordance with Section 1060 of the
Code.  Notwithstanding the foregoing, $150,000.00
of said Purchase Price shall be allocated to a covenant not to compete by
Seller and Pierce as set forth in Article XII below.  Said sum shall be payable for the first four
years at the rate of $25,000.00 per year, and $50,000.00 for Year Five.

VI.           FURTHER ASSURANCES

From
time to time, at Buyer’s request, whether at or after the Closing and without
further consideration, Seller will execute and deliver such further instruments
of conveyance and transfer and take such other action as Buyer reasonably may
require to more effectively convey and transfer to Buyer any of the Purchased
Assets.

 5
 

 

VII.          PAYMENT OF SALES AND SIMILAR TAXES

Buyer
will pay all sales, transfer, and documentary taxes, if any, payable in
connection with the sale, transfer, and deliveries to be made to Buyer
hereunder.

VIII.        EMPLOYMENT OF PIERCE, EMPLOYEES OF
SELLER

8.1           Pierce Employment.  Buyer shall employ Pierce effective
immediately upon the Closing of this transaction as contemplated herein, under
the terms and conditions of the Employment Agreement which is attached hereto
as Exhibit “9”.  Pierce shall be employed
by Buyer for a minimum term of two years, subject to automatic renewal.  Pierce shall receive an annual salary of
$100,000.00 per year. At Closing, Buyer and Pierce shall enter into said
written Employment Agreement.

8.2           Other Employees.  It is Buyer’s intention to retain in the
employment of Buyer certain employees of Seller at the present rate of
compensation of such employees; provided; however, that such expression of the
Buyer’s intention should not be construed as imposing any binding and legal
obligation on the Buyer to retain any employee or employees of Seller in the
employ of Buyer upon and after the Closing, nor as to the terms of such
employment.

IX.           REPRESENTATIONS AND WARRANTIES OF
SELLER

Seller
and Pierce represent, warrant, and covenant to and with Buyer as follows:

9.1           Organization, Good Standing, and
Corporate Power.  Seller is a
corporation duly organized, validly existing in good standing under the laws of
the State of Louisiana, and has full power and authority to conduct its
business presently being conducted and to own, sell, and convey its properties
and Assets.  Seller is duly qualified in
all states in which it is conducting business in.

9.2           Corporate Documents.  Copies of Seller’s Certificate of
Incorporation and all amendments thereof to date, certified by the Secretary of
State of Louisiana, and of Seller’s Bylaws as amended to date, have been
delivered to Buyer and are complete and correct as of the date of this
Agreement.  At the Closing, Seller shall
deliver to Buyer a Certificate of Good Standing certified by the Secretary of
State of Louisiana as well as the Secretary of State of each state in which Seller
is qualified to do business.

9.3           Corporate Authorization; Binding
Effect.  Seller has all the necessary
corporate power and authority and has taken all corporate action necessary to
enter into this Agreement, to consummate the transactions contemplated hereby
and to perform its obligations hereunder. 
This Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its respective terms.

9.4           No Conflict with Other
Instruments, Agreements or Law. 
Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby will result in (1) the
violation of or conflict with any of the provisions of the Certificate of 

 6
 

 

Incorporation or
Bylaws of the Seller; (2) a breach of or a default under any term or provision
of any contract, agreement, indebtedness, lease, amendment, license, franchise,
permit, authorization or concession to which Seller is a party, which breach or
default would have a material adverse effect on the business or financial
condition of Seller or its ability to consummate the transactions contemplated
hereby; (3) a violation by Seller of any statute, rule, regulation, ordinance,
code, order, judgment, writ, injunction, decree or award, which violation would
have a material adverse effect on the business or financial condition of Seller
or its ability to consummate the transactions contemplated hereby.

9.5           Consent.  Neither Seller nor Pierce knows of, and has
not been informed of, any consent, approval or authorization of, or declaration
of, filing or registration with any governmental or regulatory authority or any
other person or entity which is required to be made or obtained by Seller in
connection with the execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby.

9.6           Title to Assets.  Seller currently has and will transfer to
Buyer at Closing good and marketable title to all the Purchased Assets, free
and clear of all mortgages, pledges, liens, security interests, conditional
sales agreements, charges, encumbrances, restrictions and equities, except
those mortgages, pledges, liens, security interests and other liabilities
expressly assumed by Buyer hereunder.

9.7           Litigation.  Except as described in Exhibit  “10” which is attached hereto and by this
reference incorporated herein, there are no material actions, suits, claims,
proceedings or investigations pending or to the best knowledge of Seller or
Pierce, threatened against or affecting the Purchased Assets, at law or in
equity, or before or by any federal, state, municipal or other governmental
court, department, commission, board, bureau, agency or instrumentality.  Prior to the Closing, either (1) Seller shall
have resolved the matters disclosed in Exhibit 
“10”; or (2) Buyer and Seller shall have agreed as to how such matters
will be handled.

9.8           Absence of Undisclosed Liabilities.  Seller and Pierce have disclosed to Buyer all
facts known by Seller and Pierce to be material to the Assets and business to
be acquired by Buyer pursuant to this Agreement.  No written representation or warranty by
Seller or Pierce in this Agreement or any written statement or certificate
furnished or to be furnished to the Buyer pursuant hereto contains or will
contain any untrue statement of a material fact known to Seller or Pierce, or
omits or will omit to state a material fact known to Seller or Pierce necessary
to make the statements contained therein not misleading.  During the period from the date of this
Agreement to the Closing Date, Seller represents and covenants that its
business will in all respects be operated only in the ordinary course of
business.  Seller and Pierce shall give
prompt notice to Buyer with respect to any material changes in the operation of
Seller’s business and in any matter or event which comes to the attention of
Seller or Pierce and which, if it had occurred as of the date hereof, would
constitute a material breach of the representations and warranties of Seller
and/or Pierce contained in this Agreement.

9.9           Financial Statements.  All financial statements provided to Buyer
pursuant to this Agreement and all exhibits hereto are accurate in all material
respects, and all other financial 

 7
 

 

data relating to
the Purchased Assets given by Seller and Pierce to Buyer is accurate in all
material respects as to what it was represented to be when given to Buyer.

9.10         Accounts Receivable.  The Accounts Receivable reflected in the
Balance Sheet and all Accounts Receivable arising after the Balance Sheet date
to Closing arose from bona fide transactions in the ordinary course of
business, and to the best of Seller’s knowledge, they are believed to be valid.

9.11         Corporate Authorizations; 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 and Shareholders of Seller. 
Corporate resolutions reflected in the foregoing shall be delivered to
Buyer at Closing.  This Agreement and the
other agreements and instruments executed or to be executed in connection with
the transactions contemplated hereby to which Seller is a party and the
consummations of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of Seller and
constitute the valid and legally binding obligation of Seller, enforceable
against Seller in accordance with their respective terms.

9.12         Title to and Condition of Assets.  Except as otherwise disclosed in the exhibits
to this Agreement or to the Purchase Agreement or in writing, prior to Closing,
effective as of the Closing, the Seller will have, and will transfer to Buyer
good and marketable title to all the Purchased Assets, free and clear of all
liens, security interests, encumbrances, restrictions and equities, except
those mortgages, pledges, liens, security interests and other liabilities
expressly assumed by Buyer hereunder. 
All tangible personal property, equipment and fixtures included within
the Purchased Assets are in good condition and repair, and shall be in the same
condition at Closing Date, ordinary wear and tear excepted, and are suitable
for the purposes for which they are being used.    Buyer waives any warranty claims arising
under Louisiana law, including, but not limited to, those claims in redhibition
and/or quanti minoris.

9.13         Labor Matters.  Seller is not a party to any collective
bargaining agreement.  There are no
controversies between Seller and any of its employees which might reasonably be
expected to materially adversely affect the conduct of its business, or any
unresolved labor union grievances or unfair labor practice or labor arbitration
proceedings pending or threatened relating to its business, and there are not
any organizational efforts presently being made or threatened involving any of
Seller’s employees.  Seller has not
received notice of any claim that Seller has not complied with any laws
relating to the employment of labor, including any provision thereof relating
to wages, hours, collective bargaining, the payment of social security and
similar taxes, equal employment opportunities, employment discrimination and
employment safety, or that Seller is liable for any arrears of wages or any
taxes or penalties for failure to comply with any of the foregoing.

9.14         Employment Contracts.  Seller is not a party to any contract of
employment, either expressed or implied, with any of its existing employees.

9.15         Tax Matters.  Seller has filed all federal, state, and
local tax returns which are required to be filed with respect to the operation
of Seller’s business and has paid all taxes, 

 8
 

 

interest,
penalties, assessments and deficiencies which have become due, or which have
been claimed to be due hereunder.

9.16         Inventory.  The inventory set forth on Exhibit “A” is all
current.  Notwithstanding said
representation, Seller and Buyer have agreed to escrow $41,368 for potential
obstacles and slow moving inventory, pursuant to the terms of the Escrow
Agreement attached hereto as Exhibit “B” and by this reference incorporated
herein.

X.            REPRESENTATIONS AND WARRANTIES OF
BUYER

Buyer
hereby represents and warrants to Seller and Pierce as follows:

10.1         Organization; Good Standing and
Corporate Power.  Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and authority to conduct and to
own its assets as it is presently being conducted and to own and lease its
properties and Assets.

10.2         Corporate Documents.  Copies of Buyer’s Certificate of
Incorporation and all amendments thereto to date, certified by the Secretary of
State of Delaware and Buyer’s Bylaws as amended to date, have been delivered to
Seller and are complete and correct as of the date of this Agreement.

10.3         Corporate Authorizations; Binding
Effect. Buyer has all necessary corporate powers and authority to enter
into this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations hereunder.  This
Agreement has been duly executed and delivered by Buyer and constitutes a
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its respective terms, subject to the approval of the Board of
Directors of Buyer.

10.4         No Conflict with Other Instruments
or Agreements.  Neither the execution
and delivery of this Agreement, nor the consummation of the transactions
contemplated hereby will result in (1) a violation of or a conflict with the
provisions of the Certificate of Incorporation or Bylaws of Buyer; (2) a breach
of, or a default under, any term or provision of any contract, agreement,
indebtedness, lease, commitment, license, franchise, permit, authorization or
concession to which Buyer is a party, which breach or default would have a
material adverse effect on the business or financial condition of Buyer or its
ability to consummate the transactions contemplated hereby; or (3) a violation
by Buyer of any statute, rule, regulation, ordinance, code, order, judgment,
writ, injunction, decree or award, which violation would have a material
adverse effect on the business or financial condition of Buyer or its ability
to consummate the transactions contemplated hereby.

10.5         Consent.  Buyer knows of no and has not been informed
of any consent, approval, or authorization of, or declaration, filing or
registration with any governmental or regulatory authority, or any other person
or entity which is required to be made or obtained by Buyer in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby.

 

 9

 

10.6         Broker.  Neither Buyer nor any affiliate of Buyer has
entered into or will enter into any contract, agreement, arrangement, or
understanding with any person or firm which will result in the obligation of
Seller or Pierce to pay any finder’s fee, brokerage commission or similar
payment in connection with the transaction contemplated hereby.

XI.           COVENANTS OF SELLER AND BUYER

Seller
covenants with Buyer and Buyer Covenants with Seller as follows:

11.1         Assignment of Warranties.  Seller shall assign to Buyer all transferable
manufacturer, supplier or contractor warranties or guaranties respecting any of
the Purchased Assets.

11.2         Corporate Name.  Effective upon the Closing of the
transactions contemplated hereby, Seller shall no longer use, in any respect, the
name “National Cinema Service Corp.” or any similar name, without the express
written consent of Buyer.  Within 30 days
after Closing, Seller shall change its corporate name to a name which bears no
resemblance to the name “National Cinema Service Corp.” and thereafter shall
never use a name or names which shall be similar to such name.

11.3         Conduct of Business.  Except as otherwise requested by Buyer, and
without making any commitment on its behalf, Seller will use its best efforts
to preserve its business intact; and preserve for Buyer the goodwill of the
suppliers, customers, and others having business relationships with Seller
prior to Closing.  In addition, until
Closing, Seller shall make no purchases or sales of Inventory items, or enter
into any contracts or transactions without the consent of Buyer in writing,
except in the ordinary course of business.

11.4         Accounts Receivable.  At the Closing, Seller and Pierce shall
execute and deliver to Buyer a guaranty in the form set forth as Exhibit “11”
attached hereto, and by this reference incorporated herein (the “Guaranty”)
under the terms of which Seller and Pierce shall unconditionally guaranty that
all indebtedness represented by the Accounts Receivable of Seller and purchased
by Buyer, as of the Closing Date will be paid by the respective debtors to
Buyer.  In the event such net
indebtedness is not paid on or before 165 days after the Closing Date, Seller
and/or Pierce shall within 10 days following receipt from Buyer of notice to
such effect make payment to Buyer of an amount in cash equal to the difference
between the amount collected by Buyer and the net receivables as shown on the
Balance Sheet, whereupon Buyer shall promptly assign or cause to be assigned to
Seller and/or Pierce (as the case may be) all rights, claims, actions or causes
of action which Buyer may have relating to such unpaid receivables.  Buyer shall use its best efforts to collect
all accounts receivable of Seller not purchased by Buyer pursuant to Section
1.7.1.

11.5         Public Announcement.  Buyer shall have the right to approve any
public announcement and/or press release concerning this transaction.  No public announcement shall be made by any
party to this Agreement until after the transaction as contemplated herein has
been closed.

 10
 

 

XII.         COVENANT NOT TO COMPETE

At
the Closing, Seller and Pierce will execute a Non-Competition Agreement in the
form of Exhibit  “12” attached hereto and
by its reference incorporated herein. 
The effectiveness of this Agreement and of the Non-Competition Agreement
will be contingent upon the execution of each other.

XIII.        ACTIONS BY SELLER AND BUYER AFTER THE
CLOSING

On
and after the Closing Date, Seller, Pierce and Buyer will take all appropriate
action and execute all documents, instruments or conveyances of any kind which
may be reasonably necessary or advisable to carry out any of the provisions
hereof.

XIV.        INDEMNIFICATIONS

14.1         Indemnifications by Seller and
Pierce.  It is specifically
acknowledged that Buyer does not assume and will not be responsible for any
liabilities of Seller and Pierce, except as may be expressly stated
herein.  Effective as of the Closing
Date, Seller and Pierce shall indemnify and hold harmless Buyer against and in
respect of:

14.1.1      All liabilities and obligations of, or claims
against, Seller or Pierce not expressly assumed by Buyer in this Agreement,
including but not limited to, all operating and other expenses of Seller up to
the Effective Date of the Closing, all income, sales, use, employment and other
tax liabilities accrued for operations up to the Effective Date of the Closing
and all employment obligations of Seller, including without limitation, all
state or federal withholding obligations, employee benefit obligations,
vacation, claims of discrimination or unfair labor practices or of any other
nature, whether occurring prior or subsequent to the Effective Date of Closing
relating to any present or former employee of Seller while he/she was an
employee of Seller and any claims of employees of said  Seller to have any entitlement of employment
with Buyer unless said employees are expressly retained by Buyer after the
employee has submitted an employment application to Buyer.

14.1.2      Any damage or deficiency relating from any
material misrepresentation, breach of warranty or non-fulfillment of any
agreement on the part of Seller and/or Pierce under this Agreement or from any
material misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished to Buyer under this Agreement.

14.1.3      Any and all liabilities, claims or damages
(whether or not caused by negligence) including civil or criminal fines arising
out of relating to any of the following: (i) any generation, processing,
handling, transportation, storage, treatment or disposal of solid waste or
hazardous waste by Seller or Pierce, including but not limited to, any such
activities occurring with respect to the business of Seller, the assets
purchased pursuant to the Asset Purchase Agreement, and including any
facilities or 

 11
 

 

property leased by Seller or Pierce; and (ii) any
releases or contamination by Seller or Pierce or their predecessors, tenants,
vendors, employees or agents (including, but not limited to, any releases as
declared under the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended), to the extent occurring or existing prior
to or at Closing including, but not limited to, such release as to land, ground
water, surface water, or into the air.

14.2         Indemnification by Buyer.  Buyer agrees that on and after the date
hereof, it shall indemnify and save and hold harmless Seller and Pierce from
and against any and all damages incurred in connection with or arising out of
or resulting from (1) any material breach of any covenant or warranty, or the
inaccuracy of any representation, made by Buyer in or pursuant to this
Agreement; (2) any liability, obligation or commitment of Buyer relating in any
way to the Purchased Assets or Assumed Liabilities; or (3) any claim,
liability, obligation or commitment of any nature which is specifically assumed
by Buyer pursuant to this Agreement.

14.3         Conditions of Indemnification.  With respect to any actual or potential
claim, any written demand, the commencement of any action, or the occurrence of
any other event which involves any matter or related series of matters (a “Claim”)
against which a party hereto is indemnified (the “Indemnified Party”) by the
other party (the “Indemnifying Party”) under Sections 14.1 and 14.2 of this
Section 14 hereof:

14.3.1      Promptly after the Indemnified Party first
receives written documentation pertaining to the Claim, or if such Claim does
not involve a third-party claim (a “Third-Party Claim”) promptly after the
Indemnified Party first has actual knowledge of such Claim, the Indemnified
Party shall give notice to the Indemnifying Party of such claim in reasonable
detail and stating the amount involved, if known, together with copies of any
such written documents setting forth details pertaining to the claim.

14.3.2      The Indemnifying Party shall have no
obligation to indemnify the Indemnified Party with respect to any Claim if the
Indemnified Party fails to give notice with respect thereto in accordance with
Section 14.3.1 above.

14.3.3      If the Claim involves a Third-Party Claim,
then the Indemnifying Party shall have the right, at its sole cost, expense and
ultimate liability, regardless of the outcome, and through counsel of its
choice (which counsel shall be reasonably satisfactory to the Indemnified
Party) to litigate, defend, or otherwise attempt to resolve such Third-Party
Claim; provided, however, that if in the Indemnified Party’s reasonable
judgment a conflict of interest may exist between the Indemnified Party and the
Indemnifying Party with respect to such Third-Party Claim, then the Indemnified
Party shall be entitled to select counsel of its own choosing reasonably
satisfactory to the Indemnifying Party in which event the Indemnifying Party
shall be obligated to pay the fees and expenses of such counsel.  Notwithstanding the preceding sentence, the
Indemnified Party may elect, at any time and at the Indemnified Party’s sole
cost, expense and ultimate liability, regardless of the outcome and through
counsel of its own choice, to litigate, defend, settle, or otherwise attempt to
resolve such Third-Party Claim.  If the
Indemnified Party so elects (for reasons other than the Indemnifying Party’s failure

 12
 

 

or refusal to provide a
defense to such Third-Party Claim), then the Indemnifying Party shall have no
obligation to indemnify the Indemnified Party with respect to such Third-Party
Claim, but such disposition will be without prejudice to any other right the
Indemnified Party may have to indemnification under Sections 14.1 and 14.2 of
this Article 14 hereof, regardless of the outcome of such Third-Party
Claim.  If the Indemnifying Party fails
or refuses to provide defense to any Third-Party Claim, then the Indemnified
Party shall have the right to undertake the defense, compromise, or settlement
of such Third-Party Claim, through counsel of its choice on behalf of and for
the account and at the risk of the Indemnifying Party and the Indemnifying
Party shall be obligated to pay the costs, expenses, and attorney fees incurred
by the Indemnified Party in connection with such Third-Party Claims.  In any event, Buyer, Seller and Pierce shall
fully cooperate with each other and their respective counsel in connection with
any such litigation, defense, settlement or other attempted resolution.

XV.                            CONDITIONS
PRECEDENT TO OBLIGATIONS OF BUYER

The
obligations of Buyer to purchase the Purchased Assets from Seller are subject
to the satisfaction on or before the Closing Date of all of the following
conditions, which conditions may be waived in writing by Buyer:

15.1         Accuracy of Representations and
Warranties and Covenants.  The
representations and warranties of Seller and Pierce 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 though made on and as of the Closing Date.

15.2         Performance of Agreements.  The Seller and Pierce shall have, have caused
to be performed and observed, in all material respects, 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 them at or
prior to the Closing Date.

15.3         Purchased Assets.  If, prior to the Closing Date, any material
part of the Purchased Assets is damaged by fire, other casualty, or any cause
or activity not attributable to or under the control of Buyer, Seller shall
give Buyer a written notice thereof and Buyer may, at its option, terminate
this Agreement by written notice of such election given to Seller no later than
five (5) working 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
Buyer shall not so elect or if an immaterial part of the Assets is damaged,
then Seller hereby assigns to Buyer 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 Purchased Assets.  Seller
hereby agrees to pay Buyer a sum equal to the deductible amount provided in
such policies to the extent necessary to correct such damage.

15.4         Non-Competition Agreement.  At or prior to Closing, Seller and Pierce
shall have executed a non-competition agreement as provided in Article XII.

 13
 

 

15.5         No Material Change.  There shall not have been between the date of
this Agreement and the Closing Date any material change in any of the Purchased
Assets or the current operations of Seller.

15.6         Litigation.  (1) Seller shall have resolved the matters
disclosed in Exhibit “8” or (2) Buyer and Seller shall have agreed as to how
those matters will be handled.

15.7         Employment Agreement.  At or prior to the Closing, Buyer and Pierce
shall execute the Employment Agreement as provided in Section 8.1 herein.

15.8         Completion of Due Diligence.  Prior to Closing, Buyer shall have completed,
to its satisfaction, such financial, technical and legal due diligence of
Seller as Buyer, its counsel, and its accountant shall deem necessary and
appropriate.

15.9         Board Approval.  Buyer shall have received approval from the
Board of Directors for consummation of this transaction on the terms and
conditions contained herein.

15.10       Legal Opinion.  Buyer shall have received from Seller’s
counsel, an opinion dated as of the Closing Date, in form and substance
satisfactory to Buyer and its counsel in the form attached hereto as
Exhibit  “13” and by its reference
incorporated herein.

15.11       Guaranty.  Seller and Pierce shall execute the Guaranty
as provided in Section 11.4 herein.

15.12       Sales Tax.  Seller shall have provided a tax clearance
letter for each state in which Seller is doing business, or Seller and Buyer
shall mutually agree on a satisfactory amount to be held in escrow until such
time as Seller has been able to deliver tax clearance letters from all
applicable jurisdictions.  In the event
that Seller has failed to file a sales tax return, or to pay all applicable
sales tax in any state in which Buyer determines a return shall have been
filed, and sales tax paid, Seller agrees to escrow an amount determined by
Buyer to approximate Seller’s sales tax liability in each such state for a
period of five (5) years prior to the year of closing.  Said Escrow Agreement shall be in the form of
Exhibit “14” attached hereto and by this reference incorporated herein.

15.3         Lease.  Seller shall execute a one (1) year Lease
with the Buyer for the premises located at 1512 Edwards Avenue, Suite 3, which
should be in the form of Exhibit “15” attached hereto and by this reference incorporated
herein.

XVI.        CONDITIONS PRECEDENT TO OBLIGATIONS OF
SELLER

The
obligations of Seller to sell the Purchased Assets under this Agreement to
Buyer is subject to the satisfaction on or before the Closing Date of all the
following conditions, which conditions may be waived in writing by Seller:

16.1         Accuracy of Representations and
Warranties.  The Representation and
Warranties of Buyer contained in this agreement shall have been true in all
material respects when made, 

 14
 

 

and in addition,
shall be true in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date.

16.2         Performance of Agreements.  Buyer shall have, or have caused to be
performed and observed, in all material respects, all covenants, agreements and
conditions hereof to be performed or observed by Buyer at or before the
Closing.

16.3         Approval of Board of Directors.  Seller shall have received approval from its
Board of Directors of the consummation of this transaction on the terms and
conditions contained herein.

16.4         Resolution of Litigation.  Either (a) Seller shall have resolved the
matters disclosed in Exhibit  10  or (b) Buyer and Seller shall have agreed as
to how those matters will be handled.

16.5         Legal Opinion.  Seller shall have received from Buyer’s
counsel, an opinion dated as of the Closing Date in form and substance
satisfactory to Seller and its counsel in the form attached hereto as Exhibit “16”
and by this reference incorporated herein.

XVII.       NON-ASSIGNMENT

Neither
this Agreement nor any of the rights and obligations hereunder may be assigned
by any party without the prior written consent of the other parties; provided,
however, Buyer may, without the consent of Seller and/or Pierce assign this
Agreement and its rights and obligations hereunder to a wholly-owned subsidiary
corporation, which after any such assignment shall become the Buyer
hereunder.  Notwithstanding the
foregoing, in the event that Buyer shall assign this Agreement to a
wholly-owned subsidiary corporation, Buyer shall guaranty the performance by
the assignee of all of the obligations of Buyer hereunder.  Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, the
respective successors and permitted assigns. 
No other person shall have any right, benefit or obligation hereunder as
a third-party beneficiary or otherwise.

XVIII.     EXPENSES

Except
as otherwise provided in this Agreement, each party shall pay its respective
expenses, taxes, and charges from liabilities incurred in connection with or
arising out of this Agreement, including without limitation thereto, counsel
fees, accounting fees, and any other expenses related to the assignment and
delivery of the Purchased Assets to Buyer.

XIX.                       LEASE OF
EMPLOYEES

Seller
shall lease to Buyer all of Seller’s employees used in the operation of Seller’s
business for the period from June 1, 2006 through June 30, 2006.  Said Lease payment shall include the entire
cost of the employees of Seller, including, but not limited to, all employer 

 15
 

 

payments in
addition to salary such as FICA match and FUTA, SUTA, 401(k), matching payments
and the employer’s share of payments for medical and disability insurance
premiums.  Buyer shall not be liable for
any accrued overtime earned by employees for any period prior to the Effective
Date..

XX          MISCELLANEOUS

20.1         Notices.  Unless otherwise provided herein, any
notices, requests, instructions or other documents to be given hereunder by
either party to the other shall be in writing and delivered personally or
mailed by certified mail, postage prepaid, return receipt requested (such
mailed notice to be effective on the date such receipt is acknowledged or
refused), as follows:

	
  IF TO SELLER:

  	
  National Cinema Service Corp.

  
	
   

  	
  Attention:   Christopher J. Pierce

  
	
   

  	
  1512 Edwards
  Avenue, Suite 3

  
	
   

  	
  Harahan, LA  70123

  
	
   

  	
   

  
	
  WITH A COPY TO:

  	
  Christopher J. Pierce

  
	
   

  	
  1512 Edwards
  Avenue, Suite 3

  
	
   

  	
  Harahan, LA  70123

  
	
   

  	
   

  
	
   

  	
  And

  
	
   

  	
   

  
	
   

  	
  Roy M. D’Aquila

  
	
   

  	
  D’Aquila, Volk,
  Mullins & Contreral, L.L.C.

  
	
   

  	
  3329 Florida
  Avenue

  
	
   

  	
  Kenner, LA  70065

  
	
   

  	
   

  
	
  IF TO BUYER:

  	
  Ballantyne of Omaha, Inc.

  
	
   

  	
  Attention:  John P. Wilmers

  
	
   

  	
  4350 McKinley
  Street

  
	
   

  	
  Omaha, NE  68112

  
	
   

  	
   

  
	
  WITH A COPY TO:

  	
  Marks Clare & Richards, L.L.C.

  
	
   

  	
  Myron J. Kaplan,
  Esq.

  
	
   

  	
  11605 Miracle
  Hills Drive, Suite 300

  
	
   

  	
  Omaha, NE  68154-4487

  

 

or at such other
address or designation as is provided by one party to the other in writing.

20.2         Choice of Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Nebraska, without regard
to principles of conflict of law.  Each
party irrevocably consents to the exclusive, personal jurisdiction, in any
court of competent jurisdiction located in the State of Nebraska with respect
to any action arising out of or pertaining to this Agreement.

 16
 

 

20.3         Survival of Representations and
Warranties.  The representations,
warranties and covenants of the parties hereto contained herein or in any other
document delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation theretofore made by either party.  Each and every representation, warranty and
covenant of Seller, Pierce and Buyer and the indemnification provisions set
forth in Article IV herein shall survive the Closing Date and remain operative
and in full force and effect as herein provided.

20.4         Entire Agreement; Amendments and
Waivers.  This Agreement, together
with all exhibits and schedules hereto, constitutes the entire agreement between
the parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written.  No supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby.  No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall  such waiver constitute a continuing waiver
unless otherwise expressly provided.

20.5         Multiple Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.

20.6         Invalidity.  In the event that any one or more of the
provisions  contained in this Agreement
or in any other instrument referred to herein shall, for any reason, be held to
be invalid,  illegal or unenforceable in
any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.

20.7         Titles.  The titles, captions or headings of the
Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.

20.8         Confidential Information.  In connection with the negotiation of this
Agreement, each party acknowledges that it has had access to confidential
information relating to the other party. 
Each party shall treat such information as confidential, preserve the
confidentiality thereof and not duplicate or make use of any other such
information, except as to advisors, consultants, lenders and affiliates in
connection with the transactions contemplated hereby or pursuant to or as
required by law.  If the transaction is
not closed, each party shall return to the other all confidential information
in tangible form, belonging or relating to the other party or provide a certificate
of destruction of such material acceptable to the other party.

 17
 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on their respective behalf, by their respective officers thereunder
duly authorized, on this 30th day of June, 2006.

 

	
   

  	
   

  	
  NATIONAL CINEMA SERVICE
  CORP.,

  
	
   

  	
   

  	
  a Louisiana
  corporation “Seller”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Christopher
  J. Pierce

  	
   

  
	
   

  	
   

  	
  Christopher J.
  Pierce, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Christopher
  J. Pierce

  	
   

  	
   

  
	
   

  	
   

  	
  Christopher J. Pierce
  “PIERCE”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BALLANTYNE OF
  OMAHA, INC.,

  	
   

  
	
   

  	
   

  	
  a Delaware
  corporation, “Buyer”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Brad French

  	
   

  
	
   

  	
   

  	
  Brad French
  Secretary/Treasurer

  	
   

  

 

 18

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