Exhibit 10.66
SUPPORT PARTY AGREEMENT
dated as of February ___, 2003
made by
AMERCO, a Nevada corporation
as Support Party and
PM PREFERRED PROPERTIES, L.P.,
a Texas limited partnership
as Borrower
in favor of
GMAC COMMERCIAL HOLDING CORP.,
a Nevada corporation
as Administrative Agent
for the benefit of
GMAC COMMERCIAL HOLDING CAPITAL CORP.,
a Colorado corporation
as Lender
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS..................................................................... 1
SECTION 1.1. Definitions........................................................ 1
ARTICLE II SUPPORT PARTY OBLIGATIONS...................................................... 3
SECTION 2.1. Obligations........................................................ 3
SECTION 2.2. Issuance and Purchase Procedures................................... 4
SECTION 2.3. Rights of Administrative Agent and Lenders......................... 5
SECTION 2.4. Obligations Absolute, etc.......................................... 6
SECTION 2.5. Reinstatement, etc................................................. 7
SECTION 2.6. Waiver, etc........................................................ 7
SECTION 2.7. Borrower's Agreement............................................... 8
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................ 8
SECTION 3.1. Organization; Powers............................................... 8
SECTION 3.2. Authorization; Enforceability...................................... 9
SECTION 3.3. Governmental Approvals; No Conflicts............................... 9
SECTION 3.4. Properties......................................................... 9
SECTION 3.5. Litigation and Environmental Matters............................... 9
SECTION 3.6. Compliance with Laws and Agreements................................ 10
SECTION 3.7. Investment and Holding Company Status.............................. 10
SECTION 3.8. Taxes.............................................................. 10
SECTION 3.9. ERISA.............................................................. 10
SECTION 3.10. Disclosure......................................................... 10
SECTION 3.11. Federal Reserve Regulations........................................ 11
SECTION 3.12. Environmental and Safety Matters................................... 11
SECTION 3.13. Financial Statements............................................... 11
SECTION 3.14. No Material Adverse Change......................................... 11
SECTION 3.15. Agreements......................................................... 11
SECTION 3.16. Borrower's Business................................................ 12
ARTICLE IV COVENANTS...................................................................... 12
SECTION 4.1. Notices of Material Events......................................... 12
SECTION 4.2. Existence; Conduct of Business..................................... 13
SECTION 4.3. Payment of Obligations............................................. 13
SECTION 4.4. Maintenance of Properties; Insurance............................... 13
SECTION 4.5. Books and Records; Inspection Rights............................... 13
SECTION 4.6. Compliance with Laws............................................... 13
SECTION 4.7. Financial Statements, Reports, etc................................. 14
SECTION 4.8. Pari Passu Ranking................................................. 16
SECTION 4.9. Subordination to Secured Indebtedness.............................. 16
ARTICLE V SUPPORT PARTY DEFAULT........................................................... 16
SECTION 5.1. Default............................................................ 16
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SECTION 5.2. Default Standstill................................................. 18
ARTICLE VI MISCELLANEOUS PROVISIONS....................................................... 18
SECTION 6.1. Binding on Successors, Transferees and Assigns;
Assignment of Support Party Agreement........................................... 18
SECTION 6.2. Amendments, etc.................................................... 18
SECTION 6.3. Addresses for Notices.............................................. 18
SECTION 6.4. No Waiver; Remedies................................................ 18
SECTION 6.5. Section Captions................................................... 19
SECTION 6.6. Severability....................................................... 19
SECTION 6.7. Termination of Support Party Agreement............................. 19
SECTION 6.8. Governing Law...................................................... 19
SECTION 6.9. Waiver of Jury Trial............................................... 19
SECTION 6.10. Consent to Jurisdiction; Waiver of Immunities...................... 19
SECTION 6.11. Right of Setoff.................................................... 20
SECTION 6.12. Expenses; Indemnity; Damage Waiver................................. 20
ARTICLE VII LIMITATION OF LIABILITY....................................................... 21
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SUPPORT PARTY AGREEMENT
THIS SUPPORT PARTY AGREEMENT (this "Support Party Agreement"), dated as
of February ___, 2003, is made by AMERCO, a Nevada corporation (the "Support
Party") and PM PREFERRED PROPERTIES, L.P., a Texas limited partnership (the
"Borrower") in favor of GMAC COMMERCIAL HOLDING CORP., a Nevada corporation, as
Administrative Agent (the "Administrative Agent") for the benefit of GMAC
COMMERCIAL HOLDING CAPITAL CORP., a Colorado corporation (together with its
successors and assigns, the "Lender").
W I T N E S S E T H:
WHEREAS, as a condition to the making of a loan in the maximum
principal amount of $255,000,000 to Borrower from Lender under the Loan
Agreement dated of even date herewith (together with all amendments,
supplements, amendments and restatements and other modifications, if any, from
time to time hereafter made thereto, the "Loan Agreement"), by and between the
Lender and the Borrower, the Support Party and Borrower are required to execute
and deliver this Support Party Agreement in favor of the Administrative Agent
for the benefit of the Lender;
WHEREAS, the Support Party and Borrower have duly authorized the
execution, delivery and performance of this Support Party Agreement; and
WHEREAS, it is in the best interests of the Support Party to execute
this Support Party Agreement inasmuch as the Support Party has an economic
interest in the transactions contemplated by the Loan Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lender to enter into
the Loan Agreement with the Borrower, the Support Party agrees, for the benefit
of the Administrative Agent and the Lender, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used but not
otherwise defined in this Support Party Agreement have the respective meanings
specified in the Loan Agreement; and the rules of interpretation set forth
therein shall apply to this Support Party Agreement. As used in this Support
Party Agreement, the following terms have the meanings specified below:
"Change of Control" as defined in the Loan Agreement.
"Covenant Obligation" shall mean each of the covenants and
agreements made by Borrower under Section 6.10 of the Loan Agreement.
"Debt Obligation" shall mean each and every obligation of
Borrower under the Note and Loan Agreement or any other Loan Document to make
any payment of interest or other sum due thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Support Party, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Support Party or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Support Party or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Support Party or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by the Support Party or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Support Party or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Fair Market Value" shall mean with respect to any Mortgaged
Property an amount equal to the NOI (as defined in the Loan Agreement) of such
Mortgaged Property for the period of twelve (12) months immediately preceding
the Valuation Date divided by a capitalization rate factor equal to .095.
"Future Advance" shall mean amounts funded by Lender to
Borrower under the Loan Agreement as a "Subsequent Advance."
"Issuance Date" shall mean the date specified in the Issuance
Notice (which date shall be no fewer than five (5) Business Days from the date
of such Issuance Notice) on which the purchase of the additional partnership
interest, the purchase of Subordinated debt, the escrow of cash, or the purchase
of Mortgaged Property must be made pursuant to Article 2.
"Issuance Notice" shall mean a notice from the Administrative
Agent to the Support Party stating the occurrence of a default of Borrower of a
Debt Obligation or a breach of a Covenant Obligation and designating an Issuance
Date.
"Issuance Price" shall mean the purchase price for additional
partnership interests or Subordinated debt, purchased pursuant to Article 2,
which shall be an amount equal to the default by Borrower under its Debt
Obligation or the amount needed to cure the breach of the Covenant Obligations,
as applicable.
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"Loan Documents" shall mean each and every agreement,
instrument or document evidencing, securing or otherwise pertaining to the Loan
or the Debt Obligation.
"Material Subsidiary" shall mean any subsidiary of the Support
Party having a tangible net worth, determined in accordance with GAAP, equal to
or greater than $10,000,000.
"Maximum Obligation" shall mean the amount of $70,000,000 plus
any Future Advance less principal payments made by Borrower. From and after the
fourth (4th) anniversary date of this Support Party Agreement, the Maximum
Obligation shall be adjusted annually based upon the Aggregate Collateral NOI of
the Mortgaged Properties (as defined in the Loan Agreement) for the immediately
preceding fiscal year such that the Maximum Obligation Amount shall be reduced
by $5,000,000 for each $500,000 of Aggregate Collateral NOI for the immediately
preceeding year above $26,000,000 (the "Threshold Amount"). In the event that
one or more of the Mortgaged Properties have been released in accordance with
the provisions of the Loan Agreement, the Threshold Amount shall be reduced
based upon the percentage that such released Mortgage Properties' projected NOI
forecast for the calendar year 2007 bears to the Aggregate Collateral NOI
projected for all Mortgaged Properties for calendar year 2007 as set forth on
such Schedule 4.1(c) of the Loan Agreement.
Notwithstanding the foregoing in no event shall the Maximum Obligation as
adjusted after the fourth anniversary date in accordance with the preceding
chart exceed $70,000,000 plus Future Advances less principal payments made by
the Borrower.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Support
Party or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Subordinated" shall mean subject and subordinate for all
purpose to all liens, claims or encumbrances of Lender under this Support
Agreement and any other Loan Document evidencing or securing the Loan or this
Support Agreement and shall be subject to the specific terms and conditions set
forth on Exhibit A attached hereto and made a part hereof for all purposes.
"Valuation Date" shall mean the last day of any month during
which the Support Party elects to purchase any Mortgaged Property in accordance
with the right granted to the Support Party under Section 2.1.C.
"Voluntary Prepayments" shall mean any amount paid by or on
behalf of Borrower under the Note or any Loan Document prior to its scheduled
due date.
ARTICLE II
SUPPORT PARTY OBLIGATIONS
SECTION 2.1. Obligations.
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A. In the event that Borrower fails to pay any Debt
Obligation as and when due, an Issuance Notice shall be given and the Support
Party shall, on the Issuance Date, at Support Party's option, either:
(i) purchase additional partnership interest in
the Borrower at the Issuance Price; or
(ii) purchase Subordinated debt of Borrower at
the Issuance Price.
B. In the event that a Covenant Obligation is breached
for any reason, an Issuance Notice shall be given and the Support Party shall,
on the Issuance Date, at Support Party's option, either:
(i) purchase additional partnership interest in
the Borrower at the Issuance Price; or
(ii) purchase Subordinated debt of Borrower at
the Issuance Price; or
(iii) escrow an amount equal to the Issuance Price
in cash with Lender.
C. After the expiration of the fourth (4th) Loan Year
(as defined in the Loan Agreement) the Support Party shall have the right, in
addition to the options set forth in Section 2.1.A, 2.1.B above, to purchase
from the Borrower any of the Mortgaged Properties for an amount (the "Purchase
Price") equal to the greater of the Fair Market Value of such Mortgaged Property
or Release Price as defined in the Loan Agreement plus any prepayment premium
required under the Loan Documents to effectuate the release of the Mortgage
Property to be purchased by the Support Party. No purchase or sale of a
Mortgaged Property shall be permitted if, in Lender's sole and absolute
discretion, after giving effect to such sale, either (i) the Aggregate Debt
Service Coverage Ratio would decline, or (ii) the LTV Ratio with respect to the
Properties in the aggregate would increase.
D. The Support Party acknowledges that it is the intent
of the parties hereunder to cause the purchases referred to in Sections 2.1.A
and 2.1.B in order to provide the Borrower with sufficient funds to pay the Debt
Obligations and/or cure the breaches of the Covenant Obligations, and the
Support Party hereby agrees to cause the Borrower to apply the proceeds thereof
for such purposes, immediately upon receipt of such proceeds.
E. The Support Party acknowledges that any escrow
provided for in Section 2.1.B is to be held in an escrow under Lender's
exclusive control. The Support Party hereby pledges all interest in and to said
escrow to Lender and agrees that Lender may apply such escrow to any and all
amounts due and owing under the Loan Documents following a default by Borrower
in the payment of a Debt Obligation in such order as Lender may elect. Upon the
cure of the Covenant Obligations for which any funds were escrowed pursuant to
this Section 2.1.E, and written request from Support Party, Lender shall release
the escrowed funds to the Support Party.
SECTION 2.2. Issuance and Purchase Procedures.
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A. On each Issuance Date, each party to the related
Issuance Notice shall take the following actions required of it:
(i) If the Support Party has the right and has
elected to purchase additional partnership interests
in the Borrower:
(x) The Support Party shall tender the
Issuance Price to the Borrower in immediately
available funds; and
(y) The Borrower shall accept such price
and issue to the Support Party additional partnership
interests in the Borrower.
(ii) If the Support Party has the right and has
elected to purchase Subordinated debt of the
Borrower:
(x) The Support Party shall tender the
Issuance Price to the Borrower in immediately
available funds; and
(y) The Borrower shall accept such price
and issue to the Support Party Subordinated debt
instruments in the amount of the Issuance Price.
(iii) If the Support Party has the right and has
elected to escrow funds with Lender:
(x) The Support Party shall tender the
Issuance Price in cash to Lender; and
(y) Lender shall hold such amount as
additional security for the repayment of the Loan,
subject to Section 2.1.E.
(iv) If the Support Party has the right and has
elected to purchase a Mortgaged Property from the
Borrower as permitted by 2.1.C:
(x) The Support Party shall tender the
Purchase Price for such Mortgaged Property to the
Borrower in immediately available funds; and
(y) The Borrower shall accept the
Purchase Price for the Mortgaged Properties and
deliver to the Support Party title to the Properties.
SECTION 2.3. Rights of Administrative Agent and Lenders. The
Support Party authorizes the Administrative Agent on behalf of the Lender to
perform any or all of the following acts at any time in its sole discretion, all
without notice to the Support Party and without affecting the Support Party's
obligations under this Support Party Agreement:
A. The Lender may alter any terms of the Loan Documents
or any part thereof, including renewing, compromising, extending or
accelerating, or otherwise changing the
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time for payment of, or increasing or decreasing the rate of interest on, the
amounts outstanding under the Loan Documents or any part thereof.
B. The Administrative Agent or Lender may take and hold
security for the amounts outstanding under the Loan Documents or this Support
Party Agreement, accept additional or substituted security for either, and
subordinate, exchange, enforce, waive, release, compromise, fail to perfect and
sell or otherwise dispose of any such security.
C. Upon any Event of Default, the Administrative Agent
or any Lender may direct the order and manner of any sale of all or any part of
any security now or later to be held for the amounts outstanding under the Loan
Documents or this Support Party Agreement, respectively, and the Administrative
Agent or Lender may also bid at any such sale.
D. The Administrative Agent or Lender may apply any
payments or recoveries from the Borrower, the Support Party or any other source,
and any proceeds of any security, to the Borrower's obligations under the Loan
Documents in such manner, order and priority as the Administrative Agent or such
Lender may elect, whether or not those obligations are secured at the time of
the application
E. The Administrative Agent or any Lender may extend
additional credit to the Borrower or the Support Party in addition to the
amounts outstanding under the Loan Agreement, and may take and hold security for
the credit so extended.
SECTION 2.4. Obligations Absolute, etc. The terms of this Support
Party Agreement shall in all respects be continuing, absolute, unconditional and
irrevocable, and shall remain in full force and effect until all amounts
outstanding under the Loan Documents have been paid in full, and all obligations
of the Borrower and the Support Party shall have been paid in full. The
liability of the Support Party under this Support Party Agreement shall be
irrevocable irrespective of:
A. any lack of validity, legality or enforceability of
the Loan Documents;
B. the failure of Lender or the Administrative Agent:
(i) to assert any claim or demand to enforce any
right or remedy against any Person under the
provisions of the Loan Agreement or any of the Loan
Documents otherwise, or
(ii) to exercise any right or remedy against any
guarantor of, or collateral securing, any amounts
outstanding under the Loan Documents;
C. any change in the time, manner or place of payment
of, or in any other term of, all or any of the amounts outstanding under the
Loan Documents or any extension, compromise or renewal of any of the amounts
outstanding under the Loan Documents;
D. any reduction, limitation, impairment or termination
of the amounts outstanding under the Loan Documents, for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and any
defense or setoff, counterclaim, recoupment or
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termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, the amounts outstanding under the Loan Documents;
E. any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of the Loan
Documents;
F. any addition, exchange, release, surrender or
nonperfection of any collateral, or any amendment to or waiver or release or
addition of, or consent to departure from, any guaranty, held by the
Administrative Agent or Lender securing any of the amounts outstanding under the
Loan Documents;
G. any failure on the part of the Borrower, or any other
Person in complying with its obligations under this Support Party Agreement or
the Loan Documents;
H. any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge of, any
indemnitor, any surety or any guarantor; or
I. the commencement of any case under the Bankruptcy
Code by or against any person obligated under any of the Loan Documents.
SECTION 2.5. Reinstatement, etc. The Support Party agrees that
this Support Party Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment (in whole or in part) of any of the
amounts outstanding under the Loan Documents is rescinded or must otherwise be
restored by the Administrative Agent or Lender, upon the insolvency, bankruptcy
or reorganization of Borrower or any guarantor, indemnitor or surety or
otherwise, as though such payment had not been made.
SECTION 2.6. Waiver, etc. The Support Party hereby waives:
A. All statutes of limitations as a defense to any
action or proceeding brought against the Support Party by the Administrative
Agent or Lender, to the fullest extent permitted by law;
B. Any right it may have to require the Administrative
Agent or Lender to proceed against the Borrower, proceed against or exhaust any
security held by Lender, or pursue any other remedy in the Administrative
Agent's or Lender's power to pursue;
C. Any defense based on any claim that the Support
Party's obligations exceed or are more burdensome than those of the Borrower;
D. Any defense based on: (i) any legal disability or
lack of authority of the Borrower, (ii) any release, discharge, modification,
impairment or limitation of the liability of the Borrower to the Administrative
Agent or Lender from any cause, whether consented to by the Administrative Agent
or Lender or arising by operation of law or from any insolvency proceeding and
(iii) any rejection or disaffirmance of the Loan Documents, or any part thereof,
or any security held in connection with the Loan, in any proceeding;
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E. Any defense based on any action taken or omitted by
the Administrative Agent or Lender in any insolvency proceeding involving the
Borrower, including any election to have the Administrative Agent's or Lender's
claim allowed as being secured, partially secured or unsecured, any extension of
credit by the Lender to the Borrower in any insolvency proceeding, and the
taking and holding by the Administrative Agent or any Lender of security for any
such extension of credit;
F. All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Support Party Agreement and of the existence, creation, or
incurrence of new or additional indebtedness, and demands and notices of every
kind;
G. Any defense based on or arising out of (i) any
defense that the Borrower may haste to the payment or performance of the amounts
outstanding under the Loan Documents or any part thereof, (ii) any defense that
the Borrower has failed to perform any action required by it hereunder, or in
the state in which any Mortgaged Property is located or (iii) the financial
condition of the Borrower; and
H. Any defense based on or arising out of any action of
the Administrative Agent or Lender described in Sections 2.3 or 2.4 above.
SECTION 2.7. Borrower's Agreement. The Borrower hereby agrees to
(a) conduct any action as may be necessary in order for the Support Party to
comply with its obligations under this Support Party Agreement, including, but
not limited to, issuing Subordinated debt and partnership interests to the
Support Party and selling the Mortgaged Properties to the Support Party in
accordance with Article II and (b) apply the proceeds of any amounts received
from the Support Party to the payment or prepayment of amounts as and when due
under the Loan Documents to the Lender and the Administrative Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Support Party represents and warrants to the Administrative Agent
for the benefit of the Lender that:
SECTION 3.1. Organization; Powers. The Support Party and each of
its respective subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and as
proposed to be conducted, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required except
where such failure would not have a material adverse effect upon such party or
this Support Party Agreement. The Support Party and each of its respective
subsidiaries has the power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Support Party
Agreement and to perform the transactions contemplated in this Support Party
Agreement (the "Transactions").
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SECTION 3.2. Authorization; Enforceability. The Transactions are
within the Support Party's powers and have been duly authorized by all necessary
action. This Support Party Agreement has been duly executed and delivered by the
Support Party and constitutes a legal, valid and binding obligation of the
Support Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3. Governmental Approvals; No Conflicts. The
Transactions: (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect; (b) will not
violate any applicable law, statute rule or regulation or the charter, by-laws
or other organizational documents of the Support Party (or any of its
subsidiaries) or any order, writ, ruling, injunction or decree of any
Governmental Authority; (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Support Party (or any
of its subsidiaries) or its assets, or give rise to a right thereunder to
require any payment to be made by the Support Party (or any of its
subsidiaries); and, (d) will not result in the creation or imposition of any
lien on any asset of the Support Party (or any of its subsidiaries).
SECTION 3.4. Properties.
A. The Support Party and each of its subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
B. The Support Party and each of its subsidiaries owns,
or is licensed to use, all trademarks, tradenames, permits, service marks,
licenses, franchises, formulas, copyrights, patents and other intellectual
property or rights with respect to the foregoing, and has obtained assignments
of all leases and other rights of whatever nature, necessary for the present
conduct of its business, without any known conflict with the rights of others
which, or the failure to obtain which, as the case may be, would have in a
material adverse effect on the business, operations, property, assets, nature of
assets, condition (financial or otherwise) or prospects of the Support Party or
of the Support Party and its subsidiaries taken as a whole.
SECTION 3.5. Litigation and Environmental Matters.
A. Except as otherwise disclosed on Exhibit X attached
hereto, there are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of the Support
Party, threatened against or affecting the Support Party or any of its
subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the
Support Party's financial condition or operations or (ii) that involve this
Support Party Agreement or the Transactions.
B. Except with respect to any matter that, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect on the Support Party's
9
financial condition or operations or as otherwise disclosed on Exhibit X
attached hereto, neither the Support Party nor any of its subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has received notice of or become subject to, or knows of any basis for, any
claim, judgment, loss or liability with respect to any Environmental Law.
SECTION 3.6. Compliance with Laws and Agreements. The Support
Party and each of its subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except as disclosed on Exhibit X hereto or where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the Support Party's financial condition or
operations.
SECTION 3.7. Investment and Holding Company Status. Neither the
Support Party nor any of its subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940,
(b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935 or (c) subject to any Federal or
state statute or regulation limiting its ability to incur indebtedness for money
borrowed. Neither the Support Party nor any of its subsidiaries is subject to
the Interstate Commerce Act.
SECTION 3.8. Taxes. The Support Party and each of its subsidiaries
has timely filed or caused to be filed all tax returns and reports required to
have been filed and have paid or caused to be paid all taxes required to have
been paid by it, except (a) taxes that are being contested in good faith by
appropriate proceedings and for which the Support Party or such subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to have a material
adverse effect on the Support Party's financial condition or operations.
SECTION 3.9. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
have a material adverse effect on the Support Party's financial condition or
operations. The present value of all accumulated benefit obligations under each
Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $10,000,000
the fair market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $10,000,000 the fair market value of the
assets of all such underfunded Plans.
SECTION 3.10. Disclosure. The Support Party has disclosed to the
Administrative Agent and the Lender all agreements, instruments and corporate or
other restrictions to which it or any of its subsidiaries is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the operations or
financial condition of the Support Party. None of the information furnished by
or on behalf of
10
the Support Party to the Administrative Agent or any Lender in connection with
the negotiation of this Support Party Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 3.11. Federal Reserve Regulations. Neither the Support
Party nor any of its respective subsidiaries is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock.
SECTION 3.12. Environmental and Safety Matters. The Support Party
and each of its subsidiaries has complied in all material respects with all
federal, state, local and other statutes, ordinances, orders, judgments, rulings
and regulations relating to environmental pollution or to environmental
regulation or control or to employee health or safety. Neither the Support Party
nor any of its subsidiaries has received notice of any material failure so to
comply. The Support Party's and its subsidiaries' facilities do not manage any
Hazardous Materials, as defined in Environmental Law or any other applicable law
relating to environmental pollution or employee health and safety. The Support
Party is not aware of any events, conditions or circumstances involving
environmental pollution or contamination or employee health or safety that could
reasonably be expected to result in material liability on the part of the
Support Party or any of its subsidiaries.
SECTION 3.13. Financial Statements. The Support Party has
heretofore furnished to the Administrative Agent and the Lender its consolidated
and consolidating balance sheets and statements of income and cash flows as of
and for the fiscal year ended March 31, 2002, audited by and accompanied by the
opinion of Pricewaterhouse Coopers, independent public accountants. Such
financial statements present fairly the financial condition and results of
operations of the Support Party and its consolidated subsidiaries as of such
date and for such period. Such balance sheets and the notes thereto disclose all
material liabilities, direct or contingent, of the Support Party and its
consolidated subsidiaries as of the date thereof. Such financial statements were
prepared in accordance with GAAP applied on a consistent basis.
SECTION 3.14. No Material Adverse Change. There has been no
material adverse change in the business, assets, nature of assets, operations,
prospects or condition, financial or otherwise, of the Support Party and its
subsidiaries, taken as a whole, since December 31, 2002.
SECTION 3.15. Agreements.
A. Except as disclosed on Exhibit X, neither the Support
Party nor any of its subsidiaries is a party to any agreement or instrument or
subject to any corporate restriction that has resulted or could result in a
material adverse effect on the operations or financial condition of the Support
Party or its subsidiaries.
B. Neither the Support Party nor any of its subsidiaries
is in default in any manner under any provision of any indenture or other
agreement or instrument evidencing any indebtedness, or any other material
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, except as disclosed on Exhibit X or
where
11
such default could result in a material adverse effect on the operations or
financial condition of the Support Party or its subsidiaries.
SECTION 3.16. Borrower's Business. The Support Party is familiar
with Borrower's financial condition and business operations and has done all
diligence to enter into this Support Party Agreement and has not relied on the
Administrative Agent or Lender with respect to such diligence. The Support Party
has received a copy of the Loan Documents and hereby acknowledges and consents
to the terms and conditions thereunder.
ARTICLE IV
COVENANTS
The Support Party covenants and agrees that, so long as any portion of
the amounts outstanding under the Loan Documents shall remain unpaid or
outstanding, it will observe the following covenants:
SECTION 4.1. Notices of Material Events. The Support Party will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
A. the occurrence of any Support Party Default;
B. the filing or commencement of any action, suit or
proceeding by or before any arbitrator, or Governmental Authority against or
affecting the Support Party or any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a material adverse effect
on the operations or financial condition of the Support Party or its
subsidiaries;
C. the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Support Party and its subsidiaries in an
aggregate amount exceeding $10,000,000;
D. any action by the Support Party pursuant to Article
II of this Support Party Agreement, or any agreement to do so;
E. any provision of this Support Agreement is held to be
invalid, illegal or unenforceable in any jurisdiction resulting in a material
adverse effect on the ability of the Support Party to perform its obligations
hereunder;
F. any change by Xxxxx'x or S&P in the rating of the
Support Party's senior, unsecured, non-credit-enhanced long-term indebtedness
for borrowed money after the date hereof; and
G. any other development that results in, or could
reasonably be expected to result in, a material adverse effect on the operations
or financial condition of the Support Party or its subsidiaries.
12
Each notice delivered under this Section shall be accompanied by a statement of
an executive officer of the Support Party setting forth the details of the event
or development requiring such notice and any action taken or proposed to be
taken with respect thereto.
SECTION 4.2. Existence; Conduct of Business. The Support Party
will, and will cause each of its subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business and will maintain and operate such business in
substantially the manner in which it is presently conducted and operated. The
Support Party shall, directly or through its wholly-owned subsidiaries, own and
control not less than 50% of the voting stock of the sole general partner of the
Borrower.
SECTION 4.3. Payment of Obligations. The Support Party will, and
will cause each of its subsidiaries to, pay its indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
give rise to a lien upon such properties or any part thereof; provided, however,
that such payment and discharge shall not be required with respect to (i) any
such tax, assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings and the
Support Party or such subsidiary of the Support Party shall have set aside on
its respective books adequate reserves with respect thereto and; (ii) the
obligations set forth on Exhibit X.
SECTION 4.4. Maintenance of Properties; Insurance. The Support
Party will, and will cause each of its subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it, or as may be
required by law.
SECTION 4.5. Books and Records; Inspection Rights. The Support
Party will, and will cause each of its subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its respective business and activities.
The Support Party will, and will cause each of its subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender through the
Administrative Agent, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 4.6. Compliance with Laws. The Support Party will, and
will cause each of its subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority, whether now in effect or hereafter
enacted, applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to
13
result in a material adverse effect on the operations or financial condition of
the Support Party or its subsidiaries.
SECTION 4.7. Financial Statements, Reports, etc. The Support Party
will furnish to the Administrative Agent and Lender:
A. as soon as practicable and in any event within 60
days after each fiscal quarter, (i) consolidated balance sheets of the Support
Party and its subsidiaries and as of the end of such period, and the related
statements of income, stockholders' equity and cash flows for such fiscal
period, setting forth in each case in comparative form the figures for the
corresponding periods of the previous fiscal year (but together with the
consolidating intercompany eliminations and adjustments in the case of (i) and
(ii)), all in reasonable detail and certified by a financial officer of the
Support Party that they fairly present the financial condition of the Support
Party and its subsidiaries as at the date indicated and the results of their
operations and changes in their financial position for the periods indicated,
subject to changes resulting from audit and normal year-end adjustment;
B. as soon as practicable and in any event within 120
days after the end of each fiscal year of the Support Party, consolidated
balance sheets of the Support Party and its subsidiaries, as at the end of such
year, and the related consolidated statements of income, stockholders' equity
and cash flows for such fiscal year, setting forth in each case, in comparative
form the consolidated figures for the previous year, all in reasonable detail
and accompanied by a report thereon of independent certified public accountants
of recognized national standing selected by the Support Party and reasonably
satisfactory to the Lender, which report shall be unqualified as to going
concern and scope of audit and shall state that such consolidated financial
statements present fairly, in all material respects, the financial position of
the Support Party and its subsidiaries, as at the dates indicated, and the
results of their operations and cash flows for the periods indicated in
conformity with GAAP (applied on a basis consistent with prior years unless as
otherwise stated therein) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
C. together with each delivery of financial statements
of the Support Party and its subsidiaries pursuant to Sections 4.7.A and B
above, (i) a certificate of a financial officer stating that the signer thereof
has reviewed the terms of this Support Party Agreement and has made, or caused
to be made, a review in reasonable detail of the transactions and condition of
the Support Party and its subsidiaries during the accounting period covered by
such financial statements and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signer does not
have knowledge of the existence as at the date of such certificate, of any
condition or event which constitutes a Support Party Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action the Support Party has taken, is taking and
proposes to take with respect thereto;
D. together with each delivery of financial statements
of the Support Party and its subsidiaries' pursuant to Section 4.7.B above, a
written statement by the independent public accountants giving the report
thereon (i) stating that their audit examination has included a review of the
terms of this Support Party Agreement as they relate to accounting matters,
14
(ii) stating whether, in connection with their audit examination, any condition
or event which constitutes a Support Party Default has come to their attention,
and if such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants shall not
be liable by reason of any failure to obtain knowledge of any such Support Party
Default that would not be disclosed in the course of their audit examination,
and (iii) stating that based on their audit examination nothing has come to
their attention that causes them to believe that either or both the information
contained in the certificates delivered therewith pursuant to Section 4.7 B.
above is not correct;
E. promptly upon request therefore, copies of all
reports submitted to the Support Party by independent public accountants in
connection with each annual, interim or special audit of the financial
statements of the Support Party made by such accountants, including any comment
letter submitted by such accountants to management in connection with their
annual audit;
F. promptly upon their becoming available, copies of all
(i) financial statements, reports, notices and proxy statements sent or made
available generally by the Support Party to its security holders or by any of
its subsidiaries to its security holders other than the Support Party or another
of its subsidiaries, (ii) regular and periodic reports and all registration
statements and prospectuses, if any, filed by the Support Party or any of its
subsidiaries with any securities exchange or with the Securities and Exchange
Commission or any Governmental Authority succeeding to any of its functions, and
(iii) press releases and other statements made available generally by the
Borrower or any of it subsidiaries to the public concerning material
developments in the business of the Support Party and its subsidiaries;
G. promptly upon any officer of the Support Party
obtaining knowledge (i) of any event which constitutes a Support Party Default,
or becoming aware that any Lender or the Administrative Agent has given any
notice or taken any other action with respect to a claimed Support Party Default
under this Support Party Agreement, (ii) that any Person has given any notice to
the Support Party or any of its subsidiaries of the Support Party or taken any
other action with respect to a claimed default or event or condition of the type
referred to in paragraph D. of Article V or (iii) of any condition or event that
might have a material adverse effect on the operations or financial condition of
the Support Party or its subsidiaries, a certificate of a financial officer
specifying the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or Person and the
nature of such claimed default, Support Party Default, event or condition, and
what action the Support Party has taken, is taking and proposes to take with
respect thereto;
H. promptly upon any officer of the Support Party
obtaining knowledge of (i) the institution of, or threat of any action, suit,
proceeding, governmental investigation or arbitration against or affecting the
Support Party or any of its subsidiaries or any property of the Support Party or
any of its subsidiaries not previously disclosed by the Support Party to the
Lender, or (ii) any material development in any action, suit, proceeding,
governmental investigation or arbitration, which, in either case, if adversely
determined, could reasonably be expected to have a material adverse effect on
the financial condition or operations of the Support Party or its subsidiaries,
the Support Party shall promptly give notice thereof to the Lender and
15
provide such other information as may be reasonably available to it to enable
the Lender and their counsel to evaluate such matters; and
I. with reasonable promptness, such other information
and data with respect to the Support Party or any of its subsidiaries as from
time to time may be reasonably requested by Lender.
SECTION 4.8. Pari Passu Ranking. The Support Party shall take, or
cause to be taken, all action that may be or become necessary or appropriate to
ensure that its obligations under this Support Party Agreement will continue to
rank at least pari passu in right of payment with all other present and future
unsecured indebtedness of the Support Party.
SECTION 4.9. Subordination to Secured Indebtedness. Lender
acknowledges and agrees that the indebtedness or obligations of the Support
Party hereunder are and shall remain subordinate to all present and future
indebtedness of the Support Party to its secured creditors.
ARTICLE V
SUPPORT PARTY DEFAULT
SECTION 5.1. Default. Each of the following events shall
constitute an event of default under this Support Party Agreement (a "Support
Party Default"):
A. the Borrower or the Support Party shall fail to
observe or perform any covenant, condition or agreement contained in Article 2.1
of this Support Party Agreement and such failure to perform continues to exist
for a period of three (3) Business Days;
B. any representation or warranty made or deemed made by
or on behalf of the Support Party or any subsidiary in or in connection with
this Support Party Agreement or any amendment or modification hereof or waiver
hereunder, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Support Party Agreement or any
amendment or modification hereof or waiver hereunder, shall prove to have been
incorrect when made or deemed made;
C. the Borrower or the Support Party shall fail to
observe or perform any covenant, condition or agreement as provided in this
Support Party Agreement (other than as referred to in clause B. of this Article)
and such failure shall continue unremedied for a period of thirty (30) days
after notice thereof from the Administrative Agent or Lender to the Support
Party;
D. any event or condition occurs that results in a
default under any financial covenant relating to any material indebtedness of
the Support Party or its subsidiaries or any event or condition occurs that
results in any material indebtedness of the Support Party or its subsidiaries
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time, or both) the holder or holders
of any such material indebtedness or any trustee or agent on its or their behalf
to cause any such material indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior
16
to its scheduled maturity, including but not limited to the defaults under the
indebtedness set forth on Exhibit X;
E. an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Support Party or any of its Material Subsidiaries
or their respective debts, or of a substantial part of their respective assets,
under any federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment or a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Support Party or any of its Material Subsidiaries or for a substantial part of
their respective assets, and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
F. the Support Party or any of its Material Subsidiaries
shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause E. of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Support Party
or any of its Material Subsidiaries or for a substantial part of their
respective assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
G. the Support Party shall become unable, admit in
writing, or fail generally, to pay its debts as they become due;
H. one or more judgments for the payment of money in an
aggregate amount in excess of $1,000,000 shall be rendered against the Support
Party, any of its subsidiaries or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Support Party or any
of its subsidiaries to enforce any such judgment;
I. an ERISA Event shall have occurred that, in the
opinion of the Administrative Agent or Lender, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
a material adverse effect on the financial condition or operations of the
Support Party or its subsidiaries; and
J. a Change of Control shall have occurred.
then, in addition to any rights the Administrative Agent or the Lender may have
under the Loan Documents, and irrespective of whether (i) such Support Party
Default is the result, directly or indirectly, of the failure of the Support
Party or, the Borrower, or any other Person in complying with its obligations
under this Support Party Agreement or (ii) any amounts outstanding under the
Loan Documents have become or have been declared immediately due and payable the
17
Administrative Agent may, and at the request of the Lender shall, proceed to
protect and enforce the rights of the Lender by an action at law, a suit in
equity or other appropriate proceeding.
SECTION 5.2. Default Standstill. In the event that a Support Party
Default exists under Section 5.1 B. through I. hereof, inclusive, Lender shall
not exercise its rights and remedies hereunder so long as Lender continues to
receive, from and after the date of such Support Party Default until the Support
Party Reinstatement Conditions (as defined in the Loan Agreement) are satisfied,
100% of Excess Cash Flow in accordance with Section 4.1 of the Loan Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. Binding on Successors, Transferees and Assigns;
Assignment of Support Party Agreement. This Support Party Agreement shall be
binding upon the Support Party and its successors, transferees and assigns and
shall inure to the benefit of and be enforceable by the Administrative Agent on
behalf of the Lender and their respective permitted successors and assigns;
provided, however, that the Support Party may not assign any of its obligations
hereunder without the prior written consent of all of the Lender.
SECTION 6.2. Amendments, etc. No amendment to or waiver of any
provision of this Support Party Agreement, nor consent to any departure by the
Support Party herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 6.3. Addresses for Notices. Except in the case of notices
and other communications expressly permitted to be given by telephone, all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
A. if to the Borrower or Lender, as provided in Section
11.9 of the Loan Agreement; and
B. if to the Support Party, to it at 0000 Xxxxxxxxxx
Xxx, Xxxxx 000, Xxxx, Xxxxxx 00000-0000, Attention of Xxxxx Xxxxxxx (Telecopy
No. (000) 000-0000) with a copy to Xxxxxxxx X. Xxxxxxx, U-Haul, 0000 X. Xxxxxxx
Xxx., Xxxxxxx, XX 00000, fax: (000) 000-0000.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Support Party Agreement shall be deemed to have been given on the date
of receipt.
SECTION 6.4. No Waiver; Remedies. No failure on the part of the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder (including, but not limited to, the issuance of the Issuance Notice)
shall operate as a waiver thereof; nor shall any single or
18
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 6.5. Section Captions. Section captions used in this
Support Party Agreement are for convenience of reference only, and shall not
affect the construction of this Support Party Agreement.
SECTION 6.6. Severability. Wherever possible each provision of
this Support Party Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Support
Party Agreement shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Support Party Agreement.
SECTION 6.7. Termination of Support Party Agreement. The Support
Party's obligations under this Support Party Agreement shall terminate on the
date upon which all amounts outstanding under the Loan Documents have been paid
in full, and all other obligations under the Loan Documents and this Support
Party Agreement shall have been fully and finally discharged provided that the
agreements in Section 6.12 of this Support Party Agreement shall survive.
SECTION 6.8. Governing Law. THIS SUPPORT PARTY AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
SECTION 6.9. Waiver of Jury Trial. THE SUPPORT PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS SUPPORT PARTY AGREEMENT. THE SUPPORT PARTY
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT AND THE LENDER ENTERING INTO THE LOAN DOCUMENTS.
SECTION 6.10. Consent to Jurisdiction; Waiver of Immunities. The
Support Party hereby acknowledges and agrees that:
A. It irrevocably submits to the jurisdiction of any
federal court sitting in the Southern District of New York in any action or
proceeding arising out of or relating to this Support Party Agreement, and the
Support Party hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such federal court. The
Support Party hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The Support Party agrees that a final, unappealable
judgment in any such action or proceeding shall be
19
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
B. It hereby irrevocably designates, appoints and
empowers CT Corporation, presently located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (together with any successor thereto, the "Service of Process
Agent"), as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its properties, service of any and all
legal process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason the Service of Process Agent shall cease
to be available to act as such, the Support Party agrees to designate a new
Service of Process Agent in New York City on the terms and for the purposes of
this provision satisfactory to the Administrative Agent. The Support Party
further irrevocably consents to service of process in the manner provided for
notices in Section 6.3. Nothing in this Support Agreement will affect the right
of any party to this Support Agreement to serve process in any other manner
permitted by law.
C. Nothing in this Section shall affect the right of the
Administrative Agent or Lender to serve legal process in any manner permitted by
law or affect the right of the Administrative Agent or Lender to bring any
action or proceeding against the Support Party or its property in the courts of
any other jurisdictions.
SECTION 6.11. Right of Setoff. If a Support Party Default shall
have occurred and be continuing, the Administrative Agent, Lender and each of
its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing such Administrative Agent, Lender or
Affiliate to or for the credit or the account of the Support Party against any
of and all the obligations of the Support Party now or hereafter existing under
this Support Party Agreement held by Lender, irrespective of whether or not
Lender shall have made any demand under this Support Party Agreement and
although such obligations may be unmatured. The rights of Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which Lender may have.
SECTION 6.12. Expenses; Indemnity; Damage Waiver.
A. The Support Party shall pay (i) all reasonable
out-of-pocket expenses incurred by the Lender, Administrative Agent and its
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent, in connection with the preparation and
administration of this Support Party Agreement or any amendments, modifications
or waivers of the provisions hereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket
expenses incurred by the Administrative Agent or Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent or Lender,
in connection with the enforcement or protection of its rights in connection
with this Support Party Agreement, including its rights under this Section.
B. The Support Party shall indemnify and hold harmless
the Administrative Agent, Lender and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") from and against and pay them for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges,
20
expenses or disbursements (including attorney costs) of any kind or nature
whatsoever with respect to the execution, delivery and enforcement of this
Support Party Agreement, or the Transactions, and with respect to any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto related to this Support
Party Agreement, whether or not any Indemnified Person is a party thereto (all
the foregoing, collectively, the "Indemnified Liabilities"); provided, that the
Support Party shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities directly arising from the gross negligence or
willful misconduct of such Indemnified Person as determined by a court of
competent jurisdiction. The agreements in this Section 6.12 shall survive
payment of the amounts outstanding under the Loan Documents.
C. To the extent permitted by applicable law, the
Support Party shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Support Party Agreement or any
agreement or instrument contemplated hereby or the Transactions.
D. All amounts due under this Section shall be payable
promptly after written demand therefore.
ARTICLE VII
LIMITATION OF LIABILITY
Notwithstanding any provision to the contrary herein contained, the
obligations of the Support Party under Article II hereof shall be limited to the
then applicable Maximum Obligation. In no event shall any amounts paid, invested
or escrowed by the Support Party under or pursuant to Article II hereof be
deemed to reduce the Maximum Obligation.
21
IN WITNESS WHEREOF, this Support Party Agreement has been executed as
of the day and date first, above written.
SUPPORT PARTY:
AMERCO, a Nevada corporation
By: /s/ Xxxx X. Xxxxxx
_________________________________
Name: Xxxx X. Xxxxxx
_________________________________
Title: Treasurer
_________________________________
(SIGNATURE PAGE CONTINUED ON NEXT PAGE)
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BORROWER:
PM PREFERRED PROPERTIES, L.P., a Texas
limited partnership
By: SR Preferred Properties, Inc.,
a Texas corporation
Its: General Partner
By: /s/ Xxxxxxx Xxxxxxxx
_______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: President
EXHIBIT A
SUBORDINATION TERMS
1. The Support Party hereby agrees that (a) all of the liens,
security interests, terms, covenants and conditions of the Subordinated debt
shall at all times be wholly subordinate to the liens, security interests,
terms, covenants and conditions of the Loan Document and any and all advances
(whether or not obligatory) advanced or incurred in accordance therewith, and
(b) all amounts due to the Support Party under the Subordinated debt (including
interest and/or principal payments or prepayments, assignments of leases and
rents, rights with respect to insurance proceeds and condemnation awards,
advances and expenses with interest), are hereby and shall at all times continue
to be expressly subject and subordinate in right of payment to the indebtedness
of the Borrower evidenced by the Loan Documents and any and all advances
(whether or not obligatory) advanced or incurred in accordance therewith. The
Support Party acknowledges that the disbursement of sums or future advances may
increase the indebtedness secured by the Loan Documents above the original
principal amount thereof.
2. The Support Party shall not acquire by subrogation, contract
or otherwise any lien upon any other estate, right or interest in the Property
(including without limitation any which may arise in respect to real estate
taxes, assessments of other governmental charges) which is or may be prior in
right to the Loan Documents.
3. Lender may, without affecting the subordination of the
Subordinated debt (1) release or compromise any obligation in the Loan
Documents, (2) release its liens in, or surrender, release or permit any
substitution or exchange of all or any part of any properties securing repayment
of the Loan Documents or (3) retain or obtain a lien in any property to further
secure payment of the Loan.
4. The Support Party shall give Lender and Administrative Agent
copies of any notices to Borrower relating to the Subordinated debt.
5. Neither Lender nor Administrative Agent shall be obligated to
give the Support Party notices of (1) any increase, amendment, deferral,
extension, consolidation, or supplement ("Modification") to the Loan; or (2) any
cancellation, extension, modification, renewal or amendment of any lease or
ground lease covering the Property or any portion thereof.
6. The commencement of foreclosure proceedings or other remedial
action under the Subordinated debt by the Support Party, shall constitute a
default under the Loan at the time the Support Party takes such enforcement or
remedial action.
7. During the continuance of a default under the Loan Documents,
or in the event of a foreclosure sale under either the Loan or the Subordinated
debt, or any liquidation or dissolution of Borrower, or of any execution sale,
receivership, insolvency, bankruptcy, liquidation, readjustment, reorganization,
or other similar proceeding relative to the Borrower or its property, the
Support Party shall not be entitled to receive or retain any payment made under
the Subordinated debt and all amounts due under the Loan Documents shall first
be paid in full before any payment is made under the Subordinated debt. In such
event a payment or
distribution of any kind, whether in cash, rents, profits, property or
securities, which is made against the Subordinated debt shall be held in trust
by the Support Party for the benefit of Lender and shall be paid over to Lender
in kind for application in payment of the Loan. The Loan shall not be deemed
paid or satisfied in full until Lender has received a payment that is not
subject to rescission, restoration or return.
8. In order to enable Lender to enforce any claims by the Support
Party against the Borrower in any liquidation or dissolution of Borrower, or any
execution sale, receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization, or other similar proceeding relative to the Borrower or its
property, Lender is hereby irrevocably authorized and empowered in its
discretion to make and present, for and on behalf of the undersigned the Support
Party, such proofs of claims against the Borrower on account of the Subordinated
debt as Lender may deem expedient or proper, and to vote such proofs of claims
in any such proceeding and to receive and collect any and all dividends or other
payments or disbursements made thereon in whatever form the same may be paid or
issued. The Support Party further agrees to execute and deliver to Lender such
assignments or other instruments as may be required by Lender in order to enable
Lender to enforce any and all such claims and to collect any and all such
payments or disbursements.
9. So long as the Loan Documents shall remain a lien upon the
Property or any part thereof, the Support Party shall execute, acknowledge and
deliver, upon Lender's reasonable demand, at any time or from time to time, any
and all further subordinations, agreements or other instruments in recordable
form as Lender may reasonably require for carrying out the purpose and intent of
the covenants contained herein.
2
SCHEDULE X
On October 15, 2002, AMERCO failed to make a $100 million principal
payment due to the Series 0000-X Xxxx Xxxxxx Xxxxx Xxxxx ("XXX"). Xx that date,
AMERCO also failed to pay a $26.5 million obligation to Citibank and Bank of
America in connection with the BATs.
As a result of the foregoing, AMERCO is in default with respect to its
other credit arrangements that contain cross-default provisions, including its
3-Year Credit Agreement dated June 28, 2002 (the "Revolver") in the amount of
$205 million. In addition to the cross-default under the Revolver, AMERCO is
also in default under that agreement as a result of its failure to obtain
incremental net cash proceeds and/or availability from additional financings in
the aggregate amount of at least $150 million prior to October 15, 2002. In
addition, Amerco Real Estate Company has defaulted on a $100 million loan by
failing to grant mortgages required by the loan agreement in a timely manner.
The obligations of AMERCO in default (either directly or as a result of a
cross-default), as of December 31, 2002, are approximately $1,175.4 million. As
a result of the foregoing, AMERCO is also in default under the Chase/XX Xxxxxx
Support Agreement.
AMERCO has retained the financial restructuring firm Crossroads, LLC to
assist with the negotiation of standstill agreements and waivers, as
appropriate. This would permit AMERCO to pursue financing alternatives and asset
sales that would enable it to repay the Revolver and the BATs, meet calendar
year 2003 maturities, and restructure its balance sheet.
AMERCO, through Crossroads, is in communication with all of its
lenders. On November 27, 2002 AMERCO reached a standstill agreement with respect
to the Revolver. During the standstill period, the Revolver lenders will receive
interest at the default rate on the outstanding balance.
Generally speaking, AMERCO's other lenders have been cooperative to
date and are acting in a manner consistent with customary standstill
arrangements even though written standstill agreements have not been executed
with any lenders other than the Revolver lenders. All lenders are receiving
detailed financial and other information from AMERCO concerning the progress of
the restructuring. In addition, all of AMERCO's lenders are continuing to
receive all payments due to them (other than the $100 million owed to the BATs
and default interest). Lenders that execute a standstill agreement (e.g., the
Revolver lenders) will receive default interest.
Currently, AMERCO is in discussions with several major financial
institutions regarding loans that would enable AMERCO to fully satisfy its
obligations under the BATs, the Revolver, and debt maturities in calendar year
2003. On December 20, 2002, AMERCO executed term sheets with two major financial
institutions for up to $650 million in connection with AMERCO's planned debt
restructuring. AMERCO plans to close the financing by March 31, 2003. AMERCO's
continuation as a going concern is dependent, in part, upon its ability to
successfully complete these necessary financing arrangements.
In addition, the Support Party has been named as a defendant in certain
class action and shareholder derivative suits. However, the Support Party does
not believe there is a reasonably possibility of adverse determination with
respect to such cases.