Case 12-13262-CTG Doc 296-2 Filed 02/27/13 Page 1 of 7
`
`EXHIBIT B
`
`Declarations
`
`DOCSDE:186067.173864/001
`
`

`

`Case 12-13262-CTG Doc 296-2 Filed 02/27/13 Page 2 of 7
`
`I, Randall G. Koster, declare as follows:
`
`1. I am the President of Koster Industries Inc., (the "Auctioneer"), an asset
`recovery firm specializing in the auction and liquidation of industrial equipment. I make
`this Declaration in support of the Application of US Tool& Engineering, LLC Pursuant to
`Sections 327(a) and 328(a) of the Bankruptcy Code, Rules 2014 and 6005 of the
`Federal Rules of Bankruptcy Procedure and Local Rule 2014-1 for Authorization to
`Employ and Retain Auctioneer to the Debtor (the "Application"), filed by US Tool &
`Engineering, LLC, one of the debtors and debtors in possession (the "Debtor"). Except
`as otherwise noted, I have personal knowledge of the matters set forth herein.
`
`Disinterestedness of Auctioneer
`
`Neither I, the Auctioneer nor any principal or professional thereof, insofar as I
`have been able to ascertain, has any connection with the Debtor, its creditors, or any
`other parties-in-interest in this bankruptcy case, or the respective attorneys except as
`set forth herein. Specifically, and as a matter of routine course in bankruptcy
`proceedings, we have manually analyzed the creditor lists attached provided by the
`Debtor and have determined that no conflicts exist. The Auctioneer does not hold nor
`represent any entity having an adverse interest in connection with this bankruptcy case.
`
`To the best of my knowledge, the Auctioneer is a "disinterested person" as the
`term is defined in the Bankruptcy Code. The Auctioneer and its members and
`employees:
`
`(a)
`
`(b)
`
`(c)
`
`(d)
`
`(e)
`
`do not hold or represent any interests adverse to the estates, are
`disinterested, and are eligible to serve as auctioneer for the Debtor under
`the Bankruptcy Code;
`
`are not creditors, equity security holders, or insiders of the Debtor and do
`not represent any entity (or its attorneys and accountants) other than the
`Debtor, in connection with this case;
`
`are not, and were not within the past two years, a director, officer, or
`employee of the Debtor;
`
`have no interests materially adverse to the interests of the Debtor or of
`any class of creditors or equity security holders of the Debtor; and
`
`have no connections, other than as disclosed herein, with the Debtor, its
`creditors, any other party in interest, their respective attorneys and
`
`

`

`Case 12-13262-CTG Doc 296-2 Filed 02/27/13 Page 3 of 7
`
`accountants, the United States Trustee or any person employed in the
`office of the United States Trustee.
`
`As part of its regular practice, the Auctioneer appears in numerous cases,
`proceedings and transactions involving attorneys, accountants, investment bankers and
`financial consultants, some of which may represent claimants and parties-in-interest in
`in the past, and may in the
`the Debtor’s chapter 11 case. Further, the Auctioneer has
`future, be represented by attorneys and law firms in the legal community, some of
`whom may be involved in these proceedings. In addition, the Auctioneer has in the
`past and will likely in the future be working with or against other professionals involved
`in this case in matters unrelated to this case. Based on our current knowledge of the
`professionals involved, and to the best of my knowledge, none of these business
`relations constitute interests materially adverse to the Debtor regarding the matters
`upon which the Auctioneer is to be employed.
`
`The Auctioneer may have in the past represented, may currently represent, and
`may in the future represent non-debtor affiliates of the Debtor in connection with
`matters unrelated to the Debtor and its chapter 11 case, including a secured party sales
`agreement with Power-Tec on January 9, 2013.
`
`Scope of Services to be Provided and Compensation
`
`The parties have entered into the Guarantee Auction Agreement attached to the
`Application as Exhibit A (the "Engagement Agreement"), which governs the relationship
`between the Auctioneer and the Debtor. The terms and conditions of the Engagement
`Agreement reflect the parties’ mutual agreement as to the efforts that will be required
`to liquidate the Equipment.
`
`The material terms of the proposed engagement include:
`
`(a)
`
`(b)
`
`The Auctioneer shall guarantee the Debtor the sum of $625,000 (the
`"Guarantee Price"). The Auctioneer shall pay the Debtor a deposit of 10%
`upon execution of the agreement with the Auctioneer, which shall be
`credited to the Guarantee Price. The balance of the Guarantee Price shall
`be paid to the Debtor the day before the Auction.
`
`The Auctioneer shall conduct a public auction of the Equipment, free and
`clear of any liens, claims, interests and encumbrances, on location at the
`Facility approximately six (6) weeks following Court approval, on a date to
`be determined. The Equipment shall be sold "as is, where is", with all
`
`

`

`Case 12-13262-CTG Doc 296-2 Filed 02/27/13 Page 4 of 7
`
`(c)
`
`(d)
`
`(e)
`
`faults, and without any representation or warranty whatsoever. The
`Auctioneer shall be granted access to the Facility to conduct the Auction.
`
`The Auctioneer shall retain the first $625,000 of Auction proceeds as
`reimbursement of the Guarantee Price and the next $40,000 of Auction
`proceeds to offset Auction expenses advanced by the Auctioneer. All
`Auction proceeds in excess of $665,000 (exclusive of buyer’s premium and
`sales tax) shall be split 100% to the Debtor and 0% to Auctioneer.
`
`The Auctioneer shall charge and collect sales and use taxes to Auction
`buyers, where applicable, unless Auction buyers present a tax exempt
`certificate. The Auctioneer will be authorized to file all applicable sales
`and use tax and to remit the funds collected at the sale for such taxes to
`the appropriate taxing authority.
`
`Buyer’s Premium is compensation for the services provided under this
`Agreement. The Auctioneer shall charge and retain a 15% buyer’s
`premium for each item sold onsite and an 18% buyer’s premium for each
`item sold online.
`
`I believe that the foregoing terms are reasonable, in accordance with the
`applicable industry standards and legal standards.
`
`No promises have been received by the Auctioneer or by any shareholder or
`professional thereof as to compensation in connection with this case other than in
`accordance with the provisions of the Bankruptcy Code.
`
`There are no outstanding bills due and owing to the Auctioneer for professional
`services performed for the Debtor or for reimbursement of charges and disbursements.
`
`As of the Petition Date, the Auctioneer was not a creditor of the Debtor.
`
`Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the
`foregoing is true and correct.
`
`Executed on this 2LL day of February, 2013.
`
`I
`
`Randall G. Koster
`
`

`

`Case 12-13262-CTG Doc 296-2 Filed 02/27/13 Page 5 of 7
`
`I, Steven R. Mattes, declare as follows:
`
`1. I am the CEO of BidltUp Auctions Worldwide, Inc., (the "Auctioneer"), an
`asset recovery firm specializing in the auction and liquidation of industrial equipment. I
`make this Declaration in support of the Application of US Tool & Engineering, LLC
`Pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code, Rules 2014 and 6005
`of the Federal Rules of Bankruptcy Procedure and Local Rule 2014-1 for Authorization
`to Employ and Retain Auctioneer to the Debtor (the "Application"), filed by US Tool &
`Engineering, LLC, one of the debtors and debtors in possession (the "Debtor"). Except
`as otherwise noted, I have personal knowledge of the matters set forth herein.
`
`Disinterestedness of Auctioneer
`
`Neither I, the Auctioneer nor any principal or professional thereof, insofar as I
`have been able to ascertain, has any connection with the Debtor, its creditors, or any
`other parties-in-interest in this bankruptcy case, or the respective attorneys except as
`set forth herein. Specifically, and as a matter of routine course in bankruptcy
`proceedings, we have manually analyzed the creditor lists attached provided by the
`Debtor and have determined that no conflicts exist. The Auctioneer does not hold nor
`represent any entity having an adverse interest in connection with this bankruptcy case.
`
`To the best of my knowledge, the Auctioneer is a "disinterested person" as the
`term is defined in the Bankruptcy Code. The Auctioneer and its members and
`employees:
`
`(a)
`
`(b)
`
`(C) (cid:9)
`
`(d)
`
`(e)
`
`do not hold or represent any interests adverse to the estates, are
`disinterested, and are eligible to serve as auctioneer for the Debtor under
`the Bankruptcy Code;
`
`are not creditors, equity security holders, or insiders of the Debtor and do
`not represent any entity (or its attorneys and accountants) other than the
`Debtor, in connection with this case;
`
`are not, and were not within the past two years, a director, officer, or
`employee of the Debtor;
`
`have no interests materially adverse to the interests of the Debtor or of
`any class of creditors or equity security holders of the Debtor; and
`
`have no connections, other than as disclosed herein, with the Debtor, its
`creditors, any other party in interest, their respective attorneys and
`
`

`

`Case 12-13262-CTG Doc 296-2 Filed 02/27/13 Page 6 of 7
`
`accountants, the United States Trustee or any person employed in the
`office of the United States Trustee.
`
`As part of its regular practice, the Auctioneer appears in numerous cases,
`proceedings and transactions involving attorneys, accountants, investment bankers and
`financial consultants, some of which may represent claimants and parties-in-interest in
`the Debtor’s chapter 11 case. Further, the Auctioneer has in the past, and may in the
`future, be represented by attorneys and law firms in the legal community, some of
`whom may be involved in these proceedings. In addition, the Auctioneer has in the
`past and will likely in the future be working with or against other professionals involved
`in this case in matters unrelated to this case. Based on our current knowledge of the
`professionals involved, and to the best of my knowledge, none of these business
`relations constitute interests materially adverse to the Debtor regarding the matters
`upon which the Auctioneer is to be employed.
`
`The Auctioneer may have in the past represented, may currently represent, and
`may in the future represent non-debtor affiliates of the Debtor in connection with
`matters unrelated to the Debtor and its chapter 11 case, including a secured party sales
`agreement with Power-Tec on January 9, 2013.
`
`Scone of Services to be Provided and Compensation
`
`The parties have entered into the Guarantee Auction Agreement attached to the
`Application as Exhibit A (the "Engagement Agreement"), which governs the relationship
`between the Auctioneer and the Debtor. The terms and conditions of the Engagement
`Agreement reflect the parties’ mutual agreement as to the efforts that will be required
`to liquidate the Equipment.
`
`The material terms of the proposed engagement include:
`
`(a)
`
`(b)
`
`The Auctioneer shall guarantee the Debtor the sum of $625,000 (the
`"Guarantee Price"). The Auctioneer shall pay the Debtor a deposit of 10%
`upon execution of the agreement with the Auctioneer, which shall be
`credited to the Guarantee Price. The balance of the Guarantee Price shall
`be paid to the Debtor the day before the Auction.
`
`The Auctioneer shall conduct a public auction of the Equipment, free and
`clear of any liens, claims, interests and encumbrances, on location at the
`Facility approximately six (6) weeks following Court approval, on a date to
`be determined. The Equipment shall be sold "as is, where is", with all
`
`

`

`Case 12-13262-CTG Doc 296-2 Filed 02/27/13 Page 7 of 7
`
`(c)
`
`(d)
`
`(e)
`
`faults, and without any representation or warranty whatsoever. The
`Auctioneer shall be granted access to the Facility to conduct the Auction.
`
`The Auctioneer shall retain the first $625,000 of Auction proceeds as
`reimbursement of the Guarantee Price and the next $40,000 of Auction
`proceeds to offset Auction expenses advanced by the Auctioneer. All
`Auction proceeds in excess of $665,000 (exclusive of buyer’s premium and
`sales tax) shall be split 100% to the Debtor and 0% to Auctioneer.
`
`The Auctioneer shall charge and collect sales and use taxes to Auction
`buyers, where applicable, unless Auction buyers present a tax exempt
`certificate. The Auctioneer will be authorized to file all applicable sales
`and use tax and to remit the funds collected at the sale for such taxes to
`the appropriate taxing authority.
`
`Buyer’s Premium is compensation for the services provided under this
`Agreement. The Auctioneer shall charge and retain a 15% buyer’s
`premium for each item sold onsite and an 18% buyer’s premium for each
`item sold online.
`
`I believe that the foregoing terms are reasonable, in accordance with the
`applicable industry standards and legal standards.
`
`No promises have been received by the Auctioneer or by any shareholder or
`professional thereof as to compensation in connection with this case other than in
`accordance with the provisions of the Bankruptcy Code.
`
`There are no outstanding bills due and owing to the Auctioneer for professional
`services performed for the Debtor or for reimbursement of charges and disbursements.
`
`As of the Petition Date, the Auctioneer was not a creditor of the Debtor.
`
`Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the
`foregoing is true and correct.
`
`Executed on this1 day of February, 2013.
`
`? -1v<
`
`Steven R. Mattes
`
`