<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 6, 1996
REGISTRATION NO. 333-10119
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERCO
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0106815
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
------------------------
1325 AIRMOTIVE WAY, SUITE 100
RENO, NEVADA 89502-3239
(702) 688-6300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
GARY V. KLINEFELTER, ESQ.
GENERAL COUNSEL
AMERCO
1325 AIRMOTIVE WAY, SUITE 100
RENO, NEVADA 89502-3239
(702) 688-6300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
JON S. COHEN, ESQ. ARNOLD B. PEINADO, III
SNELL & WILMER L.L.P. MILBANK, TWEED, HADLEY & MCCLOY
ONE ARIZONA CENTER ONE CHASE MANHATTAN PLAZA
PHOENIX, ARIZONA 85004-0001 NEW YORK, NEW YORK 10005
(602) 382-6247 (212) 530-5546
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A) MAY
DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
(Subject to Completion, Dated September 6, 1996)
PROSPECTUS
$600,000,000
A M E R C O
DEBT SECURITIES
LOGO
AMERCO (the "Company"), a holding company for U-Haul International, Inc.,
Ponderosa Holdings, Inc., Amerco Real Estate Company, and other companies, may
issue and sell from time to time unsecured debt securities ("Securities")
consisting of debentures, notes and/or other unsecured evidences of indebtedness
in one or more series. The Securities offered pursuant to this Prospectus may be
issued in one or more series or issuances and will be limited to an aggregate
public offering price of $600,000,000.
The specific terms of the particular Securities in respect of which this
Prospectus is being delivered ("Offered Securities") will be set forth in a
supplement to this Prospectus ("Prospectus Supplement") which will be delivered
together with this Prospectus, including, where applicable, the specific
designation, aggregate principal amount, denomination, maturity, premium, if
any, rate (which may be fixed or variable), time and method of calculating
payments of interest, if any, place or places where principal, premium, if any,
and interest, if any, on such Securities will be payable, any terms of
redemption at the option of the Company, any sinking fund provisions, and the
initial public offering price for the Offered Securities.
The Company may sell Securities directly to purchasers or through agents
designated from time to time by the Company or to or through underwriters or a
group of underwriters which may be managed by one or more underwriters. If any
agents of the Company or any underwriters are involved in the sale of Securities
in respect of which this Prospectus is being delivered, the names of such agents
or underwriters and any applicable commission or discount will be set forth in
the applicable Prospectus Supplement. The net proceeds to the Company from the
sale of Securities will be the public offering price of such Securities less
such discount, in the case of an offering through an underwriter, or the
purchase price of such Securities less such commission, in the case of an
offering through an agent, and less, in each case, other expenses of the Company
associated with the issuance and distribution of such Securities.
No person is authorized to give the information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with this Prospectus and, if given or made, any such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy securities in any state or other jurisdictions
where, or to any person to whom, it is unlawful to make such an offer or a
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
ON PAGES 5-6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER , 1996.
<PAGE> 3
------------------------
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements, and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at its regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048,
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, such material may be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov.
The Company has filed with the Commission a registration statement (the
"Registration Statement") with respect to the Securities offered hereby. This
Prospectus, which constitutes part of the Registration Statement, does not
contain all of the information contained in the Registration Statement and the
exhibits thereto. For further information with respect to the Company and the
Securities offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, which may be examined without charge at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of all or any part thereof may be
obtained from the Public Reference Section of the Commission at prescribed
rates. Statements contained in this Prospectus as to the contents of any
contract or any other document are not necessarily complete and, in each
instance, reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each statement being qualified in all
respects by such reference.
The Company's Series A 8 1/2% Preferred Stock is listed on the New York
Stock Exchange and the Company's Common Stock is listed on Nasdaq. Reports,
proxy statements, and other information filed by the Company may be inspected
and copied at the New York Stock Exchange, 20 Broad Street, New York, New York
10005 and at the National Association of Securities Dealers, 1735 K Street,
N.W., Washington, D.C. 20007.
In addition, Summary Quarterly Financial Reports may be accessed
electronically by means of the Company's home page on the Internet at:
http://www.uhaul.com.
INFORMATION INCORPORATED BY REFERENCE
The Annual Report of the Company on Form 10-K for the fiscal year ended
March 31, 1996, the Quarterly Report of the Company on Form 10-Q for the quarter
ended June 30, 1996, and the Current Report of the Company on Form 8-K filed
with the Commission on May 6, 1996 are incorporated herein by reference.
All reports filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be made a part hereof from
their respective dates of filing.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will cause to be furnished without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon the
written or oral request of such person, a copy of any documents described above,
other than certain exhibits to such documents. Requests should be addressed to:
AMERCO, Investor Relations, 1325 Airmotive Way, Suite 100, Reno, Nevada 89502;
telephone: (702) 688-6300.
2
<PAGE> 4
COMPANY SUMMARY
The Company is the holding company for its principal subsidiary, U-Haul
International, Inc. ("U-Haul"). The Company's U-Haul rental operations
represented 83.9%, 85.1%, and 85.0% of the Company's total revenue for the years
ended March 31, 1996, 1995 and 1994, respectively. The Company is also a holding
company for Ponderosa Holdings, Inc. ("Ponderosa") and Amerco Real Estate
Company ("AREC"). Throughout this Prospectus, unless the context otherwise
requires, the term "Company" includes all of the Company's subsidiaries.
U-Haul U-Move Operations. Founded in 1945, U-Haul is primarily engaged,
through its subsidiaries, in the rental of trucks, automobile-type trailers, and
support rental items to the do-it-yourself moving customer. The Company's
do-it-yourself moving business operates under the U-Haul name through an
extensive and geographically diverse distribution network of approximately 1,100
Company-owned U-Haul Centers and approximately 13,700 independent dealers
throughout the United States and Canada. The Company believes that it has more
moving equipment rental locations than its two largest competitors combined.
U-Haul's rental equipment fleet consists of approximately 87,000 trucks and
approximately 99,000 trailers. The Company, as part of its fleet renewal
program, purchased approximately 80,000 new trucks between March 1987 and March
1996 and reduced the overall average age of its truck fleet from approximately
eleven years at March 1987 to approximately five years at March 1996. Since
1990, U-Haul has replaced approximately 62% of its trailer fleet with new, more
aerodynamically designed trailers better suited to the low height profile of
many newly manufactured automobiles. Additionally, U-Haul sells related products
(such as boxes, tape and packaging materials) and rents various kinds of
equipment (such as floor polishing and carpet cleaning equipment).
U-Haul Self-Storage Rental Operations. U-Haul entered the self-storage
business in 1974 and offers for rent more than 18.7 million square feet of
self-storage space through approximately 800 Company-owned or managed storage
locations. The Company believes it is the second largest self-storage operator
(in terms of square feet) in the industry. The Company believes its self-storage
operations are complementary to its do-it-yourself moving business. All of its
self-storage space is located at or near one or more U-Haul Centers or
independent U-Haul dealers.
Ponderosa. Ponderosa serves as the holding company for the Company's
insurance businesses. Ponderosa's two principal subsidiaries are Oxford Life
Insurance Company ("Oxford") and Republic Western Insurance Company ("RWIC").
For financial statement presentation, the Company's insurance subsidiaries
report on a calendar year basis while the Company reports on the basis of a
fiscal year ending on March 31.
Oxford primarily reinsures life, health, and annuity insurance products and
administers the Company's self-insured employee health plan. Approximately 7.2%
of Oxford's premium revenues are from business with the Company. Oxford's
revenues represented 3.8%, 3.2%, and 2.8% of the Company's total revenue for the
years ended March 31, 1996, 1995, and 1994, respectively. Approximately 97% of
Oxford's invested assets are in investment grade (NAIC-2 or greater) fixed
income securities. Oxford is rated "A-VII" by A.M. Best.
RWIC originates and reinsures property and casualty type insurance products
for various market participants, including independent third parties, the
Company's customers, and the Company. RWIC's principal strategy is to capitalize
on its knowledge of insurance products aimed at the moving and rental markets.
Approximately 39% of RWIC's written premiums relate to insurance underwriting
activities involving U-Haul and its affiliates. RWIC's revenues represented
12.3%, 11.7%, and 12.2% of the Company's total revenue for the years ended March
31, 1996, 1995, and 1994, respectively. Approximately 98% of RWIC's invested
assets are in investment grade (NAIC-2 or greater) fixed income securities. RWIC
is rated
"A+-VIII" by A.M. Best.
AREC. AREC owns and actively manages most of the Company's real estate
assets, including the Company's U-Haul Center locations. In addition to its
U-Haul operations, AREC actively seeks to lease or dispose of the Company's
surplus properties.
3
<PAGE> 5
The Company's principal executive offices are located at 1325 Airmotive
Way, Suite 100, Reno, Nevada 89502, and the telephone number of the Company is
(702) 688-6300. For more information on the Company, see "Business."
The following chart represents the corporate structure of the major
operating subsidiaries of the Company.
LOGO
4
<PAGE> 6
RISK FACTORS
THE FOLLOWING MATTERS, INCLUDING THOSE MENTIONED ELSEWHERE, SHOULD BE
CONSIDERED CAREFULLY BY A PROSPECTIVE INVESTOR IN EVALUATING A PURCHASE OF THE
SECURITIES.
COMPANY STOCK REPURCHASE
As discussed in "Shoen Litigation," the Company will repurchase 10,094,852
shares of its Common Stock on or before October 1, 1996 in satisfaction of a
judgment arising out of a lawsuit brought by certain significant shareholders of
the Company against certain of its current and former directors. The Company has
previously repurchased 8,160,124 shares of Common Stock from four of the
plaintiffs in the lawsuit in satisfaction of their claims. After completing all
of these repurchases, the Company will have acquired approximately 47.3% of its
outstanding Common Stock. The Company is not a defendant in this action.
The Company will acquire the remaining shares of Common Stock and will
satisfy the remainder of the judgment in full with the payment of approximately
$256.0 million, plus interest if ultimately awarded. The Company has sold
mortgage notes for proceeds of $83.5 million and has completed a $97.4 million
sale and subsequent leaseback of rental trailers to raise a portion of the cash
needed. The remainder of the cash will be raised from the sale of surplus or
non-essential assets including real estate and mortgage notes, from internally
generated funds and, to the extent necessary, from additional borrowings under
the Company's existing credit agreements.
In order to comply with covenants in the Company's current credit
agreements and to improve the likelihood that its existing debt ratings will be
maintained, the Company increased its equity by selling $100.0 million of its
Series B Convertible Preferred Stock in a private placement.
As a result of funding the repurchase, the Company will incur additional
costs in the future in the form of lease payments and/or interest. Furthermore,
following the repurchase, the Company's outstanding Common Stock will be reduced
by 10,094,852 shares in addition to the 8,160,124 shares repurchased from the
plaintiffs to date. In addition, the Company plans to deduct for income tax
purposes approximately $324.3 million of the payments already made and remaining
to be made by the Company to the plaintiffs, which will reduce the Company's
income tax liability. While the Company believes that such income tax deductions
are appropriate, there can be no assurance that any such deductions ultimately
will be allowed in full.
Furthermore, in the event the fair value of the consideration paid by the
Company to the plaintiffs is in excess of the fair value of the stock
repurchased by the Company, the Company will be required to record an expense
equal to that difference. No such expense was recorded for the previous
transactions with the plaintiffs and no provision has been made in the Company's
financial statements for any payments to be made to the plaintiffs in the
future. For the reasons set forth above, the repurchase could result in material
changes in the Company's financial condition, results of operations, cash flow,
capital expenditure plans, net income, or earnings per common share. See "Shoen
Litigation."
ENVIRONMENTAL MATTERS
The Company has since fiscal 1989 managed a testing and removal program
that is expected to result in the removal of all but approximately 100 of its
underground storage tanks ("USTs") by the year 2000. Under this program, the
Company budgets $7 million annually for UST testing, removal and remediation and
has removed a total of 2,296 USTs from April 1, 1989 through June 30, 1996 at a
total cost of approximately $26.2 million. At June 30, 1996, the Company owned
properties containing approximately 680 USTs. The USTs are used to store various
petroleum products, including gasoline, fuel oil, and waste oil, and a majority
of USTs have a capacity of less than 6,000 gallons. See
"Business -- Environmental Matters."
5
<PAGE> 7
SEASONALITY
The Company's U-Haul rental operations are seasonal and proportionally more
of the Company's revenues and net earnings from its rental operations are
generated in the first and second quarters of each fiscal year (April through
September). In addition, the Company's results of operations have in the past
been and will continue to be affected by a wide variety of factors, including
natural disasters (which affect, among other things, results of insurance
operations) and other events that are beyond the control of the Company.
LIMITED PRIOR MARKET
There has been no public market for any of the Company's securities other
than the Company's Series A 8 1/2% Preferred Stock which is trading on the New
York Stock Exchange under the symbol "AO/A" and a small percentage of the
Company's Common Stock which is trading on Nasdaq under the symbol "AMOO". There
is currently no established market for any Securities that may be offered
pursuant to this Prospectus. Although the Company may apply to have the
Securities offered hereby listed on a national securities exchange or approved
for quotation on Nasdaq, there can be no assurance that it will do so or that an
active trading market will develop or be maintained following such offering. The
absence of any trading market for any of the Securities may have an adverse
effect on the liquidity of such Securities.
USE OF PROCEEDS
The use of proceeds for a particular offering of Securities will be set
forth in the Prospectus Supplement relating to such offering.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratios of earnings to fixed
charges for the periods indicated. For purposes of computing the ratio of
earnings to fixed charges, "earnings" consists of pretax earnings from
operations plus total fixed charges excluding interest capitalized during the
period, and "fixed charges" consists of interest expense, capitalized interest,
amortization of debt expense and discounts, and one-third of the Company's
annual rental expense (which the Company believes is a reasonable approximation
of the interest factor of such rentals). The ratio for the three months ended
June 30, 1996 may not be indicative of the ratio to be expected for fiscal 1997
because, among other reasons, the Company's U-Haul rental operations are
seasonal and proportionally more of its earnings are generated in the first and
second quarters of each fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
JUNE 30, YEARS ENDED MARCH 31,
- ------------ ----------------------------------------------------------------
1996 1996 1995 1994 1993 1992
- ------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
3.48 2.01 1.99 1.67 1.45 1.21
</TABLE>
6
<PAGE> 8
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected financial information, insofar as it relates to each
of the fiscal years ended March 31, 1996, 1995, 1994, 1993, and 1992, has been
derived from and is qualified by reference to the financial statements and other
information and data contained in the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1996, which is incorporated by reference herein.
The selected financial information related to the three months ended June 30,
1996 and 1995 has been derived from the Company's unaudited quarterly report on
Form 10-Q for the quarter ended June 30, 1996, which is incorporated by
reference herein. Oxford and RWIC have been consolidated on the basis of fiscal
years ended December 31. The summaries for the three months ended June 30, 1996
and 1995 are unaudited; however, in the opinion of management, all adjustments
necessary for a fair presentation of such financial information have been
included. The results of operations for the three months ended June 30, 1996 may
not be indicative of the results to be expected for fiscal 1997 because, among
other reasons, the Company's U-Haul rental operations are seasonal and
proportionally more of its revenue and net earnings are generated in the first
and second quarters of each fiscal year.
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
FOR THE YEARS ENDED MARCH 31, JUNE 30,
-------------------------------------------------------------- -----------------------
1996(1) 1995 1994 1993 1992 1996 1995(1)
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Rental, net sales and other revenue.... $1,094,185 $1,058,499 $ 967,743 $ 900,863 $ 845,128 $ 315,551 $ 288,427
Premiums and net investment income..... 200,238 177,733 162,151 139,465 126,756 44,157 42,082
---------- ---------- ---------- ---------- ---------- ---------- ----------
1,294,423 1,236,232 1,129,894 1,040,328 971,884 359,708 330,509
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating expense, advertising expense,
and cost of sales.................... 880,429 779,302 730,880 697,117 661,229 230,506 220,074
Benefits, losses and amortization of
deferred acquisition costs........... 168,363 144,303 130,168 115,969 99,091 27,280 30,169
Depreciation(2)........................ 81,847 151,409 133,485 110,105 109,641 18,779 37,693
Interest expense....................... 67,558 67,762 68,859 67,958 76,189 18,856 18,832
---------- ---------- ---------- ---------- ---------- ---------- ----------
1,198,197 1,142,776 1,063,392 991,149 946,150 295,421 306,768
---------- ---------- ---------- ---------- ---------- ---------- ----------
Pretax earnings from operations........ 96,226 93,456 66,502 49,179 25,734 64,287 23,741
Income tax expense..................... (35,832) (33,424) (19,853) (17,270) (4,940) (24,282) (8,564)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings from operations before
extraordinary loss on early
extinguishment of debt and cumulative
effect of change in accounting
principle............................ 60,394 60,032 46,649 31,909 20,794 40,005 15,177
Extraordinary loss on early
extinguishment of debt(3)............ -- -- (3,370) -- -- -- --
Cumulative effect of change in
accounting principle(4).............. -- -- (3,095) -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net earnings........................... $ 60,394 $ 60,032 $ 40,184 $ 31,909 $ 20,794 $ 40,005 $ 15,177
========== ========== ========== ========== ========== ========== ==========
Ratios:
Ratio of earnings to fixed
charges(5)......................... 2.01 1.99 1.67 1.45 1.21 3.48 1.95
Ratio of EBITDA to Interest(6)....... 3.94 4.80 4.13 3.61 2.97 5.74 4.41
MARCH 31, JUNE 30,
-------------------------------------------------------------- -----------------------
1996 1995 1994 1993 1992 1996 1995
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
Balance Sheet Data:
Total property, plant and equipment,
net................................. $1,316,715 $1,274,246 $1,174,236 $ 989,603 $ 987,095 $1,249,816 $1,268,623
Total assets.......................... $2,827,978 2,605,989 2,344,442 2,024,023 1,979,324 2,714,443 2,678,930
Notes and loans payable............... 998,220 881,222 723,764 697,121 733,322 756,098 866,132
Stockholders' equity.................. 649,548 686,784 651,787 479,958 451,888 677,957 700,949
</TABLE>
- ---------------
(1) Reflects the adoption of Statement of Position 93-7, "Reporting on
Advertising Costs."
(2) Reflects the change in estimated salvage value during the year ended March
31, 1996.
(3) During fiscal 1994, the Company extinguished $25.2 million of its
medium-term notes originally due in fiscal 1995 through 2000. This resulted
in an extraordinary charge of $1.9 million, net of $1.0 million of tax
benefit. The Company also terminated swaps with a national value of $77.0
million originally due in fiscal 1995. The terminations resulted in an
extraordinary charge of $1.5 million net of a $0.8 million tax benefit.
(4) Reflects the adoption of Statement of Financial Accounting Standards No. 106
"Employers' Accounting for Postretirement Benefits Other than Pensions."
(5) For purposes of computing the ratio of earnings to fixed charges, "earnings"
consists of pretax earnings from operations plus total fixed charges
excluding interest capitalized during the period and "fixed charges"
consists of interest expense, capitalized interest, amortization of debt
expense and discounts and one-third of the Company's annual rental expense
(which the Company believes is a reasonable approximation of the interest
factor of such rentals).
(6) For purposes of computing the ratio of EBITDA to Interest, "EBITDA" consists
of net earnings (loss) before interest, taxes, depreciation, and
amortization. EBITDA is not intended to represent cash flow or any other
measure of performance in accordance with generally accepted accounting
principles. EBITDA is included herein because certain investors find it to
be a useful tool in understanding cash flow generated from operations that
is available for debt service, taxes and capital expenditures.
7
<PAGE> 9
BUSINESS
HISTORY
The Company was founded in 1945 under the name "U-Haul Trailer Rental
Company". From 1945 to 1975, the Company rented trailers and trucks on a one-way
and in-town (round-trip) basis through independent dealers (at that time
principally independent gasoline service stations). Since 1974, the Company has
developed a network of Company-owned rental centers ("U-Haul Centers") through
which U-Haul rents its trucks and trailers and provides a number of other
related products and services and has expanded the number and geographic
diversity of its independent dealers. At June 30, 1996, the Company's
distribution network included approximately 1,100 U-Haul Centers and
approximately 13,700 independent dealers.
In March 1974, in conjunction with the acquisition and construction of
U-Haul Centers, the Company entered the self-storage business. As of March 31,
1996, approximately 72% of the Company's U-Haul Centers were located at or near
U-Haul self storage locations. Beginning in 1974, the Company introduced the
sale and installation of hitches and towing systems, as well as the sale of
support items such as packing and moving aids. During 1983, the Company expanded
its range of do-it-yourself rental products to include tools and equipment for
the homeowner and small contractor and other general rental items.
In 1969, the Company acquired Oxford to provide employee health and life
insurance for the Company in a cost-effective manner. In 1973, the Company
formed RWIC to provide automobile liability insurance for the U-Haul truck and
trailer rental customers.
Commencing in 1987, the Company began the implementation of a strategic
plan designed to emphasize reinvestment in its core do-it-yourself rental,
moving, and storage business. The plan included a fleet renewal program (see
"Business -- U-Haul Operations -- Rental Equipment Fleet"), and provided for the
discontinuation of certain unprofitable and unrelated operations. As part of its
plan, the Company discontinued the operation of its full-service moving van
lines, initiated the phase out of its recreational vehicle rental operations,
and began the disposition of its recreational vehicle rental fleet. The
disposition of the moving van lines' assets and the recreational vehicle rental
fleet was completed in 1988 and 1992, respectively. The Company also eliminated
various types of rental equipment and closed certain warehouses and repair
facilities. The Company believes that its refocused business strategy enabled
U-Haul to generate higher revenues and to achieve significant cost savings.
Since 1987, the Company has sold surplus real estate assets with a book
value of approximately $43.6 million for total proceeds of approximately $87.9
million.
In 1990, the Company reorganized its operations into separate legal
entities, each with its own operating, financial, and investment strategies. The
reorganization separated the Company into three parts: U-Haul rental operations,
insurance, and real estate. The purpose of the reorganization was to increase
management accountability and to allow the allocation of capital based on
defined performance measurements.
BUSINESS STRATEGY
U-HAUL OPERATIONS
The Company's present business strategy remains focused on the
do-it-yourself moving customer. The objective of this strategy is to offer, in
an integrated manner over a diverse geographical area, a wide range of products
and services to the do-it-yourself moving customer.
Integrated Approach to Moving. Through its "Moving Made Easier(R)"
program, the Company strives to offer its customers a high quality, reliable,
and convenient fleet of trucks and trailers at reasonable prices while
simultaneously offering other related products and services, including moving
accessories, self-storage facilities, and other items often desired by the
do-it-yourself mover. The rental trucks purchased in the fleet renewal program
have been designed with the do-it-yourself customer in mind to include features
such as low decks, air conditioning, power steering, automatic transmissions,
soft suspensions, AM/FM cassette stereo systems, and over-the-cab storage. The
Company has introduced certain insurance products, including
8
<PAGE> 10
"Safemove(R)" and "Safestor(R)", to provide the do-it-yourself mover with
certain moving-related insurance coverage. In addition, the Company provides
rental customers the option of storing their possessions at either their points
of departure or destination.
Wide Geographic Distribution. The Company believes that the customer
access, in terms of truck or trailer availability and proximity of rental
locations, is critical to its success. Since 1987, the Company has more than
doubled the number of U-Haul rental locations, with a net addition of over 8,300
independent dealers.
High Quality Fleet. To effectively service the U-Haul customer at these
additional rental locations with equipment commensurate with the Company's
commitment to product excellence, the Company, as part of the fleet renewal
program, purchased approximately 80,000 new trucks between March 1987 and March
1996 and reduced the overall average age of its truck fleet from approximately
11 years at March 1987 to approximately five years at March 1996. During this
period, approximately 64,000 trucks were retired or sold.
Since 1990, U-Haul has replaced approximately 61% of its trailer fleet with
new, more aerodynamically designed trailers better suited to the low height
profile of many newly manufactured automobiles. Given the mechanical simplicity
of a trailer relative to a truck as well as a trailer's longer useful life, the
Company expects to replace trailers only as necessary.
Network Management System. Beginning in 1983, the Company implemented a
point-of-sale computer system for all of its Company-owned locations. The system
was designed primarily to handle the Company's reservations, traffic, and
reporting of rental transactions. The Company believes that the implementation
of the system has been a significant factor in allowing the Company to increase
its fleet utilization. On an ongoing basis, the Company is enhancing and
revising the system to include managerial tools, such as budgeting and profit
and loss reporting. The Company is also expanding the system to include
transaction reporting from independent dealers and managed storage facilities.
INSURANCE OPERATIONS
Oxford's business strategy emphasizes long-term capital growth funded
through earnings from reinsurance and investment activities. In the past, Oxford
has selectively reinsured life, health, and annuity-type insurance products.
Oxford anticipates pursuing its growth strategy by providing reinsurance
facilities to well-managed insurance or reinsurance companies which offer
similar products and are in need of additional capital, either as a result of
rapid growth or regulatory demands, or are interested in divesting non-core
business lines.
RWIC's principal business strategy is to capitalize on its knowledge of
insurance products aimed at the moving and rental markets. RWIC believes that
providing U-Haul and U-Haul customers with property and casualty insurance
coverage has enabled it to develop expertise in the areas of rental vehicle
lessee insurance coverage, self-storage property coverage, motor home insurance
coverage, and general rental equipment coverage. RWIC has used, and plans to
continue to use, this knowledge to expand its customer base by offering similar
products to insureds other than U-Haul and its customers. In addition, RWIC
plans to expand its involvement in specialized areas by offering commercial
multi-peril and excess workers' compensation.
U-HAUL OPERATIONS
GENERAL
The Company's do-it-yourself moving business operates under the U-Haul name
through an extensive and geographically diverse distribution network of
Company-owned U-Haul Centers and independent dealers throughout the United
States and Canada.
Substantially all of the Company's rental revenue is derived from
do-it-yourself moving customers. Other occasional use customers provide the
remaining rental revenue. Moving rentals include: (i) in-town (round-trip)
rentals, where the equipment is returned to the originating U-Haul Center or
independent dealer and (ii) one-way rentals, where the equipment is returned to
a U-Haul Center or independent dealer in another
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city. Typically, the number of in-town(R) rental transactions is substantially
greater than the number of one-way rental transactions. However, total revenues
generated by one-way transactions typically exceed total revenues from in-town
rental transactions.
As part of the Company's integrated approach to the do-it-yourself moving
market, U-Haul has a variety of product offerings. U-Haul's "Moving Made
Easier(R)" program is designed to offer clean, well-maintained rental trucks and
trailers at a price the customer can afford and to provide support items such as
furniture pads, hand trucks, appliance and utility dollies, mirrors, tow bars,
tow dollies, and bumper hitches. The Company also sells boxes, tape, and
packaging materials and rents additional items such as floor polishers and
carpet cleaning equipment at its U-Haul Center locations. U-Haul Centers also
sell and install hitches, sell propane, and some of them sell gasoline. U-Haul
sells insurance packages such as (i) "Safemove(R)", which provides moving
customers with a damage waiver, cargo protection, and medical and life coverage,
and (ii) "Safestor(R)", which provides self-storage rental customers with
various insurance coverages.
The U-Haul truck and trailer rental business tends to be seasonal with
proportionally more transactions and revenues generated in the spring and summer
months than during the balance of the year. The Company attributes this
seasonality to the preference of do-it-yourself movers to move during this time.
Also, consistent with do-it-yourself mover preferences, the number of rental
transactions tends to be higher on weekends than on weekdays.
RENTAL EQUIPMENT FLEET
As of June 30, 1996, U-Haul's rental equipment fleet consisted of
approximately 87,000 trucks and approximately 99,000 trailers. Rental trucks are
offered in five sizes and range in size from the ten-foot "Mini-Mover(R)" to the
twenty-six-foot "Super-Mover(R)". In addition, U-Haul offers pick-up trucks and
cargo vans at many of its locations. Trailers range between six feet and twelve
feet in length and are offered in both open and closed box configurations.
DISTRIBUTION NETWORK
The Company's U-Haul products and services are marketed across the United
States and Canada through approximately 1,100 Company-owned U-Haul Centers and
approximately 13,700 independent dealers as of June 30, 1996. The independent
dealers, which include gasoline station operators, general equipment rental
operators, and others, rent U-Haul trucks and trailers in addition to carrying
on their principal lines of business. U-Haul Centers, however, are dedicated to
the U-Haul line of products and services. Independent dealers are commonly
located in suburban and rural markets, while U-Haul Centers are concentrated in
urban and suburban markets.
Independent dealers receive U-Haul equipment on a consignment basis and are
paid a commission on gross revenues generated from their rentals. Independent
dealers also may earn referral commissions on U-Haul products and services
provided at other U-Haul locations. The Company maintains contracts with its
independent dealers that can be canceled upon thirty days' written notice by
either party.
In addition, the Company has sought to improve the productivity of its
rental locations by installing computerized reservations and network management
systems in each U-Haul Center and with a limited number of independent dealers.
The Company believes that these systems have been a major factor in enabling the
Company to deploy equipment more effectively throughout its network of locations
and anticipates expanding these systems to cover additional independent dealers.
The Company's U-Haul Center and independent dealer network in the United
States and Canada is divided into ten districts, each supervised by an area
district vice president. Within the districts, the Company has established local
marketing companies, each of which, guided by a marketing company president, is
responsible for retail marketing at all U-Haul Centers and independent dealers
within its respective geographic area.
Although rental dealers are independent, U-Haul area field managers work
with the dealer network by reviewing each independent dealer's facilities,
auditing their activities, and providing training on securing more
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customers on a regular basis. In addition, the area field managers recruit new
independent dealers for expansion or replacement purposes. U-Haul has instituted
performance compensation programs that focus on accomplishment and reward strong
performers.
SELF-STORAGE BUSINESS
U-Haul entered the self-storage business in 1974 and since that time has
increased the rentable square footage of its storage locations through the
acquisition of existing facilities and new construction. In addition, the
Company has entered into management agreements to manage self-storage properties
owned by others and is expanding its ownership of self-storage facilities. The
Company also provides financing and management services for independent
self-storage businesses.
Through approximately 800 Company-owned or managed storage locations in the
United States and Canada, the Company offers for rent more than 18.7 million
square feet of self-storage space as of June 30, 1996. The Company's
self-storage facility locations range in size from 1,000 to 149,000 square feet
of storage space, with individual storage spaces ranging in size from 16 square
feet to 200 square feet.
The primary market for storage rooms is the storage of household goods. The
majority of customers renting storage rooms are in the process of a move. Even
with an increase of over 25,000 new and acquired storage rooms during fiscal
1996, average occupancy remained high, rates in the mid 80% range, with very
little seasonal variation. During fiscal 1996 and fiscal 1995, delinquent
rentals as a percentage of total storage rentals were approximately 6% in each
year. The Company considers this rate to be satisfactory.
EQUIPMENT DESIGN, MANUFACTURE AND MAINTENANCE
The Company designs and manufactures its truck van boxes, trailers, and
various other support rental equipment items. With the needs of the
do-it-yourself moving customer in mind, the Company's equipment is designed to
achieve high safety standards, simplicity of operation, reliability,
convenience, durability, and fuel economy. Truck chassis are manufactured to
Company specifications by both foreign and domestic truck manufacturers. These
chassis receive certain post-delivery modifications and are joined with van
boxes at seven Company-owned manufacturing and assembly facilities in the United
States.
The Company services and maintains its trucks and trailers through an
extensive preventive maintenance program. Regular vehicle maintenance is
generally performed at Company-owned facilities located throughout the United
States and Canada. Major repairs are performed either by the chassis
manufacturers' dealers or by Company-owned repair shops. To the extent
available, the Company takes advantage of manufacturers' warranties.
COMPETITION
The do-it-yourself moving truck and trailer rental market is highly
competitive and dominated by national operators in both the in-town and one-way
markets. These competitors include the truck rental divisions of Ryder System,
Penske Truck Leasing, and Budget Rent-A-Car. Management believes that there are
two distinct users of rental trucks: commercial users and do-it-yourself users.
As noted above, the Company focuses on the do-it-yourself mover. The Company
believes that the principal competitive factors are price, convenience of rental
locations, and availability of quality rental equipment.
The self-storage industry is also highly competitive. The top three
national firms, including the Company, Public Storage and Shurgard, only account
for ten percent of total industry square footage. Efficient management of
occupancy and delinquency rates, as well as price and convenience, are key
competitive factors.
EMPLOYEES
For the period ended March 31, 1996, the Company's non-seasonal workforce
consisted of approximately 13,000 employees comprised of approximately 39%
part-time and 61% full-time employees. During the summer months, the Company
increases its workforce by approximately 450 employees and the percentage of
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<PAGE> 13
part-time employees increases to approximately 43% of the total workforce. The
Company's employees are non-unionized, and management believes that its
relations with its employees are satisfactory.
INSURANCE OPERATIONS
OXFORD -- LIFE INSURANCE
Oxford underwrites life, health and annuity insurance, both as a direct
writer and as an assuming reinsurer. Oxford's direct writings are primarily
related to the underwriting of credit life and accident and health business
which accounted for 20.8% of Oxford's premium revenues for the year ended
December 31, 1995. Oxford's other direct lines are related to group life and
disability coverage issued to employees of the Company. For the year ended
December 31, 1995, approximately 7.2% of Oxford's premium revenues resulted from
business with the Company. In addition, direct premium revenue includes
individual life insurance acquired from other insurers. Oxford administers the
Company's self-insured group health and dental plans.
Oxford's reinsurance assumed lines, which accounted for approximately 71.8%
of Oxford's premium revenues for the year ended December 31, 1995, include
individual life insurance coverage, annuity coverages, excess loss health
insurance coverage, credit life, credit accident and health, and short-term
travel accident coverage. These reinsurance arrangements are entered into with
unaffiliated insurers, except for travel accident products reinsured from RWIC.
RWIC -- PROPERTY AND CASUALTY
RWIC's underwriting activities consist of three basic areas: U-Haul and
U-Haul-affiliated underwriting, direct underwriting, and assumed reinsurance
underwriting. U-Haul underwritings include coverage for U-Haul and U-Haul
employees, and U-Haul-affiliated underwritings consist primarily of coverage for
U-Haul customers. For the year ended December 31, 1995, approximately 39% of
RWIC's written premiums relate to insurance underwriting activities involving
U-Haul and its affiliates. RWIC's direct underwriting is done through home
office underwriters and selected general agents. The products provided include
liability coverage for rental vehicle lessees and storage rental properties, and
coverage for commercial multiple peril and excess workers' compensation. RWIC's
assumed reinsurance underwriting is done via broker markets and includes, among
other things, reinsurance of municipal bond insurance written through MBIA, Inc.
RWIC's liability for unpaid losses is based on estimates of the ultimate
cost of settling claims reported prior to the end of the accounting period,
estimates of reinsurers and estimates of incurred but unreported losses which
are based on RWIC's experience and insurance industry historical experience.
Unpaid loss adjustment expenses are based on historical ratios of loss
adjustment expense paid to losses paid.
The liabilities are estimates of the amount necessary to settle all claims
as of the date of the stated reserves and all incurred but not reported claims.
RWIC updates the reserves as additional facts regarding claims become available.
In addition, court decisions, economic conditions and public attitudes impact
the estimation of reserves and also the ultimate cost of claims. In estimating
reserves, no attempt is made to isolate inflation from the combined effect of
numerous factors including inflation. Unpaid losses and unpaid loss expenses are
not discounted.
RWIC's unpaid loss and loss expenses are certified annually by an
independent actuarial consulting firm as required by state regulation.
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<PAGE> 14
Activity in the liability for unpaid claims and claim adjustment expenses
is summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at January 1............................... $329,741 $314,482 $320,509
Less reinsurance recoverable..................... 74,663 76,111 81,747
-------- -------- --------
Net balance at January 1........................... 255,078 238,371 238,762
Incurred related to:
Current year..................................... 114,110 102,782 91,044
Prior years...................................... 8,292 6,576 12,688
-------- -------- --------
Total incurred..................................... 122,402 109,358 103,732
Paid related to:
Current year..................................... 22,576 22,269 20,200
Prior years...................................... 86,796 70,382 83,923
-------- -------- --------
Total paid......................................... 109,372 92,651 104,123
Net balance at December 31......................... 268,108 255,078 238,371
Plus reinsurance recoverable..................... 73,873 74,663 76,111
-------- -------- --------
Balance at December 31............................. $341,981 $329,741 $314,482
======== ======== ========
</TABLE>
As a result of changes in estimates of insured events in prior years, the
provision for unpaid loss and loss adjustment expenses (net of reinsurance
recoveries of $26.7 million and $26.5 million in 1995 and 1994, respectively)
increased by $8.3 million and $6.6 million in 1995 and 1994, respectively,
because of higher than anticipated losses and related expenses for claims
associated with assumed reinsurance and certain retrospectively rated policies.
The table on the next page illustrates the change in unpaid loss and loss
adjustment expenses. The first line shows the reserves as originally reported at
the end of the stated year. The second section, reading down, shows the
cumulative amounts paid as of the end of successive years with respect to that
reserve. The third section, reading down, shows revised estimates of the
original recorded reserve as of the end of successive years. The last section
compares the latest revised estimated reserve amount to the reserve amount as
originally established. This last section is cumulative and should not be
summed.
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<PAGE> 15
UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------------------------------------------------------------------
1985 1986 1987 1988 1989 1990
-------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Adjustment Expenses:......... $123,342 $146,391 $168,688 $199,380 $207,939 $226,324
Paid (Cumulative) as of:
One year later............ 41,170 54,627 49,681 59,111 50,992 55,128
Two years later........... 77,697 92,748 91,597 89,850 87,850 97,014
Three years later......... 105,160 124,278 110,834 114,979 116,043 120,994
Four years later.......... 126,734 137,744 129,261 133,466 132,703 133,338
Five years later.......... 133,421 151,354 142,618 145,864 142,159 144,764
Six years later........... 142,909 161,447 152,579 153,705 151,227
Seven years later......... 151,379 169,601 158,531 161,498
Eight years later......... 158,728 173,666 165,021
Nine years later.......... 162,082 178,101
Ten years later........... 165,923
Reserve Reestimated as of:
One year later............ 138,287 167,211 187,663 200,888 206,701 229,447
Two years later........... 147,968 192,272 190,715 202,687 206,219 221,450
Three years later......... 168,096 192,670 194,280 203,343 199,925 211,998
Four years later.......... 168,040 199,576 195,917 199,304 198,986 207,642
Five years later.......... 175,283 201,303 195,203 200,050 197,890 200,629
Six years later........... 178,232 202,020 196,176 198,001 194,601
Seven years later......... 182,257 202,984 196,770 197,112
Eight years later......... 184,266 202,654 196,072
Nine years later.......... 187,247 203,285
Ten years later........... 188,301
Initial Reserve in Excess
of (Less than)
Reestimated Reserve:
Amount (Cumulative)......... $(64,959) $(56,894) $(27,384) $ 2,268 $ 13,338 $ 25,695
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Adjustment Expenses:......... $236,019 $238,762 $314,482 $329,741 $341,981
Paid (Cumulative) as of:
One year later............ 65,532 83,923 70,382 86,796
Two years later........... 105,432 123,310 115,467
Three years later......... 126,390 153,030
Four years later.......... 143,433
Five years later..........
Six years later...........
Seven years later.........
Eight years later.........
Nine years later..........
Ten years later...........
Reserve Reestimated as of:
One year later............ 231,779 251,450 321,058 338,033
Two years later........... 224,783 254,532 323,368
Three years later......... 223,403 253,844
Four years later.......... 214,854
Five years later..........
Six years later...........
Seven years later.........
Eight years later.........
Nine years later..........
Ten years later...........
Initial Reserve in Excess
of (Less than)
Reestimated Reserve:
Amount (Cumulative)......... $ 21,165 $(15,082) $ (8,886) $ (8,292)
</TABLE>
The operating results of the property and casualty insurance industry,
including RWIC, are subject to significant fluctuations due to numerous factors,
including premium rate competition, catastrophic and unpredictable events
(including man-made and natural disasters), general economic and social
conditions, interest rates, investment returns, changes in tax laws, regulatory
developments, and the ability to accurately estimate liabilities for unpaid
losses and loss adjustment expenses.
INVESTMENTS
Oxford's and RWIC's investments must comply with the insurance laws of the
State of Arizona where the companies are domiciled. These laws prescribe the
type, quality, and concentration of investments that may be made. In general,
these laws permit investments in federal, state, and municipal obligations,
corporate bonds, preferred and common stocks, real estate mortgages, and real
estate, within specified limits and subject to certain qualifications. Moreover,
in order to be considered an acceptable reinsurer by cedents and intermediaries,
a reinsurer must offer financial security. The quality and liquidity of invested
assets are important considerations in determining such security.
The investment philosophies of Oxford and RWIC emphasize protection of
principal through the purchase of investment grade fixed income securities.
Approximately 97% of Oxford's portfolio and 98% of RWIC's portfolio consist of
investment grade (NAIC-2 or greater) fixed income securities. The maturity
distributions are designed to provide sufficient liquidity to meet future cash
needs.
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<PAGE> 16
REINSURANCE
The Company's insurance operations assume and cede insurance from and to
other insurers and members of various reinsurance pools and associations.
Reinsurance arrangements are utilized to provide greater diversification of risk
and to minimize exposure on large risks. However, the original insurer remains
liable should the assuming insurer not be able to meet its obligations under the
reinsurance agreements.
REGULATION
The Company's insurance subsidiaries are subject to considerable regulation
and supervision in the states in which they transact business. The purpose of
such regulation and supervision is primarily to provide safeguards for
policyholders. As a result of federal legislation, the primary regulation of the
insurance industry is performed by the states. State regulation extends to such
matters as licensing companies; restricting the types or quality of investments;
regulating capital and surplus and actuarial reserve maintenance; setting
solvency standards; requiring triennial financial examinations, market conduct
surveys, and the filing of reports on financial condition; licensing agents;
regulating aspects of the insurance companies' relationship with their agents;
restricting expenses, commissions, and new business issued; imposing
requirements relating to policy contents; restricting use of some underwriting
criteria; regulating rates, forms, and advertising; limiting the grounds for
cancellations or non-renewal of policies; regulating solicitation and
replacement practices; and specifying what constitutes unfair practices. State
laws also regulate transactions and dividends between an insurance company and
its parent or affiliates, and generally require prior approval or notification
for any change in control of the insurance subsidiary.
In the past few years, the insurance and reinsurance regulatory framework
has been subjected to increased scrutiny by the National Association of
Insurance Commissioners (the NAIC), state legislatures, insurance regulators,
and the United States Congress. State legislatures have considered or enacted
legislative proposals that alter, and in many cases increase, state authority to
regulate insurance companies and holding company systems. The NAIC and state
insurance regulators have been examining existing laws and regulations with an
emphasis on insurance company investment and solvency issues. Legislation has
been introduced in Congress that could result in the federal government assuming
some role in the regulation of the insurance industry. It is not possible to
predict the future impact of changing state and federal regulation on the
operations of Oxford and RWIC.
Oxford and RWIC have adopted the NAIC minimum risk-based capitalization
requirements for insurance companies. As of December 31, 1995, Oxford and RWIC
are in compliance with these requirements.
COMPETITION
The insurance industry is competitive. Competitors include a large number
of life insurance companies and property and casualty insurance companies, some
of which are owned by stockholders and others of which are owned by
policyholders (mutual). Many companies in competition with Oxford and RWIC have
been in business for a longer period of time or possess substantially greater
financial resources. Competition in the insurance business is based upon price,
product design, and services rendered to producers and policyholders.
AMERCO REAL ESTATE OPERATIONS
AREC owns and manages most of the Company's real estate assets, including
the Company's U-Haul Center locations. AREC has responsibility for acquiring and
developing properties suitable for new U-Haul Centers and self-storage
locations. AREC is also responsible for managing any environmental risks
associated with the Company's real estate. In addition to the U-Haul operations,
AREC actively seeks to lease or dispose of surplus properties.
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<PAGE> 17
ENVIRONMENTAL MATTERS
UNDERGROUND STORAGE TANKS
The Company owns properties that, as of June 30, 1996, contained
approximately 680 underground storage tanks (USTs). The USTs are used to store
various petroleum products, including gasoline, fuel oil, and waste oil. The
USTs are subject to various federal, state, and local laws and regulations that
require testing and removal of leaking USTs, and remediation of polluted soils
and groundwater under certain circumstances. In addition, if leakage from USTs
has migrated, the Company may be subject to civil liability to third parties.
From April 1, 1989 through June 30, 1996, the Company incurred expenditures
totaling approximately $26.2 million for removal and remediation of 2,296 USTs,
a portion of which may be recovered from insurance and certain states' funds for
the removal of USTs. Expenditures incurred through the end of fiscal 1996 may
not be representative of future experience. However, the Company believes that
compliance with laws and regulations, and cleanup and liability costs related to
USTs will not have a material adverse effect on the Company's financial
condition or operating results.
In fiscal 1989, the Company began its current program emphasizing removal
of all but approximately 100 USTs by the year 2000. The USTs expected to remain
at the year 2000 are currently anticipated to consist primarily of waste oil
tanks not required to be removed under current laws and regulations and gasoline
tanks located at its remote rental locations where their use is deemed necessary
to service the Company's moving customers. The Company has budgeted $7.0 million
for fiscal 1997 for UST testing, removal, and remediation. Removal and
remediation costs are capitalized to the extent these costs improve the safety
or efficiency of the properties or are incurred in preparing the properties for
sale.
FEDERAL SUPERFUND SITES
The Company has been named as a "potentially responsible party" (PRP) with
respect to the disposal of hazardous wastes at fourteen federal superfund
hazardous waste sites located in eleven states. Under applicable laws and
regulations the Company could be held jointly and severally liable for the costs
to clean up these sites. Currently, the Company has entered into settlements for
nine of the sites for de minimis amounts. One of the sites has been disputed by
the Company with no response for eight years. Based upon the information
currently available to the Company regarding these fourteen sites, the current
anticipated magnitude of the cleanup, the number of PRPs, and the volumes of
hazardous waste currently anticipated to be attributed to the Company and other
PRPs, the Company believes its share of the cost of investigation and cleanup at
the fourteen superfund sites will not have a material adverse effect on the
Company's financial condition or operating results.
WASHINGTON STATE HAZARDOUS WASTE SITES
A subsidiary of U-Haul owns one property located within two different state
hazardous waste sites in the State of Washington. The property is located in
Yakima, Washington and is believed to contain elevated levels of pesticide and
other contaminant residue as a result of onsite operations conducted by one or
more former owners. The State of Washington has designated the property as a
state hazardous waste site known as the "Yakima Valley Spray Site". The
subsidiary, U-Haul Co. of Inland Northwest (Inland Northwest), has been named by
the State of Washington as a "potentially liable party" (PLP) under state law
with respect to this site, along with approximately 100 other companies and
individuals. Inland Northwest, together with eight other companies and persons,
has formed a committee that has retained an environmental consultant. The
process of site assessment on the Yakima Valley Spray Site is ongoing and, based
upon the information currently available to Inland Northwest regarding the
volume and nature of wastes present, Inland Northwest is unable to reasonably
assess the potential investigation and cleanup costs, but the costs could be
substantial. Although Inland Northwest has entered into an agreement with such
other companies and persons under which Inland Northwest has assumed
responsibility for 20% of the costs to investigate the site, no agreement among
the parties with respect to cleanup costs has been entered into at the date
hereof.
In addition, Inland Northwest has been named by the State of Washington as
a PLP along with 300 other PLPs with respect to another state-listed hazardous
waste site known as the "Yakima Railroad Site". The
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<PAGE> 18
Yakima Valley Spray Site is located within the Yakima Railroad Site. Inland
Northwest has been notified that the Yakima Railroad Site involves potential
groundwater contamination in an area of approximately two square miles. Inland
Northwest has contested its designation as a PLP at this site, but, at the date
hereof, no formal ruling has been issued in this matter.
In February 1992, the State of Washington issued an enforcement order to
Inland Northwest and eight other parties requiring an interim remedial action
and the provision of bottled water to households that obtain drinking water from
wells within the Yakima Railroad Site. Without conceding any liability, Inland
Northwest and several of the other PLPs have implemented the bottled water
program. Over the past four years, Inland Northwest has incurred an average
annual expense of $720 for the bottled water program. The State of Washington
has stated its intention to expand the existing municipal water system to supply
municipal water to those households currently receiving bottled water, and it is
estimated that the cost thereof will be approximately $6 million, with such cost
being allocated among the 300 PLPs.
In addition, there will be costs associated with remedial measures to
address the regional groundwater contamination issue. The process of site
assessment on the Yakima Railroad Site is ongoing and, based upon the
information currently available to Inland Northwest regarding the volume and
nature of wastes present, Inland Northwest is unable to reasonably assess the
potential investigation and clean-up costs, but the costs could be substantial.
Moreover, the investigative and remedial costs incurred by the State can be
imposed upon Inland Northwest and any other PLP as a joint and several
liability. At the date of this report, other than the indication of the
expansion of the municipal water system, there has been no formal indication
from the State of Washington of its intentions regarding future cost recoveries
at the Yakima Railroad Site.
OTHER
Subsidiaries of the Company own twelve facilities that manufacture and
assemble various components of the Company's equipment. In addition, the
subsidiaries own various facilities engaged in the maintenance and servicing of
its equipment. Various individual properties owned and operated by the Company
are subject to various state and local laws and regulations relating to the
methods of disposal of solvents, tires, batteries, antifreeze, waste oils and
other materials. Compliance with these requirements is monitored and enforced at
the local level. Based upon information currently available to the Company,
compliance with these local laws and regulations has not had, and is not
expected to have, a material adverse effect on the Company's financial condition
or operating results.
AREC currently leases approximately 200 properties to various businesses.
AREC has a policy of leasing properties subject to an environmental
indemnification from the lessee for operations conducted by the lessee. It
should be recognized, however, that such indemnifications do not cover
pre-existing conditions and may be limited by the lessee's financial
capabilities. In any event, to the extent that any lessee does not perform any
of its obligations under applicable environmental laws and regulations, the
Company may remain potentially liable to governmental authorities and other
third parties for environmental conditions at the leased properties.
Furthermore, as between the Company and its lessees, disputes may arise as to
allocation of liability with respect to environmental conditions at the leased
properties.
SHOEN LITIGATION
A judgment was entered on February 21, 1995, in an action in the Superior
Court of the State of Arizona, Maricopa County, entitled Samuel W. Shoen, M.D.,
et al. v. Edward J. Shoen, et al., No. CV88-20139, instituted August 2, 1988
(the "Shoen Litigation") against Edward J. Shoen, James P. Shoen, Aubrey K.
Johnson, John M. Dodds, and William E. Carty, who are current members of the
Board of Directors of the Company and against Paul F. Shoen, who is a former
director. The Company was also a defendant in the action as originally filed,
but was dismissed from the action on August 15, 1994. The plaintiffs alleged,
among other things, that certain of the individual plaintiffs were wrongfully
excluded from sitting on the Company's Board of Directors in 1988 through the
sale of Company Common Stock to certain key employees. That sale allegedly
prevented the plaintiffs from gaining a majority position in the Company's
Common Stock and control of the Company's Board of Directors. The plaintiffs
alleged various breaches of fiduciary duty and
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other unlawful conduct by the individual defendants and sought equitable relief,
compensatory damages, punitive damages, and statutory post-judgment interest.
Based on the plaintiffs' theory of damages, the court ruled that the
plaintiffs elected as their remedy in this lawsuit to transfer their shares of
stock in the Company to the defendants upon the satisfaction of the judgment.
The judgment was entered against the defendants in the amount of approximately
$461.8 million plus interest and taxable costs. In addition, on February 21,
1995, judgment was entered against Edward J. Shoen in the amount of $7 million
as punitive damages. On March 23, 1995, Edward J. Shoen filed a notice of appeal
with respect to the award of punitive damages.
Pursuant to separate indemnification agreements, the Company has agreed to
indemnify the defendants to the fullest extent permitted by law or the Company's
Articles of Incorporation or By-Laws, for all expenses and damages incurred by
the defendants in this proceeding, subject to certain exceptions. In addition,
the transfer of Common Stock from the plaintiffs to the defendants would
implicate rights held by the Company. For example, pursuant to the Company's
By-Laws, the Company has certain rights of first refusal with respect to the
transfer of the plaintiffs' stock. Furthermore, the defendants' rights to
acquire the plaintiffs' stock may present a corporate opportunity which the
Company is entitled to exercise.
On February 21, 1995, Edward J. Shoen, James P. Shoen, Aubrey K. Johnson,
John M. Dodds, and William E. Carty (the "Director-Defendants") filed for
protection under Chapter 11 of the federal bankruptcy laws, resulting in the
issuance of an order automatically staying the execution of the judgment against
those defendants. In late April 1995, the Director-Defendants, in cooperation
with the Company, filed plans of reorganization in the United States Bankruptcy
Court for the District of Arizona, all of which propose the same funding and
treatment of the plaintiffs' claims resulting from the judgment in the Shoen
Litigation. The plans of reorganization, as amended and restated on February 29,
1996, were confirmed by the bankruptcy court on March 15, 1996. The plans, as
confirmed, shall collectively be referred to as the "Plan".
On April 25, 1995, the Director-Defendants filed an action in the
bankruptcy court seeking injunctive relief to prevent the Company from
conducting its annual meetings of stockholders until the Plan is confirmed
and/or to prevent the plaintiffs from voting the common stock that they are
required to transfer pursuant to the Shoen Litigation. On June 8, 1995, the
bankruptcy court issued a memorandum decision and an order enjoining the Company
from holding its 1994 Annual Meeting of Stockholders (which was originally
delayed as a result of litigation initiated by Paul F. Shoen) or any subsequent
annual meeting of stockholders until the court enters an order confirming or
denying confirmation of the Plan or until further order of the court. On June
21, 1996, the bankruptcy court issued an order enjoining the annual meetings
until consummation of the Plan. The Company has not scheduled the 1994, 1995, or
1996 Annual Meetings of Stockholders. However, the Company anticipates that such
meetings will occur as soon as practicable after the consummation of the Plan.
In early October 1995, the Director-Defendants made written demand upon the
Company to make them whole for losses resulting from the judgment in the Shoen
Litigation. The Director-Defendants also asserted substantial claims against the
Company related to or arising from the Shoen Litigation, including, but not
limited to, claims for financial losses, emotional distress, loss of business
and/or professional reputation, loss of credit standing and breach of contract.
The Director-Defendants claim that their actions that form the basis for the
judgment in the Shoen Litigation were actions within the scope of the
Director-Defendants' duties and that such actions were undertaken in good faith
and for the benefit of the Company.
In addition, the Director-Defendants had retained unexpired appeal rights
with respect to the Shoen Litigation. If the Director-Defendants exercised such
appeal rights, the damage award may have increased and the Company may have been
exposed to increased liability to the Director-Defendants under existing
indemnity agreements.
In recognition of the foregoing and of the substantial risks associated
with an appeal of the Shoen Litigation, on October 17, 1995, the Company entered
into an agreement ("the Agreement") with the Director-Defendants resolving the
foregoing issues. Under the Agreement, the Company agreed, among other things,
to fund the Plan and to release the Director-Defendants from all claims the
Company may have against
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them arising from the Shoen Litigation. In addition, the Director-Defendants
agreed, (i) to release, subject to certain exceptions, the Company from any
claim they may have against it pursuant to any indemnification agreements, (ii)
to assign all rights they have under the Shoen Litigation to the Company, (iii)
to waive all appeal rights related to the Shoen Litigation (not including Edward
J. Shoen's appeal of the punitive damage award), and (iv) not to oppose the
Company should it elect to exercise its right of first refusal on any Common
Stock to be transferred by the plaintiffs upon satisfaction of the judgment in
the Shoen Litigation.
On September 19, 1995, the Director-Defendants entered into a Stock
Purchase Agreement with one of the plaintiffs in the Shoen Litigation, Maran,
Inc., a Nevada corporation ("Maran"). All of Maran's voting stock was held by
Mary Anna Shoen Eaton ("Shoen Eaton"), who was also a plaintiff in the Shoen
Litigation. Under the Stock Purchase Agreement, the Director-Defendants agreed
to purchase 3,343,076 shares of Common Stock held by Maran in exchange for
approximately $22.7 million. The Stock Purchase Agreement was approved by the
bankruptcy court on October 10, 1995. On October 18, 1995, the Company exercised
its right of first refusal and repurchased the Common Stock that was the subject
of the Stock Purchase Agreement for the price set forth therein. In addition, on
September 19, 1995, the Director-Defendants, Shoen Eaton, Maran, and the Company
entered into a Settlement Agreement, providing for the payment to Shoen Eaton of
approximately $41.4 million in exchange for a full release of all claims against
the Company and the Director-Defendants, including all claims asserted by her in
the Shoen Litigation. The Settlement Agreement was approved by the bankruptcy
court on October 10, 1995, and the payment was made on October 18, 1995. As a
result of the foregoing, and after giving effect to the discount achieved
through settlement, approximately $84.6 million of the judgment in the Shoen
Litigation was satisfied.
Pursuant to the judgment in the Shoen Litigation, on January 30, 1996, the
Company acquired 833,420 shares of Common Stock held by L.S.S., Inc. ("L.S.S.")
in exchange for approximately $5.7 million and paid damages to L.S. Shoen of
approximately $15.4 million. The Company also funded a total of approximately
$2.1 million of statutory post-judgment interest on the above amounts. In
addition, on February 7, 1996, the Company acquired 1,651,644 shares of Common
Stock held by Thermar, Inc. ("Thermar") by paying Thermar approximately $41.8
million, including damages of approximately $30.6 million. The Company also paid
to Thermar approximately $4.1 million of statutory post-judgment interest on
such amount. Finally, on July 19, 1996, the Company paid CEMAR, Inc. ("Cemar")
approximately $15.9 million to repurchase 2,331,984 shares of Common Stock held
by Cemar. On the same date, the Company paid damages to Cecilia M. Hanlon of
approximately $43.1 million and statutory post-judgment, pre-petition date
interest of $129,000. On August 6, 1996, the Company funded approximately $8.3
million of post-petition date interest by depositing such amount into an escrow
account pending the outcome of a dispute involving the entitlement of the
plaintiffs in the Shoen Litigation to post-petition date interest. Upon the
funding of the above-mentioned escrow account, the Common Stock held by Cemar
was transferred into the Company treasury. As a result of the foregoing
transactions, the balance of the judgment has been reduced to approximately
$256.0 million, plus post-petition date interest claimed by the plaintiffs.
With respect to the remaining plaintiffs in the Shoen Litigation, the Plan
provides for the payment by the Company of approximately $68.6 million in
exchange for 10,094,852 shares of Common Stock held by five of the plaintiffs
and for the payment by the Company of approximately $187.4 million to three of
the plaintiffs as damages.
As of the date hereof, an issue remains regarding whether or not the
remaining plaintiffs and Cecilia M. Hanlon are entitled to statutory
post-judgment interest at the rate of 10% per year for the period following the
Director-Defendants' bankruptcy filings. As of September 5, 1996, total accrued
post-petition date interest on the outstanding balance of the judgment is
approximately $39.2 million and is accruing at the rate of approximately $70,000
per day. On July 19, 1996 the bankruptcy court ruled that the plaintiffs are
entitled to such post-petition date interest. The Director-Defendants and the
Company intend to appeal the bankruptcy court's decision following the entry of
a final order on this issue by the bankruptcy court. Pending the final
resolution of the post-petition date interest dispute (including all appeals by
either side), the Company intends, if necessary, to deposit either cash or, in
appropriate circumstances, an irrevocable letter of credit into an escrow
account to secure payment of the post-petition date interest. The amount of the
escrow deposit
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would be in such case equal to the accrued interest to the date funds are
deposited into escrow. As provided in the Plan, the escrow deposit, plus
interest thereon, will remain until all aspects of the post-petition date
interest dispute have been finally decided, including dischargeability
litigation which the plaintiffs filed against the Director-Defendants in the
bankruptcy court as an alternative means of trying to collect post-petition date
interest. The dischargeability litigation has not been set for trial and is
likely to await the outcome of the other aspects of the post-petition date
interest dispute.
On March 15, 1996, the bankruptcy court issued a Confirmation Order in each
Director-Defendant's Chapter 11 case. This order provided that the effective
date for the Plan (i.e., the date on which the Company will pay the plaintiffs
an aggregate of approximately $256.0 million and the remaining plaintiffs will
surrender their Common Stock) will be no later than October 1, 1996 (absent
compelling circumstances justifying an extension of that date).
The Company has sold mortgage notes for proceeds of $83.5 million and has
completed a $97.4 million sale and subsequent leaseback of rental trailers to
raise a portion of the cash needed to fund the Plan. The remainder of the cash
will be raised from the sale of surplus or non-essential assets including real
estate and mortgage notes, from internally generated funds and, to the extent
necessary, from additional borrowings under the Company's existing credit
agreements.
In order to comply with covenants in the Company's current credit
agreements and to improve the likelihood that its existing debt ratings will be
maintained, the Company increased its equity by selling $100.0 million of its
Series B Convertible Preferred Stock in a private placement.
As a result of funding the Plan, the Company will incur additional costs in
the future in the form of lease payments and/or interest. Furthermore, following
the repurchase, the Company's outstanding Common Stock will be reduced by
10,094,852 shares in addition to the 3,343,076 shares repurchased from Maran on
October 18, 1995, the 833,420 shares repurchased from L.S.S. on January 30,
1996, the 1,651,644 shares repurchased from Thermar on February 7, 1996, and the
2,331,984 shares repurchased from Cemar on August 6, 1996. In addition, the
Company plans to deduct for income tax purposes approximately $324.3 million of
the payments already made and remaining to be made by the Company to the
plaintiffs, which will reduce the Company's income tax liability. While the
Company believes that such income tax deductions are appropriate, there can be
no assurance that any such deductions ultimately will be allowed in full.
Furthermore, in the event the fair value of the consideration paid by the
Company to the plaintiffs is in excess of the fair value of the stock
repurchased by the Company, the Company will be required to record an expense
equal to that difference. No such expense was recorded for the previous
transactions with the plaintiffs and no provision has been made in the Company's
financial statements for any payments to be made to the plaintiffs in the
future. For the reasons set forth above, the repurchase could result in material
changes in the Company's financial condition, results of operations, cash flow,
capital expenditure plans, net income, or earnings per common share.
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DESCRIPTION OF SECURITIES
The following is a description of certain general terms of the Securities
to which any Prospectus Supplement may relate. The particular terms of the
Securities offered by any Prospectus Supplement (the "Offered Securities") and
the extent, if any, to which such general provisions may apply to the Securities
so offered will be described in the Prospectus Supplement relating to such
Offered Securities.
The Offered Securities are to be issued under an indenture (the
"Indenture"), between the Company and The First National Bank of Chicago, as
trustee (the "Trustee"), a copy of which is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all provisions of the Indenture, including the
definitions therein of certain terms. Wherever particular provisions or defined
terms of the Indenture are referred to, such provisions or defined terms are
incorporated herein by reference. Certain defined terms in the Indenture are
capitalized herein.
GENERAL
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Securities, the Securities will be unsecured obligations of the Company.
The Indenture does not limit the amount of Securities that may be issued
thereunder and provides that Securities may be issued thereunder from time to
time in one or more series.
Reference is made to the Prospectus Supplement relating to the Offered
Securities for the following terms, where applicable, of the Offered Securities:
(1) the title of the Offered Securities; (2) any limit on the aggregate
principal amount of the Offered Securities; (3) the Person to whom any interest
on any Offered Security will be payable, if other than the Person in whose name
such Offered Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest; (4) the date
or dates on which the Offered Securities will mature; (5) the rate or rates
(which may be fixed or variable) at which the Offered Securities will bear
interest, if any, and the date or dates from which such interest will accrue;
(6) the dates on which such interest, if any, will be payable and the Regular
Record Dates for such Interest Payment Dates; (7) the place or places where the
principal of (and premium, if any) and interest on the Offered Securities shall
be payable, where any Offered Securities may be surrendered for registration of
transfer or exchange and where notices to or demand upon the Company may be
delivered; (8) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, the Offered Securities may be redeemed
in whole or in part, at the option of the Company; (9) the obligation, if any,
of the Company to redeem or purchase such Offered Securities pursuant to any
sinking fund or analogous provision or at the option of a Holder thereof and the
period or periods within which, the price or prices at which, and the terms and
conditions upon which, such Offered Securities shall be redeemed or purchased,
in whole or in part, pursuant to such obligation; (10) the denominations in
which such Offered Securities will be issuable, if other than denominations of
$1,000 and any integral multiples thereof; (11) the portion of the principal
amount of the Offered Securities, if other than the entire principal amount
thereof, payable upon acceleration of maturity thereof; (12) the right of the
Company to defease the Offered Securities or certain restrictive covenants and
certain Events of Default under the Indenture; (13) the currency or currencies
in which payment of principal and premium, if any, and interest on the Offered
Securities will be payable, if other than United States dollars; (14) if the
principal of (and premium, if any) or interest, if any, on such Offered
Securities is to be payable, at the election of the Company or a Holder thereof,
in a currency or currencies other than that in which such Offered Securities are
stated to be payable, the currency or currencies in which payment of the
principal of (and premium, if any) or interest, if any, on such Offered
Securities as to which such election is made will be payable and the period or
periods within which, and the terms and conditions upon which, such election may
be made; (15) any index used to determine the amount of payments of principal of
and premium, if any, and interest, if any, on the Offered Securities; (16) if
the Offered Securities will be issuable only in the form of a Global Security as
described under "Book-Entry Securities," the Depository or its nominee with
respect to the Offered Securities, and the circumstances under which the Global
Security may be registered for transfer or exchange in the name of a
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Person other than the Depository or its nominee; (17) any additional Events of
Default; and (18) any other terms of the Offered Securities.
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Securities, principal of and premium, if any, and interest, if any, on the
Securities will be payable, and the Securities will be exchangeable and
transfers thereof will be registrable, at the office of the Trustee at One First
National Plaza, Chicago, Illinois 60670-0126, provided that, at the option of
the Company, payment of interest may be made by: (1) wire transfer on the date
of payment in immediately available federal funds or next day funds to an
account specified by written notice to the Trustee from any Holder of
Securities; (2) any similar manner that such Holder may designate in writing to
the Trustee; or (3) by check mailed to the address of the Person entitled
thereto as it appears in the Security Register. Any payment of principal and
premium, if any, and interest, if any, required to be made on an Interest
Payment Date, Redemption Date, or at Maturity that is not a Business Day need
not be made on such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on the Interest Payment Date,
Redemption Date, or at Maturity, as the case may be, and no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date, or Maturity.
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Securities, the Securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 or any integral multiple thereof. No service
charge will be made for any transfer or exchange of Securities, but the Company
may require payment of a sum sufficient to cover any tax or other government
charge payable in connection therewith.
Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount from their stated
principal amount. In addition, under Treasury Regulations, it is possible that
Securities that are offered and sold at their stated principal amount would,
under certain circumstances, be treated as issued at an original issue discount
for federal income tax purposes. Federal income tax consequences and other
special considerations applicable to any such Original Issue Discount Securities
(or other Securities treated as issued at an original issue discount) and to
"investment units" will be described in the Prospectus Supplement relating
thereto. "Original Issue Discount Security" means any security that provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof upon the occurrence of an
Event of Default and the continuation thereof.
BOOK-ENTRY SYSTEM
The Securities will be represented by one or more permanent global notes
(each, a "Global Security") deposited with, or on behalf of, The Depository
Trust Company, as Depository under the Indenture and the Supplemental Indenture
(the "Depository"), and registered in the name of the Depository's nominee.
Except as set forth below, (1) owners of beneficial interests in a Global
Security will not be entitled to have Securities represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Securities in definitive form and will not be considered
the owners or holders thereof under the Securities Indenture and the
Supplemental Indenture and (2) each Global Security may be transferred, in whole
and not in part, only to another nominee of the Depository or to a successor of
the Depository or its nominee. Accordingly, beneficial interests in the
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository and its participants. The laws of
some states require certain purchasers of securities to take physical delivery
thereof in definitive form. The depository arrangements described above and such
laws may impair the ability to own or transfer beneficial interests in a Global
Security. Owners of beneficial interests in any Global Security will not be
entitled to receive Securities in definitive form and will not be considered
holders of Securities unless (1) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Global Security or if at
any time the Depository ceases to be a clearing agency registered under the
Exchange Act, (2) the Company executes and delivers to the Trustee a Company
Order that such Global Security shall be so exchangeable or (3) there shall have
occurred and be continuing an Event of Default or an event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default
with respect to the Securities (a "Default"). In such
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circumstances, upon surrender by the Depository or a successor depository of any
Global Security, Securities in definitive form will be issued to each person
that the Depository or a successor depository identifies as the beneficial owner
of the related Securities. Upon such issuance, the Trustee is required to
register such Securities in the name of, and cause such Securities to be
delivered to, such person or persons (or nominees thereof). Such Securities
would be issued in fully registered form without coupons, in denominations of
$1,000 and integral multiples thereof.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the laws of the State of New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of section 17A of the Exchange Act. The Depository was created to
hold securities for its participants (the "Participants") and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
Participants, thereby eliminating the need for physical movement of securities
certificates. The Depository's direct Participants include securities brokers
and dealers, banks, trust companies, clearing corporations, and certain other
organizations, some of whom (and/or their representatives) own the Depository.
Access to the Depository's book-entry system is also available to others (the
"Indirect Participants"), such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly. The Depository agrees with and represents to its
Participants that it will administer its book-entry system in accordance with
its rules and by-laws and requirements of law.
Principal and interest payments on Securities registered in the name of or
held by the Depository or its nominee will be made to the Depository or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Securities. Under the terms of the Securities Indenture and
the Supplemental Indenture, the Company and the Trustee will treat the persons
in whose names the Securities are registered as the holders of such Securities
for the purpose of receiving payment of principal and interest on such
Securities and for all other purposes whatsoever. Therefore, none of the
Company, the Trustee or any paying agent has any direct responsibility or
liability for the payment of principal of or interest on the Securities to
owners of beneficial interests in any Global Security. The Depository has
advised the Company and the Trustee that its current practice is to credit the
accounts of Participants with payments of principal or interest on the date
payable in amounts proportionate to their respective holdings in principal
amount of beneficial interests in a Global Security as shown in the records of
the Depository, unless the Depository has reason to believe that it will not
receive payment on such date. The Depository's current practice is to credit
such accounts, as to interest, in next-day funds and, as to principal, in
same-day funds. Payments by Participants and Indirect Participants to owners of
beneficial interests in a Global Security will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name" and
will be the responsibility of the Participants and Indirect Participants.
The Depository has advised the Company that it will take any action
permitted to be taken by an owner or Holder of Securities only at the direction
of one or more Participants to whose account with the Depository such Holder's
Securities are credited. Additionally, the Depository has advised the Company
that it will take such actions with respect to any percentage of the beneficial
interest of holders who hold Securities through Participants only at the
direction of and on behalf of Participants whose account holders include
undivided interests that satisfy any such percentage. The Depository may take
conflicting actions with respect to other undivided interests to the extent that
such actions are taken on behalf of Participants whose account Holders include
such undivided interests.
PURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL
Upon the occurrence of a Change of Control Triggering Event, each Holder
shall have the right to require the Company to purchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Securities pursuant
to the offer described below (the "Change of Control Offer") at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the purchase date (the "Change of Control Purchase Price").
Without the appropriate consent of the Holders of the Securities, neither the
Board of Directors of the Company nor the Trustee may waive the provisions of
the Indenture
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requiring the Company to make a Change of Control Offer upon a Change of Control
Triggering Event. Events that constitute a Change of Control may not require
approval by the Company's Board of Directors.
Within 30 days following any Change of Control Triggering Event, the
Company shall (i) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Jones News Service or similar business news service in the
United States and (ii) mail a notice to the Trustee and each Holder stating: (1)
that a Change of Control Triggering Event has occurred and a Change of Control
Offer is being made pursuant to the covenant in the Indenture entitled "Purchase
of Securities at the Option of Holders Upon a Change of Control" and that all
Securities timely tendered will be accepted for payment; (2) the purchase price
and the purchase date, which date shall be, subject to any contrary requirements
of applicable law, a business day no earlier than 30 days nor later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Securities (or portion thereof) accepted for payment (and duly paid on
the Change of Control Payment Date) pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date; (4)
that any Securities (or portions thereof) not tendered will continue to accrue
interest; (5) a description of the transaction or transactions constituting the
Change of Control Triggering Event; and (6) the procedures that holders of
Securities must follow in order to tender their Securities (or portions thereof)
for payment and the procedures that Holders of Securities must follow in order
to withdraw an election to tender Securities (or portions thereof) for payment.
The Company will comply, to the extent then applicable and required by law,
with the requirements of Rule 14e-1 under the Exchange Act, and any other
securities laws and regulations thereunder in connection with the purchase of
Notes pursuant to the Change of Control Offer. To the extent that the provisions
of any securities laws or regulations conflict with the provisions relating to
the Change of Control Offer, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations described above by virtue thereof.
Except as described above with respect to a Change of Control Triggering
Event, the Indenture does not contain any other provisions that permit the
Holders of the Securities to require that the Company purchase or redeem the
Securities in the event of a takeover, recapitalization or similar
restructuring.
Management has no present intention to engage in a transaction involving a
Change of Control, although it is possible that the Company would decide to do
so in the future. Subject to the limitations discussed below, the Company could,
in the future, enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that would not constitute a Change of
Control under the Indenture, but that could increase the amount of indebtedness
for money borrowed outstanding at such time or otherwise affect the Company's
capital structure or credit ratings. The Indenture does not contain any
covenants or provisions that may afford holders of the Securities protection in
the event of a highly leveraged transaction.
The Company may not currently have adequate financial resources to effect a
repurchase of the Securities upon a Change of Control Triggering Event and there
can be no assurance that the Company will have such resources in the future. The
inability of the Company to repurchase the Securities upon a Change of Control
Triggering Event would constitute an Event of Default.
The occurrence of certain of the events that would constitute a Change of
Control could trigger a prepayment obligation under certain of the Company's
credit agreements and debt obligations, and failure to effect such prepayment
could constitute an event of default under such credit agreements and debt
obligations. If the Company is not able to obtain requisite consents or waivers
from the lenders under such credit agreements and the holders of such debt
obligations, the Company may be unable to fulfill its repurchase obligations
following a Change of Control Triggering Event, thereby resulting in a default
under the Indenture and permitting the pursuit of remedies under the Indenture
in the manner described under "Events of Default." Future indebtedness of the
Company may also contain prohibitions of certain events that would constitute a
Change of Control or require such indebtedness to be repurchased upon a Change
of Control. Moreover, the exercise by the holders of Securities of their right
to require the Company to repurchase the Securities could cause a default under
such indebtedness, even if the Change of Control Triggering Event itself does
not, due to the financial effect of such repurchase on the Company. Finally, the
Company's ability to pay cash to the holders upon a repurchase may be limited by
the Company's then existing financial
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resources. In the event that a Change of Control Offer occurs at a time when the
Company does not have sufficient available funds to pay the Change of Control
Purchase Price for all Securities tendered pursuant to such offer or a time when
the Company is prohibited from purchasing the Securities (and the Company is
unable either to obtain the consent of the holders of the relevant indebtedness
or to repay such indebtedness), an Event of Default would occur under the
Indenture.
COVENANTS
The Indenture contains certain restrictive covenants that are set forth
below. Any additional restrictive covenants relating to any series of Securities
will be described in the Prospectus Supplement relating to such series. If any
such covenants are described, the Prospectus Supplement will also state whether
the "covenant defeasance" provisions described below will apply.
Limitation on Liens Securing Indebtedness. The Company will not, and will
not permit any Consolidated Subsidiary to, create or incur, or suffer to be
incurred or to exist, at any time, any Lien on its or their property, whether
now owned or hereafter acquired, or upon any income or profits therefrom, to
secure the payment of any indebtedness for money borrowed of the Company or of
any Consolidated Subsidiary or of any other Person, unless all obligations of
the Company on or in respect of the Securities are equally and ratably and
validly secured by such Lien by proceedings and documents reasonably
satisfactory to the Trustee, except that the provisions of this paragraph shall
not prohibit the following:
(a) Liens existing as of the Issue Date securing indebtedness for
money borrowed of the Company and its Consolidated Subsidiaries outstanding
on such date;
(b) Liens (i) incurred after the Issue Date given (on or within 120
days of the date of acquisition, construction or improvement) to secure the
payment of the purchase price or construction costs incurred by the Company
or a Consolidated Subsidiary in connection with the acquisition,
construction or improvement of real and personal property useful and
intended to be used in carrying on the business of the Company or such
Consolidated Subsidiary, or (ii) on fixed assets useful and intended to be
used in carrying on the business of the Company or a Consolidated
Subsidiary existing at the time of acquisition or construction thereof by
the Company or such Consolidated Subsidiary or at the time of acquisition
by the Company or a Consolidated Subsidiary of any business entity then
owning such fixed assets, whether or not such existing Liens were given to
secure the payment of the purchase price or construction costs of the fixed
assets to which they attach, so long as Liens permitted by this clause (ii)
were not incurred, extended or renewed in contemplation of such acquisition
or construction, provided that any such Liens permitted by this clause (b)
shall attach solely to the property acquired, constructed, improved or
purchased;
(c) Liens for taxes, assessments or other governmental levies or
charges not yet due or which are subject to a good faith contest;
(d) Liens incidental to the conduct of the Company's and its
Subsidiaries' businesses or their ownership of property and other assets
not securing any indebtedness for money borrowed and not otherwise incurred
in connection with the borrowing of money or obtaining of credit, and which
do not in the aggregate materially diminish the value of the Company's or
Subsidiaries' property or assets when taken as a whole, or materially
impair the use thereof in the operation of their businesses;
(e) Liens in respect of any interest or title of a lessor in any
property subject to a Capitalized Lease permitted under "-- Limitation on
Sale and Leaseback";
(f) Liens arising in respect of judgments against the Company, except
for any judgment in an amount in excess of $1,000,000 which is not
discharged or execution thereof stayed pending appeal within 45 days after
entry thereof;
(g) Liens in favor of the Company or any Consolidated Subsidiary of
the Company;
(h) Liens consisting of minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way, utilities
and other similar purposes, or zoning or other restrictions as
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to use of real property, that are necessary for the conduct of the
operations of the Company and its Subsidiaries or that customarily exist on
properties of corporations engaged in similar businesses and are similarly
situated and that do not in any event materially impair their use in the
operations of the Company and its Subsidiaries; and
(i) Liens renewing, extending or refunding any Lien permitted by the
preceding clauses of this paragraph; provided, however, that the principal
amount of indebtedness for money borrowed secured by such Lien immediately
prior thereto is not increased and such Lien is not extended to any other
assets or property.
Notwithstanding the foregoing, the Company or any Consolidated Subsidiary
may create or assume Liens, in addition to those otherwise permitted by the
preceding clauses of this paragraph, securing indebtedness for money borrowed of
the Company or any Consolidated Subsidiary issued or incurred after the Issue
Date, provided that at the time of such issuance or incurrence, the aggregate
amount of all Secured Indebtedness and Attributable Debt would not exceed 15% of
Consolidated Net Tangible Assets.
In the event that any property of the Company or any Consolidated
Subsidiary is subjected to a Lien not otherwise permitted by this paragraph, the
Company will make or cause to be made a provision whereby the Securities will be
secured (together with other indebtedness for money borrowed then entitled
thereto and equal in rank to the Securities), to the full extent permitted under
applicable law, equally and ratably with all other obligations secured thereby,
and in any case the Securities shall (but only in such event) have the benefit,
to the full extent that the holders of the Securities may be entitled thereto
under applicable law, of an equitable Lien on such property equally and ratably
securing the Securities and such other obligations.
Limitation on Sale and Leaseback. The Company will not, and will not
permit any Consolidated Subsidiary to, enter into any arrangement, directly or
indirectly, whereby the Company or such Consolidated Subsidiary shall, in one
transaction or a series of related transactions, (i) sell, transfer or otherwise
dispose of any property owned by the Company or any Consolidated Subsidiary and
(ii) more than 120 days after the later of the date of initial acquisition of
such property or completion or occupancy thereof, as the case may be, by the
Company or such Consolidated Subsidiary, rent or lease, as lessee, such property
or substantially identical property or any material part thereof (a "Sale and
Leaseback Transaction"), provided that the foregoing restriction shall not apply
to any Sale and Leaseback Transaction if (a) immediately after the consummation
of such Sale and Leaseback Transaction and after giving effect thereto, no
Default or Event of Default shall exist and (b) any one of the following
conditions is satisfied:
(i) the lease concerned constitutes a Capitalized Lease and at the
time of entering into such Sale and Leaseback Transaction and after giving
effect thereto and to any Liens incurred pursuant to "-- Limitation on
Liens Securing Indebtedness", the aggregate amount of all Secured
Indebtedness and Attributable Debt would not exceed 15% of Consolidated Net
Tangible Assets; or
(ii) the lease has a term which in the aggregate would not exceed 36
months (including any extensions or renewals thereof at the option of the
lessee); or
(iii) the sale of such property is for cash consideration which equals
or exceeds the fair market value thereof (as determined in good faith by
the Company) and the net proceeds from such sale are applied, within 30
days of the date of the sale thereof, to the payment (other than payments
due at maturity or in satisfaction of, or applied to, any mandatory or
scheduled payment or prepayment obligation) of indebtedness for money
borrowed of the Company which ranks, in right of payment, on a parity with
or senior to the Securities.
Restrictive Agreements. The Company will not and will not permit any of
its Consolidated Subsidiaries to enter into any indenture, agreement, instrument
or other arrangement which, directly or indirectly, prohibits or restrains, or
has the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the ability of any Consolidated Subsidiary to make loans or
advances to the Company or to declare and pay dividends or make distribution on
shares of such Consolidated Subsidiary's capital stock (whether now or hereafter
outstanding); provided, however, that any agreement to subordinate indebtedness
for money borrowed owing from any Consolidated Subsidiary to the Company or
owing between Consolidated
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Subsidiaries pursuant to any Priority Debt or to any guarantee of such
indebtedness for money borrowed shall not be deemed to violate this paragraph so
long as any such agreement to subordinate does not directly or indirectly
prohibit or restrain the ability of any such Consolidated Subsidiary to make
loans or advances to the Company or to declare and pay dividends or make
distributions on shares of such Consolidated Subsidiary's capital stock (whether
now or hereafter outstanding).
Corporate Existence. The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and material rights (charter and statutory) and material franchises of the
Company; provided, however, that the Company shall not be required to preserve
any such right or franchise if the Board of Directors shall determine that the
preservation of such rights and franchises is no longer desirable in the conduct
of the business of the Company and its Consolidated Subsidiaries considered as a
whole, and that the loss thereof is not disadvantageous in any material respect
to the holders of the Securities.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Securities of any series: (a) failure to pay principal of or premium, if any, on
any Security of that series when due; (b) failure to pay any interest on any
Security of that series when due, continued for 30 days; (c) (i) the failure by
the Company or any Subsidiary to pay indebtedness for money borrowed (including
Securities of other series) in an aggregate principal amount exceeding
$10,000,000 at the later of final maturity or upon the expiration of any
applicable period of grace with respect to such principal amount or (ii)
acceleration of the maturity of any indebtedness for money borrowed of the
Company or any Subsidiary in excess of $10,000,000, if such failure to pay or
acceleration is not discharged or such acceleration is not annulled within 15
days after due notice; (d) the failure to perform any covenant or warranty of
the Company in the Indenture described herein under "Purchase at the Option of
Holders Upon a Change of Control" (including the failure to purchase the
Securities required to be purchased pursuant to a Change of Control Offer in
accordance with the terms of such Change of Control Offer); (e) failure to
deposit any sinking fund payment, when due, in respect of any Security of that
series; (f) failure to perform any other covenant or warranty of the Company in
the Indenture (other than a covenant or warranty included in the Indenture
solely for the benefit of a series of Securities other than that series),
continued for 60 days after written notice as provided in the Indenture; (g)
certain events in bankruptcy, insolvency or reorganization; and (h) any other
Event of Default provided with respect to Securities of that series.
If an Event of Default specified in clause (g) above occurs and is
continuing with respect to Securities, then the principal amount of the
Outstanding Securities shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. If an Event
of Default (other than one specified in clause (g) in the immediately preceding
paragraph) with respect to Outstanding Securities of any series shall occur and
be continuing, either the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Securities of that series may declare the principal
amount (or, if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of that series to be due and payable
immediately by written notice to the Company (and to the Trustee if given by the
Holders). At any time after a declaration of acceleration with respect to
Securities of any series has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in principal amount of
the Outstanding Securities of that series may, under certain circumstances,
rescind and annul such acceleration. For information as to waiver of defaults,
see "Modification and Waiver" below.
Reference is made to the Prospectus Supplement relating to each series of
Offered Securities that are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during default to act with the required
standard of care, to exercise any of its rights or powers under the
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Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity. Subject to such
provisions for indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Securities of any series will have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Securities of that series.
The Company will furnish to the Trustee annually a certificate as to
compliance by the Company with all terms, provisions, and conditions of the
Indenture.
DEFEASANCE
The Prospectus Supplement will state if any defeasance provision will apply
to the Offered Securities.
DEFEASANCE AND DISCHARGE
The Indenture provides that, if applicable, the Company will be discharged
from any and all obligations in respect of the Securities of any series (except
for certain obligations to register the transfer or exchange of Securities of
such series, to replace stolen, lost, or mutilated Securities of such series, to
maintain paying agencies and to hold monies for payment in trust) upon the
irrevocable deposit with the Trustee, in trust, of money and/or U.S. Government
Obligations (as defined), which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of and premium, if any, and each installment of
interest on the Securities of such series on the Stated Maturity of such
payments in accordance with the terms of the Indenture and the Securities of
such series. Such a trust may only be established if, among other things, the
Company has delivered to the Trustee an Opinion of Counsel (who may be an
employee of or counsel for the Company) to the effect that Holders of the
Securities of such series will not recognize income, gain, or loss for federal
income tax purposes as a result of such deposit, defeasance, and discharge and
will be subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such deposit, defeasance,
and discharge had not occurred.
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT
The Indenture provides that the Company may omit to comply with the
covenants described under "Purchase at the Option of Holders Upon a Change of
Control", "Certain Covenants -- Limitation on Liens Securing Indebtedness",
"Certain Covenants -- Limitation on Sale and Leaseback", and "Certain
Covenants -- Restrictive Agreements" and that violations of such covenants will
not be deemed to be an Event of Default under the Indenture to the extent that
the conditions described herein are met. The Indenture also provides with
respect to the Securities of any series, to the extent provided for in the
Prospectus Supplement, that the Company may omit to comply with certain
restrictive covenants provided for in this Prospectus or the Prospectus
Supplement and, to the extent provided in the Prospectus Supplement, that
violations of certain restrictive covenants provided for in the Prospectus
Supplement shall not be deemed to be an Event of Default under the Indenture and
the Securities of such series, upon the deposit with the Trustee, in trust, of
money and/or U.S. Government Obligations (as defined) which through the payment
of interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of and premium, if
any, and each installment of interest on the Securities of such series on the
Stated Maturity of such payments in accordance with the terms of the Indenture
and the Securities of such series. The obligations of the Company under the
Indenture and the Securities of such series other than with respect to the
covenants referred to above and the Events of Default other than the Event of
Default referred to above shall remain in full force and effect. Such a trust
may only be established if, among other things, the Company has delivered to the
Trustee an Opinion of Counsel (who may be an employee of or counsel for the
Company) to the effect that the Holders of the Securities of such series will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance of certain covenants and Events of Default and
will be subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such deposit and defeasance
had not occurred.
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DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Securities of any series
as described above and the Securities of such series are declared due and
payable because of the occurrence of any Event of Default other than the Event
of Default described in clause (f) under "Events of Default," the amount of
money and U.S. Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Securities of such series at the time of
their Stated Maturity but may not be sufficient to pay amounts due on the
Securities of such series at the time of the acceleration resulting from such
Event of Default. However, the Company shall remain liable for such payments.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of a majority in principal
amount of the Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, (b) reduce the
principal amount of, or the premium, if any, or interest, if any, on any
Security, (c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof, (d) change the place
or currency of payment of principal of, or premium, if any, or interest, if any,
on, any Security, (e) impair the right to institute suit for the enforcement of
any payment on or with respect to any Security, or (f) reduce the percentage in
principal amount of Outstanding Securities of any series, the consent of the
Holders of which is required for modification or amendment of the Indenture or
for waiver of compliance with certain provisions of the Indenture or for waiver
of certain defaults.
The Holders of a majority in principal amount of the Outstanding Securities
of any series may on behalf of the Holders of all Securities of that series
waive, insofar as that series is concerned, compliance by the Company with
certain restrictive provisions of the Indenture. The Holders of a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all Securities of that series waive any past default under the
Indenture with respect to that series, except a default in the payment of the
principal of or premium, if any, or interest on any Security of that series or
in respect of a provision that under the Indenture cannot be modified or amended
without the consent of the Holder of each Outstanding Security of that series
affected. In addition, a modification or amendment to the Indenture may not
waive the Company's obligation to make a Change of Control Offer without the
written consent of the holders of at least two-thirds in aggregate principal
amount of the then outstanding Securities.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding Securities,
may consolidate or merge with or into, or transfer or lease its assets as an
entirety to, any corporation, provided that (i) the corporation (if other than
the Company) formed by such consolidation or into which the Company is merged or
that acquires or leases the assets of the Company substantially as an entirety
is a corporation, partnership or trust, is organized and existing under the laws
of any United States jurisdiction and expressly assumes the Company's
obligations on the Securities and under the Indenture, (ii) after giving effect
to such transaction no Event of Default, and no event that, after notice or
lapse of time or both, would become an Event of Default, shall have occurred and
be continuing (provided that a transaction will only be deemed to be in
violation of this condition (ii) as to any series of Securities as to which such
Event of Default or such event shall have occurred and be continuing), and (iii)
certain other conditions are met.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants contained in the Indenture. Reference is made to the Indenture for the
full definition of all such terms as well as any other capitalized terms used
herein for which no definition is provided.
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"Attributable Debt" means indebtedness for money borrowed deemed to be
incurred in respect of a Sale and Leaseback Transaction and shall be, at the
date of determination, the present value (discounted at the actual rate of
interest implicit in such transaction, compounded annually), of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Leaseback Transaction.
"Capital Stock" means, with respect to any person, any and all shares or
other equivalents (however designated) of corporate stock, partnership
interests, or any other participation, right, warrant, option, or other interest
in the nature of an equity interest in such person, but excluding debt
securities convertible or exchangeable into such equity interest.
"Capitalized Lease" means any lease the obligation for Rentals with respect
to which is required to be capitalized on a consolidated balance sheet of the
lessee and its subsidiaries in accordance with GAAP.
"Change of Control" means the occurrence of any of the following events:
(i) any "person" or "group" (within the meaning of Sections 13(d) and 14(d) of
the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act;
provided, however, that a group formed solely for the purpose of voting
securities shall not be deemed to be a group for purpose of this definition),
other than the Company, any employee benefit plan of the Company or any
Subsidiary, or Permitted Persons, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35% or
more of the total voting power of the fully diluted Voting Stock of the Company,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by the Board of Directors of the
Company or whose nomination for election by the shareholders of the Company was
approved by a vote of 66-2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office, (iii) the Company consolidates or merges with or into any other person
or any other person consolidates or merges with or into the Company, in either
case, other than a consolidation or merger (a) with a Wholly-Owned Consolidated
Subsidiary in which all of the Voting Stock of the Company outstanding
immediately prior to the effectiveness thereof is changed into or exchanged for
substantially the same consideration or (b) (1) pursuant to a transaction in
which the outstanding Voting Stock of the Company is changed into or exchanged
for cash, securities or other property with the effect that the "beneficial
owners" of the outstanding Voting Stock of the Company, immediately prior to
such transaction, beneficially own, directly or indirectly, more than 50% of the
total voting power of the fully diluted Voting Stock of the surviving
corporation immediately following such transaction and (2) no "person" or
"group", other than the Company, any employee benefit plan of the Company or any
Subsidiary, or Permitted Persons, beneficially owns, directly or indirectly, 35%
or more of the total voting power of the fully diluted Voting Stock of the
surviving corporation immediately following such transaction, or (iv) the
Company sells, conveys, transfers or leases, directly or indirectly, all or
substantially all of its assets to any Person other than a Wholly-Owned
Consolidated Subsidiary.
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline with respect to the Securities.
"Consolidated Net Tangible Assets" means, as of the date of any
determination thereof, the total amount of all assets of the Company and its
Consolidated Subsidiaries (less depreciation, depletion and other properly
deductible valuation reserves) after deducting Intangibles.
"Consolidated Subsidiary" means any Subsidiary of the Company or of any
Consolidated Subsidiary which is consolidated with the Company for financial
reporting purposes in accordance with GAAP.
"GAAP" means United States generally accepted accounting principles as in
effect as of the date of determination, unless otherwise stated.
"indebtedness for money borrowed", when used with respect to the Company or
any Subsidiary, means any obligation of, or any obligation guaranteed by, the
Company or any Subsidiary for the repayment of borrowed money, whether or not
evidenced by bonds, debentures, notes or other written instruments, and any
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deferred obligation of, or any such obligation guaranteed by, the Company for
the payment of the purchase price of property or assets.
"Intellectual Properties" means all material patents, patent applications,
copyrights, copyright applications, trade secrets, trade names and trademarks,
technologies, methods, processes or other proprietary properties or information
which are used by the Company and its Consolidated Subsidiaries in the conduct
of their business and are either owned by them or are used, employed or
practiced by them under valid and existing licenses, grants, "shop rights", or
other rights.
"Intangibles" means all Intellectual Properties and all goodwill, patents,
trade names, trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense, deferred assets
(other than prepaid insurance, prepaid taxes, prepaid advertising, prepaid
licensing and other similar expenses prepaid in the ordinary course of
business), amounts invested in or advanced to or equity in the Company's
Subsidiaries other than Consolidated Subsidiaries less any writedowns thereof,
the excess of cost of shares acquired over book value of related assets, any
increase in the value of a fixed asset arising from a reappraisal, revaluation
or write-up thereof, and such other assets as are properly classified as
"intangible assets" in accordance with GAAP.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's Investors Service, Inc. (or any successor to the
rating agency business thereof), BBB- (or the equivalent) by Standard & Poor's
Rating Group (or any successor to the rating agency business thereof), and BBB-
(or the equivalent) by Duff & Phelps Credit Rating Co. (or any successor to the
rating agency business thereof).
"Issue Date" means, with respect to any series of Securities, the date of
initial issuance of such series.
"Lien" means any interest in property securing an obligation owed to, or a
claim by, a person other than the owner of the property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
bankers' liens, setoffs and similar arrangements, leases and other title
exceptions and encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all similar
arrangements) affecting property. For the purposes hereunder, the Company or a
Consolidated Subsidiary shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement, Capitalized Lease
or other arrangement pursuant to which title to the property has been retained
by or vested in some other person for security purposes and such retention or
vesting shall constitute a Lien.
"Permitted Persons" means (i) Edward J. Shoen, Mark V. Shoen, James P.
Shoen, Paul F. Shoen, Sophia M. Shoen (and during the Plan Consummation Period
only, Samuel W. Shoen, Michael L. Shoen, and Katrina Shoen Carlson) and the
spouse and lineal descendants of each such individual, the spouses of each such
lineal descendants and the lineal descendants of such spouses, (ii) any trusts
for the primary benefit of, the executor or administrator of the estate of, or
other legal representative of, any of the individuals referred to in the
foregoing clause (i), and (iii) any corporation with respect to which all the
Voting Stock thereof is, directly or indirectly, owned by any of the individuals
referred to in the preceding clause (i).
"Plan Consummation Period" means the period beginning on the Issue Date and
ending on the date of purchase by the Company (directly or indirectly) of Common
Stock of the Company held by Samuel W. Shoen, Michael L. Shoen, and Katrina
Shoen Carlson or any corporation with respect to which all the Voting Stock
thereof is, directly or indirectly, owned by any of the foregoing individuals.
"Priority Debt" means (i) indebtedness for money borrowed of any
Consolidated Subsidiary, except indebtedness for money borrowed issued to and
held by the Company or a Wholly-Owned Consolidated Subsidiary, and (but without
duplication) (ii) Secured Indebtedness.
"Rating Agencies" means Standard & Poor's Rating Group, Duff & Phelps
Credit Rating Co., and Moody's Investors Service, Inc. or any successor to the
respective rating agency businesses thereof.
31
<PAGE> 33
"Rating Date" means the date which is 90 days prior to the earlier of (i) a
Change of Control and (ii) public notice of the occurrence of a Change of
Control or of the intention of the Company to effect a Change of Control.
"Rating Decline" means, with the respect to the Securities, the occurrence
of the following on, or within 90 days after, the date of public notice of the
occurrence of a Change of Control or of the intention by the Company to effect a
Change of Control (which period shall be extended so long as the rating of such
Securities is under publicly announced consideration for possible downgrade by
any of the Rating Agencies): (a) in the event the Securities were assigned an
Investment Grade Rating by at least two of the three Rating Agencies on the
Rating Date, the rating of the Securities by both Standard & Poor's Rating Group
and Moody's Investors Service, Inc. shall decrease below an Investment Grade
Rating; or (b) in the event the Securities were rated below an Investment Grade
Rating by at least two of the three Rating Agencies on the Rating Date, the
rating of the Securities by both Standard & Poor's Rating Group and Moody's
Investors Service, Inc. shall decrease by one or more gradations (including
gradations within rating categories as well as between rating categories).
"Rentals" means and includes, as of the date of any determination thereof,
all fixed payments (including as such all payments which the lessee is obligated
to make to the lessor on termination of the lease or surrender of the property)
payable by the Company or a Consolidated Subsidiary, as lessee or sublessee
under a lease of real or personal property, but shall be exclusive of any
amounts required to be paid by the Company or a Consolidated Subsidiary (whether
or not designated as rents or additional rents) on account of maintenance,
repairs, insurance, taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the minimum rents,
if any, required to be paid by the lessee regardless of sales volume or gross
revenues.
"Secured Indebtedness" means any indebtedness for money borrowed, whether
of the Company or any Consolidated Subsidiary, secured by any Lien on any
property of the Company or any Consolidated Subsidiary.
"Subsidiary" means a person more than 50% of the outstanding Voting Stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries.
"Voting Stock" of a person means all classes of Capital Stock of such
person then outstanding and normally entitled to vote in the election of
directors (or persons performing similar functions) or to direct the business
and affairs of the issuer of such Capital Stock in the absence of contingencies.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated Subsidiary
all of the outstanding Capital Stock of which (except for directors' qualifying
shares to the extent required by applicable law) is owned by the Company and/or
its Wholly-Owned Consolidated Subsidiaries.
32
<PAGE> 34
PLAN OF DISTRIBUTION
The Company may sell the Securities in and/or outside the United States:
(i) through underwriters or dealers; (ii) directly to a limited number of
purchasers or to a single purchase; or (iii) through agents. The Prospectus
Supplement with respect to the Securities being offered will set forth the terms
of the offering of the Offered Securities, including the name or names of any
underwriters or agents, the purchase price of the Offered Securities and the
proceeds to the Company from such sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Securities, or, if an underwriting syndicate
is used, the managing underwriter or underwriters, will be set forth on the
cover of the applicable Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the underwriters to
purchase the Offered Securities will be subject to conditions precedent and the
underwriters will be obligated to purchase all of the Offered Securities if any
are purchased.
If dealers are utilized in the sale of Offered Securities in respect of
which this Prospectus is delivered, and if so specified in the applicable
Prospectus Supplement, the Company will sell such Offered Securities to the
dealers as principals. The dealers may then sell such Offered Securities to the
public at varying prices to be determined by such dealers at the time of resale.
The names of the dealers and the terms of the transaction will be set forth in
the applicable Prospectus Supplement.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect to which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters, dealers or agents may be
required to make in respect thereof. Underwriters, dealers and agents may be
customers of, may engage in transactions with, or perform services for, the
Company in the ordinary course of business.
LEGAL OPINIONS
The validity of the Securities offered hereunder will be passed upon for
the Company by Lionel, Sawyer & Collins, 300 S. 4th Street, Suite 1700, Las
Vegas, Nevada 89101. Certain legal matters in connection with this offering will
be passed upon for the underwriters or agents, if any, by the counsel named in
the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Company as of March 31, 1996
and 1995 and for each of the years in the three-year period ended March 31, 1996
incorporated in this Prospectus by reference to the Company's Annual Report on
Form 10-K for the year ended March 31, 1996 have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
upon the authority of said firm as experts in auditing and accounting.
33
<PAGE> 35
=========================================================
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, ANY UNDERWRITER OR AGENT, OR ANY OTHER
PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THOSE TO WHICH THEY RELATE OR AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................... 2
Information Incorporated by Reference... 2
Company Summary......................... 3
Risk Factors............................ 5
Use of Proceeds......................... 6
Ratio of Earnings to Fixed Charges...... 6
Selected Consolidated Financial Data.... 7
Business................................ 8
Shoen Litigation........................ 17
Description of Securities............... 21
Plan of Distribution.................... 33
Legal Opinions.......................... 33
Experts................................. 33
</TABLE>
=========================================================
=========================================================
$600,000,000
A M E R C O
LOGO
DEBT SECURITIES
---------------------------
PROSPECTUS
---------------------------
Dated September , 1996
=========================================================
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $206,897
Printing and Engraving Expenses.................................. 20,000*
Legal Fees and Expenses.......................................... 90,000*
Accounting Fees and Expenses..................................... 50,000*
Other Expenses................................................... 3,103*
--------
Total Expenses......................................... $370,000*
========
</TABLE>
- ---------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada General Corporation Law requires the Company to indemnify
officers and directors for any expenses incurred by any officer or director in
connection with any actions or proceedings, whether civil, criminal,
administrative, or investigative, brought against such officer or director
because of his or her status as an officer or director, to the extent that the
director or officer has been successful on the merits or otherwise in defense of
the action or proceeding. The Nevada General Corporation Law permits a
corporation to indemnify an officer or director, even in the absence of an
agreement to do so, for expenses incurred in connection with any action or
proceeding if such officer or director acted in good faith and in a manner in
which he or she reasonably believed to be in or not opposed to the best
interests of the corporation and such indemnification is authorized by the
stockholders, by a quorum of disinterested directors, by independent legal
counsel in a written opinion authorized by a majority vote of a quorum of
directors consisting of disinterested directors, or by independent legal counsel
in a written opinion if a quorum of disinterested directors cannot be obtained.
The Company's Restated Articles of Incorporation eliminate personal liability of
directors and officers, to the Company or its stockholders, for damages for
breach of their fiduciary duties as directors or officers, except for liability
(i) for acts or omissions that involve intentional misconduct, fraud, or a
knowing violation of law, or (ii) for the unlawful payment of dividends. In
addition, the Company's By-Laws provide that the Company shall indemnify, to the
fullest extent authorized or permitted by law, any person made, or threatened to
be made, a defendant in any threatened, pending, or completed action, suit, or
proceeding by reason of the fact that he or she was a director or officer of the
Company. The Company has also executed Indemnification Agreements that provide
that certain of the Company's directors and officers shall be indemnified and
held harmless by the Company to the fullest extent permitted by applicable law
or the Restated Articles of Incorporation or By-Laws of the Company. The Company
has established a trust fund with Harris Trust and Savings Bank as trustee in
order to fund its obligations under the Indemnification Agreements. The Company
has agreed to maintain a minimum balance in the trust fund of $1,000,000. The
Nevada General Corporation Law prohibits indemnification of a director or
officer if a final adjudication establishes that the officer's or director's
acts or omissions involved intentional misconduct, fraud, or a knowing violation
of the law and were material to the cause of action. Despite the foregoing
limitations on indemnification, the Nevada General Corporation Law may permit an
officer or director to apply to the court for approval of indemnification even
if the officer or director is adjudged to have committed intentional misconduct,
fraud, or a knowing violation of the law. The Nevada General Corporation Law
also provides that indemnification of directors is not permitted for the
unlawful payment of distributions, except for those directors registering their
dissent to the payment of the distribution.
II-1
<PAGE> 37
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ -------
<S> <C>
1.1 Form of Underwriting Agreement for Debt Securities
1.2 Form of Distribution Agreement for Debt Securities*
2.1 Order Confirming Plan(1)
2.2 Second Amended and Restated Debtor's Plan of Reorganization
Proposed by Edward J. Shoen(1)
4.1 Form of Indenture
4.2 Form of Debt Securities (included in Exhibit 4.1)
4.3 Form(s) of Supplemental Indenture relating to Debt Securities*
4.4 Restated Articles of Incorporation(2)
4.5 Restated By-Laws of AMERCO dated September 27, 1996
5 Opinion re Legality+
12 Statement re Computation of Ratios+
23.1 Consent of Independent Accountants
23.2 Consent of Lionel, Sawyer & Collins (included in Exhibit 5)+
24 Power of Attorney (included on signature page of Registration Statement)
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee under the Indenture+
28 Information from Reports Furnished to State Insurance Regulatory Authorities(4)
</TABLE>
- ---------------
* To be filed by means of Form 8-K.
+ Previously filed.
(1) Incorporated by reference to the Company's Registration Statement on Form
S-3, Registration No. 333-1195
(2) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended December 31, 1992, File No. 0-7862.
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1995, File No. 0-7862.
(4) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended March 31, 1996, File No. 0-7862.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each such filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new
II-2
<PAGE> 38
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(7) To file an application for the purpose of determining the
eligibility of the Trustee to act under subsection (a) of section 310 of
the Trust Indenture Act of 1939 in accordance with the rules and
regulations prescribed by the Commission under section 305(b)(2) of the
Trust Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Phoenix, State of
Arizona, on the 5th day of September, 1996.
AMERCO
By: /s/ EDWARD J. SHOEN
------------------------------------
Edward J. Shoen
Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to this Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------- -------------------
<S> <C> <C>
/s/ EDWARD J. SHOEN Chairman of the Board and September 5, 1996
- ------------------------------------------ President (Principal
Edward J. Shoen executive officer)
* Treasurer (Principal September 5, 1996
- ------------------------------------------ financial and accounting
Gary B. Horton officer)
Director September , 1996
- ------------------------------------------
Mark V. Shoen
* Director September 5, 1996
- ------------------------------------------
James P. Shoen
* Director September 5, 1996
- ------------------------------------------
William E. Carty
* Director September 5, 1996
- ------------------------------------------
John M. Dodds
* Director September 5, 1996
- ------------------------------------------
Charles J. Bayer
* Director September 5, 1996
- ------------------------------------------
Richard J. Herrera
Director September , 1996
- ------------------------------------------
Aubrey K. Johnson
By: /s/ EDWARD J. SHOEN
- ------------------------------------------
*Edward J. Shoen
(Attorney-in-fact)
</TABLE>
II-4
<PAGE> 40
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NUMBERED
NUMBER TITLE PAGE
------ -------------------------------------------------------------------- ----------
<C> <C> <S> <C>
1.1 Form of Underwriting Agreement for Debt Securities..................
1.2 Form of Distribution Agreement for Debt Securities*.................
2.1 Order Confirming Plan(1)............................................
2.2 Second Amended and Restated Debtor's Plan of Reorganization Proposed
by Edward J. Shoen(1)...............................................
4.1 Form of Indenture...................................................
4.2 Form of Debt Securities (included in Exhibit 4.1)...................
4.3 Form(s) of Supplemental Indenture relating to Debt Securities*......
4.4 Restated Articles of Incorporation(2)...............................
4.5 Restated By-Laws of AMERCO dated September 27, 1996.................
5 Opinion re Legality+................................................
12 Statement re Computation of Ratios+.................................
23.1 Consent of Independent Accountants..................................
23.2 Consent of Lionel, Sawyer & Collins (included in Exhibit 5)+........
24 Power of Attorney (included on signature page of Registration
Statement)..........................................................
25 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939,
as amended, of The First National Bank of Chicago, as Trustee under
the
Indenture+..........................................................
28 Information from Reports Furnished to State Insurance Regulatory
Authorities(4)......................................................
</TABLE>
- ---------------
* To be filed by means of Form 8-K.
+ Previously filed.
(1) Incorporated by reference to the Company's Registration Statement on Form
S-3, Registration No. 333-1195
(2) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended December 31, 1992, File No. 0-7862.
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1995, File No. 0-7862.
(4) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended March 31, 1996, File No. 0-7862.
<PAGE> 41
APPENDIX A
DESCRIPTION OF GRAPHIC MATERIAL
<TABLE>
<S> <C> <C>
1. Location: Outside Front and Back Covers of Prospectus
Item:
Company Logo
Description:
Registered Logo U-Haul International, Inc.
2. Location:
Page 4 of the Prospectus
Item:
Corporate Structure
Description:
A chart showing the corporate structure of the Company and its major
subsidiaries. The chart shows the Company on top, above its three
principal subsidiaries; Ponderosa Holdings, Inc., U-Haul International,
Inc., and Amerco Real Estate Company situated horizontally beside one
another. Directly below Ponderosa Holdings, Inc. are its subsidiaries,
Oxford Life Insurance Company and Republic Western Insurance Company,
situated horizontally beside one another.
</TABLE>
<PAGE> 1
EXHIBIT 1.1
AMERCO
Debt Securities
UNDERWRITING AGREEMENT -- BASIC PROVISIONS
________ __, 1996
1. Introductory. AMERCO, a Nevada corporation (the "Company"),
proposes to issue and sell from time to time senior debt securities (the
"Securities") registered under the registration statement referred to in Section
2(a) hereof. The Securities will be issued under one or more indentures (as
amended or supplemented from time to time, an "Indenture" and collectively, the
"Indentures"), more particularly described in a Terms Agreement, between the
Company and the trustee or trustees named therein (the "Trustee(s)"), in one or
more series, which series may vary as to interest rates, maturities, redemption
provisions, selling prices and other terms, with all such terms for any
particular series of the Securities being determined at the time of sale. The
Securities will be sold pursuant to a Terms Agreement, for resale in accordance
with terms of offering determined at the time of sale.
The firm or firms which agree to purchase the Securities are
hereinafter referred to as the "Underwriters" of such Securities, and the
representative or representatives of the Underwriters, if any, specified in a
Terms Agreement are hereinafter referred to as the "Representatives"; provided,
however, that if the Terms Agreement does not specify any representative of the
Underwriters, the term "Representatives," as used in this Agreement, shall mean
the Underwriters.
2. Representations and Warranties of the Company. The Company
represents and warrants as of the date of this Agreement as follows:
(a) The Company meets the requirements for the use of Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"),
and a registration statement on Form S-3 (File No. 333-10119) with
respect to the Securities has (i) been prepared by the Company in
conformity with the requirements of the Securities Act and the rules
and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and (ii) been filed
with the Commission under the Securities Act. Such registration
statement has become effective under the Securities Act. If any
post-effective amendment to such registration statement has been filed
with the Commission prior to the date of the applicable Terms
Agreement, the most recent such amendment has been declared effective
by the Commission. Copies of such registration statement and any
amendments thereto have been delivered by the Company to the
Representatives.
As used in this Agreement, "Effective Time" means the
date and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective
by the Commission; "Effective Date" means the date of the Effective
Time. As provided in Section 4(a), a prospectus supplement reflecting
the terms of the Securities, the terms of the offering thereof and the
other matters set forth therein has been prepared and will be filed
pursuant to Rule 424 under the Securities Act. In addition, a
preliminary prospectus supplement reflecting the terms of the
Securities, the terms of the offering thereof and the other matters set
forth therein also may be prepared and filed pursuant to Rule 424 under
the Securities Act. Such prospectus supplement, in the form filed on or
after the date of this Agreement pursuant to Rule 424, is referred to
in this Agreement as the "Prospectus Supplement," and any such
preliminary prospectus supplement in the form filed
<PAGE> 2
2
after the date of this Agreement pursuant to Rule 424 is referred to as
the "Preliminary Prospectus Supplement." Any prospectus accompanied by
a Preliminary Prospectus Supplement is referred to in this Agreement,
collectively with such Preliminary Prospectus Supplement, as a
"Preliminary Prospectus." The registration statement referred to in
this Section 2(a), as amended at the time of the Terms Agreement,
including the exhibits thereto, the documents filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any exhibits thereto, that are
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act (the "Incorporated Documents"), and including the
information, if any, deemed to be a part of the registration statement
pursuant to Rule 430A(b) under the Securities Act, is called the
"Registration Statement"; and the basic prospectus included therein
relating to all offerings of securities under the Registration
Statement, as supplemented by the Prospectus Supplement, is called the
"Prospectus," except that, if such basic prospectus is amended or
supplemented on or prior to the date on which the Prospectus Supplement
is first filed pursuant to Rule 424, the term "Prospectus" shall refer
to the basic prospectus as so amended or supplemented and as
supplemented by the Prospectus Supplement, in either case including the
Incorporated Documents.
The Commission has not issued any order suspending the
effectiveness of the Registration Statement, and no stop order has been
issued or threatened by the Commission.
(b) The Registration Statement conformed, on the
Effective Date or (with respect to Incorporated Documents) on the date
of filing thereof with the Commission, in all material respects to the
requirements of the Securities Act and the Rules and Regulations, and
the Registration Statement on the Effective Date did not contain and on
the Closing Date will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and on the
date of the applicable Terms Agreement, and at the time of filing of
the Prospectus pursuant to Rule 424(b), the Prospectus will conform in
all material respects to the requirements of the Securities Act and the
Rules and Regulations, and the Prospectus on such dates did not contain
and on the Closing Date will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; and on the Effective Date and the
Closing Date, respectively, the Indenture conformed and will conform in
all material respects with the requirements of the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the applicable
rules and regulations thereunder; provided that no representation or
warranty is made as to (i) information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein (which information shall be determined as set forth
in Section 7(b)) or (ii) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act.
(c) Price Waterhouse LLP, whose report is incorporated by
reference in the Prospectus, are independent certified public
accountants as required by the Securities Act. The financial statements
and schedules (including the related notes and supporting schedules)
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the financial condition, results of
operations and changes in financial condition of the entities
<PAGE> 3
3
purported to be shown thereby at the dates and for the periods
indicated and have been prepared in accordance with generally accepted
accounting principles.
(d) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its organization, with
full power and authority (corporate and other) to own or lease its
properties and conduct its business as described in the Prospectus and
is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business conducted by it or
the location of the properties owned or leased by it make such
qualification necessary, except where the failure to so qualify would
not have a material adverse effect on the condition (financial or
other), results of operations, assets, business or prospects of the
Company and its subsidiaries taken as a whole; and none of the
subsidiaries of the Company, other than those so identified in the
Terms Agreement, is a "significant subsidiary," as such term is defined
in Rule 405 of the Rules and Regulations.
(e) All of the issued shares of capital stock of each
significant subsidiary of the Company have been duly and validly
authorized and issued and are fully paid, non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) Each of this Agreement and the Terms Agreement has
been duly authorized, executed and delivered by the Company and
constitutes the valid and binding agreement of the Company and is
enforceable against the Company in accordance with its terms.
(g) Except as described in or contemplated by the
Prospectus, there has not been any material adverse change in, or
adverse development which materially affects, the condition (financial
or other), results of operations, assets, business or prospects of the
Company and its subsidiaries taken as a whole, from the date as of
which information is given in the Prospectus.
(h) Neither the Company nor any of its subsidiaries is,
or with the giving of notice or lapse of time or both would be, in
violation of or in default under the articles or certificate of
incorporation or by-laws of the Company or any of its subsidiaries, or
any bond, debenture, note or any other evidence of indebtedness or any
indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them is bound, or to which any of their
properties is subject, where the effect of such violation or default
would have a material adverse effect on the condition (financial or
other), results of operations, assets, business or prospects of the
Company and its subsidiaries taken as a whole. The execution and
delivery, fulfillment and consummation of the transactions contemplated
by this Agreement, the Term Agreement, the Securities, the Indenture
and the Supplemental Indenture will not conflict with or constitute a
breach of, or default (with the passage of time or otherwise) under, or
result in the imposition of a lien on any properties of the Company or
any of its subsidiaries, or an acceleration of indebtedness pursuant
to, the articles or certificate of incorporation or by-laws of the
Company or any of its subsidiaries, or any bond, debenture, note or any
other evidence of indebtedness of any indenture, mortgage, deed of
trust or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them is
bound, or to which any of the property or assets of the Company or any
of its subsidiaries is subject, or any law, rule, administrative
regulation, order or decree of any court or any governmental agency
<PAGE> 4
4
or body having jurisdiction over the Company, any of its subsidiaries
or any of their respective properties. Except for the orders of the
Commission declaring the Registration Statement effective under the
Securities Act and permits and similar authorizations required under
the securities or "Blue Sky" laws of certain jurisdictions, no consent,
approval, authorization or order of any court, governmental agency or
body or financial institution is required in connection with the
consummation of the transactions contemplated by this Agreement, the
Terms Agreement, the Securities, the Indenture and the Supplemental
Indenture.
(i) Subsequent to the respective dates as of which
information is given in the Registration Statement, any Preliminary
Prospectus and Prospectus and prior to the Closing Date, neither the
Company nor any of its subsidiaries has incurred or will have incurred
any liabilities or obligations for borrowed money, direct or
contingent, or entered into any transactions, not in the ordinary
course of business which would have a material adverse effect on the
condition (financial or other), results of operations, assets, business
or prospects of the Company and its subsidiaries taken as a whole.
(j) The Company and each of its subsidiaries owns, or has
valid rights to use in the manner currently used or proposed to be
used, all items of real and personal property which are material and
which they reasonably believe are necessary to the business of the
Company and its subsidiaries taken as a whole (including without
limitation all U-Haul Centers, manufacturing facilities, assembly
facilities and service centers described or referred to in the
Prospectus), free and clear of all liens, encumbrances and claims which
may materially interfere with the use thereof or have a material
adverse effect on the condition (financial or other), results of
operations, assets, business or prospects of the Company and its
subsidiaries taken as a whole.
(k) Except as described in the Prospectus, there is no
litigation or governmental proceeding to which the Company or any of
its subsidiaries is a party or to which any property of the Company or
any of its subsidiaries is subject or which is pending or, to the
knowledge of the Company, contemplated against the Company or any of
its subsidiaries which might result in any material adverse change in
the condition (financial or other), results of operations, assets,
business or prospects of the Company and its subsidiaries taken as a
whole.
(l) Neither the Company nor any of its subsidiaries is in
violation of any law, ordinance, governmental rule or regulation or
court decree to which it may be subject which might have a material
adverse effect on the condition (financial or other), results of
operations, assets, business or prospects of the Company and its
subsidiaries taken as a whole.
(m) All licenses, permits or registrations required for
the business of the Company and each of its subsidiaries, as presently
conducted and proposed to be conducted, under any federal, state or
local laws, regulations or ordinances (including those related to
consumer protection, protection of the environment and regulation of
franchising) have been obtained or made, other than any such licenses,
permits or registrations, the failure of which to obtain or make,
either individually or in the aggregate, would not have a material
adverse effect, the condition (financial or other), results of
operations, assets, business or prospects of the Company and its
subsidiaries taken as a whole, and each of the Company and its
subsidiaries is in compliance with all such licenses, permits or
registrations.
<PAGE> 5
5
(n) Except as disclosed in the Prospectus, the Company
and its subsidiaries comply in all material respects with all
Environmental Laws (as defined below) (except to the extent that
failure to comply with such Environmental Laws could not have a
material adverse effect on the condition (financial or other), results
of operations, assets, business or prospects of the Company and its
subsidiaries taken as a whole). Except as disclosed in the Prospectus,
neither the Company nor any of its subsidiaries is the subject of any
pending or threatened federal, state or local investigation evaluating
whether any remedial action by the Company or any of its subsidiaries
is needed to respond to a release of any Hazardous Materials (as
defined below) into the environment, resulting from the Company's or
any of its subsidiaries' business properties or assets or is in
contravention of any Environmental Law that could have a material
adverse effect on the condition (financial or other), results of
operations, assets, business or prospects of the Company and its
subsidiaries taken as a whole. Except as disclosed in the Prospectus,
neither the Company nor any of its subsidiaries has received any notice
or claim, nor are there pending or threatened lawsuits against them,
with respect to violations of any Environmental Law or in connection
with any release of any Hazardous Material into the environment that,
in the aggregate, if the subject of any unfavorable decision, ruling or
finding, could have a material adverse effect on the condition
(financial or other), results of operations, assets, business or
prospects of the Company and its subsidiaries taken as a whole. As used
herein, "Environmental Laws" means any federal, state or local law,
regulation, permit, rule or order of any governmental authority,
administrative body or court applicable to the Company's or any of its
subsidiaries' business operations or the ownership or possession of any
of their properties or assets relating to environmental matters, and
"Hazardous Materials" means those substances that are regulated by or
form the basis of liability under any Environmental Laws.
(o) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to include any securities owned or to be owned by
such person in the securities registered pursuant to the Registration
Statement, or, except as described in the Prospectus or Schedule B to
the Terms Agreement, to require the Company to file any other
registration under the Securities Act (other than a registration
statement on Form S-8) with respect to any securities of the Company
owned or to be owned by such person or to require the Company to
include such securities in any securities being registered pursuant to
any other registration statement filed by the Company under the
Securities Act.
(p) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
filed as exhibits to the Registration Statement.
(q) No relationship, direct or indirect, exists between
or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus and which is not so
described.
(r) The Company is not required to be registered, and is
not regulated, as an "investment company" as such term is defined under
the United States Investment Company Act of 1940, as amended and the
rules and regulations thereunder (collectively, the "Investment Company
Act").
<PAGE> 6
6
(s) The Company has all of the requisite corporate power
and authority to execute, issue and deliver the Securities and to incur
and perform its obligations provided for therein; the Securities have
been duly authorized by the Company and, when executed and
authenticated in accordance with the provisions of the Terms Agreement,
the Indenture and the Supplemental Indenture and delivered to and paid
for by the Underwriters as provided for in this Agreement, will have
been duly executed, authenticated (assuming due authentication by the
Trustee), issued and delivered and will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture and the Supplemental Indenture and enforceable against the
Company in accordance with their terms; and the Securities conform in
all material respects to the description thereof contained in the
Prospectus.
(t) The Company has all of the requisite corporate power
and authority to execute and deliver the Indenture and the Supplemental
Indenture and to perform its obligations provided for therein; the
Indenture has been duly authorized by the Company and has been duly
qualified under the Trust Indenture Act, will be substantially in the
form heretofore delivered to the Representatives and, upon due
execution and delivery by the Company, and assuming due execution and
delivery by the Trustee, will constitute a legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms; and each of the Indenture and the Supplemental
Indenture conforms in all material respects to the description thereof
contained in the Prospectus.
3. Purchase and Offering of the Securities by the
Underwriters. The obligation of the Underwriters to purchase the Securities will
be evidenced by an exchange of a telegram, telex or other written communications
("Terms Agreement") at each time the Company determines to sell the Securities.
Each Terms Agreement will be in the form of Annex II attached hereto and will
incorporate by reference the provisions of this Agreement, except as otherwise
provided therein, and will specify the firm or firms which will be Underwriters,
the names of any Representatives, the amount to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters and certain terms
of the Securities and whether any of the Securities may be sold to institutional
investors pursuant to Delayed Delivery Contracts (as defined below). The Terms
Agreement will also specify the time and date of delivery and payment (such time
and date being herein and in the Terms Agreement referred to as the "Closing
Date"), the place of delivery and payment and any details of the terms of public
offering that should be reflected in the Prospectus Supplement relating to the
offering of the Securities. The obligations of the Underwriters to purchase the
Securities will be several and not joint. It is understood that the Underwriters
propose to offer the Securities for sale as set forth in the Prospectus.
Securities delivered to the Underwriters on the Closing Date will be in fully
registered form, in such denominations and registered in such names as the
Underwriters may request.
If the Terms Agreement provides for sales of Securities
pursuant to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contract") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be made only with institutional investors,
including commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. On the Closing
Date the Company will pay, as compensation, to the Representatives for the
accounts of the Underwriters, the fee set forth in such Terms Agreement in
respect of the amount of Securities to be sold pursuant to Delayed Delivery
contracts ("Contract Securities"). The Underwriters will not have any
responsibility in respect of the validity or the performance of Delayed Delivery
Contracts.
<PAGE> 7
7
If the Company executes and delivers Delayed Delivery Contracts, the Contract
Securities will be deducted from the Securities to be purchased by the several
Underwriters and the aggregate amount of Securities to be purchased by each
Underwriter will be reduced pro rata in proportion to the amount of Securities
set forth opposite each Underwriter's name in such Terms Agreement, except to
the extent that the Representatives determine that such reduction shall be
otherwise than pro rata and so advise the Company. The Company will advise the
Representatives not later than the business day prior to the Closing Date of the
amount of Contract Securities.
4. Covenants of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus, including the Prospectus
Supplement, pursuant to Rule 424(b) within the time period prescribed
by the Rules and Regulations; to notify the Representatives, promptly
after it receives notice, of the time when the Registration Statement
or any amendment thereto becomes effective or promptly after the filing
of any supplement or amendment to the Prospectus (other than any
Incorporated Document or any amendment or supplement relating to an
offering of securities other than the Securities) and to furnish the
Representatives with copies thereof; to notify the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives
and to counsel for the Underwriters a copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all exhibits filed
therewith;
(c) To furnish promptly to each of the Representatives
copies of the Registration Statement, including all exhibits, any
Preliminary Prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as are reasonably requested;
(d) To file promptly with the Commission any amendment to
the Registration Statement or the Prospectus or any supplement to the
Prospectus that may be required by the Securities Act, in the
reasonable judgment of the Company or the Representatives, or requested
by the Commission;
(e) Prior to filing with the Commission any (i) amendment
to the Registration Statement or (ii) any Prospectus pursuant to Rule
424 of the Rules and Regulations (other than any Incorporated Document
or any amendment or supplement relating to an offering of securities
other than the Securities), to furnish a copy thereof to the
Representatives and counsel for the Underwriters;
<PAGE> 8
8
(f) As soon as practicable but no later than 16 months
after the date of each Terms Agreement, to make generally available to
its security holders an earning statement of the Company and its
subsidiaries conforming with the requirements of Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158)
covering a period of at least twelve months beginning on the first day
of the first fiscal quarter of the Company commencing after the later
of (i) the effective date of the Registration Statement, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Company's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of such
Terms Agreement;
(g) During the period, if any, specified in the Terms
Agreement after the date of such Terms Agreement, to furnish to the
Representatives copies of all materials furnished by the Company to its
public securityholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the securities of the Company may be
listed pursuant to requirements of or agreements with such exchange or
to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Prompt from time to time, to take such action as the
Representatives reasonably may request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Securities; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject;
(i) Until the date set forth in the Terms Agreement, the
Company will not:
(i) without the consent of the Representatives,
offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company (other than the
Securities) that mature more than one year after the Closing
Date and that are publicly offered to investors or offered to
investors in reliance upon Rule 144A under the Securities Act,
or
(ii) without notifying the Representatives,
offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company (other than the
securities described in the preceding clause (i));
provided, however, that the foregoing covenant shall not apply to (A)
any notes sold under the Company's shelf registration statement (file
no. 333-1195), originally filed with the Commission on February 26,
1996, and (B) any sale and leaseback financing with respect to rental
trucks, trailers and related equipment used by the Company in its
operations.
(j) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and
the Company further agrees that if it commences engaging in
<PAGE> 9
9
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida Department
of Banking and Finance (the "Department"), whichever date is later, or
if the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in a form
acceptable to the Department.
(k) The Company shall take such steps as shall be necessary to
ensure that neither the Company nor any subsidiary shall become an
"investment company" within the meaning of such term under the
Investment Company Act.
5. Expenses. Whether or not this Agreement becomes effective
or is terminated or the sale of the Securities to the Underwriters is
consummated, the Company shall pay or cause to be paid (A) all expenses
(including any associated taxes) incurred in connection with the authorization,
issuance, sale and delivery to the several Underwriters of the Securities, (B)
all fees and expenses (including, without limitation, fees and expenses of the
Company's accountants and counsel, but excluding fees and expenses of counsel
for the Underwriters except as set forth in clauses (C) and (D) below or as
otherwise agreed to by the Company) in connection with the preparation,
printing, filing, delivery and shipping of the Registration Statement (including
the financial statements therein and all amendments and exhibits thereto), any
Preliminary Prospectus, the Prospectus and any amendments or supplements thereto
and any documents incorporated by reference into any of the foregoing and the
printing, delivery and shipping of this Agreement and other underwriting
documents, including, but not limited to, Underwriters' Questionnaires,
Underwriters' Powers of Attorney, Blue Sky Memoranda, Agreements Among
Underwriters and Selected Dealer Agreements and any legal investment survey, (C)
all filing fees and fees and disbursements of counsel to the Underwriters
incurred in connection with the qualification of the Securities under state
securities laws as provided in Section 4(h) hereof, (D) the filing fee of the
National Association of Securities Dealers, Inc., if any, and fees and
disbursements of counsel to the Underwriters in connection with any application
to, and any review of the offering of the Securities conducted by, the National
Association of Securities Dealers, Inc., including the preparation of materials
therefor, (E) any applicable listing or other fees, (F) the cost and charges of
the Trustee and any transfer agent or registrar, (G) any fees payable to rating
agencies in connection with the rating of the Securities and (H) all other costs
and expenses incident to the performance of its obligations hereunder and under
any Delayed Delivery Contracts for which provision is not otherwise made in this
Section. It is understood, however, that, except as provided in this Section 5
and Section 10 hereof, each of the Underwriters shall pay all of its own costs
and expenses, including the fees of its counsel (except as set forth in clauses
(C) and (D) above or as otherwise agreed to by the Company) and any advertising
expenses incurred in connection with any offers it may make.
6. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and at the time of delivery of any Securities pursuant to a Terms Agreement, of
the representations and warranties of the Company contained in this Agreement,
to the performance by the Company of its obligations under this Agreement, and
to each of the following additional terms and conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 p.m. New York City time on the date
of determination
<PAGE> 10
10
of the public offering price, if such determination occurred at or
prior to 3:00 p.m. New York City time on such date or (ii) 12:00 noon
New York City time on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 p.m. New York City time on such date; if filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Prospectus, and any such supplement, shall have been filed
in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Terms
Agreement, the Indenture, the Securities, the Registration Statement
and the Prospectus, and all other legal matters relating to this
Agreement and the Terms Agreement and the transactions contemplated
hereby and thereby shall be satisfactory in all material respects to
counsel for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) The Company shall have furnished to the Representatives
the opinion of Snell & Wilmer L.L.P., counsel for the Company, dated
the Closing Date, to the effect that:
(i) each of the Company, Oxford Life Insurance Company,
an Arizona corporation, and Republic Western Insurance
Company, an Arizona corporation, has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the State of Nevada or the State of Arizona,
as the case may be, with full corporate power and authority to
own its properties and conduct its business as described in
the Prospectus and to carry out the transactions contemplated
hereunder, and each of the Nevada Subsidiaries (as hereinafter
defined) is duly qualified to do business as a foreign
corporation and is in good standing under the laws of the
State of Arizona;
(ii) the Company's authorized, issued and outstanding
capital stock is as set forth in the Prospectus; the
Securities conform to the description thereof contained in the
Prospectus; and, if the Securities are to be listed on any
securities exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of
satisfactory distribution, or the Company has filed a
preliminary listing application and all required supporting
documents with respect to the Securities with such securities
exchange and such counsel has no reason to believe that the
Securities will not be authorized for listing, subject to
official notice of issuance and evidence of satisfactory
distribution;
(iii) each of the Indenture and the Supplemental Indenture
has been duly authorized, executed and delivered by the
Company and has been duly qualified under the Trust Indenture
Act, and each constitutes a legal, valid and binding
instrument enforceable
<PAGE> 11
11
against the Company in accordance with its terms, except that
(a) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights
generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought; and the
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Terms
Agreement, the Indenture and the Supplemental Indenture and
delivered to and paid for by the Underwriters pursuant to the
Terms Agreement and this Agreement, in the case of the
Underwriters' Securities, or by the purchasers thereof
pursuant to Delayed Delivery Contracts, in the case of any
Contract Securities, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture and the Supplemental Indenture, except that (x) the
enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights
generally and (y) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought;
(iv) to the best knowledge of such counsel, there is no
franchise, contract or other document of a character required
to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit, which is not described or filed
as required; and the statements included or incorporated in
the Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters;
(v) the Registration Statement has become effective under
the Securities Act; any required filing of the Basic
Prospectus, any Preliminary Prospectus and the Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule
424(b); to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Prospectus (other than with respect to financial
statements and other financial and statistical information as
to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements
of the Securities Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; and such
counsel has no reason to believe that at the Effective Date
the Registration Statement (other than with respect to
financial statements and other financial and statistical
information as to which such counsel need express no opinion)
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus (other than with respect to financial
statements and other financial and statistical information as
to which such counsel need express no opinion) at its date or
at the Closing Date included or includes any untrue statement
of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
<PAGE> 12
12
(vi) this Agreement, the Terms Agreement and any Delayed
Delivery Contracts have been duly authorized, executed and
delivered by the Company;
(vii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in the
Terms Agreement or any Delayed Delivery Contracts, except such
as have been obtained under the Securities Act and such as may
be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained;
(viii) neither the execution and delivery of the Indenture
or the Supplemental Indenture or the issuance and sale of the
Securities nor the consummation of any other of the
transactions herein or therein contemplated, nor the
fulfillment of the terms hereof or thereof or of the Terms
Agreement or any Delayed Delivery Contracts, will (a) conflict
with the articles or certificate of incorporation or by-laws
of the Company or any of its subsidiaries or (b) result in a
breach or violation of or constitute a default under any law
or any bond, debenture, note or any other evidence of
indebtedness of any indenture, mortgage, deed of trust or
other material agreement or instrument known to such counsel
and to which the Company or any of its subsidiaries is a party
or bound or any judgment, order or decree known to such
counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries, except (with
regard to clause (b)) for such breaches, violations or
defaults as would not have a material adverse effect on the
condition (financial or other), results of operations, assets,
business or prospects of the Company and its subsidiaries
taken as a whole;
(ix) each of the Indenture and the Supplemental Indenture
conforms in all material respects to the descriptions thereof
contained in the Prospectus;
(x) an Arizona court would give effect to the choice
of New York law in the Indenture and the Supplemental
Indenture; and
(xi) the Company is not, and is not directly or indirectly
controlled by, or acting on behalf of any person or entity
which is, an "investment company" within the meaning of the
Investment Company Act.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of Arizona, the State of Nevada or the United States, to
the extent deemed proper and specified in such opinion, upon the
opinion of other counsel of good standing believed to be reliable and
who are satisfactory to counsel for the Underwriters, (B) as to matters
involving the application of the laws of the State of Nevada upon the
opinion delivered pursuant to Section 5(e) hereof and, (C) as to
matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials. Such counsel
may assume, for the purposes of such opinion and without investigation,
that the substantive laws of the State of New York do not materially
differ from the substantive laws of the State of Arizona, and such
counsel need express no opinion as to
<PAGE> 13
13
the laws of New York or their applicability to the matters covered by
such opinion. References to the Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(e) You shall have received on the Closing Date an opinion,
addressed to Snell & Wilmer L.L.P. and the Representatives, of Lionel,
Sawyer & Collins, counsel for the Company, dated the Closing Date, to
the effect that:
(i) each of the Company, Amerco Real Estate Company, a
Nevada corporation, U- Haul International, Inc., a Nevada
corporation, Ponderosa Holdings, Inc., a Nevada corporation,
and U-Haul Leasing and Sales Co., a Nevada corporation
(together, the "Nevada Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Nevada, with full
corporate power and authority to own its properties and
conduct its business as described in the Prospectus and to
carry out the transactions contemplated hereunder and in the
Prospectus;
(ii) each of the Indenture and the Supplemental Indenture
has been duly authorized, executed and delivered by the
Company and (assuming, in reliance upon the opinion delivered
pursuant to Section 5(g) hereof, that each of the Indenture
and the Supplemental Indenture is a legal, valid and binding
instrument enforceable against all parties thereto under the
laws of New York) constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms, except that (a) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of
the court before which any proceedings therefor may be
brought; and the Securities have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Terms Agreement, the Indenture and the
Supplemental Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, in the case of the
Underwriters' Securities, or by the purchasers thereof
pursuant to Delayed Delivery Contracts, in the case of any
Contract Securities, will constitute legal, valid and binding
obligations of the Company (assuming, in reliance upon the
opinion delivered pursuant to Section 5(g) hereof, that each
of the Securities and Contract Securities is a legal, valid
and binding instrument enforceable against all parties thereto
under the laws of New York), except that (x) the
enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights
generally and (y) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought;
(iii) no consent, approval, authorization or order of any
court or governmental agency or body of the State of Nevada is
required for the consummation of the transactions contemplated
herein or in any Delayed Delivery Contracts, except such as
have been obtained under the Securities Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
<PAGE> 14
14
Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained;
(iv) neither the execution and delivery of the Indenture
or the Supplemental Indenture or the issuance and sale of the
Securities nor the consummation of any other of the
transactions herein or therein contemplated nor the
fulfillment of the terms hereof or thereof or of the Term
Agreement or any Delayed Delivery Contracts will conflict
with, result in a breach or violation of or constitute a
default under any law or the articles or certificate of
incorporation or by-laws of the Company or any of the Nevada
Subsidiaries or any bond, debenture, note or any other
evidence of indebtedness of any indenture, mortgage, deed of
trust or other material agreement or instrument known to such
counsel and to which the Company or any of the Nevada
Subsidiaries is a party or bound or any judgment, order or
decree known to such counsel to be applicable to the Company
or any of the Nevada Subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of the Nevada
Subsidiaries; and
(v) A Nevada court would give effect to the choice of New
York law in the Indenture and the Supplemental Indenture.
As used therein, the phrase "known to counsel" shall
mean only such actual knowledge as such counsel has obtained from
consultation with attorneys presently in its firm from whom it has
determined are likely, in the ordinary course of their respective
duties, to have knowledge of the matters covered by such opinions.
Except as expressly provided otherwise therein, it has not conducted
any other investigation or review in connection with the opinions
rendered therein, including without limitation a review of any of its
files or the files of the Company or the Nevada Subsidiaries.
Such counsel may further assume information as to
certain contacts between the jurisdictions of New York and the
transactions contemplated by the Securities, Contract Securities,
Indenture and Supplemental Indenture, including the following:
(a) substantial negotiations relating
to such transactions have taken place in the State of
New York,
(b) the Company is executing and
delivering the Securities, Contract Securities,
Indenture and Supplemental Indenture in New York in
connection with the restructuring of certain of its
indebtedness and for certain other lawful and
authorized ends,
(c) the Company's financial advisor, as
well as the external counsel representing the
Representatives in connection with such transactions,
have their principal offices in the State of New
York, and negotiations in connection with such
transactions have taken place in certain of their
offices, including such offices in New York, and
(d) many of the Representatives are
located in the State of New York.
<PAGE> 15
15
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of Nevada or the United States, to the extent deemed
proper and specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters, (B) as to matters involving the laws of
the State of Arizona, upon the opinion delivered pursuant to Section
5(d) hereof, (C) as to matters involving the laws of the State of New
York, upon the opinion delivered pursuant to Section 5(g) hereof and,
(D) as to matters of fact, to the extent deemed proper, on certificates
of responsible officers of the Company and public officials. References
to the Prospectus in this paragraph (c) include any supplements thereto
at the Closing Date.
(f) You shall have received on the Closing Date an opinion
(addressed to the Representatives) of Gary V. Klinefelter, Secretary
and General Counsel of the Company, dated the Closing Date to the
effect that:
(i) each of the Company and its subsidiaries has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material
properties or conducts material business;
(ii) all the outstanding shares of capital stock
of each subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares
of capital stock of the subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and
clear of any perfected security interest or any other security
interests, claims, liens or encumbrances;
(iii) there is no pending or threatened action,
suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving the Company or
any of its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character required
to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit, which is not described or filed
as required; and the statements included or incorporated in
the Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters;
(iv) neither the execution and delivery of the
Indenture or the Supplemental Indenture or the issuance and
sale of the Securities nor the consummation of any other of
the transactions herein or therein contemplated, nor the
fulfillment of the terms hereof or thereof or of any Delayed
Delivery Contracts, will conflict with, result in a breach or
violation of or constitute a default under any law or the
articles or certificate of incorporation or by-laws of the
Company or any of its subsidiaries or any bond, debenture,
note or any other evidence of indebtedness of any indenture,
mortgage, deed of trust or other material agreement or
instrument and to which the Company or any of
<PAGE> 16
16
its subsidiaries is a party or bound or any judgment, order or
decree to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries; and
(v) to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose
have been instituted or threatened, and the Registration
Statement and the Prospectus (other than the financial
statements and other financial and statistical information
contained therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
applicable requirements of the Securities Act, the Exchange
Act and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe that at
the Effective Date the Registration Statement (other than the
financial statements and other financial and statistical
information contained therein as to which such counsel need
express no opinion) contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other than the
financial statements and other financial and statistical
information contained therein as to which such counsel need
express no opinion) at its date or at the Closing Date
included or includes any untrue statement of a material fact
or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g) The Representatives shall have received from Milbank,
Tweed, Hadley & McCloy, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale
of the Securities, the Indenture, the Supplemental Indenture, any
Delayed Delivery Contracts, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(h) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplement to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the
Company in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
<PAGE> 17
17
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or other), results of operations,
assets, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(i) At the Execution Time and on the Closing Date, the Company
shall furnish a letter addressed to the Representatives, in form and
substance satisfactory to the Representatives, from Price Waterhouse
LLP, independent public accountants, containing the statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information relating to the Company contained or
incorporated by reference into the Registration Statement and the
Prospectus.
(j) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(g) of this Section 5 or (ii) any change in or affecting the business
or properties of the Company and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the
judgement of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(k) Prior to such time, none of the following shall have
occurred: (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the National Association of Securities
Dealers Automated Quotation National Market System or trading in the
Company's Series A 8 1/2% Preferred Stock shall have been suspended by
the Commission or the New York Stock Exchange, or trading in securities
generally on the New York Stock Exchange or the National Association of
Securities Dealers Automated Quotation National Market System shall
have been suspended or limited or minimum prices shall have been
established on either such Exchange or Market System, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crises the effect of
which on financial markets is such as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
(l) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act) or any
notice given of any intended or potential decrease in any such rating
or of a possible change in any such rating that does not indicate the
direction of the possible change.
(m) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
<PAGE> 18
18
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution
(a) The Company shall indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Securities), to
which that Underwriter or controlling person may become subject, under
th Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner
to, the Securities or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (provided that the Company shall not be liable
under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct), and shall
reimburse each Underwriter, the directors, officers, employees and
agents of each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by that Underwriter or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein (which information
shall be determined as set forth in Section 7(b)); and provided
further, that as to any Preliminary Prospectus or supplement thereto
this indemnity agreement shall not inure to the benefit of any
Underwriter, the directors, officers, employees and agents of each
Underwriter or any person controlling that Underwriter on account of
any loss, claim, damage, liability or action arising from the sale of
Securities to any person by that Underwriter if that Underwriter failed
to send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Securities
Act, and the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus or supplement thereto was corrected in the
Prospectus, unless such failure resulted from non-compliance by the
Company with Section 4(c). For purposes of the second proviso to the
immediately preceding sentence, the term Prospectus shall not be deemed
to include the documents incorporated by reference therein, and no
Underwriter shall be obligated to send or give any supplement or
amendment to any document incorporated by reference in a Preliminary
<PAGE> 19
19
Prospectus or supplement thereto or the Prospectus to any person other
than a person to whom such Underwriter has delivered such incorporated
documents in response to a written request therefor. The foregoing
indemnity agreement is in addition to any liability which the Company
may otherwise have to any Underwriter or to any controlling person of
that Underwriter.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of its directors
(including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company),
each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the
Company or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of
that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The Company acknowledges that the statements set
forth in the last paragraph of the cover page and under the heading
"Underwriting" in any Preliminary Final Prospectus or the Final
Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in the documents
referred to in the foregoing indemnity, and the Representatives confirm
that such statements are correct. The foregoing indemnity agreement is
in addition to any liability which any Underwriter may otherwise have
to the Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, if
a claim in respect thereof is to be made against the indemnifying party
under this Section 7, the indemnified party shall notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any such
claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Representatives shall have the right to employ
counsel to represent jointly the Representatives and those other
Underwriters and their respective controlling persons who may
<PAGE> 20
20
be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company under
this Section 7, if, in the reasonable judgment of the Representatives,
if there are legal defenses available to them which are different from
or in addition to those available to such indemnifying party (it being
understood that the Company shall not, in connection with any one such
claim or action or separate but substantially similar or related claims
or actions in the same jurisdiction arising out of the same allegations
or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (other than local counsel
which shall be engaged for purposes of appearing with such counsel in
such jurisdictions in which such firm of attorneys is not licensed to
practice)), and in that event the fees and expenses of such separate
counsel shall be paid by the Company. Anything in this Section 7(c) to
the contrary notwithstanding, an indemnifying party shall not be liable
for any settlement of any claim or action effected without its written
consent.
(d) If the indemnification provided for in this Section 7
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 7(a) or 7(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein (other than by reason of the failure to give notice, as
provided in the first sentence of Section 7(c)), then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute
to the amount paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well
as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Securities
purchased under this Agreement, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section 7(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to in this Section 7(d). The amount
paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in
this Section 7(d) shall be deemed to include, for purposes of this
Section 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
7(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public was offered to the
<PAGE> 21
21
public exceeds the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this
Section 7(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) The Underwriters severally confirm that the statements
with respect to the public offering of the Securities set forth on the
cover page of, and under the caption "Underwriting" in, the Prospectus
are correct and constitute the only information furnished in writing to
the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
(f) The agreements contained in Sections 4(f), 4(g), 5 and
this Section 7 and the representations and warranties of the Company in
Section 2 (as made as of the date of this Agreement) shall survive the
delivery of the Securities and shall remain in full force and effect,
regardless of any termination or cancellation of the Terms Agreement
incorporating the terms of this Agreement or any investigation made by
or on behalf of any indemnified party.
8. Defaulting Underwriters. If any Underwriter defaults in the
performance of its obligations under a Terms Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Securities which
the defaulting Underwriter agreed but failed to purchase in the respective
proportions which the number of shares or principal amount of Securities set
opposite the name of each remaining non-defaulting Underwriter in Schedule A to
the Terms Agreement bears to the total number of shares or principal amount of
the Securities set opposite the names of all the remaining non-defaulting
Underwriters in Schedule A to the Terms Agreement; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any
Securities on the Closing Date if the aggregate number of shares or principal
amount of the Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
or principal amount of the Securities, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares or principal amount of Securities set forth opposite its name on Schedule
A to the Terms Agreement. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the
Securities. If the remaining Underwriters or other underwriters satisfactory to
the Representatives do not elect to purchase the number of shares or principal
amount which the defaulting Underwriter or Underwriters agreed but failed to
purchase, the Terms Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 5 and 10.
Nothing contained herein shall relive a defaulting Underwriter
of any liability it may have to the Company for damages caused by its default.
If other underwriters are obligated or agree to purchase the Securities of a
defaulting or withdrawing Underwriter, either the Representatives or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or any supplement thereto or in any other document or arrangement.
<PAGE> 22
22
9. Effective Date and Termination. The obligations of the
Underwriters under the Terms Agreement may be terminated by the Representatives
by notice given to and received by the Company prior to delivery of any payment
for the Securities if, prior to that time, the events described in any of
Section 6(k), 6(j) or 6(l) shall have occurred.
10. Reimbursement of Underwriters' Expenses. If (a) the
Company shall fail to tender the Securities for delivery to the Underwriters for
any reason permitted under this Agreement or the Terms Agreement or (b) the
Underwriters shall decline to purchase the Securities for any reason permitted
under this Agreement or the Terms Agreement (including the termination of the
Terms Agreement pursuant to Section 9), the Company shall reimburse the
Underwriters for the reasonable fees and expenses of their counsel and for such
other out-of-pocket expenses as shall have been reasonably incurred by them in
connection with the Terms Agreement and the proposed purchase of the Securities,
and upon demand the Company shall pay the full amount thereof to the
Representatives. If the Terms Agreement is terminated pursuant to Section 8 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any Underwriter on account of those expenses.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing and shall be deemed duly given if
mailed or terminated by any standard form of telecommunication. Such notices
shall be directed as follows:
(a) if to the Underwriters, to their addresses furnished to
the Company in writing for the purpose of communications hereunder;
(b) if to the Company, to the address of the Company set forth
in the Registration Statement, Attention: General Counsel;
provided, however, that any notice to an Underwriter pursuant to Section 7(c)
shall be given to such Underwriter at its address set forth in its acceptance
telex to the Representatives, which address will be supplied to any other party
hereto by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect at the time of receipt thereof.
12. Persons Entitled to Benefit of Agreement. The Terms
Agreement (including the provisions of this Agreement) shall inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. The Terms Agreement (including the provisions of this
Agreement) are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement also shall be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 7(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 12, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions contained in this Agreement. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
solely by reason of such purchase.
<PAGE> 23
23
13. Certain Definitions. For purposes of this Agreement,
"business day" means any day on which the New York Stock Exchange is open for
trading, and "subsidiary" has the meaning set forth in Rule 405 of the Rules and
Regulations.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York (without giving effect to the
principles of choice of law).
15. Counterparts. The Terms Agreement may be executed in
counterparts and each such counterpart shall be deemed to be an original but all
such counterparts shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
<PAGE> 24
ANNEX I
[Three copies of this Delayed Delivery Contract should be signed and returned to
the address shown below so as to arrive not later than 9:00 A.M., New York time,
on _______________, 19__*.]
DELAYED DELIVERY CONTRACT
[Insert date of initial
public offering]
AMERCO
c/o [Name of Underwriter[s]]
[Address]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from AMERCO, a
Delaware corporation ("Company"), and the Company agrees to sell to the
undersigned, [If one delayed closing, insert--as of the date hereof, for
delivery on _______________, 19__ ("Delivery Date"),]
[$]_____________________________
principal amount of the Company's [Insert title of securities] ("Securities"),
offered by the Company's Prospectus dated _______________, 19__ and a Prospectus
Supplement dated ______, 19__, relating thereto, receipt of copies of which is
hereby acknowledged, at ___% of the principal amount thereof plus accrued
interest from _______________, 19__, if any, and on the further terms and
conditions set forth in this Delayed Delivery Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date
hereof, for delivery on the dates set forth below, Securities in the principal
amounts set forth below:
Delivery Date Principal Amount
_________________ [$]_________________
_________________ [$]_________________
Each of such delivery dates is hereinafter referred to as a "Delivery Date".]
Payment for the Securities that the undersigned has agreed to
purchase for delivery on [the] [each] Delivery Date shall be made to the Company
or its order by certified or official bank check in [New York Clearing House
(next day)] funds at the office of _______________ at 10:00 a.m. on the Delivery
Date upon delivery to the undersigned of the Securities to be purchased by the
undersigned for delivery on such Delivery Date in definitive fully registered
form and in such denominations and
______________
* Insert date which is third full business day prior to Closing Date under
the Terms Agreement.
I-1
<PAGE> 25
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to such Delivery Date.
It is expressly agreed that the provisions for delayed
delivery and payment are for the sole convenience of the undersigned; that the
purchase hereunder of Securities is to be regarded in all respects as a purchase
as of the date of this Contract; that the obligation of the Company to make
delivery of and accept payment for, and the obligation of the undersigned to
take delivery of and make payment for, Securities on [the] [each] Delivery Date
shall be subject only to the conditions that (i) investment in the Securities
shall not at such Delivery Date be prohibited under the laws of any jurisdiction
in the United States to which the undersigned is subject and (2) the Company
shall have sold to the Underwriters the total principal amount of the Securities
less the principal amount thereof covered by this and other similar Contracts.
The undersigned represents that its investment in the Securities is not, as of
the date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the
Company will mail or deliver to the undersigned at its address set forth below,
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is undersigned that the acceptance of any such Contract is
in the Company's sole discretion and, without limiting the foregoing, need not
be on a "first-come, first-served" basis. If this Contract is acceptable to the
Company, it is requested that the Company sign in the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the Company
and the undersigned when such counterpart is so mailed or delivered.
Yours very truly,
____________________________
(Name of Purchaser)
By__________________________
(Title of Signatory)
____________________________
____________________________
(Address of Purchaser)
Accepted as of the above date:
AMERCO
By________________________
Name:
Title:
I-2
<PAGE> 26
ANNEX II
AMERCO
(the "Company")
Debt Securities
TERMS AGREEMENT
, 19__
AMERCO
1325 Automotive Way, Suite 100
Reno, Nevada 89502-3239
Attention: Chief Financial Officer
Ladies and Gentlemen:
[On behalf of the several Underwriters named in Schedule A
hereto and for their respective accounts, we] [We] offer to purchase, on and
subject to the terms and conditions of the Underwriting Agreement Basic
Provisions of the Company attached hereto (the "Underwriting Agreement"), the
following securities ("Securities") to be issued under an indenture, dated
______ ___, 19__, between the Company and _______________, as Trustee, on the
following terms:
Title: [ %] [Floating Rate] [Senior] Notes Due _____
Principal Amount: [$]_________
Interest: [ % per annum, from ______ ___, 19__, payable semiannually on
______ ___ and ______ ___, commencing _______ ___, 19__, to holders of record on
the preceding ______ ___ or ______ ___, as the case may be.] [Zero coupon.]
Maturity: ______ ___, _____.
Optional Redemption:
Sinking Fund:
Period Designated Pursuant to Section 4(g) of the Underwriting
Agreement: _____ years.
Period Designated Pursuant to Section 4(i) of the Underwriting
Agreement: _____ days.
[Conversion Provisions]:
[Add any other terms.]
Delayed Delivery Contracts: [None] [Delivery Date][s] shall be ______
___, 19__. Underwriters' fee is ___% of the principal amount of the Contract
Securities.]
II-1
<PAGE> 27
Purchase Price: ___% of principal amount, plus accrued interest [, if
any,] from ______ ___, 19__.
Expected Reoffering Price: ___% of principal amount, subject to change
by the undersigned.
Closing Date: ______ a.m. on ______ ___, 19__, at __________, in New
York Federal (same-day) funds.
[Name and Address[es] of Representative[s]:]
The respective principal amounts of the Securities to be purchased by each of
the Underwriters are set forth opposite their names in Schedule A hereto.
[If appropriate, insert--It is understood that we may, with your
consent, amend this offer to add additional Underwriters and reduce the
aggregate principal amount to be purchased by the Underwriters listed in
Schedule A hereto by the aggregate principal amount to be purchased by such
additional Underwriters.]
The significant subsidiaries (as defined in Rule 405 under the
Securities Act of 1933) of the Company are as follows: ___________________.
The provisions of the Underwriting Agreement are incorporated herein by
reference [If appropriate, insert--, except that the obligations and agreements
set forth in Section 8 ("Defaulting Underwriters") of the Underwriting Agreement
shall not apply to the obligations of the Underwriters to purchase the above
Securities].
The Securities will be made available for checking and packaging at the
office of _______________ at least 24 hours prior to the Closing Date.
[Please signify your acceptance of our offer by signing the enclosed
response to us in the space provided and returning it to us.]
[Please signify your acceptance of the foregoing by return wire not
later than _____ p.m. today.]
Very truly yours,
[Insert name(s) of Representatives or Underwriters]
[, on behalf of [themselves] [itself] and as
Representative[s] of the Several] [As] Underwriter[s]
[By [Name of Representative]]
By____________________________
Name:
Title:
II-2
<PAGE> 28
SCHEDULE A
Principal
Underwriter Amount
- ----------- ---------
---------
Total.......................................[$]
II-3
<PAGE> 29
SCHEDULE B
II-4
<PAGE> 30
SCHEDULE C
To: [Insert name(s) of Representatives or Underwriters],
As [Representative[s] of the Several] Underwriter[s]
[c/o [Name of Representative]]
We accept the offer contained in your [letter] [wire], dated ______
___, 19__, relating to [$]_______ principal amount of our [insert title of
Securities] (the "Terms Agreement"). We also confirm that, to the best of our
knowledge after reasonable investigation, the representations and warranties of
the undersigned contained in Section 2 of the Underwriting Agreement -- Basic
Provisions of the Company referred to in the Terms Agreement (together with the
Terms Agreement, the "Underwriting Agreement"), are true and correct, no stop
order suspending the effectiveness of the Registration Statement (as defined in
the Underwriting Agreement) or of any part thereof has been issued and no
proceedings for that purpose have been instituted or, to the knowledge of the
undersigned, are contemplated by the Securities and Exchange Commission and,
subsequent to the respective dates of the most recent financial statements in
the Prospectus (as defined in the Underwriting Agreement), there has been (or in
the case of a form of prospectus filed pursuant to Rule 424(b)(2) or (5) there
will be, as of the date of such prospectus) no material adverse change in the
financial position or results of operations of the undersigned and its
subsidiaries except as set forth in or contemplated by the Prospectus.
Very truly yours,
AMERCO
By____________________________
Name:
Title:
II-5
<PAGE> 1
EXHIBIT 4.1
AMERCO
TO
The First National Bank of Chicago, as Trustee
--------------------------------
Indenture
Dated as of September _____, 1996
--------------------------------
<PAGE> 2
AMERCO
Certain Sections of this Indenture relating to Sections 310 through
318, inclusive, of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C>
Section 310(a)(1)................................. 609
(a)(2).................................... 609
(a)(3).................................... Not Applicable
(a)(4) ................................... Not Applicable
(b)....................................... 608
610
Section 311(a) ................................... 613
(b)....................................... 613
Section 312(a) ................................... 701
702(a)
(b)....................................... 702(b)
(c)....................................... 702(c)
Section 313(a) ................................... 703(a)
(b)....................................... 703(a)
(c)....................................... 703(a)
(d)....................................... 703(b)
Section 314(a) ................................... 704
(a)(4).................................... 101
1005
(b)....................................... Not Applicable
(c)(1).................................... 102
(c)(2) ................................... 102
(c)(3) ................................... Not Applicable
(d) ...................................... Not Applicable
(e) ...................................... 102
Section 315(a) ................................... 601
(b) ...................................... 602
(c) ...................................... 601
(d) ...................................... 601
(e) ...................................... 514
Section 316(a).................................... 101
(a)(1)(A)................................. 502
512
(a)(1)(B)................................. 513
(a)(2) ................................... Not Applicable
(b) ...................................... 508
(c) ...................................... 104(c)
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Section 317 (a)(1) ............................... 503
(a)(2) ............................... 504
(b) .................................. 1003
Section 318 (a) .................................. 107
</TABLE>
- -------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES................................................................. 1
RECITALS OF THE COMPANY ................................................ 1
<CAPTION>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
<S> <C>
SECTION 101. Definitions................................................ 1
Act ......................................................... 2
Affiliate.................................................... 2
Attributable Debt............................................ 2
Authenticating Agent......................................... 2
Board of Directors........................................... 2
Board Resolution............................................. 2
Book-Entry Security.......................................... 2
Business Day................................................. 2
Capital Stock................................................ 2
Capitalized Lease............................................ 3
Change of Control............................................ 3
Change of Control Offer...................................... 3
Change of Control Payment.................................... 3
Change of Control Purchase Price............................. 3
Change of Control Triggering Event........................... 4
Commission................................................... 4
Company .................................................... 4
Company Request.............................................. 4
Consolidated Net Tangible Assets............................. 4
Consolidated Subsidiary...................................... 4
Corporate Trust Office....................................... 4
Debt ........................................................ 4
Default ..................................................... 5
Defaulted Interest........................................... 5
Depository................................................... 5
Dollars ..................................................... 5
Event of Default............................................. 5
Exchange Act................................................. 5
GAAP ........................................................ 5
Good Faith Contest........................................... 5
</TABLE>
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of the Indenture.
i
<PAGE> 5
<TABLE>
<S> <C>
Holder ...................................................... 5
Indenture.................................................... 5
Intangibles.................................................. 6
Intellectual Properties...................................... 6
Interest .................................................... 6
Interest Payment Date........................................ 6
Investment Grade Rating...................................... 6
Issue Date................................................... 6
Lien ........................................................ 6
Maturity .................................................... 7
Officers' Certificate........................................ 7
Opinion of Counsel........................................... 7
Original Issue Discount Security............................. 7
Outstanding.................................................. 7
Paying Agent................................................. 8
Permitted Persons............................................ 8
Person ...................................................... 8
Place of Payment............................................. 8
Plan Consummation Period..................................... 9
Predecessor Security......................................... 9
Priority Debt................................................ 9
Property .................................................... 9
Rating Agencies.............................................. 9
Rating Date.................................................. 9
Rating Decline............................................... 9
Redemption Date.............................................. 9
Redemption Price............................................. 10
Regular Record Date.......................................... 10
Rentals ..................................................... 10
Sale and Leaseback Transaction............................... 10
Secured Indebtedness......................................... 10
Securities................................................... 10
Security Register............................................ 10
Special Record Date.......................................... 10
Stated Maturity.............................................. 10
Subsidiary................................................... 10
Trustee ..................................................... 10
Trust Indenture Act.......................................... 11
U.S. Government Obligations.................................. 11
Vice President............................................... 11
Voting Stock................................................. 11
</TABLE>
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of the Indenture.
ii
<PAGE> 6
<TABLE>
<S> <C>
Wholly Owned Consolidated Subsidiary.......................... 11
SECTION 102. Compliance Certificates and Opinions................. 11
SECTION 103. Form of Documents Delivered to Trustee............... 12
SECTION 104. Acts of Holders; Record Dates........................ 13
SECTION 105. Notices, Etc., to Trustee and Company................ 14
SECTION 106. Notice to Holders; Waiver............................ 14
SECTION 107. Conflict with Trust Indenture Act.................... 15
SECTION 108. Effect of Headings and Table of Contents............. 15
SECTION 109. Successors and Assigns............................... 15
SECTION 110. Separability Clause.................................. 15
SECTION 111. Benefits of Indenture................................ 15
SECTION 112. Governing Law........................................ 15
SECTION 113. Legal Holidays....................................... 15
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally...................................... 16
SECTION 202. Form of Face of Security............................. 16
SECTION 203. Form of Reverse of Security.......................... 18
SECTION 204. Form of Legend for Book-Entry Securities............. 22
SECTION 205. Form of Trustee's Certificate of Authentication...... 22
ARTICLE THREE
THE SECURITIES......................... 23
SECTION 301. Amount Unlimited; Issuable in Series................. 23
SECTION 302. Denominations........................................ 25
SECTION 303. Execution, Authentication, Delivery and Dating....... 25
SECTION 304. Temporary Securities................................. 27
SECTION 305. Registration, Registration of Transfer and Exchange.. 27
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities..... 29
SECTION 307. Payment of Interest; Interest Rights Preserved....... 30
SECTION 308. Persons Deemed Owners................................ 31
SECTION 309. Cancellation......................................... 31
SECTION 310. Computation of Interest.............................. 31
SECTION 311. Book-Entry System.................................... 31
ARTICLE FOUR
SATISFACTION AND DISCHARGE.................... 33
SECTION 401. Satisfaction and Discharge of Indenture.............. 33
</TABLE>
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of the Indenture.
iii
<PAGE> 7
<TABLE>
<S> <C>
SECTION 402. Application of Trust Money............................ 34
SECTION 403. Defeasance and Discharge of Securities of Any Series.. 34
ARTICLE FIVE
REMEDIES.............................. 36
SECTION 501. Events of Default..................................... 36
SECTION 502. Acceleration of Maturity; Rescission and Annulment.... 38
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee................................ 39
SECTION 504. Trustee May File Proofs of Claim...................... 40
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities.............................. 41
SECTION 506. Application of Money Collected........................ 41
SECTION 507. Limitation on Suits................................... 41
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.................................. 42
SECTION 509. Restoration of Rights and Remedies.................... 42
SECTION 510. Rights and Remedies Cumulative........................ 42
SECTION 511. Delay or Omission Not Waiver.......................... 43
SECTION 512. Control by Holders.................................... 43
SECTION 513. Waiver of Past Defaults............................... 43
SECTION 514. Undertaking for Costs................................. 44
SECTION 515. Waiver of Stay or Extension Laws...................... 44
ARTICLE SIX
THE TRUSTEE............................ 44
SECTION 601. Certain Duties and Responsibilities................... 45
SECTION 602. Notice of Defaults.................................... 45
SECTION 603. Certain Rights of Trustee............................. 45
SECTION 604. Not Responsible for Recitals or Issuance of Securities 46
SECTION 605. May Hold Securities................................... 46
SECTION 606. Money Held in Trust................................... 46
SECTION 607. Compensation and Reimbursement........................ 47
SECTION 608. Disqualification; Conflicting Interests............... 47
SECTION 609. Corporate Trustee Required; Eligibility............... 47
SECTION 610. Resignation and Removal; Appointment of Successor..... 47
SECTION 611. Acceptance of Appointment by Successor................ 49
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business................................ 50
SECTION 613. Preferential Collection of Claims Against Company..... 50
SECTION 614. Appointment of Authenticating Agent................... 50
</TABLE>
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of the Indenture.
iv
<PAGE> 8
<TABLE>
<S> <C>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY......... 52
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders.................................. 52
SECTION 702. Preservation of Information; Communications to Holders 52
SECTION 703. Reports by Trustee.................................... 53
SECTION 704. Reports by Company.................................... 53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE....... 53
SECTION 801. Company May Consolidate, Etc., Only on
Certain Terms......................................... 53
SECTION 802. Successor Substituted................................. 54
ARTICLE NINE
SUPPLEMENTAL INDENTURES........................ 54
SECTION 901. Supplemental Indentures Without Consent of Holders.... 54
SECTION 902. Supplemental Indentures with Consent of Holders....... 56
SECTION 903. Execution of Supplemental Indentures.................. 57
SECTION 904. Effect of Supplemental Indentures..................... 57
SECTION 905. Conformity with Trust Indenture Act................... 57
SECTION 906. Reference in Securities to Supplemental Indentures.... 57
ARTICLE TEN
COVENANTS............................. 58
SECTION 1001. Payment of Principal, Premium and Interest............ 58
SECTION 1002. Maintenance of Office or Agency....................... 58
SECTION 1003. Money for Securities Payments to Be Held in Trust..... 58
SECTION 1004. Limitation on Liens Securing Indebtedness............. 59
SECTION 1005. Limitation on Sale and Leaseback...................... 61
SECTION 1006. Restrictive Agreements................................ 62
SECTION 1007. Corporate Existence................................... 62
SECTION 1008. Defeasance of Certain Obligations..................... 62
SECTION 1009. Statement by Officers as to Default................... 64
SECTION 1010. Waiver of Certain Covenants........................... 64
SECTION 1011. Purchase of Securities at the Option of
Holders Upon a Change of Control...................... 64
ARTICLE ELEVEN
REDEMPTION OF SECURITIES...................... 66
SECTION 1101. Applicability of Article.............................. 66
</TABLE>
- ---------------------------
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of the Indenture.
v
<PAGE> 9
<TABLE>
<S> <C>
SECTION 1102. Election to Redeem; Notice to Trustee................. 66
SECTION 1103. Selection by Trustee of Securities to Be Redeemed..... 67
SECTION 1104. Notice of Redemption.................................. 67
SECTION 1105. Deposit of Redemption Price........................... 68
SECTION 1106. Securities Payable on Redemption Date................. 68
SECTION 1107. Securities Redeemed in Part........................... 69
ARTICLE TWELVE
SINKING FUNDS............................ 69
SECTION 1201. Applicability of Article.............................. 69
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities. 69
SECTION 1203. Redemption of Securities for Sinking Fund............. 70
TESTIMONIUM .............................................................. 70
SIGNATURES AND SEALS ..................................................... 70
ACKNOWLEDGEMENTS ......................................................... 72
</TABLE>
- ---------------------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
vi
<PAGE> 10
INDENTURE, dated as of September _____, 1996, between AMERCO, a
corporation duly organized and existing under the laws of the State of Nevada
(herein called the "Company"), having its principal office at 1325 Airmotive
Way, Suite 100, Reno, Nevada 89502-3239, and The First National Bank of Chicago,
a national banking association, existing under the laws of the United States of
America, having its principal corporate office in Chicago, Illinois, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance GAAP; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
<PAGE> 11
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" means indebtedness for money borrowed deemed to be
incurred in respect of a Sale and Leaseback Transaction and shall be, at the
date of determination, the present value (discounted at the actual rate of
interest implicit in such transaction, compounded annually), of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Leaseback Transaction.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a Security bearing the legend specified in
Section 204 evidencing all or part of a series of Securities, authenticated and
delivered to the Depository for such series or its nominee, and registered in
the name of such Depository or nominee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares
or other equivalents (however designated) of corporate stock, partnership
interests, or any other participation, right, warrant, option or other interest
in the nature of an equity interest in such Person, but excluding debt
securities convertible or exchangeable into such equity interest.
2
<PAGE> 12
"Capitalized Lease" means any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with GAAP.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (within the meaning of Sections 13(d) and
14(d) of the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act;
provided, however, that a group formed solely for the purpose of voting
securities shall not be deemed to be a group for purposes of this definition),
other than the Company, any employee benefit plan of the Company or any
Subsidiary, or Permitted Persons, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35% or
more of the total voting power of the fully diluted Voting Stock of the Company,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by the Board of Directors of the
Company or whose nomination for election by the shareholders of the Company was
approved by a vote of 66-2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office, (iii) the Company consolidates or merges with or into any other Person
or any other Person consolidates or merges with or into the Company, in either
case, other than a consolidation or merger (a) with a Wholly-Owned Consolidated
Subsidiary in which all of the Voting Stock of the Company outstanding
immediately prior to the effectiveness thereof is changed into or exchanged for
substantially the same consideration or (b) (1) pursuant to a transaction in
which the outstanding Voting Stock of the Company is changed into or exchanged
for cash, securities or other Property with the effect that the "beneficial
owners" of the outstanding Voting Stock of the Company, immediately prior to
such transaction, beneficially own, directly or indirectly, more than 50% of the
total voting power of the fully diluted Voting Stock of the surviving
corporation immediately following such transaction and (2) no "person" or
"group", other than the Company, any employee benefit plan of the Company or any
Subsidiary, or Permitted Persons, beneficially owns, directly or indirectly, 35%
or more of the total voting power of the fully diluted Voting Stock of the
surviving corporation immediately following such transaction, or (iv) the
Company sells, conveys, transfers or leases, directly or indirectly, all or
substantially all of its assets to any Person other than a Wholly-Owned
Consolidated Subsidiary.
"Change of Control Offer" has the meaning specified in Section 1011
hereof.
"Change of Control Payment" has the meaning specified in Section 1011
hereof.
"Change of Control Purchase Price" has the meaning specified in Section
1011 hereof.
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"Change of Control Triggering Event" means the occurrence of both a
Change of Control and a Rating Decline with respect to the Securities.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934 (the
"Exchange Act"), or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or a Assistant Secretary, and delivered to
the Trustee.
"Consolidated Net Tangible Assets" means, as of the date of any
determination thereof, the total amount of all assets of the Company and its
Consolidated Subsidiaries (less depreciation, depletion and other properly
deductible valuation reserves) after deducting Intangibles.
"Consolidated Subsidiary" means any Subsidiary of the Company or of any
Consolidated Subsidiary which is consolidated with the Company for financial
reporting purposes in accordance with GAAP.
"Corporate Trust Office" means the office of the Trustee in Chicago,
Illinois at which at any particular time its corporate trust business shall be
administered, which as of the date of this Indenture is the address of the
Trustee set forth in Section 105.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Debt" of the Company or any Subsidiary thereof means, collectively,
(i) any bond, debenture, note or other evidence of indebtedness for money
borrowed by the Company or any Subsidiary (excluding any indebtedness for money
borrowed by the Company from any Affiliate thereof) or (ii) any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company
(excluding any indebtedness for money borrowed by the Company from any Affiliate
thereof) or any Subsidiary (excluding any indebtedness for money borrowed by any
Subsidiary from any Affiliate thereof), whether such indebtedness now exists or
shall hereafter be created.
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<PAGE> 14
"Default" means an event which, with the giving of notice or the lapse
of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the Person designated as Depository by the Company pursuant to
Section 301 which must be a clearing agency registered under the Exchange Act,
and if at any time there is more than one such Person, "Depository" shall mean
the Depository with respect to the Securities of that series.
"Dollars" means the lawful currency of the United States of America.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means United States generally accepted accounting principles as
in effect as of the date of determination, unless otherwise stated.
"Good Faith Contest" means, with respect to any tax, assessment, Lien,
obligation, claim, liability, judgment, injunction, award, decree, order, law,
regulation, statute or similar item, any challenge or contest thereof by
appropriate proceedings timely initiated in good faith by the Person subject
thereto for which adequate reserves therefor have been taken in accordance with
GAAP.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"indebtedness for money borrowed", when used with respect to the
Company or any Subsidiary, means any obligation of, or any obligation guaranteed
by, the Company or any Subsidiary for the repayment of borrowed money, whether
or not evidenced by bonds, debentures, notes or other written instruments, and
any deferred obligation of, or any such obligation guaranteed by, the Company
for the payment of the purchase price of Property or assets.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
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<PAGE> 15
"Intangibles" means all Intellectual Properties and all goodwill,
patents, trade names, trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense, deferred assets
(other than prepaid insurance, prepaid taxes, prepaid advertising, prepaid
licensing and other similar expenses prepaid in the ordinary course of
business), amounts invested in or advanced to or equity in the Company's
Subsidiaries other than Consolidated Subsidiaries less any writedowns thereof,
the excess of cost of shares acquired over book value of related assets, any
increase in the value of a fixed asset arising from a reappraisal, revaluation
or write-up thereof, and such other assets as are properly classified as
"intangible assets" in accordance with GAAP.
"Intellectual Properties" means all material patents, patent
applications, copyrights, copyright applications, trade secrets, trade names and
trademarks, technologies, methods, processes or other proprietary properties or
information which are used by the Company and its Consolidated Subsidiaries in
the conduct of their business and are either owned by them or are used, employed
or practiced by them under valid and existing licenses, grants, "shop rights" or
other rights.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Investment Grade Rating" means a rating equal to or higher than Baa3
(or the equivalent) by Moody's Investors Service, Inc. (or any successor to the
rating agency business thereof), BBB- (or the equivalent) by Standard & Poor's
Rating Group (or any successor to the rating agency business thereof) and BBB-
(or the equivalent) by Duff & Phelps Credit Rating Co. (or any successor to the
rating agency business thereof).
"Issue Date" means with respect to any series of Securities, the date
of initial issuance of such series.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
bankers' liens, setoffs and similar arrangements, leases and other title
exceptions and encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all similar
arrangements) affecting Property. For the purposes hereunder, the Company or a
Consolidated Subsidiary shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, Capitalized
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<PAGE> 16
Lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes and such
retention or vesting shall constitute a Lien.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificates given pursuant to Section 1009 shall be the
principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities in accordance with
Section 401; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Securities for whose payment or redemption money or U.S.
Government Obligations in the necessary amount has been theretofore
deposited with the Trustee (or another trustee satisfying the
requirements of Section 609) in trust for the holders of such
Securities in accordance with Section 403; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of
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<PAGE> 17
which there shall have been presented to the Trustee proof satisfactory
to it that such Securities are held by a bona fide purchaser in whose
hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
Dollar equivalent, determined in the manner provided as contemplated by Section
301 on the Issue Date of such Security, of the principal amount (or, in the case
of an Original Issue Discount Security, the Dollar equivalent on the Issue Date
of such Security of the amount determined as provided in (i) above) of such
Security, and (iii) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Permitted Persons" means (i) Edward J. Shoen, Mark V. Shoen, James P.
Shoen, Paul F. Shoen, Sophia M. Shoen (and during the Plan Consummation Period
only, Samuel W. Shoen, Michael L. Shoen, and Katrina Shoen Carlson) and the
spouse and lineal descendant of each such individual, the spouses of each such
lineal descendants and the lineal descendants of such spouses, (ii) any trusts
for the primary benefit of, the executor or administrator of the estate of, or
other legal representative of, any of the individuals referred to in the
foregoing clause (i), and (iii) any corporation with respect to which all the
Voting Stock thereof is, directly or indirectly, owned by any of the individuals
referred to in the preceding clause (i).
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
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<PAGE> 18
"Plan Consummation Period" means the period beginning on the Issue Date
and ending on the date of purchase by the Company (directly or indirectly) of
non-serial common stock, par value $0.25 per share, of the Company held by
Samuel W. Shoen, Michael L. Shoen, and Katrina Shoen Carlson or any corporation
with respect to which all the Voting Stock thereof is, directly or indirectly,
owned by any of the foregoing individuals.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Priority Debt" means (i) indebtedness for money borrowed of any
Consolidated Subsidiary, except indebtedness for money borrowed issued to and
held by the Company or a Wholly Owned Consolidated Subsidiary, and (but without
duplication) (ii) Secured Indebtedness.
"Property" means any kind of property or asset, whether real, personal
or mixed, and whether tangible or intangible.
"Rating Agencies" means Standard & Poor's Rating Group, Duff & Phelps
Credit Rating Co. and Moody's Investors Service, Inc. or any successor to the
respective rating agency businesses thereof.
"Rating Date" means the date which is 90 days prior to the earlier of
(i) a Change of Control and (ii) public notice of the occurrence of a Change of
Control or of the intention of the Company to effect a Change of Control.
"Rating Decline" means, with the respect to the Securities, the
occurrence of the following on, or within 90 days after, the date of public
notice of the occurrence of a Change of Control or of the intention by the
Company to effect a Change of Control (which period shall be extended so long as
the rating of such Securities is under publicly announced consideration for
possible downgrade by any of the Rating Agencies): (a) in the event the
Securities were assigned an Investment Grade Rating by at least two of the three
Rating Agencies on the Rating Date, the rating of the Securities by both
Standard & Poor's Rating Group and Moody's Investors Service, Inc. shall
decrease below an Investment Grade Rating; or (b) in the event the Securities
were rated below an Investment Grade Rating by at least two of the three Rating
Agencies on the Rating Date, the rating of the Securities by both Standard &
Poor's Rating Group and Moody's Investors Service, Inc. shall decrease by one or
more gradations (including gradations within rating categories as well as
between rating categories).
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
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"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Rentals" means and includes, as of the date of any determination
thereof, all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
Property) payable by the Company or a Consolidated Subsidiary, as lessee or
sublessee under a lease of real or personal Property, but shall be exclusive of
any amounts required to be paid by the Company or a Consolidated Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Sale and Leaseback Transaction" has the meaning specified in Section
1005 hereof.
"Secured Indebtedness" means any indebtedness for money borrowed,
whether of the Company or any Consolidated Subsidiary, secured by any Lien on
any Property of the Company or any Consolidated Subsidiary.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a Person more than 50% of the outstanding Voting
Stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions
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of this Indenture, and thereafter "Trustee" shall mean or include each Person
who is then a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of interest
on or principal of any such U.S. Government Obligation held by such custodian
for the account of the holder of a depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation evidenced
by such depository receipt.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled to vote in the election of
directors (or Persons performing similar functions) or to direct the business
and affairs of the issuer of such Capital Stock in the absence of contingencies.
"Wholly Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the outstanding Capital Stock of which (except for directors'
qualifying shares to the extent required by applicable law) is owned by the
Company and/or its Wholly Owned Consolidated Subsidiaries.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion
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<PAGE> 21
shall be given in the form of an Officers' Certificate, if to be given by an
officer of the Company, or an Opinion of Counsel, if to be given by counsel, and
shall comply with the requirements of the Trust Indenture Act and any other
requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section .
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders of Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and
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<PAGE> 23
the Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its office, One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust
Administration, or at such other address as furnished in writing to the
Company by the Trustee, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office
specified in the first paragraph of this instrument or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder effected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
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SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the Trust Indenture Act provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or excluded, as the case may
be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be effected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section ))
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<PAGE> 25
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form
set forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Face of Security.
[If the Security is an Original Issue Discount Security,
insert--FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES
INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
ON THIS SECURITY IS ___% OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS __________,
199_[,] [AND] THE YIELD TO MATURITY IS ___% [, THE METHOD USED TO DETERMINE THE
YIELD IS ________ AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE
SHORT ACCRUAL PERIOD OF __________, 19__ TO _______, 19_ IS __% OF THE PRINCIPAL
AMOUNT OF THIS SECURITY].
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<PAGE> 26
AMERCO
-----------------------------------
No. ___________ $________
AMERCO, a corporation duly organized and existing under the laws of
Nevada (herein called the "Company", which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to __________________________________ or registered assigns, the
principal sum of ______________________ Dollars on
____________________________________________ [if the Security is to bear
interest prior to Maturity, insert--, and to pay interest thereon from
___________ or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, on ________ and _______ (each "an Interest
Payment Date"), commencing ___________, at the rate of _____% per annum, until
the principal hereof is paid or made available for payment [if applicable,
insert--, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of __% per annum on any overdue principal and premium
and on any overdue installment of interest]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the
___________________________ or ____________________________(whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert--The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of _____% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ______% per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
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<PAGE> 27
Payment of the principal of (and premium, if any) and [if
applicable, insert--any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in __________, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts [if applicable,
insert--; provided, however, that at the option of the Company payment of
interest may be made by: (1) wire transfer on the date of payment in immediately
available federal funds or next day funds to an account specified by written
notice to the Trustee from any Holder of Securities; (2) any similar manner that
such Holder may designate in writing to the Trustee; or (3) by check mailed to
the address of the Holder].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
AMERCO
By:______________________________________
ATTEST
By: ________________________________
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of September __, 1996, (herein called
the "Indenture"), between the Company and The First National Bank of Chicago, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be,
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<PAGE> 28
authenticated and delivered. This Security is one of the series
designated on the face hereof[, limited in aggregate principal amount to
$_________].
Pursuant to Section 1011 of the Indenture, upon the occurrence of a
Change of Control Triggering Event with respect to the Securities, each Holder
of such Securities shall have the right to require the Company to purchase such
Holder's Securities, in whole or in part, in a principal amount that is an
integral multiple of $1,000, or at a purchase price equal to 101% of the
principal amount thereof on any Change of Control Payment Date plus accrued and
unpaid interest, if any, to the Change of Control Payment Date. The Holder of
this Security may elect to have this Security or a portion thereof, in an
authorized denomination purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below and tendering this Security pursuant
to the Change of Control Offer.
[If applicable, insert--The Securities of this series are subject
to redemption upon not less than 30 days' notice by mail, [if applicable,
insert--(1) on ___________ in any year commencing with the year _____ and ending
with the year _____ through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after _________, 19__], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before ____________, ____%, and if
redeemed] during the 12-month period beginning _________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption [if applicable, insert--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business as the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert--The Securities of this series are subject
to redemption upon not less than 30 days' notice by mail, (1) on ___________ in
any year commencing with the year ____ and ending with the year ____ through A'n
of the sinking fund for this series at the Redemption Prices for redemption
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below, and (2) at any time [on or after
___________], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning ___________ of the years
indicated,
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ----------------- ----------------------
<S> <C> <C>
</TABLE>
19
<PAGE> 29
and thereafter at a Redemption Price equal to ____% of the principal
amount,together in the case of any such redemption (whether through operation of
the sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
____________, redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than ____% per annum.]
[The sinking fund for this series provides for the redemption on
______________ in each year beginning with the year ____ and ending with the
year ____ of [not less than $_______ ("mandatory sinking fund") and not more
than] $_______ aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the inverse order in which they become due].]
[If the Security is subject to redemption, insert--In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security,
insert--If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security, insert--If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to--insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority of aggregate principal amount or at least
two-thirds of the aggregate principal amount, as applicable, of the Securities
at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive
20
<PAGE> 30
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $_______ and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 204. Form of Legend for Book-Entry Securities.
Any Book-Entry Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
21
<PAGE> 31
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of
a Depository or a nominee of a Depository or a successor
depository. This Security is not exchangeable for Securities
registered in the name of a Person other than the Depository or its
nominee except in the limited circumstances described in the
Indenture, and no transfer of this Security (other than transfer of
this Security as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) may be registered except in the
limited circumstances described in the Indenture."
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The First National Bank of Chicago
As Trustee
By:_________________________________________
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other series);
22
<PAGE> 32
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the series pursuant
to Section 304, 305, 306, 906 or 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security (or one
or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of
the series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, or the method or methods by which such rate or rates shall be
determined, if any, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which any such interest shall be payable and the
Regular Record Date for any interest payable on any Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable, where any Securities of
the series may be surrendered for registration or transfer, where any Securities
of the series may be surrendered for exchange, and where notices or demands to
or upon the Company in respect of the Securities of the series and this
Indenture may be delivered;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities of
the series shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(10) the application, if any, of Section 403 to the Securities of
the series;
(11) the application, if any, of Section 1008 to the Securities of
the series;
23
<PAGE> 33
(12) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the series
shall be payable if other than the currency of the United States of America and
the manner of determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of "Outstanding" in Section
101;
(13) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference to an
index, the manner in which such amounts shall be determined;
(14) whether the Securities of the series shall be issued in whole
or in part in the form of one or more Book-Entry Securities and, in such case,
the Depository with respect to such Book-Entry Security or Securities and the
circumstances under which any such Book-Entry Security may be registered for
transfer or exchange, or authenticated and delivered, in the name of a Person
other than such Depository or its nominee, if other than as set forth in Section
305;
(15) if other than the principal of or any premium or interest on
any Securities of the series is to be payable, at the election of the Company or
a Holder thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency, currencies
or currency units in which payment of the principal of and any premium and
interest on Securities of such series as to which such election is made shall be
payable, and the periods within which and the terms and conditions upon which
such election is to be made;
(16) if other than the entire principal amount thereof, the portion
of the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502;
(17) any Event of Default with respect to the Securities of the
series, if not otherwise set forth herein; and
(18) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
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<PAGE> 34
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Treasurer, one of its Assistant Treasurers, its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form has
been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms have
been established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
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<PAGE> 35
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series, the Company shall execute, and the
Trustee shall authenticate and deliver in exchange therefor, one or more
definitive Securities of the same series, of any authorized denominations
26
<PAGE> 36
and of a like aggregate principal amount and tenor. Until so exchanged, the
temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
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The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 (including any notice of Change of Central Offers pursuant to Section 1011)
and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding the foregoing, no Book-Entry Security shall be
registered for transfer or exchange, or authenticated and delivered, whether
pursuant to this Section, Sections 304, 306, 906 or 1107 or otherwise, in the
name of a Person other than the Depository for such Book-Entry Security or its
nominee until (i) the Depository with respect to a Book-Entry Security notifies
the Company that it is unwilling or unable to continue as Depository for such
Book-Entry Security or the Depository ceases to be a clearing agency registered
under the Exchange Act at a time when such Depository is required to be so
registered in order to act as Depository, (ii) the Company executes and delivers
to the Trustee a Company Order that such Book-Entry Security shall be so
transferable and exchangeable or (iii) there shall have occurred and be
continuing an Event of Default with respect to the Securities of such series.
Upon the occurrence in respect of any Book-Entry Security of any series of any
one or more of the conditions specified in clauses (i), (ii) or (iii) of the
preceding sentence or such other conditions as may be specified as contemplated
by Section 301 for such series, such Book-Entry Security may be registered for
transfer or exchange for Securities registered in the names of, or authenticated
and delivered to, such Persons as the Depository with respect to such series
shall direct.
Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Book-Entry Security, whether pursuant to this Section,
Section 304, 306, 906 or 1107 or otherwise, shall also be a Book-Entry Security
and bear the legend specified in Section 204.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same
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series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for
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such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as provided in this clause. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall not
be more than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each Holder
of Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may pay any Defaulted Interest on the Securities of
any series in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Book-Entry
Security, nothing herein shall prevent the Company, the Trustee, or any agent of
the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by a Depository or impair, as between a
Depository and holders of beneficial interests in any Book-Entry Security, the
operation of customary practices governing the exercise of the rights of the
Depository as Holder of such Book-Entry Security.
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SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be destroyed and a certificate of
destruction shall be furnished to the Company.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 311. Book-Entry System.
The Securities shall be represented by one or more permanent global
notes (each, a "Global Security") deposited with, or on behalf of, The
Depositary Trust Company, as Depository under the Indenture (the "Depository"),
and registered in the name of the Depository's nominee. Except as set forth in
the following paragraph, (1) owners of beneficial interests in a Global Security
shall not be entitled to have Securities represented by such Global Securities
registered in their names, will not receive or be entitled to receive physical
delivery of Securities in definitive form and shall not be considered the owners
or Holders thereof under the Indenture and (2) each Global Security may be
transferred, in whole and not in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee. Accordingly, beneficial
interests in the Securities shall be shown on, and transfers thereof shall be
effected only through, records maintained by the Depository and its
participants.
Notwithstanding any provisions of Section 305 hereof, no Security
that is a Global Security shall be registered for transfer or exchange, or be
authenticated and delivered, and owners of beneficial interests in any Global
Security will not be entitled to receive Securities in definitive form and will
not be considered Holders of Securities unless (1) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security or if at any time the Depository ceases to be a clearing agency
registered under the Exchange Act, (2) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so exchangeable or
(3) there shall have occurred and be continuing a Default or an Event of
Default. In such circumstances, upon surrender by the Depository or a successor
depository of any Global Security, Securities in definitive form will be issued
to each Person that the Depository or successor depository identifies as the
beneficial owner of the
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related Securities. Upon such issuance, the Trustee is required to register such
Securities in the name of, and cause such Securities to be delivered to, such
Person or Persons (or nominees thereof). Such Securities would be issued in
fully registered form without coupons, in denominations of $1,000 and integral
multiples thereof.
The Depository shall be permitted to take any action permitted to
be taken by an owner or Holder of Securities only at the direction of one or
more participants in the Depository, as it may from time to time determine.
Principal and interest payments on Securities registered in the
name of or held by the Depository or its nominee shall be made to the Depository
or its nominees, as the case may be, as the registered owner of the Global
Security representing such Securities. The Company and the Trustee shall treat
the Persons in whose name the Securities are registered as the Holders of such
Securities for the purpose of receiving payment of principal and interest on
such Securities and for all other purposes whatsoever. Therefore, none of the
Company, the Trustee or any Paying Agent has direct responsibility or liability
for the payment of principal and interest on the Securities to owners of
beneficial interests in any Global Security. Payments by direct and indirect
participants in the Depository shall be the responsibility of such participants.
The Securities shall trade in the Depository's Same-Day Funds
Settlement System until Maturity (or until they are subject to repurchase
pursuant to Section 1011 hereof or acceleration pursuant to Article Five
hereof), and secondary market trading activity in the Securities may be required
by the Depository to settle in immediately available funds.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(a) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
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(b) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company, and the Company,
in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607 and to any
Authenticating Agent under Section 614 and, if money or U.S. Government
Obligations shall have been deposited with the Trustee in accordance with
Section 403 or 1008, the obligations of the Company to the Trustee under Section
402(2), and, if money shall have been deposited with the Trustee pursuant to
subclause (b) of clause (1) of this Section the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
(1) Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
403 or 1008 and all money received by the Trustee in respect of U.S. Government
Obligations deposited with the Trustee pursuant to Section 403 or 1008, shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment
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such money has been deposited with or received by the Trustee or to make
mandatory sinking fund payments or analogous payments as contemplated by Section
403 or 1008.
(2) The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against U.S. Government
Obligations deposited pursuant to Section 403 or 1008 or the interest and
principal received in respect of such obligations other than any payable by or
on behalf of Holders.
(3) The Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 403 or 1008 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are then in excess of the amount thereof which
then would have been required to be deposited for the purpose for which such
money or U.S. Government Obligations were deposited or received.
SECTION 403. Defeasance and Discharge of Securities of Any Series.
If this Section 403 is specified, as contemplated by Section 301, to be
applicable to Securities of any series, then notwithstanding Section 401, the
Company shall be deemed to have paid and discharged the entire indebtedness on
all the Outstanding Securities of that series, the provisions of this Indenture
as it relates to such Outstanding Securities (except as to the rights of Holders
of Securities to receive, from the trust funds described in subparagraph (1)
below, payment of the principal of (and premium, if any) and any installment of
principal of (and premium, if any) or interest on such Securities on the Stated
Maturity of such principal or installment of principal or interest or any
mandatory sinking fund payments or analogous payments applicable to the
Securities of that series on the day on which such payments are due and payable
in accordance with the terms of the Indenture and of such Securities, the
Company's obligations with respect to such Securities under Sections 305, 306,
1002 and 1003 and the rights, powers, trusts, duties and immunities of the
Trustee hereunder) shall no longer be in effect, and the Trustee, at the expense
of the Company, shall, upon Company Request, execute proper instruments
acknowledging the same, provided that the following conditions have been
satisfied:
(1) the Company has deposited or caused to be deposited with the
Trustee (or another trustee satisfying the requirements of Section 609),
irrevocably (irrespective of whether the conditions in subparagraphs (2), (3),
(4) and (5) below have been satisfied, but subject to the provisions of Section
402(3) and the last paragraph of Section 1003), as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of the Securities of that series, with reference to this Section
403, (A) money in an amount, or (B) U.S. Government Obligations which through
the payment of interest and principal in respect thereof in accordance with
their terms will provide not later than the opening of business on the due date
of any payment referred to in clause (i) or (ii) of this subparagraph (1) money
in an amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the
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Trustee, to pay and discharge (i) the principal of (and premium, if any) and
each installment of principal (and premium, if any) and interest on such
Outstanding Securities on the Stated Maturity of such principal or installment
of principal or interest and (ii) any mandatory sinking fund payments or
analogous payments applicable to Securities of such series on the day on which
such payments are due and payable in accordance with the terms of this Indenture
and of such Securities;
(2) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;
(3) no Event of Default or event which with the giving of notice or
lapse of time, or both, would become an Event of Default with respect to the
Securities of that series shall have occurred and be continuing on the date of
such deposit and no Event of Default under Section 501(5) or Section 501(6) or
event which with the giving of notice or lapse of time or both, would become an
Event of Default under Section 501(5) or Section 501(6) shall have occurred and
be continuing on the 91st day after such date;
(4) the Company has delivered to the Trustee an Opinion of Counsel
to the effect that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date first
set forth hereinabove, there has been a change in the applicable Federal Income
Tax law, in either case (A) or (B) to the effect that Holders of the Securities
of that series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit, defeasance and
discharge had not occurred; and
(5) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance and discharge of the entire
indebtedness on all Outstanding Securities of any such series as contemplated by
this Section have been complied with.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
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(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this Indenture
solely for the benefit of a series of Securities other than that series), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstated
and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
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(7) default (including a default with respect to debt securities of
any series other than the Securities) under any Debt of the Company or any
Subsidiary thereof, which default shall have resulted (i) in a failure to pay an
aggregate principal amount exceeding $10,000,000 of such Debt at the later of
final maturity thereof or upon the expiration of any applicable period of grace
with respect to such principal amount or (ii) in such Debt in an aggregate
principal amount exceeding $10,000,000 becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable without such Debt having been discharged, or such acceleration having
been rescinded or annulled, within a period of 15 days after there shall have
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal amount
of the Securities, a written notice specifying such default and requiring the
Company to cause such Debt to be discharged or to cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder; provided, however, that the Trustee shall not be deemed to have
knowledge of such default unless either (A) an officer in the Corporate Trust
Administration of the Trustee shall have actual knowledge of such default or (B)
the Trustee shall have received written notice thereof from the Company, from
any Holder, from the holder of any such Debt or from the trustee under any such
mortgage, indenture or other instrument; or
(8) the failure to perform the obligations of the Company set forth
in Section 1011 hereof (including the obligation to purchase the Securities
required to be purchased pursuant to a Change of Control Offer in accordance
with the terms of such Change of Control Offer); or
(9) any other Event of Default provided with respect to Securities
of that series.
Upon receipt by the Trustee of any Notice of Default pursuant to
this Section 501 with respect to Securities of a series all or part of which is
represented by a Book-Entry Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such Notice of Default, which record date shall be at the close of business on
the day the Trustee receives such Notice of Default. The Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to join in such Notice of Default, whether or not such Holders remain Holders
after such record date; provided, that unless Holders of at least 10% in
principal amount of the Outstanding Securities of such series, or their proxies,
shall have joined in such Notice of Default prior to the day which is 90 days
after such record date, such Notice of Default shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new Notice of Default which is
identical to a Notice of Default which has been canceled pursuant to the proviso
to the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 501.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable, except that no such
declaration shall be required upon the occurrence of an Event of Default
specified in Section 501(5) or 501(6) hereof.
At any time after such a declaration of acceleration with respect
to Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(a) all overdue interest on all Securities of that series,
(b) the principal of (and premium, if any, on) any Securities
of that series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed therefor
in such Securities,
(c) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefor in such
Securities, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal and premium, if any, of
Securities of that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
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Upon receipt by the Trustee of any written notice declaring such an
acceleration, or recision and annulment thereof, with respect to Securities of a
series all or part of which is represented by a Book-Entry Security, a record
date shall be established for determining Holders of Outstanding Securities of
such series entitled to join in such notice, which record date shall be at the
close of business on the day the Trustee receives such notice. The Holders on
such record date, or their duly designated proxies, and only such Persons, shall
be entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission or annulment thereof, as the case may be, which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 502.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof, the Company will, upon demand
of the Trustee, pay to it, for the benefit of the Holders of such Securities,
the whole amount then due and payable on such Securities for principal and any
premium and interest and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal and premium and on any
overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the
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rights of the Holders of Securities of such series by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or any
premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
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FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and any premium and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
any interest on such Security on the Stated
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Maturity or Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
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(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Upon receipt by the Trustee of any written notice directing the
time, method or place of conducting any such proceeding or exercising any such
trust or power, with respect to Securities of a series all or part of which is
represented by a Book-Entry Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that unless Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 512.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest
on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to waive any past default
hereunder. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided, that unless such majority in principal amount shall have been
obtained prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be canceled and of no further effect.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but
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no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided
by the Trust Indenture Act and this Indenture. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
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Holders shall be given until at least 60 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall
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not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the process thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the
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costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(2) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(3) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(4) If at any time:
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(a) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(b) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company or by any
such Holder, or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company by a Board
Resolution may remove the Trustee with respect to all Securities, or (ii)
subject to Section 514, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(6) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust Office.
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SECTION 611. Acceptance of Appointment by Successor.
(1) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(2) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (b)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(c) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(3) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (2) and (3) of this Section, as the case may be.
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(4) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in
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accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section .
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section .
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section .
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The First National Bank of Chicago
As Trustee
By:___________________________________
As Authenticating Agent
By:____________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not later than 15 days after each Regular Record
Date for each series of Securities at the time Outstanding, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the Holders
as of such Regular Record Date (or a date to be determined pursuant to Section
301 for Original Issue Discount Securities) and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; excluding from any such list names and addresses
received by the Trustee in its capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(1) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
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(2) The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.
(3) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(1) The Trustee shall transmit to the Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
In the case of any reports pursuant to Section 313(a) of the Trust
Indenture Act, such reports shall be transmitted within 60 days after April 15
of each year commencing with the year 1997 and shall be dated as of April 15.
(2) A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Trustee with each stock exchange
upon which any Securities are listed, with the Commission and with the Company.
The Company will notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person where the Company is not the surviving corporation, or convey, transfer
or lease its properties and assets substantially as an entirety to any Person,
unless:
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(1) the corporation formed by such consolidation or into which the
Company is merged or which acquires by conveyance or transfer, or which leases,
the properties and assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly existing under
the laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing;
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
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(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal, and
with or without interest coupons, or to permit or facilitate the issuance of
Securities in uncertificated form or to facilitate the issuance of Securities in
global form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any Security of
any series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Security with respect to such provision or (ii) shall become
effective only when there is no such Security Outstanding; or
(6) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
611(z); or
(8) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture, provided that such action pursuant to this clause (8) shall not
adversely affect the interests of the Holders of Securities of any series in any
material respect; or
(9) to secure the Securities.
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SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or
change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1010, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby, provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1010, or the deletion of this
proviso, in accordance with the requirements of Sections 611(2) and 901(8).
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date
or their duly designated proxies, and only such
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Persons, shall be entitled to consent to such supplemental indenture, whether or
not such Holders remain Holders after such record date; provided, that unless
such consent shall have become effective by virtue of the requisite percentage
having been obtained prior to the date which is 90 days after such record date,
any such consent previously given shall automatically and without further action
by any Holder be canceled and of no further effect.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities of that series and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
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The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (i) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 1004. Limitation on Liens Securing Indebtedness.
The Company shall not, and shall not permit any Consolidated
Subsidiary to, create or incur, or suffer to be incurred or to exist, at any
time, any Lien on its or their Property, whether not owned or hereafter
acquired, or upon any income or profits therefrom, to secure the payment of any
indebtedness for money borrowed of the Company or of any Consolidated Subsidiary
or of any other Person, unless all obligations of the Company on or in respect
of the Securities are equally and ratably and validly secured by such Lien by
proceedings and documents reasonably satisfactory to the Trustee, except that
the provisions of this Section 1004 shall not prohibit the following:
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(a) Liens existing as of the Issue Date securing indebtedness
for money borrowed of the Company and its Consolidated Subsidiaries
outstanding on such date;
(b) Liens (i) incurred after the Issue Date given (on or
within 120 days of the date of acquisition, construction or
improvement) to secure the payment of the purchase price or
construction costs incurred by the Company or a Consolidated Subsidiary
in connection with the acquisition, construction or improvement of real
and personal Property useful and intended to be used in carrying on the
business of the Company or such Consolidated Subsidiary, or (ii) on
fixed assets useful and intended to be used in carrying on the business
of the Company or a Consolidated Subsidiary existing at the time of
acquisition or construction thereof by the Company or such Consolidated
Subsidiary or at the time of acquisition by the Company or a
Consolidated Subsidiary Company of any business entity then owning such
fixed assets, whether or not such existing Liens were given to secure
the payment of the purchase price or construction costs of the fixed
assets to which they attach, so long as Liens permitted by this clause
(ii) were not incurred, extended or renewed in contemplation of such
acquisition or construction, provided that any such Liens permitted by
this clause (b) shall attach solely to the Property acquired,
constructed, improved or purchased.
(c) Liens for taxes, assessments or other governmental levies
or charges not yet due or which are subject to a Good Faith Contest;
(d) Liens incidental to the conduct of the Company's and its
Subsidiaries' businesses or their ownership of Property and other
assets not securing any indebtedness for money borrowed and not
otherwise incurred in connection with the borrowing of money or
obtaining of credit, and which do not in the aggregate materially
diminish the value of the Company's or Subsidiaries' Property or assets
when taken as a whole, or materially impair the use thereof in the
operation of their businesses;
(e) Liens in respect of any interest or title of a lessor in
any Property subject to a Capitalized Lease permitted under Section
1005 hereof;
(f) Liens arising in respect of judgments against the Company,
except for any judgment in an amount in excess of $1,000,000 which is
not discharged or execution thereof stayed pending appeal within 45
days after entry thereof;
(g) Liens in favor of the Company or any Consolidated
Subsidiary of the Company;
(h) Liens consisting of minor survey exceptions or minor
encumbrances, easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or zoning or other
restrictions as to use of real Property, that are necessary for the
conduct of the operations of the Company and its Subsidiaries or that
customarily exist on properties of corporations engaged in similar
businesses and are
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similarly situated and that do not in any event materially impair their
use in the operations of the Company and its Subsidiaries; and
(i) Liens renewing, extending or refunding any Lien permitted
by the preceding clauses of this Section 1004; provided, however, that
the principal amount of indebtedness for money borrowed secured by such
Lien immediately prior thereto is not increased and such Lien is not
extended to any other assets or Property.
Notwithstanding the foregoing, the Company or any Consolidated
Subsidiary may create or assume Liens, in addition to those otherwise permitted
by the preceding clauses of the Section 1004, securing indebtedness for money
borrowed of the Company or any Consolidated Subsidiary issued or incurred after
the Issue Date, provided that at the time of such issuance or incurrence, the
aggregate amount of all Secured Indebtedness and Attributable Debt would not
exceed 15% of Consolidated Net Tangible Assets.
In the event that any Property of the Company or any Consolidated
Subsidiary is subjected to a Lien not otherwise permitted by this Section 1004,
the Company shall make or cause to be made a provision whereby the Securities
shall be secured (together with other indebtedness for money borrowed then
entitled thereto and equal in rank to the Securities), to the full extent
permitted under applicable law, equally and ratably with all other obligations
secured thereby, and in any case the Securities shall (but only in such event)
have the benefit, to the full extent that the Holders of the Securities may be
entitled thereto under applicable law, of an equitable Lien on such Property
equally and ratably securing the Securities and such other obligations.
SECTION 1005. Limitation on Sale and Leaseback.
The Company shall not, and shall not permit any Consolidated
Subsidiary to, enter into any arrangement, directly or indirectly, whereby the
Company or such Consolidated Subsidiary shall, in one transaction or a series of
related transactions, (x) sell, transfer or otherwise dispose of any Property
owned by the Company or any Consolidated Subsidiary and (y) more than 120 days
after the later of the date of initial acquisition of such Property or
completion or occupancy thereof, as the case may be, by the Company or such
Consolidated Subsidiary, rent or lease, as lessee, such Property or
substantially identical Property or any material part thereof (a "Sale and
Leaseback Transaction"), provided that the foregoing restriction shall not apply
to any Sale and Leaseback Transaction if (a) immediately after the consummation
of such Sale and Leaseback Transaction and after giving effect thereto, no
Default or Event of Default shall exist and (b) any one of the following
conditions is satisfied:
(i) the lease concerned constitutes a Capitalized Lease and at
the time of entering into such Sale and Leaseback Transaction and after
giving effect thereto and to any Liens incurred pursuant to Section
1004 hereof, the aggregate amount of all Secured Indebtedness and
Attributable Debt would not exceed 15% of Consolidated Net Tangible
Assets; or
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(ii) the lease has a term which in the aggregate would not
exceed 36 months (including any extensions or renewals thereof at the
option of the lessee); or
(iii) the sale of such Property is for cash consideration
which equals or exceeds the fair market value thereof (as determined in
good faith by the Company) and the net proceeds from such sale are
applied, within 30 days of the date of the sale thereof, to the payment
(other than payments due at maturity or in satisfaction of, or applied
to, any mandatory or scheduled payment or prepayment obligation) of
indebtedness for money borrowed of the Company which ranks, in right of
payment, on a parity with or senior to the Securities.
SECTION 1006. Restrictive Agreements.
The Company shall not, and shall not permit any of its Consolidated
Subsidiaries to, enter, into any indenture, agreement, instrument or other
arrangement which, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, the ability of any Consolidated Subsidiary to make loans or advances to
the Company or to declare and pay dividends or make distribution on shares to
the Company or to declare and pay dividends or make distribution on shares of
such Consolidated Subsidiary's capital stock (whether now or hereafter
outstanding); provided, however, that any agreement to subordinate indebtedness
for money borrowed owing from any Consolidated Subsidiary to the Company or
owing between Consolidated Subsidiaries pursuant to any Priority Debt or to any
guarantee of such indebtedness for money borrowed shall not be deemed to violate
this Section 1006 so long as any such agreement to subordinate does not directly
or indirectly prohibit or restrain the ability of any such Consolidated
Subsidiary to make loans or advances to the Company or to declare and pay
dividends or make distributions on shares of such Consolidated Subsidiary's
capital stock (whether now or hereafter outstanding).
SECTION 1007. Corporate Existence.
The Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and material
rights (charter and statutory) and material franchises of the Company; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors of the Company shall determine that the
preservation of such rights and franchises is no longer desirable in the conduct
of the business of the Company and its Consolidated Subsidiaries considered as a
whole, and that the loss thereof is not disadvantageous in any material respect
to the Holders of the Securities.
SECTION 1008. Defeasance of Certain Obligations.
If this Section 1008 is specified, as contemplated by Section 301,
to be applicable to Securities of any series, (i) the Company may omit to comply
with any term, provision or condition of those certain covenants established
pursuant to Sections 301, 1004, 1005, 1006, 1007, and 1011 hereof and to which
this Section 1008 is to be made applicable, and (ii) Section
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501(4) with respect to such covenants to which this Section 1008 is to be made
applicable shall be deemed not to be an Event of Default, in each case with
respect to the Securities of that series, provided that the following conditions
have been satisfied:
(1) With reference to this Section 1008, the Company has deposited
or caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 609) irrevocably (irrespective of whether the conditions
in subparagraphs (2), (3), (4), (5) and (6) below have been satisfied, but
subject to the provisions of Section 402(3) and the last paragraph of Section
1003), as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of that
series, (A) money in an amount, or (B) U.S. Government Obligations which through
the payment of interest and principal in respect thereof in accordance with
their terms will provide not later than the opening of business on the due date
of any payment referred to in clause (i) or (ii) of this subparagraph (1) money
in an amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge (i) the principal (and premium, if any) and each installment of
principal (and premium, if any) and interest on the Outstanding Securities of
that series on the Stated Maturity of such principal or installment of principal
or interest and (ii) any mandatory sinking fund payments or analogous payments
applicable to Securities of such series on the day on which such payments are
due and payable in accordance with the terms of this Indenture and of such
Securities;
(2) Such deposit shall not cause the Trustee with respect to the
Securities of that series to have a conflicting interest for purposes of the
Trust Indenture Act with respect to the Securities of any series;
(3) Such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;
(4) No Event of Default or event which with the giving of notice or
lapse of time, or both, would become an Event of Default with respect to the
Securities of that series shall have occurred and be continuing on the date of
such deposit and no Event of Default under Section 501(5) or Section 501(6) or
event which with the giving of notice or lapse of time, or both, would become an
Event of Default under Section 501(5) or Section 501(6) shall have occurred and
be continuing on the 91st day after such date;
(5) The Company has delivered to the Trustee an Opinion of Counsel
to the effect that Holders of the Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and defeasance of certain obligations and will be subject to federal income tax
on the same amount and in the same manner and at the same times, as would have
been the case if such deposit and defeasance had not occurred; and
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(6) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated by this
Section have been complied with.
SECTION 1009. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 1010. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition of those certain covenants established pursuant to
Section 301 hereof to which this Section 1010 is said to be applicable, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to waive any such term,
provision or condition. If a record date is fixed, the Holders on such record
date or their duly designated proxies, and only such Persons, shall be entitled
to waive any such term, provision or condition hereunder, whether or not such
Holders remain Holders after such record date; provided, that unless the Holders
of at least a majority in principal amount of the Outstanding Securities of such
series shall have waived such term, provision or condition prior to the date
which is 90 days after such record date, any such waiver previously given shall
automatically and without further action by any Holder be canceled and of not
further effect.
SECTION 1011. Purchase of Securities at the Option of Holders Upon a Change of
Control.
(a) Upon the occurrence of a Change of Control Triggering Event,
each Holder of Securities shall have the right to require the Company to
purchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Securities pursuant to the offer described below (the "Change of
Control Offer") at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the purchase date
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(the "Change of Control Purchase Price") in accordance with the procedures set
forth in this Section 1011.
(b) Within 30 days of any Change of Control Triggering Event, the
Company shall (i) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Jones News Service or similar business news service in the
United States and (ii) send by first-class mail, postage prepaid, to the Trustee
and to each Holder of the Securities, at its address appearing in the Securities
Register for the Securities, a notice stating:
(1) that a Change of Control Triggering Event has occurred and a Change
of Control Offer is being made pursuant to Section 1011 hereof and
that all Securities timely tendered shall be accepted for payment,
subject to the terms and conditions set forth herein;
(2) the Change of Control Purchase Price and the purchase date, which
date shall be, subject to any contrary requirements of applicable
law, a Business Day no earlier than 30 days nor later than 60 days
from the date such notice is mailed (the "Change of Control Payment
Date");
(3) that any Security (or portion thereof) accepted for payment (and
duly paid on the Change of Control Payment Date) pursuant to the
Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;
(4) that any Securities (or portions thereof) not tendered shall
continue to accrue interest;
(5) a description of the transaction or transactions constituting the
Change of Control Triggering Event;
(6) that Holders accepting the offer to have their Securities purchased
pursuant to a Change of Control Offer will be required to surrender
such Securities, accompanied by a duly completed form of "Option of
Holder to Elect Purchase" contained on the reverse of such
Securities, to the Trustee as Securities Registrar at a Place of
Payment specified in the notice (or otherwise make effective
delivery of the Security and form of "Option of Holder to Elect
Purchase" pursuant to book-entry procedures and the related rules
of the Depository) prior to the close of business on the Business
Day preceding the Change of Control Payment Date;
(7) that Holders whose Securities are being purchased only in part will
be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, provided that
each Security purchased and each such new Security issued shall be
in a principal amount in denominations of $1,000 and integral
multiples thereof; and
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(8) any other procedures (if any) that Holders of Securities must
follow in order to accept a Change of Control Offer or effect
withdrawal of such acceptance.
(c) On the Change of Control Payment Date, the Company shall (i)
accept for payment the Securities or portion thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Trustee money sufficient to pay
the aggregate Change of Control Purchase Price and (iii) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate indicating the Securities or portions thereof tendered to the
Company. The Trustee shall promptly mail to each Holder of Securities so
accepted payment in an amount equal to the Change of Control Purchase Price for
such Securities, and the Trustee shall promptly authenticate and mail to such
Holder a new Security equal in principal amount to any unpurchased portion of
the Securities surrendered, provided that each such new Security shall be issued
in an original principal amount in denominations of $1,000 and integral
multiples thereof.
(d) The Company shall comply, to the extent then applicable and
required by law, with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder in connection with the
purchase of Securities pursuant to the Change of Control Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions relating to the Change of Control Offer, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described above by virtue thereof.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or by action taken pursuant to a Board
Resolution. In case of any redemption at the election of the Company of less
than all the Securities of any series, the Company shall, at least 60 days prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in
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this Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed,
the particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate (but subject to compliance with the rules of any
Securities Exchange on which the Securities of such series may be listed) and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series; provided that if less than all the Securities of a series having
different tenor are to be redeemed, the specific Securities to be redeemed shall
be selected by the Company. If less than all of the Securities of such series
and of a specified tenor are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company (or, in the case of a
selection by the Company, the Company shall promptly notify the Trustee) in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
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(3) if less than all the Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case,
and
(7) the CUSIP numbers, if any, of the Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
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SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. If a Book-Entry Security is so
surrendered, such new Security so issued shall be a new Book-Entry Security.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 and not more than 60 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
AMERCO,
a Nevada corporation
By:__________________________________
Gary V. Klinefelter
Secretary and General Counsel
Attest:
___________________________________
John A. Lorentz
Assistant Secretary
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THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:__________________________________
Its:__________________________________
Attest:
___________________________________
___________________________________
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STATE OF ARIZONA )
) ss.:
COUNTY OF MARICOPA )
On the ___ day of September, 1996, before me personally came Gary V.
Klinefelter, to me known, who, being by me duly sworn, did depose and say that
he is Secretary and General Counsel of AMERCO, one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
________________________________________
Notary Public
State of Arizona
My Commission expires:
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the ___ day of September, 1996, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he is __________________ of The First National Bank of Chicago, one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
________________________________________
Notary Public
State of Illinois
My Commission expires:
<PAGE> 1
EXHIBIT 4.5
RESTATED
BY-LAWS OF
AMERCO
A NEVADA CORPORATION
Date: As of August 27,1996
ARTICLE I
SECTION 1. Offices:
The principal office and registered office of the corporation shall be located
in the State of Nevada at such locations as the Board of Directors may from time
to time authorize by resolutions. The corporation may have such other offices
either within or without the State of Nevada as the Board of Directors may
designate or as the business of the corporation may require from time to time.
SECTION 2. References:
Any reference herein made to law will be deemed to refer to the law of the State
of Nevada, including any applicable provisions of Chapter 78 of Title 7, Nevada
Revised Statutes (or its successor), as at any given time in effect. Any
reference herein made to the Articles will be deemed to refer to the applicable
provision or provisions of the Articles of Incorporation of the corporation, and
all amendments thereto, as at any given time on file with the office of the
clerk of Washoe County, Nevada.
SECTION 3. Shareholders of Record:
The word "shareholder" as used herein shall mean one who is a holder of record
of shares in the corporation.
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ARTICLE II
SHAREHOLDERS
SECTION 1. Annual Meeting:
An annual meeting of the shareholders for the election of directors to succeed
those whose terms expire and for the transaction of such other business as may
properly come before the meeting shall be held, within a reasonable interval
after the close of the fiscal year so that the information in the annual report
is relatively timely, on a date and at a time of day and place as determined by
the Board of Directors.
SECTION 2. Special Meetings:
a. Special meetings of the shareholders may be held whenever and
wherever called by the Chairman of the Board, a majority of the Board of
Directors, or upon the delivery of proper written request of the holders of not
less than fifty percent (50%) of all the shares outstanding and entitled to vote
at such meeting. The business which may be conducted at any such special meeting
will be confined to the purpose stated in the notice thereof, and to such
additional matters as the Chairman of such meeting may rule to be germane to
such purposes.
b. For purposes of this Section, proper written request for the
call of a special meeting shall be made by a written request specifying the
purposes for any special meeting requested and providing the information
required by Section 5 hereof. Such written request must be delivered either in
person or by registered or certified mail, return receipt requested, to the
Chairman of the Board, or such other person as may be specifically authorized by
law to receive such request. Within thirty (30) days after receipt of proper
written request, a special meeting shall be called and notice given in the
manner required by these By-Laws and the meeting shall be held at a time and
place selected by the Board of Directors, but not later than ninety (90) days
after receipt of such proper written request. The shareholder(s) who request a
special meeting of shareholders must pay the corporation the corporation's
reasonably estimated cost of preparing and mailing a notice of a meeting of
shareholders before such notice is prepared and mailed.
SECTION 3. Notice:
Notice of any meeting of the shareholders will be given by the corporation as
provided by law to each shareholder entitled to vote at such meeting. Any such
notice may be waived as provided by law.
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SECTION 4. Right to Vote:
For each meeting of the shareholders, the Board of Directors will fix in advance
a record date as contemplated by law, and the shares of stock and the
shareholders "entitled to vote" (as that or any similar term is herein used) at
any meeting of the shareholders will be determined as of the applicable record
date. The Secretary (or in his or her absence an Assistant Secretary) will see
to the making and production of any record of shareholders entitled to vote that
is required by law. Any such entitlement may be exercised through proxy, or in
such other manner as is specifically provided by law. No proxy shall be valid
after eleven (11) months from the date of its execution unless otherwise
provided by the proxy. In the event of contest, the burden of proving the
validity of any undated, irrevocable, or otherwise contested proxy will rest
with the person seeking to exercise the same. A telegram, cablegram, or
facsimile appearing to have been transmitted by a shareholder (or by his duly
authorized attorney-in-fact) may, in the discretion of the tellers, if any, be
accepted as a sufficiently written and executed proxy.
SECTION 5. Manner of Bringing Business Before the Meeting:
At any annual or special meeting of shareholders only such business (including
nomination as a director) shall be conducted as shall have been properly brought
before the meeting. In order to be properly brought before the meeting, such
business must be a proper subject for stockholder action under Nevada law and
must have either been (A) specified in the written notice of the meeting (or any
supplement thereto) given to shareholders on the record date for such meeting by
or at the direction of the Board of Directors, (B) brought before the meeting at
the direction of the Board of Directors or the Chairman of the meeting, selected
as provided in Section 9 of this Article II, or (C) specified in a written
notice given by or on behalf of a shareholder on the record date for such
meeting entitled to vote thereat or a duly authorized proxy for such
shareholder, in accordance with the following requirements. A notice referred to
in clause (C) hereof must be delivered personally to, or mailed to and received
at, the principal executive office of the corporation, addressed to the
attention of the Secretary, not more than ten (10) days after the date of the
initial notice referred to in clause (A) hereof, in the case of business to be
brought before a special meeting of shareholders, and not less than one hundred
and twenty (120) days prior to the anniversary date of the initial notice
referred to in clause (A) hereof with respect to the previous year's annual
meeting, in the case of business to be brought before an annual meeting of
shareholders. Such notice referred to in clause (C) hereof shall set forth (i) a
full description of each such item of business proposed to be brought before the
meeting and the reasons for conducting such business at such meeting, (ii) the
name and address of the person proposing to bring such business before the
meeting, (iii) the class and number of shares held of record, held beneficially,
and represented by proxy by such person as of the record date for the meeting,
if such date has been made publicly available, or as of a date not later than
thirty (30) days prior to the delivery of the initial notice referred to in
clause (A) hereof, if the record date has not been made publicly available, (iv)
if any item of such business involves a nomination for director, all information
regarding each such nominee that would
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be required to be set forth in a definitive proxy statement filed with the
Securities and Exchange Commission pursuant to Section 14 of the Securities
Exchange Act of 1934, as amended, or any successor thereto, and the written
consent of each such nominee to serve if elected, (v) any material interest of
such shareholder in the specified business, (vi) whether or not such shareholder
is a member of any partnership, limited partnership, syndicate, or other group
pursuant to any agreement, arrangement, relationship, understanding, or
otherwise, whether or not in writing, organized in whole or in part for the
purpose of acquiring, owning, or voting shares of the corporation, and (vii) all
other information that would be required to be filed with the Securities and
Exchange Commission if, with respect to the business proposed to be brought
before the meeting, the person proposing such business was a participant in a
solicitation subject to Section 14 of the Securities Exchange Act of 1934, as
amended, or any successor thereto. No business shall be brought before any
meeting of the shareholders of the corporation otherwise than as provided in
this Section.
Notwithstanding compliance with the foregoing provisions, the Board of Directors
shall not be obligated to include information as to any shareholder nominee for
director or any other shareholder proposal in any proxy statements or other
communication sent to shareholders.
The Chairman of the meeting may, if the facts warrant, determine that any
proposed item of business or nomination as director was not brought before the
meeting in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the improper item of business
or nomination shall be disregarded.
SECTION 6. Right to Attend:
Except only to the extent of persons designated by the Board of Directors or the
Chairman of the meeting to assist in the conduct of the meeting, and except as
otherwise permitted by the Board or such Chairman, the persons entitled to
attend any meeting of shareholders may be confined to (i) shareholders entitled
to vote thereat and (ii) the persons upon whom proxies valid for purposes of the
meeting have been conferred or their duly appointed substitutes (if the related
proxies confer a power of substitution); provided, however, that the Board of
Directors or the Chairman of the meeting may establish rules limiting the number
of persons referred to in clause (ii) as being entitled to attend on behalf of
any shareholder so as to preclude such an excessively large representation of
such shareholder at the meeting as, in the judgment of the Board or such
Chairman, would be unfair to other shareholders represented at the meeting or be
unduly disruptive to the orderly conduct of business at such meeting (whether
such representation would result from fragmentation of the aggregate number of
shares held by such shareholder for the purpose of conferring proxies, from the
naming of an excessively large proxy delegation by such shareholder, or from
employment of any other device). A person otherwise entitled to attend any such
meeting will cease to be so entitled if, in the judgment of the Chairman of the
meeting, such person engages thereat
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in disorderly conduct impeding the proper conduct of the meeting in the
interests of all shareholders as a group.
SECTION 7. Quorum Requirements:
One-third of the outstanding shares of the corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of the
shareholders. If less than one-third of the outstanding shares are represented
at a meeting, the majority of the shares so represented may adjourn the meeting
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting originally called.
SECTION 8. Tellers:
The Board of Directors, in advance of any shareholders meeting may appoint one
or more tellers to act at such meeting (and any adjournment thereof), and may
appoint one or more alternate tellers to serve (in the order designated) in the
absence of any teller or tellers so appointed. If any person appointed as a
teller or alternate teller fails to appear or to act, a substitute may be
appointed by the Chairman of the meeting. The tellers (acting through a majority
of them on any disputed matter) will determine the number of shares outstanding,
the authenticity, validity and effect of proxies, the credentials of persons
purporting to be shareholders or persons named or referred to in proxies, and
the number of shares represented at the meeting in person and by proxy; they
will receive and count votes, ballots, and consents and announce the results
thereof; they will hear and determine all challenges and questions pertaining to
proxies and voting; and, in general, they will perform such acts as may be
proper to conduct elections and voting with complete fairness to all
shareholders. No such teller need be a shareholder of the corporation. Unless
otherwise provided in the Articles of Incorporation or other governing
instrument, each shareholder shall be entitled to one vote for each share of
stock held by him or her, and, in the event a shareholder holds a fraction of a
share or a full share plus a fraction, any such fractional share shall be
entitled to a proportionate fraction of one vote or such other votes, if any, as
is provided in the Articles of Incorporation or other governing instrument.
SECTION 9. Organization and Conduct of Business:
Each shareholders meeting will be called to order and thereafter chaired by the
Chairman of the Board if there then is one; or, if not, or if the Chairman of
the Board is absent or so requests, then by the President; or if both the
Chairman of the Board and the President are unavailable, then by such other
officer of the corporation or such shareholder as may be appointed by the Board
of Directors. The Secretary (or in his or her absence an Assistant Secretary) of
the corporation will act as secretary of each shareholders meeting; if neither
the Secretary nor an Assistant Secretary is in attendance, the Chairman of the
meeting may appoint any person (whether a shareholder or not) to act as
secretary
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thereat. After calling a meeting to order, the Chairman thereof may require the
registration of all shareholders intending to vote in person, and the filing of
all proxies, with the teller or tellers, if one or more have been appointed (or,
if not, with the secretary of the meeting). After the announced time for such
filing of proxies has ended, no further proxies or changes, substitutions, or
revocations of proxies will be accepted. The Chairman of a meeting will, among
other things, have absolute authority to determine the order of business to be
conducted at such meeting and to establish rules for, and appoint personnel to
assist in, preserving the orderly conduct of the business of the meeting
(including any informal, or question and answer, portions thereof). Any
informational or other informal session of shareholders conducted under the
auspices of the corporation after the conclusion of or otherwise in conjunction
with any formal business meeting of the shareholders will be chaired by the same
person who chairs the formal meeting, and the foregoing authority on his or her
part will extend to the conduct of such informal session.
SECTION 10. Voting:
The number of shares voted on any matter submitted to the shareholders which is
required to constitute their action thereon or approval thereof will be
determined in accordance with applicable law, the Articles, and these By-Laws,
if applicable. Voting will be by ballot on any matter as to which a ballot vote
is demanded, prior to the time the voting begins, by any person entitled to vote
on such matter; otherwise, a voice vote will suffice. No ballot or change of
vote will be accepted after the polls have been declared closed following the
ending of the announced time for voting.
SECTION 11. Shareholder Approval or Ratification:
The Board of Directors may submit any contract or act for approval or
ratification at any duly constituted meeting of the shareholders, the notice of
which either includes mention of the proposed submittal or is waived as provided
by law. If any contract or act so submitted is approved or ratified by a
majority of the votes cast thereon at such meeting, the same will be valid and
as binding upon the corporation and all of its shareholders as it would be if
approved and ratified by each and every shareholder of the corporation.
SECTION 12. Informalities and Irregularities:
All informalities or irregularities in any call or notice of a meeting, or in
the areas of credentials, proxies, quorums, voting, and similar matters, will be
deemed waived if no objection is made at the meeting.
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SECTION 13. Action Without a Meeting:
Shareholder action by written consent is prohibited.
SECTION 14. Application of Nevada Revised Statutes Sections 78.378 to 78.3793,
inclusive:
The provisions of Sections 78.378 to 78.3793, inclusive, of the Nevada Revised
Statutes shall not apply to the exchange of shares of the corporation's Series A
Common Stock, 0.25 par value, for shares of the corporation's common stock,
$0.25 par value, held by Mark V. Shoen, James P. Shoen and Edward J. Shoen or to
any exchange of shares of the corporation's Common Stock, $0.25 par value for
shares of the corporation's Series A Common Stock, $0.25 par value held by Mark
V. Shoen, James P. Shoen and Edward J. Shoen.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. Number and Term of Directors:
The Board of Directors shall consist of not less than 4 nor more than 8
directors, the exact number of directors to be determined from time to time
solely by a resolution adopted by an affirmative vote of a majority of the
entire Board of Directors. The directors shall be divided into four classes,
designated Class I, Class II, Class III and Class IV. Subject to applicable law,
each class shall consist, as nearly as may be possible, of one-fourth of the
total number of directors constituting the entire Board of Directors. At the
1990 Annual Meeting of Shareholders, Class I directors shall be elected for a
one-year term, Class II directors for a two-year term, Class III directors for a
three-year term, and Class IV directors for a four-year term. At each succeeding
annual meeting of shareholders, commencing in 1991, successors to the class of
directors whose term expires at the annual meeting shall be elected or reelected
for a four-year term.
If the number of directors is changed, any increase or decrease shall be
apportioned among the classes of directors so as to maintain the number of
directors in each class as nearly equal as possible, but in no case will a
decrease in the number of directors shorten the term of any incumbent director.
When the number of directors is increased by the Board of Directors and any
newly created directorships are filled by the Board, there shall be no
classification of the additional directors until the next annual meeting of
shareholders.
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A director shall hold office until the meeting for the year in which his or her
term expires and until his or her successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
SECTION 2. Vacancies:
Newly created directorships resulting from an increase in the number of the
directors and any vacancy on the Board of Directors shall be filled by an
affirmative vote of a majority of the Board of Directors then in office. A
director elected by the Board of Directors to fill a vacancy shall hold office
until the next meeting of shareholders called for the election of directors and
until his or her successor shall be elected and shall qualify; provided,
however, that if a vacancy on the Board of Directors occurs or is filled after
the date by which a shareholder, acting in accordance with Article II, Section
5(C) of these By-Laws, may present a director nomination before the next meeting
of shareholders called for the election of directors, the director elected by
the Board of Directors to fill such vacancy shall hold office until the next
meeting of shareholders called for the election of directors at which a
shareholder, acting in accordance with Article II, Section 5(C) of these
By-Laws, may present a director nomination. This Section shall not apply to any
vacancies in the office of any "Preferred Stock Director," as defined in section
(e)(ii) of the Certificate of Designation, Preference, and Rights of Series A
Preferred Stock of AMERCO dated October 14, 1993, such vacancies shall be filled
pursuant to the terms of said section (e)(ii).
SECTION 3. Regular Meetings:
After the adjournment of the annual meeting of the shareholders of the
corporation, the newly elected Directors shall meet for the purpose of
organization, the election of officers, and the transaction of such other
business as may come before said meeting. No notice shall be required for such
meeting. The meeting may be held within or without the State of Nevada. Regular
meetings, other than the annual ones, may be held at regular intervals at such
times and places as the Board of Directors may provide.
SECTION 4. Special Meetings:
Special meetings of the Board of Directors may be called at any time by the
Chairman of the Board or by any three (3) members of the Board giving written
notice thereof to the Chairman of the Board, or said special meeting may be
called without notice by unanimous consent of all the members by the presence of
all the members of said board at any such meeting. The special meetings of the
Board of Directors may be held within or without the State of Nevada.
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SECTION 5. Notice:
No notice need be given of regular meetings of the Board of Directors. Notice of
the time and place (but not necessarily the purpose or all of the purposes) of
any special meeting will be given to each director in person or by telephone, or
via mail or telegram addressed in the manner then appearing on the corporation's
records. Notice to any director of any such special meeting will be deemed given
sufficiently in advance when (i), if given by mail, the same is deposited in the
United States mail at least four days before the meeting date, with postage
thereon prepaid, (ii) if given by telegram, the same is delivered to the
telegraph office for fast transmittal at least 48 hours prior to the convening
of the meeting, (iii) if given by facsimile transmission, the same is received
by the director or an adult member of his or her office staff or household, at
least 24 hours prior to the convening of the meeting, or (iv) if personally
delivered or given by telephone, the same is handed, or the substance thereof is
communicated over the telephone, to the director or to an adult member of his or
her office staff or household, at least 24 hours prior to the convening of the
meeting. Any such notice may be waived as provided by law. No call or notice of
a meeting of directors will be necessary if each of them waives the same in
writing or by attendance. Any meeting, once properly called and noticed (or as
to which call and notice have been waived as aforesaid) and at which a quorum is
formed, may be adjourned to another time and place by a majority of those in
attendance.
SECTION 6. Quorum:
A majority of the Board of Directors shall constitute a quorum for the
transaction of business, except where otherwise provided by law or by these
By-Laws, but if at any meeting of the Board less than a quorum is present, a
majority of those present may adjourn the meeting from time to time until a
quorum is obtained.
SECTION 7. Action by Telephone or Consent:
Any meeting of the Board or any committee thereof may be held by conference
telephone or similar communications equipment as permitted by law in which case
any required notice of such meeting may generally describe the arrangements
(rather than the place) for the holding thereof, and all other provisions herein
contained or referred to will apply to such meeting as though it were physically
held at a single place. Action may also be taken by the Board or any committee
thereof without a meeting if the members thereof consent in writing thereto as
contemplated by law.
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SECTION 8. Order of Business:
The Board of Directors may, from time to time, determine the order of business
at their meeting. The usual order of business at such meetings shall be as
follows:
1st Roll Call; a quorum being present.
2nd. Reading of minutes of the preceding meeting and action
thereon.
3rd. Consideration of communications of the Board of Directors.
4th. Reports of officials and committees.
5th. Unfinished business.
6th. Miscellaneous business.
7th. New business.
8th. Adjournment.
SECTION 9. Voting:
Any matter submitted to a vote of the directors will be resolved by a majority
of the votes cast thereon. If during the course of any annual, regular or
special meeting of the Board of Directors, at which all the members of said
board are present and vote, there is a vote taken and the vote is evenly divided
between equal numbers of directors, then, and only then, the Chairman of the
Board of Directors shall break the deadlock by casting a second and deciding
vote. This power may be exercised by the Chairman of the Board as to any and
every issue that properly comes to the board for a vote, including, but not
limited to the election of officers.
ARTICLE IV
POWER OF DIRECTORS
SECTION 1. Generally:
The Government in control of the corporation shall be vested in the Board of
Directors.
SECTION 2. Special Powers:
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The Board of Directors shall have, in addition to its other powers, the express
right to exercise the following powers:
1. To purchase, lease, and acquire, in any lawful manner any
and all real or personal property including franchises,
stocks, bonds and debentures of other companies, business and
goodwill, patents, trademarks in contracts, and interests
thereunder, and other rights and properties which in their
judgment may beneficial for the purpose of this corporation,
and to issue shares of stock of this corporation in payment of
such property, and in payment for services rendered to this
corporation when they deem it advisable.
2. To fix and determine and to vary, from time to time, the
amount or amounts to be set aside or retained as reserve funds
or as working capital of this corporation.
3. To issue notes and other obligations or evidence of the
debt of this corporation, and to secure the same, if deemed
advisable, and endorse and guarantee the notes, bonds, stocks,
and other obligations of other corporations with or without
compensation for so doing, and from time to time to sell,
assign, transfer or otherwise dispose of any of the property
of this corporation, subject, however, to the laws of the
State of Nevada, governing the disposition of the entire
assets and business of the corporation as a going concern.
4. To declare and pay dividends, both in the form of money and
stock, but only from the surplus or from the net profit
arising from the business of this corporation, after deducting
therefrom the amounts, at the time when any dividend is
declared which shall have been set aside by the Directors as a
reserve fund or as a working fund.
5. To adopt, modify and amend the By-Laws of this corporation.
6. To periodically determine by Resolution of the Board the
amount of compensation to be paid to members of the Board of
Directors in accordance with Article 6, Section B, Sub-section
viii of the Articles of Incorporation.
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ARTICLE V
SECTION 1. Committees:
From time to time the Board of Directors, by affirmative vote of a majority of
the whole Board may appoint any committee or committees for any purpose or
purposes, and such committee or committees shall have and may exercise such
powers as shall be conferred or authorized by the resolution of appointment.
Provided, however, that such committee or committees shall at no time have more
power than that authorized by law.
ARTICLE VI
OFFICERS
SECTION 1. Officers:
The officers of the corporation shall consist of the Chairman of the Board, a
President, one or more Vice-Presidents, Secretary, Assistant Secretaries,
Treasurer, Assistant Treasurer, a resident agent and such other officers as
shall from time to time be provided for by the Board of Directors. Such officers
shall be elected by ballot or unanimous acclamation at the meeting of the Board
of Directors after the annual election of Directors. In order to hold any
election there must be quorum present, and any officer receiving a majority vote
shall be declared elected and shall hold office for one year and until his or
her respective successor shall have been duly elected and qualified; provided,
however, that all officers, agents and employees of the corporation shall be
subject to removal from office pre-emptorily by vote of the Board of Directors
at any meeting.
SECTION 2. Powers and Duties of Chairman of the Board:
The Chairman of the Board of Directors will serve as a general executive
officer, but not necessarily as a full-time employee, of the corporation. He or
she shall preside at all meetings of the shareholders and of the Board of
Directors, shall have the powers and duties set forth in these By-Laws, and
shall do and perform such other duties as from time to time may be assigned by
the Board of Directors.
SECTION 3. Powers and Duties of President:
The President shall at all times be subject to the control of the Board of
Directors. He shall have general charge of the affairs of the corporation. He
shall supervise over and direct all officers and employees of the corporation
and see that their duties are properly performed. The President, in conjunction
with the Secretary, shall sign and execute all contracts, notes, mortgages, and
all other obligations in the name of the corporation, and with the Secretary or
Assistant Secretary shall sign all certificates of the shares of the capital
stock of the corporation.
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The President shall each year present an annual report of the preceding year's
business to the Board of Directors at a meeting to be held immediately preceding
the annual meeting of the shareholders, which report shall be read at the annual
meeting of the shareholders. The President shall do and perform such other
duties as from time to time may be assigned by the Board of Directors to him.
Notwithstanding any provision to the contrary contained in the By-Laws of the
corporation, the Board may at any time and from time to time direct the manner
in which any person or persons by whom any particular contract, document, note
or instrument in writing of the corporation may or shall be signed by and may
authorize any officer or officers of the corporation to sign such contracts,
documents, notes or instruments.
SECTION 4. Powers and Duties of Vice-President:
The Vice-President shall have such powers and perform such duties as may be
assigned to him by the Board of Directors of the corporation and in the absence
or inability of the President, the Vice-President shall perform the duties of
the President.
SECTION 5. Powers and Duties of the Secretary and Assistant Secretary:
The Secretary of said corporation shall keep the minutes of all meetings of the
Board of Directors and the minutes of all meetings of the shareholders, and also
when requested by a committee, the minutes of such committee, in books provided
for the purpose. He shall attend to the giving and serving of notice of the
corporation. It shall be the duty of the Secretary to sign with the President,
in the name of the corporation, all contracts, notes, mortgages, and other
instruments and other obligations authorized by the Board of Directors, and when
so ordered by the Board of Directors, he shall affix the Seal of corporation
thereto. The Secretary shall have charge of all books, documents, and papers
properly belonging to his office, and of such other books and papers as the
Board of Directors may direct. In the absence or inability of the Secretary, the
Assistant Secretary shall perform the duties of the Secretary.
Execution of Instruments:
In addition to the provisions of any previous By-Laws respecting the execution
of instruments of the corporation, the Board of Directors may from time to time
direct the manner in which any officer or officers or by whom any particular
deed, transfer, assignment, contract, obligation, certificate, promissory note,
guarantee and other instrument or instruments may be signed on behalf of the
corporation and any acts of the Board of Directors subsequent to the 1st day of
December, 1978 in accordance with the provision of this By-Law are hereby
adopted, ratified and confirmed as actions binding upon and enforceable against
the corporation.
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SECTION 6. Powers and Duties of Treasurer and Assistant Treasurer:
The Treasurer shall have the care and custody of all funds and securities of the
corporation, and deposit the same in the name of the corporation in such bank or
banks or other depository as the Directors may select. He shall sign checks,
drafts, notices, and orders for the payment of money, and he shall pay out and
dispose of the same under the direction of the Board of Directors, but checks
may be signed as directed by the Board by resolution. The Treasurer shall
generally perform the duties of and act as the financial agent for the
corporation for the receipts and disbursements of its funds. He shall give such
bond for the faithful performance of his duties as the Board of Directors may
determine. The office of the Treasurer of said corporation may be held by the
same person holding the President, Vice-President or Secretary's office,
provided the Board of Directors indicates the combination of these offices. In
the absence or inability of the Treasurer, the Assistant Treasurer shall perform
the duties of the Treasurer.
SECTION 7. Indemnification:
The corporation shall indemnify, to the fullest extent authorized or permitted
by law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the corporation
to provide broader indemnification rights than such law permitted the
corporation to provide prior to such amendment), any person made, or threatened
to be made, a defendant or witness to any threatened, pending or completed
action, suit, or proceeding (whether civil, criminal, administrative,
investigative or otherwise) by reason of the fact that he or she, or his or her
testator or intestate, is or was a director or officer of the corporation or by
reason of the fact that such director or officer, at the request of the
corporation, is or was serving any other corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. Nothing contained
herein shall diminish any rights to indemnification to which employees or agents
other than directors or officers may be entitled by law, and the corporation may
indemnify such employees and agents to the fullest extent and in the manner
permitted by law. The rights to indemnification set forth in this Article VI,
Section 7 shall not be exclusive of any other rights to which any person may be
entitled under any statute, provision of the Articles of Incorporation, bylaw,
agreement, contract, vote of shareholders or disinterested directors, or
otherwise.
In furtherance and not in limitation of the powers conferred by statute:
1. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is serving in any
capacity, at the request of the corporation, any other
corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against any liability or
expense incurred by him or
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her in any such capacity, or arising out of his or her status
as such, whether or not the corporation would have the power
to indemnify him or her against such liability or expense
under the provisions of law; and
2. The corporation may create a trust fund, grant a security
interest or lien on any assets of the corporation and/or use
other means (including, without limitation, letters of credit,
guaranties, surety bonds and/or other similar arrangements),
and enter into contracts providing indemnification to the full
extent authorized or permitted by law and including as part
thereof provisions with respect to any or all of the foregoing
to ensure the payment of such amounts as may become necessary
to effect indemnification as provided therein, or elsewhere.
ARTICLE VII
STOCK AND CERTIFICATES AND TRANSFERS
SECTION 1. Stock and Certificates and Transfers:
All certificates for the shares of the capital stock of the corporation shall be
signed by the President or Vice-President, and Secretary or Assistant Secretary.
Each certificate shall show upon its face that the corporation is organized
under the laws of Nevada, the number and par value, if any, of each share
represented by it, and the name of the person owning the shares represented
thereby, with the number of each share and the date of issue. The transfer of
any share or shares of stock in the corporation may be made by surrender of the
certificate issued therefor, and the written assignment thereof by the owner or
his duly authorized Attorney in Fact. Upon such surrender and assignment, a new
certificate shall be issued to the Assignee as he may be entitled, but without
such surrender and assignment no transfer of stock shall be recognized by the
corporation. The Board of Directors shall have the power concerning the issue,
transfer and registration of certificates for agents and registrars of transfer,
and may require all stock certificates to bear signatures of either or both. The
stock transfer books shall be closed ten days before each meeting of the
shareholders and during such period no stock shall be transferred.
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SECTION 2. Right of First Refusal on Its Common Stock, $0.25 par value:
a. In case any holder of shares of the corporation's common
stock, $0.25 par value, and Series A Common Stock, $0.25 par
value (collectively, the "Common Stock") shall wish to make
any sale, transfer or other disposition of all or any part of
the Common Stock held by him, he shall first notify the
Secretary of the corporation in writing designating the number
of shares of Common Stock which he desires to dispose of, the
name(s) of the person(s) to whom such shares are to be
disposed of, and the bona fide cash price at which such shares
are to be disposed of. The right of first refusal set forth in
this paragraph shall not apply to shares of the Corporation's
Series B Common Stock.
b. The corporation shall have a period of 30 calendar days
following the date of its receipt of such notice to determine
whether it wishes to purchase such shares at the price stated
therein. Such determination shall be made by the corporation
by its delivery to such holder of a written acceptance of such
offer within such 30-day period. Such written acceptance shall
specify the date (to be not later than the tenth calendar day
following the date on which such 30-day period expired), time
and place at which such holder shall deliver to the
corporation the certificate(s) for the shares of Common Stock
to be so sold against the delivery by the corporation of a
certified or bank cashier's check in the amount of the
purchase price therefor.
c. If the corporation shall not so accept such offer within
such 30-day period, then such holder shall be entitled, for a
period of 90 days commencing on the first day after the date
on which such 30-day period expires, to dispose of all or any
part of the shares of Common Stock designated in such notice
to the corporation at the price set forth therein to the
prospective named transferee(s) and such transferee(s) shall
be entitled to have such shares transferred upon the books of
the corporation upon its acquisition thereof at such price. If
such holder shall not dispose of all or any part of such
shares within such 90-day period (or, in the event of a sale
of part thereof, the shares remaining untransferred), such
shares shall continue to be subject in all respects to the
provision of this Article VII, Sec. 2.
d. All certificates for shares of Common Stock shall, so long
as the provisions of this Article VII, Sec. 2 shall be in
effect, bear the following legend:
"The transfer of the shares represented by this
certificate is subject to a right of first refusal by
the corporation as provided in its By-Laws,
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and no transfer of this certificate or the shares
represented hereby shall be valid or effective unless
and until such provision of the By-Laws shall have
been met. A copy of the By-Laws of the corporation is
available for inspection at the principal office of
the corporation."
e. The provisions of this Article VII, Sec. 2 may be
terminated or modified at any time by the affirmative vote of
not less than a majority of the then number of directors of
the corporation. Each holder of shares of Common Stock shall
be notified of any such termination and shall have the right
to exchange his outstanding certificate for such shares for a
certificate without the aforesaid legend.
f. The provisions of this Article VII, Sec. 2 may be extended
to other classes or series of the corporation's stock prior to
the issuance thereof upon the affirmative vote of not less
than a majority of the then number of directors of the
corporation.
g. The provisions of Section 2 of Article VII shall not apply
to shares of the corporation's Common Stock (i) sold,
transferred, or otherwise disposed of by the Trust under the
AMERCO Employee Savings, Profit Sharing and Employee Stock
Ownership Plan, (ii) sold in a bona fide underwritten public
offering or in a bona fide public distribution pursuant to
Rule 144 under the Securities Act of 1933 (provided however
that if such public distribution is pursuant to Rule 144(k)
then, notwithstanding the provisions of Rule 144(k), such
distribution shall comply with the "manner of sale"
requirements of Rule 144(f) and (g)), or (iii) sold,
transferred, or otherwise disposed of by a member of the
public who acquired such Common Stock in a transaction
permitted by this Paragraph g.
SECTION 3. Lost Certificates:
In the event of the loss, theft or destruction of any certificate representing
shares of stock of this corporation, the corporation may issue (or, in the case
of any such stock as to which a transfer agent and/or registrar have been
appointed, may direct such transfer agent and/or register to countersign,
register and issue) a replacement certificate in lieu of that alleged to be
lost, stolen or destroyed, and cause the same to be delivered to the owner of
the stock represented thereby, provided that the owner shall have submitted such
evidence showing the circumstances of the alleged loss, theft or destruction,
and his or her ownership of the certificate as the corporation considers
satisfactory, together with any other facts which the corporation considers
pertinent, and further provided that an
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indemnity agreement and/or indemnity bond shall have been provided in form and
amount satisfactory to the corporation and to its transfer agents and/or
registrars, if applicable.
ARTICLE VIII
FISCAL YEAR
SECTION 1. Fiscal Year:
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE IX
AMENDMENT OF BY-LAWS
SECTION 1. Amendment of By-Laws by the Board of Directors:
The By-Laws may be amended by a majority vote of the Board of Directors of this
corporation at any meeting of the Board of Directors.
SECTION 2. Shareholder Amendment of By-Laws:
The By-Laws may be amended by an affirmative vote of shares possessing
two-thirds or more of the votes that are generally (not just as the result of
the occurrence of a contingency) entitled to vote for the election of the
members of the Board of Directors of this corporation. Such vote must be by
ballot at a duly constituted meeting of the shareholders, the notice of which
meeting must include the proposed amendment.
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CERTIFICATE
I, Gary V. Klinefelter, Secretary of AMERCO, a Nevada corporation, do
hereby certify that the foregoing is a true and correct copy of the
corporation's Restated By-Laws, and that such Restated By-Laws are in full force
and effect as of the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
the corporation this 27th day of August, 1996.
-----------------------------------
Gary V. Klinefelter, Secretary
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated June 25, 1996 appearing on page 53 of the AMERCO Annual Report on Form
10-K for the year ended March 31, 1996. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
September 5, 1996
Phoenix, Arizona
