Document:

<PAGE>   1
                                                                   EXHIBIT 10.25

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MANNESMANN DEMATIC RAPISTAN CORP. ("RAPISTAN SYSTEMS") WITH OFFICES LOCATED
AT:  8600 W. Royal Lane, Suite 100 A
     Irving, TX 75063

SUBMITS THIS PROPOSAL TO:                         EQUIPMENT TO BE INSTALLED AT:
      HOME INTERIORS & GIFTS,                       HOME INTERIORS & GIFTS, INC.
      4550 Spring Valley Road                       Carrollton, TX
      Dallas, TX  75244

This PROPOSAL consists of the following documents:

1.   Sales Agreement No. 56-5738 Rev. B, including General Terms and Conditions
     (Exhibit A)

2.   This Proposal, Tabs 1 through 9 and Pages 1 through 59. Rapistan Systems
     drawings: P565738Q010G, Rev. 4, P565738 L010, Rev. 4 L011, Rev 4, L012,
     Rev. 4, L013, Rev. 4, dated 11/3/99

4.   Other documents: None

In the event of conflict between any documents, the document first listed above
shall govern all documents listed below it.

All of the information in the Proposal is confidential and has been prepared for
Home Interiors' use solely in considering the purchase of the equipment
described. Transmission of all or any part of this information to others or Home
Interiors' use for any other purpose is unauthorized without Rapistan Systems'
prior written consent. All Rapistan Systems specifications and drawings will
remain the property of Rapistan Systems and are subject to recall at any time.

Copyright, Mannesmann Dematic Rapistan Corp., 1999. The contents of this
Proposal may not be reproduced without the express written permission of
Rapistan Systems.

THIS PROPOSAL SUBMITTED BY:
/s/ BRAD BIJONOWSKI                SALES ENGINEER           972-929-7700
--------------------------         ------------------       -------------------
BRAD BIJONOWSKI                    TITLE                    PHONE

/s/ ROYAL SMITH                    GENERAL MANAGER          972-929-7700
--------------------------         ------------------       -------------------
ROYAL SMITH                        TITLE                    PHONE

This Proposal will remain valid through December 23, 1999. In the event this
Proposal is not accepted prior to this date, then the price, schedule, and other
portions of this Proposal could be subject to change.

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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999
PROPOSAL CONTENT

This Proposal covers a Turnkey Material Handling System encompassing conveyor
equipment, controls, field wiring, installation, commissioning and training for
Home Interiors new Carrollton Distribution Center.

SCOPE OF WORK:

The following elements are included in this proposal:
     o    Carton conveying system
     o    Sortation support structure
     o    Primary and back-up air compressor and piping
     o    Safety netting under specific conveyor sections
     o    Scanning systems for zone routing and sorting
     o    Gravity Best-Flex expandable conveyors for truck loading
     o    Coordination with EXE and selected rack vendor
     o    RapidVIEW - graphical systems monitor

The following items have not been included in this proposal and will be the
responsibility of Home Interiors & Gifts.
     o    Overall building construction
     o    Seismic approvals or building permits
     o    Lighting systems
     o    Sprinkler systems
     o    Fork trucks
     o    Dunnage machines
     o    Carton sealers
     o    Reserve (back-stock) pallet rack
     o    Pick module rack system
     o    Pallet track in "Slapper Line" area
     o    Empty carton conveyor system
     o    Baler or trash compactor
     o    Pick to Light system (see Rapistan proposal #56-5879)
     o    Printers and labels
     o    Scanners and required computer hardware at dunnage stations

MECHANICAL DESIGN: The refinement of layout drawings submitted with this
Proposal, preparation of installation drawings, including air piping diagrams;
design of nonstandard equipment components and the integration of the standard
and nonstandard equipment into an operational system.

                                                                               2
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PROPOSAL CONTENT
CONTINUED

CONTROL DESIGN: The development of control scheme, selection of control
components, preparation of schematic wiring diagrams and preparation of detailed
descriptions of operations.

MANUFACTURE AND SUPPLY OF MECHANICAL AND ELECTRICAL EQUIPMENT:  Supplied as
outlined in the Lists of Equipment.

MECHANICAL INSTALLATION: Installation of all conveyors and conveyor accessories
specified within the Proposal. Receiving, unloading, rigging and placement of
conveyors will be performed by Rapistan Systems.

FIELD WIRING: Field wiring of all conveyors and conveyor accessories specified
within this Proposal. This includes setting the control cabinets, connecting the
power and control wiring from these cabinets to the conveyors and remote control
devices and mounting the control devices. Home Interiors will provide wiring
from the power source to the control cabinet(s).

                                                                               3
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MATERIALS TO BE HANDLED

The equipment will convey materials having the dimensions, weights, shapes,
surfaces and other characteristics, as set forth in this section. The equipment
will have the mechanical capability to convey such materials at the rates
specified in this section.

The items to be conveyed will have the following physical properties:

<TABLE>
<CAPTION>

                            Length      Width     Height    Weight
<S>                        <C>         <C>         <C>      <C>
        Minimum               8"          4"        2"      2 lbs.

        Maximum              28"         20"       30"      50 lbs.

        Shipping Carton    25.5"       15.5"       20"      5-50 lbs.
        (Design Length)
</TABLE>

Please note that the length dimension shown above will be the dimension parallel
to product flow and the height dimension shown above will be the dimension
perpendicular to the conveying surface when the product(s) are initially placed
on the conveying equipment.

The materials to be conveyed must be in a condition to permit proper conveyance.
The bottom surface of the materials to be conveyed which is in contact with the
conveyor must be firm and flat, free of distortion, and of sufficient strength
to support its own weight.

The equipment has been designed to handle the rates listed below. The ability to
obtain these rates is predicated on Home Interiors' equipment and personnel
being able to feed and unload product to meet these rates.

Items which will not convey well are those with the following characteristics:

     A.   Uneven bottoms, soft bottoms or bottoms with banding or strapping.

     B.   Open or improperly sealed containers.

     C.   Imperfections in the form of the conveyed product.

     D.   Side or bottom which has concave or convex distortion.

     E.   Protrusions on the sides or bottom.

     F.   Uneven weight distribution or shifting center of gravity.

                                                                               4
<PAGE>   5

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MATERIALS TO BE HANDLED
CONTINUED

Rates

It is Rapistan Systems' responsibility to provide conveyor equipment that is
mechanically capable of conveying the following rates through the system. It is
Home Interiors' responsibility to provide personnel to operate the equipment
necessary to attain the above rate.

Product Flow Rate

Product flow rates are defined as the number of items that are able to pass by a
given point in a fixed unit of time.

Rates given are defined as peak (maximum) and are based on "design product
length".

<TABLE>
<CAPTION>

================ ================== ======================= =============== ===================================
                                            DESIGN               RATE
   LOCATION          DRAWING NO.        PRODUCT LENGTH         ITEM/MIN.                 COMMENTS
================ ================== ======================= =============== ===================================
<S>                  <C>                     <C>                 <C>              <C>
       A            P565738Q010F             25.5                 15             Picking Pod Exit
---------------- ------------------ ----------------------- --------------- -----------------------------------
       B            P565738Q010F             25.5                7.5             To Packing (Dunnage Taping)
---------------- ------------------ ----------------------- --------------- -----------------------------------
       C            P565738Q010F             25.5                 30             Packing to Sort Merge
---------------- ------------------ ----------------------- --------------- -----------------------------------
       D            P565738Q010F             25.5                 25             Full Case to Sort Merge
---------------- ------------------ ----------------------- --------------- -----------------------------------
       E            P565738Q010F             25.5                 80             Sort Induction
================ ================== ======================= =============== ===================================
</TABLE>

NOTE: All rates were developed using data gathered and evaluated by Tompkins
Associates, Inc..

                                                                               5
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MATERIALS TO BE HANDLED
CONTINUED

Sortation - Servo-Induction

The sortation system selected requires product to be inducted with a
pre-determined gap from trailing edge of product to leading edge of next
product. Rate will be variable with longer product having rate less than design
rate and shorter product having a rate greater than design rate.

Rate will be tested with cartons of design length and will be defined as the
quantity of sortable product (as defined in the Materials to be Handled section
of this Proposal) presented to the sortation machine, divided by the length of
time the system can deliver a continuous supply of product from one or more
conveyor lines.

For purposes of testing and acceptance, sortation rate will consider "Line Full
to Recirculation" and "No-Reads to Reject" as successfully sorted.

                                                                               6
<PAGE>   7

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

DESCRIPTION OF OPERATION

The equipment will perform as described when properly operated, maintained and
managed by Home Interiors. Please refer to Rapistan Systems drawing(s)
referenced on Page 1 of this Proposal while reviewing the following description
of operation.

Unit Control Identification

Units:         RA-1000 through RG-50030

Control Panel: CC-1, CC-2, CC-3, ISC-01, RSC-01

Start-Up Procedure (Typical)

When the main disconnect switch is turned to the "On" position, the conveyors
are energized from "Start" pushbutton(s) mounted on the main control panel(s).
When a "Start" pushbutton is depressed, a start-up warning horn sounds for ten
(10) seconds prior to any equipment movement to warn personnel to stand clear of
the equipment. When the horn stops sounding, the equipment will be energized.

Emergency Stop Procedure (Typical)
------------------------

Manually actuated emergency stops have been provided at various points along the
conveyor system to de-energize the conveyors if an emergency occurs. The
emergency stop pushbutton is "Push to Stop" and "Pull to Reset". The emergency
stop pullcords are "Pull to Stop" and must be reset manually at the actuated
switch. When actuated, the emergency stops are maintained contact-manual reset
and will remain in the actuated position until reset. When the problem has been
cleared, the actuated stop must be reset and the conveyor equipment must be
restarted at the control panel(s) as previously described.

                                                                               7
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

DESCRIPTION OF OPERATION
CONTINUED

Accumulation Flow Control (Typical)

In each area where a surge accumulation conveyor may be loaded with product by
another conveyor, a photo electric controller with time delay relay is included
to stop the preceding conveyor(s) or activate an air operated stop when the
accumulation conveyor is fully loaded and the controller is blocked for a preset
time. When the accumulation conveyor is allowed to begin discharging its load,
the controller will be cleared indicating that space is again available on the
accumulation conveyor. When this occurs the stopped conveyor(s) will be
restarted automatically or the air-operated stop will be lowered.

System Overview

The system has four major physical components: two (2) picking "pods", dunnage
and taping area, full case "slapper line" and a high-speed sorter.

The pods consist of two (2), three level pick modules that are configured for
two deep pallet flow rack and carton flow (pick modules are by others), to
minimize picking travel for the slowest moving items. The pods also have
designated slots for input of empty shipping cartons and removal of empty
pallets. A powered conveyor serpentines from the lower level, through two (2)
upper levels. Cartons are zone routed through two sets of diverts on each
picking level, which serves to divide each level into four (4) physical zones.
Cartons continue out of the module and decline to the lower level of the second
module in the pod, to serpentine up through the second and third levels of the
second module. The serpentine through both modules of a pod allows the pickers
to more completely fill the containers as the pick and pass operation passes all
of the SKU facings in the stock assortment.

If there are candles in an order, the order will start in the candle area. The
picker will utilize a special candle box that is smaller than the standard
shipping container (specific dimensions to be determined). This container will
hold six (6) candles. If there are not six candles left to pick, a picker may
choose to open a large shipping container to pack the remaining candles. Either
carton, if not completely full, will be diverted into the next appropriate zone.
When product will no longer fit into the current carton, it will be closed out
(see Pick to Light description), and a new carton will be married to the current
order.

All cartons exiting the picking pods are conveyed to dunnage and taping
stations. A packing operator will manually transfer cartons onto a ball transfer
table for handling. The unique bar code will be scanned and a carton contents
list and shipping label will be printed (scanners, printers and labels are by
others).

                                                                               8
<PAGE>   9

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

DESCRIPTION OF OPERATION
CONTINUED

The operator will apply the carton contents list to the inside, the shipping
label to the top, and fill the carton with air bag packaging protection (dunnage
provided by others). Cartons are then manually placed onto an accumulation
conveyor feeding automatic, self indexing, carton sealers (carton sealers are by
others). Sealed cartons are conveyed out of the dunnage and taping area, merged
onto a live roller take away and accumulated before a saw-tooth merge, for
induction to the sorter.

A "slapper line" for the fastest moving items is provided to pick full cases
using labels directly applied to the top. Cases from this area are conveyed
directly to the saw-tooth merge, as no dunnage or sealing is required. The pick
labels, printed by the WMS system, will serve as both shipping label and sort
destination identification.

Cartons and cases are sorted to one of 21 diverts. There is one divert for the
UPS marshalling area. It will also serve as a "no read" line should a read error
be encountered. The other 20 diverts serve individual shipping doors. Each
divert is equipped with an accumulation conveyor at the sorter level, a decline
belt and a gravity extendible loading conveyor. The system will verify
successful diverts and provide case counts by sort lane for upload to the host
system.

Picking waves, planned by the WMS, will utilize 10 of the 20 available doors at
a time. Waves will alternate between every other door in order to keep
transition times minimal, and to allow the truck loaders to staff according to
volume. For a more detailed description of picking waves, see Rapistan Systems'
Pick to Light Proposal #56-5879.

                                                                               9
<PAGE>   10

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

LIST OF MECHANICAL EQUIPMENT

<TABLE>
<CAPTION>

                                      APPROX.                 SPEED
UNIT NO.          DESCRIPTION         LENGTH       WIDTH      (FPM)     MOTOR
--------          -----------         -------      -----      -----     -----
<S>               <C>                 <C>          <C>        <C>       <C>>
                  COMMENTS
</TABLE>

To be engineered

                                                                              10
<PAGE>   11

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

                                                                              11
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

LIST OF ELECTRICAL EQUIPMENT

Controls, motors, and other equipment supplied by Rapistan Systems will be
designed to operate from a supply of 60 hertz, 3 phase power, at a nominal level
of 480 volts, with a voltage variation not exceeding plus or minus 5% of
nominal.

The following electrical equipment will be included:

     (3)  Prewired, pretested electrical control cabinet, NEMA-12, with the
          following equipment mounted and wired to terminal blocks:
          3 Disconnect switch with flange mounted handle
          36 Group motor fuses
          3 Control transformer, 115 volt
          173 Starter(s), IEC, non-reversing
          24 Starter(s), IEC, reversing
          198 Motor protector, IEC
          18 Pushbutton(s), door mounted
          9 Indicating light(s), door mounted
          12 Relay(s) in enclosure for interlock
          2 Programmable controller
          89 Input and output modules with racks

The following electrical device(s) will be furnished loose and are to be mounted
and wired in the field:

          198 Combination motor starter/disconnect(s)
          198 Motor disconnect switch(s)
          17 Warning horn(s)
          292 Photo control(s) with mounting bracket(s)
          29 Limit switch(s) with actuator(s)
          66 Emergency stop pull cord switch(s)
          7 Start/stop pushbutton station(s)
          29 Beacon(s)

The following computer hardware will be included for the RapidVIEW2 graphical
systems monitor

          1 Deskpro EN M4300/CDS P2-350 64 MB 6.4GB 512K 24X NT 4.0
          1 Sutherland-Schultz PLC interface
          1 S700 17" Compaq 1600X1200 75 HZ
          1 USP APC SU700XLNET - 700VA (includes data cable)
          1 Iomega Jaz Internal 2GB Ultra SCSI Drive
          1 Microsoft Windows NT Resource Kit

                                                                              28
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

LIST OF ELECTRICAL EQUIPMENT
CONTINUED

          1 DHX Drive/Win NTCyberlogics Driver for Sutherland Schultz
          1 Winzip
          1 Diskeeper
          1 Norton Anti-Virus
          1 Ghost Software
          1 Microsoft Office for NT
          1 PCAnywhere @ NT
          1 Laser Printer 11100XI
          1 Printer Cable
          1 US Robotics Sportswear 56k V90 External Voice FAX Modem
          1 10' Null Modem Cable DB25M - DB9F
          1 2-Port serial I/O board
          1 Soundblaster board
          1 Speaker, Pair
          1 3.5" diskettes (10-pack)
          1 Iomega 3 Pack 2 GB Tapes
          1 Printer paper
          1 Miscellaneous Connectors and Supplies
          1 Ice Station Environmental Enclosure with A/C (IS60)

                                                                              29
<PAGE>   14

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

LIST OF ELECTRICAL EQUIPMENT
CONTINUED

The following services will be included:

          1. Schematic wiring diagram
          2. Bill of materials
          3. Panel layout
          4. Physical equipment layout
          5. Sequence of Operations
          6. Field trip by engineer to commission
          7. Spare parts list
          8. Field wiring

NOTES: 1. Motor Voltage: 480 volt, 3 phase, 60 Hertz

       2.   Control Voltage: 115 volt, 1 phase, 60 Hertz

       3.   Field mounted control enclosures to be NEMA-12 or better.

       4.   The control cabinet will be painted with a standard gray primer
               for the exterior with a white interior.

                                                                              30
<PAGE>   15

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MECHANICAL INSTALLATION STANDARDS

General

The proper mechanical installation is vital for the equipment to operate as
described in this Proposal. These installation standards show the importance
that Rapistan Systems places on quality installation.

Installation Standards

1. General:

   The following standards, where applicable, will be used as guidelines by
   Rapistan Systems installation superintendents and Rapistan installation
   subcontractors.

2. Dimensional Reference Points:

   a.   The path of each conveyor in the system will be determined by
        establishing a reference point at each end of the conveyor from which
        the centerline of the conveyor will be established. The practice of
        measuring from column line or building walls to each point of support
        will not be followed.

3. Level and Elevations:

   a.   Conveyors will be installed in accordance with the elevations shown on
        the layout drawing(s).

   b.   After the first elevation is established, the elevation of all other
        points will be related to this first point. The practice of
        dimensioning elevations from the floor at each point of support will
        not be followed. When the floor level changes significantly, such as
        the system going to an upper or lower floor, or into another building
        or room, a new elevation will be established from the floor at that
        point. This new elevation will then become the reference for
        subsequent elevations.

4. Standards for Floor Mounting:

   a.   Anchoring will be accomplished by drilling into the floor and
        inserting a suitable anchor bolt.

    b.  Intermediate stands will be anchored with 3/8" diameter minimum
        bolts--one in each support assembly.

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<PAGE>   16

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MECHANICAL INSTALLATION STANDARDS
CONTINUED

    c.  Support stands for drives will be anchored with 1/2" diameter
        bolts--two per support assembly and four per drive.

    d.  Explosive type anchors will not be used. Adhesive rubberized belt
        mounting pads will be used only when specified.

5. Ceiling Supported Equipment:

    a.  Hanging procedures for concrete and masonry construction:

        (1)  Explosive type anchors will not be used.

        (2)  Each hanger will be anchored with a minimum of four bolts, two
             per upright, using minimum 1/2" diameter bolts.

        (3)  Anchoring will be accomplished by drilling into the concrete
             ceiling and inserting suitable bolt anchors.

        (4)  Consistency of concrete must be considered and if soft spots are
             encountered, anchor heads of sufficient length to distribute the
             load will be used.

        (5)  Anchoring to masonry walls will be accomplished by drilling
             through the wall and applying a through bolt with back-up
             plate(s) to which the wall bracket is fastened.

        (6)  Equipment may be supported from concrete walls through suitable
             bolts and anchors or by bolting through the wall, if the
             condition of the wall or the degree of imposed load dictates.

    b.   Hanging Procedures for Open Building Steel:

        (1)  Welding of auxiliary steel (stringers or headers) to building
             steel will be prohibited, unless otherwise approved Home
             Interiors.

        (2)  Drilling and bolting to building steel will be done only with
             Home Interiors' written permission.

                                                                              32
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MECHANICAL INSTALLATION STANDARDS
CONTINUED

          (3)  All vertical field welds will be accomplished through the
               "vertical up" method. Exception: Welding of light gauges (sheet
               metal).

          (4)  Horizontal stringers will be securely clamped to building steel.

          (5)  Headers when used for short spans between building steel, such as
               between roof purlins, will be securely clamped to building steel.
               Headers when used between stringers may be welded to the
               stringers or suitable angle clips will connect the header to the
               stringer.

          (6)  Support steel or wall brackets may be clamped to the columns
               either by clamping to the flanges or by clamping to the entire
               beam using through-bolts which will clamp suitable angles to
               opposite flanges of the building column.

6. Field Painting

    a.   All exposed field steel, unless otherwise specified, will be touch
         painted to match the painted finish of the equipment. This includes
         hangers, headers, special supports, braces, etc.

    b.   All painted equipment surfaces that have been damaged during the
         erection process will be touched up.

                                                                              33
<PAGE>   18

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

ELECTRICAL INSTALLATION STANDARDS

General

The proper electrical installation is vital for the equipment to operate as
described in this Proposal. These installation standards show the importance
that Rapistan Systems places on quality installation.

Installation Standards

1. General:

    a.   The following standards, where applicable, will be used as guidelines
         by Rapistan Systems installation superintendents and Rapistan Systems
         installation subcontractors.

2. Electrical Codes:

    a.   Electrical work will conform with the national, state and local
         electrical codes.

3. General Wiring Requirements:

    a.   Color of Insulation

          (1)  BLACK - Line, load and AC or DC circuits above 150 volts.
          (2)  RED- AC control circuits, 150 volts and lower.
          (3)  BLUE - DC control circuits, 150 volts and lower.
          (4)  YELLOW - Interlock control circuits wired from external power
               source.
          (5)  GREEN (with or without yellow strip) - Equipment grounding
               conductors.
          (6)  WHITE - Neutral circuit conductors.

     b.   Insulation for all wires will be 600 volt, unless otherwise specified.

     c.   Wire numbers will carry the same color consistently.

     d.   All single conductor control wiring will be #14 THHN or THWN stranded
          wire, unless otherwise specified.

     e.   The minimum size motor wiring will be #12 THHN or THWN stranded wire.

                                                                              34
<PAGE>   19

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

ELECTRICAL INSTALLATION STANDARDS
CONTINUED

     f.   Field wiring entering a control cabinet or a control console will tie
          to a terminal strip. Likewise, internal components will also tie to a
          terminal strip. External wiring entering a control cabinet will be
          tie-wrapped and formed inside the control cabinet. (Terminal strip in
          control cabinets with Programmable Controllers may be located on
          controller I/O housings.)

4. Splicing Regulations:

     a.   When three or less conductors are spliced, a "Scotchlock" or
          equivalent wire nut connector will be provided.

     b.   Splices in junction boxes will be marked with "Brady" markers or an
          equivalent marker.

     c.   Terminal connections at control devices or control centers will be
          marked with "Brady" markers or an equivalent marker.

     d.   Splices will not be allowed in conduit.

     e.   Splices are allowed in wireway and troughs if cover is removable.

5. Conduit Requirements:

     a.   Conduit will be thinwall EMT unless otherwise specified.

     b.   Conduit fittings will be compression type.

     c.   Conduit will be installed in a good workmanship like manner.

          (1)  Conduits on or near conveyor equipment will be mounted clear from
               mechanical and electrical adjustable brackets, screws, etc.

          (2)  Conduit will not be attached to guard rails.

          (3)  Conduit will normally run parallel or perpendicular to conveyor
               or building structure.

                                                                              35
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HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

ELECTRICAL INSTALLATION STANDARDS
CONTINUED

          (4)  Conduit will normally be exposed on the building structure or on
               conveyor equipment.

     d.   Conduits entering a cabinet, console, junction box, or wireway will be
          provided with an insulated bushing.

6. Junction Boxes, Wireways, etc.:

     a.   Junction boxes will be large enough to avoid pressure on splices and
          wire insulation when junction box is closed.

     b.   Under normal conditions, a maximum of ten (10) splices will be
          allowed in a junction box. When more than ten (10) splices are
          necessary, terminal strips will be provided as required, or box size
          will be increased.

     c.   Junction boxes, conduit fittings, termination boxes, and wireways will
          be general purpose, unless otherwise specified.

     d.   Wireways are used for the ease of adding or deleting control wires
          when large numbers of control wires are required for complex control
          situations.

7. Miscellaneous Requirements:

     a.   All limit switches, photo control units, motors, or any other device
          which may require movement or adjustment, will be attached with U.L.
          approved liquid-tight flexible conduit. Flexible conduit will not
          exceed 6'-0" in length and will provide for a minimum of 6" adjustment
          of control device in either direction from its original position.

     b.   All photo eyes and limit switches will be bolted with hex bolts and
          hex nuts. Photos and limit switches will be aligned for proper
          operation.

     c.   Control cabinets will be NEMA-12 dust tight cabinets, surface mounted,
          unless otherwise specified.

     d.   Cutting, floor slotting, and holes drilled during the electrical
          installation will be properly patched.

                                                                              36
<PAGE>   21

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

INSTALLATION COMMISSIONING

The Installation Commissioning of the equipment covered by this Proposal can
best be defined as being the final adjustments and run in of the installed
equipment required for its proper operation. The need for Installation
Commissioning is inherent, since the individual components of equipment covered
by this Proposal are installed together at the installation site to operate as a
whole.

When the mechanical and/or electrical installation is included as part of this
Proposal, Rapistan Systems will furnish the necessary Installation Commissioning
for the portion of installation Rapistan Systems assumes. In those instances
where Home Interiors furnishes the mechanical and/or electrical installation,
Home Interiors will provide the Installation Commissioning for that portion of
the installation.

During the commissioning phase, it is necessary to load the equipment with the
materials to be handled, which provides the means of detecting those areas
requiring adjustments. Home Interiors will provide the materials to be handled
and the labor for loading and unloading the equipment during the commissioning
phase.

The installation of this system includes the Acceptance Procedure as outlined on
the following pages. The Installation Commissioning will be considered complete
upon completion of the Acceptance Procedure.

                                                                              37
<PAGE>   22

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

ACCEPTANCE PROCEDURE

PURPOSE: To demonstrate the conveyor system is installed and operates as
         described in this Proposal.

Rapistan Systems Activity Prior to Acceptance:

a.   Verify that the equipment operates properly and all preliminary adjustments
     are complete.

b.   Verify that the equipment is installed in accordance with the drawings.

c.   Notify Home Interiors five days prior to the planned Phase I Acceptance
     Procedure.

Home Interiors' Activity Prior to Acceptance:

a.   Provide qualified maintenance and operating personnel.

b.   Provide the product specified in this Proposal in adequate quantities to
     conduct the Acceptance Procedure.

c.   Provide an authorized representative to accept the portion of the equipment
     subject to the Acceptance Procedure.

Phase I - Equipment Acceptance:

a.   Conducted under Rapistan Systems supervision with Home Interiors'
     designated personnel observing.

b.   Home Interiors will provide loading and removal of product, as required.

c.   Requires the operation of each portion of the system for short time
     periods. A total time of eight hours is provided for Phase I.

d.   Demonstrate the ability of each mechanical and electrical function to
     handle the product at the rates specified in this Proposal.

e.   Demonstrate the ability of mechanical and electrical equipment to function
     in an integrated manner, as described in the "Description of Operation".

                                                                              38
<PAGE>   23

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

ACCEPTANCE PROCEDURE
CONTINUED

f.   Items requiring additional work will be listed so that corrections can be
     made with minimal delay prior to starting Phase II.

Phase II - Operational Acceptance:

a.   Conducted under actual or simulated working conditions with Home Interiors'
     supervision, operational and maintenance personnel operating the system.

b.   Duration: one day, single shift.

c.   It should be recognized that during this acceptance phase, it is likely
     that adjustments will be required and malfunctions or failures may occur.
     Any defect in material or workmanship will be remedied by Rapistan Systems
     as expeditiously as possible without cost to Home Interiors.

d.   It should be recognized that during this operational acceptance period, it
     may not be possible for the mechanized system to function at normal
     operating levels. This can be due to conditions beyond Rapistan Systems'
     control and related to the unavailability of product, skills of
     maintenance and operation people, or the status of supporting logistics.
     Such conditions will have to be taken into account in evaluating the Phase
     II results.

e.   Rapistan Systems' Project Manager, or his designate, will be on site
     during this time for the purpose of monitoring results and to provide
     assistance as conditions dictate.

After completion of the Acceptance Procedure, Rapistan Systems' Project Manager
will furnish to Home Interiors a letter which will indicate the following:

a.    The Acceptance Procedure has been completed.

b.    Confirmation of the start of the warranty period.

c.    Final payment requisition date.

                                                                              39
<PAGE>   24

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PARAMETERS

GENERAL

1.   Rapistan Systems' standard equipment will be furnished with a dark green
     powder coat or galvanized steel finish. Special fabricated equipment will
     be furnished with a dark green powder coat. Outside purchased equipment
     will be the manufacturer's standard finish.

2.   Rapistan Systems will furnish the air schematic drawing(s) for air-operated
     devices. Rapistan Systems will furnish a properly sized air compressor for
     the proposed system and filter-regulator units as required.

3.   Rapistan Systems will provide three sets of Operation and Maintenance
     Manuals for Home Interiors.

4.   Rapistan Systems will provide one set of as-built system drawings upon
     completion of the project.

5.   A recommended spare parts list for the equipment under this Proposal will
     be furnished to Home Interiors prior to Installation Commissioning. This
     will allow Home Interiors to select and purchase spare parts prior to
     start-up. This list will include the following:

     A.   Item number
     B.   Item description
     C.   Manufacturer
     D.   Part number
     E.   Price
     F.   Lead time
     G.   Recommended inventory quantity

6.   Only those work stations, catwalks, platforms or crossovers specified in
     this Proposal are included.

7.   The equipment is designed to operate in one (1) direction only.

                                                                              40
<PAGE>   25

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PARAMETERS
CONTINUED

GENERAL  (CONT.)

8.   This Proposal is presented as a total package and, with the exception of
     any proposed options, must be purchased as such.

9.   All conveyor widths indicated on the Mechanical Equipment List in this
     Proposal are overall widths (outside to outside of conveyor beds).

10.  Rapistan Systems will provide drip pans under all motors furnished with
     gear reducers.

11.  Home Interiors will approve Rapistan Systems drawings within two weeks
     after Rapistan Systems' submittal in order that the project schedule can be
     maintained without delay.

12.  Manual assistance may be required to initiate and/or maintain the flow of
     product on gravity conveyor(s). It is understood that due to the inherent
     characteristics of gravity conveyor, free flow of product may not occur at
     all times.

13.  Rapistan Systems in no event shall be liable for incidental or
     consequential damages (including loss of profits).

14.  Side and Top Scanning Bar Code Specification: At this time no label sample
     has been provided by Home Interiors. The scanning system and related
     pricing for this Proposal is based on the following bar code criteria and
     system operational requirements.

     If these criteria cannot be met and the final label design varies from
     these criteria, scanning system hardware, software, controls and
     operational requirements may be affected which, in turn, may effect a
     change in the price.

     Labels will be placed on the side and top of the product.

     The bar code scanning equipment included in the scope of this Proposal is
     based on the following bar code label specifications:

     o    Up to 20 Digit Code 128 Subset C, Numeric

     o    Symbology that meets code 128 A.I.M. specification USS 128 standards.

                                                                              41
<PAGE>   26

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PARAMETERS
CONTINUED

GENERAL  (CONT.)

     o    Width of the narrow bar and space between bars to be a minimum of
          .020" (or 20 Mil).

     o    Wide to narrow bar ratio to be 2:1.

     o    The label must be printed with a carbon based ink. Reflectance per
          A.I.M. specification 128 standards.

     o    The code must be printed on the label blank to allow at least a 1/4"
          white zone around the entire perimeter of the bar code.

     o    It is the Home Interiors' responsibility to place the label on the
          product in a manner that suits the application.

     In both side and top scanning applications, the label must be placed on the
     product so that the 1/4" white zone surrounding the "Bar Code" is
     completely visible to the scanner. For side scanning applications, the bar
     code must also be within the first 6" of the leading edge of the product
     and be in ladder orientation +/-15(Degree) from perpendicular to the
     conveying surface.

                                                                              42
<PAGE>   27

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PARAMETERS
CONTINUED

SITE CONDITIONS

In order for Rapistan Systems to perform its work at the installation site, Home
Interiors will provide:

1.   The project coordination involving all contractors employed by Home
     Interiors, as required, to assure work is completed in accordance with the
     project schedule.

2.   A work site to permit installation and operation of the equipment, as
     required by the Project Schedule.

3.   A work site in a watertight condition and free of debris or obstructions
     other than those caused by Rapistan Systems.

4.   A clear path for the ingress to and the egress from the installation site
     for Rapistan Systems personnel and equipment.

5.   Unless otherwise agreed to, an open and clear area above and below the
     equipment to be installed overhead.

6.   The necessary access roads and cleared dock areas suitable for receiving
     and unloading the equipment. Rapistan Systems will advise the approximate
     arrival time of delivery trucks.

7.   A secure, safe, dry, convenient and adequate storage area for Rapistan
     Systems equipment, tools, and materials used on the site. Adequate working
     space will also be provided for Rapistan Systems' installation crew.

8.   All necessary federal, state, and local government licenses or permits.

9.   Suitable lunchroom and lavatory facilities for Rapistan Systems'
     installation crew while on the job site.

10.  Suitable electric service, lighting, compressed air, water, and heat as may
     be required for installation, test, and operation of the equipment. Voltage
     supplies may not vary more than plus or minus 8% during installation and
     may not vary more than plus or minus 5% for permanent power. The frequency
     variation may not exceed plus or minus 1% at all times. Electrical service
     of 110V, 20 amperes on 100 foot centers and 460V, 3 phase, 100 amperes on
     200 foot centers will be required for installation tools. The minimum
     lighting requirement

                                                                              43
<PAGE>   28

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PARAMETERS
CONTINUED

SITE CONDITIONS  (CONT.)

     shall be not less than 10 foot candles as measured at the location where
     the work is actually performed.

11.  A building with adequate structural strength to support the load of the
     equipment, materials being handled, guarding, and all other loads being
     imposed upon the structure in accordance with all applicable federal, state
     and local laws, codes and regulations.

12.  Any building alterations, removal of obstructions, enclosures, floor
     openings, wall openings, fire doors and similar requirements in accordance
     with all applicable federal, state and local laws, codes and regulations.

13.  Excavations, drainage, piling, foundations, masonry and concrete work,
     concrete lining, steel and other building materials necessary to the
     installation of the equipment.

14.  All area guarding necessary to protect personnel and conveyor equipment,
     i.e. warning signs, hand rails, barriers, netting, floor markings, etc.

15.  Guarding to protect the equipment from damage by fork trucks.

16.  Any mechanical and electrical interface with peripheral equipment, process
     control, or process supplies, not specifically included in this Proposal.

17.  An electrical power supply line within 10'-0" from each control cabinet
     furnished by Rapistan Systems.

18.  The product for running and testing the conveyor equipment during the
     installation period. Also, Home Interiors will have fork truck and
     personnel available, as required, to bring product from its final
     destination back to its loading point during the installation testing
     phase.

19.  Appropriate operational and maintenance personnel to receive on-the-job
     operational and maintenance instructions from Rapistan Systems prior to
     completion of the work required by this Proposal.

                                                                              44
<PAGE>   29

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PARAMETERS
CONTINUED

SITE CONDITIONS  (CONT.)

20.  Full service maintenance of the equipment commencing with Home Interiors'
     operation of the equipment or any part thereof.

21.  All equipment and services required of Home Interiors under this Proposal
     in a timely manner and in accordance with the Project Schedule so that
     Rapistan Systems can commission the equipment without delay. Any delays
     could cause an escalation to the contract price and/or a delay to the
     Project Schedule.

22.  Suitable devices for the safe maintenance servicing of elevated equipment
     where catwalks, mezzanines or similar means of access are not provided.
     These devices could include man lifts, platform ladders or similar devices.

                                                                              45
<PAGE>   30

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PARAMETERS
CONTINUED

MECHANICAL AND ELECTRICAL INSTALLATION

1.   The mechanical installation of the conveyor equipment will be provided by
     Rapistan Systems.

2.   The field wiring installation of the conveyor equipment will be provided by
     Rapistan Systems.

3.   Installation is based on utilizing non-union labor on a straight time,
     first shift basis, with work occurring during normal working hours (8 am to
     5 pm), Monday through Friday, excluding holidays.

4.   Rapistan Systems will receive, unload and move the equipment to the
     assigned storage area. Rapistan Systems will move equipment from storage to
     the installation area.

5.   Home Interiors will permit Rapistan Systems and/or Rapistan Systems
     subcontractors to burn and weld at the installation site.

6.   The installation is to be performed in accordance with the Project
     Schedule. Any change in the Project Schedule may involve an adjustment to
     the contract price.

                                                                              46
<PAGE>   31

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

CLARIFICATIONS

1.   This proposal is based on the ability to ceiling hang certain conveyor
     sections. Rapistan Systems will provide point load drawings for all ceiling
     hung conveyor. It is Home Interiors' responsibility to obtain all necessary
     permits and approvals. If the existing ceiling structure is found to be
     inadequate to support conveyor loading, alternate support methods may
     require a change to the contract price.

2.   No seismic approvals or permits are included in this proposal. Permits will
     be provide by Rapistan on a time and material basis.

3.   This proposal includes conveyor for pick modules only. Rack structure,
     decking and flow tracks must be purchased separately.

4.   It is Home Interiors' responsibility to provide 460V, 3-phase, 60 Hz power
     with isolated ground connection from the power source to within 10 feet of
     Rapistan control cabinets. Rapistan will provide wiring from our control
     panels to all field devices.

5.   Direct dial, analog telephone lines, at locations specified by Rapistan
     Systems, will be required for modem startup and troubleshooting assistance.
     Alternate voice lines are recommended for troubleshooting and diagnostic
     purposes.

6.   All automatic scanners, required for zone routing cartons within the pick
     modules, are included in this proposal.

7.   An air compressor, sized appropriately for the proposed conveyor system,
     backup compressor and all required air piping, is included in this
     proposal.

8.   Safety netting has been provided under conveyor sections between the pick
     modules and dunnage area for protection against falling product. Once the
     cartons have been sealed, it is assumed that conveyor guardrail will
     provide adequate protection.

9.   Highway fork truck guarding is not provided in this proposal.

10.  Dunnage stations will consist of a gravity gate for personnel access and a
     ball transfer table for product handling. Any required computer stations,
     empty carton shelving or materials storage must be provided by others.

11.  Communication to the WMS, via ethernet connection, will be the
     responsibility of Home Interiors.

12.  Tapers to be purchased by others will have self metering devices.

                                                                              47
<PAGE>   32

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

YEAR 2000 READINESS DISCLOSURE

The Rapistan manufactured software and hardware provided to Home Interiors,
along with all integrated third party certified software and hardware, for this
project is designed to be used prior to, during, and after the calendar year
2000 A.D. and will operate during each such time period without error relating
to date data. This system, when used in conjunction with other information
technology systems, will accurately process date data provided the other systems
also furnish Year 2000 Compliant date data.

                                                                              48
<PAGE>   33

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

POST ORDER SERVICES

SYSTEMS ENGINEERING DESIGN COORDINATION- A detailed system Project Schedule
Matrix will be prepared immediately upon signing of the Agreement. This matrix
outlines the required activities and the expected timing related to the
activities.

PROJECT MANAGEMENT- A Rapistan Systems project manager will be assigned to this
project and will maintain close liaison with Home Interiors' representative(s).
The success of the proposed system is dependent upon close cooperation in the
areas of system requirements, design, and project implementation.

SYSTEM START-UP: Rapistan Systems will supply adequate personnel for
commissioning the system prior to system start-up with operational and
maintenance training taking place during this period.

SYSTEM MAINTENANCE- Operation and Maintenance Manuals will be provided and will
include part identification, recommended spare parts lists, safety precautions
and recommended maintenance procedures.

INSTALLATION COMMISSIONING AND THE SYSTEM ACCEPTANCE PROCEDURE- The Installation
Commissioning and System Acceptance Procedure will be performed on a planned and
scheduled basis as described within this Proposal.

                                                                              49
<PAGE>   34

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

MUTUAL COMMITMENT TO SAFETY

It is recognized that accidents can be reduced by following safe practices in
the design, construction, installation, operation, and maintenance of the
equipment. Therefore, in a mutual effort to minimize the possibility of
accidents, the parties agree as follows:

1.   Rapistan Systems will furnish equipment designed, manufactured and
     installed under the guidance of the appropriate ANSI/ASME Standards.
     Likewise, Home Interiors will apply appropriate ANSI/ASME Standards as they
     incorporate user instructions into their operations, and will enforce these
     operating standards and instructions. In particular, Home Interiors will
     place into standard operating procedure those instructions contained within
     those Conveyor Safety Guidelines and Principles, Form 5100 (1990), which
     Rapistan Systems will supply.

2.   When Rapistan Systems provides on-site installation services, Rapistan
     Systems will provide operational and maintenance instructions and training
     prior to the completion of Installation Commissioning. Home Interiors will
     provide the appropriate operational and maintenance personnel for such
     instruction and training. Also, Home Interiors will retain a record of
     attendees.

3.   Rapistan Systems will provide written instructions relating to the safe use
     of the equipment. These materials will include such items as manuals,
     safety instructions, posters, user instructions, etc. Home Interiors will
     make such instructions available on a continuous basis to its operational
     and maintenance personnel.

4.   Home Interiors will periodically conduct safety programs, as required, to
     keep its operational and maintenance personnel, including new hires,
     constantly knowledgeable with respect to the safe use of the equipment.

5.   Home Interiors will maintain a dress code which requires all personnel
     around the equipment to wear hair protection (or short hair), snug fitting
     clothes and heavy duty work shoes. The wearing of tennis shoes, baggy
     cuffs, neckties, jewelry and similar apparel will not be permitted. Hard
     hats will be worn where personnel could be subjected to injury because of
     obstructions or falling objects.

6.   Home Interiors will provide man lifts, platforms or similar devices for the
     safe maintenance servicing of elevated equipment where catwalks, platforms
     or similar means of access are not provided.

                                                                              50
<PAGE>   35

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

AN IMPORTANT NOTE TO HOME INTERIORS

OSHA LOCKOUT/TAGOUT RULES

On August 28, 1989, the U.S. Department of Labor amended the Occupational Safety
and Health Standards to incorporate lockout/tagout requirements. This new
standard applies to most employers and covers, among other things, "the
servicing and maintenance of machines and equipment in which the unexpected
energization or start-up of the machines or equipment ... could cause injury to
employees." The standard states that servicing and maintenance covers various
workplace activities including "lubrication, cleaning or unjamming of machines
or equipment ... where the employee may be exposed to the unexpected
energization or start-up of the equipment."

In Rapistan Systems' opinion, this standard applies to most workplaces utilizing
powered conveyor. Rapistan Systems is bringing this to the attention of Home
Interiors in the event Home Interiors is not aware of the standard. Rapistan
Systems urges Home Interiors to review the applicability and requirements of the
standard with respect to Home Interiors' facilities. In general, the standard
requires employers to establish an ongoing program of control procedures and
employee training (regardless of training provided by the equipment vendor at
the time of sale) to ensure that equipment is rendered inoperative before any
servicing or maintenance is performed.

The referenced standard may be found at 29 CFR Part 1910, Section 1910.147; it
was published in the Federal Register, Volume 54, No. 169 on September 1, 1989.
Also, copies may be requested from the Rapistan Systems Contracts Administration
Department.

                                                                              51
<PAGE>   36

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

Another Rapistan Systems Service...

                        RAPISTAN SYSTEMS CUSTOMER SERVICE

                         SOFTWARE AND PARTS AND SERVICE

                              CALL: (800) 530-9153

                        (24 HOURS A DAY - 7 DAYS A WEEK)

                                    WARRANTY

For Warranty of Rapistan Systems supplied Computer Hardware/Software, refer to
General Terms and Conditions (Exhibit A), Item #2.

                                EMERGENCY SERVICE

Our Emergency Service is designed to give you special assistance 7 Days a week.
Your call will be promptly handled by experienced technicians who will attempt
to quickly resolve the problem through phone discussion. In the event the
problem cannot be resolved over the phone, your authorization is all that is
necessary for the prompt dispatch of our personnel to your site.

Rapistan Systems warranties any contractually delivered software to be free from
defects in workmanship for a period of one year, starting from the point of The
Customer Corporation acceptance or the start of beneficial usage, whichever
occurs first. Should any problems arise, Rapistan Systems will address them in a
timely manner, either by telephone and modem, or by physical presence on site.

                                                                              52
<PAGE>   37

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

SOFTWARE WARRANTY AND SOFTWARE EMERGENCY SERVICE

For Warranty of Software and Software Emergency Service supplied by Rapistan
Systems, refer to the General Terms and Conditions (Exhibit A), Item # 2.

Computer Hardware Warranty

For computer equipment supplied by Rapistan Systems, Rapistan Systems supplies a
one year computer hardware service warranty. This warranty covers computer
hardware for a period of one year from the date of the start of the warranty
period. This warranty only covers the Rapistan Systems provided computer
hardware identified above in this Description of Operation. The computer
equipment specified is suited for an environmentally controlled office
environment and unless the environmental enclosure option is selected, this
warranty is null and void for failures which are attributed to the environment
they are located within. The computer hardware service warranty covers
next-business day response to problems, from 8 a.m. - 5 p.m. Eastern Standard
Time, Monday through Friday.

Rapistan Systems does not warrant and is not responsible for any equipment
warranties for computer equipment supplied by The Customer Corporation and used
in the Rapistan Systems system. The Customer Corporation will be responsible for
all equipment warranties under those circumstances, including any equipment
problems detected while the equipment is being used for development at Rapistan
Systems.

Extended Computer Hardware Service Warranty Option

You may purchase an extended computer hardware service warranty to extend your
warranty period past the one year that Rapistan Systems provides. The extended
warranty is available for the computer hardware and selected equipment supplied
by Rapistan Systems. This provides the Customer the ability to have the computer
hardware and selected equipment warranted for additional year(s) after
expiration of the one year of standard computer hardware warranty provided by
Rapistan Systems.

As in the standard computer hardware service warranty, this warranty option only
covers the Rapistan Systems provided computer hardware identified above in this
Description of Operation.

                                                                              52
<PAGE>   38

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

SCHEDULE

                                                                              54
<PAGE>   39

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PRICING:

The price for the performance of Rapistan Systems work described in this
Proposal is as follows:

<TABLE>

<S>                                                               <C>
Mechanical equipment..............................................$2,606,206.00
Project management & engineering....................................$212,243.00
Electrical controls & engineering...................................$740,563.00
Mechanical installation.............................................$667,780.00
Electrical installation.............................................$474,428.00
Freight............................................................ $136,250.00
</TABLE>

        BASE SYSTEM PRICE.........................................$4,837,470.00

Option 1: RapidVIEW(2) - Maintenance database serves as a centralized system to
          organize facility maintenance and spare parts inventory. See
          appendix "D" for further details...........................$35,685.00

          Accept____________________              Decline__________X___________

Option 2: Additional RapidVIEW(2) workstation, with environmental enclosure
        .............................................................$14,935.00

          Accept____________________              Decline___________X__________

Option 3:  Deduct to remove two (2) downlines to shipping doors....($48,020.00)
           Includes engineering, equipment, installation and freight.

          Accept__________X__________             Decline__________X___________

Option 4: Deduct to remove spiral belt curves and replace with
               Decline belts.......................................($45,640.00)

          Accept____________________              Decline__________X___________

                                                                              55
<PAGE>   40

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PRICING (CONT'D):

Option 5: Deduct to relocate last shipping downline and shorten sorter and
          platform approximately 15'.............................. ($27,423.00)

          Accept________X___________               Decline_____________________

Option 6: Deduct to remove (2) RS200 divert
          modules..................................................($41,570.00)

          Accept________X___________               Decline_____________________

Option 7: Add critical spare parts for conveyor system..............$100,000.00

          Accept________X___________               Decline_____________________

Option 8: Deduct Rapistan Systems discount if all three projects are purchased
          .........................................................($52,750.00)

          Accept________X___________               Decline_____________________

CONVEYOR SYSTEM PRICE.............................................$4,767,707.00

    Estimated Taxes at 8.25%........................................$393,336.00

TOTAL CONVEYOR INVESTMENT.........................................$5,161,043.00

                                                                              56
<PAGE>   41

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

PAYMENT TERMS:

Rapistan Systems agrees to submit invoices and Home Interiors agrees to pay
invoices in accordance with the terms and conditions of the agreement and the
invoice and payment schedule shown below. All payments shall be made at the
address indicated on Rapistan Systems' invoice.

A late payment charge of prime plus two percent will be added to any amount not
received by Rapistan Systems on or before the invoice payment date indicated on
the payment schedule. Where this rate exceeds a maximum rate permitted by
applicable law, the permissible rate will apply.

In connection with Rapistan Systems' obligation to install the Equipment, the
final invoice, per the invoice and payment schedule, may be held as retainer.
Home Interiors will pay the retainer amount within 15 days after Rapistan
Systems' completion of the installation, testing of the equipment, acceptance of
the equipment and goods by Purchaser, and delivery to Purchaser of (a) duly
executed unconditional waivers of mechanics' and materialmens' liens from
Rapistan Systems and every supplier of work, material, goods or services in
connection with the equipment, (b) originals of any and all warranties
associated with the equipment and goods, (c) originals of any and all user
guides and manuals and owner's manuals associated with the equipment and goods,
and (d) an affidavit of Rapistan Systems listing all persons who supplied,
manufactured, and/or installed the equipment and goods (collectively,
"Installation Commissioning"). However, should there be a dispute about the
completion of the Installation Commissioning, then Home Interiors shall inform
Rapistan Systems of any claimed defects in the Equipment and the amount
necessary to correct claimed defects will be mutually determined in writing.
Home Interiors will then pay the final invoice less the determined amount. Home
Interiors will pay the remaining retainer upon correction by Rapistan Systems of
any defects in the Equipment as mutually determined.

                                                                              57
<PAGE>   42

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

Invoices and payment will be forwarded to provide for receipt by the appropriate
party on the date shown.

<TABLE>
<CAPTION>
                                                                                   DATE PAYMENT
                                             INVOICE                               RECEIVED BY
  INVOICE DATE   INVOICE DESCRIPTION          VALUE       AMOUNT                 RAPISTAN SYSTEMS
  ------------   -------------------          -----    -------------       ----------------------------
    <S>          <C>                           <C>     <C>                 <C>
    12-17-99     Down Payment                  25%    $1,191,927.00       Upon Written Notification to
                                                                                     proceed
    01-01-00     Engineering Complete
                      All Equipment In Mfg.    15%    $  715,156.00                Net 15 days
    02-01-00     Equipment Shipped             20%    $  953,540.00                Net 15 days
    03-01-00     Progressive Billing           10%    $  476,771.00                Net 15 days
    04-01-00     Progressive Billing           10%    $  476,771.00                Net 15 days
    05-01-00     Installation Complete         10%    $  476,771.00                Net 15 days
    06-01-00     Retainer                      10%    $  476,771.00       Net 15 days after Installation
                                                      -------------               Commissioning
                 TOTAL                                $4,767,707.00
</TABLE>

                                                                              58
<PAGE>   43

HOME INTERIORS                                                 [RAPISTAN SYSTEM]
56-5738 Rev. B
December 14, 1999

This Sales Agreement, hereinafter called "Agreement", made by and between Home
Interiors & Gifts, Inc., 4550 Spring Valley Road, Dallas, TX 75244, hereinafter
called "Home Interiors" and Mannesmann Dematic Rapistan Corp., 8600 W. Royal
Lane, Suite 100 A, Irving, TX 75063, hereinafter called "Rapistan Systems",
constitutes Agreement of the parties as follows:

     1.   Rapistan Systems agrees to sell to Home Interiors and Home Interiors
          agrees to purchase from Rapistan Systems, the equipment and any
          services described in Rapistan Systems Proposal No. 56-5738 Rev. B,
          dated December 14, 1999, Tabs 1 through 9 and pages 1 through 59 for
          the price set forth in the Proposal and on the terms and conditions of
          Exhibit A.

     2.   This Agreement constitutes the entire agreement between the parties
          and no oral or other representation shall prevail, notwithstanding any
          other terms and conditions of any order submitted by Home Interiors.
          Any changes, modifications, or additions to this Agreement are binding
          and enforceable only if made in writing and signed by both parties.

Approved and Executed By:

HOME INTERIORS & GIFTS, INC.          MANNESMANN DEMATIC RAPISTAN CORP.

/s/ BETTINA SIMMON                    /s/ ROYAL SMITH
-------------------------------       --------------------------------
Signature                             Signature

Vice President, General Counsel
& Secretary                            General Manager
-------------------------------       --------------------------------
Title                                 Title

December 15, 1999                      December 15, 1999
-------------------------------       --------------------------------
Date                                  Date

                                                                              59<PAGE>   1
                                                                   EXHIBIT 10.26

                           PURCHASE AND SALE AGREEMENT
               (1400 LAVON STREET, MCKINNEY, COLLIN COUNTY, TEXAS)

         THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into by
and between HOMCO, INC., a Texas corporation ("Seller") and DONALD J. CARTER,
JR. ("Purchaser"), effective as of the Effective Date provided for in SECTION
19.11. below.

         For and in consideration of the mutual promises contained herein,
Seller and Purchaser agree as follows:

                                   ARTICLE 1.

                         AGREEMENT OF SALE AND PURCHASE

         1.1. PROPERTY. Subject to the terms and conditions of this Agreement,
Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from
Seller, that certain 15.3-acre tract of real property situated in Collin County,
Texas, described on Exhibit A attached hereto and hereby made a part hereof (the
"Land"), together with any buildings, structures, appurtenances and improvements
located on the Land (such buildings and all other improvements located on the
Land being herein referred to as the "Improvements") and all rights and
appurtenances pertaining to the Land and the Improvements, including, without
limitation, any and all rights of Seller in and to all oil, gas and mineral
rights relating to the Land, all roads, alleys, easements, streets and ways
adjacent to the Land, strips and gores and rights of ingress and egress thereto.
The Land and Improvements as well as all Seller's rights and appurtenances
pertaining thereto described above are hereinafter collectively referred to as
the "Property." The legal description of the Land shown on the Survey
(hereinafter defined) shall be substituted for the description of the Land set
forth on Exhibit A upon its approval by Seller, Purchaser and the Title Company
(hereinafter defined) and such legal description shall be utilized for the
conveyance of the Property from Seller to Purchaser.

                                   ARTICLE 2.

                                 PURCHASE PRICE

         2.1. AMOUNT. The purchase price (the "Purchase Price") for the Property
is Three Million Seven Hundred Twenty-Seven Thousand Three Hundred Eighty and
No/100 Dollars ($3,727,380.00) and shall be payable in the manner set forth in
SECTION 2.2. below.

         2.2. METHOD OF PAYMENT. The entire Purchase Price shall be paid by
Purchaser's delivering cash, a cashier's check or another form of current,
collected federal funds in that amount to the Title Company (hereinafter
defined) for disbursement by it to Seller or for Seller's account at the Closing
(hereinafter defined).

         2.3. EARNEST MONEY DEPOSIT. Within three (3) business days after the
date this Agreement is executed by both Seller and Purchaser, Purchaser shall
deliver to the offices of

<PAGE>   2

Republic Title of Texas, Inc., to the attention of Leslie Wheeler, 2626 Howell
Street, 10th Floor, Dallas, Texas 75204-4064, telephone number: (214) 855-8888,
telecopy number: (214) 855-8852 (the "Title Company"), as agent for First
American Title Insurance Company, a deposit of Ten Thousand and No/l00 Dollars
($10,000.00) in cash (the "Earnest Money Deposit"). In the event Purchaser does
not deposit the Earnest Money Deposit with the Title Company on or prior to the
date designated in the preceding sentence, this Agreement shall automatically
terminate and the parties hereto shall have no further rights, duties or
obligations one to the other hereunder. In the event Purchaser does not
terminate this Agreement prior to the expiration of the Review Period (defined
in SECTION 8.1.) then the Earnest Money Deposit shall be nonrefundable to
Purchaser except in the event of the default of Seller under the terms hereof.
The Title Company shall hold the Earnest Money Deposit as escrow agent and shall
invest the Earnest Money Deposit in such interest bearing investments as
Purchaser shall reasonably designate from time to time which mature no later
than the earlier of (a) the date on which the Closing hereunder is scheduled (at
the time such investment is made) to be held or (b) the date (if it is then
determinable) on which the Earnest Money Deposit will be required to be
delivered to either Purchaser or Seller pursuant to the provisions of this
Agreement. All such interest earned thereon shall be deemed to constitute a
portion of the Earnest Money Deposit and shall be added thereto. At Closing, or
upon the occurrence of a default under this Agreement, the Title Company shall
deliver the Earnest Money Deposit to the party entitled to it in accordance with
the other terms of this Agreement.

         2.4. INDEPENDENT CONTRACT CONSIDERATION. In addition to the Earnest
Money Deposit, Purchaser shall deliver to Seller on the Effective Date a check
in the amount of One Hundred and No/l00 Dollars ($100.00) (the "Independent
Contract Consideration"), which amount the parties bargained for and agreed to
as consideration for Seller's execution and delivery of this Agreement. This
Independent Contract Consideration is in addition to and independent of any
other consideration or payment provided in this Agreement, is non-refundable
under any circumstances, and shall be retained by Seller notwithstanding any
other provision of this Agreement.

                                   ARTICLE 3.

                            THE DEED AND BILL OF SALE

         3.1. THE DEED. At the Closing, Seller shall convey the Property to
Purchaser by special warranty deed in the form of Exhibit B attached hereto (the
"Deed").

         3.2. DEED PROVISIONS. The Deed shall convey the Property to Purchaser
subject only to the Permitted Exceptions as defined in SECTION 9.4. below.

         3.3. BILL OF SALE. The Bill of Sale shall convey to Purchaser, without
recourse to or warranty by Seller, all rights of Seller in and to the fixtures,
equipment and other tangible personal property attached to, installed in or used
solely in connection with the Property (other than those trade fixtures and
items of equipment and tangible personal property removed or identified for
removal by Seller before Closing). The Bill of Sale shall also assign, to the
extent assignable and without recourse to or warranty by Seller, all rights of
Seller in and to any

                                        2

<PAGE>   3

warranties, guaranties and service contracts in effect on the Closing Date (as
herein defined) relating to the tangible personal property to be sold or to the
Improvements. The Bill of Sale shall be in the form of Exhibit C attached
hereto.

         3.4. AS IS TRANSACTION. TO INDUCE SELLER TO ENTER INTO THIS AGREEMENT,
PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN THIS AGREEMENT, AND EXCEPT FOR SELLER'S WARRANTY OF TITLE IN SELLER'S SPECIAL
WARRANTY DEED, THE PROPERTY SHALL BE CONVEYED AND TRANSFERRED TO PURCHASER "AS
IS, WHERE IS, AND WITH ANY AND ALL FAULTS AND PATENT AND LATENT DEFECTS," AND
SELLER HAS NOT MADE, DOES NOT MAKE, AND SPECIFICALLY DISCLAIMS ANY
REPRESENTATION, PROMISE, COVENANT, AGREEMENT, GUARANTY OR WARRANTY OF ANY KIND
OR CHARACTER, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, AS TO THE
MERCHANTABILITY, QUANTITY, QUALITY, CONDITION, SUITABILITY, HABITABILITY, OR
FITNESS OF THE PROPERTY FOR ANY PURPOSE WHATSOEVER, INCLUDING WITHOUT
LIMITATION, ANY REPRESENTATION REGARDING SOIL CONDITIONS, AVAILABILITY OF
UTILITIES, DRAINAGE, ZONING LAWS, ENVIRONMENTAL LAWS, OR ANY OTHER FEDERAL,
STATE OR LOCAL STATUTES, CODES, REGULATIONS OR ORDINANCES. PURCHASER ALSO
ACKNOWLEDGES AND AGREES THAT THE PROVISIONS IN THIS AGREEMENT FOR PURCHASER'S
INSPECTION AND INVESTIGATION OF THE PROPERTY ARE ADEQUATE TO ENABLE PURCHASER TO
MAKE PURCHASER'S OWN DETERMINATION WITH RESPECT TO THE SUITABILITY OR FITNESS OF
THE PROPERTY, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO SOIL CONDITIONS,
AVAILABILITY OF UTILITIES, DRAINAGE, ZONING LAWS, ENVIRONMENTAL LAWS, AND ANY
OTHER FEDERAL, STATE OR LOCAL STATUTES, CODES REGULATIONS OR ORDINANCES.
PURCHASER ACKNOWLEDGES THAT THE DISCLAIMERS, AGREEMENTS AND OTHER STATEMENTS SET
FORTH IN THIS PARAGRAPH ARE AN INTEGRAL PORTION OF THIS AGREEMENT AND THAT
SELLER WOULD NOT AGREE TO SELL THE PROPERTY TO PURCHASER FOR THE PURCHASE PRICE
WITHOUT THE DISCLAIMERS, AGREEMENTS AND OTHER STATEMENTS SET FORTH IN THIS
PARAGRAPH. PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER IS NOT IN A DISPARATE
BARGAINING POSITION WITH RESPECT TO SELLER. THE PROVISIONS CONTAINED IN THIS
PARAGRAPH SHALL SURVIVE THE CLOSING HEREUNDER AND THE DELIVERY FROM SELLER TO
PURCHASER OF THE SPECIAL WARRANTY DEED.

                                   ARTICLE 4.

                                   THE CLOSING

         The closing of the transaction contemplated by this Agreement (the
"Closing") shall be at the offices of the Title Company and shall be held at
10:00 a.m., on a date selected by Seller and reasonably acceptable to Purchaser
(the "Closing Date") falling between Monday, May 15, 2000, and Friday, May 26,
2000, unless Purchaser and Seller mutually agree to an earlier Closing,

                                       3
<PAGE>   4

which agreement must be in writing and signed by the party against whom it is
sought to be enforced. Upon completion of the Closing, Seller shall deliver
possession of the Property to Purchaser in "As-Is" condition.

                                   ARTICLE 5.

                               CLOSING PRORATIONS

         5.1. The following amounts or items shall be prorated, credited or
added to the Purchase Price at the Closing as appropriate, and except to the
extent otherwise provided herein, shall adjust the Purchase Price at Closing:

         (a) Taxes. At Closing, all state, county and municipal ad valorem
taxes, assessments and similar charges with respect to the Property for the year
in which the Closing is consummated will be prorated as of the Closing Date
based upon taxes, assessments and charges for such year, or if said ad valorem
tax amounts for such year are not available, upon the ad valorem taxes for the
previous year. Upon receipt of the tax bill for the Property for the year in
which the Closing is consummated, the parties agree to prorate the taxes based
on such bill and to adjust between themselves any differences between such bill
and the previous year's tax bill.

         (b) Assessments. If, as of the Closing Date, the Property or any part
thereof shall be or shall have been affected by any assessment or assessments,
other than assessments for taxes on the Property for any years prior to the year
Closing is consummated, which are or may become payable in installments, such
assessments falling due after Closing shall be paid in full by Seller at
Closing.

         (c) Utility Charges, Etc. Utility charges, maintenance costs, insurance
premiums and other expenses of operating the Property shall be apportioned
between Seller and Purchaser at the Closing as of 11:59 p.m. of the day
preceding the date of Closing, such that credits and charges equitably
attributable to all days preceding the date of Closing shall be allocated to
Seller, and that credits and charges equitably attributable to all days from and
after the date of Closing shall be allocated to Purchaser. Effective as of the
Closing Date, Purchaser shall obtain its own insurance covering the Property,
and shall change all utilities to its name and make all new utility deposits.

The foregoing proration provisions shall survive Closing.

                                   ARTICLE 6.

                         REPRESENTATIONS AND WARRANTIES

         6.1. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller
represents and warrants to Purchaser as of the Effective Date and as of the
Closing Date that:

                                       4
<PAGE>   5

         (a) Seller has all power and authority legally necessary to enter into
this Agreement, execute and deliver the Closing documents and sell and convey
the Property to Purchaser in accordance with the terms of this Agreement.

         (b) Seller is not a "foreign person" as defined in Section 1445(f)(3)
of the Internal Revenue Code as amended from time to time and at Closing Seller
shall furnish Purchaser an Affidavit confirming the same in the form attached
hereto as Exhibit D.

         (c) Seller will transfer to Purchaser at the Closing, fee simple title
to the Property, subject only to the Permitted Exceptions.

         (d) There are no unrecorded liens or Uniform Commercial Code liens
against any of the Property, but if it is determined that such liens do exist,
they shall be satisfied at Closing out of the Purchase Price.

         (e) To the best of Seller's actual knowledge, during the period of
Seller's ownership of the Property, no Hazardous Materials have been generated,
processed, collected, treated, emitted, discharged, disposed or transported on,
under, in, above, to or from the Property. As used herein, the term "Hazardous
Materials" means (i) asbestos requiring abatement, removal, encapsulation,
treatment or other handling pursuant to any Applicable Environmental Laws
(hereinafter defined), (ii) polychlorinated byphenyls (more commonly known as
"PCB's"), (iii) storage tanks, whether above ground or below ground, in need of
abatement, removal, repair, treatment, or other handling in order that the same
shall comply with Applicable Environmental Laws, (iv) any wastes, chemicals,
substances or other materials, the generation, processing, collection, storage,
treatment, release, emission, discharge, disposal or transportation of which is
prohibited on, under, in, above, to or from the Property by any Applicable
Environmental Laws, (v) any wastes, chemicals, substances or other materials
present on or being released, emitted or discharged from the Property in
quantities sufficient to require reporting under any Applicable Environmental
Laws and (vi) any other wastes, chemicals, substances or materials which,
pursuant to any Applicable Environmental Laws, require notification to be
provided to any Governmental Authority (hereinafter defined), in their
generation, processing, collection, storage, treatment, disposal or
transportation. As used herein, the term "Governmental Authority" shall mean the
United States of America, the State of Texas, the County of Collin, the City of
McKinney or any other political subdivision in which the Property is located,
and any other political subdivision, department, commission, board, agency,
authority or instrumentality exercising jurisdiction over Seller or the
Property. As used herein, the term "Applicable Environmental Laws" shall mean
any and all valid and applicable federal, state or local laws, rules or
regulations in effect at the time in question, protecting the environment,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Hazardous Materials
Transportation Act, as amended, the Resource Conservation and Recovery Act, as
amended, the Federal Water Pollution Control Act, the Clean Air Act, as amended,
the Clean Water Act, as amended, the Hazardous and Solid Waste Amendments of
1984, as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Texas Natural Resources Code, the Texas Hazardous
Substances Spill and Control Act, as amended, the Texas Water Code and the Texas
Solid Waste Disposal Act, and the regulations adopted and promulgated pursuant
thereto. Seller is unaware as to whether or not that any Hazardous Materials
were generated, processed, collected, treated,

                                       5
<PAGE>   6

emitted, discharged, disposed or transported on, under, in, above, to or from
the Property during the period prior to Seller's ownership of the Property.

         (f) Seller may have provided, or may provide prior to Closing, to
Purchaser documents prepared by third parties relating to the operations or
condition of the Property, including, without limitation, reports, analyses,
plans, surveys and specifications (the "Third Party Documents").

         As used in this Agreement, "Seller's actual knowledge" or words of like
import shall mean the current actual knowledge of Jim Livingston, based on an
examination of his books and records, but without any duty of further inquiry or
investigation of any kind.

         PURCHASER HEREBY ACKNOWLEDGES THAT SELLER HAS NOT MADE AND DOES NOT
MAKE ANY WARRANTY OR REPRESENTATION REGARDING THE TRUTH OR ACCURACY OF THE THIRD
PARTY DOCUMENTS OR THE SOURCE THEREOF AND SELLER SPECIFICALLY DISCLAIMS ANY
PRINCIPAL/AGENCY RELATIONSHIP BETWEEN SELLER AND THE AUTHOR OR SOURCE OF ANY
CONSTITUENT REPORT OR DOCUMENT OF THE THIRD PARTY DOCUMENTS. SELLER HAS NOT
UNDERTAKEN ANY INDEPENDENT INVESTIGATION AS TO THE TRUTH OR ACCURACY OF THE
THIRD PARTY DOCUMENTS AND IS PROVIDING THE THIRD PARTY DOCUMENTS SOLELY AS AN
ACCOMMODATION TO PURCHASER; IN PERMITTING THE PERMITTED OUTSIDE PARTIES TO
REVIEW THE THIRD PARTY DOCUMENTS OR INFORMATION TO ASSIST PURCHASER, NO THIRD
PARTY BENEFITS RELATIONSHIPS OF ANY KIND, EITHER EXPRESS OR IMPLIED, HAVE BEEN
OFFERED, INTENDED OR CREATED BY SELLER AND ANY SUCH CLAIMS ARE EXPRESSLY
REJECTED BY SELLER AND WAIVED BY PURCHASER AND THE PERMITTED OUTSIDE PARTIES.
THE PROVISIONS CONTAINED IN THIS PARAGRAPH SHALL SURVIVE THE CLOSING HEREUNDER
AND THE DELIVERY FROM SELLER TO PURCHASER OF THE SPECIAL WARRANTY DEED.

         6.2. PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Purchaser
represents and warrants to Effective Date and as of the Closing Date that:

         (a) Purchaser has the full right, power, and authority to purchase the
Property from Seller as provided in this Agreement and to carry out Purchaser's
obligations under this Agreement, and all requisite action necessary to
authorize Purchaser to enter into this Agreement and to carry out Purchaser's
obligations hereunder has been accomplished or will be accomplished on or before
Closing.

         (b) As of the Effective Date, Purchaser has been hereby advised in
writing that Purchaser should have an abstract covering the Property examined by
an attorney of Purchaser's own selection or that Purchaser should be furnished
with or obtain a policy of title insurance.

         (c) Purchaser is not subject to any legal or administrative proceeding,
debt structure or other agreement which would prevent Purchaser's full and
timely performance of its obligations hereunder.

                                       6
<PAGE>   7

         (d) Purchaser acknowledges that any and all of the Third Party
Documents are proprietary and confidential in nature and have been or will be
delivered to Purchaser solely to assist Purchaser in determining the feasibility
of purchasing the Property. Purchaser agrees not to disclose any of the Third
Party Documents, or any of the provisions, terms or conditions thereof, to any
party outside of Purchaser's organization except as to its attorneys,
accountants, lenders or investors (collectively, the "Permitted Outside
Parties"). Purchaser further agrees that within its organization, or as to the
Permitted Outside Parties, the Third Party Documents shall be disclosed and
exhibited only to those persons within Purchaser's organization or the Permitted
Outside Parties who are responsible for determining the feasibility of
Purchaser's acquisition of the Property.

         (e) In the event the transaction contemplated by this Agreement is not
consummated for any reason, except for Seller's default, Purchaser shall
promptly deliver to Seller copies of (but no propriety rights in) all available
reports and studies (other than appraisals) relating to the Property in its
possession or in the possession of its agents, consultants or employees,
including, without limitation, any and all (i) environmental reports, (ii)
market studies, (iii) site plans, plats and related engineering, (iv) prospect
lists, (v) soil reports, (vi) architectural renderings, drawings and/or
elevations, and (vii) Third Party Documents, including any copies thereof made
by Purchaser or at Purchaser's direction.

                                   ARTICLE 7.

                               SELLER'S COVENANTS

         In addition to Seller's other covenants and obligations contained in
this Agreement, Seller agrees as follows:

         7.1. PROPERTY RECORDS. Seller shall deliver to Purchaser, on or before
five (5) days after the Effective Date, copies of (a) all tax bills relating to
the Property, including, but not limited to, ad valorem, rental and special
assessments for the preceding two (2) calendar years; (b) utility documents
relating to the Property, if any, for the preceding two (2) calendar years; (c)
any and all information regarding any condemnation notices, proceedings and/or
awards received by Seller affecting the Property; (d) any endangered species
letters received by Seller pertaining to the Property; and (e) any and all other
information reasonably requested by Purchaser relating to Seller's use and
occupancy of the Property.

         7.2. PLANS AND STUDIES. Seller, at its expense, shall deliver to
Purchaser, on or before five (5) days after the Effective Date, copies of (but
no propriety rights in) all surveys, plats, site plans, engineering studies,
topographical surveys, environmental studies and other plans, specifications and
studies relating to all or any part of the Property which are in Seller's
possession.

         7.3. NO ENCUMBRANCES. Seller agrees to neither grant, suffer, commit
nor permit any easements or encumbrances upon any part of the Property between
the Effective Date of this Agreement and the Closing or termination of this
Agreement, except such easements or encumbrances as shall be released on or
before Closing.

                                       7
<PAGE>   8

                                   ARTICLE 8.

                                   CONDITIONS

         8.1. PURCHASER'S REVIEW PERIOD. Purchaser shall have a period of time
commencing upon the Effective Date and ending upon the day which is thirty (30)
days after the Effective Date (the "Review Period") during which to inspect the
Property, the status of title to the Property, any books and records of Seller
relating to the ownership or operation of the Property, and to perform any
appraisals, surveys, studies and analysis desired by Purchaser relating to the
status of title to the Property and the environmental condition of the Property.
If, prior to the expiration of the Review Period, Purchaser determines that the
Property or the status of title to the Property is not suitable for its
purposes, Purchaser may terminate this Agreement by providing written notice of
termination to Seller prior to the expiration of the Review Period. If Purchaser
terminates this Agreement before the end of the Review Period in strict
accordance with its right to terminate set forth in the preceding sentence, then
the Earnest Money Deposit shall be immediately refunded to Purchaser without
deduction or offset. Should Purchaser fail to terminate this Agreement in
accordance with the provisions of this SECTION 8.1. prior to the expiration of
the Review Period, the Earnest Money Deposit shall be nonrefundable to Purchaser
except in the event of a default by Seller under the terms hereof.

         8.2. PURCHASER'S TESTING RIGHTS AND INDEMNITY. During the Review
Period, Purchaser, its agents, contractors, employees and representatives, shall
have the right to enter the Property at all reasonable times in order to inspect
the Property; provided that (i) all such work shall be at Purchaser's risk and
expense, and (ii) copies of all such reports (except appraisals), audits,
studies and analyses shall be forwarded to Seller without recourse or warranty
to Purchaser. Purchaser shall not undertake any destructive testing without
Seller's prior written consent. Purchaser agrees to indemnify Seller and hold
Seller harmless from and against all injury, damage, loss, cost and expense,
including costs of repairing damage to the Property and costs of defending
claims arising out of the exercise of Purchaser's testing and inspection rights
accorded by this SECTION 8.2. This indemnity obligation shall survive
termination of this Agreement. At Seller's election Purchaser shall immediately
restore the Property to substantially its original condition if changed due to
the tests and inspections performed by Purchaser.

                                   ARTICLE 9.

                                TITLE AND SURVEY

         9.1. TITLE COMMITMENT DELIVERY. Within ten (10) days after the
Effective Date of this Agreement, Seller shall obtain and cause to be delivered
to Seller: (a) a current Commitment for an Owner's Policy of Title Insurance or
preliminary title report covering the Property (the "Title Commitment") issued
by the Title Company, whereby the Title Company commits to issue to Purchaser
its Owner's Policy of Title Insurance in accordance with this Agreement; and (b)
true and legible copies of all instruments listed or referred to as exceptions
on the Title Commitment (collectively, the "Exception Documents").

                                       8
<PAGE>   9

         9.2. TITLE COMMITMENT FEATURES. The Title Commitment shall describe the
Property (and such legal description as modified by the Survey (hereinafter
defined) shall, after approval of the Survey by Purchaser and Seller, be
automatically incorporated as the description of the Property into this
Agreement and shall be used as such in all Closing documents), list Purchaser as
the proposed insured and show the Purchase Price as the policy amount.

         9.3. SURVEY. Within ten (10) days after the Effective Date of this
Agreement, Seller shall obtain and cause to be delivered to Seller and Purchaser
an on-the-ground, as-built survey of the Land and Improvements (the "Survey"),
prepared and certified as to all matters shown thereon by a registered surveyor
in compliance with the standards of a Category 1-A, Condition II survey, as
specified in the latest edition of the Manual of Practice for Land Surveying of
Texas published by the Texas Surveyor's Association.

         9.4. TITLE REVIEW. All title encumbrances or exceptions which are
referred to or listed in Schedule B of the Title Commitment, or are shown on the
Survey, and to which Purchaser does not object in a written notice given to
Seller on or before the period of time (the "Objection Period") expiring fifteen
(15) days after the date on which Purchaser has received the last to be received
of the Title Commitment, the Exception Documents and the Survey, shall be deemed
to be exceptions (the "Permitted Exceptions") which are permitted to be included
as exceptions to title both in Seller's Deed to Purchaser and in the Owner's
Policy of Title Insurance required by SECTION 10.1.(E) below. With regard to
matters to which Purchaser does object in a written notice given to Seller
before the end of the Objection Period, Seller shall have a period of time
expiring ten (10) days after the date Seller has received Purchaser's written
objection notice ("Seller's Curative Period") within which Seller may (but shall
have no obligation) to cure such written objections. Seller shall have the
right, but no obligation, to cure any matters to which Purchaser objects. If
Seller fails to cure any such objections within Seller's Curative Period, then
Purchaser, as its sole and exclusive remedy, shall have the right to terminate
this Agreement by written notice delivered to Seller and the Title Company prior
to the expiration of the Review Period, whereupon all of the Earnest Money
Deposit shall be returned to Purchaser, or Purchaser, at its election may waive
in writing any such objections and proceed to Closing without reduction in the
Purchase Price in which event such written objections shall be Permitted
Exceptions.

                                   ARTICLE 10.

                                   THE CLOSING

         10.1. SELLER'S CLOSING OBLIGATIONS. At the Closing, Seller shall cause
the following documents, certificates and items to be furnished to Purchaser:

         (a) The Deed in the form required by ARTICLE 3. above, duly executed
and acknowledged by Seller.

         (b) Evidence of payment, satisfaction and discharge of any and all
outstanding liens (other than the statutory lien for taxes not yet due and
payable) and other assessments, mortgages, security interests or other
encumbrances securing the payment of any indebtedness secured by the Property.

                                       9
<PAGE>   10

         (c) The Bill of Sale and Assignment in the form required by ARTICLE 3.
above, duly executed by Seller.

         (d) The Affidavit described in SECTION 6.1.(B).

         (e) An Owner's Policy of Title Insurance covering the Property issued
by the Title Company in accordance with the terms of this Agreement insuring
Purchaser's title in the amount of the Purchase Price.

         (f) Tax Certificates.

         (g) Evidence reasonably satisfactory to Purchaser and the Title Company
of Seller's and Seller's closing representative's power and authority to
consummate the transactions provided for in this Agreement.

         (h) Any additional documents that the Title Company considers
reasonably necessary to consummate this transaction.

         10.2. PURCHASER'S CLOSING OBLIGATIONS. Subject to Seller's performing
its obligations under SECTION 10.1. above, at the Closing, Purchaser shall:

         (a) Pay the Purchase Price pursuant to the provisions of SECTION 2.2.
above.

         (b) Evidence reasonably satisfactory to Seller and the Title Company of
Purchaser's and Purchaser's closing representative's power and authority to
consummate the transactions provided for in this Agreement.

         (c) Any additional documents that the Title Company considers
reasonably necessary to consummate this transaction.

         The Earnest Money Deposit shall be credited against the Purchase Price.

                                   ARTICLE 11.

                      RISK OF LOSS; DAMAGE OR CONDEMNATION

         The risk of loss resulting from any pending or threatened condemnation
or eminent domain proceeding which is commenced prior to Closing, and the risk
of loss to the Property due to any other cause, remains with Seller until
Closing. If, prior to the Closing, all or part of the Property shall be
destroyed, damaged or subjected to a bona fide threat of condemnation, eminent
domain or other proceeding, Seller shall so notify Purchaser, and Purchaser may
elect to (i) terminate this Agreement, in which event the Earnest Money Deposit
shall be returned to Purchaser, or (ii) Purchaser may declare this Agreement to
remain in full force and effect and at Closing, Seller shall assign, transfer
and set over to Purchaser all of the right, title and interest of Seller in and
to any awards and insurance proceeds or claims that have been or that may
thereafter be made for such taking or damage.

                                       10

<PAGE>   11

                                   ARTICLE 12.

                  DEFAULT, REMEDIES, AND DISPOSITION OF DEPOSIT

         12.1. SELLER'S DEFAULT. If the transaction provided for herein is not
completed because of a default (willful or otherwise) by Seller then and in that
event the Earnest Money Deposit shall be immediately returned to Purchaser, and
Purchaser may as its sole and exclusive remedy either (i) terminate this
Agreement by written notice to Seller, or (ii) enforce specific performance.
Provided, however, that Purchaser's right to specific performance against Seller
shall be limited to the right to require Seller to convey only such title to the
Property as Seller may have, with no reduction in the Purchase Price.

         12.2. PURCHASER'S DEFAULT. If the transaction provided for herein is
not completed because of a default (willful or otherwise) by Purchaser, Seller,
as its sole and exclusive remedy, may terminate this Agreement by giving written
notice, accompanied by Seller's sworn written statement to both Purchaser and
the Title Company that Purchaser is then in default under this Agreement and
Seller is not, and may have and receive the Earnest Money Deposit as liquidated
damages (such sum being agreed upon as reasonable liquidated damages, and not as
a penalty, because of the difficulty and inconvenience of ascertaining Seller's
actual damages). Provided, that if Purchaser duly exercises its option to
terminate this Agreement pursuant to SECTION 8.1. above before the end of the
Review Period, then all of the Earnest Money Deposit shall be promptly refunded
to Purchaser.

         12.3. EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to a right herein granted, then the Earnest Money Deposit shall be disbursed to
Purchaser or Seller, as appropriate, and thereafter neither party shall have any
further rights or obligations hereunder, except with respect to obligations that
expressly survive such termination.

                                   ARTICLE 13.

                                    EXPENSES

         13.1. SELLER'S PAYMENTS. At (or, at Seller's election, before) the
Closing Date, Seller shall pay:

         (a) One-half (1/2) the costs of the Owner's Policy of Title Insurance
required hereby except that the costs of any additional premiums for
modification or deletion of standard exceptions, or endorsements to the Owner's
Policy of Title Insurance shall be at Purchaser's sole cost and expense;

         (b) The fee for recording the Deed;

         (c) One-half (1/2) of any escrow fee charged by the Title Company;

                                       11
<PAGE>   12

         (d) One-half (1/2) the costs associated with the Survey;

         (e) All charges for Tax Certificates;

         (f) Seller's own attorneys' fees;

         (g) All of any special messenger, copy or other service charge made by
the Title Company for services requested by Seller or its representatives; and

         (h) Any other customary costs and expenses not specifically provided
for herein and normally borne by a Seller of real property in the county in
which the Property is situated.

         13.2. PURCHASER'S PAYMENTS. At (or at Purchaser's election before) the
Closing Date, Purchaser shall pay:

         (a) One-half of any escrow fee charged by the Title Company;

         (b) Purchaser's own attorneys' fees;

         (c) One-half (1/2) the costs associated with the Survey;

         (d) One-half (1/2) the costs of the Owner's Policy of Title Insurance
required hereby except that the costs of any additional premiums for
modification or deletion of standard exceptions, or endorsements to the Owner's
Policy of Title Insurance shall be at Purchaser's sole cost and expense;

         (e) All of any special messenger, copy or other service charge made by
the Title Company for services requested by Purchaser or its representatives;
and

         (f) All costs and expenses associated with the due diligence review of
the Property and any other customary costs and expenses borne by a Purchaser of
real property in the county in which the Property is situated.

                                   ARTICLE 14.

                         REAL ESTATE BROKERAGE INDEMNITY

         Seller does hereby agree to indemnify Purchaser against and hold
Purchaser harmless from any and all real estate commissions, claims for such
commissions or similar fees, including attorneys' fees incurred in any lawsuit
regarding such commissions or fees arising by, through or under Seller.
Purchaser does hereby agree to indemnify Seller against and hold Seller harmless
from any and all real estate commissions, claims for such commissions or similar
fees arising by, through or under Purchaser. In connection therewith, Purchaser
and Seller hereby represent and warrant to each other that neither such party,
their officers, employees and agents, have contracted for any such real estate
commissions, nor have they, without the knowledge of the other, contacted real
estate agents or brokers, nor have they, without the others knowledge, acted in
a manner so as to give rise to a claim for such real estate commissions or
similar fees.

                                       12
<PAGE>   13

                                   ARTICLE 15.

                                    SURVIVAL

         The representations and warranties of Purchaser and Seller contained in
this Agreement shall survive the Closing for a period of one (1) calendar year
and shall not be deemed merged into the Closing documents.

                                   ARTICLE 16.

                               RIGHT OF ASSIGNMENT

         Purchaser may assign its rights under this Agreement to a person or
entity which, directly or indirectly, controls, is controlled by or is under
common control with Purchaser, without the prior written consent of Seller.
Purchaser may not assign its rights under this Agreement to any other person or
entity without the prior written consent of Seller. Any person or entity to
which Purchaser assigns its rights under this Agreement shall execute and
deliver to Seller, contemporaneously with such assignment, a written assumption
agreement under which such assignee assumes all of the duties, obligations and
liabilities of Purchaser under this Agreement, states that the Earnest Money
Deposit has become the property of such assignee, and agrees to be bound by all
of the terms and provisions of this Agreement. Should Purchaser assign its
rights under this Agreement in the manner permitted hereby, upon delivery of
such assumption agreement to Seller, Purchaser shall be released from all
liability and obligations under this Agreement.

                                   ARTICLE 17.

                                LITIGATION COSTS

         Should either Seller or Purchaser bring legal proceedings permitted
hereunder against the other to enforce any provision of this Agreement, the
party in whose favor final judgment is entered by the Court in such proceedings
shall be entitled to recover against the other party the reasonable attorneys'
fees and expenses incurred by the prevailing party.

                                   ARTICLE 18.

                        CONTINUATION OF MARKETING EFFORTS

         Purchaser acknowledges that Seller will continue to market the Property
for sale to third parties while this Agreement is in effect. If Seller at any
time receives a bona fide offer to purchase the Property or any part thereof
from a third party offeror that Seller determines is preferable to the terms of
this Agreement (the "Third Party Offer"), Seller may subordinate Purchaser's
rights under this Agreement (as to the entire Property or the part thereof
included in the Third Party Offer) to the rights of such third party offeror (in
which event this Agreement will become a "back-up" contract), and may accept the
Third Party Offer unless Purchaser elects,

                                       13
<PAGE>   14

within five (5) business days of its receipt of written notice that Seller has
received a Third Party Offer (the "Notice"), to amend this Agreement and
purchase the Property on the price and terms set forth in the Third Party Offer.
Seller's written notice to Purchaser of the Third Party Offer shall set forth
the price of the proposed sale, the identification of the proposed purchaser and
a description of the Property or part thereof proposed to be sold, and shall be
accompanied by a copy of the written document evidencing the Third Party Offer.
If Purchaser elects to purchase the Property (or part thereof included in the
Third Party Offer) on the price and terms set forth in the Third Party Offer,
Purchaser shall sign and deliver an amendment to this Agreement, prepared by
Seller's counsel in form reasonably satisfactory to Purchaser and Seller (the
"Amendment"), evidencing the same price and terms as set forth in the Third
Party Offer, except that the Closing Date and all interim deadlines for
performance set forth in this Agreement shall remain in effect, such that
Closing under this Agreement, as amended by the Amendment, occurs in any event
on or before May 26, 2000. If Purchaser does not elect to purchase the Property
(or part thereof included in the Third Party Offer) within five (5) business
days of its receipt of the Notice by delivering to Seller written notice of such
election, or does not sign and deliver the Amendment within five (5) business
days of its receipt of the Amendment, then Purchaser's rights under this
Agreement shall automatically become subordinate (as to the entire Property or
the part thereof included in the Third Party Offer), to the rights of the third
party offeror under the contract it enters into with Seller in accordance with
the Third Party Offer (i.e., this Agreement will become a "back-up" contract),
and Seller may sell the Property or part thereof included in the Third Party
Offer to the third party offeror free and clear of all claims of Purchaser under
this Agreement. The immediately preceding sentence is intended to be
self-operative and effective without the necessity of further action or approval
by any party. If Purchaser's rights under this Agreement are subordinated to the
rights of a third party offeror pursuant to this ARTICLE 18, and Seller
consummates the sale of the Property to such offeror as permitted by this
ARTICLE 18, the Earnest Money Deposit shall be returned to Purchaser and Seller
shall reimburse Purchaser for the actual and reasonable costs, including
reasonable attorneys' fees and expenses, incurred by Purchaser in connection
with its efforts to purchase of the Property. Purchaser agrees to provide
Seller, upon request, with reasonable documentation confirming (i) the
subordination of Purchaser's rights under this Agreement (i.e., that this
Agreement has become a "back-up" contract), and (ii) substantiating such costs.

                                   ARTICLE 19.

                                  MISCELLANEOUS

         19.1. NOTICES. All notices, requests and other communications under
this Agreement shall be in writing and shall be sent via facsimile, delivered in
person, or sent by registered or certified mail, postage prepaid and return
receipt requested, addressed as follows:

                                       14
<PAGE>   15

            If intended for Seller:

                   Homco, Inc.
                   Attn:  Bettina S. Simon, Vice President and General Counsel
                   4550 Spring Valley Road
                   Dallas, Texas 75244-3705
                   Telephone: 972-386-1084
                   Facsimile: 972-386-1106

            with a copy to:

                   Weil, Gotshal & Manges LLP
                   Attn:  Philip I. Danze, Esq.
                   100 Crescent Court, Suite 1300
                   Dallas, Texas 75201-6950
                   Telephone: 214/746-7716
                   Facsimile: 214/746-7777

            If intended for Purchaser:

                   Mr. Donald J. Carter, Jr.

                   -------------------------------------------

                   -------------------------------------------
                   Telephone:
                             ---------------------------------
                   Facsimile:
                             ---------------------------------

            with a copy to:

                   Munsch, Hardt, Kopf & Harr, P.C.
                   Attn:  Lynn M. Collins, Jr., Esq.
                   1445 Ross Avenue
                   4000 Fountain Place
                   Dallas, TX 75202
                   Telephone: 214-855-7500
                   Facsimile: 214-855-7584

or at such other address, and to the attention of such other person, as any
party shall specify in a notice given as herein provided. Facsimile and personal
delivery of all notices shall always be effective with evidence of confirmation
of receipt, and all such notices, requests and other communications shall be
deemed to have been sufficiently given for all purposes hereof in the event of a
mailing in the manner specified herein, on a date three (3) days after the date
of the mailing thereof, whether or not the intended recipient of the notice
actually receives it.

         19.2. SECTION 1031. Purchaser shall cooperate as reasonably requested
by Seller, at no cost to Purchaser, in connection with Seller's selling the
Property pursuant to a tax-deferred exchange qualifying under Section 1031 of
the Internal Revenue Code. Purchaser shall not be obligated to take title to any
replacement property or incur any cost or expense as part of such

                                       15
<PAGE>   16

cooperation. Rather, the parties shall use an affiliate of the Title Company as
a qualified intermediary and an escrow arrangement reasonably approved by
Purchaser. Seller has or soon will have the exchange property under contract and
shall designated the Property as the sole and exclusive trade property for the
exchange transaction in accordance with ARTICLE 4. Seller also assumes
responsibility for filing necessary tax forms for the exchange.

         19.3. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement embodies and
constitutes the entire understanding between the parties with respect to the
transactions contemplated herein, and all prior or contemporaneous agreements,
understandings, representations and statements (oral or written) are merged into
this Agreement. Neither this Agreement nor any provisions hereof may be waived,
modified, amended, discharged or terminated except by an instrument in writing
signed by the party against whom the enforcement of such waiver, modification,
amendment, discharge or termination is sought, and then only to the extent set
forth in such instrument.

         19.4. APPLICABLE LAW AND VENUE. This Agreement is performable in Collin
County, Texas and shall be governed by and construed in accordance with the laws
of the State of Texas. Either Collin County, Texas or Dallas County, Texas shall
be a proper place of venue for all suits hereon.

         19.5. CAPTIONS. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe, limit or affect
the scope or intent of this Agreement or any of its provisions.

         19.6. BINDING EFFECT. This Agreement shall bind and benefit the parties
hereto and their respective successors and permitted assigns.

         19.7. TIME OF THE ESSENCE. Time is of the essence of the performance of
Seller's and Purchaser's obligations hereunder.

         19.8. EXHIBITS INCORPORATED. All Exhibits to this Agreement referred to
above are hereby incorporated in this Agreement at the respective places in it
where they are mentioned.

         19.9. CONSTRUCTION. Purchaser and Seller acknowledge that each party
and its legal counsel have reviewed and revised this Agreement and that they
agree the normal rule of construction that any ambiguities are to be resolved
against the drafter shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.

         19.10. TIME PERIODS. If the final day of any period of time set out in
any provision of this Agreement falls on Saturday or Sunday or on a legal
holiday under the laws of the State of Texas, then and in such an event, the
time of such period shall be extended to the next day which is not a Saturday,
Sunday or legal holiday.

         19.11. OFFER; EFFECTIVE DATE. The submission of this Agreement to
Purchaser for its review and signature does not constitute an offer to sell the
Property to Purchaser on the terms set forth herein, but rather an invitation
for Purchaser to make an offer to Seller on these terms. Seller shall not be
bound by this Agreement until Seller has signed and delivered this Agreement to
Purchaser and the Title Company. The "Effective Date" of this Agreement shall be
the date

                                       16
<PAGE>   17

the Title Company acknowledges that an original of this Agreement executed by
both Purchaser and Seller and the Earnest Money Deposit have been received by
the Title Company.

         19.12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original; but all of such counterparts
shall together constitute but one and the same instrument.

         19.13. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provisions
shall be fully severable; this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of
this Agreement; and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid or enforceable.

         19.14. CONDITION PRECEDENT TO SELLER'S OBLIGATIONS. Purchaser
acknowledges that the approval of the Board of Directors of Seller to the
transactions described in this Agreement shall be a condition precedent to
Seller's obligations hereunder.

         19.15. FURTHER ACTS. In addition to the acts recited in this Agreement
to be performed by Seller and Purchaser, Seller and Purchaser agree to perform,
or cause to be performed, on, before and after Closing any and all such further
acts as may be reasonably necessary to consummate the transactions contemplated
hereby.

         19.16. CONFIDENTIALITY. By their execution hereof, Seller and
Purchaser, their respective agents, employees, officers, shareholders,
directors, successors, independent contractors and permitted assigns hereby
agree to maintain in strict confidentiality, all of the terms, provisions,
agreements and information contained in or referred to in this Agreement,
including any of the exhibits attached hereto and the results of any tests,
surveys, economic feasibility studies, environmental audits and other
information provided to or generated by Purchaser or Seller. The information to
be maintained in strict confidentiality pursuant to the preceding sentence shall
not be disclosed directly or indirectly to any person or entity without the
prior written consent and specific written approval of the other party hereto.
Notwithstanding the foregoing, information may be disclosed to title company
personnel, attorneys, accountants, prospective lenders and their counsel and
prospective equity participants and their counsel or as otherwise required by
law or court order.

                                       17
<PAGE>   18

         EXECUTED in multiple counterparts, each of which shall constitute an
original hereof for all purposes and be enforceable without production of or
accounting for the others, effective as of the Effective Date provided for in
SECTION 19.11. above.

                                     SELLER:

                                     HOMCO, INC.,
                                     a Texas corporation

                                     By:
                                        --------------------------------------
                                        Name:
                                             ---------------------------------
                                        Title:
                                              --------------------------------

Executed on           , 2000
            ----------

                                     PURCHASER:

                                     -----------------------------------------
                                     DONALD J. CARTER, JR.

Executed on           , 2000
            ----------

                                       18
<PAGE>   19

         Fully executed counterpart original of this Agreement and the sum of
$10,000 cash Earnest Money Deposit received.

                                    TITLE COMPANY:

                                    REPUBLIC TITLE OF TEXAS, INC.

                                     By:
                                        -----------------------------------
                                     Name:
                                          ---------------------------------
                                     Title:
                                           --------------------------------

Executed on ___________________, 2000
(the "Effective Date" of this Agreement)

Exhibit A  -  Property Description
Exhibit B  -  Special Warranty Deed
Exhibit C  -  Bill of Sale
Exhibit D  -  Non-Foreign Status Affidavit

                                       19
<PAGE>   20

                                    EXHIBIT A

                              PROPERTY DESCRIPTION

Being Lot 1, in Block A, of HOMCO ADDITION, an Addition to the City of McKinney,
Collin County, Texas, according to the Map thereof recorded in Volume J, Page
824, of the Map Records of Collin County, Texas.

<PAGE>   21

                                    EXHIBIT B

WHEN RECORDED RETURN TO:

                              SPECIAL WARRANTY DEED

STATE OF TEXAS           )
                         )              KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF COLLIN         )

         THAT HOMCO, INC., a Texas corporation, whose address is 4550 Spring
Valley Road, Dallas, Texas 75244-3705 (herein referred to as "Grantor"), for and
in consideration of the sum of Ten and no/100 Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which consideration
are hereby acknowledged, has GRANTED, SOLD AND CONVEYED and by these presents
does GRANT, SELL and CONVEY unto DONALD J. CARTER, JR. (herein referred to as
"Grantee"), whose address is _______________________________________________,
the following described property:

         Being that certain tract of real property situated in Collin County,
         Texas, described on Exhibit A attached hereto and hereby made a part
         hereof (the "Land"), together with any buildings, structures,
         appurtenances and improvements located on the Land (such buildings and
         all other improvements located on the Land being herein referred to as
         the "Improvements") and all rights and appurtenances pertaining to the
         Land and the Improvements, including, without limitation, any and all
         rights of Seller in and to all oil, gas and mineral rights relating to
         the Land, all roads, alleys, easements, streets and ways adjacent to
         the Land, strips and gores and rights of ingress and egress thereto.
         The Land and Improvements as well as all Seller's rights and
         appurtenances pertaining thereto described above are hereinafter
         collectively referred to as the "Property;" subject, however, to the
         exceptions to title (the "Permitted Encumbrances") more particularly
         set forth on Exhibit B attached hereto and fully made a part hereof by
         reference for all purposes.

         TO HAVE AND TO HOLD the above-described Property, subject to the
Permitted Encumbrances, together with all and singular the rights and
appurtenances thereto in any wise belonging to Grantor, unto the said Grantee,
its successors and assigns FOREVER, and Grantor does hereby bind itself and its
successors and assigns to WARRANT AND FOREVER DEFEND all and singular the
Property unto the said Grantee, its successors and assigns, against

<PAGE>   22

every person whomsoever, lawfully claiming or to claim the same or any part
thereof, by, through or under Grantor, but not otherwise.

         Grantee assumes the payment of all ad valorem taxes and special
assessments pertaining to the Property for 2000 and subsequent years, there
having been a proper proration of ad valorem taxes for the current calendar year
between Grantor and Grantee.

         EXECUTED effective the              day of May, 2000.
                                ------------

                                     GRANTOR:

                                     HOMCO, INC., a Texas corporation

                                     By:
                                        --------------------------------------
                                        Name:
                                             ---------------------------------
                                        Title:
                                              --------------------------------

STATE OF TEXAS                )
                              )
COUNTY OF DALLAS              )

         This instrument was acknowledged before me on May ___, 2000 by
___________________________, the ____________ of HOMCO, INC., a Texas
corporation, on behalf of such corporation.

                                      Notary Public's Signature

    (PERSONALIZED SEAL)

Grantee's Address for Tax Purposes:

-----------------------------------

-----------------------------------

                                        2
<PAGE>   23

                                    EXHIBIT A

                             Description of Property

                                [TO BE ATTACHED]

<PAGE>   24

                                    EXHIBIT B

                             Permitted Encumbrances

                                [TO BE ATTACHED]

<PAGE>   25

                                    EXHIBIT C

                                  BILL OF SALE

         Concurrently with the execution and delivery hereof, HOMCO, INC., a
Texas corporation ("Assignor"), is conveying to DONALD J. CARTER, JR.
("Assignee"), by Special Warranty Deed that certain tract of land, together with
the improvements consisting of the buildings located thereon (the "Property"),
lying and being situated in Collin County, Texas, being more particularly
described on Exhibit "A" attached hereto and made a part hereof for all
purposes.

         It is the desire of Assignor to hereby assign, transfer and convey to
Assignee, without recourse to or warranty by Assignor, the equipment and other
tangible personal property attached to, installed in or used solely in
connection with the Property as of this date, and to the extent assignable all
rights of Assignor in and to any warranties, guaranties and service contracts
relating to such tangible personal property or the improvements on the Property
as of this date (all of such properties and assets being collectively called the
"Assigned Properties").

         NOW, THEREFORE, in consideration of the receipt of Ten and No/100
Dollars ($10.00) and other good and valuable consideration in hand paid by
Assignee to Assignor, the receipt and sufficiency of which are hereby
acknowledged and confessed by Assignor, Assignor does hereby ASSIGN, TRANSFER,
SET OVER and DELIVER to Assignee, its successors and assigns, WITHOUT RECOURSE
TO OR WARRANTY BY ASSIGNOR, all of the Assigned Properties, including without
limitation of the generality of the foregoing, the following:

         1. All rights of Assignor in and to the fixtures, equipment and other
tangible personal property attached to, installed in or used solely in
connection with the Property.

         2. To the extent assignable, the rights and interests of Assignor in
and to, and existing under and by virtue of, any and all contracts to which
Assignor is now a party and which relate to the operation or maintenance of the
Property. Assignor hereby agrees to indemnify and hold Assignee harmless from
and against any and all losses (including reasonable attorneys' fees) incurred
by or asserted against Assignee as a result of claims brought against Assignee,
as Assignor's successor in interest to such service contracts, related to causes
of action arising from any acts or omissions of Assignor under such contracts
occurring prior to the date hereof. By its execution hereof, Assignee assumes
all obligations of Assignor under such contracts arising from and after the date
hereof and agrees to indemnify and hold Assignor harmless from and against any
and all losses (including reasonable attorneys' fees) incurred by or asserted
against Assignor as a result of any obligation assumed by Assignee accruing on
or after the date hereof.

         3. All assignable warranties and guaranties (express or implied) issued
in connection with or arising out of (a) the purchase and repair of all
fixtures, equipment and tangible personal property owned by Assignor and
attached to and located in the Property, including but not limited to, (i) all
heating, air conditioning, plumbing and lighting fixtures and equipment, and
stoves, ovens, ranges, refrigerators, disposals, dishwashers and water heaters,
and (ii) carpeting,

<PAGE>   26

furniture and window draperies, or (b) the construction of any of the
improvements located in the Property. At the request of Assignee, the Assignor
shall execute such documents or instruments as may be reasonably requested by
Assignee to provide to the issuers of such warranties or guaranties in order to
evidence these assignments.

         4. All proceeds payable pursuant to policies of insurance owned by
Assignor pertaining to the Property with respect to casualty losses occurring
prior to the date hereof.

         TO HAVE AND TO HOLD the Assigned Properties unto Assignee, its
successors and assigns, forever.

         Assignor hereby agrees to perform, execute and deliver or cause to be
performed, executed and delivered any and all such further acts and assurances
as Assignee may reasonably require to perfect Assignee's interest in the
properties hereby assigned.

         Simultaneously with the execution and delivery of this Assignment,
Assignor has executed and delivered to Assignee the specific conveyances and
deeds described in the recitals hereof. Nothing herein contained shall be deemed
to limit or restrict the properties, assets and rights conveyed, assigned or
transferred to or acquired by Assignee by such specific conveyances and deeds.

         IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed
the ____ day of May, 2000.

                                          ASSIGNOR:
                                          --------

                                          HOMCO, INC., a Texas corporation

                                          By:
                                             --------------------------------
                                             Name:
                                                  ---------------------------
                                             Title:
                                                   --------------------------

                                          ASSIGNEE:
                                          --------

                                          -----------------------------------
                                          DONALD J. CARTER, JR.

<PAGE>   27

                                    EXHIBIT A

                                LEGAL DESCRIPTION

                                [TO BE ATTACHED]

<PAGE>   28

                                    EXHIBIT D

                       CERTIFICATION OF NONFOREIGN STATUS

         Section 1445 of the Internal Revenue Code provides that a transferee
(Purchaser) of a U.S. real property interest must withhold tax if the transferor
(Seller) is a foreign person. To inform the transferee (Purchaser) that
withholding tax is not required upon the disposition of a U.S. real property
interest, the undersigned Homco, Inc. hereby certifies the following:

         1. Homco, Inc. is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);

         2. The U.S. tax identification number of Homco, Inc. is
_______________;

         3. The office address of Homco, Inc. is 4550 Spring Valley Road,
Dallas, Texas 75244-3705. Homco, Inc. understands that this certification may be
disclosed to the Internal Revenue Service by transferee (Purchaser) and that any
false statement contained herein could be punished by fine, imprisonment, or
both.

         Under the penalties of perjury the undersigned declares that he has
examined this certification and to the best of his knowledge and belief it is
true, correct and complete, and he further declares that he has authority to
sign this document on behalf of Homco, Inc.

         EXECUTED effective the ____ day of May, 2000.

                                          HOMCO, INC.

                                          By:
                                             --------------------------------
                                             Name:
                                                  ---------------------------
                                             Title:
                                                   --------------------------

         SUBSCRIBED AND SWORN TO before me by _______________, __________ of
HOMCO, INC., a Texas corporation, on behalf of such corporation, on this _____
day of May, 2000, to certify which witness my hand and seal of office.

                                          ------------------------------------
                                          Notary Public, State of Texas
                                          Printed Name:
                                                       -----------------------
My commission expires:

-------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}]]