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EXHIBIT 10.1
[MACHINERY ACQUISITIONS INTERNATIONAL, INC.]
May 19, 2000
Total Building Systems, Inc.
6250 N. Houston Rosslyn Road
Houston, Texas 77091
Attention: Charlie McPhail, President
Dear Mr. McPhail:
This letter will confirm our agreement for the purchase by Machinery
Acquisitions International, Inc. (MAI) of Houston, Texas, of all of the tangible
personal property (TPP) of Total Building Systems, Inc. and Texas TBS (jointly
and severally hereinafter known as TBS) located at the TBS facility at 6250 N.
Houston Rosslyn Road, Houston, Texas, and hereinafter known as the Facility,
(with the exception of those set out on Exhibit A attached hereto) together with
all of the tangible personal property assets at TBS's plant on 15630 Jacintoport
Blvd. in Houston, Texas, which assets TBS will immediately deliver to the
Facility. Our agreement is set forth in the numbered paragraphs below.
1. MAI will purchase all of said assets ("Assets") which Assets have been
inspected by Mr. Skip Bradley.
2. The total purchase price for the Assets is $265,000 payable by
cashier's check or wire transfer of funds to TBS in full by May 15,
2000, or by a portion of said amount being paid on said date or at said
future date to TBS's secured creditors as it may designate. Upon such
payment (or payments) being made in full TBS shall execute and deliver
to MAI a bill of sale in the form attached hereto.
3. The parties further understand and agree that MAI may take possession
of the Assets immediately upon said payment for the same and the risk
of loss including theft of the Assets together with any responsibility
and liability for being in control of the same will pass from TBS to
MAI at the time of said payment.
4. In connection with MAI's conducting public and private sales, it will
use Plant & Machinery, Inc. (PMI) of Houston, Texas, as its auctioneers
and PMI will supply to TBS upon the execution of this document
certificate evidence of insurance coverage for general and product
liability showing TBS being added as an additional insured on PMI's
policies in the amount of $11,000,000.
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5. TBS agrees that MAI and PMI employees will have expense free access to
the areas of the Facility where the Assets are located for the purpose
of preparing and lotting the Assets for sale and their customers shall
have similar access for inspections to be conducted and escorted by MAI
and PMI personnel. Similar access to the Facility shall be available
for the proper removal of goods sold. The total process is to take
place and be completed by July 31, 2000.
6. MAI HAS INSPECTED THE ASSETS PRIOR TO PURCHASE AND ACKNOWLEDGES THAT
THE ASSETS ARE BEING PURCHASED "AS IS" AND "WHERE IS" AND THAT EXCEPT
AS PROVIDED IN THE NEXT SENTENCE, TBS MAKES NO REPRESENTATION,
GUARANTEE OR WARRANTY, EXPRESSED OR IMPLIED, OF ANY KIND WITH RESPECT
TO THE ASSETS, INCLUDING ANY WARRANTY AS TO CONDITION, FITNESS FOR ANY
USE, OR MERCHANTABILITY. TBS expressly warrants that good, merchantable
and marketable title to the Assets is being sold to MAI, free and clear
of any liens, claims or encumbrances of any kind whatsoever including
without limitation security interests, tax liens or charges, statutory
liens, the liens of any judgements or decrees and the rights of former
owners.
7. It is agreed to and understood by the parties hereto that MAI is
purchasing nothing containing PCB's or other hazardous or toxic waste,
and any responsibility for the disposal of the same lies with parties
other than PMI or MAI. PMI and MAI know of no such problem existing at
this time. MAI shall also have a right to abandon unsold items after
the auction.
8. PMI hereby agrees with MAI to handle all facets of the auction sale
including but not limited to the following:
a. PMI will provide an on-site sale coordinator who will with the
assistance of others conduct the final cleanup, preparation
and merchandising of the Assets for sale. We are anticipating
that the process will take place over a 2-week period. PMI
people will also oversee the check-out of items sold after the
sale. The total process including removal will be completed
approximately two weeks after the auction date.
b. During the preparation period PMI will engage in tagging,
numbering and describing the various lots to be auctioned. PMI
will assume the responsibility for the dictation and
preparation of
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all computer entries of lot numbers and lot descriptions which
will then be used by PMI computers to prepare advertising, to
print catalogues for use at the sale and also to print
invoices to all buyers.
c. PMI advertising people will photograph the Assets, gather
detailed descriptions and assemble other pertinent information
for auction brochures and advertising.
d. Advertising will include color brochures to be mailed to
potential customers. PMI will place advertisements in trade
journals, newspapers and other applicable publications on a
regional and national basis.
e. PMI further will engage in a telephone marketing campaign in
order to provide a personal touch to invitations for
attendance to the most serious bidders, and further, this
helps obtain as many "phone-in-bids" as are possible prior to
the opening of the auction.
f. Several auctioneers and ring men will be provided on the sale
day as well as other support personnel for buyer registration,
credit checks, taping the auction to resolve disputes, etc.
g. PMI will collect all auction proceeds and applicable sales
taxes in a segregated bank account for this purpose. PMI
agrees that in return for TBS's consent to conduct the auction
at the Facility, PMI will isolate 65% of all proceeds (other
than the buyer's premium) received over the amount of $315,000
for the account of TBS and pay the same in full to TBS within
15 banking days after the auction. MAI hereby agrees to such
payment being made. The parties further agree that all of the
intangible interests of TBS's product lines are included in
MAI's purchase and in the auction and that the proceeds of the
same shall be a part of the aforesaid formula for payment by
PMI to TBS.
9. Each party further represents that it is duly authorized to enter into
this agreement and that the undersigned is duly authorized to execute
the same on behalf of such party.
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10. As a matter of Texas law, PMI is required to advise you that should you
have any complaints to be made to the Texas Department of Licensing and
Regulation in connection with this company or its auctioneers, said
department's address and phone number is P.O. Box 12157, Austin, Texas,
78711, (512) 463-2906.
Yours sincerely,
Machinery Acquisitions
International, Inc. Plant & Machinery, Inc.
/s/ Robert J. Braman /s/ Robert J. Braman
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BY: Robert Jay Braman, President, BY: Robert Jay Braman, President
Agreed and Accepted:
Total Building Systems, Inc.
/s/ Charlie McPhail
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BY: Charlie McPhail, President
RJB/dr D2406
Attachment
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EXHIBIT A
1. Gardner Denver Air Compressor
2. Atlas Copco Air Compressor
3. (2) Receiving Tanks For Compressed Air
4. All Bridge Cranes
5. All Components Of The Telephone System