Ambassadors to sell two business lines; buyer to assume some debt

By Caroline Salls

Pittsburgh, April 21 - Ambassadors International, Inc. and wholly owned subsidiary Ambassadors, LLC have entered into an asset purchase agreement with Travel and Event Services, LLC for the sale of the subsidiary's Ambassadors Convention Housing Services line and the line arranging full-service housing for trade shows, associations and conventions, according to an 8-K filed with the Securities and Exchange Commission.

Under the purchase agreement, Travel and Event Services has agreed to pay $500,000 in cash and assume $3.8 million of Ambassadors, LLC's debt.

The buyer is also obligated to pay up to an additional $300,000 in cash to the subsidiary if net revenue for the year ending Dec. 31, 2009 related to the purchased business lines exceeds specified thresholds.

The purchase agreement also contains three-year non-competition and non-solicitation provisions covering the company, the subsidiary and their affiliates.

According to the 8-K, Ambassadors, LLC will continue to operate its Ambassadors Travel & Events business related to corporate incentive travel planning and management.

As previously reported, if the company is not able to sell its non-Windstar Cruises related assets, including the operations of marine, travel and events, Majestic America Line and insurance, it would be forced to extend payment terms with vendors where possible and/or suspend or curtail some of its planned operations and possibly seek bankruptcy protection.

The company said it is also seeking additional financing sources and renegotiating existing debt obligations.

Ambassadors is a Newport Beach, Calif.-based cruise and travel company.

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