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EXHIBIT 2.5
ASSET PURCHASE AGREEMENT
DATED AUGUST 23, 1999
BY AND AMONG
RUSH ENTERPRISES, INC.
RUSH EQUIPMENT CENTERS OF MICHIGAN, INC.
▇▇▇▇▇▇▇ SALES, INC.
AND
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
TRUSTEE OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST
(Sole Shareholder of ▇▇▇▇▇▇▇ Sales, Inc.)
COVERING THE PURCHASE
OF SPECIFIED ASSETS OF
▇▇▇▇▇▇▇ SALES, INC.
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TABLE OF CONTENTS
Page
1. GENERAL DEFINITIONS.................................................................. 1
1.1 "Assets".................................................................... 1
1.2 "Affiliate"................................................................. 1
1.3 "Balance Sheet Date"........................................................ 1
1.4 "Best Knowledge"............................................................ 1
1.5 "Business".................................................................. 2
1.6 "Business Day".............................................................. 2
1.7 "Closing"................................................................... 2
1.8 "Closing Date".............................................................. 2
1.9 "Code"...................................................................... 2
1.10 "Contracts"................................................................. 2
1.11 "Control"................................................................... 2
1.12 "Damages"................................................................... 2
1.13 "Deposits".................................................................. 2
1.14 "Encumbrance"............................................................... 2
1.15 "Environmental Conditions".................................................. 2
1.16 "Environmental Laws"........................................................ 2
1.17 "Environmental Liabilities"................................................. 3
1.18 "Environmental Permits"..................................................... 3
1.19 "ERISA"..................................................................... 3
1.20 "Escrow Agent".............................................................. 3
1.21 "Exchange Act".............................................................. 3
1.22 "Excluded Assets"........................................................... 3
1.23 "Governmental Authority".................................................... 3
1.24 "Governmental Requirement".................................................. 4
1.25 "Hazardous Materials"....................................................... 4
1.26 "Indemnification Event"..................................................... 4
1.27 "Indemnitee"................................................................ 4
1.28 "Indemnitor"................................................................ 4
1.29 "▇▇▇▇ Deere"................................................................ 4
1.30 "Losses".................................................................... 4
1.31 "Mt. ▇▇▇▇▇▇ Improvements"................................................... 4
1.32 "Mt. ▇▇▇▇▇▇ Land"........................................................... 4
1.33 "Mt. ▇▇▇▇▇▇ Lease".......................................................... 4
1.34 "Mt. ▇▇▇▇▇▇ Property"....................................................... 4
1.35 "New Contracts"............................................................. 5
1.36 "New Pontiac Location"...................................................... 5
1.37 "Old Pontiac Location"...................................................... 5
1.38 "Overstocked Item".......................................................... 5
1.39 "PBGC"...................................................................... 5
1.40 "Permitted Exceptions"...................................................... 5
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1.41 "Person".................................................................... 5
1.42 "Pontiac Relocation"........................................................ 5
1.43 "Purchase Price"............................................................ 5
1.44 "Reference Balance Sheet"................................................... 5
1.45 "Retained Liabilities"...................................................... 6
1.46 "Schedule".................................................................. 6
1.47 "SEC" or "Commission"....................................................... 6
1.48 "Section"................................................................... 6
1.49 "Securities Act"............................................................ 6
1.50 "Slow-Moving Item".......................................................... 6
1.51 "Subsidiary"................................................................ 6
1.52 "Tax Returns"............................................................... 6
1.53 "Taxes"..................................................................... 6
1.54 "Territory"................................................................. 6
1.55 "Third-Party Claims"........................................................ 6
1.56 "Title Company"............................................................. 6
1.57 "UCC Report"................................................................ 6
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE........................................ 7
2.1 Assets to be Purchased...................................................... 7
2.2 Purchase and Sale........................................................... 8
2.3 Delivery of Assets and Transfer Documents................................... 8
2.4 UCC Reports................................................................. 8
2.5 Closing; Closing Date....................................................... 9
2.6 Excluded Assets............................................................. 9
2.7 Escrowed Funds.............................................................. 10
3. PURCHASE PRICE....................................................................... 10
3.1 Price and Payment........................................................... 10
3.2 Assumed Obligations......................................................... 11
4. REPRESENTATIONS AND WARRANTIES OF SELLER
AND THE SHAREHOLDER.................................................................. 12
4.1 Incorporation; Capitalization............................................... 13
4.2 Employee Benefits........................................................... 13
4.3 Financial Statements........................................................ 14
4.4 Events Since the Balance Sheet Date......................................... 14
4.5 Customer List............................................................... 15
4.6 Taxes....................................................................... 15
4.7 Employee Matters............................................................ 16
4.8 Contracts and Agreements.................................................... 17
4.9 Effect of Agreement......................................................... 18
4.10 Properties, Assets and Leasehold Estates.................................... 19
4.11 Intangible Property......................................................... 19
4.12 Suits, Actions and Claims................................................... 20
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4.13 Licenses and Permits; Compliance With Governmental Requirements............. 20
4.14 Authorization............................................................... 20
4.15 Records..................................................................... 20
4.16 Environmental Protection Laws............................................... 21
4.17 Brokers and Finders......................................................... 22
4.18 Deposits.................................................................... 22
4.19 Work Orders................................................................. 22
4.20 Telephone Numbers........................................................... 22
4.21 No Royalties................................................................ 22
4.22 Insurance................................................................... 23
4.23 Great Lakes Sales and Rental, Inc........................................... 23
4.24 Warranties and Product Liability............................................ 23
4.25 No Untrue Statements........................................................ 23
5. REPRESENTATIONS AND WARRANTIES OF THE RUSH PARTIES................................... 24
5.1 Incorporation............................................................... 24
5.2 Authorization............................................................... 24
5.3 Brokers and Finders......................................................... 24
6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF SELLER AND,
WHERE APPLICABLE, OF SHAREHOLDER..................................................... 24
7. CONTRACTS PRIOR TO THE CLOSING DATE.................................................. 24
7.1 Approval of Contracts....................................................... 24
7.2 Contracts Included in Assets................................................ 24
8. COVENANTS OF SELLER AND SHAREHOLDER PRIOR TO CLOSING DATE............................ 25
8.1 Access to Information....................................................... 25
8.2 General Affirmative Covenants............................................... 25
8.3 General Negative Covenants.................................................. 26
8.4 Disclosure of Misrepresentations and Breaches............................... 27
8.5 Government Filings.......................................................... 27
8.6 Access to and Inspection of Premises, Facilities and Equipment.............. 27
9. COVENANTS REGARDING THE CLOSING...................................................... 27
9.1 Covenants of Seller......................................................... 27
9.2 Covenants of Purchaser...................................................... 28
9.3 Inventory Audit............................................................. 28
10. CONDITIONS TO OBLIGATIONS OF PURCHASER............................................... 28
10.1 Accuracy of Representations and Warranties and Fulfillment of Covenants..... 28
10.2 Financial Information....................................................... 28
10.3 No Governmental Actions..................................................... 29
10.4 No Adverse Change........................................................... 29
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10.5 Update of Contracts......................................................... 29
10.6 Approval of Counsel......................................................... 29
10.7 No Material Adverse Information............................................. 29
10.8 Notices and Consents........................................................ 29
10.9 Mt. ▇▇▇▇▇▇ Lease............................................................ 30
10.10 Corporate Approval.......................................................... 30
10.11 Insurance Coverage.......................................................... 30
10.12 Transfer and Assignment Documents........................................... 30
10.13 Liens Released.............................................................. 30
10.14 UCC Matters................................................................. 30
10.15 Telephone Transfer.......................................................... 30
10.16 Ordinary Course of Business................................................. 30
10.17 Other Documents............................................................. 31
10.18 Dealer License.............................................................. 31
10.19 ▇▇▇▇ Deere Approval......................................................... 31
10.20 Inventory Audit............................................................. 31
10.21 Other Records............................................................... 31
10.22 Government Approvals........................................................ 31
10.23 Receivables Guarantee....................................................... 31
10.24 Leasehold Policy............................................................ 31
10.25 Environmental Reports or Assessments........................................ 31
10.26 MESA Form 1027.............................................................. 32
10.27 Fair Market Value........................................................... 32
10.28 Pontiac Relocation.......................................................... 32
10.29 Seller's Obligation to Hire Additional Employees............................ 32
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER........................................ 32
11.1 Accuracy of Representations and Warranties and Fulfillment of Covenants..... 32
11.2 Delivery of Purchase Price.................................................. 32
11.3 Approval of Counsel......................................................... 32
11.4 Governmental Approvals...................................................... 32
11.5 Mt. ▇▇▇▇▇▇ Lease............................................................ 32
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS........................................... 32
12.1 Change of Name.............................................................. 32
12.2 Exchange Act Filing; Cooperation............................................ 33
13. INDEMNITY BY SELLER.................................................................. 33
13.1 Indemnification by Seller................................................... 33
13.2 Environmental Indemnification............................................... 33
13.3 Tax Indemnification......................................................... 34
13.4 Products Liability and Warranty Indemnification............................. 34
13.5 Indemnification by the Rush Parties......................................... 34
13.6 Procedure................................................................... 34
13.7 Payment..................................................................... 36
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13.8 Failure to Pay Indemnification.............................................. 36
13.9 Cooperation................................................................. 36
13.10 Time Limitations............................................................ 36
13.11 Special Provisions Concerning New Pontiac Location.......................... 36
13.12 Limitation on Indemnification............................................... 36
14. NON-COMPETITION AGREEMENTS........................................................... 36
14.1 Non-Competition............................................................. 36
14.2 Judicial Reformation........................................................ 37
14.3 Customer Lists; Non-Solicitation............................................ 37
14.4 Covenants Independent....................................................... 37
14.5 Remedies.................................................................... 38
15. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION........................................... 38
15.1 Covenant of Seller and Shareholder.......................................... 38
15.2 Covenant of Rush Parties.................................................... 38
16. DAMAGE TO ASSETS..................................................................... 39
17. TERMINATION.......................................................................... 39
17.1 Mutual Consent.............................................................. 39
17.2 Failure of Conditions....................................................... 39
17.3 Failure to Close............................................................ 39
17.4 Liquidated Damages.......................................................... 40
18. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER..................................... 40
18.1 New Employees of Purchaser.................................................. 40
18.2 No Hiring Commitment........................................................ 40
18.3 Vacation, Sick Pay, Health Insurance, etc................................... 40
18.4 Severance Benefits; Employment Termination.................................. 41
18.5 Employee Benefit Plans...................................................... 41
18.6 Reporting of Data........................................................... 42
18.7 Employment Related Claims................................................... 42
19. OFFSET PROVISIONS.................................................................... 42
20. ADJUSTMENT OF PURCHASE PRICE......................................................... 42
21. SURVEY............................................................................... 42
21.1 Survey...................................................................... 42
21.2 Remedies for Failure to Deliver Survey...................................... 43
22. TITLE COMMITMENT AND CONDITION OF TITLE.............................................. 43
22.1 Title Commitment............................................................ 43
22.2 Disclosure of Exceptions by Title Commitment and UCC Report................. 44
23. ENVIRONMENTAL STUDIES AND REMEDIATION ACTIVITIES..................................... 44
23.1 Environmental Studies....................................................... 44
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23.2 Remediation................................................................. 45
24. GENERAL PROVISIONS................................................................... 45
24.1 Governing Law; Interpretation; Section Headings............................. 45
24.2 Severability................................................................ 46
24.3 Entire Agreement............................................................ 46
24.4 Binding Effect.............................................................. 46
24.5 Assignment.................................................................. 46
24.6 Amendment; Waiver........................................................... 46
24.7 Gender; Numbers............................................................. 47
24.8 Counterparts................................................................ 47
24.9 Telecopy Execution and Delivery............................................. 47
24.10 Press Releases.............................................................. 47
24.11 Expenses.................................................................... 47
24.12 Arbitration................................................................. 47
24.13 Assignment of Contracts..................................................... 48
24.14 Further Actions............................................................. 49
24.15 Notices..................................................................... 49
24.16 Risk of Loss................................................................ 50
Exhibits
Exhibit A Escrow Agreement
Exhibit B Mt. ▇▇▇▇▇▇ Lease Agreement
Exhibit C Mt. ▇▇▇▇▇▇ Property
Exhibit D General Warranty ▇▇▇▇ of Sale and Assignment of Contract Rights
Schedules
Schedule 2.1 Purchased Assets Items
Schedule 2.6 Excluded Items
Schedule 2.6(a) Exclusions: Cash, Securities & Short Term Investments
Schedule 2.6(b) Insurance Policies & Other Contracts
Schedule 2.6(d) Expressly Designated Assets
Schedule 2.6(e) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Items
Schedule 4.2(a) Benefit Plans & Compensation Agreements
Schedule 4.23 Great Lakes Sales & Rental, Inc. Information
Schedule 4.3 Financial Statements of Seller
Schedule 4.5 Customer List of the Business
Schedule 4.6 Schedule of Unpaid Taxes
Schedule 4.7 Names of Employees & Compensation
Schedule 4.8 Contracts & Agreements of Seller
Schedule 4.11 List of Intangible Property
Schedule 4.12 List of Pending Claims
Schedule 4.13 List of Licenses & Permits; Exceptions
Schedule 4.16 Exceptions to Environmental Laws
Schedule 4.22 List of Insurance Policies that Terminate
Schedule 4.23 List of Warranties Made by Seller
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Schedule 4.24 Warranties and Product Liability
Schedule 18.7 Employment Related Claims
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 23rd day of August, 1999 by and among (i) ▇▇▇▇▇▇▇ Sales, Inc., a Michigan
corporation ("Seller"), (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trust (a revocable inter-vivos grantor trust and the owner of 100% of the
capital stock of Seller (referred to herein as the "Shareholder")), and (iii)
Rush Equipment Centers of Michigan, Inc., a Delaware corporation ("Purchaser").
Rush Enterprises, Inc., a Texas corporation ("Rush" and, together with
Purchaser, the "Rush Parties"), joins this Agreement for the limited purposes
expressly set forth in this Agreement. Shareholder joins this Agreement for the
limited purposes expressly set forth in this Agreement.
WITNESSETH:
WHEREAS, Seller is the owner of all right, title and interest in and to the
Assets (as herein defined) described herein, with such assets being the assets
currently used in the conduct of the operation of two ▇▇▇▇ Deere dealership
businesses operated by Seller;
WHEREAS, Purchaser is a wholly-owned subsidiary of Rush;
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 "Assets" shall have the meaning assigned to it in Section 2.1.
1.2 "Affiliate" of any Person shall mean any Person Controlling, Controlled
by or under common Control with such Person.
1.3 "Balance Sheet Date" shall have the meaning assigned to it in Section
4.3(a).
1.4 "Best Knowledge" shall mean both what a Person knew as well as what the
Person should have known had the person exercised reasonable diligence. 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
key employees of the Person. When used with respect to Seller, the
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term "Best Knowledge" shall include only those matters known to ▇▇▇▇▇▇ ▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
1.5 "Business" shall have the meaning assigned to it in Section 2.1.
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 2.5.
1.8 "Closing Date" shall have the meaning assigned to it in Section 2.5.
1.9 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.10 "Contracts" shall have the meaning assigned to it in Section 4.8.
1.11 "Control" and all derivations thereof shall mean the ability to either
(i) vote (or direct the vote of) 50% or more of the voting interests in any
Person or (ii) direct the affairs of another, whether through voting power,
contract or otherwise.
1.12 "Damages" shall mean any and all liabilities, losses, damages,
demands, assessments, punitive damages, loss of profits, refund obligations
(including, without limitation, interest and penalties thereon) 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).
1.13 "Deposits" shall have the meaning assigned to it in Section 4.18.
1.14 "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.
1.15 "Environmental Conditions" means any and all acts, omissions, events,
circumstances, and conditions on or in connection with the Mt. ▇▇▇▇▇▇ Land, the
old Pontiac Location, the New Pontiac Location, 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.
1.16 "Environmental Laws" shall mean all applicable federal, state, local
or municipal laws, rules, regulations, statutes, ordinances or orders of any
Governmental Authority, including all laws, rules, regulations, statutes,
ordinances or orders of the State of Michigan and any political subdivision or
instrumentality thereof (irrespective of the provisions of Section 24.1 hereof),
relating to (a) the
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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.
1.17 "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.
1.18 "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.
1.19 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.20 "Escrow Agent" shall mean The Frost National Bank, N.A. whose address
is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
1.21 "Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.
1.22 "Excluded Assets" shall have the meaning assigned to it in Section
2.6.
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,
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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 "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.
1.26 "Indemnification Event" shall have the meaning assigned to it in
Section 13.6.
1.27 "Indemnitee" shall mean (i) 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 (ii) 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.
1.28 "Indemnitor" shall mean the Person or Persons having the obligation to
indemnify or make payment pursuant to the provisions of Article 13 hereof.
1.29 "▇▇▇▇ Deere" shall mean ▇▇▇▇ Deere Construction Equipment Company and
its Affiliates.
1.30 "Losses" shall mean General Losses, Environmental Losses, Tax Losses
and Product Losses (each as defined in Article 13 hereof), as the case may be.
1.31 "Mt. ▇▇▇▇▇▇ Improvements" shall have the meaning assigned to it in
Section 1.35.
1.32 "Mt. ▇▇▇▇▇▇ Land" shall have the meaning assigned to it in Section
1.35.
1.33 "Mt. ▇▇▇▇▇▇ Lease" shall mean the Lease Agreement attached hereto as
Exhibit A with such modifications as may be agreed to by Seller and Purchaser.
1.34 "Mt. ▇▇▇▇▇▇ Property" shall mean all those certain tracts, pieces or
parcels of land where Seller's Mt. ▇▇▇▇▇▇, Michigan dealership is located, as
more particularly described in Exhibit A attached hereto and made a part hereof
for all purposes (herein referred to as the "Mt. ▇▇▇▇▇▇ 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
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operation of the Mt. ▇▇▇▇▇▇ Land (herein collectively referred to as the "Mt.
▇▇▇▇▇▇ Improvements"), and all rights and appurtenances pertaining thereto,
including, but not limited to: (a) all right, title and interest, if any, of the
owner(s) of the Mt. ▇▇▇▇▇▇ Land, in and to any land in the bed of any street,
road or avenue open or proposed in front of or adjoining the Mt. ▇▇▇▇▇▇ Land;
(b) all right, title and interest, if any, of the owner(s) of the Mt. ▇▇▇▇▇▇
Land, 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 Mt. ▇▇▇▇▇▇
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 Mt. ▇▇▇▇▇▇ Land, existing or abandoned; (d) all sewage
treatment capacity and water capacity and other utility capacity to serve the
Mt. ▇▇▇▇▇▇ Land and Mt. ▇▇▇▇▇▇ Improvements; (e) all oil, gas, and other
minerals in, on, or under, and that may be produced from the Mt. ▇▇▇▇▇▇ Land;
(f) all water in, under or that may be produced from the Mt. ▇▇▇▇▇▇ Land, and
all ▇▇▇▇▇, water rights, permits and historical water usage pertaining to or
associated with the Mt. ▇▇▇▇▇▇ Land; (g) all right, title and interest, if any,
of the owner(s) of the Mt. ▇▇▇▇▇▇ Land, in and to any land adjacent or
contiguous to, or a part of the Mt. ▇▇▇▇▇▇ Land, 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 the owner(s) of the Mt. ▇▇▇▇▇▇ Land, or whether or not
they are located on any survey; and (h) any reversionary rights attributable to
the Mt. ▇▇▇▇▇▇ Land.
1.35 "New Contracts" shall have the meaning assigned to it in Section 10.6.
1.36 "New Pontiac Location" shall have the meaning assigned to it in
Section 8.2(n).
1.37 "Old Pontiac Location" shall have the meaning to it in Section 3.2(j).
1.38 "Overstocked Item" shall mean any item described in Sections 2.1(b),
(c) or (k) for which there is more than an 18-month supply (based on historical
sales of such item over the last 12 months).
1.39 "PBGC" shall mean the Pension Benefit Guaranty Corporation.
1.40 "Permitted Exceptions" shall have the meaning assigned to it in
Section 22.2.
1.41 "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.
1.42 "Pontiac Relocation" shall have the meaning assigned to it in Section
8.2(n).
1.43 "Purchase Price" shall have the meaning assigned it in Article 3.
1.44 "Reference Balance Sheet" shall have the meaning assigned it in
Section 4.3(a).
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1.45 "Retained Liabilities" shall have the meaning assigned it in Section
3.2.
1.46 "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.
1.47 "SEC" or "Commission" shall mean the United States Securities and
Exchange Commission.
1.48 "Section" shall mean the Sections of this Agreement, unless otherwise
stated.
1.49 "Securities Act" shall mean the Securities Act of 1933, as amended.
1.50 "Slow-Moving Item" shall mean any item described in Sections 2.1(b),
(c) or (k) that has not sold during the previous 12-month period.
1.51 "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.
1.52 "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).
1.53 "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.
1.54 "Territory" shall mean the following counties each of which is
situated in the State of Michigan: (a) Genesee, (b) Saginaw, (c) Tuscola, (d)
Sanilac, (e) Huron, (f) St. Clair, (g) Macomb, (h) Lapeer, (i) Oakland, (j)
▇▇▇▇▇, (k) Washtenaw, and (l) half of ▇▇▇▇▇▇▇▇▇▇.
1.55 "Third-Party Claims" shall have the meaning such term is given in
Section 13.6(b) hereof.
1.56 "Title Company" shall mean ▇▇▇▇▇ Title Company, Agent for First
American Title Insurance Company, whose office is located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.57 "UCC Report" shall have the meaning such term is given in Section 2.4
hereof.
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2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
2.1 Assets to be Purchased. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall sell, convey, assign, transfer and
deliver to Purchaser, and Purchaser shall purchase and acquire from company, all
of Seller's right, title and interest in and to the Assets, in each case, free
and clear of any charge, claim, community or marital property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal or restriction of any kind, including any restriction on use,
voting (in the case of any security), transfer, receipt of income, or exercise
of any other attribute of ownership. The "Assets" shall mean all of Seller's
property and assets, personal or mixed, tangible and intangible, of every kind
and description, wherever located, belonging to Seller at the close of business
on the Closing Date and which relate to the business currently conducted by
Seller as a going concern, including its operation of a ▇▇▇▇ Deere dealership as
well as any and all goodwill associated therewith (the "Business"), other than
the Excluded Assets (as defined in Section 2.6), including the following:
(a) all new construction machinery equipment, irrespective of
manufacturer, except for new construction machinery equipment manufactured
by ▇▇▇▇ Deere, which will be returned by the Seller to ▇▇▇▇ Deere (the
"Returned Equipment"),
(b) all new, current and returnable parts and accessories inventory,
except for ▇▇▇▇ Deere new, current and returnable parts and accessories,
which will be returned by the Seller to ▇▇▇▇ 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 and equipment
in Seller's parts and service departments,
(e) all of Seller's furniture, fixtures and office equipment
(including related software),
(f) all shop equipment and special tools, and all parts and
accessories equipment other than new attachment inventory,
(g) all company vehicles (the "Company Vehicles"),
(h) all signs, and all promotional, advertising and training materials
used in the Business, except for any of the foregoing items which are
required to be returned to ▇▇▇ Cat or ▇▇▇▇▇▇ based upon the termination of
any dealer agreement with Seller upon the consummation of this transaction
with Purchaser,
(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,
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(j) all intangible assets of Seller required to do business as a ▇▇▇▇
Deere dealer, including any other permits or licenses issued by any
department or agency for Seller's dealership, other than any and all
existing dealer sales and service center agreements with ▇▇▇▇ Deere, which
agreements will be terminated by Seller and ▇▇▇▇ Deere, together with all
intangible assets of Seller required to do business as a dealer or
distributor for other manufacturers (but only to the extent permission is
given to the assignment by Seller to Purchaser of each dealer or
distributor agreement by such other manufacturers),
(k) all new obsolete parts and accessories and all used parts,
(l) all used, rental, leased and "rent to own" construction machinery
equipment, and all used attachment inventory,
(m) all customer deposits and agreements to sell construction
machinery equipment ordered but not delivered to the customer at the time
of Closing;
(n) all of Seller's interest in the Mt. ▇▇▇▇▇▇ Improvements;
(o) all new attachment inventory; and
(p) the items described on Schedule 2.1.
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 liens, encumbrances or
obligations, if any, expressly 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 and
the Shareholder 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 liens, encumbrances or obligations, if any, expressly assumed by
Purchaser hereunder), and shall deliver to Purchaser (a) a duly executed general
warranty ▇▇▇▇ of sale covering the Assets, in the form of and containing
substantially the same terms and provisions as the General Warranty ▇▇▇▇ of Sale
and Assignment of Contract Rights included in Exhibit D, (b) duly executed title
and transfer documents covering any assets for which there exists a certificate
of title, subject to payment of sales tax by Purchaser due upon registering the
transfer of title of the Company Vehicles with the State of Michigan, (c)
delivery of the Mt. ▇▇▇▇▇▇ Lease, duly executed by the landlord thereunder, 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 liens,
encumbrances or obligations, if any, expressly assumed by Purchaser hereunder).
2.4 UCC Reports. Within seven 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 Genesee
County and Oakland County, Michigan and of the Office of
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the Secretary of State, State of Michigan, or the proper offices in the State of
Michigan 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.
2.5 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 31, 1999, at 10:00 a.m., local time,
at such location as may be agreed upon by the Parties, or at such other time,
date and place as Purchaser and Seller shall in writing designate. Each of the
Parties covenants and agrees to use its best efforts to have the Closing take
place on or before August 31, 1999. The date of the Closing is referred to
herein as the "Closing Date".
2.6 Excluded Assets. Notwithstanding anything to the contrary contained in
Section 2.1 or elsewhere in this Agreement, the following items (collectively,
the "Excluded Assets") are not part of the sale and purchase contemplated
hereunder, are excluded from the Assets being conveyed hereunder, and shall
remain the property of Seller:
(a) all cash and cash equivalents and all securities and short term
investments listed on Schedule 2.6(a);
(b) all Seller's insurance policies and all other contracts listed in
Schedule 2.6(b);
(c) all rights and funds in connection with retirement, employee
benefit and similar plans;
(d) any assets expressly designated in Schedule 2.6(d) as Excluded
Assets;
(e) the Pontiac Lease and all of Seller's right, title and interest in
and to the real property leased and demised thereby;
(f) items of personal property and possessions of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
inclusive of policy of life insurance and cash surrender value of such life
insurance upon the life of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, that are not and have not been a
part of the operation of the Seller as set out in Schedule 2.6(e) attached
hereto and made a part hereof;
(g) any and all other assets reasonably designated by Purchaser, in
its sole discretion, as being Excluded Assets. Purchaser shall advise
Seller in writing at least five days prior to Closing of those other items
which Purchaser does not intend to purchase. The exclusion of any such
items shall not reduce the Purchase Price;
(h) the Mt. ▇▇▇▇▇▇ Property (which is to be leased to the Purchaser by
the existing owner pursuant to the Mt. ▇▇▇▇▇▇ Lease); and
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(i) Any items required by ▇▇▇ Cat or ▇▇▇▇▇▇ to be returned upon
termination of dealer agreements with Seller.
2.7 Escrowed Funds. Contemporaneously with the execution of this Agreement,
Purchaser shall deposit $150,000.00 (the "Escrowed Funds") in escrow with the
Escrow Agent pursuant to the Escrow Agreement attached hereto as Exhibit A. At
Closing, the Escrowed Funds shall be distributed to Purchaser; provided,
however, in the event the Closing does not occur by October 31, 1999, for any
reason other than (i) a breach of this Agreement by either Seller or Shareholder
or (ii) a breach of any covenant, agreement, undertaking, representation or
warranty of Seller or Shareholder pursuant to this Agreement, then the Escrowed
Funds shall be distributed to the Seller as liquidated damages in accordance
with the provisions of Section 17.4 hereof.
3. PURCHASE PRICE.
3.1 Price and Payment. Subject to adjustment as provided in Article 20 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) $235,942 such amount representing the agreed upon value of the
differential between adjusted book value and estimated fair market value
and estimated fair market value of specified assets; plus
(b) an amount equal to Seller's actual cost 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, any dealer
marketing funds attributed to such piece of equipment and other reductions
paid or credited to Seller on such equipment; plus
(c) with respect to the items described in Sections 2.1(b) and (c), an
amount equal to (i) 100% of the replacement cost of the new and not
obsolete, not Overstocked and not Slow-Moving Items returnable to the
manufacturer; (ii) 85% of the replacement cost for new Overstocked or
Slow-Moving Items returnable to the manufacturer and that are not obsolete;
(iii) 50% of the replacement cost for new Overstocked or Slow-Moving Items
not returnable to the manufacturer and that are not obsolete; 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, 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 actual freight costs and predelivery costs
of Seller, less any discounts, credits, rebates or any and all other
deductions received by Seller, paid by Seller on any Returned Equipment
that is purchased from ▇▇▇▇ Deere by Purchaser; plus
(e) 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
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(f) an amount equal to the net 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
(g) zero for the items described in Section 2.1(h), (i) and (j) ,plus
(h) an amount equal to Seller's actual cost for items described in
Section 2.1(o) that have been held by Seller for less than two years, and
an amount to be agreed upon for any such items held by Seller for two years
or longer (provided that if Purchaser and Seller cannot agree on an amount
to be paid for any Asset described in this Section, such Asset shall be an
Excluded Asset), plus
(i) with respect to the items described in Section 2.1(k), an amount
to be agreed upon by Seller and Purchaser; provided, however, in the event
the parties cannot agree on an amount for such items, then such items shall
be excluded from the Assets, plus
(j) an amount equal to the net 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 and used attachment inventory, reduced by the amount of any
dealer marketing funds attributed to each piece of equipment or inventory,
described in Section 2.1(l).
The Purchase Price shall be payable by payment of all amounts specified in
Sections 3.1(a) through (i) above by wire transfer as directed by Seller.
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 or on the updated list of contracts required by
Article 13 and (b) accepted in writing by Purchaser pursuant to the provisions
of Section 4.8 or Articles 10 or 13; 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
expressly assumed by Purchaser pursuant to this Agreement, Seller shall take
full and complete responsibility for all of its 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;
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(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, except for any
proration and assumption thereof by Purchaser pursuant to Article 20
hereof;
(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 Michigan;
(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 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 non-compliance 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 any Seller as
representing any of its employees;
(i) accounts payable of Seller; and
(j) without limiting the generality of the foregoing provision of this
Section 3.2, all Environmental Liabilities, known or unknown, whether now
existing or hereafter arising, in, on, at, under, arising in connection
with, or related to the real property located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at which Seller currently operates its Pontiac
dealership (the "Old Pontiac Location").
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SHAREHOLDER. Seller and
Shareholder hereby jointly and severally represent and warrant to Purchaser as
follows:
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4.1 Incorporation; Capitalization.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Michigan, 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 in any
such jurisdiction. Seller has not, to Seller's Best Knowledge, taken any
action, or failed to take any action which such action or such failure will
preclude or prevent Seller's Business from being conducted in substantially
the same manner in which Seller has heretofore conducted the same.
(b) The Shareholder owns all of the outstanding capital stock of
Seller, and there are no options, rights or other grants currently
outstanding for the acquisition or purchase of any shares of the capital
stock of Seller.
4.2 Employee Benefits. As used in this Section, Seller shall include "Great
Lakes Sales and Rental, Inc." and/or any member of a controlled group or
affiliated service group (as defined in 414(b), (c), (m), and (o) of the Code)
of which the Seller is a member.
(a) List of All Benefit Plans and Compensation Agreements. Schedule
4.2(a) includes a complete and accurate list of all employee welfare
benefit and employee pension benefit plans as defined in Sections 3(1),
3(2), and 3(3) of ERISA and all other employee benefit agreements or
arrangements, including but not limited to deferred compensation plans,
incentive plans, bonus plans or arrangements, stock option plans, stock
purchase plans, golden parachute agreements, severance pay plans, dependent
care plans, cafeteria plans, employee assistance programs, scholarship
programs, employment contracts and other similar plans, agreements and
arrangements that are currently in effect or were maintained within three
years of the Closing Date, or have been approved before this date but are
not yet effective, for the benefit of directors, officers, employees, or
former employees (or beneficiaries of them) of the Seller.
(b) Representations. 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 set out in Schedule 4.2(a). In addition, the Seller makes the
following representations (i) as to employee pension benefit plans of
Seller: (a) no Person 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; (b) Seller has not ceased operations at
a facility so as to become subject to the provisions of Section 4062(e) of
ERISA; and (c) Seller has not made a complete or partial withdrawal from a
multiemployer
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plan (as defined in Section 3(37) of ERISA) so as to incur withdrawal
liability as defined in Section 4201 of ERISA, and (ii) all group health
plans maintained by Seller have been operated in compliance with Section
4980B(f) of the Code.
(c) Non-assumption of Seller's Plans. 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.
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 hereto:
(a) Unaudited Balance Sheet (the "Reference Balance Sheet") as of July
31, 1999 (the "Balance Sheet Date") and Unaudited Income Statement for the
seven-month period ended on the Balance Sheet Date;
(b) Reviewed Balance Sheets, Income Statements and Statements of
Changes in Financial Position for the two (2) most recent fiscal years; and
(c) Unaudited Balance Sheet, as of June 30, 1999 and Unaudited Income
Statement for the six-month period then ended.
All financial statements supplied to Purchaser by Seller, whether or not
included in Schedule 4.3 hereto, are and will be true and accurate in all
respects, have been and will be prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, and will present fairly the financial condition of the Business as of
the dates and for the periods indicated thereon. The Reference Balance Sheet
reflects, as of the Balance Sheet Date, all liabilities, debts and obligations
of any nature of the Business, whether accrued, absolute, contingent or
otherwise, and whether due, or to become due, including, but not limited to,
liabilities, debts or obligations on account of Taxes to the extent such items
are required to be reflected on such balance sheet under generally acceptable
accounting principles consistently applied.
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;
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(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;
(c) any breach or default by Seller or, to the Best Knowledge of
Seller and Shareholder, 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 and Shareholder, 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
30, 1998. Two days prior to the Closing Date, Seller will deliver to Purchaser a
true, correct and complete update of this list as of the three days prior to the
Closing Date, and immediately prior to the Closing, Seller will deliver to
Purchaser a true, correct and complete update of this list as of the Closing
Date, in each case noting all deletions therefrom and additions thereto and
updating all information contained thereon, and conspicuously marking all
changes from the previous list or update, as the case may be.
4.6 Taxes. Except as set forth in Schedule 4.6 hereto:
(a) all Tax Returns of or relating to any Taxes that are required to
be filed on or before the Closing Date, subject to any allowable extension
periods, for, by, on behalf of or with respect to Seller, including, but
not limited to, those relating to the income, business, operations or
property of Seller (whether on a separate, consolidated, affiliated,
combined, unitary or any other basis), have been timely filed with the
appropriate foreign, federal, state and local authorities, and all Taxes
shown to be due and payable on such Tax Returns or related to such Tax
Returns have been paid in full on or before the Closing Date except Taxes
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which have not yet accrued or otherwise become due, all of which are
reflected in the Reference Balance Sheet;
(b) all such Tax Returns and the information and data contained
therein have been properly and accurately compiled and completed in all
material respects, fairly present the information purported to be shown
therein, and reflect, to the Best Knowledge of Seller, all liabilities for
Taxes for the periods covered by such Tax Returns, net of any applicable
reserves;
(c) Seller has not received notice that any of such Tax Returns are
under audit or examination by any foreign, federal, state or local
authority and there are no agreements, waivers or other arrangements
providing for an extension of time with respect to the assessment or
collection of any Tax or deficiency of any nature against Seller or with
respect to any such Tax Return, or any suits or other actions, proceedings,
investigations or claims now pending or, to the Best Knowledge of Seller,
threatened against Seller with respect to any Tax, or any matters under
discussion with any foreign, federal, state or local authority relating to
any Tax, or any claims for any additional Tax asserted by any such
authority;
(d) all Taxes assessed and due and owing from or against Seller on or
before the Closing Date (including, but not limited to, ad valorem Taxes
relating to any property of Seller) have been timely paid in full on or
before the Closing Date;
(e) all withholding Tax, Tax deposit and estimated Tax payment
requirements imposed on Seller for any and all periods ending on or before
the Closing Date, or through and including the Closing Date for periods
that have not ended on or before the Closing Date, have been satisfied in
full on or before the Closing Date or reserves adequate for the payment of
such withholding, deposit and estimated Taxes have been established in the
financial statements of Seller on or before the Closing Date; and
(f) the financial statements reflect and include adequate charges,
accruals, reserves and provisions for the payment in full of any and all
Taxes payable with respect to any and all periods ending on or before the
respective dates thereof.
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. 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. There are
no collective bargaining or other labor union agreements to which Seller is a
party or by which it is bound. At the date hereof, there are no disputes with
employees in general to which Seller is a party. At the date hereof, there are
no strikes, slowdowns or picketing against Seller (or, to the Best Knowledge of
Seller against any material supplier of goods or services to Seller) pending or,
to the Best Knowledge of Seller, threatened. At the date hereof, Seller has not
received notice from any union or employees setting forth demands for
representation, elections or for present or future changes in wages, terms of
employment or working conditions. Other than wage increases in the ordinary
course of business,
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since the Balance Sheet Date Seller has not made any commitment or agreement to
increase the wages or modify the conditions or terms of employment of any of the
employees of Seller.
4.8 Contracts and Agreements. Schedule 4.8 sets forth a true and complete
list of and briefly describes (including termination date) all of the following
contracts, agreements, leases, licenses, plans, arrangements or commitments,
written or oral, 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 sale of
products or services or the purchase of raw materials, supplies or other
products or utilities;
(b) all offers, tenders or the like outstanding and capable of being
converted into an obligation of Seller by the passage of time or by an
acceptance or other act of some other person or entity or both;
(c) all sales, agency or distributorship agreements or franchises or
legally enforceable commitments or obligations with respect thereto;
(d) all collective bargaining agreements, union agreements, employment
agreements, consulting agreements or agreements providing for the services
of an independent contractor;
(e) all profit-sharing, pension, stock option, severance pay,
retirement, bonus, deferred compensation, group life and health insurance
or other employee benefit plans, agreements, arrangements or commitments of
any nature whatsoever, whether or not legally binding, and all agreements
with any present or former officer, director or shareholder of Seller;
(f) all loan or credit agreements, indentures, guarantees (other than
endorsements made for collection), mortgages, pledges, conditional sales or
other title retention agreements, and all equipment financing obligations,
lease and lease-purchase agreements relating to or affecting the Assets or
the Business;
(g) all leases related to the Assets or the Business;
(h) all performance bonds, bid bonds, surety bonds and the like, all
contracts and bids covered by such bonds, and all letters of credit and
guaranties;
(i) all consent decrees and other judgments, decrees or orders,
settlement agreements and agreements relating to competitive activities,
requiring or prohibiting any future action;
(j) all accounts, notes and other receivables, and all security
therefor, and all documents and agreements related thereto;
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(k) all contracts or agreements of any nature with Seller, or any
Affiliate of Seller or Shareholder; and
(l) all contracts, commitments and agreements entered into outside the
ordinary course of the operation of the Business.
All of such contracts, agreements, leases, licenses, plans, arrangements, and
commitments and all other such items included in the Assets but not specifically
described above (collectively, the "Contracts") are valid, binding and in full
force and effect in accordance with their terms and conditions and there is no
known existing default thereunder or breach thereof by Seller, or, to the Best
Knowledge of Seller, by any other party to the 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 the Contracts, and the Contracts will not be breached by or give
any other party a right of termination as a result of the transactions
contemplated by this Agreement. Seller is not obligated to pay any liquidated
damages under any of the contracts, agreements, indentures, 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 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 have been delivered by Seller
to Purchaser, and such copies and/or descriptions are true, complete and
accurate and include all amendments, supplements or modifications thereto. After
reviewing the Contracts, Purchaser may, at its sole option, choose not to assume
one or more of the Contracts, and, within 30 days of receipt by Purchaser of all
information reasonably requested by Purchaser with respect to the Contracts,
Purchaser shall notify Seller of which Contracts, if any, Purchaser does not
intend to assume hereunder. 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. 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, it will be obtained by Seller and delivered to Purchaser at or
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 Articles 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 Seller is a party or to which any of
the Assets are subject; (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; 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). To the Best Knowledge of Seller, the business
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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.
Notwithstanding the foregoing, Seller and Shareholder represent that there
are various dealer/distributor agreements with third parties other than ▇▇▇▇
Deere and, upon notice of sale, any one or more of such third parties may object
to the sale contemplated by this Agreement and further may terminate such
dealer/distributor agreements. Seller shall take all reasonable steps to
encourage the assignment of any such dealer/distributor agreements from Seller
to Purchaser; however, the withholding of consent to any such assignment shall
not be the basis of any claim of default or breach by Seller under this
Agreement.
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 (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 Mt. ▇▇▇▇▇▇
Property, T & I Equipment World, Inc., a Michigan corporation (the "Mt. ▇▇▇▇▇▇
Landlord") on the Closing Date will have 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. To the Best Knowledge of Seller, the
plants, structures, equipment, vehicles and other tangible properties included
in the Assets and comprising the Mt. ▇▇▇▇▇▇ Improvements, and the tangible
property leased by Seller 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 comprising the Mt. ▇▇▇▇▇▇ Improvements, and the
present use of all such items, conform to all known 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.
4.11 Intangible Property. Schedule 4.11 is a list and description of all
material patents, trademarks, service marks, trade names, and copyrights and
applications therefor owned by or registered in the name of Seller or in which
Seller has any right, license or interest. Except for the agreements listed on
Schedule 4.11, Seller is not a party to any license agreements, either as
licensor or licensee, with respect to any patents, trademarks, service marks,
trade names, or copyrights or applications therefor. Seller has good and
indefeasible title to or the right to use such assets and all inventions,
processes, designs, formulae, trade secrets, and know-how necessary for the
conduct of its business, without the payment of any royalty or similar payment.
Seller is not infringing any
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patent, trademark, service ▇▇▇▇, trade name, or copyright of others, and Seller
is not aware of any infringement by others of any such rights owned by Seller.
4.12 Suits, Actions and Claims. Except as set forth in Schedule 4.12, (a)
there are no suits, actions, claims, 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 Seller or any of its properties, assets or business, or to
which Seller is or might become a party, or which question the validity or
legality of the transactions contemplated hereby, (b) 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 Seller or any of its properties,
assets or business. Without limiting the foregoing, to the Best Knowledge of
Seller, there are no known facts or the occurrence of any event forming the
basis of any present or potential claim against Seller.
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 (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 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. Each of Seller and Shareholder 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 Shareholder and the performance by Seller and Shareholder of the
transactions contemplated herein have been duly and validly authorized by all
requisite corporate action of Seller and by Shareholder, and this Agreement has
been duly and validly executed and delivered by Seller and by Shareholder and is
the legal, valid and binding obligation of each of them, enforceable against
Seller and Shareholder in accordance with its terms, except as limited by
applicable bankruptcy, moratorium, insolvency or other similar laws affecting
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
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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 Assets and the Business at
the Mt. ▇▇▇▇▇▇ Land in substantial 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 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 or, to the Best Knowledge of Seller, investigations,
inquiries or proceedings by or before any court or any other Governmental
Authority directed against the Mt. ▇▇▇▇▇▇ Land, the Assets or the 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 Mt. ▇▇▇▇▇▇ Land, 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, all known 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 previous operation or use of the ▇▇. ▇▇▇▇▇▇
Land and the 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) Other than as set forth on Schedule 4.16, there are no underground
storage tanks on or under the Mt. ▇▇▇▇▇▇ Land. To the Best Knowledge of
Seller, there were underground storage tanks, other than those set forth on
Schedule 4.16, on or under the Mt. ▇▇▇▇▇▇ Land, but same have been removed
in accordance with applicable Environmental Laws.
(f) To the Best Knowledge of Seller, no portion of the Mt. ▇▇▇▇▇▇ Land
is part of a Superfund site under CERCLA or any similar ranking or listing
under any similar state law.
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(g) To the Best Knowledge of Seller, all Hazardous Materials generated
in connection with the operation of the Business at the Mt. ▇▇▇▇▇▇ Land
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 Mt.
▇▇▇▇▇▇ Land by Seller or its agents, servants, employees or contractors.
(h) To the Best Knowledge of Seller, no Person has disposed or
released any Hazardous Materials on or under the Mt. ▇▇▇▇▇▇ Land and Seller
has not disposed or released Hazardous Materials on or under the Mt. ▇▇▇▇▇▇
Land, the Assets or the Business except in compliance with all
Environmental Laws, and there has not been, in respect to the Assets, 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 Michigan 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 Mt. ▇▇▇▇▇▇ Land, the Business or the 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, except as specifically described in
any environmental report commissioned by Purchaser.
4.17 Brokers and Finders. No broker or finder has acted for Seller or
Shareholder 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 or
Shareholder.
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 ("Deposits")
which are not reflected as liabilities on the Reference Balance Sheet. If Seller
holds any Deposits as of the Closing Date, Purchaser will be given credit
against the Purchase Price for the amount of any such Deposits pursuant to
Article 20 hereof.
4.19 Work Orders. There are no outstanding work orders or contracts
relating to any portion of the Assets or the Mt. ▇▇▇▇▇▇ Land 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.
4.20 Telephone Numbers. All telephone numbers used by Seller in connection
with the Business are included in the Assets and are believed to be fully
transferable 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.
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4.22 Insurance. Schedule 4.22 hereto sets forth all existing insurance
policies held by Seller relating to the Business, the Assets, the Mt. ▇▇▇▇▇▇
Improvements, or the 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 as such on Schedule 4.22, none of
such policies will terminate as a result of the transactions contemplated by
this Agreement.
4.23 Great Lakes Sales and Rental, Inc. The personal property of Great
Lakes Sales and Rental, Inc., a Michigan corporation ("Great Lakes"), consisting
of construction equipment, previously held in the name of Seller, shall have
been re-acquired by Seller in accordance with all applicable laws. From and
after the acquisition of such personal property of Great Lakes, Seller shall
possess such property, as described on Schedule 4.23.
4.24 Warranties and Product Liability.
(a) Except for (i) warranties implied by law and (ii) warranties
disclosed on Schedule 4.24 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 known existing 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 known existing 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.
4.25 No Untrue Statements. The statements, representations and warranties
of Seller and Shareholder 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 known untrue statement
of a material fact or omit to state any material fact necessary to make the
statements, representations and warranties made not misleading. To the Best
Knowledge of Seller, there is no fact or matter that is not disclosed to
Purchaser in this Agreement or the Schedules that materially and adversely
affects or, so far as Seller or Shareholder can now reasonably foresee, could
materially and adversely affect the condition (financial or otherwise) of any of
the Assets or the Business or the ability of Seller or Shareholder to perform
their respective obligations under this Agreement.
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5. REPRESENTATIONS AND WARRANTIES OF THE RUSH PARTIES. The Rush Parties
represent and warrant to Seller and Shareholder 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.
6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS, GUARANTEES,
REPRESENTATIONS AND WARRANTIES OF SELLER AND, WHERE APPLICABLE, OF SHAREHOLDER.
All statements of fact contained in this Agreement or in any written statement
(including financial statements), certificate, schedule or other document
delivered by or on behalf of Seller or Shareholder pursuant to this Agreement or
in connection with the transactions contemplated hereby shall be deemed
representations and warranties of Seller and Shareholder hereunder. All
indemnifications, guarantees, covenants, agreements, representations and
warranties made by Seller, in addition, by and Shareholder, where applicable,
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.
7. CONTRACTS PRIOR TO THE CLOSING DATE.
7.1 Approval of Contracts. Seller shall not enter into or materially amend
any contracts related to the Business or the Assets between the date hereof and
the Closing Date, other than in the ordinary course of business, unless approved
in writing by Purchaser. Except for contracts entered into in the ordinary
course of business, Seller will provide all information requested by Purchaser
relating to each such contract or amendment 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 the provisions of
Section 3.2. Excluded from the foregoing are any Contracts that relate to the
business prior to the Closing and do not impose on Purchaser any duty or
obligation whatsoever.
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8. COVENANTS OF SELLER AND SHAREHOLDER PRIOR TO CLOSING DATE. Seller and
Shareholder hereby covenant and agree 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, and each Shareholder shall
cause Seller to:
(a) conduct the Business only in the ordinary course;
(b) maintain the Assets and the Mt. ▇▇▇▇▇▇ Improvements in good
working order and condition, ordinary wear and tear excepted;
(c) perform all its obligations under agreements relating to or
affecting the Assets, the Mt. ▇▇▇▇▇▇ Land, the Mt. ▇▇▇▇▇▇ Improvements or
the Business;
(d) keep in full force and effect adequate insurance coverage on the
Assets, the Mt. ▇▇▇▇▇▇ Improvements 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;
(f) duly and timely file all reports or returns required to be filed
with any Governmental Authority, and promptly pay all Taxes levied or
assessed upon it or its properties or upon any part thereof;
(g) duly observe and conform to all Governmental Requirements relating
to the Assets, the Mt. ▇▇▇▇▇▇ Land, 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 or the Mt. ▇▇▇▇▇▇ Land
(except for liens and encumbrances, if any, specifically assumed by
Purchaser pursuant to this Agreement or liens and encumbrances, if any, on
the Mt. ▇▇▇▇▇▇ Land that are expressly permitted pursuant to the terms and
provisions of the Mt. ▇▇▇▇▇▇ Lease);
(i) duly and timely take all actions necessary to carry out the
transactions contemplated hereby;
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(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;
(k) deliver to Purchaser on the Closing Date a true and correct
unaudited annual balance sheet, statement of income and statement of
changes in financial position for the six months ended June 30, 1999,
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;
(l) preserve and maintain the goodwill of the Business;
(m) cause the net book value of the used, rental, leased and "rent to
own" construction machinery equipment, and all used attachment inventory of
Seller to be 85% of the fair market value; and
(n) relocate Seller's Pontiac, Michigan dealership to a location
designated by Purchaser (the "New Pontiac Location") and to sublease such
location from Purchaser until the earlier of October 31, 1999 or the
Closing Date under substantially identical terms as the terms of any lease
by Purchaser of such location, so long as Purchaser agrees to reimburse
Seller for all its reasonable out-of-pocket expenses from such relocation
(the "Pontiac Relocation"). Notwithstanding the foregoing, in the event the
transactions contemplated herein are not consummated by October 31, 1999,
then Seller may, at its option, continue to sublease the New Pontiac
Location under the same terms and conditions for any period of time ending
on or before October 31, 2000, after which ▇▇▇▇ ▇▇▇▇▇▇ and Purchaser may
enter into good faith negotiations for the continued leasing by Seller of
the New Pontiac Location.
8.3 General Negative Covenants. Seller shall not take, and each Shareholder
shall not permit Seller to 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 the Mt. ▇▇▇▇▇▇ Land or
selling, leasing, abandoning or otherwise disposing of any of the Assets,
the Mt. ▇▇▇▇▇▇ Land, 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,
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 or Shareholder hereunder are determined
by Seller or Shareholder to have been incorrect when made, or are determined by
Seller or Shareholder to be incorrect as of any date subsequent to the date
hereof, or if any of the covenants of Seller or Shareholder contained in this
Agreement have not been complied with timely, then Seller and Shareholder 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 17 to terminate
this Agreement or refuse to consummate the transactions contemplated hereby or
(b) to enforce any rights or remedies it may have hereunder). Notwithstanding
the foregoing, is Seller provides written Notice to Purchaser that a material
representation or warranty of Seller or Shareholder is incorrect prior to the
Closing, the sole remedy that Purchaser may have is to either terminate this
Purchase Agreement or enter into a mutual agreement with Seller and Shareholder
regarding an adjustment of the Purchase Price.
8.5 Government Filings. Seller and Shareholder 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.
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 Mt. ▇▇▇▇▇▇ Land and all other 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.
9. COVENANTS REGARDING THE CLOSING AND POST-CLOSING.
9.1 Covenants of Seller. (a) Seller and Shareholder hereby covenant and
agree that they shall (i) use commercially reasonable efforts to cause all of
their respective representations and warranties set forth in this Agreement to
be true on and as of the Closing Date, (ii) use commercially reasonable efforts
to cause all of their respective obligations that are to be fulfilled on or
prior to the Closing Date to be so fulfilled, (iii) 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 (iv) deliver to Purchaser at the
Closing the certificates, updated lists, opinion of counsel, 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 17 to terminate this Agreement or refuse to
consummate the transactions contemplated hereby).
(b) To the extent Seller receives any funds or other assets in payment
of receivables, or in connection with any other Assets being sold to Purchaser
pursuant hereto, Seller shall
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immediately deliver such funds and assets to Purchaser and take all steps
necessary to vest title to such funds and assets in Purchaser. Seller hereby
designates Purchaser and its officers as Seller's true and lawful
attorney-in-fact, with full power of substitution, to execute or endorse for the
benefit of Purchaser any checks, notes or other documents included in the Assets
or received by Purchaser in payment of or in substitution or exchange for any of
the Assets. Seller hereby acknowledges and agrees that the power of attorney set
forth in the preceding sentence is coupled with an interest, and further agrees
to execute and deliver to Purchaser from time to time any documents or
instruments reasonably requested by Purchaser to evidence such power of
attorney.
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 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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976 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 17 to terminate this
Agreement or to refuse to consummate the transactions contemplated hereby).
9.3 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 jointly 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 respective representations and warranties of Seller and
Shareholder 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 and Shareholder to be performed on or before the Closing
Date pursuant to the terms hereof shall have been performed. Seller and
Shareholder shall have delivered to Purchaser a certificate dated the Closing
Date and executed by Seller and Shareholder to all such effects.
10.2 Financial Information. Seller and Shareholder shall have provided to
Purchaser at Closing all financial information of Seller in the format required
in connection with the filing of
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financial information of Seller with Rush'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 and
Shareholder shall have delivered to Purchaser a certificate dated the Closing
Date and executed by Seller and Shareholder stating they have no Best Knowledge
of any such items. No Governmental 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 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 and
Shareholder shall have delivered to Purchaser a certificate dated the Closing
Date and executed by Seller and Shareholder 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 reasonable right
to delay the Closing for up to five days if in its sole 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 and the future obligations of Seller thereunder shall be assumed by
Purchaser pursuant to Section 3. 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 and Shareholder shall have delivered to Purchaser a
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certificate dated the Closing Date and executed by Seller and Shareholder 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 Mt. ▇▇▇▇▇▇ Lease. Mt. ▇▇▇▇▇▇ Landlord and Purchaser shall have entered
into the Mt. ▇▇▇▇▇▇ Lease.
10.10 Corporate Approval. Seller and Shareholder 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 approve
and authorize the execution and delivery of this Agreement by the Seller, and
Seller and Shareholder 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 2.4 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 Michigan, in the office of the
County Clerk of Genesee County, Michigan, or in any other appropriate offices
for the filing of such documents in the State of Michigan with reference to the
Assets.
10.15 Telephone Transfer. Seller shall have transferred to Purchaser its
user rights to all telephone numbers 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 and Shareholder shall have delivered to
Purchaser at Closing a certificate to that effect.
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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 Michigan to do business as a
▇▇▇▇ Deere dealer in the present territory of Seller's dealership.
10.19 ▇▇▇▇ Deere Approval. Purchaser shall have received written
confirmation from each of ▇▇▇▇ Deere and ▇▇▇▇ Deere Commercial Worksite
Products, Inc., that the existing dealership agreements will 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 9.3
shall have been completed and the results thereof shall be satisfactory to
Purchaser.
10.21 Other Records. Seller shall have delivered or caused to be delivered
all of the following items in the possession of or under the control of Seller:
original licenses and permits, certificates of occupancy, certificates of
compliance, permits, architectural, mechanical, or electrical plans and
specifications and surveys relating to the Mt. ▇▇▇▇▇▇ Land, the Mt. ▇▇▇▇▇▇
Improvements, and the Assets; all studies with respect to the functional aspects
of the Mt. ▇▇▇▇▇▇ Land, the Mt. ▇▇▇▇▇▇ Improvements 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 Mt.
▇▇▇▇▇▇ Land and the Assets; and copies of all other books and records relating
to the ownership and operation of the Mt. ▇▇▇▇▇▇ Land, the Mt. ▇▇▇▇▇▇
Improvements and the Assets.
10.22 Government Approvals. All necessary government and regulatory
approvals have been obtained.
10.23 Receivables Guarantee. Rush shall have agreed to guarantee any
recourse obligations of Seller required in connection with the sale by Seller of
accounts receivable generated with respect to the Business prior to the Closing
Date in consideration for the agreement of Seller to reimburse Rush for any
amounts paid under such guarantee.
10.24 Leasehold Policy. Seller shall have delivered to Purchaser a
leasehold policy of title insurance in the form ordinarily and customarily
utilized in the State of Michigan insuring Purchaser's leasehold interest under
the Mt. ▇▇▇▇▇▇ Lease issued in accordance with the Title Commitment (including
the required endorsements thereto as set forth in Section 22.1 hereof, and
containing only those exceptions set forth in the Title Commitment as amended in
accordance with Section 22.1 hereof).
10.25 Environmental Reports or Assessments. Purchaser shall have received
environmental reports or assessments which show the Mt. ▇▇▇▇▇▇ Land and the
Assets in an environmental condition reasonably satisfactory to Purchaser.
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10.26 MESA Form 1027. Purchaser shall have received from Seller in the time
and manner required by law Michigan Employment Security Agency (MESA) Form 1027.
Purchaser shall have two (2) days following receipt by Purchaser of such MESA
Form to agree to be bound by terms of this Agreement irrespective of any other
rights of review granted to Purchaser hereunder.
10.27 Fair Market Value. The net book value of the used, rental, leased and
"rent to own" construction machinery equipment, and all used attachment
inventory of Seller shall be 85% of fair market value.
10.28 Pontiac Relocation. Seller shall have completed the Pontiac
Relocation.
10.29 Seller's Obligation to Hire Additional Employees. Seller shall have
hired two (2) individuals designated by Purchaser to perform such duties for
Seller as Purchaser may designate; provided, however, Seller acknowledges that
such individuals are employees of Seller and not of Purchaser or Purchaser's
Affiliates and Seller is responsible for any and all employment related issues
or claims arising out of the employment relationships between Seller and such
individuals.
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 20 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.
11.5 Mt. ▇▇▇▇▇▇ Lease. Mt. ▇▇▇▇▇▇ Landlord and Purchaser shall have entered
into the Mt. ▇▇▇▇▇▇ Lease.
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS.
12.1 Change of Name. Immediately upon the occurrence of the Closing, Seller
and the Shareholder shall cease using the names "▇▇▇▇ Deere," "▇▇▇▇▇▇▇ Sales,"
and all derivations thereof. Seller covenants and agrees that after the Closing
they will not, directly or indirectly, use the names
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"▇▇▇▇ Deere," "▇▇▇▇▇▇▇ Sales," or any derivation thereof in connection with any
business enterprise; provided, however, Seller may make reference to "▇▇▇▇▇▇▇
Sales" in connection with the adoption of any plan of dissolution, liquidation
and termination of existence of Seller.
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.
13. INDEMNITY BY SELLER AND THE SHAREHOLDERS.
13.1 Indemnification by Seller. The Seller and Shareholder agree to jointly
and severally 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 and
any of the Shareholders in this Agreement.
13.2 Environmental Indemnification. Seller and Shareholder agree to jointly
and severally 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
Shareholder or other person or entity for whose actions Seller is legally
responsible on or prior to the Closing Date relating to the Mt. ▇▇▇▇▇▇ Land, the
New Pontiac Location or the Assets or any operations conducted by Seller or on
the Mt. ▇▇▇▇▇▇ Land; (b) any violation of Environmental Law by Seller or other
person or entity for whose actions Seller is legally responsible occurring or
commencing on or prior to the Closing Date and resulting from or related to the
Mt. ▇▇▇▇▇▇ Land, the New Pontiac Location, the Assets or the operations
conducted on or with the Mt. ▇▇▇▇▇▇ Land, the New Pontiac Location or the
Assets; (c) the management, treatment or disposal of any wastes at or from the
Mt. ▇▇▇▇▇▇ Land, the New Pontiac Location on or prior to the Closing Date by
Seller or other person or entity for whose actions Seller is legally
responsible; (d) the presence or use of any Hazardous Materials at, on or under
the Mt. ▇▇▇▇▇▇ Land or the New Pontiac Location on or prior to the Closing Date;
(e) any Environmental Condition existing at or with respect to the Assets on the
Mt. ▇▇▇▇▇▇ Land or the New Pontiac Location as of the Closing Date attributable
to Seller or other person or entity for whose actions Seller is legally
responsible; (f) any acts or omissions of Seller or Shareholder relating to the
Mt. ▇▇▇▇▇▇ Land, the Assets or the Businesses or any operations conducted on or
with the Mt. ▇▇▇▇▇▇ Land, the New Pontiac Location, or the Assets; or (g) any
breach by Seller or Shareholder of a representation or warranty contained in
Section 4.16 hereof; or (h) the Old Pontiac Location (collectively,
"Environmental Losses"). In clarification of this Section, and not in limitation
thereof, Seller's or Shareholder'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
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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.
13.3 Tax Indemnification. Seller and Shareholder agree to jointly and
severally 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 and
Shareholder agree to jointly and severally 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 Shareholder
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 (a) any
misrepresentation, breach of warranty or breach of any covenant, commitment or
agreement made or undertaken by the Rush Parties in this Agreement; (b) any
violation of Environmental Law by any of the Rush Parties at the New Pontiac
Location, the presence or use of Hazardous Materials at the New Pontiac
Location, or any Environmental Condition at the New Pontiac Location, first
arising after the Closing Date and not attributable to Seller, Shareholder or
Seller's affiliates or any of their respective agents, employees or
representatives.
13.6 Procedure. All claims for indemnification or payment under this
Article 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
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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 with respect to Losses arising from claims of any third party that
are subject to the indemnification provided for in this Article
("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 13.6(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.
(c) If a claim for indemnity is provided pursuant to this Article 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 24.12 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 from
the date the claim is first made until fully paid.
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13.7 Payment. Payment of any amounts due pursuant to this Article shall be
made within ten Business Days after final adjudication of such claim and after
written notice is sent by the Indemnitee.
13.8 Failure to Pay Indemnification. If and to the extent the Indemnitee
shall make written demand upon the Indemnitor for indemnification pursuant to
this Article and the Indemnitor shall refuse or fail to pay in full within
thirty (30) 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 24.12 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.
13.9 Cooperation. The Indemnitor and the Indemnitee shall cooperate with
each other with regard to any indemnification obligation under this Article 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.
13.10 Time Limitations. Notwithstanding any provision contained herein to
the contrary, Shareholder will have no liability with respect to any
representation, warranty, covenant or obligation, other than those set forth in
Section 13.11, Section 14 or in which actual fraud is involved, unless on or
before one (1) year from the Closing Date, Purchaser notifies Seller of a claim
specifying the factual basis of such claim in reasonable detail to the extent
then known by Purchaser.
13.11 Special Provisions Concerning New Pontiac Location. The Rush Parties
and Seller agree to obtain a Phase I environmental site assessment of the New
Pontiac Location at the time that Purchaser enters into the lease therefor (and
Seller enters into the sublease therefor, as provided in Section 8.2(n) hereof,
and to obtain an update thereof as of the time that the sublease from Purchaser
to Seller terminates, in order to better establish the nature and extent of any
Environmental Conditions or violations of Environmental Laws occurring at or
with respect to the New Pontiac Location during Seller's occupancy thereof. Such
site assessment and the update thereof shall be prepared by a qualified
environmental consultant or firm selected and paid for by Purchaser and
reasonably acceptable to Seller. Seller agrees that one such firm is GeoConsul
of Buda, Texas. All reports prepared by such consultant or firm shall be the
property of Purchaser, but Purchaser shall provide Seller with copies thereof,
which Seller agrees to maintain in strict confidence in accordance with its
provision of Article 15 hereof. Notwithstanding anything in this Section 13.11
to the contrary, any environmental study shall be at the sole expense of the
Purchaser.
13.12 Limitation on Indemnification. Notwithstanding any provision
contained herein to the contrary, the Rush Parties shall not make any claim for
indemnification, nor shall Seller or Shareholder be responsible for paying any
indemnification obligation, in excess of the Purchase Price.
14. NON-COMPETITION AGREEMENTS.
14.1 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 and Shareholder hereby covenant and
agree that, commencing on the Closing Date and ending
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on the fifth anniversary of the Closing Date, Seller and Shareholder shall not,
and Seller will cause their Affiliates, officers, directors and representatives,
as applicable, not to, directly or indirectly, as proprietor, partner,
stockholder, director, executive, officer, employee, consultant, joint venturer,
investor or in any other capacity, engage in, or own, manage, operate or
control, or participate in the ownership, management, operation or control, of
any entity in the states of Michigan or Texas which engages in any business
activity which Seller or the Rush Parties or their Affiliates participates or
participated as of the Closing Date, including, but not limited to, the
construction machinery business; provided, however, the foregoing shall not
prohibit Seller and Shareholder, and their Associates, Affiliates and
representatives 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 and
Shareholder, and their Affiliates and representatives do not participate in any
way in the management, operation or control of such entity.
14.2 Judicial Reformation. Seller and Shareholder acknowledge that, given
the nature of the Rush Parties' business, the covenants contained in Section
14.1 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 14.1 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.
14.3 Customer Lists; Non-Solicitation. Seller and Shareholder hereby
further covenant and agree that they shall not, and Seller and Shareholder will
cause their 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 Seller 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 or Shareholder, its
Affiliates and representatives, and (iii) is disclosed in accordance with an
order of a court of competent jurisdiction or applicable law, (b) call on,
solicit, or attempt to call on or solicit any clients or customers of Seller or
the Rush Parties, nor (c) solicit for employment, recruit, hire or attempt to
recruit or hire any employees of Seller or the Rush Parties.
14.4 Covenants Independent. The covenants of Seller and Shareholder
contained in Sections 14.1, 14.2 and 14.3 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 or the Shareholder against the Rush Parties
will not constitute a defense to the enforcement by the Rush Parties of said
provisions. Seller and Shareholder understand that the provisions contained in
Sections 14.1, 14.2 and 14.3 are essential elements of the transactions
contemplated by this Agreement and, but for the agreement of Seller and
Shareholder to Sections 14.1, 14.2 and 14.3, the Rush Parties would not have
agreed to enter into this Agreement and the transactions contemplated herein.
Seller and Shareholder have been advised to consult with counsel in order to be
informed in all respects concerning the reasonableness and propriety of Sections
14.1, 14.2 and 14.3 with specific
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regard to the nature of the business conducted by Seller and the Rush Parties,
Seller and Shareholder acknowledge that Sections 14.1, 14.2 and 14.3 are
reasonable in all respects.
14.5 Remedies. In the event of a breach or a threatened breach by Seller or
the Shareholder of any of the provisions contained in Sections 14.1, 14.2 or
14.3 of this Agreement, Seller and Shareholder acknowledge 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 ▇▇▇
for damages.
15. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
15.1 Covenant of Seller and Shareholder. Seller and Shareholder recognize
and acknowledge that they have and will have access to certain confidential
information of Seller that is included in the Assets (including, but not limited
to, environmental studies and reports, 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 and Shareholder agree that Seller and Shareholder will, and will cause
their Affiliates and representatives to, keep confidential and not disclose to
any other Person or use for his or its own benefit or for the benefit of any
other Person, and Seller and Shareholder will use their 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 or the
Shareholder, or Seller's 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 or the Shareholder of
any of the provisions contained in this Article, Seller and Shareholder
acknowledge 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 ▇▇▇ for damages.
15.2 Covenant of Rush Parties. Rush and Rush Parties, their officers,
directors, agents, employees and any Affiliate of Rush and Rush Parties (for
purposes of this Section 15.2, collectively, the "Purchaser"), recognize and
acknowledge that they have and will have access to certain confidential
information of Seller that is included in the Assets (including, but not limited
to, environmental studies and reports, lists of customers, trade secrets, costs
and financial information) that is valuable, special and unique property of
Seller. In the event the transactions
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contemplated hereby are not consummated, Purchaser agrees that Purchaser will,
and will cause Purchaser's Affiliates and representatives to, keep confidential
and not disclose to any other Person or use for his or its own benefit or for
the benefit of any other Person, and Purchaser will use their 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 Seller; 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 Purchaser and
Purchaser's 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 Purchaser of any of the provisions contained in this
Article, Purchaser acknowledges that Seller and Shareholder 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, Seller and Shareholder 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 Seller and Shareholder may have under this
Agreement, at law or in equity, including, without limitation, the right to ▇▇▇
for damages.
16. 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.
17. TERMINATION. This Agreement may be terminated without further
obligation of the parties, as follows:
17.1 Mutual Consent. This Agreement may be terminated at any time prior to
Closing by mutual written consent of the parties hereto.
17.2 Failure of Conditions. This Agreement may be terminated by any 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.
17.3 Failure to Close. This Agreement will automatically terminate on
October 31, 1999, 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 result of termination
pursuant to this Section unless the failure of the Closing was due to the
failure of such party to comply with the terms of this Agreement.
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17.4 Liquidated Damages. The parties agree that in the event the Closing
does not occur due to the failure of Purchaser to comply with the terms of this
Agreement, the actual damages that might be sustained by Seller and Shareholder
are uncertain and difficult, if not impossible, to ascertain. Therefore, the
parties agree that upon such failure to close Purchaser shall pay to Seller the
Escrowed Funds as liquidated damages. The parties agree that the payment of such
amount as liquidated damages represents the parties' reasonable forecast of
fair, reasonable and just compensation for Purchaser's failure to comply with
the terms of this Agreement.
18. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.
18.1 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.
18.2 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.
18.3 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(a) 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 18.1. Notwithstanding the foregoing, Purchase shall
assume at the Closing Seller's obligations to employees of Seller actually
hired by Purchaser for accrued but unused vacation and sick leave, which
shall include (i) accrued vacation and sick leave through 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, and the Purchase Price shall be
reduced by the dollar value of such obligation; 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
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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 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.
18.4 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.
18.5 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
Seller: (i) Seller has not 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) Seller has not ceased operations at a facility so as
to become subject to the provisions of Section 4062(e) of ERISA; and (iii)
Seller 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
Seller 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.
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18.6 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.
18.7 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 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 18.7 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.
19. OFFSET PROVISIONS. Notwithstanding any other provisions of this
Agreement, in the event Seller or Shareholder become obligated to pay sums to
Purchaser or any party entitled to indemnification under this Agreement or any
of the documents or agreements referenced herein or contemplated hereby (whether
as a result of indemnity, breach of contract or otherwise), Purchaser shall be
entitled to, and shall have the right to, reduce and offset payments due under
this Agreement or the Mt. ▇▇▇▇▇▇ Lease in such amount or amounts as Purchaser
(and any Indemnitee that is not promptly paid by Seller) is entitled to receive
from Seller or Shareholder, and any such offset shall be deemed to be a payment
under this Agreement.
20. ADJUSTMENT OF PURCHASE PRICE. The Purchase Price shall be adjusted on
the Closing Date (a) to reduce the Purchase Price by the amount allocated to any
damaged or destroyed Assets as contemplated by Article 16; (b) to account for a
proration of personal property taxes on the Assets, lease payments, utilities
and other items commonly prorated; and (c) to account for any Deposits held by
Seller on the Closing Date. Three days prior to the Closing Date, Seller will
provide Purchaser with a statement of adjustments showing all proposed
adjustments to the Purchase Price, such statement of adjustments having all
reasonable backup documentation for such suggested adjustments. Purchaser and
Seller will work to finalize all required adjustments prior to the Closing Date.
21. SURVEY.
21.1 Survey. Upon written request by Purchaser within ten days from and
after the date hereof, Seller agrees, on behalf of Purchaser, and at Purchaser'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 of the Mt. ▇▇▇▇▇▇ Land (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
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at least one copy of the Survey plat and a certificate under the seal of the
surveyor, which 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 Equipment Centers of Michigan, Inc., Rush Enterprises,
Inc. and ▇▇▇▇▇ Title Company, (ii) the description contained hereon is
correct, (iii) the property described hereon 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 property shown hereon are correct, and (vi) the area of the 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 Leasehold Policy of Title Insurance to be delivered by Seller as provided
below. 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 surveyed parcel, 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 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
Mt. ▇▇▇▇▇▇ Lease, 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 parcel comprising the Mt. ▇▇▇▇▇▇ Land.
21.2 Remedies for Failure to Deliver Survey. In the event Seller does not
deliver the Surveys 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 transactions contemplated by this
Agreement.
22. TITLE COMMITMENT AND CONDITION OF TITLE.
22.1 Title Commitment. Within ten days from and after the date hereof, at
Purchaser's sole cost and expense, Seller for the benefit of Purchaser agrees to
cause the Title Company to furnish
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Purchaser and its counsel a Commitment for Leasehold Owner Policy of Title
Insurance (the "Title Commitment") prepared and issued by the Title Company
describing and covering the Mt. ▇▇▇▇▇▇ Land listing Purchaser as the prospective
named insured and showing as the policy amount $400,000. The Title Commitment
shall constitute the commitment of the Title Company to insure, by title
insurance in the standard form promulgated in the State of Michigan, Purchaser's
leasehold interest in the Mt. ▇▇▇▇▇▇ Land subject only to the exceptions set
forth in the Title Commitment and to the standard printed exceptions except as
modified below, but deleting (at Purchaser's expense in excess of the expense of
a standard policy with exceptions) to the maximum extent permitted by applicable
title insurance regulations the standard printed form survey exception. 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 Commitments
shall contain no exception for "visible and apparent easements" or for "public
or private roads" or the like. The Title Commitments shall contain no exception
for "rights of parties in possession" (other than Purchaser). In addition, the
Title Commitment shall provide (by endorsements or otherwise as permissible
under applicable regulations) coverage against violation of restrictive
covenants and zoning laws, encroachments, overlapping of improvements, shortages
in area and mechanic's liens.
22.2 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 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 (subject to the consent
of the owner of the applicable parcel), 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 to title in the Mt. ▇▇▇▇▇▇ Lease. In the event, however, that a
lien indebtedness against the Mt. ▇▇▇▇▇▇ Property (including past due taxes) is
disclosed by the applicable Title Commitment or 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.
23. ENVIRONMENTAL STUDIES AND REMEDIATION ACTIVITIES.
23.1 Environmental Studies. Within 10 days after the date hereof, Seller
shall provide to Purchaser, at Seller's cost and expense, copies of (a) all
existing Environmental Site Assessments (whether Phase I, Phase II or otherwise)
covering all or any portion of the Mt. ▇▇▇▇▇▇ Land, to the
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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 Mt. ▇▇▇▇▇▇ Land, 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"). At Purchaser's option
(x) Purchaser may obtain new or updated Environmental Site Assessments for the
Mt. ▇▇▇▇▇▇ Land certified to Purchaser so that Purchaser may rely on same,
and/or (y) a recertification of the existing Environmental Site Assessments to
Purchaser, and/or (z) Phase II Environmental Site Assessments certified to both
Seller and Purchaser. 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 sixty (60) days from the date hereof
(the "Feasibility Period") within which to conduct any and all engineering,
environmental and economic feasibility studies and tests of the Mt. ▇▇▇▇▇▇ Land
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. In accordance with Section 8.6 hereof,
Seller has granted and hereby grants to Purchaser and its contractors and
representatives access to the Mt. ▇▇▇▇▇▇ Land 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 Mt. ▇▇▇▇▇▇ Land shall restore each parcel of real
property as nearly as is reasonably possible to the condition it was in
immediately prior to such activities.
23.2 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 Mt. ▇▇▇▇▇▇ Land, 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 or to give notice in writing to Purchaser, that it will not
undertake such remediation. In the event that an Environmental Condition exists
or is discovered on the Mt. ▇▇▇▇▇▇ Land and Seller 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 Seller 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) if the Environmental
Conditions affect a portion, but not all, of the Mt. ▇▇▇▇▇▇ Land, to elect to
delete the portion of the real property so affected from the definition of "Mt.
▇▇▇▇▇▇ Land" hereunder and to lease only the newly defined "Mt. ▇▇▇▇▇▇ Land" at
Closing, or (d) 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.
24. GENERAL PROVISIONS.
24.1 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 Michigan.
The section headings contained herein are for purposes
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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.
24.2 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 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.
24.3 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.
24.4 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 heirs, executors,
administrators, representatives, successors and assigns.
24.5 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.
24.6 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.
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24.7 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.
24.8 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 hereof, individually or taken together,
shall bear the signatures of the parties reflected hereon as signatories.
24.9 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.
24.10 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.
24.11 Expenses. Whether or not the transactions contemplated hereby are
consummated, each of the parties will pay all costs and expenses of its or his
performance of and compliance with this Agreement.
24.12 Arbitration. Except for the provisions of Articles 14 and 15 of this
Agreement dealing with restrictive covenants and non-disclosure 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 heirs,
executors, administrators, legal representatives, 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. ss.ss.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 Two Hundred and Fifty Thousand Dollars ($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
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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 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, 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.
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 for a judgment to be
entered upon any award entered through such arbitration proceedings.
24.13 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 non-assignable 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 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.
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24.14 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.
24.15 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:
(a) If to Purchaser, at:
Rush Equipment Centers of Michigan, Inc.
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Rush, at:
Rush Enterprises, Inc.
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(c) If to Seller, at:
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, C.P.A.
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, C.P.A.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
AND
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(d) If to Shareholder, at:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
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 shall
be effective when received at the address for notice for the party to which the
notice is given.
24.16 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 the
Purchaser.
(Remainder of page intentionally left blank, 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 MICHIGAN, INC.
By:
---------------------------------------------------
Name:
-------------------------------------------------
Title:
------------------------------------------------
SELLER:
▇▇▇▇▇▇▇ SALES, INC.
By:
---------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
SHAREHOLDER:
------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust
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