1
Exhibit 10.94
ASSET PURCHASE AGREEMENT
DATED DECEMBER 9, 1996
BY AND AMONG
RUSH TRUCK CENTERS OF COLORADO, INC.
RUSH ENTERPRISES, INC.
DENVER PETERBILT, INC.
AND
GREG LESSING
COVERING THE PURCHASE
OF SPECIFIED ASSETS OF
DENVER PETERBILT, INC.
81
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TABLE OF CONTENTS
1. GENERAL DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
---------
1.2 Best Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
--------------
1.3 Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
-------
1.4 Environmental Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------------------
1.5 Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----------------------
1.6 Governmental Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------------------------
1.7 Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------------------
1.8 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------
1.9 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
------
1.10 Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------
1.11 Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-------
1.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Assets to be Purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----------------------
2.2 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------------
2.3 Delivery of Assets and Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------------------------------------
2.4 Closing; Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
---------------------
3. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Price and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------------
3.2 Assumed Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------------
3.3 Payment for Noncompetition Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------------------------------
3.4 Sales and Use Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------------
3.5 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------------
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------
4.2 Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-------------
4.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
--------------------
4.4 Events Since the Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------------------------
4.5 Customer List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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4.6 Taxes and Governmental Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
------------------------------
4.7 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------
4.8 Contracts and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------------------------
4.9 Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.10 Properties, Assets and Leasehold Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
----------------------------------------
4.11 Intangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.12 Suits, Actions and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-------------------------
4.13 Licenses and Permits; Compliance With Governmental Requirements . . . . . . . . . . . . . . . . . . 12
---------------------------------------------------------------
4.14 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.15 No Untrue Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
--------------------
4.16 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.17 Environmental Protection Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
------------------------------
4.18 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------------
4.19 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
--------
4.20 Work Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-----------
4.21 Telephone Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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5. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND RUSH . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-------------------
5.4 Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-------------------
5.5 Suits, Actions and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-------------------------
5.6 Authority and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
----------------------------
5.7 No Defaults or Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-------------------------
5.8 Subsidiary Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS, GUARANTEES, REPRESENTATIONS AND WARRANTIES OF
SELLER AND SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6A. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS, GUARANTEES, REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND RUSH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7. CONTRACTS PRIOR TO THE CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Approval of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------------------
7.2 Contracts Included in Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------------------------
8. COVENANTS OF SELLER AND SHAREHOLDER PRIOR TO CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------------------
8.2 General Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----------------------------
8.3 General Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
--------------------------
8.4 Disclosure of Misrepresentations and Breaches . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
---------------------------------------------
8.5 Government Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
------------------
8.6 Access to and Inspection of Premises, Facilities and Equipment . . . . . . . . . . . . . . . . . . . 21
--------------------------------------------------------------
8.7 Inspection of Underground Storage Tanks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------------------------------------
9. COVENANTS REGARDING THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.1 Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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9.2 Covenants of Purchaser and Rush . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-------------------------------
9.3 Inventory Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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9A. COVENANTS AFTER THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9A.1 Covenants of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
----------------------
10. CONDITIONS TO OBLIGATIONS OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.1 Accuracy of Representations and Warranties and Fulfillment of Covenants . . . . . . . . . . . . . . 22
-----------------------------------------------------------------------
10.2 No Governmental Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-----------------------
10.3 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
--------------------------
10.4 Update of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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10.5 No Material Adverse Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-------------------------------
10.6 Notices and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.7 Noncompetition Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.8 Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.9 Corporate Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.10 Transfer and Assignment Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
---------------------------------
10.11 Liens Released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.12 Ordinary Course of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
---------------------------
10.13 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.14 Dealer License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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10.15 Inventory Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.1 Accuracy of Representations and Warranties and Fulfillment of Covenants . . . . . . . . . . . . . . 25
-----------------------------------------------------------------------
11.2 Delivery of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
--------------------------
11.3 Receivables Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
---------------------
11.4 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
----------------------
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.1 Delivery of Funds and Other Assets Collected by Seller; Power of Attorney . . . . . . . . . . . . . 25
-------------------------------------------------------------------------
12.2 Change of Name of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
------------------------
12.3 Access to Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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12.4 Exchange Act Filing; Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
--------------------------------
13. INDEMNITY BY SELLER AND SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
13.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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13.2 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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13.3 Right of Seller to Participate in Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
-----------------------------------------
13.4 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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13.5 Limit of Liability of Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
---------------------------------
13.6 Limitations on Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
------------------------
13A. INDEMNITY BY PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
13A.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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13A.2 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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13A.3 Right of Purchaser to Participate in Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------------------------------------------
13A.4 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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13A.5 Limitations on Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------------------
14. LEASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
15. NONCOMPETITION AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
16. NONDISCLOSURE OF CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
17. ASSIGNMENT OF CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18. DAMAGE TO ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
19. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
20. FURTHER ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
21. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
22. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
22.1 Governing Law; Interpretation; Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-----------------------------------------------
22.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
------------
22.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
----------------
22.4 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
--------------
22.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
----------
22.6 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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22.7 Gender; Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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22.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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22.9 Telecopy Execution and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-------------------------------
22.10 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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22.11 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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23. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
23.1 Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
--------------
23.2 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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24. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
24.1 New Employees of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------------
24.2 No Hiring Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------
24.3 Existing Employee Benefit Plans; Assumption of Vacation and Sick Leave Obligations 36
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25. OFFSET PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
26. ADJUSTMENT OF PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
27. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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SCHEDULES
SCHEDULE 2.1
- ------------
EXCLUDED ASSETS
SCHEDULE 2.3
- ------------
GENERAL WARRANTY BILL OF SALE AND ASSIGNMENT OF CONTRACT RIGHTS
SCHEDULE 4.3
- ------------
FINANCIAL STATEMENTS
SCHEDULE 4.5
- ------------
CUSTOMER LIST
SCHEDULE 4.7A
- -------------
EMPLOYEES
SCHEDULE 4.7B
- -------------
EMPLOYEE BENEFIT PLANS
SCHEDULE 4.8
- ------------
CONTRACTS AND AGREEMENTS
SCHEDULE 4.12
- -------------
SUITS, ACTIONS AND CLAIMS
SCHEDULE 4.13
- -------------
LICENSES AND PERMITS
SCHEDULE 14
- -----------
LEASE AGREEMENT
SCHEDULE 15
- -----------
NONCOMPETITION AGREEMENT
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 9th day of December, 1996, by and among (i) Denver Peterbilt, Inc., a
Colorado corporation ("Seller"), (ii) Greg Lessing, the owner of all of the
capital stock of Seller ("Shareholder"), (iii) Rush Truck Centers of Colorado,
Inc., a Delaware corporation ("Purchaser"), and (iv) Rush Enterprises, Inc., a
Texas corporation ("Rush"), as the sole shareholder of Purchaser and as the
guarantor of all of Purchaser's liabilities, obligations, covenants and
agreements under this Agreement.
W I T N E S S E T H :
WHEREAS, Seller is the owner of all right, title and interest in and
to the assets described in Section 2.1 hereto (the "Assets"), with such Assets
being the assets currently used in the conduct of the heavy duty truck sales
and service business and various related businesses operated by Seller in
Denver and Greeley, Colorado (collectively, the "Business");
WHEREAS, Seller desires to sell the Assets to Purchaser and Purchaser
desires to acquire the Assets from Seller, all pursuant to this Agreement as
hereinafter provided; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the execution and delivery of this Agreement, and to set forth
certain additional agreements related to the transactions contemplated hereby;
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. GENERAL DEFINITIONS. For purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
1.1 Affiliate. "Affiliate" of any Person shall mean any Person
Controlling, Controlled by or under common Control with such Person.
1.2 Best Knowledge. "Best Knowledge" shall mean both what a Person
knew as well as what the Person should have known had the person exercised
reasonable diligence. When used with respect to a Person other than a natural
person, the term "Best Knowledge" shall include matters that are known to the
directors, officers, and employees of the Person.
1.3 Control. "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.
1.4 Environmental Liability. "Environmental Liability" shall mean
any Damages as that term is defined in Section 13.1 arising from or with
respect to a breach of the warranties and representations in Section 4.17,
Waste Materials, Waste Materials Contamination, any Environmental Claim, any
Environmental Permit or any Requirement of Environmental Law.
1.5 Governmental Authority. "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.
1.6 Governmental Requirement. "Governmental Requirement" shall
mean any and all laws (including, but not limited to, applicable common law
principles), statutes, ordinances, codes, rules, regulations,
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interpretations, guidelines, directions, orders, judgments, writs, injunctions,
decrees, decisions or similar items or pronouncements, promulgated, issued,
passed or set forth by any Governmental Authority.
1.7 Material Adverse Effect. "Material Adverse Effect" shall mean
any matter concerning Seller, the Assets or the Business, other than a change
in general business or industry conditions affecting substantially all
businesses similar to the Business, which results in net income of Seller for
the 12-month period ending February 28, 1997, being less than $1,100,000, or
any damage or destruction to any of the Assets which cannot reasonably be
expected to be repaired within six months.
1.8 Payments. All payments and all dollar amounts required by this
Agreement shall be in United States Dollars.
1.9 Person. "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.
1.10 Schedule. "Schedule" shall mean the Schedules to this
Agreement, unless otherwise stated. The Schedules to this Agreement may be
attached to this Agreement or may be set forth in a separate document denoted
as the Schedules to this Agreement, or both.
1.11 Section. "Section" shall mean the Section of this Agreement,
unless otherwise stated.
1.12 Taxes. "Tax" and "Taxes" shall mean any and all income,
excise, franchise or other taxes and all other charges or fees imposed or
collected by any Governmental Authority or pursuant to any Governmental
Requirement, and shall also include any and all penalties, interest,
deficiencies, assessments and other charges with respect thereto.
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
2.1 Assets to be Purchased. The Assets to be purchased from Seller
are the following assets held by Seller as of the Closing for use in connection
with the Business:
(a) all new 1996 and 1997 Peterbilt motor vehicles
inventory,
(b) all new, current and returnable parts and accessories
inventory in unbroken lots and original packages and
all chassis kits,
(c) all miscellaneous inventories, including gas, diesel
fuel, oil, grease, paint and body shop materials,
(d) all work in progress and sublet repairs on vehicles
in Seller's parts and service departments,
(e) all of Seller's furniture, fixtures and office
equipment (including related software),
(f) all shop equipment and special tools, and all parts
and accessories equipment,
(g) all company vehicles not included in the Excluded
Assets,
(h) all signs, and all promotional, advertising and
training materials,
(i) all sales files and customer lists, and all warranty
and service and customer service and repair files,
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(j) all intangible assets of Seller to do business in
Denver, Colorado, and Greeley, Colorado, as a Peterbilt dealer,
including any and all Dealer Sales and Service Agreements between
Seller and Peterbilt, and to the extent assignable, the New Motor
Vehicle Dealer's Licenses, and any other permits or licenses issued by
any department or agency of the State of Colorado for Seller's
dealerships and the name "Denver Peterbilt",
(k) subject to agreement on price pursuant to Section
3.1(f) below, all used vehicles,
(l) subject to agreement on price pursuant to Section
3.1(f) below, all new obsolete parts and accessories and all used
parts and accessories,
(m) all accounts receivable from finance companies, and
all related contingent obligations but only to the extent that Seller
shall have received, prior to Closing, written confirmation from
PACCAR Financial Corporation and Associated Commercial Corporation
that the existing Limited Liability Recourse Repurchase Agreements
will survive Closing, and
(n) all customer deposits and agreements to sell
Peterbilt vehicles ordered but not delivered to the customer at the
time of Closing.
All other assets of Seller not described in this Section 2.1,
including the assets described on Schedule 2.1 (the "Excluded Assets"), shall
not be sold by Seller to Purchaser.
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 Section 3.
2.3 Delivery of Assets and Transfer Documents. At the Closing,
Seller and the Shareholder shall take all steps necessary to put Purchaser in
possession of the Assets, free and clear of any liens or encumbrances of any
nature whatsoever (except for liens, encumbrances or obligations, if any,
expressly assumed by Purchaser hereunder), and shall deliver to Purchaser (i) a
duly executed general warranty bill of sale covering the Assets, in the form of
and containing substantially the same terms and provisions as the General
Warranty Bill of Sale and Assignment of Contract Rights included in Schedule
2.3, (ii) duly executed title and transfer documents covering any assets for
which there exists a certificate of title, and (iii) 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 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 March 1, 1997, at 10:00 a.m., local
time, at the offices of Seller in Denver, Colorado, 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 April 30, 1997, in accordance with Sections 8.6 and 8.7 and Seller
shall have the right to delay the Closing up to and including September 1,
1997, in accordance with Article 10. The date of the Closing is referred to
herein as the "Closing Date".
3. PURCHASE PRICE.
3.1 Price and Payment. Subject to adjustment as provided in
Article 26 with respect to prorations, deposits and certain other items, the
aggregate consideration to be paid by Purchaser for the Assets is as follows:
(a) $6,000,000, plus
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(b) an amount equal to Dealer Cost (as defined in Section
3.2 below) for each vehicle of Seller described in Section 2.1(a),
payable, at the option of Purchaser, by the Assumption and Agreement
to pay the floor plan financing obligations of Seller under the
financing arrangements listed on Schedule 4.8 with respect to such
vehicles (and obtaining Seller's release therefrom), plus
(c) an amount equal to the replacement cost of the items
described in Sections 2.1(b) and (c), plus
(d) an amount equal to the Seller's actual cost of the
work in process and sublet repairs described in Section 2.1(d), plus
(e) an amount equal to the depreciated book value
(determined in accordance with generally accepted accounting
principles, consistently applied) at Closing of the items described in
Sections 2.1(e), (f) and (g), less $250,000, plus
(f) an amount to be agreed upon by Seller and Purchaser
for the items described in Sections 2.1(k) and (l) (provided that if
Seller and Purchaser cannot agree on the amount to be paid for any
Asset described in these Sections, such Asset shall be an Excluded
Asset), plus
(g) an amount equal to the book value (determined in
accordance with generally accepted accounting principles, consistently
applied) at Closing of the assets described in Section 2.1(m) subject
to verification of outstanding amounts and such guarantees by Seller
and Shareholder as Purchaser shall reasonably require, plus
(h) $2,000,000, which sum shall become payable in
accordance with the terms of this Section 3.1 when Purchaser shall
have sold its 500th new Peterbilt truck (the "Performance Criteria").
If Purchaser shall default in the payment of any amounts due to Seller
under this Section 3.1(h), Purchaser shall be liable for interest
thereon at the rate of twelve percent (12%) per annum, and all costs
of collection, including reasonable attorneys' fees.
The Purchase Price shall be payable by (a) payment of all amounts
specified in Sections 3.1(b) - (g) above in cash at Closing, (b) $6,000,000 in
cash at Closing (subject to the adjustment provisions in Section 26), and (c)
subject to the offset rights set forth in Section 25, and subject to the
Performance Criteria having been satisfied, payment of the amounts specified in
Section 3.1(h) in cash at the end of the calendar month in which the
Performance Criteria are satisfied, but in no event earlier than at the end of
the 24 month period following the Closing Date.
3.2 Assumed Obligations. At the Closing, Purchaser shall assume
and agree to timely discharge (a) the obligations of Seller under all contracts
and agreements transferred by Seller to Purchaser under this Agreement that are
(i) listed and described on Schedule 4.8 or on the updated list of contracts
required by Section 10.4 and (ii) accepted in writing by Purchaser pursuant to
the provisions of Section 4.8 or Section 7.2 or 10.4, (b) if included in the
Purchase Price under Section 3.1(b), the floor plan financing obligations of
Seller under the financing arrangements listed on Schedule 4.8 with respect to
the vehicles described in Section 2.1(a), but only to the extent of the Dealer
Cost (as defined below) of such vehicles, and Purchaser shall obtain a release
of Seller's liability thereunder, and (c) certain vacation and sick leave
obligations of Seller pursuant to Section 24.3; 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. "Dealer Cost" shall mean manufacturer's invoice price to Seller, reduced
by the amount of all manufacturer's rebates, allowances and other price
reductions paid or credited to Seller on such vehicle (other than the
manufacturer's reimbursement for dealer preparation and delivery expenses and
any floor plan interest credits for such vehicle), plus Seller's actual cost
and expense of installation of dealer-installed options on such vehicle. Except
as specifically set forth in this Section 3.2, Purchaser shall not assume, and
shall not be treated as having assumed, any liability or obligation of Seller
of any nature whatsoever.
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3.3 Payment for Noncompetition Agreements. As consideration for
the execution and delivery at the Closing of the noncompetition agreement of
Seller and Shareholder as contemplated by Article 15 hereof, Purchaser shall
pay jointly to Seller and Shareholder the amount of $10,000 on the first day of
the calendar month following the Closing Date and continuing on the first day
of each consecutive calendar month thereafter until such time as the amounts
specified in Section 3.1(h) shall have been paid. If Purchaser shall default in
the payment of any amounts due to Seller under this Section 3.3, Purchaser
shall be liable for interest thereon at the rate of twelve percent (12%) per
annum, and all costs of collection, including reasonable attorneys' fees.
3.4 Sales and Use Tax. Purchaser shall pay to any Sales and Use
Tax in connection with consummation of the transactions contemplated by this
Agreement up to a maximum of $35,000, and Seller shall be responsible for
payment to a Governmental Authority of all Sales and Use Tax in excess of
$35,000 in connection with such consummation.
3.5 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets to the extent relevant for income tax purposes in
accordance with Section 1060 of the Internal Revenue Code of 1986, as amended,
and Schedule 3.5 attached hereto. The parties agree to report the transactions
contemplated by this Agreement for tax purposes in accordance with the
allocation shown on Schedule 3.5, and each party will indemnify and hold each
other party harmless from any loss, cost, damage, additional tax or expense
(including attorneys' fees) arising from any failure by the indemnifying party
to so report such transactions.
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SHAREHOLDER.
Seller and the Shareholder hereby jointly and severally represent and warrant
to Purchaser as follows:
4.1 Incorporation. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado, 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. Seller is not qualified as a foreign corporation in any
jurisdiction, and Seller is not required to qualify or otherwise be authorized
to do business as a foreign corporation in any jurisdiction in order to carry
on any of its businesses as now conducted or to own, lease or operate the
Assets.
4.2 Share Capital. The Shareholder in the aggregate owns all of
the outstanding capital stock of Seller, and there are no options, rights or
other grants currently outstanding for the acquisition or purchase of any
shares of the capital stock of Seller.
4.3 Financial Statements. Seller has delivered to Purchaser copies
of the following financial statements for Seller, all of which financial
statements are included in Schedule 4.3 hereto:
(a) Unaudited Balance Sheet of Seller (the "Reference
Balance Sheet") as of October 31, 1996, (the "Balance Sheet Date") and
Unaudited Income Statement of Seller for the ten-month period ended on
the Balance Sheet Date; and
(b) Audited Balance Sheets, Income Statements and Statements
of Changes in Financial Position for each of Seller's two (2) most
recent fiscal years.
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 do and will present fairly the financial condition of Seller 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 Seller, 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.
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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 and Shareholder, by any other party, under any
agreement or obligation included in the Assets or by which any of the
Assets are bound;
(d) any damage, destruction or loss (whether or not
covered by insurance) adversely affecting the Assets or the Business;
(e) to the Best Knowledge of Seller and Shareholder, any
legislative or regulatory change adversely affecting the Assets or the
Business;
(f) any change in the types, nature, composition or
quality of the services of the Business, any adverse change in the
contributions of any of the service lines of the Business to the
revenues or net income of such Business, or any adverse change in the
sales, revenue or net income of the Business;
(g) any transaction related to or affecting the Assets or
the Business other than transactions in the ordinary course of
business of Seller; or
(h) any other occurrence, event or condition that has
adversely affected (or can reasonably be expected to adversely affect)
the Assets or the Business.
4.5 Customer List. Schedule 4.5 sets forth a true, correct and
complete list of all customers of the Business to which Seller has sold or
provided products or services during the two (2) years immediately preceding
the date hereof. Such list provides an accurate statement of the gross revenues
received from each such customer by the Business during the ten-month period
ended October 31, 1996. Two (2) days prior to the Closing Date, Seller will
deliver to Purchaser a true, correct and complete update of this list as of the
three (3) days prior to the Closing Date, and immediately prior to the Closing,
Seller will deliver to Purchaser a true, correct and complete update of this
list as of the Closing Date, in each case noting all deletions therefrom and
additions thereto and updating all information contained thereon, and
conspicuously marking all changes from the previous list or update, as the case
may be.
4.6 Taxes and Governmental Returns. As of the date hereof, all Tax
returns, information returns and governmental reports of every nature required
by any Governmental Authority or Governmental Requirement to be filed by Seller
or which include or should include Seller, including, but not limited to, those
relating to Taxes of any nature to which Seller or any of its business is
subject ("Governmental Returns"), have been filed for all periods ending on or
before the date hereof (except for any returns not yet due), and all Taxes
shown to be due and payable on such Governmental Returns or on any assessments
related to such Governmental Returns have been paid. All such Governmental
Returns and reports and the information and data contained therein have been
properly and accurately compiled and completed, fairly present the information
purported to be shown therein, and reflect all Tax liabilities of Seller for
the periods covered by such Governmental Returns. Except as specifically
disclosed in this Agreement or the Schedules hereto, Seller has no unpaid
liability for any Taxes of any nature whatsoever for any period prior to the
date hereof. The Governmental Returns of Seller or that include Seller have
not been audited, and are not now under audit, by any Governmental Authority.
There are no agreements, waivers or other arrangements providing for an
extension of time with respect to the assessment of any Taxes of any nature
against Seller or with respect to
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any Governmental Return filed by Seller or that include Seller, or any suits or
other actions, proceedings, investigations or claims now pending or threatened
against Seller with respect to any Taxes or any matters under discussion with
any Governmental Authority relating to any Taxes, or any claims for additional
Taxes asserted by any Governmental Authority.
4.7 Employee Matters. Schedule 4.7A 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.
With respect to each employee hired after November 6, 1986, a copy of the Form
I-9 completed pursuant to the Immigration Reform and Control Act of 1986, and
the rules and regulations promulgated thereunder, has been attached to Schedule
4.7A. Except as specifically described on Schedule 4.7B, Seller has no employee
benefit plans (including, but not limited to, pension plans and health or
welfare plans), arrangements or understandings, whether formal or informal.
Purchaser will have no liability with respect to any such plans as a result of
the transactions contemplated by this Agreement. Seller does not now and has
never contributed to a "multiemployer plan" as defined in section 4001(a)(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Seller has complied with all applicable provisions of ERISA and all rules and
regulations promulgated thereunder and neither Seller nor any trustee,
administrator, fiduciary, agent or employee thereof has at anytime been
involved in a transaction that would constitute a "prohibited transaction"
within the meaning of Section 406 of ERISA. Seller is not a party to any
collective bargaining or other union agreements. Seller has not, within the
last five years, had or been threatened with any union activities, work
stoppages or other labor trouble with respect to its employees which had or
might have had a material adverse effect on any of the Business. To the Best
Knowledge of Seller and the Shareholder, no union activities, work stoppages or
other labor trouble with respect to the employees of any of the customers or
suppliers of the Business are pending or threatened which might have an adverse
effect on the Business. Other than wage increases in the ordinary course of
business, 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 used in connection with the Business, and
between the date of this Agreement and the Closing Date, Seller will not make
any agreement to increase the wages or modify the conditions or terms of
employment of any of the employees of Seller used in connection with the
Business without the prior written approval of Purchaser.
4.8 Contracts and Agreements. Schedule 4.8 sets forth a true and
complete list of and briefly describes (including termination date) all of the
following contracts, agreements, leases, licenses, plans, arrangements or
commitments, written or oral, that relate to the Assets or the Business
(including all amendments, supplements and modifications thereto):
(a) all contracts, agreements or commitments in respect
of the sale of products or services or the purchase of raw materials,
supplies or other products or utilities;
(b) all offers, tenders or the like outstanding and
capable of being converted into an obligation of Seller by the passage
of time or by an acceptance or other act of some other person or
entity or both;
(c) all sales, agency or distributorship agreements or
franchises or legally enforceable commitments or obligations with
respect thereto;
(d) all collective bargaining agreements, union
agreements, employment agreements, consulting agreements or agreements
providing for the services of an independent contractor;
(e) all profit-sharing, pension, stock option, severance
pay, retirement, bonus, deferred compensation, group life and health
insurance or other employee benefit plans, agreements, arrangements or
commitments of any nature whatsoever, whether or not legally binding,
and all agreements with any present or former officer, director or
shareholder of Seller;
(f) all loan or credit agreements, indentures, guarantees
(other than endorsements made for collection), mortgages, pledges,
conditional sales or other title retention agreements, and all
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equipment financing obligations, lease and lease-purchase agreements
relating to or affecting the Assets or the Business;
(g) all leases related to the Assets or the Business;
(h) all performance bonds, bid bonds, surety bonds and
the like, all contracts and bids covered by such bonds, and all
letters of credit and guaranties;
(i) all consent decrees and other judgments, decrees or
orders, settlement agreements and agreements relating to competitive
activities, requiring or prohibiting any future action;
(j) all accounts, notes and other receivables, and all
security therefor, and all documents and agreements related thereto;
(k) all contracts or agreements of any nature with
Shareholder, or any Affiliate of Shareholder; and
(l) all contracts, commitments and agreements entered
into outside the ordinary course of the operation of the Business.
All of such contracts, agreements, leases, licenses, plans, arrangements and
commitments and all other such items included in the Assets but not
specifically described above (collectively, the "Contracts") are valid, binding
and in full force and effect in accordance with their terms and conditions and
there is no existing default thereunder or breach thereof by Seller, or, to the
Best Knowledge of Seller and Shareholder, 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 and Shareholder, 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. To the Best
Knowledge of Seller and Shareholder 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, Purchaser may, at its sole option,
choose not to assume one or more of the Contracts, and, within 30 days of
receipt by Purchaser of all information reasonably requested by Purchaser with
respect to the Contracts, Purchaser shall notify Seller of which Contracts, if
any, Purchaser does not intend to assume hereunder. Except for Contracts, if
any, that Purchaser notifies Seller that it will not assume, all of the
Contracts are and shall be included in the Assets. All of the Contracts may be
assigned to Purchaser without the approval or consent of any Person, or, if
such approval or consent is required, it will be obtained by Seller and
delivered to Purchaser at or prior to the Closing; provided, however, that if
any Contract is not assignable, Purchaser shall not assume such Contract and
Seller shall remain responsible for the performance thereunder.
4.9 Effect of Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
(i) result in any breach of any of the terms or conditions of, or constitute a
default under, the Articles of Incorporation or other charter documents or
bylaws of Seller, or any commitment, mortgage, note, bond, debenture, deed of
trust, contract, agreement, license or other instrument or obligation to which
Seller is now a party or by which Seller or any of its properties or assets may
be bound or affected; (ii) result in any violation of any Governmental
Requirement applicable to Seller, the Assets or the Business; (iii) cause
Purchaser to lose the benefit of any right or privilege included in the Assets;
(iv) relieve any Person of any obligation (whether contractual or otherwise) or
enable any Person to 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; or (v) require notice to or the consent,
authorization, approval or order of any Person (except as may be contemplated
by the last sentence of Section 4.8). To the Best Knowledge of Seller and
Shareholder, the business relationships of clients, customers and suppliers of
the Business will not be
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adversely affected by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
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 and 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. The plants, structures,
equipment, vehicles and other tangible properties included in the Assets and
the tangible property leased by Seller under leases included in the Assets are
in good operating condition and repair, normal wear and tear excepted, and are
capable of being used for their intended purpose in the Business as now
conducted. The Assets include all existing warranties and service contracts
with respect to any of the Assets to the extent the same are capable of being
assigned to Purchaser. During the past two years, there has not been any
significant interruption of the Business due to the breakdown or inadequate
maintenance of any of the Assets. All plants, structures, equipment, vehicles
and other tangible properties included in the Assets, and the present use of
all such items, conform to all applicable Governmental Requirements, and no
notice of any violation of any such Governmental Requirements relating to such
assets or their use has been received by Seller. The Assets include all
easements, rights of ingress and egress, and utilities and services necessary
for the conduct of the Business. Neither the whole nor any portion of any real
property to be conveyed to Purchaser hereunder has been condemned or otherwise
taken by any public authority, nor, to the Best Knowledge of Seller and
Shareholder, is any such condemnation or taking threatened or planned.
4.11 Intangible Property. The operation of the Business as now
conducted by Seller does not require the use of or consist of any rights under
any trademarks, trade names, brand names, service marks or copyrights other
than "Peterbilt" and "Denver Peterbilt".
4.12 Suits, Actions and Claims. Except as set forth in Schedule
4.12, (i) 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 and
Shareholder, 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, (ii)
no basis or grounds for any such suit, action, claim, inquiry, investigation or
proceeding exists, and (iii) 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, neither Seller
nor Shareholder has 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. Schedule 4.13 sets forth a true and complete list of all licenses
and permits necessary for the conduct of the Business. Seller has all such
licenses and permits validly issued to it and in its name, and all such
licenses and permits are in full force and effect. True and correct copies of
all such licenses and permits are included in Schedule 4.13. No violations are
or have been recorded in respect of such licenses or permits and no proceeding
is pending or, to the Best Knowledge of Seller and Shareholder, threatened
seeking the revocation or limitation of any of such licenses or permits. All
such licenses and permits that are subject to transfer are included in the
Assets. Seller has complied with all Governmental Requirements applicable to
its business, and all Governmental Requirements with respect to the
distribution and sale of products and services by it.
4.14 Authorization. Each of Seller and Shareholder has full legal
right, power, and authority to enter into and deliver this Agreement and to
consummate the transactions set forth herein and to perform all the terms and
conditions hereof to be performed by them. The execution and delivery of this
Agreement by Seller and Shareholder and the performance by each of them of the
transactions contemplated herein have been duly and validly authorized by all
requisite corporate action of Seller and by Shareholder, and this Agreement has
been duly and validly executed and delivered by Seller and Shareholder and is
the legal, valid and binding obligation of each of them, enforceable against
each of them in accordance with its terms, except
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as limited by applicable bankruptcy, moratorium, insolvency or other similar
laws affecting generally the rights of creditors or by principles of equity.
4.15 No Untrue Statements. The statements, representations and
warranties of Seller and Shareholder set forth in this Agreement and the
Schedules and in all other documents and information furnished to 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 and Shareholder, 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 Seller or Shareholder can now reasonably foresee,
could materially and adversely affect the condition (financial or otherwise) of
any of the Assets or the Business or the ability of Seller or Shareholder to
perform their respective obligations under this Agreement.
4.16 Records. The books, records and minutes kept by Seller with
respect to the Assets and the Business, including, but not limited to, all
customer files, service agreements, quotations, correspondence, route sheets
and historic revenue data of Seller, have been kept properly and contain
records of all matters required to be included therein by any Governmental
Requirement or by generally accepted accounting principles, and such books,
records and minutes are true, accurate and complete and (except for corporate
minute books and stock records) are included in the Assets.
4.17 Environmental Protection Laws.
(a) For purposes of this Section 4.17, unless the context
otherwise specifies or requires, the following terms shall have the
meaning herein defined:
(i) "Waste Materials" shall mean
(A) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act of 1976, 42. U.S.C.
Sections 6901 et seq., as amended from time to time, and
regulations promulgated thereunder;
(B) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Sections 9601, et seq., as
amended from time to time;
(C) asbestos;
(D) polychlorinated biphenyls;
(E) underground storage tanks, whether empty,
filled or partially filled with any substance;
(F) any other substance the presence of which is
prohibited by any Governmental Requirement; and
(G) any other substance which by any Governmental
Requirement requires special handling or notification of any
federal, state or local governmental entity in its collection,
storage, treatment, recycling, or disposal.
(ii) "Waste Materials Contamination" shall mean
the presence of Waste Materials on, in or under any property
whatsoever which is associated with or is in any way related
to the Assets or the Business, including the improvements,
facilities, soil, ground, water or air.
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(b) All business conducted by Seller, including but not
limited to the Business, has been and is being operated, and the
assets of Seller, including but not limited to the Assets, have been
and are being used and were obtained, in all respects in compliance
with all Governmental Requirements.
(c) Seller is not now, and has not been, in violation of
any Governmental Requirement. The Assets, the Business and all of the
operations of Seller are in full compliance with all Governmental
Requirements relating to Waste Materials, and no judicial or
administrative actions, including non-compliance orders or demand
letters, are pending that relate to such Governmental Requirements.
Without in any way limiting the foregoing, Seller and Shareholder
hereby jointly and severally specifically represent and warrant that:
(i) Seller has complied with all applicable
Governmental Requirements relating to pollution and
environmental control;
(ii) Seller is not in violation of any of the
permits described in or required to be described on Schedule
4.13 or any Governmental Requirement regulating emissions,
discharges or releases (including solids, liquids and gases)
into the environment or the proper transportation, handling,
storage, treatment or disposal of materials;
(iii) Seller has received all permits and approvals
with respect to emissions, discharges or releases (including
solids, liquids and gases) into the environment and the proper
transportation, handling, storage, treatment and disposal of
materials required for the operation of the businesses of
Seller as presently conducted;
(iv) Seller has kept all records and made all
filings required by applicable Governmental Requirements with
respect to emissions, discharges or releases (including
solids, liquids and gases) into the environment and the proper
transportation, handling, storage, treatment and disposal of
materials;
(v) All hazardous waste, hazardous materials and
hazardous substances attributable to the Assets, the Business
or the operations of Seller on, in or under any real property
owned or leased by Seller have been removed and no past or
present disposal, spill, or other release of hazardous waste,
hazardous materials or hazardous substances attributable to
the Assets, the Business or the operations of Seller on, in,
under or adjacent to any real property owned or leased by
Seller will subject Purchaser to corrective or response action
or any other liability under any Governmental Requirement or
the common law;
(vi) No investigation, administrative order,
consent order and agreement, litigation or settlement with
respect to Waste Materials or Waste Materials Contamination is
proposed, threatened, anticipated or in existence with respect
to the Assets or the Business. None of the Assets are
currently on, and to the Best Knowledge of Seller and
Shareholder, after diligent investigation and inquiry, have
ever been on, any federal or state "Superfund" or "Superlien"
list.
(vii) Seller does not have any contingent
liabilities under any Governmental Requirement to any Person
and whether or not such contingent liability is required
pursuant to generally accepted accounting principles to be
reflected on the financial statements of Seller, in connection
with any emission, discharge or release of any hazardous or
toxic waste, substance or constituent or any other substance
into the environment; and
(viii) Seller has not handled, treated, stored,
generated, transported or disposed of any Waste Material in
contravention of any Governmental Requirement, and there have
been no acts or omissions of Seller or any of its agents or
employees that would result in liability under any
Governmental Requirement.
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(d) Seller has, and has listed on Schedule 4.13, all
necessary environmental and operations permits for operations relating
to the Business or the Assets.
(e) There have not been nor will there be (i) any
violation of any Requirement of Environmental Law or Environmental
Permits (as those terms are hereinafter defined) of Seller or
Shareholder occurring between December 31, 1986 and the Closing Date,
(ii) any acts, omissions, conditions, facts, or circumstances
occurring or existing between December 31, 1986 and the Closing Date
with respect to the Assets, the Business or the operations of Seller
which give rise to Environmental Claims (as hereinafter defined)
before or after the date hereof, and (iii) any failure of Seller or
Shareholder to obtain or maintain, between December 31, 1986 and the
Closing Date, any Environmental Permit. For purposes of this Section
4.17(e) the term "Environmental Claim" means any action, lawsuit,
claim or proceeding by any Person relating to the Assets or the
Business or the operations or the business of Seller which seeks to
impose liability for (i) noise, (ii) pollution or contamination or
threatened pollution or contamination of the air, surface water,
groundwater or land, (iii) solid, gaseous or liquid waste generation,
handling, treatment, storage, disposal or transportation, (iv)
exposure to hazardous or toxic substances or (v) non-compliance with
any Requirement of Environmental Law. An "Environmental Claim"
includes, without limitation, a proceeding to terminate a permit or
license to the extent that such a proceeding attempts to redress
violations of the applicable permit or license or any Requirement of
Environmental Law as alleged by any Governmental Authority. For
purposes of this Section 4.17(e) the term "Environmental Permit" means
any permit, license, approval or other authorization related to, used
in connection with or necessary for the operation or use of the
Business or the Assets, or the operations or the businesses of Seller
under any applicable Requirement of Environmental Law. For purposes of
this Section 4.17(e)the term "Requirement of Environmental Law" means
all Governmental Requirements related to health or the environment,
including, but not limited to, all Governmental Requirements that
relate to (i) noise, (ii) pollution or protection of the air, surface
water, groundwater or land, (iii) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or transportation,
(iv) exposure to hazardous or toxic substances, or (v) any other
matters related to health or the environment.
4.18 Brokers and Finders. No broker or finder has acted for Seller
or Shareholder in connection with this Agreement or the transactions
contemplated by this Agreement and no broker or finder is entitled to any
brokerage or finder's fee or to any commission in respect thereof based in any
way on agreements, arrangements or understandings made by or on behalf of
Seller or Shareholder.
4.19 Deposits. Seller does not now hold any deposits or prepayments
by third parties with respect to any of the Assets or the Business which are
not reflected as liabilities on the Reference Balance Sheet.
4.20 Work Orders. There are no outstanding work orders or contracts
relating to any portion of the Assets from or required by any policy of
insurance, fire department, sanitation department, health authority or other
governmental authority nor is there any matter under discussion with any such
parties or authorities relating to work orders or contracts.
4.21 Telephone Numbers. All telephone numbers used by Seller in
connection with the Business are included in the Assets and will not be used by
Seller or Shareholder following the Closing. Seller does not guarantee that the
phone company will transfer such telephone numbers to Purchaser.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND RUSH.
Purchaser and Rush jointly and severally represent and warrant to Seller and
Shareholder as follows:
5.1 Incorporation. Purchaser is a corporation duly organized and
validly existing and in good standing under the laws of the State of Delaware,
and is qualified to do business in the State of Colorado. Purchaser is not
aware of any reason it cannot satisfy all Governmental Requirements in order to
carry on the Business as presently conducted.
5.2 Authorization. Purchaser 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
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hereof to be performed by it. This Agreement has been duly executed and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser enforceable in accordance with its terms, except as limited by
applicable bankruptcy, moratorium, insolvency or other laws affecting generally
the rights of creditors or by principles of equity.
5.3 Brokers and Finders. No broker or finder has acted for
Purchaser 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 Purchaser.
5.4 Effect of Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
(i) result in any breach of any of the terms or conditions of, or constitute a
default under, the Articles of Incorporation or other charter documents or
bylaws of Purchaser, or any commitment, mortgage, note, bond, debenture, deed
of trust, contract, agreement, license or other instrument or obligation to
which Purchaser is now a party or by which Purchaser or any of its properties
or assets may be bound or affected; or (ii) result in any violation of any
Governmental Requirement applicable to Purchaser.
5.5 Suits, Actions and Claims. There are no suits, actions,
claims, inquiries or investigations by any Person, or any legal, pending or, to
the Best Knowledge of Purchaser, threatened against or affecting Purchaser or
any of its properties, assets or business, or to which Purchaser is or might
become a party, or which question the validity or legality of the transactions
contemplated hereby which could result in a material adverse change in the
condition, financial or otherwise, of Purchaser.
5.6 Authority and Enforceability. Rush has the 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 of the terms and
conditions hereof to be performed by it. This Agreement constitutes the valid
and binding obligation of Rush, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, moratorium, insolvency and other
laws affecting the rights of creditors or by principles of equity.
5.7 No Defaults or Violations. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
(i) result in any breach of any of the terms and conditions of, or constitute a
default under, the Articles of Incorporation or other charter documents or
bylaws of Rush or any commitment, mortgage, note, bond, debenture, deed of
trust, contract, agreement, license or other instrument or obligation to which
Rush is now a party or by which Rush or any of its properties or assets may be
bound or affected; or (ii) result in any violation of any Governmental
Requirement applicable to Rush, except to the extent that any such breach,
default or violation would not materially adversely affect the condition,
financial or otherwise, of Rush.
5.8 Subsidiary Status. Rush is the sole shareholder of Purchaser
and there are no options, rights or other grants currently outstanding for the
acquisition or purchase of any shares of the capital stock of Purchaser.
6. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER. All
statements of fact contained in this Agreement or in any written statement
(including financial statements), certificate, schedule or other document
delivered by or on behalf of Seller or Shareholder pursuant to this Agreement
or in connection with the transactions contemplated hereby shall be deemed
representations and warranties of Seller and Shareholder hereunder. All
indemnifications, guarantees, covenants, agreements, representations and
warranties made by Seller or Shareholder hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the Closing.
6A. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF PURCHASER AND RUSH. 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 Purchaser or Rush pursuant to this Agreement or in
connection with the
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transactions contemplated hereby shall be deemed representations and warranties
of Purchaser and Rush hereunder. All indemnifications, guarantees, covenants,
agreements, representations and warranties made by Purchaser or Rush hereunder
or pursuant hereto or in connection with the transactions contemplated hereby
shall survive the Closing.
7. CONTRACTS PRIOR TO THE CLOSING DATE.
7.1 Approval of Contracts. Except in the ordinary course of
business and consistent with past practice, Seller shall not enter into or
amend any contracts related to the Business or the Assets between the date
hereof and the Closing Date unless approved in writing by Purchaser. Seller
will provide all information relating to each such contract or amendment that
is requested by Purchaser to enable Purchaser to make an informed decision
regarding approval of such contract or amendment. The failure of Purchaser to
respond to any written request by Seller for consent to any of the foregoing
actions within 24 hours after receipt of such request by W. Marvin Rush, W. M.
"Rusty" Rush, Robin M. Rush or David Orf, on behalf of Purchaser, shall be
deemed to be consent by Purchaser to such action. For these purposes a
confirmed fax addressed to any of the foregoing individuals will constitute
receipt at the time of confirmation.
7.2 Contracts Included in Assets. Any contracts, agreements or
commitments (or amendments to such items) related to the Business or the Assets
that are entered into by Seller between the date hereof and the Closing Date
and are approved in writing by Purchaser (after review of true, correct and
accurate copies of such items) shall be included in the Assets (with no
addition to the Purchase Price) and shall be assumed by Purchaser pursuant to
Section 3.2.
8. COVENANTS OF SELLER AND SHAREHOLDER PRIOR TO CLOSING DATE.
Seller and Shareholder hereby covenant and agree that between the date of this
Agreement and the Closing Date:
8.1 Access to Information. Seller shall afford to the officers and
authorized representatives of Purchaser access to the plants, properties, books
and records of Seller related to the Assets and the Business and shall furnish
Purchaser with such financial and operating data and other information
regarding the Assets and the Business and as Purchaser may from time to time
reasonably request.
8.2 General Affirmative Covenants. Seller shall, and Shareholder
shall cause Seller to:
(a) conduct the Business only in the ordinary course;
(b) maintain the Assets in good working order and
condition, ordinary wear and tear excepted;
(c) perform all its obligations under agreements relating
to or affecting the Assets or the Business;
(d) keep in full force and effect adequate insurance
coverage on the Assets and the operation of the Business;
(e) use its best efforts to maintain and preserve the
Business, and retain its present employees, customers, suppliers and
others having business relations with it;
(f) duly and timely file all reports or returns required
to be filed with any Governmental Authority, and promptly pay all
Taxes levied or assessed upon it or its properties or upon any part
thereof;
(g) duly observe and conform to all Governmental
Requirements relating to the Assets or its properties or to the
operation and conduct of its business and all covenants, terms and
conditions upon or under which any of its properties are held;
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(h) remove and have released, by payment or otherwise,
all liens and encumbrances of any nature whatsoever on the Assets
(except for liens and encumbrances, if any, specifically assumed by
Purchaser pursuant to this Agreement);
(i) duly and timely take all actions necessary to carry
out the transactions contemplated hereby;
(j) deliver to Purchaser on or before the 15th day of
each month true and correct unaudited monthly balance sheets and
statements of income for the Business for the immediately preceding
month; and
(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 December
31, 1996, together with any additional financial information
reasonably requested by Purchaser to allow Purchaser to timely comply
with its reporting requirements under the Securities Exchange Act of
1934 (the "Exchange Act"), all in form and substance sufficient to
allow Purchaser to timely comply with such reporting requirements; and
(l) preserve and maintain the goodwill of the Business.
8.3 General Negative Covenants. Seller shall not take, and
Shareholder will not permit Seller to take, any of the following actions
without the prior written consent of Purchaser:
(a) entering into or amending or assuming any contract,
agreement, obligation, lease, license or commitment related to the
Business or the Assets (or of a type included in the Assets) other
than in accordance with the provisions of Section 7.1;
(b) except in the ordinary course of business and
consistent with past practice, selling, leasing, abandoning or
otherwise disposing of any of the fixed Assets, including, but not
limited to, real property, machinery, equipment or other operating
properties;
(c) engaging in any activities or transactions that might
adversely affect the Assets or the Business;
(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; or
(e) selling or agreeing to sell 10 or more new trucks in
any single transaction or any series of related transactions at a
gross margin of less than 3 1/2%, or purchasing or agreeing to
purchase 10 or more used trucks.
The failure of Purchaser to respond to any written request by Seller for
consent to any of the foregoing actions within 24 hours after receipt of such
request by W. Marvin Rush, Rusty Rush, Robin Rush or David Orf, on behalf of
Purchaser, shall be deemed to be consent by Purchaser to such action. For these
purposes a confirmed fax addressed to any of the foregoing individuals will
constitute receipt at the time of confirmation.
8.4 Disclosure of Misrepresentations and Breaches. If any of the
representations or warranties of Seller or Shareholder hereunder are determined
by Seller or Shareholder to have been incorrect when made, or are determined by
Seller or Shareholder to be incorrect as of any date subsequent to the date
hereof, or if any of the covenants of Seller or Shareholder contained in this
Agreement have not been complied with timely, then Seller and Shareholder shall
immediately notify Purchaser to such effect (provided that such notice shall in
no way limit the rights of Purchaser under Articles 10 and 23 to terminate this
Agreement or refuse to consummate the transactions contemplated hereby).
8.5 Government Filings. Seller and Shareholder shall cooperate
with Purchaser and its representatives in the preparation of any documents or
other material that may be required by any
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Governmental Authority in connection with the Assets or the Business or the
transactions contemplated hereby.
8.6 Access to and Inspection of Premises, Facilities and
Equipment. Seller shall afford to the officers and authorized representatives
of Purchaser access to the premises, facilities and tangible assets included in
the Assets for the purpose of inspecting such premises, facilities and
equipment in such manner as Purchaser shall deem appropriate, including, but
not limited to, an environmental inspection and audit. If upon completion of
such inspection Purchaser finds any conditions which Purchaser, in its sole
discretion, considers to be unacceptable, Purchaser may, in addition to its
rights to terminate this Agreement pursuant to Articles 10 and 23, delay the
Closing under Section 2.4 up to and including the earlier of (i) 10 days after
remedy of the condition to Purchaser's satisfaction, or (ii) April 30, 1997.
Purchaser shall provide Seller and Shareholder with a detailed written
description of such unacceptable condition and shall give Seller and
Shareholder a reasonable opportunity to cure such condition before it may elect
to terminate this Agreement.
8.7 Inspection of Underground Storage Tanks. Within five days
prior to the Closing, Seller shall (i) cause all underground storage tanks
located on the premises leased by Purchaser in accordance with Article 14 to be
inspected for leakage and operating condition by independent third party
inspectors acceptable to Purchaser and (ii) deliver to Purchaser a written
report of the inspection as prepared by such inspectors. If Purchaser, in its
sole discretion, considers any items in the inspection report to be
unacceptable, then Purchaser may, in addition to its rights to terminate this
Agreement pursuant to Articles 10 and 23, delay the Closing Date under Section
2.4 up to and including the earlier of (i) 10 days after remedy of the
condition to Purchaser's satisfaction, or (ii) April 30, 1997.
9. COVENANTS REGARDING THE CLOSING.
9.1 Covenants of Seller. Seller and Shareholder hereby covenant
and agree that they shall (i) use commercially reasonable efforts to cause all
of their representations and warranties set forth in this Agreement to be true
on and as of the Closing Date, (ii) use commercially reasonable efforts to
cause all of their obligations that are to be fulfilled on or prior to the
Closing Date to be so fulfilled, (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 23 to terminate this Agreement or refuse to
consummate the transactions contemplated hereby).
9.2 Covenants of Purchaser and Rush. Purchaser and Rush hereby
covenant and agree that each of them shall (i) use commercially reasonable
efforts to cause all of their respective representations and warranties set
forth in this Agreement to be true on and as of the Closing Date, (ii) use
commercially reasonable efforts to cause all of their respective obligations
that are to be fulfilled on or prior to the Closing Date to be so fulfilled,
(iii) use commercially reasonable efforts to cause all conditions to the
Closing set forth in this Agreement to be satisfied on or prior to the Closing
Date (provided that failure by Purchaser or Rush to comply with a second
requirement for information under the HSR Act or to comply with any requested
divestiture of assets or to enter into any consent or similar order or
agreement shall not constitute a failure of Purchaser or Rush to use
commercially reasonable efforts), and (iv) 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 23 to terminate this Agreement
or to refuse to consummate the transactions contemplated hereby).
9.3 Inventory Audit. Within five days prior to Closing, Seller and
Purchaser shall each appoint one or more representatives knowledgeable in the
heavy duty truck business, and shall cause such representatives to conduct an
audit (in accordance with generally accepted accounting principles,
consistently
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applied) of the inventory of the Assets as of the Closing Date. Each party
shall bear their cost of conducting such audit.
9A. COVENANTS AFTER THE CLOSING.
9A.1 Covenants of Purchaser. Within 30 days after the end of each
calendar month ending prior to payment in full of the portion of the Purchase
Price described in Section 3.1(h), Purchaser shall notify Shareholder of the
number of new Peterbilt motor vehicles sold by Purchaser during such calendar
month.
10. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser hereunder are, at the option of Purchaser, subject to the
satisfaction, on or prior to the Closing Date, of the following conditions (any
of which may be waived by Purchaser, in its sole discretion):
10.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of Seller and Shareholder
contained in this Agreement shall be true and correct on and as of the Closing
Date with the same effect as though such representations and warranties had
been made on and as of such date except to the extent any inaccuracy would not
have a Material Adverse Effect. Each and all of the agreements and covenants of
Seller and Shareholder to be performed on or before the Closing Date pursuant
to the terms hereof shall have been performed except to the extent any failure
would not have a Material Adverse Effect. Seller and Shareholder shall have
delivered to Purchaser a certificate dated the Closing Date and executed by
Seller and Shareholder to all such effects or disclosing any such
representation or warranty not so true and correct or any such agreement or
covenant not so performed.
10.2 No Governmental Actions. No action or proceeding before any
Governmental Authority shall have been instituted or threatened to restrain or
prohibit the transactions contemplated by this Agreement, and Seller and
Shareholder shall have delivered to Purchaser a certificate dated the Closing
Date and executed by Seller and Shareholder stating they have no Best Knowledge
of any such items. No Governmental Authority shall have taken any other action
as a result of which the management of Purchaser reasonably deems it
inadvisable to proceed with the transactions contemplated by this Agreement
except to the extent any such action would not have a Material Adverse Effect.
10.3 No Material Adverse Change. No Material Adverse Effect 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 and
Shareholder to such effect.
10.4 Update of Contracts. Seller and Shareholder shall have
delivered to Purchaser an accurate list, as of the Closing Date, showing (i)
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 (ii) all other
agreements, contracts and commitments related to the Business or the Assets
entered into since the date of this Agreement, together with true, complete and
accurate copies of all documents (or in the case of oral commitments,
descriptions of the material terms thereof) relevant to the items on the list
(the "New Contracts"). Purchaser shall have the opportunity to review the New
Contracts, and shall have the right to delay the Closing for up to five (5)
days if it in its sole discretion Purchaser deems such a delay necessary to
enable it to adequately review the New Contracts. All of the New Contracts that
are approved in writing by Purchaser prior to the Closing, as it may be
delayed, (whether such approval by Purchaser is given before or after Seller
executes the New Contract) shall be included in the Assets (with no addition to
the Purchase Price) and the future obligations of Seller thereunder shall be
assumed by Purchaser pursuant to Section 3.2. Any New Contracts that are not
approved in writing by Purchaser prior to the Closing, as it may be delayed,
shall remain the sole obligation of Seller and shall not be assumed by
Purchaser, and Purchaser shall have no obligation or liability with respect
thereto.
10.5 No Material Adverse Information. The investigations with
respect to Seller, the Assets and the Business performed by Purchaser's
professional advisors and other representatives shall not have revealed any
Material Adverse Effect.
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10.6 Notices and Consents. No notice to or consent, authorization,
approval or order of any Person shall be required for the consummation of the
transactions contemplated by this Agreement (except for notices that have been
duly and timely given and consents, authorizations and approvals that have been
obtained), and Seller and Shareholder shall have delivered to Purchaser a
certificate dated the Closing Date and executed by Seller and Shareholder to
such effect. True and correct copies of all required notices, consents,
authorizations and approvals shall have been delivered to Purchaser and shall
be satisfactory in form and substance to Purchaser and its counsel.
10.7 Noncompetition Agreements. Each of Seller and Shareholder
shall have entered into and delivered a fully executed Noncompetition Agreement
as contemplated by Article 15.
10.8 Lease. Purchaser shall have received a fully executed and
delivered Lease Agreement as contemplated by Article 14 hereof.
10.9 Corporate Approval. Each of Seller and Shareholder shall have
taken or caused to be taken all necessary or desirable actions, steps and
corporate proceedings (whether by directors, shareholders or otherwise) to
approve and authorize the transfer of the Business and the Assets by Seller to
Purchaser, and to approve and authorize the execution and delivery of this
Agreement by the Seller, and Seller and Shareholder shall have delivered to
Purchaser at Closing a certificate to all such effects.
10.10 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.
10.11 Liens Released. Each and every lien or encumbrance of any
nature, if any, relating to the Assets shall have been terminated and released
and proof thereof delivered to the Purchaser (except for liens and
encumbrances, if any, specifically assumed by Purchaser pursuant to this
Agreement).
10.12 Ordinary Course of Business. During the period from the date
of this Agreement until Closing, Seller shall have carried on the Business in
accordance with Sections 8.2 and 8.3, except to the extent that violations of
the provisions of any one or more of the provisions of Sections 8.2(a) through
(g) and (l) and 8.3(b) and (c) would not result in a Material Adverse Effect,
and the Seller and Shareholder shall have delivered to Purchaser at Closing a
certificate to that effect.
10.13 Other Documents. Seller and Shareholder shall have delivered
or caused to be delivered all other documents, agreements, resolutions,
certificates or declarations as Purchaser or its attorneys may have reasonably
requested.
10.14 Dealer License. Purchaser shall have obtained written approval
to be licensed as a New Motor Vehicle Dealer by the appropriate department or
agency of the State of Colorado to do business as a Peterbilt dealer at the
present locations of the dealerships; provided, however, that Purchaser shall
use its reasonable best efforts to secure such approval prior to Closing.
10.15 Inventory Audit. The inventory audit contemplated by Section
9.3 shall have been completed.
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations
of Seller hereunder are, at its option, subject to the satisfaction, on or
prior to the Closing Date, of the following conditions (any of which may be
waived by Seller in its sole discretion):
11.1 Accuracy of Representations and Warranties and Fulfillment of
Covenants. The representations and warranties of Purchaser contained in this
Agreement shall be true and correct on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
such date. Each of the agreements and covenants of Purchaser to be performed on
or before the
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Closing Date shall have been performed. Purchaser shall have delivered to
Seller a certificate dated the Closing Date and executed by Purchaser to all
such effects.
11.2 Delivery of Purchase Price. Purchaser shall have paid to
Seller the Purchase Price as required by this Agreement, subject in all
respects to the provisions of Article 26 below.
11.3 Receivables Guarantee. Rush shall have agreed to guarantee any
recourse obligations of Seller required in connection with the sale by Seller
of accounts receivable generated with respect to the Business prior to the
Closing Date in consideration for the agreement of Seller and Shareholder to
reimburse Rush for any amounts paid under such guarantee.
11.4 Governmental Approvals. All necessary government and
regulatory approvals have been obtained, and all required waiting periods under
the HSR Act shall have expired or been terminated.
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS.
12.1 Delivery of Funds and Other Assets Collected by Seller; Power
of Attorney. To the extent Seller receives any funds or other assets in payment
of receivables, or in connection with any other Assets, being sold to Purchaser
pursuant hereto, Seller shall 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.
12.2 Change of Name of Seller. Immediately upon the occurrence of
the Closing, Seller shall cease using, and thereafter not use, the name "Denver
Peterbilt" and all derivations thereof in connection with any business
enterprise or investment activity, including but not limited to the sale of new
or used trucks or other motor vehicles, except with respect to the filing and
use of the "Denver Peterbilt" tradename in connection with securing dealer
license plates for vehicles of Shareholder and with collection of accounts
receivable of Seller existing on the Closing Date. Within one year after the
Closing Date, Seller will take all actions necessary to change its corporate
name to a name other than "Denver Peterbilt" or a derivation thereof.
12.3 Access to Files. For a period of five years after the Closing
or such longer term as Seller or Shareholder may require if Seller or
Shareholder is then involved in litigation or under investigation or audit by a
governmental agency or bureau relating to Seller or the Assets, Purchaser shall
maintain and give Seller and Shareholder and their respective representatives
full access to, and shall permit Seller and Shareholder and their respective
representatives, at their own expense, to make photocopies of, all originals of
the files and records relating to Seller or the Assets.
12.4 Exchange Act Filing; Cooperation. After the Closing, Seller
shall, at the cost and expense of Purchaser, reasonably cooperate with and
provide information to Purchaser as is necessary for Purchaser to comply with
its reporting obligations under the Exchange Act.
13. INDEMNITY BY SELLER AND SHAREHOLDER.
13.1 Indemnity. Seller and the Shareholder (the "Indemnifying
Parties") shall, and hereby do, jointly and severally indemnify, hold harmless
and defend Purchaser and its officers, directors, employees, agents,
consultants, representatives and Affiliates (collectively, the "Indemnified
Parties") at all times from and after the date of Closing, from and against any
and all penalties, demands, damages, punitive damages, losses, liabilities,
suits, costs, costs of any settlement or judgment, claims of any and every kind
whatsoever, refund obligations (including, without limitation, interest and
penalties thereon), remediation costs and expenses (including, without
limitation, reasonable attorneys' fees and reduced by the amount of any federal
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income tax benefits utilized by Purchaser), of or to any of the Indemnified
Parties ("Damages"), which may now or in the future be paid, incurred or
suffered by or asserted against the Indemnified Parties by any Person resulting
or arising from or incurred in connection with any one or more of the following
(provided that this Section 13.1 shall not apply to any items that have been
expressly assumed by Purchaser under this Agreement):
(a) any liability or claim for liability (whether in
contract, in tort or otherwise, and whether or not successful) of or
against Seller or Shareholder or related in any way to the business or
assets of any of them;
(b) any liability or claim for liability (whether in
contract, in tort or otherwise, and whether or not successful) related
in any way to the Assets or the Business to the extent such liability
or claim for liability arises in connection with any action, omission
or event occurring on or prior to the Closing Date (including, but not
limited to, claims for product liability with respect to products
manufactured, distributed or sold by Seller on or prior to the Closing
Date);
(c) any liability or claim for liability (whether in
contract, in tort or otherwise, and whether or not successful) related
to any liens, obligations or encumbrances of any nature whatsoever
against or in any way related to the Assets or the Business which have
not been expressly assumed by Purchaser hereunder;
(d) any liability or claim for liability (whether in
contract, in tort or otherwise, and whether or not successful) related
to Taxes of Seller;
(e) any liability or claim for liability (whether or not
successful) related to any lawsuit or threatened lawsuit or claim
involving Seller or Shareholder;
(f) any misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement on the part of Seller or
Shareholder under this Agreement or from any misrepresentation in or
omission from any list, schedule, certificate or other instrument
furnished or to be furnished to Purchaser pursuant to the terms of
this Agreement, including any such misrepresentation, breach of
warranty or nonfulfillment disclosed to Purchaser in accordance with
Section 10.1 resulting in Damages of less than $200,000;
(g) any liability or claim for liability against Purchaser or
any of the Assets to the extent such liability or claim for liability
arises in connection with the failure of Purchaser and Seller to
comply with any applicable bulk transfer law; and
(h) all actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including costs of court
and reasonable attorneys' fees) incident to any of the foregoing;
but only if such Damages exceed $200,000 in the aggregate.
13.2 Notice of Claim. Purchaser agrees that upon its discovery of
facts giving rise to a claim for indemnity under the provisions of this
Agreement, including receipt by it or any Indemnified Party of notice of any
demand, assertion, claim, action or proceeding, judicial or otherwise, by any
Person with respect to any matter as to which any of the Indemnified Parties
are entitled to indemnity under the provisions of this Agreement (such actions
being collectively referred to herein as the "Claim"), Purchaser will give
prompt notice thereof in writing to Seller together with a statement of such
information respecting any of the foregoing as it shall then have; provided
that any delay in giving or failure to give such notice shall not limit the
rights of Purchaser or any Indemnified Party to indemnity hereunder except to
the extent that the Indemnifying parties are shown to have been damaged by such
delay or failure.
13.3 Right of Seller to Participate in Defense. With respect to any
Claim as to which any of the Indemnified Parties seeks indemnity hereunder,
Purchaser shall provide Seller with the opportunity to participate in the
defense of such Claim with counsel of Seller's choice and at Seller's cost and
expense and
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shall not, without the consent of Seller, which consent shall not be
unreasonably withheld, settle any such Claim, so long as the Indemnifying
Parties shall have unconditionally acknowledged their obligation to indemnify
hereunder with respect to such Claim. To the extent reasonably requested by
Purchaser, Seller shall reasonably cooperate with Purchaser and its
representatives and counsel in any dispute or defense related to any Claim.
13.4 Payment. The Indemnifying Parties shall promptly pay to
Purchaser or such other Indemnified Party as may be entitled to indemnity
hereunder in cash the amount of any Damages to which Purchaser or such
Indemnified Party may become entitled by reason of the provisions of this
Agreement.
13.5 Limit of Liability of Shareholder. Notwithstanding any other
provisions of this Agreement, the liability of Shareholder under this
Agreement, shall be limited in the aggregate to $8,000,000.
13.6 Limitations on Indemnity. Notwithstanding the foregoing
provisions of Article 13:
(a) No action for indemnification shall be brought by the
Indemnified Parties under Article 13 unless a Claim has been delivered
to the Indemnifying Parties prior to the expiration of two years after
the Closing Date; and
(b) No action for indemnification shall be brought by any
Indemnified Party under Article 13 with respect to any matter of which
such Indemnified Party had actual knowledge prior to Closing, other
than from oral communications from Seller or Shareholder.
(c) Neither Seller nor Shareholder shall be liable to any
Indemnified Party under this Agreement for any Damages for any
Environmental Liability with respect to, or relating to, any acts,
omissions, conditions, facts or circumstances occurring or existing
prior to December 31, 1986.
13A. INDEMNITY BY PURCHASER.
13A.1 Indemnity. Purchaser shall, and hereby does indemnify,
hold harmless and defend Seller and Shareholder at all times from and after the
date of this Agreement, from and against any and all penalties, demands,
damages, punitive damages, losses, liabilities, suits, costs, costs of any
settlement or judgment, claims of any and every kind whatsoever, refund
obligations (including, without limitation, interest and penalties thereon),
remediation costs and expenses (including, without limitation, reasonable
attorneys' fees), of or to Seller or Shareholder ("Damages"), which may now or
in the future be paid, incurred or suffered by or asserted against Seller or
Shareholder by any Person resulting or arising from or incurred in connection
with any one or more of the following:
(a) any liability or claim for liability (whether in
contract, in tort or otherwise, and whether or not successful) related
in any way to the Assets or the Business to the extent such liability
or claim for liability arises in connection with any action, omission
or event occurring after the Closing Date (including, but not limited
to, claims for product liability with respect to products
manufactured, distributed or sold by Seller after the Closing Date;
and
(b) any misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement on the part of Purchaser
under this Agreement or from any misrepresentation in or omission from
any list, schedule, certificate or other instrument furnished or to be
furnished to Seller or Shareholder pursuant to the terms of this
Agreement.
(c) any failure to timely make any payment due to Seller
or Shareholder pursuant to the terms of this Agreement, including but
not limited to the provisions of Sections 3.1(h) and 3.3.
13A.2 Notice of Claim. Seller and Shareholder agrees that upon their
discovery of facts giving rise to a claim for indemnity under the provisions of
this Agreement, including receipt by Seller or Shareholder of notice of any
demand, assertion, claim, action or proceeding, judicial or otherwise, by any
Person with respect to any matter as to which Seller or Shareholder are
entitled to indemnity under the provisions of this
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Agreement (such actions being collectively referred to herein as the "Claim"),
Seller and Shareholder will give prompt notice thereof in writing to Purchaser
together with a statement of such information respecting any of the foregoing
as they shall then have; provided that any delay in giving or failure to give
such notice shall not limit the rights of Seller or Shareholder to indemnity
hereunder except to the extent that the Purchaser is shown to have been damaged
by such delay or failure.
13A.3 Right of Purchaser to Participate in Defense. With respect to
any Claim as to which Seller or Shareholder seeks indemnity hereunder, Seller
and Shareholder shall provide Purchaser with the opportunity to participate in
the defense of such Claim with counsel of Purchaser's choice and at Purchaser's
cost and expense. To the extent reasonably requested by Seller and Shareholder,
Purchaser shall reasonably cooperate with Seller and Shareholder and their
representatives and counsel in any dispute or defense related to any Claim.
13A.4 Payment. Purchaser shall promptly pay to Seller and
Shareholder in cash the amount of any Damages to which Seller and Shareholder
may become entitled by reason of the provisions of this Agreement.
13A.5 Limitations on Indemnity. Notwithstanding the foregoing
provisions of Article 13A:
(a) No action for indemnification shall be brought by Seller
or Shareholder under Article 13A unless a Claim has been delivered to
Purchaser prior to the expiration of two years after the Closing Date
except for claims related to the payments due to Seller and
Shareholder pursuant to Sections 3.1(h) and 3.3.
(b) No action for indemnification shall be brought by Seller
or Shareholder under this Article 13A with respect to any matter of
which Seller or Shareholder had actual knowledge prior to Closing,
other than from oral communications from Purchaser.
14. LEASE AGREEMENT. An appraisal of the property on which
Seller's Denver, Colorado dealership is located (the "Denver Property") will be
completed as of the date of Closing and a "net net" lease between Seller and
Purchaser in the form of and containing the same terms and provisions as the
Lease Agreement included in Schedule 14 (the "Lease Agreement") will be entered
into on such date. The terms of the Lease Agreement will provide that (a)
Purchaser will pay rent to Seller in a monthly amount equal to 1% of the
appraised value of the Denver Property as of the date of Closing, and (b) the
Lease Agreement will be for a period equal to the earlier to occur of (i) 30
months from the Closing, or (ii) at such time as Purchaser is prepared to
relocate the Denver, Colorado dealership and the Denver Property is sold. At
the expiration of such period, Seller and Purchaser shall jointly use their
best efforts to sell the Denver Property. If after a reasonable marketing
period the best bona fide offer to purchase such property is less than 90% of
the amount that such property appraised for on the date of Closing and Seller
desires to sell the Denver Property, Purchaser shall be required to elect to
either (i) purchase the Denver Property for an amount equal to 90% of such
appraised value, or (ii) direct Seller to sell the Denver Property for the
amount of such bona fide offer and pay to Seller an amount equal to the
difference between 90% of the appraised value of the Denver Property on the
date of Closing and the amount for which such property is ultimately sold.
15. NONCOMPETITION AGREEMENTS. On the Closing Date, Seller and
Shareholder shall execute and deliver to Purchaser a Noncompetition Agreement
in the form of and containing the same terms and provisions as the
Noncompetition Agreement included in Schedule 15.
16. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Seller and
Shareholder recognize and acknowledge that they have and will have access to
certain confidential information) of Seller that is included in the Assets
(including, but not limited to, lists of customers, and costs and financial
information) that after the consummation of the transactions contemplated
hereby will be valuable, special and unique property of Purchaser. Seller and
Shareholder agree that they will not disclose, and they will use their best
efforts to prevent disclosure by any other Person of, any such confidential
information to, nor any discussion of any of the terms of this Agreement with,
any Person for any purpose or reason whatsoever, except to authorized
representatives of Purchaser. Seller and Shareholder recognize and agree that
violation of any of the agreements contained in this Article 16 will cause
irreparable damage or injury to Purchaser, the exact amount
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of which may be impossible to ascertain, and that, for such reason, among
others, Purchaser shall be entitled to an injunction, without the necessity of
posting bond therefor, restraining any further violation of such agreements.
Such rights to any injunction shall be in addition to, and not in limitation
of, any other rights and remedies Purchaser may have against Seller or
Shareholder.
17. 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 (i) 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 (ii) 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 (i) and (ii) 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 Article 17
shall relieve Seller and Shareholder of their obligations to obtain any
consents required for the transfer of the Assets and all rights thereunder to
Purchaser, or shall relieve Seller or Shareholder from any liability to
Purchaser for failure to obtain such consents.
18. DAMAGE TO ASSETS. If, on or before the Closing Date, any of
the Assets are damaged or destroyed, Seller will immediately notify Purchaser
of such damage or destruction. In the event of any such damage or destruction,
Purchaser shall, except as otherwise provided in this Agreement, (i) 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 (ii) 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.
19. 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.
20. 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.
21. NOTICES. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally, given by
prepaid telex or telegram or by facsimile or other similar instantaneous
electronic transmission device or mailed first class, postage prepaid,
certified United States mail, return receipt requested, as follows:
(a) If to Purchaser, at:
Rush Truck Centers of Colorado, Inc.
P. O. Box 34630
San Antonio, Texas 78265
Attention: Robin M. Rush
Facsimile No.: (210) 661-4306
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With a copy to:
Fulbright & Jaworski L.L.P.
300 Convent Street, Suite 2200
San Antonio, Texas 78205
Attention: Phillip M. Renfro, Esq.
Facsimile No.: (210) 224-8336
(b) If to Seller, at:
Denver Peterbilt, Inc.
4901 Race Street
Denver, Colorado 80216
Attention: Greg Lessing
Facsimile No.: (303) 292-5377
With a copy to:
Lentz, Evans & King, P.C.
2900 Lincoln Centre Bldg.
1660 Lincoln Street
Denver, Colorado 80264
Attention: Richard Robinson
Facsimile No.: (303) 860-8654
(c) If to Shareholder, at:
Greg Lessing
13506 Travois Trail
Parker, Colorado 80134
With a copy to:
Lentz, Evans & King, P.C.
2900 Lincoln Centre Bldg.
1660 Lincoln Street
Denver, Colorado 80264
Attention: Richard Robinson
Facsimile No.: (303) 860-8654
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 Article
21 shall be effective when received at the address for notice for the party to
which the notice is given.
22. GENERAL PROVISIONS.
22.1 Governing Law; Interpretation; Section Headings. This
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Colorado, without regard to conflict-of-laws rules as
applied in Colorado. The section headings contained herein are for purposes of
convenience only, and shall not be deemed to constitute a part of this
Agreement or to affect the meaning or interpretation of this Agreement in any
way.
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22.2 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.
22.3 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.
22.4 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.
22.5 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.
22.6 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.
22.7 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.
22.8 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.
22.9 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.
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22.10 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.
22.11 Arbitration. The Parties to this Agreement agree that any
dispute or controversy arising out of or in connection with this Agreement or
any alleged breach hereof shall be settled by arbitration in Denver, Colorado,
pursuant to the rules of the American Arbitration Association. If the two
parties cannot jointly select a single arbitrator to determine the matter, one
arbitrator shall be chosen by each party (or, if a party fails to make a
choice, by the American Arbitration Association on behalf of such party) and
the two arbitrators so chosen will select a third. The decisions of the single
arbitrator jointly selected by the parties, or, if three arbitrators are
selected, the decision of any two of them, will be final and binding upon the
parties and the judgment of a court of competent jurisdiction may be entered
thereon. Fees of the arbitrators and costs of arbitration shall be borne by the
parties in such manner as shall be determined by the arbitrator or arbitrators.
23. TERMINATION. This Agreement may be terminated without further
obligation of the parties, as follows:
23.1 Mutual Consent. This Agreement may be terminated at any time
prior to Closing by mutual written consent of the parties hereto.
23.2 Termination.
(a) Termination by Purchaser. This Agreement may be
terminated by Purchaser upon delivery of a written notice of
termination to Seller and Shareholder if the conditions set forth in
Article 10 of this Agreement have not been fulfilled by Seller, or
waived by Purchaser on or before the Closing Date. Prior to Purchaser
exercising its rights to terminate this Agreement, it shall deliver
written notice of such failure to Seller and to Shareholder describing
such failure in detail, and giving Seller and Shareholder, at their
option, the right to delay the closing for a period of not more than
180 days for the purpose of curing such failure. In the event of such
termination, the Escrowed Funds (as defined in the Escrow Agreement
dated December _, 1996, among Seller, Purchaser and the Escrow Agent
(as defined therein)) shall be delivered to Purchaser, and Purchaser
shall have no further claim or right of action against Seller or
Shareholder as a result of this Agreement, except that if such
termination occurs because of any failure under Sections 9.3, 10.7,
10.9, 10.10, 10.11 or 10.12of the Agreement, then Seller and
Shareholder shall pay to Purchaser cash in the amount of $1,000,000 as
liquidated damages, in full satisfaction of any and all claims or
causes of action against Seller and Shareholder as a result of such
failure.
(b) Termination by Seller. This Agreement may be
terminated by Seller and Shareholder upon delivery of a written notice
of termination to Purchaser, if the conditions set forth in Sections
9.3 or 11 of this Agreement have not been fulfilled by Purchaser or
waived by Seller on or before the Closing Date. Prior to Seller
exercising its rights to terminate this Agreement, it shall deliver
written notice of such failure to Purchaser describing such failure in
detail and giving Purchaser, at its option, the right to delay the
closing for a period of not more than 180 days for the purpose of
curing such failure. In the event of such termination, the Escrowed
Funds shall be delivered to Seller as liquidated damages, and Seller
shall have no further claim or right of action against Purchaser or
Rush as a result of this Agreement.
(c) Exclusivity of Remedies. The termination of the
Agreement and the provisions for liquidated damages set forth in this
Section 23.2 shall be the exclusive remedy of either party for the
other party's failure to satisfy the conditions set forth in Sections
9.3, 10 or 11.
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24. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.
24.1 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, which ever is later. Such new
employees shall be entitled only to such compensation and employees benefits as
are agreed to by such employees and Purchaser, or as are otherwise provided by
Purchaser, in its sole discretion.
24.2 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.
24.3 Existing Employee Benefit Plans; Assumption of Vacation and
Sick Leave Obligations. At the Closing, Purchaser shall assume Seller's
obligations to employees of Seller hired by Purchaser for accrued but unused
vacation and sick leave, and the Purchase Price shall be reduced by the dollar
value of such obligation. Except for vacation and sick leave time assumed by
Purchaser as set forth above, Purchaser shall have no obligation after the
Closing to continue any pension plans or work benefit plans currently offered
by Seller to its employees.
25. OFFSET PROVISIONS. If, following the Closing Date, Seller or
Shareholder becomes obligated to pay any sums to Purchaser or any Indemnified
Party pursuant to the provisions of Section 13 of this Agreement, Purchaser
shall be entitled to and shall have the right to reduce and offset payments due
under this Agreement and the Noncompetition Agreement in such amount or amounts
as Purchaser (and any Indemnified Party that is not promptly paid by Seller) is
entitled to receive from Seller or Shareholder, and any such offset shall be
deemed to be a payment under such Agreements; provided, however, that prior to
any such offset Purchaser shall have provided to the Shareholder a notice of
Claim as described in Section 13.2 or an otherwise reasonably detailed
description of the matter giving rise to such offset.
26. ADJUSTMENT OF PURCHASE PRICE. The Purchase Price shall be
adjusted on the Closing Date (i) to reduce the Purchase Price by the amount
allocated to any damaged or destroyed Assets as contemplated by Article 18;
(ii) to account for a proration of property taxes on the Assets, lease
payments, utilities and other items commonly prorated; and (iii) to reduce the
Purchase Price for the value of any vacation and sick time obligations of
Seller assumed by Purchaser pursuant to Section 24.3. Three (3) days prior to
the Closing Date, Seller will provide Purchaser with a statement of adjustments
showing all proposed adjustments to the Purchase Price, such statement of
adjustments having all reasonable back up documentation for such suggested
adjustments. Purchaser and Seller will work to finalize all required
adjustments prior to the Closing Date.
27. GUARANTEE. Rush hereby (i) unconditionally guarantees the
prompt payment and performance of each and every obligation, liability,
indemnity, covenant and agreement of Purchaser under this Agreement, (ii)
waives any requirement of notice, demand, protest or grace period with respect
thereto; (iii) agrees that neither Seller nor Shareholder shall be required to
either seek recovery from Purchaser or to exhaust their remedies against
Purchaser or any other person before enforcing the provisions of this
guarantee; (iv) waives any defense arising by reason of any disability or other
defense of Purchaser (other than an offset in accordance with Article 25 of
this Agreement), or by reason of cessation of liability from any cause
whatsoever, except full payment or performance thereof; and (v) agrees that
Seller and Shareholder shall be entitled to recover all costs and expenses with
respect to the enforcement of this guarantee, including but not limited to
court costs and reasonable attorneys' fees. Rush hereby agrees and acknowledges
that Seller and Shareholder are relying on this guarantee in entering into and
consummating the transactions contemplated by this Agreement, and that, but for
this guarantee, they would not enter into this Agreement or consummate the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date first above written.
PURCHASER:
RUSH TRUCK CENTERS OF
COLORADO, INC.
By: /s/ W. Marvin Rush
---------------------------------------
Name: W. Marvin Rush
------------------------------------
Title: Chief Executive Officer
------------------------------------
SOLE SHAREHOLDER OF PURCHASER:
RUSH ENTERPRISES, INC.
By: /s/ W. Marvin Rush
-------------------------------------------
Name: W. Marvin Rush
-------------------------------------
Title: Chairman of the Board and Chief
Executive Officer
-----------------------------------
SELLER:
DENVER PETERBILT, INC.
By: /s/ Greg Lessing
---------------------------------------
Name: Greg Lessing
-------------------------------------
Title:
-------------------------------------
SOLE SHAREHOLDER OF SELLER:
/s/ Greg Lessing
-------------------------------------------
Greg Lessing
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