Document:

Exhibit
10.59

FIRST
AMENDMENT TO ACQUISITION AGREEMENT

This
First Amendment to Acquisition Agreement (the “Amendment”) is executed as of July 19,
2007, by Mac Farms of Hawaii, LLC, a Delaware limited liability company (“Mac Farms”) and
Kapua Orchard Estates, LLC, a Delaware limited liability company (“Kapua”), (both
collectively sometimes called “Seller”), and ML Macadamia Orchards, L.P. (“MLP” or “Buyer”), a Delaware
limited partnership, with reference to the following facts:

A.             Effective
as of May 24, 2007, Mac Farms, Kapua and Buyer executed an Acquisition
Agreement (the “Agreement”)
providing for the acquisition by Buyer of certain personal
property assets and the subleasing, leasing or otherwise acquiring rights of
use from Seller for those real property assets used by Seller in connection
with its macadamia nut operations, all as
more particularly set forth in the Agreement. Unless otherwise defined herein, the capitalized terms in this Amendment
shall have the same meaning as set forth in the Agreement.

B.              Section 5.9(a) of the Agreement required Buyer
to seek SEC Preliminary Approval to permit
the filing of certain abbreviated financial information in the Proxy Statement, which would be sent to Unitholders, and
the Form 8-K, which would be required to be filed with the SEC by Buyer upon consummation of the acquisition
under the Agreement (the “Form 8-K”). Section
5.9(c) and Section 9.1(f) of the Agreement contained rights to terminate the Agreement in the event the SEC
Preliminary Approval was not timely obtained.

C.            Although Buyer timely sought the SEC Preliminary
Approval, it obtained relief from the
SEC only with respect to the financial information to be included in the Proxy Statement, but did not obtain any relief from the
SEC with respect to the financial information to be included in the Form 8-K.
In light of the failure to obtain the SEC Preliminary Approval, the
Parties have determined not to terminate the Agreement and to attempt to
provide audited financial statements in the Proxy Statement and the Form 8-K.

D.              In
order to prepare the necessary financial statements and to obtain an audit thereon, the Parties have agreed to extend the
time for closing the transaction, to take such other actions as set
forth in this Amendment and to amend the Agreement as set forth in this
Amendment.

NOW, THEREFORE, the
Parties have agreed as follows:

1.                                           Article
1 of the Agreement is amended to add the following new definitions:

“Average Closing Price” means the average closing price per unit of the
units of MLP on the New York Stock Exchange for the ten (10) trading
days immediately preceding the date upon which approval of this transaction by
a Majority Interest of the Partnership is obtained.

“Buyer Material Adverse Effect” means any condition, event, circumstance, change, or
effect, which, since March 31, 2007, individually or in the aggregate, has had,
or could reasonably be expected to have a
material adverse effect on the business, assets, properties, results of
operation or financial condition or prospects of Buyer. However, neither (i) a decrease in the market price of the units of MLP
by itself, nor (ii) a decrease in the Spot Price, as defined herein, by itself, or the effects
resulting from either of these events shall be deemed a Buyer Material
Adverse Effect. Notwithstanding the foregoing, the cause of a decrease in the market price of units of MLP could be a Buyer
Material Adverse Effect, if it otherwise meets the definition thereof. For
example, if a portion of Buyer’s nut trees are destroyed and the market price of units of MLP dropped as a result
thereof, then the mere drop in the market price would not be a Buyer Material Adverse Effect, but the destruction of the
trees (i.e., the “cause” of the price reduction) could be a Buyer
Material Adverse Effect.

“Floor Price” means
U.S. $4.72 per unit of MLP.

“Spot
Price” shall mean the average of the spot price per pound for
bulk premium (Hawaiian and Australian) Style
II Raw Macadamia Nuts (FOB West Coast) for a container load and the spot
price per pound for bulk premium (Hawaiian and Australian) Style II Raw
Macadamia Nuts (FOB West Coast) for a pallet load.

“Spot Price Adjustment” shall be the
difference between the $3.25 and the Spot Price on the Closing Date times the number of pounds of marketable bulk
premium (Hawaiian and Australian) Style II Raw or Roasted Macadamia Nuts in
Seller’s inventory on the Closing Date.

“Unit Price Adjustment” shall mean the difference between the Floor Price
and the Average Closing Price times 650,000.

2.             Section
2.6 of the Agreement is amended to read as follows: 

“2.6 Closing.

The closing of the transactions contemplated by this
Agreement (the “Closing”) will take
place at the offices of Carlsmith Ball, ASB Tower, Suite 2200, 1001 Bishop
Street, Honolulu, Hawaii, 96813, ten
(10) Business Days, after Buyer receives the approval of a Majority
Interest of the Partnership to close this transaction or at such other date or
place as Buyer and Seller may mutually
determine (the “Closing Date”). The Closing Date may be postponed by either Party provided that the Closing
Date shall not be later than December 31, 2007, without the approval, in
writing, of both Parties.”

3.             Section
2.8(d) of the Agreement is amended to change the date “September 30, 2007” to
the Closing Date and to change the date “October 31, 2007” to December 31,
2007.

4.              Section
2.9 of the Agreement is added and shall read as follows:

 

“2.9         Unit Price Adjustment

In the event that the
Average Closing Price is less than the Floor Price, Seller shall also have a right to terminate this Agreement by
complying with the provisions of this Section, subject, however, to Buyer’s further rights as set forth in this
Section. In the event Seller wishes to terminate this Agreement under
this Section, then Seller must give written notice to Buyer of its election to terminate the Agreement on or before 3:00 p.m.
Honolulu time on the second Business Day after Seller’s receipt of
written notice from Buyer of the approval of a Majority Interest of the Partnership having been obtained at a
Unitholders’ meeting. In the event Seller elects to terminate this
Agreement, then the Buyer shall have a right to elect to avoid termination by agreeing to pay to Seller
the Unit Price Adjustment, which will be payable in cash in addition to
but as a part of the Cash Payment on the Closing Date. Buyer must give written notice of its election to avoid Seller’s
termination under this Section on, or before, three (3) Business Days after
receipt by Buyer of Seller’s written notice of termination. If Buyer provides such notification, then Buyer shall be
obligated to pay the Unit Price Adjustment. For example, if the Average
Closing Price is $4.75 and the Floor Price is $4.80 then Buyer would pay an additional $32,500 in cash as the Unit Price
Adjustment ($.05 times 650,000) on the Closing Date.”

5.            Section 2.10 of the Agreement is
added and shall read as follows:

“2.10    Spot Price Adjustment

If on the day immediately
preceding the day which Buyer obtains approval of this transaction by a
Majority Interest of the Partnership at a Unitholders meeting, the Spot Price
shall be less than U.S. $3.25 per pound, then Seller shall also have a right to
terminate this Agreement by complying with the provisions of this Section,
subject, however, to the Buyer’s further rights as set forth in this Section.
In the event Seller wishes to terminate this Agreement under this Section, Seller must provide written notice to Buyer of its
election to terminate this Agreement
on or before 3:00 p.m. Honolulu-time on the second Business Day, after Seller’s
receipt of written notification from
Buyer of the approval of a Majority Interest of the Partnership having
been obtained at a Unitholders’ meeting. Such notice shall also contain backup information justifying the claimed Spot
Price. In the event Seller elects to terminate this Agreement under this
Section, then the Buyer shall have a right to elect to avoid termination by
agreeing to pay to Seller the Spot Price Adjustment, if any. In the event Buyer
elects to avoid termination, then Buyer
must notify Seller on, or before, three (3) Business Days after receipt by
Buyer of Seller’s written notice of termination, that Buyer elects to avoid
termination and agrees to pay the Spot Price
Adjustment, if any, and the termination shall not occur. An election by
Buyer to avoid the alleged termination by Seller under this Section shall not
be deemed an agreement by Buyer that Seller
has a right to terminate or that the Spot Price claimed by Seller is accurate.
The Spot Price and the Spot Price Adjustment shall be determined as of the Closing Date as part of the
True-Up process under Section 2.3(a)(1) of this Agreement and shall be
paid in cash to Seller in addition to, and as part of, the payments, which may
otherwise be required as part of the True-Up. For example, in the event the
Spot Price on the Closing Date is $3.00 and
there is 20,000 pounds of marketable inventory of bulk premium (Hawaiian and Australian) Style II Raw and Roasted
Macadamia Nuts on the Closing Date, then
the Spot Price Adjustment would be $.25 per pound ($3.25 less $3.00) times
20,000 pounds or $5,000. No
adjustment or payment under this Section shall be made relating to or on account
of any other item or category of inventory other than bulk premium (Hawaiian
and Australian) Style II Raw or Roasted Macadamia Nuts.”

 

6.             Section
5.9 of the Agreement is amended to read as follows:

“5.9         SEC
Compliance.

(a)           On
or before the execution of this Amendment, Mac Farms shall engage Grant
Thornton LLP or another qualified independent accounting firm reasonably
approved by Buyer (“Seller’s Accountants”) to
assist Mac Farms to prepare the SEC Financial Statements (as defined herein). The term “SEC Financial Statements” shall
refer to the consolidated balance sheets of Mac Farms as at December 31,
2006, and December 31, 2005, and the consolidated statements of income and cash
flows for Mac Farms for the fiscal years ended December 31, 2006, and December 31, 2005, all prepared in accordance
with GAAP and the rules and regulations of the SEC, and with such notes,
statements and schedules as may be required
thereby. For the avoidance of doubt, the term “Financial Statements” in the Agreement
does not include the SEC Financial Statements.

(b)           Upon completion of the SEC Financial Statements,
Seller shall deliver the SEC Financial Statements to Buyer and on or
before such date, Buyer shall engage Accuity LLP (or another qualified
independent accounting firm selected by Buyer) (“Buyer’s Accountants”) to audit the SEC
Financial Statements. Seller shall use its reasonable efforts to deliver the SEC Financial Statements to Buyer on or
before July 24, 2007; provided, however, that notwithstanding any other provision in this Amendment or the
Agreement, so long as Seller
reasonably cooperates with Buyer’s Accountants as provided in this Section 5.9(b) and uses its
reasonable efforts to deliver the SEC Financial Statements to Buyer as provided
in this Section 5.9(b), Seller
shall have no liability whatsoever to Buyer and shall not be in breach of any representation, warranty, or covenant in this
Amendment or the Agreement, in the event that Seller is unable to deliver the SEC Financial Statements to Buyer
by July 24, 2007, or ever. From the date of this Amendment and until the
delivery by Buyer’s Accountants of their audit report, Seller shall cooperate
with Buyer’s Accountants in providing access to and copies of its books,
records and other documents and to answer questions and provide information in
connection with Buyer’s Accountants’ audit. Seller shall request its counsel to
respond to such customary audit inquiries as
may be reasonably requested by Buyer’s Accountants concerning contingencies and shall cause its counsel to
promptly respond to such inquiries. Seller shall also provide to Buyer’s Accountants such other information, material or
statements, including a customary executed management representation
letter, as Buyer’s Accountants shall reasonably request in connection with their audit. Notwithstanding the foregoing,
Buyer shall not knowingly request and
Seller shall not be required to make false or misleading statements in the management representation letter. Seller shall
also provide to Buyer’s Accountants, during the audit, responses to
reasonable inquiries relating to Seller’s compliance with the financial
covenants contained in Seller’s loan agreement. Seller shall also provide to
Buyer such interim financial information as may be may be reasonably requested
and required to be produced for purposes of
the Proxy Statement or Form 8-K. Notwithstanding any other provision in this Amendment or the Agreement, Seller shall not be
required to provide to Buyer (or permit Buyer to provide to the Buyer’s
Accountants or the SEC) any additional information relating to Seller without Seller’s express agreement or
consent (which it shall not unreasonably withhold), even if such
additional information is required by the SEC to clear the Proxy Statement.

 

(c)             Buyer shall (i) reimburse Seller,
within ten (10) days after receipt of a reimbursement request from Seller,
accompanied by the relevant invoices of the Seller’s Accountants, for all payments of all fees and expenses paid to the Seller’s
Accountants by Seller, and (ii) pay
all fees and expenses of Buyer’s Accountants in connection with their assistance
in preparing the SEC Financial Statements and the audit by Buyer’s Accountants,
provided that Buyer shall have the right to
review in advance the budget for fees and costs for such work which
shall be provided at the time when the accountants are engaged.

(d)             As promptly as practicable after the receipt of
the SEC Financial Statements and an unqualified audit report issued by Buyer’s
Accountants thereon, Buyer shall prepare and
file with the SEC a proposed Proxy Statement. Each of Buyer and Seller shall prepare
and file with the SEC any other filings as and when required or requested by
the SEC. Each of Buyer and Seller will use all reasonable best efforts (i) to
respond to any comments made by the SEC with
respect to the Proxy Statement and (ii) to have the Proxy Statement cleared
by the SEC. Seller shall cooperate with Buyer and the SEC and furnish
reasonable information requested by Buyer
and the SEC. As promptly as practicable after clearing all SEC comments to the Proxy Statement, Buyer shall mail
the Proxy Statement to Buyer’s Unitholders.
The Proxy Statement shall include the recommendation of the Board of Directors of Seller that adoption of this Agreement and the
transactions contemplated hereby by Buyer’s Unitholders are advisable and in the best interests of Buyer. No
amendment or supplement to the Proxy
Statement will be made by Buyer without the approval of Seller (which approval shall
not be unreasonably withheld, conditioned, or delayed).

(e)
The information supplied by Seller for inclusion in the Proxy Statement shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements
contained therein not misleading. The information supplied by Buyer for
inclusion in the Proxy Statement shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements contained therein not misleading. All documents that Buyer is responsible for filing
with the SEC in connection with the transactions contemplated herein
will comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the rules and regulations
thereunder, the Exchange Act and the rules and regulations thereunder, and
other applicable Law.”

7.               Subsection
7.1(j) is added to the Agreement and shall read as follows:

“(j)                              Receipt of
Audited SEC Financial Statements.

Buyer
shall have received the SEC Financial Statements and an unqualified
audit report issued by Buyer’s Accountants thereon as well as a consent issued
by Buyer’s Accountants permitting use of its audit report on the SEC Financial
Statements in the Proxy Statement and the Form 8-K.”

 

8.               Subsection
7.2(e) is added to the Agreement and shall read as follows:

“7.2(e) No Material Adverse Change. No Buyer
Material Adverse Effect shall have occurred, nor shall any termination by
Seller, pursuant to Section 2.9 and/or 2.10 hereof, have occurred, which Buyer has not elected to avoid, pursuant to the
terms and conditions of either or both of those sections, as applicable.”

9.                                Section
9.1(e) is amended to read as follows:

“(e)
Buyer or Seller may terminate this Agreement if the Closing does not occur by December 31, 2007; provided, however, that a Party does not
have the right to terminate this
Agreement under this Section 9.1(e) if
such Party’s breach of any obligation under this Agreement has been the
primary cause of the failure of the Closing to occur on or before the aforementioned
date.”

10.                              Section
9.1(f) is amended to read as follows:

“(f)
Either Party may terminate this Agreement in its sole discretion at any time
after October 31, 2007, if the SEC Financial Statements and Buyer’s Accountants’
audit report relating thereto are not
delivered to Buyer by October 31, 2007, without any liability or obligation
hereunder or otherwise, whatsoever.”

11.             Section
9.1(g) is deleted from the Agreement.

12.             All
questions concerning the construction, validity and interpretation of this Amendment
will be governed by and construed in accordance with the Laws of the State of Hawaii without giving effect to any choice of law
or conflict of law provision or rule that would cause the application of the Laws of any jurisdiction other than
the State of Hawaii. This Amendment may be executed in counterparts, each of
which is deemed an original, and such counterparts constitute one and the same
instrument, which may be sufficiently evidenced by a counterpart. A
facsimile, telecopy, PDF, or other reproduction of this Amendment may be executed by one or more Parties, and an executed
copy of this Amendment may be delivered by one or more Parties by
facsimile, PDF e-mail, or similar instantaneous electronic transmission device under which the signature of or on behalf
of such Party can be seen, and such execution and delivery is to be
considered valid, binding and effective for all purposes. At the request of any
Party, the Parties agree to execute an original of this Amendment as well as
any facsimile, telecopy or other reproduction hereof. No amendment or
modification of this Amendment is valid unless in writing and signed by the
Parties.

13.             Seller hereby confirms, that the condition
precedent set forth in Section 7.2(d) of the Agreement has been satisfied.
However, notwithstanding anything to the contrary herein or in the Agreement, for the avoidance of doubt, the
Parties expressly acknowledge, that all other conditions precedent set
forth in Sections 7.1 and 7.2 of the Agreement, as amended, remain unfulfilled
conditions precedent, which must be satisfied or waived prior to Closing.

14.             Except
as expressly modified above, all terms and conditions of the Agreement shall
remain in full force and effect.

 

IN WITNESS
WHEREOF, the Parties are signing this First Amendment to Acquisition Agreement
as of the date first above written, but effective as of May 24, 2007.

BUYER:

ML MACADAMIA ORCHARDS, L.P.

By:___ 

DENNIS J. SIMONIS, President

SELLER:

MAC FARMS OF HAWAII, LLC

By:_______________________________________________________ 

ROBERT D. SPARKS, Chairman of the Board

KAPUA ORCHARD ESTATES, LLC By: MFH Investors, LLC, its manager

By:___ 

JEFF GILBRECH, Vice-PresidentExhibit 4.4

RUSH ENTERPRISES, INC. 2007 LONG-TERM INCENTIVE PLAN

STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT dated as
of the Grant Date (the “Grant Date”) set forth on Schedule I hereto,
between RUSH ENTERPRISES, INC., a Texas corporation (the “Company”), and the
employee of the Company or of a subsidiary of the Company identified on
Schedule I hereto (the “Employee”).

On the Grant Date the Company
granted to the Employee the option or options hereinafter described pursuant
to, and subject to and upon the terms and conditions set forth in, the Rush
Enterprises, Inc. 2007 Long-Term Incentive Plan, as amended from time to
time (the “Plan”), and promptly thereafter notified the Employee of the grant
of such option or options.

NOW, THEREFORE, in consideration
of the mutual covenants hereinafter set forth and for other good and valuable
consideration, the parties hereto hereby agree as follows:

1.             Grant of Option.

(a)           On the Grant Date, the Company irrevocably granted to the
Employee, as a matter of separate agreement and not in lieu of salary or any
other compensation for services, the right and option to purchase all or any
part of the aggregate number of shares of its Common Stock, par value $.01 per
share (the “Common Stock”), set forth on Schedule I hereto, on the terms
and conditions herein set forth.

(b)           To the extent set forth in Schedule I hereto, the
right and option to purchase shares of Common Stock are intended to be an
incentive stock option (an “ISO”) within the meaning of Section 422(b) of
the Internal Revenue Code of 1986, as amended (the “Code”).  To the extent such right and option to
purchase shares of Common Stock as set forth on Schedule I hereto is not
identified as being intended to be an ISO, such right and option will be
considered a non-statutory option. 
In addition, to the extent that a right and option to purchase shares of
Common Stock intended to be an ISO does not qualify as an ISO, such right and
option, to the extent that it does not so qualify, shall be converted to a non-statutory
option.

(c)           The ISOs and non-statutory stock options granted to
the Employee hereunder are each referred to as an “Option” and collectively
referred to as the “Options”.

2.             Terms.

(a)           Exercise Price.  The exercise price per share for the shares
of Common Stock subject to an Option granted hereunder shall be the per share
amount set forth in Schedule I hereto for such Option (the “Exercise Price”).  With respect to any Option, the Exercise
Price shall not be less than the fair market value per share (determined as of
the date the Option is granted) of the Common Stock on such date.

 

(b)           Vesting. 
Subject to the provisions of Section 4 of this Agreement and the
Plan, the Option or Options granted hereunder shall become exercisable as to
the portions of the aggregate number of shares covered by such Option as set
forth on Schedule I hereto on and after each of the related dates during
the term of such Option set forth on Schedule I hereto.

(c)           Term and Conditions of Exercise.  An Option granted hereunder shall be
exercisable in whole at any time or in part from time to time during the term
of such Option as to all or any of the shares then purchasable under such
Option, but not as to less than the minimum number of shares stated on
Schedule I hereto with respect to such Option (or the shares then
purchasable under the Option if less than such minimum) at any one time;
provided that if there is a SAR (as defined in the Plan) outstanding which
relates to any of the shares purchasable under such Option, then the number of
shares so purchasable shall be reduced by the number of shares in respect of
which the SAR has been exercised.

The term of the Option or
Options subject hereto shall be for the number of years from the Grant Date set
forth on Schedule I hereto with respect to such Option or such shorter
period of time as is described in Section 4.  In no event shall the term of the Option
exceed ten years from the Grant Date.

Except as provided in
Section 4, an Option granted hereunder shall not be exercisable unless the
Employee shall, at the time of exercise, be an employee of the Company or of a
subsidiary of the Company.  The holder of
such Option shall have none of the rights of a shareholder with respect to the
shares subject to such Option until such shares are transferred to the holder
upon the exercise of such Option.

3.             Restrictions on Transfer.  An Option granted hereunder shall not be
assignable or transferrable by the Employee except by will or by the laws of
descent and distribution, and subject to Section 4(a), such Option is
exercisable, during the Employee’s lifetime, only by the Employee.  The designation of a beneficiary by the
Employee shall not constitute a transfer. 
More particularly (but without limiting the generality of the
foregoing), such Option may not be assigned, transferred (except as aforesaid),
pledged or encumbered in any way (whether by operation of law or otherwise) and
shall not be subject to execution, attachment or similar process.  In the event of any attempted assignment,
transfer, pledge, encumbrance or other disposition of such Option contrary to
the provisions hereof, or the levy of any attachment or similar process upon
such Option, such Option shall be null and void and of no further effect.

4.             Status of Option Upon
Certain Events.  If the
Employee’s employment shall terminate prior to the complete exercise of an
Option granted hereunder, then such Option shall thereafter be exercisable
solely to the extent provided in paragraphs (a) through (c) of this
Section 4; provided, however, that (i) such Option may not be
exercised after the scheduled expiration date and (ii) if the Employee’s
employment terminates for any reason other than as contemplated by paragraphs
(a) through (c) of this Section 4, the Option shall remain exercisable for
a period of 30 days following such termination (but in no event shall such
period extend beyond the scheduled expiration of such Option) at which time
such Option shall immediately terminate and be forfeited, but only for the
number of shares for which such Option shall have vested as provided on
Schedule I hereto as of the date of such termination.

(a)           Death or Disability or Retirement.  If the Employee shall die or be subject to
Disability (as defined in Section 22(e)(3) of the Code) while employed by the
Company or a subsidiary or Retire (defined as termination by the Employee of
the Employee’s employment relationship with the 

Company after 10 years of employment with the Company and attaining the
age of 60), an Option granted hereunder (unless previously terminated pursuant
to paragraphs (b), (c) or (d) below) may be exercised as follows:  (i) in the case of death, in full for
the aggregate number of shares covered thereby by the legatee or legatees of
such Option under the Employee’s last will, or by the personal representatives
or distributes of the Employee, at any time within a period of one year after
the Employee’s death, but in no event after the expiration of such Option set
forth in Section 2(c); (ii) in the case of Disability while employed by
the Company or a subsidiary, in full for the aggregate number of shares covered
thereby by the Employee or by the personal representatives of the Employee if
the Employee is unable to act for himself or herself, at any time within a
period of one year after the Employee ceases to be an employee of the Company
or one of its subsidiaries, but in no event after the expiration of such Option
set forth in Section 2(c) herein; and (iii) in the case of retirement, for
so long as the Employee does not become employed by a “competitor” of the
Company subsequent to such retirement, the Option shall continue to vest
pursuant to the Vesting Schedule set forth on Schedule I hereto, but in no
event after the expiration of the Option set forth in Section 2(c) herein.  A determination as to whether the Employee
has become employed by a “competitor,” and the definition of “competitor,”
shall be made by the Compensation Committee (the “Committee”), in its sole
discretion.  In the event Employee
becomes employed by a “competitor,” then the Option can be exercised within 90
days of the date such employment occurs for the number of shares for which such
Option shall have vested on such date. 
If an ISO is exercised more than three months after the Employee’s
retirement and the Employee has not died or incurred a Disability, such Option
will be converted to a non-statutory option.

(b)           Termination with Cause.  If the Employee’s employment with the Company
or a subsidiary shall be terminated by the Company or such subsidiary for “cause”
(as defined below) prior to the exercise of any part of the Option or Options
granted hereunder, then such Option or Options held by the Employee shall
immediately terminate and be forfeited unless the Committee, in its sole
discretion, shall otherwise determine. 
For this purpose, termination for “cause” shall have the meaning
established by the Committee or, in the absence thereof, shall include but not
be limited to, termination for insubordination, dishonesty, incompetence, poor
performance, moral turpitude, unauthorized disclosure of confidential
information of the Company, other misconduct of any kind or Employee’s refusal
to perform the duties and responsibilities of his or her position for any
reason other than illness or incapacity.

(c)           Change in Employment.  The Option or Options granted hereunder shall
not be affected by any change of employment (or by any temporary leave of
absence approved by the Committee or by the Board itself), so long as the
Employee continues to be in the employ of the Company or of a subsidiary of the
Company.

5.             Adjustments.  If all or any portion of an Option granted
hereunder is exercised subsequent to any stock dividend, stock split,
recapitalization, combination, exchange of shares, merger, consolidation,
liquidation, split-up, split-off, spin-off or other similar
change in capitalization, any distribution to stockholders, including a rights
offering, other than regular cash dividends, changes in the outstanding stock
of the Company by reason of any increase or decrease in the number of issued
shares of Common Stock resulting from a split-up or consolidation of
shares or any similar capital adjustment or the payment of any stock dividend,
any share repurchase at a price in excess of the closing market price (as
determined by the Committee) of the Common Stock at the time such repurchase is
announced or other increase or decrease in the number of such shares, the
Committee may make such appropriate adjustments in the purchase price paid upon
exercise of such Option and the aggregate number and class of shares or other
securities or property 

issuable upon any such exercise
as the Committee shall, in its sole discretion, determine.  In any such event, no fractional share shall
be issued upon any such exercise, and the aggregate price paid shall be
appropriately reduced on account of any fractional share not issued; further,
the minimum number of full shares which may be purchased upon any such exercise
shall be the minimum number specified on Schedule I hereto adjusted
proportionately.

6.             Payment; Method of
Exercise.  Payment of the
purchase price of the shares of Common Stock subject to an Option granted
hereunder may be made (i) in any combination of cash or whole shares of
Common Stock already owned by the Employee or (ii) in shares of Common
Stock withheld by the Company from the shares of Common Stock otherwise
issuable to the Employee as a result of the exercise of such Option (“cashless
exercise”).  Subject to the terms and
conditions of this Agreement, such Option may be exercised by written notice to
the Company at its principal office, attention of the Secretary.  Such notice shall (a) state the election
to exercise such Option, the number of shares in respect of which it is being
exercised and the manner of payment for such shares and (b) be signed by
the person or persons so exercising such Option and, in the event such Option
is being exercised pursuant to Section 4 by any person or persons other
than the Employee, accompanied by appropriate proof of the right of such person
or persons to exercise such Option.  If
the Option being exercised is an ISO and non-statutory options have also
been granted to the Employee hereunder, such notice shall also identify whether
the Option being exercised is an ISO and, if so, the number of shares of Common
Stock to be purchased pursuant to such exercise.  Such notice shall either (i) elect
cashless exercise or be accompanied by payment of the full purchase price of
such shares, in which event the Company shall issue and deliver a certificate
or certificates representing such shares as soon as practicable after the
notice is received, or (ii) fix a date (not more than 10 business days
from the date of such notice) for the payment of the full purchase price of such
shares at the Company’s principal office, against delivery of a certificate or
certificates representing such shares. 
Cash payments of such purchase price shall, in case of clause (i) or
(ii) above, be made by cash or check payable to the order of the Company.  Common Stock payments (valued at the closing
market price on the date of exercise, as determined by the Committee), shall be
made by delivery of stock certificates in negotiable form.  All cash and Common Stock payments shall, in
either case, be delivered to the Company at its principal office, attention of
the Secretary.  Shares of Common Stock
withheld pursuant to a cashless exercise election shall be valued at the
closing market price on the date of exercise, as determined by the
Committee.  If certificates representing
Common Stock are used to pay all or part of the purchase price of an Option
granted hereunder, a replacement certificate shall be delivered by the Company
representing the number of shares delivered but not so used, and an additional
certificate shall be delivered representing the additional shares to which the
holder of such Option is entitled as a result of the exercise of such
Option.  The certificate or certificates
for the shares as to which such Option shall have been so exercised shall be
registered in the name of the person or persons so exercising the Option and
shall be delivered as aforesaid to or upon the written order of the person or
persons exercising such Option.  All
shares issued as provided herein will be fully paid and nonassessable.

7.             Administration.  The Committee shall have the power to
interpret the Plan and this Agreement, and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules.  All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Employee, the Company and all other interested persons.

8.             Taxes.  The Company shall have the right to deduct or
withhold, or require the person exercising an Option to remit to the Company,
an amount sufficient to satisfy federal, state and local taxes (including such
person’s FICA obligation) required by law to be withheld with respect to any
taxable event arising or as a result of this Option.

 

9.             Reserves, Etc.  Shares of Common Stock delivered upon the
exercise of an Option granted hereunder shall, in the discretion of the Board
or the Committee, be either shares of Common Stock heretofore or hereafter
authorized and then unissued, or previously issued shares of Common Stock
heretofore or hereafter acquired through purchase in the open market or
otherwise, or some of each.  The Company
shall be under no obligation to reserve or to retain in its treasury any
particular number of shares of Common Stock at any time, and no particular
shares, whether unissued or held as treasury shares, shall be identified as
those covered by an Option granted hereunder.

10.           No Right to Continued
Employment.  Nothing in
this Agreement or in the Plan shall confer upon the Employee any right to
continue in the employ of the Company or shall interfere with or restrict in
any way the rights of the Company, which are hereby expressly reserved, to
discharge the Employee at any time for any reason whatsoever, with or without
cause.

11.           General Restrictions.

(a)           An Option granted hereunder shall be subject to the
requirement that, if at any time the Committee shall determine that
(i) the listing, registration or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any
state or Federal law, or (ii) the consent or approval of any governmental
regulatory body, or (iii) an agreement by the recipient of such Option
granted pursuant to this Agreement with respect to the disposition of shares of
Common Stock is necessary or desirable (in connection with any requirement or
interpretation of any Federal or state securities law, rule or regulation) as a
condition of, or in connection with, the granting of such Option or the
issuance, purchase or delivery of shares of Common Stock thereunder, such
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.

(b)           The Employee hereby (i) represents and warrants that
any shares of Common Stock issued, transferred or delivered to, or acquired by,
the Employee pursuant to this Agreement shall be acquired solely for the
Employee’s own account for investment, and not with a view to any distribution
thereof that would violate the Securities Act of 1933 (the “Securities Act”) or
the applicable securities laws of any state, (ii) agrees that he or she
will not distribute any such shares of Common Stock in violation of the
Securities Act or the applicable securities laws of any state, and
(iii) acknowledges that, unless notified to the contrary by the Company,
such shares of Common Stock will not have been registered under the Securities
Act or the securities laws of any state and must be  held indefinitely unless subsequently
registered under the Securities Act and any applicable state securities laws or
unless an exemption from such registration becomes or is available.

12.           Entire Agreement; Amendment.  This Agreement together with the Plan
constitutes the entire agreement between the parties with respect to the
subject matter hereof.  Any term or
provision of this Agreement may be waived at any time by the party which is
entitled to the benefits thereof, except that any waiver of any term or
condition of this Agreement must be in writing.

The Committee shall have the
authority to amend this Agreement to include any provision which, at the time
of such amendment, is authorized under the terms of the Plan; however, an
Option granted hereunder may not be revoked or altered in a manner unfavorable
to the holder without the written consent of the holder.

 

13.           Governing Law.  The laws of the State of Delaware shall
govern the interpretation, validity and performance of the terms of this
Agreement regardless of the law that might be applied under principles of
conflict of laws.

14.           Successors.  This Agreement shall be binding upon and
inure to the benefit of the successors, assigns and heirs of the respective
parties.

15.           Acceleration of Retirement
Eligibility. 
Notwithstanding the terms of Section 4(a), the Committee in its sole
discretion may at any time accelerate the date an Employee is eligible to
Retire.

16.           Notices.  All notices or other communications made or
given in connection with this Agreement shall be in writing and shall be deemed
to have been duly given when delivered or mailed by registered or certified
mail, return receipt requested, to those listed below at their following
respective addresses or at such other address as each may specify by notice to
the others:

	
  To the Employee:

  	
   

  
	
   

  
	
  As set forth in
  Schedule I

  
	
   

  
	
  To the Company:

  	
   

  
	
   

  	
   

  
	
  Street Address:

  
	
   

  
	
  Rush Enterprises, Inc.

  
	
  555 IH-35 South

  
	
  New Braunfels,
  TX 78130

  
	
  Attn: Compensation
  Committee

  
	
   

  
	
  Mailing Address:

  	
   

  
	
   

  	
   

  
	
  Rush Enterprises, Inc.

  
	
  P. O. Box 34630

  
	
  San Antonio, Texas 78265

  
	
  Attention:
  Compensation Committee

  

 

1.             Waiver.  The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

2.             Construction.  Titles are provided herein for convenience
only and are not to serve as a basis for interpretation on construction of the
Agreement.  The singular form shall
include the plural, when the context so indicates.  In the event of an inconsistency between the
terms of this Agreement and the terms of Schedule I hereto, the terms of
Schedule I shall prevail.  In the
event of an inconsistency between the terms of this Agreement (including
Schedule I) and the terms of the Plan, the terms of the Plan shall
prevail.

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its officer thereunto duly authorized, and the Employee has hereunto set his or
her signature, all as of the Grant Date.

	
  

  	
  RUSH ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee

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