Exhibit
10.1


 


	
   

  
	
  SALE OF GOVERNMENT PROPERTY

  AMENDMENT OF INVITATION FOR BIDS/MODIFICATION OF CONTRACT

  
	
   

  
	
  1.     AMENDMENT TO INVITATION FOR
  BIDS NO.:     
  99-4001-0004

  	
  2.  EFFECTIVE DATE

  	
  PAGE 1 OF    5  PAGES

  
	
          SUPPLEMENTAL AGREEMENT NO.:     5

  
	
  3.     ISSUED BY

  DEFENSE REUTILIZATION AND MARKETING SERVICE

  ATTN: DRMS-BBS

  74 WASHINGTON AVE. N.

  BATTLE CREEK, MI 49017-3092

  	
  4.  NAME AND
  ADDRESS WHERE BIDS ARE RECEIVED

  DEFENSE REUTILIZATION AND MARKETING SERVICE

  ATTN: DRMS-BBS

  74 WASHINGTON AVE. N.

  BATTLE CREEK, MI 49017-3092

  
	
  5.     o AMENDMENT OF INVITATION FOR BIDS NO.
     
  (See item 6)



  	
  DATED

  	
  x MODIFICATION OF CONTRACT NO.
      (See item 8)

  994001-00004

  	
  DATED

  

  03/28/07

  
	
  6.     THIS
  BLOCK APPLIES ONLY TO AMENDMENTS OF INVITATIONS FOR BIDS

         The above
  numbered invitation for bids is amended as set forth in Item 9.  Bidders must acknowledge receipt of this
  amendment unless indicated otherwise in item 11 prior to the hour and date
  specified in the invitation for bids, or as amended, by one of the following
  methods:

         (a)     By signing and returning __________
  copies of this amendment;

         (b)     By acknowledging receipt of this
  amendment on each copy of the bid submitted; or

         (c)     By separate letter or telegram which
  includes a reference to the invitation for bids and amendment number.

         FAILURE OF
  YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE ISSUING OFFICE PRIOR TO THE HOUR
  AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR BID.  If by virtue of this amendment you desire
  to change a bid already submitted, such change may be made by telegram or
  letter, provided such telegram or letter makes reference to the invitation
  for bids and this amendment, and is received prior to the opening hour and
  date specified.

   

  
	
  7.     ACCOUNTING
  AND APPROPRIATION DATE (If required)



  
	
  8.     THIS
  APPLIES ONLY TO MODIFICATION OF CONTRACTS

  This Supplemental Agreement is entered into pursuant to authority of

  MUTUAL AGREEMENT

  
	
  9.     DESCRIPTION
  OF AMENDMENT/MODIFICATION (Except as provided
  below all terms and conditions of the document referenced in item 6 remain in
  full force and effect)

   

  Whereas
  Contract 99-4001-0004 was entered into on June 9, 2005 by and between
  the United States of America, hereinafter referred to as the Government
  and Liquidity Services, Inc. hereinafter referred to as the contractor, and
  DOD Surplus, LLC formed by the contractor to serve as the entity that
  processes DRMS assets, hereinafter referred to as the Purchaser, and Whereas
  the contract involved the follow item in Invitation for Bid 99-4001:

   

  0001:  All scrap material located in the
  continental United States (other than Tennessee and the Carolinas) and in
  Alaska that is demilitarization code A, B, E, or Q or that is subject to
  demilitarization as a condition of sale other than material and items in the
  list of excluded SCLs and FSCs set forth in Part IV.  Contract performance is 7 years with three
  one year renewal option periods.

   

   

   

  THE HOUR AND DATE FOR
  RECEIPT OF BIDS           o           IS
  NOT EXTENDED,        o         IS
  EXTENDED UNTIL       O’CLOCK                M

  (LOCAL TIME)            DATE

  
	
  10.   BIDDER/PURCHASE
  NAME AND ADDRESS (Include zip Code)

  DOD Surplus, LLC

  15051 N. Kierland Blvd. Third Floor

  Scottsdale, AZ  85254

   

  	
  11.  o  BIDDER IS NOT REQUIRED TO
  SIGN THIS DOCUMENT

   

        x   PURCHASER IS REQUIRED TO
  SIGN THIS DOCUMENT   AND RETURN ORIGINAL AND   0    
  COPIES TO THE   ISSUING OFFICE

  
	
  12.   SIGNATURE
  FOR BIDDER/PURCHASER

   

  BY           /s/ Thomas B. Burton                                                               
                         (Signature of person authorized to sign)

  	
  15.     UNITED STATES OF AMERICA

   

  BY             /s/
  Gregory E. Ortiz                                                
                       (Signature of Contracting Officer)

  
	
  13.   NAME AND
  TITLE OF SIGNER (type or print)

  

  Thomas B. Burton, President

  	
  14.  DATE
  SIGNED

  

  5-20-07

  	
  16.  NAME OF CONTRACTING OFFICER
   (type or print)

  GREGORY E. ORTIZ

  	
  17.  DATE SIGNED

  5/21/07

  
	
  AUTHORIZED FOR LOCAL REPRODUCTION

  	
   

  	
  STANDARD FORM 114d (REV.
  1-84)

  
	
  Previous edition is usable

  	
   

  	
  Prescribed by GSA PPRM (41
  CRF) 101-45.3.

  
								



 











DRMS CONTRACT NUMBER
99-4001-0004

Supplemental Agreement 5

Page 2 of 5


WHEREAS, the
Defense Reutilization and Marketing Service (“DRMS”) requires that property
being sold as scrap material receive increased scrutiny to ensure that
mutilation is being performed in accordance with the requirements of this sales
contract; and


WHEREAS, in
order to effectively scrutinize the mutilation of property that presents a risk
of release in its useable configuration to the public, while maintaining an
efficient flow of saleable scrap material that represents lower risk, and where
mutilation is not critical to its sale;


NOW, THEREFORE,
it is mutually agreed between the two parties hereto to this modification that:


1.               Part
II, Section V, “Demil “B” and “Q” Property,” shall be amended as follows:


Third paragraph shall be deleted in its entirety and
replaced with the following paragraph:


All Property offered under this contract including
DEMIL Code “A” property, requires Mutilation, (destructively scrapping in a
manner that prevents recognition or reconstruction of the original item and sub
components) unless specifically excluded from Mutilation by the
Government.  Property generally excluded
from Mutilation requirement includes: Demil code “A” vehicles, tires, lockers,
ammunition cans, production stock/residue (bars, plate rod, wire, borings and
turnings), wire and cable, pipe and tube construction material/residue
(lumber, block, brick, windows, I-beams), wood products, furniture and white
goods (appliances, e.g.,
refrigerators)  The Purchaser may request
from the SCO that other property be excluded from the Mutilation
requirement.  DRMS will evaluate such
requests in the exercise of its sole discretion.  Mutilation is not required for scrap material
generated from Puget Sound Naval Shipyard and CDC Texarkana, TX, as this scrap
is already mutilated prior to referral to the Purchaser.  In instances where scrap is not mutilated at
these locations prior to release under the SV contract, mutilation will be
required.


8th paragraph shall
be deleted in its entirety and replaced with the following paragraph:


If the material (Demil “A”, “B” and “Q” Property) has
not been mutilated before re-sale, the Purchaser will either perform the
mutilation at the DRMO or witness mutilation by the re-sale buyer and attest to
the mutilation by signing as a witness to the mutilation process on the
Certificate of Destruction.  The
Purchaser’s reasonable costs associated with verifying the destructive
scrapping shall be submitted as seller indirect costs.











DRMS CONTRACT NUMBER
99-4001-0004

Supplemental Agreement 5

Page 3 of 5


2.               Part VI, Article
Seven, Section 5, Part C(1) shall be amended as follows:

Delete paragraph in its entirety and replace with the following paragraph:


For MLI and CCLI (i.e. DEMIL “B” and “Q”) Property not
mutilated by the Purchaser, the Purchaser shall promulgate in all re-sale
advertisements and catalogs, as well as in the terms and conditions of sale, a
notice to prospective buyers that the terms will require export permits.  The wording of such notice shall be approved
in advance by DRMS in the exercise of its
sole discretions.  Before releasing a
particular item of DEMIL “B” or “Q” Property to a prospective re-sale
buyer, (i) Purchaser shall obtain a completed EUC from such buyer for each
lot (or group of lots at a single re-sale event) of such Property and furnish a
copy thereof to DRMS, (ii) Purchaser shall confirm with DRMS through the SCO
that such buyer is cleared for the purchase of DEMIL “B” and “Q” items.  Purchaser shall promulgate in all re­sale advertisements and catalogs, as well as in the
terms and conditions of sale, a notice to prospective buyers that the
terms will require mutilation of material not excluded from the mutilation
requirement.  The Purchaser will either
perform the mutilation at the DRMO, or witness the re-sale buyer’s
mutilation process and attest to the mutilation by signing as a witness to the
mutilation process on the Certificate of Destruction for every removal.


3.               Purchaser shall
promulgate in all sales advertisements and catalogs, as well as in the terms
and conditions of sale, a notice to prospective buyers that the Government has
the right to Surveillance to allow Government personnel to accompany GL
personnel in the performance of witnessing and attesting to the mutilation
process performed at the re-sale Buyer’s facility.


4.               Government
personnel will witness and attest to the Mutilation of all scrap received, and
provided under this contract identified as Standard Waste and Scrap
Classification (SCL) Codes MUT, MFS and CSI. 
All SCL Codes MUT, MFS, and CSI will be destroyed at no more than two
locations in CONUS with the requirements listed below.  The Government reserves the rights to inspect
and approve the locations identified by GL to process these scrap codes to
ensure the processing requirements can be met. 
The DRMOs will be provided instructions to ship this property to the
approved locations.


a.               Material will be
completely destroyed using a process that will input items up to 8’ foot X 8
foot in size and result in residue not to exceed 4 inches X 4 inches in
size.  Automated size reduction prior to
shredding is allowed.


b.              End items whose
original size is smaller than 4 inches X 4 inches must be destroyed beyond
recognition and destroyed so that it cannot be used for its original intended
purpose.


c.               For special type
items (i.e., material hardness and thickness) which cannot be destroyed in the
manner prescribed above, the degree and method of destruction will then be
prescribed by a government representative.











DRMS CONTRACT
NUMBER 99-4001-0004

Supplemental Agreement 5

Page 4 of 5


d.              Military markings
and data plates identified on residue must be removed and destroyed beyond
recognition.


e.               Parts removal to
any degree is strictly forbidden.


f.                 The Purchaser
will be required to process 100,000 lbs of metallic material per day and 30,000
lbs of non-metallic material per day or a minimum of 6 hours of shredding per
day as quantities warrant.


g.              The processing
locations must provide a secure area at their facility in the event that the
property cannot be destroyed the day it arrives.


h.              GL will provide an
Operational Plan which identifies the capability to accomplish destruction as
described above.


5.               Part II, Article
Sixteen, Section 3, “Calculate Net Worth Allocations,” shall be amended as
followed:


Section 3(A), “Calculate Contractor Net Worth
Allocation,” change to read,


“Purchaser shall calculate the amount of the ‘Contractor
Net Worth Allocation’ as Operating Net Worth multiplied by 23%


6.               Section 3(B), “Calculate
DRMS Net Worth Allocation,” change to read,


“Purchaser shall calculate the amount of the ‘DRMS Net
Worth Allocation’ as Operating Net Worth multiplied by 75.2%.


Section 3(C), “Calculate KGP Net Worth Allocation,”
shall remain the same.


7.               Mutilation
Timeline:


a.               Implement new
mutilation requirements in all spot sales and new term contract offerings – 30
days after effective date of modification


b.              Implement new
mutilation requirements in all existing term contracts or offer new term
contracts with the mutilation requirements – 120 days after effective date of
modification


8.               Reports


a.               Provide a monthly
report NLT 15 days after the end of the month all completed certificates of
destruction in Microsoft excel format. 
Separate worksheets shall be kept for term sales and spot sales.


b.              Report shall include
the following information:


	
  i.

  	
   

  	
  Sale & Lot Number

  
	
  ii.

  	
   

  	
  Buyers name

  
	
  iii.

  	
   

  	
  Property sales location

  
	
  iv.

  	
   

  	
  Type of Property

  
	
  v.

  	
   

  	
  Weight

  












DRMS CONTRACT
NUMBER 99-4001-0004

Supplemental Agreement 5

Page 5 of 5


	
  vi.

  	
   

  	
  Date of removal

  
	
  vii.

  	
   

  	
  Date of destruction

  
	
  viii.

  	
   

  	
  Certifiers Name (GL)

  
	
   

  	
   

  	
   

  



c.               Report shall
contain copies of the certificate of destruction.  Certificate of destruction will be provided
for every removal.


d.              Monthly report
identifying contracts with outstanding certificates of destruction.


9.               Calculations for
DRMS and Contractor net worth allocations outlined in sections 5 and 6 above
shall commence on the 1 day of the month following execution of this
modification.


10.         All existing terms and
conditions including Supplemental Agreements 1-4 remain in effect.


////////
NOTHING FOLLOWS ////////