1
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
DATED OCTOBER 3, 1997
BY AND BETWEEN
RUSH ENTERPRISES, INC.
RUSH EQUIPMENT CENTERS OF TEXAS, INC.
C. XXX XXXXXXX & XXXXXXXXX, INC.
AND
XXXXXXX & XXXXXXXXX REALTY CORPORATION
COVERING THE PURCHASE
OF SPECIFIED ASSETS OF
C. XXX XXXXXXX & XXXXXXXXX, INC.
2
TABLE OF CONTENTS
1. GENERAL DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 "Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.3 "Balance Sheet Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.4 "Best Knowledge" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.5 "Business" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
--------
1.6 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.8 "Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.9 "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.10 "Construction Equipment Business" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.11 "Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.12 "Control" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.13 "Damages" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.14 "Dealership Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.15 "Encumbrance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.16 "Environmental Conditions" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.17 "Environmental Laws" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.18 "Environmental Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.19 "Environmental Permits" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.20 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.21 "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.22 "Form 10-Q" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.23 "Governmental Authority" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.24 "Governmental Requirement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.25 "Gulf Coast Territory" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.26 "Hazardous Materials" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.27 "HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.28 "Incidental Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.29 "Indemnification Event" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.30 "Indemnitee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.31 "Indemnitor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.32 "IRS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
---
1.33 "Xxxx Deere" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.34 "Lease" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.35 "Losses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.36 "New Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.37 "Overstocked Item" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.38 "PBGC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.39 "Permitted Exceptions" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.40 "Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.41 "Plans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.42 "Promissory Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.43 "Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.44 "Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.45 "Reference Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.46 "Remaining Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.47 "Remaining Property Option Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.48 "Retained Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.49 "Rush Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.50 "Schedule" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.51 "SEC" or "Commission" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.52 "SEC Documents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.53 "Section" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.54 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.55 "Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.56 "Slow-Moving Item" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.57 "Tax Returns" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.58 "Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.59 "Third-Party Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.60 "Title Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Assets to be Purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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2.2 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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2.3 Delivery of Assets and Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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2.4 Closing; Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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3. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Price and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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3.2 Assumed Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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3.3 Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.2 Warranties and Product Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.4 Events Since the Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.5 Customer List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.6 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.7 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.8 Contracts and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.9 Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.10 Properties, Assets and Leasehold Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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4.11 Intangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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4.12 Suits, Actions and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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4.13 Licenses and Permits; Compliance With Governmental Requirements . . . . . . . . . . . . . . . . . . 16
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4.14 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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4.15 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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4.16 Environmental Protection Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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4.17 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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4.18 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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4.19 Work Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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4.20 Telephone Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.21 No Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.22 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.23 Securities Laws Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.24 No Untrue Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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5. REPRESENTATIONS AND WARRANTIES OF THE RUSH PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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5.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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5.4 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS, GUARANTEES, REPRESENTATIONS AND WARRANTIES OF
SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7. CONTRACTS PRIOR TO THE CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Approval of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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7.2 Contracts Included in Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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8. COVENANTS OF SELLER PRIOR TO CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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8.2 General Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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8.3 General Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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8.4 Disclosure of Misrepresentations and Breaches . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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8.5 Government Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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8.6 Access to and Inspection of Premises, Facilities and Equipment . . . . . . . . . . . . . . . . . . . 24
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9. COVENANTS REGARDING THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.1 Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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9.2 Covenants of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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9.3 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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9.4 Inventory Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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10. CONDITIONS TO OBLIGATIONS OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.1 Accuracy of Representations and Warranties and Fulfillment of Covenants . . . . . . . . . . . . . . 25
-----------------------------------------------------------------------
10.2 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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10.3 No Governmental Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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10.4 No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.5 Update of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.6 Approval of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.7 No Material Adverse Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.8 Notices and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.9 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.10 Corporate Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.11 Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.12 Transfer and Assignment Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.13 Liens Released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.14 UCC Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.15 Telephone Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.16 Ordinary Course of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.17 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.18 Dealer License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.19 Certain Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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10.20 Inventory Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.21 Other Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.22 Special Warranty Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.23 Government Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.24 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.25 Title Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.26 Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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10.27 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.1 Accuracy of Representations and Warranties and Fulfillment of Covenants . . . . . . . . . . . . . . 29
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11.2 Delivery of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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11.3 Approval of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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11.4 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
----------------------
11.5 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------
11.6 Rush Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
---------------------
11.7 Xxxx Deere Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
---------------------
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.1 Change of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------------
12.2 Exchange Act Filing; Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
--------------------------------
12.3 Trade Names; Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
-----------------------
12.4 Tax Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
----------
13. INDEMNITY BY SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13.1 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
-------------------------
13.2 Environmental Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
-----------------------------
13.3 Tax Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-------------------
13.4 Products Liability and Warranty Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-----------------------------------------------
13.5 Indemnification by the Rush Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-----------------------------------
13.6 Time Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
----------------
13.7 Limitations on Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
---------------------
13.8 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
---------
13.9 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-------
13.10 Failure to Pay Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
------------------------------
13.11 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-----------
14. RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
15. NON-COMPETITION AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
15.1 Non-Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
---------------
15.2 Judicial Reformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
--------------------
15.3 Customer Lists; Non-Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
--------------------------------
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15.4 Covenants Independent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
---------------------
15.5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
--------
16. NONDISCLOSURE OF CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
17. DAMAGE TO ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
18. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
18.1 Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
--------------
18.2 Failure of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
---------------------
18.3 Failure to Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
----------------
19. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
19.1 New Employees of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------------
19.2 No Hiring Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------
19.3 Vacation, Sick Pay, Health Insurance, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
-----------------------------------------
19.4 Severance Benefits; Employment Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
------------------------------------------
19.5 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
----------------------
19.6 Reporting of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-----------------
19.7 Employment Related Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-------------------------
20. OFFSET PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
21. ADJUSTMENT OF PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
22. INCIDENTAL REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
22.1 Incidental Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-----------------------
22.2 Limitation on Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
--------------------------
22.3 Registration Procedures and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
------------------------------------
22.4 Agreement by the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-----------------------
22.5 Allocation of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
----------------------
22.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
---------------
22.7 Rule 144 Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
--------------
23. SURVEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
23.1 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
------
23.2 Remedies for Failure to Deliver Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
--------------------------------------
24. TITLE COMMITMENT AND CONDITION OF TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
24.1 Title Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
----------------
24.2 UCC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
-----------
24.3 Disclosure of Exceptions by Title Commitment and UCC Report . . . . . . . . . . . . . . . . . . . . 43
-----------------------------------------------------------
25. ENVIRONMENTAL STUDIES AND REMEDIATION ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
25.1 Environmental Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
---------------------
25.2 Remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
-----------
25.3 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
--------
25.4 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
---------
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26. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
26.1 Governing Law; Interpretation; Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 44
-----------------------------------------------
26.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
------------
26.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
----------------
26.4 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
--------------
26.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
----------
26.6 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
-----------------
26.7 Gender; Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
---------------
26.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
------------
26.9 Telecopy Execution and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
-------------------------------
26.10 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
--------------
26.11 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
--------
26.12 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
-----------
26.13 Assignment of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
-----------------------
26.14 Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
---------------
26.15 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
-------
26.16 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
------------
26.17 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
------------
Exhibits
--------
Exhibit A-1 Description of Dealership Property
Exhibit A-2 Description of Remaining Property
Exhibit B General Warranty Xxxx of Sale and Assignment of Contract Rights
Exhibit D Rush Option Agreement
Exhibit E Promissory Note
Exhibit F Escrow Agreement
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8
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 3rd day of October, 1997, by and between C. Xxx Xxxxxxx & Xxxxxxxxx,
Inc., a Delaware corporation, Xxxxxxx & Xxxxxxxxx Realty Corporation, a Texas
corporation (collectively, and jointly and severally for all purposes herein,
"Seller"), and Rush Equipment Centers of Texas, Inc., a Delaware corporation
("Purchaser"). Rush Enterprises, Inc., a Texas corporation ("Rush"), joins
this Agreement for the limited purposes expressly set forth in this Agreement.
W I T N E S S E T H :
WHEREAS, Seller is the owner of all right, title and interest in and
to the assets described in Section 2.1 hereto (the "Assets"), with such Assets
being the assets currently used in the conduct of the operation of the Xxxx
Deere dealership business operated by Seller (collectively, the "Business");
WHEREAS, Purchaser is a wholly-owned subsidiary of Rush (Rush,
together with Purchaser, the "Rush Parties").
WHEREAS, Seller desires to sell the Assets to Purchaser and Purchaser
desires to acquire the Assets from Seller, all pursuant to this Agreement as
hereinafter provided; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the execution and delivery of this Agreement, and to set forth
certain additional agreements related to the transactions contemplated hereby;
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. GENERAL DEFINITIONS. For purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
1.1 "Affiliate" of any Person shall mean any Person Controlling,
Controlled by or under common Control with such Person.
1.2 "Assets" shall have the meaning assigned to it in Section 2.1.
1.3 "Balance Sheet Date" shall have the meaning assigned to it in
Section 4.3(a).
1.4 "Best Knowledge" shall mean what a Person actually knew. When
used with respect to a Person other than a natural person, the term "Best
Knowledge" shall include matters that are known to the directors, officers and
employees of the Person.
1.5 "Business" shall have the meaning assigned to it in the
Witnesseth clause.
1
9
1.6 "Business Day" shall mean any day other than Saturday, Sunday
or other day on which federally chartered commercial banks in San Antonio,
Texas are authorized or required by law to close.
1.7 "Closing" shall have the meaning assigned to it in Section
2.4.
1.8 "Closing Date" shall have the meaning assigned to it in
Section 2.4.
1.9 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.10 "Construction Equipment Business" shall mean the manufacture
or distribution of earth moving equipment, forestry equipment, skidsteer
equipment and utility equipment.
1.11 "Contracts" shall mean the contracts set forth on Schedule
4.8(a) and Schedule 4.8(b).
1.12 "Control" and all derivations thereof shall mean the ability
to either (a) vote (or direct the vote of) 50% or more of the voting interests
in any Person or (b) direct the affairs of another, whether through voting
power, contract or otherwise.
1.13 "Damages" shall mean any and all liabilities, losses, damages,
demands, assessments, punitive damages, refund obligations (including, without
limitation, interest and penalties thereon but not including incidental and
consequential damages), claims of any and every kind whatsoever, costs and
expenses (including interest, awards, judgments, penalties, settlements, fines,
costs of remediation, diminutions in value, costs and expenses incurred in
connection with investigating, prosecuting and defending any claims or causes
of action (including, without limitation, reasonable attorneys' fees and
reasonable expenses and all reasonable fees and reasonable expenses of
consultants and other professionals)).
1.14 "Dealership Property" shall mean all those certain tracts,
pieces or parcels of land described in Exhibit A-1 attached hereto and made a
part hereof for all purposes (herein collectively referred to as the
"Dealership Land"), together with the buildings, structures, manufacturing
plants, fixtures, paving, curbing, trees, shrubs, plants, and other
improvements of every kind and nature presently situated on, in, or under, or
hereafter erected or installed or used in, on, or about or in connection with
the ownership, use and operation of the Dealership Land (herein collectively
referred to as the "Dealership Improvements"), and all rights and appurtenances
pertaining thereto, including, but not limited to (a) all right, title and
interest, if any, of Seller, in and to any land in the bed of any street, road
or avenue open or proposed in front of or adjoining the Dealership Land; (b)
all right, title and interest, if any, of Seller, in and to any rights-of-way,
rights of ingress or egress or other interests in, on, or to, any land,
highway, street, road, or avenue, open or proposed, in, on, or across, in front
of, abutting or adjoining the Dealership Land, and any awards made, or to be
made in lieu thereof, and in and to any unpaid awards for damage thereto by
reason of a change of grade of any such highway, street, road, or avenue; (c)
any easement across, adjacent or appurtenant to the Dealership Land, existing
or abandoned; (d) all sewage treatment capacity and water capacity and other
utility capacity to serve the Dealership Land and Dealership Improvements; (e)
all of Seller's right, title and interest in and to oil, gas, and other
minerals in, on, or under, and that may be produced from the Dealership Land;
(f) all water in, under or that may be produced from the Dealership Land, and
all xxxxx, water rights, permits and historical water usage pertaining to or
associated with the Dealership Land; (g) all right, title and interest, if any,
of Seller, in and to any
2
10
land adjacent or contiguous to, or a part of the Dealership Land (other than
the land comprising the Remaining Property), whether those lands are owned or
claimed by deed, limitations or otherwise, and whether or not they are located
inside or outside the description given herein, or whether or not they are held
under fence by Seller, or whether or not they are located on any survey
referred to in Article 23 hereof; and (h) any reversionary rights attributable
to the Dealership Land.
1.15 "Encumbrance" shall mean any security interest, mortgage,
pledge, trust, claim, lien, charge, option, defect, restriction, encumbrance or
other right or interest of any third Person of any nature whatsoever.
1.16 "Environmental Conditions" means any and all acts, omissions,
events, circumstances and conditions on or in connection with the Real Property
or the other Assets that constitute a violation of, or require remediation
under, any Environmental Laws, including any pollution, contamination,
degradation, damage, or injury caused by, related to, or arising from or in
connection with the generation, use, handling, treatment, storage, disposal,
discharge, emission or release of Hazardous Materials.
1.17 "Environmental Laws" shall mean all applicable federal, state,
local or municipal laws, rules, regulations, statutes, ordinances or orders of
any Governmental Authority, relating to (a) the control of any potential
pollutant, or protection of health or the air, water or land, (b) solid,
gaseous or liquid waste generation, handling, treatment, storage, disposal,
discharge, release, emission or transportation, (c) exposure to hazardous,
toxic or other substances alleged to be harmful, (d) the protection of any
endangered or at-risk plant or animal life, or (e) the emission, control or
abatement of noise. "Environmental Laws" shall include, but not be limited to,
the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act, 33
U.S.C. Section 1251 et seq., the Resource Conservation Recovery Act ("RCRA"),
42 U.S.C. Section 6901 et seq., the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., the Endangered Species Act, 16 U.S.C. Section 1531 et
seq., the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., and the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq., including the Superfund Amendments
and Reauthorization Act, 42 U.S.C. Section 11001, et seq. The term
"Environmental Laws" shall also include all applicable state, local and
municipal laws, rules, regulations, statutes, ordinances and orders dealing
with the subject matter of the above listed federal statutes or promulgated by
any governmental or quasi-governmental agency thereunder in order to carry out
the purposes of any federal, state, local or municipal law.
1.18 "Environmental Liabilities" shall mean any and all
liabilities, responsibilities, claims, suits, losses, costs (including
remedial, removal, response, abatement, clean-up, investigative and/or
monitoring costs and any other related costs and expenses), other causes of
action recognized now or at any later time, damages, settlements, expenses,
charges, assessments, liens, penalties, fines, pre-judgment and post-judgment
interest, attorneys' fees and other legal costs incurred or imposed (a)
pursuant to any agreement, order, notice of responsibility, directive
(including directives embodied in Environmental Laws), injunction, judgment or
similar documents (including settlements) arising out of, in connection with,
or under Environmental Laws, (b) pursuant to any claim by a Governmental
Authority or any other person or entity for personal injury, property damage,
damage to natural resources, remediation, or payment or reimbursement of
response costs incurred or expended by such Governmental Authority, person or
entity pursuant to common law or statute and related to the use or release of
Hazardous Materials, or (c) as a result of Environmental Conditions.
3
11
1.19 "Environmental Permits" shall mean any permits, licenses,
approvals, consents, registrations, identification numbers or other
authorizations with respect to the Assets or the Businesses or the ownership or
operation thereof required under any applicable Environmental Law.
1.20 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
1.21 "Exchange Act" shall mean the Securities and Exchange Act of
1934, as amended.
1.22 "Form 10-Q" shall have the meaning assigned to it in Section
5.4.
1.23 "Governmental Authority" shall mean any and all foreign,
federal, state or local governments, governmental institutions, public
authorities and governmental entities of any nature whatsoever, and any
subdivisions or instrumentalities thereof, including, but not limited to,
departments, boards, bureaus, commissions, agencies, courts, administrations
and panels, and any divisions or instrumentalities thereof, whether permanent
or ad hoc and whether now or hereafter constituted or existing.
1.24 "Governmental Requirement" shall mean any and all laws
(including, but not limited to, applicable common law principles), statutes,
ordinances, codes, rules, regulations, interpretations, guidelines, directions,
orders, judgments, writs, injunctions, decrees, decisions or similar items or
pronouncements, promulgated, issued, passed or set forth by any Governmental
Authority.
1.25 "Gulf Coast Territory" means all of the following counties in
the State of Texas: Austin, Brazoria, Xxxxxxxx, Colorado, Fort Bend, Galveston,
Grimes, Harris, Houston Metro, Jackson, Jefferson, Liberty, Madison, Matagorda,
Xxxxxxxxxx, Orange, San Jacinto, Walker, Waller and Xxxxxxx.
1.26 "Hazardous Materials" means any (a) petroleum or petroleum
products, (b) asbestos or asbestos containing materials, (c) hazardous
substances as defined by Section 101(14) of CERCLA and (d) any other chemical,
substance or waste that is regulated by any Governmental Authority under any
Environmental Law.
1.27 "HSR Act" shall have the meaning assigned to it in Section
8.5.
1.28 "Incidental Rights" shall mean all of Seller's right, title
and interest in and to and under all contracts, guaranties, warranties or other
agreements relating to the ownership, construction, rental, operation,
maintenance and repair of the Dealership Property, including, without
limitation, all contracts or agreements, such as ownership, use, service,
management, operation, maintenance and repair of the Dealership Property, the
main telephone number assigned to the Dealership Improvements, and all
governmental permits or approvals or licenses heretofore granted (or granted
prior to Closing) with respect to the ownership, construction, use, occupancy
and operation of the Businesses, the Dealership Property and the Assets, and
all goodwill of Seller associated with the Business, the Assets and Seller's
operations thereof and Seller's sales therefrom.
1.29 "Indemnification Event" shall have the meaning assigned to it
in Section 13.8.
4
12
1.30 "Indemnitee" shall mean the Rush Parties and each of their
respective Affiliates, officers, directors, employees, agents, consultants,
representatives, shareholders and controlling Persons and their respective
successors and assigns, on the one hand, and the Seller and its Affiliates,
officers, directors, employees, agents, consultants, representatives,
shareholders and controlling Persons and their respective successors and
assigns, on the other hand, whether indemnified, or entitled, or claiming to be
entitled to be indemnified or receive property, pursuant to the provisions of
Article 13 hereof.
1.31 "Indemnitor" shall mean the Person or Persons having the
obligation to indemnify or make payment pursuant to the provisions of Article
13 hereof.
1.32 "IRS" shall mean the Internal Revenue Service.
1.33 "Xxxx Deere" shall mean Xxxx Deere Construction Equipment
Company and its Affiliates.
1.34 "Lease" shall have the meaning assigned to it in Section 25.3.
1.35 "Losses" shall mean General Losses, Environmental Losses, Tax
Losses and Product Losses (each as defined in Article 13 hereof), as the case
may be.
1.36 "New Contracts" shall have the meaning assigned to it in
Section 10.5.
1.37 "Overstocked Item" shall mean any item described in Sections
2.1(b), (c) or (j) for which there is more than an 18-month supply (based on
historical sales of such item over the last 12 months).
1.38 "PBGC" shall mean the Pension Benefit Guaranty Corporation.
1.39 "Permitted Exceptions" shall have the meaning assigned to it
in Section 24.3 hereof.
1.40 "Person" shall mean any natural person, any Governmental
Authority and any entity the separate existence of which is recognized by any
Governmental Authority or Governmental Requirement, including, but not limited
to, corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or otherwise.
1.41 "Plans" shall mean all of Seller's rights, titles and
interests in and to all plans, drawings, specifications, surveys, engineering,
inspection or similar reports and other technical descriptions relating to the
Dealership Property and the Assets.
1.42 "Promissory Note" shall have the meaning assigned to it in
Section 3.1.
1.43 "Purchase Price" shall have the meaning assigned to it in
Article 3.
1.44 "Real Property" shall mean collectively the Dealership
Property and the Remaining Property, metes and bounds descriptions of which are
attached hereto as Exhibit A-1 and Exhibit A-2, respectively.
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1.45 "Reference Balance Sheet" shall have the meaning assigned to
it in Section 4.3(a).
1.46 "Remaining Property" shall mean all those certain tracts,
pieces or parcels of land described in Exhibit A-2 attached hereto and made a
part hereof for all purposes (herein collectively referred to as the "Remaining
Land"), together with the buildings, structures, manufacturing plants,
fixtures, paving, curbing, trees, shrubs, plants, and other improvements of
every kind and nature presently situated on, in, or under, or hereafter erected
or installed or used in, on, or about or in connection with the ownership, use
and operation of the Remaining Land (herein collectively referred to as the
"Remaining Improvements"), and all rights and appurtenances pertaining thereto,
including, but not limited to (a) all right, title and interest, if any, of
Seller, in and to any land in the bed of any street, road or avenue open or
proposed in front of or adjoining the Remaining Land; (b) all right, title and
interest, if any, of Seller, in and to any rights-of-way, rights of ingress or
egress or other interests in, on, or to, any land, highway, street, road, or
avenue, open or proposed, in, on, or across, in front of, abutting or adjoining
the Remaining Land, and any awards made, or to be made in lieu thereof, and in
and to any unpaid awards for damage thereto by reason of a change of grade of
any such highway, street, road, or avenue; (c) any easement across, adjacent or
appurtenant to the Remaining Land, existing or abandoned; (d) all sewage
treatment capacity and water capacity and other utility capacity to serve the
Remaining Land and Remaining Improvements; (e) all of Seller's right, title and
interest in and to oil, gas and other minerals in, on, or under, and that may
be produced from the Remaining Land; (f) all water in, under or that may be
produced from the Remaining Land, and all xxxxx, water rights, permits and
historical water usage pertaining to or associated with the Remaining Land; (g)
all right, title and interest, if any, of Seller, in and to any land adjacent
or contiguous to, or a part of the Remaining Land (other than the land
comprising the Dealership Property), whether those lands are owned or claimed
by deed, limitations or otherwise, and whether or not they are located inside
or outside the description given herein, or whether or not they are held under
fence by Seller, or whether or not they are located on any survey referred to
in Article 23 hereof; and (h) any reversionary rights attributable to the
Remaining Land.
1.47 "Remaining Property Option Agreement" shall have the meaning
assigned to it in Article 14.
1.48 "Retained Liabilities" shall have the meaning assigned to it
in Section 3.2.
1.49 "Rush Stock" shall mean the common stock, $.01 par value, of
Rush.
1.50 "Schedule" shall mean the Schedules to this Agreement, unless
otherwise stated. The Schedules to this Agreement may be attached to this
Agreement or may be set forth in a separate document denoted as the Schedules
to this Agreement, or both.
1.51 "SEC" or "Commission" shall mean the United States Securities
and Exchange Commission.
1.52 "SEC Documents" shall have the meaning assigned to it in
Section 5.4.
1.53 "Section" shall mean the Section of this Agreement, unless
otherwise stated.
1.54 "Securities Act" shall mean the Securities Act of 1933, as
amended.
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1.55 "Subsidiary" shall mean, with respect to any Person (the
"parent"), (a) any corporation, association, joint venture, partnership or
other business entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power or beneficial interest
are, at the time as of which any determination is being made, owned or
controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent and (b) any joint venture or
partnership of which the parent or any Subsidiary of the parent is a general
partner or has responsibility for its management.
1.56 "Slow-Moving Item" shall mean any item described in Sections
2.1(b), (c) or (j) that has not sold during the previous 12-month period.
1.57 "Tax Returns" shall mean all Tax returns and reports
(including, without limitation, income, franchise, sales and use, unemployment
compensation, excise, severance, property, gross receipts, profits, payroll and
withholding Tax returns and information returns).
1.58 "Taxes" shall mean any foreign, federal, state or local tax,
assessment, levy, impost, duty, withholding, estimated payment or other similar
governmental charge, together with any penalties, additions to Tax, fines,
interest and similar charges thereon or related thereto.
1.59 "Third-Party Claims" shall have the meaning assigned to it in
Section 13.8(b) hereof.
1.60 "Title Company" shall mean Xxxxxxx Title Company, Attention
Xxxx Xxxxx, 2961 Mossrock, Xxx Xxxxxxx, Xxxxx 00000.
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
2.1 Assets to be Purchased. The assets to be purchased from
Seller are the following assets held by Seller as of the Closing for use in
connection with the Business as more fully described on Schedule 2.1, which
Assets include (collectively, the "Assets"):
(a) all new construction machinery equipment, except for
any new construction machinery equipment manufactured by Xxxx Deere,
which may be returned to Xxxx Deere;
(b) all new, current and returnable parts and accessories
inventory, except for any Xxxx Deere new, current and returnable parts
and accessories inventory, which may be returned to Xxxx Deere;
(c) all miscellaneous inventories, including gas, diesel
fuel, oil, grease, paint and body shop materials;
(d) all work in progress and sublet repairs on vehicles
in Seller's parts and service departments;
(e) all of Seller's furniture, fixtures and office
equipment (excluding the telephone system and all software);
(f) all shop equipment and special tools, and all parts
and accessories equipment;
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(g) all company vehicles;
(h) all signs, and all promotional, advertising and
training materials that do not contain the Xxxxxxx & Xxxxxxxxx logo;
(i) all sales files and customer lists, and all warranty
and service and customer service and repair files, excluding any files
that support receivables retained by Seller;
(j) all new obsolete parts and accessories and all used
parts;
(k) all used, rental, leased and "rent to own"
construction machinery equipment;
(l) the Dealership Property, the Plans and the Incidental
Rights; and
(m) all customer deposits and agreements to sell
construction machinery equipment ordered but not delivered to the
customer at the time of Closing.
2.2 Purchase and Sale. Subject to the terms and conditions herein
contained, Seller agrees to sell, assign, transfer and deliver the Assets to
Purchaser at the Closing (as hereinafter defined), free and clear of any liens
or encumbrances of any nature whatsoever (except for the Permitted Exceptions
and any liens, encumbrances or obligations, if any, expressly permitted and/or
assumed by Purchaser hereunder). Subject to the terms and conditions herein
contained, Purchaser agrees to purchase from Seller the Assets in consideration
for the Purchase Price (as hereinafter defined) payable as set forth in Article
3.
2.3 Delivery of Assets and Transfer Documents. At the Closing,
Seller shall take all steps necessary to put Purchaser in possession of the
Assets, free and clear of any liens or encumbrances of any nature whatsoever
(except for the Permitted Exceptions and other liens, encumbrances or
obligations, if any, expressly permitted and/or assumed by Purchaser
hereunder), and shall deliver to Purchaser (a) a duly executed and acknowledged
Special Warranty Deed in form for recording conveying the Dealership Property
to Purchaser, subject only to the Permitted Exceptions and any other matters
specifically approved by Purchaser in accordance herewith; (b) a duly executed
general warranty xxxx of sale covering the Assets, in the form of and
containing substantially the same terms and provisions as the General Warranty
Xxxx of Sale and Assignment of Contract Rights included in Exhibit B; (c) duly
executed title and transfer documents covering any assets for which there
exists a certificate of title; and (d) such other duly executed transfer and
release documents as Purchaser shall reasonably request to evidence the
transfer of the Assets to Purchaser free and clear of any liens or encumbrances
of any nature whatsoever (except for the Permitted Exceptions and any other
liens, encumbrances or obligations, if any, expressly permitted and/or assumed
by Purchaser hereunder).
2.4 Closing; Closing Date. Subject to the terms and conditions
herein contained, the consummation of the transactions referenced above shall
take place (the "Closing") on or before October 15, 1997, at 10:00 a.m., local
time, at the offices of Fulbright & Xxxxxxxx L.L.P. in San Antonio, Texas, or
at such other time, date and place as Purchaser and Seller shall in writing
designate. The date of the Closing is referred to herein as the "Closing
Date".
3. PURCHASE PRICE.
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3.1 Price and Payment. Subject to adjustment as provided in
Article 21 with respect to prorations, deposits and certain other items, the
aggregate consideration to be paid by Purchaser for the Assets is as follows
(the "Purchase Price"):
(a) $4,375,000; plus
(b) an amount equal to book value (determined in
accordance with generally accepted accounting principles, consistently
applied) for each piece of construction machinery equipment of Seller
described in Section 2.1(a), reduced by the amount of all
manufacturer's rebates, allowances and other reductions paid or
credited to Seller on such equipment plus an amount equal to factory
freight and build-up for each piece of construction machinery
equipment returned to Xxxx Deere; plus
(c) with respect to the items described in Sections
2.1(b), (c) and (j), an amount equal to (i) 100% of the replacement
cost of all new items that are not Overstocked and are not Slow-Moving
Items; (ii) 85% of the replacement cost for new Overstocked or
Slow-Moving Items returnable to the manufacturer; (iii) 50% of the
replacement cost for new Overstocked or Slow-Moving Items not
returnable to the manufacturer; and (iv) with respect to all obsolete
and all other items, including used items, an amount to be agreed upon
by Seller and Purchaser; provided, however, Seller may provide written
notice to Purchaser specifying items falling under (i) - (iv) above
which shall be excluded from the Assets and, in the event that the
parties cannot agree on an amount for the items referred to in (iv)
above, such items not agreed upon shall be excluded from the Assets;
plus
(d) an amount equal to the Seller's actual cost plus
Seller's internal burdened labor rate of the work in process and
sublet repairs described in Section 2.1(d); plus
(e) an amount equal to the depreciated book value
(determined in accordance with generally accepted accounting
principles, consistently applied) at Closing of the items described in
Sections 2.1(e), (f) and (g); plus
(f) an amount equal to book value (determined in
accordance with generally accepted accounting principles, consistently
applied) for each piece of used, rental, leased or "rent to own"
construction machinery equipment described in Section 2.1(k); plus
(g) an amount equal to $4,100,000 for the Dealership
Property, Dealership Improvements and Remaining Property.
(h) Purchaser shall grant to Seller an option (the
"Option") to purchase an aggregate of 171,875 shares of Rush Stock at
$12.00 per share, such Option being substantially in the form of the
Rush Option Agreement (the "Rush Option Agreement") attached hereto as
Exhibit D.
The Purchase Price shall be payable on October 6, 1997, by (a) payment
of all amounts specified in Sections 3.1(b) - (g) above in cash (by wire
transfer of immediately available funds) at Closing, and (b) payment of the
amount specified in Section 3.1(a) as follows, (i) $2,312,500 in cash (by wire
transfer of immediately available funds) at Closing (subject to the adjustment
provisions in Article 21), and (ii) subject to the offset rights set forth in
Article 20, $2,062,500 by delivery of a
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promissory note substantially in the form of the promissory note included in
Exhibit E hereto (the "Promissory Note"), with interest on such Promissory Note
payable quarterly at the rate of 7% per annum, and the principal amount thereof
due and payable five years from the date of the Promissory Note; provided,
however, on October 6, 1997, the Purchaser shall deposit in an interest bearing
account with the Frost National Bank, N.A. (the "Escrow Agent"), pursuant to an
escrow agreement (the "Escrow Agreement") to be attached hereto as Exhibit F,
an amount equal to $750,000 (the "Escrowed Funds") of the Purchase Price
payable to Seller. The Escrowed Funds shall be held to satisfy in part any
Purchase Price Adjustment as described in Article 21 hereof.
3.2 Assumed Obligations. At the Closing, Purchaser shall assume
and agree to timely discharge the obligations of Seller under all contracts and
agreements transferred by Seller to Purchaser under this Agreement that are (a)
listed and described on Schedule 4.8(a) or on the updated list of contracts
required by Article 10 and (b) accepted in writing by Purchaser pursuant to the
provisions of Section 4.8 or Article 7 or 10; provided that Purchaser
specifically does not assume any liabilities of Seller under any contracts or
agreements with respect to any breaches of such contracts or agreements
occurring on or before the Closing Date or any damages to third parties
resulting from acts, events or omissions occurring on or before the Closing
Date. Except for the obligations assumed by Purchaser in this Agreement,
Seller shall take full and complete responsibility for all of their respective
liabilities, debts and obligations, whether known or unknown, now existing or
hereafter arising, contingent or liquidated (the "Retained Liabilities"), and
Purchaser shall not assume, or in any way be liable or responsible for, any of
the Retained Liabilities. The Retained Liabilities shall include, without
limitation, the following:
(a) the responsibility for contributions to, or any
liability in connection with, any employee pension benefit plan, any
employee welfare benefit plan, or other employee benefit agreement or
arrangement maintained by Seller for its employees, former employees,
retirees, their beneficiaries or any other person, and any
continuation coverage (including any penalties, excise taxes or
interest resulting from the failure to provide continuation coverage)
required by Section 4980B of the Code due to qualifying events which
occur on or before Closing Date;
(b) any liability or obligation of Seller, or any
consolidated group of which Seller is a member, for any federal income
tax or state franchise tax, or for any foreign, federal, state,
commonwealth, county or local taxes of any kind or nature, or any
taxes levied by any other legitimate taxing authority, or any interest
or penalties thereon, accruing through, but not after, the Closing
Date;
(c) any liability to which any of the parties may become
subject as a result of the fact that the transactions contemplated by
this Agreement are being effected without compliance with the bulk
sales provisions of the Uniform Commercial Code as in effect in the
State of Texas;
(d) any liability with respect to any claims, suits,
actions or causes of action arising out of the conduct of the Business
on or prior to the Closing Date;
(e) notwithstanding any disclosures or representations by
Seller, any dispute, litigation, settlement, negotiation,
administrative or other proceeding, any related or
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subsequent litigation, appeal or administrative action and any debt,
obligation or liability arising out of or in connection with any facts
existing prior to the Closing Date;
(f) any noncompliance by Seller with any applicable laws,
rules and regulations relating to employment and labor management
relations, including without limitation any provisions thereof
relating to wages and the payment thereof, hours of work, collective
bargaining agreements, workers' compensation laws and the withholding
and payment of Social Security and similar taxes;
(g) any failure by Seller to withhold all amounts
required by law or agreement to be withheld from the wages or salaries
of its employees, and any liability for any wage arrearages, taxes or
penalties for failure to comply with any of the foregoing;
(h) any liability arising out of any controversies
between Seller and its employees or former employees or any union or
other collective bargaining unit that has been certified or recognized
by Seller as representing any of its employees; and
(i) accounts payable of Seller.
3.3 Allocation. The Purchase Price shall be allocated among the
Assets as specified in Schedule 3.3 hereto. After the Closing, the parties
agree to make consistent use of the allocation, fair market value and useful
life specified in Schedule 3.3 for all tax purposes and in any and all filings,
declarations and reports with the IRS in respect thereof, including, without
limitation, the reports required to be filed under Section 1060 of the Code, if
applicable, it being understood that Purchaser shall prepare and deliver IRS
Form 8594 to Seller after the Closing Date if such form is required to be filed
with the Internal Revenue Service. In any proceeding related to the
determination of any tax, neither Purchaser nor Seller shall contend or
represent that such allocation is not a correct allocation.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller (each
Seller, jointly and severally for all purposes) hereby represents and warrants
to Purchaser as follows:
4.1 Incorporation. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and is duly authorized, qualified and licensed under all applicable
Governmental Requirements to carry on its business in the places and in the
manner as now conducted and to own, operate and lease the Assets it now owns,
operates or holds under lease. There has not been any claim by any other
jurisdiction to the effect that Seller is required to qualify or otherwise be
authorized to do business as a foreign corporation therein in order to carry on
any of its businesses as now conducted or to own, lease or operate the Assets.
Seller is qualified or otherwise authorized to do business as a foreign
corporation in each jurisdiction in order to carry on any of its business as
now conducted or to own, lease or operate the Assets. Seller has not, to
Seller's Best Knowledge, taken any action, or failed to take any action which
action or failure will preclude or prevent Seller's Business from being
conducted in substantially the same manner in which Seller has heretofore
conducted the same.
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4.2 Warranties and Product Liability.
(a) Except for (i) warranties implied by law and (ii)
warranties disclosed on Schedule 4.2 hereto, Seller has not given or made any
warranties in connection with the sale or rental of goods or services in
connection with the operation of the Business, including, without limitation,
warranties covering the customer's consequential damages. To the Best
Knowledge of Seller, there is no state of facts or occurrence of any event
forming the reasonable basis of any present claim against Seller with respect
to warranties in connection with the operation of the Business relating to
products manufactured, sold or distributed by Seller or services performed by
or on behalf of Seller in connection with the operation of the Business that
could reasonably be expected to materially exceed the reserves therefor.
(b) To the Best Knowledge of Seller, there is no state of
facts or any event forming the reasonable basis of any present claim against
Seller in connection with the operation of the Business not fully covered by
insurance, except for deductibles and self-insurance retentions, for personal
injury or property damage alleged to be caused by products shipped or services
rendered by or on behalf of Seller in connection with the operation of the
Business.
4.3 Financial Statements. Seller has delivered to Purchaser
copies of the following financial statements of the Business, all of which
financial statements are included in Schedule 4.3(a) hereto:
(a) Unaudited Balance Sheet (the "Reference Balance
Sheet") as of June 30, 1997 (the "Balance Sheet Date") and Unaudited
Income Statement for the five-month period ended on the Balance Sheet
Date;
(b) Unaudited Balance Sheets, Income Statements and
Statements of Changes in Financial Position for the most recent fiscal
year; and
(c) Unaudited Balance Sheets, Income Statements and
Changes in Financial Position for the quarter ended April 30, 1997.
All financial statements supplied to Purchaser by Seller, whether or not
included in Schedule 4.3(a) hereto, are and will be true and accurate in all
material respects.
4.4 Events Since the Balance Sheet Date. Since the Balance Sheet
Date, there has not been:
(a) any change in the condition (financial or otherwise)
or in the properties, assets, liabilities, business or prospects of
the Business, except normal and usual changes in the ordinary course
of business, none of which has been adverse and all of which in the
aggregate have not been adverse;
(b) any labor trouble, strike or any other occurrence,
event or condition affecting the employees of Seller that adversely
affects the condition (financial or otherwise) of the Assets or the
Business;
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(c) any breach or default by Seller or, to the Best
Knowledge of Seller, by any other party, under any agreement or
obligation included in the Assets or by which any of the Assets are
bound;
(d) any damage, destruction or loss (whether or not
covered by insurance) adversely affecting the Assets or the Business;
(e) to the Best Knowledge of Seller, any legislative or
regulatory change adversely affecting the Assets or the Business;
(f) any change in the types, nature, composition or
quality of the services of the Business, any adverse change in the
contributions of any of the service lines of the Business to the
revenues or net income of such Business, or any adverse change in the
sales, revenue or net income of the Business;
(g) any transaction related to or affecting the Assets or
the Business other than transactions in the ordinary course of
business of Seller; or
(h) any other occurrence, event or condition that has
adversely affected (or can reasonably be expected to adversely affect)
the Assets or the Business.
4.5 Customer List. Schedule 4.5 sets forth a true, correct and
complete list of all customers of the Business to which Seller has sold or
provided products or services during the two years immediately preceding the
date hereof. Such list provides an accurate statement of the gross revenues
received from each such customer by the Business during the 12-month period
ended September 15, 1997. Two days prior to the Closing Date, Seller will
deliver to Purchaser, if requested orally or in writing by Purchaser, a true,
correct and complete update of this list as of the three days prior to the
Closing Date.
4.6 Reserved.
4.7 Employee Matters. Schedule 4.7 sets forth a true and complete
list of the names of, and current annual compensation paid by Seller to each
employee of Seller utilized in connection with the operation of the Business.
Seller is not a party to any collective bargaining or other union agreements in
connection with the operation of the Business. Seller has not, within the last
five years, had or been threatened with any union activities, work stoppages or
other labor trouble with respect to its employees utilized in connection with
the operation of the Business.
4.8 Contracts and Agreements. Schedule 4.8(a) sets forth a true
and complete list of all of the following contracts, agreements and leases that
relate to the Assets or the Business (including all amendments, supplements and
modifications thereto):
(a) all contracts, agreements or commitments in respect
of the purchase of services used in the Business;
(b) lease, lease-purchase, rental and "rent-to-own"
agreements relating to or affecting the Assets or the Business; and
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(c) all contracts or other agreements relating to the
operation, maintenance and repair of the Real Property.
Schedule 4.8(b) sets forth all other contracts and agreements of any
kind or nature that relate to the Assets or the Business or the Real
Property.
All contracts, agreements and leases included in Schedule 4.8(a) are valid,
binding and in full force and effect in accordance with their terms and
conditions and there is no existing default thereunder or breach thereof by
Seller, or, to the Best Knowledge of Seller, by any other party to such
contracts, or any conditions which, with the passage of time or the giving of
notice or both, might constitute such a default by Seller, or, to the Best
Knowledge of Seller, by any other party to such contracts. Seller is not
obligated to pay any liquidated damages under any of the contracts, agreements,
leases or other instruments described in Schedule 4.8(a) hereto and Seller is
not aware of any facts or circumstances that could reasonably be expected to
result in an obligation of Seller to pay any such liquidated damages. To the
Best Knowledge of Seller there is no reason why any of the contracts set forth
in Schedule 4.8(a) (i) will result in a loss to Purchaser on completion by
performance or (ii) cannot readily be fulfilled or performed by Purchaser with
the Assets on time without undue or unusual expenditure of money or effort.
Copies of all of the documents (or in the case of oral commitments,
descriptions of the material terms thereof) relevant to the contracts listed in
Schedule 4.8(a) have been made available by Seller to Purchaser, and such
copies and/or descriptions are true, complete and accurate and include all
amendments, supplements or modifications thereto. Except for Contracts, if
any, that Purchaser notifies Seller that it will not assume, all of the
Contracts are and shall be included in the Assets. Except for the contracts
set forth in Schedule 4.8(b), all of the Contracts may be assigned to Purchaser
without the approval or consent of any Person, or, if such approval or consent
is required, Seller will use its reasonable efforts to obtain such approval or
consent prior to the Closing.
4.9 Effect of Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
(a) violate any provision of the Certificate of Incorporation or other charter
documents or bylaws of Seller; (b) result in any violation of any Governmental
Requirement applicable to Seller, the Assets or the Business; (c) conflict
with, or result in any breach of, or default or loss of any right under (or an
event or circumstance that, with notice or the lapse of time, or both, would
result in a default), or the creation of an Encumbrance pursuant to, or cause
or permit the acceleration prior to maturity or "put" right with respect to,
any obligation under, any contract, indenture, mortgage, deed of trust, lease,
loan agreement or other agreement or instrument to which any of the Assets are
subject other than the agreements set forth on Schedule 4.8(b); (d) relieve any
Person of any obligation (whether contractual or otherwise) or enable any
Person to accelerate or terminate any such obligation or any right or benefit
enjoyed by Seller or to exercise any right under any agreement in respect of
the Assets or the Business other than the agreements set forth on Schedule
4.8(b); and (e) require notice to or the consent, authorization, approval,
clearance, waiver or order of any Person (except as may be contemplated by the
last sentence of Section 4.8) other than those Persons set forth on Schedule
4.8(b). To the Best Knowledge of Seller, the business relationships of
clients, customers and suppliers of the Business will not be adversely affected
by the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Seller will not result in the loss of any material
governmental license, franchise or permit possessed by Seller.
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4.10 Properties, Assets and Leasehold Estates. Seller owns or has
the right to use (pursuant to a valid lease or license disclosed on Schedule
4.8) all operating assets and properties necessary for Seller to conduct the
Business in the manner presently conducted by Seller, and all of such operating
assets and properties, except for the telephone system and computer software
(or, in the case of leased assets, the leases covering such assets) are
included in the Assets. Seller has good, marketable title to all the Assets,
free and clear of all mortgages, liens, pledges, conditional sales agreements,
charges, easements, covenants, assessments, options, restrictions and
encumbrances of any nature whatsoever and, with respect to the Real Property,
Seller has good, marketable and indefeasible title in fee simple, free and
clear of all restrictions, liens, leases, encumbrances, rights-of-way,
easements, encroachments, exceptions and other matters affecting title, except
for the Permitted Exceptions and, with respect to the Remaining Property, the
matters shown in Schedule B of the Commitment for Owner Policy of Title
Insurance described in the last sentence of Section 24.1 hereof. The plants,
structures, equipment, vehicles and other tangible properties included in the
Assets and the tangible property leased by Seller under leases included in the
Assets are in good operating condition and repair, normal wear and tear
excepted, and are capable of being used for their intended purpose in the
Business as now conducted. The Assets include all existing warranties and
service contracts with respect to any of the Assets to the extent the same are
capable of being assigned to Purchaser. During the past two years, there has
not been any significant interruption of the Business due to the breakdown or
inadequate maintenance of any of the Assets. All plants, structures,
equipment, vehicles and other tangible properties included in the Assets, and
the present use of all such items, conform to all applicable Governmental
Requirements, and no notice of any violation of any such Governmental
Requirements relating to such assets or their use has been received by Seller.
The Assets include all easements, rights of ingress and egress, and utilities
and services necessary for the conduct of the Business. Neither the whole nor
any portion of any Real Property has been condemned or otherwise taken by any
public authority, nor, to the Best Knowledge of Seller, is any such
condemnation or taking threatened or planned. There will be no outstanding
mechanic's and materialmen's liens or claims of creditors against the Assets on
the Closing Date that will not be removed by Seller on the Closing Date. To
the Best Knowledge of Seller, there are no taxes, assessments or levies of any
type whatsoever that can be imposed upon and collected from the Assets arising
out of or in connection with the ownership and operation of the Assets or
Remaining Property, or any public improvements in the general vicinity of the
Real Property, other than ad valorem taxes on the Real Property for the
calendar year in which the Closing Date occurs payable to the State of Texas,
County of Xxxxxx, the school districts in which the Assets are situated, and
the City of Houston, Texas. The conveyance of the Assets contemplated
hereunder shall not cause a redesignation of the Assets which will increase the
ad valorem or property taxes paid thereon. All transfer taxes and costs of
documentary stamps payable in connection with the transactions herein
contemplated will be paid by Seller on the Closing Date. To the Best Knowledge
of Seller, each of the Dealership Property and the Remaining Property,
individually, has sufficient utilities for water, sewage, electricity, gas and
other similar services to service the Assets; all necessary connections to
public utilities have, or on the Closing Date, will have, been made. All
utilities, including, without limitation, sanitary and storm sewer, electrical,
gas, telephone, and water lines for the proper operation of the Assets have
been connected to or installed upon both the Dealership Property and the
Remaining Property, individually, and enter each of the Dealership Property and
the Remaining Property, separately and individually, from adjoining public
rights of way or through private easements benefiting each (as applicable).
Each of the Dealership Property and the Remaining Property has separate and
independent access to publicly dedicated and accepted thoroughfares, and all
access points from the Dealership Property and the Remaining Property to any
public rights of way are either through duly issued curb (and median, if
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applicable) cut permits or through private easements running with title
thereto. There is no pending or threatened governmental proceeding which would
impair or curtail such access. Prior to the Closing Date, Seller shall give
notice to the appropriate suppliers of utility services to the Dealership
Property for the purpose of reading meters on the Closing Date in connection
with the prorations required in Article 21 hereof and for the purpose of
transferring payment responsibility for such expenses to Purchaser after the
Closing Date. To the Best Knowledge of Seller, no restrictive covenant, zoning
or other ordinance, rule, statute or governmental law or regulation is violated
by the continued use and maintenance of the Assets and Remaining Property and
appurtenant uses, and there are no proceedings to change such zoning
classification, and Seller shall not itself apply for or acquiesce in any such
change. To the Best Knowledge of Seller, neither the Dealership Property nor
the Remaining Property lies within any area that has been designated by the
Federal Emergency Management Agency, the Army Corps of Engineers, the Federal
Insurance Administration, the Department of Housing and Urban Development or
any other governmental agency or body as being subject to the 100-year flood
plain or any special flooding hazards.
4.11 Intangible Property. The operation of the Business as now
conducted by Seller does not require the use of or consist of any rights under
any trademarks, trade names, brand names, service marks or copyrights other
than "Xxxx Deere," "Xxxx Deere Worksite Products," "Sakai American, Inc.,"
"Allied," "Trail Kings Industries, Inc.," "Xxxx Company," and "Diamond Z
Manufacturing," "The Read Corporation," "Re-Tech," "Enviroquip Systems, Inc.,"
"Scarab Manufacturing and Leasing, Inc.," "Xxxxxx Industries," "Safe-T-Shore"
and "Spectra-Physics Laserplane, Inc."
4.12 Suits, Actions and Claims. Except as set forth in Schedule
4.12, (a) there are no suits, actions or claims, or, to the Best Knowledge of
Seller, inquiries or investigations, by any Person, or any legal,
administrative or arbitration proceedings in which Seller is engaged or which
are pending or, to the Best Knowledge of Seller, threatened against or
affecting the Assets or the Business, or which question the validity or
legality of the transactions contemplated hereby, (b) to the Best Knowledge of
Seller, no basis or grounds for any such suit, action, claim, inquiry,
investigation or proceeding exists, and (c) there is no outstanding order,
writ, injunction or decree of any Governmental Authority against or affecting
the Assets or the Business. Without limiting the foregoing, Seller does not
have any Best Knowledge of any state of facts or the occurrence of any event
forming the basis of any present or potential claim against the Assets or the
Business.
4.13 Licenses and Permits; Compliance With Governmental
Requirements. Except as set forth in Schedule 4.13 hereto, Seller has all
material federal, state, local and foreign governmental licenses and permits
necessary to the conduct of the operations of Seller's Business as currently
conducted, such licenses and permits are in full force and effect, no material
violations currently exist in respect of any thereof and no proceeding is
pending or, to the Best Knowledge of Seller, threatened to revoke or limit any
thereof. Schedule 4.13 hereto contains a true, complete and accurate list of,
or copies of, (a) all such governmental licenses and permits, (b) all consents,
orders, decrees and other compliance agreements under which Seller is operating
or bound, copies of all of which have been furnished to Purchaser, and (c) all
material governmental licenses and permits applied for but not yet received by
Seller. Seller has not received and is not aware of any reports of inspections
under the United States Occupational Safety and Health Act, or under any other
applicable federal, state or local health and safety laws and regulations
relating to Seller, the Assets or the operation of Seller's Business. Seller
has not received any notice that there are safety, health, anti-competitive or
discrimination claims that have been made or are pending or, to the Best
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Knowledge of Seller, that are threatened relating to the business or employment
practices of Seller. To the Best Knowledge of Seller, Seller has complied with
all Governmental Requirements applicable to its business and all Governmental
Requirements with respect to the distribution and sale of products and services
by it.
4.14 Authorization. Seller has full legal right, power, and
authority to enter into and deliver this Agreement and to consummate the
transactions set forth herein and to perform all the terms and conditions
hereof to be performed by them. The execution and delivery of this Agreement
by Seller and the performance by Seller of the transactions contemplated herein
have been duly and validly authorized by all requisite corporate action of
Seller, and this Agreement has been duly and validly executed and delivered by
Seller and is the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as limited by applicable
bankruptcy, moratorium, insolvency or other similar laws affecting generally
the rights of creditors or by principles of equity.
4.15 Records. The books, records and minutes kept by Seller with
respect to the Assets and the Business, including, but not limited to, all
customer files, service agreements, quotations, correspondence, route sheets
and historic revenue data of Seller, have been kept properly and contain
records of all matters required to be included therein by any Governmental
Requirement or by generally accepted accounting principles, and such books,
records and minutes are true, accurate and complete and (except for corporate
minute books and stock records) are included in the Assets.
4.16 Environmental Protection Laws.
(a) Except as set forth in Schedule 4.16 hereto, to the
Best Knowledge of Seller, Seller has at all times operated the Real
Property, Assets and Business in compliance with all applicable
limitations, restrictions, conditions, standards, prohibitions,
requirements and obligations of Environmental Laws and related orders
of any court or other Governmental Authority, and is not currently
operating or required to be operating the Real Property, Assets or the
Business under any compliance order, decree or agreement; any consent
decree, order or agreement; and/or any corrective action decree, order
or agreement issued by or entered into with any Governmental Authority
under any Environmental Law.
(b) Except as set forth in Schedule 4.16 hereto, there
are no existing, pending or, to the Best Knowledge of Seller,
threatened actions, suits, claims, investigations, inquiries or
proceedings by or before any court or any other Governmental Authority
directed against the Real Property, Assets or Business which pertain
or relate to (i) any remedial obligations under any applicable
Environmental Law, (ii) violations of any Environmental Law, (iii)
personal injury or property damage claims relating to the release of
chemicals or Hazardous Materials or (iv) response, removal or remedial
costs under CERCLA or any similar state law, and there is not any
Environmental Condition on or at the Real Property or any other matter
on or connected with the Assets that would cause the imposition on
Purchaser of Environmental Liabilities if such Environmental Condition
or other matter were disclosed to Governmental Authorities.
(c) Except as set forth in Schedule 4.16 hereto, to the
Best Knowledge of Seller, all notices, Environmental Permits, licenses
or similar authorizations required to be obtained or filed by Seller
under all applicable Environmental Laws in connection with its current
and
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previous operation or use of the Real Property and Assets, or the
current and previous conduct of the Business have been duly obtained
or filed and are in full force and effect.
(d) Seller has not received notice that any Environmental
Permit, license or similar authorization is to be revoked or suspended
by any Governmental Authority.
(e) Seller does not own or operate any underground
storage tanks.
(f) To the Best Knowledge of Seller, no portion of the
Real Property is part of a Superfund site under CERCLA or any similar
ranking or listing under any similar state law.
(g) To the Best Knowledge of Seller, all Hazardous
Materials generated in connection with the operation of the Business
have been transported, stored, treated and disposed of by carriers,
storage, treatment and disposal facilities authorized and maintaining
valid permits under all applicable Environmental Laws, and no
Hazardous Materials have been dumped, landfilled, stored, located or
disposed of on the Real Property.
(h) To the Best Knowledge of Seller, no Person has
disposed or released any Hazardous Materials on or under the Real
Property and Seller has not disposed or released Hazardous Materials
on or under the Real Property, except in compliance with all
Environmental Laws, and there has not been, in respect to the Real
Property, Assets or the Business, any emission (other than steam or
water vapor) into the atmosphere or any discharge, direct or indirect,
of any pollutants into the waters of the State of Texas or the United
States of America other than domestic sewage discharged into a
publicly owned treatment facility.
(i) To the Best Knowledge of Seller, no facts or
circumstances exist which could reasonably be expected to result in
any liability to any Person with respect to the Real Property,
Business or Assets in connection with (i) any release, transportation
or disposal of any Hazardous Materials, hazardous substance or solid
waste or (ii) action taken or omitted that was not in full compliance
with or was in violation of, any applicable Environmental Law.
4.17 Brokers and Finders. No broker or finder has acted for Seller
in connection with this Agreement or the transactions contemplated by this
Agreement and no broker or finder is entitled to any brokerage or finder's fee
or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Seller.
4.18 Deposits. Seller does not now hold any deposits or
prepayments by third parties with respect to any of the Assets or the Business
which are not reflected as liabilities on the Reference Balance Sheet.
4.19 Work Orders. There are no outstanding work orders or
contracts relating to any portion of the Assets from or required by any policy
of insurance, fire department, sanitation department, health authority or other
governmental authority nor is there any matter under discussion with any such
parties or authorities relating to work orders or contracts.
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4.20 Telephone Numbers. Seller will use its best efforts to ensure
that all telephone numbers used by Seller in connection with the Business are
included in the Assets and are transferred to Purchaser.
4.21 No Royalties. No royalty or similar item or amount is being
paid or is owing by Seller, nor is any such item accruing, with respect to the
operation, ownership or use of the Business or the Assets.
4.22 Insurance. Schedule 4.22 hereto sets forth all existing
insurance policies held by Seller relating to the Business, Assets, employees
or agents of Seller. Each such policy is in full force and effect and is with
insurance carriers believed by Seller to be responsible. There is no dispute
with respect to such policies, and all claims arising from events or
circumstances occurring prior to the date hereof have been paid in full or
adequate reserves therefor are recorded in the Reference Balance Sheet. All
retroactive premium adjustments for any period ended on or before June 1, 1997,
under any worker's compensation policy or any other insurance policies of
Seller have been recorded in accordance with generally accepted accounting
principles and are reflected in the Reference Balance Sheet. Except for such
policies which are identified on Schedule 4.22, none of such policies will
terminate as a result of the transactions contemplated by this Agreement.
4.23 Securities Laws Matters.
(a) Seller recognizes and understands that the Option (as
hereinafter defined) and underlying shares of Rush Stock to be issued to Seller
pursuant to this Agreement (the "securities") will not be registered under the
Securities Act, or under the securities laws of any state (the "securities
laws"). The securities are not being so registered in reliance upon exemptions
from the Securities Act and the securities laws which are predicated, in part,
on the representations, warranties and agreements of the Seller contained
herein.
(b) The Seller represents and warrants that (i) Seller has
business knowledge and experience, such experience being based on actual
participation therein, (ii) Seller is capable of evaluating the merits and
risks of an investment in the securities and the suitability thereof as an
investment therefor, (iii) the securities to be acquired by Seller in
connection with this Agreement will be acquired solely for investment and not
with a view toward resale or redistribution in violation of the securities
laws, (iv) Seller's domicile and principal place of business is in the State of
Texas, (v) in connection with the transactions contemplated hereby, no
assurances have been made concerning the future results of the Rush Parties or
as to the value of the securities and (vi) Seller is an "accredited investor"
within the meaning of Regulation D promulgated by the SEC pursuant to the
Securities Act. Seller understands that none of the Rush Parties is under any
obligation to file a registration statement or to take any other action under
the securities laws with respect to any such securities except as provided in
Article 22.
(c) Seller has consulted with Seller's own counsel in regard
to the securities laws and is fully aware (i) of the circumstances under which
the Seller is required to hold the securities, (ii) of the limitations on the
transfer or disposition of the securities, (iii) that the securities must be
held indefinitely unless the transfer thereof is registered under the
securities laws or an exemption from registration is available and (iv) that no
exemption from registration is likely to become available for at least one year
from the date of acquisition of the securities. Seller has been advised by
Seller's counsel as to the provisions of Rules 144 and 145 as promulgated by
the Commission under the
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Securities Act and has been advised of the applicable limitations thereof.
Seller acknowledges that the Rush Parties are relying upon the truth and
accuracy of the representations and warranties in this Section 4.23 by Seller
in consummating the transactions contemplated by this Agreement without
registering the securities under the securities laws.
(d) Seller has been furnished with (i) the definitive proxy
statement filed with the Commission in connection with the annual meeting of
stockholders of Rush held on June 4, 1997 and (ii) copies of Rush's
Registration Statement on Form S-1, Annual Report on Form 10-K for the year
ended December 31, 1996, and Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997, filed with the Commission under the
Exchange Act. Seller has been furnished with the complete financial statements
of Rush for the fiscal years ended December 31, 1994, 1995 and 1996, and the
three and six months ended March 31, 1997 and June 30, 1997, respectively.
Seller has been furnished with a summary description of the terms of the Rush
Stock and the Rush Parties have made available to Seller the opportunity to ask
questions and receive answers concerning the terms and conditions of the
transactions contemplated by this Agreement and to obtain any additional
information which they possess or could reasonably acquire for the purpose of
verifying the accuracy of information furnished to Seller as set forth herein
or for the purpose of considering the transactions contemplated hereby. Rush
has offered to make available to Seller upon request at any time all exhibits
filed by Rush with the Commission as part of any of the reports filed
therewith.
(e) Seller agrees that the certificates representing its
securities to be acquired pursuant to this Agreement will be imprinted with the
following legend, the terms of which are specifically agreed to:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR UNDER ANY APPLICABLE STATE SECURITIES LAWS AND ARE "RESTRICTED
SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT.
NEITHER THE SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED FOR SALE,
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SUCH STATE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COUNSEL FOR
THIS CORPORATION, IS AVAILABLE.
Seller understands and agrees that appropriate stop transfer notations will be
placed in the records of Rush and with its transfer agent in respect of the
securities which are to be issued to Seller pursuant to this Agreement.
4.24 No Untrue Statements. The statements, representations and
warranties of Seller set forth in this Agreement and the Schedules and in all
other documents and information furnished to the Rush Parties and their
representatives in connection herewith do not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements, representations and warranties made not misleading.
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5. REPRESENTATIONS AND WARRANTIES OF THE RUSH PARTIES. The Rush
Parties represent and warrant to Seller as follows:
5.1 Incorporation. Each of the Rush Parties is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation.
5.2 Authorization. Each of the Rush Parties has full legal right
and corporate power to enter into and deliver this Agreement and to consummate
the transactions set forth herein and to perform all the terms and conditions
hereof to be performed by it. This Agreement has been duly executed and
delivered by each of the Rush Parties and is a legal, valid and binding
obligation of each of them enforceable in accordance with its terms, except as
limited by applicable bankruptcy, moratorium, insolvency or other laws
affecting generally the rights of creditors or by principles of equity.
5.3 Brokers and Finders. No broker or finder has acted for either
of the Rush Parties in connection with this Agreement or the transactions
contemplated by this Agreement and no broker or finder is entitled to any
brokerage or finder's fee or to any commission in respect thereof based in any
way on agreements, arrangements or understandings made by or on behalf of the
Rush Parties.
5.4 SEC Documents. Rush has provided to Seller its Registration
Statement on Form S-1, Annual Report on Form 10-K for the year ended December
31, 1996, its Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997 and June 30, 1997, and its proxy statement with respect to the Annual
Meeting of Stockholders held on June 4, 1997 (such documents collectively
referred to herein as the "SEC Documents"). As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
Exchange Act (as hereinafter defined) and the rules and regulations of the
Commission promulgated thereunder applicable to such SEC Documents, and none of
the SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of Rush
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the Commission with respect thereto, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of Rush and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (except in the case of
interim period financial information for normal year-end adjustments). All
material agreements, contracts and other documents required to be filed as
exhibits to the SEC Documents have been so filed. The consolidated balance
sheet included in Rush's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997 (the "Form 10-Q") reflects, as of the date thereof, all
liabilities, debts and obligations of any nature, kind or manner of Rush and
its subsidiaries, whether direct, accrued, absolute, contingent or otherwise,
and whether due or to become due that are required to be reflected on such
balance sheet under generally accepted accounting principles consistently
applied.
6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF SELLER. All statements of fact
contained in this Agreement or in any written statement (including financial
statements), certificate,
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schedule or other document delivered by or on behalf of Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby shall be
deemed representations and warranties of Seller hereunder. ALL
INDEMNIFICATIONS, COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES MADE BY
SELLER HEREUNDER OR PURSUANT HERETO OR IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL SURVIVE THE CLOSING REGARDLESS OF ANY INVESTIGATION
AT ANY TIME MADE BY OR ON BEHALF OF PURCHASER AND REGARDLESS OF ANY NEGLIGENCE
OR GROSS NEGLIGENCE OF PURCHASER IN CONNECTION WITH SUCH INVESTIGATION.
7. CONTRACTS PRIOR TO THE CLOSING DATE.
7.1 Approval of Contracts. Seller shall not enter into or amend
any contracts related to the Business or the Assets between the date hereof and
the Closing Date unless approved in writing by Purchaser. Seller will provide
all information relating to each such contract or amendment that is requested
by Purchaser to enable Purchaser to make an informed decision regarding
approval of such contract or amendment.
7.2 Contracts Included in Assets. Any contracts, agreements or
commitments (or amendments to such items) related to the Business or the Assets
that are entered into by Seller between the date hereof and the Closing Date
and are approved in writing by Purchaser (after review of true, correct and
accurate copies of such items) shall be included in the Assets (with no
addition to the Purchase Price) and shall be assumed by Purchaser pursuant to
Section 3.2.
8. COVENANTS OF SELLER PRIOR TO CLOSING DATE. Seller hereby
covenants and agrees that between the date of this Agreement and the Closing
Date:
8.1 Access to Information. Seller shall afford to the officers
and authorized representatives of the Rush Parties access to the plants,
properties, books and records of Seller related to the Assets and the Business
and shall furnish Purchaser with such financial and operating data and other
information regarding the Assets and the Business and as Purchaser may from
time to time reasonably request.
8.2 General Affirmative Covenants. Seller shall:
(a) conduct the Business only in the ordinary course;
(b) maintain the Assets in good working order and
condition, ordinary wear and tear excepted;
(c) perform all its obligations under agreements relating
to or affecting the Assets or the Business;
(d) keep in full force and effect adequate insurance
coverage on the Assets and the operation of the Business;
(e) use its best efforts to maintain and preserve the
Business, and retain its present employees, customers, suppliers and
others having business relations with it;
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(f) duly and timely file all reports or returns relating
to the Business or the Assets required to be filed with any
Governmental Authority, and promptly pay all Taxes levied or assessed
upon the Business or the Assets;
(g) duly observe and conform to all Governmental
Requirements relating to the Assets or its properties or to the
operation and conduct of its Business and all covenants, terms and
conditions upon or under which any of its properties are held;
(h) remove and have released, by payment or otherwise,
all liens and encumbrances of any nature whatsoever on the Assets
(except for liens and encumbrances, if any, specifically assumed by
Purchaser pursuant to this Agreement);
(i) duly and timely take all actions necessary to carry
out the transactions contemplated hereby;
(j) deliver to Purchaser on or before the 15th day of
each month true and correct unaudited monthly balance sheets and
statements of income for the Business for the immediately preceding
month, with such financial statements for the month of September,
1997, to be delivered at the time of execution of this Agreement;
(k) deliver to Purchaser on or before the Closing Date
(i) a true and correct unaudited annual balance sheet, statement of
income and statement of changes in financial position for the year
ended January 31, 1997, (ii) an unaudited balance sheet, statement of
income and statement of changes in financial position for the quarter
ended April 30, 1997, and (iii) unaudited balance sheet as of June 30,
1997 and unaudited income statement for the five-month period ended
June 30, 1997, together with any additional financial information
reasonably requested by Purchaser to allow Purchaser to timely comply
with its reporting requirements under the Exchange Act, all in form
and substance sufficient to allow Purchaser to timely comply with such
reporting requirements; and
(l) preserve and maintain the goodwill of the Business.
8.3 General Negative Covenants. Seller shall not take any of the
following actions without the prior written consent of Purchaser:
(a) entering into or amending or assuming any contract,
agreement, obligation, lease, license or commitment related to the
Business or the Assets (or of a type included in the Assets) other
than in accordance with the provisions of Section 7.1;
(b) entering into or amending or assuming any mortgage,
pledge, conditional sale or other title retention agreement, lien,
encumbrance or charge of any kind upon any of the Assets, or selling,
leasing, abandoning or otherwise disposing of any of the Assets,
including, but not limited to, real property, machinery, equipment or
other operating properties;
(c) engaging in any activities or transactions that might
adversely affect the Assets or the Business; or
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(d) increasing the compensation of any officer or
employee of Seller associated with the Business, other than normal
compensation adjustments in the ordinary course of the Business
consistent with past practice.
8.4 Disclosure of Misrepresentations and Breaches. If any of the
representations or warranties of Seller hereunder are determined by Seller to
have been incorrect when made, or are determined by Seller to be incorrect as
of any date subsequent to the date hereof, or if any of the covenants of Seller
contained in this Agreement have not been complied with timely, then Seller
shall immediately notify Purchaser to such effect (provided that such notice
shall in no way limit the rights of Purchaser (a) under Articles 10 and 18 to
terminate this Agreement or refuse to consummate the transactions contemplated
hereby or (b) to enforce any rights or remedies it may have hereunder).
8.5 Government Filings. Seller shall cooperate with the Rush
Parties and their representatives in the preparation of any documents or other
material that may be required by any Governmental Authority in connection with
the Assets or the Business or the transactions contemplated hereby, including,
but not limited to, any required filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx").
8.6 Access to and Inspection of Premises, Facilities and
Equipment. Seller shall afford to the officers and authorized representatives
of Purchaser access to the premises, facilities and tangible assets included in
the Assets for the purpose of inspecting such premises, facilities and
equipment in such manner as Purchaser shall deem appropriate, including, but
not limited to, an environmental inspection and audit. If upon completion of
such inspection Purchaser finds any conditions which Purchaser, in its sole
discretion, considers to be unacceptable, Purchaser may, in addition to its
rights to terminate this Agreement pursuant to Articles 10 and 18, delay the
Closing under Article 2 up to and including the earlier of (a) ten days after
remedy of the condition to Purchaser's satisfaction, or (b) October 30, 1997.
9. COVENANTS REGARDING THE CLOSING.
9.1 Covenants of Seller. Seller hereby covenants and agrees that
they shall (a) use commercially reasonable efforts to cause all of their
representations and warranties set forth in this Agreement to be true on and as
of the Closing Date, (b) use commercially reasonable efforts to cause all of
their obligations that are to be fulfilled on or prior to the Closing Date to
be so fulfilled, (c) use commercially reasonable efforts to cause all
conditions to the Closing set forth in this Agreement to be satisfied on or
prior to the Closing Date, and (d) deliver to Purchaser at the Closing the
certificates, updated lists, notices, consents, authorizations, approvals,
agreements, leases, transfer documents, receipts, and amendments contemplated
by Article 10 (with such additions or exceptions to such items as are necessary
to make the statements set forth in such items accurate, provided that if any
of such additions or exceptions cause any of the conditions to Purchaser's
obligations hereunder as set forth in Article 10 not to be fulfilled, such
additions and exceptions shall in no way limit the rights of Purchaser under
Articles 10 and 18 to terminate this Agreement or refuse to consummate the
transactions contemplated hereby).
9.2 Covenants of Purchaser. Purchaser hereby covenants and agrees
that it shall (a) use commercially reasonable efforts to cause all of its
representations and warranties set forth in this Agreement to be true on and as
of the Closing Date, (b) use commercially reasonable efforts to cause all of
its obligations that are to be fulfilled on or prior to the Closing Date to be
so fulfilled, (c) use
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commercially reasonable efforts to cause all conditions to the Closing set
forth in this Agreement to be satisfied on or prior to the Closing Date
(provided that failure by Purchaser to comply with a second requirement for
information under the HSR Act or to comply with any requested divestiture of
assets or to enter into any consent or similar order or agreement shall not
constitute a failure of Purchaser to use commercially reasonable efforts), and
(d) deliver to Seller at the Closing the certificate contemplated by Article 11
(with such additions or exceptions to such certificate as are necessary to make
the statements set forth in such certificate accurate, provided that if any of
such additions or exceptions cause any of the conditions to Seller's
obligations hereunder as set forth in Article 11 not to be fulfilled, such
additions and exceptions shall in no way limit the rights of Seller under
Articles 11 and 18 to terminate this Agreement or to refuse to consummate the
transactions contemplated hereby).
9.3 HSR Act. The parties will prepare and file the notification
required to be filed by them under the HSR Act with respect to the transactions
contemplated by this Agreement, will request early termination prior to the
Closing Date of the statutory waiting period prescribed by the HSR Act, and
will use commercially reasonable efforts to respond to any inquiry made by the
Federal Trade Commission or the Antitrust Division of the Department of Justice
regarding such notification; provided that the parties will respond to any
request for information only if and to the extent requested by Purchaser, in
its sole discretion.
9.4 Inventory Audit. Within five days prior to Closing, Seller
and Purchaser shall each appoint one or more representatives knowledgeable in
the equipment business, and shall cause such representatives to conduct an
audit (in accordance with generally accepted accounting principles,
consistently applied) of the inventory of the Assets as of the Closing Date.
Each party shall bear their cost of conducting such audit.
10. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser hereunder are, at the option of Purchaser, subject to the
satisfaction, on or prior to the Closing Date, of the following conditions (any
of which may be waived by Purchaser in its sole discretion):
10.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of Seller contained in this
Agreement shall be true and correct on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date. Each and all of the agreements and covenants of Seller to be
performed on or before the Closing Date pursuant to the terms hereof shall have
been performed. Seller shall have delivered to Purchaser a certificate dated
the Closing Date and executed by Seller to all such effects.
10.2 Financial Information. Seller shall have provided to
Purchaser at Closing all financial information of Seller in the format required
in connection with the filing of financial information of Seller with
Purchaser's Current Report on Form 8-K under the Exchange Act required in
connection with Purchaser's acquisition of the Business.
10.3 No Governmental Actions. No action or proceeding before any
Governmental Authority shall have been instituted or threatened to restrain or
prohibit the transactions contemplated by this Agreement, and Seller shall have
delivered to Purchaser a certificate dated the Closing Date and executed by
Seller stating they have no Best Knowledge of any such items. No Governmental
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Authority shall have taken any other action as a result of which the management
of Purchaser reasonably deems it inadvisable to proceed with the transactions
contemplated by this Agreement.
10.4 No Adverse Change. No material adverse change in the Business
shall have occurred, and no loss or damage to any of the Assets, whether or not
covered by insurance, shall have occurred since the Balance Sheet Date, and
Seller shall have delivered to Purchaser a certificate dated the Closing Date
and executed by Seller to all such effects.
10.5 Update of Contracts. Seller shall have delivered to Purchaser
an accurate list, as of the Closing Date, showing (a) all agreements, contracts
and commitments of the type listed on Schedule 4.8 entered into since the date
of this Agreement (including, but not limited to, amendments, if any, to the
items listed on Schedule 4.8), and (b) all other agreements, contracts and
commitments related to the Business or the Assets entered into since the date
of this Agreement, together with true, complete and accurate copies of all
documents (or in the case of oral commitments, descriptions of the material
terms thereof) relevant to the items on the list (the "New Contracts").
Purchaser shall have the opportunity to review the New Contracts, and shall
have the right to delay the Closing for up to five days if it in its reasonable
discretion Purchaser deems such a delay necessary to enable it to adequately
review the New Contracts. All of the New Contracts that are approved in
writing by Purchaser prior to the Closing, as it may be delayed (whether such
approval by Purchaser is given before or after Seller executes the New
Contract) shall be included in the Assets (with no addition to the Purchase
Price) and the future obligations of Seller thereunder shall be assumed by
Purchaser pursuant to Section 3.2. Any New Contracts that are not approved in
writing by Purchaser prior to the Closing, as it may be delayed, shall remain
the sole obligation of Seller and shall not be assumed by Purchaser, and
Purchaser shall have no obligation or liability with respect thereto.
10.6 Approval of Counsel. All actions, proceedings, instruments
and documents required or incidental to carrying out this Agreement and all
other related legal matters shall have been approved by counsel to Purchaser.
10.7 No Material Adverse Information. The investigations with
respect to Seller, the Assets and the Business, performed by Purchaser's
professional advisors and other representatives shall not have revealed any
material adverse information concerning Seller, the Assets or the Business that
has not been made known to Purchaser in writing prior to the date of this
Agreement.
10.8 Notices and Consents. No notice to or consent, authorization,
approval or order of any Person shall be required for the consummation of the
transactions contemplated by this Agreement (except for notices that have been
duly and timely given and consents, authorizations and approvals that have been
obtained), and Seller shall have delivered to Purchaser a certificate dated the
Closing Date and executed by Seller to such effect. True and correct copies of
all required notices, consents, authorizations and approvals shall have been
delivered to Purchaser and shall be satisfactory in form and substance to
Purchaser and its counsel.
10.9 Reserved.
10.10 Corporate Approval. Seller shall have taken or caused to be
taken all necessary or desirable actions, steps and corporate proceedings
(whether by directors, shareholders or otherwise) to approve and authorize the
transfer of the Business and the Assets by Seller to Purchaser, and to
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approve and authorize the execution and delivery of this Agreement by the
Seller, and Seller shall have delivered to Purchaser at Closing a certificate
to all such effects.
10.11 Insurance Coverage. Seller has obtained from Seller's current
insurers adequate "tail" insurance to provide coverage for any claims made
after the termination of Seller's existing insurance policies.
10.12 Transfer and Assignment Documents. Seller shall have
delivered to Purchaser all documents reasonably necessary or required to
effectively transfer and assign the Business and the Assets to Purchaser
(including, without limitation, all required consents), such transfers and
assignments to convey good and marketable title to the Assets to Purchaser,
free and clear of all liens and encumbrances whatsoever (except for liens,
encumbrances and obligations, if any, specifically assumed by Purchaser
pursuant to this Agreement), and to be in form and substance reasonably
satisfactory to Purchaser and its counsel.
10.13 Liens Released. Each and every lien or encumbrance of any
nature, if any, relating to the Assets shall have been terminated and released
and proof thereof delivered to the Purchaser (except for liens and
encumbrances, if any, specifically assumed by Purchaser pursuant to this
Agreement).
10.14 UCC Matters. The current certificate issued by a company
reasonably acceptable to Purchaser reflecting that since the date of the
searches furnished pursuant to Section 2.3 hereof no Uniform Commercial Code
filings, chattel mortgages, assignments, pledges or other encumbrances have
been filed in the offices of the Secretary of State of the State of Texas, in
the office of the County Clerk of Xxxxxx County, Texas, or in any other
appropriate offices for the filing of such documents in the State of Texas with
reference to the Assets.
10.15 Telephone Transfer. Seller shall have used its best efforts
to have transferred to Purchaser its user rights to the main telephone number
included in the Assets.
10.16 Ordinary Course of Business. During the period from the date
of this Agreement until Closing, Seller shall have carried on the Business in
the ordinary and usual course and the Seller shall have delivered to Purchaser
at Closing a certificate to that effect.
10.17 Other Documents. Seller shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as Purchaser or its attorneys may have reasonably requested.
10.18 Dealer License. Purchaser shall have obtained written
approval by the appropriate departments or agencies of the State of Texas to do
business as a Xxxx Deere dealer in the present territory of Seller's
dealership.
10.19 Certain Approvals. Purchaser shall have received written
confirmation from each of Xxxx Deere, Xxxx Deere Commercial Worksite Products,
Inc., The Read Corporation, Re-Tech, Scarab Manufacturing and Leasing, Inc.,
Xxxxxx Industries, Safe-T-Shore, Spectra-Physics Laserplane, Inc., Sakai
American, Inc., Allied Construction Products, Trail Kings Industries, Inc.,
Xxxx Company and Diamond Z Manufacturing, Inc. that the existing dealership
agreements will
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survive the termination of the dealership or that Purchaser will have an
authorized dealership from each of such companies in Seller's existing
territory subsequent to the Closing Date.
10.20 Inventory Audit. The inventory audit contemplated by Section
9.4 shall have been completed and the results thereof shall be satisfactory to
Purchaser.
10.21 Other Records. All original licenses and permits,
certificates of occupancy, certificates of compliance, permits, architectural,
mechanical, or electrical plans and specifications and surveys relating to the
Real Property and the Assets; all studies with respect to the functional
aspects of the Real Property and the Assets, including, without limitation,
environmental site assessments and reports; soil and compaction tests and
flooding studies; all extra promotional brochures, posters, signs and other
advertising materials relative to the operation of the Real Property and the
Assets; and copies of all other books and records relating to the ownership and
operation of the Real Property and the Assets.
10.22 Special Warranty Deed. Purchaser shall have received from
Seller a Special Warranty Deed (the "Deed") which, when recorded, shall convey
the Dealership Property to Purchaser, free and clear of all liens,
encumbrances, covenants, restrictions and other matters, except for the
Permitted Exceptions and any matters expressly waived by Purchaser hereunder.
10.23 Government Approvals. All necessary government and regulatory
approvals have been obtained, including all necessary approvals under the HSR
Act and all waiting periods under the HSR Act shall have expired or been
terminated.
10.24 Reserved.
10.25 Title Policy. Seller shall have delivered to Purchaser an
Owner Policy of Title Insurance (or an Owner Leasehold Policy of Title
Insurance, if Purchaser elects to enter into the Lease at Closing, in
accordance with clause (c) of Section 25.2 hereof) in the face amount of the
portion of the Purchase Price allocated to the Dealership Property in
accordance with Schedule 10.26 hereof, insuring in Purchaser good and
indefeasible title to the Dealership Property (or insuring Purchaser's
leasehold interest in the Dealership Property, if applicable), subject only to
the Permitted Exceptions and any matters expressly waived by Purchaser, and
with (a) the standard exception concerning shortages in area or discrepancies
or conflicts in boundary lines, or any encroachments, or any overlapping of
improvements deleted (at Seller's expense) to the maximum extent permitted by
applicable title insurance regulation; (b) the exception concerning
restrictions endorsed "None of Record" except as may be included in the
Permitted Exceptions; (c) the exception as to taxes limited to the year of
Closing and subsequent years and endorsed "Not Yet Due and Payable"; and (d)
the exception concerning parties in possession deleted. Seller shall pay the
premium for the Owner (or Owner Leasehold, if applicable) Policy, including the
additional premium for deletion (to the maximum extent permitted under
applicable title insurance regulations) of the standard printed form survey
exception.
10.26 Objections. As of the Closing Date, there shall be no matter,
objection, encumbrance or defect in title affecting the Real Property not
reflected on the Surveys or the Title Commitment, or any change in the matters
reflected on the Surveys or in the Title Commitment, except as consented to in
writing by Purchaser.
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10.27 Financial Statements. Purchaser shall have received from its
auditors (i) Audited Balance Sheets, Income Statements and Statements of
Changes in Financial Position of Seller for Seller's most recent fiscal year,
and (ii) unaudited Balance Sheets, Income Statements and Changes in Financial
Position of Seller for the quarter ended April 30, 1997, which financial
statements have undergone an FAS71 review (collectively, the "Reviewed
Financials"). There shall be no material difference between the financial
information included in Schedule 4.3 and the Reviewed Financials.
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The
obligations of Seller hereunder are, at its option, subject to the
satisfaction, on or prior to the Closing Date, of the following conditions (any
of which may be waived by Seller in its sole discretion):
11.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of Purchaser contained in this
Agreement shall be true and correct on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date. Each of the agreements and covenants of Purchaser to be performed
on or before the Closing Date shall have been performed. Purchaser shall have
delivered to Seller a certificate dated the Closing Date and executed by
Purchaser to all such effects.
11.2 Delivery of Purchase Price. Purchaser shall have paid to
Seller the Purchase Price as required by this Agreement, subject in all
respects to the provisions of Article 21 below.
11.3 Approval of Counsel. All actions, proceedings, instruments
and documents required or incidental to carrying out this Agreement and all
other related legal matters shall have been approved by counsel to Seller.
11.4 Governmental Approvals. All necessary government and
regulatory approvals have been obtained, including all necessary approvals
under the HSR Act, and required waiting periods under the HSR Act shall have
expired or been terminated.
11.5 Reserved.
11.6 Rush Option Agreement. Purchaser shall have delivered to
Seller the Rush Option Agreement.
11.7 Xxxx Deere Repurchase. Xxxx Deere has repurchased, or has
agreed to repurchase, all new construction machinery equipment manufactured by
Xxxx Deere that is owned by Seller as of the Closing Date.
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS.
12.1 Change of Name. Seller covenants and agrees that after the
Closing they will not, directly or indirectly, use the names "Xxxx Deere,"
"Xxxx Deere Worksite Products," "Sakai American, Inc.," "Allied," "Trail Kings
Industries, Inc.," "Xxxx Company," "The Read Corporation," "Re-Tech," "Scarab
Manufacturing and Leasing," "Xxxxxx Industries," "Safe-T-Shore,"
"Spectra-Physics Laserplane" and "Diamond Z Manufacturing" as they relate to
the Construction Equipment Business in the Gulf Coast Territory in the State of
Texas.
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12.2 Exchange Act Filing; Cooperation. After the Closing, Seller
shall reasonably cooperate with and provide information to Purchaser as is
necessary for Purchaser to comply with its reporting obligations under the
Exchange Act, including, but not limited to, all financial and other
information and access to Seller's personnel required in order for Seller to
perform "push-down" accounting procedures on the Business.
12.3 Trade Names; Trademarks. Purchaser acknowledges that it is
not acquiring any rights in or to the name "Xxxxxxx & Xxxxxxxxx" or any trade
names or trademarks of Seller or its Affiliates other than those trade names or
trademarks specified in Section 12.1 that are currently used by Seller in
connection with the Business (the "Acquired Names"), and agrees not to use the
name "Xxxxxxx & Xxxxxxxxx" or any trade name or trademark of Seller or its
Affiliates without the express written consent of Seller, other than the
Acquired Names.
12.4 Tax Audits. Purchaser covenants and agrees that it will
cooperate with Seller in the event that Seller becomes subject to an audit for
Taxes relating to the Business or Assets.
13. INDEMNITY BY SELLER.
13.1 Indemnification by Seller. The Seller agrees to indemnify,
defend and hold harmless the Rush Parties and each of their respective
Affiliates, officers, directors, employees, agents, consultants,
representatives, shareholders and controlling Persons and their respective
successors and assigns from and against and in respect of any and all Damages
which may now or in the future be paid, incurred or suffered by or asserted
against such party (collectively, "General Losses"), arising out of or
resulting from or relating to any misrepresentation, breach of warranty or
breach of any covenant, commitment or agreement made or undertaken by Seller in
this Agreement.
13.2 Environmental Indemnification. Seller agrees to indemnify,
defend and hold harmless the Rush Parties and each of their respective
Affiliates, officers, directors, employees, agents, consultants,
representatives, shareholders and controlling Persons and their respective
successors and assigns from and against and in respect of any and all
Environmental Liabilities which may now or in the future be paid, incurred or
suffered by or asserted against such party, arising out of or resulting from or
relating to or in connection with (a) the acts or omissions of Seller or other
person or entity on or prior to the Closing Date relating to the Assets or any
operations conducted by Seller or on the Real Property; (b) any violation of
Environmental Law occurring or commencing on or prior to the Closing Date and
resulting from or related to the Assets or the operations conducted on or with
the Assets; (c) the management, treatment or disposal of any wastes at or from
the Real Property on or prior to the Closing Date; (d) the presence or use of
any Hazardous Materials at, on or under the Real Property on or prior to the
Closing Date; (e) any Environmental Condition existing at, on or with respect
to any of the Assets or the Businesses as of the Closing Date; (f) any acts or
omissions of Sellers, relating to the Assets or the Businesses or any
operations conducted on or with the Assets; or (g) any breach by Seller of a
representation or warranty contained in Section 4.16 hereof (collectively,
"Environmental Losses"). In clarification of this Section 13.2, and not in
limitation thereof, Seller's indemnity of Purchaser hereunder shall include (y)
any capital or other expenditures necessary to comply with Environmental Laws,
provided such expenditures relate to any Environmental Condition that existed
as of the Closing Date, and (z) all fines, penalties and other costs and
expenses that arise from or relate to an Environmental Condition that existed
as of the Closing Date, including fines, penalties and other costs and expenses
that arise from or relate to the continued existence of such Environmental
Condition after the Closing Date.
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13.3 Tax Indemnification. Seller agrees to indemnify, defend and
hold harmless the Rush Parties and each of their respective Affiliates,
officers, directors, employees, agents, consultants, representatives,
shareholders and controlling Persons and their respective successors and
assigns from and against and in respect of any and all Damages which may now or
in the future be paid, incurred or suffered by or asserted against such party
arising out of or resulting from or relating to any Taxes or Tax Returns of
Seller for any period, or portion thereof, up to and including the Closing Date
(collectively, "Tax Losses").
13.4 Products Liability and Warranty Indemnification. Seller
agrees to indemnify, defend and hold harmless the Rush Parties and each of
their respective Affiliates, officers, directors, employees, agents,
consultants, representatives, shareholders and controlling Persons and their
respective successors and assigns from and against and in respect of any and
all Damages which may now or in the future be paid, incurred or suffered by or
asserted against such party arising out of or resulting from or relating to any
products manufactured, sold or distributed or services provided by or on behalf
of Seller in connection with the Business or Assets on or prior to the Closing
Date or with respect to any claims made pursuant to warranties to third Persons
in connection with products manufactured, sold or distributed or services
provided by or on behalf of Seller in connection with the Business or Assets on
or prior to the Closing Date (collectively, "Product Losses").
13.5 Indemnification by the Rush Parties. The Rush Parties,
jointly and severally, agree to indemnify, defend and hold harmless Seller and
Seller's Affiliates, officers, directors, employees, agents, consultants,
representatives, shareholders and controlling Persons and their respective
successors and assigns from and against and in respect of any and all Damages
which may now or in the future be paid, incurred or suffered by or asserted
against any such party, arising out of or resulting from or relating to any
misrepresentation, breach of warranty or breach of any covenant, commitment or
agreement made or undertaken by the Rush Parties in this Agreement.
13.6 Time Limitations. Seller will have no liability (for
indemnification or otherwise) with respect to any representation, warranty,
covenant or obligation, other than those with respect to title to the Assets,
unless on or before October 3, 1999, Purchaser notifies Seller of a claim
specifying the factual basis of such claim in reasonable detail to the extent
then known by Purchaser.
13.7 Limitations on Amount.
(a) Seller will have no liability (for indemnification or
otherwise) with respect to the matters described in Section 13.1 until
the total amount of all Damages with respect to such matters exceeds
$10,000, subsequent to which Purchaser shall be entitled to full
indemnification for all Damages, including the first $10,000 incurred.
(b) Seller will have no liability (for indemnification or
otherwise) with respect to the matters described in Section 13.2 until
the total of all Damages with respect to such matters exceeds $50,000,
subsequent to which Purchaser shall be entitled to full
indemnification for all Damages, including the first $50,000 incurred.
(c) The maximum aggregate liability of Seller under this
Article 13 shall not exceed the Purchase Price.
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(d) Notwithstanding the foregoing, this Section 13.7 will
not apply with respect to any claim based on (i) any breach of
Seller's representations and warranties of which Seller had Best
Knowledge at any time prior to the date on which such representation
and warranty is made, or (ii) any intentional breach by Seller of any
covenant or obligation.
13.8 Procedure. All claims for indemnification or payment under
this Article 13 shall be asserted and resolved as follows:
(a) An Indemnitee shall promptly give the Indemnitor
written notice of any matter which an Indemnitee has determined has
given or could give rise to a right of indemnification under this
Agreement (an "Indemnification Event"), stating the amount of the
Loss, if known, and method of computation thereof, all with reasonable
particularity, and stating with particularity the nature of such
matter. Failure to provide such written notice shall not affect the
right of the Indemnitee to indemnification except to the extent such
failure shall have resulted in liability to the Indemnitor that could
have been actually avoided had such notice been provided within such
required time period.
(b) The obligations and liabilities of an Indemnitor
under this Article 13 with respect to Losses arising from claims of
any third party that are subject to the indemnification provided for
in this Article 13 ("Third-Party Claims") shall be governed by and
contingent upon the following additional terms and conditions: if an
Indemnitee shall receive notice of any Third-Party Claim, the
Indemnitee shall give the Indemnitor prompt notice of such Third-Party
Claim and the Indemnitor may, at its option, assume and control the
defense of such Third-Party Claim at the Indemnitor's expense and
through counsel of the Indemnitor's choice reasonably acceptable to
Indemnitee. Subject to the condition that written notice be delivered
prior to the expiration of one year after the Closing Date, failure to
provide such written notice shall not affect the right of the
Indemnitee to indemnification except to the extent such failure shall
have resulted in liability to the Indemnitor that could have been
actually avoided had such notice been provided within such required
time period. In the event the Indemnitor assumes the defense against
any such Third-Party Claim as provided above, the Indemnitee shall
have the right to participate at its own expense in the defense of
such asserted liability, shall cooperate with the Indemnitor in such
defense and will attempt to make available on a reasonable basis to
the Indemnitor all witnesses, pertinent records, materials and
information in its possession or under its control relating thereto as
is reasonably required by the Indemnitor. In the event the Indemnitor
does not elect to conduct the defense against any such Third-Party
Claim, the Indemnitor shall cooperate with the Indemnitee (and be
entitled to participate) in such defense and attempt to make available
to it on a reasonable basis all such witnesses, records, materials and
information in its possession or under its control relating thereto as
is reasonably required by the Indemnitee. The Indemnitor understands
that if such Third-Party Claim results in an obligation to indemnify
hereunder, Damages shall include all reasonable costs and expenses of
such defense. Except for the settlement of a Third-Party Claim that
involves the payment of money only and for which the Indemnitor has
provided written objection to Indemnitee under Section 13.8(c), no
Third-Party Claim may be settled without the written consent of the
Indemnitee. Written notice of any proposed settlement of any such
claim and the material terms thereof shall be delivered by Indemnitee
to Indemnitor at least five Business Days prior to any settlement of
any such claim.
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(c) If a claim for indemnity is provided pursuant to this
Article 13 by an Indemnitee and the Indemnitor does not pay such claim
or object to such claim within 20 Business Days after written notice
is received by the Indemnitor, such claim shall be deemed agreed to by
the Indemnitor. If the Indemnitor shall object to such claim, a
written notice of such objection setting forth in reasonable detail
the basis for such objection shall be provided to the Indemnitee and
such dispute shall be resolved in accordance with Section 26.12
hereof. In addition, if the claim shall have been determined to have
been a valid claim, Damages shall include interest at the prime rate
as quoted from time to time by The Frost National Bank, San Antonio,
Texas, from the date the claim is first made until fully paid.
13.9 Payment. Payment of any amounts due pursuant to this Article
13 shall be made within ten Business Days after final adjudication of such
claim and after written notice is sent by the Indemnitee.
13.10 Failure to Pay Indemnification. If and to the extent the
Indemnitee shall make written demand upon the Indemnitor for indemnification
pursuant to this Article 13 and the Indemnitor shall refuse or fail to pay in
full within 20 Business Days of such written demand the amounts demanded
pursuant hereto and in accordance herewith, then the Indemnitee shall proceed
in accordance with the arbitration provisions of Section 26.12 hereof;
provided, however, that in the case of indemnification for a Third-Party Claim,
such matter need not be resolved by arbitration until the underlying
Third-Party Claim is finally resolved.
13.11 Cooperation. The Indemnitor and the Indemnitee shall
cooperate with each other with regard to any indemnification obligation under
this Article 13 and each shall attempt to make available to the other on a
reasonable basis all personnel records, materials and information in its
possession or under its control as is reasonably requested by the other.
14. RESERVED.
15. NON-COMPETITION AGREEMENTS.
15.1 Non-Competition. In consideration of the benefits of this
Agreement to Seller and as a material inducement to the Rush Parties to enter
into this Agreement and pay the Purchase Price, Seller hereby covenants and
agrees that, commencing on the Closing Date and ending on the fifth anniversary
of the Closing Date, Seller shall not, and Seller will cause its Affiliates,
officers and directors not to, directly or indirectly, as proprietor, partner,
stockholder, director, executive, officer, employee, consultant, joint
venturer, investor or in any other ownership capacity, engage in, or own,
manage, operate or control, or participate in the ownership, management,
operation or control, of any entity which engages in the Construction Equipment
Business in the Gulf Coast Territory of the State of Texas or in the State of
Michigan, provided that, if Seller or any of its Affiliates acquires such a
business in the Gulf Coast Territory of the State of Texas or anywhere in the
State of Michigan, it shall not be in violation of this Article 15 if it
disposes of such Construction Equipment Business in a reasonably timely
fashion; provided, however, the foregoing shall not prohibit Seller, its
Affiliates, officers and directors from purchasing and holding as an investment
not more than 5% of any class of publicly traded securities of any entity which
conducts a business in competition with the business of the Rush Parties, so
long as Seller, its Affiliates, officers and directors do not participate in
any way in the management, operation or control of such entity.
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15.2 Judicial Reformation. Seller acknowledges that, given the
nature of the Rush Parties' business, the covenants contained in Section 15.1
establish reasonable limitations as to time, geographic area and scope of
activity to be restrained and do not impose a greater restraint than is
reasonably necessary to protect and preserve the goodwill of the Rush Parties'
business and to protect their legitimate business interests. If, however,
Section 15.1 is determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too long a period of time or over
too large a geographic area or by reason of it being too extensive in any other
respect or for any other reason, it will be interpreted to extend only over the
longest period of time for which it may be enforceable and/or over the largest
geographic area as to which it may be enforceable and/or to the maximum extent
in all other aspects as to which it may be enforceable, all as determined by
such court.
15.3 Customer Lists; Non-Solicitation. Seller hereby further
covenants and agrees that it shall not, and Seller will cause its Affiliates
and representatives not to, directly or indirectly, (a) use or make known to
any person or entity the names or addresses of any clients or customers of the
Business or the Rush Parties or any other information pertaining to them,
provided, however, such limitation shall not apply to any information which (i)
is then generally known to the public; (ii) become or becomes generally known
to the public through no fault of Seller, its Affiliates and representatives;
and (iii) is disclosed in accordance with an order of a court of competent
jurisdiction or applicable law, nor (b) solicit for employment, recruit, hire
or attempt to recruit or hire any employees of the Business or the Rush Parties
for a period of one (1) year without the prior consent of Rush.
15.4 Covenants Independent. The covenants of Seller contained in
Sections 15.1, 15.2 and 15.3 of this Agreement will be construed as independent
of any other provision in this Agreement, and the existence of any claim or
cause of action by Seller against the Rush Parties will not constitute a
defense to the enforcement by the Rush Parties of said provisions. Seller
understands that the provisions contained in Sections 15.1, 15.2 and 15.3 are
essential elements of the transactions contemplated by this Agreement and, but
for the agreement of Seller to Sections 15.1, 15.2 and 15.3, the Rush Parties
would not have agreed to enter into this Agreement and the transactions
contemplated herein. Seller has been advised to consult with counsel in order
to be informed in all respects concerning the reasonableness and propriety of
Sections 15.1, 15.2 and 15.3 with specific regard to the nature of the business
conducted by Seller and the Rush Parties and Seller acknowledge that Sections
15.1, 15.2 and 15.3 are reasonable in all respects.
15.5 Remedies. In the event of a breach or a threatened breach by
Seller of any of the provisions contained in Sections 15.1, 15.2 or 15.3 of
this Agreement, Seller acknowledges that the Rush Parties will suffer
irreparable damage or injury not fully compensable by money damages, or the
exact amount of which may be impossible to obtain, and, therefore, will not
have an adequate remedy available at law. Accordingly, the Rush Parties shall
be entitled to obtain such injunctive relief or other equitable remedy, without
the necessity of posting bond therefor, from any court of competent
jurisdiction as may be necessary or appropriate to prevent or curtail any such
breach, threatened or actual. The foregoing shall be in addition to and
without prejudice to any other rights that the Rush Parties may have under this
Agreement, at law or in equity, including, without limitation, the right to xxx
for damages.
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16. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Seller recognizes
and acknowledges that it has and will have access to certain confidential
information of Seller that is included in the Assets (including, but not
limited to, lists of customers, trade secrets, costs and financial information)
that after the consummation of the transactions contemplated hereby will be
valuable, special and unique property of Purchaser. Seller agrees that Seller
will, and will cause its Affiliates and representatives, to keep confidential
and not disclose to any other Person or use for his own benefit or for the
benefit of any other Person, and it will use its best efforts to prevent
disclosure by any other Person of, any such confidential information to any
Person for any purpose or reason whatsoever, except to authorized
representatives of Purchaser; provided, however, such limitation shall not
apply to any information which (a) is then generally known to the public; (b)
become or becomes generally known to the public through no fault of Seller, its
Affiliates and representatives; and (c) is disclosed in accordance with an
order of a court of competent jurisdiction or applicable law. In the event of
a breach or a threatened breach by Seller of any of the provisions contained in
this Article 16 of this Agreement, Seller acknowledges that the Rush Parties
will suffer irreparable damage or injury not fully compensable by money
damages, or the exact amount of which may be impossible to obtain, and,
therefore, will not have an adequate remedy available at law. Accordingly, the
Rush Parties shall be entitled to obtain such injunctive relief or other
equitable remedy, without the necessity of posting bond therefor, from any
court of competent jurisdiction as may be necessary or appropriate to prevent
or curtail any such breach, threatened or actual. The foregoing shall be in
addition to and without prejudice to any other rights that the Rush Parties may
have under this Agreement, at law or in equity, including, without limitation,
the right to xxx for damages.
17. DAMAGE TO ASSETS. If, on or before the Closing Date, any of
the Assets are damaged or destroyed, Seller will immediately notify Purchaser
of such damage or destruction. In the event of any such damage or destruction,
Purchaser shall (a) remove any or all of the damaged or destroyed asset or
assets it does not desire to purchase from the Assets to be purchased hereunder
and reduce the Purchase Price by an amount equal to the portion of the Purchase
Price attributable to the damaged or destroyed asset or assets so removed and
(b) complete the purchase of the remainder of the Assets and reduce the
Purchase Price by the loss in fair market value of any damaged or destroyed
Assets that are purchased by Purchaser.
18. TERMINATION. This Agreement may be terminated without further
obligation of the parties, as follows:
18.1 Mutual Consent. This Agreement may be terminated at any time
prior to Closing by mutual written consent of the parties hereto.
18.2 Failure of Conditions. This Agreement may be terminated by
either party hereto, if the conditions, as set forth in this Agreement, to such
party's obligations under this Agreement are not fulfilled on or prior to the
Closing Date; provided that any such termination shall not limit the remedies
otherwise available to such party as a result of misrepresentations of or
breaches by the other party.
18.3 Failure to Close. This Agreement will automatically terminate
on October 15, 1997, if the Closing shall not have occurred on or before such
date, unless the parties shall have otherwise agreed in writing prior to such
date. No party will be liable in damages to any other party as a
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result of termination pursuant to this Section 18.3 unless the failure of the
Closing was due to the failure of such party to comply with the terms of this
Agreement.
19. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.
19.1 New Employees of Purchaser. It is the intention of Purchaser,
and Seller hereby acknowledges and agrees with such position, that any
employees of Seller that Purchaser hires will be new employees of Purchaser as
of the Closing Date or the date of hire, whichever is later. Such new
employees shall be entitled only to such compensation and employee benefits as
are agreed to by such employees and Purchaser, or as are otherwise provided by
Purchaser, in its sole discretion.
19.2 No Hiring Commitment. Purchaser specifically does not commit
to hire any of the employees of the Business, and Seller specifically
understands and acknowledges this fact. However, notwithstanding Purchaser's
position, Purchaser will review its needs in anticipation of the purchase of
the Assets with a view to hiring certain of the employees of Seller as of the
Closing Date. In its review, Purchaser expects to be able to review employee
records and conduct employee interviews. Seller agrees that after the date
hereof it will make, on a confidential basis, its employee records available to
Purchaser and permit Purchaser to contact its employees for the purpose of
conducting employee interviews. Seller further agrees to make employees
designated by Purchaser available to Purchaser for such purpose.
19.3 Vacation, Sick Pay, Health Insurance, etc.
(a) Notwithstanding Purchaser's decision to hire any or
all of such employees after the Closing Date, Purchaser shall not be
liable under any bonus plan or other plan described in Schedule 4.2 or
under any other similar plan that may have been established by Seller
or for any health insurance benefits that may have accrued to such
employees prior to the Closing Date, and Seller expressly acknowledges
that it has sole liability for all such employee benefit costs accrued
as of the Closing Date whether or not any or all of such employees are
subsequently hired by Purchaser pursuant to Section 19.1.
Notwithstanding the foregoing, Purchaser shall assume at the Closing
Seller's obligations to employees of Seller actually hired by
Purchaser for accrued but unused vacation and sick leave, and the
Purchase Price shall be reduced by the dollar value of such
obligation, which shall include (i) accrued vacation and sick leave as
of each employee's previous anniversary date and (ii) the pro rata
portion of vacation and sick leave earned by each employee since the
last anniversary date through the Closing Date, which such vacation
and sick leave will be available to employee following his next
anniversary; provided, however, Purchaser shall only assume up to the
number of accrued but unused vacation and sick leave days that each
employee of Seller actually hired by Purchaser would be entitled to
under Purchaser's vacation day and sick leave policy. Except for
vacation and sick leave time assumed by Purchaser as set forth above,
Purchaser shall have no obligation after the Closing to continue any
pension plans or work benefit plans currently offered by Seller to its
employees.
(b) With respect to employees actually employed by
Purchaser, Seller will remain responsible for medical expenses covered
under its plans (i) actually incurred prior to the Closing Date or
(ii) actually incurred with respect to any hospitalization that begins
prior to the Closing Date until such hospitalization ends (as required
under such plans), and Purchaser will be responsible for all other
medical expenses incurred on or after the Closing Date to
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the extent covered under its plans; provided, however, the employees
will be treated as newly hired employees of Purchaser beginning on the
Closing Date insofar as medical expenses paid under Purchaser's plans
affects the time or amount of coverage. Seller shall cooperate with
Purchaser to provide continuity of such insurance coverage to such
employees. Seller shall be solely responsible for any obligations
under the Consolidated Omnibus Budget Reconciliation Act, as amended,
with respect to its employees.
19.4 Severance Benefits; Employment Termination. Purchaser shall
have no obligation whatsoever to pay all or any part of any severance benefits
that Seller is or may be obligated to pay in connection with the termination of
employment by Seller of any of its employees.
19.5 Employee Benefit Plans. Purchaser shall not and does not
hereby assume, continue or maintain any pension, retirement or welfare plans,
severance or vacation policies or benefits, or other employee compensation or
benefit arrangements or policies or plans maintained by Seller for its
employees. It is intended that Purchaser shall not at any time be a successor
employer for purposes of Title IV of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). Seller hereby represents and warrants to
Purchaser that the consummation of this Agreement (and the employment by the
Purchaser of former employees of the Seller) will not result in any carryover
liability to the Purchaser for taxes, penalties, interest or any other claims
resulting from any employee pension benefit plan, employee welfare benefit
plan, or other employee benefit agreement or arrangement maintained by Seller.
In addition, the Seller makes the following representations (a) as to employee
pension benefit plans of the Company: (i) no Company has become liable to the
PBGC under Section 4062, 4063 or 4064 of ERISA under which a lien could attach
to the assets of the Seller under Section 4068 of ERISA; (ii) the Company has
not ceased operations at a facility so as to become subject to the provisions
of Section 4062(e) of ERISA; and (iii) the Company has not made a complete or
partial withdrawal from a multiemployer plan (as defined in Section 3(37) of
ERISA) so as to incur withdrawal liability as defined in Section 4201 of ERISA,
and (b) all group health plans maintained by the Company have been operated in
compliance with Section 4980B(f) of the Code.
In addition, the parties agree that the Purchaser does not and will
not assume the sponsorship of, or the responsibility for contributions to, or
any liability in connection with, any employee pension benefit plan, any
employee welfare benefit plan, or other employee benefit agreement or
arrangement maintained by Seller for its employees, former employees, retirees,
their beneficiaries or any other person. In addition and not as a limitation
of the foregoing covenant the parties agree that the Seller shall be liable for
any continuation coverage (including any penalties, excise taxes or interest
resulting from the failure to provide continuation coverage) required by
Section 4980B of the Code due to qualifying events which occur on or before
Closing Date.
19.6 Reporting of Data. Purchaser and Seller shall complete and
furnish to each other such other employee data as shall be reasonably required
from time to time for each party to perform and fulfill its obligations under
this Article 19.
19.7 Employment Related Claims. Seller agrees that it, and not
Purchaser, shall be solely responsible for, and Seller hereby agrees to
indemnify, defend and hold harmless Purchaser from and against, all liability,
costs and expenses (including reasonable attorneys' fees) for all existing
employment claims that have been filed by any employee or former employee of
Seller prior to the Closing Date relating to arbitrations, unfair labor
practice charges, employment discrimination
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charges, wrongful termination claims, workers' compensation claims, any
employment-related tort claim or other claims or charges of or by employees of
Seller, or any thereof filed after the Closing Date but arising as a result of
conditions, actions or events or series of actions or events which occurred
prior to the Closing Date. Schedule 19.7 hereto sets forth a brief description
of any of such claims that have been filed or, to Seller's knowledge,
threatened. Without in any way limiting the foregoing, Seller shall defend and
hold harmless Purchaser from and against any and all claims, demands, actions,
judgments, costs and expenses, including without limitation, attorney fees and
settlement costs and other reasonable expenses, related to all liabilities and
obligations in connection with Seller's qualified pension, retirement or
welfare plans, severance or vacation policies or benefits, or other employee
compensation or benefit arrangements or policies.
20. OFFSET PROVISIONS. Notwithstanding any other provision
contained herein, in the event that it is determined by a final decision issued
pursuant to arbitration proceedings conducted pursuant to the terms of this
Agreement, or final decision of a court of law, that Seller has breached this
Agreement or that Purchaser is otherwise entitled to indemnification under this
Article 20, the Purchaser may, upon notice thereof given by the Purchaser to
the Seller, thereafter withhold payments which otherwise become due and payable
pursuant to the Promissory Note or other amounts that Purchaser may owe to
Seller hereunder.
21. ADJUSTMENT OF PURCHASE PRICE. Following the Closing Date, the
Purchase Price shall be adjusted as of the Closing Date (the "Purchase Price
Adjustment") (a) to reduce the Purchase Price by the amount allocated to any
damaged or destroyed Assets as contemplated by Article 17; (b) to account for a
proration of personal property taxes on the Assets, lease payments, utilities,
telephone service and other items commonly prorated; (c) to account for any of
the Assets that the Purchaser and Seller contemplated would be returned by
Seller to Xxxx Deere, but were not actually returned to Xxxx Deere; and (d) to
account for the actual amount, as of the Closing Date, of the amounts to be
paid by Purchaser under Sections 3.1(b)-(f) to be made. Purchaser and Seller
shall jointly determine not later than November 30, 1997, the net amount of all
adjustments described under Section 21(a)-(d) above (the "Adjustment Amount")
and Purchaser or Seller shall pay to the other the amount necessary to
compensate for the increase or decrease, respectively, in the final adjusted
Purchase Price from the Purchase Price estimated and paid at Closing. All
amounts owed as a result of the adjustment shall first be satisfied by payment
from the Escrowed Funds to the party entitled to receive same, with any amounts
owed in excess of the Escrowed Funds being paid directly from Seller to
Purchaser, or Purchaser to Seller, as applicable. If Purchaser and Seller have
not determined on or before November 30, 1997, the Adjustment Amount, then
Seller shall cause its independent public accountants to meet with Purchaser's
independent public accountants in an attempt to resolve any differences. If
such independent public accountants are unable to resolve the differences, then
the issues in dispute shall be submitted to a third firm selected by the
independent accountants of Purchaser and Seller, for resolution, and the
determination of such independent public accountants shall be final and binding
upon the parties.
22. INCIDENTAL REGISTRATION.
22.1 Incidental Registration. If, at any time after the Closing
Date, Rush proposes to register any of the Rush Stock (whether unissued, yet to
be authorized or held by any person) under the Securities Act, Rush shall, at
least 30 days prior to the filing under the Securities Act of the registration
statement relating thereto, give written notice to the Seller of its intention
to do so, and, upon the written request of the Seller given within ten days
after the giving of any such notice (which
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request shall state the proposed method of distribution), Rush shall include or
cause to be included in any such registration statement the shares of Rush
Stock subject to the Rush Option Agreement; provided, however, that Rush may at
any time withdraw or cease proceeding with any such registration if it shall at
the time withdraw or cease proceeding with the registration of such Rush Stock
originally proposed to be registered; and provided further, that if the
registration proposed by Rush relates to an underwritten offering, the Seller
shall not have any right to sell the Rush Stock subject to the Rush Option
Agreement in any manner or through any underwriter other than in the manner and
through the managing underwriter or underwriters being used by Rush.
22.2 Limitation on Registration. Notwithstanding any other
provision of this Article 22, if a registration pursuant to this Article 22
involves a firm commitment, underwritten offering of the securities so being
registered and if the managing underwriter of such offering informs Rush and
the Seller by letter of its belief that marketing factors require a limitation
of the number of shares to be underwritten, Rush may limit the amount of Rush
Stock subject to the Rush Option Agreement to be included in the registration
and underwriting; provided that no such reduction shall reduce the securities
being offered by Rush for its own account; and provided that those shares which
are excluded from the underwritten offering shall be withheld from the market
by the holders thereof for a period, not to exceed 180 days, which the managing
underwriter reasonably determines as necessary in order to effect the
underwritten offering.
22.3 Registration Procedures and Expenses. If and whenever Rush is
required to include a portion of the Rush Stock subject to the Rush Option
Agreement in a registration statement under the Securities Act, as provided in
this Article 22, Rush shall, as expeditiously as is reasonably practicable, do
each of the following:
(a) prepare and file with the SEC a registration
statement with respect to the Rush Stock subject to the Rush Option
Agreement and, subject to the limitations under this Article 22, use
its best efforts to cause such registration statement to become
effective;
(b) cooperate with Seller and any underwriter who shall
sell the Rush Stock subject to the Rush Option Agreement in connection
with their review of Rush made in connection with such registration;
(c) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for 120 days from the date of its effectiveness,
and to comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all the Rush Stock
subject to the Rush Option Agreement covered by such registration
statement for such period;
(d) furnish to Seller such number of copies of the
prospectus forming a part of such registration statement (including
each preliminary prospectus), in conformity with the requirements of
the Securities Act, and such other documents as Seller may reasonably
request in order to facilitate the disposition of the Rush Stock
subject to the Rush Option Agreement; and
(e) (i) notify Seller, at any time when a prospectus
relating to the Rush Stock subject to the Rush Option Agreement is
required to be delivered under the Securities Act,
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of the happening of any event as a result of which the prospectus
forming a part of such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing, and (ii) at the request of Seller, prepare and furnish
to Seller a reasonable number of copies of any supplement to or any
amendment of such prospectus that may be necessary so that, as
thereafter delivered to the purchasers of the Rush Stock subject to
the Rush Option Agreement, such prospectus shall not include any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing.
22.4 Agreement by the Seller. In the event that Seller
participates, pursuant to this Section 22.4, in the offering of the Rush Stock
subject to the Rush Option Agreement, Seller shall:
(a) furnish Rush all material information reasonably
requested by Rush concerning the Seller and the proposed method of
sale or other disposition of the Rush Stock subject to the Rush Option
Agreement and such other information and undertakings as shall be
reasonably required in connection with the preparation and filing of
the registration statement covering the Rush Stock subject to the Rush
Option Agreement in order to ensure full compliance with the
Securities Act and the rules and regulations of the SEC thereunder;
(b) cooperate in good faith with Rush and its
underwriters, if any, in connection with such registration, including
placing the Rush Stock subject to the Rush Option Agreement in escrow
or custody to facilitate the sale and distribution thereof provided
that such escrow or custody arrangement shall be no more restrictive
upon Seller than upon any other holder of Rush Stock for the benefit
of whom such registration is undertaken; and
(c) make no further sales or other dispositions, or
offers therefor, of the Rush Stock subject to the Rush Option
Agreement under such registration statement if, during the
effectiveness of such registration statement, an intervening event
should occur which, in the opinion of counsel to Rush, makes the
prospectus included in such registration statement no longer comply
with the Securities Act, so long as written notice containing the
facts and legal conclusions relied upon by Rush in this regard has
been received by Seller from Rush, until such time as Seller has
received from Rush copies of a new, amended or supplemented prospectus
complying with the Securities Act, which prospectus shall be delivered
to Seller by Rush as soon as practicable after such notice.
22.5 Allocation of Expenses. If and whenever Rush is required by
the provisions of this Article 22 to use its best efforts to effect the
registration of the Rush Stock subject to the Rush Option Agreement under the
Securities Act, Rush shall pay the costs and expenses in connection therewith;
provided, however, that Seller shall pay, in all events, all underwriting
discounts, selling commissions and stock transfer taxes attributable to the
Rush Stock subject to the Rush Option Agreement under such registration
statement.
22.6 Indemnification. In the event of any registration of any of
the Rush Stock subject to the Rush Option Agreement under the Securities Act
pursuant to this Article 22, Seller shall indemnify and hold harmless, Rush,
each director of Rush, each officer of Rush who shall sign such registration
statement, each underwriter and any person who controls Rush or such
underwriter
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within the meaning of the Securities Act, with respect to any statement in or
omission from such registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, if such
statement or omission was made in reliance upon and in conformity with written
information furnished to Rush or its underwriter through an instrument duly
executed by Seller specifically for use in the preparation of such registration
statement, preliminary prospectus, final prospectus or amendment or supplement.
22.7 Rule 144 Stock. Notwithstanding the foregoing provisions of
this Article 22, Rush shall not be obligated to effect a registration pursuant
to Article 22 with respect to the Rush Stock subject to the Rush Option
Agreement which could then be sold pursuant to Rule 144 under the Securities
Act.
23. SURVEY.
23.1 Survey. Within ten days from and after the date hereof,
Seller agrees, at Seller's sole cost and expense, (a) to cause a registered,
licensed state surveyor approved by Purchaser and the Title Company to prepare
a new or updated on the ground survey or surveys of both the Dealership
Property and the Remaining Property (whether one or more, the "Survey"), and
(b) to deliver to Purchaser at least three copies, to Purchaser's counsel at
least one copy, and to the Title Company at least one copy of each Survey plat
and a certificate under the seal of the surveyor, which Survey shall be made in
accordance with the "Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys" jointly adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, including items 1, 2, 3, 4,
6, 7, 8, 9, 10, 11 and 13 thereof. The survey shall also include the
surveyor's registered number and seal, the date of the Survey (which shall be
no earlier than the date hereof), and the following narrative certificate:
"The undersigned does hereby certify that (i) this survey was this day
made upon the ground of the property reflected hereon, for the benefit
of and reliance by Rush Enterprises, Inc. and Xxxxxxx Title Company,
(ii) the description contained hereon is correct, (iii) each of the
Dealership Property and the Remaining Property has separate access to
and from a dedicated roadway as shown hereon, (iv) except as shown
hereon, there are no discrepancies, conflicts, shortages in area,
encroachments, improvements, overlapping of improvements, set-back
lines, easements or roadways, (v) the gross and net areas (both
acreage and square footage) of the Dealership Property and the
Remaining Property shown hereon are correct, and (vi) the area of the
Dealership Property and the Remaining Property is shown, if any, which
lies within the one hundred year (100) year plain or any area having
special flood hazards as designated by the U.S. Army Corps of
Engineers, the Federal Emergency Management Agency, or any other
government agency."
The Survey shall be in form and substance acceptable to the Title
Company as a basis for deleting to the maximum extent permitted by applicable
title insurance regulations (at Seller's expense) the standard printed
exceptions from the Owner Policy of Title Insurance (or Owner Leasehold Policy,
as applicable) to be delivered by Seller as hereinabove provided. The terms
"net acreage" and "net square footage" as used herein shall mean the number of
acres and square feet determined by the Surveyor to be equal to (a) the total
acreage and square footage within the Dealership Property or Remaining
Property, as applicable, less (b) the number of total acres and square feet
contained within any land lying within any easement or right-of-way or other
such matter
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as described in Subsections (iv), (v) and (vi) above, and contained within any
land lying within the 100 year flood plain. For purposes of the property
description to be included in the Deed, the Lease, and/or the Remaining
Property Option Agreement, as applicable, the field notes prepared by the
Surveyor shall control any conflicts or inconsistencies with the description
herein. Without in any way limiting the foregoing, the surveyor shall provide
separate written field note descriptions for each of the Dealership Property
and the Remaining Property.
23.2 Remedies for Failure to Deliver Survey. In the event Seller
does not deliver the Survey within such ten-day period, then and thereafter,
Purchaser shall have the option to (a) cancel this Agreement, in which event
the parties hereto shall have no further obligations hereunder, or (b) procure
the Survey, at the expense of Seller (and Seller shall reimburse Purchaser
immediately upon demand for all amounts incurred or expended in procuring the
same, and in the event Seller does not so reimburse Purchaser, Purchaser may
deduct such amounts from the Purchase Price on the Closing Date), or (c) waive
the Survey requirements and proceed to close the sale contemplated by this
Agreement.
24. TITLE COMMITMENT AND CONDITION OF TITLE.
24.1 Title Commitment. Within ten days from and after the date
hereof, at Seller's sole cost and expense, Seller agrees to cause the Title
Company to furnish Purchaser and its counsel a Commitment for Owner Policy of
Title Insurance (the "Title Commitment") prepared and issued by the Title
Company describing and covering the Dealership Property, listing Purchaser as
the prospective named insured and showing as the policy amount the portion of
the Purchase Price allocated to the Dealership Property, in accordance with
Article 3 hereof. The Title Commitment shall constitute the commitment of the
Title Company to insure, by title insurance in the standard form promulgated by
the Board of Insurance of the State of Texas, Purchaser's title to the
Dealership Property to be good and indefeasible and subject to the standard
printed exceptions except as modified below, but deleting (at Seller's expense)
to the maximum extent permitted by applicable title insurance regulations the
standard printed form survey exception from the Owner Policy of Title Insurance
as hereinabove provided. The standard exception as to the lien for taxes shall
be limited to the year of Closing, and shall be endorsed "Not Yet Due and
Payable." The Title Commitment shall contain no exception for "visible and
apparent easements" or for "public or private roads" or the like. The Title
Commitment shall contain no exception for "rights of parties in possession".
Seller shall also cause the Title Company to issue, concurrently with the
issuance of the Title Commitment, a separate Commitment for Owner Policy of
Title Insurance with respect to the Remaining Property, naming Purchaser as the
prospective named insured and otherwise in substantially the same form as the
Title Commitment (leaving the policy amount blank), for Purchaser's and
Seller's use in connection with the Remaining Property Option Agreement.
24.2 UCC Reports. Within three days from and after the date
hereof, Seller, at its sole cost and expense, shall furnish to Purchaser a
report (the "UCC Report") of searches made of the Uniform Commercial Code
Records of Xxxxxx County, Texas, of the Official Public Records of Real
Property of Xxxxxx County, Texas, and of the Office of the Secretary of State,
State of Texas, or the proper offices in the State of Texas where Uniform
Commercial Code records are maintained, which searches shall show that the
Assets are not subject to any lien or security interest (other than liens and
security interests which are to be released at the Closing). An update of the
searches (dated no more than two days prior to the Closing Date, but delivered
prior to the Closing Date) shall be provided by Seller to Purchaser at Seller's
sole cost and expense.
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24.3 Disclosure of Exceptions by Title Commitment and UCC Report.
Purchaser shall have a period of 20 days from the last to be delivered to
Purchaser and its counsel of each of the Survey, UCC Report, Title Commitment
and the documents referred to therein as conditions or exceptions to title to
the Dealership Property in which to review such items and to deliver to Seller
in writing such objections as Purchaser may have to anything contained or set
forth in the Survey, UCC Report, Title Commitment or title exception documents.
Any items to which Purchaser does not object within such period shall be deemed
to be permitted exceptions hereunder ("Permitted Exceptions"). In the event
Purchaser timely objects to any matter contained in the Survey, UCC Report,
Title Commitment or title exception documents, Seller shall have a reasonable
time, not to exceed fifteen days from the date such objections are made known
in writing to Seller, to cure such objections. Any curative actions shall be
completed and all curative materials shall be filed by Seller, at its sole cost
and expense, within such 15-day period. If Seller cannot cure the objections
within such fifteen-day period, Purchaser shall have the option to (a) cancel
this Agreement, in which event the parties shall have no further obligations
hereunder; (b) if the matters to which Purchaser has objected can be cured for
$50,000 or less, to cure and deduct the cost of such cure from the Purchase
Price; or (c) waive the objections, and proceed to close the transaction
contemplated hereby in which event such objections shall be included as
exceptions in the Deed or Lease, as applicable. In the event, however, that a
lien indebtedness against the Assets (including past due taxes) is disclosed by
the Title Commitment or the UCC Report, then Seller shall (y) discharge such
lien indebtedness prior to the Closing, or (z) authorize the Title Company to
discharge such lien indebtedness at the Closing out of the Purchase Price, and
all costs incurred in connection with discharging such lien indebtedness shall
not count against the $50,000 amount referenced in clause (b) of the
immediately preceding sentence.
25. ENVIRONMENTAL STUDIES AND REMEDIATION ACTIVITIES.
25.1 Environmental Studies. Purchaser has undertaken or is
undertaking, with the consent of Seller, its own Phase I environmental site
assessment ("ESA") with respect to the Real Property. Within 10 days after the
date hereof, Seller shall provide to Purchaser, at Seller's sole cost and
expense, copies of (a) all existing ESAs (whether Phase I, Phase II or
otherwise) covering all or any portion of the Real Property, to the extent the
same are in Seller's possession or Seller has access to them, and (b) any other
environmental studies, reports and information, including, without limitation,
correspondence from Governmental Authorities, concerning the environmental
condition of the Real Property, to the extent the same are in Seller's
possession or Seller has access to them (all of the foregoing information,
whether obtained by Purchaser or provided by Seller, being hereinafter referred
to as "Environmental Information"). Without in any way limiting the provisions
of the preceding sentence, Purchaser and its contractors and representatives,
at Purchaser's expense, shall have at least 30 days from the date hereof, but
in no event less than 20 days from receipt of the Environmental Information
(the "Feasibility Period") within which to conduct any and all engineering,
environmental and economic feasibility studies and tests of the Real Property
which Purchaser, in Purchaser's sole discretion, deems necessary to determine
whether the Real Property is environmentally, engineeringly and economically
suitable for Purchaser's intended use. Seller has granted and hereby grants to
Purchaser and its contractors and representatives access to the Real Property
for the purpose of performing such studies or tests. Such persons shall
conduct their studies and tests in such a manner as to minimize interference
with the Business, and, upon completion of their activities on the Real
Property, shall restore the Real Property as nearly as is reasonably possible
to the condition it was in immediately prior to such activities.
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25.2 Remediation. In the event that any of the Environmental
Information or any studies or tests performed or commissioned by Purchaser
indicate the existence of any Environmental Conditions on the Real Property,
then Seller shall have a period of 30 days after notification thereof in which
to remediate or otherwise cure the same in accordance with all applicable
Governmental Requirements. In the event that an Environmental Condition exists
or is discovered on the Real Property and Purchaser fails or refuses to
remediate or otherwise cure such Environmental Condition within the required
30-day period, or in the event such Environmental Condition is not capable of
being remediated or otherwise cured within such 30-day period, then Purchaser
shall have the following options: (a) cancel this Agreement by written notice
thereof given to Sellers prior to the Closing Date, in which event the parties
hereto shall have no further obligations hereunder, (b) if the Environmental
Condition can be remediated or cured for $50,000 or less, to remediate or cure
and deduct the cost of such cure from the Purchase Price; (c) [intentionally
deleted]; (d) if the Environmental Condition affects the Remaining Property, to
elect not to enter into the Remaining Property Option Agreement, or to elect to
enter into it with the understanding that Seller shall undertake to cure the
Environmental Conditions affecting the Remaining Property prior to Purchaser's
exercise of the option and/or shall grant an extension of the option term to
afford Seller and/or Purchaser the opportunity to cure such Environmental
Conditions prior to the exercise of the option; (e) if the Environmental
Conditions affect a portion, but not all, of the Dealership Property, to elect
to delete the portion of the Dealership Property so affected from the
definition of "Dealership Property" hereunder and to take title only to the
newly defined "Dealership Property" at Closing, with a reduction being made in
the Purchase Price hereunder in proportion to the amount of the original
Dealership Property so deleted from the definition thereof, or (f) waive in
writing the remediation or cure of such Environmental Condition (without in any
way waiving Purchaser's rights under Article 13 hereof pertaining to Seller's
environmental indemnification) and proceed to close the sale contemplated by
this Agreement.
25.3 Reserved.
25.4 No Waiver. It is expressly understood and agreed by
Purchaser and Seller that nothing in this Article 25 shall in any way operate
as a waiver of or limitation on the environmental indemnification obligations
of Seller set forth in Article 13 of this Agreement, and such indemnification
obligations shall apply without regard to whether (a) any Environmental
Conditions are disclosed as existing on the Real Property by any of the
Environmental Information or any studies or reports performed or commissioned
by Purchaser, (b) any environmental remediation or curative actions are
undertaken by Purchaser or Seller hereunder, or (c) Purchaser elects to waive
remediation or other curative actions with respect to Environmental Conditions
on the Real Property and to proceed to Closing.
26. GENERAL PROVISIONS.
26.1 Governing Law; Interpretation; Section Headings. This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Texas, without regard to conflict-of-laws rules as
applied in Texas. The section headings contained herein are for purposes of
convenience only, and shall not be deemed to constitute a part of this
Agreement or to affect the meaning or interpretation of this Agreement in any
way.
26.2 Severability. Should any provision of this Agreement be held
unenforceable or invalid under the laws of the United States of America or the
State of Texas, or under any other
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applicable laws of any other jurisdiction, then the parties hereto agree that
such provision shall be deemed modified for purposes of performance of this
Agreement in such jurisdiction to the extent necessary to render it lawful and
enforceable, or if such a modification is not possible without materially
altering the intention of the parties hereto, then such provision shall be
severed herefrom for purposes of performance of this Agreement in such
jurisdiction. The validity of the remaining provisions of this Agreement shall
not be affected by any such modification or severance, except that if any
severance materially alters the intentions of the parties hereto as expressed
herein (a modification being permitted only if there is no material
alteration), then the parties hereto shall use commercially reasonable efforts
to agree to appropriate equitable amendments to this Agreement in light of such
severance, and if no such agreement can be reached within a reasonable time,
any party hereto may initiate arbitration under the then current commercial
arbitration rules of the American Arbitration Association to determine and
effect such appropriate equitable amendments.
26.3 Entire Agreement. This Agreement, the Schedules and the
documents and agreements referenced herein set forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersede all prior agreements, arrangements and
understandings related to the subject matter hereof. No representation,
promise, inducement or statement of intention has been made by any party hereto
which is not embodied or referenced in this Agreement, the Schedules or the
documents or agreements referenced herein, and no party hereto shall be bound
by or liable for any alleged representation, promise, inducement or statement
of intention not so set forth.
26.4 Binding Effect. All the terms, provisions, covenants and
conditions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns.
26.5 Assignment. This Agreement and the rights and obligations of
the parties hereto shall not be assigned or delegated by any party hereto
without the prior written consent of the other parties hereto.
26.6 Amendment; Waiver. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, provisions, representations,
warranties, covenants or conditions hereof may be waived, only by a written
instrument executed by all parties hereto, or, in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
to enforce the same. No waiver by any party of any condition contained in this
Agreement, or of the breach of any term, provision, representation, warranty or
covenant contained in this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any such
condition or breach, or as a waiver of any other condition or of the breach of
any other term, provision, representation, warranty or covenant.
26.7 Gender; Numbers. All references in this Agreement to the
masculine, feminine or neuter genders shall, where appropriate, be deemed to
include all other genders. All plurals used in this Agreement shall, where
appropriate, be deemed to be singular, and vice versa.
26.8 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Agreement
shall be binding when one or more counterparts
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hereof, individually or taken together, shall bear the signatures of the
parties reflected hereon as signatories.
26.9 Telecopy Execution and Delivery. A facsimile, telecopy or
other reproduction of this Agreement may be executed by one or more parties
hereto, and an executed copy of this Agreement may be delivered by one or more
parties hereto by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen, and such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all parties
hereto agree to execute an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.
26.10 Press Releases. No press releases or other public
announcement with respect to this Agreement or the transactions contemplated
herein shall be made prior to the Closing Date without the joint approval of
Purchaser and Seller, except as required by law.
26.11 Expenses. Whether or not the transactions contemplated hereby
are consummated, each of the parties will pay all costs and expenses of its
performance of and compliance with this Agreement.
26.12 Arbitration. Except for the provisions of Articles 15 and 16
of this Agreement dealing with restrictive covenants and nondisclosure of
confidential information, with respect to which the Rush Parties expressly
reserve the right to petition a court directly for injunctive and other relief,
any controversy of any nature whatsoever, including but not limited to tort
claims or contract disputes, between the parties to this Agreement or their
respective successors and assigns, as applicable, arising out of or related to
this Agreement, including the implementation, applicability and interpretation
thereof, shall, upon the written request of one party served upon the other, be
submitted to and settled by arbitration in accordance with the provisions of
the Federal Arbitration Act, 9 U.S.C. Sections 1-15, as amended. The terms of
the commercial arbitration rules of the American Arbitration Association shall
apply except to the extent they conflict with the provisions of this paragraph.
If the amount in controversy in the arbitration exceeds $250,000, exclusive of
interest, attorneys' fees and costs, the arbitration shall be conducted by a
panel of three independent arbitrators. Otherwise, the arbitration shall be
conducted by a single independent arbitrator. The parties shall endeavor to
select independent arbitrators by mutual agreement. If such agreement cannot
be reached within 30 calendar days after a dispute has arisen which is to be
decided by arbitration, the selection of the arbitrator(s) shall be made in
accordance with Rule 13 of the Rules as presently in effect. If three
arbitrators are selected, the arbitrators shall elect a chairperson to preside
at all meetings and hearings. If a dispute is to be resolved by a sole
arbitrator in accordance with the terms hereof, or if the dispute is to be
resolved by a panel of three arbitrators as provided hereinabove, then each
such arbitrator shall be a member of a state bar engaged in the practice of law
in the United States or a retired member of a state or the federal judiciary in
the United States. The award of the arbitrator(s) shall require a majority of
the arbitrators in the case of a panel of arbitrators, shall be based on the
evidence admitted and the substantive law of the State of Texas and shall
contain an award for each issue and counterclaim. The award shall be made 30
days following the close of the final hearing and the filing of any post
hearing briefs authorized by the arbitrator(s). The award of the arbitrator(s)
shall be final and binding on the parties hereto. Each party shall be entitled
to inspect and obtain a copy of non-privileged relevant documents in the
possession or control of the other party. All such discovery shall be in
accordance with procedures approved by the arbitrator(s). Unless otherwise
provided in the award, each party shall bear its own
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costs of discovery. Each party shall be entitled to take one deposition. Each
party shall be entitled to submit one set of interrogatories which require no
more than 30 answers. All discovery shall be expedited, consistent with the
nature and complexity of the claim or dispute and consistent with fairness and
justice. The arbitrator(s) shall have the power to compel any party to comply
with discovery requests of the other parties and to issue binding orders
relating to any discovery dispute which shall be enforceable in the same manner
as awards. The arbitrator(s) also shall have the power to impose sanctions for
abuse or frustration of the arbitration process, including without limitation,
the refusal to comply with orders of the arbitrator(s) relating to discovery
and compliance with subpoenas. Without limiting the scope of the parties'
obligation to arbitrate disputes pursuant to this Section 26.12, the
arbitrator(s) are not empowered to award damages including, without limitation,
punitive damages and multiple damages under applicable Texas statutes, in
excess of compensatory damages; provided that in no event shall consequential
damages be awarded. Each of Rush, Purchaser and Seller hereby irrevocably
waives and releases any right to recover such damages in excess of those
damages authorized by this Section 26.12. The arbitrator(s) may require the
non-prevailing party to pay the prevailing party's attorneys' fees and costs
incurred in connection with the arbitration. It is further agreed that any of
the parties hereto may petition the United States District Court for the
Western District of Texas, San Antonio Division, for a judgment to be entered
upon any award entered through such arbitration proceedings.
26.13 Assignment of Contracts. Notwithstanding any other provision
of this Agreement, nothing in this Agreement or any related document shall be
construed as an attempt to assign (a) any Contract which, as a matter of law or
by its terms, is nonassignable without the consent of the other parties thereto
unless such consent has been given, or (b) any Contract or claim as to which
all of the remedies for the enforcement thereof enjoyed by Seller would not, as
a matter of law or by its terms, pass to Purchaser as an incident of the
transfers and assignments to be made under this Agreement. In order, however,
that the full value of every Contract and claim of the character described in
clauses (a) and (b) above and all claims and demands on such Contracts may be
realized for the benefit of Purchaser, Seller, at the request and expense and
under the direction of Purchaser, shall take all such action and do or cause to
be done all such things as will, in the opinion of Purchaser, be necessary or
proper in order that the obligations of Seller under such Contracts may be
performed in such manner that the value of such Contract will be preserved and
will inure to the benefit of Purchaser, and for, and to facilitate, the
collection of the moneys due and payable and to become due and payable
thereunder to Purchaser in and under every such contract and claim. Seller
shall promptly pay over to Purchaser all moneys collected by or paid to it in
respect of every such contract, claim or demand. Nothing in this Section 26.13
shall relieve Seller of its obligations to obtain any consents required for the
transfer of the Assets and all rights thereunder to Purchaser, or shall relieve
Seller from any liability to Purchaser for failure to obtain such consents.
26.14 Further Actions. From time to time, at the request of any
party hereto, the other parties hereto shall execute and deliver such
instruments and take such action as may be reasonably requested to evidence the
transactions contemplated hereby.
26.15 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally, given by
prepaid telex or telegram or by facsimile or other similar instantaneous
electronic transmission device or mailed first class, postage prepaid,
certified United States mail, return receipt requested, as follows:
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(a) If to Purchaser, at:
Rush Equipment Centers of Texas, Inc.
P. O. Xxx 00000
Xxx Xxxxxxx, Xxxxx 00000
Attention: W. Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
With a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
(b) If to Rush, at:
Rush Enterprises, Inc.
P. O. Xxx 00000
Xxx Xxxxxxx, Xxxxx 00000
Attention: W. Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
With a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
(c) If to Seller, at:
C. Xxx Xxxxxxx & Xxxxxxxxx, Inc.
P. O. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Xx., Vice President
Facsimile No.: (000) 000-0000
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With a copy to:
Xxxxxxx & Xxxxxxxxx Services, Inc.
P. O. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Legal Department
Facsimile No.: (000) 000-0000
provided that any party may change its address for notice by giving to the
other party written notice of such change. Any notice given under this Section
26.15 shall be effective when received at the address for notice for the party
to which the notice is given.
26.16 Condemnation. In the event that, prior to the date of
Closing, any portion of the Dealership Property which, in Purchaser's sole
opinion, is not material to the use of the remainder, shall be condemned or
taken by eminent domain by any authority, then in such case, this Agreement
shall not terminate, but shall remain in full force and effect, and Seller
shall assign or pay to Purchaser at Closing Seller's interest in and to any
condemnation award or proceeds from any such proceedings or actions in lieu
thereof. In the event of a taking by condemnation or similar proceedings or
actions of all of the Dealership Property or any portion of the Dealership
Property which, in Purchaser's sole opinion, is material to the use of the
remainder, Purchaser shall have the option to terminate this Agreement upon
written notice to Seller prior to Closing, in which event neither Purchaser nor
Seller shall have any further right or obligation hereunder except as set forth
herein. Should Purchaser elect not to exercise its option to terminate as
provided hereunder, then this Agreement shall remain in full force and effect
and Seller shall assign or pay to Purchaser at Closing Seller's interest in and
to all condemnation awards or proceeds from any such proceedings or actions in
lieu thereof.
26.17 Risk of Loss. Seller shall bear all risk of loss to the
Assets until such time as the Closing has occurred and title to the Assets has
passed to Purchaser.
[Signatures on following page.]
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date first above written.
RUSH:
RUSH ENTERPRISES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
PURCHASER:
RUSH EQUIPMENT CENTERS
OF TEXAS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
SELLER:
C. XXX XXXXXXX & XXXXXXXXX, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
XXXXXXX & XXXXXXXXX REALTY
CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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