Right of First Refusal Agreement entered into by and among Rush Enterprises, Inc., W.M. RustyRush and Frost Bank

Exhibit 10.35

Execution Version

RIGHT OF FIRST REFUSAL AGREEMENT

THIS RIGHT OF FIRST REFUSAL AGREEMENT (the “Agreement”), dated October 18, 2022, is entered into by and among Rush Enterprises, Inc., a Texas corporation (“Rush”), W.M. “Rusty” Rush (“Borrower”), and Frost Bank, a Texas state bank (“Lender”).

RECITALS

WHEREAS, Borrower intends to enter into a margin loan agreement (such margin loan agreement, together with the related promissory note, pledge and security agreement, account agreement, and all other documents, instruments, or agreements executed and delivered by Borrower in connection therewith, being the “Loan Documents”) with Lender;

WHEREAS, pursuant to the Loan Documents, to secure Borrower’s obligations thereunder, Borrower has granted Lender a security interest in, among other things, certain shares of his Rush Class B Common Stock (the “Pledged Shares”);

WHEREAS, Borrower has authorized Lender, on his behalf, to deliver notices to Rush in accordance with this Agreement pursuant to the ROFR Power of Attorney (as defined below);

WHEREAS, the Loan Documents permit Lender, under certain circumstances, to foreclose on its security interest in the Pledged Shares and to sell those shares to pay, in whole or in part, the obligations of Borrower under the Loan Documents; and

WHEREAS, in connection with the Loan Documents, the parties hereto are entering into this Agreement with respect to the Pledged Shares in the event that Lender ever forecloses its security interest in all or any portion of the Pledged Shares.

AGREEMENT

NOW THEREFORE, in consideration of the premises and for the mutual promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be bound, the parties hereto hereby agree as follows:

1.            Definitions. For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

“Acceptance Deadline” means 12:00 p.m., San Antonio, Texas, time, on that date which is three (3) Business Days after delivery by Lender of a ROFR Notice.

“Agreement” has the meaning assigned to it in the first paragraph of this Right of First Refusal Agreement.

“Borrower” has the meaning assigned to it in the first paragraph of this Agreement.

“Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in San Antonio, Texas, are open for the general transaction of business.

“Delinquent Amount” has the meaning assigned to it in Section 3 of this Agreement.

“Event of Default” has the meaning assigned to it in the Loan Documents.

“Lender” has the meaning assigned to it in the first paragraph of this Agreement.

“Loan Documents” has the meaning assigned to it in the recitals to this Agreement.

“Loan Payment Event” has the meaning assigned to it in Section 2 of this Agreement.

“Margin Call Price” means the average of the VWAPs for the two (2) full Trading Days most recently ended prior to the time of delivery by Lender of the ROFR Notice.

“Margin Call Shares” has the meaning assigned to it in Section 3 of this Agreement.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority, or other entity.

“Pledged Shares” has the meaning assigned to it in the recitals to this Agreement.

“ROFR Notice” has the meaning assigned to it in Section 2 of this Agreement.

“ROFR Power of Attorney” means a power of attorney granted to Lender pursuant to Section 9 of the Pledge and Security Agreement executed by Borrower, for the benefit of Lender, granting Lender the authority to deliver a ROFR Notice on behalf of Borrower upon the occurrence of a Loan Payment Event.

“Rush” has the meaning assigned to it in the first paragraph of this Agreement.

“Rush Notice” has the meaning assigned to it in Section 4 of this Agreement.

“Trading Day” means any day on which The Nasdaq Stock Market is open for trading during its regular trading session (it being understood and agreed that any day on which The Nasdaq Stock Market is open for trading but is scheduled to close early in connection with a current or pending holiday shall constitute a regular trading session).

“VWAP” means the volume-weighted average price.

2.            Loan Payment Event.  Upon an Event of Default, mandatory prepayment event, margin call, or any other event or circumstance that requires a payment to be made by Borrower under any Loan Document (any or all of the foregoing events or circumstances being herein collectively referred to as a “Loan Payment Event”), and, as a result of any such Loan Payment Event, Lender is entitled to foreclose upon and sell all or any portion of the Pledged Shares in accordance with the terms of the Loan Documents, then Lender, pursuant to the ROFR Power of Attorney, will provide written notice of same to Rush (“ROFR Notice”).

3.            ROFR Notice. The ROFR Notice will specify (a) the amount of any payment(s) due but unpaid by Borrower under the Loan Documents (the “Delinquent Amount”), (b) the number of Pledged Shares determined by Lender in its reasonable judgment to be sufficient to pay the Delinquent Amount and to cause Borrower to come into full compliance with all of its obligations under the Loan Documents (the “Margin Call Shares”), and (c) the Margin Call Price. The ROFR Notice will constitute a binding, irrevocable offer by Borrower to sell to Rush the Margin Call Shares at the Margin Call Price, and by its signature below Borrower hereby agrees and acknowledges that any Delinquent Amount to be paid by Rush in exchange for such Margin Call Shares shall be paid directly to Lender via Lender’s account identified on Schedule A hereto.

4.            ROFR Process and Procedure.

5.            Miscellaneous.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.