PROPERTY MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") is entered into as of
October 1, 1995 by and between Four SAC Self-Storage Corporation, a
Nevada corporation with its principal place of business at 000 Xxxxx
Xxxxxxx Xxxx Xxxxx, Xxxx, XX 00000, ("Owner") and the property managers
identified herein (hereinafter "U-Haul").
RECITALS
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A. Owner owns or will own self-storage real property located at
certain addresses (hereinafter collectively the "Property").
B. Owner intends that the Property be rented on a space-by-space
retail basis to corporations, partnerships, individuals or other
entities for use as storage facilities.
C. Owner desires that U-Haul manage the Property and U-Haul
desires to act as manager, all in accordance with the terms and
conditions of this Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, Owner and U-Haul hereby agree as follows:
AGREEMENT
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1. Employment
(a) Owner hereby retains U-Haul, and U-Haul agrees to act as
manager of the Property upon the terms and conditions hereinafter set
forth.
(b) Owner acknowledges that U-Haul is in the business of managing
mini-warehouses both for its own account and for others. It is hereby
expressly agreed that U-Haul and its affiliates may continue to engage
in such activities, may manage facilities other than those presently
managed by it (whether or not such other facilities may be in direct or
indirect competition with the Owner) and may in the future engage in
other business which may compete directly or indirectly with activities
of the Owner.
(c) In the performance of its duties under this Agreement, U-Haul
shall occupy the position of an independent contractor with respect to
the Owner. Nothing contained herein shall be construed as making the
parties hereto partners or joint ventures, nor (except as expressly
otherwise provided for herein) construed as making U-Haul an agent or
employee of Owner.
2. Duties and Authority of U-Haul
(a) GENERAL DUTIES AND AUTHORITY. Subject only to the
restrictions and limitations provided in paragraphs (o) and (p) of this
Section 2 and the right of Owner to terminate this Agreement as
provided in Section 6 hereof, U-Haul shall have the sole and exclusive
authority to fully manage the Property and supervise and direct the
business and affairs associated or related to the daily operation
thereof, and to that end on behalf of Owner execute such documents or
instruments as, in the sole judgment of U-Haul, may be deemed
reasonably necessary or advisable. Such duties and authority shall
include those set forth as follows, which are not in limitation of the
foregoing.
(b) RENTING OF THE PROPERTY. U-Haul shall establish policies and
procedures for the marketing activities for the Property. U-Haul shall
have the sole discretion, which discretion shall be exercised in good
faith, to establish the terms and conditions of occupancy by the
tenants of the Property and U-Haul is hereby authorized to enter into
rental agreements on behalf and for the account of the Owner with such
tenants and to collect rent from such tenants. U-Haul shall cause the
Owner to advertise in such media and to the extent that it deems
necessary and appropriate. U-Haul may jointly advertise the Property
with other properties owned or managed by U-Haul, and in that event, U-
Haul shall reasonably prorate the cost of such advertising among those
properties.
(c) REPAIR, MAINTENANCE AND IMPROVEMENTS. U-Haul shall make and
execute, or supervise and have control over the making and executing,
of all decisions concerning the acquisition of furniture, fixtures and
supplies for the Property, and the purchase, lease or other acquisition
of the same on behalf of Owner. U-Haul shall make and execute, or
supervise and have control over the making and executing of all
decisions concerning the maintenance, repair, and landscaping of the
Property; all costs incurred in connection therewith shall be on behalf
of the Owner. With the prior approval of the Owner, U-Haul shall, on
behalf of the Owner, negotiate and contract for and supervise the
installation of all capital improvements related to the Property. U-
Haul agrees to secure the prior approval of Owner on all expenditures
in excess of $5,000.00 for any one item, except monthly or recurring
operating charges and/or emergency repairs if in the opinion of U-Haul
such expenditures are necessary to protect the Property from damage or
to maintain services to the tenants as called for in their leases.
(d) PERSONNEL. U-Haul shall select all vendors, suppliers,
contractors, subcontractors and employees with respect to the Property
and shall hire, discharge and supervise all labor and employees
required for the operation and maintenance of the Property. Any
employees so hired shall be employees of U-Haul, and shall be carried
on the payroll of U-Haul. Employees may include, but will not be
limited to, on-site resident managers, on-site assistant managers, and
relief managers located, rendering services, or performing activities
on the Property in connection with its operation and management. The
cost of employing such persons shall not exceed prevailing rates for
comparable persons performing the same or similar services with respect
to real estate similar to the Property. The cost of same shall not
exceed the amount customarily paid to such persons performing such
services without first obtaining the prior written consent of the Owner
and the party holding the first position mortgage on the Property
(herein sometimes referred to as the "First Mortgagee").
U-Haul shall be responsible for the disbursement of funds in
payment of all expenses incurred in connection with the operation of
the Property and the Owner shall not be required to employ personnel to
assist in such disbursement. U-Haul shall not be separately reimbursed
for the time of its executive officers devoted to Owner's affairs or
for the other overhead expenses of U-Haul.
(e) AGREEMENTS. U-Haul shall negotiate and execute on behalf of
the Owner such agreements which U-Haul deems necessary or advisable for
the furnishing of utilities, services, concessions and supplies, for
the maintenance, repair and operation of the Property and such other
agreements which may benefit the Property or be incidental to the
matters for which U-Haul is responsible hereunder.
(f) OTHER DECISIONS. U-Haul shall make all decisions in
connection with the daily operation of the Property.
(g) REGULATIONS AND PERMITS. U-Haul shall comply in all material
respects with any statute, ordinance, law, rule, regulation or order of
any governmental or regulatory body, having jurisdiction over the
Property, respecting the use of the Property or the maintenance or
operation thereof. U-Haul shall apply for and attempt to obtain and
maintain, on behalf of the Owner, all licenses and permits required or
advisable (in the reasonable judgment of U-Haul) in connection with the
management and operation of the Property.
(h) RECORDS AND REPORTS OF DISBURSEMENTS AND COLLECTIONS. U-Haul
shall establish, supervise, direct and maintain the operation of a
system of record keeping and bookkeeping with respect to all receipts
and disbursements in connection with the management and operation of
the Property. The books, records and accounts shall be maintained at
the U-Haul office or at each Property or such other location as U-Haul
shall reasonably determine, and shall be available and open to
examination and audit quarterly by Owner, its representatives, any
mortgagee of the Property, or the mortgagee's representative. On or
before thirty (30) days after the close of each quarter, U-Haul shall
cause to be prepared and delivered to Owner and the First Mortgagee, a
monthly statement of receipts, expenses and charges and a disbursement
to Owner representing receipts less disbursements.
(i) [Reserved].
(j) COLLECTION. U-Haul shall direct the collection and billing of
all accounts payable and due to the Owner with respect to the Property
and shall be responsible for establishing policies and procedures to
minimize the amount of bad debts.
(k) LEGAL ACTIONS. U-Haul shall cause to be instituted, on behalf
and in the name of the Owner, any and all legal actions or proceedings
U-Haul deems necessary or advisable to collect charges, rent or other
income due to the Owner with respect to the Property or to oust or
dispossess tenants or other persons unlawfully in possession under any
lease, license concession agreement or otherwise, and to collect
damages for breach thereof or default thereunder by such tenant,
licensee, concessionaire or occupant. The costs of all such legal
actions or proceedings shall be borne by the Owner.
(l) INSURANCE. U-Haul shall use its best efforts to assure that
there is obtained and kept in force, fire, comprehensive liability and
other insurance policies in amounts generally carried with respect to
similar facilities. Specifically, U-Haul may in its discretion obtain
employee theft or similar insurance in amounts and with such
deductibles as U-Haul may deem appropriate. Owner shall be required to
participate in the insurance coverage obtained by U-Haul. A
certificate of insurance will be provided to Owner upon the written
request of Owner. All such related insurance expenses shall be deemed
ordinary operating expenses of the Property.
(m) TAXES. During the term of this Agreement, U-Haul shall pay
from Owner's funds, prior to delinquency, all real estate taxes,
personal property taxes, and all other taxes assessed to or levied upon
the Property. If required by the First Mortgagee, U-Haul will set
aside, from Owner's funds, a reserve from each month's rent and other
income collected, in an amount required by said First Mortgagee.
(n) RESTRICTIONS. Notwithstanding anything to the contrary set
forth in this Section 2, U-Haul shall not be required to do, or cause
to be done, anything for the account of the Owner (i) which may make U-
Haul liable to third parties; (ii) which may not be commenced,
undertaken or completed because of insufficient funds of Owner; or,
(iii) which may not be commenced, undertaken or completed because of
acts of God, strikes, governmental regulations of laws, acts of war or
other types of events beyond the control of U-Haul, whether similar or
dissimilar to the foregoing.
(o) LIMITATIONS ON U-HAUL AUTHORITY. Notwithstanding anything to
the contrary set forth in this Section 2, U-Haul shall not, without
obtaining the prior written consent of the Owner, (i) rent storage
space in the Property by written lease or agreement for a stated term
in excess of one year, (ii) alter the building or other structures of
the Property in any material manner; (iii) make any other agreements
which exceed one year and are not terminable on thirty day's notice at
the will of the Owner, without penalty, payment or surcharge; (iv) act
in violation of any law; or (v) act in violation of any duty or
responsibility of Owner under any mortgage loan secured by the
Property.
(p) SHARED EXPENSES. Certain economies may be achieved with
respect to certain expenses to be incurred on behalf of Owner hereunder
if materials, supplies, insurance or services are purchased by U-Haul
in quantity for use not only in connection with the Property but in
connection with other properties owned or managed by U-Haul. U-Haul
shall have the right to purchase such materials, supplies, insurance or
services in its own name and charge Owner a pro rata share of the cost;
provided, however, that the pro rata cost of such purchase to Owner
shall not result in expenses greater than would otherwise be incurred
at an arms length, competitive prices and terms available in the area
where the Property is located; and provided further, U-Haul shall give
Owner access to records so Owner may review any such expenses incurred.
3. Duties of the Owner
The Owner hereby agrees to cooperate with U-Haul in the
performance of its duties under this Agreement and to that end, upon
the request of U-Haul, to provide reasonable office space for U-Haul
employees on the premises of the Property, give U-Haul access to all
files, books and records of the Owner relevant to the Property.
4. Compensation of U-Haul
The Owner shall pay to U-Haul as the full amount due for the
services herein provided a monthly Management Fee equal to six percent
(6%) of the "Gross Receipts" derived from or connected with the
Property. The term "Gross Receipts" shall mean all receipts (excluding
security deposits unless and until the Owner recognizes the same as
income) of the Owner (whether or not received by U-Haul on behalf or
for the account of the Owner) arising from the operation of the
Property, including without limitation, rental payments of lessees of
space in the Property, vending machine or concessionaire revenues,
maintenance charges, if any, paid by the tenants of the Property in
addition to basic rent, parking fees, if any, and all monies whether or
not otherwise described herein paid for the use of the Property.
"Gross Revenue" shall be determined on a cash basis. The Management
Fee for each month shall be paid promptly at the end of such quarter
and shall be calculated on the basis of the "Gross Receipts" of such
quarter. The Management Fee shall be paid to each property manager
based on the Gross Receipts of each respective Property for which such
property manager is responsible as set forth in Section 16 hereof.
Each property manager agrees that its monthly Management Fee shall be
subordinate to that month's principal balance and interest payment on
any first lien position mortgage loan on the Property. Gross Receipts
shall not include, (i) sale tax or other similar taxes, (ii)
condemnation awards, (iii) casualty or other insurance proceeds, (iv)
proceeds relating to the sale or refinance of the Property, (v) revenue
relating to the equipment or vehicle rentals except for net commission
payable, (vi) revenue relating to retail sales and auctions, except to
the extent of net amounts retained by Owner and (vii) any revenue which
is derived other than in connection with the use of the Property.
U-Haul shall repay to Owner any Management Fee collected
incorrectly or if paid in connection with Gross Receipts which is later
refundable.
It is understood and agreed that such compensation will not be
reduced by the cost to Owner of those employees and independent
contractors engaged by or for Owner, including but not limited to the
categories of personnel specifically referred to in Section 2(d).
Except as provided in this Section 4, it is further understood and
agreed that U-Haul shall not be entitled to additional compensation of
any kind in connection with the performance by it of its duties under
this Agreement.
5. Use of Trademarks, Service Marks and Related Items
Owner acknowledges the significant value of the U-Haul name in the
operations of the Owner's property and it is therefore understood and
agreed that the name, trademark and service xxxx, "U-Haul", and
related marks, slogans, caricatures, designs and other trade or service
items shall be utilized for the non-exclusive benefit of the Owner in
the rental and operation of the Property, and in comparable operations
elsewhere. It is further understood and agreed that this name and all
such marks, slogans, caricatures, designs and other trade or service
items shall remain and be at all times the property of U-Haul and its
affiliates, and that, except during the term hereof, the Owner shall
have no right whatsoever therein. Owner agrees that during the term of
this agreement the sign faces at the property will have the name U-
Haul. The U-Haul sign faces will be paid for by the Owner. Upon
termination of this agreement at any time for any reason, all such use
by and for the benefit of the Owner of any such name, xxxx, slogan,
caricature, design or other trade or service item in connection with
the Property shall, in any event, be terminated and any signs bearing
any of the foregoing shall be removed from view and no longer used by
the Owner. In addition, upon termination of this Agreement at any time
for any reason, Owner shall not enter into any new leases of Property
using the U-Haul lease form or use other forms prepared by U-Haul. It
is understood and agreed that U-Haul will use and shall be unrestricted
in its use of such name, xxxx, slogan, caricature, design or other
trade or service item in the management and operation of other storage
facilities both during and after the expiration or termination of the
term of this Agreement.
6. Termination
The Term of this Agreement shall be twenty five (25) years,
however, Owner may terminate this Agreement with or without cause for
any reason or no reason, by giving not less than sixty (60) days'
written notice to U-Haul pursuant to Section 11 hereof. If Owner fails
to pay U-Haul any amounts (which amounts are not in dispute) owed under
this Agreement when due for more than sixty (60) days following written
notice to Owner and the First Mortgagee, U-Haul may terminate this
Agreement by giving Owner and First Mortgagee not less than thirty days
written notice pursuant to Section 11 hereof (unless such default is
cured within said thirty (30) days). In any event, U-Haul shall not
resign as property manager until a nationally recognized and reputable
successor property manager is available and prepared to assume property
management responsibilities. Upon termination of this Agreement, U-
Haul shall promptly return to Owner all monies, books, records and
other materials held by U-Haul for or on behalf of Owner. In addition,
if U-Haul has contracted to advertise the Property in the Yellow Pages,
Owner shall, at the option of U-Haul, continue to be responsible for
the cost of such advertisement and shall either (i) pay U-Haul the
remaining amount due under such contract in a lump sum; or (ii) pay U-
Haul monthly for the amount due under such contract.
7. Indemnification
U-Haul hereby agrees to indemnify and hold each of Owner, all
persons and companies affiliated with Owner, and all officers,
shareholders, directors, employees and agents of Owner and of any
affiliated companies or persons (collectively, the "Indemnified
Persons") harmless from any and all costs, expenses, attorneys' fees,
suits, liabilities, judgments, damages, and claims in connection with a
breach by U-Haul in the performance of this Agreement and/or in
connection with the management of the Property (including the loss of
use thereof following any damage, injury or destruction), arising from
its willful misconduct or gross negligence.
8. Assignment
This Agreement shall be assignable by the Owner in connection with
any mortgage loan on the Property. U-Haul shall have the right to
assign this Agreement to an affiliate or a wholly or majority owned
subsidiary; provided, however, any such assignee must assume all
obligations of U-Haul hereunder, the Owner's rights hereunder will be
enforceable against any such assignee and U-Haul shall not be released
from its liabilities hereunder unless the Owner shall expressly agree
thereto in writing.
9. Headings
The headings contained herein are for convenience of reference
only and are not intended to define, limit or describe the scope or
intent of any provision of this Agreement.
10. Governing Law
The validity of this Agreement, the construction of its terms and
the interpretation of the rights and duties of the parties shall be
governed by the internal laws of the State of Arizona.
11. Notices
Any notice required or permitted herein is to be given in writing
and shall be personally delivered or mailed first class postage prepaid
or delivered by an overnight delivery service to the respective
addresses of the parties set forth below their signatures on the
signature page thereof, or to such other address as any party may give
to the other in writing. Any notice required by this Agreement will be
deemed to have been given when personally served or one day after
delivery to an overnight delivery service or five days after deposit in
the first class mail.
12. Severability
Should any term or provision hereof be deemed invalid, void or
unenforceable either in its entirety or in a particular application,
the remainder of this Agreement shall nonetheless remain in full force
and effect and, if the subject term or provision is deemed to be
invalid, void or unenforceable only with respect to a particular
application, such term or provision shall remain in full force and
effect with respect to all other applications.
13. Successors
This Agreement shall be binding upon and inure to the benefit of
the respective parties hereto and their permitted assigns and
successors in interest.
14. Attorneys' Fees
If it shall become necessary for either party hereto to engage
attorneys to institute legal action for the purpose of enforcing its
rights hereunder or for the purpose of defending legal action brought
by the other party hereto, the party or parties prevailing in such
litigation shall be entitled to receive all costs, expenses and fees
(including reasonable attorneys' fees) incurred by it in such
litigation (including appeals).
15. Counterparts
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
16. Scope of Property Manager Responsibility.
The duties, obligations and liability of each property manager
identified herein shall extend only so far as to relate to the Property
for which such property manager is managing located in the domicile
state of such property manager, and no individual property manager
hereunder shall be liable for the acts or omissions of any other
property manager hereunder. Each property manager shall use its best
efforts to assist Owner in fulfilling Owner's obligations arising under
any loan to Owner that is secured by the Property, including but not
limited to preparing and providing financial and accounting reports,
and maintaining the Property. Each property manager agrees that it
will perform its obligations hereunder according to reasonable industry
standards, in good faith, and in a commercially reasonable manner. U-
Haul agrees that, in discharging its duties hereunder, it will not have
any relationship with any of its affiliates that would be less
favorable to Owner than would reasonably be available in a transaction
with an unaffiliated party.
17. Termination/First Mortgagee.
Prior to any termination of this Agreement by the Property
Manager, by reason of a default by Owner, the Property Manager shall
provide to said First Mortgagee notice and at least i) sixty (60) days
additional time than that provided for the Owner to cure said default,
and ii) such reasonable additional time as said First Mortgagee shall
require if in order to cure First Mortgagee must first foreclose,
and/or terminate to obtain possession of the Property. Nothing herein
shall create any obligation whatsoever on said First Mortgage to cure
any such default by Owner. This Agreement shall be subject and
subordinate to all mortgages encumbering the Property.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
FOUR SAC SELF-STORAGE CORPORATION
a Nevada corporation
000 X. Xxxxxxx Xxxx Xxxxx
Xxxx, Xxxxxxx 00000
/S/ XXXX X. XXXXX
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Xxxx X. Xxxxx, President
PROPERTY MANAGERS:
Address for all Property Managers for purposes of receiving notice:
[Name of Property Manager]
c/o U-Haul International, Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xx. Xxxxxx or Treasurer
U-Haul Co. of Arizona
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of California
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Connecticut
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of District of Columbia, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Florida
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Georgia
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Louisiana
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Massachusetts, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Maryland, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Michigan
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Mississippi
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of North Carolina
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of North Dakota
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of New Jersey, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of New Mexico, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Nevada, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of New York, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. (Canada) Ltd.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of South Carolina, Inc.
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Texas
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Virginia
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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U-Haul Co. of Washington
By: /S/ X.X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: ASST. SECY
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