Exhibit 10.72
RESTRUCTURING AGREEMENT
This Restructuring Agreement (this "Agreement") is made and entered into as
of August 12, 2003, by AMERCO Real Estate Company, a Nevada corporation ("AREC")
and the signatories hereto that are holders of the Notes described below
(collectively, the "Noteholders"). AREC and the Noteholders are collectively
referred to herein as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, AREC and the Noteholders have engaged in good faith negotiations
with the objective of reaching an agreement with regard to (i) the restructuring
of the $95,000,000 Senior Notes, Series A, due April 30, 2012 and the $5,000,000
Senior Notes, Series B, due April 30, 2007, issued by AREC (collectively, the
"Notes") under that certain Note Purchase Agreement dated March 15, 2002 (the
"Purchase Agreement"), between AREC and the Noteholders, and guaranteed by
AREC's parent, AMERCO, a Nevada corporation ("AMERCO"), under and pursuant to
the Purchase Agreement, and (ii) the recapitalization of AREC and AMERCO.
WHEREAS, on June 20, 2003, AMERCO filed for relief under Chapter 11 of
Title 11 of the United States Code, 11 U.S.C. Section Section 101, et. seq. (the
"Bankruptcy Code"), which case is pending before the United States Bankruptcy
Court for the District of Nevada (the "Bankruptcy Court").
WHEREAS, AREC and the Noteholders desire to implement the financial
restructuring consistent with this Agreement and the term sheet attached hereto
and incorporated herein by reference as Exhibit A (the "Term Sheet," and the
restructuring and recapitalization contemplated therein, the "Financial
Restructuring"), by AREC filing for relief under Chapter 11 of the Bankruptcy
Code on or before August 14, 2003 (the "AREC Petition Date"). AREC intends to
file a motion with the Bankruptcy Court requesting that its Chapter 11 Case be
consolidated, for administrative purposes only, with the Chapter 11 Case of
AMERCO (collectively, with any other bankruptcy cases filed by any affiliates or
subsidiaries of AMERCO or AREC under the Bankruptcy Code, the "Chapter 11
Cases").
WHEREAS, in order to implement the Financial Restructuring, AREC intends,
subject to the terms and conditions of this Agreement and the Term Sheet, to
prepare a disclosure statement and a plan of reorganization consistent with the
terms set forth in this Agreement and the Term Sheet, to solicit acceptances of
such plan, and to file and seek approval of such Disclosure Statement and
confirmation of such plan in its administratively consolidated Chapter 11 Cases,
as expeditiously as possible under the Bankruptcy Code and the Federal Rules of
Bankruptcy Procedure (the "Bankruptcy Rules").
WHEREAS, each Noteholder executing this Agreement (each a "Consenting
Noteholder" and collectively, the "Consenting Noteholders") owns or controls the
aggregate principal amount of indebtedness under the Notes ("Existing Noteholder
Obligations"), in each case as identified on the signature pages hereto.
WHEREAS, in order to facilitate and expedite the implementation of the
Financial Restructuring, the Noteholders are prepared, subject to the terms and
conditions of this
Agreement, to vote their respective Claims (as that term is defined in the
Bankruptcy Code) against AREC and AMERCO arising under the Notes and the
Purchase Agreement (the "Noteholder Claims") to accept the "Conforming Plan" (as
defined in Section 3 hereof).
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties
hereby as agree as follows:
1. Recitals. Each of the foregoing Recitals is incorporated hereby as
if fully set forth herein.
2. Filing of Reorganization Case. AREC will commence its voluntary
Chapter 11 case by August 14, 2003, or such other date as may be agreed to in
writing by AREC and the Consenting Noteholders.
3. Conforming Plan, Conforming Disclosure Statement, Voting in Favor of
the Conforming Plan.
(a) For purposes of this Agreement, a "Conforming Plan" and a
"Conforming Disclosure Statement" shall mean, respectively, a plan and
disclosure statement, proposed by AREC and AMERCO pursuant to the
Bankruptcy Code and reasonably acceptable to the Consenting Noteholders,
that shall:
(i) effectuate the Financial Restructuring, in accordance with
the terms and conditions of this Agreement and the Term Sheet;
(ii) grant the Noteholders allowed claims in the Chapter 11
Cases on account of the Noteholder Claims in the amount of (w) all
outstanding principal on the Notes, (x) interest accrued and unpaid on
the Notes from October 15, 2002 up to the AREC Petition Date, payable
at the default rate, (y) interest accrued on the Notes from the AREC
Petition Date up to the actual date of payment of amounts due to the
Consenting Noteholders on the Effective Date pursuant to this
Agreement and the Term Sheet, payable at the non-default rate, and (z)
any applicable reasonable fees and expenses provided under the Notes
and the Purchase Agreement, including, without limitation, all
reasonable attorneys fees and other reasonable professional advisor
fees (collectively, the "Allowed Noteholder Claims");
(iii) comply with all material terms of this Agreement and the
Term Sheet;
(iv) not otherwise prejudice rights, remedies, claims, interests
of the Noteholders, including the Allowed Noteholder Claims, or the
distributions to be made to the Noteholders under this Agreement and
the Term Sheet. The Parties understand that the Conforming Plan and
all related documents will contain
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customary provisions for transactions of the nature set forth herein
and in the Term Sheet;
(v) provide that AREC and AMERCO shall not syndicate the "Term
Loan B Notes" to "Market Participants" (as outlined and defined in the
Term Sheet) in excess of $30,000,000 aggregate face par amount, unless
such syndication is completed in an amount not less than $80,000,000
aggregate face par amount; and
(vi) provide that AREC and AMERCO shall pay to the bondholders of
AMERCO an amount no greater than thirty-five percent (35%) of their
claims against AMERCO in cash from the proceeds of the Emergence
Facility.
(b) Each Consenting Noteholder agrees to timely vote its
Noteholder Claim in favor of the Conforming Plan and not to revoke or
withdraw such vote unless the Conforming Plan shall be (i) modified to
provide for treatment of the Noteholders that is different in any material
respect from the treatment described in this Agreement and in the Term
Sheet or (ii) withdrawn by AREC or AMERCO. Each Consenting Noteholder to
this Agreement agrees not to elect on any ballot concerning a Conforming
Plan to preserve any rights, if any, that such Party may have that may be
affected by the releases provided for under the Conforming Plan.
4. RESTRICTIONS ON TRANSFER. Without the prior written consent of
AREC and provided that no "Event of Termination" (as defined in Section 9
hereof) has theretofore occurred, each Consenting Noteholder hereby agrees not
to (a) sell, transfer, assign, pledge, or otherwise dispose of any of its
Noteholder Claims, in whole or in part, or any interest therein, unless the
transferee accepts such claims subject to the terms of this Agreement, or (b)
grant any proxies, deposit any of its Noteholder Claims into a voting trust, or
enter into a voting agreement with respect to any of its Noteholder Claims
unless such arrangement provides for compliance herewith. Unless AREC has
otherwise consented in writing or an Event of Termination has theretofore
occurred, in the event that a Consenting Noteholder transfers such Noteholder
Claims prior to the last date for voting on the Conforming Plan, such
transferee shall comply with and be subject to all the terms of this Agreement
so long as such Agreement remains in effect, including, but not limited to,
such Consenting Noteholder's obligations to vote in favor of the Conforming
Plan and shall, as a condition precedent to such transfer, execute an agreement
on terms substantially identical to the terms of this Agreement and, upon
commencement of the solicitation of votes to accept or reject the Conforming
Plan, a ballot indicating its acceptance of the Conforming Plan.
5. AREC AGREEMENTS. During the term of this Agreement, AREC hereby
agrees to the following:
(a) AREC shall use all reasonable efforts to have the Conforming
Disclosure Statement approved by the Bankruptcy Court, and to use all
reasonable efforts to obtain an order of the Bankruptcy Court confirming
the Conforming Plan, in each case as expeditiously as possible under the
Bankruptcy Code and the Bankruptcy Rules and
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consistent with the terms and conditions set forth in this Agreement and in the
Term Sheet.
(b) AREC shall (i) prior to the AREC Petition Date, make a payment of all
accrued and unpaid interest on the Notes from April 30, 2003 to the AREC
Petition Date, payable at the default rate under the Notes, (ii) prior to the
AREC Petition Date, make a cash deposit of (x) $400,000 for counsel to the
Noteholders, XxXxxxxxx Will & Xxxxx, and (y) $100,000 for the financial advisors
to the Noteholders, Houlihan, Lokey, Xxxxxx, & Xxxxx ("HLHZ"), to the Consenting
Noteholders for reasonable professional fees, including reasonable attorneys
fees and other reasonable professional advisor fees, incurred after the Petition
Date in connection with this Agreement, the Term Sheet, the Financial
Restructuring, and the Chapter 11 Cases, (iii) subject to the approval of the
Bankruptcy Court, make additional prepayments for reasonable professional fees
as reasonably requested by the Consenting Noteholders from time-to-time, and
(iv) separately pay, prior to the AREC Petition Date, any accrued and unpaid
reasonable fees of such professionals, including attorneys and other
professional advisors, including, without limitation, fees due to HLHZ under
that certain Engagement Agreement between AREC and HLHZ.
(c) AREC shall use all reasonable efforts to obtain approval by the
Bankruptcy Court of (i) the $300,000,000 debtor-in-possession financing facility
(the "DIP Facility") provided to AREC and AMERCO by Xxxxx Fargo Foothill, Inc.,
as lead arranger, collateral agent, syndication agent and administrative agent
("Foothill"), and (ii) an emergence facility of approximately $650,000,000 (the
"Emergence Facility") also to be provided by Foothill on the confirmation and
consummation of the Conforming Plan, based on the Term Sheet, attached hereto as
Exhibit B (the "Foothill Term Sheet"). Notwithstanding the references in this
Agreement or the Term Sheet to Foothill and the Foothill Term Sheet, AREC and
AMERCO may select an alternative senior lender or lenders to provide the DIP
Facility or the Emergence Facility under terms (i) similar in all material
respects to the Foothill Term Sheet and (ii) effectuating the Financial
Restructuring in accordance with the Term Sheet and this Agreement.
(d) Except as provided pursuant to this Agreement and the Term Sheet, AREC
shall not request, shall not acquiesce in any request, and shall use all
reasonable efforts to oppose any request or action of any other party that (i)
impairs or changes the rights, remedies, claims, powers, benefits, privileges,
liens, security interests or protections of the Noteholders, including, without
limitation, any objection to the Allowed Noteholder Claims, (ii) obtains any
additional credit outside of the ordinary course (other than the DIP Facility
and the Emergence Facility) without the prior written consent of the Consenting
Noteholders, (iii) other than through a Conforming Plan, substantively
consolidates the estates of AREC and any other entity, including, without
limitation, AMERCO, or (iv) rejects this Agreement pursuant to Section 365 of
the Bankruptcy Code or other applicable law. Furthermore, AREC shall use all
best efforts to obtain an order approving the assumption of this Agreement
pursuant to Section 365 of the Bankruptcy Code on or before October 15, 2003.
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(e) Reference is hereby made to the $205 million credit facility (the
"Credit Facility") under the Credit Agreement dated as of June 28, 2002, among
AMERCO, the lenders identified therein (the "Revolver Lenders") and JPMorgan
Chase Bank, acting as administrative agent on behalf of the Revolver Lenders
("JPMorgan"). If the Revolver Lenders and JPMorgan fail to execute a
restructuring agreement providing for the financial restructuring of the Credit
Facility consistent with the treatment of the Credit Facility, the Revolver
Lenders and JPMorgan as provided in the Term Sheet on or before September 15,
2003, AREC hereby agrees that the Revolver Lenders and JPMorgan shall not
receive payment of any amounts from or under the DIP Facility.
6. Support of the Conforming Plan.
(a) Provided that an Event of Termination has not theretofore occurred,
each Party shall use all reasonable efforts to obtain confirmation of the
Conforming Plan in accordance with the Bankruptcy Code as expeditiously as
possible, including, without limitation, communicating its support of the
Conforming Plan to the holders of allowed impaired claims.
(b) Provided that an Event of Termination has not theretofore occurred, no
Party shall:
(i) object to confirmation of the Conforming Plan or otherwise
commence any proceeding to oppose or alter the Conforming Plan or any other
reorganization related documents or agreements that implement and are
consistent with the Conforming Plan (the "Conforming Plan Documents"),
which shall include, but not be limited to any documents or agreements
related to the DIP Facility and the Emergence Facility, to the extent such
documents substantially conform to the terms of the Foothill Term Sheet,
the Term Sheet, and this Agreement,
(ii) vote for, consent to, support or participate in the formulation
of any other plan of reorganization or liquidation proposed or filed or to
be proposed or filed in any of the Chapter 11 Cases,
(iii) directly or indirectly seek, solicit, support or encourage any
other plan, sale, proposal or offer of dissolution, winding up,
liquidation, reorganization, merger or restructuring of AREC, AMERCO or any
of their subsidiaries that could reasonably be expected to materially
prevent, delay or impede the successful restructuring of AREC and AMERCO
as contemplated by the Conforming Plan or the Conforming Plan Documents,
(iv) object to the Conforming Disclosure Statement or the
solicitation of consents to the Conforming Plan, or
(v) take any other action that is inconsistent with, or that would
materially delay confirmation of, the Conforming Plan.
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7. Acknowledgment.
(a) This Agreement is not, and shall not be deemed to be, a
solicitation for consents to the Conforming Plan. The acceptances of the
Consenting Noteholders will not be solicited until such Parties have
received the Disclosure Statement approved by order of the Bankruptcy Court
as containing "adequate information," as such term is defined in Section
1125(a)(1) and (2) of the Bankruptcy Code, the Conforming Plan and related
ballot.
(b) The Consenting Noteholders are creditors only. None of the
Consenting Noteholders, or any of their respective present or former
employees, officers, directors, or agents at any time has agreed or
consented to being an agent, principal, participant, joint venturer,
partner, or alter ego of AREC. None of the Consenting Noteholders or any of
their respective present or former employees, officers, directors, or
agents at any time has directed or participated in any of the business
dealing of AREC in any capacity other than as a creditor.
(c) Except as expressly set forth herein and subject to the automatic
stay provisions of Section 362 of the Bankruptcy Code: (i) the Notes and
the Purchase Agreement shall remain in full force and effect in accordance
with their respective terms; and (ii) nothing contained in this Agreement
shall: (A) modify or alter any of the terms or provisions in the Notes or
the Purchase Agreement in any manner whatsoever; (B) cure, waive, release
or postpone any defaults now or hereafter existing under the Notes or the
Purchase Agreement; (C) establish a custom between any of the parties
hereto; (D) in any way waive, limit, or condition the rights of remedies of
the Consenting Noteholders under the Notes or the Purchase Agreement; or
(E) cause the Consenting Noteholders to be or be deemed in control of AREC
and AMERCO, their operations or properties, or to be acting as a
"responsible person" with respect to the operation and management of AREC,
AMERCO or their properties. Subject to the automatic stay provisions of
Section 362 of the Bankruptcy Code, the Consenting Noteholders may exercise
their respective rights and remedies with respect to the events of default
upon termination of this Agreement as provided in Section 9 hereof.
8. Disclaimer. On or promptly following the AREC Petition Date, the
Parties agree that a copy of this Agreement shall be filed with the Bankruptcy
Court.
9. Termination of Agreement.
(a) Upon the effectiveness of this Agreement in accordance with
Section 26 hereof, the obligations of the Consenting Noteholders and AREC
hereunder shall remain effective and binding until the "Effective Date" (as
defined in the Term Sheet) of the Conforming plan unless terminated as
provided herein.
(b) Upon the occurrence of an Event of Termination, which has not
been waived in writing by all Consenting Noteholders within seven (7)
business days of notice thereof, the obligations of the Parties hereto
shall immediately and automatically
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terminate without further demand or notice of any kind. The occurrence of any
one or more of the following shall constitute an "Event of Termination"
hereunder:
(i) the Conforming Plan or any Conforming Plan Document is modified
to provide for treatment of the Consenting Noteholders that is different in
any material respect from the treatment described in the Term Sheet;
(ii) the Conforming Plan or any Conforming Plan Document is modified
to provide for the treatment of the Credit Facility that is different in
any material respect from the treatment described in the Term Sheet;
(iii) AMERCO or AREC pays to JPMorgan, on behalf of the Revolver
Lenders, more than $51,250,000 in cash in the aggregate from the DIP
Facility;
(iv) AREC fails to file the Conforming Plan and Conforming
Disclosure Statement on or before October 15, 2003;
(v) the Conforming Disclosure Statement is not approved on or
before December 15, 2003;
(vi) the Conforming Plan is not confirmed on or before February 27,
2004;
(vii) the Conforming Plan is not consummated on or before March 15,
2004;
(viii) the Bankruptcy Court does not approve the Emergence Facility as
part of the confirmation of the Conforming Plan;
(ix) the revolving credit facility and the "Term Loan A Notes" (as
such term is defined in the attached Term Sheet) exceeds $550,000,000 in
face amount;
(x) the "Term Loan B Notes" (as such term is defined in the
attached Term Sheet), exceeds $200,000,000 in face amount;
(xi) the Bankruptcy Court denies confirmation of the Conforming
Plan;
(xii) any of the Chapter 11 Cases are converted to a case under
Chapter 7 of the Bankruptcy Code or a trustee or examiner with expanded
powers is appointed in any of the Chapter 11 Cases under any chapter of the
Bankruptcy Code;
(xiii) any written representation or warranty made by AREC to the
Consenting Noteholders in this Agreement or the Term Sheet (including
without limitation, representation, relating to AREC or AMERCO's financial
performance) is false or misleading in any material respect;
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(xiv) a material default occurs under the DIP Facility and is not
waived by the lenders under the DIP Facility within ten (10) business days
thereof;
(xv) the material breach of any provision of this Agreement;
(xvi) the Bankruptcy Court finds or holds unenforceable this
Agreement, the Term Sheet, or any material provision thereof;
(xvii) the estates of AREC and any other entity, including, without
limitation, AMERCO, are substantively consolidated, other than through the
Conforming Plan; or
(xviii) the voluntary or involuntary commencement of any bankruptcy,
receivership, or assignment for the benefit of creditors proceeding by or
against U-Haul International, Inc. or any other material subsidiary of
AMERCO or AREC, other than as part of the implementation of the Conforming
Plan.
(c) Except as set forth in Section 9(d) hereof, no Party shall have any
liability to the other or any other person as a result of the termination of
such Party's obligations hereunder in accordance with this Section 9. In
addition, each of the Parties hereunder acknowledges and agrees that any
assumption of this Agreement pursuant to Section 5(d) hereof and Section 365 of
the Bankruptcy Code shall not result in the Noteholder Claims being granted any
administrative expense priority under the Bankruptcy Code in the Chapter 11
Cases without further order of the Bankruptcy Court.
(d) Upon termination of this Agreement pursuant to Section 9(a),
(i) except as set forth in Section 9(d)(iii) hereof, all obligations
contained herein of the Parties shall immediately terminate and no
provision contained herein shall be binding upon any Party;
(ii) the Noteholders shall be immediately entitled to exercise their
rights and remedies under the Notes and the Purchase Agreement; and
(iii) subject to the automatic stay provisions of Section 362 of the
Bankruptcy Code, the forbearance provided in Section 11 hereof shall
terminate and all amounts due and owing under the Notes and the Purchase
Agreement shall become immediately due and payable, including, without
limitation, (x) all principal, (y) any and all accrued and unpaid interest
on the Notes, including default interest as provided in the Notes, and (z)
fees and expenses provided under the Notes and the Purchase Agreement.
Provided that the Noteholders have not theretofore materially breached this
Agreement, all such amounts due under the Notes shall be deemed allowed
claims by AREC, and AREC shall not object to such claim being allowed in
the Chapter 11 Cases. In addition, the Noteholders retain all rights to
assert any "make-whole" provisions contained in the Purchase Agreement as
part of their allowed claim in the Chapter 11 Cases, and AREC reserves all
rights to dispute any such "make-whole" provisions.
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10. Good Faith Negotiation of Documents. Each Party hereby further
covenants and agrees to negotiate the definitive documents relating to the
Conforming Plan Documents, in good faith, and in any event, in all material
respects consistent with the Term Sheet.
11. Forbearance. Each Consenting Noteholder, for so long as no Event of
Termination has occurred, hereby severally agrees to forbear from exercising any
rights or remedies it may have under the Notes, the Purchase Agreement and all
related documents, applicable law, or otherwise (including without limitation,
the filing of an involuntary petition against AREC) with respect to any default
with respect to the Notes or the Purchase Agreement, whether presently existing
or hereafter arising. Notwithstanding the foregoing, the forbearance provided
herein shall terminate upon the termination of this Agreement pursuant to
Section 9 hereof, and the Consenting Noteholders shall immediately be entitled
to exercise their rights and remedies as provided in Section 9(d) hereof,
subject to the automatic stay provisions of Section 362 of the Bankruptcy Code.
12. Representations and Warranties. Each Consenting Noteholder represents
and warrants that the statements set forth in clauses (a), (b), (e), (f), and
(g) below are true, correct and complete as of the date hereof, and AREC
represents and warrants that the statements set forth in clauses (a) through (e)
below are true, correct and complete as of the date hereof:
(a) Corporate Power and Authority. It is duly organized, validly
existing, and in good standing under the laws of the place of its
organization, and has all requisite corporate, partnership, limited
liability company or other similar power and authority to enter into this
Agreement and to carry out the transaction contemplated by, and perform its
respective obligations under, this Agreement.
(b) Authorization. The executive and delivery of this Agreement and
the performance of its obligations hereunder have been duly authorized by
all necessary corporate, partnership, limited liability company, or other
similar action on its part.
(c) No Conflicts. The execution, delivery and performance by it of
this Agreement do not and shall not (i) violate any provision of law, rule
or regulation applicable to it or any of its subsidiaries or its
certificate of incorporation or bylaws or other organizational documents or
those of any of its subsidiaries or (ii) conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under
any material contractual obligation to which it or any of its subsidiaries
is a party.
(d) Governmental Consents. The execution, delivery and performance by
it of this Agreement do not and shall not require any registration or
filing with consent or approval of, or notice to, or other action to, with
or by, and federal, state or other governmental authority or regulatory
body, other than the approval of the Bankruptcy Court, in the case of AREC.
(e) Binding Obligation. Subject to the provisions of Sections 1125
and 1126 of the Bankruptcy Code, this Agreement is the legally valid and
binding obligation of each Party, enforceable against each Party in
accordance with the terms of this Agreement.
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(f) Owner of Claims. As of the date hereof, each Consenting
Noteholders is the beneficial owner of, or holder of investment authority
over, its Noteholder Claim against AREC that it has agreed to vote in favor
of the Conforming Plan.
(g) Acknowledgement of Risks. Each Consenting Noteholder has received
and reviewed this Agreement and all schedules and exhibits hereto and has
received all such information as it deems necessary and appropriate to
enable it to evaluate the financial risk inherent in the Conforming Plan.
13. Further Acquisition of Claims. This Agreement shall in no way be
construed to preclude any of the Consenting Noteholders from acquiring
additional Noteholder Claims in the Chapter 11 Cases. However, any such
additional Noteholder Claims so acquired shall automatically be deemed to be
subject to the terms of this Agreement.
14. Amendments. This Agreement may not be modified, amended or
supplemented without the prior written consent of AREC and all of the
Consenting Noteholders.
15. Disclosure of Individual Consenting Noteholders. Unless required by
applicable law or regulation, AREC shall not disclose any Consenting
Noteholder's holding of Existing Noteholder Obligations without the prior
written consent of such Consenting Noteholder; and if such announcement or
disclosure is so required by law or regulation, AREC shall afford the
Consenting Noteholder a reasonable opportunity to review and comment upon any
such announcement or disclosure prior to AREC's making such announcement or
disclosure. The foregoing shall not prohibit AREC from disclosing the
approximate aggregate holdings of Existing Noteholder Obligations by the
Noteholders as a group.
16. Consent to DIP Facility. Unless an Event of Termination has occurred
and subject to compliance with Section 5(e) hereof, the Consenting Noteholders
(a) consent to the approval of the DIP Facility, including the partial payment
to the Revolver Lenders from the proceeds of the DIP Facility as set forth in
the attached Term Sheet, and, (b) if requested by AREC, will provide consents
in form and substance reasonably acceptable to AREC and the Consenting
Noteholders relating to the implementation of the DIP Facility.
17. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without regard to any conflicts of law provision which would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, each of the Parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought in the United States
District Court for the District of Nevada. By execution and delivery of this
Agreement, each of the Parties hereto irrevocably accepts and submits itself to
the nonexclusive jurisdiction of such court, generally and unconditionally,
with respect to any such action, suit or proceeding. Notwithstanding the
foregoing consent to Nevada jurisdiction, upon the commencement of the Chapter
11 Case by AREC, each of the Parties hereto hereby agrees that the Bankruptcy
Court shall have exclusive jurisdiction of all matters arising out of or in
connection with this Agreement.
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18. Specific Performance. It is understood and agreed by each of the
Parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by any Party and each non-breaching Party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy of any such breach.
19. Headings. The headings of the sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
20. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of the Parties and their respective successors, assigns, heirs,
executors, administrators and representatives.
21. Prior Negotiations. This Agreement and the Term Sheet supersede all
prior negotiations with respect to the subject matter hereof.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement. Delivery of an executed counterpart of
this Agreement by facsimile shall be equally as effective as delivery of the
original executed counterpart of this Agreement.
23. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties hereto and no other
person or entity shall be a third-party beneficiary hereof, other than
successors and assigns of any Party.
24. Consideration. It is hereby acknowledged by the Parties hereto that no
additional consideration shall be due or paid to the Noteholders for its
agreement to vote to accept the Conforming Plan in accordance with the terms
and conditions of this Agreement.
25. Notices.
(a) All notices hereunder to be served to AREC shall be deemed given
if in writing and delivered or sent by telecopy, courier or by registered
or certified mail (return receipt requested) to the following addresses or
telecopier numbers (or at such other addresses or telecopier numbers as
shall be specified by like notice):
AMERCO Real Estate Company
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx
Fax: 000-000-0000
with copy to:
SQUIRE, XXXXXXX & XXXXXXX L.L.P.
00 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
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Fax: 000-000-0000
(b) All notices hereunder to be served to a Consenting Noteholder
shall be deemed given if in writing and delivered or sent by telecopy,
courier or by registered or certified mail (return receipt requested) to
the address or telecopier number for such Consenting Noteholder set forth
above its signature hereto (or at such other addresses or telecopier
numbers as shall be specified by like notice), with copies to:
XxXXXXXXX, WILL & XXXXX
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx, Esq.
Fax: 000-000-0000
26. Effectiveness. This Agreement shall become effective when AREC has
received counterparts of this Agreement duly executed and delivered by AREC and
all of the Noteholders.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered by its duly authorized officer as of the date first
above written.
AREC:
AMERCO Real Estate Company
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------
Title: Controller
------------------
[Additional signature pages follow]
NOTEHOLDERS:
MONUMENTAL LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President
------------------------------------------
Principal Amount of Notes Owned or
Controlled: $21,000,000 Series A
Address: c/o Aegon USA Investment Management, LLC
-----------------------------------------
0000 Xxxxxxxx Xxxx XX
-----------------------------------------
Xxxxx Xxxxxx, XX 00000-0000
-----------------------------------------
Attention: Xxxxxx X. Xxxxxxxx
-------------------------------
TRANSAMERICA LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President
------------------------------------------
Principal Amount of Notes Owned or
Controlled: $10,500,000 Series A
--------------------------------
Address: c/o Aegon USA Investment Management, LLC
----------------------------------------
0000 Xxxxxxxx Xxxx XX
----------------------------------------
Xxxxx Xxxxxx, XX 00000-0000
----------------------------------------
Attention: Xxxxxx X. Xxxxxxxx
-----------------------------
AUSA LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------
Title: Vice President
----------------------
Principal Amount of Notes Owned
or Controlled: $3,500,000 Series A
-------------------
Address: c/o AEGON USA INVESTMENT MANAGEMENT, LLC
----------------------------------------
0000 XXXXXXXX XXXX XX
----------------------------------------
XXXXX XXXXXX, XX 00000-0000
----------------------------------------
Attention: XXXXXX X. XXXXXXXX
-----------------------------
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------
Title: Its Authorized Representative
--------------------------------
Principal Amount of Notes Owned or
Controlled: $35,000,000 Series A
-----------------------
Address: The Northwestern Mutual Life
Insurance Company
-----------------------------
000 X. Xxxxxxxxx Xxx.
-----------------------------
Xxxxxxxxx, XX 00000
-----------------------------
Attention: XXXXXXX XXXXXXX
-----------------------------
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------
Name: XXXX X. XXXXXXXXXX
----------------------------------
Title: AUTHORIZED SIGNATORY
----------------------------------
Principal Amount of Notes Owned or
Controlled: $19,000,000 Series A
----------------------
Address: Xxx Xxxxxxxxxx Xxxxx
-------------------------------
Xxxxxxxx, Xxxx 00000-0000
-------------------------------
-------------------------------
Attention:
---------------------
NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
By: [Illegible Signature]
----------------------------------
Name: XXXX X. XXXXXXXXXX
----------------------------------
Title: AUTHORIZED SIGNATORY
----------------------------------
Principal Amount of Notes Owned or
Controlled: $3,000,000 Series A
----------------------
Address: Xxx Xxxxxxxxxx Xxxxx
-------------------------------
Xxxxxxxx, Xxxx 00000-0000
-------------------------------
-------------------------------
Attention:
---------------------
NATIONWIDE INDEMNITY COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxxx
-----------------------------
Title: Authorized Signatory
-----------------------------
Principal Amount of Notes Owned or
Controlled: $3,000,000 Series A
-----------------------
Address: Xxx Xxxxxxxxxx Xxxxx
--------------------------------
Xxxxxxxx, Xxxx 00000-0000
--------------------------------
Attention:
----------------------
THE CANADA LIFE ASSURANCE COMPANY
By: /s/ X.X. Xxxxxx
-------------------------------
Name: X.X. Xxxxxx
-----------------------------
Title: Assistant Vice President,
Investments, U.S. Operations
-----------------------------
By: /s/ Xxx Xxxxxxxx
--------------------------------
Name: Xxx Xxxxxxxx
------------------------------
Title: Manager, Investments,
-----------------------------
U.S. Operations
Principal Amount of Notes Owned or
Controlled: $5,000,000 Series B
-----------------------
Address: 8515 East Orchard Road, 3T2
--------------------------------
Xxxxxxxxx Xxxxxxx, XX 00000-0000
--------------------------------
Attention: Xxx Xxxxxx
----------------------
EXHIBIT A
AREC/AMERCO
TERM SHEET
This Term Sheet describes the principal terms of the proposed
restructuring and recapitalization of certain of the outstanding indebtedness
AMERCO Real Estate Company, a Nevada corporation ("AREC") and its parent,
("AMERCO"), pursuant to a plan of reorganization (the "Conforming Plan") in
accordance with (a) Chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code") and (b) the terms and conditions contained herein. This Term
Sheet has been produced for discussion and settlement purposes only and is not
an offer with respect to any securities or a solicitation of acceptances of the
Conforming Plan.
CERTAIN DEFINITIONS
"AREC" means AMERCO Real Estate Company.
"Effective Date" means the date the Conforming Plan becomes effective in
accordance with its terms and conditions.
"Term Loan A Notes" means the notes to be issued by the Debtors, as
reorganized, jointly and severally, on the Effective Date of the Conforming
Plan, in the aggregate face amount not to exceed $350,000,000.
"Term Loan B Notes" means the notes to be issued by the Debtors, as
reorganized, jointly and severally, on the Effective Date of the Conforming
Plan, in the aggregate face amount not to exceed $200,000,000.
"Debtor or Debtors" means, collectively, AMERCO, AREC, and any other
affiliates or subsidiaries of AMERCO or AREC who file voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code, other than PAC Fourteen, Inc.
and PAC Fifteen, Inc.
"New Notes" means, collectively, the Term Loan A Notes and the Term Loan B
Notes.
CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE
RESPECTIVE MEANINGS ASCRIBED TO THEM IN THAT CERTAIN RESTRUCTURING AGREEMENT,
BY AND AMONG, AREC AND THE NOTEHOLDERS SIGNATORY THERETO (THE "NOTEHOLDERS
RESTRUCTURING AGREEMENT").
TREATMENT OF NOTES
CLASSIFICATION: The Conforming Plan will place the claims of the
Noteholders in a single class, and such class will be
impaired and entitled to vote on the Conforming Plan.
CASH On the Effective Date of the Conforming Plan, the Consenting
DISTRIBUTIONS: Noteholders will receive the following cash distributions:
-- $65,000,000 in cash;
-- Additional cash in an amount equal to the sum of (a)
interest accrued and unpaid from October 15, 2002 up to the
AREC Petition Date, payable at the default rate; and (b)
interest accrued from the AREC Petition Date up to the
Effective Date, payable at the non-default rate.
DISTRIBUTION OF $18,600,000 (18.6% of remaining principal amount of the
NEW NOTES: Notes) exchanged for and satisfied with Term Loan A Notes
under the Emergence Facility in the par amount (net after
any discount) of $18,600,000, subject to the Syndication
Terms set forth in this Term Sheet.
$16,400,000 (16.4% of the remaining principal amount of the
Notes) exchanged for and satisfied with Term Loan B Notes
under the Emergence Facility in having an aggregate Market
Value (as defined below) of $16,400,000, subject to the
Syndication Terms set forth in this Term Sheet.
TERMS OF NEW As the New Notes are issued under the Emergence Facility,
NOTES: the New Notes (under both Term Loan A and Term Loan B) will
be identical to the notes issued under the Emergence
Facility and will be issued under the same credit agreement,
note purchase agreement, or comparable governing document,
and will be governed by and entitled to all of the same
benefits and terms as the Term Loan A Notes and Term Loan B
Notes, including borrowers, guarantors, maturity date, early
termination provisions, lien priority on collateral,
interest rate, fees, and all other terms of the Foothill
Term Sheet, subject to the qualification that the maturity
of the New Notes will not exceed 5 years from date of
issuance.
FEES: On the Effective Date, the Noteholders will be entitled to
receive 2% of the par amount of Term Loan B Notes actually
issued to the Noteholders.
SYNDICATION AMERCO will obtain ratings from the Term Loan B Notes from
RIGHTS: either Fitch, S&P or Xxxxx'x prior to the Effective Date.
1. If the Term Loan B Notes are syndicated as described
below, then the "Market Value" of the Term Loan B Notes
shall be the price (net after any discounts) at which Term
Loan B Notes are purchased in such syndication.
-ii-
2. AMERCO will use its best efforts to arrange for placement
of a portion of the Term Loan B Notes to "Market
Participants" (as defined below). The proceeds of any
commitments from new Market Participants (as described
below) above $30,000,000 aggregate face par amount of Term
Loan B Notes will be paid initially to the Revolver Lenders
until the total cash received by the Revolver Lenders equals
65% of the face amount of the credit facility, and all
proceeds thereafter will be paid, on a pro rata basis, to
the Revolver Lenders and Noteholders, in lieu of an equal
amount of Term Loan B Notes to reduce, on a pro rata basis,
the principal amounts required to be purchased by the
Revolver Lenders and the Noteholders.
3. In addition to any fees payable to the Noteholders as set
forth in this Term Sheet, to the extent the Term Loan B
Notes are offered or issued in a syndication with additional
fees, discounts, increased spreads, or other additional
compensations not already taken into account in the
determination of Market Value (whether paid pre- or
post-closing of the Term Loan B Notes, and including
anticipated flex fees), the Noteholders will fully
participate therein, on the same terms offered or issued to
each other holder of Term Loan B Notes.
4. If less than $20,000,000 of Term Loan B Notes are sold to
Market Participants on the same terms as issued to the
Noteholders, then the Noteholders will receive Term Loan A
Notes in the amount (net after any discount) of $16,400,000,
instead of any Term Loan B Notes, and the Noteholders will
not participate in the Term Loan B Notes. For purposes of
this Term Sheet, "Market Participants" shall be defined as
recognized institutional investors not affiliated with the
Debtors or with any "insider" (as that term is defined in
the Bankruptcy Code) of the Debtors.
NOTEHOLDER
FEES: The reasonable fees and expenses of the financial and legal
professionals retained by the Noteholders shall be paid on
the Effective Date of the Conforming Plan, including,
without limitation, fees, including success fees, due to
Houlihan, Lokey, Xxxxxx, & Zukin ("HLHZ") under that certain
Engagement Agreement between AREC and HLHZ.
TREATMENT OF REVOLVER LENDERS
CLASSIFICATION: The Conforming Plan will place the claims of the Revolver
Lenders under the Credit Agreement in a single class or
subclass, and such class or subclass will be impaired and
entitled to vote on the Conforming Plan.
-iii-
TREATMENT: The treatment of the Revolver Lenders under the Conforming Plan
will not be different in any material adverse respect from the
treatment of the Noteholders described in this Term Sheet, except
that:
1. The Revolver Lenders will be paid cash in the amount of
$51,250,000 (25% of the existing Credit Facility) from the
proceeds of the DIP Facility if the Debtors and the Revolver
Lenders execute a restructuring agreement evidencing the terms of
this Term Sheet on or before September 15, 2003;
2. The Revolver Lenders will be entitled to be paid, on the
Effective Date of the Conforming Plan, additional cash in the
amount of $71,750,000 (35% of the existing Credit Facility) if
the Debtors and the Revolver Lenders execute a restructuring
agreement evidencing the terms of this Term Sheet on or before
September 15, 2003;
3. $48,400,000 (23.6% of the remaining principal amount of the
Credit Facility) satisfied with Term Loan A Notes under the
Emergence Facility in the par amount (net after any discount) of
$48,400,000, subject to the Syndication Terms set forth in this
Term Sheet; and
4. $33,600,000 (16.4% of the remaining principal amount of the
Credit Facility) satisfied with Term Loan B Notes under the
Emergence Facility having an aggregate Market Value of
$33,600,000, subject to the Syndication Terms set forth in this
Term Sheet.
OTHER TERMS
RELEASE AND The Conforming Plan will contain release and exculpation
EXCULPATION provisions in substantially the following form:
PROVISIONS:
1. As of the Effective Date, the Debtors and reorganized Debtors
will be deemed to forever release, waive and discharge all
claims, obligations, suits, judgments, damages, demands, debts,
rights, causes of action and liabilities whatsoever in connection
with or related to the Debtors, the Chapter 11 Cases or the
Conforming Plan (other than the rights of the Debtors or
reorganized Debtors to enforce the Conforming Plan and the
contracts, instruments, releases, indentures, and other
agreements or documents delivered thereunder) whether liquidated
or unliquidated, fixed or contingent, matured or unmatured, known
or unknown, foreseen on unforeseen, then existing or thereafter
arising, in law, equity or otherwise that are based in whole or
part on any act, omission, transaction, event or other occurrence
taking place on or prior to the Effective Date in any way
relating to the Debtors, the
-iv-
reorganized Debtors, the Chapter 11 Cases or the Conforming
Plan, and that may be asserted by or on behalf of the
Debtors or their estates or the reorganized Debtors against:
(a) the directors, officers, employees, agents and
professionals as of the Debtors as of the AREC Petition Date
and thereafter, (b) the holders of prepetition lender
claims, (c) the DIP Facility agent and the holders of DIP
Facility claims, (d) each Consenting Noteholder and each
Revolver Lender, and (e) the directors, officers, employees,
agents, and professionals (as of the AREC Petition Date and
thereafter) of the entities released in subclauses (b)-(d).
2. As of the Effective Date, each prepetition lender, each
Consenting Noteholder and each Revolver Lender and each
holder of an impaired claim that affirmatively elects on the
ballot for voting on the Conforming Plan to do so, shall in
consideration for the obligations of the Debtors and the
reorganized Debtors under the Conforming Plan and the
securities, contracts, instruments, releases and other
agreements or documents to be delivered in connection with
the Conforming Plan, forever release, waive and discharge
all claims, obligations, suits, judgments, damages, demands,
debts, rights, causes of action and liabilities (other than
the rights to enforce the Debtors' or the reorganized
Debtors' obligations under the Conforming Plan and the
securities, contracts, instruments, releases and other
agreements and documents delivered thereunder), whether
liquidated or unliquidated, fixed or contingent, matured or
unmatured, known or unknown, foreseen or unforseen, then
existing or thereafter arising, in law, equity or otherwise
that are based in whole or in part on any act, omission,
transaction, event or other occurrence taking place on or
prior to the Effective Date in any way relating to the
Debtors, the reorganized Debtors, the Chapter 11 Cases, or
the Conforming Plan against: (a) the Debtors and the
reorganized Debtors, (b) the directors, officers, employees,
agents and professionals of the Debtors as of the AREC
Petition Date and thereafter, (c) the holders of prepetition
lender claims and the agents thereto, (d) the DIP Facility
agent and the holders of DIP Facility claims, (e) each
Consenting Noteholder and each Revolver Lender, and (f) the
directors, officers, employees, agents, and professionals
(as of the AREC Petition Date and thereafter) of the
entities released in subclauses (a)-(e) acting in such
capacity.
3. None of the Debtors, the reorganized Debtors, the
Consenting Noteholders, the Revolver Lenders, the holders of
DIP Facility claims, the DIP Facility agent, the holders of
prepetition lender claims, the agents thereto, nor any of
their respective present or former members, officers,
directors, employees, advisors, or attorneys shall have or
incur any liability to any holder of a claim or an interest,
or any other party in interest, or any of their respective
agents, employees,
-v-
representatives, financial advisors, attorneys, or affiliates, or
any of their successors or assigns, for any act or omission in
connection with, relating to, or arising out of, the Chapter 11
Cases, formulating negotiating or implementing the Conforming
Plan, the solicitation of acceptances of the Conforming Plan, the
pursuit of confirmation of the Conforming Plan, the confirmation
of the Conforming Plan, the consummation of the Conforming Plan,
or the administration of the Conforming Plan or the property to
be distributed under the Conforming Plan, except for their gross
negligence or willful misconduct, and in all respects shall be
entitled to reasonably rely upon the advice of counsel with
respect to their duties and responsibilities under the Conforming
Plan.
EMERGENCE On the Effective Date, the Debtors shall close the
FACILITY: Emergence Facility with substantially the terms and conditions
set forth in the Foothill Term Sheet.
All funded obligations outstanding under the DIP Facility on the
Effective Date shall be repaid from borrowings under the
Emergence Facility.
AGREEMENT OF On or before September 15, 2003, the Revolver Lenders shall
REVOLVER execute a restructuring agreement (a) containing terms and
LENDERS IN conditions substantially the same, in all material respects, with
SUPPORT OF the terms of this Term Sheet, including the financial
THIS restructuring of the Credit Facility as outlined herein, and (b)
TERM SHEET: including an agreement by the Revolver Lenders to support the
terms and conditions contained herein and in the Noteholders
Restructuring Agreement, including the financial restructuring of
the Notes as outlined herein and in the Noteholders Restructuring
Agreement.
-vi-
EXHIBIT B
AREC/AMERCO
FOOTHILL TERM SHEET
ANNEX A
AMERCO AND AMERCO REAL ESTATE COMPANY, ET AL.
FINANCING COMMITMENT
$300,000,000 DIP FACILITY
$650,000,000 EMERGENCE FACILITY
JUNE 19, 2003
--------------------------------------------------------------------------------
The proposed terms and conditions summarized herein represent the terms and
conditions pursuant to which Xxxxx Fargo Foothill, Inc., formerly known as
Foothill Capital Corporation ("Foothill"), will underwrite (i) a $300,000,000
debtor-in-possession credit facility (the "DIP Facility") for purposes of
financing Borrowers' operations during the contemplated Chapter 11
reorganization cases to be filed by Borrowers and Guarantors, and (ii) a
$650,000,000 credit facility (the "Emergence Facility") to be provided
concurrent with a confirmed reorganization plan acceptable to Foothill of the
respective Chapter 11 cases.
The proposed terms and conditions summarized herein with respect to the DIP
Facility and the Emergence Facility are provided to evidence the terms and
conditions by which Foothill hereby commits, in accordance with the terms of
the accompanying Commitment Letter, to provide financing to Borrowers and
Guarantors under the DIP Facility and the Emergence Facility.
--------------------------------------------------------------------------------
BORROWERS: DIP FACILITY: AMERCO, a Nevada corporation, Amerco Real
Estate Company and certain of their wholly-owned
subsidiaries as required by Foothill (collectively,
"Companies" or "Borrowers"), each as a debtor-in-possession
under cases to be filed under chapter 11 of the United
States Bankruptcy Code (the "Chapter 11 Cases").
EMERGENCE FACILITY: AMERCO, a Nevada corporation, Amerco
Real Estate Company, U-Haul International, Inc. and such
other of their wholly-owned subsidiaries and affiliates as
required by Foothill (collectively, "Companies" or
"Borrowers").
GUARANTORS: DIP FACILITY: All U.S. affiliates and subsidiaries of the
Companies (that are not direct Borrowers under the DIP
Facility) as required by Foothill, including, without
limitation, U-Haul International, Inc. and its subsidiaries
(together with Borrowers, each a "Loan Party" and
collectively, the "Loan Parties").
EMERGENCE FACILITY: All U.S. affiliates and subsidiaries of
the Companies (that are not direct Borrowers under the
Emergence Facility) as required by Foothill.
A-1
LEAD ARRANGER AND DIP FACILITY: Xxxxx Fargo Foothill, Inc., f/k/a
ADMINISTRATIVE Foothill Capital Corporation ("Agent" or "Foothill"),
AGENT: as lead arranger, collateral agent, syndication agent
and administrative agent.
EMERGENCE FACILITY: Foothill, as lead arranger,
administrative agent, collateral agent and syndication
agent.
FINANCING FACILITIES: TRANCHED FACILITIES: Two separate senior secured
credit facilities with Maximum Credit Amounts as
follows:
(1) A $300,000,000 debtor-in-possession credit
facility (the "DIP Facility"), with the Maximum Credit
Amount of $300,000,000 available upon the entry of a
final Order (the "Final Order") approving such
facility; and
(2) A $650,000,000 credit facility to be provided
concurrent with a confirmed reorganization plan of
Borrowers' and Guarantors' Chapter 11 cases acceptable
to Agent (the "Emergence Facility"). The DIP Facility
and the Emergence Facility shall collectively be
referred to as the "Financing Facilities."
APPROVAL OF DIP FACILITY: A senior secured credit
facility with a Maximum Credit Amount of $300,000,000
consisting of a revolving credit facility of up to
$200,000,000 ("DIP Revolver"), with a $25,000,000
subfacility for the issuance of letters of credit, plus
an interest only term loan facility of $100,000,000
("DIP Term Loan"). Aggregate loans and letters of
credit under the DIP Facility upon entry of the Final
Order will be limited to the lesser of (a)
$300,000,000, and (b) the Borrowing Base (as
hereinafter defined).
NOTE: The DIP Facility is being presented on the basis
that Borrowers will not seek approval on an interim
basis but will seek approval for the DIP Facility at a
final hearing.
EMERGENCE FACILITY: A senior secured credit facility
with a Maximum Credit Amount of $650,000,000 consisting
of (i) a revolving credit facility of up to
$200,000,000 ("Revolver"), with a $25,000,000
subfacility for the issuance of letters of credit, plus
(ii) a $350,000,000 amortizing term loan facility
("Term Loan A") with amortization thereon to be
determined, plus (iii) a $100,000,000 term loan
facility with no scheduled amortization payments ("Term
Loan B"). Aggregate loans and letters of credit under
the Revolver and Term Loan A of the Emergence Facility
will be limited to the lesser of (a) $550,000,000, and
(b) the Borrowing Base.
A-2
The Borrowing Base for the DIP Facility shall be 40% of
the fair market value of the Real Property Collateral with
respect to the DIP Revolver and the DIP Term Loan thereof.
The Borrowing Base for the Emergence Facility shall be 55%
of the fair market value of owned Real Property Collateral
and shall apply to the Revolver and Term Loan A thereof.
All such amounts would also be net of a reserve for
anticipated environmental remediation costs for certain
properties, a reserve for any title defects affecting the
Real Property Collateral (as defined below) deemed
unacceptable to Agent, and other customary and normal
reserves (including, without limitation, reserves for
Carve-Out Expenses) which may be established by Agent.
LETTERS OF CREDIT: Each letter of credit will be issued for the account of a
Borrower by Xxxxx Fargo Bank or another bank selected by
Agent, which shall be reasonably satisfactory to
Borrowers, and shall have an expiry date that is not later
than thirty (30) days prior to the Maturity Date (as
hereinafter defined) unless on or prior to the Maturity
Date such letter of credit shall be cash collateralized
in an amount equal to 105% of the face amount of such
letter of credit. Borrowers and Guarantors will be bound
by the usual and customary terms contained in the letter
of credit issuance documentation of the issuing bank and
Foothill.
MATURITY DATE: FINANCING UNDER THE DIP FACILITY: The earlier of (i) the
date which is twelve (12) months following the date of
entry of the Final Order, (ii) ten (10) days following the
date of entry of an Order confirming Borrowers' plan of
reorganization (a "Plan") in the Chapter 11 Cases
acceptable to Foothill, and (iii) the conversion of the
Chapter 11 Cases to cases under Chapter 7 of the
Bankruptcy Code (such earliest date, the "Maturity Date").
No confirmation order with respect to a Plan entered in
the Chapter 11 Cases will discharge or otherwise affect in
any way any of the joint and several obligations of the
Loan Parties to Foothill under the DIP Facility, other
than after the payment in full and in cash to Foothill of
all obligations under the DIP Facility on or before the
effective date of the Plan.
EMERGENCE FACILITY: Five (5) years from closing date of
the Emergence Facility (the "Emergence Facility Maturity
Date").
A-3
EARLY TERMINATION: Termination of the Emergence Facility prior to the
Emergence Facility Maturity Date shall be subject to a
prepayment premium payable to Foothill equal to the
percentage set forth in the following schedule of then
applicable Maximum Credit Amount for each full and
partial month remaining to the Emergence Facility
Maturity Date:
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
2.00%
1.50%
1.00%
0.00%
0.00%
Other customary prepayments to be included in definitive
loan documentation (including sale of assets, casualty
events, etc.), subject to levels to be negotiated.
CLOSING DATE: With respect to the DIP Facility on the earlier of (i)
July 31, 2003, or (ii) thirty (30) business days
following execution of the accompanying Commitment
Letter and satisfying the terms thereof (specifically
including payment of any required fees), subject only to
the Bankruptcy Court having entered the Final Order in
form and substance reasonably satisfactory to Foothill.
Borrowings under the DIP Facility are subject to entry
of the Final Order, in form and substance reasonably
satisfactory to Foothill.
COLLATERAL: DIP Facility: All obligations of the Loan Parties to
Foothill shall he: (a) entitled to super-priority
administrative expense claim status pursuant to Section
364(c)(1) of the Bankruptcy Code in each Chapter 11
Case, subject only to (i) the payment of allowed
professional fees and disbursements incurred by the Loan
Parties and any official committees appointed in the
Chapter 1I Cases, in an aggregate amount not in excess
of $5,000,000 (plus all unpaid professional fees and
disbursements incurred, accrued or invoiced prior to the
Occurrence of an Event of Default, to the extent allowed
by the Bankruptcy Court) (ii) the payment of fees
pursuant to 28 U.S.C. Section 1930 (collectively, the
"Carve-Out Expenses") and (b) secured pursuant to
Sections 364(c)(2), (c)(3) and (d) of the Bankruptcy
Code by a security interest in
A-4
and lien on all now owned or hereafter acquired property
and assets of the Loan Parties, both tangible and
intangible, and real property (the "Real Property
Collateral") and personal property (including, without
limitation, capital stock or other equity interests of
their subsidiaries), and the proceeds thereof, excluding
(i) Borrowers' real estate subject to any currently
existing synthetic lease arrangements and to the
existing promissory notes issued to Amerco Real Estate
Company by SAC Holdings and its subsidiaries, and (ii)
causes of action arising under Sections 502(d), 544,
545, 547, 548, 549, 550 or 551 of the Bankruptcy Code.
The security interests in and liens on the
aforementioned assets of the Loan Parties shall be first
priority, senior secured liens not subject to
subordination, but subject to the Carve-Out Expenses.
Emergence Facility: Subject to a confirmed Plan
acceptable to Foothill, all obligations of the Loan
Parties to Foothill shall be secured by a first priority
perfected security interest in substantially all the
assets of Borrowers and Guarantors, but excluding (i) the
existing promissory notes issued to Amerco Real Estate
Company by SAC Holdings and its subsidiaries and (ii)
Borrowers' real estate subject to any currently existing
synthetic lease arrangements. The Emergence Facility
shall include provisions authorizing the granting of a
junior lien in substantially all of the assets of
Borrowers in favor of those parties receiving new notes
in connection with the confirmed Plan, subject to an
intercreditor agreement, the terms and conditions of
which shall be satisfactory to Foothill. Such
intercreditor agreement shall, at a minimum, provide for
both lien subordination and payment subordination and
shall, in all respects, be a "deeply subordinated'
instrument.
All borrowings by Borrowers, all reimbursement
obligations with respect to letters of credit, all
costs, fees and expenses of Foothill, and all other
obligations owed to Foothill shall be secured as
described above and charged to the loan account to be
established under the Facilities.
INTEREST RATES: Advances outstanding under the DIP Facility shall bear
interest, at Borrowers' option, at (a) the LIBOR Rate
plus 3.50%, or (b) the Base Rate plus 1.00%.
Advances outstanding under (i) the Emergence Facility
Revolver would bear interest, at Borrowers' option, at
(a) the LIBOR Rate plus 4.00%, or (b) the Base Rate plus
1.00%, and (ii) advances outstanding under the Emergence
Facility Term Loan A would bear interest at the LIBOR
Rate plus 4.00%. In addition, the interest rate could be
periodically reduced subject to Borrowers
A-5
achieving certain financial performance and leverage
ratios ("Performance Pricing Grid") to be determined.
Advances outstanding under the Emergence Facility Term
Loan B would bear interest at (i) the greater of the
Base Rate plus 4.75% (ii) or 9.00% per annum; provided
that 1.75% of such interest will be payment-in-kind
(PIK).
As used herein (x) "Base Rate" means the rate of
interest publicly announced from time to time by Xxxxx
Fargo Bank, N.A. at its principal office in San
Francisco, California, as its reference rate, base rate
or prime rate. The LIBOR Rate means the rate per annum,
determined by Foothill in accordance with its customary
procedures, at which dollar deposits are offered to
major banks in the London interbank market, adjusted by
the reserve percentage prescribed by governmental
authorities as determined by Foothill. With respect to
the Emergence Facility only, at no time shall the LIBOR
Rate utilized prior to application of the appropriate
margin be less than 2.00%. All interest and fees for the
Financing Facilities shall be computed on the basis of a
year of 360 days for the actual days elapsed. If any
Event of Default shall occur, interest shall accrue
under the Facilities at a rate per annum equal to 2.00%
in excess of the rate of interest otherwise in effect.
FEES: Unused Line Fee One half of one percent (0.50%) on
(for the Financing the unused portion of the
Facilities): respective Revolver Facility,
payable monthly in arrears.
Letter of Credit Three and one-half percent (3.50%)
Fees (for the per annum of the face amount of
Financing each letter of credit issued under
Facilities): the DIP Facility and four percent
(4.00%) per annum of the face
amount of each letter of credit
issued under the Emergence
Facility, in each case, payable
monthly in advance, plus the
customary charges imposed by the
letter of credit issuing bank.
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Field Examination Without limiting the foregoing,
Fee (for the Borrowers would be required to pay
Financing (a) a fee of $850 per day, per
Facilities): analyst, plus out-of-pocket
expenses, for each financial audit
of Borrowers performed by personnel
employed by Foothill, and (b) the
actual charges paid or incurred by
Foothill if it elects to employ the
services of one or more third
parties to perform financial audits
of Borrowers, to appraise
Borrowers' collateral, or to assess
Borrowers' business valuation.
Borrowers shall also pay all applicable fees set forth
in one or more of the fee letters of even date herewith
(collectively, the "Fee Letters").
USE OF PROCEEDS: DIP Facility: To refinance a certain amount of Amerco's
existing $205 million revolving credit facility and fund
working capital in the ordinary course of business
(including for the fees and transaction costs in
connection with the DIP Facility and for the payment of
such pre-petition claims as may be permitted by the
Court pursuant to "first day" orders or other
pre-petition claims permitted under the DIP Facility)
with agreed limitations on use of proceeds to fund or
capitalize non-debtor entities affiliated with Borrowers
and Guarantors.
Emergence Facility: To refinance the DIP Facility, fund
Borrowers' confirmed Plan and for general corporate
purposes including the financing of working capital and
capital expenditures.
CONDITIONS The obligation of Foothill to make any loans in
PRECEDENT: connection with the DIP Facility will be subject to
customary conditions precedent including, without
limitation, the following:
(a) Execution and delivery of appropriate legal
documentation in form and substance satisfactory
to Foothill and the satisfaction of the conditions
precedent contained therein.
(b) Amerco Real Estate Company shall have become a
debtor-in-possession under the Chapter 11 Cases
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(c) No material adverse change in the business
operations, assets, financial condition or
prospects of Borrowers and Guarantors ("Material
Adverse Change") other than the filing of the
Chapter 11 Cases and the events resulting from the
filing of the Chapter 11 Cases, as determined by
Foothill in its sole discretion.
(d) Entry of the Final Order in the Chapter 11 Cases,
reasonably satisfactory in form and substance to
Foothill, which Final Order (i) shall approve the
transactions contemplated herein, grant the super
priority administrative expense claim status and
senior liens referred to above, (ii) shall not
have been reversed, modified, amended, stayed or
vacated, and (iii) shall have been entered no
later than July 31,2003.
(e) Foothill shall have been granted a deemed
perfected, first priority senior lien on all
Collateral, as defined earlier. Foothill shall
have received real estate UCC, tax and judgment
lien searches and other appropriate evidence,
confirming the absence of any liens on the
Collateral, except existing liens acceptable to
Foothill. Foothill acknowledges that it has
already reviewed real estate title reports on over
95% of Borrowers' properties, have negotiated a
form of title insurance commitment and have
reviewed issued title insurance commitments on
over 350 of Borrowers' properties.
(f) Opinions from the Loan Parties' counsel as to such
matters as Foothill and its counsel may reasonably
request.
(g) Insurance satisfactory to Foothill, such insurance
to include liability insurance for which Foothill,
will be named as an additional insured and
property insurance with respect to the Collateral
for which Foothill will be named as loss payee.
(h) Foothill's completion of and satisfaction in all
respects with the results of its ongoing due
diligence investigation of the business, assets,
operations, properties (including compliance with
FIRREA), condition (financial or otherwise),
contingent liabilities, prospects and material
agreements of Borrowers and their respective
Subsidiaries.
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(i) Borrowers shall have paid to Foothill all fees and
expenses, including all appraisal fees and
expenses, then owing to Foothill.
(j) Receipt of the Budget as provided to the
Bankruptcy court.
(k) Borrowers shall, at loan closing, have a minimum
of $40,000,000 in the aggregate of unrestricted
cash and available but unused credit availability
(defined as the difference between (i) the lesser
of the (X) the Borrowing Base or (Y) $300,000,000
and (ii) the sum of the loans and LC's
outstanding) under the DIP Facility.
(l) Satisfying any conditions precedent in the
Commitment Letter.
Emergence Facility:
The obligation of Foothill to make any loans or assist
in the issuance of any letters of credit in connection
with the $6,50,000.000 Emergence Facility will be
subject to customary conditions precedent including,
without limitation, the following:
(a) Foothill shall have closed the DIP Facility
with Borrowers as provided herein.
(b) Receipt of evidence of the entry of a final
Order confirming Borrowers' Plan and
accompanying disclosure statement, and
satisfaction of all other conditions to the
confirmation of such Plan, which Plan,
disclosure statement, and confirmation Order
shall be in form and substance reasonably
acceptable to Foothill and which Plan will
include, among things, a level of assets
both in number and value, acceptable to
Foothill.
(c) Receipt of management's projections and
business plan for the succeeding twelve (12)
month period on a month- by-month basis and
the succeeding four year period on an annual
basis in form and substance acceptable to
Foothill.
(d) Payment of all reasonable fees and expenses
owing to Foothill in connection with the
Emergence Facility.
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(e) Execution and delivery of appropriate legal
documentation in form and substance satisfactory to
Foothill and the satisfaction of the conditions
precedent contained therein and delivery of all
appropriate opinions of counsel relating thereto,
reasonably satisfactory in all respects to Foothill.
(f) Payment in full of obligations owing and amounts
outstanding under the DIP Facility.
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(g) Foothill shall have been granted a perfected, first
priority lien on all Collateral including without
limitation mortgages on all owned real property in form
and substance satisfactory to Foothill. Foothill shall
have received real estate, UCC, tax and judgment lien
searches and other appropriate evidence, confirming the
absence of any liens on the Collateral, except
existing liens acceptable to Foothill.
(h) No default or event of default shall exist under the
loan documents for the DIP Facility or the Emergence
Facility, and no pending claim, investigation or
litigation by any governmental entity shall exist with
respect to the Loan Parties or the transactions
contemplated hereby.
(i) The absence of (i) a Material Adverse Change in the
business operations, assets, condition (financial or
otherwise) or prospects of Borrowers and Guarantors
since March 31, 2002, as determined by Foothill in its
sole discretion, other than (x) the filing of the
Chapter 11 Cases and the events resulting from the
filing of the Chapter 11 Cases, (y) the withdrawal by
PriceWaterhouseCoopers of its audit letter with respect
to the Borrowers' financial statements for the fiscal
year ended as of March 31, 2002, and (z) such other
matters as have been disclosed in writing by Borrowers
to Foothill on or before June 20, 2003 or (ii) an
adverse change or disruption in the loan syndication,
financial, banking or capital markets generally that, in
Foothill's judgment, could materially impair the
syndication of the Emergence Facility.
(j) Foothill's commencement and completion of, and
satisfaction in all respects with, the results of its
ongoing due diligence investigation of the business,
assets, operations, properties, condition (financial or
otherwise), contingent liabilities, prospects and
material agreements of Borrowers and their respective
Subsidiaries.
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REPRESENTATIONS Usual representations and warranties, including, but
AND WARRANTIES: not limited to, corporate existence and good
standing, permits and licenses, authority to enter
into the respective loan documents, occurrence of the
closing date for the respective Financing Facilities,
validity of the Final Order, governmental approvals,
non-violation of other agreements, financial
statements, litigation, compliance with
environmental, pension and other laws. taxes.
insurance, absence of Material Adverse Change,
absence of default or unmatured default and priority
of Foothill's liens.
COVENANTS: With respect to the DIP Facility, Borrowers will be
required to maintain agreed upon minimum levels of
EBITDA, EBITDAR and fixed charge coverage ratios.
With respect to the Emergence Facility, Borrowers
will be required to maintain agreed upon minimum
levels of EBITDA. EBITDAR, leverage and fixed charge
coverage ratios. All such covenants will be not less
than 80% of Borrowers' projected operating
performance. Borrowers will also have a limitation on
capital expenditures (to be determined). All such
financial covenants shall be tested quarterly.
Financial reporting shall include, without
limitation, the delivery to Agent of monthly
financial statements, audited annual financial
statements and annual updated projections and any
financial and other reporting material filed in the
Bankruptcy Cases or shared with any Committees
appointed in the Bankruptcy Cases.
Other customary covenants (both positive and
negative), including, but not limited to, notices of
litigation, defaults and unmatured defaults and other
information (including pleadings, motions,
applications and other documents filed with the
Bankruptcy Court or distributed to any official
committee appointed in the Chapter 11 Cases),
compliance with laws, permits and licenses,
inspection of properties, books and records,
maintenance of insurance, limitations with respect to
liens and encumbrances, dividends, retirement of
capital stock and repurchases of subordinated debt
(except for certain repurchases to be agreed upon
based on performance ratios and liquidity at levels
to be determined at the time of the proposed
repurchase), guarantees, sale and lease back
transactions, consolidations and mergers,
investments, capital expenditures, loans and
advances, indebtedness, compliance with pension,
environmental and other laws, operating leases,
transactions with affiliates and prepayment of other
indebtedness.
CASH MANAGEMENT: Borrowers shall institute a cash management system
satisfactory to Agent, including without limitation,
establishing one or more concentration accounts at
financial institutions acceptable to
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Agent.
EVENTS OF DEFAULT: Usual events of default, including, but not limited
to, payment, cross-default, violation of covenants,
breach of representations or warranties, judgments,
ERISA, environmental, change of control and other
events of default which are customary in facilities
of this nature.
In addition, an Event of Default shall occur if (i)
(A) any of the Chapter 11 Cases shall be dismissed or
converted to a chapter 7 case, a chapter 11 trustee
or an examiner with enlarged powers shall be
appointed in any of the cases, any other
superpriority administrative expense claim which IS
senior to or pan passu with Foothill's claims shall
be granted and the Final Order shall be stayed,
amended, modified, reversed or vacated; (B) a Plan
shall be confirmed in any of the Chapter 11 Cases
which does not provide for termination of the
commitment under the DIP Facility and payment in full
in cash of the Loan Parties' obligations thereunder
on the effective date of the Plan; or an order shall
be entered which dismisses any of the Loan Parties'
Chapter 11 Cases and which order does not provide for
termination of the Financing Facility then
outstanding and payment in full in cash of all
obligations thereunder; (C) the Loan Parties shall
take any action, including the filing of an
application, in support of any of the foregoing or
any person other than the Loan Parties shall do so
and such application is not contested in good faith
by the Loan Parties and the relief requested is
granted in an order that is not stayed pending
appeal; (ii) the Bankruptcy Court shall enter an
order granting relief from the automatic stay to the
holder of any security interest in any asset of the
Loan Parties having a book value in an amount equal
to or exceeding an amount to be agreed upon; and
(iii) such other similar Events of Default as are
usual and customary in DIP credit facilities.
GOVERNING LAW: All documentation in connection with the Financing
Facilities shall be governed by the laws of the State
of New York applicable to agreements made and
performed in such State except as governed by the
Bankruptcy Code.
ASSIGNMENTS AND Foothill shall be permitted to assign its rights and
PARTICIPATIONS: obligations hereunder, or any part thereof, to any
person or entity without the consent of the Loan
Parties. Foothill shall be permitted to grant
participations in such rights and obligations, or any
part thereof, to any person or entity without the
consent of the Loan Parties.
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EXPENSES: The Loan Parties shall pay on demand all fees and
expenses of Foothill (including legal fees, financial
consultant fees (if any), audit fees, search fees,
filing fees, and documentation fees, and expenses in
excess of the Deposit), incurred in connection with
the transactions contemplated by this Term Sheet,
whether or not such transactions close.
SYNDICATION: Foothill shall underwrite the DIP Facility and
syndicate to other qualified financial institutions
and, to the extent set forth in the Commitment
Letter, Foothill shall underwrite the Emergence
Facility and syndicate to other qualified financial
institutions.
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