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EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
DATED JULY 12, 1998
BY AND AMONG
RUSH ENTERPRISES, INC.
RUSH EQUIPMENT CENTERS OF MICHIGAN, INC.
▇▇▇▇▇▇▇▇ EQUIPMENT, INC.
AND
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
AND
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
COVERING THE PURCHASE
OF SPECIFIED ASSETS OF
▇▇▇▇▇▇▇▇ EQUIPMENT, INC.
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TABLE OF CONTENTS
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 "▇▇▇▇▇▇▇▇▇ Landlord"...................................................... 2
1.15 "▇▇▇▇▇▇▇▇▇ Lease"......................................................... 2
1.16 "▇▇▇▇▇▇▇▇▇ Property"...................................................... 2
1.17 "Encumbrance"............................................................. 2
1.18 "Environmental Conditions"................................................ 2
1.19 "Environmental Laws"...................................................... 2
1.20 "Environmental Liabilities................................................ 3
1.21 "Environmental Permits"................................................... 3
1.22 "ERISA"................................................................... 3
1.23 "Exchange Act"............................................................ 3
1.24 "Governmental Authority".................................................. 3
1.25 "Governmental Requirement"................................................ 3
1.26 "Grand Rapids Landlord"................................................... 4
1.27 "Grand Rapids Lease"...................................................... 4
1.28 "Grand Rapids Property"................................................... 4
1.29 "Hazardous Materials"..................................................... 4
1.30 "HSR Act"................................................................. 4
1.31 "Improvements"............................................................ 4
1.32 "Indemnification Event"................................................... 4
1.33 "Indemnitee".............................................................. 4
1.34 "Indemnitor".............................................................. 4
1.35 "IRS"..................................................................... 4
1.36 "▇▇▇▇ Deere".............................................................. 4
1.37 "Land".................................................................... 4
1.38 "Landlord's Consent and Estoppel"......................................... 4
1.39 "Leases".................................................................. 4
1.40 "Losses".................................................................. 4
1.41 "New Contracts"........................................................... 5
1.42 "New ▇▇▇▇▇▇▇▇▇ Lease"..................................................... 5
1.43 .......................................................................... 5
1.44 "PBGC".................................................................... 5
1.45 "Permitted Exceptions".................................................... 5
1.46 "Person".................................................................. 5
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1.47 "Purchase Price".......................................................... 5
1.48 "Real Property"........................................................... 5
1.49 "Reference Balance Sheet.................................................. 5
1.50 "Retained Liabilities..................................................... 5
1.51 "Schedule................................................................. 5
1.52 "SEC" or "Commission"..................................................... 6
1.53 "Section.................................................................. 6
1.54 "Securities Act".......................................................... 6
1.55 "Subsidiary".............................................................. 6
1.56 "Tax Returns.............................................................. 6
1.57 "Taxes"................................................................... 6
1.58 "Territory"............................................................... 6
1.59 "Third-Party Claims"...................................................... 6
1.60 "Title Company"........................................................... 6
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE...................................... 6
2.1 Assets to be Purchased.................................................... 6
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..................................................... 8
2.6 Excluded Assets........................................................... 8
3. PURCHASE PRICE..................................................................... 9
3.1 Price and Payment......................................................... 9
3.2 Assumed Obligations....................................................... 10
3.3 Allocation................................................................ 11
4. REPRESENTATIONS AND WARRANTIES OF SELLER........................................... 11
4.1 Incorporation; Capitalization............................................. 12
4.2 Employee Benefits......................................................... 12
4.3 Financial Statements...................................................... 13
4.4 Events Since the Balance Sheet Date....................................... 13
4.5 Customer List............................................................. 14
4.6 Taxes..................................................................... 14
4.7 Employee Matters.......................................................... 15
4.8 Contracts and Agreements.................................................. 15
4.9 Effect of Agreement....................................................... 16
4.10 Properties, Assets and Leasehold Estates.................................. 17
4.11 Intangible Property....................................................... 18
4.12 Suits, Actions and Claims................................................. 18
4.13 Licenses and Permits; Compliance With Governmental Requirements........... 18
4.14 Authorization............................................................. 18
4.15 Records................................................................... 19
4.16 Environmental Protection Laws............................................. 19
4.17 Brokers and Finders....................................................... 20
4.18 Deposits.................................................................. 20
4.19 Work Orders............................................................... 20
4.20 Telephone Numbers......................................................... 21
4.21 No Royalties.............................................................. 21
4.22 Insurance................................................................. 21
4.23 Warranties and Product Liability.......................................... 21
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4.24 No Untrue Statements...................................................... 21
4.25 Shareholders' Representations............................................. 22
5. REPRESENTATIONS AND WARRANTIES OF THE RUSH PARTIES................................. 22
5.1 Incorporation............................................................. 22
5.2 Authorization............................................................. 22
5.3 Brokers and Finders....................................................... 23
5.4 No Violation of Laws of Agreements........................................ 23
6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF THE PARTIES.......................... 23
7. CONTRACTS PRIOR TO THE CLOSING DATE................................................ 23
7.1 Approval of Contracts..................................................... 23
7.2 Contracts Included in Assets.............................................. 23
8. COVENANTS OF SELLER PRIOR TO CLOSING DATE.......................................... 23
8.1 Access to Information..................................................... 23
8.2 General Affirmative Covenants............................................. 24
8.3 General Negative Covenants................................................ 25
8.4 Disclosure of Misrepresentations and Breaches............................. 25
8.5 Government Filings........................................................ 25
8.6 Access to and Inspection of Premises, Facilities and Equipment............ 26
9. COVENANTS REGARDING THE CLOSING.................................................... 26
9.1 Covenants of Seller....................................................... 26
9.2 Covenants of Shareholders................................................. 26
9.3 Covenants of the Rush Parties............................................. 27
9.4 HSR Act................................................................... 27
9.5 Inventory Audit........................................................... 27
10. CONDITIONS TO OBLIGATIONS OF THE RUSH PARTIES...................................... 27
10.1 Accuracy of Representations and Warranties and Fulfillment of Covenants... 27
10.2 Financial Information..................................................... 28
10.3 No Governmental Actions................................................... 28
10.4 No Adverse Change......................................................... 28
10.5 Update of Contracts....................................................... 28
10.6 Approval of Counsel....................................................... 28
10.7 No Material Adverse Information........................................... 28
10.8 Notices and Consents...................................................... 28
10.9 Lease Arrangements........................................................ 29
10.10 Corporate Approval........................................................ 29
10.11 Transfer and Assignment Documents......................................... 29
10.12 Liens Released............................................................ 29
10.13 Ordinary Course of Business............................................... 30
10.14 Other Documents........................................................... 30
10.15 Dealer License............................................................ 30
10.16 Inventory Audit........................................................... 30
10.17 Other Records............................................................. 30
10.18 Keys...................................................................... 30
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10.19 Government Approvals...................................................... 30
10.20 Employment Agreements..................................................... 30
10.21 Non-Competition Agreements................................................ 30
10.22 Assignment/Termination of Leases.......................................... 30
10.23 Leasehold Policies........................................................ 31
10.24 Dealership Agreement...................................................... 31
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND
SHAREHOLDERS....................................................................... 31
11.1 Accuracy of Representations and Warranties and Fulfillment of Covenants... 31
11.2 Delivery of Purchase Price................................................ 31
11.3 Approval of Counsel....................................................... 31
11.4 Governmental Approvals.................................................... 31
11.5 Lease Arrangements........................................................ 31
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS......................................... 31
12.1 Change of Name............................................................ 31
12.2 Exchange Act Filing; Cooperation.......................................... 31
13. INDEMNITY BY SELLER................................................................ 32
13.1 Indemnification by Seller................................................. 32
13.2 Indemnification by Shareholders........................................... 32
13.3 Environmental Indemnification............................................. 32
13.4 Tax Indemnification....................................................... 33
13.5 Products Liability and Warranty Indemnification........................... 33
13.6 Maximum Loss.............................................................. 33
13.7 Indemnification by the Rush Parties....................................... 33
13.8 Procedure................................................................. 33
13.9 Payment................................................................... 34
13.10 Failure to Pay Indemnification............................................ 34
13.11 Cooperation............................................................... 35
14. LEASES............................................................................. 35
15. NON-COMPETITION AGREEMENTS......................................................... 35
15.1 (a) Non-Competition................................................. 35
(b) Permitted Competition........................................... 35
15.2 Judicial Reformation...................................................... 35
15.3 Customer Lists; Non-Solicitation.......................................... 36
15.4 Covenants Independent..................................................... 36
15.5 Remedies.................................................................. 36
16. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.......................................... 36
17. DAMAGE TO ASSETS................................................................... 37
18. TERMINATION........................................................................ 37
18.1 Mutual Consent............................................................ 37
18.2 Failure of Conditions..................................................... 38
18.3 Failure to Close.......................................................... 38
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19. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER................................... 38
19.1 New Employees of Purchaser................................................ 38
19.2 No Hiring Commitment...................................................... 38
19.3 Vacation, Sick Pay, Health Insurance, etc................................. 38
19.4 Severance Benefits; Employment Termination................................ 39
19.5 Employee Benefit Plans.................................................... 39
19.6 Reporting of Data......................................................... 39
19.7 Employment Related Claims................................................. 40
20. ACCESS TO INFORMATION.............................................................. 40
21. ADJUSTMENT OF PURCHASE PRICE....................................................... 40
22. SURVEYS; TITLE COMMITMENT AND CONDITION OF TITLE................................... 41
22.1 Surveys................................................................... 41
22.2 Title Commitment.......................................................... 41
22.3 Disclosure of Exceptions by Title Commitments and UCC Report.............. 41
23. ENVIRONMENTAL STUDIES AND REMEDIATION ACTIVITIES................................... 42
23.1 Environmental Studies..................................................... 42
23.2 Remediation............................................................... 42
24. GENERAL PROVISIONS................................................................. 42
24.1 Governing Law; Interpretation; Section Headings........................... 42
24.2 Severability.............................................................. 43
24.3 Entire Agreement.......................................................... 43
24.4 Binding Effect............................................................ 43
24.5 Assignment................................................................ 43
24.6 Amendment; Waiver......................................................... 43
24.7 Gender; Numbers........................................................... 43
24.8 Counterparts.............................................................. 44
24.9 Telecopy Execution and Delivery........................................... 44
24.10 Press Releases............................................................ 44
24.11 Expenses.................................................................. 44
24.12 Arbitration............................................................... 44
24.13 Assignment of Contracts................................................... 45
24.14 Further Actions........................................................... 46
24.15 Bulk Transfer Laws........................................................ 46
24.16 Notices................................................................... 46
24.17 Risk of Loss.............................................................. 47
APPENDIX A
DISPUTE RESOLUTION PROCEDURES............................................. A-1
Exhibits
Exhibit A Real Property
Exhibit B General Warranty ▇▇▇▇ of Sale and Assignment of Contract Rights
Exhibit C Employment Agreements
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Exhibit D-1 Lease Forms, Form of Lease Guaranty Agreement, Form of
Subordination, Nondisturbance and Attornment Agreement
Exhibit D-2 Lease Terms
Exhibit E Landlord's Consent and ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement"), made this 12th day of July,
1998, by and among (i) ▇▇▇▇▇▇▇▇ EQUIPMENT, INC., a Michigan corporation
("Seller"), (ii) ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., and ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (the "Shareholders"), and (iii) RUSH EQUIPMENT CENTERS OF MICHIGAN,
INC., a Delaware corporation ("Purchaser"), and RUSH ENTERPRISES, INC., a Texas
corporation ("Rush").
W I T N E S S E T H :
WHEREAS, Seller is the owner of all right, title and interest in and to
the Assets (as herein defined) described herein, with such assets being the
assets currently used in the conduct of the operation of the ▇▇▇▇ Deere
Construction Equipment Company, ▇▇▇▇ Deere Commercial and Consumer Equipment
Division and ▇▇▇▇ Deere Commercial Worksite Products, Inc. ("▇▇▇▇ Deere") sales
and service dealership business operated by Seller;
WHEREAS, Purchaser is a wholly-owned subsidiary of Rush (Rush and
Purchaser are sometimes referred to herein as the "Rush Parties");
WHEREAS, the Shareholders collectively own and control a majority of
Seller's issued and outstanding shares of stock;
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, with respect to Seller, only the
actual current knowledge of ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and, with respect to the Rush Parties, only the actual current
knowledge of W. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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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 "Ellsworth Landlord" shall mean ▇▇▇▇▇▇▇▇ Properties, Inc., a
Michigan corporation.
1.15 "Ellsworth Lease" shall mean the current lease agreement between
▇▇▇▇▇▇▇▇ Properties, Inc. (as landlord) and Seller (as tenant) for the Ellsworth
property.
1.16 "Ellsworth Property" shall mean the real property and improvements
comprising Seller's Ellsworth facility located at ▇▇▇▇ ▇.▇. ▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.17 "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.
1.18 "Environmental Conditions" means any and all acts, omissions,
events, circumstances, and conditions on or in connection with the Real
Property, the Grand Rapids Property or the other Assets that constitute a
violation of, or require remediation under, any Environmental Laws, including
any pollution, contamination, degradation, damage, or injury caused by, related
to, or arising from or in connection with the generation, use, handling,
treatment, storage, disposal, discharge, emission or release of Hazardous
Materials.
1.19 "Environmental Laws" shall mean all applicable federal, state,
local or municipal laws, rules, regulations, statutes, ordinances or orders of
any Governmental Authority, relating
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to (a) the control of any potential pollutant, or protection of health or the
air, water or land, (b) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal, discharge, release, emission or transportation,
(c) exposure to hazardous, toxic or other substances alleged to be harmful, (d)
the protection of any endangered or at-risk plant or animal life, or (e) the
emission, control or abatement of noise. "Environmental Laws" shall include, but
not be limited to, the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Clean
Water Act, 33 U.S.C. Section 1251 et seq., the Resource Conservation Recovery
Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the Toxic Substances Control Act,
15 U.S.C. Section 2601 et seq., the Endangered Species Act, 16 U.S.C. Section
1531 et seq., the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., and
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq., including the Superfund Amendments
and Reauthorization Act, 42 U.S.C. Section 11001, et seq. The term
"Environmental Laws" shall also include all applicable state, local and
municipal laws, rules, regulations, statutes, ordinances and orders dealing with
the subject matter of the above listed federal statutes or promulgated by any
governmental or quasi-governmental agency thereunder in order to carry out the
purposes of any federal, state, local or municipal law.
1.20 "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.
1.21 "Environmental Permits" shall mean any permits, licenses,
approvals, consents, registrations, identification numbers or other
authorizations with respect to the Assets, the Businesses, the Real Property or
the Grand Rapids Property or the ownership or operation thereof required under
any applicable Environmental Law.
1.22 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.23 "Exchange Act" shall mean the Securities and Exchange Act of 1934,
as amended.
1.24 "Governmental Authority" shall mean any and all foreign, federal,
state or local governments, governmental institutions, public authorities and
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including, but not limited to, departments, boards,
bureaus, commissions, agencies, courts, administrations and panels, and any
divisions or instrumentalities thereof, whether permanent or ad hoc and whether
now or hereafter constituted or existing.
1.25 "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
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or similar items or pronouncements, promulgated, issued, passed or set forth by
any Governmental Authority.
1.26 "Grand Rapids Landlord" shall mean 5770 Investors, L.L.C., a
Michigan limited liability company.
1.27 "Grand Rapids Lease" shall mean the Lease dated September 9, 1994
between 5770 Investors, L.L.C. (as landlord) and Seller (as tenant) for the
Grand Rapids Property.
1.28 "Grand Rapids Property" shall mean the real property and
improvements located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, as more particularly described in the Grand Rapids Lease.
1.29 "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.
1.30 "HSR Act" shall have the meaning assigned to it in Section 8.5.
1.31 "Improvements" shall have the meaning assigned to it in Section
1.48.
1.32 "Indemnification Event" shall have the meaning assigned to it in
Section 13.8.
1.33 "Indemnitee" shall mean the Rush Parties and each of their
respective Affiliates, officers, directors, employees, agents, consultants,
representatives, shareholders and controlling Persons and their respective
successors and assigns, on the one hand, and the Seller and its Affiliates,
officers, directors, employees, agents, consultants, representatives,
shareholders and controlling Persons and their respective successors and
assigns, on the other hand, whether indemnified, or entitled, or claiming to be
entitled to be indemnified or receive property, pursuant to the provisions of
Article 13 hereof.
1.34 "Indemnitor" shall mean the Person or Persons having the
obligation to indemnify or make payment pursuant to the provisions of Article 13
hereof.
1.35 "IRS" shall mean the Internal Revenue Service.
1.36 "▇▇▇▇ Deere" shall mean ▇▇▇▇ Deere Construction Equipment Company
and its Affiliates.
1.37 "Land" shall have the meaning assigned to it in Section 1.48.
1.38 "Landlord's Consent and Estoppel" shall mean an instrument,
executed by the Grand Rapids Landlord in substantially the form attached hereto
as Exhibit E and made a part hereof.
1.39 "Leases" shall have the meaning assigned to it in Article 14.
1.40 "Losses" shall mean General Losses, Environmental Losses, Tax
Losses and Product Losses (each as defined in Article 13 hereof), as the case
may be.
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1.41 "New Contracts" shall have the meaning assigned to it in Section
10.5.
1.42 "New ▇▇▇▇▇▇▇▇▇ Lease" shall have the meaning assigned to it in
Section 10.9.
1.43 [Intentionally deleted]
1.44 "PBGC" shall mean the Pension Benefit Guaranty Corporation.
1.45 "Permitted Exceptions" shall have the meaning assigned to it in
Section 22.3.
1.46 "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.
1.47 "Purchase Price" hall have the meaning assigned it in Article 3.
1.48 "Real Property" shall mean all those certain tracts, pieces or
parcels of land where Seller's Traverse City and Work-N-Play dealerships are
located, as more particularly described in Exhibit A attached hereto and made a
part hereof for all purposes (herein referred to as the "Land"), together with
the buildings, structures, plants, fixtures, paving, curbing, trees, shrubs,
plants, and other improvements of every kind and nature presently situated on,
in, or under, or hereafter erected or installed or used in, on, or about or in
connection with the ownership, use and operation of the Land (herein
collectively referred to as the "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 Land, in and to any land in
the bed of any street, road or avenue open or proposed in front of or adjoining
the Land; (b) all right, title and interest, if any, of the owner(s) of the
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 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 Land,
existing or abandoned; (d) all sanitary sewer capacity (if any), water capacity
and other utility capacity to serve the Land and Improvements; (e) all oil, gas,
and other minerals in, on, or under, and that may be produced from the Land; (f)
all water in, under or that may be produced from the Land, and all ▇▇▇▇▇, water
rights, permits and historical water usage pertaining to or associated with the
Land; (g) all right, title and interest, if any, of the owner(s) of the Land, in
and to any land adjacent or contiguous to, or a part of the 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 Land, or whether or not
they are located on any survey; and (h) any reversionary rights attributable to
the Land.
1.49 "Reference Balance Sheet" shall have the meaning assigned it in
Section 4.3(a).
1.50 "Retained Liabilities" shall have the meaning assigned it in
Section 3.2.
1.51 "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.
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1.52 "SEC" or "Commission" shall mean the United States Securities and
Exchange Commission.
1.53 "Section" shall mean the Section of this Agreement, unless
otherwise stated.
1.54 "Securities Act" shall mean the Securities Act of 1933, as
amended.
1.55 "Subsidiary" shall mean, with respect to any Person (the
"parent"), (a) any corporation, association, joint venture, partnership or other
business entity of which securities or other ownership interests representing
more than 50% of the ordinary voting power or beneficial interest are, at the
time as of which any determination is being made, owned or controlled by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent and (b) any joint venture or partnership of
which the parent or any Subsidiary of the parent is a general partner or has
responsibility for its management.
1.56 "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).
1.57 "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.
1.58 "Territory" shall mean the States of Texas and Michigan.
1.59 "Third-Party Claims" shall have the meaning such term is given in
Section 13.8(b) hereof.
1.60 "Title Company" shall mean Northern Michigan Title Company,
Commonwealth Land Title Insurance Company, Lawyers Title Insurance Company or
any other similar title insurance company mutually agreed upon by Seller and
Purchaser.
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 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, real, 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 ▇▇▇▇ 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 and attachments,
consumer equipment, worksite products and trailers except for new
construction
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machinery equipment and attachments, consumer equipment, worksite
products and trailers manufactured by ▇▇▇▇ Deere, which will be
returned by the Seller to ▇▇▇▇ Deere,
(b) all new 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 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 of Seller's vehicles,
(h) all signs, and all promotional, advertising and training
materials used in the Business except for signs and materials owned by
▇▇▇▇ Deere, which will be returned by Seller to ▇▇▇▇ Deere,
(i) all sales files and customer lists, and all warranty and
service and customer service and repair files, excluding any files that
support receivables retained by Seller,
(j) all intangible assets of Seller required to do business as
a ▇▇▇▇ Deere dealer and a Stihl 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, and any ancillary or related agreements between Seller and
▇▇▇▇ Deere, which agreements will be terminated by Seller and ▇▇▇▇
Deere,
(k) all used parts listed on Schedule 2.1(k) hereto, which
used parts listed on Schedule 2.1(k), as of the Closing Date, shall not
be less than 90% of the parts listed thereon as of the date hereof,
(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 leasehold interest under the Grand Rapids
Lease and a leasehold interest in the ▇▇▇▇▇▇▇▇▇ Property pursuant to
the terms of the New ▇▇▇▇▇▇▇▇▇ Lease,
(o) all new attachment inventory, and
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(p) all the leases or subleases of real property, customer
contracts, purchase orders, equipment repurchase agreements, and other
contracts, agreements and undertakings set forth on Schedule 2.1(p).
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
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 ▇▇▇▇ of sale
covering the Assets, in the form of and containing substantially the same terms
and provisions as the ▇▇▇▇ of Sale and Assignment of Contract Rights included in
Exhibit B, (b) duly executed title and transfer documents covering any assets
for which there exists a certificate of title, (c) the Leases, duly executed by
the respective owner(s) of each of the locations comprising the Real Property,
together with memoranda thereof, in form required for recording in the
appropriate public records of the counties where each parcel of Real Property is
located, (d) an assignment of Seller's interest in the Grand Rapids Lease and
the ▇▇▇▇▇▇▇▇▇ Lease, duly executed by Seller, the Grand Rapids Landlord and the
▇▇▇▇▇▇▇▇▇ Landlord, as applicable, (e) the leasehold policies of title insurance
described in Section 22.2 hereof and (f) 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 ten days prior to the Closing, 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 each county where the
Real Property, the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property are located
and of the Office of 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 none of the Assets are subject to any
lien or security interest (other than liens and security interests which are to
be released at the Closing or are permitted hereunder). 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 August 3, 1998, at 10:00 a.m., local time, at
the offices of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ in Lansing, Michigan, or at
such other time, date and place as Purchaser and Seller shall in writing
designate; provided, however, that Purchaser shall have the right to delay the
Closing up to and including October 31, 1998,in accordance with Section 8.6. 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
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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 accounts receivable, pre-paid items, cash and cash
equivalents and all securities and short term investments listed on
Schedule 2.6(a);
(b) all Seller's insurance policies cash surrender values, 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) any and all other assets 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; and
(f) Seller's interest in Maple Creek Golf Course, LLC,
including the names "Maple Creek," "Maple Creek Golf Course," the
"Emerald," and the "Emerald at Maple Creek," alone or in connection
with any product identification, and all logos, trademarks, trade
names, and copyrights which include the same.
3. PURCHASE PRICE.
3.1 Price and Payment. Subject to adjustment as provided in Section
19.3 and Article 21 with respect to prorations, deposits and certain other
items, the aggregate consideration to be paid by Purchaser for the Assets is as
follows (the "Purchase Price"):
(a) $2,000,000, plus
(b) an amount equal to Seller's actual cost, taking into
account for each piece of construction machinery equipment of Seller
described in Section 2.1(a), (i) all manufacturer's rebates, allowances
and other reductions paid or credited to Seller on such equipment
purchased by the Purchaser, and (ii) all previously invoiced freight
and pre-delivery expenses, plus
(c) an amount equal to all of the previously invoiced freight
and pre-delivery expenses paid by Seller for each piece of construction
machinery equipment not purchased by Purchaser and returned by Seller
to ▇▇▇▇ Deere, plus
(d) an amount equal to the actual cost of the items described
in Sections 2.1(b) and (c), plus
(e) an amount equal to the Seller's actual cost plus Seller's
internal burdened labor rate (determined in accordance with generally
accepted accounting principles, consistently applied) 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(k), 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
three years, and an amount to be agreed upon for any such items held by
Seller for three 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) an amount equal to the lesser of (i) the net book value
(determined in accordance with generally accepted accounting
principles, consistently applied) and (ii) the Appraised Value (as
hereafter defined), for each piece of used, rental, leased or "rent to
own" construction machinery equipment and used attachment inventory
described in Section 2.1(l).
The Purchase Price shall be payable by payment of all amounts specified
in Sections 3.1(a) - (i) above in cash or cashier's check at Closing.
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
listed and described on Schedule 2.1(p) or that are (a) listed and described on
Schedule 4.8 or on the updated list of contracts required by Section 10.5 and
(b) accepted in writing by Purchaser pursuant to the provisions of Section 4.8
or Section 10.5; 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;
(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 21 hereof;
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(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 noncompliance by Seller with any applicable laws,
rules and regulations relating to employment and labor management
relations, including without limitation any provisions thereof relating
to wages and the payment thereof, hours of work, collective bargaining
agreements, workers' compensation laws and the withholding and payment
of Social Security and similar taxes;
(g) any failure by Seller to withhold all amounts required by
law or agreement to be withheld from the wages or salaries of its
employees, and any liability for any wage arrearages, taxes or
penalties for failure to comply with any of the foregoing;
(h) any liability arising out of any controversies between
Seller and its employees or former employees or any union or other
collective bargaining unit that has been certified or recognized by any
Seller as representing any of its employees;
(i) accounts payable of Seller;
(j) any and all contracts, agreements or other obligations of
Seller to repurchase any equipment, parts or other items previously
sold by Seller; and
(k) any liability arising out of any breach or default by
Seller under the Grand Rapids Lease or the ▇▇▇▇▇▇▇▇▇ Lease and all
obligations of Seller under the Grand Rapids Lease and the ▇▇▇▇▇▇▇▇▇
Lease arising during or attributable to any period prior to Closing
hereunder.
3.3 Allocation. The Purchase Price payable by Purchaser for the Assets
shall be allocated as set forth in Schedule 3.3 hereto. The Rush Parties and
Seller shall, at Closing; complete Internal Revenue Service Form 8594 (Asset
Acquisition Statement under I.R.C. Section 1060) and otherwise report the
federal, state and local income and other tax consequences of the transactions
contemplated hereby in a manner consistent with such allocation and shall not
take any position or action inconsistent with such allocation in the filing of
any federal or state income or other tax returns.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Except as set forth in
a schedule hereto referring to the applicable Section herein, Seller represents
and warrants to the Rush Parties 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 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.
4.2 Employee Benefits. As used in this Section, the "Company" shall
include the Seller and any member of a controlled group or affiliated service
group (as defined in Sections 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 the Company: (a) no Company has
become liable to the PBGC under Section 4062, 4063 or 4064 of ERISA
under which a lien could attach to the assets of the Seller under
Section 4068 of ERISA; (b) the Company has not ceased operations at a
facility so as to become subject to the provisions of Section 4062(e)
of ERISA; and (c) the Company has not made a complete or partial
withdrawal from a multiemployer plan (as defined in Section 3(37) of
ERISA) so as to incur withdrawal liability as defined in Section 4201
of ERISA, and (ii) all group health plans maintained by the Company
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)
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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 May 31, 1998 (the "Balance Sheet Date") and Unaudited Income
Statement for the two-month period ended on the Balance Sheet Date; and
(b) Unaudited Balance Sheet and Income Statement for the
fiscal year ending on March 31, 1998, and Audited Balance Sheets,
Income Statements and Statements of Changes in Financial Position for
the two fiscal years ending on March 31, 1996 and March 31, 1997.
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;
(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, 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, the Business, the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property, or the Grand Rapids Property;
(e) to the Best Knowledge of Seller, any legislative or
regulatory change adversely affecting the Assets, the Business, the
Real Property, the ▇▇▇▇▇▇▇▇▇ Property, or the Grand Rapids Property;
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(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, the
Business, the Real Property, the ▇▇▇▇▇▇▇▇▇ Property, or the Grand
Rapids Property 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, the Business, the Real Property, the ▇▇▇▇▇▇▇▇▇ Property, or
the Grand Rapids Property.
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 fiscal year ended March 31, 1998, and an
accurate statement of the gross revenues received from each such customer by the
Business during such period.
4.6 Taxes.
(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 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;
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(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 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. To the best of Seller's knowledge, 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. 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 and except as set
forth on Schedule 4.7, 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, together with Schedule
2.1(p), sets forth a true and complete list of and briefly describes all of the
following contracts, agreements, leases, licenses, plans, arrangements or
commitments, written or oral, that relate to the Assets, the Real Property, the
Grand Rapids Property, the ▇▇▇▇▇▇▇▇▇ Property and 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;
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(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, the Business, the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property, or the Grand Rapids Property;
(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 contracts or agreements of any nature with Seller, or
any Affiliate of Seller or Shareholders; and
(k) 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
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 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 (i) will result in a loss
to Purchaser on completion by performance or (ii) cannot readily be fulfilled or
performed by Purchaser with the Assets on time without undue or unusual
expenditure of money or effort. Copies of all of the documents (or in the case
of oral commitments, descriptions of the material terms thereof) relevant to the
Contracts listed in Schedule 4.8 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
described on Schedule 4.8, the Purchaser may, at its sole option, choose to
assume one or more of such Contracts, and, within twenty (20) days of receipt by
Purchaser of all information reasonably requested by Purchaser with respect to
such Contracts, Purchaser shall notify Seller of which Contracts, if any,
Purchaser intends to assume hereunder. Except for Contracts, if any, that
Purchaser notifies Seller (in writing) that it will assume, all of the Contracts
described on Schedule 4.8 (but not including any other Contracts, including the
Contracts on Schedule 2.1(p)) 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.
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
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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 (to the Best
of Seller's Knowledge) 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
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. To the Best of Seller's
Knowledge, 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.
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 Real
Property, each of the owners thereof identified on Schedule 4.10 has good,
marketable and indefeasible title in fee simple, free and clear of all
restrictions, liens, leases, encumbrances, rights-of-way, easements,
encroachments, exceptions, and other matters affecting title, except for the
Permitted Exceptions. Neither Seller nor (to the Best of Seller's Knowledge) the
Grand Rapids Landlord nor the ▇▇▇▇▇▇▇▇▇ Landlord are currently in default of any
of their respective obligations under the Grand Rapids Lease and the ▇▇▇▇▇▇▇▇▇
Lease, and each such lease is now and at Closing will be in full force and
effect in accordance with its terms. The plants, structures, equipment, vehicles
and other tangible properties included in the Assets, the Real Property and the
tangible property leased by Seller under the Grand Rapids Lease and the
▇▇▇▇▇▇▇▇▇ Lease and other leases included in the Assets, are in good operating
condition and repair, normal wear and tear excepted, and are capable of being
used for their intended purpose in the Business as now conducted. The Assets
include all existing warranties and service contracts with respect to any of the
Assets, the Real Property, the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property
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. To the Best
of Seller's Knowledge, all plants, structures, equipment, vehicles and other
tangible properties included in the Assets, the Real Property, the ▇▇▇▇▇▇▇▇▇
Property and the Grand Rapids Property and the present use of all such items,
conform to all applicable Governmental Requirements, and no notice of any
violation of any such Governmental Requirements relating to such assets or their
use has been received by Seller. The Assets include all easements, rights of
ingress and egress, and utilities and services necessary for the conduct of the
Business.
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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 Seller's agreements with
▇▇▇▇ Deere and 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. To the Best of Seller's Knowledge, 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. To the Best of Seller's
Knowledge, Seller is not infringing any 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, Seller does not have any
Best Knowledge of any state of facts or the occurrence of any event forming the
basis of any present or potential claim against Seller.
4.13 Licenses and Permits; Compliance With Governmental Requirements.
To the Best of Seller's Knowledge and 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, 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. As of the Closing, the Seller shall have 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. As of the Closing, the execution and
delivery of this Agreement by Seller and each of the Shareholders and the
performance by Seller and each of the Shareholders of the transactions
contemplated herein shall have been duly and validly authorized by all requisite
corporate action of Seller and
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by each Shareholder, and this Agreement shall have been duly and validly
executed and delivered by Seller and by each Shareholder and shall be the legal,
valid and binding obligation of each of them, enforceable against Seller and
each of the Shareholders in accordance with its terms, except as limited by
applicable bankruptcy, moratorium, insolvency or other similar laws affecting
principles of equity.
4.15 Records. To the Best of Seller's Knowledge, the books, records and
minutes kept by Seller with respect to the Assets and the Business, including,
but not limited to, all customer files, service agreements, quotations,
correspondence, route sheets and historic revenue data of Seller, have been kept
properly and contain records of all matters required to be included therein by
any Governmental Requirement or by generally accepted accounting principles, and
such books, records and minutes are true, accurate and complete and (except for
corporate minute books and stock records) are included in the Assets.
4.16 Environmental Protection Laws. Except as described on Schedule
4.16:
(a) To the Best Knowledge of Seller, Seller and each of the
respective owners of the Real Property, as applicable, have at all
times operated the Real Property, Grand Rapids Property, ▇▇▇▇▇▇▇▇▇
Property, Assets and Business in compliance with all applicable
limitations, restrictions, conditions, standards, prohibitions,
requirements and obligations of Environmental Laws and related orders
of any court or other Governmental Authority, and are not currently
operating or required to be operating the Assets, the Business, the
Real Property, the ▇▇▇▇▇▇▇▇▇ Property, or the Grand Rapids Property
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) 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 Real
Property, Grand Rapids Property, ▇▇▇▇▇▇▇▇▇ Property, Assets or Business
which pertain or relate to (i) any remedial obligations under any
applicable Environmental Law, (ii) violations of any Environmental Law,
(iii) personal injury or property damage claims relating to the release
of chemicals or Hazardous Materials or (iv) response, removal or
remedial costs under CERCLA or any similar state law, and there is not
any Environmental Condition on or at the Real Property, Grand Rapids
Property, ▇▇▇▇▇▇▇▇▇ Property, or any other matter on or connected with
the Assets that would cause the imposition on Purchaser of
Environmental Liabilities if such Environmental Condition or other
matter were disclosed to Governmental Authorities.
(c) To the Best of Seller's Knowledge, all notices,
Environmental Permits, licenses or similar authorizations required to
be obtained or filed by Seller under all applicable Environmental Laws
in connection with its current and previous operation or use of the
Real Property, Grand Rapids Property, ▇▇▇▇▇▇▇▇▇ Property and Assets, or
the current and previous conduct of the Business have been duly
obtained or filed and are in full force and effect.
(d) Seller has not received notice that any Environmental
Permit, license or similar authorization is to be revoked or suspended
by any Governmental Authority.
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(e) There are no underground storage tanks on the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property or the Grand Rapids Property. To the
best knowledge of Seller and each of the Shareholders, there have never
been any underground storage tanks on the Real Property, the ▇▇▇▇▇▇▇▇▇
Property or the Grand Rapids Property.
(f) To the Best Knowledge of Seller, no portion of the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property or Grand Rapids Property is part of a
Superfund site under CERCLA or any similar ranking or listing under any
similar state law.
(g) To the Best Knowledge of Seller and each of the
Shareholders, all Hazardous Materials generated in connection with the
operation of the Business have been transported, stored, treated and
disposed of by carriers, storage, treatment and disposal facilities
authorized and maintaining valid permits under all applicable
Environmental Laws, and no Hazardous Materials have been dumped,
landfilled, stored, located or disposed of on the Real Property, the
▇▇▇▇▇▇▇▇▇ Property or the Grand Rapids Property.
(h) To the Best Knowledge of Seller and each of the
Shareholders, no Person has disposed or released any Hazardous
Materials on or under the Real Property, the ▇▇▇▇▇▇▇▇▇ Property or the
Grand Rapids Property and Seller has not disposed or released Hazardous
Materials on or under the Real Property, ▇▇▇▇▇▇▇▇▇ Property, Grand
Rapids Property, Assets or 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 Real Property, Grand Rapids Property,
▇▇▇▇▇▇▇▇▇ Property, Business or Assets in connection with (i) any
release, transportation or disposal of any Hazardous Materials,
hazardous substance or solid waste or (ii) action taken or omitted that
was not in full compliance with or was in violation of, any applicable
Environmental Law.
4.17 Brokers and Finders. No broker or finder has acted for Seller or
any of the Shareholders 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 any of the Shareholders.
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 or on
Schedule 4.18. 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 21 hereof.
4.19 Work Orders. There are no outstanding work orders or contracts
relating to any portion of the Assets, Real Property, ▇▇▇▇▇▇▇▇▇ Property, or
Grand Rapids Property from or required by any policy of insurance, fire
department, sanitation department, health authority or other governmental
authority nor, to the Best of Seller's Knowledge, is there any matter under
discussion with any such parties or authorities relating to work orders or
contracts.
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4.20 Telephone Numbers. Seller will use its best efforts to transfer
all telephone numbers used by Seller in connection with the Business to
Purchaser.
4.21 No Royalties. No royalty or similar item or amount is being paid
or, to the Best of Seller's Knowledge, is owing by Seller, nor is any such item
accruing, with respect to the operation, ownership or use of the Business or the
Assets.
4.22 Insurance. Schedule 4.22 hereto sets forth all existing insurance
policies held by Seller relating to the Business, the Assets, the Real Property,
the ▇▇▇▇▇▇▇▇▇ Property, the Grand Rapids Property, the Improvements and all
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. To the Best of
Seller's Knowledge, 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. To the Best of Seller's Knowledge, 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. To the Best of Seller's Knowledge and
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 Warranties and Product Liability.
(a) Except for warranties implied by law, 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 of
Seller's Knowledge, there is no state of facts or occurrence of any event
forming the reasonable basis of any present claim against Seller with respect to
warranties in connection with the operation of the Business relating to
products, 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 of Seller's Knowledge, there is no state of facts
or any event forming the reasonable basis of any present claim against Seller in
connection with the operation of the Business not fully covered by insurance,
except for deductibles and self-insurance retentions, for personal injury or
property damage alleged to be caused by products shipped or services rendered by
or on behalf of Seller in connection with the operation of the Business.
4.24 No Untrue Statements. To the Best of Seller's Knowledge, the
statements, representations and warranties of Seller set forth in this Agreement
and the Schedules and in all other documents and information furnished to
Purchaser and its representatives in connection herewith do not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements, representations and warranties made not misleading. 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 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 any of the Shareholders to perform
their respective obligations under this Agreement.
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4.25 Shareholders' Representations and Warranties. The
Shareholders hereby jointly and severally represent and warrant to the Rush
Parties as follows:
(a) Due Authorization. Each Shareholder has full power and
authority to execute and deliver this Agreement and the agreement
contemplated herein and to perform his obligations hereunder and
thereunder. Each Shareholder has duly executed this Agreement, and this
Agreement is, and each other agreement contemplated hereby to which he
will be a party will be, upon execution and delivery thereof by him,
his legal, valid and binding obligation, enforceable against him in
accordance with its terms (except as the enforceability thereof may be
limited by any applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally or by general principles of
equity, regardless of whether such enforceability is considered in
equity or at law).
(b) No Conflict. Neither Shareholders' execution and delivery
of this Agreement or the agreements contemplated herein nor the
consummation of the transactions contemplated hereby or thereby by him
will (i) conflict with, result in a breach or violation of or
constitute (or with notice or lapse of time or both constitute) a
default under any law, statute, regulation, order, judgment or decree
or any instrument, contract or other agreement to which he is a party
or by which he (or any of his assets or properties) is bound; or (ii)
require him to obtain any authorization, consent, approval or waiver
from, to give notification to, or to make any filing with, any
Governmental Authority, or to obtain the approval or consent of any
other Person.
(c) Brokers. Neither Shareholder has paid or become obligated
to pay any fee or commission to any broker, finder, investment banker
or other intermediary in connection with the transactions contemplated
by this Agreement.
(d) Seller's authorized capital stock consists of 250,000
shares of Common Stock, of which 54,796 shares are issued and
outstanding and are owned of record and beneficially as set forth on
Schedule 4.25, free and clear of all liens, Encumbrances or other
obligations. All of the outstanding shares of capital stock of Seller
have been duly authorized and validly issued and are fully paid and
non-assessable. There are no outstanding options, warrants, convertible
securities, calls, rights, commitments, preemptive rights, agreements,
arrangements or understandings of any character obligating Seller (a)
to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of Seller or any securities or
obligations convertible into or exchangeable for such shares or (b) to
grant, extend or enter into any such option, warrant, convertible
security, call, right, commitment, preemptive right, agreement,
arrangement or understanding described in clause (a) above.
5. REPRESENTATIONS AND WARRANTIES OF THE RUSH PARTIES. The Rush
Parties represent and warrant to Seller and the Shareholders 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
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applicable bankruptcy, moratorium, insolvency or other laws affecting generally
the rights of creditors or by principles of equity.
5.3 Brokers and Finders. No broker or finder has acted for either of
the Rush Parties in connection with this Agreement or the transactions
contemplated by this Agreement and no broker or finder is entitled to any
brokerage or finder's fee or to any commission in respect thereof based in any
way on agreements, arrangements or understandings made by or on behalf of the
Rush Parties.
5.4 No Violation of Laws of Agreements. The execution, delivery and
performance of this Agreement and/or the transactions contemplated by this
Agreement by each of the Rush Parties does not (a) violate any provision of
applicable law, (b) violate any judgment, order, writ or decree of any court or
other tribunal applicable to either or both of the Rush Parties, (c) violate any
of the provisions of the Articles of Incorporation or the By-Laws of the Rush
Parties, of (d) constitute a default under any material agreement, bond, note or
indenture by which the Rush Parties or any of their properties or assets are
bound.
6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS, GUARANTEES,
REPRESENTATIONS AND WARRANTIES OF THE PARTIES. 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, any
of the Shareholders or the Rush Parties, as the case may be, pursuant to this
Agreement or in connection with the transactions contemplated hereby shall be
deemed representations and warranties hereunder of Seller, each Shareholder or
the Rush Parties, as the case may be. All indemnifications, guarantees,
covenants, agreements, representations and warranties made by any party
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 any other party.
7. CONTRACTS PRIOR TO THE CLOSING DATE.
7.1 Approval of Contracts. Other than contracts entered into in the
ordinary course of business, none of which are materially adverse to the
transaction to which it relates, Seller shall not enter into or amend any
contracts related to the Business, the Assets, the Real Property, the ▇▇▇▇▇▇▇▇▇
Property or the Grand Rapids Property between the date hereof and the Closing
Date unless approved in writing by Purchaser. 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, the Assets,
the Real Property, the ▇▇▇▇▇▇▇▇▇ Property or the Grand Rapids Property that are
entered into by Seller between the date hereof and the Closing Date and are
approved in writing by Purchaser (after review of true, correct and accurate
copies of such items) shall be included in the Assets (with no addition to the
Purchase Price) and shall be assumed by Purchaser pursuant to Section 3.2.
8. COVENANTS OF SELLER PRIOR TO CLOSING DATE. Seller hereby covenants
and agrees that between the date of this Agreement and the Closing Date:
8.1 Access to Information. Seller shall afford to the officers and
authorized representatives of the Rush Parties access to the facilities,
properties, books and records of
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Seller related to the Assets, the Business, the Real Property, the ▇▇▇▇▇▇▇▇▇
Property and the Grand Rapids Property and shall furnish the Rush Parties with
such financial and operating data and other information regarding the Assets,
the Business, the Real Property and the Grand Rapids Property and as Purchaser
may from time to time reasonably request.
8.2 General Affirmative Covenants. Seller shall:
(a) conduct the Business only in the ordinary course;
(b) maintain the Assets and the 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 Real Property, the Grand Rapids Property,
the ▇▇▇▇▇▇▇▇▇ Property or the Business (including, without limitation,
the Grand Rapids Lease and the ▇▇▇▇▇▇▇▇▇ Lease);
(d) keep in full force and effect adequate insurance coverage
on the Assets the 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, upon any part thereof or
upon its Shareholders as the result of the Seller's election to be
taxed as an "S" corporation under the Code;
(g) duly observe and conform to all Governmental Requirements
relating to the Assets or its properties, the Real Property, the
▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property 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, the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property (except
for liens and encumbrances, if any, specifically assumed by Purchaser
pursuant to this Agreement or permitted under the Leases, the New
▇▇▇▇▇▇▇▇▇ Lease or the Grand Rapids Lease, as applicable);
(i) duly and timely take all actions necessary to carry out
the transactions contemplated hereby;
(j) deliver to Purchaser on or before the 15th day of each
month true and correct unaudited monthly balance sheets and statements
of income for the Business for the immediately preceding month;
(k) deliver to Purchaser on or before the Closing Date a true
and correct audited annual balance sheet, statement of income and
statement of changes in financial position for the year ended March 31,
1998, together with any additional financial information reasonably
requested by Purchaser to allow Purchaser to timely comply with
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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; and
(m) cause the book value of the used, rental, leased and "rent
to own" construction machinery equipment, and all used attachment
inventory of Seller to be at least $2,300,000 and to purchase and sell
such equipment and inventory only in accordance with past practice.
8.3 General Negative Covenants. Seller shall not take any of the
following actions without the prior written consent of Purchaser:
(a) entering into or amending or assuming any contract,
agreement, obligation, lease, license or commitment related to the
Business, the Real Property, the ▇▇▇▇▇▇▇▇▇ Property, the Grand Rapids
Property 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, the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property, the Grand Rapids Property, or
selling, leasing, abandoning or otherwise disposing of any of the
Assets, the Real Property, the ▇▇▇▇▇▇▇▇▇ Property, or the Grand Rapids
Property, 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, the Real Property, the ▇▇▇▇▇▇▇▇▇ Property,
the Grand Rapids Property or the Business; or
(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 any of the Shareholders hereunder are
determined by Seller or any of the Shareholders to have been incorrect when
made, or are determined by Seller or any of the Shareholders to be incorrect as
of any date subsequent to the date hereof, or if any of the covenants of Seller
and each of the Shareholders contained in this Agreement have not been complied
with timely, then Seller or the Shareholders, as the case may be, shall
immediately notify Purchaser to such effect (provided that such notice shall in
no way limit the rights of Purchaser (a) under Articles 10 and 18 to terminate
this Agreement or refuse to consummate the transactions contemplated hereby or
(b) to enforce any rights or remedies it may have hereunder).
8.5 Government Filings. Seller and the Shareholders shall cooperate
with Purchaser and their representatives in the preparation of any documents or
other material that may be required by any Governmental Authority in connection
with the Assets or the Business or the transactions contemplated hereby,
including, but not limited to, any required filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇").
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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 Real Property, the ▇▇▇▇▇▇▇▇▇ Property, the Grand Rapids Property
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, including, but not limited to, an
environmental inspection and audit. To the extent the consent of any owner of
any parcel of the Real Property, the ▇▇▇▇▇▇▇▇▇ Landlord or the Grand Rapids
Landlord is required for such access, Seller has heretofore obtained or will
obtain the same and agrees to indemnify the Rush Parties and their agents,
officers, employees, contractors, consultants and representatives against any
and all claims, demands or suits against any of such persons by the owners of
any parcel of the Real Property, the ▇▇▇▇▇▇▇▇▇ Landlord or the Grand Rapids
Landlord in connection with such access or the exercise of any of Seller's or
Purchaser's rights under this agreement, except to the extent such claims,
demands or suits arise out of the negligence or intentional misconduct of the
indemnified parties. If upon completion of such inspection the Rush Parties find
any conditions which the Rush Parties, in their sole discretion, consider to be
unacceptable, the Rush Parties may, in addition to their rights to terminate
this Agreement pursuant to Articles 10 and 18, delay the Closing under Article 2
up to and including the earlier of (a) ten days after remedy of the condition to
the Rush Parties' satisfaction, or (b) October 31, 1998.
9. COVENANTS REGARDING THE CLOSING AND POST-CLOSING.
9.1 Covenants of Seller. (a) Seller and each Shareholder hereby
covenant and agree that they shall each (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
18 to terminate this Agreement or refuse to consummate the transactions
contemplated hereby).
(b) To the extent Seller receives any funds or other assets in
connection with the Assets being sold to Purchaser pursuant hereto, Seller shall
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 Shareholders. For a period of 18 calendar months
following the Closing Date, the Shareholders shall cause Seller to maintain cash
and prepaid amounts to the Internal Revenue Service in the aggregate amount of
at least $1.5 million and the cash
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surrender value of all life insurance policies currently owned by Seller, to
retain its ownership interest in Maple Creek Golf Course, LLC, and not to incur
any indebtedness from and after the Closing other than indebtedness incurred in
connection with any existing recourse obligation, guaranty or any Contract
described on Schedule 4.8.
9.3 Covenants of the Rush Parties. (a) Each of the Rush Parties 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 the Rush Parties to
comply with a second requirement for information under the HSR Act or to comply
with any requested divestiture of assets or to enter into any consent or similar
order or agreement shall not constitute a failure of the Rush Parties to use
commercially reasonable efforts), and (d) deliver to Seller at the Closing the
certificate contemplated by Article 11 (with such additions or exceptions to
such certificate as are necessary to make the statements set forth in such
certificate accurate, provided that if any of such additions or exceptions cause
any of the conditions to Seller's obligations hereunder as set forth in Article
11 not to be fulfilled, such additions and exceptions shall in no way limit the
rights of Seller under Articles 11 and 18 to terminate this Agreement or to
refuse to consummate the transactions contemplated hereby).
(b) In the event Seller repurchases any equipment or machinery
covered by a repurchase obligation referred to in Section 3.2(j) and listed on
Schedule 2.1(p) and thereafter elects to have repairs made to such equipment and
machinery before selling or disposing of such equipment and machinery, the Rush
Parties shall make all such repairs in consideration for the actual cost of such
repairs plus the intercompany labor rate of the Rush Parties.
9.4 HSR Act. The parties will prepare and file the notification, if
any, required to be filed by them under the HSR Act with respect to the
transactions contemplated by this Agreement, will request early termination
prior to the Closing Date of the statutory waiting period prescribed by the HSR
Act, and will use commercially reasonable efforts to respond to any inquiry made
by the Federal Trade Commission or the Antitrust Division of the Department of
Justice regarding such notification; provided that the parties will respond to
any request for information only if and to the extent requested by the Rush
Parties, in their sole discretion.
9.5 Inventory Audit. Within five days prior to Closing, Seller and the
Rush Parties shall each appoint one or more representatives knowledgeable in the
equipment business, and shall cause such representatives to conduct an audit (in
accordance with generally accepted accounting principles, consistently applied)
of the inventory of the Assets as of the Closing Date. Each party shall bear
their cost of conducting such audit.
10. CONDITIONS TO OBLIGATIONS OF THE RUSH PARTIES. The obligations of
the Rush Parties hereunder are, at the option of the Rush Parties, subject to
the satisfaction, on or prior to the Closing Date, of the following conditions
(any of which may be waived by the Rush Parties, in their sole discretion):
10.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of Seller and each of the
Shareholders 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
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all of the agreements and covenants of Seller and each of the Shareholders,
respectively, to be performed on or before the Closing Date pursuant to the
terms hereof shall have been performed. Seller and each of the Shareholders
shall have delivered to the Rush Parties a certificate dated the Closing Date
and executed by Seller and each of the Shareholders, as the case may be, to all
such effects.
10.2 Financial Information. Seller shall have provided to the Rush
Parties at Closing all financial information of Seller in the format required in
connection with the filing of 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 shall have
delivered to Purchaser a certificate dated the Closing Date and executed by
Seller stating it has no Best Knowledge of any such items. No Governmental
Authority shall have taken any other action as a result of which the management
of the Rush Parties 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 shall
have delivered to Purchaser a certificate dated the Closing Date and executed by
Seller to all such effects.
10.5 Update of Contracts. Seller shall have delivered to the Rush
Parties 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"). The Rush
Parties shall have the opportunity to review the New Contracts, and shall have
the right to delay the Closing for up to five days if the Rush Parties in their
sole discretion deem such a delay necessary to enable them to adequately review
the New Contracts. All of the New Contracts that are approved in writing by the
Rush Parties prior to the Closing, as it may be delayed, (whether such approval
by the Rush Parties is given before or after Seller executes the New Contract)
shall be included in the Assets (with no addition to the Purchase Price) and the
future obligations of Seller thereunder shall be assumed by Purchaser pursuant
to Section 3.2. Any New Contracts that are not approved in writing by the Rush
Parties 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 the Rush Parties.
10.7 No Material Adverse Information. The investigations with respect
to Seller, the Assets and the Business, performed by the Rush Parties'
professional advisors and other representatives shall not have revealed any
material adverse information concerning Seller, the
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Assets or the Business that has not been made known to the Rush Parties in
writing prior to the date of this Agreement.
10.8 Notices and Consents. No notice to or consent, authorization,
approval or order of any Person shall be required for the consummation of the
transactions contemplated by this Agreement (except for notices that have been
duly and timely given and consents, authorizations and approvals that have been
obtained), and Seller shall have delivered to the Rush Parties a certificate
dated the Closing Date and executed by Seller to such effect. True and correct
copies of all required notices, consents, authorizations and approvals shall
have been delivered to the Rush Parties and shall be satisfactory in form and
substance to the Rush Parties and their counsel.
10.9 Lease Arrangements. Purchaser shall have entered into Lease
Agreements with the owners of the Real Property and the ▇▇▇▇▇▇▇▇▇ Landlord for
each of the parcels of real property comprising the Real Property and the
▇▇▇▇▇▇▇▇▇ Property, respectively, in the forms attached hereto as Exhibit D-1
and subject to the location-specific rent rates and other business terms set
forth in Exhibit D-2 attached hereto. All such lease agreements covering the
Real Property are herein referred to individually as a "Lease" and collectively
as the "Leases". Such new Lease Agreement covering the ▇▇▇▇▇▇▇▇▇ Property is
referred to herein as the "New ▇▇▇▇▇▇▇▇▇ Lease". In addition, the owners of the
Real Property, the Grand Rapids Landlord and the ▇▇▇▇▇▇▇▇▇ Landlord shall have
obtained the signatures of all mortgagees of the Real Property, the Grand Rapids
Property and the ▇▇▇▇▇▇▇▇▇ Property (as applicable) on the Subordination,
Non-disturbance and Attornment Agreements in substantially the form incorporated
into the Lease Agreement attached hereto as Exhibit D-1. In addition Rush shall
execute a Lease Guaranty Agreement in favor of each of the Landlords under the
Leases in the form attached hereto as Exhibit D-1.
10.10 Corporate Approval. Seller shall have taken or caused to be taken
all necessary or desirable actions, steps and corporate proceedings (whether by
directors, shareholders or otherwise) to approve and authorize the transfer of
the Business and the Assets by Seller to the Rush Parties and the entering into
of the Leases and the New ▇▇▇▇▇▇▇▇▇ Lease by the owners of the Real Property and
the ▇▇▇▇▇▇▇▇▇ Landlord, respectively, and to approve and authorize the execution
and delivery of this Agreement by the Seller, the Leases by the owners of the
Real Property, and the New ▇▇▇▇▇▇▇▇▇ Lease by the ▇▇▇▇▇▇▇▇▇ Landlord, and
Seller, the owners of the Real Property and the ▇▇▇▇▇▇▇▇▇ Landlord, as
applicable, shall have delivered to Purchaser at Closing a certificate to all
such effects.
10.11 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.
10.12 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.
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10.13 Ordinary Course of Business. During the period from the date of
this Agreement until Closing, Seller shall have carried on the Business in the
ordinary and usual course and the Seller shall have delivered to the Rush
Parties at Closing a certificate to that effect.
10.14 Other Documents. Seller shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as the Rush Parties or their attorneys may have reasonably
requested.
10.15 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.
10.16 Inventory Audit. The inventory audit contemplated by Section 9.5
shall have been completed and the results thereof shall be satisfactory to the
Rush Parties.
10.17 Other Records. All original licenses and permits, certificates of
occupancy, certificates of compliance, permits, architectural, mechanical, or
electrical plans and specifications and surveys relating to the Real Property,
the Grand Rapids Property, the ▇▇▇▇▇▇▇▇▇ Property and the Assets; all studies
with respect to the functional aspects of the Real Property, the Grand Rapids
Property, the ▇▇▇▇▇▇▇▇▇ Property and the Assets, including, without limitation,
environmental site assessments and reports; soil and compaction tests and
flooding studies; all extra promotional brochures, posters, signs and other
advertising materials relative to the operation of the Real Property, the Grand
Rapids Property, the ▇▇▇▇▇▇▇▇▇ Property and the Assets; and copies of all other
books and records relating to the ownership and operation of the Real Property,
the Grand Rapids Property, the ▇▇▇▇▇▇▇▇▇ Property and the Assets.
10.18 Keys. Keys to the Improvements shall be delivered to the
Purchaser.
10.19 Government Approvals. All necessary government and regulatory
approvals have been obtained, including all necessary approvals under the HSR
Act and all waiting periods under the HSR Act shall have expired or been
terminated.
10.20 Employment Agreements. Each of ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇., shall have entered into and delivered a fully executed Employment Agreement
in substantially the form attached hereto as Exhibit C.
10.21 Non-Competition Agreements. Each of ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall either be subject to the
non-competition agreement in Article 15 hereof, or shall have entered into and
delivered a fully-executed Non-Competition Agreement in substantially the form
of Article 15 hereof.
10.22 Assignment/Termination of Leases. Seller shall have delivered to
Purchaser an executed assignment of Seller's interest in the Grand Rapids Lease
and a Landlord's Consent and Estoppel executed by the Grand Rapids Landlord, in
form and substance reasonably acceptable to Seller and Purchaser and their
respective counsel, and an instrument terminating the ▇▇▇▇▇▇▇▇▇ Lease executed
by Purchaser and the ▇▇▇▇▇▇▇▇▇ Landlord in form and substance reasonably
acceptable to Seller and Purchaser and their respective counsel, wherein the
▇▇▇▇▇▇▇▇▇ Landlord shall represent and agree that there are no existing defaults
or further obligations or liabilities on the part of Sellers in connection with
or as a result of the ▇▇▇▇▇▇▇▇▇ Lease.
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10.23 Leasehold Policies. Seller shall have delivered to Purchaser
leasehold policies of title insurance in the form contemplated by Section 22.2
hereof insuring the Purchaser with respect to leasehold interests under the
Leases, the ▇▇▇▇▇▇▇▇▇ Lease and the Grand Rapids Lease.
10.24 Dealership Agreement. Purchaser and ▇▇▇▇ Deere shall have
executed and delivered a dealer sales and service agreement, and ancillary or
related agreements, in form and substance satisfactory to Purchaser.
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND SHAREHOLDERS. The
obligations of Seller and the Shareholders hereunder are, at their option,
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions (any of which may be waived by Seller and the Shareholders in their
sole discretion):
11.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of the Rush Parties 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 the Rush Parties to be
performed on or before the Closing Date shall have been performed. The Rush
Parties shall have delivered to Seller a certificate dated the Closing Date and
executed by the Rush Parties to all such effects.
11.2 Delivery of Purchase Price. Purchaser shall have paid to Seller
the Purchase Price as required by this Agreement, subject in all respects to the
provisions of Article 21 below.
11.3 Approval of Counsel. All actions, proceedings, instruments and
documents required or incidental to carrying out this Agreement and all other
related legal matters shall have been approved by counsel to Seller and the
Shareholders.
11.4 Governmental Approvals. All necessary government and regulatory
approvals have been obtained, including all necessary approvals under the HSR
Act, and required waiting periods under the HSR Act shall have expired or been
terminated.
11.5 Lease Arrangements. Seller and Purchaser shall have entered into
the Leases and the New ▇▇▇▇▇▇▇▇▇ Lease.
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS.
12.1 Change of Name. Immediately upon the occurrence of the Closing,
Seller and the Shareholders shall cease using the name "▇▇▇▇ Deere," "▇▇▇▇▇▇▇▇,"
"▇▇▇▇▇▇▇▇ Equipment," and "Stihl" and all derivations thereof. Seller covenants
and agrees that after the Closing they will not, directly or indirectly, use the
name "▇▇▇▇ Deere," "▇▇▇▇▇▇▇▇," "▇▇▇▇▇▇▇▇ Equipment," "Stihl" or any derivation
thereof in connection with any business enterprise.
12.2 Exchange Act Filing; Cooperation. After the Closing, Seller shall
reasonably cooperate with and provide information to the Rush Parties as is
necessary for the Rush Parties to comply with its reporting obligations under
the Exchange Act.
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13. INDEMNITY BY SELLER AND THE SHAREHOLDERS.
13.1 Indemnification by Seller. Seller agrees to indemnify, defend and
hold harmless the Rush Parties and each of their respective Affiliates,
officers, directors, employees, agents, consultants, representatives,
shareholders and controlling Persons and their respective successors and assigns
from and against and in respect of any and all Damages which may now or in the
future be paid, incurred or suffered by or asserted against such party
(collectively, "General Losses"), arising out of or resulting from or relating
to any misrepresentation, breach of warranty, representation or breach of any
covenant, commitment or agreement made or undertaken by Seller.
13.2 Indemnification by Shareholders. The Shareholders, 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
misrepresentation, breach of warranty or breach of any covenant, commitment or
agreement made or undertaken by any of the Shareholders in this Agreement.
13.3 Environmental Indemnification. Seller agrees to indemnify, defend
and hold harmless the Rush Parties and each of their respective Affiliates,
officers, directors, employees, agents, consultants, representatives,
shareholders and controlling Persons and their respective successors and assigns
from and against and in respect of any and all Environmental Liabilities which
may now or in the future be paid, incurred or suffered by or asserted against
such party, arising out of or resulting from or relating to or in connection
with (a) the acts or omissions of Seller, any of the Shareholders or other
person or entity on or prior to the Closing Date relating to the Real Property,
the Grand Rapids Property, the ▇▇▇▇▇▇▇▇▇ Property, the Assets or any operations
conducted by Seller or on the Real Property, the ▇▇▇▇▇▇▇▇▇ Property, or the
Grand Rapids Property; (b) any violation of Environmental Law occurring or
commencing on or prior to the Closing Date and resulting from or related to the
Real Property, the Grand Rapids Property, the ▇▇▇▇▇▇▇▇▇ Property, the Assets or
the operations conducted on or with respect to the Real Property, the ▇▇▇▇▇▇▇▇▇
Property, the Grand Rapids Property, or the Assets; (c) the management,
treatment or disposal of any wastes at or from the Real Property, the ▇▇▇▇▇▇▇▇▇
Property or the Grand Rapids Property on or prior to the Closing Date; (d) the
presence or use of any Hazardous Materials at, on or under the Real Property,
the Grand Rapids Property or the ▇▇▇▇▇▇▇▇▇ Property on or prior to the Closing
Date; (e) any Environmental Condition existing at or with respect to the Assets,
the Real Property, the ▇▇▇▇▇▇▇▇▇ Property, or the Grand Rapids Property as of
the Closing Date; (f) any acts or omissions of Seller or any of the
Shareholders, relating to the Real Property, the ▇▇▇▇▇▇▇▇▇ Property, the Grand
Rapids Property, the Assets or the Businesses or any operations conducted on or
with the Real Property, the Grand Rapids Property, the ▇▇▇▇▇▇▇▇▇ Property or the
Assets; or (g) any breach by Seller of a representation or warranty contained in
Section 4.16 hereof (collectively, "Environmental Losses"). In clarification of
this Section 13.3, and not in limitation thereof, Seller's indemnity of
Purchaser hereunder shall include (y) any capital or other expenditures
necessary to comply with Environmental Laws, provided such expenditures relate
to any Environmental Condition that existed as of the Closing Date, and (z) all
fines, penalties and other costs and expenses that arise from or relate to an
Environmental Condition that existed as of the Closing Date, including fines,
penalties and other costs and expenses that arise from or relate to the
continued existence of such Environmental Condition after the Closing Date.
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13.4 Tax Indemnification. Seller agrees to indemnify, defend and hold
harmless the Rush Parties and each of their respective Affiliates, officers,
directors, employees, agents, consultants, representatives, shareholders and
controlling Persons and their respective successors and assigns from and against
and in respect of any and all Damages which may now or in the future be paid,
incurred or suffered by or asserted against such party arising out of or
resulting from or relating to any Taxes or Tax Returns of Seller for any period,
or portion thereof, up to and including the Closing Date (collectively, "Tax
Losses").
13.5 Products Liability and Warranty Indemnification. Seller agrees to
indemnify, defend and hold harmless the Rush Parties and each of their
respective Affiliates, officers, directors, employees, agents, consultants,
representatives, shareholders and controlling Persons and their respective
successors and assigns from and against and in respect of any and all Damages
which may now or in the future be paid, incurred or suffered by or asserted
against such party arising out of or resulting from or relating to any products
manufactured, sold or distributed or services provided by or on behalf of Seller
in connection with the Business or Assets on or prior to the Closing Date or
with respect to any claims made pursuant to warranties to third Persons in
connection with products manufactured, sold or distributed or services provided
by or on behalf of Seller in connection with the Business or Assets on or prior
to the Closing Date (collectively, "Product Losses").
13.6 Maximum Loss. Seller shall not have any liability under this
Article 13 in the event that the aggregate amount of General Losses,
Environmental Losses, Tax Losses and Product Losses do not exceed $50,000.
13.7 Indemnification by the Rush Parties. The Rush Parties jointly and
severally agree to indemnify, defend and hold harmless Seller and the
Shareholders and Seller's Affiliates, officers, directors, employees, agents,
consultants, representatives, shareholders and controlling Persons and their
respective successors and assigns from and against and in respect of any and all
Damages which may now or in the future be paid, incurred or suffered by or
asserted against any such party, arising out of or resulting from or relating to
any misrepresentation, breach of warranty or breach of any covenant, commitment
or agreement made or undertaken by the Rush Parties in this Agreement.
13.8 Procedure. All claims for indemnification or payment under this
Article 13 shall be asserted and resolved as follows:
(a) An Indemnitee shall promptly give the Indemnitor written
notice of any matter which an Indemnitee has determined has given or
could give rise to a right of indemnification under this Agreement (an
"Indemnification Event"), stating the amount of the Loss, if known, and
method of computation thereof, all with reasonable particularity, and
stating with particularity the nature of such matter. Failure to
provide such written notice shall not affect the right of the
Indemnitee to indemnification except to the extent such failure shall
have resulted in liability to the Indemnitor that could have been
actually avoided had such notice been provided within such required
time period and except that an Indemnitor shall not have any liability
under this Article 13 in the event such written notice is not given
under within 18 months following the Closing Date.
(b) The obligations and liabilities of an Indemnitor under
this Article 13 with respect to Losses arising from claims of any third
party that are subject to the indemnification provided for in this
Article 13 ("Third-Party Claims") shall be governed
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by and contingent upon the following additional terms and conditions:
if an Indemnitee shall receive notice of any Third-Party Claim, the
Indemnitee shall give the Indemnitor prompt notice of such Third-Party
Claim and the Indemnitor may, at its option, assume and control the
defense of such Third-Party Claim at the Indemnitor's expense and
through counsel of the Indemnitor's choice reasonably acceptable to
Indemnitee. Subject to the condition that written notice be delivered
prior to the expiration of one year after the Closing Date, failure to
provide such written notice shall not affect the right of the
Indemnitee to indemnification except to the extent such failure shall
have resulted in liability to the Indemnitor that could have been
actually avoided had such notice been provided within such required
time period. In the event the Indemnitor assumes the defense against
any such Third-Party Claim as provided above, the Indemnitee shall have
the right to participate at its own expense in the defense of such
asserted liability, shall cooperate with the Indemnitor in such defense
and will attempt to make available on a reasonable basis to the
Indemnitor all witnesses, pertinent records, materials and information
in its possession or under its control relating thereto as is
reasonably required by the Indemnitor. In the event the Indemnitor does
not elect to conduct the defense against any such Third-Party Claim,
the Indemnitor shall cooperate with the Indemnitee (and be entitled to
participate) in such defense and attempt to make available to it on a
reasonable basis all such witnesses, records, materials and information
in its possession or under its control relating thereto as is
reasonably required by the Indemnitee. The Indemnitor understands that
if such Third-Party Claim results in an obligation to indemnify
hereunder, Damages shall include all reasonable costs and expenses of
such defense. Except for the settlement of a Third-Party Claim that
involves the payment of money only and for which the Indemnitor has
provided written objection to Indemnitee under Section 13.8(c), no
Third-Party Claim may be settled without the written consent of the
Indemnitee. Written notice of any proposed settlement of any such claim
and the material terms thereof shall be delivered by Indemnitee to
Indemnitor at least five Business Days prior to any settlement of any
such claim.
(c) If a claim for indemnity is provided pursuant to this
Article 13 by an Indemnitee and the Indemnitor does not pay such claim
or object to such claim within 20 Business Days after written notice is
received by the Indemnitor, such claim shall be deemed agreed to by the
Indemnitor. If the Indemnitor shall object to such claim, a written
notice of such objection setting forth in reasonable detail the basis
for such objection shall be provided to the Indemnitee and such dispute
shall be resolved in accordance with Section 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.
13.9 Payment. Payment of any amounts due pursuant to this Article 13
shall be made within ten Business Days after final adjudication of such claim
and after written notice is sent by the Indemnitee.
13.10 Failure to Pay Indemnification. If and to the extent the
Indemnitee shall make written demand upon the Indemnitor for indemnification
pursuant to this Article 13 and the Indemnitor shall refuse or fail to pay in
full within 20 Business Days of such written demand the amounts demanded
pursuant hereto and in accordance herewith, then the Indemnitee shall proceed in
accordance with the arbitration provisions of Section 24.12 hereof; provided,
however,
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that in the case of indemnification for a Third-Party Claim, such matter need
not be resolved by arbitration until the underlying Third-Party Claim is finally
resolved.
13.11 Cooperation. The Indemnitor and the Indemnitee shall cooperate
with each other with regard to any indemnification obligation under this Article
13 and each shall attempt to make available to the other on a reasonable basis
all personnel records, materials and information in its possession or under its
control as is reasonably requested by the other.
14. LEASES. On the Closing Date, Seller shall cause the appropriate
owner(s) of the Real Property to enter into the Leases described in Exhibit D
with Purchaser.
15. NON-COMPETITION AGREEMENTS.
15.1 (a) 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 the Shareholders
hereby covenant and agree that, commencing on the Closing Date and ending on the
second anniversary of the Closing Date, Seller and the Shareholders 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 which engages in the sales, service and/or rental of construction
equipment and machinery and any similar business activity in Michigan and/or
Texas; provided, however, the foregoing shall not prohibit Seller and the
Shareholders, 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 each of
the Shareholders, and their Affiliates and representatives do not participate in
any way in the management, operation or control of such entity.
(b) Permitted Competition. Notwithstanding anything to the
contrary in this Section 15, in the event that the Rush Parties do not assume
any contract, repurchase agreement, recourse retail installment contracts,
guaranteed buyback contracts, or similar undertaking, including the repurchase
obligations set forth on Schedule 15.1(b), then Seller, after repurchasing such
equipment or machinery from a customer, shall be entitled to re-sell or
otherwise dispose of such equipment or machinery to any customer, person or
buyer in Michigan, Texas or elsewhere, on such terms as Seller may deem
appropriate and Seller shall retain 100% of the proceeds from the sale or
disposition of such equipment and machinery.
15.2 Judicial Reformation. Seller and each of the Shareholders
acknowledge that, given the nature of the Rush Parties' business, the covenants
contained in Section 15.1 establish reasonable limitations as to time,
geographic area and scope of activity to be restrained and do not impose a
greater restraint than is reasonably necessary to protect and preserve the
goodwill of the Rush Parties' business and to protect their legitimate business
interests. If, however, Section 15.1 is determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too long a
period of time or over too large a geographic area or by reason of it being too
extensive in any other respect or for any other reason, it will be interpreted
to extend only over the longest period of time for which it may be enforceable
and/or over the largest geographic area as to which it may be enforceable and/or
to the maximum extent in all other aspects as to which it may be enforceable,
all as determined by such court.
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15.3 Customer Lists; Non-Solicitation. Seller and each of the
Shareholders hereby further covenant and agree that they shall not, and Seller
and each of the Shareholders 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 and any of the Shareholders, 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.
15.4 Covenants Independent. The covenants of each of Seller and each of
the Shareholders contained in this Section 15 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 any of Shareholders against the Rush Parties will
not constitute a defense to the enforcement by the Rush Parties of said
provisions. Seller and each of the Shareholders understand that the provisions
contained in Sections 15.1, 15.2 and 15.3 are essential elements of the
transactions contemplated by this Agreement and, but for the agreement of Seller
and each of the Shareholders to Sections 15.1, 15.2 and 15.3, the Rush Parties
would not have agreed to enter into this Agreement and the transactions
contemplated herein. Seller and each of the Shareholders have been advised to
consult with counsel in order to be informed in all respects concerning the
reasonableness and propriety of Sections 15.1, 15.2 and 15.3 with specific
regard to the nature of the business conducted by Seller and the Rush Parties
and Seller and each of the Shareholders acknowledge that Sections 15.1, 15.2 and
15.3 are reasonable in all respects.
15.5 Remedies. In the event of a breach or a threatened breach by
Seller or any of the Shareholders of any of the provisions contained in Sections
15.1, 15.2 or 15.3 of this Agreement, Seller and each of the Shareholders
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.
16. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Seller and each of the
Shareholders 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, 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 the Rush
Parties. Seller and each of the Shareholders agree that Seller and each of the
Shareholders 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 each of the
Shareholders 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 the Rush Parties;
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 any of
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the Shareholders, or their respective 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 any
of the Shareholders of any of the provisions contained in this Article 16,
Seller and each of the Shareholders 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.
17. DAMAGE TO ASSETS. If, on or before the Closing Date, any of the
Assets are damaged or destroyed, Seller will immediately notify the Rush Parties
of such damage or destruction. In the event of any such damage or destruction,
the 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. If, on or before the Closing Date, all or any
portion of the Real Property or the Grand Rapids Property (including, without
limitation, any of the buildings or other improvements thereon) is damaged or
destroyed by fire or other casualty or wholly or partially taken by condemnation
or eminent domain or action in lieu thereof, then Seller shall immediately
notify the Rush Parties thereof, whereupon the Rush Parties shall have the
option of (i) requiring Seller to repair and restore the damaged parcel to the
condition it was in as of the date hereof, immediately upon Seller's receipt of
the casualty insurance proceeds or condemnation award therefor (as applicable),
in which event the Closing hereunder (as to either the entirety of this
transaction or just the parcel so affected, at the Rush Parties' election) shall
be delayed until such repairs are complete, (ii) proceeding to Closing upon
Seller's assignment to Purchaser of all casualty insurance proceeds or
condemnation awards associated with such damage, destruction or taking, (iii)
electing not to enter into a Lease with respect to any parcel of Real Property
so damaged, destroyed or taken, (iv) electing to enter into a Lease with respect
to any such parcel so damaged, destroyed or taken, but with a fair and equitable
reduction in the rental rate therefor determined by mutual agreement of the
owner thereof and the Rush Parties, or (v) if such damage, destruction or taking
affects the Grand Rapids Property, electing not to take assignment of the Grand
Rapids Lease or, at the Rush Parties' option, postponing acceptance of such
assignment until such time as the results of the damage, destruction or taking
of the Grand Rapids Property have been repaired or otherwise resolved in
accordance with the terms of the Grand Rapids Lease), or (vi) if such damage,
destruction or taking affects the ▇▇▇▇▇▇▇▇▇ Property, electing not to enter into
the New ▇▇▇▇▇▇▇▇▇ Lease or, at the Rush Parties' option, postponing the entering
into of the New ▇▇▇▇▇▇▇▇▇ Lease until such time as the results of the damage,
destruction or taking of the ▇▇▇▇▇▇▇▇▇ Property have been repaired or otherwise
resolved in accordance with the terms of the ▇▇▇▇▇▇▇▇▇ Lease).
18. TERMINATION. This Agreement may be terminated without further
obligation of the parties, as follows:
18.1 Mutual Consent. This Agreement may be terminated at any time prior
to Closing by mutual written consent of the parties hereto.
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18.2 Failure of Conditions. This Agreement may be terminated by either
party hereto, if the conditions, as set forth in this Agreement, to such party's
obligations under this Agreement are not fulfilled on or prior to the Closing
Date; provided that any such termination shall not limit the remedies otherwise
available to such party as a result of misrepresentations of or breaches by the
other party.
18.3 Failure to Close. This Agreement will automatically terminate on
October 31, 1998, 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 18.3 unless the failure of the Closing was due to the
failure of such party to comply with the terms of this Agreement.
19. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.
19.1 New Employees of Purchaser. It is the intention of Purchaser, and
Seller hereby acknowledges and agrees with such position, that any employees of
Seller that Purchaser hires will be new employees of Purchaser as of the Closing
Date or the date of hire, whichever is later. Such new employees shall be
entitled only to such compensation and employee benefits as are agreed to by
such employees and Purchaser, or as are otherwise provided by Purchaser, in its
sole discretion.
19.2 No Hiring Commitment. Purchaser specifically does not commit to
hire any of the employees of the Business, and Seller specifically understands
and acknowledges this fact. However, notwithstanding Purchaser's position,
Purchaser will review its needs in anticipation of the purchase of the Assets
with a view to hiring certain of the employees of Seller as of the Closing Date.
In its review, Purchaser expects to be able to review employee records and
conduct employee interviews. Seller agrees that after the date hereof it will
make, on a confidential basis, its employee records available to Purchaser and
permit Purchaser to contact its employees for the purpose of conducting employee
interviews. Seller further agrees to make employees designated by Purchaser
available to Purchaser for such purpose.
19.3 Vacation, Sick Pay, Health Insurance, etc.
(a) Notwithstanding Purchaser's decision to hire any or all of
such employees after the Closing Date, Purchaser shall not be liable
under any bonus plan or other plan described in Schedule 4.2(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 19.1.
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,
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Purchaser shall have no obligation after the Closing to continue any
pension plans or work benefit plans currently offered by Seller to its
employees.
(b) With respect to employees actually employed by Purchaser,
Seller will remain responsible for medical expenses covered under its
plans (i) actually incurred prior to the Closing Date or (ii) actually
incurred with respect to any hospitalization that begins prior to the
Closing Date until such hospitalization ends (as required under such
plans), and Purchaser will be responsible for all other medical
expenses incurred on or after the Closing Date to the extent covered
under its plans; provided, however, the employees will be treated as
newly hired employees of Purchaser beginning on the Closing Date
insofar as medical expenses paid under Purchaser's plans affects the
time or amount of coverage. Seller shall cooperate with Purchaser to
provide continuity of such insurance coverage to such employees. Seller
shall be solely responsible for any obligations under the Consolidated
Omnibus Budget Reconciliation Act, as amended, with respect to its
employees.
19.4 Severance Benefits; Employment Termination. Purchaser shall have
no obligation whatsoever to pay all or any part of any severance benefits that
Seller is or may be obligated to pay in connection with the termination of
employment by Seller of any of its employees.
19.5 Employee Benefit Plans. Purchaser shall not and does not hereby
assume, continue or maintain any pension, retirement or welfare plans, severance
or vacation policies or benefits, or other employee compensation or benefit
arrangements or policies or plans maintained by Seller for its employees. It is
intended that Purchaser shall not at any time be a successor employer for
purposes of Title IV of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). Seller hereby represents and warrants to Purchaser that the
consummation of this Agreement (and the employment by the Purchaser of former
employees of the Seller) will not result in any carryover liability to the
Purchaser for taxes, penalties, interest or any other claims resulting from any
employee pension benefit plan, employee welfare benefit plan, or other employee
benefit agreement or arrangement maintained by Seller. In addition, the Seller
makes the following representations (a) as to employee pension benefit plans of
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.
19.6 Reporting of Data. Purchaser and Seller shall complete and furnish
to each other such other employee data as shall be reasonably required from time
to time for each party to perform and fulfill its obligations under this Article
19.
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19.7 Employment Related Claims. Seller agrees that it, and not
Purchaser, shall be solely responsible for, and Seller hereby agrees to
indemnify, defend and hold harmless Purchaser from and against, all liability,
costs and expenses (including reasonable attorneys' fees) for all existing
employment claims that have been filed by any employee or former employee of
Seller prior to the Closing Date relating to arbitrations, unfair labor practice
charges, employment discrimination charges, wrongful termination claims,
workers' compensation claims, any employment-related tort claim or other claims
or charges of or by employees of Seller, or any thereof filed after the Closing
Date but arising as a result of conditions, actions or events or series of
actions or events which occurred prior to the Closing Date. Schedule 19.7 hereto
sets forth a brief description of any of such claims that have been filed or, to
Seller's knowledge, threatened. Without in any way limiting the foregoing,
Seller shall defend and hold harmless Purchaser from and against any and all
claims, demands, actions, judgments, costs and expenses, including without
limitation, attorney fees and settlement costs and other reasonable expenses,
related to all liabilities and obligations in connection with Seller's qualified
pension, retirement or welfare plans, severance or vacation policies or
benefits, or other employee compensation or benefit arrangements or policies.
20. ACCESS TO INFORMATION. Seller, Shareholders and the Rush Parties
shall reasonably cooperate with each other after the Closing so that (subject to
any limitations that are reasonably required to preserve any applicable
attorney-client privilege) each party has access to the employees, files, books,
business records, contracts and other information existing at the Closing and
relating to the Assets and the Business as is reasonably necessary for (a) any
customer inquiry or audit, (b) the preparation for or the prosecution or defense
of any suit, action, litigation or administrative, arbitration or other
proceeding or investigation by or against Seller, the Shareholders or the Rush
Parties (other than one by or on behalf of a party to this Agreement), (c) the
preparation and filing of any tax return or election relating the Assets or the
Business or any audit by any taxing authority of any returns of the Rush
Parties, Seller or the Shareholders relating thereto, (d) the preparation and
filing of any other documents required by any Governmental Authority or (e) any
other valid business purpose. The party requesting such information and
assistance shall reimburse the other party for all out-of-pocket costs and
expenses incurred by such party in providing such information and in rendering
such assistance other than attorney fees. The access to the employees, files,
books, records, contracts and other information contemplated herein shall be
during normal business hours and upon not less than five (5) business days'
prior written request, shall be subject to such reasonable limitations as the
party having custody or control thereof may impose to preserve the
confidentiality of information contained therein, and shall not extend to
material subject to a valid claim of privilege unless expressly waived by the
party entitled to claim the same.
21. 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 17; (b) to reduce the
Purchase Price by the amount to be credited to Purchaser as described on the
first page of Schedule 2.1(p); (c) to account for a proration of real and
personal property taxes on the Assets, lease deposits, lease payments, utilities
and other items commonly prorated; and (d) to account for any Deposits held by
Seller on the Closing Date. Three days prior to the Closing Date, Seller will
provide the Rush Parties 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. The Rush Parties
and Seller will work to finalize all required adjustments prior to the Closing
Date.
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22. SURVEYS; TITLE COMMITMENT AND CONDITION OF TITLE.
22.1 Surveys. Within twenty (20) days from and after the date hereof,
the Rush Parties shall have the right, at their sole option and at their sole
cost and expense, to obtain an ALTA or equivalent boundary and improvements
surveys of all or any portion of the Real Property, the ▇▇▇▇▇▇▇▇▇ Property and
the Grand Rapids Property (whether one or more, the "Surveys"), prepared by a
professional engineer or land surveyor licensed by the State of Michigan and in
form and substance satisfactory to the Rush Parties. Should the Rush Parties
elect to obtain a survey of the Grand Rapids Property or the ▇▇▇▇▇▇▇▇▇ Property,
Seller agrees to use its best efforts to obtain the consent of the Grand Rapids
Landlord or the ▇▇▇▇▇▇▇▇▇ Landlord, as the case may be, to the performance of
such survey, if required under the Grand Rapids Lease or the ▇▇▇▇▇▇▇▇▇ Lease,
and the twenty day time period provided for in this Section 23.1 shall not begin
running until such time as such consent is obtained.
22.2 Title Commitment. Within ten days from and after the date hereof,
at Seller's sole cost and expense, Seller agrees to cause the Title Company to
furnish Purchaser and its counsel Commitments for Leasehold Policy of Title
Insurance (each, a "Title Commitment" and collectively, the "Title Commitments")
prepared and issued by the Title Company describing and covering the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property, listing
Purchaser as the prospective named insured and showing as the policy amounts the
amounts set forth in Schedule 22.2 hereto. The Title Commitments 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
interests in the Real Property, the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids
Property, subject to the standard printed exceptions on such promulgated form,
except as modified below. 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 "rights of
parties in possession" (other than Purchaser). Further, the Title Commitments
shall incorporate the Title Company's commitment to provide (i) an ALTA Form 9
or CLTA Form 100 endorsement (or the closest equivalent thereto available in the
State of Michigan) and (ii) an ALTA Form 3 or CLTA Form 123 endorsement (or the
closest equivalent thereto available in the State of Michigan), to each of the
policies of title insurance to be issued pursuant thereto.
22.3 Disclosure of Exceptions by Title Commitments and UCC Report.
Purchaser shall have a period of 15 days from the last to be delivered to
Purchaser and its counsel of each of the Surveys, UCC Report, Title Commitments
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 Surveys, UCC
Report, Title Commitments or title exception documents. Any items to which
Purchaser does not object within such period shall be deemed to be permitted
exceptions hereunder and under the applicable Leases and the Grand Rapids Lease
or the New ▇▇▇▇▇▇▇▇▇ Lease, as applicable ("Permitted Exceptions"). In the event
the Rush Parties timely object to any matter contained in the Surveys, UCC
Report, Title Commitments 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; or (b) waive the objections, and proceed to close the
transaction contemplated hereby in which event such objections shall be included
as exceptions in the Leases, the Grand Rapids Lease, or the New ▇▇▇▇▇▇▇▇▇ Lease
as applicable.
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23. ENVIRONMENTAL STUDIES AND REMEDIATION ACTIVITIES.
23.1 Environmental Studies. Seller has heretofore provided to the Rush
Parties copies of (a) all existing Environmental Site Assessments (whether Phase
I, Phase II or otherwise) covering all or any portion of the Real Property, the
▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property, to the extent the same are in
Seller's possession or Seller has access to them, and (b) any other
environmental studies, reports and information, including, without limitation,
correspondence from Governmental Authorities, concerning the environmental
condition of the Real Property, the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids
Property, to the extent the same are in Seller's possession or Seller has access
to them (all of the foregoing information, whether obtained by the Rush Parties
or provided by Seller, being hereinafter referred to as "Environmental
Information"). Without in any way limiting the provisions of the preceding
sentence, the Rush Parties and their contractors and representatives, at the
Rush Parties' expense, shall have at least 45 days from the date hereof, but in
no event less than 30 days from receipt of the Environmental Information (the
"Feasibility Period") within which to conduct any and all engineering,
environmental and economic feasibility studies and tests of the Real Property,
the ▇▇▇▇▇▇▇▇▇ Property and its Grand Rapids Property which the Rush Parties, in
their sole discretion, deem necessary to determine whether the Real Property,
the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property are environmentally,
engineeringly and economically suitable for the Rush Parties' intended use. In
accordance with Section 8.6 hereof, Seller has granted and hereby grants to the
Rush Parties and their contractors and representatives access to the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property and the Grand Rapids Property for the purpose
of performing such studies or tests. Such persons shall conduct their studies
and tests in such a manner as to minimize interference with the Business, and,
upon completion of their activities on the Real Property, the ▇▇▇▇▇▇▇▇▇ Property
and the Grand Rapids Property, shall restore the Real Property, the ▇▇▇▇▇▇▇▇▇
Property and the Grand Rapids Property as nearly as is reasonably possible to
the condition they were 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 the Rush
Parties indicate the existence of any Environmental Conditions on the Real
Property, the ▇▇▇▇▇▇▇▇▇ Property or the Grand Rapids Property, then Seller shall
have a period of 30 days after notification thereof in which to remediate or
otherwise cure the same in accordance with all applicable Governmental
Requirements. In the event that an Environmental Condition exists or is
discovered on the Real Property, the ▇▇▇▇▇▇▇▇▇ Property or the Grand Rapids
Property 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) to postpone the leasing of all or any portion of the
Real Property or the assumption of the Grand Rapids Lease or the ▇▇▇▇▇▇▇▇▇
Lease, as the case may be, for a reasonable period pending Seller's remediation
of such Environmental Condition, or (c) waive in writing the remediation or cure
of such Environmental Condition and proceed to close the sale and other
transactions 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
Texas. The section headings contained
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herein are for purposes of convenience only, and shall not be deemed to
constitute a part of this Agreement or to affect the meaning or interpretation
of this Agreement in any way.
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.
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.
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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 15 and 16 of
this Agreement dealing with restrictive covenants and nondisclosure of
confidential information, with respect to which the Rush Parties expressly
reserve the right to petition a court directly for injunctive and other relief,
any controversy of any nature whatsoever, including but not limited to tort
claims or contract disputes, between the parties to this Agreement or their
respective 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. Sections 1-15, as amended. The terms of the commercial
arbitration rules of the American Arbitration Association shall apply except to
the extent they conflict with the provisions of this paragraph. If the amount in
controversy in the arbitration exceeds 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 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
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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 24.12, the arbitrator(s) are not
empowered to award damages including, without limitation, punitive damages and
multiple damages under applicable Texas statutes, in excess of compensatory
damages; provided that in no event shall consequential damages be awarded. Each
of Rush, Purchaser and Seller hereby irrevocably waives and releases any right
to recover such damages in excess of those damages authorized by this Section
24.12. The arbitrator(s) may require the non- prevailing party to pay the
prevailing party's attorneys' fees and costs incurred in connection with the
arbitration. It is further agreed that any of the parties hereto may petition
the United States District Court for the Western District of Texas, San Antonio
Division, for a judgment to be entered upon any award entered through such
arbitration proceedings.
In the event that any of the Shareholders is required to travel to
Texas to attend any hearing or deposition in connection with arbitration
proceedings pursuant to this Section 24.12, the Rush Parties shall reimburse
each such Shareholder for his coach air fare and shall pay to such Shareholder a
per diem travel allowance equal to the per diem travel allowance then paid by
Rush to its employees.
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 nonassignable without the consent of the other parties thereto
unless such consent has been given, or (b) any Contract or claim as to which all
of the remedies for the enforcement thereof enjoyed by Seller would not, as a
matter of law or by its terms, pass to Purchaser as an incident of the transfers
and assignments to be made under this Agreement. In order, however, that the
full value of every Contract and claim of the character described in clauses (a)
and (b) above and all claims and demands on such Contracts may be realized for
the benefit of Purchaser, Seller, at the request and expense and under the
direction of Purchaser, shall take all such action and do or cause to be done
all such things as will, in the opinion of Purchaser, be necessary or proper in
order that the obligations of Seller under such Contracts may be performed in
such manner that the value of such Contract will be preserved and will inure to
the benefit of Purchaser, and for, and to facilitate, the collection of the
moneys due and payable and to become due and payable thereunder to Purchaser in
and under every such contract and claim. Seller shall promptly pay over to
Purchaser all moneys collected by or paid to it in respect of every such
contract, claim or demand. Nothing in this Section 24.13 shall relieve Seller of
its obligations to obtain any consents required for the transfer of the Assets
and all rights thereunder to Purchaser, or shall relieve Seller from any
liability to Purchaser for failure to obtain such consents.
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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 Bulk Transfer Laws. Seller, the Shareholders and the Rush Parties
hereby waive compliance by the other parties with the provisions of any bulk
sales or similar law in any applicable jurisdiction, if and to the extent
applicable to this transaction. Seller shall indemnify the Rush Parties from,
and hold them harmless against, any liabilities, damages, costs and expenses
resulting from or arising out of (i) Seller's failure to comply with any of such
laws in respect of the transactions contemplated by this Agreement, or (ii) any
action brought or levy made as a result thereof, other than Seller's Obligations
which are assumed by the Rush Parties. The Rush Parties shall indemnify Seller
and the Shareholders from, and hold them harmless against, any liabilities,
damages, costs and expenses resulting from or arising out of (i) the Rush
Parties' failure to comply with any of such laws in respect of the transactions
contemplated by this Agreement, or (ii) any action brought or levy made as a
result thereof.
24.16 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 SELLER:
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇. ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) IF TO PURCHASER:
Rush Equipment Centers of Michigan, Inc.
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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.: (▇▇▇) ▇▇▇-▇▇▇▇
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 24.16
shall be effective when received at the address for notice for the party to
which the notice is given.
24.17 Risk of Loss. Seller shall bear all risk of loss to the Assets until such
time as the Closing has occurred and title to the Assets has passed to the
Purchaser.
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:
-----------------------------
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PURCHASER:
RUSH EQUIPMENT CENTERS
OF MICHIGAN, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
-----------------------------
SELLER:
▇▇▇▇▇▇▇▇ EQUIPMENT, INC.
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
SHAREHOLDERS:
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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APPENDIX A
DISPUTE RESOLUTION PROCEDURES
Re: Employment Agreement dated _______ ___, 1998 (including any
amendments, the "Agreement"), between Rush Equipment Centers of Michigan, Inc.,
a Delaware corporation (the "Company"), and __________________________
("Employee"). Unless otherwise defined in this Appendix A, terms defined in the
Agreement and used herein shall have the meanings set forth therein.
A. Negotiations. If any claim, dispute or controversy described in
Article 7 of the Agreement (collectively, the "Dispute") arises, either party
may, by written notice to the party, have the Dispute referred to the persons
designated below for attempted resolution by good faith negotiations within 45
days after such written notice is received. Such designated persons are as
follows:
1. Company. The Chairman of the Board and Chief Executive Officer or
his designee; and
2. Employee. Employee or his designee.
Any settlement reached by the parties under this paragraph A shall not be
binding until reduced to writing and signed by both parties. When reduced to
writing, such settlement agreement shall supersede all other agreements, written
or oral, to the extent such agreements specifically pertain to the matters so
settled. If the above-designated persons are unable to resolve such dispute
within such 45-day period, either party may invoke the provisions of paragraph B
below.
B. Arbitration. All Disputes shall be settled by negotiation among the
parties as described in paragraph A above or, if such negotiation is
unsuccessful, by binding arbitration in accordance with procedures set forth in
paragraphs C and D below.
C. Notice. Notice of demand for binding arbitration by one party shall
be given in writing to the other party pursuant to the Agreement. In no event
may a notice of demand of any kind be filed more than one (1) year after the
date the Dispute is first asserted in writing to the other party pursuant to
paragraph A above, and if such demand is not timely filed, the Dispute
referenced in the notice given pursuant to paragraph A above shall be deemed
released, waived, barred and unenforceable for all time, and barred as if by
statute of limitations.
D. Binding Arbitration. Upon filing of a notice of demand for binding
arbitration by either party, arbitration shall be commenced and conducted as
follows:
1. Arbitrators. All Disputes and related matters in question shall
be referred to and decided and settled by a panel of three arbitrators, one
selected by the Company, one selected by Employee and the third selected by the
two arbitrators so selected. Selection of the arbitrators to be selected the
Company and Employee shall be made within ten (10) business days after the date
of giving of a notice of demand for arbitration, and the two arbitrators so
appointed shall appoint the third within 10 business days following their
appointment.
▇-▇
▇▇
▇. Cost of Arbitration. The cost of arbitration proceedings,
including without limitation the arbitrators' compensation and expenses, hearing
room charges, court reporter transcript charges etc., shall be borne by the
parties equally or otherwise as the arbitrators may determine. The arbitrators
may award the prevailing party its reasonable attorneys' fees and costs incurred
in connection with the arbitration. The arbitrators are specifically instructed
to award attorneys' fees for instances of abuse in the discovery process.
3. Location of Proceedings. The arbitration proceedings shall be
held in Southfield, Michigan, unless the parties agree otherwise.
4. Pre-hearing Discovery. The parties shall have the right to
conduct and enforce pre- hearing discovery in accordance with the then current
Federal Rules of Civil Procedure, subject to these limitations:
(a) Each party may serve no more than one set of
interrogatories limited to 30 questions, including sub-parts;
(b) Each party may depose the other party's expert witnesses
who will be called to testify at the hearing, plus two fact witnesses
without regard to whether they will be called to testify (each party
will be entitled to a total of no more than 24 hours of deposition time
of the other party's witnesses), provided however, that the arbitrators
may provide for additional depositions upon showing of good cause; and
(c) Document discovery and other discovery shall be under the
control of and enforceable by the arbitrators.
5. Discovery disputes. All discovery disputes shall be decided by
the arbitrators. The arbitrators are empowered;
(a) to issue subpoenas to compel pre-hearing document or
deposition discovery;
(b) to enforce the discovery rights and obligations of the
parties; and
(c) to otherwise to control the scheduling and conduct of the
proceedings.
Notwithstanding any contrary foregoing provisions, the arbitrators shall have
the power and authority to, and to the fullest extent practicable shall,
abbreviate arbitration discovery in a manner which is fair to all parties in
order to expedite the conclusion of each alternative dispute resolution
proceeding.
6. Pre-hearing Conference. Within fifteen (15) days after selection
of the third arbitrator, or as soon thereafter as is mutually convenient to the
arbitrators, the arbitrators shall hold a pre- hearing conference to establish
schedules for completion of discovery, for exchange of exhibit and witness
lists, for arbitration briefs and for the hearing, and to decide procedural
matters and address all other questions that may be presented.
7. Hearing Procedures. The hearing shall be conducted to preserve
its privacy and to allow reasonable procedural due process. Rules of evidence
need not be strictly followed, and the hearing shall be streamlined as follows:
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(a) Documents shall be self-authenticating, subject to valid
objection by the opposing party;
(b) Expert reports, witness biographies, depositions and
affidavits may be utilized, subject to the opponent's right of a live
cross-examination of the witness in person;
(c) Charts, graphs and summaries shall be utilized to present
voluminous data, provided (i) that the underlying data is made
available to the opposing party thirty (30) days prior to the hearing,
and (ii) that the preparer of each chart, graph or summary is available
for explanation and live cross-examination in person;
(d) The hearing should be held on consecutive business days
without interruption to the maximum extent practicable; and
(e) The arbitrators shall establish all other procedural rules
for the conduct of the arbitration in accordance with the rules of
arbitration of the Center for Public Resources.
8. Governing Law. This arbitration provision shall be governed by,
and all rights and obligations specifically enforceable under and pursuant to,
the Federal Arbitration Act (9 U.S.C. Section 1, et seq.)
9. Consolidation. No arbitration shall include, by consolidation,
joinder or in any other manner, any additional person not a party to the
Agreement, except by written consent of both parties containing a specific
reference to these provisions.
10. Award. The arbitrators are empowered to render an award of
general compensatory damages and equitable relief (including, without
limitations, injunctive relief), but are not empowered to award exemplary,
special or punitive damages. The award rendered by the arbitrators (a) shall be
final, (b) shall not constitute a basis for collateral estoppel as to any issue
and (c) shall not be subject to vacation or modification.
11. Confidentiality. The parties hereto will maintain the
substance of any proceedings hereunder in confidence and the arbitrators, prior
to any proceedings hereunder, will sign an agreement whereby the arbitrators
agree to keep the substance of any proceedings hereunder in confidence.
A-3
59
EXHIBIT A
(ATTACH PROPERTY DESCRIPTIONS)
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EXHIBIT B
GENERAL WARRANTY ▇▇▇▇ OF SALE AND ASSIGNMENT
OF CONTRACT RIGHTS
THIS GENERAL WARRANTY ▇▇▇▇ OF SALE AND ASSIGNMENT OF CONTRACT RIGHTS is
made and executed by ▇▇▇▇▇▇▇▇ EQUIPMENT, INC., a Michigan corporation
("Assignor"), to RUSH EQUIPMENT CENTERS OF MICHIGAN, INC., a Delaware
corporation ("Assignee").
RECITALS
A. Assignor and Assignee have heretofore entered into that certain Asset
Purchase Agreement dated July 12, 1998 (the "Purchase Agreement").
B. Pursuant to the terms of the Purchase Agreement, Assignor wishes to
sell, transfer and convey to Assignee all of the Assets (as defined in the
Purchase Agreement) owned or held by Assignor, as well as all other properties,
rights and interests which Assignor has agreed to convey to Assignee under the
Purchase Agreement.
AGREEMENTS
NOW THEREFORE, for and in consideration of the foregoing, Ten and No/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, Assignor and
Assignee hereby agree as follows:
1. The foregoing recitals are incorporated herein for all purposes.
Unless otherwise required by context, capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement.
2. Assignor hereby GRANTS, BARGAINS, SELLS, CONVEYS, ASSIGNS, TRANSFERS,
SETS OVER, and DELIVERS unto Assignee, its successors and assigns forever, all
of the Assets described in Section 2.1 of the Purchase Agreement including,
without limitation, the Assets described on Exhibit A attached hereto and made a
part hereof for all purposes.
Assignor hereby binds Assignor, and Assignor's successors and assigns, to
warrant and forever defend the title to the Assets, unto Assignee, its
successors and assigns, against every person whomsoever lawfully claiming or to
claim the same or any part thereof.
3. Assignor hereby TRANSFERS, ASSIGNS and SETS OVER unto Assignee, its
successors and assigns forever, all of Assignor's right, title and interest in
and to and under the following, to the extent that Assignor's right, title and
interest in and to and under the same is assignable to Assignee:
a. all governmental permits or approvals or licenses heretofore
granted with respect to the ownership, management and operation of the
Business and the Assets; and
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b. all goodwill of Assignor associated with the Business, the Assets
and Assignor's operations thereof and Assignor's sales therefrom.
4. Assignor hereby TRANSFERS, ASSIGNS and SETS OVER unto Assignee, its
successors and assigns forever, all of Assignor's right, title and interest in
and to and under each of the contracts, agreements, arrangements and commitments
of Assignor (the "Contracts") set forth on Exhibit B attached hereto and made a
part hereof for all purposes.
5. Assignor agrees to perform, execute and/or deliver or cause to be
performed, executed and/or delivered any and all such further acts and
assurances as Assignee may reasonably require to perfect Assignee's interest in
and to the Assets, properties, rights and interests herein conveyed, transferred
and assigned from Assignor to Assignee.
(Signatures Begin on Next Page)
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62
IN WITNESS WHEREOF, the parties have executed this General Warranty ▇▇▇▇
of Sale and Assignment of Contract Rights as of the day of , 1998.
ASSIGNOR:
▇▇▇▇▇▇▇▇ EQUIPMENT, INC.,
a Michigan corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ASSIGNEE:
RUSH EQUIPMENT CENTERS
OF MICHIGAN, INC.,
a Delaware corporation
By:
-------------------------------------
W. ▇▇▇▇▇▇ ▇▇▇▇
Chief Executive Officer
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EXHIBIT A
(TO GENERAL WARRANTY ▇▇▇▇ OF SALE ASSIGNMENT OF CONTRACT RIGHTS)
LIST OF ASSETS
[to come (will be same as Schedules 2.1, except
Schedule 2.1(p), to Purchase Agreement)]
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EXHIBIT B
(TO GENERAL WARRANTY ▇▇▇▇ OF SALE ASSIGNMENT OF CONTRACT RIGHTS)
LIST OF CONTRACTS
[to come (will be same as Schedule 2.1(p) to Purchase Agreement)]
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EXHIBIT C
DISPUTES RELATING TO THIS AGREEMENT ARE REQUIRED TO BE SETTLED PURSUANT
TO CERTAIN DISPUTE RESOLUTION PROCEDURES AS PROVIDED IN ARTICLE 7 AND
APPENDIX A OF THIS AGREEMENT.
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into effective
as of the ____ day of ________, 1998, between ____________ ("Employee"), and
Rush Equipment Centers of Michigan, Inc., a Delaware corporation (the
"Company"), whose principal executive offices are located in San Antonio, Texas.
WHEREAS, the Company desires to employ Employee, and Employee desires
to be employed by the Company, on terms hereinafter set forth;
NOW, THEREFORE, in consideration for the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DUTIES
1.1 Employment. During the term of this Agreement, the Company agrees
to employ Employee, and Employee accepts such employment, on the terms and
conditions set forth in this Agreement.
1.2 Extent of Service. During the term of this Agreement, Employee
shall devote his full- time business time, energy and skill to the affairs of
the Company and its affiliated companies, and Employee shall not be engaged in
any other substantial business or consulting activity pursued for gain, profit
or other pecuniary advantage. The foregoing shall not prevent Employee from
making monetary investments in businesses, provided that such investments do not
involve any substantial services on the part of Employee in the operation or
affairs of such businesses.
1.3 Duties. Employee's duties hereunder shall include such duties as
may be prescribed from time to time by Employee's supervisors or the Board of
Directors of the Company (the "Board"). Employee shall also perform, without
additional compensation, such duties for the Company's affiliated companies.
1.4 Access to and Use of Proprietary Information. Employee recognizes
and the Company agrees that, to assist Employee in the performance of his duties
hereunder, Employee will be provided access to and limited use of proprietary
and confidential information of the Company. Employee further recognizes that,
as a part of his employment with the Company, Employee will benefit from and
Employee's qualifications will be enhanced by additional training, education and
experience which will be provided to Employee by the Company directly
66
and/or as a result of work projects assigned by the Company in which proprietary
and confidential information of the Company is utilized by Employee.
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67
ARTICLE 2
TERM OF EMPLOYMENT
Subject to earlier termination pursuant to Article 4 hereof, this
Agreement shall have a term commencing as of the date hereof and ending upon the
expiration of 36 calendar months.
ARTICLE 3
COMPENSATION
3.1 Monthly Base Salary. As compensation for services rendered under
this Agreement, Employee shall be entitled to receive from the Company a monthly
base salary (before standard deductions) equal to $10,833, subject to periodic
review and upward adjustment by the Board in its sole discretion (downward
adjustment shall not be permitted). Employee's monthly base salary shall be
payable at regular intervals (at least semi-monthly) in accordance with the
prevailing practice and policy of the Company.
3.2 Discretionary Performance Bonus. As additional compensation for
services rendered under this Agreement, Employee shall also be eligible to
receive a discretionary performance bonus if, as and when declared by the Board
in its sole discretion.
3.3 Benefits. Employee shall, in addition to the compensation provided
for herein, be entitled to the following additional benefits:
(a) Medical, Health and Disability Benefits. Employee shall be
entitled to receive all medical, health and disability benefits that
may, from time to time, be provided by Rush Enterprises, Inc., a Texas
corporation ("Rush"), to its executive officers as a group.
(b) Other Benefits. Employee shall also be entitled to receive
any other benefits that may, from time to time, be provided by Rush to
its executive officers as a group.
(c) Vacation. Employee shall be entitled to an annual vacation
as determined in accordance with the prevailing practice and policy of
the Company and Rush.
(d) Holidays. Employee shall be entitled to holidays in
accordance with the prevailing practice and policy of the Company and
Rush.
(e) Reimbursement of Expenses. The Company shall reimburse
Employee for all expenses reasonably incurred by Employee in
conjunction with the rendering of services at the Company's request,
including expenses incurred for continuing professional education and
training, provided that such expenses are incurred in accordance with
the prevailing practice and policy of the Company and are properly
deductible by the Company for federal income tax purposes. As a
condition to such reimbursement, Employee shall submit an itemized
accounting of such expenses in reasonable detail, including receipts
where required under federal income tax laws.
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(f) Car Allowance. The Company shall pay to Employee $500 per
month as an automobile allowance, and such amount shall be in lieu of
any other benefit relating to the use of an automobile to which
Employee may otherwise be entitled.
(g) Compensation Program. Employee shall be entitled to
participate in all current and deferred executive compensation programs
offered by Rush to its executive officers as a group.
ARTICLE 4
TERMINATION
4.1 Termination With Notice. This Agreement may be terminated by the
Company or Employee, without cause, upon 30 days' prior written notice thereof
given by one party to the other party. In the event of termination effected by
the Employee giving notice pursuant to this Section 4.1, the Company shall pay
Employee his monthly base salary (subject to standard deductions) earned pro
rata to the date of such termination and the Company shall have no further
obligations to Employee hereunder. In the event of termination effected by the
Company giving notice pursuant to this Section 4.1, the Company shall pay
Employee, within 15 days of such termination, a lump-sum payment equal to his
base salary under Section 3.1 hereof for the remaining portion of his 36-month
term of employment pursuant to this Agreement. Payment by the Company in
accordance with this Section shall constitute Employee's full severance pay and
the Company shall have no further obligation to Employee arising out of such
termination.
4.2 Termination For Cause. This Agreement may be terminated by the
Company for "Cause" (hereinafter defined) upon written notice thereof given by
the Company to Employee. In the event of termination pursuant to this Section
4.2, the Company shall pay Employee his monthly base salary (subject to standard
deductions) earned pro rata to the date of such termination and the Company
shall have no further obligations to Employee hereunder. The term "Cause" shall
include only the following: (i) Employee breaches any of the terms of this
Agreement; (ii) Employee is convicted of a felony; (iii) Employee fails, after
at least two written warnings, to perform duties assigned under this Agreement
(other than a failure due to death or physical or mental disability); (iv)
Employee intentionally engages in conduct which is injurious to the Company or
its affiliates, monetarily or otherwise; (v) Employee commits fraud or theft of
personal or Company property from Company premises; (vi) Employee falsifies
Company documents or records; (vii) Employee engages in acts of gross
carelessness or willful negligence to endanger life or property on Company
premises; (viii) Employee uses, distributes or is under the influence of illegal
drugs, alcohol or any other intoxicant on Company premises; (ix) Employee
possesses or stores lethal weapons on Company premises; or (x) Employee
intentionally violates state, federal or local laws and regulations.
4.3 Termination Upon Death or Disability. In the event that Employee
dies, this Agreement shall terminate upon Employee's death. Likewise, if
Employee becomes unable to perform the essential functions of his duties
hereunder, with or without reasonable accommodation, on account of illness,
disability or other reason whatsoever for a period of more than 180 consecutive
or nonconsecutive days in any 12-month period, the Company may, upon notice to
Employee, terminate this Agreement. In the event of termination pursuant to this
Section 4.3, Employee (or his legal representatives) shall be entitled only to
his monthly base salary earned pro rata for services actually rendered prior to
the date of such termination;
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69
provided, however, Employee shall not be entitled to his monthly base salary for
any period with respect to which Employee has received short- term or long-term
disability benefits under employee benefit plans maintained from time to time by
the Company.
4.4 Survival of Provisions. The covenants and provisions of Articles 5,
6 and 7 hereof shall survive any termination of this Agreement and continue for
the periods indicated, regardless of how such termination may be brought about.
ARTICLE 5
PROPRIETARY PROPERTY; CONFIDENTIAL INFORMATION
5.1 Proprietary Property; Confidential Information. Employee
acknowledges that in and as a result of Employee's employment hereunder,
Employee will be making use of, acquiring and/or adding to confidential
information and proprietary property of a special and unique nature and value
relating to such matters as the Company's trade secrets, systems, procedures,
manuals, confidential reports and lists of customers ("Confidential
Information"). As a material inducement to the Company to enter into this
Agreement and to pay to Employee the compensation and benefits stated herein,
the Employee covenants and agrees that Employee shall not, at any time during or
following the term of Employee's employment, directly or indirectly, divulge or
disclose for any purpose whatsoever any Confidential Information or proprietary
information of the Company. Upon termination of this Agreement, regardless of
how such termination may be brought about, Employee shall deliver to the Company
any and all documents, instruments, notes, papers or other expressions or
embodiments of confidential information which are in Employee's possession or
control.
5.2 Publicity. During the term of this Agreement and for a period of
ten years thereafter, Employee shall not, directly or indirectly, originate or
participate in the origination of any publicity, news release or other public
announcements, written or oral, whether to the public press or otherwise,
relating to this Agreement, to any amendment hereto, to Employee's employment
hereunder or to the Company, without the prior written approval of the Company.
ARTICLE 6
RESTRICTIVE COVENANTS
6.1 Non-Competition. Except as otherwise provided in that certain Asset
Purchase Agreement dated July 12, 1998, between Employee, the Company, Rush and
other parties, in consideration of the benefits of this Agreement, including
Employee's access to and limited use of proprietary and confidential information
of the Company, as well as training, education and experience provided to
Employee by the Company directly and/or as a result of work projects assigned by
the Company with respect thereto, Employee hereby covenants and agrees that
during the term of this Agreement and for a period equal to the longer of (i)
five years from the date hereof, and (ii) two years following termination of
this Agreement, regardless of how such termination may be brought about,
Employee shall not, and the Employee will cause his associates, affiliates and
representatives not to, directly or indirectly, as proprietor, partner,
stockholder, director, 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
which engages in the sales, service and/or rental of construction equipment and
machinery or any similar business activity in Michigan and/or Texas; provided,
however, the foregoing shall not, prohibit Employee and his associates,
affiliates and representatives from purchasing and holding as an investment not
more than 5%
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of any class of publicly traded securities of any entity which conducts a
business in competition with the business of the Company, so long as Employee
does not participate in any way in the management, operation or control of such
entity.
6.2 Reformation. Employee acknowledges that, given the nature of the
Company's business, the covenants contained in Section 6.1 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 Company's business and to protect its
legitimate business interests. If, however, Section 6.1 is determined by any
tribunal 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 tribunal.
6.3 Customer Lists; Non-Solicitation. In consideration of the benefits
of this Agreement, including Employee's access to and limited use of proprietary
and confidential information of the Company, as well as training, education and
experience provided to Employee by the Company directly and/or as a result of
work projects assigned by the Company with respect thereto, Employee hereby
further covenants and agrees that following the termination of this Agreement,
regardless of how such termination may be brought about, Employee shall not,
directly or indirectly, (a) use or make known to any person or entity the names
or addresses of any clients or customers of the Company or any other information
pertaining to them, (b) call on, solicit, take away or attempt to call on,
solicit or take away any clients or customers of the Company on whom Employee
called or with whom he or she became acquainted during his employment with the
Company, nor (c) recruit, hire or attempt to recruit or hire any employees of
the Company.
ARTICLE 7
ARBITRATION
Except for the provisions of Articles 5 and 6 of this Agreement dealing
with proprietary property, confidential information and restrictive covenants,
with respect to which the Company expressly reserves the right to petition a
court directly for injunctive and other relief, any claim, dispute or
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 Employee's employment or the terms
and conditions of this Agreement, including the implementation, applicability or
interpretation thereof, shall be resolved in accordance with the dispute
resolution procedures set forth in Appendix A attached hereto and made a part
hereof.
ARTICLE 8
MISCELLANEOUS
8.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by an overnight
delivery service with tracking procedures or by facsimile to the parties at the
following addresses or at such other addresses as shall be specified by the
parties by like notice: If to Employee, at the address set forth below his name
on the signature page hereof; and if to the Company, by mail at P. O. ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇,
▇
▇▇
▇▇▇▇▇ ▇▇▇▇▇, or by delivery at 8810 I.H. ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chairman of the Board and Chief Executive Officer.
8.2 Equitable Relief. In the event of a breach or a threatened breach
by Employee of any of the provisions contained in Article 5 or 6 of this
Agreement, Employee acknowledges that the Company will suffer irreparable injury
not fully compensable by money damages and, therefore, will not have an adequate
remedy available at law. Accordingly, the Company shall be entitled to obtain
such injunctive relief or other equitable remedy 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 Company may have under this Agreement, at
law or in equity, including, without limitation, the right to ▇▇▇ for damages.
8.3 No Rights in Contracts. Employee acknowledges and agrees that he or
she shall not have any rights in or to any contracts entered into with clients
or customers of the Company in connection with services provided by Employee
hereunder (including those in which Employee may be specifically named with the
Company), unless otherwise agreed to in writing by the Company.
8.4 Assignment. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. Employee's rights under this Agreement are not
assignable and any attempted assignment thereof shall be null and void.
8.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan without giving effect to the
conflict of law provisions thereof.
8.6 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties and supersedes all other agreements between the
parties which may relate to the subject matter contained in this Agreement. This
Agreement may not be amended or modified except by an agreement in writing which
refers to this Agreement and is signed by both parties.
8.7 Headings. The headings of sections and subsections of this
Agreement are for convenience only and shall not in any way affect the
interpretation of any provision of this Agreement or of the Agreement itself.
8.8 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
8.9 Waiver. The waiver by any party of a breach of any provision hereof
shall not be deemed to constitute the waiver of any prior or subsequent breach
of the same provision or any other provisions hereof. Further, the failure of
any party to insist upon strict adherence to any term of this Agreement on one
or more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement unless such party expressly waives such provision pursuant to
a written instrument which refers to this Agreement and is signed by such party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
RUSH EQUIPMENT CENTERS
OF MICHIGAN, INC.
By:
--------------------------------
W. ▇▇▇▇▇▇ ▇▇▇▇,
Chief Executive Officer
EMPLOYEE:
-----------------------------------
-----------------------------------
Address:
--------------------------
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EXHIBIT D-1
LEASE FORMS; FORM OF LEASE GUARANTY AGREEMENT;
FORM OF SUBORDINATION, NONDISTURBANCE AND
ATTORNMENT AGREEMENT
This Exhibit D-1 is comprised of the following five (5) documents, each
of which is attached hereto and made a part hereof:
Exhibit D-1-a Lease Agreement With Option to Purchase (Ellsworth, Michigan
Facility), between Three-K Company, as Landlord, and Rush
Equipment Centers of Michigan, Inc., as Tenant
Exhibit D-1-b Lease Agreement With Option to Purchase (Work-N-Play;
Ellsworth, Michigan Facility), between ▇▇▇▇▇▇▇▇ Properties,
Inc., as Landlord, and Rush Equipment Centers of Michigan,
Inc., as Tenant
Exhibit D-1-c Lease Agreement With Option to Purchase (Traverse City,
Michigan Facility), between ▇▇▇▇▇▇▇▇ Properties, Inc., as
Landlord, and Rush Equipment Centers of Michigan, Inc., as
Tenant
Exhibit D-1-d Form of Lease Guaranty Agreement
Exhibit D-1-e Form of Subordination, Nondisturbance and Attornment Agreement
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EXHIBIT D-1-d
LEASE GUARANTY AGREEMENT
THIS LEASE GUARANTY AGREEMENT (this "Agreement") is dated as of
______________________________, 19__, between ____________________________, a
__________________________ ("Landlord"), having its principal offices at
__________________________, and RUSH ENTERPRISES, INC., a Texas corporation
("Guarantor"), having its principal offices at 8810 I.H. ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
Contemporaneously herewith, Landlord, as landlord, is entering into a
certain Lease Agreement With Option to Purchase (the "Lease") for real property
located in the City of , County of , and State of Michigan, which property is
more particularly described in Exhibit A attached to the Lease, with Rush
Equipment Centers of Michigan, Inc., a Delaware corporation ("Tenant"), as
tenant. Guarantor owns a controlling interest in the capital stock of Tenant and
is executing this Agreement as an inducement to Landlord to enter into the
Lease.
NOW THEREFORE, in consideration of the premises, Guarantor agrees as
follows:
1. Guarantor hereby absolutely and unconditionally guarantees to Landlord the
full and punctual payment by Tenant, its successors and assigns of all rent
required to be paid by Tenant under the Lease. This is a guaranty of payment
(and not merely collectability) only, and not a guaranty of the performance or
observance of any of the other covenants, obligations or duties of Tenant under
the Lease (other than Tenant's obligations to pay rent thereunder).
2. Guarantor hereby waives demand, protest, notice of any indulgences or
extensions granted to Tenant, any requirements of diligence or promptness on the
part of Landlord in the enforcement of the Lease and any notice thereof, and any
other notice whereby to charge Guarantor; provided however, Guarantor shall be
furnished with a copy of any notice of or relating to default under or
termination of the Lease to which Tenant is entitled or which is served upon
Tenant at the time the same is sent to or served upon Tenant.
3. The liability of Guarantor hereunder shall in no way be affected by: (a) the
release or discharge of Tenant in any creditors', receivership or bankruptcy
proceeding; (b) any alteration of or amendment to the Lease which alteration or
amendment has been consented to in writing by Guarantor; (c) any permitted sale,
assignment, or sublease, (unless Tenant is released by Landlord pursuant to any
such sale, assignment, or sublease), pledge or mortgage of the rights of Tenant
under the Lease; or (d) any application or release of any security or other
guaranty given for the performance and observance of the covenants and
conditions in the Lease on Tenant's part to be performed and observed.
4. This Agreement, and any obligations of Guarantor hereunder, shall terminate
upon the earlier of (a) the expiration of the primary term of the Lease
(including any extension or renewal periods) or (b) the termination of the Lease
for any reason other than a default by Tenant thereunder.
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5. This Agreement shall inure to the benefit of Landlord and its successors and
assigns and any assignee of Landlord's interest in the Lease, and shall be
binding upon Guarantor and its successors and assigns.
6. This Agreement may not be changed or terminated orally, but only by a written
amendment hereto signed by a duly authorized representative of Guarantor.
7. Any notice required hereunder to be sent to Guarantor shall be sufficiently
given by mailing by certified or registered mail, postage prepaid, addressed as
follows:
Rush Enterprises, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
IN WITNESS WHEREOF, Guarantor has duly executed this Agreement by its
duly authorized officer as of the day and year first above written.
RUSH ENTERPRISES, INC.
By:
-----------------------------
Name:
--------------------------
Title:
-------------------------
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EXHIBIT D-1-e
STATE OF MICHIGAN )
)
COUNTY OF ____________ )
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT is entered into by and between
_______________________________, a ________________________________ ("Lender"),
____________________________________, a ________________________________
("Landlord"), and Rush Equipment Centers of Michigan, Inc., a Delaware
corporation ("Tenant").
Recitals
Lender is the mortgagee under that certain ______________________
("Mortgage") dated ____________________, executed by Landlord, as grantor,
mortgaging certain real property ("Premises") located in ______________ County,
Michigan, more particularly described on EXHIBIT A attached hereto and made a
part hereof for all purposes.
Tenant has a leasehold estate in and to the Premises pursuant to the
Lease Agreement ("Lease") of even date herewith, executed by Tenant and
Landlord.
Lender, Landlord, and Tenant desire to enter into this Agreement to set
forth their agreement concerning the Lease and the Premises.
Agreement
In consideration of the covenants and agreements contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. The Lease, and the rights of Tenant in, to and under the Lease and
the Premises, are hereby subjected and subordinated to the lien of the Mortgage.
2. So long as Tenant is not in default of any material terms or
provisions of the Lease (beyond any and all notice periods and periods given to
Tenant to cure any such defaults), Lender shall not disturb Tenant's possession
of the Premises or any of Tenant's other rights and privileges under the Lease,
and the Lease shall not be terminated (except as permitted by the provisions of
the Lease) or otherwise be diminished or adversely affected by the enforcement
of any rights given to Lender in the Mortgage, in the note secured thereby, or
in any other documents held by Lender or by the enforcement of any rights given
to Lender as a matter of law.
3. Tenant shall attorn to Lender or to any person who acquires title to
the Premises through a foreclosure of the lien created by the Mortgage or by a
transfer in lieu of such foreclosure ("Purchaser"). Upon acquisition of title to
the Premises, Purchaser shall succeed to the interest of Landlord under the
Lease, and upon Tenant's receipt of notice from Purchaser,
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together with a copy of the instrument of conveyance, Tenant shall accept
Purchaser as Tenant's new landlord, and the Lease shall continue in full force
and effect, after any such foreclosure or other transfer of title, as a direct
lease between Tenant and Purchaser, upon all the terms, covenants, conditions,
and agreements set forth in the Lease.
4. Tenant acknowledges and consents to the assignment of Landlord's
rights under the Lease to Lender pursuant to the Mortgage which contains a
provision assigning to Lender all Leases, rents and other income from the
Premises.
5. If the Mortgage is foreclosed and Lender succeeds to the interest of
Landlord under the Lease, Lender shall be bound to Tenant under all the terms,
covenants and conditions of the Lease. Notwithstanding the foregoing, however,
Lender shall not be (a) liable for any act or omission of Landlord or any prior
lessor, except to the extent the same constitutes a default existing and
continuing during Lender's ownership of the Premises; (b) subject to any offsets
or defenses that Tenant may have against Landlord or any prior lessor or subject
to any claim for damages or counterclaims against Landlord or any prior lessor;
(c) bound by any rent or additional rent that Tenant may have paid more than one
month in advance to Landlord or any prior lessor; (d) bound by any amendment or
modification of the Lease or any consent, approval or waiver by Landlord with
respect to the Lease or the Premises made after the date hereof without Lender's
prior written consent; (e) liable for any security deposit except to the extent
Lender does hold such security deposit; (f) liable to Tenant under the Lease or
otherwise for matters first arising after Lender ceases to own the Premises; (g)
liable for any covenant or agreement to undertake or complete construction or
installation of improvements on the Premises or any part thereof; (h) liable for
any payment to Tenant of any sums, or granting to Tenant of any credit, in the
nature of a contribution towards the cost of preparing, furnishing or moving in
to the Premises or any part thereof; or (i) liable for any other obligation
under the Lease which shall have accrued prior to the date Lender acquires title
to the Premises; provided, however, Lender shall be obligated to cure any
existing and continuing defaults of Landlord or any prior lessor with respect to
the maintenance or repair of the Premises. If Lender becomes liable to Tenant
under this paragraph for any claim, loss or damage, Tenant shall look solely to
the Premises for recovery of any judgment or damages from Lender, and Lender
shall have no personal liability, directly or indirectly, under or in connection
with the Lease. Nothing in this Agreement shall impose any obligation on Lender
for the management, control or condition of the Premises prior to the time
Lender succeeds to the interest of Landlord under the Lease.
6. Landlord and Tenant will not, without the prior written consent of
Lender (which shall not be unreasonably withheld or delayed), (i) amend the
Lease, (ii) assign or sublet all or any part of the Premises unless permitted
under the express provisions of the Lease, or (iii) subordinate the Lease to any
other lien.
7. In the event of the occurrence of any act or omission of Landlord
that would give Tenant the right to terminate the Lease, to claim a partial or
total eviction, or to exercise any other remedy under the Lease or other
applicable law, Tenant shall give to Lender copies of all written notices of
such act or omission that Tenant is required to give to Landlord pursuant to the
terms of the Lease, and Lender shall have the same period for remedying such act
or omission as granted to Landlord under the Lease.
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8. Tenant hereby represents and warrants to Lender that as of the date
hereof:
a. the Lease is in full force and effect;
b. the Lease has not been modified or amended;
c. all rents, additional rents and other sums due and payable under
the Lease have been paid in full and no rent due under the Lease
has been paid more than one (1) month in advance; and
d. Tenant has not assigned, sublet, transferred or hypothecated its
interest in the Lease.
9. Tenant agrees, from time to time, upon ten (10) days' prior written
notice from Lender, to execute, acknowledge and deliver to Lender an estoppel
certificate in form reasonably satisfactory to Lender stating that the Lease is
then in effect, the rental then prevailing under the Lease and any defaults by
Landlord under the Lease of which Tenant is then aware.
10. The foregoing provisions shall be self-operative and effective
without the execution of any further instruments on the part of any party
hereto. The parties, however, agree to execute and deliver to each other such
other instrument as shall be necessary to effectuate the provisions of this
Agreement.
11. Any notice, request, demand, or other instrument which may be
required or permitted to be furnished to or served upon the parties shall be in
writing, shall be sent by United States mail, registered or certified, return
receipt requested, and shall be deemed given when postmarked and addressed to
such party at the address set forth below. Unless later changed by notices to
all parties hereof in the manner provided herein, the parties' addresses for
purposes of notices are as follows:
LENDER:
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Attention:
----------------------------------------
LANDLORD:
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Attention:
----------------------------------------
TENANT: Rush Equipment Centers of Michigan, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
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with a copy to: Rush Enterprises, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
12. This Agreement shall be binding upon and inure to the benefit of
Lender, Landlord, Tenant, and their respective representatives, successors and
assigns; provided, however, this Agreement shall not be binding upon or inure to
the benefit of any assignee from Tenant other than an assignee that is a
wholly-owned subsidiary of Rush Enterprises, Inc., a Texas corporation.
13. The term "Lender" as used herein shall include the successors and
assigns of Lender and any person, party or entity which shall become the owner
of the premises by reason of foreclosure, the power of sale or the acceptance of
a deed or assignment or otherwise. The term "Landlord" as used herein shall mean
and include the present Landlord under the Lease and such Landlord's
predecessors and successors in interest under the Lease, unless context requires
otherwise. The term "Premises" as used herein shall mean the Premises, the
improvements now or hereafter located thereon and the estates therein encumbered
by the Mortgage. The term "Tenant" as used herein shall include the successors
and assigns of Tenant.
14. This Agreement may not be modified or amended except pursuant to a
written document executed by Lender, Landlord and Tenant.
15. This Agreement shall be governed by and construed under the laws of
the State of Michigan.
[Signatures Begin on Next Page]
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80
IN WITNESS WHEREOF, the parties have executed this Agreement on the
______ day of _____________________________, 19__.
Attest: Lender:
------- -------
,
----------------------------------- ----------------------------------
Printed Name: a
---------------------- ---------------------------------
By:
----------------------------------- -------------------------------
Printed Name: Name:
--------------------- -----------------------------
Title:
----------------------------
Attest: Landlord:
------ --------
,
----------------------------------- ----------------------------------
Printed Name: a
---------------------- ---------------------------------
By:
----------------------------------- -------------------------------
Printed Name: Name:
---------------------- -----------------------------
Title:
----------------------------
Attest: Tenant:
------ ------
----------------------------------- RUSH EQUIPMENT CENTERS OF MICHIGAN,
Printed Name: INC., a Delaware corporation
----------------------
By:
----------------------------------- -------------------------------
Printed Name: Name:
---------------------- -----------------------------
Title:
----------------------------
5
81
THE STATE OF _______________ )
)
COUNTY OF __________________ )
This instrument was acknowledged before me on the ____________ day of
_____________ , 19__ by _________________, ____________________ of
________________________________________, a corporation, on behalf of said
corporation.
(SEAL)
--------------------------------------
Notary Public in and for
the State of ____________
--------------------------------------
(Printed Name of Notary)
My commission expires:
----------------
THE STATE OF _______________ )
)
COUNTY OF __________________ )
This instrument was acknowledged before me on the ____________ day of
_____________ , 19__ by _________________, ____________________ of
________________________________________, a corporation, on behalf of said
corporation.
(SEAL)
--------------------------------------
Notary Public in and for
the State of ____________
--------------------------------------
(Printed Name of Notary)
My commission expires:
----------------
6
82
THE STATE OF _______________ )
)
COUNTY OF __________________ )
This instrument was acknowledged before me on the ____________ day of
_____________ , 19__ by _________________, ____________________ of Rush
Equipment Centers of Michigan, Inc., a Delaware corporation, on behalf of said
corporation.
(SEAL)
--------------------------------------
Notary Public in and for
the State of ____________
--------------------------------------
(Printed Name of Notary)
My commission expires:
----------------
AFTER RECORDING PLEASE RETURN TO:
--------------------------------
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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83
EXHIBIT A
(To Subordination, Nondisturbance and Attornment Agreement)
[Attach Legal Description for Premises]
8
84
EXHIBIT D-2
Location Specific Lease Provisions
▇▇▇▇▇▇▇▇▇:
---------
Term: Initial five (5) year term with two (2) renewal
options of five (5) years each
Monthly Rent: $ 8,500 during initial 5-year term; increases each
renewal term in proportion to the corresponding
increase in the Consumer Price Index
Deposit: $ 8,500
Purchase Option:
At end of first five years of term: $ 890,000
At end of first five year renewal term: Appraised Value
At end of second five year renewal term: Appraised Value
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85
EXHIBIT E
LANDLORD'S CONSENT AND ESTOPPEL
▇▇▇▇▇▇▇▇ Equipment, Inc.
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Rush Equipment Centers of Michigan, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Lease between 5770 Investors, L.L.C. and ▇▇▇▇▇▇▇▇ Equipment, Inc. covering
the premises located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
To each of the above addressees:
5770 Investors, L.L.C. , a ____________________ limited liability company
("Landlord"), is the landlord under that certain Lease dated September 9, 1994,
between ▇▇▇▇▇▇▇▇ Equipment, Inc., a Michigan corporation ("Tenant") and
Landlord. A true copy of such lease, together with all amendments and
modifications thereto (collectively, the "Lease"), is attached hereto as Exhibit
A. In connection with Tenant's assignment of all of its interest under the Lease
to Rush Equipment Centers of Michigan, Inc., a Delaware corporation ("Rush"),
Landlord does hereby certify and agree as follows:
1. The Lease is presently in full force and effect and is unmodified except as
may be evidenced by a written instrument attached as a part of Exhibit A.
2. The Lease term has commenced and full rental is now accruing thereunder.
The primary term of the Lease is ten (10) years, beginning March 1, 1995,
and ending February 28, 2005, with one (1) option to extend the primary
term of the
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86
Lease for five (5) years, unless sooner terminated or extended pursuant to
the provisions of the Lease.
3. There is no construction completed, ongoing or planned for which Tenant is
obligated to reimburse Landlord (other than through payment of the base
monthly rent herein disclosed) or for which Landlord is obligated to
reimburse Tenant.
4. Tenant has accepted possession of the leased premises under the Lease and,
to the best of Landlord's knowledge, any improvements required by the terms
of the Lease to be made by Landlord have been completed to the satisfaction
of Tenant.
5. Tenant is currently paying $ , on a monthly basis, to Landlord as rent
under the Lease. Such amount is subject to increase on March 1 of each year
during the term of the Lease in a amount proportionate to the corresponding
increase in the Consumer Price Index over the previous 12 months. In
addition, Tenant is currently paying the following amounts due under the
Lease:
a. Real property taxes and special assessments levied against the leased
premises;
b. Personal property taxes on all personal property at the leased
premises; and
c. All utility charges with respect to the leased premises.
6. No rent under the Lease has been paid more than thirty (30) days in advance
of its due date.
7. Tenant is not in monetary default under the terms and provisions of the
Lease nor, to the best knowledge of Landlord, is Tenant in default of any
of its other covenants, agreements, duties or obligations under the Lease.
8. Tenant has deposited the sum of $________________ with Landlord as a
security deposit under the Lease (the "Security Deposit").
9. Landlord hereby consents to the assignment by Tenant of all of its rights,
title and interests under the Lease to Rush and to the assumption by Rush
of all of the rights, duties and obligations of Tenant as "Tenant" under
the Lease from and after the date of such assignment. Landlord agrees that
(i) Tenant shall not be liable for breaches or defaults by Rush under the
Lease, and (ii) Rush shall
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87
not be liable for breaches or defaults by Tenant under the Lease. Landlord
understands that Tenant has assigned all of its rights with respect to the
Security Deposit (including the right, subject to the terms of the Lease,
to receive a return thereof at the end of the Lease term) to Rush.
5770 INVESTORS, L.L.C.
By:
------------------------------------
---------------------------
Name:
----------------------------------
Title:
---------------------------
Date:
----------------------------
, 1998
-----------
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