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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
September 4, 2008 (August 29, 2008)
WESTERN POWER & EQUIPMENT CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 0-26230 91-1688446
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
6407-B N.E. 117TH AVENUE, VANCOUVER, WA 98662
(Address of Principal Executive Offices) (Zip Code)
(360) 253-2346
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communication pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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FORWARD-LOOKING STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:
This Current Report contains forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance, and underlying assumptions and other statements that are
other than statements of historical facts. These statements are subject to
uncertainties and risks including, but not limited to, demand and acceptance of
services, changes in governmental policies and regulations applicable to the
mining industry, economic conditions, the impact of competition and pricing, and
other risks defined in this document and in statements filed from time to time
with the Securities and Exchange Commission by Western Power & Equipment Corp.
(the "Company"). All readers are encouraged to review this Current Report. All
such forward-looking statements, whether written or oral, and whether made by or
on behalf of the Company, are expressly qualified by the cautionary statements
and any other cautionary statements which may accompany the forward-looking
statements. In addition, the Company disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the date
hereof.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
As previously disclosed in the Company's Current Report on Form 8-K filed
June 26, 2008, on June 25, 2008, the Company entered into an Assets Sale and
Purchase Agreement dated as of June 20, 2008 (the "Agreement"), with Western
Power & Equipment Corp., an Oregon corporation and a wholly owned subsidiary of
the Company ("WPE" and collectively with the Company, the "Seller"), and CNH
Dealer Holding Company LLC (n/k/a Case Dealer Holding Company LLC), a Delaware
limited liability company (the "Buyer"), which is wholly owned by CNH America,
LLC.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to the Agreement described in Item 1.01 above, the Company had
agreed to sell, and the Buyer had agreed to purchase all the Company's right,
title and interest in and to the assets and the ordinary course of business
operations of WPE, including leases, fixed assets, inventory, prepaid items,
accounts, assigned contracts, assigned permits, causes of action, books and
records, intellectual property, service work orders in process and other
necessary assets, located at or relating to the Acquired Locations (as such term
is defined below) (the "Purchased Assets"). The Acquired Locations included: (i)
2535 Ellis Street, Redding, CA 96001; (ii) 1751 Bell Ave., Sacramento, CA 95838;
(iii) 1041 S. Pershing Ave., Stockton, CA 95206; (iv) 1455 Glendale Ave.,
Sparks, NV 89431; (v)1745 NE Columbia Blvd., Portland, OR 97211; (vi) 1655 NE
Silverton Rd., Salem, OR 97303; (vii) 2702 West Valley Hwy., North, Auburn, WA
98001; (viii) 15111 Smokey Point Blvd., Marysville, WA 98271; and 6407 B NE 117
Ave., Vancouver, WA 98662.
The consideration for the purchase of the Purchased Assets, which
consideration is subject to adjustment after the closing (as provided in the
Agreement), was comprised of (i) a cash payment of approximately $29,115,000,
(ii) less an amount equal to the aggregate dollar amount of the Scheduled
Liabilities (as such term is defined in the Agreement), (iii) less the aggregate
of all amounts paid by the Buyer (at the Buyer's option) directly to creditors
of WPE to discharge encumbrances on the Purchased Assets, (iv) less an amount
equal to $1,000,000 to be held by the Buyer to pay (a) any adjustment amount
owed to the Buyer and/or (b) indemnity claims, (iv) less an amount equal to
$725,000 to be held by the Buyer to pay the Company's withdrawal liability under
ERISA due to a possible partial termination of the Company's obligation to make
contributions under a multi-employer plan with Local #3 of the Operating
Engineers Union and (vi) plus the assumption of the assumed liabilities.
The closing under the Agreement took place on Friday, August 29, 2008. At
the closing, the Buyer paid on behalf of the Company the agreed upon
consideration and assumed and agreed to pay and discharge certain liabilities of
WPE, including liabilities arising under the leases, assigned contracts and
assigned permits arising after the closing date.
At the closing, the Buyer and the Company entered into several agreements.
Under a certain transition agreement, the Buyer agreed to provide the Company
for a period of six months certain services for a fixed fee of less than
$15,000. Under a certain sublease, the Company subleased the premises where its
executive offices are located to Buyer for an initial term of six months, which
term may be extended by the Buyer for an additional six-
month term on 90 days' notice. The base rent under the sublease is $14,000 per
month. The Buyer has agreed to pay its utilities and to indemnify the Company in
certain circumstances. A copy of the sublease is attached hereto as Exhibit
10.1. Under a certain letter agreement, the Company and the Buyer agreed that
corrective action was needed to address certain conditions that exist on the
Acquired Locations, which Buyer determines, in its sole discretion, are adequate
to address such conditions. The Company's expense under this agreement shall not
exceed an aggregate amount of $700,000. A copy of the letter agreement is
attached hereto as Exhibit 10.2.
At the time of the closing, the Company and its affiliates had the
following material relationships with the Buyer and its affiliates. Affiliates
of the Buyer, pursuant to various dealer agreements and financing agreements,
had provided construction equipment and parts inventory to the Company for
retail sale at the Acquired Locations and have also provided floor plan
financing with respect to such equipment and inventory.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) NOT APPLICABLE.
(b) NOT APPLICABLE.
(c) NOT APPLICABLE.
(d) EXHIBITS:
EXHIBIT
NUMBER DESCRIPTION
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10.1 Sublease by and between Western Power & Equipment Corp. and Case
Dealer Holding Company, LLC with respect to the premises located
at 6407-B N.E. 117th Avenue, Vancouver, WA 98662.
10.2 Letter Agreement by and between Western Power & Equipment Corp.,
a Delaware corporation and Western Power & Equipment Corp., an
Oregon corporation and Case Dealer Holding Company LLC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: September 4, 2008
WESTERN POWER & EQUIPMENT CORP.
By: /s/ Mark J. Wright
--------------------------------
Name: Mark J. Wright
Title: Chief Financial Officer
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------
10.1 Sublease by and between Western Power & Equipment Corp. and Case
Dealer Holding Company, LLC with respect to the premises located
at 6407-B N.E. 117th Avenue, Vancouver, WA 98662.
10.2 Letter Agreement by and between Western Power & Equipment Corp.,
a Delaware corporation and Western Power & Equipment Corp., an
Oregon corporation and Case Dealer Holding Company LLC.