SECURITY AND COLLATERAL AGENCY AGREEMENT
Exhibit
10.86
THIS
SECURITY AND COLLATERAL AGENCY AGREEMENT (this “Security
Agreement”),
dated
as of May 31,
2006
is entered into by and among U-Haul Leasing & Sales Co., a Nevada
corporation, U-Haul Co. of Arizona, an Arizona corporation, and U-Haul
International, Inc., a Nevada corporation (“UHI”)
(collectively, the “Borrowers”),
BTMU
Capital Corporation, a Delaware corporation (with its successors, indorsees,
transferees and assigns, in such capacity, the “Lender”)
and
Orange
Truck Trust 2006,
a
Utah common law trust (with its successors, indorsees, transferees and assigns,
the “Collateral
Agent”).
RECITALS
A. Pursuant
to a Credit Agreement, dated as of May 31,
2006
(the “Credit
Agreement”),
between the Borrowers, U-Haul International, Inc., as Servicer/Manager and
Guarantor (the “Servicer/Manager”),
AMERCO, as Guarantor, the Collateral Agent and the Lender, the Lender has agreed
to extend certain credit facilities to the Borrowers to finance the purchase
of
certain new Vehicles (as defined below), upon the terms and subject to the
conditions set forth therein.
B. The
parties hereto desire to arrange for the appointment of the Collateral Agent
and
enter into certain related covenants and agreements, as specified
herein.
C. The
Lender’s obligation to extend the credit facilities to the Borrowers under the
Credit Agreement and the Hedge Provider’s obligation to enter into any Hedge are
subject, among other conditions, to receipt by the Lender and the Collateral
Agent of this Security Agreement, duly executed by the Borrowers.
AGREEMENT
NOW,
THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Borrowers hereby agree with the Lender as follows:
Definitions
and Interpretation.
(a) Definitions.
When
used in this Security Agreement, the following terms shall have the following
respective meanings:
“Account
Bank”
means,
as applicable, the Collection Account Bank or the Collection Sub-Account
Bank.
“Account
Debtor”
has
the
meaning given to that term in subsection 9(g) hereof.
“Borrowers”
has
the
meaning given to that term in the introductory paragraph hereof.
“BTMUCC”
means
BTMU Capital Corporation, a Delaware corporation.
“Collateral”
has
the
meaning given to that term in Section 3(a) hereof.
“Collateral
Agent”
has
the
meaning given to that term in the introductory paragraph hereof, in such
capacity, on behalf of the Lender.
“Credit
Agreement”
has
the
meaning given to that term in Recital
A
hereof.
“Dealer
List”
means
a
list in electronic format, delivered by or on behalf of the Borrowers to the
Lender as updated from time to time in accordance with Section 8.01(g) of the
Credit Agreement.
“Equipment”
has
the
meaning given to that term in Attachment
1
hereto.
“Guarantors”
means
each of UHI and AMERCO, as guarantors under the Guarantee
Agreement.
“Hedge
Provider”
means
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as swap counterparty,
or any other counterparty acceptable to the Lender.
“Inventory”
has
the
meaning given to that term in Attachment
1
hereto.
“Lender”
has
the
meaning given to that term in the introductory paragraph hereof.
“Loan
Documents”
means
the Credit Agreement, the Note, the Guarantee Agreement, the Structuring Fee
Letter, the Collection Sub-Account Control Agreement, the Collection Account
Control Agreement, the Hedge and this Security Agreement.
“Officer’s
Certificate”
means,
unless otherwise specified in this Security Agreement, a certificate delivered
to the Collateral Agent signed by the chairman of the board, the president,
any
executive vice president, any director, any managing director, any vice
president, the treasurer or the controller, the assistant treasurer or any
other
authorized officer of the Lender.
“Opinion
of Counsel”
means
a
written opinion of legal counsel satisfactory to the Collateral Agent, which
counsel may be an employee of the Collateral Agent or an Affiliate or may from
time to time provide legal services to the Collateral Agent or an
Affiliate.
“Proceeds”
means
all proceeds of, and all other profits, products, rentals or receipts, in
whatever form, arising from the collection, sale, lease, exchange, assignment,
licensing or other disposition of, or other realization upon, any Collateral,
including, without limitation, all claims of the Borrowers against third parties
for loss of, damage to or destruction of, or for proceeds payable under, or
unearned premiums with respect to, policies of insurance in respect of, any
Collateral, any payments with respect to a Warranty and all claims of the
Borrowers against the provider of any such Warranty, and any condemnation or
requisition payments with respect to any Collateral, in each case whether now
existing or hereafter arising, provided that, with respect to any Vehicle,
“Proceeds” shall not include any dealer commissions, licensing fees, maintenance
costs and insurance expenses owing under the Dealership Contracts.
“Receivables”
has
the
meaning given to that term in Attachment
1
hereto.
“Secured
Obligations”
means
the obligations secured under this Security Agreement, including (a) all
principal of and interest (including, without limitation, any interest which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of any Borrower, whether or
not
allowed or allowable as a claim in any such case, proceeding or other action)
on
any Loan to the Borrowers under the Credit Agreement; (b) all other liabilities,
debts, obligations, or amounts, howsoever arising, payable by the Borrowers
to
the Lender (whether evidenced by any note or instrument and whether for the
payment of money), direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, under the Credit Agreement or under
any
other Loan Document, including without limitation all interest, fees, charges,
expenses, attorneys’ fees and accountants’ fees chargeable to the Borrowers or
payable by the Borrowers thereunder; (c) any renewals or extensions of any
of
the foregoing; (d) all obligations owing to the Hedge Provider pursuant to
any
Hedge and (e) all other obligations of the Borrowers or their Affiliates under
any Loan Document.
“Secured
Parties”
means
the Lender and the Hedge Provider.
“UCC”
means,
unless otherwise stated, the Uniform Commercial Code as in effect in the State
of New York as of the date hereof.
“Vehicle”
means
a
new motor vehicle owned by any Borrower and constituting part of the Borrowers’
fleet of rental assets as identified on the Vehicle Schedule delivered by the
Borrowers to the Lender under the Credit Agreement, a copy of which is attached
hereto as Attachment
4
(as the
same may be updated from time to time).
“Warranty”
means
any warranty with respect to any Vehicle or any component parts thereof, whether
from the dealer, seller or manufacturer of such Vehicle or any third party
warranty provider, relating to the merchantability of such Vehicle or parts
or
the life or performance of such Vehicle or parts and all available remedies
thereunder, including payment, replacement, repair, substitution or other
remedies.
(b) Other
Defined Terms.
Unless
otherwise defined herein, all other capitalized terms used herein and defined
in
the Credit Agreement have the respective meanings given to those terms in the
Credit Agreement, and all terms defined in the UCC in the applicable
jurisdiction have the respective meanings given to those terms in the UCC in
the
applicable jurisdiction.
(c) Other
Interpretive Provisions.
The
rules of construction set forth in Section 1.02 of the Credit Agreement shall,
to the extent not inconsistent with the terms of this Security Agreement, apply
to this Security Agreement and are hereby incorporated by
reference.
Appointment
of a Collateral Agent.
(a) The
Lender appoints Orange
Truck Trust 2006
as
Collateral Agent under this Security Agreement. Orange
Truck Trust 2006
accepts
such appointment and agrees to perform the duties of the Collateral Agent under
this Security Agreement.
(b) The
Collateral Agent will, all for the benefit of the Secured Parties:
hold
a
security interest in the Collateral for the benefit of the Secured
Parties;
protect
its interest in the Collateral upon an Event of Default (A) by entering into
(I)
the Collection Account Control Agreement, that certain blocked account control
agreement (shifting control), dated as of May 31,
2006,
among JPMorgan Chase Bank, N.A, and its successors, or another depositary
institution mutually acceptable to the Lender and the Borrowers (the
“Collection
Account Bank”),
the
Servicer/Manager and the Collateral Agent, and (II) the Collection Sub-Account
Control Agreement, that certain blocked account control agreement (automatic
sweep/frozen account), dated as of May 31,
2006
among the Collection Account Bank, the Servicer/Manager and the Collateral
Agent, and (B) by being named on the Certificates of Title of the Vehicles
as
secured party as provided in this Security Agreement;
take
such
action as is necessary or advisable, or as determined by the Lender to be
necessary or advisable, to authorize and file all financing statements,
continuation statements, instruments of further assurance and other instruments
and other evidence of its perfected security interest in the Vehicles, and
any
amendments to the foregoing, prior to closing, naming itself as “secured party”,
“lienholder” or the like, and shall take such action determined by the Lender to
be necessary or advisable (including recording such financing statements,
continuation statements, amendments or other instruments in a public filing
office) to (A) perfect, publish notice of or protect the validity of any
security interest granted pursuant to this Security Agreement, (B) enforce
the
Collateral, or (C) preserve and defend title to the Collateral and the rights
of
the Collateral Agent in such Collateral against the claims of all Persons;
and
take
the
actions required to be taken by the Collateral Agent pursuant to Section 4
following an Event of Default.
Grant
of Security Interest.
(a)
As
security for the Secured Obligations, the Borrowers, jointly and severally,
hereby pledge and assign to the Collateral Agent, as agent on behalf of the
Secured Parties, and their respective successors, indorsees, transferees and
assigns, and grant to the Collateral Agent, on behalf of the Secured Parties,
a
security interest in all right, title and interest of the Borrowers in and
to
the property whether now owned or hereafter acquired described in Attachment
1
hereto,
as such Attachment may be amended or supplemented from time to time after the
date hereof by a supplemental Vehicle Schedule delivered by the Borrowers to
the
Collateral Agent and the Lender (collectively and severally, the “Collateral”),
which
Attachment
1
is
incorporated herein by this reference.
(b) The
Collateral Agent acknowledges such grant and agrees to perform the duties
required in this Security Agreement so that the interests of the Secured Parties
may be adequately and effectively protected.
(c)
Upon
the
release of Collateral as set forth in the Credit Agreement, and upon the request
of, and at the expense of the Borrowers, the Collateral Agent shall execute
and
file such releases or assignments of financing statements or, UCC termination
statements and other documents and instruments as may be reasonably requested
by
the Borrowers to effectuate release of the Collateral. The Collateral Agent
will
not have legal title to any part of the released Collateral on and will have
no
further interest in or rights with respect to such Collateral.
Duties
of the Collateral Agent.
(a) If
an
Event of Default has occurred and is continuing with respect to any Secured
Obligations, the Collateral Agent, acting at the direction of the Lender, shall
exercise the rights and remedies with respect to the Collateral of a secured
party under the UCC to the extent permitted by applicable law. In connection
with the exercise of any rights or remedies with respect to the Collateral,
the
Collateral Agent acknowledges that it shall hold or possess any Collateral
solely for the benefit of the Secured Parties (except to the extent of any
excess Collateral that remains after the obligations of the Secured Parties
have
been paid in full).
(b) The
Collateral Agent, at the direction of the Lender, shall apply all or any part
of
proceeds realized from recourse against the Collateral in the following order
of
priority:
(i) to
the
payment of the Secured Obligations in the priorities specified in the Credit
Agreement; and
(ii) to
the
payment of all remaining amounts to the Borrowers or whosoever shall be lawfully
entitled to receive the same.
(c) Except
during the continuance of an Event of Default:
(i) the
Collateral Agent undertakes to perform such duties and only such duties as
are
specifically set forth in this Security Agreement and no implied covenants
or
obligations are to be read into this Security Agreement against the Collateral
Agent; and
(ii) in
the
absence of bad faith on its part, the Collateral Agent may conclusively rely,
as
to the truth of the statements and the correctness of the opinions furnished
to
it, upon any certificates or opinions furnished to it and, if required by the
terms of this Security Agreement, conforming to the requirements of this
Security Agreement, provided that the Collateral Agent will examine any such
certificates and opinions to determine whether or not they conform on their
face
to the requirements of this Security Agreement.
(d) The
Collateral Agent will not be liable for any action it takes or omits to take
in
the absence of bad faith which it believes to be authorized or within its rights
or powers. However, the Collateral Agent may not be relieved from liability
for
its own willful misconduct, negligence or bad faith, except that:
(i) the
Collateral Agent will not be liable for any error of judgment made in the
absence of bad faith by Related Parties unless it is proved that the Collateral
Agent was negligent in ascertaining the pertinent facts; and
(ii) the
Collateral Agent will not be liable with respect to any action it takes or
omits
to take in the absence of bad faith in accordance with a direction received
by
it from the Lender with respect to the exercise of remedies pursuant to this
Security Agreement or other Loan Documents.
(e) The
Collateral Agent, if it has reasonable grounds to believe that repayment of
funds advanced by it or adequate indemnity satisfactory to it against such
risk
or liability is not reasonably assured to it, is not required to expend or
risk
its own funds or otherwise incur financial liability in the performance of
any
of its duties under this Security Agreement or in the exercise of any of its
rights or powers by any provision of this Security Agreement.
(f) Every
provision of this Security Agreement relating to the conduct or affecting the
liability of or affording protection to the Collateral Agent is subject to
the
provisions of this Section 4.
(g) The
Collateral Agent will not be charged with knowledge of the occurrence of any
Event of Default unless either (i) Related Parties of the Collateral Agent
have
actual knowledge of such occurrence or (ii) notice of such occurrence has been
given to the Collateral Agent in accordance with the Loan
Documents.
Rights
of the Collateral Agent.
(a) Before
the Collateral Agent acts or refrains from acting, it may require an Officer’s
Certificate or an Opinion of Counsel. The Collateral Agent will not be liable
for any action it takes or omits to take in the absence of bad faith in reliance
on an Officer’s Certificate or Opinion of Counsel. However, the Collateral Agent
will examine any such Officer’s Certificates and Opinions of Counsel to
determine whether or not they conform on their face to the requirements of
this
Security Agreement.
(b) The
Collateral Agent may execute any of the trusts or powers under this Security
Agreement or perform any duties under this Security Agreement either directly
or
by or through agents or attorneys or a custodian or nominee, and the Collateral
Agent will not be responsible for any misconduct or negligence on the part
of,
or for the supervision of, any such agent, counsel, custodian or nominee
appointed with due care by it under this Security Agreement.
(c) The
Collateral Agent may consult with counsel, and the advice or opinion of counsel
with respect to legal matters relating to this Security Agreement will be full
and complete authorization and protection from liability in respect to any
action taken, omitted or suffered by it under this Security Agreement in the
absence of bad faith and in accordance with the advice or opinion of such
counsel.
(d) The
Collateral Agent may rely and will be protected in acting or refraining from
acting upon any resolution, certificate, statement, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Collateral Agent need not investigate any fact or matter stated
in
any such document.
(e) The
Collateral Agent will not be (a) responsible for, and does not make any
representation as to, the validity or adequacy of this Security Agreement,
(b)
accountable for the Borrower’s use of the funds advanced under the Credit
Agreement, or (c) responsible for any statement of the Borrower in this Security
Agreement.
Compensation.
Borrowers
will pay or cause to be paid to Collateral Agent as compensation for the
Collateral Agent’s services under this Security Agreement such fees as have been
separately agreed upon on the date of this Security Agreement between Borrowers
and the Collateral Agent. The Collateral Agent’s compensation will not be
limited by any law on compensation of a trustee of an express trust. Borrowers
will reimburse the Collateral Agent (or cause the Collateral Agent to be
reimbursed) for all reasonable out-of-pocket expenses incurred or made by the
Collateral Agent, including costs of collection, and the reasonable
compensation, expenses and disbursements of the Collateral Agent’s agents,
counsel, accountants and experts, but excluding any expenses incurred by the
Collateral Agent through the Collateral Agent’s own willful misconduct,
negligence or bad faith.
Replacement
of Collateral Agent.
(a) No
resignation or removal of the Collateral Agent, and no appointment of a
successor Collateral Agent, will become effective until the acceptance of
appointment by the successor Collateral Agent reasonably acceptable to the
Lender pursuant to this Section 7. The Collateral Agent may resign by notifying
the Lender and the Borrowers. The Lender may remove the Collateral Agent at
any
time with or without cause by notifying other parties to this Security Agreement
and following such removal or resignation may appoint a successor Collateral
Agent. Following the removal or resignation of any Person in the capacity of
Collateral Agent, the obligations (solely in the case of obligations performed,
or required to be performed, prior to such termination) of such Person in such
capacity will terminate.
(b) If
the
Collateral Agent resigns or is removed or if a vacancy exists in the office
of
the Collateral Agent for any reason, the Lender will appoint a successor
Collateral Agent promptly.
(c) Any
successor Collateral Agent must execute and deliver an acceptance of its
appointment to the retiring Collateral Agent, the Lender and each other party
to
this Security Agreement, and thereupon the resignation or removal of the
retiring Collateral Agent will become effective, and such successor Collateral
Agent will have all the rights, powers, duties and obligations of the Collateral
Agent under this Security Agreement. Borrower will pay all amounts owed to
the
retiring Collateral Agent upon the retiring Collateral Agent’s resignation or
removal. The retiring Collateral Agent will promptly transfer all property
held
by it as Collateral Agent to the successor Collateral Agent.
(d) If
a
successor Collateral Agent does not take office within 60 days after the
retiring Collateral Agent resigns or is removed, the retiring Collateral Agent,
the Borrower, or the Lender may petition any court of competent jurisdiction
for
the appointment of a successor Collateral Agent.
Indemnification.
(a) To
the
extent that the Borrowers do not so indemnify the Collateral Agent in Section
12.03 of the Credit Agreement, the Lender will indemnify, defend and hold
harmless the Collateral Agent and its respective officers, directors, employees
and agents (each, an “Indemnified
Person”),
from
and against any and all costs, expenses, losses, damages, claims and liabilities
incurred by it in connection with the acceptance, administration and performance
of its respective duties and obligations under this Security Agreement,
including the costs and expenses of defending itself against any loss, damage,
claim or liability incurred by it in connection with the exercise or performance
of any of its powers or duties under this Security Agreement, but excluding
any
cost, expense, loss, damage, claim or liability incurred by the Collateral
Agent
through the Collateral Agent’s own willful misconduct, negligence or bad
faith.
(b) The
payment obligations of the Lender to the Collateral Agent pursuant to this
Section 8 will survive the resignation or removal of the Collateral Agent and
the termination of this Security Agreement. When the Collateral Agent incurs
expenses after the occurrence of an Event of Default, the expenses are intended
to constitute expenses of administration under the Bankruptcy Code or any other
applicable federal or State bankruptcy, insolvency or similar law.
Representations
and Warranties.
The
Borrowers, jointly and severally, represent and warrant to the Lender and the
Collateral Agent as follows:
Each
of
UHI and U-Haul Sales & Leasing Co. is a corporation duly authorized and
validly existing and in good standing under the laws of the State of Nevada.
U-Haul Co. of Arizona is a corporation duly authorized and validly existing
and
in good standing under the laws of the State of Arizona. Except as disclosed
on
Attachment
5,
none of
the Borrowers has (x) had any other corporate name during the past six years,
(y) changed its identity or corporate structure in any way within the past
six
years, or (z) used or operated under any other names (including trade names
or
other similar names) during the past six years. The exact corporate name of
each
Borrower as it appears on its certificate of incorporation, and location of
its
chief executive office are as follows:
(i) U-Haul
International, Inc., 0000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
00000;
(ii) U-Haul
Co. of Arizona, 0000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000; and
(iii) U-Haul
Leasing & Sales Co., 0000 Xxxxxxxxx Xxx, Xxxx, Xxxxxx 00000.
The
Borrowers are the legal and beneficial owners of the Collateral (or, in the
case
of after-acquired Collateral, at the time the Borrowers acquire rights in the
Collateral, will be the legal and beneficial owners thereof). No other Person
has (or, in the case of after-acquired Collateral, at the time a Borrower
acquires rights therein, will have) any right, title, claim or interest (by
way
of Lien, purchase option or otherwise) in, against or to the Collateral, other
than Permitted Encumbrances.
All
actions have been taken that are necessary under the UCC as in effect on the
date hereof in the applicable jurisdiction to perfect the Collateral Agent’s
interest in the Collateral. All actions have been taken that are necessary
under
applicable state vehicle titling and registration law to perfect the Borrowers’
interest in Vehicles constituting the Collateral.
The
Borrowers have not performed any acts which might prevent the Collateral Agent
or the Lender from enforcing any of the terms of this Security Agreement or
which would limit the Collateral Agent or the Lender in any such enforcement.
Other than financing statements or other similar or equivalent documents or
instruments with respect to the Security Interests and Permitted Encumbrances,
no financing statement, mortgage, security agreement or similar or equivalent
document or instrument covering all or any part of the Collateral is on file
or
of record in any jurisdiction in which such filing or recording would be
effective to perfect a Lien on such Collateral.
The
Borrowers shall furnish to the Lender on or before the Closing Date lien search
reports or other evidence satisfactory to the Lender that no liens prior to
the
lien of this Security Agreement shall exist with respect to any
Collateral.
All
Equipment and Inventory are (i) located at the locations indicated in the most
recent Dealer List delivered to the Lender and the Collateral Agent, and have
been consigned to the possession of a third-party dealer pursuant to the
Dealership Contracts, except when such Equipment and Inventory have been rented
to consumers in the ordinary course of the Borrowers’ business, as such list of
locations may be updated by the Borrowers from time to time at the request
of
the Lender or the Collateral Agent, (ii) in transit to such locations or (iii)
in transit to a third party purchaser which will become obligated on a
Receivable to a Borrower upon receipt. Except for Equipment and Inventory
referred to in the preceding sentence, the Borrowers have exclusive possession
and control of the Inventory and Equipment. All Equipment and Inventory has
been
acquired by the Borrowers in the ordinary course of the Borrowers’
business.
Each
Receivable is genuine and enforceable against the party obligated to pay such
Receivable (an “Account
Debtor”)
free
from any right of rescission, defense, setoff or discount. Each Receivable
was
originated in the ordinary course of the Borrowers’ business.
Each
insurance policy maintained by the Borrowers in accordance with Section 8.07
of
the Credit Agreement is validly existing and is in full force and effect. The
Borrowers are not in default in any material respect under the provisions of
any
such insurance policy, and there are no facts which, with the giving of notice
or passage of time (or both), would result in such a default under any provision
of any such insurance policy. Set forth in Attachment
3
hereto
is a complete and accurate list of the insurance of the Borrowers in effect
on
the date of this Security Agreement required pursuant to Section 8.07 of the
Credit Agreement showing as of such date, (i) the type of insurance carried,
(ii) the name of the insurance carrier, and (iii) the amount of each type of
insurance carried.
The
information set forth in each Dealer List delivered pursuant to Section 8.01(g)
of the Credit Agreement is true, correct and accurate.
Covenants.
The
Borrowers, jointly and severally, hereby agree as follows:
The
Borrowers, at the Borrowers’ expense, shall promptly procure, execute and
deliver to the Collateral Agent and the Lender all documents, instruments and
agreements and perform all acts which are necessary or desirable, or which
the
Lender or the Collateral Agent may request, to establish, maintain, preserve,
protect and perfect the Collateral, the Lien granted to the Collateral Agent
therein and the first priority of such Lien or to enable the Collateral Agent
to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
The
Borrowers shall not use or permit any Collateral to be used in violation of
(i)
any provision of the Credit Agreement, this Security Agreement or any other
Loan
Document, (ii) any applicable Requirement of Law where such use might have
a
Material Adverse Effect, or (iii) any policy of insurance covering the
Collateral.
The
Borrowers shall pay promptly when due all Taxes, all Liens and all other charges
now or hereafter imposed upon, relating to or affecting any
Collateral.
Without
thirty (30) days’ prior written notice to the Lender and the Collateral Agent,
no Borrower shall (i) change its jurisdiction of organization, or the office
in
which such Borrower’s books and records relating to Receivables or the originals
of Dealership Contracts or Rental Company Contracts are kept, (ii) keep
Collateral consisting of documents at any location other than the offices of
UHI
or U-Haul Co. of Arizona at 0000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000,
or
the offices of U-Haul Sales & Leasing Co. at 0000 Xxxxxxxxx Xxx, Xxxx,
Xxxxxx 00000, or (iii) keep Collateral consisting of Equipment, Inventory or
other goods at any location other than the locations permitted pursuant to
Section 9.02 of the Credit Agreement.
For
each
of the Collection Sub-Account and the Collection Account, UHI shall (i) execute
and deliver to the Account Bank a Collection Sub-Account Control Agreement
and a
Collection Account Control Agreement substantially in the form of Attachment
2
hereto
and (ii) cause the Account Bank to execute and deliver to the Collateral Agent
such account control agreements.
Commencing
from the date hereof, the Borrowers shall make or cause to be made all deposits
required pursuant to Section 5.03 of the Credit Agreement, at the times so
required.
The
Borrowers shall fully comply with any shifting control notice delivered pursuant
to the Collection Account Control Agreement.
The
Borrowers shall appear in and defend any action or proceeding which may affect
its title to or the Collateral Agent’s interest in the Collateral.
The
Borrowers shall keep separate, accurate and complete records of the Collateral
and shall provide the Collateral Agent and the Lender with such records and
such
other reports and information relating to the Collateral as the Collateral
Agent
or the Lender may reasonably request from time to time.
The
Borrowers shall not surrender or lose possession of (other than to the Lender),
sell, encumber, lease, rent, option, or otherwise dispose of or transfer any
Collateral or right or interest therein except in the ordinary course of the
Borrowers’ business and as permitted in the Credit Agreement, and,
notwithstanding any provision of the Credit Agreement, the Borrowers shall
keep
the Collateral free of all Liens except Permitted Encumbrances.
The
Borrowers shall collect, enforce and receive delivery of the Receivables in
accordance with past practice until otherwise notified by the
Lender.
The
Borrowers shall comply with all material Requirements of Law applicable to
the
Borrowers which relate to the production, possession, operation, maintenance
and
control of the Collateral.
The
Borrowers shall (i) maintain and keep in force public liability insurance of
the
types and in amounts customarily carried from time to time during the term
of
the Credit Agreement in its lines of business, such insurance to be carried
with
companies and in amounts satisfactory to the Lender, (ii) deliver to the Lender
from time to time, as the Lender may request, schedules setting forth all
insurance then in effect or copies of the applicable policies, and (iii) deliver
to the Lender copies of each policy of insurance which replaces, or evidences
the renewal of, each existing policy of insurance at least fifteen (15) days
prior to the expiration of such policy. If required pursuant to Section 8.07
of
the Credit Agreement, the Collateral Agent shall be named as additional insured
on all liability insurance of the Borrowers with respect to any Collateral,
and
such policies shall contain such additional endorsements as shall be required
by
the Lender, including the endorsements specified in Attachment
3
hereto.
Prior to the occurrence and the continuance of an Event of Default, all proceeds
of any property insurance (whether maintained by any Borrower or a third party)
paid as a result of any event or occurrence shall be paid to the Borrowers.
All
proceeds of any property insurance (whether maintained by any Borrower or a
third party) paid after the occurrence and during the continuance of an Event
of
Default shall be paid to the Collateral Agent or the Collection Sub-Account
to
be held as Collateral and applied as provided in the Credit Agreement or, at
the
election of the Lender, returned to the Borrowers.
(n) The
Borrowers shall (i) promptly make any applicable claims under each applicable
Warranty and (ii) deliver to the Lender and the Collateral Agent from time
to
time, as the Lender or the Collateral Agent may request, schedules setting
forth
all Warranties then in effect or copies of such Warranties, together with a
schedule of all Vehicles covered by such Warranty. Prior to the occurrence
and
the continuance of an Event of Default, all cash proceeds of any Warranty shall
be paid to the Borrowers. All cash proceeds of any Warranty paid after the
occurrence and during the continuance of an Event of Default shall be paid
to
the Collateral Agent or the Collection Sub-Account to be held as Collateral
and
applied as provided in the Credit Agreement or, at the election of the Lender,
returned to the Borrowers.
Authorized
Action by Collateral Agent.
The
Borrowers hereby irrevocably appoint the Collateral Agent as its
attorney-in-fact and agree that the Collateral Agent may perform (but the
Collateral Agent shall not be obligated to and shall incur no liability to
the
Borrowers or any third party for failure so to do) any act which the Borrowers
are obligated by this Security Agreement to perform, and to exercise such rights
and powers as Borrowers might exercise with respect to the Collateral,
including, without limitation, the right to (a) collect by legal proceedings
or
otherwise and endorse, receive and receipt for all dividends, interest,
payments, proceeds and other sums and property now or hereafter payable on
or on
account of the Collateral; (b) enter into any extension, reorganization,
deposit, merger, consolidation or other agreement pertaining to, or deposit,
surrender, accept, hold or apply other property in exchange for the Collateral;
(c) insure, process, preserve and enforce the Collateral; (d) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; (e) pay any Indebtedness of any Borrower relating to the
Collateral; (f) execute UCC financing statements and other documents,
instruments and agreements required hereunder; (g) note any Borrower’s lien on
certificates of title relating to the Collateral; provided,
however,
that
the Collateral Agent may exercise such powers only after the occurrence and
during the continuance of an Event of Default. The Borrowers agree to reimburse
the Collateral Agent upon demand for all reasonable costs and expenses,
including attorneys’ fees, that the Collateral Agent may incur while acting as
the Borrowers’ attorney-in-fact hereunder, all of which costs and expenses are
included in the Secured Obligations. The Borrowers agree that such care as
the
Collateral Agents gives to the safekeeping of its own property of like kind
shall constitute reasonable care of the Collateral when in the Collateral
Agent’s possession; provided,
however,
that
Collateral Agent shall not be required to make any presentment, demand or
protest, or give any notice and need not take any action to preserve any rights
against any prior party or any other Person in connection with the Secured
Obligations or with respect to the Collateral.
Default
and Remedies.
The
Borrowers shall be deemed in default under this Security Agreement upon the
occurrence and during the continuance of an Event of Default, as that term
is
defined in the Credit Agreement. In addition to all other rights and remedies
granted to the Lender or the Collateral Agent by this Security Agreement, the
Credit Agreement, the other Loan Documents, the UCC and other applicable
Requirements of Law, the Collateral Agent may, upon the occurrence and during
the continuance of any Event of Default, exercise any one or more of the
following rights and remedies: (a) collect, receive, appropriate or realize
upon
the Collateral or otherwise foreclose or enforce the Collateral Agent’s security
interests in any or all Collateral in any manner permitted by applicable
Requirements of Law or in this Security Agreement; (b) notify any or all Account
Debtors to make payments on Receivables directly to the Collateral Agent; (c)
direct the Collection Account Bank or the Collection Sub-Account Bank to
liquidate the account(s) maintained by it, pay all amounts payable in connection
therewith to the Collateral Agent and/or deliver any proceeds thereof to the
Collateral Agent; (d) sell or otherwise dispose of any or all Collateral at
one
or more public or private sales, whether or not such Collateral is present
at
the place of sale, for cash or credit or future delivery, on such terms and
in
such manner as the Collateral Agent may determine; (e) require the Borrowers
to
assemble the Collateral and make it available to the Collateral Agent at a
place
to be designated by the Collateral Agent; (f) enter onto any property where
any
Collateral is located and take possession thereof with or without judicial
process; and (g) prior to the disposition of the Collateral, store, process,
repair or recondition any Collateral consisting of goods, perform any
obligations and enforce any rights of the Borrowers or their Subsidiaries under
any Dealership Contracts, any Rental Company Contracts or the Fleet Owner
Agreement, or otherwise prepare and preserve Collateral for disposition in
any
manner and to the extent the Collateral Agent deems appropriate. In furtherance
of the Collateral Agent’s rights hereunder, the Borrowers hereby grant to the
Collateral Agent an irrevocable, non-exclusive license (exercisable without
royalty or other payment by the Lender) to use, license or sublicense any
patent, trademark, tradename, copyright or other intellectual property in which
any Borrower now or hereafter has any right, title or interest, together with
the right of access to all media in which any of the foregoing may be recorded
or stored. In any case where notice of any sale or disposition of any Collateral
is required, the Borrowers hereby agree that seven (7) days notice of such
sale
or disposition is reasonable.
Miscellaneous.
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:
if
to any
Borrower, to it at 0000 Xxxxxxxxx Xxx, Xxxx, XX 00000-0000, Attention: Xxxxx
Xxxxxxx (Facsimile No. (000) 000-0000), with a copy to 0000 X. Xxxxxxx Xxxxxx,
Xxxxxxx, XX 00000, Attention: Xxxxxxxx Xxxxxxx (Facsimile No. (000) 000-0000);
if
to the
Lender, to it at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000-0000,
Attention: Senior Vice President - Portfolio Adminstration (Facsimile No. (000)
000-0000); and
if
to the
Collateral Agent, to it at [Orange Truck Trust 2006 Address], Attention: [Name
of Contact] (Facsimile No. [(____)________]).
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 Security Agreement shall be deemed to have been given on the date of
receipt.
Waivers;
Amendments.
No
failure or delay by the Lender or the Collateral Agent in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Lender and the Collateral Agent
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver
of
any provision of any Loan Document or consent to any departure by any Loan
Party
therefrom shall in any event be effective unless the same shall be permitted
by
subsection (b) of this Section 13, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall
not
be construed as a waiver of any Default, regardless of whether the Lender may
have had notice or knowledge of such Default at the time.
Neither
this Security Agreement nor any other Loan Document nor any provision hereof
or
thereof may be waived, amended or modified except, in the case of this Security
Agreement, pursuant to an agreement or agreements in writing entered into by
the
Borrowers, the Collateral Agent and the Lender.
Successors
and Assigns.
The
provisions of this Security Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that a Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent
of
the Lender and the Collateral Agent (and any attempted assignment or transfer
by
a Borrower without such consent shall be null and void). Nothing in this
Security Agreement, expressed or implied, shall be construed to confer upon
any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of BTMUCC) any legal or equitable right, remedy or claim under or by
reason of this Security Agreement:
The
Lender may, without the consent of the Borrowers, assign all or a portion of
its
rights and obligations under this Security Agreement;
The
Collateral Agent may not assign, without the consent of the Lender, all or
a
portion of its rights and obligations under this Security Agreement;
and
The
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Security Agreement to secure obligations of
the
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section 13 shall not apply to any such pledge or
assignment of a security interest; provided
that no
such pledge or assignment of a security interest shall release the Lender from
any of its obligations hereunder or substitute any such pledgee or assignee
for
the Lender as a party hereto.
Severability.
Any
provision of this Security Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other
jurisdiction.
Survival.
All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments delivered
in
connection with or pursuant to this Security Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Lender may have had notice
or knowledge of any Default or incorrect representation or warranty at the
time
any credit is extended hereunder, and shall continue in full force and effect
as
long as the principal of or any accrued interest on any Loan or any fee or
any
other amount payable under this Security Agreement is outstanding and unpaid
and
so long as the Commitments have not expired or terminated.
Borrowers’
Continuing Liability.
Notwithstanding any provision of this Security Agreement or any other Loan
Document or any exercise by the Lender or the Collateral Agent of any of its
rights hereunder or thereunder (including, without limitation, any right to
collect or enforce any Collateral), (i) the Borrowers and their Subsidiaries
shall remain liable to perform their obligations and duties in connection with
the Collateral (including, without limitation, the Fleet Owner Agreement, the
Rental Company Contracts, the Dealership Contracts and all other agreements
relating to the Collateral) and (ii) neither the Lender nor the Collateral
Agent
shall assume any liability to perform such obligations and duties or to enforce
any of the Borrowers’ rights in connection with the Collateral (including,
without limitation, Fleet Owner Agreement, the Rental Company Contracts, the
Dealership Contracts and all other agreements relating to the
Collateral).
Governing
Law.
THIS
SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW
OF THE STATE OF NEW YORK.
Each
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State
of
New York sitting in New York County and of the United States District Court
of
the Southern District of New York, and any appellate court from any thereof,
in
any action or proceeding arising out of or relating to any Loan Document, or
for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any
such action or proceeding may be heard and determined in such New York State
or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law. Nothing in this Security Agreement or
any
other Loan Document shall affect any right that the Lender may otherwise have
to
bring any action or proceeding relating to this Security Agreement or any other
Loan Document against any Borrower or its properties in the courts of any
jurisdiction.
Each
Borrower hereby irrevocably and unconditionally waives, to the fullest extent
it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of
or
relating to this Security Agreement or any other Loan Document in any court
referred to in subsection (g)(i) of this Section 13. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in
any
such court.
Each
Borrower hereby irrevocably agrees that service of process in any such action
or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Borrower at its address set forth in Section 15(a) or at such other address
of
which the Lender shall have been notified pursuant thereto. Nothing in this
Security Agreement or any other Loan Document will affect the right of any
party
to this Security Agreement to serve process in any other manner permitted by
law.
WAIVER
OF JURY TRIAL.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, ANY OTHER
LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). THE BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER.
(i) Headings.
Section
and subsection headings used herein are for convenience of reference only,
are
not part of this Security Agreement and shall not affect the construction of,
or
be taken into consideration in interpreting, this Security
Agreement.
(j) Joint
and Several Liability of Borrowers.
Each
Borrower acknowledges and agrees that, whether or not specifically indicated
as
such in a Loan Document, all Secured Obligations shall be joint and several
Secured Obligations of each individual Borrower, and in furtherance of such
joint and several Secured Obligations, each Borrower hereby irrevocably and
unconditionally guarantees the payment of all Secured Obligations of each other
Borrower. Each Borrower hereby acknowledges and agrees that such Borrower shall
be jointly and severally liable to the Lender and the Collateral Agent for
all
representations, warranties, covenants and, obligations and indemnities of
the
Borrowers hereunder.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
be
executed as of the day and year first above written.
U-HAUL
LEASING & SALES CO.
By:
Name:
Title:
U-HAUL
CO. OF ARIZONA
By:
Name:
Title:
U-HAUL
INTERNATIONAL, INC.
By:
Name:
Title:
BTMU
CAPITAL CORPORATION
By:
Name:
Title:
ORANGE
TRUCK TRUST 2006
By:
Xxxxx
Fargo Bank Northwest, National Association,
solely as Trustee
By:
Name:
Title:
[Signature
Page for Security Agreement]
ATTACHMENT
1
To
Security Agreement
COLLATERAL
DESCRIPTION
All
right, title and interest of the Borrowers, whether now owned or hereafter
acquired, in and to the following:
(a) All
equipment as defined in the UCC listed on the accompanying Vehicle Schedule,
as
the same may be updated from time to time pursuant to the Credit Agreement,
including, without limitation, all Vehicles, together with all additions and
accessions thereto and replacements therefor (collectively, the “Equipment”);
(b) All
inventory as defined in the UCC listed on the accompanying Vehicle Schedule,
as
the same may be updated from time to time pursuant to the Credit Agreement,
including, without limitation, all Vehicles, together with all additions and
accessions thereto, replacements therefor, products thereof and documents
therefor (collectively, the “Inventory”);
(c) All
amounts receivable with respect to Fleet Owner Cash Flows and with respect
to
sales of Vehicles to third parties (the “Receivables”);
(d) The
Dealership Contracts, the Rental Company Contracts, the Fleet Owner Agreement
and any Warranty;
(e) The
Collection Account, and all cash on deposited therein from time to
time;
(f) The
Collection Sub-Account, and all cash deposited therein from time to time;
(g) All
payments owing to the Borrowers with respect to a Hedge; and
All
Proceeds of the foregoing (including, without limitation, whatever is receivable
or received when Collateral or proceeds is sold, collected, exchanged, returned,
substituted or otherwise disposed of, whether such disposition is voluntary
or
involuntary, including rights to payment and return premiums and insurance
proceeds under insurance with respect to any Collateral, and all rights to
payment with respect to any cause of action affecting or relating to the
Collateral).
ATTACHMENT
2
To
Security Agreement
FORM
OF
COLLECTION
ACCOUNT CONTROL AGREEMENT
AND
COLLECTION SUB- ACCOUNT CONTROL AGREEMENT
ATTACHMENT
3
To
Security Agreement
INSURANCE
AND
INSURANCE
ENDORSEMENTS
Pursuant
to Section 8.07 of the Credit Agreement, each of the liability insurance
policies of the Borrowers shall contain substantially the following
endorsements:
(a) If
the
Lender or the Collateral Agent shall determine that a Material Adverse Change
has occurred or if an Event of Default shall have occurred, then within five
Business Days after delivery by the Lender or the Collateral Agent to the
Borrowers of a written request therefor, the Borrowers shall cause each of
the
Lender and Collateral Agent to be named as an additional insured.
(b) In
respect of the interests of the Collateral Agent in the policies, the insurance
shall not be invalidated by any action or by inaction of any Borrower or by
any
Person having temporary possession of the property covered thereby (the
“Property”)
while
under contract with any Borrower to perform maintenance, repair, alteration
or
similar work on the Property, and shall insure the interests of the Collateral
Agent regardless of any breach or violation of any warranty, declaration or
condition contained in the insurance policy by any Borrower or the Collateral
Agent or any other additional insured (other than by such additional insured,
as
to such additional insured) or by any Person having temporary possession of
the
Property while under contract with any Borrower to perform maintenance, repair,
alteration or similar work on the Property.
(c) If
the
insurance policy is cancelled for any reason whatsoever, or substantial change
is made in the coverage that affects the interests of the Collateral Agent,
or
if the insurance coverage is allowed to lapse for non-payment of premium, such
cancellation, change or lapse shall not be effective as to the Collateral Agent
for 30 days (or 10 days in the case of non-payment of premium) after receipt
by
the Collateral Agent of written notice from the insurer of such cancellation,
change or lapse.
(d) The
Collateral Agent shall not have any obligation or liability for premiums,
commissions, assessments, or calls in connection with the
insurance.
(e) The
insurer shall waive any rights of set-off or counterclaim or any other
deduction, whether by attachment or otherwise, that it may have against the
Collateral Agent.
(f) The
insurance shall be primary without right of contribution from any other
insurance that may be carried by the Collateral Agent with respect to its
interests in the Property.
(g) The
insurer shall waive any right of subrogation against the Collateral
Agent.
(h) All
provisions of the insurance, except the limits of liability, shall operate
in
the same manner as if there were a separate policy covering each insured
party.
ATTACHMENT
4
To
Security Agreement
VEHICLE
SCHEDULE
[On
file
with Orange
Truck Trust 2006]
ATTACHMENT
5
To
Security Agreement
SCHEDULE
OF PRIOR NAMES, TRADE NAMES, PRIOR CORPORATE
STRUCTURES,
ETC.
|
COMPANY
|
FORMER
NAMES
(1998
- Present)
|
CHANGES
TO CORPORATE STRUCTURE
(1998
- Present)
|
FICTITIOUS
NAMES
(1998
- Present)
|
|
U-Haul
International, Inc.
|
None
|
None
|
None
|
|
U-Haul
Leasing & Sales Co.
|
None
|
None
|
None
|
|
U-Haul
Co. of Arizona
|
None
|
None
|
U-Haul
Co. of Southern Arizona
U-Haul
Co. of Western Arizona
U-Haul
Co. of Eastern Arizona
|
