EXHIBIT 10.2
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CASE DEALER HOLDING COMPANY LLC
(f/k/a CNH Dealer Holding Company LLC)
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
August 29, 2008
Western Power & Equipment Corp. (Oregon)
0000-X X.X. 000xx Xxxxxx
Xxxxxxxxx, XX 00000
Western Power & Equipment Corp. (Delaware)
0000-X X.X. 000xx Xxxxxx
Xxxxxxxxx, XX 00000
Re: Acquired Locations
Gentlemen:
Reference is made to that certain Assets Sale and Purchase Agreement
dated June 20, 2008 (the "Purchase Agreement") by and among Western Power &
Equipment Corp., an Oregon corporation ("WPE"), Western Power & Equipment Corp.,
a Delaware corporation and the sole shareholder of WPE ("WPE Parent" and,
together with WPE, "Sellers"), and Case Dealer Holding Company LLC, a Delaware
limited liability company (f/k/a CNH Dealer Holding Company LLC) (the "Buyer").
Capitalized terms used herein and not defined shall have the meanings given them
in the Purchase Agreement.
In the course of its due diligence review of the Business, Buyer has
determined that certain conditions exist on the Acquired Locations which Buyer
believes should be corrected. Under the provisions of Section 8.2(d) of the
Purchase Agreement, Buyer has notified Sellers that it is unwilling to close the
Transactions unless the parties agree on the manner in which the aforesaid
conditions will be addressed. Sellers have determined that it is in their best
interests to close the Transactions, and accordingly have agreed to the
following provisions of this letter agreement, with the stipulation that their
execution and delivery of this letter agreement shall not be construed as an
admission that the Acquired Locations are not in full compliance with applicable
laws, which Sellers expressly deny.
Subject to the foregoing, Sellers agree that WPE shall be
responsible for the cost of those corrective actions described on Exhibit A
attached hereto (or such other corrective actions in lieu of the corrective
actions described on Exhibit A, which Buyer determines, in its xxxx discretion,
are adequate to address the conditions that exist on the Acquired Locations)
(the "WPE Actions"), up to an aggregate amount of $700,000 (the "WPE Payment
Amount").
Buyer is hereby authorized to and shall deduct the costs of the WPE
Actions from the Holdback Amount at such time and from time to time as Buyer
contracts for such corrective actions to be performed, up to the total WPE
Payment Amount, with the same effect as if such deduction were made in
satisfaction of an Indemnification Obligation as provided in Section 9.5 of the
Purchase Agreement.
Subject to Sellers' obligations of confidentiality under Section 7.1
of the Purchase Agreement, Buyer shall provide WPE with copies of any reports
produced by Buyer's contractor(s) as they relate to such work, and shall permit
representatives of WPE, at WPE's sole cost and upon reasonable notice and at
reasonable times, to monitor the such work.
Please indicate your agreement with the foregoing by executing the
Acknowledgment below and returning a signed copy to my attention.
CASE DEALER HOLDING COMPANY LLC
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Chief Executive Officer and President
ACKNOWLEDGMENT
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Intending to be legally bound, the undersigned have executed this
letter agreement as of the date set forth above.
WESTERN POWER & EQUIPMENT CORP., AN
OREGON CORPORATION
By: /s/ C. Xxxx XxXxxx
--------------------------------
C. Xxxx XxXxxx
Chief Executive Officer and President
WESTERN POWER & EQUIPMENT CORP., A
DELAWARE CORPORATION
By: /s/ C. Xxxx XxXxxx
--------------------------------
C. Xxxx XxXxxx
Chief Executive Officer and President
