EXHIBIT 10.1
------------
AGREEMENT OF SUBLEASE
THIS AGREEMENT OF SUBLEASE (this "Sublease"), made effective as of
the 1st day of September, 2008 between WESTERN POWER & EQUIPMENT CORP., an
Oregon corporation ("Sublandlord"), and CASE DEALER HOLDING COMPANY LLC, a
Delaware limited liability company ("Subtenant").
W I T N E S E T H:
WHEREAS, Sublandlord is tenant under a certain Commercial Lease
dated July 1, 2006 (the "Prime Lease") with McLain-Rubin Realty Company II,
L.L.C. ("Prime Landlord") of the land and improvements located at 6407-B N.E.
117th Avenue, Vancouver, Washington (the "Premises"); a copy of the Prime Lease
as in effect on the date hereof is attached hereto and made a part hereof as
Exhibit A; and
WHEREAS, Sublandlord and Subtenant are parties to that certain
Assets Sale and Purchase Agreement dated June 20, 2008 (the "Purchase
Agreement"), which Purchase Agreement provides by its terms that Sublandlord, as
a condition to Closing, will cause Prime Landlord (its affiliate) to enter into
a new lease agreement with Subtenant (capitalized terms used herein and not
defined shall have the meanings given them in the Purchase Agreement); and
WHEREAS, Sublandlord has requested that, in lieu of a new lease,
Subtenant enter into this Sublease, and Subtenant has agreed to enter into this
Sublease, on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, intending to be legally bound, the parties agree as
follows:
1. Sublease of Premises. Sublandlord hereby subleases the Premises
to Subtenant for the Term (as hereinafter defined) subject to the terms,
conditions and covenants set forth in this Sublease. The initial term of this
Sublease (the "Initial Term") shall commence on the date hereof and shall end,
without the necessity of any further action by either party, on February 28,
2009; provided that, Subtenant shall have the option to renew this Sublease for
one additional six (6) month period (the "Extended Term") by giving Sublandlord
written notice thereof at least ninety (90) days prior to the expiration of the
Initial Term. The Initial Term together with, if applicable, the Extended Term,
is/are hereinafter referred to as the "Term." Subject to the conditions of
Section 8 of the Prime Lease, upon expiration of the Term Subtenant shall
surrender the Premises to Sublandlord in substantially the same condition as at
the commencement of this Sublease, reasonable wear and tear excepted. Subtenant
shall also return all keys to the Premises.
2. Rent. During the Term, Subtenant shall pay to Sublandlord an
amount equal to $14,000 per month (the "Rent"), at such times as the terms of
the Prime Lease specify with respect to the payment of Base Rent (as defined
therein), with the understanding that Sublandlord will remit such payments to
the Prime Landlord in satisfaction of rental payment obligations under the Prime
Lease. In addition, Subtenant shall reimburse Sublandlord for that portion of
insurance costs, property taxes and utility charges incurred by Sublandlord
under
Sections 6.2, 7.1, 7.5 and 7.6, respectively, of the Prime Lease, attributable
to the period of Subtenant's occupancy of the Premises (hereinafter, "Additional
Rent").
3. Prime Lease.
a. This Sublease and all of the rights of Subtenant hereunder are
expressly subject and subordinate to all of the terms and conditions of the
Prime Lease, and all mortgages to which the Prime Lease is subordinate, and
during the Term Subtenant shall be entitled to all of the rights and benefits of
Sublandlord as tenant thereunder. Notwithstanding the foregoing, Subtenant is
not hereby assuming any payment or indemnification obligations of Sublandlord
under the Prime Lease and is not hereby agreeing to perform or comply with any
of Sublandlord's obligations thereunder, other than the obligation to pay the
Rent as provided in Section 2 hereof, and to use the Premises in a manner
consistent with Sections 3.1, 3.2, 3.3, 3.4(b), 3.4(c), 3.4(e), 5.1, 13, 14,
15.3, 16.8 and16.10 of the Prime Lease. During the Term, Sublandlord shall
continue to be responsible for all other obligations of tenant under the Prime
Lease, and shall indemnify and hold Subtenant harmless with respect thereto.
b. Except as otherwise provided in this Section or elsewhere in this
Sublease, all of the terms, covenants, conditions and definitions of the Prime
Lease are hereby incorporated in and made part of this Sublease with the same
force and effect as though set forth at length herein.
4. Indemnification. Subtenant shall indemnify and hold Sublandlord
harmless from and against any damages, loss or liability (including
Sublandlord's reasonable attorney's fees) arising from or in connection with
Subtenant's possession, operation, use or occupation of the Premises, if and to
the extent not covered by insurance. In connection therewith, Sublandlord shall
cause Subtenant to be named as an additional insured on all policies maintained
by Sublandlord under Section 6.2 of the Prime Lease.
5. Miscellaneous.
a. This Sublease may be executed in counterparts, which taken
together shall constitute a single document.
b. This Sublease shall be governed by, and construed in accordance
with, the laws of the State of Washington.
c. This Sublease may only be amended in a writing signed by both
parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
IN WITNESS WHEREOF, the parties have executed this Sublease the day
and year first above written.
WESTERN POWER & EQUIPMENT CORP.
By: /s/ C. Dean McLain
---------------------------
Title: President
CASE DEALER HOLDING COMPANY LLC
By: /s/ James Hasler
---------------------------
Title: CEO and President
ACKNOWLEDGEMENT AND CONSENT
The undersigned, intending to be legally bound, hereby consents to
the foregoing Sublease, acknowledges and agrees to the provisions of Section
3(a) thereof, and agrees with the Subtenant that for so long as it continues to
pay Rent and Additional Rent and to comply in all material respects with the
provisions of the Prime Lease specifically enumerated in Section 3(a) of the
Sublease, Subtenant shall be entitled to the quiet enjoyment of the Premises
through the Term. Capitalized terms used herein shall have the meaning giving
them in the Sublease.
McLAIN-RUBIN REALTY COMPANY II, L.L.C.
By: /s/ C. Dean McLain
------------------------------
Title: Manager
3
EXHIBIT A
COPY OF PRIME LEASE