e10vq

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No o

20,625,766 shares of AMERCO Common Stock, $0.25 par value were outstanding at February 13, 2004.

5,385 shares of U-Haul International, Inc. Common Stock, $0.01 par value, were outstanding at February 13, 2004.


(1)	SAC Holdings property, plant and equipment totaled $991.5 million and $1,015.5 million before eliminations, inter-company eliminations were $258.2 million and $258.2 million at December 31, 2003 and March 31, 2003 respectively.

The accompanying notes are an integral part of these consolidated financial statements.


*	2002 amounts revised to reflect the corrected number of weighted average common shares outstanding.

The accompanying notes are an integral part of these consolidated financial statements.


*	2002 amounts revised to reflect the corrected number of weighted average common shares outstanding.

The accompanying notes are an integral part of these consolidated financial statements.

On June 20, 2003, AMERCO (the “Debtor”) filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the District of Nevada. On August 13, 2003, the company’s wholly owned subsidiary, Amerco Real Estate Company, filed a petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the District of Nevada. Under Chapter 11, certain claims against the Debtor in existence prior to the filing of the petition for relief under the federal bankruptcy laws are stayed while the Debtor continues business operations as debtor-in-possession. These claims are reflected in the December 31, 2003, balance sheet as “liabilities subject to compromise.” Additional claims (liabilities subject to compromise) may arise subsequent to the filing date resulting from rejection of executory contracts, including leases, and from the determination by the court (or agreed to by parties in interest) of allowed claims for contingencies and other disputed amounts. Claims secured against the Debtor’s assets (“secured claims”) also are stayed, although the holders of such claims have the right to move the court for relief from the stay. Secured claims are secured primarily by liens of the Debtor’s property, plant and equipment.

On October 6, 2003, AMERCO filed its Plan of Reorganization and Disclosure Statement with the Bankruptcy Court. On November 26, 2003, AMERCO filed an Amended Plan of Reorganization (the “Plan”). On December 12, 2003, the Bankruptcy Court approved AMERCO’s Disclosure Statement. On February 2, 2004, the Bankruptcy Court confirmed the Plan contingent upon completion of documentation and agreements acceptable to the involved parties and the submission of proposed findings of fact and conclusions of law and a confirmation order acceptable to all involved parties. AMERCO expects that by fiscal year end (i) it will satisfy the above contingencies and (ii) the Bankruptcy Court will execute a confirmation order. The confirmation order will become final if it is not appealed within ten days after entry and AMERCO intends to proceed to implement the Plan and emerge from bankruptcy as soon as possible thereafter.

AMERCO, a Nevada corporation (“AMERCO”), is the holding company for U-Haul International, Inc. (“U-Haul”), Amerco Real Estate Company (“Real Estate”), Republic Western Insurance Company (“RepWest”) and Oxford Life Insurance Company (“Oxford”). Throughout this Form 10-Q, unless the context otherwise requires, the term “Company” refers to AMERCO and all of its legal subsidiaries. The Company has four industry segments represented by Moving and Storage Operations (U-Haul), Real Estate, Property and Casualty Insurance (RepWest) and Life Insurance (Oxford).

SAC Holding Corporation and SAC Holding Corporation II, Nevada corporations (collectively, “SAC Holdings”), are the holding companies for several individual corporations that own self-storage properties managed by AMERCO subsidiaries in the ordinary course of business. Mark V. Shoen, a significant shareholder and executive officer of AMERCO, owns all of the equity interest of SAC Holdings.

AMERCO. AMERCO does not have an equity ownership interest in SAC Holdings, except for investments made by RepWest and Oxford in a SAC Holdings-controlled limited partnership which holds Canadian self-storage properties. SAC Holdings are not legal subsidiaries of AMERCO. SAC Holdings’ securitized loan agreements have no guarantees, or triggers that could create a guarantee, from AMERCO. There are no cross default provisions on indebtedness between AMERCO and SAC Holdings. The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in AMERCO’s annual financial statements and notes. For a more detailed presentation of the accounts and transactions of AMERCO, refer to AMERCO’s Form 10-K.

The condensed consolidated balance sheet as of December 31, 2003 and the related condensed consolidated statements of operations, comprehensive income, and cash flow for the quarters ended December 31, 2003 and 2002 are unaudited. In our opinion, all adjustments necessary for a fair presentation of such condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results for a full year.

Revenues, expenses (including professional fees), realized gains and losses, and provisions for losses directly associated with the reorganization and restructuring of the business are reported as part of operating expenses in the Condensed Consolidated Statements of Operations. The Condensed Consolidated Balance Sheets distinguish pre-petition liabilities subject to compromise from both those pre-petition liabilities that are not subject to compromise and from post-petition liabilities. Liabilities subject to compromise are reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.

The operating results and financial position of RepWest and Oxford have been consolidated on the basis of a calendar year and, accordingly, results from operations for RepWest and Oxford are for the quarter and nine months ended September 30, 2003 and 2002.

On June 20, 2003 (the “Petition Date”), AMERCO filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court, District of Nevada (the “Bankruptcy Court”) (Case No. 0352103). AMERCO is continuing to manage its properties and operate its businesses as “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. In general, as debtor-in-possession, AMERCO is authorized under Chapter 11 to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Specific information pertaining to the bankruptcy filing may be obtained from the website www.amerco.com. The Company’s independent auditors qualified their opinion on the Company’s March 31, 2003 financial statements by including an explanatory paragraph in which they expressed substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect future effects on the recoverability and classification of assets or the amount and classification of liabilities that might result from these uncertainties.

In connection with the audit of the Company’s financial statements for the year ended March 31, 2003, it was determined that there was a need for the Company to record adjustments that resulted in the restatement of the Company’s financial statements, including financial statements for the quarter ended December 31, 2002. The condensed consolidated statement of operations, comprehensive income and cash flow for the quarter ended December 31, 2002 contained in this report have been restated. Loss for the three months ended December 31, 2002 as originally reported was $32.3 million, or $1.73 per basic and diluted share. Restated loss for this period were $45.8 million and $2.45 per basic and diluted share. Net earnings for the nine months

ended December 31, 2002 as originally reported was $48.8 million, or $1.88 per basic and diluted share. Net earnings (loss) for this period as restated was $0.1 million and ($0.48) per basic and diluted share. The major components of the restatement were related to an adjustment to accrue for fully-developed actuarial estimates of the Company’s insurance reserves and to recognize equity-method losses relating to the Company’s investments in Private Mini Storage Realty, L.P. For a detailed discussion of the adjustments to our financial statements for the fiscal years ended March 31, 2002 and 2001, see footnote 2 to consolidated financial statements contained in our Annual Report on Form 10-K.

Certain balances as of March 31, 2003 have been reclassified in the accompanying condensed consolidated financial statements to conform with the current year presentation. These reclassifications had no effect on previously reported net income or stockholders’ equity.

During fiscal year 2004 U-Haul decreased the estimated useful lives of pick-up trucks and vans. The effect of this change decreased net earnings for the nine-month period and three-month period ended December 31, 2003 by approximately $4,875,000 ($0.24 per share) and $2,600,000 ($0.13 per share), respectively, net of income tax benefit. The adjustment reflects management’s best estimate, based on information available, of the estimated useful lives of these pick-ups and vans.

A comparison of amortized cost to estimated market value for fixed maturities is as follows:

In the normal course of business, AMERCO is a defendant in a number of suits and claims. AMERCO is also a party to several administrative proceedings arising from state and local provisions that regulate the removal and/or clean up of underground fuel storage tanks.

Compliance with environmental requirements of federal, state and local governments significantly affects Real Estate’s business operations. Among other things, these requirements regulate the discharge of materials into the water, air and land and govern the use and disposal of hazardous substances. Real Estate is aware of issues regarding hazardous substances on some of its properties. Real Estate regularly makes capital and operating expenditures to stay in compliance with environmental laws and has put in place a remedial plan at each site where it believes such a plan is necessary.

A subsidiary of U-Haul, INW Company (INW), owns one property located within two different state hazardous substance sites in the State of Washington. The sites are referred to as the “Yakima Valley Spray Site” and the “Yakima Railroad Area.” INW has been named as a “potentially liable party” under state law with respect to this property as it relates to both sites. As a result of the cleanup costs of approximately $5.0 million required by the State of Washington, INW filed for reorganization under federal bankruptcy laws in May of 2001. The potential liability to INW could be in the range of $750,000 to $1.25 million.

Based upon the information currently available, compliance with the environmental laws and the costs of investigation and cleanup of known hazardous waste sites are not expected to have a material adverse affect on the Company’s financial position or operating results.

In connection with the resolution of litigation with certain members of the Shoen family and their corporations, AMERCO has deducted for income tax purposes approximately $372.0 million of the payments made to plaintiffs in a lawsuit. While AMERCO believes that such income tax deductions are appropriate, there can be no assurance that such deductions ultimately will be allowed in full. The IRS has proposed adjustments to the Company’s 1997 and 1996 tax returns. Nearly all of the adjustments are attributable to denials of deductions claimed for certain payments made in connection with this litigation. We believe these income tax deductions are appropriate and are vigorously contesting the IRS adjustments. No additional taxes have been provided in the accompanying financial statements, as management believes that none will result.

damages. On November 5, 2002, the trial court entered an Order (“Order”) affirming the $39 million jury verdict and denying Oxford’s motion for New Trial Or, in The Alternative, Remittitur. On January 27, 2004, the matter was argued before the West Virginia Supreme Court and taken under advisement. Management does not believe that the Order is sustainable and expects the Order to be overturned by the West Virginia Supreme Court, in part because the jury award has no reasonable nexus to the actual harm suffered by Kocher. The Company has accrued $725,000, which represents management’s best estimate of the costs associated with legal fees to appeal and re-try the case.

As previously discussed, on June 20, 2003, AMERCO filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. As debtor-in-possession, AMERCO is authorized under Chapter 11 to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. As of the Petition Date, virtually all pending litigation against AMERCO is stayed, and absent further order of the Bankruptcy Court, no party, subject to certain exceptions, may take any action, again subject to certain exceptions, to recover on pre-petition claims against AMERCO. The automatic stay, however, does not apply to AMERCO’s subsidiaries, other than Amerco Real Estate Company, which filed for protection under Chapter 11, on August 13, 2003. On October 6, 2003, AMERCO filed its Plan of Reorganization and Disclosure Statement with the Bankruptcy Court. On November 26, 2003, AMERCO filed an Amended Plan of Reorganization (the “Plan”). On December 12, 2003, the Bankruptcy Court approved AMERCO’s Disclosure Statement. On February 2, 2004, the Bankruptcy Court confirmed the Plan contingent upon completion of documentation and agreements acceptable to the involved parties and the submission of proposed findings of fact and conclusions of law and a confirmation order acceptable to all involved parties. AMERCO expects by fiscal year end (i) that it will satisfy the above contingencies and (ii) that the Bankruptcy Court will execute a confirmation order. The confirmation order will become final if it is not appealed within ten days after entry and AMERCO intends to proceed to implement the Plan and emerge from bankruptcy as soon as possible thereafter.

On September 24, 2002, Paul F. Shoen filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Paul F. Shoen vs. SAC Holding Corporation et al, CV02-05602, seeking damages and equitable relief on behalf of AMERCO from SAC Holdings and certain current and former members of the AMERCO Board of Directors, including Edward J. Shoen, Mark V. Shoen and James P. Shoen. AMERCO is named a nominal defendant for purposes of the derivative action. The complaint alleges breach of fiduciary duty, self-dealing, usurpation of corporate opportunities, wrongful interference with prospective economic advantage and unjust enrichment and seeks the unwinding of sales of self-storage properties by subsidiaries of AMERCO to SAC Holdings over the last several years. The complaint seeks a declaration that such transfers are void as well as unspecified damages. On October 28, 2002, AMERCO, the Shoen directors, the non-Shoen directors and SAC Holdings filed Motions to Dismiss the complaint. In addition, on October 28, 2002, Ron Belec filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Ron Belec vs. William E. Carty, et al, CV 02-06331 and on January 16, 2003, M.S. Management Company, Inc. filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned M.S. Management Company, Inc. vs. William E. Carty, et. al, CV 03-00386. Two additional derivative suits were also filed against these parties. These additional suits are substantially similar to the Paul F. Shoen derivative action. The five suits assert virtually identical claims. In fact, three of the five plaintiffs are parties who are working closely together and chose to file the same claims multiple times. The court consolidated all five complaints before dismissing them on May 8, 2003. Plaintiffs have filed a notice of appeal. These lawsuits falsely alleged that the AMERCO Board lacked independence. In reaching his decision to dismiss these claims, the court determined that the AMERCO Board of Directors had the requisite level of independence required in order to have these claims resolved by the Board. These cases are stayed pending AMERCO’s emergence from bankruptcy.

The Securities and Exchange Commission (“SEC”) has issued a formal order of investigation to determine whether the Company has violated the Federal securities laws. On January 7, 2003, the Company received the first of several subpoenas issued by the SEC to the Company. SAC Holdings, the Company’s current and former auditors, and others have also received one or more subpoenas relating to this matter. The Company is cooperating fully with the SEC and is facilitating the expeditious review of its financial statements and any other issues that may arise. The Company has produced a large volume of documents and other materials in response to the subpoenas, and the Company is continuing to assemble and produce additional documents and materials for the SEC. Although the Company has fully cooperated with the SEC in this matter and intends to continue to fully cooperate, the SEC may determine that the Company has violated Federal securities laws. We cannot predict when this investigation will be completed or its outcome. If the SEC makes a determination that we have violated Federal securities laws, we may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief.

AMERCO is a defendant in four putative class action lawsuits. Article Four Trust v. AMERCO, et al., District of Nevada, United States District Court, Case No. CV-N-03-0050-DWH-VPC. Article Four Trust, a purported AMERCO shareholder, commenced this action on January 28, 2003 on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Article Four Trust action alleges one claim for violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. Mates v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0107. Maxine Mates, an AMERCO shareholder, commenced this putative class action on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Mates action asserts claims under section 10(b) and Rule 10b-5, and section 20(a) of the Securities Exchange Act. Klug v. AMERCO, et al., United States District Court of Nevada, Case No. CV-S-03-0380. Edward Klug, an AMERCO shareholder, commenced this putative class action on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Klug action asserts claims under section 10(b) and Rule 10b-5 and section 20(a) of the Securities Exchange Act. IG Holdings v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0199. IG Holdings, an AMERCO bondholder, commenced this putative class action on behalf of all persons and entities who purchased, acquired, or traded AMERCO bonds between February 12, 1998 and September 26, 2002, alleging claims under section 11 and section 12 of the Securities Act of 1933 and section 10(b) and Rule 10b-5, and section 20(a) of the Securities Exchange Act. Each of these four securities class actions allege that AMERCO engaged in transactions with SAC entities that falsely improved AMERCO’s financial statements, and that AMERCO failed to disclose the transactions properly. The actions are at a very early stage and have recently been consolidated. As to AMERCO, the actions are stayed pending AMERCO’s emergence from bankruptcy. In addition, by agreement of the parties, AMERCO’s directors who are also named in the lawsuits have an extension to file their responses to the complaints. Management intends to defend these cases vigorously.

such parties to extend the tolling agreement and they have done so. The DOL has not advised the Company that it believes that any other violations of ERISA have in fact occurred. Instead, the DOL is simply investigating potential violations. The Company intends to defend its position. The Company also intends to take any corrective action that may be needed in light of the DOL’s ultimate findings. Although the Company has fully cooperated with the DOL in this matter and intends to continue to fully cooperate, the DOL may determine that the Company has violated ERISA. In that event, the Company may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief.

Statement of Financial Accounting Standards (“SFAS”) No. 143 (“SFAS 143”), Accounting for Asset Retirement Obligations, requires recognition of the fair value of liabilities associated with the retirement of long-lived assets when a legal obligation to incur such costs arises as a result of the acquisition, construction, development and/or the normal operation of a long-lived asset. Upon recognition of the liability, a corresponding asset is recorded at present value and accreted over the life of the asset and depreciated over the remaining life of the long-lived asset. SFAS 143 defines a legal obligation as one that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel. SFAS 143 is effective for fiscal years beginning after September 15, 2002. We adopted this statement effective April 1, 2003, and it did not affect our consolidated financial position or results of operations.

In April 2002, the FASB adopted SFAS No. 145 (“SFAS 145”), Rescission of No. 4, (Reporting Gains and Losses from Extinguishment of Debt), No. 44 (Accounting for Intangible Assets of Motor Carriers), No. 64, (Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements), Amendment of FASB Statement No. 13 (Accounting for Leases) and Technical Corrections. This statement eliminates the requirement that gains and losses on debt extinguishment must be classified as extraordinary items in the income statement. Instead, such gains and losses will be classified as extraordinary items only if they are deemed to be unusual and infrequent, in accordance with the current GAAP criteria for extraordinary classification. In addition, SFAS 145 eliminates an inconsistency in lease accounting by requiring that modification of capital leases that result in reclassification as operating leases be accounted for consistent with sale-leaseback accounting rules. The statement also contains other non-substantive corrections to authoritative accounting literature. The changes related to debt extinguishment are effective for fiscal years beginning after May 15, 2002. We previously reclassified all extraordinary loss on debt extinguishment to interest expense. The changes related to lease accounting will be effective for transactions occurring after May 15, 2002. We adopted the lease accounting provisions effective May 16, 2002 and it did not affect our consolidated financial position or results of operations.

In September 2002, the FASB issued Statement of Financial Accounting Standards No. 146, (“SFAS 146”) Accounting for Costs Associated with Exit or Disposal Activities, which addresses accounting for restructuring and similar costs. SFAS 146 supersedes previous accounting guidance, principally Emerging Issues Task Force (EITF) Issue No. 94-3. SFAS 146 requires that the liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF No. 94-3, a liability for an exit cost was recognized at the date of a company’s commitment to an exit plan. SFAS 146 also establishes that the liability should initially be measured and recorded at fair value. Accordingly, SFAS 146 may affect the timing of recognizing future restructuring costs as well as the amount recognized. The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002. We adopted the Statement effective January 1, 2003 and it did not affect our consolidated financial position or results of operations.

In November 2002, the FASB issued FASB Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting for Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an

interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34, Disclosure of Indirect Guarantees of Indebtedness of Others. FIN 45 clarifies the requirements for a guarantor’s accounting for and disclosure of certain guarantees issued and outstanding. It also requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. This Interpretation also incorporates without reconsideration the guidance in FASB Interpretation No. 34, which was superseded. As a result of FIN 45, the Company has recorded a $125 million liability at March 31, 2003 and December 31, 2003, which is management’s estimate of the liability associated with the guarantee of the indebtedness of an affiliate of Private Mini Storage Realty, L. P. which was entered into in February 2003.

In December 2002, the FASB issued Statement of Financial Accounting Standards 148 (“SFAS 148”), “Accounting for Stock-Based Compensation -Transition and Disclosure”, which amends Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation”. SFAS 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirement of SFAS 123 to require more prominent and more frequent disclosures in financial statements of the effects of stock-based compensation. The transition guidance and annual disclosure provisions of SFAS 148 are effective for fiscal years ending after December 15, 2002. The interim disclosure provisions are effective for financial reports containing condensed financial statements for interim periods beginning after December 15, 2002. We have adopted this statement and it had no impact on the Company’s consolidated balance sheet or results of operations.

In April 2003, the FASB issued Statement of Financial Accounting Standards 149, (“SFAS 149”) “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This Statement amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS 133. In particular, SFAS 149 (1) clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative as discussed in SFAS 133, (2) clarifies when a derivative contains a financing component, (3) amends the definition of an underlying derivative to conform it to the language used in FIN 45, and (4) amends certain other existing pronouncements. SFAS 149 is generally effective for contracts entered into or modified after June 30, 2003. The Company does not believe the adoption of SFAS No. 149 will have a material impact on the Company’s financial position, results of operations or cash flows.

In May 2003, the FASB issued SFAS 150 (“SFAS 150”), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This Statement establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 is effective at the beginning of the first interim period beginning after June 15, 2003; including all financial instruments created or modified after May 31, 2003. SFAS 150 currently has no impact on the Company.

In January 2003, the FASB issued Interpretation Number 46, Consolidation of Variable Interest Entities (“FIN 46”), an interpretation of Accounting Research Bulletin No. 51. FIN 46 requires that variable interest entities be consolidated by a company if that company absorbs a majority of the entity’s expected losses, receives a majority of its expected residual returns, or both, as a result of holding a variable interest. In December 2003, the FASB issued FIN 46R, which reflected certain amendments to the standard. The provisions of FIN 46, as revised, are effective for the first interim or annual period ending after March 15, 2004 when certain conditions are met by a variable interest entity. At this time an evaluation is being conducted to determine whether the adoption of FIN 46 will require that we consolidate SAC Holdings’ investment in Private Mini.

[Continued from above table, first column(s) repeated]


Balance Sheet,		SAC Moving
December 31,		and Storage					Total
2003		Operations		Eliminations			Consolidated


		(In thousands)
Assets:
Cash and cash equivalents		$	4,077	$	—		$	136,866
Trade receivables, net			—		(30,715	)(d)		239,378
Notes and mortgage receivables, net			—		(35,549	)(d)		17,129
Inventories, net			4,750		—			55,230
Prepaid expenses			1,411		(2,733	)(d)		17,487
Investments, fixed maturities			—		(5,039	)(d)		763,673
Investments, other			1,701		(411,031	)(d)		474,978
Deferred policy acquisition costs, net			—		—			86,603
Other assets			55,931		(29,508	)		98,430

			67,870		(514,575	)(c)		1,889,774
Investment in Subsidiaries			—		—			—
Investment in SAC			—		42,664	(c)		—

Total Investment in Subsidiaries			—		42,664			—
Property, plant, and equipment, at cost:
	Land		—		—			159,508
	Buildings and improvements		—		—			751,877
	Furniture and equipment		—		—			293,173
	Rental trailers and other rental equipment		—		—			156,237
	Rental trucks		—		—			1,208,303
	SAC Holdings — Property, plant and equipment(b)		991,486		(258,271	)(h)		733,215

			991,486		(258,271	)		3,302,313
Less: Accumulated depreciation			74,877		(8,062	)		1,385,632

	Total property, plant and equipment		916,609		(250,209	)		1,916,681

Total Assets		$	984,479	$	(722,120	)	$	3,806,455

[Continued from above table, first column(s) repeated]


Balance
Sheet —
December 31,			SAC Moving
2003			and Storage						Total
(Continued)			Operations			Eliminations			Consolidated


			(In thousands)
Liabilities:
Payables and accrued expenses			$	46,205		$	(66,266	)(d)	$	359,186
	AMERCO’s notes and loans payable			—			—			85,380
	SAC Holdings’ notes and loans payable			990,079			(403,521	)(d)		586,558
	Policy benefits and losses, claims and loss expenses payable			—			—			836,221
	Liabilities from investment contracts			—			—			603,992
	Other policyholders’ funds and liabilities			—			—			45,523
	Deferred income			5,328			(32,241	)(d)		11,042
	Deferred income taxes			(23,819	)		(98,005	)(h)		1,345
	Other liabilities			—			—			—
	Liabilities subject to compromise			—			—			875,372

Total Liabilities				1,017,793			(600,033	)		3,404,619
Minority Interest				12,549			(12,549	)(c)		—
Stockholders’ equity:
Series preferred stock:
		Series A preferred stock		—			—			—
		Series B preferred stock		—			—			—
Series A common stock				—			—			1,441
Common Stock				—			—			9,122
Additional paid in- capital				—			(160,264	)(h)		235,784
Additional paid-in- capital — SAC				3,199			(3,199	)(c)		3,199
Accumulated other comprehensive (loss)				—			—			(25,801	)
Accumulated other comprehensive income/(loss) — SAC Holdings				3,598			(3,598	)(c)		3,598
Retained earnings				(49,461	)		57,523	(c)		608,593
Cost of common shares in treasury, net				(3,199	)		—			(421,378	)
Unearned ESOP shares				—			—			(12,722	)

Total stockholders’ equity				(45,863	)		(109,538	)(c)		401,836

Total Liabilities and Stockholders’ Equity			$	984,479		$	(722,120	)	$	3,806,455

[Continued from above table, first column(s) repeated]


		SAC
		Moving and
Balance Sheet		Storage					Total
March 31, 2003		Operations		Eliminations			Consolidated


		(In thousands)
Assets:
Cash and cash equivalents		$	4,662	$	—		$	66,834
Trade receivables, net			—		(7,754	)(d)		255,796
Notes and mortgage receivables, net			—		(24,879	)(d)		10,809
Inventories, net			4,037		—			53,270
Prepaid expenses			811		(6,463	)(d)		21,846
Investments, fixed maturities			—		(6,477	)(d)		860,600
Investments, other			—		(399,522	)(d)		389,252
Deferred policy acquisition costs, net			—		—			105,100
Other assets			24,635		—			63,600

			34,145		(445,095	)(c)		1,827,107
Investment in Subsidiaries			—		—			—
Investment in SAC			—		41,938	(c)		—

Total Investment in Subsidiaries			—		41,938			—
Property, plant, and equipment, at cost:
	Land		—		—			157,987
	Buildings and improvements		—		—			747,853
	Furniture and equipment		—		—			291,383
	Rental trailers and other rental equipment		—		—			149,707
	Rental trucks		—		—			1,140,294
	SAC Holdings — Property, plant and equipment(b)		1,015,563		(258,271	)(h)		757,292

			1,015,563		(258,271	)		3,244,516
Less: Accumulated depreciation			59,679		(6,616	)		1,298,199

	Total property, plant and equipment		955,884		(251,655	)		1,946,317

Total Assets		$	990,029	$	(654,812	)	$	3,773,424


(a)	Balances as of December 31, 2002

(b)	Included in this caption is land of $273,470, buildings and improvements of $739,534 and furniture and equipment of $2,559

(c)	Eliminate investment in subsidiaries

(d)	Eliminate intercompany receivables and payables

(e)	Eliminate intercompany lease income

(f)	Eliminate intercompany premiums

(g)	Eliminate intercompany interest on debt

(h)	Eliminate gain on sale of surplus property from AMERCO to SAC

6. Consolidating balance sheets by industry segment as of March 31, 2003 are as follows:


Balance					U-Haul
Sheet — March					Moving and					Property and
31, 2003					Storage					Casualty		Life					AMERCO
(Continued)		AMERCO			Operations			Real Estate		Insurance(a)		Insurance(a)		Eliminations			Consolidated


		(In thousands)
Liabilities:
	Payables and accrued expenses	$	139,496		$	263,394		$	7,892	$	—	$	570	$	(39,735	)(c)	$	371,617
	AMERCO’s notes and loans payable		861,158			31,693			101,505		—		—		(39,500	)(d)		954,856
	SAC Holdings’ notes and loans payable		—			—			—		—		—		—			—
	Policy benefits and losses, claims and loss expenses payable		—			168,666			—		485,383		182,583		—			836,632
	Liabilities from investment contracts		—			—			—		—		639,998		—			639,998
	Other policyholders’ funds and liabilities		—			—			—		20,164		10,145		—			30,309
	Deferred income		2,863			30,943			1,011		—		—		—			34,817
	Deferred income taxes		120,446			214,715			94,914		—		8,664		(353,058	)(d)		85,681
	Other liabilities		—			—			325,783		—		11,315		(337,098	)(d)		—
	Liabilities subject to compromise		—			—			—		—		—		—			—

Total Liabilities			1,123,963			709,411			531,105		505,547		853,275		(769,391	)		2,953,910
Minority Interest			—			—			—		—		—		—			—
Stockholders’ equity:
Series preferred stock			—			—			—		—		—		—			—
	Series A preferred stock		—			—			—		—		—		—			—
	Series B preferred stock		—			—			—		—		—		—			—
Series A common stock			1,441			—			—		—		—		—			1,441
Common Stock			9,122			540			1		3,300		2,500		(6,341	)(c)		9,122
Additional paid in- capital			396,050			121,230			147,481		70,023		16,435		(355,169	)(c)		396,050
Additional paid-in- capital — SAC			3,199			—			—		—		—		—			3,199
Accumulated other comprehensive (loss)			(54,278	)		(39,849	)		—		13,589		4,166		22,094	(c)		(54,278	)
Accumulated other comprehensive income/(loss) — SAC Holdings			(1,487	)		—			—		—		—		—			(1,487	)
Retained earnings			561,606			430,656			67,500		112,185		87,999		(698,340	)(c)		561,606
Cost of common shares in treasury, net			(418,179	)		—			—		—		—		—			(418,179	)
Unearned ESOP shares			20			(13,197	)		—		—		—		—			(13,177	)

Total stockholders’ equity			497,494			499,380			214,982		199,097		111,100		(1,037,756	)		484,297

Total Liabilities and Stockholders’ Equity		$	1,621,457		$	1,208,791		$	746,087	$	704,644	$	964,375	$	(1,807,147	)	$	3,438,207

[Continued from above table, first column(s) repeated]


Balance		SAC
Sheet — March		Moving and
31, 2003		Storage						Total
(Continued)		Operations			Eliminations			Consolidated


		(In thousands)
Liabilities:
	Payables and accrued expenses	$	48,033		$	(32,633	)(d)	$	387,017
	AMERCO’s notes and loans payable		—			—			954,856
	SAC Holdings’ notes and loans payable		983,190			(394,171	)(d)		589,019
	Policy benefits and losses, claims and loss expenses payable		—			—			836,632
	Liabilities from investment contracts		—			—			639,998
	Other policyholders’ funds and liabilities		—			—			30,309
	Deferred income		12,033			(6,463	)(d)		40,387
	Deferred income taxes		(19,918	)		(98,005	)(h)		(32,242	)
	Other liabilities		—			—			—
	Liabilities subject to compromise		—			—			—

Total Liabilities			1,023,338			(531,272	)		3,445,976
Minority Interest			11,828			(11,828	)(c)		—
Stockholders’ equity:
Series preferred stock			—			—			—
	Series A preferred stock		—			—			—
	Series B preferred stock		—			—			—
Series A common stock			—			—			1,441
Common Stock			—			—			9,122
Additional paid in- capital			—			(160,266	)(h)		235,784
Additional paid-in- capital — SAC			3,199			(3,199	)(c)		3,199
Accumulated other comprehensive (loss)			—			—			(54,278	)
Accumulated other comprehensive income/(loss) — SAC Holdings			(1,487	)		1,487	(c)		(1,487	)
Retained earnings			(43,650	)		50,266	(c)		568,222
Cost of common shares in treasury, net			(3,199	)		—			(421,378	)
Unearned ESOP shares			—			—			(13,177	)

Total stockholders’ equity			(45,137	)		(111,712	)(c)		327,448

Total Liabilities and Stockholders’ Equity		$	990,029		$	(654,812	)	$	3,773,424


(a)	Balances as of December 31, 2002

(b)	Included in this caption is land of $273,470, buildings and improvements of $739,534 and furniture and equipment of $2,559

(c)	Eliminate investment in subsidiaries

[Continued from above table, first column(s) repeated]


Quarter
Ended			SAC
December			Moving and
31,			Storage						Total
2003			Operations			Eliminations			Consolidated


			(In thousands)
Revenues:
	Rental revenue		$	43,298		$	(13,520	)(e)	$	386,497
	Net sales			10,501			—			47,171
	Premiums			—			—			56,088
	Net investment and interest income			—			(8,628	)(g)		12,827

	Total Revenues			53,799			(22,148	)		502,583
Costs and expenses:
	Operating expenses			24,926			(3,156	)(e)		311,979
	Commission expenses			—			(6,987	)(e)		31,136
	Cost of sales			4,218			—			23,907
	Benefits and losses			—			—			50,956
	Amortization of deferred policy acquisition costs			—			—			11,027
	Lease expense			—			(3,377	)(e)		36,214
	Depreciation, net			5,148			(482	)(h)		38,394

		Total costs and expenses		34,292			(14,002	)		503,613
Equity in earnings of AREC, UHI, RW & OLIC				—			—			—
Equity in earnings of SAC				—			(216	)		—

Total — equity earnings in subsidiaries				—			(216	)		—
Earnings (losses) from operations				19,507			(8,362	)		(1,030	)
	Interest Expense			20,052			(8,628	)(g)		31,168

Pretax earnings (loss)				(545	)		266			(32,198	)
	Income tax benefit (expense)			761			—			10,531

	Net earnings (loss)			216			266			(21,667	)
Less: Preferred stock dividends				—			—			3,241

Earnings (loss) available to common shareholders			$	216		$	266		$	(24,908	)


(a)	Balances are for the quarter ending September 30, 2003

(b)	Included in this caption is land of $260,496, buildings and improvements of $727,586 and furniture and equipment of $3,404

(c)	Eliminate investment in subsidiaries

(d)	Eliminate intercompany receivables and payables

(e)	Eliminate intercompany lease income

(f)	Eliminate intercompany premiums

(g)	Eliminate intercompany interest on debt

(h)	Eliminate gain on sale of surplus property from AMERCO to SAC

[Continued from above table, first column(s) repeated]


Quarter			SAC
Ended			Moving and
December			Storage						Total
31, 2002			Operations			Eliminations			Consolidated


			(In thousands)
Revenues:
	Rental revenue		$	39,369		$	(11,475	)(e)	$	335,760
	Net sales			10,180			—			45,074
	Premiums			—			—			80,115
	Net investment and interest income			—			(11,081	)(g)		6,274

	Total Revenues			49,549			(22,556	)		467,223
Costs and expenses:
	Operating expenses			24,698			(2,850	)(e)		286,758
	Commission expenses			—			(6,640	)(e)		32,224
	Cost of sales			3,545			—			22,422
	Benefits and losses			—			—			59,709
	Amortization of deferred policy acquisition costs			—			—			6,253
	Lease expense			—			(1,985	)(e)		33,265
	Depreciation, net			4,667			(482	)(h)		33,314

		Total costs and expenses		32,910			(11,957	)		473,945
Equity in earnings of AREC, UHI, RW & OLIC				—			—			—
Equity in earnings of SAC				—			4,338			—

Total — equity earnings in subsidiaries				—			4,338			—
Earnings (losses) from operations				16,639			(6,261	)		(6,722	)
	Interest Expense			20,483			(11,081	)(g)		31,419
	Fees on early extinguishment of BBAT’s			—			—			26,551

Pretax earnings (loss)				(3,844	)		4,820			(64,692	)
Income tax benefit (expense)				(494	)		—			18,909

	Net earnings (loss)			(4,338	)		4,820			(45,783	)
Less: Preferred stock dividends				—			—			3,241

Earnings (loss) available to common shareholders			$	(4,338	)	$	4,820		$	(49,024	)

[Continued from above table, first column(s) repeated]


Nine Months
Ended			SAC Moving
December 31,			and Storage						Total
2003			Operations			Eliminations			Consolidated


			(In thousands)
Revenues:
	Rental revenue		$	127,415		$	(42,876	)(e)	$	1,304,470
	Net sales			39,621			—			182,048
	Premiums			—			—			188,024
	Net investment and interest income			—			(28,795	)(g)		35,614

	Total revenues			167,036			(71,671	)		1,710,156
Costs and expenses:
	Operating expenses			81,541			(9,811	)(e)		909,380
	Commission expenses			—			(22,933	)(e)		116,132
	Cost of sales			16,903			—			87,023
	Benefits and losses			—			—			169,801
	Amortization of deferred policy acquisition costs			—			—			28,886
	Lease expense			—			(10,132	)(e)		112,058
	Depreciation, net			16,007			(1,446	)(h)		113,356

		Total costs and expenses		114,451			(44,322	)		1,536,636
Equity in earnings of AREC, UHI, RW & OLIC				—			—			—
Equity in earnings of SAC				—			5,811			—

Total — equity earnings in subsidiaries				—			5,811			—
Earnings (loss) from operations				52,585			(21,538	)		173,520
	Interest Expense			61,273			(28,795	)(g)		92,839

Pretax earnings (loss)				(8,688	)		7,257			80,681
	Income tax benefit (expense)			2,877			—			(30,587	)

	Net earnings (loss)			(5,811	)		7,257			50,094
Less: Preferred stock dividends				—			—			9,723

Earnings (loss) available to common shareholders			$	(5,811	)	$	7,257		$	40,371

6. Consolidating statements of operations by industry segment for the nine months ended December 31, 2002 are as follows (as restated):


Nine Months							U-Haul
Ended							Moving and						Property and
December 31,							Storage						Casualty			Life						AMERCO
2002				AMERCO			Operations			Real Estate			Insurance(a)			Insurance(a)			Eliminations			Consolidated


				(In thousands)
Revenues:
	Rental revenue			$	—		$	1,146,849		$	51,384		$	—		$	—		$	(52,092	)(e)	$	1,146,141
	Net sales				—			137,554			48			—			—			—			137,602
	Premiums				—			—			—			126,876			121,099			(4,844	)(f)		243,131
	Net investment and interest income				1,811			23,243			8,040			21,464			13,036			(7,692	)		59,902

		Total revenues			1,811			1,307,646			59,472			148,340			134,135			(64,628	)		1,586,776
Costs and expenses:
	Operating expenses				11,399			824,302			5,080			26,234			29,555			(61,642	)(e)		834,928
	Commission expenses				—			144,148			—			—			—			—			144,148
	Cost of sales				—			71,481			17			—			—			—			71,498
	Benefits and losses				—			—			—			111,733			88,409			—			200,142
	Amortization of deferred policy acquisition costs				—			—			—			13,159			14,736			—			27,895
	Lease expense				697			120,407			7,480			—			—			—			128,584
	Depreciation, net				21			83,933			5,437			—			—			—			89,391

			Total costs and expenses		12,117			1,244,271			18,014			151,126			132,700			(61,642	)		1,496,586
Equity in earnings of AREC, UHI, RW & OLIC					56,512			—			—			—			—			(56,512	)		—
Equity in earnings of SAC					(5,394	)		—			—			—			—			—			(5,394	)

Total — equity earnings in subsidiaries					51,118			—			—			—			—			(56,512	)		(5,394	)
Earnings (losses) from operations					40,812			63,375			41,458			(2,786	)		1,435			(59,498	)		84,796
	Interest Expense				29,842			7,657			16,650			—			—			—			54,149
	Fees on early extinguishment of BBAT’s				26,551			—			—			—			—			—			26,551

Pretax earnings (loss)					(15,581	)		55,718			24,808			(2,786	)		1,435			(59,498	)		4,096
Income tax benefit (expense)					14,259			(38,122	)		(8,683	)		(79	)		(978	)		28,185			(5,418	)

	Net earnings (loss)				(1,322	)		17,596			16,125			(2,865	)		457			(31,313	)		(1,322	)
Less: Preferred stock dividends					9,723			—			—			—			—			—			9,723

Earnings (loss) available to common shareholders				$	(11,045	)	$	17,596		$	16,125		$	(2,865	)	$	457		$	(31,313	)	$	(11,045	)

[Continued from above table, first column(s) repeated]


Nine Months				SAC
Ended				Moving and
December 31,				Storage						Total
2002				Operations			Eliminations			Consolidated


				(In thousands)
Revenues:
	Rental revenue			$	123,760		$	(36,858	)(e)	$	1,233,043
	Net sales				38,107			—			175,709
	Premiums				—			—			243,131
	Net investment and interest income				—			(28,394	)(g)		31,508

		Total revenues			161,867			(65,252	)		1,683,391
Costs and expenses:
	Operating expenses				74,922			(9,195	)(e)		900,655
	Commission expenses				—			(21,707	)(e)		122,441
	Cost of sales				15,986			—			87,484
	Benefits and losses				—			—			200,142
	Amortization of deferred policy acquisition costs				—			—			27,895
	Lease expense				—			(5,956	)(e)		122,628
	Depreciation, net				14,457			(1,446	)(h)		102,402

			Total costs and expenses		105,365			(38,304	)		1,563,647
Equity in earnings of AREC, UHI, RW & OLIC					—			—			—
Equity in earnings of SAC					—			5,394			—

Total — equity earnings in subsidiaries					—			5,394			—
Earnings (losses) from operations					56,502			(21,554	)		119,744
	Interest Expense				60,551			(28,394	)(g)		86,306
	Fees on early extinguishment of BBAT’s				—			—			26,551

Pretax earnings (loss)					(4,049	)		6,840			6,887
Income tax benefit (expense)					(1,345	)		—			(6,763	)

	Net earnings (loss)				(5,394	)		6,840			124
Less: Preferred stock dividends					—			—			9,723

Earnings (loss) available to common shareholders				$	(5,394	)	$	6,840		$	(9,599	)

[Continued from above table, first column(s) repeated]


Cash Flow				SAC
Nine Months				Moving and
December 31,				Storage						Total
2003				Operations			Eliminations			Consolidated


				(In thousands)
Net cash provided by (used by) operating activities				$	1,208		$	11,743		$	151,201

Cash flows from investing activities:
	Purchases of investments:
		Property, plant and equipment			(19,254	)		5,717			(147,344	)
		Fixed maturities			—			—			(50,662	)
		Other asset investment			(29,508	)		29,508			(78,142	)
	Proceeds from sale of investments:
		Property, plant and equipment			43,331			(37,614	)		30,470
		Fixed maturities			—			—			171,405
		Other asset investment			—			—			28,737

Net cash provided by (used by) investing activities					(5,431	)		(2,389	)		(45,536	)

Cash flows from financing activities:
		Net change in short-term borrowings			—			—			5,649
		Proceeds from notes			10,791			(10,791	)		50,000
		Debt issuance costs			—			—			—
		Leverage Employee Stock Ownership Plan:
			Purchase of shares		—			—			—
			Repayments from loan		—			—			455
		Principal payments on notes			(7,153	)		1,437			(55,716	)
		Preferred stock dividends paid			—			—			—
		Treasury stock acquisitions, net			—			—			—
		Investment contract deposits			—			—			43,020
		Investment contract withdrawals			—			—			(79,041	)

Net cash used by investing activities					3,638			(9,354	)		(35,633	)

Increase (decrease) in cash and cash equivalents					(585	)		—			70,032
Cash and cash equivalents at the beginning of period					4,662			—			66,834

Cash and cash equivalents at the end of period				$	4,077		$	—		$	136,866

[Continued from above table, first column(s) repeated]


Cash Flow				SAC
Nine Months				Moving and
December 31,				Storage						Total
2002				Operations			Eliminations			Consolidated


				(In thousands)
Net cash provided by (used in) operating activities				$	4,702		$	(11,983	)	$	147,742

Cash flows from investing activities:
	Purchases of investments:
		Property, plant and equipment			(43,171	)		—			(196,252	)
		Fixed maturities			—			—			(248,121	)
		Other asset investments			—			—			(52,988	)
	Proceeds from sale of investments:				—			—			—
		Property, plant and equipment			24,555			—			74,262
		Fixed maturities			—			—			291,328
		Other asset investments			—			—			6,144

Net cash provided by (used in) investing activities					(18,616	)		—			(125,627	)

Cash flows from financial activities:
	Net change in short-term borrowings				—			—			—
	Proceeds from notes				46,517			(15,517	)		130,981
	Debt issuance costs				—			—			—
	Leverage Employee Stock Ownership Plan:
			Purchase of shares		—			—			—
			Repayments from loan		—			—			975
		Principal payments on notes			(31,850	)		27,500			(205,364	)
	Preferred stock dividends paid				—			—			(6,482	)
	Treasury stock acquisitions, net				—			—			(1,407	)
	Investment contract deposits				—			—			137,488
	Investment contract withdrawals				—			—			(74,047	)

Net cash provided by (used in) financing activities					14,667			11,983			(17,856	)

Increase (decrease) in cash equivalents					753			—			4,259
Cash and cash equivalents at the beginning of period					10			—			47,651

Cash and cash equivalents at the end of period				$	763		$	—		$	51,910

Under the Bankruptcy Code certain claims against AMERCO in existence prior to the Petition Date are stayed while AMERCO continues operating as a debtor-in-possession. AMERCO has received approval from the Court to (1) pay pre-petition and post-petition employee wages, salaries, benefits, other employee obligations and insurance obligations; (2) pay vendors and other providers in the ordinary course for goods and services received from and after the Petition Date. Substantially all other pre-petition liabilities of AMERCO have been classified as liabilities subject to compromise in the unaudited Condensed Consolidated Balance Sheets. Adjustments to these liabilities may result from negotiations, payments authorized by Court order, additional rejection of executory contracts including leases, or other events.

Shortly after the Chapter 11 filing, AMERCO began notifying all known or potential creditors of the filing for the purpose of identifying all pre-petition claims against the Company. Amounts that AMERCO has recorded may be different than amounts filed by its creditors.

SAC Holdings loaned Self-Storage International Holding Corporation (“SSI”) $4.5 million. As of December 31, 2003, the outstanding balance due to SAC Holdings was $1.5 million. Mark V. Shoen, a significant shareholder and executive officer of AMERCO, owns all of the equity interest of SSI and substantially all of the equity interest of SAC Holdings. For financial reporting purposes, SSI is not consolidated by AMERCO or SAC Holdings.

The following table summarizes the components of liabilities subject to compromise, included in AMERCO’s Condensed Consolidated Balance Sheet as of December 31, 2003 (in thousands):

Reorganization expenses incurred as a direct result of the Company’s Chapter 11 filing are included in operating expenses and interest expense in the Condensed Consolidated Statement of Operations. Professional fees of $7.9 million and default interest payments of $0 were paid during the quarter ended December 31, 2003. Professional fees of $13.8 million and default interest payments of $4.4 million were paid during the nine months ended December 31, 2003.

This Quarterly Report on Form 10-Q contains forward-looking statements. We may make additional written or oral forward-looking statements from time to time in filings with the Securities and Exchange Commission or otherwise. We believe such forward-looking statements are within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, the expected outcomes of the Chapter 11 proceedings, projections of revenues, income or loss, estimates of capital expenditures, our plans and intentions regarding the recapitalization of our balance sheet and the payment of dividends arrearages, plans for future operations, products or services, financing needs and plans, our perceptions of our legal positions and anticipated outcomes of pending litigation against us, liquidity as well as assumptions relating to the foregoing. The words “believe”, “expect”, “anticipate”, “estimate”, “project” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could significantly affect results include, without limitation, the risk factors enumerated at the end of this section, as well as the following: the Company’s ability to operate pursuant to the terms of its DIP facility; the Company’s ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the Company’s ability to prosecute, confirm, and consummate its plan of reorganization with respect to the Chapter 11 case; the Company’s ability to operate pursuant to the terms of its post-bankruptcy financing agreements; the Company’s ability to obtain and maintain normal terms with vendors and service providers; the Company’s ability to maintain contracts that are critical to its operations; the potential adverse impact of the Chapter 11 case on the Company’s liquidity or results of operations; the costs and availability of financing; the Company’s ability to execute its business plan; the Company’s ability to attract, motivate and retain key employees; general economic conditions; weather conditions; fluctuations in our costs to maintain and update our fleet and facilities; our ability to refinance our debt; our ability to successfully recapitalize our balance sheet; our ability to continue as a going concern; changes in government regulations, particularly environmental regulations; our credit ratings; the availability of credit; changes in demand for our products; changes in the general domestic economy; degree and nature of our competition; the resolution of pending litigation against the Company; changes in accounting standards and other factors described in this report or the other documents we file with the Securities Exchange Commission. The above factors, the following disclosures, as well as other statements in this report and in the Notes to AMERCO’s Condensed Consolidated Financial Statements, could contribute to or cause such differences, or could cause AMERCO’s stock price to fluctuate dramatically. Consequently, the forward-looking statements should not be regarded as representations or warranties by the Company that such matters will be realized. The Company disclaims any intent or obligation to update or revise any of the forward-looking statements, whether in response to new information, unforeseen events, changed circumstances or otherwise.

Information on industry segments is incorporated by reference from — Notes 1 and 6 of Notes to Condensed Consolidated Financial Statements. Those notes discuss the principles of consolidation, summarized consolidated financial information and industry segment and geographical area data, respectively. In consolidation, all inter-segment premiums are eliminated and the insured portion of the related benefits, losses and expenses are retained by the insurance companies.

Management’s discussion and analysis of financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, estimates are re-evaluated, including those related to areas that require a significant level of judgment or are otherwise subject to an

inherent degree of uncertainty. These areas include allowances for doubtful accounts, depreciation of revenue earning vehicles and buildings, self-insured liabilities, impairments of assets, insurance reserves, premiums and acquisition cost amortization, income taxes and commitments and contingencies. Our estimates are based on historical experience, observance of trends in particular areas, information and/or valuations available from outside sources and on various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts may differ from these estimates under different assumptions and conditions. Such differences may be material.

Accounting policies are considered critical when they are significant and involve difficult, subjective or complex judgments or estimates. We consider the following to be critical accounting policies:

The condensed consolidated financial statements presented here include the accounts of AMERCO and its wholly-owned subsidiaries and SAC Holdings and their subsidiaries. All material inter-company accounts and transactions have been eliminated in consolidation. AMERCO has made significant loans to SAC Holdings and is entitled to participate in SAC Holdings’ excess cash flow (after senior debt service). All of the equity interest of SAC Holdings is owned by Mark V. Shoen, a significant shareholder and executive officer of AMERCO. AMERCO does not have an equity ownership interest in SAC Holdings, except for investments made by RepWest and Oxford in a SAC Holdings-controlled limited partnership which holds Canadian self-storage properties. SAC Holdings are not legal subsidiaries of AMERCO. AMERCO is not liable for the debts of SAC Holdings and there are no default provisions in AMERCO indebtedness that cross-default to SAC Holdings’ obligations.

Depreciation is recognized in amounts expected to result in the recovery of estimated residual values upon disposal (i.e., no gains or losses). In determining the depreciation rate, we review historical disposal experience and holding periods. Due to longer holding periods on trucks and the resulting increased possibility of changes in the economic environment and market conditions, these estimates are subject to a greater degree of risk.

We review carrying value whenever events or circumstances indicate the carrying values may not be recoverable through projected undiscounted future cash flows. The events could include significant underperformance relative to expected, historical or projected future operating results, significant changes in the manner of using the assets, overall business strategy, significant negative industry or economic trends and an unexpected non-compliance with significant debt agreements.

For investments accounted for under SFAS 115, in determining if and when a decline in market value below amortized cost is other than temporary, quoted market prices, dealer quotes or discounted cash flows are reviewed. Other-than-temporary declines in value are recognized in the current period operating results to the extent of the decline.

Premiums are recognized as revenue as earned over the terms of the respective policies. Benefits and expenses are matched with recognized premiums to result in revenue and expense recognition over the life of

the contracts. This match is accomplished by recording a provision for future policy benefits and unpaid claims and claim adjustment expenses and by amortizing deferred policy acquisition costs. Charges related to services to be performed are deferred until earned. The amounts received in excess of premiums and fees are included in other policyholder funds in the consolidated balance sheets.

Unearned premiums represent the portion of premiums written which relate to the unexpired term of policies. Liabilities for health and disability and other policy claims and benefits payable represent estimates of payments to be made on insurance claims for reported losses and estimates of losses incurred but not yet reported. These estimates are based on past claims experience and current claim trends as well as social and economic conditions such as changes in legal theories and inflation. Due to the nature of underlying risks and the high degree of uncertainty associated with the determination of the liability for future policy benefits and claims, the amounts to be ultimately paid to settle liabilities cannot be precisely determined and may vary significantly from the estimated liability.

Acquisition costs related to insurance contracts have been deferred to accomplish matching against future premium revenue. The costs are charged to current earnings to the extent it is determined that future premiums are not adequate to cover amounts deferred.

Expense is recognized monthly based on reported claims and an estimate of future claims. A reserve is booked for unpaid losses. U-Haul’s self-insured retention is paid out over time as claims are settled, relieving the reserve for unpaid losses.

Rental revenue was $356.8 million and $307.9 million for the quarters ended December 31, 2003 and 2002, respectively. The increase primarily resulted from growth in equipment rental revenues due to improved revenue per transaction and fleet utilization, and increases in storage revenues due to increases in the quantity of rooms rented and price improvement in rooms rented.

Net sales revenues were $36.7 million and $34.9 million for the quarters ended December 31, 2003 and 2002, respectively. The increase reflects improved sales of propane and moving support items and shifts in the mix of products sold.

Investment income was $6.9 million and $7.3 million for the quarter ending December 31, 2003 and 2002, respectively.

Cost of sales were $19.7 million and $18.9 million for the quarters ended December 31, 2003 and 2002, respectively. The increase is due to a shift in the mix of products sold.

Operating expenses before inter-company eliminations were $283.9 million and $253.2 million for the quarters ended December 31, 2003 and 2002, respectively. The increase is due to an increase in insurance reserves partially offset by declines in advertising expense, telephone and other operating expense.

Lease expense was $36.2 million and $32.3 million for the quarters ended December 31, 2003 and 2002, respectively.

Net depreciation expense was $32.8 million and $27.9 million for the quarters ended December 31, 2003 and 2002, respectively. Depreciation from rental trucks acquired off lease and an increase in depreciation on pickups and vans caused the increase.

Operating loss before inter-company eliminations was $10.4 million and $21.1 million for the quarters ended December 31, 2003 and 2002.

Rental revenue before inter-company eliminations was $20.1 million and $21.7 million for the quarters ended December 31, 2003 and 2002, respectively. Inter-company revenue was $15.5 and $14.8 million for the quarters ended December 31, 2003 and 2002, respectively.

Net investment and interest income was $2.0 million and $3.1 million for the quarters ended December 31, 2003 and 2002, respectively.

Lease expense was $3.1 million and $2.7 for the quarters ended December 31, 2003 and 2002, respectively. The increase is a result of the increase in lease expense for storage facilities.

Net depreciation expense was $0.9 million and $1.2 million for the quarters ended December 31, 2003 and 2002, respectively.

Operating profit before inter-company eliminations was $14.4 million and $13.9 million for the quarters ended December 31, 2003 and 2002, respectively.

RepWest’s net earned premiums were $20.1 million and $40.6 million for the three months ended September 30, 2003 and 2002, respectively. General agency premiums were $13.0 million and $19.9 million for the three months ended September 30, 2003 and 2002, respectively. The decrease in 2003 is due to RepWest’s decision to exit its non-U-Haul lines. Assumed treaty reinsurance premiums were $0 and $10.6 million for the three months ended September 30, 2003 and 2002, respectively. The decrease from 2002 to 2003 is due to the cancellation of RepWest’s assumed treaty business. Rental industry earned premiums were $7.0 million and $10.0 million for the three months ended September 30, 2003 and 2002, respectively.

Net investment income was $7.3 million and $6.2 million for the three months ended September 30, 2003 and 2002, respectively. The 2003 increase included a $2.0 million gain on sale of real estate.

Benefits and losses incurred were $26.6 million and $31.8 million for the three months ended September 30, 2003 and 2002, respectively. The decrease is due to decreased earned premiums in all segments of RepWest’s business.

The net amortization of deferred acquisition costs (DAC) was $4.7 million and $1.6 million for the three months ended September 30, 2003 and 2002, respectively. The increase is due to lower premiums resulting from RepWest’s decision to exit its non-U-Haul lines.

Operating expenses were $3.5 million and $13.6 million for the three months ended September 30, 2003 and 2002, respectively. The decrease is a result of reduced commissions and general administrative expenses.

Operating loss before tax was $7.4 million and $0.2 million for the three months ended September 30, 2003 and 2002. The increase in losses is primarily due to loss development and reserve strengthening on cancelled lines of business that were written in prior years.

In April 2003, RepWest announced that in conjunction with the Company’s overall restructuring efforts, it is redirecting its operating focus. In particular, RepWest is exiting non-U-Haul related lines of business. Management estimates that approximately 75% and 81% of earned premium and balance sheet reserves, respectively, relate to the operations that are being discontinued. The process will be conducted in a fashion to help insure an orderly transition and minimize related costs.

Net premiums were $36.4 million and $40.4 million for the quarters ended September 30, 2003 and 2002, respectively. Medicare supplement premiums decreased $1.1 million as lapses on closed blocks exceeded new business. Life and annuity premiums decreased $1.3 million quarter over quarter due to a decline in new life writings. Credit insurance premiums decreased $1.3 million for the quarter as the number of accounts decreased. Other business segments had premium decreases totaling $0.3 million.

Net investment income before inter-company eliminations decreased to $4.7 million from $5.3 million due to fewer realized gains.

Benefits incurred were $24.4 million and $27.9 million for the quarters ended September 30, 2003, and 2002, respectively. Medicare supplement incurred benefits decreased $1.9 million due to a reduced population and better loss experience. Life insurance benefits decreased $1.3 million. Other business segments had benefits decreases totaling $0.4 million.

Amortization of deferred acquisition costs (DAC) and the value of business acquired (VOBA) was $6.4 million and $4.6 million for the quarters ended September 30, 2003 and 2002, respectively. The increase is from increased surrender activity from the deferred annuity segment that has occurred since AMERCO’s bankruptcy filing and Oxford’s subsequent rating decline.

Operating expenses were $6.0 million and $9.7 million for the quarters ended September 30, 2003, and 2002, respectively. Commissions have decreased $1.7 million from 2002 as new sales have declined. Fees collected from surrendered annuity policies increased $2.4 million offsetting the increases in DAC amortization. General and administrative expenses net of fees collected increased $0.5 million.

Operating profit before tax and inter-company eliminations was $4.4 million, and $3.4 million for the quarters ending September 30, 2003, and 2002, respectively. The increase is primarily from improvements in the Medicare supplement segment.

Total revenues consist of storage rental revenues, vehicle rental commissions and net sales. Total rental revenue was $43.3 million and $39.4 million for the quarters ended December 31, 2003 and 2002, respectively. The increase is due to increased room inventory and rates.

Net sales revenues increased to $10.5 million from $10.2 million for the quarters ended December 31, 2003 and 2002, respectively. The increase is due to higher sales volume of moving support items.

Operating expenses before inter-company eliminations increased to $24.9 million from $24.7 million for the quarters ended December 31, 2003 and 2002, respectively. Operating expenses are relatively constant.

Cost of sales were $4.2 million and $3.5 million for the quarters ended December 31, 2003 and 2002, respectively.

Net depreciation expense was $5.1 million and $4.7 million for the quarters ended December 31, 2003 and 2002, respectively.

Operating profits were $19.5 million and $16.6 million for the quarters ended December 31, 2003 and 2002, respectively.

Interest expense was $31.2 million and $31.4 million for the quarters ended December 31, 2003 and 2002, respectively. AMERCO’s interest expense, excluding SAC, was $19.7 and $22.0 million for the quarters ended December 31, 2003 and 2002, respectively. Interest expense of SAC Holdings on third party debt was $11.4 million and $9.4 million for the quarter ended December 31, 2003 and 2002, respectively.

Pretax loss was $32.2 million and $64.7 million for the quarters ended December 31, 2003 and 2002, respectively. After providing for income taxes, net losses were $21.7 million and $45.8 million for the quarters ended December 31, 2003 and 2002, respectively.

Rental revenue was $1,220.0 million and $1,146.8 million for the nine months ended December 31, 2003 and 2002, respectively. The increase from the prior year reflects increased equipment rental revenues which can be attributed to an increase in the average dollar per transaction, improved equipment utilization, and increases in storage revenues due to an increase in the number of rooms rented and improved pricing.

Net sales revenues were $142.4 million and $137.6 million for the nine months ended December 31, 2003 and 2002, respectively. The increase in sales reflects improved sales of propane and moving support items.

Cost of sales were $70.1 million and $71.5 million for the nine months ended December 31, 2003 and 2002, respectively. The decrease was due to a shift in the mix of products sold.

Operating expenses before inter-company eliminations were $817.8 million and $824.3 million for the nine months ended December 31, 2003 and 2002, respectively. Decreases in advertising, telephone, utility and other operating expenses caused the decrease.

Lease expense was $110.8 million and $120.4 million for the nine months ended December 31, 2003 and 2002, respectively. The decrease is due to a decrease in the number of trucks leased.

Net depreciation expense was $93.7 million and $83.9 million for the nine months ended December 31, 2003 and 2002, respectively. Depreciation from rental trucks acquired off lease, an increase in depreciation on pickups and vans, and increased losses on disposition of fixed assets is responsible for the increase in net depreciation expense.

Operating profit before inter-company eliminations was $153.8 million and $63.4 million for the nine months ended December 31, 2003 and 2002, respectively.

Rental revenue before inter-company eliminations was $50.3 million and $51.4 million for the nine months ended December 31, 2003 and 2002, respectively. Inter-company revenue was $45.7 and $45.1 million for the nine months ended December 31, 2003 and 2002, respectively.

Net investment and interest income was $6.0 million and $8.0 million for the nine months ended December 31, 2003 and 2002, respectively.

Lease expense was $10.7 million and $7.5 for the nine months ended December 31, 2003 and 2002, respectively. The increase is a result of the increase in lease expense for storage facilities.

Net depreciation expense was $5.1 million and $5.4 million for the nine months ended December 31, 2003 and 2002, respectively.

Operating profit before inter-company eliminations was $40.5 million and $41.5 million for the nine months ended December 31, 2003 and 2002, respectively.

RepWest’s earned premiums were $78.2 million and $126.9 million for the nine months ended September 30, 2003 and 2002, respectively. General agency premiums were $56.4 million and $68.5 million for the nine months ended September 30, 2003 and 2002, respectively. The decrease in 2003 is due to RepWest exiting its non-U-Haul related lines. Assumed treaty reinsurance premiums were $2.1 million and $29.1 million for the nine months ended September 30, 2003 and 2002, respectively. The decrease from 2002 to 2003 is due to the cancellation of RepWest’s assumed treaty business. Rental industry earned premiums were $19.7 million and $29.2 million for the nine months ended September 30, 2003 and 2002, respectively. The 2003 decrease was from a change in policy structure on U-Haul business effective April 1, 2003.

Net investment income was $19.2 million and $21.5 million for the nine months ended September 30, 2003 and 2002, respectively. The decrease is attributable to lower average invested assets.

Benefits and losses incurred were $89.6 million and $111.7 million for the nine months ended September 30, 2003 and 2002, respectively. The decrease is primarily due to decreased earned premiums in all segments of the RepWest’s business, which was offset partially by the reserve strengthening on discontinued lines.

The net amortization of deferred acquisition costs (DAC) were $11.8 million and $13.2 million for the nine months ended September 30, 2003 and 2002, respectively. The decrease is due to RepWest’s decreased earned premiums.

Operating expenses were $17.8 million and $26.2 million for the nine months ended September 30, 2003 and 2002, respectively. The decrease is due to reduced general administrative expenses, as a result of the discontinuance of non-related U-Haul lines.

Operating loss before tax was $21.8 million and $2.8 million for the nine months ended September 30, 2003 and 2002, respectively. The increase in the loss is due to further loss development and reserve strengthening on cancelled lines of business that were written in prior years.

Net premiums were $112.9 million and $121.1 million for the nine months ended September 30, 2003 and 2002, respectively. Life insurance premium and annuitizations decreased $2.8 million from the same period in 2002. Credit insurance premiums decreased $3.6 million for the nine months. Other business segments had premium decreases totaling $1.9 million.

Net investment income before inter-company eliminations was $15.4 million and $13.0 million for the nine months ended September 30, 2003 and 2002, respectively. This is primarily due to fewer other than

Benefits incurred were $80.2 million and $88.4 million for the nine months ended September 30, 2003 and 2002, respectively. Medicare supplement incurred benefits decreased $4.7 million and credit life and disability decreased $1.8 million from reduced populations and improved loss experience. Other segments had benefit decreases totaling $1.7 million.

Amortization of deferred acquisition cost (DAC) and the value of business acquired (VOBA) was $17.0 million and $14.7 million for the nine months ended September 30, 2003 and 2002, respectively. The increase is primarily due to surrender activity from the deferred annuity segment that has occurred since AMERCO’s bankruptcy filing and Oxford’s subsequent rating decline.

Operating expenses were $23.2 million and $29.6 million for the nine months ended September 30, 2003, and 2002, respectively. Commission expenses decreased $2.0 million as new sales declined. Fees collected from annuity policies that surrendered increased $3.2 million offsetting the increases in DAC amortization. General and administrative expenses net of fees collected decreased $1.2 million.

Operating profit before tax and inter-company eliminations was $7.8 million and $1.4 million for the nine months ended September 30, 2003 and 2002, respectively. The improvement is due to fewer write-downs of bonds and from better loss experience in the Medicare supplement segment.

Total revenues consist of storage rental revenues, vehicle rental commissions and net sales. Total rental revenue was $127.4 million and $123.8 million for the nine months ended December 31, 2003 and 2002, respectively.

Net sales revenues were $39.6 million and $38.1 million for the nine months ended December 31, 2003 and 2002, respectively. Propane and hitch sales accounted for the increase.

Operating expenses before inter-company eliminations were $81.5 million and $74.9 million for the nine months ended December 31, 2003 and 2002, respectively. Increased expenses were the result of increased payroll, advertising, property tax expenses, and liability insurance.

Cost of sales increased to $16.9 million from $16.0 million for the nine months ended December 31, 2003 and 2002, respectively. This increase was due to increased sales volume.

Net depreciation expense was $16.0 million and $14.5 million for the nine months ended December 31, 2003 and 2002, respectively. The increase is due to an increased loss on disposal of assets.

Operating profits were $52.6 million and $56.5 million for the nine months ended December 31, 2003 and 2002, respectively.

Interest expense was $92.8 million and $86.3 million for the nine months ended December 31, 2003 and 2002, respectively. AMERCO’s interest expense was $60.4 and $54.1 million for the nine months ended December 31, 2003 and 2002, respectively. AMERCO’s interest expense increased despite lower overall average debt outstanding due to an increase in the average cost of debt resulting from default interest. Interest expense of SAC Holdings on third party debt was $32.5 million and $32.2 million for the nine months ended December 31, 2003 and 2002, respectively.

Pretax earnings were $80.7 million and $6.9 million for the nine months ended December 31, 2003 and 2002, respectively. After providing for income taxes, net earnings were $50.1 million and $0.1 million for the nine months ended December 31, 2003 and 2002, respectively.

The matters described in “Liquidity and Capital Resources” to the extent that they relate to future events or expectations, may be significantly affected by the Chapter 11 case. That proceeding involves, or may result in, various restrictions on the Company’s activities, limitations on financing, the need to obtain Bankruptcy Court approval for various matters and uncertainty as to relationships with vendors, suppliers, customers and others with whom the Company may conduct or seek to conduct business.

Generally, under the Bankruptcy Code, most of a debtor’s liabilities must be satisfied in full in order to preserve the value of the debtor’s preferred and common stock. The rights and claims of the Company’s various creditors and security holders will be determined by the plan of reorganization filed by AMERCO. Although AMERCO expects to consummate a “full value” plan of reorganization that provides creditors with a combination of cash and new debt securities equal to the full amount of their allowed claims and also preserves the value of AMERCO’s common and preferred stock, no assurance can be given as to what values will be ascribed in the bankruptcy proceedings to each of these constituencies.

To meet the needs of its customers, U-Haul must maintain a large inventory of fixed asset rental items. Historically capital expenditures have primarily reflected new rental truck acquisitions and storage expansion. The capital required to fund these expenditures has historically been obtained through internally generated funds from operations, indebtedness and lease financing.

During each of the fiscal years ending March 31, 2004, 2005 and 2006, U-Haul estimates gross capital expenditures will average approximately $150 million to maintain the rental fleet at current levels. Management estimates that U-Haul will fund these requirements with leasing, internally generated funds and proceeds from the sale of trucks and surplus assets. The level of capital expenditures may be affected by the amount of internally generated funds and proceeds from the sale of assets.

At December 31, 2003, Real Estate had $101.5 million of notes and loans payable due in less than one year and its accounts payable and accrued expenses total $4.0 million. Real Estate financial assets (cash, receivables, inventories, and short term investments) at December 31, 2003 were $14.6 million.

At September 30, 2003, RepWest had no notes and loans due in less than one year and its accounts payable and accrued expenses were $1.4 million. RepWest’s financial assets (cash, receivables, inventories, short-term investments and fixed maturities) at September 30, 2003 were $545.0 million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies.

RepWest’s cash and cash equivalents and short-term investment portfolio were $61.2 million and $29.6 million at September 30, 2003, and 2002, respectively.

Stockholder’s equity was $174.9 million and $213.1 million at September 30, 2003, and 2002, respectively. RepWest considers current stockholder’s equity to be adequate to absorb unforeseen risk events.

At September 30, 2003, Oxford had no notes and loans payable due in less than one year and its accounts payable and accrued expenses total $0.7 million. Life Insurance financial assets (cash, receivables, inventories, short-term investments, other investments, and fixed maturities) at September 30, 2003 were $873.8 million. State insurance regulations restrict the amount of dividends that can be paid to stockholders of insurance companies.

In addition to cash flows from operating and financing activities, a substantial amount of liquid funds is available through Oxford’s short-term portfolio. At September 30, 2003, and 2002 short-term investments

Stockholder’s equity increased to $117.2 million from $104.3 million in 2002. The increase from 2002 is a result of earnings and changes in market value for the available for sale investment portfolio.

Oxford is in compliance with the NAIC minimum risk-based capitalization (RBC) requirements.

SAC Holdings operations are funded by various mortgage loans and unsecured notes, with interest rates ranging from 5.0% to 13.0%. SAC Holdings does not utilize revolving lines of credit to finance its operations or acquisitions. Certain of SAC Holdings’ agreements contain restrictive covenants and restrictions on incurring additional subsidiary indebtedness. At December 31, 2003, SAC Holdings was in compliance with all of these covenants.

At December 31, 2003, SAC Holdings’ notes and loans payable due in less than one year total $32.9 million and its accounts payable and accrued expenses total $46.2 million. SAC Holdings’ financial assets (cash, receivables, inventories, and short term investments) at December 31, 2003 were $8.8 million. Because AMERCO does not have any equity ownership in SAC Holdings (other than investments made by RepWest and Oxford in a SAC Holdings-controlled limited partnership which holds Canadian self-storage properties), these assets are not available to meet the obligations of AMERCO.

At December 31, 2003, total outstanding notes and mortgages payable for SAC Holdings and consolidated subsidiaries, before inter-company eliminations were $990.1 million as compared to $983.2 million at March 31, 2003. SAC Holdings’ creditors have no recourse to AMERCO. AMERCO is not liable for the debts of SAC Holdings. Further, there are no cross default provisions on indebtedness between AMERCO and SAC Holdings.

At December 31, 2003, total outstanding notes and mortgages payable for AMERCO and wholly owned subsidiaries was $957.0 million compared to $954.9 million at March 31, 2003.

AMERCO’s operations were previously funded by various credit and financing arrangements, including unsecured long-term borrowings, unsecured medium-term notes and revolving lines of credit with domestic and foreign banks. To finance its fleet of trucks and trailers, U-Haul routinely enters into leasing transactions. As of December 31, 2003, AMERCO had $957.0 million in total notes and loans outstanding.

Certain of AMERCO’s credit agreements contained restrictive financial and other covenants, including, among others, covenants with respect to incurring additional indebtedness, making third party guarantees, entering into contingent obligations, maintaining certain financial ratios and placing certain additional liens on its properties and assets and restricting the issuance of certain types of preferred stock AMERCO’s various credit and financing arrangements are affected by its credit ratings.

On October 15, 2002, AMERCO failed to make a $100 million principal payment due to the Series 1997-C Bond Backed Asset Trust. On that date, AMERCO also failed to pay a $26.5 million obligation to Citibank and Bank of America in connection with the BBATs. As a result of the foregoing, AMERCO is in default with respect to its other credit arrangements that contain cross-default provisions, including its Revolver. In addition to the cross-default under the Revolver, AMERCO is also in default under that agreement as a result of its failure to obtain incremental net cash proceeds and/or availability from additional financings in the aggregate amount of at least $150 million prior to October 15, 2002. In addition, Amerco Real Estate Company has defaulted on a $100 million loan by failing to grant mortgages required by the loan agreement in a timely manner. The obligations of AMERCO currently in default (either directly or as a result of a cross-default) are approximately $1,121.2 million.

In February 1997, AMERCO, through its insurance subsidiaries, made an equity investment in Private Mini. During 1997, Private Mini secured a line of credit in the amount of $225 million with a financial institution, which was subsequently reduced in accordance with its terms to $125 million in December 2001. Under the terms of this credit facility AMERCO entered into a support party agreement with Private Mini and the financial institution whereby upon certain defaults or noncompliance with debt covenants by Private Mini, AMERCO could be required to assume responsibility in fulfilling all payment obligations and certain covenant obligations related to this credit facility. Private Mini defaulted on the credit facility due to AMERCO’s default under the support party agreement, which support party agreement default was triggered by virtue of cross-defaults to certain other AMERCO obligations. Additionally, Private Mini defaulted under the credit facility by virtue of non-payment of the outstanding balance at maturity. In December 2002, the financing institution exercised its option to require AMERCO to purchase all commitments under the credit facility. In March, 2003 AMERCO and the financial institution entered a standstill agreement with respect to this obligation, which standstill agreement expired by its terms on April 30, 2003. Since April 30, 2003, the financial institution has not re-issued any default notices to AMERCO with respect to this obligation or otherwise required AMERCO to purchase all commitments under the credit facility. AMERCO has not purchased any commitments under the credit facility and, as of December 31, 2003, AMERCO has recorded a liability for the $55 million remaining balance under the credit facility with a corresponding increase to its receivable from Private Mini.

In February 2003, an entity affiliated with Private Mini closed on a $255 million financing and $70 million of these proceeds were used to pay down the $125 million line of credit described above. The aggregate amount of support provided by AMERCO remains unchanged at $125 million ($55 million to the lenders under the Amended and Restated loan agreement with the 1997 lenders and $70 million under the new $255 million financing). Under the terms of the support party agreement for the $255 million financing, following certain events of default, AMERCO would assume responsibility for $70 million of the obligations under this financing. AMERCO has recorded a liability for the $70 million obligation with a corresponding increase to its receivable from Private Mini. In June 2003, AMERCO’s insurance subsidiaries sold their equity interest in Private Mini to SAC Holding.

On June 20, 2003 (the “Petition Date”), AMERCO filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court, District of Nevada (the “Bankruptcy Court”) (Case No. 0352103). AMERCO continues to manage its properties and operate its businesses as “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. In general, as debtor-in-possession, AMERCO is authorized under Chapter 11 to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Specific information pertaining to the bankruptcy filing may be obtained from the website www.amerco.com. The consolidated financial statements do not include any adjustments to reflect future effects on the recoverability and classification of assets or the amount and classification of liability that might result from these uncertainties. The Company’s independent auditors qualified their opinion on the Company’s March 31, 2003 financial statements by including an explanatory paragraph in which they expressed substantial doubt about the Company’s ability to continue as a going concern.

order. The confirmation order will become final if it is not appealed within ten days after entry and AMERCO intends to proceed to implement the Plan and emerge from bankruptcy as soon as possible thereafter.

The DIP Facility consists of a $300 million credit facility with an interest rate option of LIBOR plus 3.5% or the prime rate plus 1.0%. The DIP Facility will mature on the earlier of (i) 12 months following the Bankruptcy Court’s order approving the facility; (ii) ten days following the date of entry of an order confirming AMERCO’s plan of reorganization; or (iii) the conversion of the Chapter 11 case to a case under Chapter 7. In order to facilitate a drawing on the DIP Facility, Real Estate filed for Chapter 11. This filing was needed to facilitate granting security to the lending group in the real estate assets owned by Real Estate. The DIP Facility was approved by the Bankruptcy Court on September 26, 2003.

On August 14, 2003, the Bankruptcy Court approved the use of $56 million of DIP Facility proceeds to reduce the amount outstanding under the Revolver and to pay financing fees.

The terms of the DIP Facility include covenants that require AMERCO to maintain agreed upon minimum levels of EBITDA, EBITDAR and fixed charge coverage ratios. The DIP Facility also contains a limitation on capital expenditures. All such financial covenants are tested monthly. Other customary covenants (both positive and negative) are included in the DIP Facility.

In addition, AMERCO has entered into a restructuring agreement with the revolver lenders and a Plan Support Agreement with the Official Committee of Unsecured Creditors. Amerco Real Estate Company has entered into a restructuring agreement with the holders of $100 million of its notes. Both agreements govern the consensual treatment of such creditors under AMERCO’s Plan of Reorganization and such creditors have supported confirmation of the Plan.

SAC Holdings intends to meet its current debt obligations through cash flows, generated from its operating activities. SAC Holdings intends to continue to purchase storage properties during the next year using financing arrangements.

At December 31, 2003, total outstanding notes and mortgages payable for AMERCO and consolidated subsidiaries was $957.0 million compared to $954.9 million at March 31, 2003. The Company’s total of cash, cash equivalents and short-term investments was $136.9 million at December 31, 2003, compared to $66.8 million at March 31, 2003. At December 31, 2003, total outstanding notes and mortgages payable for SAC Holdings and consolidated subsidiaries, before inter-company eliminations were $990.1 million as compared to $983.2 million at March 31, 2003. SAC Holdings’ creditors have no recourse to AMERCO. AMERCO is not liable for the debts of SAC Holdings.

Due to the defaults and various cross defaults, the consolidated group has notes, loans and lease obligations due in one year of $1.1 billion. The group also had accounts payable and accrued expenses of $359.2 million. Liquid assets for the group totaled $431.4 million.

Cash provided by operating activities was $115.2 million and $78.0 million for the nine months ended December 31, 2003 and 2002, respectively. The increase is due to improved earnings.

Cash used by operating activities was $1.2 million and $90.8 million for the nine months ended December 31, 2003 and 2002, respectively. The decrease in cash used is from a reduction in acquisitions and construction.

Cash flows used by operating activities were $55.6 million and $45.1 million for the nine months ended September 30, 2003 and 2002, respectively. The increase in 2003 over 2002 is a result of an increase in reinsurance recoverables. The overall use of cash for operating activities is a result of the company exiting non-U-Haul lines, and reducing unearned premium and losses associated with the exit.

Cash provided/(used) by operating activities was $11.8 million and ($19.0) million for the nine months ended September 30, 2003 and 2002, respectively. The increase in cash flows from operating activities in 2003 related to $7.0 million less of federal income taxes paid, $10.0 million less in commissions paid, and the timing of the collection of receivables.

Cash flows provided by operating activities were $1.2 million and $4.7 million for the nine months ended December 31, 2003 and 2002, respectively.

Cash provided by operating activities was $151.2 million and $147.7 million for the nine months ended December 31, 2003 and 2002, respectively.

At December 31, 2003, total outstanding notes and mortgages payable for AMERCO and wholly owned subsidiaries was $957.0 million compared to $954.9 million at March 31, 2003. At December 31, 2003, total outstanding notes and mortgages payable for SAC Holdings and consolidated subsidiaries was $990.1 million compared to $983.2 million at March 31, 2003. SAC Holdings’ securitized loan agreements have no guarantees, or triggers that could create a guarantee, from AMERCO.

AMERCO does not have any ownership interest in SAC Holdings or its subsidiaries, except for investments made by RepWest and Oxford in a SAC Holdings controlled limited partnership which holds Canadian self-storage properties. The presentation of the consolidated statements has no bearing on the credit agreements or the operations of either AMERCO or SAC Holdings.

As discussed above and in Part II, Item 3 “Defaults Upon Senior Securities”, on October 15, 2002 we defaulted on our BBATs and related obligations. This default triggered cross-default provisions in most of AMERCO’s other debt agreements. As a result, approximately $1,121.2 million of AMERCO’s contractual obligations and commercial commitments listed below are classified as current.

Following its emergence from bankruptcy, AMERCO expects its debt structure, excluding the synthetic leases and the indebtedness of SAC Holdings, to be as follows:

The aggregate principal amount of SAC Holdings indebtedness will remain substantially unchanged following AMERCO’s emergence from bankruptcy.

On June 20, 2003, AMERCO filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. AMERCO’s subsidiaries were not included in the initial filing. However, on August 13, 2003, Amerco Real Estate Company filed for protection under Chapter 11. AMERCO is continuing to manage its properties and operate its businesses as “debtor-in-possession in” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. In order to exit Chapter 11 successfully, AMERCO will need to obtain confirmation by the Bankruptcy Court of, a plan of reorganization that satisfies the requirements of the Bankruptcy Code. Although AMERCO has filed a “full-value” plan of reorganization that provides creditors with a combination of cash and new debt securities equal to the full amount of their allowed claims as well as AMERCO’s emergence from bankruptcy as a going concern, there can be no assurance at this time that a plan of reorganization will be confirmed by the Bankruptcy Court or that any such plan will be implemented successfully.

The Company’s future results depend on the timely and successful confirmation and implementation of a plan of reorganization. The rights and claims of various creditors and security holders will be determined by the plan as well. Although AMERCO has filed and plans to consummate a “full value” plan of reorganization

that provides creditors with a combination of cash and new debt securities equal to the full amount of their allowed claims and also preserves the value of AMERCO’s common and preferred stock, no assurance can be given as to what values will be ascribed in the bankruptcy proceedings to each of these constituencies. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in any of such securities and claims.

AMERCO’s credit facility and the indentures to be entered into contemporaneous with our emergence from bankruptcy, contain a number of restrictive covenants that will impose significant operating and financial restrictions on us. Our failure to comply with such covenants, including as a result of events beyond our control, could result in an event of default which could materially and adversely affect our operating results and our financial condition. If there were an event of default under our contemplated debt instruments, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately. We cannot assure you that our assets, refinance proceeds or cash flow would be sufficient to fully repay borrowings under such debt instruments, either upon maturity or, if accelerated, upon an event of default. In addition, any event of default or declaration of acceleration under one debt instrument would likely also result in an event of default under one or more of our other future debt instruments.

The truck rental industry is highly competitive and includes a number of significant national and hundreds of regional and local competitors. Competition is generally based on price, product quality, convenience, availability, brand name recognition and service. In our truck rental business, we face competition from Budget Car and Truck Rental Company and Penske Truck Leasing. Some of our competitors may have greater financial resources than we have. We cannot assure you that we will not be forced to reduce our rental prices or delay price increases.

We compete with national and regional self-storage operators as well as local operators. Competition in the market areas in which we operate is significant and affects the occupancy levels, rental rates and operating expenses of our facilities. Competition might cause us to experience a decrease in occupancy levels, limit our ability to increase rental rates and compel us to offer discounted rental rates which could have a material adverse effect on our operating results.

Entry into the self-storage business through acquisition of existing facilities is possible for persons or institutions with the required initial capital. Development of new self-storage facilities is more difficult, however, due to zoning, environmental and other regulatory requirements. The self-storage industry has in the past experienced overbuilding in response to perceived increases in demand. We cannot assure you that we will be able to successfully compete in existing markets or expand into new markets.

As of December 31, 2003, Edward J. Shoen, Chairman of the Board of Directors and President of AMERCO, James P. Shoen, a director of AMERCO, and Mark V. Shoen, an executive officer of AMERCO, collectively own 8,689,933 shares (approximately 42.4%) of the outstanding common shares of AMERCO. Accordingly, Edward J. Shoen, Mark V. Shoen and James P. Shoen will be in a position to continue to influence the election of the members of the Board of Directors and approval of significant transactions. In addition, 2,372,002 shares (approximately 11.7%) of the outstanding common shares of AMERCO, including shares allocated to employees and unallocated shares, are held by our Employee Savings and Employee Stock Ownership Trust.

Compliance with environmental requirements of federal, state and local governments significantly affects our business. Among other things, these requirements regulate the discharge of materials into the water, air and land and govern the use and disposal of hazardous substances. Under environmental laws, we can be held strictly liable for hazardous substances that are found on real property we have owned or operated. We are aware of issues regarding hazardous substances on some of our real estate and we have put in place a remedial plan at each site where we believe such a plan is necessary. We regularly make capital and operating expenditures to stay in compliance with environmental laws. In particular, we have managed a testing and removal program since 1988 for our underground storage tanks. Under this program, we spent $43.7 million between April 1988 and March 31, 2003. Despite these compliance efforts, risk of environmental liability is part of the nature of our business.

Environmental laws and regulations are complex, change frequently and could become more stringent in the future. We cannot assure you that future compliance with these regulations or future environmental liabilities will not have a material adverse effect on our business.

Our business is seasonal and our results of operations and cash flows fluctuate significantly from quarter to quarter. Historically, revenues have been stronger in the first and second fiscal quarters due to the overall increase in moving activity during the spring and summer months. The fourth fiscal quarter is generally weakest, when there is a greater potential for adverse weather conditions.

In the last ten years, we purchased all of our rental trucks from Ford and General Motors. Although we believe that we have alternative sources of supply for our rental trucks, termination of one or more of our relationships with any of these suppliers could have a material adverse effect on our business, financial condition or results of operations.

Our property and casualty insurance business, RepWest, has reported losses totaling approximately $135 million since January 1, 2000. These losses are primarily attributable to business lines that were unprofitable as underwritten. To restore profitability in RepWest, we are exiting all non-U-Haul related lines and the exit may result in near term losses as these lines are eliminated. Although we believe the changes will have a positive impact on the financial position of RepWest, we cannot assure you that we will be successful in returning RepWest to sustained profitability. Our inability to sustain profitability could have a material adverse effect on our earnings and financial position.

A.M. Best has downgraded RepWest and Oxford. These downgrades have affected their standing in the insurance industry and caused their premiums to decrease. Ratings have become an increasingly important factor in establishing the competitive position of insurance companies. A.M. Best ratings reflect its opinion of an insurance company’s financial strength, operating performance, strategic position and ability to meet its obligations to policyholders. The A.M. Best ratings are C for RepWest and C+ for Oxford.

At December 31, 2003, we held $403.5 million of mortgage loans and notes due from SAC Holdings. Although these assets have been eliminated in the consolidated financial statements, we have significant economic exposure to SAC Holdings. SAC Holdings is highly leveraged with total outstanding indebtedness

and other obligations of $990.1 million at December 31, 2003. We hold various unsecured notes of SAC Holdings. If SAC Holdings are unable to meet their obligations to their senior lenders, it could trigger a default on their obligations to us. In such an event of default, we could suffer a significant loss to the extent the value of the underlying collateral on our loans to SAC Holdings is inadequate to repay SAC Holdings’ senior lenders and us. We cannot assure you that SAC Holdings will not default on their loans to their senior lenders or that the value of SAC Holdings’ assets upon liquidation would be sufficient to repay us in full.

As a holding company with no business operations, AMERCO’s material assets consist only of the stock of its subsidiaries. AMERCO will have to rely upon dividends and other payments from its subsidiaries to generate the funds necessary to pay its obligations. The ability of AMERCO’s subsidiaries to make dividend and other payments to AMERCO is subject to, among other things, the availability of funds, the terms of the indebtedness of AMERCO’s subsidiaries and applicable state laws and insurance regulations.

The SEC has issued a formal order of investigation to determine whether we have violated the Federal securities laws. Although we have fully cooperated with the SEC in this matter and intend to continue to fully cooperate, the SEC may determine that we have violated Federal securities laws. We cannot predict when this investigation will be completed or its outcome. If the SEC makes a determination that we have violated Federal securities laws, we may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief.

In addition, the Company has been named a defendant in a number of class action and related lawsuits. The findings and outcome of the SEC investigation may affect the class-action lawsuits that are pending. We are generally obliged, to the extent permitted by law, to indemnify our directors and officers who are named defendants in some of these lawsuits. We are unable to estimate what our liability in these matters may be, and we may be required to pay judgments or settlements and incur expenses in aggregate amounts that could have a material adverse effect on our financial condition or results of operations.

On June 24, 2003, we received a letter from NASDAQ indicating that, in light of AMERCO’s recent Chapter 11 filing, a NASDAQ Listing Qualifications Panel (the “Panel”) would consider such filing and associated concerns in rendering a determination regarding AMERCO’s listing status. NASDAQ has requested, and we have provided, information regarding the Chapter 11 filing and the anticipated effect of the filing on the shareholders of AMERCO. On September 12, 2003, AMERCO received a letter from Nasdaq indicating that the Panel has determined to continue the listing of AMERCO’s common stock on Nasdaq provided that on or before February 27, 2004, AMERCO submits documentation to Nasdaq evidencing that its plan of reorganization has been confirmed by the bankruptcy court and on or before March 15, 2004, AMERCO submits documentation to Nasdaq evidencing its emergence from bankruptcy. In addition to the foregoing, AMERCO must comply with all other requirements for continued listing on Nasdaq and must timely file all periodic reports with the SEC for all periods ending on or before June 30, 2004, without the benefit of any extensions provided pursuant to Exchange Act Rule 12b-25. Although we intend to take all actions available to maintain our Nasdaq listing, there can be no assurance that AMERCO will be able to do so.

On May 20, 2003, RepWest consented to an Order of Supervision issued by the DOI. Pursuant to this Order and Arizona law, during the period of supervision, RepWest may not engage in certain activities without the prior approval of the DOI.

If RepWest fails to satisfy the concerns of the DOI, the DOI may take further action, including, but not limited to, commencing a conservatorship.

Reference is made to Part II, Item 7A, Quantitative and Qualitative Disclosure About Market Risk, in AMERCO’s Annual Report on Form 10-K for the fiscal year ended March 31, 2003.

We maintain disclosure controls procedures, which are designed to ensure that information related to AMERCO and its subsidiaries and SAC Holdings and their subsidiaries, is disclosed in our public filings in a timely manner. In response to recent legislation and new SEC regulations, we reviewed our internal control structure and our disclosure controls and procedures. We believe our disclosure controls and procedures are adequate to enable us to comply with our disclosure obligations.

As of the end of the period covered by this report, members of the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, management concluded that the Company’s disclosure controls and procedures are effective in causing material information to be recorded, processed, summarized and reported by management of the Company on a timely basis and to ensure that the quality and timeliness of the Company’s public disclosures complies with its SEC disclosure obligations.

During the period covered by this report we made no change in our internal control over financial reporting which may materially affect, or is reasonably likely to materially affect, our internal control over financial reporting.

On July 20, 2000, Charles Kocher (“Kocher”) filed suit in Wetzel County, West Virginia, Civil Action No. 00-C-51-K, entitled Charles Kocher v. Oxford Life Insurance Co. (“Oxford”) seeking compensatory and punitive damages for breach of contract, bad faith and unfair claims settlement practices arising from an alleged failure of Oxford to properly and timely pay a claim under a disability and dismemberment policy. On March 22, 2002, the jury returned a verdict of $5 million in compensatory damages and $34 million in punitive damages. On November 5, 2002, the trial court entered an Order (“Order”) affirming the $39 million jury verdict and denying Oxford’s motion for New Trial Or, in The Alternative, Remittitur. Oxford has perfected its appeal to the West Virginia Supreme Court. Oral argument on the appeal petition occurred on September 9, 2003. On September 10, 2003, the West Virginia Supreme Court granted in part, Oxford’s petition. On January 27, 2004, the matter was argued before the West Virginia Supreme Court and taken under advisement. Management does not believe that the Order is sustainable and expects the Order to be overturned by the West Virginia Supreme Court, in part because the jury award has no reasonable nexus to the actual harm suffered by Kocher. The Company has accrued $725,000, which represents management’s best estimate of the costs associated with legal fees to appeal and re-try the case and the Company’s uninsured exposure to an unfavorable outcome.

Amerco Real Estate Company, which filed for protection under Chapter 11, on August 13, 2003. On October 6, 2003, AMERCO filed its Plan of Reorganization and Disclosure Statement with the Bankruptcy Court. On November 26, 2003, AMERCO filed an Amended Plan of Reorganization (the “Plan”). On December 12, 2003, the Bankruptcy Court approved AMERCO’s Disclosure Statement. On February 2, 2004, the Bankruptcy Court confirmed the Plan contingent upon completion of documentation and agreements acceptable to the involved parties and the submission of proposed findings of fact and conclusions of law and a confirmation order acceptable to all involved parties. AMERCO expects that by fiscal year end (i) it will satisfy the above contingencies and (ii) the Bankruptcy Court will execute a confirmation order. The confirmation order will become final if it is not appealed within ten days after entry and AMERCO intends to proceed to implement the Plan and emerge from bankruptcy as soon as possible thereafter.

The United States Department of Labor (“DOL”) is presently investigating whether there were violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) involving the AMERCO Employee Savings, Profit Sharing, and Employee Stock Ownership Plan (the “Plan”). The DOL has interviewed a number of Company representatives as well as the Plan fiduciaries and has issued a subpoena to the Company and a subpoena to SAC Holdings. One of the issues raised by the DOL relates to the release of shares from the Plan’s loan suspense account. The Company believes that it has resolved this particular issue by contributing additional shares. At the present time, the Company is unable to determine whether the DOL will assert any other claims against the Company, SAC Holdings, or the Plan fiduciaries. The DOL has asked AMERCO and its current directors as well as the Plan Trustees to sign an agreement tolling the statute of limitations with respect to any claims arising out of certain transactions between AMERCO or any affiliate of AMERCO and SAC Holdings or any of its affiliates and such persons have done so. The DOL has not advised the Company that it believes that any other violations of ERISA have in fact occurred. Instead, the DOL is simply investigating potential violations. The Company intends to defend its position. The Company also intends to take any corrective action that may be needed in light of the DOL’s ultimate findings. Although the Company has fully cooperated with the DOL in this matter and intends to continue to fully cooperate, the DOL may determine that the Company has violated ERISA. In that event, the Company may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief.

(a) On October 15, 2002, AMERCO failed to make a $100 million principal payment and a $3.6 million interest payment due to the Series 1997-C Bond Backed Asset Trust. On that date, AMERCO also failed to pay $26.6 million in the aggregate to Citibank and Bank of America in connection with the early extinguishment of the Series 1997-C bonds. As a result of the foregoing, AMERCO is in default with respect to the other contractual obligations and commercial commitments listed below, which contain cross-default provisions, including its 3-Year Credit Agreement dated June 28, 2002 (the “Revolver”). In addition to the cross-default under the Revolver, AMERCO is also in default under that agreement as a result of its failure to obtain incremental net cash proceeds and/or availability from additional financings in an aggregate amount of at least $150.0 million prior to October 15, 2002. In addition, Amerco Real Estate Company has defaulted on a $100 million loan by failing to grant mortgages required by the loan agreement in a timely manner. The total

(b) AMERCO has not paid the December 1, 2002 and any of the 2003 quarterly dividend payments to holders of its Series A 8.5% Preferred Stock. No assurance can be given as to when or whether the payment of the deferred preferred stock dividends will be made. The total amount of Series A 8.5% Preferred Stock dividends in arrears is $16.2 million. However, on February 4, 2004, AMERCO declared a regular quarterly dividend on the Series A 8 1/2 Preferred Stock. The dividend is payable on March 1, 2004 subject to the Bankruptcy Court execution of the findings of fact, conclusions of law, and order confirming Debtors’ First Amended Joint Plan of Reorganization. AMERCO anticipates resumption of Preferred Stock cash dividends on a quarterly basis going forward and will address the deferred dividend payments subsequent to its emergence from bankruptcy.

The 2003 Annual Meeting of Stockholders was held on November 7, 2003. At the 2003 Annual Meeting of Stockholders, John P. Brogan and James J. Grogan were elected to serve until the 2007 Annual Meeting of Stockholders. Edward J. Shoen and M. Frank Lyons continue as directors with terms that expires at the 2004 Annual Meeting of Stockholders; John M. Dodds and James P. Shoen continue as directors with terms that expire at the 2005 Annual Meeting of Stockholders; and William E. Carty and Charles J. Bayer continue as directors with terms that expire at the 2006 Annual Meeting of Stockholders. The following table sets forth the votes cast for, against or withheld, as well as the number of abstentions and broker non-votes with respect to each matter voted on at the 2003 Annual Meeting of Stockholders.

For inclusion in the proxy statement and form of proxy relating to the 2004 Annual Meeting of Stockholders, a proposal intended for presentation at that meeting must be submitted in accordance with the applicable rules of the Securities and Exchange Commission and received by the Secretary of AMERCO, c/o U-Haul International, Inc., 2721 North Central Avenue, Phoenix, Arizona 85004, on or before June 3,

2004. Proposals to be presented at the 2004 Annual Meeting of Stockholders that are not intended for inclusion in the proxy statement and form of proxy must be submitted by that date and in accordance with the applicable provisions of the Company’s By-Laws, a copy of which is available upon written request, delivered to the Secretary of AMERCO at the address in the preceding sentence. The Company suggests that proponents submit their proposals to the Secretary of AMERCO by Certified Mail-Return Receipt Requested.


(1)	Incorporated by reference to AMERCO’s Current Report on Form 8-K filed October 20, 2003, file no. 1-11255.

(2)	Incorporated by reference to AMERCO’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1992, file no. 1-11255.

(3)	Incorporated by reference to AMERCO’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, file no. 1-11255.

(4)	Incorporated by reference to AMERCO’s Annual Report on Form 10-K for the year ended March 31, 2003, file no. 1-11255.

On October 20, 2003, we filed a Form 8-K announcing that we have filed our Plan of Reorganization and Disclosure Statement with the United States Bankruptcy Court, District of Nevada on October 6, 2003 and that a court hearing on the adequacy of the Disclosure Statement is scheduled for November 18, 2003.

On November 20, 2003, we filed an amendment to Form 8-K dated September 5, 2003 to include information about non-GAAP financial measures disclosed during our first quarter earnings conference call, including reconciliations to comparable GAAP measures.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	By:	/s/ EDWARD J. SHOEN



	Edward J. Shoen
	President and Chairman of the Board
	(Duly Authorized Officer)


	By:	/s/ GARY B. HORTON



	Gary B. Horton
	Treasurer
	(Principal Financial Officer)


	By:	/s/ EDWARD J. SHOEN



	Edward J. Shoen
	President and Chairman of the Board
	(Duly Authorized Officer)


	By:	/s/ GARY B. HORTON



	Gary B. Horton
	Assistant Treasurer
	(Principal Financial Officer)


(1)	Incorporated by reference to AMERCO’s Current Report on Form 8-K filed October 20, 2003, file no. 1-11255.

(2)	Incorporated by reference to AMERCO’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1992, file no. 1-11255.

(3)	Incorporated by reference to AMERCO’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, file no. 1-11255.

(4)	Incorporated by reference to AMERCO’s Annual Report on Form 10-K for the year ended March 31, 2003, file no. 1-11255.

50 EX-2.3 3 p68793exv2w3.txt EX-2.3 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA . BK-03-52103-GWZ and BK-03-5270-GWZ In re Jointly Administered under BK-03-52103-GWZ AMERCO, a Nevada corporation, et. al., Chapter 11 Debtors. Hon. Gregg W. Zive - -------------------------------------------------------------------------------- FIRST AMENDED JOINT PLAN OF REORGANIZATION OF AMERCO AND AMERCO REAL ESTATE COMPANY, DEBTORS AND DEBTORS-IN-POSSESSION - -------------------------------------------------------------------------------- Craig D. Hansen Bruce T. Beesley Thomas J. Salerno Bridget Peck G. Christopher Meyer BEESLEY, PECK & MATTEONI, LTD Sean T. Cork 5011 Meadowood Mall Way, Suite 300 SQUIRE, SANDERS & DEMPSEY L.L.P. Reno, Nevada 89502 Two Renaissance Square, Suite 2700 (775) 827-8666 40 North Central Avenue Phoenix, Arizona 85004 Co-Counsel for Debtors and (602) 528-4000 Debtors-in-Possession Attorneys for Debtors and Debtors-in-Possession Dated: November 26, 2003 TABLE OF CONTENTS

i TABLE OF CONTENTS (continued)

ii TABLE OF CONTENTS (continued)

iii TABLE OF CONTENTS (continued)

iv TABLE OF CONTENTS (continued)

v TABLE OF CONTENTS (continued)

vi TABLE OF CONTENTS (continued)

vii TABLE OF CONTENTS (continued)

viii EXHIBITS Exhibit A -1 -- Exit Financing Facility Commitment Letter Exhibit A -2 -- Exit Financing Facility Agreement Exhibit B -- Plan Support Agreement (Creditors' Committee) Exhibit C -- Restructuring Agreement (AREC Noteholders) Exhibit D -- Restructuring Agreement (Revolver Lenders) Exhibit E -- SAC Holding Participation and Subordination Agreement Exhibit F -- AMERCO/AREC Guaranty Obligations Exhibit G -- PMSR Agreement Exhibit H -- Restated BMO Master Lease Exhibit I -- Restated Citibank Master Lease Exhibit J -- New BMO Guaranty Exhibit K -- New Citibank Guaranty Exhibit L -- New AMERCO Notes Indenture Exhibit M -- New Term Loan B Notes Indenture Exhibit N -- SAC Holding Senior Notes Indenture Exhibit O -- Restated Articles of Incorporation of Reorganized AMERCO Exhibit P -- Restated Articles of Incorporation of Reorganized AREC ix INTRODUCTION AMERCO and its wholly-owned subsidiary, Amerco Real Estate Company, as debtors and debtors-in-possession in the above-captioned jointly administered Chapter 11 Cases, together with SAC Holding Corporation ("SAC") and SAC Holding II Corporation, each a Nevada corporation (together with SAC, collectively, "SAC Holding") hereby propose the following First Amended Joint Plan of Reorganization for the resolution of the outstanding Claims against and Interests in the Debtors. Capitalized terms used herein shall have the meanings ascribed to such terms in Article I.B. of this Plan. The Debtors and SAC Holding are proponents of this Plan within the meaning of Section 1129 of the Bankruptcy Code. The direct and indirect subsidiaries of AMERCO and Amerco Real Estate Company have not commenced cases under Chapter 11 of the Bankruptcy Code. These subsidiaries, including, without limitation, U-Haul International, Inc., Oxford Life Insurance Company and Republic Western Insurance Company, continue to operate their businesses outside of bankruptcy. Under Section 1125(b) of the Bankruptcy Code, a vote to accept or reject this Plan cannot be solicited from a Claimholder until such time as the Disclosure Statement has been approved by the Bankruptcy Court and distributed to Claimholders. In this case, the Disclosure Statement was approved by the Bankruptcy Court by order entered on December [12], 2003, and has been distributed simultaneously with this Plan to all parties whose votes are being solicited. The Disclosure Statement contains, among other things, a discussion of the Debtors' and SAC Holding's history, business, properties and operations, projections for those operations, risk factors associated with the business and Plan, a summary and analysis of this Plan, and certain related matters including, among other things, the securities to be issued pursuant to this Plan by the Reorganized Debtors and SAC Holding. ALL CLAIMHOLDERS ARE ENCOURAGED TO READ THIS PLAN AND THE DISCLOSURE STATEMENT AND RELATED SOLICITATION MATERIALS IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THIS PLAN. Subject to certain restrictions and requirements set forth in Section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 and those restrictions on modifications set forth in Article 14.2 of this Plan, each of the Debtors expressly reserves its respective rights to alter, amend, modify, revoke or withdraw this Plan with respect to such Debtor, one or more times, prior to this Plan's substantial consummation. ARTICLE I DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME A. SCOPE OF DEFINITIONS For purposes of this Plan, except as expressly provided or unless the context otherwise requires, all capitalized terms not otherwise defined shall have the meanings ascribed to them in Article I.B. of this Plan. Any term used in this Plan that is not defined herein, but is defined in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules. 1 B. DEFINITIONS 1.1 "503 DEADLINE" means the deadline for any Person who requests compensation or expense reimbursement for making a substantial contribution in the Chapter 11 Cases pursuant to Sections 503(b)(3), (4), and (5) of the Bankruptcy Code to file an application with the clerk of the Bankruptcy Court, which shall be forty-five (45) days after the Effective Date. 1.2 "ADMINISTRATIVE CLAIM" means a Claim for any cost or expense of administration of the Chapter 11 Cases allowed under Sections 503(b), 507(b) or 546(c)(2) of the Bankruptcy Code and entitled to priority under Section 507(a)(1) of the Bankruptcy Code, including, without limitation: (a) fees payable under 28 U.S.C. Section 1930; (b) actual and necessary costs and expenses incurred in the ordinary course of the Debtors' business; (c) actual and necessary costs and expenses of preserving the Debtors' Estates or administering the Chapter 11 Cases; (d) DIP Facility Claims; (e) all Professional Fees to the extent allowed by Final Order under Sections 330, 331, or 503 of the Bankruptcy Code; and (f) Indenture Trustees Fees. 1.3 "ADMINISTRATIVE CLAIMS BAR DATE" means the deadline for filing proofs or requests for payment of Administrative Claims, which shall be forty-five (45) days after the Effective Date, unless otherwise ordered by the Bankruptcy Court, except with respect to Professional Claims, which shall be subject to the provisions of Article 10.2 hereof. 1.4 "AFFILIATE" has the meaning given such term by Section 101(2) of the Bankruptcy Code. 1.5 "ALLOWED CLAIM" or "ALLOWED INTEREST" means, respectively, except as otherwise allowed or provided for in this Plan, a Claim or an Interest, proof of which was timely and properly filed or, if no proof of claim or proof of interest was filed, which has been or hereafter is listed by the Debtors in their Schedules as liquidated in amount and not disputed or contingent, and in either case, as to which no objection to the allowance thereof has been interposed on or before the later of: (a) 45 days after the Effective Date; or (b) such other applicable period of limitation as may be fixed or extended by the Bankruptcy Court, or as to which any objection has been determined by a Final Order to the extent such objection is determined in favor of the respective holder. 1.6 "AMENDED AND RESTATED ARTICLES OF INCORPORATION" means the articles of incorporation of the Reorganized Debtors, amended and restated to the extent necessary to comply with the provisions of Section 1123(a)(6) of the Bankruptcy Code, in substantially the form attached hereto as Exhibit O and Exhibit P. 1.7 "AMERCO" means AMERCO, a Nevada corporation, debtor and debtor-in-possession in Case No. 03-52103 pending in the Bankruptcy Court. 1.8 "AMERCO/AREC GUARANTY OBLIGATIONS" means those obligations of the Debtors guarantying the obligations of certain of their direct and indirect subsidiaries, as set forth in Exhibit F. 1.9 "AMERCO NOTES" means, collectively, the following: (a) the $175,000,000 in original principal amount of 7.85% Senior Notes due 2003 issued by AMERCO pursuant to that certain Indenture, dated as of May 1, 1996, between AMERCO, as Issuer, and Citibank, N.A., as Trustee, as supplemented; (b) the $200,000,000 in original principal amount of 8.80% Senior Notes due 2005 issued by AMERCO pursuant to that certain Senior Indenture, dated as of April 1, 1999, between AMERCO and the Bank of New York, as Trustee, as supplemented; and (c) the $110,000,000 in medium-term notes 2 issued pursuant to that certain Indenture, dated September 10, 1999, as supplemented, between AMERCO and The Bank of New York, as successor Indenture Trustee to The First National Bank of Chicago. 1.10 "AMERCO UNSECURED CLAIMS" means any Claim arising under, from or relating to the following: (a) the AMERCO Notes; (b) the BBATs; (c) the Terminated Swaps; (d) the JPMorgan Support Party Obligation; and (e) Effective Date Interest. 1.11 "AREC" means Amerco Real Estate Company, a Nevada corporation, debtor and debtor-in-possession in Case No. 03-52790 pending in the Bankruptcy Court. 1.12 "AREC NOTE CLAIMS" means any Claim arising under, from or relating to the AREC Notes. 1.13 "AREC NOTES" means, collectively, the following: (a) the $95,000,000 original principal amount of Senior Secured Notes, Series A, due April 30, 2012; and (b) the $5,000,000 original principal amount of Senior Notes, Series B, due April 30, 2007, each issued by AREC under that certain Note Purchase Agreement, dated March 15, 2002, as amended or modified from time to time, between AREC and the holders of such Series A and Series B Notes. 1.14 "AREC SYNDICATION TERMS" means those Syndication Terms described in an exhibit to the Restructuring Agreement (AREC Noteholders). 1.15 "AVOIDANCE CLAIMS" means Causes of Action against Persons arising under any of Sections 510, 547, 548, 549, 550 and 551 (to the extent the latter two Sections are applicable to the other statutory sections referred to in this Article 1.15) of the Bankruptcy Code, or under similar or related state or federal statutes and common law, including fraudulent transfer laws, whether or not litigation has been commenced as of the Confirmation Date to prosecute such Avoidance Claims. 1.16 "BALLOT" means each of the ballot forms that are distributed with the Disclosure Statement to Claimholders included in Classes that are Impaired under this Plan and entitled to vote under Article 6.1 of this Plan to accept or reject this Plan. 1.17 "BANK OF AMERICA SWAP" means that certain ISDA Master Agreement, dated as of September 11, 1997, between AMERCO and Bank of New York, with an aggregate termination amount of $2,141,800. 1.18 "BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended and codified in title 11 of the United States Code, 11 U.S.C. Sections 101-1330, as in effect on the date hereof. 1.19 "BANKRUPTCY COURT" means the United States Bankruptcy Court for the District of Nevada or such other court as may have jurisdiction over the Chapter 11 Cases. 1.20 "BANKRUPTCY RULES" means the Federal Rules of Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal Rules of Civil Procedure, as amended, as applicable to the Chapter 11 Cases or proceedings therein, and the Local Rules of the Bankruptcy Court, as applicable to the Chapter 11 Cases or proceedings therein, as the case may be. 1.21 "BAR DATE" means the deadline set by the Bankruptcy Court pursuant to the Bar Date Order or other Final Order for filing proofs of claim in the Chapter 11 Cases. For all prepetition Claims, the Bar Date is November 10, 2003. 3 1.22 "BAR DATE ORDER" means the order entered by the Bankruptcy Court on September 30, 2003, which established November 10, 2003 as the Bar Date (Docket No. 415). 1.23 "BBATs" means the 7.135% Series 1997-C Bond Backed Asset Trust Certificates due October 15, 2002, in the original principal amount of $100,000,000 issued by AMERCO pursuant to that certain Trust Agreement, dated as of October 22, 1997, as amended or modified from time to time, between AMERCO, as depositer, and The Bank of New York as successor Trustee to IBJ Schroder Bank & Trust Company. 1.24 "BBAT SWAPS" means the following interest rate swap agreements: (a) that certain ISDA Master Agreement, dated as of October 8, 1997, between AMERCO and Citibank, N.A., New York dated October 3, 2002, with an aggregate termination amount of $15,266,722.28; and (b) that certain ISDA Master Agreement, dated as of September 11, 1997, between AMERCO and Bank of America, N.A. (f/k/a NationsBank, N.A.) with an aggregate termination amount of $11,284,099. 1.25 "BMO GUARANTY CLAIM" means all Claims arising under or related to that certain Amended and Restated Guaranty, dated July 27, 1999 (amending and restating the Guaranty dated December 8, 1996), by AMERCO in favor of (i) Bank of Montreal and each of the other various financial institutions, as the Lenders, (ii) BMO Global Capital Solutions, Inc. and the other various lessors, as Lessors, (iii) BMO Capital Solutions, Inc., as Agent Lessor for the Lessors, and (iv) Bank of Montreal, as Administrative Agent for the Lenders and as Arranger. 1.26 "BMO MASTER LEASE" means that certain Amended and Restated Master Lease Agreement and Open End Mortgage, dated as of July 27, 1999, as amended, by and among BMO Global Solutions, Inc., and the various Persons party thereto, U-Haul and AREC. 1.27 "BMO PROPERTIES" means the real property that is subject to the BMO Master Lease. 1.28 "BMO SECURED CLAIM" means any Secured Claim arising under, from or relating to the BMO Master Lease. 1.29 "BMO VALUATION HEARING" means the hearing to be conducted by the Bankruptcy Court pursuant to Article 5.4(a)(iii) of the Plan and Sections 506 and 1129(b) of the Bankruptcy Code with respect to the BMO Properties, as such hearing may be adjourned or continued from time to time. 1.30 "BUSINESS DAY" means any day, excluding Saturdays, Sundays and "legal holidays" (as defined in Bankruptcy Rule 9006(a)), on which commercial banks are open for business in Nevada. 1.31 "CAREY CASH PROCEEDS" means the Cash proceeds received by AREC and U-Haul from the Carey Sale Transaction pursuant to the terms of the Carey Sale Agreement. 1.32 "CAREY SALE AGREEMENT" means that certain Purchase and Sale Agreement, dated as of June 6, 2003, by and among AREC, U-Haul and UH Storage, including any amendment, modification, supplement and exhibit thereto. 1.33 "CAREY SALE TRANSACTION" means that certain transaction or series of transactions related to the sale of the Citibank Properties and BMO Properties pursuant to the Carey Sale Agreement. 4 1.34 "CASH" means currency, checks drawn on a bank insured by the Federal Deposit Insurance Corporation, certified checks, money orders, negotiable instruments, and wire transfers of immediately available funds. 1.35 "CAUSES OF ACTION" means any and all actions, proceedings, causes of action, suits, accounts, controversies, agreements, promises, rights to legal remedies, rights to equitable remedies, rights to payment and claims, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether asserted or assertable directly or derivatively, in law, equity or otherwise, including Avoidance Claims and Derivative Claims, unless otherwise waived or released by the Debtors or the Reorganized Debtors. 1.36 "CHAPTER 11 CASES" means the Chapter 11 Cases of the Debtors pending in the Bankruptcy Court and being jointly administered with one another under Case No. 03-52103-GWZ, and the phrase "Chapter 11 Case" when used with reference to a particular Debtor shall mean the particular case under Chapter 11 of the Bankruptcy Code commenced by such Debtor in the Bankruptcy Court. 1.37 "CITIBANK GUARANTY CLAIM" means all Claims arising under or related to that certain Parent Guaranty, dated September 24, 1999, by AMERCO in favor of Citicorp USA, Inc., as Agent for the benefit of the Note Holders and the Certificate Holders, BMO Global Capital Solutions, Inc., as Lessor under the Lease, and Citibank N.A., as APA Agent for the benefit of he APA Purchasers. 1.38 "CITIBANK MASTER LEASE" means that certain Master Lease, dated as of September 24, 1999, as amended, between BMO Global Capital Solutions, Inc., and AREC. 1.39 "CITIBANK PROPERTIES" means the real property that is subject to the Citibank Master Lease. 1.40 "CITIBANK SECURED CLAIM" means any Secured Claim arising under, from or relating to the Citibank Master Lease. 1.41 "CITIBANK VALUATION HEARING" means the hearing to be conducted by the Bankruptcy Court pursuant to Article 5.3(a)(iii) of the Plan and Sections 506 and 1129(b) of the Bankruptcy Code with respect to the Citibank Properties, as such hearing may be adjourned or continued from time to time. 1.42 "CLAIM" means a claim against one or both of the Debtors or their property, whether or not asserted in the Bankruptcy Cases, as defined in Section 101(5) of the Bankruptcy Code, including, without limitation: (a) any right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, mature, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured arising at any time before the Effective Date; (b) any right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured; (c) any claim arising from rescission of or for damages from the purchase or sale of Existing Debt Securities; or (d) any claim for reimbursement or contribution associated with Existing Debt Securities. 1.43 "CLAIMHOLDER" means a holder of a Claim. 1.44 "CLAIMS AGENT" means The Trumbull Group, LLC, P.O. Box 721, Windsor, Connecticut 06095, Attn: Ronnie Kryjak. 5 1.45 "CLASS" means a category of Claimholders or Interestholders described in Article III of this Plan. 1.46 "CLASS ACTIONS" means, collectively, the following class action lawsuits: (1) Article Four Trust v. AMERCO, et al., District of Nevada, United States District Court, Case No. CV-N-03-0050-DWH-VPC; (2) Mates v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0107; (3) Klug v. AMERCO, et al., United States District Court of Nevada, Case No. CV-S-03-0380; and (4) IG Holdings v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0199. 1.47 "CONFIRMATION DATE" means the date of entry of the Confirmation Order. 1.48 "CONFIRMATION HEARING" means the hearing before the Bankruptcy Court held to consider confirmation of this Plan and related matters under Section 1128 of the Bankruptcy Code, as such hearing may be adjourned or continued from time to time. 1.49 "CONFIRMATION ORDER" means the order entered by the Bankruptcy Court confirming this Plan. 1.50 "CREDITOR" means any holder of a Claim, whether or not such Claim is an Allowed Claim, encompassed within the statutory definition set forth in Section 101(10) of the Bankruptcy Code. 1.51 "CREDITORS' COMMITTEE" means the Official Committee of Unsecured Creditors appointed pursuant to Section 1102(a) of the Bankruptcy Code in the Chapter 11 Cases, as the membership thereof may change from time to time. 1.52 "CURE" means: (a) the cure of any non-monetary defaults to the extent required, if at all, pursuant to Section 365 of the Bankruptcy Code; and (b) with respect to monetary defaults, the distribution within a reasonable period of time following the Effective Date of Cash, or such other property as may be agreed upon by the parties or ordered by the Bankruptcy Court, with respect to the assumption (or assumption and assignment) of an executory contract or unexpired lease, pursuant to Section 365(b) of the Bankruptcy Code, in an amount equal to all unpaid monetary obligations or such other amount as may be agreed upon by the parties, under such executory contract or unexpired lease, to the extent such obligations are enforceable under the Bankruptcy Code and applicable non-bankruptcy law; provided, further, that in the event that a Debtor assumes an unexpired lease or executory contract, any guarantee provided by another Debtor related to such unexpired lease or executory contract shall be deemed Reinstated under the Plan if the failure of such guarantee to remain in force and effect would constitute a default under such assumed unexpired lease or executory contract. 1.53 "D&O INSURANCE POLICIES" means any directors and officers liability insurance policy or any applicable errors and omissions policy applicable to directors and officers of AMERCO and AREC, their Subsidiaries and Affiliates, or the Reorganized Debtors. 1.54 "DEBTORS" means AMERCO and AREC. 1.55 "DERIVATIVE ACTIONS" means, collectively, the following lawsuits: (1) Paul F. Shoen vs. SAC Holding Corporation et. al., CV02-05602, in the Second Judicial District Court of the State of Nevada, Washoe County; (2) Ron Belec vs. William E. Carty, et al, CV 02-06331, in the Second Judicial District Court of the State of Nevada, Washoe County; (3) M.S. Management Company, Inc. vs. 6 William E. Carty, et. al, CV 03-00386, in the Second Judicial District Court of the State of Nevada, Washoe County, along with two additional derivative suits against the same parties. 1.56 "DERIVATIVE CLAIMS" means any and all claims of the Debtors against any of their respective officers, directors, representatives, agents or employees based upon a breach or alleged breach by such Person of any duties owed to the Debtors. 1.57 "DIP AGENT" means the administrative agent for the DIP Lenders as defined in the DIP Credit Agreement. 1.58 "DIP CREDIT AGREEMENT" means that certain Senior Secured, Super-Priority Debtor-in Possession Loan and Security Agreement, dated as of August 15, 2003, as amended, supplemented or otherwise modified from time to time, and all documents executed in connection therewith, by and among the Debtors, the DIP Agent, and the DIP Lenders, which was executed by the Debtors in connection with the DIP Facility. 1.59 "DIP FACILITY" means the debtor-in-possession secured financing facility in the original principal amount of $300,000,000 provided to the Debtors by the DIP Lenders pursuant to the DIP Credit Agreement as authorized by the Bankruptcy Court pursuant to the DIP Facility Order. 1.60 "DIP FACILITY CLAIM" means all Administrative Claims of the DIP Agent and the DIP Lenders arising under or pursuant to the DIP Facility, including, without limitation, principal and interest on the DIP Facility, plus all reasonable fees and expenses (including professional fees and expenses) arising under the DIP Facility. 1.61 "DIP FACILITY ORDER" means, collectively, (i) the interim order that was entered by the Bankruptcy Court on August 14, 2003, (ii) the final order that was entered by the Bankruptcy Court on September 23, 2003, authorizing and approving the DIP Facility and the agreements related thereto, and (iii) any and all orders entered by the Bankruptcy Court authorizing and approving amendments to the DIP Credit Agreement. 1.62 "DIP LENDERS" means the lenders from time to time party to the DIP Credit Agreement. 1.63 "DISALLOWED CLAIM" or "DISALLOWED INTEREST" means a Claim or any portion thereof, or an Interest or any portion thereof, that: (a) has been disallowed by a Final Order; (b) is Scheduled at zero or as contingent, disputed or unliquidated and as to which a proof of claim or interest bar date has been established but no proof of claim or interest has been timely filed or deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy Court or otherwise deemed timely filed under applicable law; or (c) is not Scheduled and as to which a proof of claim or interest bar date has been set but no proof of claim or interest has been timely filed or deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy Court or otherwise deemed timely filed under applicable law. 1.64 "DISCLOSURE STATEMENT" means the written disclosure statement that relates to this Plan, as approved by the Bankruptcy Court pursuant to Section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017, as such disclosure statement may be amended, modified or supplemented from time to time. 1.65 "DISPUTED CLAIM" or "DISPUTED INTEREST" means a Claim or any portion thereof, or an Interest or any portion thereof, that is neither an Allowed Claim nor a Disallowed Claim, or an 7 Allowed Interest or a Disallowed Interest, as the case may be, and includes, without limitation, Claims or Interests that: (a) have not been Scheduled by the Debtors or have been Scheduled at zero, or have been Scheduled as unknown, contingent, unliquidated or disputed, whether or not such Claims or Interests are the subject of a proof of claim or proof of interest in the Bankruptcy Court; (b) are the subject of a proof of claim or interest that differs in nature, amount or priority from the Schedules; or (c) are the subject of an objection filed with the Bankruptcy Court, which has not been withdrawn or overruled by a Final Order of the Bankruptcy Court. 1.66 "DISTRIBUTION DATE" means the date, selected by the Debtors or Reorganized Debtors, occurring as soon as practicable after the Effective Date as determined by the Reorganized Debtors, upon which distributions to holders of Allowed Claims and Allowed Interests entitled to receive distributions under this Plan shall commence. 1.67 "EFFECTIVE DATE" means the Business Day determined by the Debtors on which all conditions to the consummation of this Plan set forth in Article 12.2 of this Plan have been either satisfied or waived as provided in Article 12.3 of this Plan and is the day upon which this Plan is substantially consummated. 1.68 "EFFECTIVE DATE INTEREST" means, to the extent actually permitted under the respective underlying agreements evidencing Allowed AMERCO Unsecured Claims, the sum of (a) all accrued and unpaid interest at the default rate, if applicable, or otherwise at the non-default contract rate, as of the Petition Date, and (b) all accrued and unpaid interest, at the non-default contract rate, after the Petition date through and including the Effective Date. 1.69 "EQUITY COMMITTEE" means the Official Committee of Equity Security Holders appointed pursuant to Section 1102(a) of the Bankruptcy Code in the Chapter 11 Cases, as the membership thereof may change from time to time. 1.70 "ESTATES" means the bankruptcy estates of the Debtors created pursuant to Section 541 of the Bankruptcy Code. 1.71 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as now in effect or hereafter amended. 1.72 "EXHIBIT" means an exhibit annexed to either this Plan, in a supplement to the Plan or as an appendix to the Disclosure Statement. 1.73 "EXHIBIT FILING DATE" means the date on which Exhibits to this Plan or the Disclosure Statement shall be filed with the Bankruptcy Court, which date shall be on or before November 26, 2003, except with respect to Exhibit A-2, Exhibit E, Exhibit L, Exhibit M, and Exhibit N, which shall be filed with the Bankruptcy Court at least seven (7) days prior to the commencement of the Confirmation Hearing. 1.74 "EXISTING COMMON STOCK" means shares of common stock, par value $0.25 per share, of AMERCO that are authorized, issued and outstanding prior to the Effective Date. 1.75 "EXISTING DEBT SECURITIES" means: (a) the AMERCO Notes; (b) the BBATS; and (c) the AREC Notes. 8 1.76 "EXISTING SAC HOLDING NOTES" means any and all promissory notes issued by SAC Holding or any Subsidiary thereof, to the Debtors, or any Subsidiary thereof, at any time on or before the Effective Date. 1.77 "EXIT FINANCING FACILITY" means a post-Effective Date working capital revolving credit financing and term facility, in substantially the form attached hereto as Exhibit A-2, pursuant to the terms of: (a) that certain Commitment Letter, dated November 5, 2003, between the Debtors, as borrowers, and Wells Fargo Foothill, Inc., as the same may be amended, modified, or supplemented from time to time, in substantially the form attached hereto as Exhibit A-1; and (b) any and all additional documents related thereto filed in accordance with Article 7.6 of this Plan. 1.78 "FACE AMOUNT" means: (a) when used in reference to a Disputed or Disallowed Claim, the full stated liquidated amount claimed by the Claimholder in any proof of claim timely filed with the Bankruptcy Court or otherwise deemed timely filed by any Final Order of the Bankruptcy Court or other applicable bankruptcy law; and (b) when used in reference to an Allowed Claim, the allowed amount of such Claim. 1.79 "FINAL ORDER" means an order or judgment, the operation or effect of which has not been stayed, reversed or amended and as to which order or judgment (or any revision, modification or amendment thereof) the time to appeal or seek review or rehearing has expired and as to which no appeal or petition for review or rehearing was filed or, if filed, remains pending. 1.80 "HOLDBACK AMOUNT" means the amount equal to twenty percent (20%) of fees billed to the Debtors in a given month to the extent retained by the Debtors after the Petition Date as a holdback on payment of Professional Claims pursuant to the Professional Fee Order. The Holdback Amount shall not be considered property of the Debtors, the Reorganized Debtors, or the Estates. 1.81 "IMPAIRED" refers to any Claim or Interest that is impaired within the meaning of Section 1124 of the Bankruptcy Code. 1.82 "INDEMNIFICATION OBLIGATION" means any obligations of the Debtors or Subsidiaries to indemnify, reimburse, advance, or provide contribution to any present or former officer, director or employee, or any present or former professionals or advisors of the Debtors, pursuant to articles of incorporation, bylaws, policies of providing employee indemnification, applicable law, or otherwise as may be in existence immediately prior to the Petition Date, including, without limitation, Indenture Trustees, accountants, auditors, financial advisors, underwriters or attorneys, whether pursuant to the Indentures, charter, by law, contract, underwriting agreement, statute or otherwise, regardless of whether the indemnification is owed in connection with pre-petition or post-petition matters. 1.83 "INDENTURES" means the respective indentures pursuant to which each of the AMERCO Notes and the BBATs were issued. 1.84 "INDENTURE TRUSTEES" means, collectively, the indenture trustees under the respective Indentures. 1.85 "INDENTURE TRUSTEES CHARGING LIEN" means any lien or other priority in payment arising prior to the Effective Date to which the Indenture Trustees are entitled, pursuant to the Indentures, against distributions to be made to holders of AMERCO Unsecured Claims for payment of Indenture Trustees Fees. 9 1.86 "INDENTURE TRUSTEE FEES" means the reasonable compensation, fees, expenses, disbursements and indemnity claims, including without limitation, attorneys' and agents' fees, expenses and disbursements, incurred by the Indenture Trustees, whether prior to or after the Petition Date and whether prior to or after the Effective Date of the Plan. 1.87 "INSURANCE FIRST DAY ORDER" means the Final Order entered by the Bankruptcy Court approving payment of certain insurance obligations of AMERCO and RepWest (Docket No. 227). 1.88 "INTERCOMPANY CLAIM" means a Claim by a Debtor, an Affiliate of a Debtor, or a non-Debtor Affiliate against another Debtor, Affiliate of a Debtor, or non-Debtor Affiliate. 1.89 "INTEREST" means the legal, equitable, contractual and other rights of any Person with respect to Existing Common Stock, Preferred Stock Interests, Other Interests, or any other equity securities of or ownership interests in the Debtors, but excludes any Subordinated Claims (Preferred) and Subordinated Claims (Common). 1.90 "INTERESTHOLDER" means a holder of an Interest. 1.91 "JPMORGAN" means JPMorgan Chase Bank. 1.92 "JPMORGAN CHASE CREDIT FACILITY" means that certain 3-year Credit Agreement, dated as of June 28, 2002, by and between AMERCO and JPMorgan Chase Bank, as administrative agent, Bank of America, N.A., as syndication agent, and Bank One, NA, as documentation agent, in the aggregate principal amount of $205,000,000, and all documents executed in connection therewith. 1.93 "JPMORGAN CLAIMS" means any Claim, whether or not a Secured Claim, arising under, from or relating to the JPMorgan Chase Credit Facility. 1.94 "JPMORGAN SUPPORT PARTY OBLIGATION" means the obligations of AMERCO arising under the PMSR Facility. 1.95 "JPMORGAN SWAP" means that certain ISDA Interest Rate and Current Exchange Agreement, dated March 5, 1992, by and between AMERCO and JPMorgan Chase Bank, with an aggregate termination amount of $3,453,808.50. 1.96 "JPMORGAN SYNDICATION TERMS" means those Syndication Terms described in an exhibit to the Restructuring Agreement (Revolver Lenders). 1.97 "KEY ORDINARY COURSE PROFESSIONAL" means those certain Persons identified as key ordinary course professionals by the Debtors pursuant to the Ordinary Course Professional Order. 1.98 "KEY ORDINARY COURSE PROFESSIONAL CLAIM" means an Administrative Claim of a Key Ordinary Course Professional for compensation for services rendered or reimbursement of costs, expenses or other charges and disbursements in an amount less than $50,000 for any month relating to services rendered or expenses incurred after the Petition Date and prior to and including the Effective Date. 1.99 "MISCELLANEOUS SECURED CLAIMS" means all Secured Claims against any of the Debtors, as the case may be, other than the Citibank Secured Claim, the BMO Secured Claim and the Claims under the JPMorgan Chase Credit Facility. 10 1.100 "NEW AMERCO NOTES" means the New AMERCO Notes to be issued by the Reorganized Debtors pursuant to the New AMERCO Notes Indenture in an original principal amount equal to the total amount of the Allowed Class 7 Claims, minus the amount of the Cash, SAC Holding Senior Notes and New Term Loan B Notes distributed to the AMERCO Unsecured Claimholders pursuant to Article 5.7(a), (b) and (c) of the Plan. 1.101 "NEW AMERCO NOTES INDENTURE" means the Indenture, dated as of the Effective Date, pursuant to which the Reorganized Debtors will issue the New AMERCO Notes, in substantially the form attached hereto as Exhibit L, as such Indenture is amended or modified from time to time. 1.102 "NEW BMO GUARANTY" means the new BMO Guaranty to be executed and delivered by Reorganized AMERCO on the Effective Date of the Plan pursuant to Article 5.4(b) of the Plan, in substantially the form attached hereto as Exhibit J. 1.103 "NEW CITIBANK GUARANTY" means the new Citibank Guaranty to be executed and delivered by Reorganized AMERCO on the Effective Date of the Plan pursuant to Article 5.3(b)(ii) of the Plan, in substantially the form attached hereto as Exhibit K. 1.104 "NEW DEBT SECURITIES" means: (a) the New Term Loan B Notes; (b) the New AMERCO Notes; and (c) the SAC Holding Senior Notes. 1.105 "NEW TERM LOAN A NOTES" means the Term Loan A Notes to be issued pursuant to the Exit Financing Facility in the original principal amount of $350,000,000. 1.106 "NEW TERM LOAN B NOTES" means the Term Loan B Notes to be issued by the Reorganized Debtors pursuant to New Term Loan B Notes Indenture in the original principal amount of $200,000,000. 1.107 "NEW TERM LOAN B NOTES INDENTURE" means the Indenture, dated as of the Effective Date, pursuant to which the Reorganized Debtors will issue the New Term Loan B Notes, in substantially the form attached hereto as Exhibit L, as such Indenture is amended or modified from time to time. 1.108 "NON-DEBTOR SUBSIDIARIES" means the Subsidiaries of the Debtors that have not commenced cases under Chapter 11 of the Bankruptcy Code. 1.109 "ORDINARY COURSE PROFESSIONAL ORDER" means the Bankruptcy Court's Order Pursuant to 11 U.S.C. Sections 105(a), 327(e) and 331 Authorizing Retention of Professionals Utilized by the Debtors in the Ordinary Course of Business. 1.110 "OTHER INTERESTS" means the preferred share purchase rights issued by AMERCO pursuant to that certain stock-holder rights plan adopted by the board of directors of AMERCO in July 1998, with each such right entitling its holder to purchase from AMERCO one one-hundredth of a share of Series C Junior Participation Preferred Stock (Series C), no par value per share of AMERCO, at a price of $132.00 per one one-hundredth of a share of Series C, subject to adjustment. 1.111 "OTHER PRIORITY CLAIMS" means all Claims entitled to priority pursuant to Section 507(a) of the Bankruptcy Code other than a Priority Tax Claim or an Administrative Claim. 11 1.112 "OTHER UNSECURED CLAIMS" means any and all Claims against the Debtors as of the Petition Date not secured by a charge against an interest in or lien on property in which a Debtors' Estate has an interest or that is subject to setoff under Section 553 of the Bankruptcy Code, including the Claims of RepWest not included in the Insurance First Day Order as of the Effective Date, but excluding therefrom: (a) Priority Claims; (b) AMERCO Unsecured Claims; (c) BMO Guaranty Claim; (d) Citibank Guaranty Claim; (e) Subordinated Claims (Preferred); (f) Subordinated Claims (Common); and (g) Claims with respect to AMERCO/AREC Guaranty Obligations. 1.113 "OXFORD" means Oxford Life Insurance Company, an Arizona corporation, and a wholly-owned subsidiary of AMERCO. Oxford is not a debtor in the Chapter 11 Cases. 1.114 "OXFORD NOTE CLAIMS" means, collectively, all Claims arising under, from or relating to the financial accommodations made available to AMERCO by Oxford as evidenced by: (a) that certain $15,000,000 Promissory Note, dated June 27, 2002, issued by AMERCO to Oxford; (b) that certain $1,700,000 Promissory Note, dated June 27, 2002, issued by AMERCO to Oxford, Christian Fidelity Life Insurance Company and North American Insurance Company; and (c) that certain $800,000 Promissory Note, dated June 27, 2002, issued by AMERCO to North America Insurance Agency. 1.115 "PERSON" means an individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, limited liability partnership, trust, estate, unincorporated organization, governmental unit (as defined in Section 101(27) of the Bankruptcy Code) or other entity. 1.116 "PETITION DATE" means: (a) with respect to AMERCO, June 20, 2003, the date on which it filed its petition for relief in the Bankruptcy Court; and (b) with respect to AREC, August 13, 2003, the date on which it filed its petition for relief in the Bankruptcy Court. 1.117 "PLAN" means this joint plan of reorganization for the resolution of outstanding Claims and Interests in the Chapter 11 Cases, as herein proposed by the Debtors and SAC Holding, including all Exhibits, supplements, appendices and schedules hereto, either in their present form or as the same may be further altered, amended or modified from time to time in accordance with the Bankruptcy Code and Bankruptcy Rules. 1.118 "PLAN SUPPORT AGREEMENT" means that certain Plan Support Agreement, dated as of November 12, 2003, and all exhibits and amendments thereto, by and among the Debtors, the Creditors' Committee and the other parties that are or may become signatories thereto. 1.119 "PMSR" means Private Mini Storage Realty, L.P., a Texas-based limited partnership that operates self-storage rental facilities. 1.120 "PMSR AGREEMENT" means that certain PMSR Agreement, dated as of the Effective Date, among PMSR, Reorganized AMERCO, and JPMorgan Chase Bank, as Administrative Agent under the PMSR Facility, in substantially the form attached hereto as Exhibit F. 1.121 "PMSR FACILITY" means that certain Amended and Restated Credit Agreement, dated as of March 3, 2003, among PMSR, as Borrower, Storage Realty L.L.C., as General Partner, the Lenders party thereto, and JPMorgan Chase Bank, as Administrative Agent, relating to financing in the original amount of $125,000,000 for investment in self-storage operations. 12 1.122 "PMSR SUPPORT AGREEMENT" means that certain Support Party Agreement, dated as of December 30, 1997, entered into by AMERCO in favor of JPMorgan Chase Bank, as further evidenced by that certain Non-Exoneration Agreement, dated as of March 3, 2003, by AMERCO in favor of JPMorgan, as Administrative Agent, pursuant to which AMERCO assumed responsibility for fulfilling certain obligations of PMSR under the PMSR Facility, subject to the limitations set forth therein. 1.123 "PMSR SUPPORT OBLIGATIONS" means AMERCO's obligations arising under the PMSR Support Agreement. 1.124 "PREFERRED STOCK INTERESTS" means the outstanding shares of the Series A 8-1/2% Preferred Stock, no par value, of AMERCO as set forth in the Restated Articles of Incorporation, as amended, together with all rights arising thereunder, including, without limitation, unpaid dividends. 1.125 "PREPETITION AGENT" means JPMorgan Chase Bank as administrative agent under the JPMorgan Chase Credit Facility. 1.126 "PREPETITION LENDERS" means the lenders from time to time party to the JPMorgan Chase Credit Facility. 1.127 "PREPETITION LENDER CLAIMS" means all Claims arising under, from or pursuant to the JPMorgan Chase Credit Facility. 1.128 "PREPETITION NOTE CLAIMS" means all Claims arising under, from or pursuant to any of the AMERCO Notes or the Indentures governing the AMERCO Notes. 1.129 "PRIORITY CLAIMS" means Administrative Claims, Priority Tax Claims and Other Priority Claims. 1.130 "PRIORITY TAX CLAIM" means a Claim entitled to priority pursuant to Section 507(a)(8) of the Bankruptcy Code. 1.131 "PROFESSIONAL" means those Persons retained in the Chapter 11 Cases by orders of the Bankruptcy Court pursuant to Sections 327 and 1103 of the Bankruptcy Code or otherwise; provided, however, that Professional does not include those Persons retained pursuant to the Ordinary Course Professional Order. 1.132 "PROFESSIONAL CLAIM" means an Administrative Claim of a Professional for compensation for services rendered or reimbursement of costs, expenses or other charges and disbursements incurred relating to services rendered or expenses incurred after the Petition Date and prior to and including the Effective Date. 1.133 "PROFESSIONAL FEE BAR DATE" means the deadline by which all applications for compensation or expense reimbursement, including Professional Claims, must be filed, which deadline shall be forty-five (45) days after the Effective Date, unless otherwise ordered by the Bankruptcy Court. 1.134 "PROFESSIONAL FEE ORDER" means the order entered by the Bankruptcy Court on June 20, 2003, authorizing the interim payment of Professional Claims subject to the Holdback Amount. 1.135 "PRO RATA" means, at any time, the proportion that the Face Amount of a Claim in a particular Class or Classes bears to the aggregate Face Amount of all Claims (including Disputed Claims, but excluding Disallowed Claims) in such Class or Classes, unless the Plan provides otherwise. 13 1.136 "PWC" means PricewaterhouseCoopers LLP. 1.137 "PWC LITIGATION" means the pending action filed by AMERCO against PwC in the Maricopa County Superior Court for the State of Arizona, Case No. CV-2003-011032. 1.138 "RECORD DATE" means the date or dates established by the Bankruptcy Court by which holders of Claims are determined for purposes of such holders' right to vote to accept or reject the Plan and to receive Distributions under the Plan. 1.139 "REINSTATED" or "REINSTATEMENT" means: (a) leaving unaltered the legal, equitable and contractual rights to which a Claim entitles the Claimholder so as to leave such Claim Unimpaired in accordance with Section 1124 of the Bankruptcy Code; or (b) notwithstanding any contractual provision or applicable law that entitles the Claimholder to demand or receive accelerated payment of such Claim after the occurrence of a default: (i) curing any such default that occurred before or after the Petition Date, other than a default of a kind specified in Section 365(b)(2) of the Bankruptcy Code; (ii) reinstating the maturity of such Claim as such maturity existed before such default; (iii) compensating the Claimholder for any damages incurred as a result of any reasonable reliance by such Claimholder on such contractual provision or such applicable law; and (iv) not otherwise altering the legal, equitable or contractual rights to which such Claim entitles the Claimholder; provided, however, that any contractual right that does not pertain to the payment when due of principal and interest on the obligation on which such Claim is based, including, but not limited to, financial covenant ratios, negative pledge covenants, covenants and restrictions on merger or consolidation, and affirmative covenants regarding corporate existence prohibiting certain transactions or actions contemplated by this Plan, or conditioning such transactions or actions on certain factors, shall not be required to be cured or reinstated in order to accomplish Reinstatement. 1.140 "RELEASED PARTIES" means, collectively: (i) all officers of each of the Debtors, all members of the boards of directors of each of the Debtors, and all employees of each of the Debtors, in each case, as of the date of the commencement of the hearing on the Disclosure Statement; (ii) the Statutory Committees and all members of the Statutory Committees in their respective capacities as such; (iii) the DIP Agent in its capacity as such; (iv) the DIP Lenders in their capacities as such; (v) the Prepetition Lenders in their capacities as such; (vi) the Prepetition Agent in its capacity as such; (vii) the holders of AREC Note Claims; (viii) the Indenture Trustees; and (ix) with respect to each of the above-named Persons, such Person's affiliates, principals, employees, agents, officers, directors, financial advisors, attorneys and other professionals, in their capacities as such. Notwithstanding the foregoing, nothing in this Article 1.140, the Plan or the Confirmation Order shall affect, release, enjoin or impact the prosecution of the Claims asserted or to be asserted against the non-Debtor defendants in the Derivative Actions, the Class Actions or the Securities Actions. 1.141 "REORGANIZED AMERCO" means AMERCO from and after the Effective Date. 1.142 "REORGANIZED AREC" means AREC from and after the Effective Date. 1.143 "REORGANIZED DEBTOR" or "REORGANIZED DEBTORS" means, collectively, Reorganized AMERCO and Reorganized AREC, in each case from and after the Effective Date. 1.144 "RESTATED BMO MASTER LEASE" means the restated BMO Master Lease to be executed and delivered by Reorganized AREC and U-Haul on the Effective Date of the Plan pursuant to Article H of the Plan, in substantially the form attached hereto as Exhibit I. 14 1.145 "RESTATED CITIBANK MASTER LEASE" means the restated Citibank Master Lease to be executed and delivered by Reorganized AREC on the Effective Date of the Plan pursuant to Article 5.3(b)(i) of the Plan, in substantially the form attached hereto as Exhibit H. 1.146 "RESTRUCTURING AGREEMENT (REVOLVER LENDERS)" means that certain AMERCO Revolver Lenders Restructuring Agreement, dated as of September 8, 2003, and any amendments thereto, by and among AMERCO, the Prepetition Agent, and the Prepetition Lenders, attached hereto as Exhibit c. 1.147 "RESTRUCTURING AGREEMENT (AREC NOTEHOLDERS)" means that certain Restructuring Agreement, dated as of August 12, 2003, and any amendments thereto, by and between AREC and the holders of the AREC Notes, attached hereto as Exhibit B. 1.148 "REPWEST" means Republic Western Insurance Company, an Arizona corporation, and a wholly-owned subsidiary of AMERCO. RepWest is not a debtor in the Chapter 11 Cases. 1.149 "RETAINED ACTIONS" means all claims, Causes of Action, rights of action, suits and proceedings, whether in law or in equity, whether known or unknown, which any Debtor or any Debtors' Estate may hold against any Person, including, without limitation: (a) claims and Causes of Action brought prior to the Effective Date; (b) the PwC Litigation; (c) claims and Causes of Action against any Persons for failure to pay for products or services provided or rendered by any of the Debtors; (d) Claims and Causes of Action relating to strict enforcement of any of the Debtors' intellectual property rights, including patents, copyrights and trademarks; (e) Claims and Causes of Action seeking the recovery of any of the Debtors' or the Reorganized Debtors' accounts receivable other receivables or rights to payment created or arising in the ordinary course of any of the Debtors or the Reorganized Debtors' businesses, including, without limitation, claim overpayments and tax refunds; (f) Avoidance Claims; and (g) Derivative Claims, if any. 1.150 "RETIREE BENEFITS" means any retiree benefits provided or to be provided by the Debtors or the Reorganized Debtors, as the case may be, encompassed within the statutory definition set forth in Section 1114(a) of the Bankruptcy Code. 1.151 "SAC HOLDING" means, collectively, SAC Holding Corporation and SAC Holding II Corporation, each a Nevada corporation. SAC Holding is not a debtor in the Bankruptcy Cases. 1.152 "SAC HOLDING NOTE DOCUMENTS" means, collectively, the SAC Holding Notes Indenture, the SAC Holding Senior Notes, the SAC Holding Participation and Subordination Agreement. 1.153 "SAC HOLDING SENIOR NOTES" means the Senior Notes to be issued by SAC Holding pursuant to the SAC Holding Senior Notes Indenture in the original principal amount of $200,000,000. 1.154 "SAC HOLDING SENIOR NOTES INDENTURE" means the Indenture, dated as of the Effective Date, pursuant to which SAC Holding will issue the SAC Holding Senior Notes, as such Indenture is amended or modified from time to time. 1.155 "SAC HOLDING PARTICIPATION AND SUBORDINATION AGREEMENT" means the SAC Holding Participation and Subordination Agreement, dated as of the Effective Date, by and among SAC Holding, the Reorganized Debtors and the Trustee under the SAC Holding Senior Notes Indenture, 15 providing for the subordination of the Existing SAC Holding Notes to payment in full of the SAC Holding Senior Notes, in substantially the form attached hereto as Exhibit D. 1.156 "SCHEDULED" means, with respect to any Claim or Interest, the status, priority, and amount, if any, of such Claim or Interest as set forth in the Schedules. 1.157 "SCHEDULES" means the schedules of assets and liabilities and the statements of financial affairs filed in the Chapter 11 Cases by the Debtors, as such schedules or statements have been or may be further modified, amended or supplemented from time to time in accordance with Bankruptcy Rule 1009 or orders of the Bankruptcy Court. 1.158 "SECURED CLAIMS" means all Claims secured by a security interest in or a lien on property in which a Debtor's Estate has an interest or that is subject to setoff under Section 553 of the Bankruptcy Code, to the extent of the value, as of the Effective Date or such other date as is established by the Bankruptcy Court, of such Claimholder's interest in the applicable Estate's interest in such property or to the extent of the amount subject to setoff, as applicable, as determined by a Final Order of the Bankruptcy Court pursuant to Section 506(a) of the Bankruptcy Code or in the case of setoff, pursuant to Section 553 of the Bankruptcy Code, or as otherwise agreed upon in writing by the Debtors and the Claimholder. 1.159 "SECURITIES ACT" means the Securities Act of 1933, as now in effect or hereafter amended. 1.160 "SECURITIES ACTION" means any Cause of Action by a Person, other than by or on behalf of a Debtor, against any Person other than a Debtor arising out of or related to a Person's ownership interests of Preferred Stock Interests and Existing Common Stock Interests, including those alleged in the Class Actions. 1.161 "STATUTORY COMMITTEES" means, collectively, the Creditors' Committee and the Equity Committee. 1.162 "SUBORDINATED CLAIMS (COMMON)" means any Claim with respect to an Existing Common Stock Interest subordinated pursuant to Section 510 of the Bankruptcy Code. 1.163 "SUBORDINATED CLAIMS (PREFERRED)" means any Claim with respect to a Preferred Stock Interest subordinated pursuant to Section 510 of the Bankruptcy Code. 1.164 "SUBSIDIARY" means an entity of which more than 50% of the outstanding capital stock entitled to vote for the election of directors is owned or controlled, directly or indirectly, by the Debtors, by one or more Subsidiaries of the Debtors, or by a Debtor and one or more of its other Subsidiaries. 1.165 "SUBSIDIARY INTERESTS" means, collectively, the issued and outstanding shares of stock of AMERCO's Subsidiaries, including AREC, directly or indirectly owned by AMERCO as of the Petition Date. 1.166 "TERMINATED SWAPS" means, collectively, the (a) BBAT Swaps; (b) JPMorgan Swap; and (c) Bank of America Swap. 1.167 "U-HAUL" means U-Haul International, Inc., a Nevada corporation. U-Haul is not a Debtor in the Chapter 11 Cases. 16 1.168 "UH STORAGE" means UH STORAGE (DE) LIMITED PARTNERSHIP, a Delaware limited partnership, and the purchaser of the Citicorp Properties and BMO Properties under the Carey Sale Agreement. UH Storage is not a Debtor in the Chapter 11 Cases. 1.169 "UNIMPAIRED" refers to any Claim or Interest that is not Impaired. 1.170 "UNSECURED DEFICIENCY CLAIM" means any Claim by a Person holding a Secured Claim to the extent the value of such Creditor's collateral, as determined in accordance with Section 506(a) of the Bankruptcy Code, is less than the Allowed amount of such Creditor's Claims as of the Petition Date, after taking into account any elections made pursuant to Section 1111(b) of the Bankruptcy Code. 1.171 "VOTING DEADLINE" means the date established by the Bankruptcy Court by which holders of Allowed Claims and Interests are determined for purposes of such Holders' right to submit Ballots. 1.172 "WORKERS' COMPENSATION PROGRAM" means, collectively, the Debtors' workers' compensation programs in all states in which they operate pursuant to which the Debtors provide their employees with workers' compensation coverage for claims arising from or related to their employment with the Debtors. C. RULES OF INTERPRETATION For purposes of this Plan, unless otherwise provided herein: (a) whenever from the context it is appropriate, each term, whether stated in the singular or the plural, will include both the singular and the plural; (b) each pronoun stated in the masculine, feminine or neuter includes the masculine, feminine and neuter; (c) unless otherwise provided in this Plan, any reference in this Plan to a contract, instrument, release or other agreement or document being in a particular form or on particular terms and conditions means that such document will be substantially in such form or substantially on such terms and conditions; (d) any reference in this Plan to an existing document or schedule filed or to be filed means such document or schedule, as it may have been or may be amended, modified or supplemented pursuant to this Plan; (e) any reference to an entity as a holder of a Claim or Interest includes that entity's successors and assigns; (f) all references in this Plan to Sections, Articles and Exhibits are references to Sections, Articles and Exhibits of or to this Plan; (g) the words "herein," "hereunder" and "hereto" refer to this Plan in its entirety rather than to a particular portion of this Plan; (h) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of this Plan; (i) subject to the provisions of any contract, certificates of incorporation, by-laws, instrument, release or other agreement or document entered into in connection with this Plan, the rights and obligations arising under this Plan shall be governed by, and construed and enforced in accordance with, federal law, including the Bankruptcy Code and Bankruptcy Rules; and (j) the rules of construction set forth in Section 102 of the Bankruptcy Code will apply. This Plan is the product of extensive discussions and negotiations between and among, inter alia, the Debtors, the Creditors' Committee, the Prepetition Agent on behalf of the Prepetition Lenders, the holders of AREC Note Claims, and certain other creditors and constituencies. Each of the foregoing was represented by counsel who either: (a) participated in the formulation and documentation of, or (b) was afforded the opportunity to review and provide comments on, the Plan, Disclosure Statement, and the documents ancillary thereto. Accordingly, the general rule of contract construction known as "contra preferentem" shall not apply to the construction or interpretation of any provision of 17 this Plan, Disclosure Statement, or any contract, instrument, release, indenture, exhibit, or other agreement or document generated in connection herewith. D. COMPUTATION OF TIME In computing any period of time prescribed or allowed by this Plan, unless otherwise expressly provided, the provisions of Bankruptcy Rule 9006(a) shall apply. E. REFERENCES TO MONETARY FIGURES All references in this Plan to monetary figures shall refer to United States of America currency, unless otherwise expressly provided. F. EXHIBITS All Exhibits are incorporated into and are a part of this Plan as if set forth in full herein and, to the extent not annexed hereto, such Exhibits shall be filed with the Bankruptcy Court on or before the Exhibit Filing Date. After the Exhibit Filing Date, copies of Exhibits can be obtained upon written request to Squire, Sanders & Dempsey L.L.P., Two Renaissance Square, 40 North Central Avenue, Suite 2700, Phoenix, Arizona 85004-4498 (Attn: Craig D. Hansen, Esq., chansen@ssd.com), counsel to the Debtors, or by downloading such exhibits from the Debtors' website at HTTP:\\WWW.AMERCO.COM. To the extent any Exhibit is inconsistent with the terms of this Plan, unless otherwise ordered by the Bankruptcy Court, the non-Exhibit portion of this Plan shall control. ARTICLE II ADMINISTRATIVE CLAIMS, PRIORITY TAX CLAIMS, AND OTHER UNCLASSIFIED CLAIMS 2.1 ADMINISTRATIVE CLAIMS. On the Distribution Date occurring after the later of: (a) the date an Administrative Claim becomes an Allowed Administrative Claim; or (b) the date an Administrative Claim becomes payable pursuant to any agreement between a Debtor (or a Reorganized Debtor) and the holder of such Administrative Claim, an Allowed Administrative Claimholder in the Chapter 11 Cases shall receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such Administrative Claim: (i) Cash equal to the unpaid portion of such Allowed Administrative Claim; or (ii) such other treatment as to which the Debtors (or the Reorganized Debtors) and such Claimholder shall have agreed upon in writing; provided, however, that: (y) Claimholders of Claims arising under the DIP Facility shall be deemed to have Allowed Claims as of the Effective Date in such amount as to which the Debtors and such Claimholders shall have agreed upon in writing or as determined by the Bankruptcy Court, which DIP Facility Claims shall be paid in accordance with Article 10.1 of this Plan; and (z) Allowed Administrative Claims with respect to liabilities incurred by the Debtors in the ordinary course of business during the Chapter 11 Cases, including the Allowed Administrative Claims of RepWest against the Debtors, shall be paid in the ordinary course of business in accordance with the terms and conditions of any agreement or Final Orders of the Bankruptcy Court relating thereto. 18 2.2 PRIORITY TAX CLAIMS. Commencing on the later of: (a) the Effective Date; (b) the date a Priority Tax Claim becomes an Allowed Priority Tax Claim; or (c) the date a Priority Tax Claim first becomes payable pursuant to any agreement between a Debtor (or a Reorganized Debtor) and the holder of such Priority Tax Claim, at the sole option of the Debtors (or the Reorganized Debtors after the Effective Date), such Allowed Priority Tax Claimholder shall be entitled to receive on account of such Priority Tax Claim, in full satisfaction, settlement, release and discharge of, and in exchange for, such Priority Tax Claim: (i) equal Cash payments on the last Business Day of each three-month period following the Effective Date, during a period not to exceed six years after the assessment of the tax on which such Claim is based, totaling the aggregate amount of such Claim plus simple interest on any outstanding balance from the Effective Date calculated at the interest rate available on ninety (90) day United States Treasuries on the Effective Date; (ii) such other treatment agreed to by the Allowed Priority Tax Claimholder and the Debtors (or the Reorganized Debtors), provided such treatment is on more favorable terms to the Debtors (or the Reorganized Debtors after the Effective Date) than the treatment set forth in clause (i) hereof; or (iii) payment in full in Cash. 2.3 WORKERS' COMPENSATION PROGRAMS CLAIMS. Following the Effective Date of the Plan, the Reorganized Debtors shall continue the Workers' Compensation Programs in accordance with applicable state laws. Nothing set forth in this Plan shall be deemed to discharge, release, or relieve the Debtors or Reorganized Debtors from any current or future liability with respect to any of the Workers' Compensation Programs. The Reorganized Debtors shall be responsible for all valid claims for benefits and liabilities under the Workers' Compensation Programs regardless of when the applicable injuries were incurred. Any and all obligations under the Workers' Compensation Programs shall be paid in accordance with the terms and conditions of Workers' Compensation Programs and in accordance with all applicable laws. 2.4 RETIREE BENEFITS. Nothing set forth in this Plan shall be deemed to alter, modify, terminate or discharge the Debtors or Reorganized Debtors from any current or future liability with respect to any Retiree Benefits that the Debtors or Reorganized Debtors are obligated to provide under any plan, fund, or program (through the purchase of insurance or otherwise) maintained or established in whole or in part by the Debtors prior to the Petition Date. 2.5 CLAIMS FOR PROFESSIONAL FEES. All Professional Claims shall be governed by Article 10.2 of this Plan. 2.6 CLAIMS OF DIP LENDER. Simultaneously with the closing of the Exit Financing Facility, all the Debtors' outstanding obligations to any DIP Lender pursuant to a DIP Financing Order shall be fully and finally satisfied in accordance with their terms using proceeds derived from, among other things, the Exit Financing Facility and/or Cash held by the Reorganized Debtors. 19 ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS Pursuant to Section 1122 of the Bankruptcy Code, set forth below is a designation of classes of Claims against and Interests in the Debtors. A Claim or Interest is placed in a particular Class for the purposes of voting on this Plan and of receiving distributions pursuant to this Plan only to the extent that such Claim or Interest is an Allowed Claim or an Allowed Interest in that Class and such Claim or Interest has not been paid, released, or otherwise settled prior to the Effective Date. In accordance with Section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims of the kinds specified in Sections 507(a)(1) and 507(a)(8) of the Bankruptcy Code have not been classified and their treatment is set forth in Article II above. 3.1 CLASS 1. Class 1 consists of the JPMorgan Claims. 3.2 CLASS 2. Class 2 consists of the Other Priority Claims. 3.3 CLASS 3. Class 3 consists of the following subclasses: Class 3(A) Citibank Secured Claim and Class 3(B) Citibank Guaranty Claim. 3.4 CLASS 4. Class 4 consists of the following subclasses: Class 4(A) BMO Secured Claim and Class 4(B) BMO Guaranty Claim. 3.5 CLASS 5. Class 5 consists of the Other Unsecured Claims. 3.6 CLASS 6. Class 6 consists of the AREC Note Claims. 3.7 CLASS 7. Class 7 consists of all AMERCO Unsecured Claims. 3.8 CLASS 8. Class 8 consists of the Oxford Note Claims. 3.9 CLASS 9. Class 9 consists of separate subclasses of Miscellaneous Secured Claims. 3.10 CLASS 10. Class 10 consists of the Intercompany Claims. 3.11 CLASS 11. Class 11 consists of the AMERCO/AREC Guaranty Obligations. 3.12 CLASS 12. Class 12 consists of the following subclasses: Class 12(A) Preferred Stock Interests and Class 12(B) Subordinated Claims (Preferred). 3.13 CLASS 13. Class 13 consists of the following subclasses: Class 13(A) Existing Common Stock Interests and Class 13(B) Subordinated Claims (Common). 3.14 CLASS 14. Class 14 consists of Subsidiary Interests. 20 ARTICLE IV IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS IMPAIRED AND UNIMPAIRED BY THE PLAN 4.1 CLASSES OF CLAIMS AND INTERESTS THAT ARE UNIMPAIRED. The following Classes are Unimpaired by the Plan: Class 2: (Other Priority Claims) Class 5: (Other Unsecured Claims) Class 8: (Oxford Note Claims) Class 9: (Miscellaneous Secured Claims) Class 10: (Intercompany Claims) Class 11: (AMERCO/AREC Guaranty Obligations) Class 12: (Preferred Stock Interest and Subordinated Claims (Preferred) Class 13: (Existing Common Stock and Other Interests and Subordinated Claims (Common)) Class 14: (Subsidiary Interests) 4.2 IMPAIRED CLASSES OF CLAIMS. The following Classes are Impaired by the Plan: Class 1: (JPMorgan Claims) Class 3: (Citibank Secured Claim and Citibank Guaranty Claim) Class 4: (BMO Secured Claim and BMO Guaranty Claim) Class 6: (AREC Note Claims) Class 7: (AMERCO Unsecured Claims) ARTICLE V PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS The treatment of Claims and Interests as provided in this Article V represents a compromise and full and final settlement, pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019, of the various Claims and Interests of parties in interest in the Chapter 11 Cases. 5.1 CLASS 1 (JPMORGAN CLAIMS) (IMPAIRED). Upon the occurrence of the Effective Date, the JPMorgan Claims are hereby allowed, and shall be treated as Allowed Claims, in the amount set forth in the Restructuring Agreement (Revolver Lenders), less the Cash payment in an amount equal to $51,250,000 paid Pro Rata to the holders of the JPMorgan Claims on or about September 10, 2003. On the Effective Date, the Prepetition Lenders shall 21 receive, in full satisfaction, settlement, release and discharge of, and in exchange for, their JPMorgan Claims (including any prepetition setoff claims) a Pro Rata portion of: (a) Cash in an amount equal to $71,750,000; (b) Cash in an amount equal to any and all accrued but unpaid interest on the principal amount outstanding payable at the non-default rate of interest under the JPMorgan Chase Credit Facility; (c) $48,400,000 in aggregate principal amount of the New Term Loan A Notes issued pursuant to the Exit Financing Facility; and (d) $33,600,000 in aggregate principal amount of the New Term Loan B Notes issued pursuant to the New Term Loan B Notes Indenture. In the event of any inconsistency between the terms of the Plan and the terms of the Restructuring Agreement (Revolver Lenders), the terms of the Restructuring Agreement (Revolver Lenders) shall control. Additionally, on the Effective Date, the Prepetition Agent under the JPMorgan Chase Credit Facility shall receive all reasonable fees and expenses provided for under the JPMorgan Chase Credit Facility. Notwithstanding the foregoing, in the event the Debtors fail to comply with the JPMorgan Syndication Terms, then the Prepetition Lenders shall receive an additional $33,600,000 in aggregate principal amount of Term Loan A Notes issued pursuant to the Exit Financing Facility in lieu of the consideration described in Article 5.1(d) of this Plan. 5.2 CLASS 2 (OTHER PRIORITY CLAIMS) (UNIMPAIRED). Upon the occurrence of the Effective Date, each holder of an Allowed Other Priority Claim shall receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such Other Priority Claim: (a) Cash in an amount equal to the amount of such Allowed Other Priority Claim; or (b) such other treatment as to which the Debtors (or the Reorganized Debtors) and such Claimholder shall have agreed upon in writing, provided that such treatment is not more favorable than the treatment in clause (a) above. The Debtors' failure to object to an Other Priority Claim in their Chapter 11 Cases shall be without prejudice to the Reorganized Debtors' right to contest or otherwise defend against such Claim in the Bankruptcy Court or other appropriate non-bankruptcy forum (at the option of the Debtors or the Reorganized Debtors) when and if such Claim is sought to be enforced by the Other Priority Claimholder. 5.3 CLASS 3 (CITIBANK SECURED CLAIM AND CITIBANK GUARANTY CLAIM) (IMPAIRED). Class 3 shall consist of a separate subclass for the Citibank Secured Claim and the Citibank Guaranty Claim. The alternative treatments set forth in this Article 5.3 of the Plan shall be in full satisfaction, settlement, release and discharge of the Citibank Secured Claim and the Citibank Guaranty Claim. (a) Class 3(a): Citibank Secured Claim (Impaired): (i) CASH - CAREY SALE PROCEEDS. On or before the Effective Date of the Plan, the holders of Citibank Secured Claim shall receive an amount of Cash from the Carey Sale Proceeds equivalent to the amount of the Allowed 22 Citibank Secured Claim, excluding therefrom, if applicable, any fine, penalty, interest or cost arising from or related to a default under the Citibank Master Lease and the Citibank Guaranty, provided that: (A) the Carey Sale Agreement shall have been approved by a Final Order of the Bankruptcy Court on or before the Effective Date; (B) the Carey Sale Transaction closes in accordance with the Carey Sale Agreement, including the payment of the Carey Sale Proceeds, on or before the Effective Date; and (C) the holders of Citibank Secured Claim in Class 3(a) and Citibank Guaranty Claim in Class 3(b) shall have voted to accept the Plan by the statutory prerequisites for such acceptance set forth in Section 1126 of the Bankruptcy Code. (ii) RESTATED CITIBANK MASTER LEASE. In the event the Carey Sale Transaction does not close in accordance with the Carey Sale Agreement on or before the Effective Date of the Plan, and provided that the holders of Citibank Secured Claim in Class 3(a) and Citibank Guaranty Claim in Class 3(b) shall have voted to accept the Plan by the statutory prerequisites for such acceptance set forth in Section 1126 of the Bankruptcy Code, Reorganized AREC shall, on the Effective Date of the Plan, execute and deliver the Restated Citibank Master Lease. (iii) CONVEYANCE OF CITIBANK PROPERTIES. In the event the holders of the Citibank Secured Claim in Class 3(a) and the Citibank Guaranty Claim in Class 3(b) vote to reject the Plan by the statutory prerequisites for such rejection set forth in Section 1126 of the Bankruptcy Code, the Debtors reserve the right, in their sole discretion, either to: (A) surrender to the holders of the Citibank Secured Claim all of their right, title and interest in and to the Citibank Properties in full and final satisfaction of all Claims arising under or related to the Citibank Master Lease, together with Cash in an amount equivalent to the Unsecured Deficiency Claim, if any such Claim exists, of the holders of the Citibank Secured Claim as determined by a Final Order of the Bankruptcy Court pursuant to the Citibank Valuation Hearing; (B) provide for the treatment of the Citibank Secured Claim in accordance with the alternative treatment set forth in Article 5.3(a)(i) and (a)(ii) of this Plan; or (C) provide such other treatment of the Citibank Secured Claim that complies with Section 1129 (b) of the Bankruptcy Code. If the Bankruptcy Court determines, as part of the Citibank Valuation Hearing, that the value of the Citibank Properties exceeds the amount of the Allowed Citibank Secured Claim, and the Debtors have selected the alternative treatment set forth in Article 5.3(a)(iii) of this Plan, the holders of the Citibank Secured Claim shall pay in Cash to the Debtors the amount of the excess value. Notwithstanding anything set forth in this Plan, if the holders of the Citibank Secured Claim vote to reject the Plan and the Debtors elect to close the Carey Sale Transaction, the holders of the Citibank Secured Claim shall receive Cash in an amount equivalent to the amount of the Allowed Citibank Secured Claim. The holders of the Citibank Secured Claim shall have the right to submit a conditional Ballot to accept or reject the Plan. (b) Class 3(b): Citibank Guaranty Claim (Impaired). In the event the Citibank Secured Claim in Class 3(a) receives the alternative treatment in Articles 5.3(a)(i) and 5.3(a)(iii) of this Plan, the Citibank Guaranty Claim, to the extent such Claim is an Allowed Claim, shall be deemed satisfied in full. In the event the Citibank Secured Claim in Class 3(a) receives the alternative treatment in Article 5.3(a)(ii) of this 23 Plan, the holder of the Citibank Guaranty Claim shall receive in full satisfaction, settlement, release and discharge of the Citibank Guaranty Claim, to the extent such Claim is an Allowed Claim, the New Citibank Guaranty, which shall be executed and delivered by Reorganized AMERCO on the Effective Date. 5.4 CLASS 4 (BMO SECURED CLAIM AND BMO GUARANTY CLAIM) (IMPAIRED). Class 4 shall consist of a separate subclass for the BMO Secured Claim and the BMO Guaranty Claim. The alternative treatments set froth in this Article 5.4 of this Plan, shall be in full satisfaction, settlement, release, and discharge of the BMO Secured Claim and the BMO Guaranty Claim. (a) Class 4(a): BMO Secured Claim (Impaired). (i) CASH - CAREY SALE PROCEEDS. On or before the Effective Date of the Plan, the holders of BMO Secured Claim shall receive an amount of Cash from the Carey Sale Proceeds equivalent to the amount of the Allowed BMO Secured Claim, excluding therefrom, if applicable, any fine, penalty, interest or cost arising from or related to a default under the BMO Master Lease or the BMO Guaranty, provided that: (A) the Carey Sale Agreement shall have been approved by a Final Order of the Bankruptcy Court on or before the Effective Date; (B) the Carey Sale Transaction closes in accordance with the Carey Sale Agreement, including the payment of the Carey Sale Proceeds, on or before of the Effective Date; and (C) the BMO Secured Claim in Class 4(a) and the BMO Guaranty Claim in Class 4(b) shall have voted to accept the Plan by the statutory prerequisites for such rejection pursuant to Section 1126 of the Bankruptcy Code. (ii) RESTATED BMO MASTER LEASE. In the event the Carey Sale Transaction does not close in accordance with the Carey Sale Agreement on or before the Effective Date of the Plan, and provided that the holders of the BMO Secured Claim in Class 4(a) and the BMO Guaranty Claim in Class 4(b) shall have voted to accept the Plan by the statutory prerequisites for such acceptance pursuant to Section 1126 of the Bankruptcy Code, Reorganized AREC and U-Haul shall, on the Effective Date, execute and deliver to the holders of the BMO Secured Claim the Restated BMO Master Lease. (iii) CONVEYANCE OF BMO PROPERTIES. In the event the holders of BMO Secured Claim in Class 4(a) and the BMO Guaranty Claim in Class 4(b) vote to reject the Plan by the statutory prerequisites for such rejection set forth in Section 1126 of the Bankruptcy Code, the Debtors reserve the right, in their sole discretion, either to: (A) surrender and cause U-Haul to surrender to the holders of the BMO Secured Claim all of their right, title and interest in and to the BMO Properties in full and final satisfaction of all Claims arising under or related to the Master Lease, together with Cash in an amount equivalent to the Unsecured Deficiency Claim, if any such Claim exists, of the holders of BMO Secured Claim as determined by a Final Order of the Bankruptcy Court pursuant to the BMO Valuation Hearing; (B) to treat the BMO Secured Claim in accordance with the alternative treatment set forth in Article 5.4 (a)(i) and (a)(ii) of this Plan; or (C) provide such other treatment that complies with the provisions of Section 1129(b) of the Bankruptcy Code. If the Bankruptcy Court determines, as part of the BMO Valuation Hearing, that the value of the BMO Properties exceeds the amount of the Allowed BMO Secured Claim, and the Debtors have selected the 24 alternative treatment set forth in Article 5.4(a)(iii) of this Plan, the holders of the BMO Secured Claim shall pay in Cash to the Debtors the amount of the excess value. Notwithstanding anything set forth in this Plan, if the holders of the BMO Secured Claim vote to reject the Plan and the Debtors elect to close the Carey Sale Transaction, the holders of the BMO Secured Claim shall receive Cash in an amount equivalent to the amount of the Allowed BMO Secured Claim. The holders of the BMO Secured Claim shall have the right to submit a conditional Ballot to accept or reject the Plan. (b) Class 4(b): BMO Guaranty Claim (Impaired). In the event the BMO Secured Claim in Class 4(a) receives the alternative treatments in Article 5.4(a)(i) and (a)(iii) of this Plan, the BMO Guaranty Claim, to the extent such Claim is an Allowed Claim, shall be deemed satisfied in full. In the event the BMO Secured Claim in Class 4(a) receives the alternative treatment in Article 5.4(a)(ii) of this Plan, the holders of BMO Guaranty Claim shall receive in full satisfaction, settlement, release and discharge of the BMO Guaranty Claim, to the extent such Claim is an Allowed Claim, the New BMO Guaranty, which shall be executed and delivered by Reorganized AMERCO on the Effective Date. 5.5 CLASS 5 (OTHER UNSECURED CLAIMS) (UNIMPAIRED). Each holder of an Allowed Other Unsecured Claim shall receive the payment of Cash equal to the amount of such holders' Allowed Class 5 Other Unsecured Claim upon the later to occur of: (i) the Distribution Date; (ii) the date upon which such Allowed Other Unsecured Claim would be paid in the ordinary course of the Debtors' or Reorganized Debtors' business; or (iii) such other date as the holder of the Allowed Class 5 Other Unsecured Claim shall have agreed. 5.6 CLASS 6 (AREC NOTE CLAIMS) (IMPAIRED). Upon the occurrence of the Effective Date, the AREC Note Claims are hereby Allowed in the amount set forth in the Restructuring Agreement (AREC Noteholders). On the Effective Date, the AREC Note Claimholders shall receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, their AREC Note Claims, a Pro Rata portion of: (a) Cash in the amount of $65,000,000; (b) Cash in an amount equal to the sum of: (i) any and all accrued but unpaid interest on the AREC Notes from October 15, 2002 up to but not including the AREC Petition Date, payable at the default rate of interest under the AREC Notes; (ii) any and all accrued and unpaid interest under the AREC Notes from the AREC Petition Date up to but not including the Effective Date, payable at the non-default rate of interest under the AREC Notes; and (iii) any reasonable unpaid fees and expenses provided for under the AREC Notes, including reasonable professional fees; (c) $18,600,000 in aggregate principal amount of the New Term Loan A Notes issued pursuant to the Exit Financing Facility; and (d) $16,400,000 in aggregate principal amount of the New Term Loan B Notes issued pursuant to the New Term Loan B Notes Indenture. 25 Notwithstanding the foregoing, in the event the Debtors fail to comply with the AREC Syndication Terms, then the holders of the AREC Note Claims shall receive a Pro Rata portion of $16,400,000 in aggregate principal amount of the New Term Loan A Notes in lieu of the consideration described in Article 5.6(d) above. In the event of any inconsistency between the terms of the Plan and the terms of the Restructuring Agreement (AREC Noteholders), the Restructuring Agreement (AREC Noteholders) shall govern and control. 5.7 CLASS 7 (AMERCO UNSECURED CLAIMS) (IMPAIRED). Upon the occurrence of the Effective Date, each holder of an Allowed AMERCO Unsecured Claim shall receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such AMERCO Unsecured Claims such holder's Pro Rata portion of the following: (a) Cash in the amount of $ 191,000,000, provided, however, that the amount of Cash shall be increased by the same amount, if any, by which the principal amount of New Term Loan B Notes distributed to the AMERCO Unsecured Claimholders is less than $200,000,000, but in no event shall the amount of Cash exceed an amount equivalent to thirty-five percent (35%) of the aggregate amount of Allowed Class 7 AMERCO Unsecured Claims. Notwithstanding anything set forth in this Plan to the contrary, the Cash distributed to the holders of Allowed Class 7 AMERCO Unsecured Claims pursuant to Article 5.7(a) of this Plan shall be decreased, only to the extent required, to enable the Reorganized Debtors to have as of the Effective Date, minimum availability under the Exit Financing Facility of $80,000,000. (b) The SAC Holding Senior Notes in the original principal amount of $200,000,000. (c) New Term Loan B Notes in the principal amount of $200,000,000, provided, however, that the amount of the New Term Loan B Notes distributed to the AMERCO Unsecured Claimholders shall be decreased by the sum of: (i) the New Term Loan B Notes distributed to the AREC Note Claimholders and the Pre-Petition Lenders as a result of the satisfaction by the Debtors of the JPMorgan Syndication Terms and the AREC Syndication Terms as provided in Articles 5.1 and 5.6 of this Plan; and (ii) the amount of New Term Loan B Notes syndicated by the Debtors to unrelated third-party market participants. (d) The New AMERCO Notes. The treatment of allowed Class 7 AMERCO Unsecured Claims, including the documentation evidencing the New Debt Securities, shall be consistent with the terms of the Plan Support Agreement. 5.8 CLASS 8 (OXFORD NOTE CLAIMS) (UNIMPAIRED). On the Effective Date, the Allowed Oxford Note Claims shall be paid in Cash in full. 5.9 CLASS 9 (MISCELLANEOUS SECURED CLAIMS) (UNIMPAIRED). On the Effective Date, the legal, equitable and contractual rights of holders of an Allowed Class 9 Claim shall be Reinstated. The Debtors' failure to object to any such Class 9 Claims in the Chapter 11 Cases shall be without prejudice to the Reorganized Debtors' right to contest or otherwise defend against such Claims in the appropriate forum when and if such Claim is sought to be enforced by 26 the Miscellaneous Secured Claimholder. Notwithstanding Section 1141(c) or any other provision of the Bankruptcy Code, all pre-petition liens on property of any Debtor held by or on behalf of the Miscellaneous Secured Claimholder with respect to such Claims shall survive the Effective Date and continue in accordance with the contractual terms of the underlying agreements with such Claimholders until, as to each Claimholder, the Allowed Claims of such Miscellaneous Secured Claimholder are paid in full. 5.10 CLASS 10 (INTERCOMPANY CLAIMS) (UNIMPAIRED). This Plan shall not alter, impair or discharge any of the Allowed Intercompany Claims. 5.11 CLASS 11 (AMERCO/AREC GUARANTY OBLIGATIONS (UNIMPAIRED). On the Effective Date, and unless otherwise specifically provided for in this Plan, the AMERCO/AREC Guaranty Obligations shall be deemed Reinstated, and any non-monetary default in the primary obligations underlying the AMERCO/AREC Guaranty Obligations arising out of or related to the commencement by the Debtors of the Chapter 11 Cases, shall be deemed Cured. Article 11.6 of the Plan shall not apply to the holders of AMERCO/AREC Guaranty Obligations. 5.12 CLASS 12 (PREFERRED STOCK INTERESTS AND SUBORDINATED CLAIMS) (UNIMPAIRED). The subclasses of Class 12 shall receive the following treatment under the Plan. (a) Class 12(a): Preferred Stock Interests (Unimpaired). The Plan shall not alter or otherwise impair any of the Allowed Preferred Stock Interests. (b) Class 12(b): Subordinated Claims (Preferred) (Unimpaired). Pursuant to Section 510 of the Bankruptcy Code and this Plan, Subordinated Claims (Preferred) shall be subordinated to the Allowed Claims of Creditors in Classes 1 through 11 under this Plan, but shall be pari passu with Allowed Preferred Stock Interests in Class 12(a) under this Plan. To the extent a Subordinated Claim (Preferred) becomes an Allowed Claim, either by agreement between the Reorganized Debtors and the holder of such Subordinated Claim (Preferred), or by Final Order of the Bankruptcy Court or other court of competent jurisdiction, such Allowed Subordinated Claim (Preferred) shall be satisfied in Cash in full by the Reorganized Debtors or on such other terms as to which the Reorganized Debtors and the holder of an Allowed Subordinated Claim (Preferred) shall have agreed to in writing. 5.13 CLASS 13 (EXISTING COMMON STOCK, OTHER INTERESTS AND SUBORDINATED CLAIMS) (UNIMPAIRED). The subclasses of Class 13 shall receive the following treatment under the Plan: (a) Class 13(a): Common stock and Other Interests (Unimpaired). The Plan shall not alter or otherwise impair Allowed Existing Common Stock and Other Interests. (b) Class 13(b): Subordinated Claims (Common) (Unimpaired). Pursuant to Section 510 of the Bankruptcy Code and this Plan, Subordinated Claims (Common) shall be subordinated to the Allowed Claims in Classes 1 through 11 and Allowed Preferred Stock Interests and Allowed Subordinated Claims (Preferred) in Class 12 of this Plan, but 27 shall be pari passu with Allowed Common Stock Interests in Class 13(a) under this Plan. To the extent a Subordinated Claim (Common) becomes an Allowed Claim, either by agreement between the Reorganized Debtors and the holder of such Subordinated Claims (Common), or by Final Order of the Bankruptcy Court or other court of competent jurisdiction, such Allowed Subordinated Claim (Common) shall be satisfied in Cash in full by the Reorganized Debtors or on such other terms as to which the Reorganized Debtors and the holder of an Allowed Subordinated Claim (Common) shall have agreed to in writing. 5.14 CLASS 14 (SUBSIDIARY INTERESTS). This Plan shall not alter or otherwise impair any of the Subsidiary Interests ARTICLE VI ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE IMPAIRED CLASSES OF CLAIMS OR INTERESTS 6.1 IMPAIRED CLASSES OF CLAIMS ENTITLED TO VOTE. Except as otherwise provided in order(s) of the Bankruptcy Court pertaining to solicitation of votes on this Plan and Article 6.2 and Article 6.4 of this Plan, Claimholders in each Impaired Class are entitled to vote in their respective classes as a class to accept or reject this Plan. 6.2 CLASSES DEEMED TO ACCEPT THE PLAN. Classes 2, 5, 8, 9, 10, 11, 12, 13 and 14 are Unimpaired by this Plan. Pursuant to Section 1126(f) of the Bankruptcy Code, such Classes are conclusively presumed to have accepted this Plan, and the votes of Claimholders and Interestholders in such Classes therefore will not be solicited. 6.3 ACCEPTANCE BY IMPAIRED CLASSES. Classes 1, 3,4, 6, and 7 are Impaired under this Plan. Pursuant to Section 1126(c) of the Bankruptcy Code, and except as provided in Section 1126(e) of the Bankruptcy Code, an Impaired Class of Claims has accepted the Plan if the Plan is accepted by the holders of at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of the Allowed Claims of such Class that have timely and properly voted to accept or reject the Plan. 6.4 CLASSES DEEMED TO REJECT THE PLAN. Pursuant to Section 1126(g) of the Bankruptcy Code, no Classes of Claims or Interests are conclusively presumed to have rejected the Plan. 6.5 CONFIRMATION PURSUANT TO SECTION 1129(b) OF THE BANKRUPTCY CODE. If any impaired Class of Claims entitled to vote should not accept this Plan by the requisite statutory majorities provided in Section 1126(c) of the Bankruptcy Code, the Debtors reserve the right to request that the Bankruptcy Court confirm this Plan under Section 1129(b) of the Bankruptcy Code. 28 ARTICLE VII MEANS FOR IMPLEMENTATION OF THE PLAN 7.1 CONTINUED CORPORATE EXISTENCE (a) The Debtors From and after the Effective Date of the Plan, each of the Debtors will continue to exist as a separate corporate entity, with all the powers of a corporation under applicable law in the jurisdiction in which each applicable Debtor is incorporated or otherwise formed and pursuant to its articles of incorporation and bylaws or other organizational documents in effect prior to the Effective Date, except to the extent such certificate of incorporation and bylaws or other organizational documents are amended by this Plan, without prejudice to any right to terminate such existence (whether by merger or otherwise) under applicable law after the Effective Date. (b) Amended and Restated Articles of Incorporation The certificates or articles of incorporation of each Debtor shall be amended as necessary to satisfy the provisions of the Plan and the Bankruptcy Code, including a provision prohibiting the issuance of non-voting equity securities, but only to the extent required by Section 1123(a)(b) of the Bankruptcy Code. The Amended and Restated Articles of Incorporation for each Debtor shall be in substantially the form of Exhibit O and Exhibit P attached to this Plan. (c) Non-Debtors There are certain Subsidiaries of the Debtors that are not Debtors in the Chapter 11 Cases. The continued existence, operation and ownership of such Non-Debtor Subsidiaries is a material component of the Debtors' businesses, and, as set forth in Article 11.1 of this Plan, all of the Debtors' equity interests and other property interests in such Non-Debtor Subsidiaries shall revest in the applicable Reorganized Debtor or its successor on the Effective Date. 7.2 DIRECTORS AND OFFICERS OF AMERCO (a) Officers The existing senior officers of the Debtors in office on the Effective Date shall serve in their current capacities after the Effective Date, subject to the authority of the board of directors of the Reorganized Debtors. (b) Directors of AMERCO The current members of the board of directors of AMERCO on the Effective Date shall continue to serve out their current term after the Effective Date, subject to the authority of the shareholders of AMERCO; provided that the board of directors, collectively, including any required committee thereof, shall comply with any other qualification, experience, and independence requirements under applicable law, including the Sarbanes-Oxley Act of 2002 and the rules then in effect of the stock exchange or quotation system (including the benefit of any transition periods available under applicable law) on which the Existing Common Stock or Series A 8-1/2% Preferred Stock of AMERCO is listed or is anticipated to be listed, when such Existing Common Stock or Series A 8-1/2% Preferred Stock is listed. 29 (c) Directors and Officers of AREC and Non-Debtor Subsidiaries The existing directors and officers of AREC and Non-Debtor Subsidiaries shall continue to serve in their current capacities after the Effective Date, provided, however that AMERCO reserves the right to identify new officers and members of the board of directors of each of AREC and the Non-Debtor Subsidiaries at any time thereafter. 7.3 LISTING ON SECURITIES EXCHANGE OR QUOTATION SYSTEM AMERCO will use its commercially reasonable best efforts to seek the continued listing, as promptly as practicable after the Effective Date, of the shares of Existing Common Stock and the Series A 8-1/2% Preferred Stock of AMERCO on a national securities exchange or for quotation on a national automated interdealer quotation system but will have no liability if it is unable to do so. 7.4 SAC HOLDING PARTICIPATION On the Effective Date, SAC Holding will execute and deliver the SAC Holding Note Documents. The SAC Holding Note Documents shall be duly and validly authorized, executed and delivered, and shall constitute valid and binding obligations of SAC Holding, enforceable in accordance with their terms. 7.5 CANCELLATION OF EXISTING DEBT SECURITIES AND ISSUANCE OF NEW DEBT SECURITIES (a) CANCELLATION OF EXISTING DEBT SECURITIES. On the Effective Date, except as otherwise specifically provided for herein, (a) the Existing Debt Securities and any other note, bond, indenture, or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors, except such notes or other instruments evidencing indebtedness or obligations of the Debtors that are Reinstated under this Plan, will be cancelled, and (b) the obligations of, and Claims against the Debtors under, relating, or pertaining to any agreements, indentures, or similar documents governing the Existing Debt Securities and any other note, bond, indenture, or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors, except such notes or other instruments evidencing indebtedness or obligations of the Debtors that are Reinstated under this Plan, as the case may be, will be released and discharged; provided, however, that any agreement that governs the rights of the Claimholder and that is administered by an Indenture Trustee, an agent, or a servicer (each hereinafter referred to as a "Servicer") will continue in effect solely for purposes of (i) allowing such Servicer to make the distributions to be made on account of such Claims under this Plan as provided in Article V of this Plan and to perform such other necessary administrative functions with respect thereto, and (ii) allowing the Servicer, including Indenture Trustees, to assert their Indenture Trustees Charging Liens against such distributions for payment of the Indenture Trustee Fees, to the extent that all or a portion of such fees are not paid pursuant to Article 9.6 of this Plan, which will effectively reduce the distributions made to the Noteholders pursuant to the Plan, and allowing the Indenture Trustees to assert their indemnification rights under the Indentures against the Reorganized Debtors for all liabilities, losses, damages, claims, costs and expenses arising our of or due to their actions or omissions, including but not limited to attorneys' fees, except for their gross negligence or willful misconduct. (b) ISSUANCE OF NEW DEBT SECURITIES. For purposes of this Plan and Section 1145 of the Bankruptcy Code, SAC Holding shall be an Affiliate of the Debtors. On the 30 Effective Date, SAC Holding will be deemed to have issued the SAC Holding Senior Notes, the Reorganized Debtors will be deemed to have issued the remainder of the New Debt Securities and the Reorganized Debtors will be deemed to have issued the New Term Loan A Notes, each as set forth in Article V of this Plan. The issuance of the New Debt Securities and the distribution thereof as described above will be in compliance with applicable registration requirements or exempt from registration under applicable securities laws pursuant to Section 1145(a) of the Bankruptcy Code or Section 4(2) of the Securities Act. 7.6 EMERGENCE DATE FINANCING On the Effective Date, the Reorganized Debtors shall enter into the Exit Financing Facility in order to obtain the funds necessary to repay the DIP Facility Claims, make other payments required to be made on the Effective Date, and conduct their post reorganization operations. The Reorganized Debtors may enter into all documents necessary and appropriate in connection with the Exit Financing Facility. The commitment letter with respect to such Facility, and principal documents with respect thereto, shall be filed by the Debtors with the Bankruptcy Court no later than the Exhibit Filing Date and will be deemed attached hereto as Exhibit A-1 and Exhibit A-2. In the Confirmation Order, the Bankruptcy Court shall approve the terms of the Exit Financing Facility in substantially the form filed with the Bankruptcy Court (and with such changes as to which the applicable Debtors and respective agents and lenders parties thereto may agree) and authorize the applicable Reorganized Debtors to execute the same together with such other documents as the applicable Reorganized Debtors and the applicable lenders may reasonably require in order to effectuate the treatment afforded to such parties under the Exit Financing Facility. 7.7 PRESERVATION OF CAUSES OF ACTION In accordance with Section 1123(b)(3) of the Bankruptcy Code, the Reorganized Debtors will retain and may (but are not required to) enforce all Retained Actions. The Debtors or the Reorganized Debtors, in their sole and absolute discretion, will determine whether to bring, settle, release, compromise, or enforce such Retained Actions (or decline to do any of the foregoing), and will not be required to seek further approval of the Bankruptcy Court for such action. The Reorganized Debtors may pursue such litigation claims in accordance with the best interests of the Reorganized Debtors or any successors holding such rights of action. 7.8 EXCLUSIVITY PERIOD The Debtors will retain the exclusive right to amend or modify this Plan, and to solicit acceptances of any amendments to or modifications of this Plan, through and until the Effective Date. 7.9 CORPORATE ACTION Each of the matters provided for under this Plan involving the corporate structure of any Debtor or Reorganized Debtor or corporate action to be taken by or required of any Debtor or Reorganized Debtor, including, without limitation, the execution by the Reorganized Debtors of the Amended and Restated Articles of Incorporation, shall, as of the Effective Date, be deemed to have occurred and be effective as provided herein, and shall be authorized, approved and, to the extent taken prior to the Effective Date, ratified in all respects without any requirement of further action by stockholders, creditors, or directors of any of the Debtors or the Reorganized Debtors. 31 7.10 EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS Each of the Chief Executive Officer and President, Chief Financial Officer, and Senior Vice President and General Counsel of the Debtors, or their respective designees, will be authorized to execute, deliver, file, or record such contracts, instruments, releases, indentures, and other agreements or documents, and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of this Plan or to otherwise comply with applicable law. The secretary or assistant secretary of the Debtors will be authorized to certify or attest to any of the foregoing actions. 7.11 EXEMPTION FROM CERTAIN TRANSFER TAXES AND RECORDING FEES (a) EXEMPTION. Pursuant to Section 1146(c) of the Bankruptcy Code, any transfers from a Debtor to a Reorganized Debtor or to any other Person or entity pursuant to this Plan, any agreement regarding the transfer of title to or ownership of any of the Debtors' real or personal property, and any recordation of mortgage liens, deeds of trust or grants of security interest necessary and appropriate to implement the Exit Financing Facility, the New Term Loan B Notes and the New AMERCO Notes, will not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, or other similar tax or governmental assessment, and the Confirmation Order will direct the appropriate state or local governmental officials or agents to forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. (b) SUBSEQUENT ISSUANCES. All subsequent issuances, transfers or exchanges of securities, or the making or delivery of any instrument of transfer by Debtors on the Reorganized Debtors, as applicable, in the Chapter 11 Cases, whether in connection with a sale, transfer, or the making, delivery or recording of any deed or other instrument or transfer shall be deemed in furtherance of this Plan. ARTICLE VIII EXECUTORY CONTRACTS AND UNEXPIRED LEASES 8.1 EXECUTORY CONTRACTS. All executory contracts and unexpired leases of the Debtors shall be deemed assumed by the applicable Reorganized Debtor, as of the Effective Date, except for any executory contract or unexpired lease: (i) that has been rejected pursuant to an order of the Bankruptcy Court entered prior to the Effective Date; or (ii) as to which a motion for approval of the rejection of such executory contract or unexpired lease, if applicable, has been filed with the Bankruptcy Court prior to the Confirmation Date. 8.2 APPROVAL OF ASSUMPTION OR REJECTION. Entry of the Confirmation Order shall constitute: (i) the approval, pursuant to Section 365(a) of the Bankruptcy Code, of the assumption of the executory contracts and unexpired leases assumed pursuant to the Plan or otherwise during the Chapter 11 Cases; and (ii) the approval, pursuant to Section 365(a) of the Bankruptcy Code, of the rejection of the executory contracts and unexpired leases rejected pursuant to the Plan or otherwise during the Chapter 11 Cases. 32 8.3 CURE OF DEFAULTS. On the Effective Date or as soon thereafter as is practicable, the Reorganized Debtors shall Cure any defaults under any executory contract or unexpired lease assumed pursuant to this Plan in accordance with Section 365(b)(1) of the Bankruptcy Code. 8.4 BAR DATE. All proofs of Claim with respect to Claims arising from the rejection of any executory contract or unexpired lease shall be filed with the Bankruptcy Court no later than forty-five (45) days after the Effective Date. Any such Claim not so filed by that date shall be forever barred. ARTICLE IX PROVISIONS GOVERNING DISTRIBUTIONS 9.1 RECORD DATE. On the Record Date, the various transfer registers for each class of Claims shall be deemed closed, and there shall be no further changes in the record holders of any Claims. The Debtors, the Reorganized Debtors and Servicers shall have no obligation to recognize any transfer of Claims accruing on or after the Record Date. 9.2 TIME OF DISTRIBUTIONS. Except as otherwise provided for herein or ordered by the Bankruptcy Court, distributions under this Plan shall commence on the Effective Date or as soon thereafter as practicable. 9.3 NO INTEREST ON CLAIMS OR INTERESTS. Unless otherwise specifically provided for in this Plan, the Confirmation Order, the DIP Credit Agreement, a post-petition agreement in writing between the Debtors and a Claimholder, or as otherwise ordered by the Bankruptcy Court, post-petition interest shall not accrue or be paid on Claims, and no Claimholder shall be entitled to interest accruing on or after the Petition Date on any Claim. Additionally, and without limiting the foregoing, interest shall not accrue or be paid on any Disputed Claim in respect of the period from the Effective Date to the date a final distribution is made when and if such Disputed Claim or Disputed Interest becomes an Allowed Claim or Allowed Interest. 9.4 REORGANIZED DEBTORS AS DISBURSING AGENT. The Reorganized Debtors shall make all distributions required under this Plan, except with respect to a holder of a Claim whose distribution is governed by an agreement and is administered by a Servicer, which distributions shall be deposited with the appropriate Servicer, who shall deliver such distributions to the holders of Claims in accordance with the provisions of this Plan and the terms of the governing agreement, so long as such holders have surrendered their securities in accordance with Article 9.5 of this Plan; provided, however, that if any such Servicer is unable to make such distributions, the Reorganized Debtor with the cooperation of such Servicer, shall make such distributions. Neither the Reorganized Debtors nor the Servicers shall be required to give any bond or surety or other security for the performance of their duties unless otherwise ordered by the Bankruptcy Court and, to the extent the Bankruptcy Court so orders, all costs and expenses of procuring such bond or surety shall be borne by the Reorganized Debtors. 33 9.5 SURRENDER OF SECURITIES OR INSTRUMENTS. Except to the extent evidenced by electronic entry, on or before the Distribution Date, or as soon as practicable thereafter, each holder of an instrument evidencing a Claim arising under, from or with respect to an Existing Debt Security (a "Certificate"), shall surrender such Certificate to the Reorganized Debtor, or, with respect to indebtedness that is governed by an agreement and administered by a Servicer, the respective Servicer, and such Certificate shall be cancelled solely with respect to the Debtors and such cancellation shall not alter the obligations or rights of any non-Debtor third parties vis-a-vis one another to such instruments; provided, however, that this Article 9.5 shall not apply to (i) any Claims Reinstated pursuant to the terms of this Plan, or (ii) the parties to the PMSR Agreement, in such capacity. No distribution of property hereunder shall be made to or on behalf of any such holder unless and until such Certificate is received by the Reorganized Debtors or the respective Servicer or the unavailability of such Certificate is reasonably established to the satisfaction of the Reorganized Debtors or the respective Servicer. Any holder who fails to surrender or cause to be surrendered such Certificate, or fails to execute and deliver an affidavit of loss and indemnity reasonably satisfactory to the Reorganized Debtors or the respective Servicer prior to the third anniversary of the Effective Date, shall be deemed to have forfeited all rights and Claims in respect of such Certificate and shall not participate in any distribution hereunder, and all property in respect of such forfeited distribution, including any dividends or interest attributable thereto, shall revert to the Reorganized Debtors notwithstanding any federal or state escheat laws to the contrary. Notwithstanding the foregoing, holders of Interests shall not be required to surrender Certificates evidencing an equity ownership in the Debtors. 9.6 SERVICES OF INDENTURE TRUSTEES, AGENTS AND SERVICERS. The services, with respect to implementation of the distributions contemplated by this Plan, of Servicers, including Indenture Trustees under the relevant agreements that govern the rights of Claimholders shall be as set forth elsewhere in this Plan. Notwithstanding the foregoing, the Reorganized Debtors shall reimburse (i) any Servicers for reasonable and necessary services performed by it (including reasonable attorneys' fees) as contemplated by, and in accordance with this Plan, and (ii) the Indenture Trustees for all reasonable fees and expenses and indemnification amounts owed to such Indenture Trustees pursuant to the respective Indentures and arising in connection with the performance of services by the Indenture Trustees under the respective Indentures or this Plan. 9.7 CLAIMS ADMINISTRATION RESPONSIBILITY. (a) REORGANIZED DEBTORS. The Reorganized Debtors will retain responsibility for administering, disputing, objecting to, compromising, or otherwise resolving and making distributions (if any) with respect to all Claims against and Interests in the Debtors. (b) FILING OF OBJECTIONS. Unless otherwise extended by the Bankruptcy Court, any objections to Claims or Interests shall be served and filed on or before forty-five (45) days following the Effective Date. Notwithstanding any authority to the contrary, an objection to a Claim or Interest shall be deemed properly served on the Claimholder or Interestholder if the Debtors or the Reorganized Debtors effect service in any of the following manners: (i) in accordance with Federal Rule of Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (ii) to the extent counsel for a Claimholder or Interestholder is unknown, by first class mail, postage prepaid, on the signatory on the proof of claim or interest or other representative identified on the proof of claim or interest or any attachment thereto; or (iii) by first class mail, postage prepaid, 34 on any counsel that has appeared on the Claimholder's or Interestholder's behalf in the Chapter 11 Cases. 9.8 DELIVERY OF DISTRIBUTIONS. Distributions to Allowed Claimholders shall be made by the Reorganized Debtor or the appropriate Servicer (a) at the addresses set forth on the proofs of claim filed by such Claimholders (or at the last known addresses of such Claimholders if no proof of claim is filed or if the Debtors have been notified in writing of a change of address), (b) at the addresses set forth in any written notices of address changes delivered to the Debtors or the Reorganized Debtors, as applicable, after the date of any related proof of claim, (c) at the addresses reflected in the Schedules if no proof of claim has been filed and the Reorganized Debtors have not received a written notice of a change of address, or (d) in the case of a Claimholder whose Claim is governed by an agreement and administered by a Servicer, including an Indenture Trustee, at the addresses contained in the official records of such Servicer or Indenture Trustee. Distributions made to holders of Allowed AMERCO Unsecured Claims by the Indenture Trustees shall be subject to the rights of the Indenture Trustees under the Indentures and/or the Indenture Trustees Charging Liens. If any Claimholder's distribution is returned as undeliverable, no further distributions to such Claimholder shall be made unless and until the Reorganized Debtors or the appropriate Servicer or Indenture Trustee is notified of such Claimholder's then-current address, at which time all missed distributions shall be made to such Claimholder or Interestholder without interest. Amounts in respect of undeliverable distributions shall be returned to the Reorganized Debtors until such distributions are claimed. All funds or other undeliverable distributions returned to the Reorganized Debtors and not claimed within six months of return shall revert to the Reorganized Debtors. 9.9 PROCEDURES FOR TREATING AND RESOLVING DISPUTED AND CONTINGENT CLAIMS. (a) No DISTRIBUTIONS PENDING ALLOWANCE. No payments or distributions will be made with respect to all or any portion of a Disputed Claim or Disputed Interest unless and until all objections to such Disputed Claim or Disputed Interest have been settled or withdrawn or have been determined by a Final Order, and the Disputed Claim or Disputed Interest has become an Allowed Claim or Allowed interest. All objections to Claims or Interests must be filed on or before forty-five (45) days following the Effective Date. (b) LIABILITY FOR DISPUTED CLAIMS AND INTERESTS. If a Disputed Claim or Disputed Interest becomes, in whole or in part, an Allowed Claim or Allowed Interest, the Reorganized Debtors shall distribute to the holder thereof the distributions, if any, to which such holder is entitled. No interest shall be paid on Disputed Claims or Disputed Interests that later become Allowed Claims or Allowed Interests or with respect to any distribution in satisfaction thereof. The Reorganized Debtors shall be responsible for all distributions to holders of Disputed Claims or Disputed Interests that become, in whole or in part, Allowed Claims or Allowed Interests. The Reorganized Debtors shall not required to create or maintain a separate distribution reserve to make payments pursuant to Article 9.8(b) of this Plan. (c) DE MINIMIS DISTRIBUTIONS. The Reorganized Debtors or the Servicers, as applicable, shall not be required to make distributions of less than one hundred dollars ($100) with respect to any Allowed Claim, unless a request therefor is made in writing to the Reorganized Debtors on or before forty-five (45) days following the Effective Date. 35 9.10 FRACTIONAL SECURITIES; FRACTIONAL DOLLARS. Neither the Reorganized Debtors nor the Servicer will be required to make distributions or payments of fractions of dollars. Whenever any payment of a fraction of a dollar under this Plan would otherwise be called for, the actual payment shall reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars or less being rounded down. ARTICLE X ALLOWANCE AND PAYMENT OF CERTAIN ADMINISTRATIVE CLAIMS 10.1 DIP FACILITY CLAIM. On the Effective Date, the DIP Facility Claim shall be allowed in an amount to be agreed upon by the Debtors and, as applicable, the DIP Lenders, or as ordered by the Bankruptcy Court with notice to the Statutory Committees, not less than five (5) Business Days prior to the Effective Date, and all obligations of the Debtors under the DIP Facility shall be paid in full in Cash on the Effective Date; provided, however, that with respect to letters of credit issued under the DIP Facility, such claims may be satisfied in full by the cash collateralization of such letters of credit or by procuring back-up letters of credit. Upon compliance with the foregoing sentence, all liens and security interests granted to secure such obligations shall be deemed cancelled and shall be of no further force and effect. To the extent that the DIP Lenders or the DIP Agent have filed or recorded publicly any liens and/or security interest to secure the Debtors' obligations under the DIP Facility, the DIP Lenders or the DIP Agent, as the case may be, shall take any commercially reasonable steps requested by the Debtors that are necessary to cancel and/or extinguish such publicly filed liens and/or security interests. 10.2 PROFESSIONAL CLAIMS. (a) FINAL FEE APPLICATIONS. All final requests for payment of Professional Claims, Key Ordinary Course Professional Claims, and requests for reimbursement of expenses of members of the Statutory Committees must be filed no later than the Professional Fee Bar Date. (b) PAYMENT OF INTERIM AMOUNTS. Subject to the Holdback Amount, on the Effective Date, the Debtors or Reorganized Debtors shall pay all amounts owing to Professionals, Key Ordinary Course Professionals, and members of the Statutory Committees for all outstanding amounts payable relating to prior periods through the Effective Date. In order to receive payment on the Effective Date for unbilled fees and expenses incurred through such date, the Professionals and Key Ordinary Course Professionals shall estimate fees and expenses due for periods that have not been billed as of the Effective Date and shall deliver such estimate to the Debtors, counsel for the Statutory Committees, and the United States Trustee. Within forty-five (45) days after the Effective Date, a Professional receiving payment for the estimated period shall submit a detailed invoice covering such period in the manner and providing the detail as set forth in the Professional Fee Order or the Ordinary Course Professional Order, as applicable. Should the estimated payment received by any Professional exceed the actual fees and expenses for such period, this excess amount will be credited against the Holdback Amount for such Professional or, if the award of the Holdback Amount for such matter is insufficient, disgorged by such Professional. 36 (c) HOLDBACK AMOUNT. The Holdback Amount shall not be considered property of the Debtors, the Reorganized Debtors or the Estates. The Reorganized Debtors shall pay to Professionals the Holdback Amount within ten (10) days following allowance thereof by the Bankruptcy Court. (d) POST-EFFECTIVE DATE RETENTION. Upon the Effective Date, any requirement that Professionals or Key Ordinary Course Professionals comply with Sections 327 through 331 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date will terminate, and the Reorganized Debtors will employ and pay Professionals and Key Ordinary Course Professionals in the ordinary course of business. 10.3 SUBSTANTIAL CONTRIBUTION COMPENSATION AND EXPENSES BAR DATE. Any Person who requests compensation or expense reimbursement for making a substantial contribution in the Chapter 11 Cases pursuant to Sections 503(b)(3), (4), and (5) of the Bankruptcy Code must file an application with the clerk of the Bankruptcy Court on or before the 503 Deadline, and serve such application on counsel for the Debtors and the Reorganized Debtors and as otherwise required by the Bankruptcy Court and the Bankruptcy Code on or before the 503 Deadline, or be forever barred from seeking such compensation or expense reimbursement. 10.4 OTHER ADMINISTRATIVE CLAIMS. All other requests for payment of an Administrative Claim (other than as set forth in Article 10.1. Article 10.2 or Article 10.3 of this Plan) must be filed and served on counsel for the Debtors and the Reorganized Debtors no later than the Administrative Claims Bar Date. Any request for payment of an Administrative Claim pursuant to this Article 10.4 that is not timely filed and served by the Administrative Claims Bar Date shall be disallowed automatically without the need for any objection from the Debtors or the Reorganized Debtors. The Debtors or the Reorganized Debtors may settle an Administrative Claim without further Bankruptcy Court approval. Unless the Debtors or the Reorganized Debtors object to an Administrative Claim, such Administrative Claim shall be deemed allowed in the amount requested. In the event that the Debtors or the Reorganized Debtors object to an Administrative Claim, the Bankruptcy Court shall determine the allowed amount of such Administrative Claim. Notwithstanding the foregoing, (a) no request for payment of an Administrative Claim need be filed with respect to an Administrative Claim which is paid or payable by the Debtors in the ordinary course of business, and (b) no request for payment of an Administrative Claim need be filed with respect to the fees, expenses, disbursements and indemnity claims incurred by Servicers and Indenture Trustees (including their counsel fees and expenses), in connection with their services as Servicers and Indenture Trustees under the respective Indentures (whether prepetition or postpetition), which fees shall be paid in Cash promptly by the Reorganized Debtors without the need for application to, or approval of, any court, and (c) no request for payment of an Administrative Claim need be filed with respect to fees and expenses that the Bankruptcy Court has previously ordered paid. ARTICLE XI EFFECT OF THE PLAN ON CLAIMS AND INTERESTS 11.1 REVESTING OF ASSETS. Except as otherwise explicitly provided in this Plan, on the Effective Date, all property comprising the Estates (including Retained Actions, but excluding property that has been abandoned 37 pursuant to an order of the Bankruptcy Court) shall revest in each of the Debtors that owned such property or interest in property as of the Effective Date, free and clear of all Claims, liens, charges, encumbrances, rights and Interests of creditors and equity security holders. As of the Effective Date, the Reorganized Debtors may operate their businesses and use, acquire, and dispose of property and settle and compromise Claims or Interests without supervision of the Bankruptcy Court, free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by this Plan and the Confirmation Order. 11.2 DISCHARGE OF THE DEBTORS. Pursuant to Section 1141(d) of the Bankruptcy Code, except as otherwise specifically provided in this Plan or in the Confirmation Order, the distributions and rights that are provided in this Plan shall be in complete satisfaction, discharge, and release, effective as of the Confirmation Date (but subject to the occurrence of the Effective Date), of Claims and Causes of Action, whether known or unknown, against, liabilities of liens on, obligations of rights against the Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to this Plan on account of such Claims and rights including, but not limited to, Claims that arose before the Confirmation Date, any liability (including withdrawal liability) to the extent such Claims relate to services performed by employees of the Debtors prior to the Petition Date and that arise from a termination of employment or a termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Confirmation Date, and all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, in each case whether or not (a) a proof of claim based upon such Claim, debt or right is filed or deemed filed under Section 501 of the Bankruptcy Code, (b) a Claim based upon such Claim, debt or right is allowed under Section 502 of the Bankruptcy Code, or (c) the holder of such a Claim or right accepted this Plan. The Confirmation Order shall be a judicial determination of the discharge of all Claims against the Debtors, subject to the Effective Date occurring. 11.3 COMPROMISES AND SETTLEMENTS. In accordance with Article 9.6 of this Plan, pursuant to Bankruptcy Rule 9019(a), the Debtors may compromise and settle various (a) Claims against them and (b) Causes of Action that they have against other Persons up to and including the Effective Date. After the Effective Date, such right shall pass to the Reorganized Debtors as contemplated in Article 11.1 of this Plan, without the need for further approval of the Bankruptcy Court, except as otherwise set forth in this Plan. 11.4 RELEASES, EXCULPATION AND RELATED MATTERS. (a) Releases by the Debtors. Pursuant to Section 1123(b)(3) of the Bankruptcy Code, effective as of the Effective Date, the Debtors, in their individual capacity and as debtors-in-possession for and on behalf of their Estates, shall be deemed to forever release, waive, and discharge all Released Parties from all claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action and liabilities whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to (i) the Debtors, (ii) the Reorganized Debtors, (iii) the Subsidiaries, (iv) the Chapter 11 Cases and the conduct thereof, and (v) the Plan. The Reorganized Debtors shall be bound, to the same extent the Debtors are bound, by all of the releases set forth in this Article 11.4(a) of this Plan. 38 (b) Release by Holders of Certain Impaired Claims. As of the Effective Date, each holder of an Impaired Claim entitled to vote to accept or reject the Plan is also entitled to vote to accept or reject the provisions of this Article 11.4(b) of the Plan. Any holder of such Impaired Claim that affirmatively elects on the ballot for voting on this Plan to agree to the provisions of this Article 11.4(b) of the Plan, shall in consideration for the obligations of the Debtors and the Reorganized Debtors under this Plan and the securities, contracts, instruments, releases and other agreements or documents to be delivered in connection with this Plan, forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities (other than the rights to enforce the Debtors' or the Reorganized Debtors' obligations under this Plan and the securities, contracts, instruments, releases and other agreements and documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the Chapter 11 Cases or the conduct thereof, or this Plan against: (i) the Debtors; (ii) the Reorganized Debtors; and (iii) the Released Parties. (c) Exculpation and Limitation of Liability Regarding Conduct of Chapter 11 Cases. The Debtors, the Reorganized Debtors, the Statutory Committees, the members of the Statutory Committees in their capacities as such, the DIP Lenders, the DIP Agent, the Prepetition Agent, the Prepetition Lenders, the Indenture Trustees, each holder of the AREC Notes, and each such parties' respective professionals, agents, present or former members, officers and directors and any of such parties' successors and assigns, shall not have or incur, and are hereby forever released, waived, and discharged from any claims, obligations, suits, judgments, damages demands, debts, rights, Causes of Action, or liabilities to one another or to any Claimholder or Interestholder, or any other party-in-interest, or any of their respective agents, employees, professionals, or any of their successors and assigns, for any act or omission, unless such act or omission is caused by such parties' gross negligence or willful misconduct, in connection with, relating to, or arising out of (i) the Debtors' Chapter 11 Cases, (ii) the negotiation and filing of this Plan, (iii) the filing of the Chapter 11 Cases, (iv) the pursuit of confirmation of the Plan, including distributions made under the Plan, and the consummation of this Plan, including distributions made under the Plan, or (v) the administration of this Plan or the property to be distributed under this Plan. (d) Exclusions and Limitations on Exculpation and Releases. Notwithstanding anything in this Plan to the contrary, the Confirmation of this Plan shall not (i) enjoin, impact or affect the prosecution of the Derivative Actions, the Class Actions or the Securities Actions, except that the Debtors and the Reorganized Debtors shall retain the right to object to the allowance of any Claim filed in the Chapter 11 Cases arising out of or related to the Derivative Actions, the Class Actions or the Securities Actions, or (ii) release or otherwise effect a release of PwC or any other party to the PwC Litigation. In addition, nothing set forth in this Article 11.4 shall preclude or otherwise impair the rights of the SEC to administer and enforce the United States federal securities laws, except that the Debtors and the Reorganized Debtors shall retain the right to object to the allowance of any Claim filed by the SEC in the Chapter 11 Cases. 39 11.5 SETOFFS. The Debtors may, but shall not be required to, set off against any Claim, and the payments or other distributions to be made pursuant to this Plan in respect of such Claim, claims of any nature whatsoever that the Debtors may have against such Claimholder but neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Debtors or the Reorganized Debtors of any such claim that the Debtors or the Reorganized Debtors may have against such Claimholder. 11.6 SUBORDINATION RIGHTS. Except as otherwise specifically provided for in the Plan, all Claims against the Debtors and all rights and claims between or among Claimholders relating in any manner whatsoever to distributions on account of Claims against or Interests in the Debtors, based upon any claimed subordination rights, whether asserted or unasserted, legal or equitable, shall be deemed satisfied by the distributions under the Plan to Claimholders or Interestholders having such subordination right, and such subordination rights shall be deemed waived, released, discharged, and terminated as of the Effective Date. 11.7 INDEMNIFICATION OBLIGATIONS. Indemnification Obligations shall be deemed to be, and shall be treated as, executory contracts that the Reorganized Debtors shall assume pursuant hereto and Section 365 of the Bankruptcy Code as of the Effective Date. Accordingly, such Indemnification Obligations shall survive unimpaired and unaffected by entry of the Confirmation Order, irrespective of whether any such Indemnification Right is owed for an act or event occurring before or after the Petition Date. 11.8 D&O INSURANCE POLICIES. D&O Insurance Policies maintained by the Debtors are hereby assumed. Entry of the Confirmation Order shall constitute approval of such assumptions pursuant to Section 365(a) of the Bankruptcy Code. Each Reorganized Debtor shall have the authority, in its sole discretion to maintain from the Effective Date D&O Insurance Policy coverage for the categories of individuals covered, as of the Petition Date, by such policies at levels and on terms no less favorable to such individuals than the terms and levels provided for under the policies assumed pursuant to this Plan. 11.9 INJUNCTION. The satisfaction, release, and discharge pursuant to this Article XI shall act as an injunction against any Person commencing or continuing any action, employment of process, or act to collect, offset, or recover any Claim or Cause of Action satisfied, released, or discharged under this Plan to the fullest extent authorized or provided by the Bankruptcy Code, including, without limitation, to the extent provided for or authorized by Sections 524 and 1141 thereof. Notwithstanding the foregoing, nothing in this Article 11.9, the Plan or the Confirmation Order shall affect, release, enjoin or impact the prosecution of the claims asserted or to be asserted against the non-Debtor defendants in the Derivative Actions, the Class Actions or the Securities Actions. 11.10 PMSR AGREEMENT. Pursuant to this Plan and Section 1141(b), on the Effective Date, Reorganized AMERCO and the other signatories to the PMSR Agreement shall execute and deliver the PMSR Agreement. As of 40 the Effective Date, the holders of PMSR Support Obligations shall have an Allowed AMERCO Unsecured Claim in the amount of $55,550,000. ARTICLE XII CONDITIONS PRECEDENT 12.1 CONDITIONS TO CONFIRMATION. The following are conditions precedent to confirmation of this Plan that may be satisfied or waived in accordance with Article 12.3 of this Plan: (a) The Bankruptcy Court shall have approved by Final Order a Disclosure Statement with respect to this Plan in form and substance acceptable to the Debtors in their sole and absolute discretion. (b) The Confirmation Order shall be in form and substance acceptable to the Debtors in their sole and absolute discretion. 12.2 CONDITIONS TO THE EFFECTIVE DATE. The following are conditions precedent to the occurrence of the Effective Date, each of which may be satisfied or waived in accordance with Article 12.3 of this Plan: (a) The Reorganized Debtors shall have entered into the Exit Financing Facility and all conditions precedent to the consummation thereof shall have been waived or satisfied in accordance with the terms thereof. (b) The Reorganized Debtors and SAC Holding shall have entered into the SAC Holding Participation and Subordination Agreement and all conditions precedent to the consummation thereof shall have been waived or satisfied in accordance with the terms thereof. (c) The Bankruptcy Court shall have entered one or more orders (which may include the Confirmation Order) authorizing the assumption and rejection of unexpired leases and executory contracts by the Debtors as contemplated by Article 8 of this Plan. (d) The Confirmation Order shall have been entered by the Bankruptcy Court and shall be a Final Order, the Confirmation Date shall have occurred, and no request for revocation of the Confirmation Order under Section 1144 of the Bankruptcy Code shall have been made, or, if made, shall remain pending. (e) Each Exhibit, document or agreement to be executed in connection with this Plan shall be in form and substance reasonably acceptable to the Debtors. 12.3 WAIVER OF CONDITIONS TO CONFIRMATION OR EFFECTIVE DATE. The conditions set forth in Article 12.1 and Article 12.2 of this Plan may be waived, in whole or in part, by the Debtors, after consultation with the Statutory Committees, without any notice to any other parties in interest or the Bankruptcy Court and without a hearing. Notwithstanding the foregoing, the condition set forth in Article 12.2(a) may be waived by the Debtors only with the prior 41 written consent of JPMorgan, in its capacity as agent under the JPMorgan Chase Credit Facility. The failure to satisfy or waive any condition to the Confirmation Date or the Effective Date may be asserted by the Debtors in their sole discretion regardless of the circumstances giving rise to the failure of such condition to be satisfied (including any action or inaction by the Debtors in their sole discretion). The failure of the Debtors to exercise any of the foregoing rights shall not be deemed a waiver of any other rights, and each such right shall be deemed an ongoing right, which may be asserted at any time. ARTICLE XIII RETENTION OF JURISDICTION Pursuant to Sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of, and related to, the Chapter 11 Cases and this Plan, including, among others, the following matters: (a) to hear and determine motions for (i)the assumption or rejection or (ii) the assumption and assignment of executory contracts or unexpired leases to which any of the Debtors are a party or with respect to which any of the Debtors may be liable, and to hear and determine the allowance of Claims resulting therefrom including the amount of Cure, if any, required to be paid; (b) to adjudicate any and all adversary proceedings, applications and contested matters that may be commenced or maintained pursuant to the Chapter 11 Cases or this Plan, proceedings to adjudicate the allowance of Disputed Claims and Disputed Interests and all controversies and issues arising from or relating to any of the foregoing; (c) to ensure that distributions to Allowed Claimholders are accomplished as provided herein; (d) to hear and determine any and all objections to the allowance or estimation of Claims and Interests filed, both before and after the Confirmation Date, including any objections to the classification of any Claim or Interest, and to allow or disallow any Claim or Interest, in whole or in part; (e) to enter and implement such orders as may be appropriate if the Confirmation Order is for any reason stayed, revoked, modified and/or vacated; (f) to issue orders in aid of execution, implementation, or consummation of this Plan; (g) to consider any modifications of this Plan, to cure any defect or omission, or to reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order; (h) to hear and determine all applications for allowance of compensation and reimbursement of Professional Claims under this Plan or under Sections 330, 331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code; 42 (i) to determine requests for the payment of Claims entitled to priority under Section 507(a)(l) of the Bankruptcy Code, including compensation of and reimbursement of expenses of parties entitled thereto; (j) to hear and determine disputes arising in connection with the interpretation, implementation or enforcement of this Plan or the Confirmation Order including disputes arising under agreements, documents or instruments executed in connection with this Plan; (k) to hear and determine all suits or adversary proceedings to recover assets of any of the Debtors and property of their Estates, wherever located; (l) to hear and determine matters concerning state, local and federal taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code; (m) to hear any other matter not inconsistent with the Bankruptcy Code; (n) to hear and determine all disputes involving the existence, nature or scope of the Debtors' discharge, including any dispute relating to any liability arising out of the termination of employment or the termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date; (o) to hear and determine disputes arising in connection with the interpretation, implementation or enforcement of the Plan; (p) to enter a final decree closing the Chapter 11 Cases; and (q) to enforce all orders previously entered by the Bankruptcy Court. ARTICLE XIV MISCELLANEOUS PROVISIONS 14.1 BINDING EFFECT. Upon the Effective Date, this Plan shall he binding upon and inure to the benefit of the Debtors, the Reorganized Debtors, all present and former Claimholders, all present and former Interestholders, other parties-in-interest and their respective heirs, successors, and assigns. 14.2 MODIFICATION AND AMENDMENTS. The Debtors may alter, amend or modify this Plan and any Exhibits thereto under Section 1127(a) of the Bankruptcy Code at any time prior to the Confirmation Hearing. After the Confirmation Date and prior to substantial consummation of this Plan with respect to the Debtors as defined in Section 1101(2) of the Bankruptcy Code, the Debtors may under Section 1127(b) of the Bankruptcy Code, institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any inconsistencies in this Plan, the Disclosure Statement, or the Confirmation Order, and such matters as may be necessary to carry out the purposes and effects of this Plan. 43 14.3 WITHHOLDING AND REPORTING REQUIREMENTS. In connection with this Plan and all instruments issued in connection therewith and distributions thereunder, the Debtors shall comply with all withholding and reporting requirements imposed by any federal, stale, local or foreign taxing authority, and all distributions hereunder shall be subject to any such withholding and reporting requirements. 14.4 REVOCATION, WITHDRAWAL OR NON-CONSUMMATION. (a) RIGHT TO REVOKE OR WITHDRAW. The Debtors reserve the right to revoke or withdraw this Plan at any time prior to the Effective Date. (b) EFFECT OF WITHDRAWAL, REVOCATION OR NON-CONSUMMATION. If the Debtors revoke or withdraw this Plan prior to the Effective Date, or if the Confirmation Date or the Effective Date does not occur, then this Plan, any settlement or compromise embodied in this Plan with respect to the Debtors (including the fixing or limiting to an amount certain any Claim or Class of Claims with respect to the Debtors, or the allocation of the distributions to be made hereunder), the assumption or rejection of executory contracts or leases effected by this Plan with respect to the Debtors, and any document or agreement executed pursuant to this Plan with respect to the Debtors shall be null and void as to the Debtors. In such event, nothing contained herein or in the Disclosure Statement, and no acts taken in preparation for consummation of this Plan, shall be deemed to constitute a waiver or release of any Claims by or against the Debtors or any other Person, to prejudice in any manner the rights of the Debtors, the holder of a Claim or Interest, or any Person in any further proceedings involving the Debtors or to constitute an admission of any sort by the Debtors or any other Person. 14.5 NOTICES. Any notice required or permitted to be provided to the Debtors, Statutory Committees, Prepetition Lenders, or the holders of the AREC Notes, shall be in writing and served by (a) certified mail, return receipt requested, (b) hand delivery, or (c) overnight delivery service, to be addressed as follows: IF TO THE DEBTORS: IF TO THE CREDITORS' COMMITTEE: AMERCO c/o Milbank, Tweed, Hadley & McCloy LLP 1325 Airmotive Way, Suite 100 601 South Figueroa Street Reno, Nevada 89502 Los Angeles, California 90017 Attention: Gary V. Klinefelter, Esq. Attention: Paul S. Aronzon, Esq. WITH A COPY TO: IF TO THE AREC NOTEHOLDERS: Squire, Sanders & Dempsey L.L.P. McDermott, Will & Emery Two Renaissance Square 227 West Monroe Street 40 North Central Avenue, Suite 2700 Chicago, Illinois 60606 Phoenix, Arizona 85004 Attention: Nathan F. Coco, Esq. Attention: Craig D. Hansen, Esq. 44 IF TO THE PREPETITION AGENT: IF TO THE EQUITY COMMITTEE: JPMorgan Chase Bank Stutman, Treister & Glatt PC 270 Park Avenue 1901 Avenue of the Stars, 12th Floor New York, New York 10017 Los Angeles, California 90067 Attention: John McDonagh Attention: Charles D. Axelrod, Esq. WITH A COPY TO: Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue Los Angeles, California 90071-3144 Attention: Richard B. Levin, Esq. 14.6 TERM OF INJUNCTIONS OR STAYS. Unless otherwise provided herein or in the Confirmation Order, all injunctions or stays provided for in the Chapter 11 Cases under Sections 105 or 362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date, shall remain in full force and effect until the Effective Date. 14.7 GOVERNING LAW. Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated, the laws of the State of Nevada shall govern the construction and implementation of this Plan, any agreements, documents and instruments executed in connection with this Plan (except as otherwise set forth in those agreements, in which case the governing law of such agreements shall control). Corporate governance matters relating to Debtors shall also be governed by the laws of the State of Nevada. 14.8 NO WAIVER OR ESTOPPEL. Upon the Effective Date, each Claimholder or Interestholder shall be deemed to have waived any right to assert that its Claim or Interest should be Allowed in a certain amount, in a certain priority, secured, or not subordinated by virtue of an agreement made with the Debtors and/or their counsel, the Statutory Committees and/or their counsel, or any other party, if such agreement was not disclosed in this Plan, the Disclosure Statement or papers filed with the Bankruptcy Court. 14.9 SEVERABILITY. In the event any provision of this Plan is held unenforceable by the Bankruptcy Court, then such provision shall be severable and shall not affect the remaining provisions of the Plan, unless the ineffectiveness of such provision would result in a material adverse change in the treatment of any Allowed Claim or Allowed Interest as provided in this Plan. 14.10 CONFLICTS. In the event that the provisions of the Disclosure Statement and the provisions of the Plan conflict, the terms of the Plan shall govern. [Remainder of Page Intentionally Left Blank] 45 Dated: November 26, 2003 Reno, Nevada Respectfully submitted. AMERCO, a Nevada corporation By: /s/ Edward J. Shoen ----------------------------------------- Its Chief Executive Officer AMERCO REAL ESTATE COMPANY, a Nevada corporation By: /s/ Carl Vizcarra ----------------------------------------- Its President SAC HOLDING CORPORATION, a Nevada corporation By: /s/ Mark V. Shoen ----------------------------------------- Its President SAC HOLDING II CORPORATION, a Nevada corporation By: /s/ Mark V. Shoen ----------------------------------------- Its President 46 EXHIBIT A-1 EXIT FINANCING FACILITY COMMITMENT LETTER [SEE ATTACHED] Wells Fargo Foothill, Inc. 2450 Colorado Avenue Suite 3000W Santa Monica, California 90404 November 5, 2003 VIA TELEFAX AND OVERNIGHT DELIVERY Mr. E. J. Shoen Chairman of the Board U-Haul International, Inc. 2727 North Central Avenue Phoenix, Arizona 85004 Re: $ 550,000,000 emergence financing for AMERCO, a Nevada corporation ("AMERCO"), Amerco Real Estate Company, a Nevada corporation ("AREC"), U-Haul International, Inc., a Nevada corporation, and certain of their wholly-owned subsidiaries (collectively, the "Borrowers" and each, individually, a "Borrower"), plus such additional related entities as may be guarantors under such financings Dear Mr. Shoen: In accordance with our recent discussions, Wells Fargo Foothill, Inc. (formerly known as Foothill Capital Corporation, "Foothill") is pleased to issue this financing commitment (the "Commitment Letter") to the Borrowers. Foothill commits to underwrite a credit facility of up to $550,000,000 to be provided concurrent with a confirmed reorganization plan acceptable to Foothill of the respective Chapter 11 cases filed by AMERCO and AREC (the "Emergence Facility"). The commitments of Foothill under the Emergence Facility will be irrevocably reduced by the amount of the commitments of any other prospective lenders that execute commitments relating to the Emergence Facility to the extent expressly stated in such commitment of such other prospective leaders. This Commitment Letter supersedes all prior written proposals or letters of interest with regard to the Emergence Facility that previously may have been issued by Foothill, including, without limitation, that certain Commitment Letter dated June 19, 2003, as supplemented by the term sheet referred to therein to the extent such prior Commitment Letter relates to the Emergence Facility, and that certain Fee Letter with respect to the Emergence Facility dated June 19, 2003. AMERCO -- Emergence Facility Commitment Letter November 5, 2003 Page 2 Foothill would act as lead arranger and administrative agent for the proposed Emergence Facility. The terms of the proposed Emergence Facility are set forth in the "Summary of Terms" dated the date hereof, attached hereto as Annex A (the "Term Sheet"). The Emergence Facility outlined in this Commitment Letter is fully underwritten with no underwriting contingency, but is subject to the satisfaction of each of the conditions contained in this Commitment Letter and the Term Sheet, including, without limitation, syndication of the Emergence Facility to the satisfaction of Foothill in its sole discretion. Foothill reserves the right to revise or modify any provision contained in the Term Sheet (provided that such changes shall not result in a reduction in the Maximum Credit Amount or the Excluded Assets, as defined in the attached Annex A) if it reasonably determines in its sole discretion that such changes are necessary during the course of preparing and negotiating the loan documentation. If the Emergence Facility contemplated by this Commitment Letter is not consummated on or before July 31, 2004, then, without any requirement of notice or other formality, Foothill's commitment to underwrite the Emergence Facility shall terminate and no party hereto would have any obligation to pursue the financing arrangement outlined in this Commitment Letter; provided, however, that prior thereto the Borrowers and Foothill agree to use their respective reasonable efforts to cause the Emergence Facility to be consummated on or before such date. As set forth herein, while Foothill has committed to underwrite the entire amount of the Emergence Facility subject to the terms and conditions of this Commitment Letter and the Term Sheet, it is the intent of Foothill to syndicate the Emergence Facility and, as a material inducement to Foothill to issue the commitments set forth herein, the Borrowers have agreed to cooperate in such syndication process. Foothill will manage all aspects of such syndication, including the timing of all offers to potential lenders, the allocation of commitments and the determination of compensation provided and titles (such as co-agent, managing agent, etc.), if any. The Borrowers also agree that no lender will receive any compensation for its participation in the Emergence Facility except as expressly set forth in the Term Sheet or as otherwise agreed to and offered by Foothill. The Borrowers agree to use commercially reasonable efforts to assist Foothill in forming a syndicate acceptable to Foothill. The Borrowers' assistance shall include but not be limited to: (i) using commercially reasonable efforts to make senior management and representatives of the Borrowers available to participate in meetings and to provide information to potential lenders and participants at such times and places as Foothill may reasonably request; (ii) using commercially reasonable efforts to provide to Foothill all information reasonably deemed necessary by Foothill to complete the syndication, subject to confidentiality agreements in form and substance reasonably satisfactory to the Borrowers and Foothill; (iii) using best efforts to ensure that the syndication efforts benefit from the Borrowers' existing lending relationships; and (iv) assisting (including using best efforts to cause affiliates and advisors of the Borrowers to assist) in the AMERCO -- Emergence Facility Commitment Letter November 5, 2003 Page 3 preparation of a confidential information memorandum for the Emergence Facility and other marketing materials to be used in connection with the syndications. To ensure an orderly and effective syndication of the Emergence Facility, the Borrowers agree that, from the date hereof until the termination of the syndication of the Emergence Facility (as determined by Foothill in its sole discretion), the Borrowers will not, and will not permit any of their affiliates to, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, any senior secured debt security or commercial bank or other debt facility (including any renewals thereof), without the prior written consent of Foothill, which consent shall not be unreasonably withheld, conditioned or delayed; provided, that the foregoing shall not limit the Borrowers' ability to negotiate with creditors, other than creditors that are likely participants in an emergence facility such as the Emergence Facility contemplated by this Commitment Letter, as part of the Borrowers' restructuring. Notwithstanding anything in this letter to the contrary, nothing contained herein shall prohibit or restrict the Borrowers from entering into discussions or negotiations with an alternative lending source or sources with respect to an emergence facility if the Borrowers determine, in their reasonable discretion, that they can obtain substantially more favorable terms from an alternative lender or lenders. This Commitment Letter, the Term Sheet and the letter agreement of even date with respect to certain fees payable with respect to the Emergence Facility (the "Fee Letter") embody the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior proposals, negotiations, or agreements whether written or oral, relating to the subject matter hereof including any letter of intent. This Commitment Letter may not be modified, amended, supplemented, or otherwise changed, except by a document in writing signed by the parties hereto. This Commitment Letter shall be governed by and construed in accordance with the laws of the State of New York as applied to contracts entered into and to be performed wholly within the State of New York. Each party hereto waives any right it may have to a trial by jury, in the event of any dispute pertaining to this Commitment Letter, the Term Sheet, the Fee Letter or the transactions contemplated hereby and thereby. In connection with the requested Emergence Facility, the Borrowers understand that it will be necessary for Foothill to make certain financial, legal, and collateral investigations and determinations and acknowledge the undertaking by Foothill and its counsel of such investigations and determinations currently. The Borrowers hereby agree to pay to Foothill an expense deposit (the "Initial Expense Deposit") of $500,000 against the expenses that have been or may be incurred by Foothill, whether under this Commitment Letter or otherwise in connection with the Emergence Facility. From time to time until the closing date of the Emergence Facility, the Borrowers shall pay Foothill an additional expense deposit as requested by Foothill against the expenses that have been or may be incurred by Foothill, whether under this Commitment Letter or otherwise (the "Additional Expense Deposit"; and together with the Initial Expense Deposit, AMERCO -- Emergence Facility Commitment Letter November 5, 2003 Page 4 hereinafter referred to as the "Expense Deposit"). The Expense Deposit will be applied to Foothill's expenses as and when they are incurred. If Foothill concludes, for any reason, that it will not make the Emergence Facility available to the Borrowers, Foothill will return the unused balance of the Expense Deposit. If, on the other hand, Foothill continues to be prepared to extend the Emergence Facility to the Borrowers and the Borrowers decline, for any reason, to accept the Emergence Facility, Foothill shall be entitled to retain the full amount of the Expense Deposit for the benefit of Foothill, irrespective of the amount of expenses incurred Foothill (except, to the extent that the Expense Deposit exceeds the amount of the expenses incurred by Foothill, such excess will be credited towards the Alternative Financing Fee defined in the Fee Letter). Foothill's retention of the balance of the Expense Deposit results from its reasonable endeavor to estimate the added administrative costs incurred and the amount of damage sustained by Foothill as a result of Borrowers' decision to decline to accept the Emergence Facility. If the Emergence Facility is funded, the Expense Deposit will be returned to the Borrowers after deducting all of Foothill's expenses actually incurred. Foothill shall not be obligated to segregate the Expense Deposit from its other funds and the Borrowers are not entitled to receive interest on any portion of the Expense Deposit. The Borrowers hereby agree to pay the fall amount of Foothill's expenses incurred in connection with the Emergence Facility and the preparation, negotiation, execution and delivery of this Commitment Letter, the Term Sheet and the loan documents and any security arrangements in connection therewith, including the reasonable fees and disbursements of counsel (whether incurred before or after the date hereof), irrespective of the amount of the Expense Deposit and whether the transaction is actually consummated. The Borrowers further agree to pay all costs and expenses of Foothill (including, without limitation, reasonable fees and disbursements of counsel) incurred in connection with the enforcement of any of its rights and remedies hereunder. Borrower acknowledges its continuing obligation to provide, from time to time, as Foothill shall request, additional supplements to the Expense Deposit to the extent that actual or anticipated expenses exceed, or may reasonably be expected to exceed, the Expense Deposit. The Borrowers represent and warrant that (i) all information (other than financial projections) that has been or will hereafter be made available to Foothill, any lender or any potential lender by or on behalf of the Borrowers or any of their respective representatives in connection with the transactions contemplated hereby is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statements were or are made and (ii) all financial projections, if any, that have been or will be prepared by or on behalf of the Borrowers or any of their respective representatives and made available to Foothill, any lender or any potential lender have been or will be prepared in good faith based upon assumptions that are reasonable at the time made and at the time the related financial projections are made available to Foothill, If, at any time from the date hereof until the date of the initial borrowings under the Emergence Facility, any of the representations and warranties in the preceding sentence would be incorrect if the information or financial projections were being furnished, and such representations and AMERCO -- Emergence Facility Commitment Letter November 5, 2003 Page 5 warranties were being made, at such time, then the Borrowers will promptly supplement the information and the financial projections so that such representations and warranties will be correct under those circumstances. The Borrowers acknowledge that information and documents relating to the transactions contemplated hereby may be transmitted through Intralinks, the internet or similar electronic information transmission systems. In issuing this Commitment Letter and in arranging the Emergence Facility, including the syndication thereof, Foothill will be entitled to use, and to rely on the accuracy of, the information furnished to them by or on behalf of the Borrowers or any of their respective representatives without responsibility for independent verification thereof. Regardless of whether the commitment herein is terminated or the proposed Emergence Facility closes, the Borrowers shall indemnify and hold harmless Foothill and its affiliates, directors, officers, employees, attorneys and representatives (each, an "Indemnified Person"), from and against all suits, actions, proceedings, claims, damages, losses, liabilities and expenses (including, but not limited to, attorneys' fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal), that may be instituted or asserted against or incurred by any such Indemnified Person in connection with, or arising out of, this Commitment Letter or the proposed Emergence Facility under consideration, the documentation related thereto, any other financing related thereto, any actions or failure to act in connection therewith, and any and all environmental liabilities and legal costs and expenses arising out of or incurred in connection with any disputes between or among any parties to any of the foregoing, and any investigation, litigation, or proceeding related to any such matters, whether or not such suit, action, proceeding, investigation or litigation is brought by a Borrower, any of its equity holders or creditors, an Indemnified Person or any other person or entity, and whether or not an Indemnified Person is otherwise a party thereto. Notwithstanding the preceding sentence, indemnitors shall not be liable for any indemnification to an Indemnified Person to the extent that any such suit, action proceeding, claim, damage, loss, liability or expense results solely from that Indemnified Persons gross negligence or willful misconduct, as finally determined by a court of competent Jurisdiction. Under no circumstances shall Foothill or any of its affiliates be liable to you or any other person for any punitive, exemplary, consequential or indirect damages in connection with this Commitment Letter, the proposed Emergence Facility, the documentation related thereto or any other financing, regardless of whether the commitment herein is terminated or the transaction or the Emergence Facility closes. You may not assign this Commitment Letter without the prior written consent of Foothill, and any attempted assignment without such consent shall be void: You acknowledge that Foothill may provide debt financing, equity capital or other services (including financial advisory services) to parties whose interests may conflict with the Borrowers' interests. Foothill will not furnish confidential information obtained from the Borrowers or their respective affiliates to any of its customers. Furthermore, Foothill has no AMERCO -- Emergence Facility Commitment Letter November 5, 2003 Page 6 obligation to use in connection with the transactions contemplated hereby, or to furnish to the Borrowers, confidential information obtained by Foothill from any Other person. If you wish to proceed on the basis outlined above, please execute this Commitment Letter in the space provided below and return it to the undersigned no later than 5:00 p.m., Los Angeles, California time, on or before November 5, 2003, accompanied by payment of the Initial Expense Deposit. If you fail to make any required fee payment by the applicable deadline, this Commitment Letter shall expire automatically and Foothill's commitments shall terminate and be of no further force and effect. This Commitment Letter is being provided to the Borrowers on a confidential basis and is not for the benefit of, nor should it be relied upon by, any third party. This Commitment Letter may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original and all of which, taken together, shall constitute one and the same Commitment Letter. Delivery of an executed counterpart of a signature page to this Commitment Letter and the Fee Letter by telecopier shall be as effective as delivery of an original executed counterpart thereof. The Borrowers' obligations with respect to payment of costs and expenses, indemnities and confidentiality shall survive the expiration or termination of this Commitment Letter whether or not the loan documents shall be executed and delivered. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] AMERCO -- Emergence Facility Commitment Letter November 5, 2003 Page 7 Very truly yours, WELLS FARGO FOOTHILL, INC., formerly known as Foothill Capital Corporation By: /s/ [ILLEGIBLE] ----------------------------------- Title: Senior Vice President [SIGNATURES CONTINUED ON FOLLOWING PAGE] AMERCO -- Emergence Facility Commitment Letter November 5, 2003 Page 8 The foregoing terms and conditions are hereby accepted and agreed to as of November 5, 2003. AMERCO, a Nevada corporation, on behalf of itself and its affiliates and subsidiaries that will be Borrowers or Guarantors as contemplated by the Term Sheet By: /s/ [ILLEGIBLE] ------------------------------------ Title: Chairman cc: Chris D. Molen, Esq. Jesse H. Austin, III, Esq. EMERGENCE FACILITY COMMITMENT LETTER ANNEX A AMERCO AND AMERCO REAL ESTATE COMPANY, ET AL. SUMMARY OF TERMS $550,000,000 EMERGENCE FACILITY NOVEMBER 5, 2003 The terms and conditions summarized herein represent the terms and conditions pursuant to which Wells Fargo Foothill, Inc., formerly known as Foothill Capital Corporation ("Foothill" or "Agent") will provide a $550,000,000 credit facility (the "Emergence Facility") to be provided concurrent with a confirmed reorganization plan acceptable to Foothill of the respective Chapter 11 cases. The proposed terms and conditions summarized herein with respect to the Emergence Facility are provided to evidence the terms and conditions by which Foothill hereby commits, in accordance with the terms of the accompanying Commitment Letter, to provide financing to Borrowers and Guarantors under the Emergence Facility. BORROWERS: AMERCO, a Nevada corporation, Amerco Real Estate Company, U-Haul International, Inc. and and certain wholly-owned subsidiaries and affiliates (collectively, the "Companies" or "Borrowers"). Excluded subsidiaries not to be considered Borrowers would be Republic Western Insurance Company ("RepWest"), and its subsidiaries, and Oxford Life Insurance Company ("Oxford"), and its subsidiaries (collectively, the "Excluded Subsidiaries"). GUARANTORS: All U.S. affiliates (excluding SAC entities) and subsidiaries of the Companies (that are not direct Borrowers) as required by Foothill, but excluding all Excluded Subsidiaries and SAC entities, (together with Borrowers, each a "Loan Party" and collectively, the "Loan Parties"). LEAD ARRANGER AND Wells Fargo Foothill, Inc. ADMINISTRATIVE AGENT: FINANCING FACILITY: EMERGENCE FACILITY: A senior secured credit facility with a Maximum Credit Amount of $550,000,000 consisting of (i) a revolving credit facility of up to $200,000,000 ("Revolver"), with a $50,000,000 subfacility for the issuance of letters of credit, plus (ii) a $350,000,000 amortizing term loan facility A-1 ("Term Loan A"). Monthly principal amortization of Term Loan A would be equal to $291,667.00 with the remaining balance due in full upon maturity of the Emergence Financing. The Borrowing Base for the Emergence Facility shall be equal to 60% of the fair market value of owned real property. All such amounts would also be net of all reserves for anticipated environmental remediation costs for certain properties and other customary and normal reserves, which may be established by Agent. To the extent that the Borrowing Base did not equal $550,000,000, Foothill would consider an appropriate advance against Borrower's rolling stock to accomplish such a level on the Borrowing Base. LETTERS OF CREDIT: Each letter of credit will be issued for the account of a Borrower by Wells Fargo Bank or another bank selected by Foothill, which shall be reasonably satisfactory to the Borrower, and shall have an expiry date that is not later than thirty (30) days prior to the Maturity Date (as hereinafter defined) unless on or prior to the Maturity Date such letter of credit shall be cash collateralized in an amount equal to 105% of the face amount of such letter of credit. Borrowers and Guarantors will be bound by the usual and customary terms contained in the letter of credit issuance documentation of the issuing bank and Foothill. MATURITY DATE: Five (5) years from closing date (the "Maturity Date"). EARLY TERMINATION: Termination of the Emergence Facility prior to the Maturity Date shall be subject to a prepayment premium payable to Foothill equal to the percentage set forth in the following schedule of then applicable Maximum Credit Amount for each full and partial month remaining to the Emergence Facility Maturity Date:

Other customary prepayments to be included in definitive loan documentation (including sale of assets, casualty events, etc.), subject to levels to be negotiated. COLLATERAL: Subject to a confirmed Plan acceptable to Foothill, all obligations of the Loan Parties to Foothill shall be secured by a first priority perfected security interest in substantially all the assets of Borrowers, but excluding (i) the existing promissory A-2 notes issued to the Loan Parties by SAC Holdings and its subsidiaries (and proceeds associated with the monetization of such asset, as they may be amended or restated from time to time), (ii) the Borrowers' real estate subject to any currently existing synthetic lease arrangements (and the proceeds associated with the monetization of such assets), (iii) the stock of RepWest and Oxford (and the proceeds associated with the monetization of such assets), (iv) real property subject to a lien by Oxford, (v) real property under contract for sale at the time of the Closing, (vi) real property defined as surplus property at the time of Closing, (vii) proceeds in excess of $50,000,000 associated with the settlement, judgment or recovery related to Borrower's lawsuit against PwC, and (viii) vehicles (including any motor vehicle, trailer or other asset) that become and remain subject to a TRAC or Operating Lease transaction. The Emergence Facility shall include provisions authorizing the granting of a junior lien in substantially all of the assets of the Borrowers in favor of those parties receiving new notes in connection with the confirmed Plan, subject to an intercreditor agreement, the terms and conditions of which shall be reasonably satisfactory to the Lenders. All borrowings by Borrowers, all reimbursement obligations with respect to letters of credit, all costs, fees and expenses of the Lenders, and all other obligations owed to the Lenders shall be secured as described above and charged to the loan account to be established under the Emergence Facility. INTEREST RATES: Advances outstanding under the Revolver would bear interest, at Borrower's option, at (a) the Base Rate plus the applicable margin set forth in the pricing matrix below, or (b) at the LIBOR Rate plus the applicable margin set forth in the pricing matrix below: Pricing Matrix

The effective interest rate would start at the level 1 pricing shown in the above grid and would remain at level 1 for the first six months following the closing. Thereafter, the interest rate will be adjusted quarterly at each fiscal quarter-end based on A-3 Borrower's consolidated EBITDA for the trailing twelve months. Advances outstanding under Term Loan A would bear interest at Borrower the LIBOR Rate plus 4.00% percentage points. Borrower would be charged a letter of credit fee (plus bank issuance charges) at a rate as determined under the Pricing Matrix times the undrawn amount of all outstanding Letters of Credit. As used herein (x) "Base Rate" means the rate of interest publicly announced from time to time by Wells Fargo Bank, N.A. at its principal office in San Francisco, California, as its reference rate, base rate or prime rate. The LIBOR Rate means the rate per annum, determined by Foothill in accordance with its customary procedures, at which dollar deposits are offered to major banks in the London interbank market, adjusted by the reserve percentage prescribed by governmental authorities as determined by Foothill. At no time shall the LIBOR Rate utilized prior to application of the appropriate margin be less than 1.00%. All interest and fees for the Emergence Facility shall be computed on the basis of a year of 360 days for the actual days elapsed. If any Event of Default shall occur, interest shall accrue under the Facility at a rate per annum equal to 2.00% in excess of the rate of interest otherwise in effect. FEES: Unused Line Fee One half of one percent (0.50%) (for the Financing on the unused portion of the Facilities): respective Revolver Facility, payable quarterly in arrears. Letter of Credit As determined above in the Fees (for the Pricing Matrix, plus the Financing customary charges imposed by Facilities): the letter of credit issuing bank A-4 Field Examination Without limiting the foregoing, Fee (for the Borrowers would be required to Financing pay (a) a fee of $850 per day, Facilities): per analyst, plus out-of-pocket expenses, for each financial audit of Borrowers performed by personnel employed by Agent, and (b) the actual charges paid or incurred by Agent if it elects to employ the services of one or more unrelated third parties to perform financial audits of Borrowers, to appraise Borrowers' collateral, or to assess Borrowers' business valuation. Borrowers shall also pay all applicable fees set forth in the fee letter of even date herewith (the "Fee Letter"). USE OF PROCEEDS: To refinance the DIP Facility, fund Borrowers' confirmed Plan and for general corporate purposes including the financing of working capital and capital expenditures. A-5 CONDITIONS The obligation of Foothill to make any loans or PRECEDENT: assist in the issuance of any letters of credit in connection with the Emergence Facility will be subject to customary conditions precedent including, without limitation, the following: (a) Receipt of evidence of the entry of a final Order confirming Borrower's Plan and accompanying disclosure statement, and satisfaction of all other conditions to the confirmation of such Plan, which Plan, disclosure statement, and confirmation Order shall be in form and substance reasonably acceptable to Foothill and which Plan will include, among things, a level of assets both in number and value, acceptable to Foothill. Such acceptance shall not be unreasonably withheld to the extent that Borrower's post-emergence capital structure takes the form similar to that outlined in a the Plan filed with the Bankruptcy Court on October 6, 2003. (b) Receipt of management's projections and business plan for the succeeding twelve (12) month period on a month-by-month basis and the succeeding three year period on an annual basis in form and substance reasonably acceptable to Foothill. (c) Payment of all reasonable fees and expenses owing to Agent in connection with the Emergence Facility. (d) Execution and delivery of appropriate legal documentation in form and substance reasonably satisfactory to Foothill and the satisfaction of the conditions precedent contained therein and delivery of all appropriate opinions of counsel relating thereto, reasonably satisfactory in all respects to Foothill. (e) Payment in full of obligations owing and amounts outstanding under the DIP Facility. (f) Foothill shall have been granted a perfected, first priority lien on all Collateral including without limitation mortgages on all owned real property in form and substance satisfactory to Foothill. Foothill shall have received real estate, UCC, tax and judgment lien searches and other appropriate evidence, confirming the absence of any liens on the Collateral, except existing liens acceptable to the Lenders. A-6 (g) No default or event of default shall exist under the loan documents for the DIP Facility or the Emergence Facility, and no pending claim, investigation or litigation by any governmental entity shall exist with respect to the Loan Parties or the transactions contemplated hereby, except as previously publicly disclosed through October 1, 2003. (h) Insurance satisfactory to Foothill, such insurance to include liability insurance for which Foothill, will be named as an additional insured and property insurance with respect to the Collateral for which the Agent, for the benefit of Foothill, will be named as loss payee. (i) Borrowers shall, at loan closing, have a minimum of $25,000,000 in the aggregate of unrestricted cash and available but unused credit availability. (j) The absence of (i) a Material Adverse Change in the business operations, assets, condition (financial or otherwise) or prospects of Borrowers and Guarantors since March 31, 2003, as determined by Foothill in its sole discretion, other than (x) the filing of the Chapter 11 Cases and the events resulting from the filing of the Chapter 11 Cases, (y) the withdrawal by PriceWaterhouseCoopers of its audit letter with respect to the Borrowers' financial statements for the fiscal year ended as of March 31, 2002, and (z) such other matters as have been disclosed in writing by Borrowers to Foothill or disclosed to Borrower's public filings on or before October 1, 2003, or (ii) an adverse change or disruption in the loan syndication, financial, banking or capital markets generally that, in Foothill's judgment, could materially impair the syndication of the Emergence Facility. (k) Foothill's completion of and satisfaction in all respects with the results of its ongoing due diligence investigation of the business, assets, operations, properties (including compliance with FIRREA), condition (financial or otherwise), contingent liabilities, prospects and material agreements of Borrowers and their respective Subsidiaries. (l) Execution of intercreditor agreements with the holders of Term B Notes and secured bonds ("Subordinated Debt") resulting from any confirmed Plan of Reorganization, in form and substance satisfactory to Foothill. (m) Satisfactory credit rating for the Facility from Standard & Poors. A-7 REPRESENTATIONS Usual representations and warranties, including, AND WARRANTIES: but not limited to, corporate existence and good standing, permits and licenses, authority to enter into the respective loan documents, occurrence of the closing date for the Facility, validity of the Final Order, governmental approvals, non-violation of other agreements, financial statements, litigation, compliance with environmental, pension and other laws, taxes, insurance, absence of Material Adverse Change, absence of default or unmatured default and priority of Foothill's liens. COVENANTS: Borrowers will be required to maintain an agreed upon minimum fixed charge coverage ratio. Borrowers will also have a limitation on capital expenditures (to be determined based upon Borrower's Plan). All such financial covenants shall be tested quarterly. Financial reporting shall include, without limitation, the delivery to the Agent of monthly financial statements, audited annual financial statements and annual updated projections. Other customary covenants (both positive and negative), including, but not limited to, notices of litigation, defaults and unmatured defaults and other information, compliance with laws, permits and licenses, inspection of properties, books and records, maintenance of insurance, limitations with respect to liens and encumbrances, dividends and retirement of capital stock, guarantees, sale and lease back transactions, consolidations and mergers, investments, capital expenditures, loans and advances, indebtedness, compliance with pension, environmental and other laws, operating leases, transactions with affiliates and prepayment of other indebtedness. With respect to certain affirmative covenants: - Borrower will be required to continue a captive self-insurance program for its fleet, as currently provided by RepWest, provided however that the Borrower may alter or replace its captive self-insurance with the approval of Foothill provided that the terms are reasonably consistent with the program currently provided by RepWest, and such approval will not be unreasonably withheld by Foothill. With respect to certain negative covenants: - Borrower would be permitted to repay Subordinated Debt using the proceeds of Excluded Assets provided that no Event A-8 of Default is then in existence or will be in existence as a result after giving effect to the said event. - Borrower would be permitted to prepay Subordinated Debt, in other circumstances, provided that (i) no Event of Default is then in existence or will be in existence as a result after giving effect to the said event, (ii) payments shall not exceed 50% of Borrower's free cash flow for the prior 12 months, and (iii) Borrower shall have not less than $35,000,000 in availability under the Facility plus unrestricted cash after giving effect to the said event and, Borrower's projected availability for the next 12 months, after giving effect to the said event, would not be below $35,000,000. - Borrower would be permitted to make cash payments on Preferred Stock in existence as of the Emergence Date, provided that (i) no Event of Default is then in existence or will be in existence as a result after giving effect to the said event, (ii) cash payments shall not exceed $13,000,000 annually, and (iii) Borrower shall have not less than $35,000,000 in availability under the Facility plus unrestricted cash after giving effect to the said event and, Borrower's projected availability for the next 12 months, after giving effect to the said event, would not be below $35,000,000. CASH MANAGEMENT: Borrowers shall institute a cash management system reasonably satisfactory to Agent, including without limitation, establishing one or more concentration accounts at financial institutions acceptable to the Agent REQUIRED LENDERS: Lenders holding 51% of the outstanding commitments and/or exposure under the Facility, except for provisions customarily requiring unanimous approval by the Lenders. EVENTS Of DEFAULT: Usual events of default, including, but not limited to, payment, cross-default, violation of covenants, breach of representations or warranties, judgments, ERISA, material environmental, change of control and other events of default which are customary in facilities of this nature. GOVERNING LAW: All documentation in connection with the Financing Facility shall be governed by the laws of the State of New York applicable to agreements made and performed in such State except as governed by the Bankruptcy Code. ASSIGNMENTS AND Foothill shall be permitted to assign its rights PARTICIPATIONS: and obligations hereunder, or any part thereof, to any person or entity without the consent of the Loan Parties. Foothill shall be permitted to grant participations in such rights and obligations, or any part A-9 thereof, to any person or entity without the consent of the Loan Parties. EXPENSES: The Loan Parties shall pay on demand all reasonable fees and expenses of Foothill (including legal fees, financial consultant fees (if any), audit fees, search fees, filing fees, and documentation fees, and expenses in excess of the Deposit), incurred in connection with the transactions contemplated by this Term Sheet, whether or not such transactions close. Borrower permits Foothill to charges such Expense to Borrower's existing DIP Facility agented by Foothill. SYNDICATION: Agent to underwrite the Financing Facility and syndicate to other qualified financial institutions. Agent may change the terms, structure (including, without limitation, the maximum amount of the Revolver and Term Loan A), tenor or pricing (including, without limitation, the offering of an original issue discount) as Agent, in its sole discretion, determines is necessary to ensure a successful syndication of the Emergence Facility; provided, however, such changes shall not result in a reduction of the Maximum Credit Amount of the Emergence Facility nor a change in the Excluded Assets, as herein defined. A-10 EXHIBIT A-2 EXIT FINANCING FACILITY AGREEMENT [TO BE FILED ON OR BEFORE THE EXHIBIT FILING DATE] EXHIBIT B PLAN SUPPORT AGREEMENT (CREDITORS' COMMITTEE) [SEE ATTACHED] EXECUTION COPY PLAN SUPPORT AGREEMENT This Plan Support Agreement (the "AGREEMENT") is made and entered into as of November 12, 2003, by and among AMERCO, Amerco Real Estate Company, ("AREC", and together with AMERCO, collectively, the "DEBTORS"), each Nevada corporations and debtors and debtors in possession, SAC Holding Corporation ("SAC") and SAC Holding II Corporation (together with SAC, collectively, "SAC HOLDING"), each a Nevada corporation and non-debtors, the Official Committee of Unsecured Creditors ("COMMITTEE") in the AMERCO Chapter 11 case, and the individual Committee Member that are signatories hereto ("COMMITTEE MEMBER"). The Debtors, SAC Holding, the Committee, the Committee Members and any subsequent person or entity that becomes a party hereto in accordance with the terms hereof are referred to herein as the "PARTIES" and individually as a "PARTY". RECITALS WHEREAS, on June 20, 2003, AMERCO filed a voluntary petition for relief ("AMERCO CASE") under Chapter 11 of Title 11 of the United States Code ("BANKRUPTCY CODE") and on August 13, 2003, AREC similarly filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (together with the AMERCO Case, the "CASES"). WHEREAS, on June 27, 2003, the Office of the United States Trustee for the District of Nevada (the "UNITED STATES TRUSTEE") appointed pursuant to section 1102 of the Bankruptcy Code, the Committee in the Case, which appointment has been amended by the United States Trustee from time to time. WHEREAS, on October 6, 2003, the Debtors and SAC Holding (together, "PROPONENTS") jointly filed a Joint Plan of Reorganization of AMERCO and AREC, Debtors and Debtors-In-Possession under section 1121(a) of the Bankruptcy Code (the "PLAN"), and a related disclosure statement (the "DISCLOSURE STATEMENT") pursuant to section 1125 of the Bankruptcy Code (capitalized terms not otherwise described herein shall have the meanings given them in the Plan). WHEREAS, the Parties have engaged in good faith negotiations in connection with the Plan with the objective of reaching an agreement concerning the restructuring of the Debtors (the "RESTRUCTURING") and, in particular, the treatment of holders of AMERCO Unsecured Claims (presently identified as Class 7 Claims under the Plan). WHEREAS, the Parties now desire to implement the Restructuring pursuant to this Agreement and amend the Disclosure Statement (hereafter the "AMENDED DISCLOSURE STATEMENT") and the Plan (hereafter, the "AMENDED PLAN") in a manner consistent with the terms set forth in this Agreement and the AMERCO Term Sheet attached hereto as Exhibit "A," and incorporated herein by this reference (the "TERM SHEET"). 1 EXECUTION COPY WHEREAS, the Proponents intend to use their commercially reasonable efforts to obtain approval of the Amended Disclosure Statement and obtain confirmation of the Amended Plan by the United States Bankruptcy Court for the District of Nevada ("BANKRUPTCY COURT"), in accordance with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure ("BANKRUPTCY RULES") on terms consistent with this Agreement and the Term Sheet. WHEREAS, the Committee intends to use their commercially reasonable efforts to cooperate and actively support confirmation and consummation of the Plan, subject to the terms and conditions of this Agreement and the Term Sheet. WHEREAS, the Committee Members that actually hold AMERCO Unsecured Claims and become a signatory hereto are prepared, subject to the terms and conditions of this Agreement and the Term Sheet, to vote their respective Claims to accept the Amended Plan. AGREEMENT NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Amended Plan to Be Consistent With Term Sheet. The Amended Plan and Amended Disclosure Statement shall provide for the treatment of AMERCO Unsecured Claims and other features of the Amended Plan in a manner consistent with the Term Sheet. 2. Approval of the Amended Disclosure Statement and Confirmation of the Plan. Proponents shall use their commercially reasonable efforts to obtain prompt approval of the Amended Disclosure in accordance with the Bankruptcy Code and on terms consistent with this Agreement, and the Committee and Committee Members shall cooperate fully in that regard. The Proponents and the Committee shall take all reasonable, necessary and appropriate actions to achieve confirmation and consummation of the Amended Plan as contemplated herein. 3. Amendments and Modifications. Should any modification or amendment to the Amended Plan be necessary to obtain confirmation of the Amended Plan or for the Restructuring to be consummated, each of the Parties agrees to negotiate in good faith any such amendments and modifications to the Amended Plan. 4. Committee Support of the Restructuring and the Amended Plan. So long as no Support Termination Event, as defined herein, has occurred, the Committee shall: (i) support confirmation and consummation of the Amended Plan, including supporting the Debtors' contention that they have, as part of Confirmation of the Plan, satisfied each of the confirmation requirements set forth in Section 1129(a) of the Bankruptcy Code, and (iii) recommend that all parties-in-interest entitled to vote do so in favor of the Amended Plan. 2 EXECUTION COPY 5. Voting in Favor of Amended Plan. So long as no Support Termination Event has occurred, each Committee Member that is a signatory hereto and that is entitled to vote an AMERCO Unsecured Claim agrees to timely vote such Claim to accept the Plan. 6. Restrictions on Transfer. Without the prior written consent of the Debtors and provided that no Support Termination Event shall have occurred, each Committee Member that is a signatory hereto and that holds an AMERCO Unsecured Claim hereby agrees not to (a) sell, transfer, assign, pledge, or otherwise dispose of any of its AMERCO Unsecured Claims, in whole or in part, or any interest therein, unless the transferee accepts such Claims subject to the terms of this Agreement, or (b) grant any proxies, deposit any of its AMERCO Unsecured Claims into a voting trust, or enter into a voting agreement with respect to any such Claims unless such arrangement provides for compliance herewith. Unless the Debtors have otherwise consented in writing or a Support Termination Event shall have occurred, in the event that a Committee Member that is a signatory hereto transfers such AMERCO Unsecured Claim prior to the last date for voting on the Amended Plan, such transferee shall comply with and be subject to all the terms of this Agreement so long as such Agreement remains in effect, including but not limited to, such Committee Member's obligations to vote in favor of the Amended Plan and shall, as a condition precedent to such transfer, execute an agreement on terms substantially identical to the terms of this Agreement and, upon commencement of the solicitation of votes to accept or reject the Amended Plan, a ballot indicating its acceptance of the Conforming Plan. 7. Reservation of Rights, Claims, Remedies and Defenses. Except as expressly provided herein, each Party expressly acknowledges and agrees that: (i) nothing herein is intended to, or does, in any manner waive, limit, impair or restrict the ability of the Committee, or each Committee Member, whether or not such Committee Member is a signatory hereto, to protect and to preserve all of their rights, claims, remedies, defenses and interests; and (ii) by entering into this Agreement, the Committee and each Committee Member, whether or not such Committee Member is a signatory hereto, does not waive any of their legal rights, claims or causes of action against the Proponents, if any, and any of their affiliates or any defenses that the Committee or each Committee Member may have in connection with any claim objection, avoidance action, adversary proceeding or other action or legal proceeding that the Proponents or their affiliates may bring against the Committee or any one or more of the Committee Members. By execution of this Agreement, the Committee and the Committee Members do not make any admissions of any law or fact. 8. Solicitation Acknowledgement. This Agreement is not and shall not be deemed to be a solicitation for consents to the Amended Plan. The solicitation of votes concerning the Amended Plan will not occur until parties entitled to vote on the Amended Plan receive the Amended Disclosure Statement and related ballots, as approved by the Bankruptcy Court. 9. Exclusivity. So long as no Support Termination Event has occurred, the Committee shall support the Debtors' request to continue their exclusive right to solicit 3 EXECUTION COPY votes to accept or reject the Plan under section 1121 of the Bankruptcy Code through and including February 28, 2004. 10. Conditions. The Committee's and, to the extent applicable, the Committee Member's obligations hereunder, are conditioned upon the satisfaction or waiver of the following conditions: a. By no later than June 1, 2004, the Bankruptcy Court shall have entered an order confirming the Amended Plan and the Amended Plan's Effective Date shall have occurred. b. All materials, documents, instruments, notes, agreements, pleadings, the Amended Disclosure Statement, the Amended Plan and orders relating to the Amended Plan, debt securities issued or sold under the Amended Plan or the Restructuring, including the SAC Holding Note Documents, shall be substantially consistent with the Amended Plan and in form and substance reasonably satisfactory to the Committee, Debtors and SAC Holding. 11. Support Termination Events. The obligations of a Party hereunder, including the obligations of the Committee Members to vote to accept the Plan under Section 5 and Section 6 hereof, shall terminate and be of no further force and effect if one of the following events occurs (each a "Support Termination Event"), and such Party does not waive such Support Termination Event. a. A breach of this Agreement by one or more of the other Parties to this Agreement, including but not limited to the failure to either satisfy or obtain the waiver of any condition set forth in paragraph 10, above; b. A material adverse change, based on events occurring subsequent to the effective date of this Agreement in the prospects, business, assets, operations, liabilities or financial performance or condition of the Debtors, U-Haul International, Inc., and its subsidiaries; c. The Cases are converted to a case under Chapter 7 of the Bankruptcy Code or the appointment of a trustee or examiner with expanded power to actually operate the business of the Debtors in any of the Cases; d. The Bankruptcy Court denies confirmation of the Amended Plan; e. The Committee, in good faith, as a fiduciary for unsecured creditors and based upon the written opinion of its counsel, determines that termination of this Agreement is necessary or appropriate to comply with their fiduciary duties and delivers notice thereof to the Proponents; or f. The termination of the Debtors' right to file and solicit a plan of reorganization under section 1121(d) of the Bankruptcy Code. 4 EXECUTION COPY Upon the occurrence of a Support Termination Event which has not been waived in writing by the Parties within seven (7) business days of notice hereof, the obligations of the Parties hereto shall immediately and automatically terminate. In that event, no Party shall have any continuing liability or liability for damages or any continuing obligation to any other Party hereunder. It is understood and agreed by each of the Parties hereto that money damages are waived and that such damages would not be a sufficient remedy for any material breach of any provision of this Agreement by any Party and each non-breaching Party shall be entitled to the sole and exclusive remedy of specific performance and injunctive or other equitable relief as a remedy for any such breach, without the necessity of securing or posting a bond or other security in connection with such remedy. 12. Representations and Warranties. Each of the Parties represents and warrants to each of the other Parties that the following statements are true, correct and complete as of the date hereof: a. It has all requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement. b. The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary action on its part. c. The execution, delivery and performance by it of this Agreement do not and shall not (i) violate any provision of law, rule or regulation applicable to it or any of its subsidiaries or its certificate of incorporation or by-laws or those of any of its subsidiaries or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party or under its certificate of incorporation or by-laws or other organizational documents. d. The execution, delivery and performance by it of this Agreement do not and shall not require any registration or filing with, consent or approval of, or notice to, or other action to, with or by, any Federal, state or other governmental authority or regulatory body. 13. Effectiveness; Amendments. This Agreement shall be effective and binding upon the Proponents and the Committee once it has been executed by such Parties. This Agreement shall not become effective and binding upon an individual Committee Member unless and until a counterpart signature page to this Agreement has been executed and delivered by such individual Committee Member. 14. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to any conflicts of law provision that would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each of the Parties hereto hereby irrevocably and unconditionally agrees for itself that the Bankruptcy Court 5 EXECUTION COPY shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement. 15. Notices. All notices and consents hereunder shall be in writing and shall be deemed to have been duly given upon receipt if personally delivered by courier service, messenger, telecopy, or by certified or registered mail, postage prepaid return receipt requested, to the following addresses, or such other addresses as may be furnished hereafter by notice in writing, to the following parties: If to the Committee or a Committee Member, to: Milbank, Tweed, Hadley & McCloy LLP 601 S. Figueroa Street, 30th Floor Los Angeles, CA 90017 Facsimile No.: (213)629-5063 Attn: Paul S. Aronzon If to the Debtors or SAC Holding: AMERCO 2727 North Central Avenue Phoenix, AZ 85004 Facsimile No.: (602)263-6173 Attn: Gary V. Klinefelter with a copy to: Squire, Sanders & Dempsey L.L.P. Two Renaissance Square 40 North Central Avenue, Suite 2700 Facsimile No.: (602) 253-8129 Attn: Craig D. Hansen 16. Representation by Counsel. Each Party acknowledges that it has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this Agreement against such Party based upon lack of legal counsel shall have no application and is expressly waived. 17. Headings. The headings of the paragraphs and subparagraphs of this Agreement are inserted for convenience only and shall not affect the interpretation hereof. 6 EXECUTION COPY 18. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the Parties and their respective permitted successors, assigns, heirs, executors, administrators and representatives. 19. Several, Not Joint, Obligations. The agreements, representations and obligations of the Parties under this Agreement are, in all respects, several and not joint. 20. Prior Negotiations. This Agreement supersedes all prior negotiations with respect to the subject matter hereof but shall not supersede the Amended Plan. 21. Counterparts. This Agreement (and any modifications, amendments, supplements or waivers in respect hereof) may be executed in one or more counterparts by manual or facsimile signature, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. 22. No Third-Party Beneficiaries. Except for the Committee Members who are intended beneficiaries of paragraph 5 and 6 of the Agreement, this Agreement shall be solely for the benefit of the Parties, and no other person or entity shall be a third party beneficiary hereof. 23. Disclosure. Until there has been public disclosure of this Agreement, (i) no disclosure of this Agreement shall be made by any Party hereto without the prior approval of the other Parties, and (ii) no Party shall make any public statement regarding the obligations hereunder without the prior approval of the other Parties; provided, however, Proponents may disclose the Committee support for the Amended Plan generally, as set forth in this Agreement, without prior approval. Further, in any event, no written statement concerning the position of another Party to this Agreement, beyond the language of the Agreement, shall be made without the prior approval of the Party. IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written. AMERCO By: /s/ [ILLEGIBLE] --------------------- Its: President AMERCO REAL ESTATE COMPANY By: /s/ [ILLEGIBLE] --------------------- Its: President 7 EXECUTION COPY SAC HOLDING CORPORATION By: /s/ [ILLEGIBLE] --------------------- Its: President SAC HOLDING II CORPORATION By: /s/ [ILLEGIBLE] --------------------- Its: President THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF AMERCO By: /s/ [ILLEGIBLE] --------------------- Its: Counsel, Milbank, Tweed, Hadley & McCloy LLP 8 EXECUTION COPY EXHIBIT A TERM SHEET (DATED AS OF NOVEMBER 5, 2003) 9 SETTLEMENT COMMUNICATION -- DATE: NOVEMBER 5, 2003 INADMISSIBLE FOR ALL PURPOSES AMERCO TERM SHEET SUMMARY OF INDICATIVE TERMS AND CONDITIONS OF THE RESTRUCTURING AND TREATMENT OF THE CLASS 7 ALLOWED AMERCO UNSECURED CLAIMS 1. DEFINITIONS: Except as expressly provided herein, all capitalized terms not otherwise defined will have the meanings ascribed to such terms in the Joint Plan of Reorganization dated as of October 6, 2003, as amended to reflect the terms and conditions set forth in this Term Sheet (the "PLAN"). 2. CLASS MEMBERS AND Class 7 will consist of the holders of all Allowed ESTIMATED ALLOWED CLAIM: AMERCO Unsecured Claims. As of the Effective Date (estimated to be January 31, 2004), the amount of Allowed Claims in Class 7, including interest following the Petition Date through the anticipated Effective Date, at the non-default contract rate, is approximately $714,600,000. 3. TREATMENT SUMMARY: Cash on Effective Date: Cash in the amount of $191,000,000, provided, however, that the amount of Cash will be increased by the same amount, if any, by which the principal amount of the New Term Loan B Notes distributed to the AMERCO Unsecured Claimholders is less than $200,000,000, but not to exceed thirty-five percent (35%) of the Allowed Class 7 Claims. The total Cash distributed to AMERCO Unsecured Claimholders holding Allowed Claims will be decreased, to the extent required, in order for the Reorganized Debtors to have minimum availability under the Exit Financing Facility (defined as Cash plus undrawn revolver) at the Effective Date of $80,000,000. New Term Loan B Notes: $200,000,000 less the sum of: (i) the principal amount of the New Term Loan B Notes externally syndicated; and, (ii) the amount of the New Term Loan B Notes distributed to the JPMorgan Claimholders and AREC Note Claimholders pursuant to the Plan. SAC Holding Senior Notes: $200,000,000. New AMERCO Notes: $714,600,000, less distributions of Cash, New Term Loan B Notes and SAC Holding Senior Notes to the holders of Allowed AMERCO Unsecured Claims. 4. GLOBAL TERMS: Transferability of New The New Debt Securities will be (i) fully Securities: transferable, and (ii) either exempt from registration under the Securities Act of 1933, or, if an exemption is not available, registered at the sole expense of AMERCO, or SAC Holding, as appropriate. AMERCO and SAC Holding will use their reasonable best efforts to support the establishment of a market in the New Debt Securities. Additionally, SAC Holding will continue to report its financial performance as part of the consolidating financials of Reorganized AMERCO, so long as Reorganized AMERCO is required to consolidate SAC Holdings under GAAP. To the extent Reorganized AMERCO is no longer required to consolidate SAC Holdings under GAAP, SAC Holdings will provide stand-alone audited financial statements. 10 Governance and As of the Effective Date, AMERCO will be compliant in Management: all material respects with all applicable laws and regulations regarding governance and Board of Director independence, including the then effective requirements of (i) Sarbanes-Oxley; (ii) NYSE; (iii) NASDAQ; and (iv) SEC. Support of Carey Sale The Creditors' Committee agrees to support the Transaction: Debtors in their efforts to execute the Carey Sale Transaction, as it may be modified or supplemented, subject to documentation reasonably satisfactory to the Creditors' Committee. 11 5. SECURITIES SUMMARY A. KEY TERMS OF NEW TERM LOAN B NOTES Issuer/Borrower: AMERCO ("BORROWER"). Guarantor: All Subsidiaries of AMERCO, including AREC, U-Haul, and all their respective Subsidiaries, but excluding RepWest, Oxford and all of their respective Subsidiaries (collectively "GUARANTORS"). SAC Holdings will not be a Borrower or Guarantor. Principal Balance: Aggregate principal balance of $200,000,000. Maturity/Term: 5 years following the Effective Date of the Plan. Rating/Coupon: The Debtors agree to have the New Term Loan B Notes rated by Standard & Poor's and price the New Term Loan B Notes at a mutually acceptable price based upon the rating obtained except that, to the extent the New Term Loan B Notes are externally syndicated in accordance with the JPMorgan Syndication Terms and the AREC Syndication Terms, the market pricing established by such syndication will govern the pricing of the New Term Loan B Notes. Interest will be paid in cash, quarterly in arrears. Security/Collateral: A second priority (behind the Exit Financing Facility), perfected security interest in substantially all of the assets of the Borrowers and Guarantors. The assets set forth on Schedule 1 attached hereto will not be part of the collateral (the "EXCLUDED ASSETS"). The Indenture Trustee with respect to the New Term Loan B Notes will enter into an inter-creditor agreement in form and substance reasonably acceptable to the Creditors' Committee, the Debtors and Foothill. Amortization: Non-amortizing. Covenants and Other Customary for debt securities of this type. Such Terms: covenants and terms will be set to take into account the impact upon the syndication of the Exit Financing Facility. B. KEY TERMS OF THE NEW AMERCO NOTES. Issuer/Borrower: AMERCO ("BORROWER"). Guarantor: All Subsidiaries of AMERCO, including AREC, U-Haul, and all their respective Subsidiaries, but excluding RepWest, Oxford and all of their respective Subsidiaries (collectively, "GUARANTORS"). SAC Holding will not be a Borrower or Guarantor. Principal Balance: The original principal amount of the New AMERCO Notes will be equal to the Allowed Class 7 Claims, minus the amount of Cash, New Term Loan B Notes and SAC Holding Senior Notes distributed to the Class 7 Claimholders as set forth in this Term Sheet and the Plan. Maturity/Term: 7 years following the Effective Date. Coupon/Rate: 12% cash, payable quarterly in arrears. Security/Collateral: A first priority perfected security interest in: (i) stock of Oxford; and first priority lien in the (ii) real property under contract for sale as of the closing of the Exit Financing Facility (the "SALE PROPERTY"): (iii) property defined as surplus property at the closing of the Exit Financing Facility, as defined in such Exit Financing Facility (the "SURPLUS PROPERTY"), and (iv) residual, restated Existing SAC Holding Notes, including existing SAC Holding Notes relating to 4 SAC, 5 SAC and 19 SAC, but excluding any Existing SAC Holding Note that is prohibited by an existing contractual relationship from being pledged. Ranking: The New AMERCO Notes will rank senior in right of payment to any existing 12 and future obligations with respect to the collateral securing the New AMERCO Notes. The New AMERCO Notes will rank junior with respect to the Exit Financing Facility, New Term Loan B Notes, and any refinancing thereof. The New AMERCO Notes will rank senior to all existing and future subordinated debt to the extent any claim exists above the value of the collateral securing the New AMERCO Notes. Optional Redemption: Following the Effective Date, Borrower may redeem some or all of the New AMERCO Notes at a redemption price of 100% of the principal amount of such Notes, plus accrued and unpaid interest, if any, as of the date of the redemption. Mandatory Redemption: In the event Reorganized AMERCO: (i) executes a sale, merger, dividend, transfer or other form of monetization of the stock or assets of all or substantially all of Oxford; (ii) monetizes the Sale Property; or (iii) monetizes Surplus Property, 100% of the net cash proceeds derived from such a transaction will be used to redeem the New AMERCO Notes at a redemption price of 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, as of the date of redemption. In addition, 75% of net recoveries realized above $50,000,000 (i.e. the first $50,000,000 is pledged as collateral for the Exit Financing Facility) from the PwC Litigation will used to redeem the New AMERCO Notes at a redemption price of 100% of the principal amount of such New AMERCO Notes, plus accrued and unpaid interest, if any, as of the date of the redemption. Covenants: Limitation on the incurrence by Reorganized AMERCO and the Guarantors of additional indebtedness, including a defined basket of indebtedness senior to the New AMERCO Notes. Limitation on restricted payments by Reorganized AMERCO and the Guarantors, provided however that Reorganized AMERCO will be able to make certain restricted payments, including dividends on existing preferred stock and other restricted payments of a type and amount customary under the terms of similar indebtedness and, in all events, reasonably acceptable to the Debtors and Creditors' Committee. Limitation on merger, sale or consolidation by Reorganized AMERCO and the Guarantors, provided that, notwithstanding such limitations, Reorganized AMERCO will not be restricted in the sale of the collateral securing the payment of New AMERCO Notes for purposes of redeeming such Notes. Limitation on liens. Other covenants customary under the terms of similar indebtedness and, in all events, reasonably acceptable to the Debtors and the Creditors' Committee. C. KEY TERMS OF SAC HOLDING SENIOR NOTES Issuer/Borrower: SAC Holding and SAC Holdings II (collectively, "SAC HOLDING"). It is anticipated that prior to the Effective Date, 4 SAC, 5 SAC and 19 SAC will be transferred into a newly formed holding company ("NEW SAC HOLDING"). New SAC Holding will not be an issuer, borrower or guarantor with respect to the SAC Holding Senior Notes, and 4 SAC, 5 SAC and 19 SAC will not be SAC Holding Subsidiaries. If 4 SAC, 5 SAC and 19 SAC are not transferred to New SAC Holding, such entities will nevertheless not be issuers, borrowers or guarantors with respect to or otherwise subject to the SAC Holding Senior Notes. AMERCO, U-Haul, AREC and all of their respective Subsidiaries will not be an issuer, borrower or guarantor of the SAC Holding Senior Notes. Principal Balance: Aggregate principal balance of $200,000,000. Maturity/Term: 10 years following the Effective Date. 13 Coupon/Rate: 8.5% cash, payable quarterly in arrears. Security/Collateral: None. Ranking: The SAC Holding Senior Notes will be senior indebtedness of SAC Holding and will be senior in priority to all existing and future indebtedness of SAC Holding, but will rank junior to the claims of third-party senior secured mortgage debt at the SAC Holding Subsidiary level. Optional Redemption: 3 year no call, subject to carveout provision. Thereafter, redeemable at the option of SAC Holding at the following percentage of principal amount, together with accrued but unpaid interest to the redemption dates: Year 4 - 104.0% Year 5 - 103.0% Year 6 - 101.5% Year 7 through 10 - 100% Mandatory Redemption In the event SAC Holding executes a sale, refinancing or other form of monetization transaction involving the real estate of any SAC Holding Subsidiary, 100% of the net cash proceeds, after payment of third-party senior secured mortgage indebtedness and any fees and taxes, derived from such a transaction will be used to redeem the SAC Holding Senior Notes at a redemption price in accordance with the call features outlined above, plus accrued and unpaid interest, if any, to the date of redemption; provided, however, that the redemption price in the case of a sale, refinancing or other monetization of 3 SAC will be 101% of principal, plus accrued and unpaid interest to the redemption date. Covenants: Cross defaults with all current and future indebtedness of SAC Holding and its Subsidiaries, provided that any such cross default will be restricted to a default that results in the acceleration of such other indebtedness, which acceleration is not rescinded or cured within 30 days of notice of such cross-default The Existing SAC Holding Notes will be restated to provide for (i) the subordination of claims thereunder against SAC Holding to those of the SAC Holding Senior Notes, other than where such subordination is prohibited by an existing contractual relationship; and (ii) the subordination of all amounts payable to SAC Holding under the Existing SAC Holding Notes in the event of default in the payment of the SAC Holding Senior Notes. Limitations of liens against SAC Holding and its Subsidiaries. Limitations on the sale of equity interests in existing SAC Holding Subsidiaries such that SAC Holding may sell its interest in SAC Holding Subsidiaries, provided that it obtains a third party appraisal verifying the sales price received and, provided further that net cash proceeds from a sale are used as outlined under the Mandatory Redemption. Limitation on the incurrence of indebtedness by SAC Holding and its Subsidiaries, but for any extension, renewal or replacement of any of the current indebtedness of SAC Holding Subsidiaries, provided that if any extension, renewal or replacement is in an amount greater than the indebtedness so extended, renewed or replaced (plus the amount of expenses, fees and any premium or penalty paid in connection with such extension, renewal or replacement), such excess amount will be distributed in accordance with the Mandatory Redemption provisions set forth above. All inter-company claims of SAC Holding and its subsidiaries will be subordinated to the SAC Holding Senior Notes. 14 Other covenants customary under the terms of similar indebtedness and, in all events, reasonably acceptable to the Debtors, SAC Holding and the Creditors' Committee. Notwithstanding the above, no covenants will be included that would interfere with the "ring fencing" of SAC Holding and its Subsidiaries from Reorganized AMERCO. SAC Holding Participation SAC Holding will be a co-proponent of the Plan with and Subordination AMERCO and AREC. To facilitate the transactions Agreement: contemplated by the Plan, SAC Holding and its shareholders will execute and deliver the SAC Holding Participation and Subordination Agreement, which will be in form and substance reasonably acceptable to the Debtors and the Creditors' Committee. The SAC Holding Participation and Subordination Agreement will, among other things, have provisions that ensure that SAC Holding and its Subsidiaries are "ring fenced" and separate and remote from AMERCO and its Subsidiaries by containing terms, conditions and covenants that are designed to facilitate such "ring fencing." The SAC Holding and Participation and Subordination Agreement will also contain provisions that provide assurances that all of the transactions and agreements contemplated by the Plan are valid, enforceable in accordance with their terms, lawful, not violative of other agreements and not subject to avoidance, rescission or other collateral attack under any applicable law. The SAC Holding Participation and Subordination Agreement will be approved the Bankruptcy Court as part of the Confirmation of the Plan, supported by findings of fact and conclusions of law, which will be contained in a Confirmation Order, all of which will be in form and substance reasonably acceptable to the Debtors and the Creditors' Committee. The SAC Holding Participation and Subordination Agreement will be in existence for so long as the SAC Holding Senior Notes and the New AMERCO Notes are outstanding, provided, however, that if the SAC Holding Senior Notes are no longer outstanding, the SAC Holding Participation and Subordination Agreement will expire at such time as all restated Existing SAC Holding Notes securing the New AMERCO Notes have been retired. 15 SCHEDULE 1 TO TERM SHEET EXCLUDED ASSETS All capitalized terms set forth below will have the meaning ascribed to such terms in the Exit Financing Facility commitment letter dated as of November 5, 2003, by and between Wells Fargo Foothill, Inc., and the Debtors, a true and correct copy of which is Exhibit A-1 to the Plan. 1. The existing promissory notes issued to the Loan Parties by SAC Holdings and its subsidiaries (and proceeds associated with the monetization of such asset, as they may be amended or restated from time to time; 2. The Borrowers' real estate subject to any currently existing synthetic lease arrangements (and the proceeds associated with the monetization of such assets); 3. The stock of RepWest and Oxford (and the proceeds associated with the monetization of such assets); 4. Real property subject to a lien by Oxford; 5. Real property under contract for sale at the time of the Closing; 6. Real property defined as surplus property at the time of Closing; 7. Proceeds in excess of $50,000,000 associated with the settlement judgment or recovery related to Borrowers' lawsuit against PwC; and 8. vehicles (including any motor vehicle, trailer or other asset) that become and remain subject to a TRAC or Operating Lease transaction. 16 EXHIBIT C RESTRUCTURING AGREEMENT (AREC NOTEHOLDERS) [SEE ATTACHED] RESTRUCTURING AGREEMENT This Restructuring Agreement (this "Agreement") is made and entered into as of August 12, 2003, by AMERCO Real Estate Company, a Nevada corporation ("AREC") and the signatories hereto that are holders of the Notes described below (collectively, the "Noteholders"). AREC and the Noteholders are collectively referred to herein as the "Parties" and individually as a "Party." RECITALS WHEREAS, AREC and the Noteholders have engaged in good faith negotiations with the objective of reaching an agreement with regard to (i) the restructuring of the $95,000,000 Senior Notes, Series A, due April 30, 2012 and the $5,000,000 Senior Notes, Series B, due April 30, 2007, issued by AREC (collectively, the "Notes") under that certain Note Purchase Agreement dated March 15, 2002 (the "Purchase Agreement"), between AREC and the Noteholders, and guaranteed by AREC's parent, AMERCO, a Nevada corporation ("AMERCO"), under and pursuant to the Purchase Agreement, and (ii) the recapitalization of AREC and AMERCO. WHEREAS, on June 20, 2003, AMERCO filed for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101, et. seq. (the "Bankruptcy Code"), which case is pending before the United States Bankruptcy Court for the District of Nevada (the "Bankruptcy Court"). WHEREAS, AREC and the Noteholders desire to implement the financial restructuring consistent with this Agreement and the term sheet attached hereto and incorporated herein by reference as Exhibit A (the "Term Sheet," and the restructuring and recapitalization contemplated therein, the "Financial Restructuring"), by AREC filing for relief under Chapter 11 of the Bankruptcy Code on or before August 14, 2003 (the "AREC Petition Date"). AREC intends to file a motion with the Bankruptcy Court requesting that its Chapter 11 Case be consolidated, for administrative purposes only, with the Chapter 11 Case of AMERCO (collectively, with any other bankruptcy cases filed by any affiliates or subsidiaries of AMERCO or AREC under the Bankruptcy Code, the "Chapter 11 Cases"). WHEREAS, in order to implement the Financial Restructuring, AREC intends, subject to the terms and conditions of this Agreement and the Term Sheet, to prepare a disclosure statement and a plan of reorganization consistent with the terms set forth in this Agreement and the Term Sheet, to solicit acceptances of such plan, and to file and seek approval of such Disclosure Statement and confirmation of such plan in its administratively consolidated Chapter 11 Cases, as expeditiously as possible under the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). WHEREAS, each Noteholder executing this Agreement (each a "Consenting Noteholder" and collectively, the "Consenting Noteholders") owns or controls the aggregate principal amount of indebtedness under the Notes ("Existing Noteholder Obligations"), in each case as identified on the signature pages hereto. WHEREAS, in order to facilitate and expedite the implementation of the Financial Restructuring, the Noteholders are prepared, subject to the terms and conditions of this Agreement, to vote their respective Claims (as that term is defined in the Bankruptcy Code) against AREC and AMERCO arising under the Notes and the Purchase Agreement (the "Noteholder Claims") to accept the "Conforming Plan" (as defined in Section 3 hereof). AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby as agree as follows: 1. Recitals. Each of the foregoing Recitals is incorporated hereby as if fully set forth herein. 2. Filing of Reorganization Case. AREC will commence its voluntary Chapter 11 case by August 14, 2003, or such other date as may be agreed to in writing by AREC and the Consenting Noteholders. 3. Conforming Plan, Conforming Disclosure Statement, Voting in Favor of the Conforming Plan. (a) For purposes of this Agreement, a "Conforming Plan" and a "Conforming Disclosure Statement" shall mean, respectively, a plan and disclosure statement, proposed by AREC and AMERCO pursuant to the Bankruptcy Code and reasonably acceptable to the Consenting Noteholders, that shall: (i) effectuate the Financial Restructuring, in accordance with the terms and conditions of this Agreement and the Term Sheet; (ii) grant the Noteholders allowed claims in the Chapter 11 Cases on account of the Noteholder Claims in the amount of (w) all outstanding principal on the Notes, (x) interest accrued and unpaid on the Notes from October 15, 2002 up to the AREC Petition Date, payable at the default rate, (y) interest accrued on the Notes from the AREC Petition Date up to the actual date of payment of amounts due to the Consenting Noteholders on the Effective Date pursuant to this Agreement and the Term Sheet, payable at the non-default rate, and (z) any applicable reasonable fees and expenses provided under the Notes and the Purchase Agreement, including, without limitation, all reasonable attorneys fees and other reasonable professional advisor fees (collectively, the "Allowed Noteholder Claims"); (iii) comply with all material terms of this Agreement and the Term Sheet; (iv) not otherwise prejudice rights, remedies, claims, interests of the Noteholders, including the Allowed Noteholder Claims, or the distributions to be made to the Noteholders under this Agreement and the Term Sheet. The Parties understand that the Conforming Plan and all related documents will contain 2 customary provisions for transactions of the nature set forth herein and in the Term Sheet; (v) provide that AREC and AMERCO shall not syndicate the "Term Loan B Notes" to "Market Participants" (as outlined and defined in the Term Sheet) in excess of $30,000,000 aggregate face par amount, unless such syndication is completed in an amount not less than $80,000,000 aggregate face par amount; and (vi) provide that AREC and AMERCO shall pay to the bondholders of AMERCO an amount no greater than thirty-five percent (35%) of their claims against AMERCO in cash from the proceeds of the Emergence Facility. (b) Each Consenting Noteholder agrees to timely vote its Noteholder Claim in favor of the Conforming Plan and not to revoke or withdraw such vote unless the Conforming Plan shall be (i) modified to provide for treatment of the Noteholders that is different in any material respect from the treatment described in this Agreement and in the Term Sheet or (ii) withdrawn by AREC or AMERCO. Each Consenting Noteholder to this Agreement agrees not to elect on any ballot concerning a Conforming Plan to preserve any rights, if any, that such Party may have that may be affected by the releases provided for under the Conforming Plan. 4. Restrictions on Transfer. Without the prior written consent of AREC and provided that no "Event of Termination" (as defined in Section 9 hereof) has theretofore occurred, each Consenting Noteholder hereby agrees not to (a) sell, transfer, assign, pledge, or otherwise dispose of any of its Noteholder Claims, in whole or in part, or any interest therein, unless the transferee accepts such claims subject to the terms of this Agreement, or (b) grant any proxies, deposit any of its Noteholder Claims into a voting trust, or enter into a voting agreement with respect to any of its Noteholder Claims unless such arrangement provides for compliance herewith. Unless AREC has otherwise consented in writing or an Event of Termination has theretofore occurred, in the event that a Consenting Noteholder transfers such Noteholder Claims prior to the last date for voting on the Conforming Plan, such transferee shall comply with and be subject to all the terms of this Agreement so long as such Agreement remains in effect, including, but not limited to, such Consenting Noteholder's obligations to vote in favor of the Conforming Plan and shall, as a condition precedent to such transfer, execute an agreement on terms substantially identical to the terms of this Agreement and, upon commencement of the solicitation of votes to accept or reject the Conforming Plan, a ballot indicating its acceptance of the Conforming Plan. 5. AREC Agreements. During the term of this Agreement, AREC hereby agrees to the following: (a) AREC shall use all reasonable efforts to have the Conforming Disclosure Statement approved by the Bankruptcy Court, and to use all reasonable efforts to obtain an order of the Bankruptcy Court confirming the Conforming Plan, in each case as expeditiously as possible under the Bankruptcy Code and the Bankruptcy Rules and 3 consistent with the terms and conditions set forth in this Agreement and in the Term Sheet. (b) AREC shall (i) prior to the AREC Petition Date, make a payment of all accrued and unpaid interest on the Notes from April 30, 2003 to the AREC Petition Date, payable at the default rate under the Notes, (ii) prior to the AREC Petition Date, make a cash deposit of (x) $400,000 for counsel to the Noteholders, McDermott Will & Emery, and (y) $100,000 for the financial advisors to the Noteholders, Houlihan, Lokey, Howard, & Zukin ("HLHZ"), to the Consenting Noteholders for reasonable professional fees, including reasonable attorneys fees and other reasonable professional advisor fees, incurred after the Petition Date in connection with this Agreement, the Term Sheet, the Financial Restructuring, and the Chapter 11 Cases, (iii) subject to the approval of the Bankruptcy Court, make additional prepayments for reasonable professional fees as reasonably requested by the Consenting Noteholders from time-to-time, and (iv) separately pay, prior to the AREC Petition Date, any accrued and unpaid reasonable fees of such professionals, including attorneys and other professional advisors, including, without limitation, fees due to HLHZ under that certain Engagement Agreement between AREC and HLHZ. (c) AREC shall use all reasonable efforts to obtain approval by the Bankruptcy Court of (i) the $300,000,000 debtor-in-possession financing facility (the "DIP Facility") provided to AREC and AMERCO by Wells Fargo Foothill, Inc., as lead arranger, collateral agent, syndication agent and administrative agent ("Foothill"), and (ii) an emergence facility of approximately $650,000,000 (the "Emergence Facility") also to be provided by Foothill on the confirmation and consummation of the Conforming Plan, based on the Term Sheet, attached hereto as Exhibit B (the "Foothill Term Sheet"). Notwithstanding the references in this Agreement or the Term Sheet to Foothill and the Foothill Term Sheet, AREC and AMERCO may select an alternative senior lender or lenders to provide the DIP Facility or the Emergence Facility under terms (i) similar in all material respects to the Foothill Term Sheet and (ii) effectuating the Financial Restructuring in accordance with the Term Sheet and this Agreement. (d) Except as provided pursuant to this Agreement and the Term Sheet, AREC shall not request, shall not acquiesce in any request, and shall use all reasonable efforts to oppose any request or action of any other party that (i) impairs or changes the rights, remedies, claims, powers, benefits, privileges, liens, security interests or protections of the Noteholders, including, without limitation, any objection to the Allowed Noteholder Claims, (ii) obtains any additional credit outside of the ordinary course (other than the DIP Facility and the Emergence Facility) without the prior written consent of the Consenting Noteholders, (iii) other than through a Conforming Plan, substantively consolidates the estates of AREC and any other entity, including, without limitation, AMERCO, or (iv) rejects this Agreement pursuant to Section 365 of the Bankruptcy Code or other applicable law. Furthermore, AREC shall use all best efforts to obtain an order approving the assumption of this Agreement pursuant to Section 365 of the Bankruptcy Code on or before October 15, 2003. 4 (e) Reference is hereby made to the $205 million credit facility (the "Credit Facility") under the Credit Agreement dated as of June 28, 2002, among AMERCO, the lenders identified therein (the "Revolver Lenders") and JPMorgan Chase Bank, acting as administrative agent on behalf of the Revolver Lenders ("JPMorgan"). If the Revolver Lenders and JPMorgan fail to execute a restructuring agreement providing for the financial restructuring of the Credit Facility consistent with the treatment of the Credit Facility, the Revolver Lenders and JPMorgan as provided in the Term Sheet on or before September 15, 2003, AREC hereby agrees that the Revolver Lenders and JPMorgan shall not receive payment of any amounts from or under the DIP Facility. 6. Support of the Conforming Plan. (a) Provided that an Event of Termination has not theretofore occurred, each Party shall use all reasonable efforts to obtain confirmation of the Conforming Plan in accordance with the Bankruptcy Code as expeditiously as possible, including, without limitation, communicating its support of the Conforming Plan to the holders of allowed impaired claims. (b) Provided that an Event of Termination has not theretofore occurred, no Party shall: (i) object to confirmation of the Conforming Plan or otherwise commence any proceeding to oppose or alter the Conforming Plan or any other reorganization related documents or agreements that implement and are consistent with the Conforming Plan (the "Conforming Plan Documents"), which shall include, but not be limited to any documents or agreements related to the DIP Facility and the Emergence Facility to the extent such documents substantially conform to the terms of the Foothill Term Sheet, the Term Sheet, and this Agreement, (ii) vote for, consent to, support or participate in the formulation of any other plan of reorganization or liquidation proposed or filed or to be proposed or filed in any of the Chapter 11 Cases, (iii) directly or indirectly seek, solicit, support or encourage any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger or restructuring of AREC, AMERCO or any of their subsidiaries that could reasonably be expected to materially prevent, delay or impede the successful restructuring of AREC and AMERCO as contemplated by the Conforming Plan or the Conforming Plan Documents, (iv) object to the Conforming Disclosure Statement or the solicitation of consents to the Conforming Plan, or (v) take any other action that is inconsistent with, or that would materially delay confirmation of, the Conforming Plan. 5 7. Acknowledgment. (a) This Agreement is not, and shall not be deemed to be, a solicitation for consents to the Conforming Plan. The acceptances of the Consenting Noteholders will not be solicited until such Parties have received the Disclosure Statement approved by order of the Bankruptcy Court as containing "adequate information," as such term is defined in Section 1125(a)(l) and (2) of the Bankruptcy Code, the Conforming Plan and related ballot. (b) The Consenting Noteholders are creditors only. None of the Consenting Noteholders, or any of their respective present or former employees, officers, directors, or agents at any time has agreed or consented to being an agent, principal, participant, joint venturer, partner, or alter ego of AREC. None of the Consenting Noteholders or any of their respective present or former employees, officers, directors, or agents at any time has directed or participated in any of the business dealings of AREC in any capacity other than as a creditor. (c) Except as expressly set forth herein and subject to the automatic stay provisions of Section 362 of the Bankruptcy Code: (i) the Notes and the Purchase Agreement shall remain in full force and effect in accordance with their respective terms; and (ii) nothing contained in this Agreement shall: (A) modify or alter any of the terms or provisions in the Notes or the Purchase Agreement in any manner whatsoever, (B) cure, waive, release or postpone any defaults now or hereafter existing under the Notes or the Purchase Agreement; (C) establish a custom between any of the parties hereto; (D) in any way waive, limit, or condition the rights of remedies of the Consenting Noteholders under the Notes or the Purchase Agreement; or (E) cause the Consenting Noteholders to be or be deemed in control of AREC and AMERCO, their operations or properties, or to be acting as a "responsible person" with respect to the operation and management of AREC, AMERCO or their properties. Subject to the automatic stay provisions of Section 362 of the Bankruptcy Code, the Consenting Noteholders may exercise their respective rights and remedies with respect to the events of default upon termination of this Agreement as provided in Section 9 hereof. 8. Disclaimer. On or promptly following the AREC Petition Date, the Parties agree that a copy of this Agreement shall be filed with the Bankruptcy Court. 9. Termination of Agreement. (a) Upon the effectiveness of this Agreement in accordance with Section 26 hereof, the obligations of the Consenting Noteholders and AREC hereunder shall remain effective and binding until the "Effective Date" (as defined in the Term Sheet) of the Conforming Plan unless terminated as provided herein. (b) Upon the occurrence of an Event of Termination, which has not been waived in writing by all Consenting Noteholders within seven (7) business days of notice thereof, the obligations of the Parties hereto shall immediately and automatically 6 terminate without further demand or notice of any kind. The occurrence of any one or more of the following shall constitute an "Event of Termination" hereunder: (i) the Conforming Plan or any Conforming Plan Document is modified to provide for treatment of the Consenting Noteholders that is different in any material respect from the treatment described in the Term Sheet; (ii) the Conforming Plan or any Conforming Plan Document is modified to provide for the treatment of the Credit Facility that is different in any material respect from the treatment described in the Term Sheet; (iii) AMERCO or AREC pays to JPMorgan, on behalf of the Revolver Lenders, more than $51,250,000 in cash in the aggregate from the DIP Facility; (iv) AREC fails to file the Conforming Plan and Conforming Disclosure Statement on or before October 15, 2003; (v) the Conforming Disclosure Statement is not approved on or before December 15,2003; (vi) the Conforming Plan is not confirmed on or before February 27, 2004; (vii) the Conforming Plan is not consummated on or before March 15, 2004; (viii) the Bankruptcy Court does not approve the Emergence Facility as part of the confirmation of the Conforming Plan; (ix) the revolving credit facility and the 'Term Loan A Notes" (as such term is defined in the attached Term Sheet) exceeds $550,000,000 in face amount; (x) the "Term Loan B Notes" (as such term is defined in the attached Term Sheet), exceeds $200,000,000 in face amount; (xi) the Bankruptcy Court denies confirmation of the Conforming Plan; (xii) any of the Chapter 11 Cases are converted to a case under Chapter 7 of the Bankruptcy Code or a trustee or examiner with expanded powers is appointed in any of the Chapter 11 Cases under any chapter of the Bankruptcy Code; (xiii) any written representation or warranty made by AREC to the Consenting Noteholders in this Agreement or the Term Sheet (including without limitation, representations relating to AREC or AMERCO's financial performance) is false or misleading in any material respect; 7 (xiv) a material default occurs under the DIP Facility and is not waived by the lenders under the DIP Facility within ten (10) business days thereof; (xv) the material breach of any provision of this Agreement; (xvi) the Bankruptcy Court finds or holds unenforceable this Agreement, the Term Sheet, or any material provision thereof; (xvii) the estates of AREC and any other entity, including, without limitation, AMERCO, are substantively consolidated, other than through the Conforming Plan; or (xviii) the voluntary or involuntary commencement of any bankruptcy, receivership, or assignment for the benefit of creditors proceeding by or against U-Haul International, Inc. or any other material subsidiary of AMERCO or AREC, other than as part of the implementation of the Conforming Plan. (c) Except as set forth in Section 9(d) hereof, no Party shall have any liability to the other or any other person as a result of the termination of such Party's obligations hereunder in accordance with this Section 9. In addition, each of the Parties hereunder acknowledges and agrees that any assumption of this Agreement pursuant to Section 5(d) hereof and Section 365 of the Bankruptcy Code shall not result in the Noteholder Claims being granted any administrative expense priority under the Bankruptcy Code in the Chapter 11 Cases without further order of the Bankruptcy Court. (d) Upon termination of this Agreement pursuant to Section 9(a), (i) except as set forth in Section 9(d)(iii) hereof, all obligations contained herein of the Parties shall immediately terminate and no provision contained herein shall be binding upon any Party; (ii) the Noteholders shall be immediately entitled to exercise their rights and remedies under the Notes and the Purchase Agreement; and (iii) subject to the automatic stay provisions of Section 362 of the Bankruptcy Code, the forbearance provided in Section 11 hereof shall terminate and all amounts due and owing under the Notes and the Purchase Agreement shall become immediately due and payable, including, without limitation, (x) all principal, (y) any and all accrued and unpaid interest on the Notes, including default interest as provided in the Notes, and (z) fees and expenses provided under the Notes and the Purchase Agreement. Provided that the Noteholders have not theretofore materially breached this Agreement, all such amounts due under the Notes shall be deemed allowed claims by AREC, and AREC shall not object to such claim being allowed in the Chapter 11 Cases. In addition, the Noteholders retain all rights to assert any "make-whole" provisions contained in the Purchase Agreement as part of their allowed claim in the Chapter 11 Cases, and AREC reserves all rights to dispute any such "make-whole" provisions. 8 10. Good Faith Negotiation of Documents. Each Party hereby further covenants and agrees to negotiate the definitive documents relating to the Conforming Plan Documents, in good faith, and in any event, in all material respects consistent with the Term Sheet. 11. Forbearance. Each Consenting Noteholder, for so long as no Event of Termination has occurred, hereby severally agrees to forbear from exercising any rights or remedies it may have under the Notes, the Purchase Agreement and all related documents, applicable law, or otherwise (including without limitation, the filing of an involuntary petition against AREC) with respect to any default with respect to the Notes or the Purchase Agreement, whether presently existing or hereafter arising. Notwithstanding the foregoing, the forbearance provided herein shall terminate upon the termination of this Agreement pursuant to Section 9 hereof, and the Consenting Noteholders shall immediately be entitled to exercise their rights and remedies as provided in Section 9(d) hereof, subject to the automatic stay provisions of Section 362 of the Bankruptcy Code. 12. Representations and Warranties. Each Consenting Noteholder represents and warrants that the statements set forth in clauses (a), (b), (e), (f), and (g) below are true, correct and complete as of the date hereof, and AREC represents and warrants that the statements set forth in clauses (a) through (e) below are true, correct and complete as of the date hereof: (a) Corporate Power and Authority. It is duly organized, validly existing, and in good standing under the laws of the place of its organization, and has all requisite corporate, partnership, limited liability company or other similar power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement. (b) Authorization. The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership, limited liability company, or other similar action on its part. (c) No Conflicts. The execution, delivery and performance by it of this Agreement do not and shall not (i) violate any provision of law, rule or regulation applicable to it or any of its subsidiaries or its certificate of incorporation or bylaws or other organizational documents or those of any of its subsidiaries or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party. (d) Governmental Consents. The execution, delivery and performance by it of this Agreement do not and shall not require any registration or filing with consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body, other than the approval of the Bankruptcy Court, in the case of AREC. (e) Binding Obligation. Subject to the provisions of Sections 1125 and 1126 of the Bankruptcy Code, this Agreement is the legally valid and binding obligation of each Party, enforceable against each Party in accordance with the terms of this Agreement. 9 (f) Owner of Claims. As of the date hereof, each Consenting Noteholders is the beneficial owner of, or holder of investment authority over, its Noteholder Claim against AREC that it has agreed to vote in favor of the Conforming Plan. (g) Acknowledgment of Risks. Each Consenting Noteholder has received and reviewed this Agreement and all schedules and exhibits hereto and has received all such information as it deems necessary and appropriate to enable it to evaluate the financial risk inherent in the Conforming Plan. 13. Further Acquisition of_Claims. This Agreement shall in no way be construed to preclude any of the Consenting Noteholders from acquiring additional Noteholder Claims in the Chapter 11 Cases. However, any such additional Noteholder Claims so acquired shall automatically be deemed to be subject to the terms of this Agreement. 14. Amendments. This Agreement may not be modified, amended or supplemented without the prior written consent of AREC and all of the Consenting Noteholders. 15. Disclosure of Individual Consenting Noteholders. Unless required by applicable law or regulation, AREC shall not disclose any Consenting Noteholder's holdings of Existing Noteholder Obligations without the prior written consent of such Consenting Noteholder; and if such announcement or disclosure is so required by law or regulation, AREC shall afford the Consenting Noteholder a reasonable opportunity to review and comment upon any such announcement or disclosure prior to AREC's making such announcement or disclosure. The foregoing shall not prohibit AREC from disclosing the approximate aggregate holdings of Existing Noteholder Obligations by the Noteholders as a group. 16. Consent to DIP Facility. Unless an Event of Termination has occurred and subject to compliance with Section 5(e) hereof, the Consenting Noteholders (a) consent to the approval of the DIP Facility, including the partial payment to the Revolver Lenders from the proceeds of the DIP Facility as set forth in the attached Term Sheet, and, (b) if requested by AREC, will provide consents in form and substance reasonably acceptable to AREC and the Consenting Noteholders relating to the implementation of the DIP Facility. 17. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each of the Parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in the United States District Court for the District of Nevada. By execution and delivery of this Agreement, each of the Parties hereto irrevocably accepts and submits itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Notwithstanding the foregoing consent to Nevada jurisdiction, upon the commencement of the Chapter 11 Case by AREC, each of the Parties hereto hereby agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement. 10 18. Specific Performance. It is understood and agreed by each of the Parties hereto that money damages would not be a sufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy of any such breach. 19. Headings. The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof. 20. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives. 21. Prior Negotiations. This Agreement and the Term Sheet supersede all prior negotiations with respect to the subject matter hereof. 22. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile shall be equally as effective as delivery of the original executed counterpart of this Agreement. 23. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties hereto and no other person or entity shall be a third-party beneficiary hereof, other than successors and assigns of any Party. 24. Consideration. It is hereby acknowledged by the Parties hereto that no additional consideration shall be due or paid to the Noteholders for its agreement to vote to accept the Conforming Plan in accordance with the terms and conditions of this Agreement. 25. Notices. (a) All notices hereunder to be served to AREC shall be deemed given if in writing and delivered or sent by telecopy, courier or by registered or certified mail (return receipt requested) to the following addresses or telecopier numbers (or at such other addresses or telecopier numbers as shall be specified by like notice): AMERCO Real Estate Company 2727 North Central Avenue Suite 500 Phoenix, Arizona 85004 Attn: Robert Peterson Fax: 602-277-4879 with copy to: SQUIRE, SANDERS & DEMPSEY L.L.P. 40 N. Central Avenue, Suite 2700 Phoenix, AZ 85004 Attn: Craig D. Hansen, Esq. 11 Fax: 602-253-8129 (b) All notices hereunder to be served to a Consenting Noteholder shall be deemed given if in writing and delivered or sent by telecopy, courier or by registered or certified mail (return receipt requested) to the address or telecopier number for such Consenting Noteholder set forth above its signature hereto (or at such other addresses or telecopier numbers as shall be specified by like notice), with copies to: McDERMOTT, WILL & EMERY 227 W. Monroe Street, Suite 4400 Chicago, IL 60606 Attn: Elizabeth Majers, Esq. Fax: 312-984-7700 26. Effectiveness. This Agreement shall become effective when AREC has received counterparts of this Agreement duly executed and delivered by AREC and all of the Noteholders. [SIGNATURE PAGE TO FOLLOW] 12 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written. AREC: AMERCO Real Estate Company By: /s/ROBERT T. PETERSON ------------------------ Name: ROBERT T. PETERSON Title: CONTROLLER [Additional signature pages follow] NOTEHOLDERS: MONUMENTAL LIFE INSURANCE COMPANY By: /s/ Martin J. Rosacker ----------------------------- Name: Martin J. Rosacker Title: Vice President Principal Amount of Notes Owned or Controlled: $21,000,000 Series A Address: c/o AEGON USA INVESTMENT MANAGEMENT, LLC 4333 EDGEWOOD ROAD NE CEDAR RAPIDS, IA 52499-5335 Attention: MARTIN J. ROSACKER TRANSAMERICA LIFE INSURANCE COMPANY By: /s/ Martin J. Rosacker ----------------------------- Name: Martin J. Rosacker Title: Vice President Principal Amount of Notes Owned or Controlled: $10,500,000 Series A Address: c/o AEGON USA INVESTMENT MANAGEMENT, LLC 4333 EDGEWOOD ROAD NE CEDAR RAPIDS, IA 52499-5335 Attention: MARTIN J. ROSACKER AUSA LIFE INSURANCE COMPANY By: /s/ Martin J. Rosacker ----------------------------- Name: Martin J. Rosacker Title: Vice President Principal Amount of Notes Owned or Controlled: $3,500,000 Series A Address: c/o AEGON USA INVESTMENT MANAGEMENT, LLC 4333 EDGEWOOD ROAD NE CEDAR RAPIDS, IA 52499-5335 Attention: MARTIN J. ROSACKER THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY BY: /s/ Jeffery J. Lueken ----------------------------------- Name: Jeffery J. Lueken Title: Its Authorized Representative Principal Amount of Notes Owned or Controlled: $35,000,000 Series A Address: The Northwestern Mutual Life Insurance Company 720 E. Wisconsin Ave Milwaukee, WI 53202 Attention: Colleen Gunther NATIONWIDE LIFE INSURANCE COMPANY By: /s/ MARK W. POEPPELMAN ------------------------------------- Name: MARK W. POEPPELMAN Title: AUTHORIZED SIGNATORY Principal Amount of Notes Owned or Controlled: $19,000,000 Series A Address: One Nationwide Plaza Columbus, Ohio 43215-2220 Attention: ------------------------- NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY By : /s/ MARK W. POEPPELMAN --------------------------------------- Name: MARK W. POEPPELMAN Title: AUTHORIZED SIGNATORY Principal Amount of Notes Owned or Controlled: $3,000,000 Series A Address: One Nationwide Plaza Columbus, Ohio 43215-2220 Attention: ---------------------- NATIONWIDE INDEMNITY COMPANY By : /s/ MARK W. POEPPELMAN --------------------------------------- Name: MARK W. POEPPELMAN Title: AUTHORIZED SIGNATORY Principal Amount of Notes Owned or Controlled: $3,000,000 Series A Address: One Nationwide Plaza Columbus, Ohio 43215-2220 Attention: ----------------------- THE CANADA LIFE ASSURANCE COMPANY By: /s/ J. G. Lowery ------------------------------ Name: J. G. Lowery Title: Assistant Vice President, Investments, U.S. Operations By: /s/ Tad Anderson ------------------------------ Name: Tad Anderson Title: Manager, Investments, U.S. Operations Principal Amount of Notes Owned or Controlled: $5,000,000 Series B Address: 8515 East Orchard Road, 3T2 Greenwood Village, CO 80111-5037 Attention: Ray Miller EXHIBIT A AREC/AMERCO TERM SHEET This Term Sheet describes the principal terms of the proposed restructuring and recapitalization of certain of the outstanding indebtedness AMERCO Real Estate Company, a Nevada corporation ("AREC") and its parent, ("AMERCO"), pursuant to a plan of reorganization (the "Conforming Plan") in accordance with (a) Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") and (b) the terms and conditions contained herein. This Term Sheet has been produced for discussion and settlement purposes only and is not an offer with respect to any securities or a solicitation of acceptances of the Conforming Plan. CERTAIN DEFINITIONS "AREC" means AMERCO Real Estate Company. "Effective Date" means the date the Conforming Plan becomes effective in accordance with its terms and conditions. "Term Loan A Notes" means the notes to be issued by the Debtors, as reorganized, jointly and severally, on the Effective Date of the Conforming Plan, in the aggregate face amount not to exceed $350,000,000. "Term Loan B Notes" means the notes to be issued by the Debtors, as reorganized, jointly and severally, on the Effective Date of the Conforming Plan, in the aggregate face amount not to exceed $200,000,000. "Debtor or Debtors" means, collectively, AMERCO, AREC, and any other, affiliates or subsidiaries of AMERCO or AREC who file voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, other than PAC Fourteen, Inc. and PAC Fifteen, Inc. "New Notes" means, collectively, the Term Loan A Notes and the Term Loan B Notes. CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEM IN THAT CERTAIN RESTRUCTURING AGREEMENT, BY AND AMONG, AREC AND THE NOTEHOLDERS SIGNATORY THERETO (THE "NOTEHOLDERS RESTRUCTURING AGREEMENT"). TREATMENT OF NOTES CLASSIFICATION: The Conforming Plan will place the claims of the Noteholders in a single class, and such class will be impaired and entitled to vote on the Conforming Plan. CASH On the Effective Date of the Conforming Plan, the Consenting DISTRIBUTIONS: Noteholders will receive the following cash distributions: -- $65,000,00 in cash; -- Additional cash in an amount equal to the sum of (a) interest accrued and unpaid from October 15, 2002 up to the AREC Petition Date, payable at the default rate; and (b) interest accrued from the AREC Petition Date up to the Effective Date, payable at the non-default rate. DISTRIBUTION OF $18,600,000 (18.6% of remaining principal amount of the Notes) NEW NOTES: exchanged for and satisfied with Term Loan A Notes under the Emergence Facility in the par amount (net after any discount) of $18,600,000, subject to the Syndication Terms set forth in this Term Sheet. $16,400,000 (16.4% of the remaining principal amount of the Notes) exchanged for and satisfied with Term Loan B Notes under the Emergence Facility in having an aggregate Market Value (as defined below) of $16,400,000, subject to the Syndication Terms set forth in this Term Sheet. TERMS OF NEW As the New Notes are issued under the Emergence Facility, the NOTES: New Notes (under both Term Loan A and Term Loan B) will be identical to the notes issued under the Emergence Facility and will be issued under the same credit agreement, note purchase agreement, or comparable governing document, and will be governed by and entitled to all of the same benefits and terms as the Term Loan A Notes and Term Loan B Notes, including borrowers, guarantors, maturity date, early termination provisions, lien priority on collateral, interest rate, fees, and all other terms of the Foothill Term Sheet, subject to the qualification that the maturity of the New Notes will not exceed 5 years from date of issuance. FEES: On the Effective Date, the Noteholders will be entitled to receive 2% of the par amount of Term Loan B Notes actually issued to the Noteholders. SYNDICATION AMERCO will obtain ratings for the Term Loan B Notes from RIGHTS: either Fitch, S&P or Moody's prior to the Effective Date. 1. If the Term Loan B Notes are syndicated as described below, then the "Market Value" of the Term Loan B Notes shall be the price (net after any discounts) at which Term Loan B Notes are purchased in such syndication. -ii- 2.AMERCO will use its best efforts to arrange for placement of a portion of the Term Loan B Notes to "Market Participants" (as defined below). The proceeds of any commitments from new Market Participants (as described below) above $30,000,000 aggregate face par amount of Term Loan B Notes will be paid initially to the Revolver Lenders until the total cash received by the Revolver Lenders equals 65% of the face amount of the credit facility, and all proceeds thereafter will be paid, on a pro rata basis, to the Revolver Lenders and Noteholders, in lieu of an equal amount of Term Loan B Notes to reduce, on a pro rata basis, the principal amounts required to be purchased by the Revolver Lenders and the Noteholders. 3. In addition to any fees payable to the Noteholders as set forth in this Term Sheet, to the extent the Term Loan B Notes are offered or issued in a syndication with additional fees, discounts, increased spreads, or other additional compensations not already taken into account in the determination of Market Value (whether paid pre- or post-closing of the Term Loan B Notes, and including anticipated flex fees), the Noteholders will fully participate therein, on the same terms offered or issued to each other holder of Term Loan B Notes. 4. If less than $20,000,000 of Term Loan B Notes are sold to Market Participants on the same terms as issued to the Noteholders, then the Noteholders will receive Term Loan A Notes in the amount (net after any discount) of $16,400,000, instead of any Term Loan B Notes, and the Noteholders will not participate in the Term Loan B Notes. For purposes of this Term Sheet, "Market Participants" shall be defined as recognized institutional investors not affiliated with the Debtors or with any "insider" (as that term is defined in the Bankruptcy Code) of the Debtors. NOTEHOLDER The reasonable fees and expenses of the financial and legal FEES: professionals retained by the Noteholders shall be paid on the Effective Date of the Conforming Plan, including, without limitation, fees, including success fees, due to Houlihan, Lokey, Howard, & Zukin ("HLHZ") under that certain Engagement Agreement between AREC and HLHZ. TREATMENT OF REVOLVER LENDERS CLASSIFICATION: The Conforming Plan will place the claims of the Revolver Lenders under the Credit Agreement in a single class or subclass, and such class or subclass will be impaired and entitled to vote on the Conforming Plan. -iii- TREATMENT: The treatment of the Revolver Lenders under the Conforming Plan will not be different in any material adverse respect from the treatment of the Noteholders described in this Term Sheet, except that: 1. The Revolver Lenders will be paid cash in the amount of $51,250,000 (25% of the existing Credit Facility) from the proceeds of the DIP Facility if the Debtors and the Revolver Lenders execute a restructuring agreement evidencing the terms of this Term Sheet on or before September 15, 2003; 2. The Revolver Lenders will be entitled to be paid, on the Effective Date of the Conforming Plan, additional cash in the amount of $71,750,000 (35% of the existing Credit Facility) if the Debtors and the Revolver Lenders execute a restructuring agreement evidencing the terms of this Term Sheet on or before September 15, 2003; 3. $48,400,000 (23.6% of the remaining principal amount of the Credit Facility) satisfied with Term Loan A Notes under the Emergence Facility in the par amount (net after any discount) of $48,400,000, subject to the Syndication Terms set forth in this Term Sheet; and 4. $33,600,000 (16.4% of the remaining principal amount of the Credit Facility) satisfied with Term Loan B Notes under the Emergence Facility having an aggregate Market Value of $33,600,000, subject to the Syndication Terms set forth in this Term Sheet. OTHER TERMS RELEASE AND The Conforming Plan will contain release and exculpation EXCULPATION provisions in substantially the following form: PROVISIONS: 1. As of the Effective Date, the Debtors and reorganized Debtors will be deemed to forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities whatsoever in connection with or related to the Debtors, the Chapter 11 Cases or the Conforming Plan (other than the rights of the Debtors or reorganized Debtors to enforce the Conforming Plan and the contracts, instruments, releases, indentures, and other agreements or documents delivered thereunder) whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen on unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the -iv- reorganized Debtors, the Chapter 11 Cases or the Conforming Plan, and that may be asserted by or on behalf of the Debtors or their estates or the reorganized Debtors against: (a) the directors, officers, employees, agents and professionals of the Debtors as of the AREC Petition Date and thereafter, (b) the holders of prepetition lender claims, (c) the DIP Facility agent and the holders of DIP Facility claims, (d) each Consenting Noteholder and each Revolver Lender, and (e) the directors, officers, employees, agents, and professionals (as of the AREC Petition Date and thereafter) of the entities released in subclauses (b) - (d). 2. As of the Effective Date, each prepetition lender, each Consenting Noteholder and each Revolver Lender and each holder of an impaired claim that affirmatively elects on the ballot for voting on the Conforming Plan to do so, shall in consideration for the obligations of the Debtors and the reorganized Debtors under the Conforming Plan and the securities, contracts, instruments, releases and other agreements or documents to be delivered in connection with the Conforming Plan, forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities (other than the rights to enforce the Debtors' or the reorganized Debtors' obligations under the Conforming Plan and the securities, contracts, instruments, releases and other agreements and documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the reorganized Debtors, the Chapter 11 Cases, or the Conforming Plan against: (a) the Debtors and the reorganized Debtors, (b) the directors, officers, employees, agents and professionals of the Debtors as of the AREC Petition Date and thereafter, (c) the holders of prepetition lender claims and the agents thereto, (d) the DIP Facility agent and the holders of DIP Facility claims, (e) each Consenting Noteholder and each Revolver Lender, and (f) the directors, officers, employees, agents, and professionals (as of the AREC Petition Date and thereafter) of the entities released in subclauses (a) - (e) acting in such capacity. 3. None of the Debtors, the reorganized Debtors, the Consenting Noteholders, the Revolver Lenders, the holders of DIP Facility claims, the DIP Facility agent, the holders of prepetition lender claims, the agents thereto, nor any of their respective present or former members, officers, directors, employees, advisors, or attorneys shall have or incur any liability to any holder of a claim or an interest, or any other party in interest, or any of their respective agents, employees, -v- representatives, financial advisors, attorneys, or affiliates, or any of their successors or assigns, for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, formulating negotiating or implementing the Conforming Plan, the solicitation of acceptances of the Conforming Plan, the pursuit of confirmation of the Conforming Plan, the confirmation of the Conforming Plan, the consummation of the Conforming Plan, or the administration of the Conforming Plan or the property to be distributed under the Conforming Plan, except for their gross negligence or willful misconduct, and in all respects shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities under the Conforming Plan. EMERGENCE On the Effective Date, the Debtors shall close the Emergence FACILITY: Facility with substantially the terms and conditions set forth in the Foothill Term Sheet. All funded obligations outstanding under the DIP Facility on the Effective Date shall be repaid from borrowings under the Emergence Facility. AGREEMENT OF On or before September 15, 2003, the Revolver Lenders shall REVOLVER execute a restructuring agreement (a) containing terms and LENDERS IN conditions substantially the same, in all material respects, SUPPORT OF THIS with the terms of this Term Sheet, including the financial TERM SHEET: restructuring of the Credit Facility as outlined herein, and (b) including an agreement by the Revolver Lenders to support the terms and conditions contained herein and in the Noteholders Restructuring Agreement, including the financial restructuring of the Notes as outlined herein and in the Noteholders Restructuring Agreement. -vi- EXHIBIT B AREC/AMERCO FOOTHILL TERM SHEET ANNEX A AMERCO AND AMERCO REAL ESTATE COMPANY, ET AL. FINANCING COMMITMENT $300,000,000 DIP FACILITY $650,000,000 EMERGENCE FACILITY JUNE 19, 2003 The proposed terms and conditions summarized herein represent the terms and conditions pursuant to which Wells Fargo Foothill, Inc., formerly known as Foothill Capital Corporation ("Foothill"), will underwrite (i) a $300,000,000 debtor-in-possession credit facility (the "DIP Facility") for purposes of financing Borrowers' operations during the contemplated Chapter II reorganization cases to be filed by Borrowers and Guarantors, and(ii) a $650,000,000 credit facility (the "Emergence Facility") to be provided concurrent with a confirmed reorganization plan acceptable to Foothill of the respective Chapter II cases. The proposed terms and conditions summarized herein with respect to the DIP Facility and the Emergence Facility are provided to evidence the terms and conditions by which Foothill hereby commits, in accordance with the terms of the accompanying Commitment Letter, to provide financing to Borrowers and Guarantors under the DIP Facility and the Emergence Facility. BORROWERS: DIP FACILITY: AMERCO, a Nevada corporation, Amerco Real Estate Company and certain of their wholly-owned subsidiaries as required by Foothill (collectively, "Companies" or "Borrowers"), each as a debtor-in-possession under cases to be filed under chapter 11 of the United States Bankruptcy Code (the "Chapter 11 Cases"). EMERGENCE FACILITY: AMERCO, a Nevada corporation, Amerco Real Estate Company, U-Haul International, Inc. and such other of their wholly-owned subsidiaries and affiliates as required by Foothill (collectively, "Companies" or "Borrowers"). GUARANTORS: DIP FACILITY: All U.S. affiliates and subsidiaries of the Companies (that are not direct Borrowers under the DIP Facility) as required by Foothill, including, without limitation, U-Haul International, Inc. and its subsidiaries (together with Borrowers, each a "Loan Party" and collectively, the "Loan Parties"). EMERGENCE FACILITY: All U.S. affiliates and subsidiaries of the Companies (that are not direct Borrowers under the Emergence Facility) as required by Foothill. A-1 LEAD ARRANGER DIP FACILITY: Wells Fargo Foothill, Inc., f/k/a Foothill AND Capital Corporation ("Agent" or "Foothill"), as lead arranger, ADMINISTRATIVE collateral agent, syndication agent and administrative agent. AGENT: EMERGENCE FACILITY: Foothill, as lead arranger, administrative agent, collateral agent and syndication agent. FINANCING TRANCHED FACILITIES: Two separate senior secured credit FACILITIES: facilities with Maximum Credit Amounts as follows: (1) A $300,000,000 debtor-in-possession credit facility (the "DIP Facility"), with the Maximum Credit Amount of $300,000,000 available upon the entry of a final Order (the "Final Order") approving such facility; and (2) A $650,000,000 credit facility to be provided concurrent with a confirmed reorganization plan of Borrowers' and Guarantors' Chapter 11 cases acceptable to Agent (the "Emergence Facility"). The DIP Facility and the Emergence Facility shall collectively be referred to as the "Financing Facilities." APPROVAL OF DIP FACILITY: A senior secured credit facility with a Maximum Credit Amount of $300,000,000 consisting of a revolving credit facility of up to $200,000,000 ("DIP Revolver"), with a $25,000,000 subfacility for the issuance of letters of credit, plus an interest only term loan facility of $100,000,000 ("DIP Term Loan"). Aggregate loans and letters of credit under the DIP Facility upon entry of the Final Order will be limited to the lesser of (a) $300,000,000, and (b) the Borrowing Base (as hereinafter defined). NOTE: The DIP Facility is being presented on the basis that Borrowers will not seek approval on an interim basis but will seek approval for the DIP Facility at a final hearing. EMERGENCE FACILITY: A senior secured credit facility with a Maximum Credit Amount of $650,000,000 consisting of (i) a revolving credit facility of up to $200,000,000 ("Revolver"), with a $25,000,000 subfacility for the issuance of letters of credit, plus (ii) a $350,000,000 amortizing term loan facility ("Term Loan A") with amortization thereon to be determined, plus (iii) a $100,000,000 term loan facility with no scheduled amortization payments ("Term Loan B"). Aggregate loans and letters of credit under the Revolver and Term Loan A of the Emergence Facility will be limited to the lesser of (a) $550,000,000, and (b) the Borrowing Base. A-2 The Borrowing Base for the DIP Facility shall be 40% of the fair market value of the Real Property Collateral with respect to the DIP Revolver and the DIP Term Loan thereof. The Borrowing Base for the Emergence Facility shall be 55% of the fair market value of owned Real Property Collateral and shall apply to the Revolver and Term Loan A thereof. All such amounts would also be net of a reserve for anticipated environmental remediation costs for certain properties, a reserve for any title defects affecting the Real Property Collateral (as defined below) deemed unacceptable to Agent, and other customary and normal reserves (including, without limitation, reserves for Carve-Out Expenses) which may be established by Agent. LETTERS OF Each letter of credit will be issued for the account of a CREDIT: Borrower by Wells Fargo Bank or another bank selected by Agent, which shall be reasonably satisfactory to Borrowers, and shall have an expiry date that is not later than thirty (30) days prior to the Maturity Date (as hereinafter defined) unless on or prior to the Maturity Date such letter of credit shall be cash collateralized in an amount equal to 105% of the face amount of such letter of credit. Borrowers and Guarantors will be bound by the usual and customary terms contained in the letter of credit issuance documentation of the issuing bank and Foothill. MATURITY DATE: FINANCING UNDER THE DIP FACILITY: The earlier of (i) the date which is twelve (12) months following the date of entry of the Final Order, (ii) ten (10) days following the date of entry of an Order confirming Borrowers' plan of reorganization (a "Plan") in the Chapter 11 Cases acceptable to Foothill, and (iii) the conversion of the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code (such earliest date, the "Maturity Date"). No confirmation order with respect to a Plan entered in the Chapter 11 Cases will discharge or otherwise affect in any way any of the joint and several obligations of the Loan Parties to Foothill under the DIP Facility, other than after the payment in full and in cash to Foothill of all obligations under the DIP Facility on or before the effective date of the Plan. EMERGENCE FACILITY: Five (5) years from closing date of the Emergence Facility (the "Emergence Facility Maturity Date"). A-3 EARLY Termination of the Emergence Facility prior to the Emergence TERMINATION: Facility Maturity Date shall be subject to a prepayment premium payable to Foothill equal to the percentage set forth in the following schedule of then applicable Maximum Credit Amount for each full and partial month remaining to the Emergence Facility Maturity Date: YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 2.00% 1.50% 1.00% 0.00% 0.00% Other customary prepayments to be included in definitive loan documentation (including sale of assets, casualty events, etc.), subject to levels to be negotiated. CLOSING DATE: With respect to the DIP Facility on the earlier of (i) July 31, 2003, or (ii) thirty (30) business days following execution of the accompanying Commitment Letter and satisfying the terms thereof (specifically including payment of any required fees), subject only to the Bankruptcy Court having entered the Final Order in form and substance reasonably satisfactory to Foothill. Borrowings under the DIP Facility are subject to entry of the Final Order, in form and substance reasonably satisfactory to Foothill. COLLATERAL: DIP Facility: All obligations of the Loan Parties to Foothill shall be: (a) entitled to super-priority administrative expense claim status pursuant to Section 364(c)(1) of the Bankruptcy Code in each Chapter 11 Case, subject only to (i) the payment of allowed professional fees and disbursements incurred by the Loan Parties and any official committees appointed in the Chapter 11 Cases, in an aggregate amount not in excess of $5,000,000 (plus all unpaid professional fees and disbursements incurred, accrued or invoiced prior to the occurrence of an Event of Default, to the extent allowed by the Bankruptcy Court) (ii) the payment of fees pursuant to 28 U.S.C.Section 1930 (collectively, the "Carve-Out Expenses") and (b) secured pursuant to Sections 364(c)(2), (c)(3) and (d) of the Bankruptcy Code by a security interest in A-4 and lien on all now owned or hereafter acquired property and assets of the Loan Parties, both tangible and intangible, and real property (the "Real Property Collateral") and personal property (including, without limitation, capital stock or other equity interests of their subsidiaries), and the proceeds thereof, excluding (i) Borrowers' real estate subject to any currently existing synthetic lease arrangements and to the existing promissory notes issued to Amerco Real Estate Company by SAC Holdings and its subsidiaries, and (ii) causes of action arising under Sections 502(d), 544, 545, 547, 548, 549, 550 or 551 of the Bankruptcy Code. The security interests in and liens on the aforementioned assets of the Loan Parties shall be first priority, senior secured liens not subject to subordination, but subject to the Carve-Out Expenses. Emergence Facility: Subject to a confirmed Plan acceptable to Foothill, all obligations of the Loan Parties to Foothill shall be secured by a first priority perfected security interest in substantially all the assets of Borrowers and Guarantors, but excluding (i) the existing promissory notes issued to Amerco Real Estate Company by SAC Holdings and its subsidiaries and (ii) Borrowers' real estate subject to any currently existing synthetic lease arrangements. The Emergence Facility shall include provisions authorizing the granting of a junior lien in substantially all of the assets of Borrowers in favor of those parties receiving new notes in connection with the confirmed Plan, subject to an intercreditor agreement, the terms and conditions of which shall be satisfactory to Foothill. Such intercreditor agreement shall, at a minimum, provide for both lien subordination and payment subordination and shall, in all respects, be a "deeply subordinated" instrument. All borrowings by Borrowers, all reimbursement obligations with respect to letters of credit, all costs, fees and expenses of Foothill, and all other obligations owed to Foothill shall be secured as described above and charged to the loan account to be established under the Facilities. INTEREST RATES: Advances outstanding under the DIP Facility shall bear interest, at Borrowers' option, at (a) the LIBOR Rate plus 3.50%, or (b) the Base Rate plus 1.00%. Advances outstanding under (i) the Emergence Facility Revolver would bear interest, at Borrowers' option, at (a) the LIBOR Rate plus 4.00%, or (b) the Base Rate plus 1.00%, and (ii) advances outstanding under the Emergence Facility Term Loan A would bear interest at the LIBOR Rate plus 4.00%. In addition, the interest rate could be periodically reduced subject to Borrowers A-5 achieving certain financial performance and leverage ratios ("Performance Pricing Grid") to be determined. Advances outstanding under the Emergence Facility Term Loan B would bear interest at (i) the greater of the Base Rat plus 4.75% (ii) or 9.00% per annum; provided that 1.75% of such interest will be payment-in-kind (PIK). As used herein (x) "Base Rate" means the rate of interest publicly announced from time to time by Wells Fargo Bank, N.A. at its principal office in San Francisco, California, as its reference rate, base rate or prime rate. The LIBOR Rate means the rate per annum, determined by Foothill in accordance with its customary procedures, at which dollar deposits are offered to major banks in the London interbank market, adjusted by the reserve percentage prescribed by governmental authorities as determined by Foothill. With respect to the Emergence Facility only, at no time shall the LIBOR Rate utilized prior to application of the appropriate margin be less than 2.00%. All interest and fees for the Financing Facilities shall be computed on the basis of a year of 360 days for the actual days elapsed. If any Event of Default shall occur, interest shall accrue under the Facilities at a rate per annum equal to 2.00% in excess of the rate of interest otherwise in effect. FEES: Unused Line Fee (for One half of one percent (0.50%) on the the Financing unused portion of the respective Facilities): Revolver Facility, payable monthly in arrears. Letter of Credit Fees Three and one-half percent (3.50%) per (for the Financing annum of the face amount of each Facilities): letter of credit issued under the DIP Facility and four percent (4.00%) per annum of the face amount of each letter of credit issued under the Emergence Facility, in each case, payable monthly in advance, plus the customary charges imposed by the letter of credit issuing bank. A-6 Field Examination Without limiting the foregoing, Fee (for the Borrowers would be required to pay (a) Financing Facilities): a fee of $850 per day, per analyst, plus out-of-pocket expenses, for each financial audit of Borrowers performed by personnel employed by Foothill, and (b) the actual charges paid or incurred by Foothill if it elects to employ the services of one or more third parties to perform financial audits of Borrowers, to appraise Borrowers' collateral, or to assess Borrowers' business valuation. Borrowers shall also pay all applicable fees set forth in one or more of the fee letters of even date herewith (collectively, the "Fee Letters"). USE OF PROCEEDS: DIP Facility: To refinance a certain amount of Amerco's existing $205 million revolving credit facility and fund working capital in the ordinary course of business (including for the fees and transaction costs in connection with the DIP Facility and for the payment of such pre-petition claims as may be permitted by the Court pursuant to "first day" orders or other pre-petition claims permitted under the DIP Facility) with agreed limitations on use of proceeds to fund or capitalize non-debtor entities affiliated with Borrowers and Guarantors. Emergence Facility: To refinance the DIP Facility, fund Borrowers' confirmed Plan and for general corporate purposes including the financing of working capital and capital expenditures. CONDITIONS Financing under DIP Facility: PRECEDENT: The obligation of Foothill to make any loans in connection with the DIP Facility will be subject to customary conditions precedent including, without limitation, the following: (a) Execution and delivery of appropriate legal documentation in form and substance satisfactory to Foothill and the satisfaction of the conditions precedent contained therein. (b) Amerco Real Estate Company shall have become a debtor-in-possession under the Chapter 11 Cases A-7 (c) No material adverse change in the business operations, assets, financial condition or prospects of Borrowers and Guarantors ("Material Adverse Change") other than the filing of the Chapter 11 Cases and the events resulting from the filing of the Chapter 11 Cases, as determined by Foothill in its sole discretion. (d) Entry of the Final Order in the Chapter 11 Cases, reasonably satisfactory in form and substance to Foothill, which Final Order (i) shall approve the transactions contemplated herein, grant the super priority administrative expense claim status and senior liens referred to above, (ii) shall not have been reversed, modified, amended, stayed or vacated, and (iii) shall have been entered no later than July 31, 2003. (e) Foothill shall have been granted a deemed perfected, first priority senior lien on all Collateral, as defined earlier. Foothill shall have received real estate UCC, tax and judgment lien searches and other appropriate evidence, confirming the absence of any liens on the Collateral, except existing liens acceptable to Foothill. Foothill acknowledges that it has already reviewed real estate title reports on over 95% of Borrowers' properties, have negotiated a form of title insurance commitment and have reviewed issued tide insurance commitments on over 350 of Borrowers' properties. (f) Opinions from the Loan Parties' counsel as to such matters as Foothill and its counsel may reasonably request. (g) Insurance satisfactory to Foothill, such insurance to include liability insurance for which Foothill, will be named as an additional insured and property insurance with respect to the Collateral for which Foothill will be named as loss payee. (h) Foothill's completion of and satisfaction in all respects with the results of its ongoing due diligence investigation of the business, assets, operations, properties (including compliance with FIRREA), condition (financial or otherwise), contingent liabilities, prospects and material agreements of Borrowers and their respective Subsidiaries. A-8 (i) Borrowers shall have paid to Foothill all fees and expenses, including all appraisal fees and expenses, then owing to Foothill. (j) Receipt of the Budget as provided to the Bankruptcy Court. (k) Borrowers shall, at loan closing, have a minimum of $40,000,000 in the aggregate of unrestricted cash and available but unused credit availability (defined as the difference between (i) the lesser of the (X) the Borrowing Base or (Y) $300,000,000 and (ii) the sum of the loans and LC's outstanding) under the DIP Facility. (l) Satisfying any conditions precedent in the Commitment Letter. Emergence Facility: The obligation of Foothill to make any loans or assist in the issuance of any letters of credit in connection with the $6,50,000,000 Emergence Facility will be subject to customary conditions precedent including, without limitation, the following: (a) Foothill shall have closed the DIP Facility with Borrowers as provided herein. (b) Receipt of evidence of the entry of a final Order confirming Borrowers' Plan and accompanying disclosure statement, and satisfaction of all other conditions to the confirmation of such Plan, which Plan, disclosure statement, and confirmation Order shall be in form and substance reasonably acceptable to Foothill and which Plan will include, among things, a level of assets both in number and value, acceptable to Foothill. (c) Receipt of management's projections and business plan for the succeeding twelve (12) month period on a month-by-month basis and the succeeding four year period on an annual basis in form and substance acceptable to Foothill. (d) Payment of all reasonable fees and expenses owing to Foothill in connection with the Emergence Facility. A-9 (e) Execution and delivery of appropriate legal documentation in form and substance satisfactory to Foothill and the satisfaction of the conditions precedent contained therein and delivery of all appropriate opinions of counsel relating thereto, reasonably satisfactory in all respects to Foothill. {f) Payment in full of obligations owing and amounts outstanding under the DIP Facility. A-10 (g) Foothill shall have been granted a perfected, first priority lien on all Collateral including without limitation mortgages on all owned real property in form and substance satisfactory to Foothill. Foothill shall have received real estate, UCC, tax and judgment lien searches and other appropriate evidence, confirming the absence of any liens on the Collateral, except existing liens acceptable to Foothill. (h) No default or event of default shall exist under the loan documents for the DIP Facility or the Emergence Facility, and no pending claim, investigation or litigation by any governmental entity shall exist with respect to the Loan Parties or the transactions contemplated hereby. (i) The absence of (i) a Material Adverse Change in the business operations, assets, condition (financial or otherwise) or prospects of Borrowers and Guarantors since March 31, 2002, as determined by Foothill in its sole discretion, other than (x) the filing of the Chapter 11 Cases and the events resulting from the filing of the Chapter 11 Cases, (y) the withdrawal by PriceWaterhouseCoopers of its audit letter with respect to the Borrowers' financial statements for the fiscal year ended as of March 31, 2002, and (z) such other matters as have been disclosed in writing by Borrowers to Foothill on or before June 20, 2003 or (ii) an adverse change or disruption in the loan syndication, financial, banking or capital markets generally that, in Foothill's judgment, could materially impair the syndication of the Emergence Facility. (j) Foothill's commencement and completion of, and satisfaction in all respects with, the results of its ongoing due diligence investigation of the business, assets, operations, properties, condition (financial or otherwise), contingent liabilities, prospects and material agreements of Borrowers and their respective Subsidiaries. A-11 REPRESENTATIONS Usual representations and warranties, including, but not AND WARRANTIES: limited to, corporate existence and good standing, permits and licenses, authority to enter into the respective loan documents, occurrence of the closing date for the respective Financing Facilities, validity of the Final Order, governmental approvals, non-violation of other agreements, financial statements, litigation, compliance with environmental, pension and other laws, taxes, insurance, absence of Material Adverse Change, absence of default or unmatured default and priority of Foothill's liens. COVENANTS: With respect to the DIP Facility, Borrowers will be required to maintain agreed upon minimum levels of EBITDA, EBITDAR and fixed charge coverage ratios. With respect to the Emergence Facility, Borrowers will be required to maintain agreed upon minimum levels of EBITDA, EBITDAR, leverage and fixed charge coverage ratios. All such covenants will be not less than 80% of Borrowers' projected operating performance. Borrowers will also have a limitation on capital expenditures (to be determined). All such financial covenants shall be tested quarterly. Financial reporting shall include, without limitation, the delivery to Agent of monthly financial statements, audited annual financial statements and annual updated projections and any financial and other reporting material filed in the Bankruptcy Cases or shared with any Committees appointed in the Bankruptcy Cases. Other customary covenants (both positive and negative), including, but not limited to, notices of litigation, defaults and unmatured defaults and other information (including pleadings, motions, applications and other documents filed with the Bankruptcy Court or distributed to any official committee appointed in the Chapter 11 Cases), compliance with laws, permits and licenses, inspection of properties, books and records, maintenance of insurance, limitations with respect to liens and encumbrances, dividends, retirement of capital stock and repurchases of subordinated debt (except for certain repurchases to be agreed upon based on performance ratios and liquidity at levels to be determined at the time of the proposed repurchase), guarantees, sale and lease back transactions, consolidations and mergers, investments, capital expenditures, loans and advances, indebtedness, compliance with pension, environmental and other laws, operating leases, transactions with affiliates and prepayment of other indebtedness. CASH MANAGEMENT: Borrowers shall institute a cash management system satisfactory to Agent, including without limitation, establishing one or more concentration accounts at financial institutions acceptable to A-12 Agent. EVENTS OF Usual events of default, including, but not limited to, DEFAULT: payment, cross-default, violation of covenants, breach of representations or warranties, judgments, ERISA, environmental, change of control and other events of default which are customary in facilities of this nature. In addition, an Event of Default shall occur if: (i) (A) any of the Chapter 11 Cases shall be dismissed or converted to a chapter 7 case, a chapter 11 trustee or an examiner with enlarged powers shall be appointed in any of the cases, any other superpriority administrative expense claim which is senior to or pari passu with Foothill's claims shall be granted and the Final Order shall be stayed, amended, modified, reversed or vacated; (B) a Plan shall be confirmed in any of the Chapter 11 Cases which does not provide for termination of the commitment under the DIP Facility and payment in full in cash of the Loan Parties' obligations thereunder on the effective date of the Plan; or an order shall be entered which dismisses any of the Loan Parties' Chapter 11 Cases and which order does not provide for termination of the Financing Facility then outstanding and payment in full in cash of all obligations thereunder; (C) the Loan Parties shall take any action, including the filing of an application, in support of any of the foregoing or any person other than the Loan Parties shall do so and such application is not contested in good faith by the Loan Parties and the relief requested is granted in an order that is not stayed pending appeal; (ii) the Bankruptcy Court shall enter an order granting relief from the automatic stay to the holder of any security interest in any asset of the Loan Parties having a book value in an amount equal to or exceeding an amount to be agreed upon; and (iii) such other similar Events of Default as are usual and customary in DIP credit facilities. GOVERNING LAW: All documentation in connection with the Financing Facilities shall be governed by the laws of the State of New York applicable to agreements made and performed in such State except as governed by the Bankruptcy Code. ASSIGNMENTS AND Foothill shall be permitted to assign its rights and PARTICIPATIONS: obligations hereunder, or any part thereof, to any person or entity without the consent of the Loan Parties. Foothill shall be permitted to grant participations in such rights and obligations, or any part thereof, to any person or entity without the consent of the Loan Parties. A-13 EXPENSES: The Loan Parties shall pay on demand all fees and expenses of Foothill (including legal fees, financial consultant fees (if any), audit fees, search fees, filing fees, and documentation fees, and expenses in excess of the Deposit), incurred in connection with the transactions contemplated by this Term Sheet, whether or not such transactions close. SYNDICATION: Foothill shall underwrite the DIP Facility and syndicate to other qualified financial institutions and, to the extent set forth in the Commitment Letter, Foothill shall underwrite the Emergence Facility and syndicate to other qualified financial institutions. A-14 EXHIBIT D RESTRUCTURING AGREEMENT (REVOLVER LENDERS) [SEE ATTACHED] AMERCO-REVOLVER LENDERS RESTRUCTURING AGREEMENT This AMERCO-Revolver Lenders Restructuring Agreement (this "Agreement") is made and entered into as of September 8, 2003, by AMERCO, a Nevada corporation ("AMERCO"), JPMorgan Chase Bank, as Administrative Agent under the Credit Agreement described below (the "Administrative Agent"), and the lenders under the Credit Agreement described below (the "Revolver Lenders"). AMERCO, the Administrative Agent and the Revolver Lenders are collectively referred to herein as the "Parties" and individually as a "Party." RECITALS WHEREAS, AMERCO, the Administrative Agent and the Revolver Lenders have engaged in good faith negotiations with the objective of reaching an agreement with regard to the restructuring of the indebtedness of AMERCO under that certain 3-Year Credit Agreement dated as of June 28, 2002 (as amended to date, the "Credit Agreement"), among AMERCO, the Revolver Lenders and JPMorgan Chase Bank, as Administrative Agent for the Revolver Lenders, and the recapitalization of AMERCO and its subsidiaries. WHEREAS, on June 20, 2003, AMERCO filed for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101, et. seq. (the "Bankruptcy Code"), which case is pending before the United States Bankruptcy Court for the District of Nevada (the "Bankruptcy Court") and on August 13, 2003, AMERCO Real Estate Company ("AREC") filed for relief under Chapter 11 of the Bankruptcy Code, which case is also pending before the Bankruptcy Court. WHEREAS, AMERCO, the Administrative Agent and the Revolver Lenders desire to implement the financial restructuring consistent with this Agreement and the term sheet attached hereto as Exhibit A (the "Term Sheet," and the restructuring and recapitalization contemplated therein, the "Financial Restructuring"). WHEREAS, in order to implement the Financial Restructuring, AMERCO intends, subject to the terms and conditions of this Agreement and the Term Sheet, to prepare a plan of reorganization (the "Plan") and a disclosure statement (the "Disclosure Statement")(1) consistent with the terms set forth in this Agreement and the Term Sheet, to file and seek approval of such Disclosure Statement, to solicit acceptances of such Plan, and to seek confirmation of such Plan in its administratively consolidated Chapter 11 cases, as expeditiously as possible under the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). WHEREAS, the Administrative Agent and each consenting Lender (collectively, the "Consenting Parties") owns or controls the aggregate principal amount of revolving loans under the Credit Agreement ("Existing Loans"), in each case as identified on the signature pages hereto. WHEREAS, in order to facilitate and expedite the implementation of the Financial Restructuring, the Administrative Agent and the Consenting Parties are prepared, subject to the terms and conditions of this Agreement, to vote their Claims (as that term is defined in the Bankruptcy Code) to accept the Plan. - ----------------------- (1) For purposes of this Agreement, the terms "Plan" and "Disclosure Statement" shall mean a Plan and Disclosure Statement consistent with the terms set forth in this Agreement and the Term Sheet. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. Recitals. Each of the foregoing Recitals is incorporated hereby as if fully set forth herein. 2. Voting in Favor of the Plan. Each Consenting Party agrees to timely vote its claim under the Credit Agreement to accept the Plan and not to revoke or withdraw such vote. The Parties understand that the Plan and all related documents will contain customary provisions for transactions of the nature set forth herein and in the Term Sheet. Each Consenting Party to this Agreement agrees not to elect on its ballot for its Credit Agreement Claim to preserve any rights, if any, that such Party may have that may be affected by the releases provided for under the Plan. 3. Restrictions on Transfer. Each Consenting Party hereby agrees, so long as this Agreement remains in effect, not to (i) sell, transfer, assign, pledge, or otherwise dispose of any of its Existing Loans, in whole or in part, or any interest therein, unless the transferee accepts such claims subject to the terms of this Agreement, or (ii) grant any proxies, deposit any of its Existing Loans into a voting trust, or enter into a voting agreement with respect to any of the Existing Loans unless such arrangement provides for compliance herewith. In the event that a Consenting Party transfers such Existing Loans prior to the last date for voting on the Plan, such transferee shall comply with and be subject to all the terms of this Agreement as long as such Agreement remains in effect, including, but not limited to, such Consenting Party's obligations to vote its Existing Loans in favor of the Plan and shall, as a condition precedent to such transfer, execute an agreement on terms substantially identical to the terms of this Agreement and, upon commencement of the solicitation of votes to accept or reject the Plan, a ballot for the Existing Loan indicating its acceptance of the Plan. 4. AMERCO Agreements. During the term of this Agreement, AMERCO hereby agrees to the following: (a) AMERCO shall use its commercially reasonable efforts to have the Disclosure Statement approved by the Bankruptcy Court, and to use its commercially reasonable efforts to obtain an order of the Bankruptcy Court confirming the Plan, in each case as expeditiously as possible under the Bankruptcy Code and the Bankruptcy Rules and consistent with the terms and conditions set forth in this Agreement and in the Term Sheet. (b) AMERCO shall use its commercially reasonable efforts to obtain approval by the Bankruptcy Court of the $300,000,000 debtor-in-possession financing facility (the "DIP Facility") based on the Term Sheet (the "Foothill Term Sheet") provided to AMERCO by Wells Fargo-Foothill, Inc., as lead arranger, collateral agent, syndication agent and administrative agent ("Foothill"), and an emergence facility of approximately $650,000,000 also to be provided by Foothill on the confirmation and consummation of the Plan (the "Emergence Facility"). Notwithstanding the references in this Agreement or the Term Sheet to Foothill and the Foothill Term Sheet, AMERCO may select an alternative 2 senior lender or lenders to provide the DIP Facility or the Emergence Facility under terms substantially similar to the Foothill Term Sheet. 5. Support of the Plan. As long as this Agreement remains in effect, AMERCO and each Consenting Party (acting only in its capacity as the holder of an Existing Loan) will: (i) use its commercially reasonable efforts to obtain confirmation of the Plan in accordance with the Bankruptcy Code as expeditiously as possible; and (ii) take all commercially reasonable, necessary and appropriate actions to achieve confirmation including communicating the Consenting Holders' support of the Plan to the holders of allowed impaired claims. As long as this Agreement remains in effect, no Consenting Party, acting in its capacity as a holder of an Existing Loan, shall (a) object to confirmation of the Plan or otherwise commence any proceeding to oppose or alter the Plan or any other reorganization related documents or agreements (the "Plan Documents"), which shall include, but not be limited to, any documents or agreements related to the DIP Facility and the Emergence Facility, to the extent such documents, in the reasonable judgment of the Consenting Parties, substantially conform to the terms of the Foothill Term Sheet, (b) vote for, consent to, support or participate in the formulation of any other plan of reorganization or liquidation proposed or filed or to be proposed or filed in any Chapter 11 or Chapter 7 case commenced in respect of AMERCO, (c) directly or indirectly seek, solicit, support or encourage any other plan, sale, proposal or offer of dissolution, winding up, liquidation, reorganization, merger or restructuring of AMERCO or any of its subsidiaries that could reasonably be expected to materially prevent, delay or impede the successful restructuring of AMERCO as contemplated by the Plan or the Plan Documents, (d) object to the Disclosure Statement or the solicitation of consents to the Plan, or (e) take any other action that is inconsistent with, or that would materially delay confirmation of, the Plan. 6. Acknowledgment. This Agreement is not, and shall not be deemed to be, a solicitation for consents to the Plan. The acceptances of the Consenting Parties will not be solicited until such Parties have received the Disclosure Statement approved by order of the Bankruptcy Court as continuing "adequate information," as such term is defined in Section 1125(a)(l) and (2) the Bankruptcy Code, the Plan and related ballot. 7. Disclaimer. The Parties agree that a copy of this Agreement shall be filed with the Bankruptcy Court. 8. Termination of Agreement. (a) Upon the effectiveness of this Agreement in accordance with Section 23, the obligations of AMERCO, the Consenting Parties and the Administrative Agent hereunder shall remain effective and binding until the "Effective Date" (as defined in the Term Sheet) of the Plan unless terminated earlier pursuant to this Section 8. (b) If any of the following occurs, one or more Revolver Lenders whose claims in respect of the Existing Loans equal or exceed two-thirds in amount of the total of the Existing Loans, may provide written notice to AMERCO of the termination of this Agreement, and upon the receipt of such notice by AMERCO, the obligations of the Parties hereunder shall immediately and automatically terminate and shall be of no further force or effect, which notice may be given by any such Revolver Lenders: 3 (1) the Plan or any Plan Document provides for or is modified to provide for treatment of the Existing Loans that is different in any material adverse respect from the treatment described in the Term Sheet; (2) the Plan or any Plan Document provides or is modified to provide for the treatment of the Senior Notes, Series A, due April 30, 2012 and Senior Notes, Series B, due April 30, 2007 (collectively, the "Notes"), issued by AREC, under that certain Note Purchase Agreement dated March 15, 2002, that is different in any material adverse respect from the treatment described in that certain Restructuring Agreement dated as of August 12, 2003, among the holders of the Notes and AREC, a copy of which has been filed with the Bankruptcy Court. (3) AMERCO or AREC pays to the Indenture Trustee on behalf of the holders of the Notes any cash from the DIP Facility. (4) AMERCO fails to file the Plan and Disclosure Statement on or before October 15, 2003; (5) the Disclosure Statement is not approved on or before December 15, 2003; (6) the Plan is not confirmed on or before February 27, 2004; (7) the Plan is not consummated on or before March 15, 2004; (8) the Bankruptcy Court does not approve the Emergence Facility as part of the confirmation and consummation of the Plan; (9) the revolving credit facility exceeds $200,000,000 in face amount, and the "Term Loan A Notes" (as such term is defined in the attached Term Sheet) exceeds $350,000,000 in face amount; (10) the 'Term Loan B Notes" (as such term is defined in the attached Term Sheet), exceeds $200,000,000 in face amount; (11) the Bankruptcy Court denies confirmation of the Plan; (12) the Chapter 11 case of AMERCO or AREC is converted to a case under Chapter 7 of the Bankruptcy Code or a trustee is appointed under any chapter of the Bankruptcy Code or an examiner with expanded powers to operate the business is appointed for AMERCO or AREC; (13) any written representation or warranty made by AMERCO or AREC to the Administrative Agent or the Revolver Lenders in this Agreement or the Term Sheet (including without limitation, representations relating to AMERCO's or AREC's current or future financial performance or AMERCO's FY2003 Form 10-K) is false or intentionally misleading in any material respect when made; 4 (14) a default occurs under the DIP Facility and is not waived by the lenders under the DIP Facility within fifteen business days after such lenders become aware of such default; (15) there is a material breach of any provision of this Agreement; (16) the Bankruptcy Court finds or holds unenforceable this Agreement, the Term Sheet, or any material provision hereof or thereof; (17) the estates of AMERCO and any other entity, including, without limitation, AREC, are substantively consolidated, other than through the Plan; (18) a voluntary or involuntary bankruptcy, receivership, or assignment for the benefit of creditors proceeding is commenced by or against U-Haul International, Inc. or any other material subsidiary of AMERCO or AREC, other than as part of the implementation of the Plan; or (19) a "Termination Event" occurs under the "Final Order Authorizing Consensual Use Of Cash Collateral And Granting Adequate Protection," entered August 14, 2003, in the AMERCO Chapter 11 case (the "Cash Collateral Order") (other than the Termination Event set forth in paragraph 11(b) of such Order). (c) Except as set forth in Section 8(d), no Party shall have any liability to the other or any other person as a result of the termination of such Party's obligations hereunder in accordance with this Section 8. (d) If this Agreement is found to be unenforceable by the Bankruptcy Court or if AMERCO materially breaches its obligations under this Agreement or the Term Sheet, each of the Administrative Agent, the Revolver Lenders and AMERCO hereby agrees that the Revolver Lenders shall be entitled to receive accrued and unpaid default interest on the principal amount owed to the Revolver Lenders as set forth in the Credit Agreement and related documents, from the effectiveness of this Agreement up to the confirmation and consummation of a plan of reorganization in the Chapter 11 Case and AMERCO shall not object to such claim being an allowed claim in the Chapter 11 Case. 9. Good Faith Negotiation of Documents. Each Party hereby further covenants and agrees to negotiate the definitive documents relating to the Plan Documents, in good faith, and in any event, in all material respects consistent with the Term Sheet. 10. Forbearance. As long as this Agreement shall remain in effect, each Consenting Party hereby severally agrees to forbear (and where necessary cause the forbearance, including by giving all necessary instructions to the Administrative Agent in accordance with the Credit Agreement) from exercising any rights or remedies it may have under the Credit Agreement and all related documents, applicable law, or otherwise with respect to any default with respect to the Existing Loans or the Credit Agreement, whether presently existing or hereafter arising. 5 11. Representations and Warranties. Each Consenting Party (and with respect to sections (a)-(e), AMERCO) represents and warrants that the following statements are true, correct and complete as of the date hereof: (a) Corporate Power and Authority. It is duly organized, validly existing, and in good standing under the laws of the state of its organization, and has all requisite corporate, partnership or limited liability company power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement. (b) Authorization. The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership or limited liability company action on its part. (c) No Conflicts. The execution, delivery and performance by it of this Agreement do not and shall not (i) violate any provision of law, rule or regulation applicable to it or any of its subsidiaries or its certificate of incorporation or bylaws or other organizational documents or those of any of its subsidiaries or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party. (d) Governmental Consents. The execution, delivery and performance by it of this Agreement do not and shall not require any registration or filing with consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body, other than the approval of the Bankruptcy Court, in the case of AMERCO. (e) Binding Obligation. Subject to the provisions of Sections 1125 and 1126 of the Bankruptcy Code, this Agreement is the legally valid and binding obligation of AMERCO, enforceable against it in accordance with its terms. (f) Owner of Claims. As of the date hereof, the Consenting Parties are the beneficial owners of, or holders of investment authority over, the Existing Loans that each Consenting Party has agreed to vote in favor of the Plan. (g) Acknowledgment of Risks. Each Consenting Party has received and reviewed this Agreement and all schedules and exhibits hereto and has received all such information as it deems necessary and appropriate to enable it to evaluate whether to become a Consenting Party. 12. Further Acquisition of Claims. This Agreement shall in no way be construed to preclude any of the Revolver Lenders or the Administrative Agent from acquiring additional Existing Loans. However, any such additional Existing Loans so acquired shall automatically be deemed to be subject to the terms of this Agreement. 13. Amendments. This Agreement may not be modified, amended or supplemented without the prior written consent of AMERCO, the Administrative Agent and the Revolver 6 Lenders whose claims in respect of the Existing Loans equal or exceed two-thirds in amount of the total of the Existing Loans. 14. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction. By its execution and delivery of this Agreement, each of the Parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in the United States District Court for the District of Nevada. By execution and delivery of this Agreement, each of the Parties hereto irrevocably accepts and submits itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Notwithstanding the foregoing consent to Nevada jurisdiction, each of the Parties hereto hereby agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement. 15. Specific Performance. It is understood and agreed by each of the Parties hereto that money damages would not be a sufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy of any such breach. 16. Headings. The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof. 17. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives. 18. Prior Negotiations. This Agreement and the Term Sheet supersede all prior negotiations with respect to the subject matter hereof. 19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile shall be equally as effective as delivery of the original executed counterpart of this Agreement. 20. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties hereto and no other person or entity shall be a third-party beneficiary hereof, other than successors and assigns of any Party. 21. Consideration. It is hereby acknowledged by the Parties hereto that no consideration shall be due or paid to the Administrative Agent or any Lender for its agreement to vote to accept the Plan in accordance with the terms and conditions of this Agreement. 22. Notices. (a) All notices hereunder to be served to AMERCO shall be deemed given if in writing and delivered or sent by telecopy, courier or by registered or certified mail 7 (return receipt requested) to the following addresses or telecopier numbers (or at such other addresses or telecopier numbers as shall be specified by like notice): AMERCO 2727 North Central Avenue Suite 500 Phoenix, Arizona 85004 Attn: Robert Peterson Fax: 602-277-4879 with copy to: SQUIRE, SANDERS & DEMPSEY L.L.P. 40 N. Central Avenue, Suite 2700 Phoenix, AZ 85004 Attn: Craig D. Hansen, Esq. Fax: 602-253-8129 (b) All notices hereunder to be served to a Consenting Party shall be deemed given if in writing and delivered or sent by telecopy, courier or by registered or certified mail (return receipt requested) to the address or telecopier number for such Consenting Party set forth above its signature hereto (or at such other addresses or telecopier numbers as shall be specified by like notice), with a copy to: SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 300 South Grand Avenue, 34th Floor Los Angeles, CA 90071 Attn: Richard Levin, Esq. Fax: 213-687-5600 23. Effectiveness. This Agreement shall become effective when AMERCO has received counterparts of this Agreement duly executed and delivered by AMERCO, the Administrative Agent and Revolver Lenders holding at least two-thirds in principal in amount of the Existing Loans; provided that such condition of effectiveness may be waived by the written consent of each of AMERCO and the Consenting Parties. 24. Cash Collateral Order Unaffected. Nothing in this Agreement supercedes any provision in the Cash Collateral Order or is intended to constitute a consent by any Consenting Party beyond the consents under the Cash Collateral Order. [Signature page follows] 8 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written. AMERCO By : /s/ Robert T. Peterson ----------------------------- Name: Robert T. Peterson Title: Assistant Treasurer [Additional signature pages follow] 9 JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT BY: /s/ John P. McDonagh -------------------- Name: John P. McDonagh Title: Managing Director 10 REVOLVER LENDERS: JPMORGAN CHASE BANK By: /s/ John P. McDonagh ------------------------ Name: John P. McDonagh Title: Managing Director Principal Amount of Loans Owned or Controlled: $ 25,000,000,00 11 REVOLVER LENDERS: SPS HIGH YIELD LOAN TRADING By: /s/ John P. McDonagh --------------------------- Name: John P. McDonagh Title: Managing Director Principal Amount of Loans Owned or Controlled: $ 15,000,000,00 11 REVOLVER LENDERS: Bank of America NA By: /s/ [ILLEGIBLE] --------------------------- Name: [ILLEGIBLE] Title: [ILLEGIBLE] Principal Amount of Loans Owned or Controlled: [ILLEGIBLE] 11 KBC BANK N.V. By: /s/ [ILLEGIBLE] /s/ ROBERT SNAUFFER ------------------------------------------- Name [ILLEGIBLE] ROBERT SNAUFFER Title: VICE PRESIDENT FIRST VICE PRESIDENT Principal Amount of Loans Owned or Controlled: $ 10,000,000 11 REVOLVER LENDERS: LaSalle Bank N.A. By: /s/ John M. Schuessler -------------------------- Name: John M. Schuessler Title: First Vice President Principal Amount of Loans Owned or Controlled: $20,000,000.00 11 REVOLVER LENDERS: U.S. Bank National Association By: /s/ Daniel E. Falstad ------------------------- Name: Daniel E. Falstad Title: Vice President Principal Amount of Loans Owned or Controlled: $20,000,000.00 11 REVOLVER LENDERS: WASHINGTON MUTUAL BANK By: /s/ Bruce Kendrex ------------------------- Name: BRUCE KENDREX Title: VICE PRESIDENT Principal Amount of Loans Owned or Controlled: $20,000,000.00 11 REVOLVER LENDERS: [ILLEGIBLE] By: /s/ [ILLEGIBLE] ------------------------- Name: [ILLEGIBLE] Title: SENIOR VICE PRESIDENT Principal Amount of Loans Owned or Controlled: $20,000,000 11 EXHIBIT A AMERCO REVOLVER LENDERS TERM SHEET This Term Sheet describes the principal terms of the proposed restructuring and recapitalization of certain of the outstanding indebtedness of AMERCO, a Nevada corporation ("AMERCO"), pursuant to a plan of reorganization (the "Plan") in accordance with (a) Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") and (b) the terms and conditions contained herein. This Term Sheet has been produced for discussion and settlement purposes only and is not an offer with respect to any securities or a solicitation of acceptances of the Plan. CERTAIN DEFINITIONS "AREC" means Amerco Real Estate Company. "Effective Date" means the date the Plan becomes effective in accordance with its terms and conditions. "Term Loan A Notes" means the notes to be issued by the Debtors, as reorganized, jointly and severally, on the Effective Date of the Plan, in the aggregate face amount not to exceed $350,000,000. "Term Loan B Notes" means the notes to be issued by the Debtors, as reorganized, jointly and severally, on the Effective Date of the Plan, in the aggregate face amount not to exceed $200,000,000. "Debtor or Debtors" means, collectively, AMERCO, AREC and any other affiliates or subsidiaries of AMERCO or AREC that file voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, other than PAC Fourteen, Inc. and PAC Fifteen, Inc. "New Notes" means, collectively, the Term Loan A Notes and the Term Loan B Notes. "Noteholders" means the holders of the Notes. CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEM IN THE AMERCO-REVOLVER LENDERS RESTRUCTURING AGREEMENT BY AND AMONG AMERCO, THE ADMINISTRATIVE AGENT AND THE REVOLVER LENDERS SIGNATORY THERETO (THE "RESTRUCTURING AGREEMENT"). A-1 TREATMENT OF REVOLVER LENDERS CLASSIFICATION: The Plan will place the claims of the Revolver Lenders under the Credit Agreement in a single class or subclass, and such class or subclass will be impaired and entitled to vote on the Plan. CASH DISTRIBUTIONS FROM DIP Upon execution of the Restructuring FACILITY: Agreement, the Revolver Lenders will receive a cash distribution of $51,250,000 (25% of the principal amount of the Existing Loans). CASH DISTRIBUTIONS ON On the Effective Date of the Plan, the EFFECTIVE DATE: Revolver Lenders will receive an additional cash distribution of $71,750,000 (35% of the principal amount of the Existing Loans), plus additional cash in the amount of any and all accrued but unpaid interest on the Existing Loans up to the Effective Date, payable at the non-default rate. NEW NOTES: $48,400,000 (23.6% of the principal amount of the Existing Loans) exchanged for and satisfied with Term Loan A Notes under the Emergence Facility in the amount (net after any discount) of $48,400,000, subject to the Syndication Terms set forth in this Term Sheet. $33,600,000 (16.4% of the principal amount of the Existing Loans) exchanged for and satisfied with Term Loan B Notes under the Emergence Facility having an aggregate Market Value (as defined below) of $33,600,000, subject to the Syndication Terms set forth in this Term Sheet. TERMS OF NEW NOTES: As the new notes are to be issued under the Emergence Facility, the new notes (under both Term Loan A and Term Loan B) will be identical to the notes issued under the Emergence Facility and will be issued under the same credit agreement, note purchase agreement, or comparable governing document, and will be governed by and entitled to all of the same benefits and terms as the Term Loan A Notes and Term Loan B Notes, including borrowers, guarantors, maturity date, early termination provisions, collateral, lien priority, interest rate, fees, and all other terms of the Foothill Term Sheet, subject to the qualification that the maturity of the New Notes may not exceed 5 years from date of issuance; A-2 FEES: On the Effective Date, the Revolver Lenders will receive 2% of the par amount of Term Loan B Notes actually issued to the Revolver Lenders, in addition to any fees provided under the Foothill Term Sheet generally to buyers of any of the Term Loan A or Term Loan B Notes CLOSING CONDITIONS - Term Loan A and Term Loan B shall be subject to conditions precedent substantially similar to those set forth in the Foothill Term Sheet. - Treatment in the Chapter 11 case of the Noteholders will be substantially as set forth in that certain Restructuring Agreement dated as of August 12, 2003, among the Noteholders and AREC (the "Noteholders Restructuring Agreement"). - Treatment in the Chapter 11 case of AMERCO's general unsecured claims will provide for cash not in excess of 35% of their allowed general unsecured claims, with the balance thereof to be satisfied through a combination of Term Loan B Notes and other securities with a priority position junior to the Term Loan B Notes in the collateral securing the Term Loan B Notes. RELEASE AND EXCULPATION The Plan will contain release and PROVISIONS: exculpation provisions in substantially the following form: 1. As of the Effective Date, the Debtors and reorganized Debtors will be deemed to forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities whatsoever in connection with or related to the Debtors, the Chapter 11 cases or the Plan (other than the rights of the Debtors or reorganized Debtors to enforce the Plan and the contracts, instruments, releases, indentures, and other agreements or documents delivered thereunder) whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen on unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other occurrence taking - place on or prior to the Effective Date in any way relating to the Debtors, the reorganized Debtors, the A-3 Chapter 11 cases or the Plan, and that may be asserted by or on behalf of the Debtors or their estates or the reorganized Debtors against (a) the directors, officers, employees, agents and professionals of the Debtors, (b) the holders of prepetition lender claims and the agents thereof, (c) the DIP Facility agent and the holders of DIP Facility claims, (d) each Noteholder and Revolver Lender, and (e) the respective directors, officers, employees, agents and professionals of the entities released in subclauses (b) - (d) acting in such capacity. 2. As of the Effective Date, each prepetition lender, each Noteholder and Consenting Party (solely in its capacity as the holder of an Existing Loan) and each holder of an impaired claim that affirmatively elects on the ballot for voting on the Plan to do so, shall in consideration for the obligations of the Debtors and the reorganized Debtors under the Plan and the securities, contracts, instruments, releases and other agreements or documents to be delivered in connection with the Plan, forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities (other than the rights to enforce the Debtors' or the reorganized Debtors' obligations under the Plan and the securities, contracts, instruments, releases and other agreements and documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event on other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the reorganized Debtors, the Chapter 11 cases, or the Plan against (a) the Debtors and the reorganized Debtors, (b) the directors, officers, employees, agents and professionals of the Debtors, (c) the holders of prepetition lender claims and the a gents thereof, (d) the DIP Facility agent and the holders of DIP Facility claims, (e) each Noteholder and Revolver Lender, and (f) the respective directors, officers, employees, agents and professionals of the entities released in subclauses (c)-(e) acting in such capacity. 3. None of the Debtors, the reorganized Debtors, the A-4 Noteholders, the Revolver Lenders, holders of DIP Facility claims, the DIP Facility agent, the holders of prepetition lender claims, the agents thereto, nor any of their respective present or former members, officers, directors, employees, advisors, or attorneys shall have or incur any liability to any holder of a claim or an interest, or any other party in interest, or any of their respective agents, employees, representatives, financial advisors, attorneys, or affiliates, or any of their successors or assigns, for any act or omission in connection with, relating to, or arising out of, the Chapter 11 cases, formulating negotiating or implementing the Plan, the solicitation of acceptances of the Plan, the pursuit of confirmation of the Plan, the confirmation of the Plan, the consummation of the Plan, or the administration of the Plan or the property to be distributed under the Plan, except for their gross negligence or willful misconduct, and in all respects shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities under the Plan. EMERGENCE FACILITY: On the Effective Date, the Debtors shall close the Emergence Facility with substantially the terms and conditions set forth in the Foothill Term Sheet. All funded obligations outstanding under the DIP Facility on the Effective Date shall be repaid from borrowings under the Emergence Facility. SYNDICATION RIGHTS: 1. AMERCO will obtain ratings for the Term Loan B Notes from either S&P or Moody's prior to closing. 2. If the Term Loan B Notes are syndicated as described below, then the "Market Value" of the Term Loan B Notes shall be the price (net after any discounts) at which Term Loan B Notes are purchased in such syndication. 3. AMERCO will use its best efforts to arrange for the placement of a portion of the Term Loan B Notes to Market Participants (as defined below). The proceeds of any commitments from new Market Participants above $30 million aggregate face amount of Term Loan B Notes will be paid initially to the Revolver Lenders until the total cash received by the Revolver Lenders equals 65% of the principal amount of the Existing Loans, and A-5 all proceeds thereafter will be paid, on a pro rata basis, to the Revolver Lenders and Noteholders, in lieu of an equal amount of Term Loan B Notes to reduce, on a pro rata basis, the principal amounts of Term Loan B Notes to be distributed to the Revolver Lenders and the Noteholders under the Plan in accordance with this Restructuring Agreement and the Noteholders Restructuring Agreement. 4. In addition to any fees payable to the Revolver Lenders under "Fees" above, to the extent the Term Loan B Notes are offered in a syndication with fees, discounts, increased spreads or any other additional compensation not already taken into account in the determination of Market Value (whether paid pre-or post-closing of the Term Loan B Notes, and including any "pricing flex"), the Revolver Lenders will fully participate therein, on the same terms offered or issued to each other holder of Term Loan B Notes. 5. If less than $20 million of Term Loan B Notes are sold to Market Participants on the same terms as are to be issued to the Revolver Lenders under the Restructuring Agreement, then the Revolver Lenders will receive Term Loan A Notes in the amount (net after any discount) of $33,600,000, instead of any Term Loan B Notes, and the Revolver Lenders will not participate in the Term Loan B Notes. For purposes of this Term Sheet, "Market Participants" is defined as recognized institutional investors not affiliated with the Debtors or with any "insider" (as that term is defined in the Bankruptcy Code) of the Debtors. REVOLVER LENDER FEES: The reasonable fees and expenses of the financial and legal professionals retained by the Administrative Agent or the Revolver Lenders shall be paid on the Effective Date of the Plan. A-6 EXHIBIT E SAC HOLDING PARTICIPATION AND SUBORDINATION AGREEMENT [TO BE FILED ON OR BEFORE THE EXHIBIT FILING DATE] EXHIBIT F AMERCO/AREC GUARANTY OBLIGATIONS [SEE ATTACHED] AMERCO/AREC GUARANTY OBLIGATIONS

BANCBOSTON LEASING, INC. NOW KNOWN AS FLEET CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 30-Jul-97 BARNETT BUSINESS FINANCE CORPORATION NOW KNOWN AS BA LEASING & CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 22-Aug-97 PITNEY BOWES CREDIT CORPORATION NOW KNOWN AS EASTERN BANK U-HAUL LEASING & SALES CO. 05-Sep-97 FLEET CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 19-Dec-97 BARNETT BUSINESS FINANCE CORPORATION NOW KNOWN AS BA LEASING & CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 26-Dec-97 US BANCORP LEASING AND FINANCIAL U-HAUL CO. OF OREGON 28-Jan-99 CORESTATES LEASING, INC. NOW KNOWN AS FIRST UNION COMMERCIAL CORPORATION U-HAUL LEASING & SALES CO. 06-Mar-98 SUMITOMO BANK OF CALIFORNIA NOW KNOWN AS ZIONS CREDIT CORPORATION U-HAUL LEASING & SALES CO. 13-Mar-98 BANC ONE LEASING CORPORATION U-HAUL LEASING & SALES CO. 20-Mar-98 COMERICA LEASING CORPORATION U-HAUL LEASING & SALES CO. 26-Mar-98 BA LEASING & CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 27-Mar-98 PITNEY BOWES CREDIT CORPORATION U-HAUL LEASING & SALES CO. 30-Mar-98 FLEET CAPITAL CORPORATION NOW KNOWN AS THE FIFTH THIRD LEASING COMPANY U-HAUL LEASING & SALES CO. 30-Mar-98 FLEET CAPITAL CORPORATION NOW KNOWN AS MIZUHO LEASING INC. U-HAUL LEASING & SALES CO. 30-Mar-98 FLEET CAPITAL CORPORATION NOW KNOWN AS LASALLE NATIONAL LEASING CORPORATION U-HAUL LEASING & SALES CO. 30-Mar-98 GENERAL ELECTRIC CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 15-May-98 AMERICAN FINANCE GROUP, INC. NOW KNOWN AS US BANCORP LEASING AND FINANCIAL U-HAUL LEASING & SALES CO. 15-Jun-98 NEWCOURT FINANCIAL USA, INC. NOW KNOWN AS US BANCORP LEASING AND FINANCIAL U-HAUL LEASING & SALES CO. 30-Jun-98 CHASE EQUIPMENT LEASING, INC. NOW KNOWN AS JP MORGAN LEASING, INC. U-HAUL LEASING & SALES CO. 15-Jul-98 CONCORD COMMERCIAL, DIVISION OF HSBC BUSINESS LOANS, INC. U-HAUL LEASING & SALES CO. 20-Jul-98 FIRSTMERIT LEASING CORPORATION U-HAUL LEASING & SALES CO. 27-Jul-98 SANWA BUSINESS CREDIT CORPORATION NOW KNOWN AS FLEET CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 24-Aug-98 SAFECO CREDIT COMPANY, INC. NOW KNOWN AS GENERAL ELECTRIC CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 26-Aug-98 FLEET CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 08-Sep-98 FLEET CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 08-Sep-98 FLEET CAPITAL CORPORATION NOW KNOWN AS BB&T LEASING CORPORATION U-HAUL LEASING & SALES CO. 08-Sep-98 CITIZENS LEASING CORPORATION U-HAUL LEASING & SALES CO. 23-Sep-98

BANCBOSTON LEASING, INC. NOW KNOWN AS FLEET CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 15-Oct-98 BANCBOSTON LEASING, INC. NOW KNOWN AS FLEET CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 15-Oct-98 CITICORP LEASING, INC. U-HAUL LEASING & SALES CO. 23-Oct-98 COMERICA LEASING CORPORATION U-HAUL LEASING & SALES CO. 16-Jun-99 FLEET CAPITAL CORPORATION NOW KNOWN AS MIZUHO LEASING INC. U-HAUL LEASING & SALES CO. 16-Jun-99 BANC ONE LEASING CORPORATION U-HAUL LEASING & SALES CO. 17-Jun-99 SUNTRUST LEASING CORPORATION U-HAUL LEASING & SALES CO. 28-Jun-99 BNY CAPITAL RESOURCES CORPORATION U-HAUL LEASING & SALES CO. 15-Jul-99 ALLFIRST BANK NOW KNOWN AS M&T BANK U-HAUL LEASING & SALES CO. 15-Jul-99 HSBC BUSINESS LOANS, INC. U-HAUL LEASING & SALES CO. 23-Jul-99 SAFECO CREDIT COMPANY, INC. NOW KNOWN AS GENERAL ELECTRIC CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 01-Sep-99 CITIZENS LEASING CORPORATION U-HAUL LEASING & SALES CO. 10-Sep-99 SOUTHTRUST BANK N.A. U-HAUL LEASING & SALES CO. 10-Sep-99 BA LEASING & CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 15-Oct-99 NATIONAL CITY LEASING CORPORATION U-HAUL LEASING & SALES CO. 15-Dec-99 NATIONAL CITY LEASING CORPORATION U-HAUL LEASING & SALES CO. 15-Dec-99 HSBC BUSINESS LOANS, INC. U-HAUL LEASING & SALES CO. 15-Dec-99 SOUTHTRUST BANK N.A. U-HAUL LEASING & SALES CO. 15-Dec-99 BB&T LEASING CORPORATION U-HAUL LEASING & SALES CO. 03-Feb-00 MELLON US LEASING, A DIVISION OF MELLON US LEASING CORPORATION NOW KNOWN AS GENERAL ELECTRIC CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 10-Feb-00 COMERICA LEASING CORPORATION U-HAUL LEASING & SALES CO. 01-Mar-00 HSBC BUSINESS LOANS, INC. U-HAUL LEASING & SALES CO. 06-Mar-00 THE FIFTH THIRD LEASING COMPANY U-HAUL LEASING & SALES CO. 10-Mar-00 US BANCORP LEASING AND FINANCIAL U-HAUL LEASING & SALES CO. 30-Mar-00 FIRSTMERIT U-HAUL LEASING & SALES CO. 30-Mar-00 BANC ONE LEASING U-HAUL LEASING & SALES CO. 07-Apr-00 FIRSTMERIT LEASING CORPORATION U-HAUL LEASING & SALES CO. 14-Apr-00 SUNTRUST LEASING CORPORATION U-HAUL LEASING & SALES CO. 17-Apr-00 GENERAL ELECTRIC CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 28-Apr-00 FIRST SECURITY BANK, N.A. NOW KNOWN AS GENERAL ELECTRIC CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 05-May-00 ICX CORPORATION U-HAUL LEASING & SALES CO. 15-May-00 LEASE PLAN USA, INC. NOW KNOWN AS CITICORP LEASING, INC. U-HAUL LEASING & SALES CO. 01-Jun-00 CITICORP LEASING, INC. U-HAUL LEASING & SALES CO. 02-Jun-00 ZIONS CREDIT CORPORATION U-HAUL LEASING & SALES CO. 09-Jun-00 WELLS FARGO BANK, N.A. U-HAUL LEASING & SALES CO. 15-Jun-00 KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC. U-HAUL LEASING & SALES CO. 22-Jun-00

GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION U-HAUL LEASING & SALES CO. 23-Jun-00 GENERAL FOODS CREDIT INVESTORS NO. 2 CORPORATION AS OWNER PARTICIPANT U-HAUL LEASING & SALES CO. 30-Jun-00 NORWEST BANK MINNESOTA, N.A. NOW KNOWN AS WELLS FARGO BANK, N.A, AS OWNER TRUSTEE OR PURCHASER U-HAUL LEASING & SALES CO. 30-Jun-00 COMMERCE BANK, N.A. U-HAUL LEASING & SALES CO. 14-Jul-00 AMERICAN FINANCE GROUP, INC., D/B/A GUARANTY CAPITAL CORPORATION NOW KNOWN AS HSBC BUSINESS LOANS. INC. U-HAUL LEASING & SALES CO. 21-Jul-00 AMERICAN FINANCE GROUP, INC., D/B/A GUARANTY CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 21-Jul-00 AMERICAN FINANCE GROUP, INC., D/B/A GUARANTY CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 21-Jul-00 KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC. U-HAUL LEASING & SALES CO. 28-Jul-00 GENERAL ELECTRIC CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 28-Jul-00 FLEET CAPITAL CORPORATION NOW KNOWN AS OVERLAND CAPITAL CORPORATION U-HAUL LEASING & SALES CO. 02-Aug-00 FLEET CAPITAL CORPORATION NOW KNOWN AS MIZUHO LEASING INC. U-HAUL LEASING & SALES CO. 04-Aug-00 FLEET CAPITAL CORPORATION NOW KNOWN AS PNC LEASING CORPORATION U-HAUL LEASING & SALES CO. 04-Aug-00 NATIONAL CITY LEASING CORPORATION U-HAUL LEASING & SALES CO. 10-Aug-00 COMERICA LEASING CORPORATION U-HAUL LEASING & SALES CO. 11-Aug-00 CITIZENS LEASING CORPORATION U-HAUL LEASING & SALES CO. 21-Aug-00 LASALLE NATIONAL LEASING CORPORATION U-HAUL LEASING & SALES CO. 29-Aug-00 ZIONS CREDIT CORPORATION U-HAUL LEASING & SALES CO. 01-Sep-00 PROVIDENT COMMERCIAL GROUP, INC. U-HAUL LEASING & SALES CO. 06-Sep-00 BOKF EQUIPMENT FINANCE INC. U-HAUL LEASING & SALES CO. 08-Sep-00 GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION U-HAUL LEASING & SALES CO. 15-Sep-00 FIRSTSTAR BANK, N.A. NOW KNOWN AS US BANCORP LEASING AND FINANCIAL U-HAUL LEASING & SALES CO. 15-Sep-00 ROYAL BANK OF CANADA U-HAUL CO.(CANADA) LTD. 30-Sep-00 GENERAL ELECTRIC CAPITAL CORPORATION OF TENNESSEE U-HAUL LEASING & OREGON 17-Nov-00 FIRST SECURITY BANK, N.A. NOW KNOWN AS WELLS FARGO BANK, N.A. U-HAUL LEASING & SALES CO. 01-Dec-00 BOKF EQUIPMENT FINANCE INC. U-HAUL LEASING & SALES CO. 01-Dec-00 KANSAS CITY INDUSTRIAL CAPITAL, U-HAUL CO. OF KANSAS, INC, dba LLC KC ENGINE SHOP 12-Apr-01 TCF LEASING, INC. U-HAUL LEASING & SALES CO. 01-Jun-01 BNY CAPITAL RESOURCES CORPORATION U-HAUL LEASING & SALES CO. 26-Jun-01

ZIONS CREDIT CORPORATION U-HAUL LEASING & SALES CO. 06-Sep-01 BANC ONE LEASING CORPORATION U-HAUL LEASING & SALES CO. 30-Oct-01 KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC. U-HAUL LEASING & SALES CO. 04-Dec-01 KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC. U-HAUL LEASING & SALES CO. 04-Dec-01 KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC. U-HAUL LEASING & SALES CO. 04-Dec-01 KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC. U-HAUL LEASING & SALES CO. 04-Dec-01 FIRSTMERIT LEASING CORPORATION U-HAUL LEASING & SALES CO. 07-Mar-02 CITIZENS LEASING CORPORATION U-HAUL LEASING & SALES CO. 28-Jun-02 BANC ONE LEASING CORPORATION U-HAUL LEASING & SALES CO. 24-Sep-02 IBM CREDIT CORPORATION Republic Western Insurance Company 30-Sep-02 BERND FREYTAG AREC MTM STATE OF CALIFORNIA DOT AREC MTM MARY MACARIO AREC 1-Feb-02 COCO'S/CARROWS AREC 1-Jun-03 COLORADO DOT AREC 1-Mar-03 COOK COUNTY DEPT OF REVENUE AREC 1-Sep-02 ELLIE SALTZMAN AREC 1-Jun-99 NORFOLK SOUTHERN CORP AREC 1-Apr-99 AIRPORT GARDEN INVESTORS AMERCO 1-Nov-98 BATON ROUGE WATER CO N/A* N/A* CITY OF HOUSTON N/A* N/A* COMED N/A* N/A* GMAC COMMERICAL HOLDING CORP., AS ADMINISTRATIVE AGENT AMERCO# 28-Feb-03

* These entries identify agreements wherein AMERCO has guaranteed U-Haul's obligations to certain providers of utility services, so no lessee is identified in these entries. # This entry identifies AMERCO's execution of a support party agreement on behalf of PM Preferred Properties, LP ("PMPP"), in relation to a credit facility under which PMPP is borrower and GMAC is lender. Accordingly, lessor and lessee nomenclature is inappropriate for this entry. EXHIBIT G PMSR AGREEMENT [SEE ATTACHED] PMSR AGREEMENT This PMSR Agreement (this "Agreement") is made and entered into as of [the Effective Date], by AMERCO, a Nevada corporation ("AMERCO"), Private Mini Storage Realty, L.P., a Texas limited partnership ("PMSR"), JPMorgan Chase Bank, as Administrative Agent under the Credit Agreement described below (the "Administrative Agent"), and the lenders under the Credit Agreement described below (the "Lenders"). AMERCO, the Administrative Agent and the Lenders are collectively referred to herein as the "Parties" and individually as a "Party." RECITALS WHEREAS, AMERCO is the Support Party under that certain Support Party Agreement dated as of December 30, 1997 (the "Support Party Agreement"), with respect to the indebtedness of PMSR under that certain Amended and Restated Credit Agreement dated as of March 3, 2003 (as amended to date, the "Credit Agreement"), among PMSR, Storage Realty L.L.C., the Lenders and the Administrative Agent. WHEREAS, pursuant to that certain Non-Exoneration Letter dated as of March 3, 2003, AMERCO acknowledged its obligations under the Support Party Agreement to purchase all of the outstanding loans made by the Lenders to PMSR in the aggregate principal amount of $55.55 million (the "PMSR Support Obligations"). WHEREAS, on June 20, 2003, AMERCO filed for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101, et. seq. (the "Bankruptcy Code"), before the United States Bankruptcy Court for the District of Nevada (the "Bankruptcy Court") and on August 13, 2003, AMERCO Real Estate Company ("AREC") filed for relief under Chapter 11 of the Bankruptcy Code before the Bankruptcy Court. WHEREAS, on October 6, 2003, AMERCO and AREC filed a Joint Plan of Reorganization (the "Plan") with the Bankruptcy Court, which was amended and was subsequently confirmed by the Bankruptcy Court on _____, 2004. Capitalized terms used herein without definition have the meanings ascribed to them in the Plan. WHEREAS, under the Plan, the Lenders have an Allowed Class 7 Claim of $55.55 million plus any unpaid interest or charges owing under the Credit Agreement and will receive a Pro Rata share of each of the following on the Effective Date: (i) Cash in an amount to be determined; (ii) New Term Loan B Notes in a principal amount to be determined; (iii) SAC Holding Senior Notes in the Face Amount of $200 million; and (iv) New AMERCO Notes in an amount to be determined (the SAC Holding Senior Notes, the New Term Loan B Notes and the New AMERCO Notes received by the Lenders are hereinafter referred to as the "New Debt Securities"); and the sum of the cash and the Face Amount of the New Debt Securities that the Lenders are to receive under the Plan will equal their Allowed Class 7 Claim. WHEREAS, pursuant to the Plan, Reorganized AMERCO and the Lenders are required to enter into this Agreement on the Effective Date of the Plan. WHEREAS, the purpose of this Agreement is to prevent the Lenders from being paid twice (i.e., once on the Loans (as defined in the Credit Agreement) and again on the New Debt 1 Securities). AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. Recitals. Each of the foregoing Recitals is incorporated hereby as if fully set forth herein. 2. New Debt Securities to be Issued to Administrative Agent. Each Lender hereby agrees that all of the New Debt Securities to be issued to the Lenders in partial satisfaction of the Lenders' Allowed Class 7 Claims shall be issued to the Administrative Agent on behalf of the Lenders, and the Administrative Agent agrees to hold such New Debt Securities as agent for and on behalf of the Lenders in accordance with this Agreement. Subject to Section 4 below, the Administrative Agent agrees to distribute all payments of principal of, and interest and other amounts on, such New Debt Securities that the Administrative Agent then holds to the Lenders on a Pro Rata basis promptly upon receipt. 3. Assignment on Effective Date; Promissory Notes. Each Lender hereby assigns to AMERCO a portion of its Loans (as defined in the Credit Agreement) in an aggregate principal amount equal to the Cash received by such Lender on the Effective Date in partial satisfaction of the principal portion of its Allowed Class 7 Claim. PMSR and the Administrative Agent hereby consent to such assignment. 4. Interest Payments, (a) The Administrative Agent shall distribute all payments of interest on the Loans to the Lenders in accordance with the Credit Agreement. So long as no default in the payment of interest has occurred and is continuing under the New Debt Securities, then, except as otherwise provided in this paragraph, upon the Administrative Agent's receipt of each payment of interest on any New Debt Securities (the date of such payment, an "NDS Interest Payment Date"), the Administrative Agent shall within one (1) Business Day thereafter distribute a portion of such interest to AMERCO in an amount equal to the product of (i) the interest on the Loans paid to the Lenders during the Interest Payment Period (as hereafter defined) ending on such NDS Interest Payment Date and (ii) a fraction, the numerator of which equals the outstanding aggregate principal amount of the New Debt Securities for which interest was received by the Administrative Agent on the relevant NDS Interest Payment Date and the denominator of which equals the outstanding aggregate principal amount of all New Debt Securities held by the Administrative Agent on such NDS Interest Payment Date. Any amount of interest on the New Debt Securities not distributed to AMERCO in accordance with the immediately preceding sentence shall be distributed to the Lenders on a pro rata basis. (b) For purposes of this Agreement, an "Interest Payment Period" is the period commencing on the Effective Date and ending on the first NDS Interest Payment Date, and each subsequent Interest Payment Period commences on the day after the preceding NDS Interest Payment Date and ends on the next succeeding NDS Interest Payment Date. 2 (c) If any payment of interest on the New Debt Securities is made other than on the date it is due, the Administrative Agent shall distribute AMERCO's portion of the payment to AMERCO 95 days after the payment date. If the payor of the interest becomes a debtor in a case under the Bankruptcy Code within the 95-day period, then the Administrative Agent shall not distribute any portion until such time as there is a final resolution of whether any interest payment is avoidable or recoverable in the bankruptcy case. At the time of such final resolution, the Administrative Agent shall retain or shall transfer to AMERCO the interest payment based on the amount, if any, that the Administrative Agent retains (for distribution to the Lenders) of the payment. 5. Principal Payments on New Debt Securities. If the issuer of a New Debt Security pays any principal owing on the New Debt Security to the Administrative Agent, or redeems such New Debt Security, then, except as otherwise provided in this paragraph, the Administrative Agent shall transfer an amount of Loans with a face amount equal to the amount of any principal paid or redeemed on the New Debt Security to AMERCO on the date that is 95 days after the date of the principal payment or redemption, together with any interest and principal payments made on such Loans during such 95 day period, if the issuer of the New Debt Securities redeemed or on which principal payments were made has not then become a debtor in a case under the Bankruptcy Code. If the issuer has become a debtor in a case under the Bankruptcy Code within the 95-day period, then the Administrative Agent may continue to hold the Loans (together with any interest and principal payments thereon) that otherwise would have been assigned and transferred until such time as there is a final resolution of whether any principal or redemption payment to the Administrative Agent is avoidable or recoverable in the bankruptcy case. At the time of such final resolution, the Administrative Agent shall retain the Loans (together with any interest and principal payments thereon) or shall transfer and assign the Loans (together with any interest and principal payments thereon) to AMERCO based on the amount, if any, that the Administrative Agent retains (for distribution to the Lenders) of the principal or redemption payment. PMSR and the Administrative Agent hereby consent to any assignment pursuant to this Section 5. 6. Sale of New Debt Securities. If any Lender (a "Selling Lender"), acting in its sole discretion, decides to sell all or a portion of the New Debt Securities held on behalf of such Lender by the Administrative Agent to a third party, such Selling Lender shall notify the Administrative Agent and AMERCO of such sale and, upon the closing of such sale, (i) the Administrative Agent shall release such New Debt Securities to the buyer and (ii) such Selling Lender shall assign to AMERCO a portion of its Loans in an aggregate principal amount equal to the Face Amount of the New Debt Securities sold by such Selling Lender. PMSR and the Administrative Agent hereby consent to any such assignment. 7. Sale or Assignment of Loans. If any Lender (an "Assigning Lender"), acting in its sole discretion, decides to sell or assign all or a portion of its Loans to a third party, in addition to complying with the assignment provisions of the Credit Agreement, such Assigning Lender shall (i) require that such third party agree in writing to become a party to this Agreement and be treated as a Lender for all purposes with respect to the assigned Loans; and (ii) notify the Administrative Agent of such sale or assignment and, upon the closing of such sale or assignment, the Administrative Agent shall hold all (or if only a portion of the Loans of the Assigning Lender are being sold or assigned, a corresponding portion) of the New Debt Securities held by the 3 Administrative Agent on behalf of the Assigning Lender as agent for and on behalf of the buyer or assignee of the Loans, subject to all of the terms and provisions of this Agreement. 8. Repayment of Loans. (a) The Administrative Agent shall distribute all payments of principal on the Loans to the Lenders in accordance with the Credit Agreement and, except as otherwise provided in this paragraph 8, shall, 95 days after the date of payment, transfer New Debt Securities in an aggregate Face Amount equal to such principal payment to AMERCO. New Debt Securities so transferred to AMERCO shall be in the following order: (i) first, New AMERCO Notes; (ii) second, New Term Loan B Notes; and (iii) third, SAC Holding Senior Notes. (b) If the Loans, together with accrued interest thereon and any other amounts due to the Administrative Agent and the Lenders under the Credit Agreement, are repaid in full prior to the payment in full of the New Debt Securities, then except as otherwise provided in this paragraph 8, the Administrative Agent shall transfer all New Debt Securities held by it on behalf of the Lenders to AMERCO 95 days after the date of repayment. (c) If PMSR becomes a debtor in a case under the Bankruptcy Code within 95 days after any payment of principal on the Loans, then the Administrative Agent may continue to hold the New Debt Securities that otherwise would have been transferred under this paragraph 8 until such time as there is a final resolution of whether any payment is avoidable or recoverable in the bankruptcy case. At the time of such final resolution, the Administrative Agent shall retain the New Debt Securities (together with any payment of principal or interest thereon) or transfer the New Debt Securities (together with any payment of principal or interest thereon) to AMERCO based on the amount, if any, that the Administrative Agent retains (for distribution to the Lenders) of the payment. 9. Subordination. AMERCO hereby covenants and agrees that its rights and the rights of any of its subsidiaries, whether now existing or hereafter arising, to receive payment on account of any indebtedness owed to it or any such subsidiary by PMSR, whether under the Loans transferred to it under this Agreement or otherwise, or to receive any payment from PMSR from any other source (other than ordinary expenses relating to the operation of the business of PMSR, paid in PMSR's ordinary course of business) shall at all times be Subordinate (as defined in the Credit Agreement) in accordance with the provisions of Schedule S of the Credit Agreement ("Schedule S") to the full and prior repayment of the amounts outstanding in favor of the Lenders under the Credit Agreement. Except as expressly provided in Schedule S or in Section 4 of this Agreement, neither AMERCO nor any of its subsidiaries shall be entitled to enforce or receive payment of any sums hereby Subordinated until the amounts outstanding under the Credit Agreement in favor of the Lenders have been paid and performed in full and all Commitments terminated, and any such sums received in violation of this Agreement or Schedule S shall be received by AMERCO or its subsidiaries, as applicable, in trust for the Administrative Agent and the Lenders. AMERCO shall cause each subsidiary to Subordinate any indebtedness owed to the subsidiary by PMSR in accordance with the terms of this Section 9. Notwithstanding anything in Schedule S to the contrary, AMERCO shall not have the right to vote on any amendment, waiver 4 or consent with respect to the Credit Agreement or any other Loan Document (as defined in the Credit Agreement) until the termination of this Agreement. If AMERCO transfers any of the Loans that it receives under this Agreement to any other entity, whether or not an AMERCO subsidiary, the subordination provisions of this paragraph shall continue to apply to the transferred Loans as though still held by AMERCO. 10. Loans Transferred to AMERCO. (a) Notwithstanding the transfer of Loans to AMERCO under any provision of this Agreement, AMERCO shall not be deemed to be a "Lender" for any purpose under this Agreement. Notwithstanding any other provision of this Agreement, once the Administrative Agent transfers a Loan to AMERCO, the Loan shall no longer be treated as a "Loan" for purposes of this Agreement. (b) If any Loan assigned, in whole or in part, to AMERCO hereunder is evidenced by a promissory note, the assigning Lender shall, promptly upon such assignment, surrender such promissory note to PMSR, and PMSR shall promptly prepare and execute new promissory notes evidencing the Loans retained by such assigning Lender and the Loans assigned to AMERCO and deliver them to the assigning Lender and AMERCO, respectively. If any Loan assigned to AMERCO hereunder is not evidenced by a promissory note, the assigning Lender shall promptly upon such assignment notify PMSR of such assignment, and PMSR shall promptly execute and deliver to AMERCO a new promissory note evidencing the Loan assigned to AMERCO. PMSR shall make all payments required under the promissory notes delivered to AMERCO hereunder directly to AMERCO or as otherwise instructed by AMERCO. 11. Disclosure. The Parties agree that a copy of this Agreement shall be filed with the Bankruptcy Court. 12. Termination of Agreement. This Agreement shall terminate on the later to occur of (i) the date that all Loans held by the Lenders on the Effective Date have been assigned or transferred to AMERCO as provided hereunder and (ii) the date that all New Debt Securities held by the Administrative Agent on behalf of the Lenders have been transferred to AMERCO in accordance with Section 8 hereof. 13. Costs and Expenses. AMERCO agrees to pay all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation, execution, delivery and administration of this Agreement or in connection with any amendments, modifications or waivers of the provisions hereof or incurred by the Administrative Agent or any Lender in connection with the enforcement or protection of their rights in connection with this Agreement, including the reasonable fees, charges and disbursements of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Administrative Agent, and, in connection with any such amendment, modification or waiver or any such enforcement or protection, the fees, charges and disbursements of any other counsel for the Administrative Agent or any Lender. 14. Representations and Warranties. AMERCO represents and warrants to the Administrative Agent and each Lender that the following statements are true, correct and complete as of the date hereof: 5 (a) Power and Authority. It is duly organized, validly existing, and in good standing under the laws of the state of its organization, and has all requisite corporate, partnership or limited liability company power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement. (b) Authorization. The execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership or limited liability company action on its part. (c) No Conflicts. The execution, delivery and performance by it of this Agreement do not and shall not (i) violate any provision of law, rule or regulation applicable to it or any of its subsidiaries or its certificate of incorporation or bylaws or other organizational documents or those of any of its subsidiaries or (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party. (d) Governmental Consents. The execution, delivery and performance by it of this Agreement do not and shall not require any registration or filing with consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body. (e) Binding Obligation. This Agreement is the legally valid and binding obligation of AMERCO, enforceable against it in accordance with its terms. (f) Bankruptcy Court Approval. This Agreement has been approved by the Bankruptcy Court in connection with the confirmation of a plan of reorganization for AMERCO in its chapter 11 case. 15. Amendments. This Agreement may not be modified, amended or supplemented without the prior written consent of AMERCO, PMSR, the Administrative Agent and all of the Lenders. 16. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. By its execution and delivery of this Agreement, each of the Parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in the United States District Court for the Southern District of New York. By execution and delivery of this Agreement, each of the Parties hereto irrevocably accepts and submits itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. 17. Headings. The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof. 6 18. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators and representatives. 19. Prior Negotiations. This Agreement supersedes all prior negotiations with respect to the subject matter hereof. 20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile shall be equally as effective as delivery of the original executed counterpart of this Agreement. 21. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties hereto and no other person or entity shall be a third-party beneficiary hereof, other than successors and assigns of any Party. 22. Notices. (a) All notices hereunder to be served to AMERCO shall be deemed given if in writing and delivered or sent by telecopy, courier or by registered or certified mail (return receipt requested) to the following addresses or telecopier numbers (or at such other addresses or telecopier numbers as shall be specified by like notice): AMERCO c/o U-Haul International, Inc. 2727 North Central Avenue Suite 500 Phoenix, Arizona 85004 Attn: Jennifer M. Settles, Esq. Fax: 602-263-6173 with copy to: SQUIRE, SANDERS & DEMPSEY L.L.P. 40 N. Central Avenue, Suite 2700 Phoenix, AZ 85004 Attn: Christopher D. Johnson, Esq. Fax: 602-253-8129 (b) All notices hereunder to be served to PMSR shall be deemed given if in writing and delivered or sent by telecopy, courier or by registered or certified mail (return receipt requested) to the following addresses or telecopier numbers (or at such other addresses or telecopier numbers as shall be specified by like notice): Private Mini Storage Realty, L.P. 10575 Westoffice Drive Houston, TX 77042 7 Attn: Doug Mulvaney Fax: 713-827-0710 with copy to: NATHAN SOMMERS JACOBS & GORMAN 2700 Post Oak Boulevard, Suite 2500 Houston, TX 77055 Attn: Marvin D. Nathan, Esq. Fax: 713-892-4800 (c) All notices hereunder to be served to the Administrative Agent or a Lender shall be deemed given if in writing and delivered or sent by telecopy, courier or by registered or certified mail (return receipt requested) to the address or telecopier number for such person set forth above its signature hereto (or at such other addresses or telecopier numbers as shall be specified by like notice), with a copy to: SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 300 South Grand Avenue, 34th Floor Los Angeles, CA 90071 Attn: Richard Levin, Esq. Fax: 213-687-5600 23. Effectiveness. This Agreement shall become effective when AMERCO has received counterparts of this Agreement duly executed and delivered by AMERCO, PMSR, the Administrative Agent and all of the Lenders. [Signature page follows] 8 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written. AMERCO By:______________________________________ Name:________________________________ Title:_______________________________ [Additional signature pages follow] 9 PRIVATE MINI STORAGE REALTY, L.P. By: STORAGE REALTY L.L.C, its General Partner By:______________________________________ Name:________________________________ Title:_______________________________ 10 JP MORGAN CHASE BANK, AS ADMINISTRATIVE AGENT By:______________________________________ Name:________________________________ Title:_______________________________ Address for notices: 11 LENDERS: By:______________________________________ Name:________________________________ Title:_______________________________ Address for notices: 12 EXHIBIT H RESTATED BMO MASTER LEASE [SEE ATTACHED] SECOND AMENDED AND RESTATED MASTER LEASE AND OPEN END MORTGAGE THIS DOCUMENT SECURES FUTURE ADVANCES THIS SECOND AMENDED AND RESTATED MASTER LEASE AND OPEN END MORTGAGE, dated as of____________________, 2004, among each institution executing a signature page hereto as a lessor an/or receiving an assignment of a lessor's interest pursuant to Section 12.1 of the Participation Agreement, for so long as such institution shall hold a lessor's interest hereunder (each, individually, a "Lessor" and collectively, the "Lessors"), U-HAUL INTERNATIONAL, INC., a Nevada corporation ("International"), as Lessee of the Existing Properties, AMERCO REAL ESTATE COMPANY, a Nevada corporation ("AREC"), as Lessee of the Properties (other than the Existing Properties) (International and AREC, collectively, the "Lessee"), and BMO GLOBAL CAPITAL SOLUTIONS, INC. (f/k/a Bank of Montreal Global Capital Solutions, Inc. and f/k/a BMO Leasing (U.S.), Inc.), a Delaware corporation, as agent for the Lessors (in such capacity, the "Agent Lessor"). WITNESSETH: WHEREAS, pursuant to the Master Lease and Open End Mortgage dated as of December 6, 1996 (the "Original Master Lease"), among International, the lessor parties thereto and the Agent Lessor, such lessors have agreed to lease to International, and the Lessee has agreed to lease from such lessors, each Property; WHEREAS, pursuant to the Amended and Restated Master Lease and Open End Mortgage dated as of July 27,1999, a copy of which is attached hereto as Exhibit A (the "Amended Master Lease"), among Lessee, the Lessors and the Agent Lessor, the Original Master Lease was amended and restated in its entirety; and WHEREAS, Lessee, the Lessors and the Agent Lessor desire to amend and restate the Amended Master Lease (the Amended Master Lease, as amended and restated as set forth herein and as further amended, supplemented, amended and restated or otherwise modified from time to time after the date hereof, this "Master Lease") to accomplish the following: (i) the prepayment of $5,100,000 of the principal balance of the Lender Base Rent and the Lessor Basic Rent obligations; (ii) extend the Lease Term by seven (7) years; (iii) increase the effective rate of interest to be paid on the Lender Basic Rent and Lessor Basic Rent obligations; and (iv) amortize over thirty (30) years the principal of the Lender Basic Rent and Lessor Basic Rent obligations. ARTICLE I DEFINITIONS; INCORPORATION BY REFERENCE; RATIFICATION 1.1 Definitions; Interpretation. Capitalized Terms used but not otherwise defined in this Master Lease have the respective meanings specified in Appendix A to the Participation Agreement; and the rules of interpretation set forth in Appendix A to the Participation Agreement shall apply to this Master Lease. 1.2 Incorporation by Reference; Ratification. The Amended Master Lease is hereby incorporated in this Master Lease by this reference as though fully stated herein; provided, however, that certain of the terms and conditions of the Amended Master Lease are hereby modified on the terms and conditions set forth herein. The parties hereby ratify and confirm the continued force and effect of this Master Lease, and agree that all terms and provisions of the Amended Master Lease shall remain in full force and effect as originally set forth, except as otherwise expressly modified or amended herein. In the event of any conflict between the provisions of this Master Lease and the provisions of the Operative Documents, the provisions of this Master Lease shall prevail. ARTICLE II AMENDED AND RESTATED TERMS 2.1 Lease Term. Section 2.3 of the Amended Master Lease is hereby deleted in its entirety and replaced with the following: 2.3 Lease Term. The Lease Term for each Property (other than Improved Property) shall consist of an Interim Lease Term (an "Interim Lease Term") and a Basic Lease Term (a "Basic Lease Term"), and the Lease Term for each Improved Property shall consist of a Basic Lease Term only. The Interim Lease Term of this Master Lease with respect to any Property (other than an Improved Property) shall commence on (and include) the Acquisition Date therefore and end on (but exclude) the Completion Date for such Property. The Basic Lease Term of this Master Lease for each Property shall be as follows: (a) with respect to each Property (other than an Improved Property), the Basic Lease Term shall commence on (and include) the last day of the Interim Lease Term for such Property and end on the date that is the day immediately preceding the date that is the seventh (7th) anniversary of the date of the Amended and Restated Lease and (b) with respect to each Improved Property, the Basic Lease Term shall commence on (and include) the Acquisition Date of such Property and end on the date that is the day immediately preceding the date that is the seventh (7th) anniversary of the date of the Amended and Restated Lease. 2.2 Rent. The following is hereby added to the end of Section 3.1(a) of the Amended Master Lease: Notwithstanding any provision to the contrary in the Master Lease or The Participation Agreement, "Basic Rent" shall be the sum of the payments for (i) the Lender Basic Rent Amortization (as set forth in Exhibit "B" attached hereto and herein incorporated by the reference) and (ii) the Lessor Basic Rent Amortization (as set forth in Exhibit "C" attached hereto and herein incorporated by the reference). IN WITNESS WHEREOF, the parties have caused this Master Lease to be duly executed and delivered as of the date first above written. U-HAUL INTERNATIONAL, INC., as a Lessee By:__________________________________ Name:________________________________ Title:_______________________________ AMERCO REAL ESTATE COMPANY, as a Lessee By:__________________________________ Name:________________________________ Title:_______________________________ BMO GLOBAL CAPITAL SOLUTIONS, INC., as Agent Lessor and as a Lessor By:__________________________________ Name:________________________________ Title:_______________________________ FBTC LEASING CORP., as a Lessor By:__________________________________ Name:________________________________ Title:_______________________________ DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCES, as a Lessor By:__________________________________ Name:________________________________ Title:_______________________________ By:__________________________________ Name:________________________________ Title:_______________________________ STATE OF__________________________ ) ) ss.: COUNTY OF_________________________ ) The foregoing Master Lease was acknowledged before me, the undersigned Notary Public, in the County of_________________, ____________________ of ________________, this ______ day of ________________, ________, by _____________________, as ___________________ of U-HAUL INTERNATIONAL, INC., a Nevada corporation, on behalf of said corporation. [Notarial Seal] ________________________________________ Notary Public My commission expires:__________________________________ STATE OF__________________________ ) ) ss.: COUNTY OF_________________________ ) The foregoing Master Lease was acknowledged before me, the undersigned Notary Public, in the County of _______________, ______________________ of _______________, this ______ day of_________________, ______, by ______________________, as ________________________ of AMERCO REAL ESTATE COMPANY, a Nevada corporation, on behalf of said corporation. [Notarial Seal] ________________________________________ Notary Public My commission expires:__________________________________ STATE OF___________________________ ) ) ss.: COUNTY OF__________________________ ) The foregoing Master Lease was acknowledged before me, the undersigned Notary Public, in the County of _____________________, ________________ of ________________, this ______ day of ____________, ________, by ______________________, as ________________________ of BMO GLOBAL CAPITAL SOLUTIONS, INC., a Delaware corporation, on behalf of said corporation. [Notarial Seal] ________________________________________ Notary Public My commission expires:__________________________________ STATE OF___________________________ ) ) ss.: COUNTY OF__________________________ ) The foregoing Master Lease was acknowledged before me, the undersigned Notary Public, in the County of _____________________, ________________ of ___________, this ___________ day of _________________, ________, by _____________________, as ________________________ of FBTC LEASING CORP., a New York corporation, on behalf of said corporation. [Notarial Seal] ______________________________________ Notary Public My commission expires:_________________________________ STATE OF___________________________ ) ) ss.: COUNTY OF__________________________ ) The foregoing Master Lease was acknowledged before me, the undersigned Notary Public, in the County of _____________________, ________________ of _______________, this ______ day of _________________, ________, by ______________________, as ________________________ of DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCES, a _____________________________________ corporation, on behalf of said corporation. [Notarial Seal] ________________________________________ Notary Public My commission expires:__________________________________ THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART. Receipt of this original counterpart of the foregoing Master Lease is hereby acknowledged as of ________________, ________. BANK OF MONTREAL, as Administrative Agent for the Lenders By:__________________________________ Name:________________________________ Title:_______________________________ BMO LENDER BASIC RENT ~~Yearly Interest 7.44% Amount Financed $121,731,320 Quarters Financed 120 Yearly Payments $ 10,174,641~~

PAYMENT TO PAYMENT TO PRINCIPLE QUARTER PAYMENT INTEREST PRINCIPLE BALANCE - ---------------------------------------------------------------------------- $121,731,320 1 $ 2,543,660 $ 2,265,344 $ 278,316 121,453,003 2 2,543,660 2,260,164 283,496 121,169,508 3 2,543,660 2,254,889 288,771 120,880,736 4 2,543,660 2,249,515 294,145 120,586,591 5 2,543,660 2,244,041 299,619 120,286,972 6 2,543,660 2,238,465 305,195 119,981,777 7 2,543,660 2,232,786 310,874 119,670,903 8 2,543,660 2,227,001 316,659 119,354,243 9 2,543,660 2,221,108 322,552 119,031,691 10 2,543,660 2,215,105 328,555 118,703,136 11 2,543,660 2,208,991 334,669 118,368,467 12 2,543,660 2,202,763 340,897 118,027,570 13 2,543,660 2,196,419 347,241 117,680,329 14 2,543,660 2,189,957 353,703 117,326,626 15 2,543,660 2,183,375 360,285 116,966,341 16 2,543,660 2,176,671 366,990 116,599,352 17 2,543,660 2,169,841 373,819 116,225,533 18 2,543,660 2,162,885 380,776 115,844,757 19 2,543,660 2,155,799 387,862 115,456,895 20 2,543,660 2,148,581 395,080 115,061,816 21 2,543,660 2,141,228 402,432 114,659,384 22 2,543,660 2,133,739 409,921 114,249,463 23 2,543,660 2,126,111 417,549 113,831,914 24 2,543,660 2,118,341 425,319 113,406,595 25 2,543,660 2,110,426 433,234 112,973,360 26 2,543,660 2,102,364 441,297 112,532,064 27 2,543,660 2,094,151 449,509 112,082,555 28 2,543,660 2,085,786 457,874 111,624,681
BMO LESSOR BASIC RENT ~~Yearly Interest 7.82% Amount Financed $21,536,490 Quarters Financed 120 Yearly Payments $ 1,866,792~~

PAYMENT TO PAYMENT TO PRINCIPLE QUARTER PAYMENT INTEREST PRINCIPLE BALANCE - ---------------------------------------------------------------------------- $21,536,490 1 $ 466,698 $ 420,971 $ 45,727 21,490,763 2 466,698 420,077 46,621 21,444,142 3 466,698 419,166 47,532 21,396,610 4 466,698 418,237 48,461 21,348,149 5 466,698 417,290 49,408 21,298,741 6 466,698 416,324 50,374 21,248,366 7 466,698 415,339 51,359 21,197,008 8 466,698 414,335 52,363 21,144,645 9 466,698 413,312 53,386 21,091,259 10 466,698 412,268 54,430 21,036,829 11 466,698 411,204 55,494 20,981,335 12 466,698 410,120 56,578 20,924,756 13 466,698 409,014 57,684 20,867,072 14 466,698 407,886 58,812 20,808,260 15 466,698 406,736 59,962 20,748,298 16 466,698 405,564 61,134 20,687,165 17 466,698 404,369 62,329 20,624,836 18 466,698 403,151 63,547 20,561,289 19 466,698 401,909 64,789 20,496,500 20 466,698 400,643 66,056 20,430,445 21 466,698 399,351 67,347 20,363,098 22 466,698 398,035 68,663 20,294,435 23 466,698 396,693 70,005 20,224,430 24 466,698 395,324 71,374 20,153,056 25 466,698 393,929 72,769 20,080,287 26 466,698 392,507 74,191 20,006,096 27 466,698 391,057 75,641 19,930,455 28 466,698 389,578 77,120 19,853,335
EXHIBIT I RESTATED CITIBANK MASTER LEASE [SEE ATTACHED] AMENDED AND RESTATED MASTER LEASE THIS AMENDED AND RESTATED MASTER LEASE, dated as of _______________________________, 2004, between BMO GLOBAL CAPITAL SOLUTIONS, INC., a Delaware corporation (the "Lessor"), having an address at 430 Park Avenue, 16th Floor, New York, New York 10022, and AMERCO REAL ESTATE COMPANY, a Nevada corporation (the "Lessee"), having an address at 2727 N. Central Avenue, Phoenix, Arizona 85004. as Lessee of the Properties (other than the Existing Properties) (International and AREC, collectively, the "Lessee"), and as agent for the Lessors (in such capacity, the "Agent Lessor"). Preliminary Statement Pursuant to the Master Lease dated as of September 24,1999, a copy of which is attached hereto as Exhibit A (the "Original Master Lease"), between Lessor and Lessee, Lessee has agreed to lease from Lessor the Properties, and Lessor has agreed to lease to Lessee the Properties. Lessee and Lessor desire to amend and restate the Original Master Lease in its entirety (the Original Master Lease, as amended and restated as set forth herein and as further amended, supplemented, amended and restated or otherwise modified from time to time after the date hereof, this "Master Lease") to accomplish the following: (i) the prepayment of $3,500,000 of the principal balance of the Series A Portion of the Adjusted Capital Cost of the Property (the "Series A Obligations"), the Series B Portion of the Adjusted Capital Cost of the Property (the "Series B Obligations") and the Series C Portion of the Adjusted Capital Cost of the Property (the "Series C Obligations"); (ii) extend the Lease Term by seven (7) years; (iii) increase the effective rate of interest to be paid on the Series A Obligations, the Series B Obligations and the Series C Obligations, and (iv) amortize over thirty (30) years the principal of the Series A Obligations, the Series B Obligations and the Series C Obligations. ARTICLE I DEFINITIONS; INCORPORATION BY REFERENCE; RATIFICATION 1.1 Definitions. Capitalized Terms used but not otherwise defined in this Master Lease have the respective meanings specified in the Participation Agreement dated as of September 24,1999, by and among AMERCO, the Lessee, the Lessor, the Persons named therein as Note Holders and as Certificate Holders, the Persons named therein as APA Purchasers, and Citicorp USA, Inc., as Agent (as the same may be amended, modified or supplemented from time to time). 1.2 Incorporation by Reference; Ratification. The Original Master Lease is hereby incorporated in this Master Lease by this reference as though fully stated herein; provided, however, that certain of the terms and conditions of the Original Master Lease are hereby modified on the terms and conditions set forth herein. The parties hereby ratify and confirm the continued force and effect of this Master Lease, and agree that all terms and provisions of the Original Master Lease shall remain in full force and effect as originally set forth, except as otherwise expressly modified or amended herein. In the event of any conflict between the provisions of this Master Lease and the provisions of the Operative Documents, the provisions of this Master Lease shall prevail. ARTICLE II AMENDED AND RESTATED TERMS 2.1 Section 3 of the Lease is hereby deleted in its entirety and replaced with the following: 3. Term. The Lease shall be effective as of the date hereof. Each Property is leased for a Term (the "Term") which shall commence, with respect to any portion of the Property, on the Transaction Date set forth in the Lease Supplement applicable to such Property and shall terminate on the date that is the day immediately preceding the date that is the seventh (7th) anniversary of the date of the Amended and Restated Lease (the "Expiration Date") or such earlier date as the Lease with applicable Lease Supplement for such Property shall be terminated pursuant to any provision hereof. 2.2 Fixed Rent. Section I.C of Schedule A is hereby deleted in its entirety and replaced with the following: Notwithstanding any provision to the contrary in the Master Lease or the Participation Agreement, "Fixed Rent" shall be due and payable in arrears on each Payment Date and shall be the sum of the payments for (i) the Series A Obligations (as set forth in Exhibit "A" attached hereto and herein incorporated by the reference), (ii) the Series B Obligations (as set forth in Exhibit "B" attached hereto and herein incorporated by the reference), and (iii) the Series C Obligations (as set forth in Exhibit "C" attached hereto and herein incorporated by the reference. IN WITNESS WHEREOF, the parties have caused this Master Lease to be duly executed and delivered as of the date first above written. LESSOR: BMO GLOBAL CAPITAL SOLUTIONS, INC. By:__________________________________ Name:________________________________ Title:_______________________________ LESSEE: . AMERCO REAL ESTATE COMPANY By:__________________________________ Name:________________________________ Title:_______________________________ CITIBANK - SERIES A OBLIGATIONS ~~Yearly Interest 7.46% Amount Financed $82,992,024 Quarters Financed 120 Yearly Payments $ 6,949,474~~

PAYMENT TO PAYMENT TO PRINCIPLE QUARTER PAYMENT INTEREST PRINCIPLE BALANCE - ------------------------------------------------------------------------ $82,992,024 1 $1,737,369 $1,548,320 $ 189,049 82,802,975 2 1,737,369 1,544,793 192,576 82,610,400 3 1,737,369 1,541,200 196,168 82,414,231 4 1,737,369 1,537,541 199,828 82,214,403 5 1,737,369 1,533,812 203,556 82,010,847 6 1,737,369 1,530,015 207,354 81,803,494 7 1,737,369 1,526,146 211,222 81,592,272 8 1,737,369 1,522,206 215,163 81,377,109 9 1,737,369 1,518,192 219,177 81,157,932 10 1,737,369 1,514,103 223,266 80,934,666 11 1,737,369 1,509,937 227,431 80,707,235 12 1,737,369 1,505,694 231,674 80,475,561 13 1,737,369 1,501,372 235,996 80,239,564 14 1,737,369 1,496,969 240,399 79,999,165 15 1,737,369 1,492,484 244,884 79,754,281 16 1,737,369 1,487,916 249,453 79,504,828 17 1,737,369 1,483,262 254,107 79,250,722 18 1,737,369 1,478,521 258,847 78,991,874 19 1,737,369 1,473,692 263,676 78,728,198 20 1,737,369 1,468,773 268,596 78,459,603 21 1,737,369 1,463,762 273,607 78,185,996 22 1,737,369 1,458,657 278,711 77,907,285 23 1,737,369 1,453,458 283,911 77,623,374 24 1,737,369 1,448,161 289,207 77,334,167 25 1,737,369 1,442,766 294,603 77,039,564 26 1,737,369 1,437,269 300,099 76,739,464 27 1,737,369 1,431,671 305,698 76,433,767 28 1,737,369 1,425,967 311,401 76,122,366
CITIBANK - SERIES B OBLIGATIONS ~~Yearly Interest 7.59% Amount Financed $11,716,521 Quarters Financed 120 Yearly Payments $993,154~~

PAYMENT TO PAYMENT TO PRINCIPLE QUARTER PAYMENT INTEREST PRINCIPLE BALANCE - ------------------------------------------------------------------------ $11,716,521 1 $248,288 $222,248 $26,041 11,690,480 2 243,288 221,754 26,535 11,663,946 3 248,288 221,250 27,038 11,636,908 4 248,288 220,738 27,551 11,609,357 5 248,288 220,215 28,073 11,581,283 6 248,288 219,682 28,606 11,552,677 7 248,288 219,140 29,149 11,523,529 8 248,288 218,587 29,702 11,493,827 9 248,288 218,024 30,265 11,463,562 10 248,288 217,449 30,839 11,432,723 11 248,288 216,864 31,424 11,401,299 12 248,288 216,268 32,020 11,369,279 13 248,288 215,661 32,627 11,336,652 14 248,288 215,042 33,246 11,303,405 15 248,288 214,411 33,877 11,269,528 16 248,288 213,769 34,520 11,235,009 17 248,288 213,114 35,174 11,199,834 18 248,288 212,447 35,842 11,163,993 19 248,288 211,767 36,521 11,127,471 20 248,288 211,074 37,214 11,090,257 21 248,288 210,368 37,920 11,052,337 22 248,288 209,649 38,639 11,013,697 23 248,288 208,916 39,372 10,974,325 24 248,288 208,169 40,119 10,934,206 25 248,288 207,408 40,880 10,893,326 26 248,288 206,633 41,656 10,851,670 27 248,288 205,843 42,446 10,809,224 28 248,288 205,037 43,251 10,765,973
CITIBANK - SERIES C OBLIGATIONS ~~Yearly Interest 8.21% Amount Financed $2,960,736 Quarters Financed 120 Yearly Payments $ 266,398~~

PAYMENT TO PAYMENT TO PRINCIPLE QUARTER PAYMENT INTEREST PRINCIPLE BALANCE - --------------------------------------------------------------------- $2,960,736 1 $ 66,599 $ 60,788 $ 5,812 2,954,924 2 66,599 60,668 5,931 2,948,993 3 66,599 60,547 6,053 2,942,940 4 66,599 60,422 6,177 2,936,763 5 66,599 60,295 6,304 2,930,459 6 66,599 60,166 6,433 2,924,025 7 66,599 60,034 6,566 2,917,460 8 66,599 59,899 6,700 2,910,759 9 66,599 59,762 6,838 2,903,921 10 66,599 59,621 6,978 2,896,943 11 66,599 59,478 7,122 2,889,821 12 66,599 59,332 7,268 2,882,554 13 66,599 59,182 7,417 2,875,137 14 66,599 59,030 7,569 2,867,567 15 66,599 58,875 7,725 2,859,843 16 66,599 58,716 7,883 2,851,959 17 66,599 58,554 8,045 2,843,914 18 66,599 58,389 8,210 2,835,704 19 66,599 58,221 8,379 2,827,325 20 66,599 58,049 8,551 2,818,774 21 66,599 57,873 8,726 2,810,047 22 66,599 57,694 8,906 2,801,142 23 66,599 57,511 9,089 2,792,053 24 66,599 57,324 9,275 2,782,778 25 66,599 57,134 9,466 2,773,313 26 66,599 56,940 9,660 2,763,653 27 66,599 56,741 9,858 2,753,795 28 66,599 56,539 10,061 2,743,734
EXHIBIT J NEW BMO GUARANTY [SEE ATTACHED] SECOND AMENDED AND RESTATED GUARANTY THIS SECOND AMENDED AND RESTATED GUARANTY, dated as of _______________, 2004, is made by AMERCO, a Nevada corporation (the "Guarantor"), in favor of BANK OF MONTREAL and each of the other various financial institutions as are or may from time to time become Lenders under the Loan Agreement pursuant to the terms thereof and of the Participation Agreement (as hereinafter defined) (together with their respective successors and assigns, the "Lenders"). BMO GLOBAL CAPTIAL SOLUTIONS, INC. (f/k/a Bank of Montreal Global Capital Solutions, Inc. and f/k/a BMO Leasing (U.S.), Inc.), a Delaware corporation, and the other various lessors identified herein, as Lessors (as "Lessors"), BMO GLOBAL CAPTIAL SOLUTIONS, INC., as Agent Lessor for the Lessors (in such capacity, the "Agent Lessor"), and BANK OF MONTREAL, as the Administrative Agent under the Loan Agreement (in such capacity, the "Administrative Agent") and as the Arranger (the "Arranger") under the Participation Agreement (the Lenders, the Lessors, the Agent Lessor, the Administrative Agent, the Arranger and their respective successors and assigns, being referred to herein collectively as the "Guaranteed Parties"). W I T N E S S E T H: WHEREAS, the Guarantor executed and delivered that certain Guaranty dated as of December 6, 1996 (the "Original Guaranty") in favor of the Guaranteed Parties; WHEREAS, pursuant to the Amended and Restated Guaranty dated as of July 27,1999, a copy of which is attached hereto as Exhibit A (the "Amended Guaranty"), among the Guarantor and the Guaranteed Parties, the Original Guaranty was amended and restated in its entirety; and WHEREAS, Guarantor and the Guaranteed Parties desire to amend and restate the Amended Guaranty (the Amended Guaranty, as amended and restated as set forth herein and as further amended, supplemented, amended and restated or otherwise modified from time to time after the date hereof, this "Guaranty"). ARTICLE I DEFINITIONS; INCORPORATION BY REFERENCE; RATIFICATION 1.1 Definitions; Interpretation. Capitalized Terms used but not otherwise defined in this Guaranty have the respective meanings specified in Appendix A to the Participation Agreement; and the rules of interpretation set forth in Appendix A to the Participation Agreement shall apply to this Guaranty. 1.2 Incorporation by Reference; Ratification. The Amended Guaranty is hereby incorporated in this Master Lease by this reference as though fully stated herein; provided, however, that certain of the terms and conditions of the Amended Guaranty are hereby modified on the terms and conditions set forth herein. The parties hereby ratify and confirm the continued force and effect of this Guaranty, and agree that all terms and provisions of the Amended Guaranty shall remain in full force and effect as originally set forth, except as otherwise expressly modified or amended herein. ARTICLE II AMENDED AND RESTATED TERMS 2.1 Recitals. The five (5) paragraphs of that section of the Amended Guaranty entitled "Witnesseth," each of which begins with "WHEREAS" are hereby deleted in their entirety. IN WITNESS WHEREOF, the Guaranty has caused this Guaranty to be duly executed and delivered as of the date first above written. AMERCO By:________________________________ Name: _____________________________ Title:_____________________________ ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN: BANK OF MONTREAL, as Administrative Agent, on behalf of the Lenders By:________________________________ Name: _____________________________ Title:_____________________________ BMO GLOBAL CAPITAL SOLUTIONS, INC., as Agent Lessor, on behalf of the Lessors By:________________________________ Name: _____________________________ Title:_____________________________ EXHIBIT K NEW CITIBANK GUARANTY [SEE ATTACHED] AMENDED AND RESTATED PARENT GUARANTY THIS AMENDED AND RESTATED PARENT GUARANTY, dated as of _______________, 2004, by AMERCO REAL ESTATE COMPANY, a Nevada corporation (the "Guarantor"), to CITICORP USA, INC., as Agent for the benefit of the Note Holders and the Certificate Holders (the "Agent"). BMO GLOBAL CAPITAL SOLUTIONS, INC., (the "Lessor"), as Lessor under the Lease and CITIBANK, N.A., as APA Agent for the benefit of the APA Purchasers (the "APA Agent"). Preliminary Statement Guarantor entered into that certain Parent Guaranty dated as of September 24,1999, a copy of which is attached hereto as Exhibit A (the "Original Guaranty"), in favor of the Agent, the Lessor and the APA Agent. Guarantor desires to amend and restate the Original Guaranty in its entirety (the Original Guaranty, as amended and restated as set forth herein and as further amended, supplemented, amended and restated or otherwise modified from time to time after the date hereof, this "Guaranty"). ARTICLE I DEFINITIONS; INCORPORATION BY REFERENCE; RATIFICATION 1.1 Definitions. Capitalized Terms used but not otherwise defined in this Guaranty have the respective meanings specified in the Participation Agreement dated as of September 24, 1999, by and among AMERCO, the Lessee, the Lessor, the Persons named therein as Note Holders and as Certificate Holders, the Persons named therein as APA Purchasers, and Citicorp USA, Inc., as Agent (as the same may be amended, modified or supplemented from time to time). 1.2 Incorporation by Reference; Ratification. The Original Guaranty is hereby incorporated in this Guaranty by this reference as though fully stated herein; provided, however, that certain of the terms and conditions of the Original Guaranty are hereby modified on the terms and conditions set forth herein. The parties hereby ratify and confirm the continued force and effect of this Guaranty, and agree that all terms and provisions of the Original Guaranty shall remain in full force and effect as originally set forth, except as otherwise expressly modified or amended herein. ARTICLE II AMENDED AND RESTATED TERMS 2.1 Preliminary Statement. The entire three paragraphs (Paragraph A, B and C) of the section of the Original Guaranty entitled "Preliminary Statement" is hereby deleted in its entirety. IN WITNESS WHEREOF, the parties have caused this Master Lease to be duly executed and delivered as of the date first above written. GUARANTOR AMERCO By:________________________________ Name: _____________________________ Title:_____________________________ EXHIBIT L NEW AMERCO NOTES INDENTURE [TO BE FILED ON OR BEFORE THE EXHIBIT FILING DATE] EXHIBIT M NEW TEAM LOAN B NOTES INDENTURE [TO BE FILED ON OR BEFORE THE EXHIBIT FILING DATE] EXHIBIT N SAC HOLDING SENIOR NOTES INDENTURE [TO BE FILED ON OR BEFORE THE EXHIBIT FILING DATE] EXHIBIT O RESTATED ARTICLES OF INCORPORATION OF REORGANIZED AMERCO [SEE ATTACHED] PROPOSED AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION OF AMERCO Article 5 of the Restated Articles of Incorporation of AMERCO is amended in its entirety to read as follows: 5. The total number of shares of common stock which this corporation is authorized to issue is (i) One Hundred and Fifty Million (150,000,000) shares of common stock with a par value of Twenty-five Cents ($0.25) per share ("Common Stock"), and (ii) One Hundred and Fifty Million (150,000,000) shares of common stock ("Serial Common Stock"), with the Board of Directors having authority to issue shares of Serial Common Stock in one or more series (the number of shares of each series being determined by the Board of Directors), with or without par value, and with such voting powers, designations, preferences, limitations, restrictions, and relative rights as shall be stated or expressed in the resolution regarding such Serial Common Stock adopted by the Board of Directors pursuant to the authority expressly vested in it by this provision of the Articles of Incorporation, or any amendment thereto. For purposes of these Articles of Incorporation, the term "common stock" includes Common Stock and Serial Common Stock. The voting powers, designations, preferences, limitations, restrictions, and relative rights of the Series A Common Stock are described on Exhibit A attached hereto. The voting powers, designations, preferences, limitations, restrictions, and relative rights of the Series B Common Stock are described on Exhibit B attached hereto. In addition to the common stock authorized to be issued by the foregoing paragraph, this corporation is authorized to issue Fifty Million (50,000,000) shares of Preferred Stock with the Board of Directors having authority to issue such shares in one or more series (the number of shares of each series being determined by the Board of Directors), with or without par value, and with such voting powers, designations, preferences limitations, restrictions, and relative rights as shall be stated or expressed in the resolution regarding such preferred stock adopted by the Board of Directors pursuant to the authority expressly vested in it by this provision of the Articles of Incorporation, or any amendment thereto. The voting powers, designations, preferences, limitations, restrictions, and relative rights of the Series A Preferred Stock are described on Exhibit C attached hereto. The voting powers, designations, preferences, limitations, restrictions, and relative rights of the Series B Preferred Stock are described on Exhibit D attached hereto. Pursuant to 1123(a)(6) of Title 11 of the United States Code, 11 U.S.C. Sections 101, et seq., and notwithstanding any provision to the contrary in this Article 5, the Board shall not authorize the issuance of any non-voting shares of Common Stock, Serial Common Stock or Preferred Stock. EXHIBIT-A AMERCO SERIES A COMMON STOCK (a) Designation. A series of Serial Common Stock (as defined in the Articles of Incorporation) is hereby designated "Series A Common Stock." The number of shares constituting the Series A Common Stock is 10,000,000. Shares of the Series A Common Stock shall have a par value of $0.25. (b) Dividends and Distributions. Shares of the Series A Common Stock shall be entitled to receive such dividends and distributions as may be declared by the Board of Directors from time to time and shall be payable, when and as declared by the Board of Directors. (c) Conversion. The holders of shares of the Series A Common Stock shall not have any rights to convert such shares into or exchange such shares for shares of any other class or classes or of any other series of any class or classes of stock [ILLEGIBLE] the Corporation. (d) Voting. The shares of the Series A Common Stock shall be entitled to one vote per share. (e) Liquidation Rights. Upon the dissolution, liquidation, or winding up of the affairs of the Corporation, whether voluntary or involuntary, the Series A Common Stock shall be entitled to distribution of the assets of the Company on a pari passu basis with the Company's common stock, $0.25 par value. EXHIBIT B AMERCO SERIES B COMMON STOCK (a) Designation. A series of Serial Common Stock (as defined in the Articles of Incorporation) is hereby designated "Series B Common Stock." The number of shares constituting the Series B Common Stock is 10,000,000. Shares of the Series B Common Stock shall have a par value of $0.25. (b) Dividends and Distributions. Shares of the Series B Common Stock shall be entitled to receive such dividends and distributions as may be declared by the Board of Directors from time to time on a pari passu basis with the Corporation's Common Stock and Series A Common Stock and shall be payable, when and as declared by the Board of Directors. (c) Conversion. The holders of shares of the Series B Common Stock shall not have any rights to convert such shares into or exchange such shares for shares of any other class or classes or of any other series of any class or classes of stock of the Corporation. (d) Voting. The shares of the Series B Common Stock shall be entitled to one-tenth (1/10) of one vote per share. (e) Liquidation Rights. Upon the dissolution, liquidation, or winding up of the affairs of the Corporation, whether voluntary or involuntary, the Series B Common Stock shall be entitled to distribution of the assets of the Corporation on a pari passu basis with the Corporation's Common Stock and Series A Common Stock. EXHIBIT C AMERCO SERIES A PREFERRED STOCK; (a) Designation. A series of preferred stock is hereby designated, "Series A 8 1/2% Preferred Stock." The number of shares constituting the Series A Preferred Stock is 6,100,000. Shares of the Series A Preferred Stock shall have a liquidation preference of $25.00 per share and shall have no par value. (b) Dividend Rate. (i) Shares of the Series A Preferred Stock shall be entitled to receive dividends at a fixed annual rate of $2.125 per share: Such dividends shall be cumulative from the date of original issue of such shares and shall be payable, when and as declared by the Board of Directors, quarterly for each of the quarters ending February, May, August, and November of each year, payable in arrears on the first business day that is not a legal holiday of each succeeding March, June, September, and December, commencing December 1, 1993. Each such dividend shall be paid to the holders of record of Shares of the Series A Preferred Stock as they appear on the stock records of the Corporation on the applicable record date, not exceeding 15 days preceding the payment date thereof, as shall be fixed by the Board of Directors. Dividends on account of arrears for any past dividend periods may be declared and paid at any time, without reference to any regular dividend payment date, to holders of record on such date as may be fixed by the Board of Directors, which shall not exceed 15 days preceding such dividend payment date thereof. (ii) No dividends shall be declared or paid or set apart for payment on any shares of any class or classes of stock of the Corporation of any series thereof ranking, as to dividends, on a parity with or junior to the Series A Preferred Stock for any period unless full cumulative dividends have been or contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof set apart for such payment, on the Series A Preferred Stock for all dividend payment periods terminating on or prior to the date of payment of such dividend. When dividends are not paid in full, as aforesaid, upon the shares of the Series A Preferred Stock and any other shares of any class or classes of stock or series thereof ranking on a parity as to dividends with the Series A Preferred Stock, all dividends declared upon shares of the Series A Preferred Stock and any other shares of such class or classes of series thereof ranking on a parity as to dividends with the Series A Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of the Series A Preferred Stock and such other shares shall in all cases bear to each other the same ratio that accrued dividends per share or the shares of the Series A Preferred Stock and such other shares bear to each other. Holders of shares of the Series A Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends, as herein provided, on the Series A Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series A Preferred Stock that may be in arrears. (iii) So long as any shares of the Series A Preferred Stock are outstanding, no dividend (other than a dividend in common stock or in any other shares ranking junior to the Series A Preferred Stock as to dividends and upon Liquidation (as defined in subsection (f) (i) and other than as provided in paragraph (ii) of this subsection (b)) shall be C-2 declared or paid or set aside for payment or other distribution declared or made upon the shares of any class or classes of stock of the Corporation or any series thereof ranking junior to or on a parity with the Series A Preferred Stock as to dividends or upon Liquidation nor shall any of the shares of any class or classes of stock of the Corporation or any series thereof ranking junior to or on a parity with the Series A Preferred Stock as to dividends or upon Liquidation be redeemed, purchased, or otherwise acquired or any consideration paid (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Corporation, or any subsidiary thereof (except by conversion into or exchange for shares of the Corporation ranking junior to the Series A Preferred Stock as to dividends and upon liquidation), unless, in each case, the full cumulative dividends on all outstanding shares of the Series A Preferred Stock shall have been or contemporaneously are declared and paid, or declared and a sum sufficient for payment thereof is set apart for payment, for all past dividend payment periods. (iv) Dividends payable on the Series A Preferred Stock for any period less than a full quarterly dividend period, and for the dividend period beginning on the date of issuance of the shares of the Series A Preferred Stock, shall be computed on the basis of a 360-day year consisting of 12 30-day months. The amount of dividends payable on shares of the Series A Preferred Stock for each full quarterly dividend period shall be computed by dividing by 4 the annual rate per share set forth above in subsection (b) (i). (c) Redemption. (i) The shares of the Series A Preferred Stock shall not be redeemable prior to December 1, 2000. On and after December 1, 2000, the Corporation, at its option, may redeem shares of the Series A Preferred Stock, as a whole or in part, for cash, at any time or from time to time, at a redemption price of $25.00 per share plus, in each case, accrued and unpaid dividends thereon to the date fixed for redemption. (ii) In the event that fewer than all the outstanding shares of the Series A Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be determined by lot or pro rata as may be determined by the Board of Directors or by any other method as may be determined by the Board of Directors in its sole discretion to be equitable. C-3 (iii) In the event the Corporation shall redeem shares of the Series A Preferred Stock, notice of such 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 record of the shares to be redeemed, at such holder's address as the same appears on the stock records of the Corporation, or by publishing notice thereof in The Wall Street Journal or The New York Times, or, if, neither such newspaper is then being published, any other daily newspaper of national circulation (each, an "Authorized Newspaper"). If the Corporation elects to provide such notice by publication, it shall also promptly mail notice of such redemption to each holder of the shares of the Series A Preferred Stock to be redeemed. Each such mailed or published notice shall state: (v) the redemption date; (w) the number of shares of the Series A Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (x) the redemption price; (y) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (z) that dividends on the shares to be redeemed will cease to accrue on such redemption date. No defect in the notice of redemption or in the mailing thereof shall affect the validity of the redemption proceedings, and the failure to give notice to any holder of shares of the Series A Preferred Stock to be so redeemed shall not effect the validity of the notice given to the other holders of shares of the Series A Preferred Stock, to be so redeemed. (iv) Notice having been mailed as aforesaid, then, notwithstanding that the certificates evidencing the shares of the Series A Preferred Stock shall not have been surrendered, from and after the redemption date (unless default shall be made by the Corporation in providing money for the payment of the redemption price) dividends on the shares of the Series A Preferred Stock so called for redemption shall cease to accrue, and said shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as stockholders (including dividend and voting rights) of the Corporation (except the right to receive from the Corporation the redemption price) shall cease. Upon surrender in accordance with said notice of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors shall so require and the notice shall so state), such shares shall be redeemed by the Corporation at the redemption price aforesaid. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be C-4 issued representing the unredeemed shares without cost to the holder thereof. (v) Any shares of the Series A Preferred Stock that shall at any time have been redeemed shall, after such redemption, in the discretion of the Board of Directors of the Corporation, be (x) held in treasury or (y) resume the status of authorized but unissued shares of preferred stock, without designation as to series, until such shares are once more designated as part of a particular series by the Board of Directors. (vi) Notwithstanding the foregoing provisions of this subsection (c), if any dividends on the Series A Preferred Stock are in arrears, no shares of the Series A Preferred Stock shall be redeemed unless all outstanding shares of the Series A Preferred Stock are simultaneously redeemed, and the Corporation shall not, and shall not permit any subsidiary thereof to, purchase or otherwise acquire any shares of the Series A Preferred Stock; provided, however, that the foregoing shall not prevent the purchase or acquisition of shares of the Series A Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of the Series A Preferred Stock. (d) Conversion. The holders of shares of the Series A Preferred Stock shall not have any rights herein to convert such shares into or exchange such shares for shares of any other class or classes or of any other series of any class or classes of stock of the Corporation. (e) Voting. The shares of the Series A Preferred Stock shall not have any voting powers either general or special, except as required by law and except that: (i) So long as any of the shares of the Series A Preferred Stock are outstanding, the consent of the holders of at least two-thirds of all the shares of the Series A Preferred Stock at the time outstanding, given in person or by proxy, either in writing or by a vote at a meeting called for the purpose at which the holders of shares of the Series A Preferred Stock shall vote together as a separate class, shall be necessary for authorizing, affecting or validating the amendment, alteration, or repeal of any of the provisions of the Articles of Incorporation of the Corporation or of any certificate amendatory thereof or supplemental thereto (including any certificate of amendment or any similar document relating to any series of preferred stock) that would adversely affect the powers, preferences, or special rights of the Series A Preferred Stock, including the creation or authorization of any class of stock that ranks senior to the Series A Preferred Stock with respect to dividends or upon Liquidation. Any C-5 amendment or any resolution or action of the Board of Directors that would create or issue any series of preferred stock out of the authorized shares of preferred stock, or that would authorize, create, or issue any shares or class of stock (whether or not already authorized), ranking junior to or on a parity with the Series A Preferred Stock with respect to the payment of dividends and distributions and distributions upon any Liquidation, shall not be considered to affect adversely the powers, preferences, or special rights of the outstanding shares of the Series A Preferred Stock; (ii) In the event that the Corporation shall have failed to declare and pay or set apart for payment in full the dividends accumulated on the outstanding shares of the Series A Preferred Stock for any six quarterly dividend payment periods, whether or not consecutive, and all such preferred dividends remain unpaid (a "Preferred Dividend Default"), the holders of outstanding shares of the Series A Preferred Stock, voting together as a class with the holders of all other series of preferred stock then entitled to vote on the election of such directors, shall be entitled to elect two directors to the Board of Directors of the Corporation until the full dividends accumulated on all outstanding shares of the Series A Preferred Stock have been declared and paid in full. Upon the occurrence of a Preferred Dividend Default, the Board of Directors shall within 10 business days (any day other than a day that is a Saturday, Sunday, or legal holiday on which banks are authorized to close in New York, New York) of such default call a special meeting of the holders of shares of the Series A Preferred Stock and all other holders of a series of preferred stock who are then entitled to participate in the election of such two directors for the purpose of electing the two directors provided by the foregoing provisions; provided that, in lieu of holding such meeting, the holders of record of a majority of the outstanding shares of the Series A Preferred Stock and all other series of preferred stock who are then entitled to participate in the election of such two directors may, by action taken by written consents permitted by law and the Articles of Incorporation and the Bylaws of the Corporation, elect such two directors. If and when all accumulated dividends on the shares of the Series A Preferred Stock have been declared and paid or set aside for payment in full, the holders of shares of the Series A Preferred Stock shall be divested of the special voting rights provided by this paragraph, subject to revesting in the event of each and every subsequent Preferred Dividend Default. Upon termination of such special voting rights attributable to all holders of shares of the Series A Preferred Stock and any other series of C-6 preferred stock, each director elected by the holders of shares of the Series A Preferred Stock and the holders of any other series of preferred stock (hereinafter referred to as a "Preferred Stock Director") pursuant to such special voting rights shall, without further action, be deemed to have resigned, subject always to the election of directors pursuant to the foregoing provisions in case of a future Preferred Dividend Default. Any Preferred Stock Director may be removed at any time with or without cause by, and shall not be removed otherwise than by, the vote of the holders of record of two-thirds of the outstanding shares of the Series A Preferred Stock and all other series of preferred stock who were entitled to participate in such Preferred Stock Director's election, voting as a separate class, at a meeting called for such purpose or by written consent as, and to the extent, permitted by law and the Articles of Incorporation and the Bylaws of the Corporation. So long as a Preferred Dividend Default shall continue, any vacancy in the office of a Preferred Stock Director shall be filled by written consent of the Preferred Stock Director remaining in office or, if none remains in office, by vote of the holders of record of a majority of the outstanding shares of the Series A Preferred Stock and all other series of preferred stock who are then entitled to participate in the election, of such Preferred Stock Directors as provided above. As long as a Preferred Dividend Default shall continue, holders of shares of the Series A Preferred Stock shall not, as such stockholders, be entitled to vote on the election or removal of directors other than Preferred Stock Directors, but shall not be divested of any other voting rights provided to such stockholders by law with respect to any other matter to be acted upon by the stockholders of the Corporation. The Preferred Stock Directors shall each be entitled to one vote per director on any matter. (f) Liquidation Rights. (i) Upon the dissolution, liquidation, or winding up of the affairs of the Corporation, whether voluntary or involuntary (collectively, a "Liquidation" ), after payment or provision for payment has been made of the debts and other liabilities of the Corporation and payment or provision for payment has been made on all amounts required to be paid in respect of all outstanding shares of any class or classes of stock of the Corporation or series thereof ranking senior to the shares of the Series A Preferred Stock, the holders or the shares of the Series A Preferred Stock shall be entitled, subject to paragraph (iv) of this subsection (f), to receive out of the assets of the Corporation, before any payment or distribution C-7 shall be made on common stock or on any other class of stock ranking junior to preferred stock upon Liquidation, the amount of $25.00 per share, plus a sum equal to all dividends (whether or not earned or declared) on such shares accrued and unpaid thereon to the date of final distribution. (ii) Neither the sale, transfer, or lease of all or any part of the property or business of the Corporation, nor the merger or consolidation of the Corporation, into or with any other corporation or the merger or consolidation of any other corporation into or with the Corporation, shall be deemed to be a Liquidation for the purposes of this subsection (f). (iii) After the payment to the holders of the shares of the Series A preferred Stock of the full preferential amounts provided for in this subsection (f), the holders of the Series A Preferred Stock as such shall have no right or claim to any of the remaining assets of the Corporation and the shares of the Series A Preferred Stock shall no longer be deemed to be outstanding or be entitled to any other powers, preferences, rights, or privileges, including voting rights, and such shares shall be surrendered for cancellation to the Corporation. (iv) In the event the assets of the Corporation available for distribution to the holders of shares of the Series A Preferred Stock upon any Liquidation shall be insufficient to pay in full all amounts to which such holders are entitled pursuant to paragraph (i) of this subsection (f), no such distribution shall be made on account of any shares of any series of preferred stock ranking on a parity with the shares of the Series A Preferred Stock upon such Liquidation unless proportionate distributive amounts shall be paid on account of the shares of the Series A Preferred Stock, ratably, in proportion, to the full distributable amounts to which holders of all such parity shares are respectively entitled upon such Liquidation. (g) Priority. Any shares of any class or classes of the Corporation or series thereof shall be deemed to ranks: (i) Prior to the shares of the Series A Preferred Stock, either as to dividends or upon Liquidation, if the holders of such class or classes shall be entitled to the receipt of dividends or of amounts distributable upon Liquidation of the Corporation, in preference or priority to the holders of shares of the Series A Preferred Stock: (ii) On a parity with shares of the Series A Preferred Stock, either as to dividends or upon C-8 Liquidation, whether or not the dividend rates, dividend payment dates, or redemption or Liquidation prices per share or sinking fund provisions, if any, be different from those of the Series A Preferred Stock, if the holders of such shares shall be entitled to the receipt of dividends or of amounts distributable upon Liquidation of the Corporation, in proportion to their respective dividend rates or Liquidation prices, without preference or priority, one over the other, as between the holders of such shares and the holders of shares of the Series A Preferred Stock; and (iii) Junior to shares of the Series A Preferred Stock, either as to dividends or upon Liquidation, if such class is common stock or if the holders of shares of the Series A Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon Liquidation of the Corporation, in preference or priority to the holders of shares of such class or classes. (h) Sinking or Retirement Fund. The shares of the Series A Preferred Stock shall not be entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of such shares. (i) Miscellaneous. (i) Subject to paragraph (iii) of subsection (c) above, all notices referred to herein shall be in writing, and all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three business days after the mailing thereof if sent by first-class mail with postage prepaid, addressed, if to the Corporation, to its offices at 1325 Airmotive Way, Suite 100, Rono, Nevada 89502-3239 (Attention: Secretary), if to a holder, to the address thereof shown on the security register maintained by the registrar for the Series A Preferred Stock, or to such other address as the Corporation or holder, as the case may be, shall have designated by notice similarly given. (ii) In the event a holder of shares of the Series A Preferred Stock shall not by written notice designate the name to whom payment upon redemption of any shares of the Series A Preferred Stock should be made or the address to which the certificate or certificates representing such shares, or such payment, should be sent, the Corporation shall be entitled to register such shares, and make such payment, in the name of the holder of such shares as shown on the records of the Corporation and to send the certificate or certificates representing such shares, or such payment, to the address of such holder shown on the records of the Corporation. C-9 EXHIBIT D AMERCO SERIES B PREFERRED STOCK The Series Designated as Series B Preferred Stock (the "Series B Preferred"), will consist of 100,000 shares and will have the designations, preferences, voting powers, relative, participating, optional or other special rights and privileges, and the qualifications, limitations and restrictions described below. Shares of the Series B Preferred shall have liquidation rights as provided in Section 2 and shall have no par value. Certain capitalized terms used below have the meanings given in Section 11. 1. Dividends and Distributions. a. Regular Dividends. Subject to the prior rights of the holders of Senior Shares, if any, the Holder, in preference to the holders of Junior Shares, shall be entitled, in conjunction with any provision then being made for the holders of Parity Shares, to receive, when, as and if declared by the Board of Directors, out of any funds of the Corporation lawfully available for the payment of dividends, payable on the last day of each Payment Period, cumulative cash dividends at, but not exceeding, (i) the product of the Conversion Value times the Floating Rate, plus (ii) any Additional Amounts, payable on the last day of each Payment Period following the date of this Certificate. If the stated dividends are not paid in full, the Series B Preferred and all Parity Shares shall share [ILLEGIBLE] in the payment of dividends, including accumulations thereof, if any, on such shares in accordance with the sums that would be payable on such shares if all dividends were paid in full. b. Notice. The Holder will notify the Corporation of any event occurring after the date of this Certificate which will entitle the Holder to receive any Additional Amounts as promptly as practicable after it obtains knowledge thereof but in any event within thirty (30) days after it obtains knowledge thereof and determines to request such compensation. Determinations and allocations by the Holder for purposes hereof of the effect of any Regulatory Change on its costs of purchasing or holding the Series B Preferred or on amounts receivable by it in respect of the Series B Preferred and of the additional amounts required to compensate the Holder in respect of any Additional Amounts, shall be prima facie valid provided that such determinations and allocations are made on a reasonable basis. c. Priority. Any and all dividends payable on the Series B Preferred shall be paid in preference and in priority to the payment of dividends or distributions on any Junior Shares. So long as any Series B Preferred shares are outstanding, no dividends whatever shall be paid or declared, nor shall any distribution be made, on any Junior Shares, other than a dividend or distribution payable in Junior Shares, nor shall the Corporation or any subsidiary of the Corporation purchase, redeem or otherwise acquire for a consideration any Junior Shares, unless full cumulative dividends have been or contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof set apart for such payment, on the Series B Preferred for all Payment Periods terminating on or prior to the date of payment of such purchase, redemption or acquisition. 2. Liquidation Rights. a. Generally. In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any amount shall be paid to the holders of any Junior Shares, the Holder of the Series B Preferred shall be paid first out of the assets of the Corporation available for distribution to holders of its capital stock an amount per share equal to, but not exceeding, (i) the Conversion Value, as appropriately adjusted to reflect any stock split, stock dividend, combination, recapitalization and the like of the Series B Preferred, plus (ii) all accrued but unpaid dividends (including any interest accrued thereon calculated through the date of liquidation (the "Liquidation Date")). If, upon the occurrence of a liquidation, dissolution or winding up, the assets and funds thus distributed to the Holder shall be insufficient to permit the payment to the Holder of its full liquidation preferences, then the entire assets and funds of the Corporation legally available for distribution to the holders of capital stock (other than Senior Shares) shall be distributed ratably to the Holder and the holders of any Parity Shares. b. Events Deemed a Liquidation. For purposes of this Section 2, the Holder may elect to have treated at a liquidation, dissolution or winding up of the Corporation the consolidation or merger of the Corporation with or into any other corporation or the sale or other transfer in a single transaction or a series of related transactions of all or substantially all of the assets of the Corporation, or any other reorganization of the Corporation, unless the stockholders of the Corporation immediately prior to any such transaction are holders of a majority of the voting securities of the surviving or acquiring corporation immediately thereafter (and for purposes of this calculation equity securities which any stockholder or the Corporation owned immediately prior to such merger or consolidation as a stockholder of another party to the transaction shall be disregarded). c. Priority. Any amounts payable on the Series B Preferred in the event of any liquidation, dissolution or winding up of the Corporation shall be paid in preference and in priority to the payment of any amounts payable on Junior Shares. 3. Conversion. The Holder has conversion rights as follows (the "Conversion Rights"): a. Right to Convert. Upon each of the following to occur from time to time: (i) August 31, 1997, and for 10 Business Days thereafter; (ii) the first day of each fiscal quarter of the Corporation occurring after August 31, 1997, and for 10 Business Days after the first day of each such fiscal quarter; (iii) the expiration of ten days after the occurrence of an Event of Noncompliance under the Stock Purchase Agreement that is not then cured, and at any time thereafter; (iv) any dividends on the Series B Preferred becoming in arrears, and at any time thereafter; (v) the Corporation no longer holding more than 50% of the outstanding stock and assets of any of [ILLEGIBLE] Holdings, Inc., Oxford Life Insurance Company or Republic Western Insurance Company, and at any time thereafter: or (vi) the Corporation or any of its subsidiaries D-2 completing any Excess Equity Offering, and at any time thereafter, then each share of Series B Preferred shall be convertible; at the option of the Holder, into either: i. the number of fully paid and nonassessable shares of Series B Common Stock that results from dividing the Conversion Price per share in effect at the time of conversion into the per share Conversion Value but no more than the maximum amount authorized and available for issuance; or ii. all of the shares of capital stock of Picacho then outstanding. Upon conversion, all accrued but unpaid dividends (including interest accrued thereon calculated as of the Conversion Date) on the Series B Preferred shall be paid in cash, to the extent permitted by applicable law. b. Conversion Price and Conversion Value. The initial Conversion Price of the Series B Preferred shall be $25.00 per share, and the initial Conversion Value of the Series B Preferred shall be $1,000.00 per share. The initial Conversion Price of the Series B Preferred shall be subject to adjustment from time to time as provided in Section 3(d). c. Mechanics of Conversion. To convert any shares of Series B Preferred, the Holder shall surrender the certificate or certificates therefor, duly endorsed, at the principal office of the Corporation, or notify the Corporation in writing that such certificates have been lost, stolen or destroyed and agree to indemnify the Corporation from any loss incurred by it in connection with such certificates, and shall give written notice (the "Conversion Notice") to the Corporation at such office that the Holder elects to convert the same, specifying whether the Series B Preferred shares are to be converted into Series B Common Stock or shares of Picacho. As soon as practicable (but not more than one Business Day) after such delivery, or after such notification, the Corporation shall issue and deliver at such office to the Holder, unless the Corporation shall elect instead to redeem the Series B Preferred as provided in Section 5: i. A certificate or certificates for the number of shares of Series B Common Stock to which the Holder shall be entitled if the Holder has elected to convert the Series B Preferred into Series B Common Stock; or ii. A certificate or certificates for all of the outstanding shares of Picacho, if the Holder has elected to convert the Series B Preferred into Picacho, stock; and, in either case, a check payable to the Holder in the amount of any accrued or declared but unpaid dividends payable pursuant to Section 1, if any. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series B Preferred to be converted or of the notification of lost certificates and the persons entitled to shares of Series B Common Stock or Picacho stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares on such date (the "Conversion Date"). In the event of a notice of redemption of any shares of Series B Preferred pursuant to Section 5, the Conversion Rights shall terminate at the close of business on the D-3 Redemption Date, unless default is made in payment of the redemption price, in which case the Conversion Rights for such shares shall continue until such payment. d. Adjustments to Conversion Price. i. Adjustments of Conversion Price. The Conversion Price of the Series B Preferred shall be adjusted if the Corporation issues or is deemed to issue Additional Shares of Common Stock for a consideration per share that is less than the Conversion Price for the Series B Preferred in effect on the date of, and immediately prior to, such issue or deemed issue. ii. Deemed Issue of Additional Shares of Common Stock. If the Corporation at any time or from time to time after the date of this Certificate issues any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the exercise of such Options and conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to Section 3(d)(iv)) of such Additional Shares of Common Stock would be less than the Conversion Price in effect on date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which Additional Shares of Common Stock are deemed to be issued: (1) except as provided in Section 5(d)(ii)(2), no further adjustment in the Conversion Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities; (2) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the corporation, or change in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof (other than under or by reason of provisions designed to protect against [ILLEGIBLE], the Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; and (3) no readjustment pursuant to clause (2) above shall have the effect of increasing the Conversion Price. D-4 iii. Adjustment of Conversion Price Upon Issuance of Additional Shares of Common Stock. Except as provided by Section 3(d)(ii)(2). In the event the Corporation shall issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 3(d)(ii) without consideration or for a consideration per share less than the Conversion Price of the Series B Preferred in effect on the date of and immediately prior to such issue, then and in each such event the Conversion Price of the Series B Preferred shall be reduced to the price (calculated to the nearest cent) [ILLEGIBLE] which the Additional Shares of Common Stock are issued. iv. Determination of Consideration. For purposes of this Section 3(d), the consideration received by the Corporation for the issue of any Additional Shares of Common Stock shall be determined after payment of all commissions paid or discounts given in connection with the issuance or deemed issuance of the shares and shall be computed as follows: (1) Cash and Property: Such consideration shall: (a) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation; (b) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined by the Board of Directors in the good faith exercise of its reasonable business judgment: and (c) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration that covers both, be the proportion of such consideration so received for the Additional Shares of Common Stock, computed as provided in clauses (a) and (b) above, as determined by the Board of Directors in the good faith exercise of its reasonable business judgment. (2) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Section 3(d)(ii), relating to Options and Convertible Securities, shall be determined by dividing; (a) the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by (b) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained, therein for a D-5 subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities. v. Other Adjustments. (a) Subdivisions, Combinations, or Consolidations of Series B Common Stock. In the event the outstanding shares of Series B Common Stock shall be subdivided, combined or consolidated, by stock split, stock dividend, combination or like event, into a greater or lesser number of shares of Series B Common Stock, the Conversion Price of the Series B Preferred in effect immediately prior to such subdivision, combination, consolidation or stock dividend shall, concurrently with the effectiveness of such subdivision, combination or consolidation, be proportionately adjusted to achieve the result that, upon conversion of the Series B Preferred into Series B Common Stock, the Holder shall receive, as nearly as possible, the same percentage of the outstanding shares of Series B Common Stock that it would have had the Series B Preferred been converted immediately prior to such subdivision, combination or consolidation. (b) Reclassifications. In the case, at any time after the date of this Certificate, of any capital reorganization or any reclassification of the stock of the corporation (other than as a result of a subdivision, combination or consolidation of shares), or the consolidation or merger of the Corporation with or into another person (other than a consolidation or merger (A) in which the Corporation is the continuing entity and that does not result in any change in the Common Stock or (B) that is treated as a liquidation pursuant to Section 2(b)), the Conversion Price shall be adjusted so that the shares of the Series B Preferred shall, after such reorganization, reclassification, consolidation or merger, be convertible into the kind and number of shares of stock or other securities or property of the Corporation or otherwise to which the Holder would have been entitled if immediately prior to such reorganization, reclassification, consolidation or merger if the Holder had converted the shares of the Series B Preferred into Series B Common Stock. The provision of this clause 3(d)(v)(b) shall similarly apply to successive reorganizations, reclassifications, consolidations or mergers. e. No Adjustments to Conversion Value. The Corporation shall not effect any stock split, stock dividend, combination or recapitalization of the Series B Preferred and, therefore, the Conversion Value of the Series B Preferred will not be adjusted. f. Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price of the Series B Preferred pursuant to this Section 3, the Corporation at its expense shall promptly compare such adjustment or readjustment in accordance with the terms of this Certificate and furnish to the Holder a Certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of the Holder, furnish or cause to be furnished to the Holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price of the Series B Preferred at the time in effect, and (iii) the number of shares of Series B Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the Series B Preferred. D-6 g. Status of Converted Stock. In case any shares of Series B Preferred shall be converted pursuant to Section 3, the shares so converted shall be canceled, shall not be reissuable and shall cease to be a part of the outstanding capital stock of the Corporation. h. Fractional Shares. In Lieu of any fractional shares of Series B Common Stock to which the Holder would otherwise be entitled upon conversion, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of one share of Series B Common Stock as determined by the Board of Directors in the good faith exercise of its reasonable business judgment. i. Miscellaneous. i. All calculation under this Section S shall be made to the nearest cent or to the nearest one hundredth (1/100) of a share, as the case may be. ii. The Holder shall have the right to challenge any determination by the Board of Directors of fair market value pursuant to this Section 3, in which case such determination of fair market value shall be made by an independent appraiser selected jointly by the Board of Directors and the Holder, the cost of such appraisal to be borne equally by the Corporation and the Holder. iii. No adjustment in the Conversion Price of the Series B Preferred need be made if such adjustment would result in change in such Conversion Price of less shares $0.01. Any adjustment of less than $0.01 that is not made shall be carried forward and shall be made at the time of and together with any subsequent adjustment that, on a cumulative basis, amounts to an adjustment of $0.01 or more in such Conversion Price. j. Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Series B Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred, such number of its shares of Series B Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred. If at any time the number of authorized but unissued shares of Series B Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Series B Common Stock to such number of shares as shall be sufficient for such purpose. 4. Voting Rights. a. Except as otherwise required by law and Subsection 4(b), the Holder shall have no voting rights with respect to the Series B Preferred. b. So long as any of the shares of Series B Preferred are outstanding, the written consent of the Holder shall be necessary for authorizing, affecting or validating the amendment, D-7 alteration, or repeal of any of the provisions of the Articles of Incorporation of the Corporation or of any certificate amendatory thereof or supplemental thereto (including any certificate of amendment or any similar document relating to any series of preferred stock) that would adversely affect the powers, preferences, or special rights of the Series B Preferred, including the creation or authorization of any class of Senior Shares or Party Shares. Any amendment or any resolution or action of the Board of Directors that would create or issue any series of Junior Shares out of the authorized shares of preferred stock, or that would authorize, create, or issue any other Junior Shares (whether or not already authorized), shall not be considered to affect adversely the powers, preferences, or special rights of the outstanding shares of the Series B Preferred. 5. Redemption. a. Optional Redemption. If the Holder exercises its Conversion Rights pursuant to Section 3, then instead of effecting the conversion, the Corporation may, by giving written notice to the Holder (a "Notice of Redemption") not later than one Business Day after receiving the Conversion Notice, elect to redeem all (but not less than all) of the Series B Preferred outstanding on the Redemption Date. b. Redemption Value. Upon any redemption of the Series B Preferred, the Corporation shall pay out of funds legally available therefor in cash a sum per share equal to the Conversion Value, together with (i) all accrued but unpaid dividends (including any interest accrued thereon) calculated as of the Redemption Date, (ii) if the Redemption Date is a date other than the last day of a Payment Period, the Interim Payment and (iii) all other costs, fees, expenses, or amounts the Corporation is required to pay Holder pursuant to the Stock Purchase Agreement, regardless of the reason for such redemption or such costs, fees, expenses, or amounts (collectively the "Redemption Value"). c. Notice of Redemption. Any Notice of Redemption given by the Corporation shall be delivered to the Holder, notifying the Holder of the redemption to be effected. The Notice of Redemption shall: i. State that the Series B Preferred is to be redeemed: ii. Specify the date (the "Redemption Date") on which the Series B Preferred is to be redeemed, which shall be not more than ten Business Days following the date the Corporation receives the Conversion Notice from the Holder. iii. Request wire transfer or other instructions for the payment of the Redemption Value. d. Transfer Instructions. Not less than one Business Day after delivery of the Notice of Redemption, the Holder shall provide the Corporation with instructions for [ILLEGIBLE] or other transfer of the Redemption Value to the Holder. D-8 e. Completing the Redemption. On the Redemption Date: i. The Holder shall surrender to the Corporation at the principal offices of the Corporation the Holder's certificate or certificates representing the shares to be redeemed or provide a notice to the Corporation in writing that such certificates have been lost, stolen or destroyed and that the Holder agrees to indemnify the Corporation from any loss incurred by it in connection with such certificates; and ii. The Corporation shall pay the Redemption Value to the Holder by wire or other transfer acceptable to the Holder, and thereupon each surrendered or lost certificate shall be canceled. f. Lack of Legally Available Funds. If the funds of the Corporation legally available for redemption of the Series B Preferred are insufficient to redeem the total number of shares of Series B Preferred required to be redeemed on the Redemption Date, then, at the Holder's election in its sole discretion, the Corporation either shall redeem that number of shares of Series B Preferred for which the Corporation has funds legally available or shall not redeem any of the Series B Preferred. g. Effect of Redemption. From and after the payment of the Redemption Value, all rights of the Holder shall cease with respect to such shares, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. 6. Notices of Record Date. In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall notify the Holder, at least 10 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 7. Notices. All notices and other communications provided for in this Certificate shall be given or made in writing and telecopied, mailed by certified mail return receipt requested or delivered to the intended recipient at such address as shall be designated by such person in a notice to each other relevant person given in accordance with this Section, in addition to any other notices that may be required by law. All such communications shall be deemed to have been duly given when transmitted by telecopy, subject to telephone confirmation of receipt, or when personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as provided herein. 8. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE CORPORATION HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR D-9 COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THE SERIES B PREFERRED SHARES, THE STOCK PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE HOLDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF. 9. Interest. Any amounts required to be paid under this Certificate that are not paid on the first day such payment may be made and any dividends in arrears shall bear interest from that date at the lesser of (a) the Maximum Rate or (b) the sum of four percent plus the rate per annum publicly announced from time to time by NationsBank. N.A. as its prime rate in effect at its principal office in Charlotte, North Carolina. 10. Maximum Rate. Notwithstanding anything to the contrary contained herein, in the event the Series B Preferred shall be deemed to be debt instead of equity, no provisions of this Certificate shall require the payment or permit the collection of interest in excess of the Maximum Rate. If any excess of interest in such respect shall be adjudicated to be so provided in this Certificate or otherwise in connection with the Series B Preferred, the provisions of this paragraph shall govern and prevail, and neither the Corporation nor the successors or assigns of the Corporation shall be obligated to pay the excess amount of such interest, or any other excess sum paid with respect to the Series B Preferred. If, for any reason, interest in excess of the Maximum Rate shall be deemed charged, required or permitted by any court of competent jurisdiction, any such excess shall be applied as a payment and reduction of the principal of indebtedness deemed to be evidenced by the Series B Preferred; and, if such principal has been paid in full, any remaining excess shall forthwith be paid to the Corporation. In determining whether or not the interest paid or payable exceed the Maximum Rate, the Corporation and the Holder shall, to the extent permitted by applicable law, (i) characterize any nonprincipal payment as an expense, fee, or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the entire term of the indebtedness deemed to be evidenced by the Series B Preferred so that the interest for the entire period does not exceed the Maximum Rate. 11. Definitions. a. Capitalized terms used in this Certificate and not otherwise defined have the meanings given to those terms in the Series B Stock Purchase Agreement between the Corporation and Blue Ridge Investments. LLC, dated August 30, 1996. b. "Additional Amounts" means such amounts. If any, as are necessary to compensate the Holder of any costs incurred by Holder which the Holder determines are attributable, directly or indirectly, to its purchase or holding of the Series B Preferred or any reduction in any amount receivable by the Holder as a holder of the Series B Preferred to the extent such costs and reductions in amount are not reflected in any dividends, fees, reimbursements or other amounts received by the Holder hereunder or under the Stock Purchase Agreement, resulting from (i) an increase (over the dividend rate paid hereunder) in the cost of funding the purchase of the Series B Preferred, or (ii) any Regulatory Change which: D-10 (A) changes the basis of taxation of any amounts payable generally to NationsBank under Eurodollar loans (other than taxes imposed on the overall net income of NationsBank of its applicable lending office for any of such loans by the jurisdiction in which NationsBank has its principal office or such applicable lending office); (B) Imposes or modifies reserve, special deposit, minimum capital, capital ratio, or similar requirement relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, NationsBank (including any of such loans or any deposits referred to in the definition of ("Floating Rate" herein); or (C) imposes any other condition generally affecting loans by NationsBank or any of such extensions of credit or liabilities or commitments. c. "Additional Shares of Common Stock" means all shares of Common Stock issued (or, pursuant to Section 3(d)(ii), deemed to be issued) by the Corporation after the date of this Certificate, other than shares of Common Stock issued or issuable: i. upon conversion of shares of Series B Preferred; ii. as a dividend or distribution on Series B Preferred; iii. in a transaction described in Section 3(d)(v); iv. by way of dividend or other distribution on shares of Common Stock excluded from the definition of Additional Shares of Common Stock. d. "Affiliate" has the meaning given that term in Rule 405 promulgated by the Securities and Exchange Commission under the Securities Act. e. "Business Day" means (a) any day which commercial banks are not authorized or required to close in charlotte, North Carolina and (b) with respect to all payments, Conversions, Payment Periods, and notices, any day which is a Business Day described in clause (a) above and which is also a day on which dealings in dollar are carried out in the London interbank market. f. "Common Stock" means shares of the Corporation's common stock, par value $0.25 per share, serial common stock, or other securities entitled generally to vote in the election of directors of the Corporation. g. "Conversion Date" has the meaning given in Section 3(c). h. "Conversion Notice" has the meaning given in Section 3(c). i. "Conversion Price" has the meaning given in Section 3(b). D-11 j. "Conversion Value" has the meaning given in Section 3(h). k. "Convertible Securities" means any evidences of indebtedness, shares or other securities convertible into or exchangeable for Common Stock, except the Series B Preferred. l. "Corporation" means AMERCO, a Nevada corporation. m. "Excess Equity Offering" means any offer or sale of equity securities of the Corporation or any of its subsidiaries, whether public or private, after the date of this Certificate, other than (i) the offer and sale of Series B Preferred issued to Holder, (ii) the offer and sale by the Corporation of up to $125,000,000 of equity securities in a single transaction occurring on or before March 1, 1997, and (iii) issuances of equity securities to employees of the Corporation or its subsidiaries pursuant to written employee benefit plans existing on the date of this Certificate in the maximum amount permitted under such plans or arrangements on the date of this Certificate. n. "Floating Rate" means, for any Payment Period; the rate per annum that is the lesser of (x) the sum of (i) two and one-quarter percent (2.25%), and (ii) the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Payment Period for a term comparable to such Payment Period, or if for any reason such rate is not available, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Payment Period for a term comparable to such Payment Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates, or (y) the Maximum Rate, Dividends shall be computed on the basis of a year of 360 days and the actual number of days elapsed (including the first day but excluding the last day) during the Payment Period unless such calculation would result in the dividends exceeding the Maximum Rate, in which case dividends shall be calculated on the basis of a year of 365 or 366 days, as the case may be. Notwithstanding the first sentence of this paragraph, if at any time the dividend is limited by the terms of this Certificate to the Maximum Rate, then any subsequent reduction in the Floating Rate shall not reduce the dividend below the Maximum Rate until the aggregate amount of dividends accrued equals the aggregate amount of dividends which would have accrued on the Series B Preferred if the dividend specified in the first sentence of this paragraph had at all times been in effect. o. "Holder" means the holder or holders of record of the Series B Preferred. p. "Interim Payment" means such amount or amounts as shall be sufficient to compensate the Holder for any loss, cost, or expense incurred by the Holder as a result of any payment or prepayment for any reason on a date other than the last day of a Payment Period. Without limiting the affect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (i) the amount of dividends which otherwise would have accrued. D-12 on the Conversion Value of the Series B Preferred redeemed from the period from the date of such redemption to the last day of the Payment Period at the applicable rate of dividends for such Series B Preferred provided for herein, over (ii) the interest component of the amount the Holder would have bid in the London interbank market for dollar deposits of leading banks in amounts comparable to the Conversion Value of the Series B Preferred redeemed and with the maturities comparable to the applicable Payment period. q. "Junior Shares" means all classes and series of shares that, by the terms of the Corporation's Articles of Incorporation, or by law, shall be subordinate to the Series B Preferred with respect to the right of the holders thereof to receive dividends and to participate in the assets of the Corporation distributable to shareholders upon any liquidation, dissolution or winding up of the Corporation. r. "Liquidation Date" has the meaning given in Section 2(a). s. "Maximum Rate" means the maximum rate of [ILLEGIBLE] interest permitted from day to day by applicable law, and calculated after taking into account any and all relevant fees, payments, and other charges contracted for, charged or received which are deemed to be interest under applicable law. t. "NationsBank" means NationsBank Corporation, a Delaware corporation. u. "Options" means rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities, other than the Series B Preferred. v. "Parity Shares" means all classes and series of shares that, by the terms of the Corporation's Articles of Incorporation, or by law, shall be on parity with the Series B Preferred with respect to the right of the holders thereof to receive dividends and to participate in the assets of the Corporation distributable to shareholders upon any liquidation, dissolution or winding-up of the Corporation. w. "Payment Period" means each period commencing on the date any shares of Series B Preferred are first issued or, in the case of each subsequent, successive Payment Period, the last day of the next preceding Payment Period, and ending on the numerically corresponding day in the first, second or third calendar month thereafter, as the Holder may select by written notice to the Corporation at least three days before the the commencement of the applicable Payment Period, except that each such Payment Period which commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (a) each Payment Period which would otherwise end on a day which is not a Business Day shall end on the next succeeding Business Day (or, if such succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); (b) any Payment Period which would otherwise extend beyond a Conversion Date, Redemption Date or Liquidation Date or Liquidation Date shall end on the Conversion Date, Redemption Date or Liquidation Date, as appropriate; and (c) no Payment Period shall have D-13 a duration of less than one (1) month. If Holder shall fail to give the Corporation a notice of the length of a Payment Period prior to the end of the then current Payment Period, such Payment Period shall automatically be continued on the last day thereof as Payment Period having a term of one month. x. "Picacho" means Picacho Peak Investment Co., a Nevada corporation. y. "Redemption Date" has the meaning given in Section 5(c). z. "Regulatory Change" means any change after the date of this Certificate in United States federal, state or foreign laws or regulations (including Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time) or the adoption or making after such date of any interpretations, directives or requests applying to a class of Institutions including NationsBank of or under any United States federal, state or foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof. aa. "Senior Shares" means all classes and series of shares, including the Corporation's Series A 8 1/2% Preferred Stock, that, by the terms of the Corporation's Articles of Incorporation, or by law, shall be senior to the Series B Preferred with respect to the right of the holders thereof to receive dividends and to participate in the assets of the Corporation distributable to shareholders upon any liquidation, dissolution or winding-up of the Corporation. bb. "Series B Common Stock" means the Series B common stock, $0.25 par value per share, of the Corporation. cc. "Stock Purchase Agreement" means the Series B Stock Purchase Agreement between the Corporation and Blue Ridge Investments, LLC, dated August 30, 1996. [ILLEGIBLE SEAL] D - 14 EXHIBIT P RESTATED ARTICLES OF INCORPORATION OF REORGANIZED AREC [SEE ATTACHED] PROPOSED AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION OF AMERCO REAL ESTATE COMPANY Article IV of the Restated Articles of Incorporation of Amerco Real Estate Company is amended in its entirety to read as follows: ARTICLE IV The number of shares of common stock which this corporation is authorized to issue is twenty million (20,000,000) shares with a par value of One Cent ($0.01) per share. In addition to the common stock authorized to be issued, the corporation is authorized to issue five million $5,000,000) shares of preferred stock, with the Board of Directors having authority to issue such shares in one or more series, with a par value of One Cent ($0.01) per share, with limited voting powers or without voting powers, and with such designations, preferences and relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof as shall be stated or expressed in the resolution regarding such stock adopted by the Board of directors pursuant to the authority expressly vested in it by this provision of the Articles of Incorporation, or any amendment hereto. Pursuant to 1123(a)(6) of Title 11 of the United States Code, 11 U.S.C. Sections 101, et seq., and notwithstanding any provision to the contrary in this Article IV, the Board shall not authorize the issuance of any non-voting shares of common stock or preferred stock. EX-2.4 4 p68793exv2w4.txt EX-2.4 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA BK-03-52103-GWZ and BK-03-5270-GWZ In re: Jointly Administered under BK-03-52103 AMERCO, a Nevada corporation, et. al., -GWZ Debtors. Chapter 11 Judge Gregg W. Zive - -------------------------------------------------------------------------------- DISCLOSURE STATEMENT CONCERNING THE DEBTORS' FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE - -------------------------------------------------------------------------------- IMPORTANT DATES: - - DATE BY WHICH OBJECTIONS TO CONFIRMATION OF THE PLAN MUST BE FILED AND SERVED: JANUARY 16, 2004 - - DATE BY WHICH BALLOTS MUST BE RECEIVED: JANUARY 20, 2004 - - HEARING ON CONFIRMATION OF THE PLAN: FEBRUARY 2, 2004, 9:30 A.M. P.D.T. - -------------------------------------------------------------------------------- Craig D. Hansen Bruce T. Beesley Thomas J. Salerno Bridget R. Peck G. Christopher Meyer BEESLEY, PECK & MATTEONI, LTD Sean T. Cork 5011 Meadowood Mall Way, Suite 300 SQUIRE, SANDERS & DEMPSEY L.L.P. Reno, Nevada 89502 Two Renaissance Square (775) 827-8666 40 North Central Avenue, Suite 2700 Phoenix, Arizona 85004 Co-Counsel to AMERCO and Amerco Real (602) 528-4000 Estate Company, Debtors and Debtors-in Possession Attorneys for AMERCO and Amerco Real Estate Company, Debtors and Debtors-in Possession Dated: November 26, 2003 TABLE OF CONTENTS
Page ---- I. INTRODUCTION AND SUMMARY ................................................................... 1 A. Overview ......................................................................... 1 B. Notice to Holders of Claims and Interests ........................................ 1 C. Summary Of Treatment Of Claims And Interests Under The Plan ...................... 5 D. General Voting Procedures, Ballots, and Voting Deadline .......................... 14 E. Confirmation Hearing and Deadline for Objections to Confirmation ................. 15 II. BACKGROUND OF THE PLAN PROPONENTS ......................................................... 17 A. Overview of Business Operations .................................................. 17 III. PREPETITION CAPITAL STRUCTURE OF THE DEBTORS ............................................. 20 A. JPMorgan Chase Credit Facility ................................................... 21 B. PrePetition Notes and Related Obligations ........................................ 21 C. Synthetic Leases ................................................................. 21 D. AREC Notes ....................................................................... 22 E. Guaranty of U-Haul TRAC Lease Obligations ........................................ 22 F. Guaranty of Phillip Morris Obligations ........................................... 22 G. Guaranty of PMSR Obligations ..................................................... 22 H. Guaranty of PMPP Obligations ..................................................... 23 I. Equity ........................................................................... 23 IV. CORPORATE STRUCTURE OF THE DEBTORS ........................................................ 24 A. Board of Directors - AMERCO ...................................................... 24 B. Senior Management - AMERCO ....................................................... 26 C. Executive Compensation - AMERCO .................................................. 27 D. Security Ownership of Management - AMERCO......................................... 27 E. Independent Governance Committee - AMERCO ........................................ 28 F. Board of Directors - AREC ........................................................ 29 G. Senior Management - AREC ......................................................... 29 H. Executive Compensation - AREC .................................................... 29 I. SAC Holding Corporation .......................................................... 30 V. EVENTS PRECIPITATING THE CHAPTER 11 CASES .................................................. 30 A. PwC Litigation ................................................................... 31 B. Department of Labor Investigations ............................................... 32 C. SEC Investigations ............................................................... 32 VI. SIGNIFICANT EVENTS IN CHAPTER 11 CASES .................................................... 33 A. Continuation of Business; Stay of Litigation ..................................... 33 B. First Day Orders ................................................................. 34 C. Appointment of Statutory Committees .............................................. 35 D. Post-Petition Financing .......................................................... 35 E. Plan Support Agreement ........................................................... 36 F. Other Significant Events During the Chapter 11 Cases ............................. 36
i VII. DESCRIPTION OF THE REORGANIZATION PLAN ................................................... 37 A. Overall Structure of the Plan .................................................... 38 B. Summary of Claims Process, Bar Date and Professional Fees ........................ 38 C. Classification and Treatment of Claims and Interests ............................ 39 D. Treatment of Unclassified Claims ................................................. 40 E. Treatment of Classified Claims and Interests ..................................... 41 F. Syndication of New Term Loan B Notes ............................................. 48 G. Continued Corporate Existence .................................................... 48 H. Directors, Officers and Stockholders of the Reorganized Debtors .................. 48 I. Listing on Securities Exchange or Quotation System ............................... 49 J. SAC Participation ................................................................ 49 K. Cancellation of Existing Debt Securities ......................................... 49 L. Exit Financing Facility .......................................................... 50 M. Issuance of New Debt Securities .................................................. 53 N. Preservation of Causes of Action ................................................. 74 O. Exclusivity Period ............................................................... 75 P. Corporate Action ................................................................. 75 Q. Effectuating Documents; Further Transactions ..................................... 75 R. Exemption From Certain Transfer Taxes and Recording Fees; Subsequent Issuances ... 75 VIII. EXECUTORY CONTRACTS AND UNEXPIRED LEASES ................................................ 76 A. Assumption and Rejection of Contracts and Leases ................................. 76 B. Payments Related to Assumption of Executory Contracts and Unexpired Leases ....... 76 C. Rejection Damages Bar Date ....................................................... 76 IX. PROVISIONS GOVERNING DISTRIBUTIONS ........................................................ 76 A. Time of Distributions ............................................................ 76 B. No Interest on Claims or Interests ............................................... 76 C. Disbursing Agent ................................................................. 77 D. Surrender of Securities or Instruments ........................................... 77 E. Services of Indenture Trustees, Agents and Servicers ............................. 77 F. Claims Administration Responsibility ............................................. 77 G. Procedures for Treating and Resolving Disputed and Contingent Claims ............. 78 X. ALLOWANCE AND PAYMENT OF CERTAIN ADMINISTRATIVE CLAIMS ..................................... 79 A. DIP Facility Claim ............................................................... 79 B. Professional Claims .............................................................. 79 C. Substantial Contribution Compensation and Expenses Bar Date ...................... 80 D. Other Administrative Claims ...................................................... 80 XI. EFFECT OF THE PLAN ON CLAIMS AND INTERESTS ................................................ 80 A. Revesting of Assets .............................................................. 80 B. Discharge of the Debtors ......................................................... 81 C. Compromises and Settlements ...................................................... 81 D. Releases, Exculpation and Related Matters ........................................ 81 E. Setoffs .......................................................................... 82 F. Subordination Rights ............................................................. 83 G. Indemnification Obligations ...................................................... 83 H. Injunction ....................................................................... 83

ii XII. CERTAIN FACTORS TO BE CONSIDERED ......................................................... 83 A. General Considerations ........................................................... 83 B. Certain Bankruptcy Considerations ................................................ 83 C. Business Factors and Competitive Conditions ...................................... 84 D. Inherent Uncertainty of Financial Projections .................................... 88 E. Access to Financing and Trade Terms .............................................. 88 F. Claims Estimations ............................................................... 89 G. Market for the New Debt Securities ............................................... 89 H. Dividends ........................................................................ 89 XIII. RESALE OF SECURITIES RECEIVED UNDER THE PLAN ............................................ 89 A. Issuance of Securities ........................................................... 89 B. Subsequent Transfers of New Debt Securities ...................................... 89 XIV. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ...................................... 90 A. United States Federal Income Tax Consequences to the Debtors ..................... 91 B. Federal Income Tax Consequences to Claimholders and Interestholders .............. 92 C. Importance of Obtaining Professional Tax Assistance .............................. 94 XV. FEASIBILITY OF THE PLAN AND THE BEST INTERESTS TEST ....................................... 95 A. Feasibility of the Plan .......................................................... 95 B. Acceptance of the Plan ........................................................... 95 C. Best Interests Test .............................................................. 96 D. Application of the Best Interests Test to the Liquidation Analysis ............... 97 E. Confirmation Without Acceptance of All Impaired Classes: The 'Cramdown' Alternative ...................................................................... 97 F. Conditions to Confirmation and Effective Date of the Plan ........................ 98 G. Waiver of Conditions to Confirmation and Consummation of the Plan ................ 99 H. Retention of Jurisdiction ........................................................ 99 XVI. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN ................................ 100 A. Continuation of the Chapter 11 Cases ............................................. 100 B. Alternative Plans of Reorganization .............................................. 100 C. Liquidation Under Chapter 7 or Chapter 11 ........................................ 101 XVII. VOTING REQUIREMENTS ..................................................................... 101 A. Parties in Interest Entitled to Vote ............................................. 102 B. Classes Impaired Under the Plan .................................................. 103 XVIII. CONCLUSION ............................................................................. 103 A. Hearing on and Objections to Confirmation ........................................ 103 B. Recommendation ................................................................... 105

iii APPENDICIES TO DISCLOSURE STATEMENT Appendix 1 - Joint Plan of Reorganization Appendix 2 - Selected Financial Information - AMERCO (Consolidated) Appendix 3 - Selected Financial Information - SAC Holding Appendix 4 - Financial Projections - AMERCO (Consolidated) Appendix 5 - Financial Projections - SAC Holding Appendix 6 - Liquidation Analysis iv I. INTRODUCTION AND SUMMARY A. OVERVIEW. AMERCO ("AMERCO") and Amerco Real Estate Company ("AREC"), debtors and debtors-in-possession (collectively, the "Debtors"), submit this disclosure statement (the "Disclosure Statement") pursuant to Section 1125 of Title 11 of the United States Code, 11 U.S.C. Sections 101, et seq. (the "Bankruptcy Code") for use in the solicitation of votes on the First Amended Joint Plan of Reorganization of AMERCO and AREC (the "Plan") proposed by the Debtors and SAC Holding Corporation ("SAC") and SAC Holding II Corporation (together with SAC, "SAC Holding"), each a Nevada corporation. For purposes of the Plan and Section 1145 of the Bankruptcy Code, SAC Holding is an Affiliate of the Debtors. The Plan was filed with the United States Bankruptcy Court for the District of Nevada (the "Bankruptcy Court"), on November 26, 2003. The following introduction and summary is a general overview only and is qualified in its entirety by, and should be read in conjunction with, the more detailed discussions, information and financial statements and notes thereto appearing elsewhere in this Disclosure Statement and the Plan. All capitalized terms not defined in this Disclosure Statement have the meanings given to them in the Plan. A copy of the Plan, separately filed in these Cases, is Appendix 1 to this Disclosure Statement. This Disclosure Statement sets forth certain information regarding the Debtors' prepetition operating and financial history, the need to seek Chapter 11 protection, significant events that have occurred during the Chapter 11 Cases, and the anticipated organization and operations of the Reorganized Debtors, and, with respect to SAC Holding, certain operating and financial information and a description of the securities to be issued by SAC Holding under the Plan. This Disclosure Statement also describes terms and provisions of the Plan, including certain alternatives to the Plan, certain effects of confirmation of the Plan, certain risk factors associated with securities to be issued under the Plan, and the manner in which distributions will be made under the Plan. In addition, this Disclosure Statement discusses the confirmation process and the voting procedures that Claimholders in Impaired Classes must follow for their votes to be counted. Certain provisions of the Plan, and thus the descriptions and summaries contained herein, may be the subject of continuing negotiations among the Debtors and various parties, may not have been finally agreed upon, and may be modified. Such modifications, however, will not have a material effect on the distributions contemplated by the Plan. Each of AMERCO, AREC and SAC Holding is a proponent of the Plan within the meaning of Section 1129 of the Bankruptcy Code. The Plan contains separate Classes and proposes recoveries for holders of Claims against and Interests in the Debtors. After careful review of the Debtors' current business operations, estimated recoveries in a liquidation scenario, and the prospects of ongoing business, the Debtors have concluded that the recovery to the Debtors' Creditors and Interestholders will be maximized by the reorganization of AMERCO and AREC, as contemplated by the Plan. Specifically, the Debtors believe that their businesses and assets have significant going concern value that would not be realized in a liquidation, either in whole or in substantial part. According to the liquidation analysis prepared by management with the assistance of the Debtors' restructuring advisors, Alvarez & Marsal, Inc. ("A&M"), and the other analyses prepared by the Debtors with the assistance of A&M, the Debtors believe that the value of the Estates of the Debtors is significantly greater in the proposed reorganization than in a liquidation. B. NOTICE TO HOLDERS OF CLAIMS AND INTERESTS. This Disclosure Statement is being transmitted to certain Claimholders for the purpose of soliciting votes on the Plan, and to others for informational purposes. The purpose of this Disclosure 1 Statement is to provide adequate information to enable the holder of a Claim against the Debtors to make a reasonably informed decision with respect to the Plan prior to exercising the right to vote to accept or reject the Plan. By order entered on December 12, 2003, the Bankruptcy Court approved this Disclosure Statement as containing information of a kind and in sufficient and adequate detail to enable Claimholders that are entitled to vote on the Plan to make an informed judgment with respect to acceptance or rejection of the Plan. THE BANKRUPTCY COURT'S APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE EITHER A GUARANTY OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN OR AN ENDORSEMENT OF THE PLAN BY THE BANKRUPTCY COURT. ALL CLAIMHOLDERS ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT AND ITS APPENDICIES CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING TO VOTE EITHER TO ACCEPT OR TO REJECT THE PLAN. This Disclosure Statement contains important information about the Plan, considerations pertinent to acceptance or rejection of the Plan, and developments concerning the Chapter 11 Cases. THIS DISCLOSURE STATEMENT AND THE OTHER MATERIALS INCLUDED IN THE SOLICITATION PACKAGE ARE THE ONLY DOCUMENTS AUTHORIZED BY THE BANKRUPTCY COURT TO BE USED IN CONNECTION WITH THE SOLICITATION OF VOTES ON THE PLAN. No solicitation of votes may be made except after distribution of this Disclosure Statement, and no person has been authorized to distribute any information concerning the Debtors or the Plan other than the information contained herein. CERTAIN OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS BY ITS NATURE FORWARD-LOOKING AND CONTAINS ESTIMATES, ASSUMPTIONS AND PROJECTIONS THAT MAY BE MATERIALLY DIFFERENT FROM ACTUAL OR FUTURE RESULTS. Except with respect to the projections set forth in Appendix 4 and Appendix 5 attached hereto (collectively, the "Projections"), and except as otherwise specifically and expressly stated herein, this Disclosure Statement does not reflect any events that may occur subsequent to the date hereof and that may have a material impact on the information contained in this Disclosure Statement. None of the Debtors, the Reorganized Debtors or SAC Holding intend to update the Projections for the purposes hereof; thus, the Projections will not reflect the impact of any subsequent events not already accounted for in the assumptions underlying the Projections. Further, the Debtors do not anticipate that any amendments or supplements to this Disclosure Statement will be distributed to reflect such occurrences. Accordingly, the delivery of this Disclosure Statement does not under any circumstance imply that the information herein is correct or complete as of any time subsequent to the date hereof. EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED HEREIN HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC ACCOUNTANT AND MAY NOT HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS INCLUDED HEREIN FOR PURPOSES OF SOLICITING ACCEPTANCES OF THE JOINT PLAN OF REORGANIZATION OF AMERCO AND AREC, AND MAY NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW TO VOTE ON THE PLAN. NO PERSON MAY GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS, OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DISCLOSURE STATEMENT, REGARDING THE PLAN OR THE SOLICITATION OF ACCEPTANCES OF THE PLAN. 2 ALL CREDITORS ARE ADVISED AND ENCOURAGED TO READ THIS DISCLOSURE STATEMENT AND THE PLAN IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. PLAN SUMMARIES AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN AND THE EXHIBITS ANNEXED TO THE PLAN AND APPENDICES ANNEXED TO THIS DISCLOSURE STATEMENT. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY AS OF THE DATE HEREOF, AND THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED HEREIN WILL BE CORRECT AT ANY TIME AFTER THE DATE HEREOF. IN THE EVENT OF ANY CONFLICT BETWEEN THE DESCRIPTION SET FORTH IN THIS DISCLOSURE STATEMENT AND THE TERMS OF THE PLAN, THE TERMS OF THE PLAN WILL GOVERN. THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE UNITED STATES BANKRUPTCY CODE AND RULE 3016(b) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER NON-BANKRUPTCY LAW. THIS DISCLOSURE STATEMENT HAS BEEN NEITHER APPROVED NOR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. PERSONS OR ENTITIES TRADING IN OR OTHERWISE PURCHASING, SELLING OR TRANSFERRING SECURITIES OF THE DEBTORS AND AFFILIATES SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND THE PLAN IN LIGHT OF THE PURPOSE FOR WHICH THEY WERE PREPARED. THIS DISCLOSURE STATEMENT CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF THE PLAN, CERTAIN STATUTORY PROVISIONS, CERTAIN DOCUMENTS RELATED TO THE PLAN, CERTAIN EVENTS IN THE CHAPTER 11 CASES, AND CERTAIN FINANCIAL INFORMATION. ALTHOUGH THE DEBTORS BELIEVE THAT SUCH SUMMARIES ARE FAIR AND ACCURATE, SUCH SUMMARIES ARE QUALIFIED TO THE EXTENT THAT THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS. FACTUAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS' MANAGEMENT, EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED. THE DEBTORS DO NOT WARRANT OR REPRESENT THAT THE INFORMATION CONTAINED HEREIN, INCLUDING THE FINANCIAL INFORMATION, IS WITHOUT ANY MATERIAL INACCURACY OR OMISSION. AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER ACTIONS OR THREATENED ACTIONS, THIS DISCLOSURE STATEMENT WILL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THIS DISCLOSURE STATEMENT WILL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING NOR WILL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES, OR OTHER LEGAL EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR CHAPTER 11 INTERESTS IN, AMERCO OR AREC, DEBTORS AND DEBTORS-IN-POSSESSION IN THESE CASES. NONE OF THE OTHER DIRECT AND INDIRECT SUBSIDIARIES OF AMERCO AND AREC HAVE COMMENCED CHAPTER 11 CASES OR SIMILAR PROCEEDINGS IN THIS OR ANY OTHER JURISDICTION. THESE SUBSIDIARIES, INCLUDING, WITHOUT LIMITATION, U-HAUL INTERNATIONAL, INC., U-HAUL SALES & LEASING CO., U-HAUL CO. (CANADA), LTD., OXFORD LIFE INSURANCE COMPANY AND REPUBLIC WESTERN INSURANCE 3 COMPANY, ARE NOT AFFECTED BY THE CHAPTER 11 CASES AND CONTINUE TO OPERATE THEIR BUSINESSES OUTSIDE OF BANKRUPTCY. IN ADDITION, ALTHOUGH SAC HOLDING IS A PROPONENT OF THE PLAN, SAC HOLDING HAS NOT, AND WILL NOT COMMENCE A CHAPTER 11 CASE OR OTHER SIMILAR PROCEEDINGS. THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS APPOINTED IN THE AMERCO CHAPTER 11 CASE SUPPORTS CONFIRMATION AND CONSUMMATION OF THE PLAN. ACCORDINGLY, THE DEBTORS AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS STRONGLY URGE YOU TO VOTE TO ACCEPT THE PLAN. 4 C. SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN. Although the Plan constitutes a joint plan of reorganization for the Debtors, the Plan does not provide for the substantive consolidation of the Debtors' Estates. The Plan contains separate classes for holders of Claims against, and Interests in, the Debtors. As required by the Bankruptcy Code, Administrative Claims and Priority Tax Claims are not classified. The table below summarizes the classification and treatment of the principal prepetition Claims and Interests under the Plan. The classification and treatment for all Classes are described in more detail in Article V of the Plan. The table below also sets forth the Debtors' estimates of the amount of Claims that will ultimately become allowed in each Class based upon review by the Debtors of all Claims scheduled by the Debtors, consideration of the provisions of the Plan that affect the allowance of certain Claims, and a general estimate of the amount by which Allowed Claims may ultimately exceed the amount of the Claims scheduled by the Debtors. As set forth in the table below, the Plan provides for the payment in full of all Allowed Claims in each Class, and the holders of Preferred Stock, Common Stock and other Interests, and Subordinated Claims arising from Preferred and Common Stock Interests are unimpaired by the Plan. In addition, for certain Classes of Claims, the actual amounts of Allowed Claims could materially exceed or could be materially less than the estimated amounts shown in the table that follows. Accordingly, for these reasons, no representation can be or is being made with respect to whether the estimated percentage recoveries set forth in the table below will actually be realized by the holders of Allowed Claims in any particular Class. THE PLAN CONTEMPLATES AND PROVIDES FOR THE PAYMENT IN FULL OF ALL ALLOWED CLAIMS AGAINST THE DEBTORS. ACCORDINGLY, FOR PURPOSES OF CALCULATING ESTIMATED RECOVERIES, THE FOLLOWING TABLE DOES NOT GIVE EFFECT TO THE SUBORDINATION RIGHTS OF VARIOUS PARTIES. FOR A DESCRIPTION OF THE PLAN AND VARIOUS RISK AND OTHER FACTORS PERTAINING TO THE PLAN AS IT RELATES TO HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS, PLEASE SEE THE "DESCRIPTION OF THE REORGANIZATION PLAN" AND "CERTAIN FACTORS TO BE CONSIDERED," SECTIONS OF THIS DISCLOSURE STATEMENT. 5
CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- 1 JP Morgan Claims As of the Petition Date, the unpaid principal amount of the JPMorgan Claims (IMPAIRED; ENTITLED TO VOTE.) was $205,000,000. The JPMorgan Claims are secured by intercompany receivables, ESTIMATED AMOUNT and certain of the Debtors' subsidiaries OF CLAIMS: $ 153,750,000 have guaranteed the JPMorgan Claims. On or about September 10, 2003, the Debtors PERCENTAGE RECOVERY: 100% made, pursuant to an order of the Bankruptcy Court, an adequate protection payment to the holders of the JPMorgan Claims in the amount of $51,250,000. The Debtors and the holders of more than two-thirds of the aggregate amount of the JPMorgan Claims have entered into the Restructuring Agreement (Revolver Lenders), which sets forth the treatment of the JPMorgan Claims under the Plan. Subject to the Debtors' compliance with the disclosure and solicitation provisions of Section 1125 of the Bankruptcy Code, the holders of the JPMorgan Claims that are parties to the Restructuring Agreement (Revolver Lenders), have agreed to vote to accept the Plan. On the Effective Date, the holders of the JPMorgan Claims will receive, in full and final satisfaction of the JPMorgan Claims, their Pro Rata portion of: (a) Cash in the amount of $71,750,000; (b) Cash in an amount equal to any and all accrued but unpaid interest on the principal amount outstanding under the JPMorgan Chase Credit Facility up to and including the Effective Date, payable at the non-default rate of interest under the JPMorgan Chase Credit Facility, plus reasonable costs and expenses, including professional fees, recoverable thereunder; (c) $48,400,000 in aggregate principal amount of the New Term Loan A Notes issued pursuant to the Exit Financing Facility; and (d) $33,600,000 in aggregate principal amount of the New Term Loan B Notes issued pursuant to the New Term Loan B Notes Indenture. If the Debtors do not comply with the syndication terms in the Restructuring Agreement (Revolver Lenders) by arranging for the placement of at least $20,000,000 in New Term Loan B Notes to unrelated third party market participants, then the holders of the JPMorgan Claims will receive an additional $33,600,000 in New Term Loan A Notes in lieu of any distribution of New Term Loan B Notes, which will result in a reduction in the amount of Cash to be paid to the holders of Allowed Claims in Class 7 under the Plan. The Debtors anticipate complying with the syndication terms in the Restructuring Agreement (Revolver Lenders), having obtained commitment letters for the placement of $30,000,000 in New Term Loan B Notes to unrelated third party market participants. 2 Other Priority Claims Other Priority Claims are primarily claims, if any, held by current and (UNIMPAIRED; DEEMED TO former employees of the Debtors for ACCEPT.) unpaid wages, salaries, bonuses, severance pay, vacation pay, and other ESTIMATED AMOUNT unpaid employee benefits. The Debtors believe that there are no valid Other Priority Claims. However, in the event there are any Allowed Other Priority Claims, the Debtors or Reorganized Debtors, as
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CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- OF CLAIMS: $0 applicable, will either pay such claims PERCENTAGE RECOVERY: N/A in full in Cash or, if necessary, agree with the claimholder to some other 3 3(a) Citibank Secured Claim mutually agreeable compensation and 3(b) Citibank Guaranty arrangement. Claim Claims in Class 3 consist (IMPAIRED; ENTITLED TO VOTE; of a separate subclass for the Citibank SUBJECT TO ALTERNATIVE Secured Claim and the Citibank Guaranty TREATMENT.) Claim, and arise out of a synthetic lease facility with AREC. Although title ESTIMATED AMOUNT OF to the real property subject to the CLAIMS: $101,000,000 synthetic lease facility is in the name PERCENTAGE RECOVERY: 100% of a special purpose entity, for purposes of the Chapter 11 Cases, the Citibank Secured Claim is treated as a Secured Claim. AMERCO has guaranteed the Citibank Secured Claim. During the Chapter 11 Cases, the holders of the Citibank Secured Claim have stipulated that the value of the real property subject to the synthetic lease facility exceeds the amount of the Citibank Secured Claim. The Debtors are actively pursuing a transaction (defined in the Plan as the Carey Sale Transaction) which, if consummated, would involve a sale of the real property subject to the synthetic lease facility, and payment in full of the Citibank Secured Claim. There can be no assurance that the Carey Sale Transaction will be consummated prior to the Effective Date of the Plan. As a result, the Plan provides for the following alternative treatments of the Citibank Secured Claim, each of which will be in full and final satisfaction of the Citibank Secured Claim: - Carey Sale Transaction closes and holders of Citibank Secured Claim and Citibank Guaranty Claim vote to accept the Plan. On or before the Effective Date of the Plan, the Citibank Secured Claimholders will receive an amount of Cash from the Carey Sale Proceeds equivalent to the amount of the Allowed Citibank Secured Claim, excluding therefrom, if applicable, any fine, penalty, interest or cost arising from or related to a default under the Citibank Master Lease, provided that: (i) the Carey Sale Agreement has been approved by a Final Order of the Bankruptcy Court on or before the Effective Date; (ii) the Carey Sale Transaction closes in accordance with the Carey Sale Agreement, including the payment of the Carey Sale Proceeds, on or before the Effective Date; and (iii) holders of the Citibank Secured Claim in Class 3(a) and the Citibank Guaranty Claim in Class 3(b) have voted to accept the Plan by the statutory prerequisites for such acceptance set forth in Section 1126 of the Bankruptcy Code. In the event the Citibank Secured Claim receives this treatment under the Plan, the Citibank Guaranty Claim, to the extent such Claim is an Allowed Claim, will be deemed satisfied in full. - Carey Sale Transaction does not close and holders of Citibank Secured Claim and Citibank Guaranty Claim vote to accept the Plan. Reorganized AREC will, on the Effective Date of the Plan, execute and deliver the Restated Citibank Master
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CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- Lease, and Reorganized AMERCO will, on the Effective Date of the Plan, execute and deliver the New Citibank Guaranty. In the event the Citibank Secured Claim receives this treatment under the Plan, the holders of the Citibank Guaranty Claim will receive in full satisfaction, release and discharge of the Citibank Guaranty Claim, to the extent such Claim is an Allowed Claim, the New Citibank Guaranty, which will be executed and delivered by Reorganized AMERCO on the Effective Date. - Carey Sale Transaction does not close and holders of Citibank Secured Claim and Citibank Guaranty Claim vote to reject the Plan. The Debtors reserve the right, in their sole discretion, either to: (i) surrender to the Citibank Claimholders all of their right, title and interest in and to the Citibank Properties in full and final satisfaction of all Claims arising under or related to the Citibank Master Lease, together with Cash in an amount equivalent to the Unsecured Deficiency Claim, if any such Claim exists, of the Citibank Claimholders as determined by a Final Order of the Bankruptcy Court pursuant to the Citibank Valuation Hearing; (ii) provide for the treatment of the Citibank Secured Claim in accordance with the alternative treatment set forth in Article 5.3(a)(i) and (a)(ii) of the Plan; or (iii) provide such other treatment of the Citibank Secured Claim that complies with Section 1129(b) of the Bankruptcy Code. If the Bankruptcy Court determines, as part of the Citibank Valuation Hearing, that the value of the Citibank Properties exceeds the amount of the Allowed Citibank Secured Claim, and the Debtors have selected the alternative treatment set forth in Article 5.3(a)(iii) of the Plan, the holders of the Citibank Secured Claim will pay in Cash to the Debtors the amount of the excess value. In the event the Citibank Secured Claim receives this treatment under the Plan, the Citibank Guaranty Claim, to the extent such Claim is an Allowed Claim, will be deemed satisfied in full. 4 4(a) BMO Secured Claim and Claims in Class 4 consist of a separate 4(b) BMO Guaranty Claim subclass for the BMO Secured Claim and the BMO Guaranty Claim, and arise out of (IMPAIRED; ENTITLED TO VOTE; a synthetic lease facility with AREC and SUBJECT TO ALTERNATIVE U-Haul. Although title to the real TREATMENT.) property subject to the synthetic lease facility is in the name of a special ESTIMATED AMOUNT OF purpose entity, for purposes of the CLAIMS: $149,000,000 Chapter 11 Cases, the BMO Secured Claim is treated as a Secured Claim. AMERCO PERCENTAGE RECOVERY: 100% has guaranteed the BMO Secured Claim. During the Chapter 11 Cases, the holders of the BMO Secured Claim have stipulated that the value of the real property subject to the synthetic lease facility exceeds the amount of the BMO Secured Claim. The Debtors are actively pursuing a transaction (defined in the Plan as the Carey Sale Transaction) which, if consummated, would involve a sale of the real property subject to the synthetic lease facility, and payment in full of the BMO Secured Claim. There can be no assurance that the Carey Sale
8
CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- Transaction will be consummated prior to the Effective Date of the Plan. As a result, the Plan provides for the following alternative treatments of the BMO Secured Claim, each of which will be in full and final satisfaction of the BMO Secured Claim: - Carey Sale Transaction closes and holders of BMO Secured Claim and BMO Guaranty Claim vote to accept the Plan. On or before the Effective Date of the Plan, the BMO Secured Claimholders will receive an amount of Cash from the Carey Sale Proceeds equivalent to the amount of the Allowed BMO Secured Claim, excluding therefrom, if applicable, any fine, penalty, interest or cost arising from or related to a default under the BMO Master Lease, provided that: (i) the Carey Sale Agreement has been approved by a Final Order of the Bankruptcy Court on or before the Effective Date; (ii) the Carey Sale Transaction closes in accordance with the Carey Sale Agreement, including the payment of the Carey Sale Proceeds, on or before the Effective Date; and (iii) the holders of the BMO Secured Claim in Class 4(a) and the BMO Guaranty Claim in Class 4(b) have voted to accept the Plan by the statutory prerequisites for such acceptance set forth in Section 1126 of the Bankruptcy Code. In the event the BMO Secured Claim receives this treatment under the Plan, the BMO Guaranty Claim, to the extent such Claim is an Allowed Claim, will be deemed satisfied in full. - Carey Sale Transaction does not close and holders of BMO Secured Claim and BMO Guaranty Claim vote to accept the Plan. Reorganized AREC will, on the Effective Date of the Plan, execute and deliver the Restated BMO Master Lease, and Reorganized AMERCO will, on the Effective Date of the Plan, execute and deliver the New BMO Guaranty. In the event the BMO Secured Claim receives this treatment under the Plan, the holders of the BMO Guaranty Claim will receive in full satisfaction, release and discharge of the BMO Guaranty Claim, to the extent such Claim is an Allowed Claim, the New BMO Guaranty, which will be executed and delivered by Reorganized AMERCO on the Effective Date. - Carey Sale Transaction does not close and holders of BMO Secured Claim and BMO Guaranty Claim vote to reject the Plan. The Debtors reserve the right, in their sole discretion, either to: (i) surrender to the BMO Secured Claimholders all of their right, title and interest in and to the BMO Properties in full and final satisfaction of all Claims arising under or related to the BMO Master Lease, together with Cash in an amount equivalent to the Unsecured Deficiency Claim, if any such Claim exists, of the BMO Claimholders as determined by a Final Order of the Bankruptcy Court pursuant to the BMO Valuation Hearing; (ii) provide for the treatment of the BMO Secured Claim in accordance with the alternative treatment set forth in Article
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CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- 5.4(a)(i) and (a)(ii) of the Plan; or (iii) provide such other treatment of the BMO Secured Claim that complies with Section 1129(b) of the Bankruptcy Code. If the Bankruptcy Court determines, as part of the BMO Valuation Hearing, that the value of the BMO Properties exceeds the amount of the Allowed BMO Secured Claim, and the Debtors have selected the alternative treatment set forth in Article 5.4(a)(iii) of the Plan, the holders of the BMO Secured Claim will pay in Cash to the Debtors the amount of the excess value. In the event the BMO Secured Claim receives this treatment under the Plan, the BMO Guaranty Claim, to the extent such Claim is an Allowed Claim, will be deemed satisfied in full. 5 Other Unsecured Claims Other Unsecured Claims include any and all Claims against the Debtors as of the (UNIMPAIRED; DEEMED TO Petition Date not secured by a charge ACCEPT.) against, an interest in or lien on property in which a Debtor's Estate has ESTIMATED AMOUNT OF an interest or that is subject to setoff CLAIMS: $3,000,000 under Section 553 of the Bankruptcy Code, excluding therefrom Priority PERCENTAGE RECOVERY: 100% Claims, AMERCO Unsecured Claims and Claims with respect to AMERCO/AREC Guaranty Obligations. Each holder of an Allowed Other Unsecured Claim, once they become Allowed Claims, will receive the payment of Cash equal to the amount of such holders' Allowed Class 5 Other Unsecured Claim upon the later to occur of: (i) the Effective Date, (ii) the date upon which such Allowed Other Unsecured Claim would be paid in the ordinary course of the Debtors or Reorganized Debtor's business, or (iii) such other date as the holder of the Allowed Class 5 Other Unsecured Claim will have agreed. 6 AREC Note Claims AREC Note Claims are general unsecured claims against AREC and include any (IMPAIRED; ENTITLED TO VOTE.) Claim arising under, from, or relating to the following: (a) the $95,000,000 ESTIMATED AMOUNT OF original principal amount of Senior CLAIMS: $100,000,000 Secured Notes, Series A, due April 30, 2012; and (b) the $5,000,000 original PERCENTAGE RECOVERY: 100% principal amount of Senior Notes, Series B, due April 30, 2007, each issued by AREC under those certain Note Purchase Agreements, each dated March 15, 2002, as amended or modified from time to time, between AREC and the holders of the Series A and Series B Notes. AMERCO has guaranteed the AREC Note Claims. On August 12, 2003, the holders of the AREC Note Claims and AREC entered into the Restructuring Agreement (AREC Noteholders), which sets forth the treatment of the AREC Note Claims under the Plan. Subject to the Debtors' compliance with the disclosure and solicitation provisions of Section 1125 of the Bankruptcy Code, the holders of the AREC Note Claims have agreed to vote to accept the Plan. On the Effective Date, the AREC Note Claimholders will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, their AREC Note Claims, a Pro Rata portion of: (a)
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CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- Cash in the amount of $65,000,000; (b) Cash in an amount equal to the sum of (i) any and all accrued but unpaid interest on the AREC Notes from October 15, 2002 up to but not including the AREC Petition Date, payable at the default rate of interest under the AREC Notes, and (ii) any and all accrued and unpaid interest under the AREC Notes from the AREC Petition Date up to but not including the Effective Date, payable at the non-default rate of interest under the AREC Notes; (c) $18,600,000 in aggregate principal amount of the New Term Loan A Notes issued pursuant to the Exit Financing Facility; and (d) $16,400,000 in aggregate principal amount of the New Term Loan B Notes issued pursuant to the New Term Loan B Notes Indenture. If the Debtors do not comply with the syndication terms in the Restructuring Agreement (AREC Noteholders) by arranging for the placement of at least $20,000,000 in New Term Loan B Notes to unrelated third party market participants, the holders of the AREC Note Claims will receive an additional $16,400,000 in New Term Loan A Notes in lieu of any distribution of New Term Loan B Notes, which will result in a reduction of the amount of Cash to be paid to the holders of Allowed Claims in Class 7 under the Plan. The Debtors anticipate complying with the syndication terms in the Restructuring Agreement (AREC Noteholders), having obtained commitment letters for the placement of $30,000,000 in New Term Loan B Notes to unrelated third party market participants. 7 AMERCO Unsecured Claims AMERCO Unsecured Claims include any Claim arising under, from or relating to (IMPAIRED; ENTITLED TO VOTE.) the following: (a) the AMERCO Notes; (b) the BBATs; (c) the Terminated Swaps; (d) ESTIMATED AMOUNT OF the JPMorgan Support Party Obligation; CLAIMS: $715,000,000 and (e) Post-Petition Interest on such AMERCO Unsecured Claims, but only to the PERCENTAGE RECOVERY: 100% extent the Bankruptcy Court determines that such Post-Petition interest will be included as an Allowed Class 7 Claim. Upon the occurrence of the Effective Date, each holder of an Allowed AMERCO Unsecured Claim will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such AMERCO Unsecured Claims such holder's Pro Rata portion of the following: (a) Cash in the amount of $191,000,000, provided, however, that the amount of Cash will be increased by the same amount, if any, by which the principal amount of New Term Loan B Notes distributed to the AMERCO Unsecured Claimholders is less than $200,000,000 (provided that the Cash to be distributed to holders of Allowed Class 7 Claims (i) will not exceed 35% of the aggregate amount of such Allowed Claims, and (ii) will be decreased, to the extent necessary, to provide the Reorganized Debtors with minimum availability under the Exit Financing Facility of $80,000,000 as of the Effective Date); (b) the SAC Holding Senior Notes in the principal amount of $200,000,000; (c) the New Term Loan B Notes in the principal amount of $200,000,000 (provided, however, that the amount of the New Term Loan B Notes
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CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- distributed to the AMERCO Unsecured Claimholders will be decreased by the sum of: (i) the New Term Loan B Notes distributed to the AREC Note Claimholders and the holders of the JPMorgan Claims as a result of the satisfaction by the Debtors of the JPMorgan Syndication Terms and the AREC Syndication Terms as provided in Article 5.1 and Article 5.6 of the Plan; and (ii) the amount of New Term Loan B Notes syndicated by the Debtors to unrelated third-party market participants); and (d) the New AMERCO Notes. The Debtors anticipate satisfying the JPMorgan Syndication Terms and the AREC Syndication Terms, having obtained commitment letters for the placement of $30,000,000 in New Term Loan B Notes to unrelated third party market participants. This syndication will result in an increase in the Cash distributions to holders of Allowed Class 7 Claims from $191,000,000 to approximately $250,000,000. 8 Oxford Note Claims Oxford Note Claims include all Claims arising under, from or relating to the (UNIMPAIRED; DEEMED TO financial accommodations made available ACCEPT.) to AMERCO by Oxford as evidenced by: (a) that certain $15,000,000 Promissory ESTIMATED AMOUNT OF Note, dated June 27, 2002, issued by CLAIMS: $17,500,000 AMERCO to Oxford; (b)that certain $1,700,000 Promissory Note, dated June PERCENTAGE RECOVERY: 100% 27, 2002, issued by AMERCO to Christian Fidelity Life Insurance Company; and (c) that certain $800,000 Promissory Note, dated June 27, 2002, issued by AMERCO to North American Insurance Agency. On the Effective Date, the Allowed Oxford Note Claims will be paid in full in Cash. 9 Miscellaneous Secured Claims Miscellaneous Secured Claims consist primarily of real property taxes that, (UNIMPAIRED; DEEMED TO by operation of law, are secured by a ACCEPT.) lien upon real property. Miscellaneous Secured Claims include all Secured ESTIMATED AMOUNT OF Claims against the Debtors, except the CLAIMS: $500,000 Citibank Secured Claim, the BMO Secured Claim and the Claims under the JPMorgan PERCENTAGE RECOVERY: 100% Chase Credit Facility. Under the Plan, on the Effective Date, the legal, equitable and contractual rights of holders of Allowed Class 9 Claims will be Reinstated, and all pre-petition liens on property of any Debtor held by or on behalf of the Miscellaneous Secured Claimholder with respect to such Claims will survive the Effective Date and continue in accordance with the contractual terms of the underlying agreements with such Claimholders until, as to each Claimholder, the Allowed Claims of such Miscellaneous Secured Claimholder are paid in full. This treatment will not impair the Reorganized Debtors' right to contest or otherwise defend against such Claims in the appropriate forum when and if such Claim is sought to be enforced by the Miscellaneous Secured Claimholder.
12
CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- 10 Intercompany Claims Intercompany Claim means a Claim by a Debtor, an Affiliate of a Debtor, or a (UNIMPAIRED; DEEMED TO non-Debtor Affiliate against another ACCEPT.) Debtor, Affiliate of a Debtor, or non-Debtor Affiliate. The Plan will not ESTIMATED AMOUNT OF alter, impair or discharge any Allowed CLAIMS: N/A Intercompany Claims. PERCENTAGE RECOVERY: N/A 11 AMERCO/AREC Guaranty AMERCO/AREC Guaranty Obligations means Obligations those obligations of the Debtors guarantying the obligations of certain (UNIMPAIRED; DEEMED TO of their direct and indirect ACCEPT.) subsidiaries, as set forth in Exhibit F to the Plan. Unless otherwise ESTIMATED AMOUNT OF specifically provided for in the Plan, CLAIMS: N/A on the Effective Date, the AMERCO/AREC Guaranty Obligations will be deemed PERCENTAGE RECOVERY: N/A Reinstated, and any non-monetary default in the primary obligations underlying the AMERCO/AREC Guaranty Obligations arising out of or related to the commencement by the Debtors of the Chapter 11 Cases, will be deemed Cured. 12 12(a) Preferred Stock Preferred Stock Interests include the Interests and 12(b) outstanding shares of the Series A Subordinated Claims 8-1/2% Preferred Stock, no par value, of (Preferred) AMERCO as set forth in the Restated Articles of Incorporation, as amended, (UNIMPAIRED; DEEMED TO together with all rights arising ACCEPT.) thereunder, including, without limitation, unpaid dividends. The Plan ESTIMATED AMOUNT OF does not alter or otherwise impair any CLAIMS: 0 of the Allowed Preferred Stock Interests. Subordinated Claims PERCENTAGE RECOVERY: N/A (Preferred) means any Claim with respect to a Preferred Stock Interest subordinated pursuant to Section 510 of the Bankruptcy Code. Under the Plan, and Section 510 of the Bankruptcy Code, Subordinated Claims (Preferred) will be subordinated to the Allowed Claims of Creditors in Classes 1 through 11 under the Plan, but will be pari passu with Allowed Preferred Stock Interests in Class 12(a) under the Plan. To the extent a Subordinated Claim (Preferred) becomes an Allowed Claim, either by agreement between the Reorganized Debtors and the holder of such Subordinated Claim (Preferred), or by Final Order of the Bankruptcy Court or other court of competent jurisdiction, such Allowed Subordinated Claim (Preferred) will be satisfied in Cash in full by the Reorganized Debtors or on such other terms as to which the Reorganized Debtors and the holder of an Allowed Subordinated Claim (Preferred) will have agreed to in writing. 13 13 (a) Existing Common Stock Existing Common Stock means shares of and Other Interests and 13(b) common stock, par value $0.25 per share, Subordinated Claims (Common) of AMERCO that are authorized, issued and outstanding prior to the Effective (UNIMPAIRED; DEEMED TO Date. Other Interests means the ACCEPT.) preferred share purchase rights issued by AMERCO pursuant to that certain stock-holder rights plan adopted by the Board of Directors of AMERCO in July 1998, with each such
13
CLASS CLASS DESCRIPTION TREATMENT UNDER PLAN - ----- ----------------- -------------------- ESTIMATED AMOUNT OF right entitling its holder to purchase CLAIMS: 0 from AMERCO one one-hundredth of a share PERCENTAGE RECOVERY: N/A of Series C Junior Participation Preferred Stock (Series C), no par value per share of AMERCO, at a price of $132.00 per one one-hundredth (1/100th) of a share of Series C, subject to adjustment. The Plan does not alter or otherwise impair the Allowed Existing Common Stock and Other Interests. Subordinated Claims (Common) means any Claim with respect to a Common Stock Interest or Other Interest subordinated pursuant to Section 510 of the Bankruptcy Code. Under the Plan, and Section 510 of the Bankruptcy Code, Subordinated Claims (Common) will be subordinated to the Allowed Claims in Classes 1 through 12 of the Plan, but will be par; passu with Allowed Common Stock Interests in Class 13(a) under the Plan. To the extent a Subordinated Claim (Common) becomes an Allowed Claim, either by agreement between the Reorganized Debtors and the holder of such Subordinated Claims (Common), or by Final Order of the Bankruptcy Court or other court of competent jurisdiction, such Allowed Subordinated Claim (Common) will be satisfied in Cash in full by the Reorganized Debtors or on such other terms as to which the Reorganized Debtors and the holder of an Allowed Subordinated Claim (Common) will have agreed to in writing. 14 Subsidiary Interests Subsidiary Interests means, collectively, the issued and outstanding (UNIMPAIRED; DEEMED TO shares of stock of AMERCO's Subsidiaries ACCEPT.) including AREC, directly or indirectly owned by AMERCO as of the Petition Date. ESTIMATED AMOUNT OF The Plan does not alter or otherwise CLAIMS: 0 impair the Subsidiary Interests. PERCENTAGE RECOVERY: N/A
D. GENERAL VOTING PROCEDURES, BALLOTS, AND VOTING DEADLINE. Accompanying this Disclosure Statement are, among other things, copies of (1) the Plan (Appendix 1 hereto, separately filed in these Cases); (2) the notice of, among other things, the time for submitting Ballots to accept or reject the Plan; the date, time and place of the hearing to consider the confirmation of the Plan and related matters, and the time for filing objections to the confirmation of the Plan (the "Confirmation Hearing Notice"); and (3) if you are entitled to vote, one or more Ballots (and return envelopes) to be used by you in voting to accept or to reject the Plan. After carefully reviewing the Plan, this Disclosure Statement, and (if you are entitled to vote) the detailed instructions accompanying your Ballot, please indicate your acceptance or rejection of the Plan by checking the appropriate box on the enclosed Ballot. Please complete and sign your original Ballot (copies will not be accepted) and return it in the envelope provided. You must provide all of the information requested by the appropriate Ballot. Failure to do so may result in the disqualification of your vote on such Ballot. Each Ballot has been coded to reflect the Class of Claims it represents. 14 Accordingly, in voting to accept or reject the Plan, you must use only the coded Ballot or Ballots sent to you with this Disclosure Statement. In order for your vote to be counted, your Ballot must be properly completed as set forth above and in accordance with the voting instructions on the Ballot and ACTUALLY RECEIVED no later than January 20, 2004 at 4:00 p.m. (prevailing Eastern time) (the "Voting Deadline") by the Voting Agent responsible for collecting Ballots pertaining to your claim. The Trumbull Group is the Voting Agent for all claimholders voting on the plan. Your Ballot contains the contact information for the Voting Agent. The contact information for the Voting Agent is also listed below. BALLOTS RECEIVED AFTER THE VOTING DEADLINE WILL NOT BE COUNTED. BALLOTS SHOULD NOT BE DELIVERED DIRECTLY TO THE DEBTORS, THE BANKRUPTCY COURT, THE STATUTORY COMMITTEES OR COUNSEL TO THE DEBTORS OR COUNSEL TO THE STATUTORY COMMITTEES. QUESTIONS ABOUT VOTING PROCEDURES If (1) you have any questions about: (a) the procedure for voting your Claim, (b) the packet of materials that you have received, or (c) the amount of your Claim holdings; or (2) you wish to obtain an additional copy of the Plan, this Disclosure Statement, or any exhibits to such documents please contact: For claims NOT involving Debt For claims involving Debt Securities Securities: only: THE TRUMBULL GROUP INNISFREE M&A INCORPORATED P.O. Box 721 (Attn: AMERCO) 501 Madison Avenue, 20th Floor Windsor, Connecticut 06095 OR New York, NY 10022 Attn: Ronnie Kryjak Attn: AMERCO Telephone: (860) 687-3965 Telephone: (877) 750-2689 e-mail: rkryjak@trumbullgroup.com [Banks and Brokers call (212) 750-5833] For further information and instructions on voting to accept or reject the Plan, see Article XVII-VOTING REQUIREMENTS OF THE PLAN. E. CONFIRMATION HEARING AND DEADLINE FOR OBJECTIONS TO CONFIRMATION. Pursuant to Section 1128 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 3017(c), the Bankruptcy Court has scheduled the Confirmation Hearing to begin on February 2, 2004, at 9:30 a.m. (prevailing Pacific time) before the Honorable Gregg W. Zive, United States Bankruptcy Judge, at the C. Clifton Young Federal Building, 300 Booth Street, Courtroom 1, Reno, Nevada 89509. The Confirmation Hearing may be adjourned from time to time by the Bankruptcy Court without further notice except for the announcement of the adjournment date made at the Confirmation Hearing or at any subsequent adjourned Confirmation Hearing. The Bankruptcy Court has directed that objections, if any, to confirmation of the Plan be filed with the Clerk of the Bankruptcy Court and served so that they are ACTUALLY RECEIVED on or before January 16, 2004, at 4:00 p.m. (prevailing Pacific time) by: COUNSEL TO THE DEBTORS: THE UNITED STATES TRUSTEE: SQUIRE, SANDERS & DEMPSEY L.L.P. OFFICE OF THE UNITED STATES TRUSTEE Two Renaissance Square 300 Booth Street, Room 2129 40 North Central Avenue, Suite 2700 Reno,NV 89509 Phoenix, Arizona 85004 Attn: Nicholas Strozza Attention: Craig D. Hansen, Esq. Telephone: (775) 784-5335 15 COUNSEL FOR THE PRE-PETITION LENDERS COUNSEL TO THE AREC NOTEHOLDERS: SKADDEN, ARPS, SLATE, MEAGHER & MCDERMOTT, WILL & EMERY FLOM LLP 227 West Monroe Street 300 South Grand Avenue Chicago, Illinois 60606 Los Angeles, California 90071-3144 Attention: Nathan Coco, Esq. Attention: Richard B. Levin, Esq. COUNSEL TO THE CREDITORS' COMMITTEE: COUNSEL TO THE EQUITY COMMITTEE: MILBANK, TWEED, HADLEY & MCCLOY LLP STUTMAN, TREISTER & GLATT PC 601 South Figueroa Street Los Angeles, California 90017 1901 Avenue of the Stars, 12th Floor Attention: Paul S. Aronzon, Esq. Los Angeles, California 90067 Attention: Charles D. Axelrod, Esq. THE DEBTORS AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS BELIEVE THAT THE PLAN PROVIDES THE BEST RECOVERIES POSSIBLE FOR THE HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS, AS APPLICABLE. THE DEBTORS AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS STRONGLY RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN. 16 II. BACKGROUND OF THE PLAN PROPONENTS A. OVERVIEW OF BUSINESS OPERATIONS. AMERCO is a Nevada corporation and is the holding company for U-Haul International. Inc. "U-Haul"), AREC, RepWest and Oxford Life Insurance Company ("Oxford"). AMERCO's executive offices are located at 1325 Airmotive Way, Suite 100, Reno, Nevada 89502-3239, and the telephone number is (775) 688-6300. AMERCO has four industry segments represented by Moving and Storage Operations (U-Haul), Real Estate Operations (AREC). Property and Casualty Insurance (RepWest) and Life Insurance (Oxford). U-Haul was founded in 1945 under the name "U-Haul Trailer Rental Company'". From 1945 to 1974, U-Haul rented trailers and, starting in 1959, trucks on a one-way and In-Town(R) basis, exclusively through independent dealers. Since 1974, U-Haul has developed a network of rental centers (U-Haul Centers) through which U-Haul also rents its trucks and trailers and provides related products and services (e.g., the sale and installation of hitches, as well as the sale of boxes and other moving and storage supplies). At March 31, 2003, U-Haul's distribution network included 1,350 centers operated by AMERCO or one of its Affiliates and 14,274 independent dealers. Throughout the 1990's, AMERCO began to exploit synergies with U-Haul's truck and trailer rental business by aggressively pursuing the expansion of its self-storage business, and established SAC Holding and its subsidiaries, as a vehicle to finance a portion of this expansion. Self-storage properties are owned by various subsidiaries of SAC Holding, and are managed by U-Haul, for a management fee, under property management agreements. SAC Holding financed the purchase of the self-storage properties through various combinations of senior loans from third-party lenders and borrowings from AMERCO. In this regard, AMERCO and its subsidiaries have made significant loans to SAC Holding and are entitled to participate in SAC Holding's excess cash flow (after senior debt service). Mark V. Shoen, a significant shareholder of AMERCO and executive officer of U-Haul, owns substantially all of the equity interest of SAC Holding. AMERCO does not have an equity ownership interest in SAC Holding. AMERCO is not liable for the debts of SAC Holding and there are no default provisions in AMERCO's indebtedness that cross-default to SAC Holding's obligations, nor are there provisions in SAC Holding's indebtedness that cross-default to the obligations of AMERCO or its Subsidiaries. Moving and Storage Operations. Moving and self-storage operations consist of the rental of equipment such as trucks and trailers, the sale of moving and storage supplies such as boxes, tape and rope, and the rental of self-storage spaces to both moving and storage customers. Operations are conducted using the registered tradename U-Haul(R) throughout the United States and Canada. The U-Haul business strategy remains focused on do-it-yourself moving and self-storage customers. U-Haul believes that customer access, in terms of truck or trailer availability and proximity of rental locations, is critical to its success. Under the U-Haul name, AMERCO's strategy is to offer, in an integrated manner over an extensive and geographically diverse network of 15,624 AMERCO operated Centers and independent dealers, a wide range of products and services to do-it-yourself moving and self-storage customers. Moving Operations U-Haul has a variety of product offerings. Rental trucks are designed with do-it-yourself customers in mind. U-Haul trailers are suited to the low profile of many newly manufactured 17 automobiles. As of March 31, 2003, the U-Haul rental equipment fleet consisted of approximately 92,000 trucks, 73,000 trailers and 19,000 tow dollies. Additionally, U-Haul provides support items such as furniture pads, utility dollies and handtrucks. Independent dealers receive U-Haul equipment on a consignment basis and are paid a commission on gross revenues generated from their rentals. U-Haul maintains contracts with its independent dealers that may typically be terminated upon 30 days written notice by either party. Historically, U-Haul has designed and manufactured its truck van boxes, trailers and various other support rental equipment items. Truck chassis are manufactured by both foreign and domestic truck manufacturers. These chassis receive certain post-delivery modifications and are joined with van boxes at strategically located AMERCO-owned manufacturing and assembly facilities in the United States. From time to time, U-Haul buys its truck bodies from a third party provider of such items. U-Haul services and maintains its trucks and trailers through an extensive preventive-maintenance program, generally performed at AMERCO-owned facilities located at or near U-Haul Centers. Major repairs are performed either by the chassis manufacturers' dealers or by AMERCO-owned repair shops. Self-Storage Business U-Haul entered the self-storage business in 1974 and has increased its presence in the industry through the acquisition and conversion of existing facilities and new construction. In addition, U-Haul has entered into management agreements to manage self-storage properties owned by others, including SAC Holding. U-Haul has also entered into a strategic and financial partnership with Private Mini Storage Realty, L.P., a Texas-based operator of self-storage properties ("PMSR"). Through 980 owned or managed self-storage locations in the United States and Canada, U-Haul offers for rent more than 28,600,000 square feet of self-storage. U-Haul's self-storage facility locations range in sizes up to 152,600 square feet of storage space, with individual storage units in sizes from 15 to 400 square feet. The primary market for storage rooms is the storage of household goods. With the addition of 18,833 storage rooms during fiscal year 2003, the average occupancy rate of same store facilities operating over one year was 82.9%, with modest seasonal variations. Real Estate Operations AREC owns approximately 90% of the real estate assets of the Debtors and their Subsidiaries, exclusive of real estate assets owned by SAC Holdings and its subsidiaries. U-Haul, RepWest, Oxford and their Subsidiaries own the remainder of the real estate assets. AREC is responsible for overseeing property acquisitions, dispositions and managing environmental risks of the properties. Insurance Property and Casualty Insurance RepWest originates and reinsures property and casualty-type insurance products for various market participants, including independent third parties, U-Haul's customers, independent dealers and AMERCO. In April 2003, RepWest announced that, in connection with AMERCO's overall restructuring 18 efforts, in order to reduce costs and to build upon its core strengths, RepWest is exiling non-U-Haul related lines of business. Life Insurance Oxford originates and reinsures annuities, credit life and disability, single premium whole life, group life and disability coverage, and Medicare supplement insurance. Oxford also administers the self-insured employee health and dental plans for AMERCO. On November 13, 2000, Oxford acquired all of the issued and outstanding shares of Christian Fidelity Life Insurance Company ("CFLIC") in an exchange of cash for stock. CFLIC is a Texas-based insurance company specializing in providing supplemental health insurance and is licensed in 31 states. The acquisition was accounted for using the purchase method of accounting and, accordingly, CFLIC's results of operations have been included in the consolidated financial statements since the date of acquisition. Oxford funded the acquisition from available cash and short-term funds. Reinsurance RepWest and Oxford 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 to large risks. However, the original insurer retains primary liability to the policyholder should the assuming insurer not be able to meet its obligations under the reinsurance agreements. Regulation RepWest and Oxford are subject to regulation by state insurance regulatory agencies. The regulation extends to such matters as licensing companies and agents, restricting the types, quality or quantity of investments, regulating capital and surplus and actuarial reserve maintenance, setting solvency standards, filing of annual and other reports on financial condition, and regulating trade 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. The insurance and reinsurance regulatory framework has been subjected to increased scrutiny by the National Association of Insurance Commissioners ("NAIC"), federal and state legislatures and insurance regulators. These regulators are considering increased regulations, with an emphasis on insurance company investment and solvency issues. It is not possible to predict the future impact of changing state and federal regulations on the operations of RepWest and Oxford. RepWest and Oxford investments must comply with the insurance laws of the state of domicile. These laws prescribe the type, quality and concentration of investments that may be made. 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 strategies of RepWest and Oxford emphasize protection of principal through the purchase of investment grade fixed-income securities. Approximately 88.0% of RepWest's and 88.6% of Oxford's fixed-income securities consist of investment grade securities (NAIC-2 or greater). The maturity distributions are designed to provide sufficient liquidity to meet future cash needs. 19 In 1998, the NAIC adopted the Codification of Statutory Accounting Principles guidance, which replaced the prior Accounting Practices and Procedures manual as the NAIC's primary guidance for statutory accounting as of January 1, 2001. The codification provides guidance for areas where statutory accounting has been silent and changes current statutory accounting practices in some areas. The Arizona Department of Insurance ("ADOI") has adopted the Codification guidance, effective January 1, 2001. Oxford and RepWest have implemented the new Codification effective January 1, 2001. In order to enhance the regulation of insurer solvency, the NAIC has adopted a formula and model law to implement risk-based capital ("RBC") requirements for insurance companies designed to assess minimum capital requirements and to raise the level of protection that statutory surplus provides for policyholder obligations. The RBC formula measures areas of risk facing insurers. Pursuant to the model law, insurers having less statutory surplus than that required by the RBC calculation will be subject to varying degrees of regulatory action, depending on the level of capital inadequacy. The RBC model law provides for four levels of regulatory action. The extent of regulatory intervention and action increases as the level of surplus to RBC decreases. The first level, the Company Action Level (as defined by the NAIC), requires an insurer to submit a plan of corrective actions to the regulator if surplus falls below 200% of the RBC amount. The Regulatory Action Level requires an insurer to submit a plan containing corrective actions and requires the relevant insurance commissioner to perform an examination or other analysis and issue a corrective order if surplus falls below 150% of the RBC amount. The Authorized Control Level gives the relevant insurance commissioner the option either to take the aforementioned actions or to rehabilitate or liquidate the insurer if surplus falls below 100% of the RBC amount. The fourth action level is the Mandatory Control Level that requires the relevant insurance commissioner to rehabilitate or liquidate the insurer if surplus falls below 70% of the RBC amount. Oxford is in compliance with the NAIC minimum RBC requirements. On May 20, 2003, the DOI determined that RepWest's level of RBC allowed for regulatory control and accordingly placed RepWest under supervision. The Debtors intend to take the position that confirmation and consummation of the Plan should result in the diminution of reserves against RepWest's regulatory capital based on AMERCO's creditworthiness. The Debtors have been informed that at this time, the ADOI does not accept the Debtors' position. The Debtors intend to have further discussions with ADOI regarding these matters. Selected Financial Information for Plan Proponents. Set forth in Appendix 2 and Appendix 3 are the following selected financial information for the Debtors and SAC Holding, respectively: (i) statements of operations on a consolidated basis for the fiscal years ended March 31, 2003, March 31, 2002, and, with respect to the Debtors, March 31, 2001; (ii) balance sheets on a consolidated basis for the fiscal years ended March 31, 2003, March 31, 2002, and, with respect to the Debtors, March 31, 2001; and (iii) statements of cash flows on a consolidated basis for the fiscal years ended March 31, 2003, March 31, 2002, and, with respect to the Debtors only, March 31, 2001. The notes that accompany the financial statements relating to the Debtors are contained in AMERCO's Annual Report on Form 10-K for the Fiscal Year Ended March 31, 2003 (the "Form 10-K"). The footnotes are an integral component of these statements and should be read in conjunction with the Form 10-K. III. PREPETITION CAPITAL STRUCTURE OF THE DEBTORS Prior to the Petition Date, the Debtors' liquidity depended primarily on cash provided from their operations, access to capital markets, bank lines of credit, and sale/lease back and other real estate financing transactions. 20 A. JPMORGAN CHASE CREDIT FACILITY. On June 28, 2002, AMERCO entered into a three-year credit facility with JP Morgan Chase (the "JPMorgan Chase Credit Facility"), which provided AMERCO with a line of credit of $205,000,000. The term of the credit facility is three years. The obligations under the credit facility are secured by intercompany receivables. AREC, U-Haul and substantially all other subsidiaries of AMERCO guaranteed the amount outstanding under the credit facility. AMERCO is in default under the terms of the JPMorgan Chase Credit Facility. B. PREPETITION NOTES AND RELATED OBLIGATIONS. AMERCO is a party to a number of indentures pursuant to which AMERCO issued, prior to the commencement of the Chapter 11 Cases, various unsecured notes and bonds. In particular, AMERCO issued approximately: (i) $175,000,000 in notes under that certain Indenture, dated May 1, 1996, as supplemented, between AMERCO and Citibank, N.A., as original indenture trustee; (ii) $200,000,000 in notes issued under that certain Senior Indenture, dated April 1, 1999, as supplemented, between AMERCO and The Bank of New York, as original indenture trustee; (iii) $110,000,000 in medium-term notes pursuant to that certain Indenture, dated September 10, 1999, between AMERCO and The First National Bank of Chicago, as original indenture trustee; and (iv) $100,000,000 in bonds backed by an asset trust ("BBAT") pursuant to that certain Indenture, dated May 1, 1996, as supplemented, between AMERCO and Citibank, N.A., as original indenture trustee. These obligations are further described below.
PRINCIPAL AMOUNT OF DEBT OWED MATURITY DATE INSTRUMENT (US$ EQUIVALENT) - ------------- ----------------------- ------------------- 05/15/03 7.85% Notes $175,000,000 02/04/05 8.80% Notes $200,000,000 09/18/06 8.04% Medium Term Notes $ 10,000,000 09/18/06 8.03% Medium Term Notes $ 5,000,000 10/02/06 8.04% Medium Term Notes $ 15,000,000 10/15/04 7.70% Medium Term Notes $ 5,000,000 01/15/27 7.47% Medium Term Notes $ 40,000,000 01/21/27 7.23% Medium Term Notes $ 33,000,000 02/06/17 8.08% Medium Term Notes $ 1,500,000 10/15/02 7.135% BBAT $100,000,000
On October 15, 2002, AMERCO failed to make a $100,000,000 principal payment, a $3,600,000 interest payment, and $26,600,000 in payments under terminated swap agreements to Citibank and Bank of America, in connection with the BBATs. The BBAT default triggered cross-defaults under AMERCO's various other credit arrangements, including the JPMorgan Chase Credit Facility. AMERCO also directly defaulted under the JPMorgan Chase Credit Facility through its inability to obtain incremental net cash proceeds or additional financing in the aggregate amount of at least $150,000,000 prior to October 15, 2002. On May 15, 2003, AMERCO also failed to make a $175,000,000 principal payment on its 7.85% senior notes. C. SYNTHETIC LEASES. As of March 31, 2003, AREC has approximately $250,000,000 owing under synthetic leases with Bank of Montreal ($149,000,000) and Citibank ($101,700,000), to finance the purchase of various 21 properties, or the construction of facilities on existing properties. Each of the synthetic leases is in cross-default. For purposes of the Chapter 11 Cases, the synthetic leases are treated as secured debt financing. D. AREC NOTES. AREC issued $95,000,000 of Series A AREC Notes and $5,000,000 of Series B AREC Notes under that certain Note Purchase Agreement, dated March 15, 2002, by and among AREC, as issuer, AMERCO, as guarantor, and the purchasers of the notes thereto. The Series A and Series B AREC Notes, which are further described below, are unsecured obligations of AREC and are defined in the Plan as the AREC Notes.
PRINCIPAL AMOUNT OF DEBT OWED MATURITY DATE INSTRUMENT (US$ EQUIVALENT) - ------------- ------------------- ------------------- ~~04/30/12 Series A AREC Notes $95,000,000 04/30/07 Series B AREC Notes $ 5,000,000~~
E. GUARANTY OF U-HAUL TRAC LEASE OBLIGATIONS. U-Haul's fleet financing consists primarily of Terminal Rental Adjustment Clause Leases ("TRAC Leases"), including, without limitation, the TRAC Lease that U-Haul Leasing & Sales Co., ("UHLS") entered into with General Foods Credit Investors No. 2 Corporation, an affiliate of Philip Morris Capital Corporation ("PMCC") which contemplates an annual exchange of existing vehicles for new vehicles (the "PMCC Like-Kind Exchange Lease"). The TRAC Leases, which are structured to qualify as operating leases, are provided by various parties to facilitate the acquisition of new rental fleet vehicles. Generally speaking, U-Haul purchases the vehicles from Ford or General Motors Corporation ("GM") and then transfers ownership of the vehicles to an owner/lessor under a TRAC Lease facility. Pursuant to the TRAC Lease facility, U-Haul receives funding from the owner/lessor. The retail market value of the asset at the end of the lease term (usually 7 years) typically exceeds the residual buy-out amount. Generally, U-Haul exercises its residual buyout option under the TRAC Leases. AMERCO has guaranteed a substantial number of the TRAC Leases. F. GUARANTY OF PHILLIP MORRIS OBLIGATIONS. In addition to the PMCC Like-Kind Exchange Lease, U-Haul, through its subsidiary UHLS, entered into a leveraged lease (the "PMCC Leveraged Lease") with General Foods Credit Corporation, an affiliate of PMCC, for the purpose of financing the acquisition of utility trailers. All of the obligations under the documents entered into with respect to the PMCC Like-Kind Exchange Lease and this PMCC Leveraged Lease are guaranteed by AMERCO. Both financing transactions are structured as sale-leaseback arrangements. G. GUARANTY OF PMSR OBLIGATIONS. PMSR is a Texas-based operator of self-storage rental facilities. SAC Holding holds 79.5% of PMSR, and U-Haul holds a 0.5% interest in PMSR. In 1997, PMSR secured a $225,000,000 senior facility with JP Morgan (the "PMSR Facility"). Under the JP Morgan Support Party Agreement, AMERCO assumes responsibility for fulfilling certain obligations under the PMSR Facility upon default or noncompliance with the debt covenants. AMERCO has executed a Non-Exoneration Agreement in February 2003 whereby it affirmed that its obligation to pay $55,000,000 under the PMSR Facility was valid and binding. AMERCO is currently in default of its JP Morgan Support Party Obligation. 22 H. GUARANTY OF PMPP OBLIGATIONS. In March 2003, an affiliate of PMSR, PM Preferred Properties, L.P. ("PMPP"), obtained a $255,000,000 secured credit facility with GMAC Commercial Holding Capital Corp. (the "PMPP Facility"). Under the PMPP Facility, AMERCO entered into the PMPP Support Party Agreement (the "PMPP Support Agreement"). Under the PMPP Support Party Agreement, AMERCO's maximum support obligation is currently $70,000,000. Prior to the filing of the Chapter 11 Cases, AMERCO was not in default of its support obligations under the PMPP Facility. I. EQUITY. As of June 30, 2003, there were 20,514,958 shares of AMERCO common stock and 6,100,000 shares of AMERCO preferred stock issued, outstanding and publicly traded. AMERCO's common stock and shares of preferred stock are listed on the Nasdaq National Market ("NNM") and New York Stock Exchange ("NYSE"), respectively. There are a number of continuing requirements that must be satisfied in order for AMERCO's stock to remain eligible for quotation on the NNM and NYSE, respectively. The closing price per share of AMERCO's common stock and preferred stock on June 20, 2003 (i.e., the date AMERCO commenced its Chapter 11 Case) and December 9, 2003, respectively, is set forth below. Based on the closing prices of AMERCO's equity securities on December 9, 2003, AMERCO's total market capitalization was $704,000,000, of which approximately $544,000,000 pertains to its Common Stock and approximately $160,000,000 to its Preferred Stock, including accrued Preferred Stock dividends.
Closing Price on Closing Price on June 20, 2003 December 9, 2003 ---------------- ---------------- ~~AMERCO Common Stock $4.08 $26.55 AMERCO Preferred Stock $9.54 $24.40~~
New York Stock Exchange Listing Status The NYSE has completed a review of the continued listing of the Series A 8 1/2% preferred stock of AMERCO following AMERCO's commencement of the Chapter 11 Case. According to NYSE, this assessment has shown that AMERCO is currently in compliance with all of the NYSE's quantitative continued listing standards. The NYSE will continue to closely monitor events at AMERCO in connection with assessing the appropriateness of continued listing of AMERCO's preferred stock. The NYSE has indicated that it will give consideration to immediate suspension of AMERCO's preferred stock if authoritative advice is received that AMERCO's securities, including the common stock, are without value, or if AMERCO subsequently falls below any of the NYSE's quantitative continued listing standards. In addition, the NYSE noted that it may, at any time, suspend a security if it believes that continued dealings in the security on the NYSE are not advisable. Nasdaq Listing Status On June 24, 2003, AMERCO received a letter from Nasdaq indicating that, in light of AMERCO's recent Chapter 11 filing, a Nasdaq Listing Qualifications Panel (the "Panel") would consider such filing and associated concerns in rendering a determination regarding AMERCO's continued listing status. Nasdaq has requested, and AMERCO has provided, information regarding AMERCO's Chapter 11 Cases and the anticipated effect of the reorganization process on the shareholders of AMERCO. On August 13, 2003, AMERCO received a letter from Nasdaq indicating that the Panel had determined to continue the listing of AMERCO's common stock on Nasdaq provided that: (1) on or before August 22, 2003, AMERCO files its Annual Report on Form 10-K for the fiscal year ended March 31, 2003, and its 23 Quarterly Report Form 10-Q for the quarter ended June 30, 2003, with the SEC and Nasdaq; (2) on or before deadlines to be determined by the Panel, AMERCO submits to Nasdaq a copy of AMERCO's Plan as filed with the Bankruptcy Court, as well as copies of any amendments to the Plan, documentation evidencing that AMERCO has commenced the solicitation of votes regarding the Plan, as well as documentation evidencing that the Plan has been confirmed by the Bankruptcy Court; and (3) on or before a date to be determined by the Panel, AMERCO submits documentation to Nasdaq evidencing its emergence from bankruptcy. In addition to the foregoing, AMERCO must comply with all other requirements for continued listing on Nasdaq. Although AMERCO did not meet the deadline to file its Form 10-Q as discussed above, it has filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2003, and its Quarterly Report Form 10-Q for the quarter ended June 30, 2003, with the SEC and Nasdaq and, as a result of the Chapter 11 filing, Nasdaq removed the "E" from AMERCO's trading symbol. The trading symbol is now "UHALQ". Following consummation of the Plan, the Debtors anticipate that the trading symbol will return to "UHAL". On November 14, 2003, AMERCO filed its Quarterly Report Form 10-Q for the quarter ended September 30, 2003, and remains current with respect to its periodic, quarterly and annual filing obligations with the SEC and Nasdaq. IV. CORPORATE STRUCTURE OF THE DEBTORS AMERCO is incorporated in Nevada. It is the parent corporation of numerous direct and indirect subsidiaries, of which only AREC is a Debtor in these jointly administered Chapter 11 Cases. None of AMERCO's other subsidiaries, including U-Haul, RepWest and Oxford, have filed for bankruptcy protection, and each is continuing normal business operations. A. BOARD OF DIRECTORS - AMERCO. The following persons comprise the Board of Directors of AMERCO.
Name Age* Position - ---------------- --- ---------------------------------------------- Edward J. Shoen 54 Chairman of the Board, President, and Director William E. Carty 76 Director John M. Dodds 66 Director Charles J. Bayer 63 Director John P. Brogan 59 Director James J. Grogan 49 Director M. Frank Lyons 67 Director James P. Shoen 43 Director
*Ages are as of June 30, 2003 Class I Directors. (Term expires at 2007 Annual Meeting of Shareholders, or until successors are duly elected and qualified) JOHN P. BROGAN has served as a Director of the Company since August 1998 and has served as the Chairman of Muench-Kreuzer Candle Company since 1980. He has been involved with various companies including a seven-year association with Alamo Rent-A-Car that ended in 1986. He is a member of the American Institute of Certified Public Accountants and served as Chairman of the Board of Trustees, College of the Holy Cross, from 1988 to 1996. JAMES J. GROGAN has served as a Director of the Company since August 1998 and is the CEO of Loreto Bay Management Arizona, LLC, a real estate development company. Mr. Grogan also served as 24 President of G.W. Holdings, a diversified investment company, from 2001 to 2002, as President and CEO of Sterling Financial Corporation; a Toronto Stock Exchange Company focused on real estate investments. He was the Senior Executive Vice President of UDC Homes, a homebuilder, from 1996 to 1998 and Managing Attorney of Gallagher and Kennedy. Mr. Grogan is a cum laude graduate of the College of the Holy Cross, and the University of Cincinnati College of Law. He was appointed by the Governor of Arizona to the Board of the Arizona Tourism and Sports Authority, where he serves as Chairman. Mr. Grogan serves on the Board of Directors of several charitable organizations. Class II Directors. (Term expires at 2004 Annual Meeting of Shareholders, or until successors are duly elected and qualified) EDWARD J. SHOEN has served as a Director and Chairman of the Board of AMERCO since 1987. He has been associated with the Company since 1971. Prior to this, Mr. Shoen was the Owner and President of Space Age Auto Paints from 1980 to 1986. He is a graduate of the College of the Holy Cross, and Arizona State University College of Law and holds an MBA from Harvard Business School. He is a member of the Arizona State Bar Association. M. FRANK LYONS has served as a Director on Board since 2002. He was president of Evergreen Realty, Inc., from 1991 to 2000. Prior to this, Mr. Lyons served in various positions with the Company, including president of Warrington Manufacturing from 1976 to 1989, president of Kar-Go Manufacturing from 1965 to 1976 and as a shop manager from 1959 to 1965, where his area of expertise was product development and manufacture. Class III Directors. (Term expires at 2005 Annual Meeting of Shareholders, or until successors are duly elected and qualified) JOHN M. DODDS has served as a Director of the Company since 1987 and Director of U-Haul since 1990. Mr. Dodds has been associated with the Company since 1963 and retired in 1994. He served as Executive Vice President from 1986 until 1994. Prior to this, Mr. Dodds served as District Vice President of U-Haul from 1977 to 1986. He was an Area Field Manager and Field Technician from 1966 until 1969 when he became U-Haul Rental Company President. Mr. Dodds began his association with the U-Haul organization in 1963 as a U-Haul Independent Dealer. JAMES P. SHOEN has served as a director of the Company since 1986 and Director of U-Haul since 1990. Mr. Shoen has been associated with the Company since 1976 and has held various executive positions in the Company, starting in 1988 as a Moving Center Manager. He has served as Vice President of AMERCO, Director of Field Repair, Director of the U-Haul Technical Center, Vice President of U-Haul International and Executive Vice President of U-Haul Field Operations. Class IV Directors. (Term expires at 2006 Annual Meeting of Shareholders, or until successors are duly elected and qualified) WILLIAM E. CARTY has served as a Director of the Company since 1987 and as Director of U-Haul since 1986. He has been associated with the Company since 1946 and retired in 1987. Mr. Carty built the first 100 trailers along with the Company's founder, L.S. Shoen. He established the first manufacturing plant in Boston and went on to establish the U-Haul System's manufacturing complex in Willow Grove, Pennsylvania. He was also instrumental in the development of the U-Haul Technical Center in Tempe, Arizona. Mr. Carty ran all marketing and product functions in the Company for many years and regularly ran the Company's most profitable division. 25 CHARLES J. BAYER has served as Director of the Company since 1990. Before retiring in 2000, Mr. Bayer had been associated with the Company since 1967. He served in various executive positions including Director of Finance and Administration for the U-Haul Technical Center, Manager of Repair and Maintenance and served as President of Amerco Real Estate Company from 1990 to 2000. Before his AMERCO career, Mr. Bayer was a commissioned officer in the U.S. Navy from 1962 to 1967 and served two tours of duty on the USS Asheville, ultimately becoming its Commanding Officer. Mr. Bayer is a graduate of Notre Dame University and holds an MBA from the University of Arizona. B. SENIOR MANAGEMENT - AMERCO. The following persons comprise the other senior management of AMERCO:
Name Age* Position - ------------------- ---- --------------------------------------------------- Gary B. Horton 59 Treasurer of AMERCO and Asst. Treasurer of U-Haul Gary V. Klinefelter 55 Secretary & General Counsel of AMERCO and U-Haul Rocky D. Wardrip 45 Assistant Treasurer of AMERCO Mark V. Shoen 52 President of U-Haul Phoenix Operations John C. Taylor 45 Director and Executive V.P. of U-Haul Ronald C. Frank 62 Executive V.P. of U-Haul Field Operations Mark A. Haydukovich 46 President of Oxford Life Insurance Company Carlos Vizcarra 56 President of Amerco Real Estate Company Richard M. Amoroso 44 President of Republic Western Insurance Company
*Ages are as of June 30, 2003 GARY B. HORTON has served as Treasurer of AMERCO since 1982 and Assistant Treasurer of U-Haul since 1990. He has been associated with AMERCO since 1969. GARY V. KLINEFELTER, Secretary of AMERCO since 1988 and Secretary of U-Haul since 1990, is licensed as an attorney in Arizona and has served as General Counsel of AMERCO and U-Haul since June 1988. He has been associated with AMERCO since 1978. ROCKY D. WARDRIP, Assistant Treasurer of AMERCO since 1990, has been associated with AMERCO since 1978 in various capacities within accounting and treasury operations. MARK V. SHOEN has served as a Director of AMERCO from 1990 until February 1997. He has served as a Director of U-Haul from 1990 until November 1997 and as President, Phoenix Operations, from 1994 to present. JOHN C. TAYLOR, Director of U-Haul since 1990, has been associated with AMERCO since 1981. He is presently an Executive Vice President of U-Haul. RONALD C. FRANK has been associated with AMERCO since 1959. He is presently Executive Vice President of U-Haul Field Operations. MARK A. HAYDUKOVICH has served as President of Oxford since June 1997. From 1980 to 1997 he served as Vice President of Oxford. CARLOS VIZCARRA has served as President of AREC since September 2000. He began his previous position as Vice President/ Storage Product Group for U-Haul in 1988. 26 RICHARD M. AMOROSO has served as President of RepWest since August 2000. He was Assistant General Counsel of U-Haul from 1993 until February 2000. He served as Assistant General Counsel of ON Semiconductor Corporation from February to August 2000. Edward J., Mark V., and James P. Shoen are brothers. William E. Carty is the uncle of Edward J. and Mark V. Shoen. M. Frank Lyons was married to William E. Carty's sister and the aunt of Edward J. and Mark V. Shoen until her death in 1992. C. EXECUTIVE COMPENSATION - AMERCO. The following Summary Compensation Table shows the annual compensation paid to (1) AMERCO's chief executive officer; and (2) the four most highly compensated executive officers of AMERCO, other than the chief executive officer.
Annual Compensation -------------------------------------------- All other Name and Principal Position Year Salary(1) Bonus Compensation(2) - ---------------------------------------- ---- -------- -------- --------------- Edward J. Shoen 2003 $503,708 -- $ 334 Chairman of the Board and President of 2002 $503,708 -- $1,311 AMERCO and U-Haul 2001 $503,708 -- $2,311 Mark V. Shoen(3) 2003 $617,308 -- $ 334 President of U-Haul Phoenix Operations 2002 $623,077 -- $1,311 2001 $623,077 -- $2,311 Gary V. Klinefelter(3) 2003 $251,738 $ 55,000 $ 334 Secretary and General Counsel of AMERCO 2002 $222,547 $ 67,000 $1,311 and U-Haul 2001 $224,239 $ 60,000 $2,311 Gary B. Horton 2003 $242,308 $ 40,000 $ 334 Treasurer of AMERCO and Assistant 2002 $233,655 $ 40,000 $1,311 Treasurer of U-Haul 2001 $234,539 $110,000 $2,192 Ronald C. Frank 2003 $237,995 $ 15,704 $ 334 Executive V.P. U-Haul Field Operations 2002 $188,471 -- $1,311 2001 $188,471 -- $2,311
(1) Includes annual fees paid to Directors of AMERCO and U-Haul. (2) Represents the value of Common Stock allocated under the AMERCO Employee Savings, Profit Sharing and Employee Stock Ownership Plan. (3) Compensation paid by other Non-Debtor Subsidiaries. D. SECURITY OWNERSHIP OF MANAGEMENT - AMERCO. To the best of AMERCO's knowledge, the following table lists, as of June 30, 2003, the beneficial ownership of AMERCO's equity securities of each director and director nominee of AMERCO, of each executive officer named in the foregoing compensation table, and of all directors and executive officers of AMERCO as a group (17 persons): 27
Shares of Common Name of Beneficial Stock Beneficially Percentage of Owner Owned Common Stock - -------------------------- ------------------ ------------- Edward J. Shoen (1) 3,487,645(2) 16.9 Mark V. Shoen(1) 3,355,471(2) 16.3 James P. Shoen (1) 2,049,962(2) 9.9 John M. Dodds 0 0 William E. Carty(1) 0 0 Charles J. Bayer 2,186 * John P. Brogan 6,000 * James J. Grogan 100 * M. Frank Lyons 300 * Gary V. Klinefelter 3,513 * Ronald C. Frank 2,592 * John C. Taylor 1,423 * All Officers and Directors 8,917,548 43.2
*The percentage of Common Stock beneficially owned is less than one percent. (1) Edward J. Shoen, Mark V. Shoen, James P. Shoen, and William E. Carty beneficially own 16,300 shares (0.26%), 16,700 shares (0.27%), 31,611 shares (0.51%), and 12,000 shares (0.19%) of AMERCO's Series A 8 1/2% Preferred Stock, respectively. The executive officers and directors as a group beneficially own 77,611 shares (1.27%) of AMERCO's Series A 8 1/2% Preferred Stock. (2) The complete name of the ESOP Trust is the ESOP Trust Fund for the AMERCO Employee Savings and Employee Stock Ownership Trust. The ESOP Trustee, which consists of three individuals without a past or present employment history or business relationship with the Company, is appointed by the Company's Board of Directors. Under the ESOP, each participant (or such participant's beneficiary) in the ESOP directs the ESOP Trustee with respect to the voting of all Common Stock allocated to the participant's account. All shares in the ESOP Trust not allocated to participants are voted by the ESOP Trustee. As of June 30, 2003, of the 2,402,456 shares of Common Stock held by the ESOP Trust, 1,607,509 shares were allocated to participants and 794,947 shares remained unallocated. The number of shares reported as beneficially owned by Edward J. Shoen, Mark V. Shoen, James P. Shoen, Paul F. Shoen, and Sophia M. Shoen include Common Stock held directly by those individuals and 3,964, 3,690, 3,648, 779, and 196 shares of Common Stock, respectively, allocated by the ESOP Trust to those individuals. Those shares are also included in the number of shares held by the ESOP Trust. E. INDEPENDENT GOVERNANCE COMMITTEE - AMERCO. Prior to the commencement of the Chapter 11 Cases, the Board created an Independent Governance Committee (the "Committee"), whose charter is to "monitor and evaluate the Company's corporate governance principles and standards and propose to the Board any modifications thereto as deemed appropriate for sound corporate governance." The Committee is co-chaired by two independent members of the Board, James J. Grogan and John P. Brogan, and includes two additional outside members, Thomas W. Hayes and Paul A. Bible. Each of the members of the Committee, qualify as independent under applicable SEC, New York Stock Exchange and NASDAQ rules and regulations. 28 F. BOARD OF DIRECTORS - AREC. The following persons comprise the Board of Directors of AREC.
Name Position - ---------------- --------------------- ~~Edward J. Shoen Chairman of the Board Gary B. Horton Director Carlos Vizcarra Director William E. Carty Director John M. Dodds Director~~
G. SENIOR MANAGEMENT-AREC. The following persons comprise the officers of AREC:
Name Position - ------------------- ------------------- ~~Carlos Vizcarra President Gary V. Klinefelter Secretary Jennifer M. Settles Assistant Secretary Gary B. Horton Treasurer Robert Peterson Assistant Treasurer~~
H. EXECUTIVE COMPENSATION - AREC. The following Summary Compensation Table shows the annual compensation paid to (1) AREC's chief executive officer; and (2) the four most highly compensated officers of AREC, other than the chief executive officer.
Annual Compensation -------------------------------------------- All other Name and Principal Position Year Salary(1) Bonus Compensation(2) - --------------------------- ---- --------- -------- --------------- Carlos Vizcarra 2003 $134,620 -- (3) President 2002 $129,812 -- (3) 2001 $117,463 -- (3) Gary V. Klinefelter (4) 2003 -- -- -- Secretary 2002 -- -- -- 2001 -- -- -- Gary B. Horton (5) 2003 $242,308 $ 40,000 $ 334 Treasurer 2002 $233,655 $ 40,000 $1,311 2001 $234,539 $110,000 $2,192 Jennifer Settles(4) 2003 -- -- -- Assistant Secretary 2002 -- -- -- 2001 -- -- -- Robert Peterson(4) 2003 -- -- -- Assistant Treasurer 2002 -- -- -- 2001 -- -- --
(1) No annual fees are paid to Directors of AREC. 29 (2) Represents the value of Common Stock allocated under the AMERCO Employee Savings, Profit Sharing and Employee Stock Ownership Plan. (3) Includes Common Stock allocated under the AMERCO Employee Savings, Profit Sharing and Employee Stock Ownership Plan. (4) Compensation is paid by other Non-Debtor Subsidiaries. (5) Includes compensation paid for services performed as an executive officer of AMERCO. I. SAC HOLDING CORPORATION The following persons comprise the Board of Directors of SAC Holding Corporation. Board of Directors - SAC Holdings Corporation Mark V. Shoen Timothy Creedon Senior Management - SAC Holding Corporation
Name Position - ---------------- ----------------------- ~~Mark V. Shoen President Bruce Brockhagen Secretary and Treasurer~~
Board of Directors - SAC Holdings IT Corporation Mark V. Shoen Senior Management- SAC Holdings II Corporation
Name Position - ---------------- ----------------------- ~~Mark V. Shoen President Bruce Brockhagen Secretary and Treasurer~~
V. EVENTS PRECIPITATING THE CHAPTER 11 CASES On June 28, 2002, AMERO entered into the $205,000,000 JPMorgan Chase Credit Facility, the terms of which required AMERCO to raise $150,000,000 of new credit availability prior to October 15, 2002. Accordingly, throughout 2002, AMERCO was contemplating a $275,000,000 bond offering (the "2002 Offering") to raise sufficient capital to: (a) meet its obligation under the JPMorgan Chase Credit Facility to obtain incremental net cash proceeds or additional financing in the aggregate amount of at least $150,000,000 prior to October 15, 2002; and (b) repay the $100,000,000 principal payment, plus related interest and swap payments, under the BBAT's. In February 2002, PricewaterhouseCoopers ("PwC"), AMERCO's auditing firm for over 20 years, informed AMERCO's management that, contrary to PwC's prior advice, the SAC Holding entities should be included in AMERCO's consolidated financial statements. According to PwC, which had originally approved the non-consolidated treatment, and had signed-off on such treatment in numerous subsequent audits, the SAC Holding entities did not qualify for non-consolidated treatment under the accounting guidelines. 30 The timing of PwC's announcement in connection with the consolidation issue had a devastating impact on AMERCO and its ability to continue to access the capital markets for its financing needs. PwC's announcement, as well as its prior and subsequent conduct, resulted in, among other things, the following: - The untimely filing of quarterly and annual reports to the SEC, because AMERCO had inadequate time in which to complete the consolidation of the SAC Holding entities and AMERCO after PwC reversed its prior opinion; - The negative financial impact of the consolidation of the SAC Holding entities and AMERCO resulted in a multi-million dollar decrease in AMERCO's net earnings and net worth, an increase in its leverage, as well as a precipitous corresponding decline in the market price of AMERCO's common stock; - Time-consuming and costly restatement of prior period financial statements; - Significantly reduced access to the capital markets to meet its financing needs - as exemplified by its inability to successfully raise capital under the 2002 Offering, which was launched in September 2002 - due to the two-month delay by PwC in completing the 2002 audit; and - Ultimately, a default in the repayment of the BBAT's in October 2002 as a result of the failed 2002 Offering, which default led to cross-defaults in substantially all other tranches of AMERCO's debt. In December 2002, as a result of concerns over the BBAT repayment default and the resulting cross-defaults in the other tranches of AMERCO's debt structure, the ADOI performed a limited scope examination of RepWest to ascertain the nature and extent of RepWest's exposure as a result of the AMERCO defaults, confirm stated assets and liabilities of RepWest, and evaluate the impact on RepWest's financial condition in the event AMERCO's various debt defaults impair its ability to fulfill its obligations to RepWest. On May 20, 2003, based upon the results of this examination, the Director of the ADOI placed RepWest under its direct supervision. Following the events that occurred in the months after PwC's announcement, AMERCO terminated PwC as its auditor on July 17, 2002. On August 8, 2002, AMERCO announced the appointment of BDO Seidman, LLP ("BDO") as its new independent accountant. BDO has assisted AMERCO in preparing its annual filing for the fiscal year ended March 31, 2003, and has conducted a re-audit of AMERCO's financial statements for fiscal 2001 and 2002. In April 2003, AMERCO filed an action against PwC that seeks in excess of $2.5 billion for actual and punitive damages related to PwC's violations of its professional duties to AMERCO (the "PwC Litigation"). As a result of the foregoing series of events, AMERCO filed its Chapter 11 Case to address and resolve, in an orderly and rational matter, the existing defaults throughout its capital structure. As part of this process, AMERCO obtained a commitment from a lending syndicate led by Wells Fargo Foothill, Inc. to provide: (1) a senior secured debtor-in-possession credit facility in the amount of $300,000,000; and (2) $550,000,000 in financing that will be used as part of the consummation of its reorganization. A. PwC LITIGATION. On April 18, 2003, AMERCO filed suit against its former auditors, PwC. The complaint seeks actual and punitive damages in excess of $2.5 billion dollars as a result of the alleged negligent, fraudulent and tortious conduct of PwC during the last seven years of its audit engagement. On May 7, 2003, AMERCO received notice from PwC that PwC's most recent audit report should no longer be associated with AMERCO's fiscal 2001 and 2002 financial statements. PwC has informed AMERCO 31 that this action is required under accounting profession independence standards as a result of AMERCO's claims against PwC, and PwC has identified no issues regarding the accuracy of the subject financial statements. The Reorganized Debtors intend to pursue the PwC Litigation. B. DEPARTMENT OF LABOR INVESTIGATIONS. The United States Department of Labor ("DOL") is presently investigating whether there were violations of the Employee Retirement Income Security Act of 1974 ("ERISA") involving the AMERCO Employee Savings, Profit Sharing, and Employee Stock Ownership Plan (the "ESOP"). The DOL has interviewed a number of AMERCO representatives as well as the ESOP fiduciaries and has issued a subpoena to AMERCO and a subpoena to SAC Holding. At the present time, AMERCO is unable to determine whether the DOL will assert any claims against AMERCO, SAC Holding, or the ESOP fiduciaries. The DOL asked AMERCO and its current directors as well as the ESOP trustees to sign an agreement tolling the statute of limitations until December 31, 2003 with respect to any claims arising out of certain transactions between AMERCO or any affiliate of AMERCO and SAC Holding or any of its affiliates, and such persons have done so. The DOL recently asked such parties to extend the tolling agreement to June 30, 2004, and the parties have agreed. The DOL has not advised AMERCO that it believes that any violations of ERISA have in fact occurred. Instead, the DOL is simply investigating potential violations. AMERCO intends to take any corrective action that may be needed in light of the DOL's ultimate findings. Although AMERCO has fully cooperated with the DOL in this matter and intends to continue to fully cooperate, the DOL may determine that AMERCO has violated ERISA. In that event, AMERCO may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief. The DOL has filed a contingent, unliquidated, unsecured proof of claim in an undetermined amount in the Debtors' Chapter 11 Cases. The Debtors intend to object to the allowance of the DOL's proof of claim. In addition, based upon the analysis by the Debtors and discussions that have taken place with the DOL to date, the Debtors do not believe the results of the DOL's investigation or its contingent, unliquidated, unsecured proof of claim will have a material adverse effect on the Debtors' results of operations or their financial condition. C. SEC INVESTIGATIONS. The SEC has issued a formal order of investigation to determine whether AMERCO has violated the Federal securities laws. On January 7, 2003, AMERCO received the first of four subpoenas issued by the SEC. SAC Holding, AMERCO's current and former auditors, and others have also received one or more subpoenas relating to this matter. AMERCO is cooperating fully with the SEC and is facilitating the expeditious review of its financial statements and any other issues that may arise. AMERCO has produced a large volume of documents and other materials in response to the subpoenas, and AMERCO is continuing to assemble and produce additional documents and materials for the SEC. Although AMERCO has fully cooperated with the SEC in this matter and intends to continue to fully cooperate, the SEC may determine that AMERCO has violated Federal securities laws. When this investigation will be completed and what its outcome will be remain uncertain. If the SEC makes a determination that AMERCO violated Federal securities laws, AMERCO may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief. The SEC has filed a contingent, unliquidated, unsecured proof of claim in an undetermined amount in the Debtors' Chapter 11 Cases. The Debtors intend to object to the proof of claim and take the position that the SEC's claim should be disallowed in its entirety. 32 VI. SIGNIFICANT EVENTS IN CHAPTER 11 CASES A. CONTINUATION OF BUSINESS; STAY OF LITIGATION. On June 20, 2003 ("AMERCO Petition Date"), AMERCO filed a voluntary petition in the Bankruptcy Court for reorganization relief under Chapter 11 of the Bankruptcy Code. On August 13, 2003 ("AREC Petition Date"), AREC filed a voluntary petition in the Bankruptcy Court for reorganization relief under Chapter 11 of the Bankruptcy Code. Since the applicable Petition Dates, the Debtors have continued to operate as debtors-in-possession subject to the supervision of the Bankruptcy Court and in accordance with the Bankruptcy Code. The Debtors are authorized to operate their businesses in the ordinary course of business, with transactions out of the ordinary course of business requiring Bankruptcy Court approval. An immediate effect of the filing of the Debtors' bankruptcy petitions was the imposition of the automatic stay under the Bankruptcy Code which, with limited exceptions, enjoined the commencement or continuation of all collection efforts by creditors, the enforcement of liens against property of the Debtors, and the continuation of litigation against the Debtors. This relief provided the Debtors with the "breathing room" necessary to assess and reorganize their business. The automatic stay remains in effect, unless modified by the Bankruptcy Court, until consummation of a plan of reorganization. A summary of the derivative and class action litigation that has been impacted by the automatic stay is set forth below. Derivative Actions On September 24, 2002, Paul F. Shoen filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Paul F. Shoen vs. SAC Holding Corporation et. al., CV02-05602, seeking damages and equitable relief on behalf of AMERCO from SAC Holding and certain current and former members of the AMERCO Board of Directors, including Edward J. Shoen, Mark V. Shoen and James P. Shoen as defendants. AMERCO is named a nominal defendant for purposes of the derivative action. The complaint alleges breach of fiduciary duty, self-dealing, usurpation of corporate opportunities, wrongful interference with prospective economic advantage and unjust enrichment and seeks the unwinding of sales of self-storage properties by subsidiaries of AMERCO to SAC Holding over the last several years. The complaint seeks a declaration that such transfers are void as well as unspecified damages. On October 28, 2002, AMERCO, the Shoen directors, the non-Sheen directors and SAC Holding filed motions to dismiss the complaint. In addition, on October 28, 2002, Ron Belec filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Ron Belec vs. William E. Carty, et al, CV 02-06331 and on January 16, 2003, M.S. Management Company, Inc. filed a derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned M.S. Management Company, Inc. vs. William E. Carty, et. al, CV 03-00386. Two additional derivative suits were also filed against these parties. The court consolidated all five complaints before dismissing them on May 8, 2003. Plaintiffs have filed a notice of appeal. Plaintiffs in one of the derivative suits have filed a contingent, unliquidated, unsecured proof of claim in the approximate amount of $200,000,000 in the Debtors' Chapter 11 Cases. The Debtors intend to object to the proof of claim and take the position that such claim should be disallowed in its entirety. Class Actions AMERCO is a defendant in four putative class action lawsuits (collectively, the "Class Actions"): (1) Article Four Trust v. AMERCO, et al.. District of Nevada, United States District Court, Case No. CV-N-03-0050-DWH-VPC: Article Four Trust, a purported AMERCO shareholder, commenced this action on January 28, 2003 on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Article Four Trust action alleges one claim for 33 violation of Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder; (2) Mates v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0107: Maxine Mates, an AMERCO shareholder, commenced this putative class action on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Mates action asserts claims under Section 10(b) and Rule 10b-5, and Section 20(a) of the Exchange Act; (3) Klug v. AMERCO, et al., United States District Court of Nevada, Case No. CV-S-03-0380: Edward Klug, an AMERCO shareholder, commenced this putative class action on behalf of all persons and entities who purchased or acquired AMERCO securities between February 12, 1998 and September 26, 2002. The Klug action asserts claims under Section 10(b) and Rule 10b-5 and Section 20(a) of the Exchange Act; and (4) IG Holdings v. AMERCO, et al., United States District Court, District of Nevada, Case No. CV-N-03-0199: IG Holdings, an AMERCO bondholder, commenced this putative class action on behalf of all persons and entities who purchased, acquired, or traded AMERCO bonds between February 12, 1998 and September 26, 2002, alleging claims under Section 11 and Section 12 of the Securities Act of 1933 (the "Securities Act") and Section 10(b) and Rule 10b-5, and Section 20(a) of the Exchange Act. Each of these four securities class actions allege that AMERCO engaged in transactions with SAC Holding entities that falsely improved AMERCO's financial statements, and that AMERCO failed to disclose the transactions properly. The actions are at a very early stage. The Klug action has not been served. In the other three actions, AMERCO does not currently have a deadline by which it must respond to the complaints. Management has stated that it intends to defend these cases vigorously. AMERCO has filed a notice of AMERCO's bankruptcy petition and the automatic stay in each of the courts where these cases are pending. Certain of the plaintiffs in the pending Class Actions have filed a contingent, unliquidated, unsecured proof of claim in the approximate amount of $314,000,000 in the Debtors' Chapter 11 Cases. A class proof of claim in an as yet undetermined amount was also filed in these Chapter 11 Cases. The Debtors intend to object to both of these proofs of claim and take the position that such claims should be disallowed in their entirety. As of the AMERCO Petition Date, all pending litigation against AMERCO is stayed, and as of the AREC Petition Date, all pending litigation against AREC is stayed. Absent further order of the Bankruptcy Court, no party, subject to certain exceptions, may take any action, again subject to certain exceptions, to recover on pre-petition claims against AMERCO or AREC. The automatic stay, however, does not apply to AMERCO's other subsidiaries or to the non-Debtor defendants in the Class Actions. B. FIRST DAY ORDERS. On or shortly after the AMERCO Petition Date and the AREC Petition Date, the Bankruptcy Court entered several orders authorizing AMERCO and AREC, respectively, to pay various prepetition claims and granting other relief necessary to facilitate the Debtors' transition between prepetition and postpetition business operations. Such orders approved certain regular business conduct that may not otherwise be authorized specifically under the Bankruptcy Code, or as to which the Bankruptcy Code requires prior approval by the Bankruptcy Court. The first day orders entered in the Debtors' Chapter 11 Case authorized, among other things: - the retention of the following professionals to serve on behalf of the Debtors: Squire, Sanders & Dempsey L.L.P., and Beesley, Peck, Matteoni, Ltd. as restructuring counsel; Alvarez & Marsal, Inc. as restructuring advisor, the Trumbull Group, EEC as claims and noticing agent, and BDO Seidman, LLP, as accountants; - the continued retention of professionals regularly employed by the Debtors in the ordinary course of their business; 34 - the maintenance of the Debtors' bank accounts and operation of their cash management systems substantially as such systems existed prior to the Petition Date, the continued use of existing business forms, and the continuation of intercompany transactions with non- Debtor subsidiaries and affiliates; - the continuation of utility services during the pendency of the Chapter 11 Cases; - the payment of employees' accrued prepetition wages and obligations associated with AMERCO's employee benefits plans; - payment of certain insurance obligations of AMERCO to its subsidiary, RepWest; and - the consensual use of cash collateral and the granting of adequate protection to JPMorgan Chase, Citibank and BMO. C. APPOINTMENT OF STATUTORY COMMITTEES. Creditors' Committee On June 27, 2003 (as amended on July 11, 2003 and again on September 8, 2003), the Office of the United States Trustee for the District of Nevada (the "United States Trustee") appointed, pursuant to Section 1102 of the Bankruptcy Code, an Official Unsecured Creditors' Committee (the "Creditors' Committee"), which is generally comprised of holders of unsecured claims evidenced by debt securities issued by AMERCO or indenture trustees. The following creditors were selected from the indenture trustees, lenders and other general unsecured creditors as members of the Creditors' Committee: Pacific Investment Management Company LLC ("PIMCO"), Law Debenture Trust Company of New York, Bank of America, N.A., GE Asset Management Inc., and The Bank of New York. PIMCO has since resigned as a member of the Creditors' Committee The Creditors' Committee is represented by Milbank, Tweed, Hadley & McCloy, LLP, whose office is located in Los Angeles, California. The Creditors' Committee's financial advisor is Jefferies & Company, Inc. Equity Committee On August 12, 2003, (as amended on September 16, 2003), the United States Trustee appointed, pursuant to Section 1102 of the Bankruptcy Code, an Official Committee of Equity Security Holders (the "Equity Committee"), which is generally comprised of representatives of holders of AMERCO's equity securities. The following creditors were selected as members of the Equity Committee: Heartland Advisors, Inc. ("Heartland"), Benten Capital, LLC, and the AMERCO Employee Savings, Profit Sharing and Employee Stock Ownership Plan. Heartland has since resigned as a member of the Equity Committee. The Equity Committee is represented by Stuttman, Treister & Glatt PC, whose office is located in Los Angeles, California. The Equity Committee's financial advisor is Providence Capital, Inc. D. POST-PETITION FINANCING. On August 14, 2003, the Debtors obtained interim approval from the Bankruptcy Court to enter into a senior secured credit facility of up to $300,000,000 (the "DIP Facility") with Wells Fargo Foothill, 35 Inc., consisting of a revolving credit facility of up to $250,000,000 (the "DIP Revolver"), including a maximum $50,000,000 subfacility for the issuance of letters of credit, plus an interest only term loan facility of $50,000,000 (the "DIP Term Loan"). Aggregate loans and letters of credit under the DIP Facility must not exceed the lesser of $300,000,000 and the Borrowing Base (as defined in the related loan document). A final order with respect to the DIP Facility was entered by the Bankruptcy Court on September 26, 2003. The Debtors sought approval of the DIP Facility to ensure necessary liquidity during the Chapter 11 Cases. The DIP Facility provided necessary stability to RepWest. The DIP Facility requires that the Debtors maintain certain financial covenants and restricts liens, indebtedness, capital expenditures, dividend payments, and sales of assets. As of October 6, 2003, the current amount outstanding under the DIP Facility was approximately $55,000,000, which was used to pay fees related to the DIP Facility and an adequate protection payment in the amount of $51,250,000 to reduce the amount of the JPMorgan Claims under the JPMorgan Chase Credit Facility. E. PLAN SUPPORT AGREEMENT Throughout the Chapter 11 Cases, the Debtors and the Creditors' Committee have engaged in extensive good faith negotiations in an attempt to reach a consensual arrangement for the treatment of the AMERCO Unsecured Claims in Class 7 under the Plan. On November 12, 2003, the Debtors and the Creditors' Committee entered into a Plan Support Agreement (the "Support Agreement"), which provides for the payment in full of the Allowed AMERCO Unsecured Claims in Class 7 as set forth in the Plan. Pursuant to the Support Agreement, the Creditors' Committee supports confirmation and consummation of the Plan. F. OTHER SIGNIFICANT EVENTS DURING THE CHAPTER 11 CASES. The Insurance First Day Order. RepWest provides several types of property and casualty insurance for AMERCO and certain of its subsidiaries, particularly U-Haul International, Inc. Prior to the AMERCO Petition Date, the ADOI had conducted a limited scope examination to determine the impact of AMERCO's defaults and financial condition on its ability to fulfill its obligations to RepWest. ADOI concluded that credit risk exposure to RepWest stemming from uncertainty over AMERCO's ability to pay deductible and other obligations to RepWest, required significant reductions to RepWest's surplus to a point below levels necessary for RepWest to operate pursuant to applicable state statutes. ADOI further concluded that AMERCO's obligations to RepWest for accrued retrospective premiums and federal income tax sharing receivables were at significant risk of non-payment, leaving RepWest with insufficient capital and surplus. On May 20, 2003, ADOI placed RepWest under its direct supervision. AMERCO sought Bankruptcy Court approval to make certain payments to RepWest in order to stabilize its relationship with RepWest and thereby minimize the risk that the ADOI (or other state agencies) would initiate precipitous and adverse action against RepWest, particularly RepWest's license to conduct business in all states in which it operates. On the AMERCO Petition Date, the Bankruptcy Court authorized AMERCO to pay certain pre-petition obligations owing to RepWest, and to continue to make such payments post-petition in accordance with AMERCO's normal and ordinary business practices, in order to provide adequate assurance to RepWest, and, by extension, the ADOI, that AMERCO will meet all post-petition obligations to RepWest. In addition, under the Insurance First Day Order, AMERCO is required to assume, effective as of the Effective Date, the outstanding insurance contracts with RepWest. As a result of this assumption, the Allowed Claims of RepWest will be assumed by, and become an obligation of, Reorganized AMERCO. 36 The AREC Noteholders Restructuring Agreement. Prior to the commencement of its Chapter 11 Case, AREC and the AREC Noteholders entered into the Restructuring Agreement (AREC Noteholders), dated August 12, 2003, which sets forth, among other things, the agreed treatment of the AREC Noteholders under the Plan, and under which the AREC Noteholders are granted Allowed Claims in the Chapter 11 Cases. Subject to the terms and conditions set forth in the Restructuring Agreement (AREC Noteholders), including the Debtors' compliance with the disclosure and solicitation requirements of Section 1125 of the Bankruptcy Code, the holders of the AREC Notes have agreed to vote to accept the Plan. The JPMorgan Restructuring Agreement. On September 8, 2003, AMERCO and the holders of more than two-thirds of the JPMorgan Claims under the JPMorgan Chase Credit Facility entered into the Restructuring Agreement (Revolver Lenders), which sets forth, among other things, the agreed treatment of the JPMorgan Claimholders under the Plan, and under which the JP Morgan Claimholders are granted Allowed Claims in the Chapter 11 Cases. Subject to the terms and conditions set forth in the Restructuring Agreement (Revolver Lenders), including the Debtors' compliance with the disclosure and solicitation requirements of Section 1125 of the Bankruptcy Code, more than two-thirds of the holder of the JPMorgan Claims have agreed to vote to accept the Plan. Cash Collateral Stipulation. On or shortly after the AMERCO Petition Date, the Bankruptcy Court entered an order authorizing AMERCO's use of cash collateral and granting adequate protection to JP Morgan Chase Bank. On or shortly after the AREC Petition Date, the Bankruptcy Court entered separate orders authorizing the Debtors' use of cash collateral and granting adequate protection to Bank of Montreal, Citibank and JPMorgan Chase Bank, respectively. Carey Transaction. As contemplated in the Plan and as referenced in this Disclosure Statement, the "Carey Sale Transaction" means the transaction whereby UH Storage (DE) Limited Partnership, a Delaware limited partnership, or other affiliate of W.P. Carey & Co., LLC, will acquire the real property that is subject to the BMO and Citibank synthetic leases and lease such real property to an affiliate of Self-Storage International, Inc. In connection with such transaction, such real property will be managed by subsidiaries of U-Haul International, Inc. pursuant to a property management agreement. The proceeds of the Carey Sale Transaction are intended to be used to: (i) repay in full the obligations under the BMO and Citibank synthetic leases; (ii) provide a security deposit to the lessor thereunder; (iii) pay for expenses of such transaction; (iv) satisfy initial lender reserves for property taxes, insurance and property maintenance; (v) pay AMERCO an option fee; (vi) pay the first quarter rent payment thereunder; and (vii) provide the lessor with an earn-out deposit pending attainment by such real property of particular net operating income thresholds. A purchase and sale agreement for the transaction has been executed by the parties, and the total purchase price for the transaction is $298,000,000. VII. DESCRIPTION OF THE REORGANIZATION PLAN THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE, CLASSIFICATION, TREATMENT AND IMPLEMENTATION OF THE PLAN AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN, WHICH ACCOMPANIES THIS DISCLOSURE STATEMENT, AND TO THE APPENDICIES ATTACHED THERETO. 37 ALTHOUGH THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT INCLUDE SUMMARIES OF THE PROVISIONS CONTAINED IN THE PLAN AND IN DOCUMENTS REFERRED TO THEREIN, THIS DISCLOSURE STATEMENT DOES NOT PURPORT TO BE A PRECISE OR COMPLETE STATEMENT OF ALL THE TERMS AND PROVISIONS OF THE PLAN OR DOCUMENTS REFERRED TO THEREIN, AND REFERENCE IS MADE TO THE PLAN AND TO SUCH DOCUMENTS FOR THE FULL AND COMPLETE STATEMENTS OF SUCH TERMS AND PROVISIONS. THE PLAN ITSELF AND THE DOCUMENTS IT REFERS TO WILL CONTROL THE TREATEMENT OF CREDITORS AND EQUITY SECURITY HOLDERS UNDER THE PLAN AND WILL, UPON THE EFFECTIVE DATE, BE BINDING UPON HOLDERS OF CLAIMS AGAINST, AND INTERESTS IN, THE DEBTORS, THE REORGANIZED DEBTORS, AND OTHER PARTIES IN INTEREST. A. OVERALL STRUCTURE OF THE PLAN. Shortly after filing for relief under Chapter 11 of the Bankruptcy Code, the Debtors focused on the formulation of a plan of reorganization that would allow them to quickly emerge from Chapter 11 and preserve their value as a going concern. The Debtors recognize that in the competitive arena in which they operate, a lengthy and uncertain Chapter 11 case may detrimentally affect the confidence in the Debtors by their respective vendors and employees, impair their financial condition, and negatively impact the prospects for a successful reorganization. The terms of the Plan are based upon, among other things, the Debtors' assessment of their ability to successfully restructure their capitalization, make the distributions contemplated under the Plan, and pay their continuing obligations in the ordinary course of the Reorganized Debtors' business. If the Plan is confirmed by the Bankruptcy Court and consummated: (1) the holders of Allowed Claims will be paid the full amount of such Claims; and (2) the holders of Preferred Stock, Common Stock and other Interests, and Subordinated Claims arising from Preferred and Common Stock Interests will be unimpaired. At certain times after the Effective Date, the Reorganized Debtors will distribute Cash, securities and other property in respect of certain Classes of Claims as provided in the Plan. The Classes of Claims against the Debtors created under the Plan, the treatment of those Classes under the Plan, and the securities and other property to be distributed under the Plan are described below. B. SUMMARY OF CLAIMS PROCESS, BAR DATE AND PROFESSIONAL FEES Claims Bar Date On September 30, 2003, the Bankruptcy Court entered an order (the "Bar Order Date") establishing the general deadline for filing proofs of claim against the Debtors (the "Bar Date"). The deadline established by the Bankruptcy Court was November 10, 2003, for Claims, including Claims of governmental units, but excluding certain other Claims, including Claims based on the rejection of executory contracts and unexpired leases, as to which the bar date is the earlier of: (a) 45 days following the entry of the order of the Bankruptcy Court approving such rejection, provided the effectiveness of such order has not been stayed; and (b) 45 days following the Effective Date of the Plan. The Debtors' claims and notice agent provided notice of the Bar Date by mailing to each person listed in the Schedules and Statements: (i) a notice of the Bar Date; (ii) a proof of claim form; and (iii) statements which indicated whether the Claim of each recipient was listed in the Schedules and Statements as either unliquidated, contingent and/or disputed. In addition, the Debtors published notice of the Bar Date in USA Today National Edition on October 15, 2003. 38 No Interests Bar Date. No date has been set for the filing of proofs of Interest and no proof of interest need be filed especially in light of the fact that neither the Series A Preferred Stock nor the Common Stock of AMERCO are being impaired under the Plan. The holders of such securities may retain the certificates representing such shares and, after the Effective Date of the Plan, those certificates will continue to represent the same number of shares having the same rights and preferences as were extant on the day AMERCO filed its Chapter 11 case. Professional Fees. At the commencement of the Chapter 11 Cases, the Bankruptcy Court entered an order establishing procedures for interim compensation and reimbursement of expenses of professionals (the "Interim Compensation Order"). The Compensation Order requires professionals retained in these cases to submit monthly fee statements to the Debtors and requires the Debtors to pay eighty percent (80%) of the requested fees and one hundred percent (100%) of the requested expenses pending interim approval by the Bankruptcy Court. The remaining 20% percent of the requested fees in such fee statements are paid only upon further order of the Bankruptcy Court (the "Holdback"). The Interim Compensation Order requires the professionals retained in the Chapter 11 Cases to file applications for approval of their fees and expenses every three months for the preceding three-month period. All interim fee applications filed in the Chapter 11 Cases are subject to final approval by the Bankruptcy Court. C. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS. Section 1122 of the Bankruptcy Code requires that a plan of reorganization classify the claims of a debtor's creditors and the interest of its equity holders. The Bankruptcy Code also provides that, except for certain claims classified for administrative convenience, a plan of reorganization may place a claim of a creditor or an interest of an equity holder in a particular class only if such claim or interest is substantially similar to the other claims of such class. The Bankruptcy Code also requires that a plan of reorganization provide the same treatment for each claim or interest of a particular class unless the holder of a particular claim or interest agrees to a less favorable treatment of its claim or interest. The Debtors believe that they have classified all Claims and Interests in compliance with the requirements of the Bankruptcy Code. If a Creditor or Interestholder challenges such classification of Claims or Interests and the Bankruptcy Court finds that a different classification is required for the Plan to be confirmed, the Debtors, to the extent permitted by the Bankruptcy Court, intend to make such reasonable modifications of the classifications of Claims or Interests under the Plan to provide for whatever classification might be required by the Bankruptcy Court for confirmation. EXCEPT TO THE EXTENT THAT SUCH MODIFICATION OF CLASSIFICATION ADVERSELY AFFECTS THE TREATMENT OF A HOLDER OF A CLAIM OR INTEREST AND REQUIRES RESOLICITATION, ACCEPTANCE OF THE PLAN BY ANY HOLDER OF A CLAIM PURSUANT TO THIS SOLICITATION WILL BE DEEMED TO BE A CONSENT TO THE PLAN'S TREATMENT OF SUCH HOLDER OF A CLAIM REGARDLESS OF THE CLASS AS TO WHICH SUCH HOLDER ULTIMATELY IS DEEMED TO BE A MEMBER. 39 D. TREATMENT OF UNCLASSIFIED CLAIMS. Administrative Claims. An Administrative Claim is a Claim for payment of an administrative expense of a kind specified in Section 503(b) of the Bankruptcy Code and entitled to priority pursuant to Section 507(a)(1) of the Bankruptcy Code, including, but not limited to: (a) DIP Facility Claims; (b) the actual, necessary costs and expenses, incurred on or after the Petition Date, of preserving the Estates and operating the business of the Debtors, (including wages, salaries or commissions for services rendered after the commencement of Chapter 11 Cases); (c) Professional Claims; (d) Ordinary Course Professional Claims; (e) all fees and charges assessed against the Estates under chapter 123 of title 28, United States Code; and (f) Allowed Claims (including reclamation claims) that are entitled to be treated as Administrative Claims pursuant to a Final Order of the Bankruptcy Court under Section 546(c)(2)(A) of the Bankruptcy Code. Subject to the provisions of the Plan, on the later of: (a) the Effective Date, (b) the date an Administrative Claim becomes an Allowed Administrative Claim; or (c) the date an Administrative Claim becomes payable pursuant to any agreement between a Debtor (or a Reorganized Debtor) and the holder of such Administrative Claim, an Allowed Administrative Claimholder in the Chapter 11 Cases will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such Administrative Claim, (i) Cash equal to the unpaid portion of such Allowed Administrative Claim or (ii) such other treatment as to which the Debtors (or the Reorganized Debtors) and such Claimholder will have agreed upon in writing; provided, however, that (y) Claimholders of Claims arising under the DIP Facility will be deemed to have Allowed Claims as of the Effective Date in such amount as to which the Debtors and such Claimholders will have agreed upon in writing or as determined by the Bankruptcy Court, such DIP Facility Claims will be paid in accordance with Article 10.1 of the Plan, and (x) Allowed Administrative Claims with respect to liabilities incurred by the Debtors in the ordinary course of business during the Chapter 11 Cases will be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto. Priority Tax Claims. Commencing on the later of: (a) the Effective Date; (b) the date a Priority Tax Claim becomes an Allowed Priority Tax Claim; or (c) the date a Priority Tax Claim first becomes payable pursuant to any agreement between a Debtor (or a Reorganized Debtor) and the holder of such Priority Tax Claim, at the sole option of the Debtors (or the Reorganized Debtors after the Effective Date), such Allowed Priority Tax Claimholder will be entitled to receive on account of such Priority Tax Claim, (i) equal Cash payments on the last Business Day of each three-month period following the Effective Date, during a period not to exceed six years after the assessment of the tax on which such Claim is based, totaling the aggregate amount of such Claim plus simple interest on any outstanding balance from the Effective Date calculated at the interest rate available on ninety (90) day United States Treasuries on the Effective Date, which the Debtors believe is appropriate based on rates approved in other Chapter 11 cases, (ii) such other treatment agreed to by the Allowed Priority Tax Claimholder and the Debtors (or the Reorganized Debtors), provided such treatment is on more favorable terms to the Debtors (or the Reorganized Debtors after the Effective Date) than the treatment set forth in clause (i) hereof, or (iii) payment in full in Cash. The Internal Revenue Service ("IRS") has filed a proof of claim in the Debtors' Chapter 11 Cases, which proof of claim has been amended by the IRS on numerous occasions. Under the most recent amended proof of claim, the IRS asserts a Priority Tax Claim in the approximate amount of $34,000,000 and an Other Unsecured Claim in the approximate amount of $675,000 (collectively, the "IRS Claims"). The Debtors intend to object to the allowance of the IRS Claims and take the position that the IRS Claims should be disallowed in their entirety. In addition, based upon the analysis by the Debtors and the 40 discussions that have taken place to date with the IRS, the Debtors do not believe that the IRS Claims will have a material adverse effect on the Debtors' operations or their financial condition. Workers' Compensation Programs Claims. Upon confirmation and substantial consummation of the Plan, the Reorganized Debtors will continue any Workers' Compensation Programs in accordance with applicable state laws. Nothing in the Plan will be deemed to discharge, release, or relieve the Debtors or Reorganized Debtors, as applicable, from any current or future liability with respect to any of the Workers' Compensation Programs. The Reorganized Debtors will be responsible for all valid claims for benefits and liabilities under the Workers' Compensation Programs regardless of when the applicable injuries were incurred. Any and all obligations under the Workers' Compensation Programs will be paid in accordance with the terms and conditions of Workers' Compensation Programs and in accordance with all applicable laws. Employee Related Claims and Retiree Benefits. Upon confirmation and substantial consummation of the Plan, the Reorganized Debtors will continue the Retiree Benefits in accordance with applicable prepetition plans. Nothing set forth in the Plan will be deemed to alter, modify, terminate or discharge the Debtors or Reorganized Debtors from any current or future liability with respect to any Retiree Benefits that the Debtors or Reorganized Debtors are obligated to provide under any plan, fund, or program (through the purchase of insurance or otherwise) maintained or established in whole or in part by the Debtors prior to the Petition Date. Claims for Professional Fees. Each Person seeking an award by the Bankruptcy Court of Professional Fees must file its final application for allowance of compensation for services rendered and reimbursement of expenses incurred through the Confirmation Date within forty-five (45) days after the Effective Date, and if the Bankruptcy Court grants such award, each such Person must be paid in full in Cash by the Reorganized Debtors in such amounts as are allowed by the Bankruptcy Court as soon thereafter as practicable. Claims of DIP Lender. Simultaneously with the closing of the Exit Financing Facility, all the Debtors' outstanding obligations to any DIP Lender pursuant to a DIP Financing Order will be fully and finally satisfied in accordance with their terms using proceeds derived from, among other things, the Exit Financing Facility and/or Cash held by Reorganized AMERCO. E. TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS. Pursuant to Section 1122 of the Bankruptcy Code, set forth below is a designation of classes of Claims against and Interests in the Debtors. A Claim or Interest is placed in a particular Class for the purposes of voting on the Plan and of receiving distributions pursuant to the Plan only to the extent that such Claim or Interest has not been paid, released, or otherwise settled prior to the Effective Date. In accordance with Section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims of the kinds specified in Sections 502(a)(1) and 507(a)(8) of the Bankruptcy Code have not been classified and their treatment is set forth above. 41 CLASSES OF CLAIMS THAT ARE UNIMPAIRED. Class 2 (Other Priority Claims) Under the Plan, upon the occurrence of the Effective Date, each holder of an Allowed Other Priority Claim will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such Other Priority Claim: (a) Cash in an amount equal to the amount of such Allowed Other Priority Claim; or (b) such other treatment as to which the Debtors (or the Reorganized Debtors) and such Claimholder will have agreed upon in writing, provided that such treatment is not more favorable than the treatment in clause (a) above. The Debtors' failure to object to an Other Priority Claim in their Chapter 11 Cases will be without prejudice to the Reorganized Debtors' right to contest or otherwise defend against such Claim in the Bankruptcy Court or other appropriate non-bankruptcy forum (at the option of the Debtors or the Reorganized Debtors) when and if such Claim is sought to be enforced by the Other Priority Claimholder. The Debtors do not believe there will be any significant amount of Class 2 Other Priority Claims, if any. Class 5 (Other Unsecured Claims) Under the Plan, each holder of an Allowed Other Unsecured Claim will receive the payment of Cash equal to the amount of such holders' Allowed Class 5 Other Unsecured Claim upon the later to occur of: (i) the Effective Date; (ii) the date upon which such Allowed Other Unsecured Claim would be paid in the ordinary course of the Debtors or Reorganized Debtors' business; or (iii) such other date as the holder of the Allowed Class 5 Other Unsecured Claim has agreed. Class 8 (Oxford Note Claims) Under the Plan, on the Effective Date, the Allowed Oxford Note Claims will be paid in full in Cash. Class 9 (Miscellaneous Secured Claims) On the Effective Date, the legal, equitable and contractual rights of holders of an Allowed Class 9 Claim will be Reinstated. The Debtors' failure to object to any such Class 9 Claims in the Chapter 11 Cases will be without prejudice to the Reorganized Debtors' right to contest or otherwise defend against such Claims in the appropriate forum when and if such Claim is sought to be enforced by the Miscellaneous Secured Claimholder. Notwithstanding Section 1141(c) or any other provision of the Bankruptcy Code, all pre-petition liens on property of any Debtor held by or on behalf of the Miscellaneous Secured Claimholder with respect to such Claims will survive the Effective Date and continue in accordance with the contractual terms of the underlying agreements with such Claimholders until, as to each Claimholder, the Allowed Claims of such Miscellaneous Secured Claimholder are paid in full. Class 10 (Intercompany Claims) The Plan will not alter, impair or discharge any of the Allowed Intercompany Claims. Class 11 (AMERCO/AREC Guaranty Claims) On the Effective Date, and unless otherwise specifically provided for in the Plan, the AMERCO/AREC Guaranty Obligations will be deemed Reinstated, and any non-monetary default in the 42 primary obligations underlying the AMERCO/AREC Guaranty Obligations arising out of or related to the commencement by the Debtors of the Chapter 11 Cases, will be deemed Cured. Class 12 (Preferred Stock Interests and Subordinated Claims (Preferred)) The Plan will not alter or otherwise impair any of the Preferred Stock Interests. Under the Plan and Section 510 of the Bankruptcy Code, Subordinated Claims (Preferred) will be subordinated to the Allowed Claims of Creditors in Classes 1 through 11 under the Plan, but will be pari passu with Allowed Preferred Stock Interests in Class 12(a) under the Plan. To the extent a Subordinated Claim (Preferred) becomes an Allowed Claim, either by agreement between the Reorganized Debtors and the holder of such Subordinated Claim (Preferred), or by Final Order of the Bankruptcy Court or other court of competent jurisdiction, such Allowed Subordinated Claim (Preferred) will be satisfied in Cash in full by the Reorganized Debtors or on such other terms as to which the Reorganized Debtors and the holder of an Allowed Subordinated Claim (Preferred) will have agreed to in writing. Class 13 (Existing Common Stock and Other Interests and Subordinated Claims (Common)) The Plan will not alter or otherwise impair the Allowed Existing Common Stock and Other Interests. Under the Plan and Section 510 of the Bankruptcy Code, Subordinated Claims (Common) will be subordinated to the Allowed Claims in Classes 1 through 11 and Allowed Preferred Stock Interests and Allowed Subordinated Claims (Preferred) in Class 12 of the Plan, but will be pari passu with Allowed Common Stock Interests in Class 13(a) under the Plan. To the extent a Subordinated Claim (Common) becomes an Allowed Claim, either by agreement between the Reorganized Debtors and the holder of such Subordinated Claims (Common), or by Final Order of the Bankruptcy Court or other court of competent jurisdiction, such Allowed Subordinated Claim (Common) will be satisfied in Cash in full by the Reorganized Debtors or on such other terms as to which the Reorganized Debtors and the holder of an Allowed Subordinated Claim (Common) will have agreed to in writing. Class 14 (Subsidiary Interests) The Plan will not alter or otherwise impair the Subsidiary Interests. CLASSES OF CLAIMS THAT ARE IMPAIRED. Class 1 (JPMorgan Claims) Under the Plan, upon the occurrence of the Effective Date, the JPMorgan Claims will be Allowed in the amount set forth in the Restructuring Agreement (Revolver Lenders), less the Cash payment in an amount equal to $51,250,000 paid Pro Rata to the holders of the JPMorgan Claims on or about September 10, 2003. On the Effective Date, the holders of the JPMorgan Claims will receive in full and final satisfaction, settlement, release and discharge of, and in exchange for, their JPMorgan Claims (including any prepetition setoff claims) a Pro Rata portion of: (a) Cash in an amount equal to $71,750,000; (b) Cash in an amount equal to any and all accrued but unpaid interest on the principal amount outstanding under the JPMorgan Chase Credit Facility up to but not including the Effective Date, payable at the non-default rate of interest under the JPMorgan Chase Credit Facility, plus reasonable costs and expenses recoverable under the JPMorgan Credit Facility; (c) $48,400,000 in aggregate principal amount of the New Term Loan A Notes issued pursuant to the Exit Financing Facility; and (d) $33,600,000 in aggregate principal amount of the New Term Loan B Notes issued pursuant to the New Term Loan B Notes Indenture. In the event of any inconsistency between the terms of the Plan and the terms of the Restructuring Agreement (Revolver Lenders), the terms of the Restructuring Agreement (Revolver Lenders) will control. 43 Notwithstanding the foregoing, in the event the Debtors fail to comply with the JPMorgan Syndication Terms, then the holders of the JPMorgan Claims will receive an additional $33,600,000 in aggregate principal amount of Term Loan A Notes issued pursuant to the Exit Financing Facility in lieu of the New Term Loan B Notes. The Debtors anticipate complying with the JPMorgan Syndication Terms, having obtained commitment letters for the placement of $30,000,000 in New Term Loan B Notes to unrelated third party market participants. Class 3 (Citibank Secured Claim and Citibank Guaranty Claim) Class 3 consists of a separate subclass for the Citibank Secured Claim and the Citibank Guaranty Claim. The alternative treatments set forth in Article 5.3 of the Plan will be in full satisfaction, settlement, release and discharge of the Citibank Secured Claim and the Citibank Guaranty Claim. (a) Class 3(a): Citibank Secured Claim (Impaired): (i) CASH - CAREY SALE PROCEEDS. On or before the Effective Date of the Plan, the holders of Citibank Secured Claim will receive an amount of Cash from the Carey Sale Proceeds equivalent to the amount of the Allowed Citibank Secured Claim, excluding therefrom, if applicable, any fine, penalty, interest or cost arising from or related to a default under the Citibank Master Lease and the Citibank Guaranty, provided that: (A) the Carey Sale Agreement will have been approved by a Final Order of the Bankruptcy Court on or before the Effective Date; (B) the Carey Sale Transaction closes in accordance with the Carey Sale Agreement, including the payment of the Carey Sale Proceeds, on or before the Effective Date; and (C) the holders of Citibank Secured Claim in Class 3(a) and Citibank Guaranty Claim in Class 3(b) will have voted to accept the Plan by the statutory prerequisites for such acceptance set forth in Section 1126 of the Bankruptcy Code. (ii) RESTATED CITIBANK MASTER LEASE. In the event the Carey Sale Transaction does not close in accordance with the Carey Sale Agreement on or before the Effective Date of the Plan, and provided that the holders of Citibank Secured Claim in Class 3(a) and Citibank Guaranty Claim in Class 3(b) will have voted to accept the Plan by the statutory prerequisites for such acceptance set forth in Section 1126 of the Bankruptcy Code, Reorganized AREC will, on the Effective Date of the Plan, execute and deliver the Restated Citibank Master Lease, and Reorganized AMERCO will, on the effective Date, execute and deliver the Restated Citibank Guaranty. (iii) CONVEYANCE OF CITIBANK PROPERTIES. In the event the holders of Citibank Secured Claim in Class 3(a) and Citibank Guaranty Claim in Class 3(b) vote to reject the Plan by the statutory prerequisites for such rejection set forth in Section 1126 of the Bankruptcy Code, the Debtors reserve the right, in their sole discretion, either to: (A) surrender to the holders of the Citibank Secured Claim all of their right, title and interest in and to the Citibank Properties in full and final satisfaction of all Claims arising under or related to the Citibank Master Lease, together with Cash in an amount equivalent to the Unsecured Deficiency Claim, if any such Claim exists, of the holders of Citibank Secured Claim as determined by a Final Order of the Bankruptcy Court pursuant to the Citibank Valuation Hearing; (B) provide for the treatment of the Citibank Secured Claim in accordance with the alternative treatment set forth in Article 5.3(a)(i) and (a)(ii) of the Plan; or (C) provide such other treatment of the Citibank Secured Claim that complies with Section 1129 (b) of the Bankruptcy Code. If the Bankruptcy Court determines, as part of the Citibank Valuation Hearing, that the value of the Citibank Properties exceeds 44 the amount of the Allowed Citibank Secured Claim, and the Debtors have selected the alternative treatment set forth in Article 5.3(a)(iii) of the Plan, the holders of the Citibank Secured Claim will pay in Cash to the Debtors the amount of the excess value. Notwithstanding anything set forth in the Plan, if the holders of the Citibank Secured Claim vote to reject the Plan and the Debtors elect to close the Carey Sale Transaction, the holders of the Citibank Secured Claim shall receive Cash in an amount equivalent to the amount of the Allowed Citibank Secured Claim. The holders of the Citibank Secured Claim shall have the right to submit a conditional Ballot to accept or reject the Plan. (b) Class 3(b): Citibank Guaranty Claim (Impaired). In the event the Citibank Secured Claim in Class 3(a) receives the alternative treatment in Articles 5.3(a)(i) and 5.3(a)(iii) of the Plan, the Citibank Guaranty Claim, to the extent such Claim is an Allowed Claim, will be deemed satisfied in full. In the event the Citibank Secured Claim in Class 3(a) receives the alternative treatment in Article 5.3(a)(ii) of the Plan, the holder of the Citibank Guaranty Claim will receive in full satisfaction, release and discharge of the Citibank Guaranty Claim, to the extent such Claim is an Allowed Claim, the New Citibank Guaranty, which will be executed and delivered by Reorganized AMERCO on the Effective Date. Class 4 (BMO Secured Claim and BMO Guaranty Claim) Class 4 will consist of a separate subclass for the BMO Secured Claim and the BMO Guaranty Claim. The alternative treatments set forth in this Article 5.4 of the Plan, will be in full satisfaction, settlement, release, and discharge of the BMO Secured Claim and the BMO Guaranty Claim. (a) Class 4(a): BMO Secured Claim (Impaired). (i) CASH - CAREY SALE PROCEEDS. On or before the Effective Date of the Plan, the holders of BMO Secured Claim will receive an amount of Cash from the Carey Sale Proceeds equivalent to the amount of the Allowed BMO Secured Claim, excluding therefrom, if applicable, any fine, penalty, interest or cost arising from or related to a default under the BMO Master Lease or the BMO Guaranty, provided that: (A) the Carey Sale Agreement will have been approved by a Final Order of the Bankruptcy Court on or before the Effective Date; (B) the Carey Sale Transaction closes in accordance with the Carey Sale Agreement, including the payment of the Carey Sale Proceeds, on or before of the Effective Date; and (C) the BMO Secured Claim in Class 4(a) and the BMO Guaranty Claim in Class 4(b) will have voted to accept the Plan by the statutory prerequisites for such rejection pursuant to Section 1126 of the Bankruptcy Code. (ii) RESTATED BMO MASTER LEASE. In the event the Carey Sale Transaction does not close in accordance with the Carey Sale Agreement on or before the Effective Date of the Plan, and provided that the holders of the BMO Secured Claim in Class 4(a) and the BMO Guaranty Claim in Class 4(b) will have voted to accept the Plan by the statutory prerequisites for such acceptance pursuant to Section 1126 of the Bankruptcy Code, Reorganized AREC and U-Haul will, on the Effective Date, execute and deliver to the holders of the BMO Secured Claim the Restated BMO Master Lease, and Reorganized AMERCO will, on the Effective Date, execute and deliver the Restated BMO Guaranty. (iii) CONVEYANCE OF BMO PROPERTIES. In the event the holders of the BMO Secured Claim in Class 4(a) and the BMO Guaranty Claim in Class 4(b) vote to reject the Plan by the statutory prerequisites for such rejection set forth in Section 1126 of the 45 Bankruptcy Code, the Debtors reserve the right, in their sole discretion, either to: (A) surrender and cause U-Haul to surrender to the holders of the BMO Secured Claim all of their right, title and interest in and to the BMO Properties in full and final satisfaction of all Claims arising under or related to the Master Lease, together with Cash in an amount equivalent to the Unsecured Deficiency Claim, if any such Claim exists, of the holders of BMO Secured Claim as determined by a Final Order of the Bankruptcy Court pursuant to the BMO Valuation Hearing; (B) to treat the BMO Secured Claim in accordance with the alternative treatment set forth in Article 5.4 (a)(i) and (a)(ii) of the Plan; or (C) provide such other treatment that complies with the provisions of Section 1129(b) of the Bankruptcy Code. If the Bankruptcy Court determines, as part of the BMO Valuation Hearing, that the value of the BMO Properties exceeds the amount of the Allowed BMO Secured Claim, and the Debtors have selected the alternative treatment set forth in Article 5.4(a)(iii) of the Plan, the holders of the BMO Secured Claim will pay in Cash to the Debtors the amount of the excess value. Notwithstanding anything set forth in the Plan, if the holders of the BMO Secured Claim vote to reject the Plan and the Debtors elect to close the Carey Sale Transaction, the holders of the BMO Secured Claim shall receive Cash in an amount equivalent to the amount of the Allowed BMO Secured Claim. The holders of the BMO Secured Claim shall have the right to submit a conditional Ballot to accept or reject the Plan. (b) Class 4(b): BMP Guaranty Claim (Impaired). In the event the BMO Secured Claim in Class 4(a) receives the alternative treatments in Article 5.4(a)(i) and (a)(iii) of the Plan, the BMO Guaranty Claim, to the extent such Claim is an Allowed Claim, will be deemed satisfied in full. In the event the BMO Secured Claim in Class 4(a) receives the alternative treatment in Article 5.4(a)(ii) of the Plan, the holders of BMO Guaranty Claim will receive in full satisfaction, release and discharge of the BMO Guaranty Claim, to the extent such Claim is an Allowed Claim, the New BMO Guaranty, which will be executed and delivered by Reorganized AMERCO on the Effective Date. Class 6 (AREC Note Claims) Under the Plan, upon the occurrence of the Effective Date, the AREC Note Claims will be Allowed in the amount set forth in the Restructuring Agreement (AREC Noteholders). On the Effective Date, the AREC Note Claimholders will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, their AREC Note Claims, a Pro Rata portion of: (a) Cash in the amount of $65,000,000; (b) Cash in an amount equal to the sum of (i) any and all accrued but unpaid interest on the AREC Notes from October 15, 2002 up to but not including the AREC Petition Date, payable at the default rate of interest under the AREC Notes, and (ii) any and all accrued and unpaid interest under the AREC Notes from the AREC Petition Date up to but not including the Effective Date, payable at the non-default rate of interest under the AREC Notes, plus reasonable costs and fees, including fees of their professional advisors; (c) $18,600,000 in aggregate principal amount of the New Term Loan A Notes issued pursuant to the Exit Financing Facility; and (d) $16,400,000 in aggregate principal amount of the New Term Loan B Notes issued pursuant to the New Term Loan B Notes Indenture. In the event of any inconsistency between the terms of the Plan and the terms of the Restructuring Agreement (AREC Noteholders), the Restructuring Agreement (AREC Noteholders) will control. In the event the Debtors fail to comply with the AREC Syndication Terms, then the holders of the AREC Note Claims will receive a Pro Rata portion of $16,400,000 in aggregate principal amount of the New Term Loan A Notes in lieu of the New Term Loan B Notes. The Debtors anticipate complying with the AREC Syndication Terms, having obtained commitment letters for the placement of $30,000,000 in New Term Loan B Notes to unrelated third party market participants. 46 Class 7 (AMERCO Unsecured Claims) Under the Plan, on the Effective Date, each holder of an Allowed AMERCO Unsecured Claim will receive, in full satisfaction, settlement, release, and discharge of, and in exchange for, such AMERCO Unsecured Claims, such holder's Pro Rata portion of the following: (a) Cash in the amount of $191,000,000, provided, however, that the amount of Cash will be increased by the same amount, if any, by which the principal amount of New Term Loan B Notes distributed to the AMERCO Unsecured Claimholders is less than $200,000,000, but in no event will the amount of Cash exceed an amount equivalent to thirty-five percent (35%) of the aggregate amount of Allowed Class 7 AMERCO Unsecured Claims. Notwithstanding anything set forth in the Plan to the contrary, the Cash distributed to the holders of Allowed Class 7 AMERCO Unsecured Claims pursuant to Article 5.7(a) of the Plan will be decreased, only to the extent required, to enable the Reorganized Debtors to have as of the Effective Date, minimum availability under the Exit Financing Facility of $80,000,000. (b) The SAC Holding Senior Notes in the original principal amount of $200,000,000. (c) New Term Loan B Notes in the principal amount of $200,000,000, provided, however, that the amount of the New Term Loan B Notes distributed to the AMERCO Unsecured Claimholders will be decreased by the sum of: (i) the New Term Loan B Notes distributed to the AREC Note Claimholders and the Pre-Petition Lenders as a result of the satisfaction by the Debtors of the JPMorgan Syndication Terms and the AREC Syndication Terms as provided in Articles 5.1 and 5.6 of the Plan, and (ii) the amount of New Term Loan B Notes syndicated by the Debtors to unrelated third-party market participants. The Debtors anticipate satisfying the JPMorgan Syndication Terms and the AREC Syndication Terms, having obtained commitment letters for the placement of $30,000,000 in New Term Loan B Notes to unrelated third party market participants. (d) The New AMERCO Notes. As set forth above, the actual amount of distributions of Cash, New Term Loan B Notes and New AMERCO Notes to the holders of Allowed AMERCO Unsecured Claims is a function of the Debtors' externally syndicating to a third-party market participant a portion of the New Term Loan B Notes in accordance with the syndication terms set forth in the Restructuring Agreement (Revolver Lenders) and the Restructuring Agreement (AREC Noteholders). The chart set forth below illustrates the impact upon such distributions if the Debtors (i) do not externally syndicate any of the New Term Loan B Notes, and (ii) externally syndicate $30,000,000 of the New Term Loan B Notes. The chart below assumes an aggregate of Allowed AMERCO Unsecured Claims in Class 7 of $715,000,000.
NO SYNDICATION OF NEW SYNDICATION OF $30,000,000 DISTRIBUTION TERM LOAN B NOTES OF NEW TERM LOAN B NOTES - ----------------------------------------------------------------------------- Cash 191,000,000 250,000,000 SAC Holding Senior Notes 200,000,000 200,000,000 New Term Loan B Notes 200,000,000 120,000,000 New AMERCO Notes 124,000,000 145,000,000 -------------------------------------------------- TOTAL: $ 715,000,000 $ 715,000,000
47 F. SYNDICATION OF NEW TERM LOAN B NOTES. Under the Restructuring Agreement (Revolver Lenders) and the Restructuring Agreement (AREC Noteholders), the Debtors agreed to use their best efforts to externally syndicate at least $30,000,000 of the New Term Loan B Notes. As a result of their efforts in this regard, the Debtors have obtained commitments from Canyon Capital Advisors LLC ("Canyon") and Double Black Diamond Offshore LDC and Black Diamond Offshore Ltd. (together, the "Carlson Funds"), each for $15,000,000 of the New Term Loan B Notes, for an aggregate syndication amount of $30,000,000. Accordingly, the Debtors anticipate that they will comply with the JPMorgan Syndication Terms and the AREC Syndication Terms, and that the actual amount of distributions of Cash, New Term Loan B Notes and New AMERCO Notes to the holders of Allowed AMERCO Unsecured Claims will be consistent with the amounts set forth in the far right column in the table above. G. CONTINUED CORPORATE EXISTENCE. The Debtors. Each of the Debtors will continue to exist after the Effective Date as a separate corporate entity, with all the powers of a corporation under applicable law in the jurisdiction in which each applicable Debtor is incorporated or otherwise formed and pursuant to its certificate of incorporation and bylaws or other organizational documents in effect prior to the Effective Date, except to the extent such certificate of incorporation and bylaws or other organizational documents are amended by the Plan, without prejudice to any right to terminate such existence (whether by merger or otherwise) under applicable law after the Effective Date. Amended and Restated Articles of Incorporation. The certificates or articles of incorporation of each Debtor will be amended as necessary to satisfy the provisions of the Plan and the Bankruptcy Code, including a provision prohibiting the issuance of non-voting equity securities, but only to the extent required by Section 1123(a)(b) of the Bankruptcy Code. The Amended and Restated Articles of Incorporation for each Debtor will be in substantially the form of Exhibit O and Exhibit P attached to the Plan. Non-Debtors. There are certain Affiliates of the Debtors that are not Debtors in the Chapter 11 Cases. The continued existence, operation and ownership of such non-Debtor Affiliates is a material component of the Debtors' businesses, and, as set forth in Article 11.1 of the Plan, all of the Debtors' equity interests and other property interests in such non-Debtor Affiliates will revest in the applicable Reorganized Debtor or its successor on the Effective Date. H. DIRECTORS, OFFICERS AND STOCKHOLDERS OF THE REORGANIZED DEBTORS. Officers. The existing senior officers of the Debtors in office on the Effective Date will serve in their current capacities after the Effective Date, subject to the authority of the board of directors of the Reorganized Debtors. 48 Directors of AMERCO. The current members of the board of directors of AMERCO on the Effective Date will continue to serve out their current term after the Effective Date, subject to the authority of the shareholders of AMERCO; provided that the board of directors, collectively, including any required committee thereof, will comply with any other qualification, experience, and independence requirements under applicable law, including the Sarbanes-Oxley Act of 2002 and the rules then in effect of the stock exchange or quotation system (including the benefit of any transition periods available under applicable law) on which the Existing Common Stock or Series A 8-1/2% Preferred Stock of AMERCO is listed. Directors and Officers of AREC and Non-Debtor Affiliates. The existing directors and officers of AREC and non-debtor Subsidiaries will continue to serve in their current capacities after the Effective Date, provided, however that AMERCO reserves the right to identify new officers and members of the board of directors of each of AREC and Non-Debtor Subsidiaries at any time thereafter. Preferred Stockholders. The Series A 8 1/2 % Preferred Stock of AMERCO is entitled to receive dividends at a fixed annual rate of $2.125 per share payable quarterly. In the event AMERCO fails to declare and pay in full the dividend for any 6 quarterly dividend periods, whether or not consecutive, the holders of the outstanding Series A Preferred Stock will be entitled, until all missed dividends have been declared and paid in full, to elect 2 directors of AMERCO. Currently, four quarterly dividends have not been declared and paid in full. A fifth quarterly dividend is scheduled to be declared in February 2004 and a sixth would be scheduled for declaration in May 2004. Under the terms of the Exit Financing Facility, Reorganized AMERCO has the right to make, if it so elects, quarterly dividend payments, subject to the terms of the Exit Financing Facility. It is AMERCO's intention that any quarterly dividend payment will be declared and paid in the order that such dividends were originally scheduled. I. LISTING ON SECURITIES EXCHANGE OR QUOTATION SYSTEM. AMERCO will use its commercially reasonable best efforts to seek the continued listing, as promptly as practicable after the Effective Date, of the shares of Existing Common Stock and the Series A 8-1/2% Preferred Stock of AMERCO on a national securities exchange or for quotation on a national automated interdealer quotation system but will have no liability if it is unable to do so. J. SAC PARTICIPATION. On the Effective Date, SAC Holding will execute and deliver the SAC Notes Indenture, the SAC Holding Senior Notes and the SAC Holding Participation and Subordination Agreement (the "SAC Holding Note Documents"). The SAC Holding Note Documents will be duly and validly authorized, executed and delivered, and will constitute valid and binding obligations of SAC Holding, enforceable in accordance with their terms. K. CANCELLATION OF EXISTING DEBT SECURITIES. On the Effective Date, except as otherwise specifically provided for herein: (a) the Existing Debt Securities and any other note, bond, indenture, or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors, except such notes or other instruments evidencing indebtedness or obligations of the Debtors that are Reinstated under the Plan, will be cancelled; and (b) 49 the obligations of, and Claims against the Debtors under, relating, or pertaining to any agreements, indentures, or similar documents governing the Existing Debt Securities and any other note, bond, indenture, or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors, except such notes or other instruments evidencing indebtedness or obligations of the Debtors that are Reinstated under the Plan, as the case may be, will be released and discharged; provided, however, that any agreement that governs the rights of the Claimholder and that is administered by an Indenture Trustee, an agent, or a servicer (each hereinafter referred to as a "Servicer") will continue in effect solely for purposes of (i) allowing such Servicer to make the distributions to be made on account of such Claims under the Plan as provided in Article V of the Plan and (ii) allowing the Servicer, including Indenture Trustees, to assert their Indenture Trustees Charging Liens against such distributions for payment of the Indenture Trustee Fees, to the extent that all or a portion of such fees are not paid pursuant to Article 9.5 of the Plan, which will effectively reduce the distributions made to the Noteholders pursuant to the Plan, and allowing the Indenture Trustees to assert their indemnification rights under the Indentures against the Reorganized Debtors for all liabilities, losses, damages, claims, costs and expenses arising out of or due to their actions or omissions, including but not limited to attorneys' fees, except for their gross negligence or willful misconduct. L. EXIT FINANCING FACILITY. Upon the Effective Date of the Plan, the Reorganized Debtors, U-Haul and certain of their wholly-owned subsidiaries and affiliates will enter into a syndicated Exit Financing Facility with Wells Fargo Foothill, Inc., as the lead arranger and administrative agent. The Exit Financing Facility, which will be guaranteed by substantially all of the Reorganized Debtors and certain of their subsidiaries, will be a senior secured credit facility with a maximum credit amount of $550,000,000 consisting of: (i) a revolving credit facility of up to $200,000,000 (the "Revolver"); plus (ii) a $350,000,000 amortizing term loan facility consisting of the New Term Loan A Notes. The Revolver will also include a $50,000,000 letter of credit sub-facility for the issuance of letters of credit. The amounts available for borrowing under the Revolver will be subject to a borrowing base formula that is based upon a percentage of the value of the borrowers' eligible real estate and vehicles, subject to agreed upon reserves for environmental remediation, title defects and other agreed upon reserves. General The amounts outstanding under the Exit Financing Facility, including the New Term Loan A Notes, will be due and payable no later than five years from the closing date of the Exit Financing Facility. No principal payments will be required under the Revolver until the maturity of the Exit Financing Facility. Monthly principal payments of $291,667 will be due and payable under the Term Loan A Notes, with the balance due in full upon maturity. Amounts outstanding under the Exit Financing Facility may be prepaid at any time after the third anniversary of the Exit Financing Facility without any prepayment penalty. Amounts prepaid during the first three years of the Exit Financing Facility will be subject to the following prepayment penalties based upon a percentage of the average daily outstanding daily balance of the Exit Financing Facility and the average daily undrawn amount of letters of credit through the date of prepayment:
YEAR 1 YEAR 2 YEAR 3 - ------------------------------ ~~2.00% 1.50% 1.00%~~
50 Interest on amounts outstanding under the Exit Financing Facility will accrue at a base LIBO rate plus a margin of 3.50% to 4.0% based on the amount of the borrowers' senior indebtedness divided by consolidated annual EBITDA for the previous four fiscal quarters. Ranking of the Exit Financing Facility The obligations underlying the Exit Financing Facility will be senior secured obligations of the Reorganized Debtors and rank pari passu in right of payment to the New Term Loan B Notes and senior in right of payment to all other indebtedness of the Reorganized Debtors. Collateral Securing the Exit Financing Facility All amounts outstanding under the Exit Financing Facility will be secured by a first priority security interest in substantially all of the assets of the Reorganized Debtors and guarantors under the Exit Financing Facility, excluding the assets described below. The assets excluded from the collateral securing the Exit Financing Facility will consist of the following: - The existing promissory notes issued to the Reorganized Debtors by SAC Holding and its subsidiaries (and proceeds associated with the monetization of such assets, as they may be amended or restated from time to time); - The Reorganized Debtors' real estate subject to any currently existing synthetic lease arrangements (and the proceeds associated with the monetization of such assets); - The capital stock of RepWest and Oxford (and the proceeds associated with the monetization of such assets); - Real property subject to a lien in favor of Oxford; - Real property under contract for sale at the time of the closing of the Exit Financing Facility; - Real property defined as surplus property at the time of Exit Financing Facility; - Proceeds in excess of $50,000,000 associated with the settlement, judgment or recovery related to the PwC Litigation; and - Vehicles (including any motor vehicle, trailer or other asset) that become and remain subject to a TRAC or operating lease transaction, including, without limitation, the PMCC Leveraged Lease and PMCC Like-Kind Exchange Lease. The Exit Financing Facility will also include provisions authorizing the granting of a junior lien in substantially all of the assets of the borrowers in favor of the parties receiving the New Term Loan B Notes, subject to the terms of an Intercreditor Agreement in form and substance reasonably satisfactory to Wells Fargo Foothill, Inc. Guarantees The Exit Financing Facility will be guaranteed by all subsidiaries of Reorganized AMERCO, including Reorganized AREC, U-Haul and all of their respective subsidiaries, but excluding RepWest, Oxford and all of their respective subsidiaries. The guarantors will jointly and severally guaranty all of the obligations under the Exit Financing Facility. The obligation of each guarantor under its guaranty will be limited to the greatest amount that would not render its obligations under the guaranty subject to 51 avoidance as a fraudulent conveyance or fraudulent transfer under applicable law. Each guarantor that makes payment or distribution of more than its proportionate share under a guaranty will be entitled to contribution from each other such guarantor that has not paid its proportionate share of such payment or distribution. Affirmative and Negative Covenants The Exit Financing Facility will include covenants requiring the borrowers to maintain an agreed upon minimum fixed charge coverage ratio and a limitation on capital expenditures. The borrowers also will be required to deliver monthly financial statements, audited annual financial statements and annual updated projections. The Exit Financing Facility will include the specific affirmative and negative covenants described below and such other customary covenants (both positive and negative) that are customary for a credit facility of this type and are agreed to by the Reorganized Debtors and the Creditors' Committee, including, but not limited to, notices of litigation, defaults and unmatured defaults and other information, compliance with laws, permits and licenses, inspection of properties, books and records, maintenance of insurance, limitations with respect to liens and encumbrances, dividends and retirement of capital stock, guarantees, certain sale and lease back transactions, consolidations and mergers, investments, capital expenditures, loans and advances, indebtedness, compliance with pension, environmental and other laws, operating leases, transactions with affiliates and prepayment of other indebtedness. With respect to certain affirmative covenants, the borrowers will be required to continue a captive self-insurance program for their fleet, as currently provided by RepWest, provided, however, that the borrowers may alter or replace their captive self-insurance with the approval of Wells Fargo Foothill, Inc. provided that the terms are reasonably consistent with the program currently provided by RepWest. With respect to certain negative covenants, (i) the borrowers will be permitted to repay subordinated debt using the proceeds of excluded assets provided that no event of default is then in existence or will be in existence as a result after giving effect to the said event; (ii) the borrowers will be permitted to prepay subordinated debt, in other circumstances, provided that (a) no event of default is then in existence or will be in existence as a result after giving effect to the said event, (b) payments do not exceed 50% of borrowers' free cash flow for the prior 12 months, and (c) the borrowers have not less than $35,000,000 in availability under the Exit Financing Facility plus unrestricted cash after giving effect to said event and, borrowers' projected availability for the next 12 months, after giving effect to the said event, would not be below $35,000,000; and (iii) the borrowers will be permitted to make cash payments on Preferred Stock in existence as of the Effective Date, provided that (a) no event of default is then in existence or will be in existence as a result after giving effect to the said event, (b) cash payments do not exceed $13,000,000 annually, and (c) the borrowers have at least $35,000,000 in availability under the Exit Financing Facility plus unrestricted cash after giving effect to the said event and, the borrowers' projected availability for the next 12 months, after giving effect to the said event, would not be below $35,000,000. Events of Default and Acceleration The Exit Financing Facility will contain events of default that are customary for a credit facility of this type, including, without limitation, the following: - failure by the borrowers to pay when due and payable all or any portion of the obligations under the Exit Financing Facility; - failure by the borrowers to comply with any of its agreements or covenants described in the Exit Financing Facility, subject to applicable grace periods; 52 - any material portion of the borrowers' assets is attached, seized, subjected to a writ or distress warrant, levied upon, or comes into possession of any third person; - any borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs; - there is a default in any material agreement to which any guarantor is a party including, without limitation, any material contract, affiliate contract or any material contract with any of SAC Holding, SSI or PMSR and such default (a) occurs at the final maturity of the obligations thereunder, of (b) results in the acceleration on the maturity of the applicable guarantor's obligations thereunder; - any material misstatement or material misrepresentation exists now or hereafter in any warranty, representation, statement, or record made to the lender by any borrower, its subsidiaries, or any officer, employee, agent, or director of any borrower or any of its subsidiaries; - the obligation of any guarantor under its guaranty is limited or terminated by operation of law or by such guarantor thereunder; - the Exit Financing Facility or any other loan document that purports to create a lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof of thereof, first priority lien on or security interest in the collateral covered thereby; or - any provision of any loan document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any borrower, or a proceeding shall be commenced by any borrower, or any governmental authority having jurisdiction over any borrower, seeking to establish the invalidity or unenforceability thereof, or any borrower shall deny that any borrower has any liability or obligation purported to be created under any loan document. Governing Law The Exit Financing Facility and guarantees are governed by, and construed in accordance with the law of the State of New York. M. ISSUANCE OF NEW DEBT SECURITIES. For purposes of the Plan and Section 1145 of the Bankruptcy Code, SAC Holding is a co-proponent of the Plan along with the Debtors. On the Effective Date, SAC Holding will be deemed to have issued the SAC Holding Senior Notes, and the Reorganized Debtors will be deemed to have issued the remainder of the New Debt Securities and the New Term Loan A Notes, each as set forth in Article V of the Plan. The issuance of the New Debt Securities and the distribution thereof as described above will be in compliance with applicable registration requirements or exempt from registration under applicable securities laws pursuant to Section 1145(a) of the Bankruptcy Code or Section 4(2) of the Securities Act. The New Debt Securities will be qualified under the Trust Indenture Act of 1939. The following summary provides a brief overview of the New Debt Securities that will be issued pursuant to the Plan as currently contemplated. The final terms and conditions of the New Debt Securities could change substantially from the overview provided below. 53 NEW TERM LOAN B NOTES The New Term Loan B Notes will be issued by Reorganized AMERCO pursuant to the New Term Loan B Notes Indenture to be entered into among Reorganized AMERCO, as issuer, the guarantors (discussed below) and a trustee to be determined prior to the Effective Date. The New Term Loan B Notes will be issued to the holders of Class 1 Claims (JPMorgan Claims), Class 6 Claims (AREC Note Claims) and Class 7 Claims (AMERCO Unsecured Claims), as well as certain new purchasers as discussed below, and will constitute senior secured debt securities under the New Term Loan B Notes Indenture. The following paragraphs summarize the material provisions of the New Term Loan B Notes and the New Term Loan B Notes Indenture. The following description does not purport to be complete and is subject to, and qualified by reference to, all of the provisions of the New Term Loan B Notes Indenture and the New Term Loan B Notes. General The New Term Loan B Notes will be limited to $200,000,000 in aggregate principal amount. The New Term Loan B Notes will mature five years from the date of issuance. The New Term Loan B Notes will bear cash interest at a rate of 9% per annum, payable quarterly in arrears, based on 90 day quarters and 360 day years. After default, the outstanding principal balance of the New Term Loan B Notes will bear interest at a rate equal to 2.0% greater than the otherwise applicable interest rate. Syndication of the New Term Loan B Notes The Debtors have obtained commitments from Canyon and the Carlson Funds (collectively, the "New Term Loan B Investors"), for an aggregate of $30,000,000 of the New Term Loan B Notes. The material conditions precedent to the financing obligations of the New Term Loan B Investors include, without limitation: - The New Term Loan B Investors and their respective advisors shall have been afforded full access to the books and records of Reorganized AMERCO, including copies of all materials filed in the Chapter 11 Cases; - Confirmation of the Plan in these Chapter 11 Cases, with such non-material modification with respect to the treatment of Class 7 Allowed Claims as the New Term Loan B Investors may agree; - No material changes to the ownership and pro forma capitalization of Reorganized AMERCO; - Execution and delivery of the note purchase agreements, the New Term Loan B Indenture, the collateral security documents, the Intercreditor Agreement (defined below) as well as supporting legal opinions and perfection of all liens and security interests as are reasonably satisfactory to the New Term Loan B Investors; - The closing of the Exit Financing Facility, and minimum availability thereunder of $25,000,000; - No material adverse change has occurred with respect to Reorganized AMERCO's business, assets, operations, properties, financial condition or prospects, as reasonably determined by the New Term Loan B Investors; - No material disruption of, or material adverse change in, financial, banking or capital market conditions generally that, in the reasonable judgment of the New Term Loan B Investors, could materially impair the marketability of the New Term Loan B Notes. 54 Ranking of the New Term Loan B Notes The New Term Loan B Notes will be senior secured obligations of Reorganized AMERCO and rank pari passu in right of payment to the indebtedness under the Exit Financing Facility and senior in right of payment to all of the other indebtedness of Reorganized AMERCO. Collateral Securing the New Term Loan B Notes The New Term Loan B Notes will be secured by substantially all of the assets of Reorganized AMERCO, excluding certain assets described below. The collateral securing the New Term Loan B Notes will be identical to the collateral securing the obligations underlying the Exit Financing Facility, but will rank second in terms of priority to the security interest granted to the lenders under the Exit Financing Facility. The assets excluded from the collateral securing the New Term Loan B Notes, which also is excluded from the collateral securing the obligations underlying the Exit Financing Facility, will consist of the following: - The existing promissory notes issued to Reorganized AMERCO by SAC Holding and its subsidiaries (and proceeds associated with the monetization of such assets, as they may be amended or restated from time to time); - Reorganized AMERCO'S real estate subject to any currently existing synthetic lease arrangements (and the proceeds associated with the monetization of such assets); - The capital stock of RepWest and Oxford (and the proceeds associated with the monetization of such assets); - Real property subject to a lien in favor of Oxford; - Real property under contract for sale at the time of the issuance New Term Loan B Notes; - Real property defined as surplus property at the time of the issuance of the New Term Loan B Notes; - Proceeds in excess of $50,000,000 associated with the settlement, judgment or recovery related to the PwC Litigation; and - Vehicles (including any motor vehicle, trailer or other asset) that become and remain subject to a TRAC or Operating Lease transaction, including, without limitation, the PMCC Leveraged Lease and PMCC Like-Kind Exchange Lease. Guarantees The New Term Loan B Notes will be guaranteed by all U.S. affiliates and subsidiaries of Reorganized AMERCO, including AREC, U-Haul and all of their respective subsidiaries, but excluding RepWest, Oxford, SAC Holding and all of their respective subsidiaries. All borrowers and guarantors under the Exit Financing Facility will be either an issuer or guarantor of the New Term Loan B Notes. The guarantors will jointly and severally guaranty all of the obligations under the New Term Loan B Notes. The obligation of each guarantor under its guaranty will be limited to the greatest amount that would not render its obligations under the guaranty subject to avoidance as a fraudulent conveyance or fraudulent transfer under applicable law. 55 The New Term Loan B Notes Indenture provides that so long as no default exists or would exist, the guaranty issued by any guarantor will be automatically and unconditionally released and discharged upon any sale to any person that is not affiliated with Reorganized AMERCO of all of the equity interest of such guarantor owned, directly or indirectly, by Reorganized AMERCO which transaction is otherwise in compliance with the New Term Loan B Notes Indenture, including, without limitation, the application of the net available proceeds to the New Term Loan B Notes from any such sale, to the extent required by the New Term Loan B Notes Indenture. Redemption of New Term Loan B Notes No sinking fund is provided for the New Term Loan B Notes and neither Reorganized AMERCO nor the guarantors will be required to make mandatory redemption payments with respect to the New Term Loan B Notes. Reorganized AMERCO will not have the right to redeem the New Term Loan B Notes prior to the first anniversary of the date of issuance. Following such date, Reorganized AMERCO may redeem the New Term Loan B Notes for cash, as a whole at any time or from time to time in part, at the redemption prices set forth below, expressed as a percentage of principal amount, together with accrued and unpaid interest to the date of redemption: (c) After the first anniversary but up to and including the second anniversary, at 105.5%; (d) After the second anniversary but up to and including the third anniversary, at 104.5%; (e) After the third anniversary but up to and including the fourth anniversary, at 101.0%; (f) After the fourth anniversary, at 100.0%. If redeemed at the option of Reorganized AMERCO, the New Term Loan B Notes will be redeemed at a price equal to the sum of the redemption price plus accrued and unpaid interest, if any, on such notes to the applicable redemption date. The redemption prices of a New Term Loan B Note within a specified period following the issuance date will be determined by mutual agreement of Reorganized AMERCO and the Creditors' Committee and set forth in the final form of New Term Loan B Notes Indenture. Change of Control Permits Purchase of Notes by Reorganized AMERCO at the Option of the Holder In the event of a change of control, each holder will have the right, at the holder's option, subject to the terms and conditions of the New Term Loan B Notes Indenture, to require Reorganized AMERCO to purchase for cash all or any portion of the holder's notes at an amount equal to 101% of the face amount of the New Term Loan B Note. Reorganized AMERCO will be required to purchase the New Term Loan B Notes as of a date not earlier than 30 days nor later than 60 days from the date notice of the change of control is mailed at a cash price equal to the sum of the purchase price described above plus accrued and unpaid interest, if any, on such note to such date of purchase. Within 30 days after the occurrence of a change of control, Reorganized AMERCO will be obligated to mail, or cause to be mailed, to all holders of notes at their addresses shown in the register of the registrar and to beneficial owners as required by applicable law a notice: - describing the transaction or transactions that constitute a change of control; - offering to purchase, on a date specified in the notice, all notes properly tendered by a holder pursuant to the such change of control offer; and 56 - describing the procedures that holders must follow to accept the change in control offer. Under, and subject to exceptions specified in, the New Term Loan B Notes Indenture, a "change of control" of Reorganized AMERCO will be deemed to have occurred upon the occurrence of any of the following: - any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Persons (as defined below), is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause that person or group will be deemed to have "beneficial ownership" of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of voting stock representing more than 35% of the voting power of the total outstanding voting stock of Reorganized AMERCO, provided, however, that such event will not be deemed to be a change of control so long as the Permitted Persons own voting stock representing in the aggregate a greater percentage of the total voting power of the voting stock of Reorganized AMERCO than such other person or group; - during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors (together with any new directors whose election to such board of directors or whose nomination for election by the stockholders of Reorganized AMERCO was approved by a vote of the majority of the directors of Reorganized AMERCO 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 Reorganized AMERCO; - (a) all or substantially all of the assets of Reorganized AMERCO and the restricted subsidiaries are sold or otherwise transferred to any person other than a wholly-owned restricted subsidiary or (b) Reorganized AMERCO consolidates or merges with or into another person or any person consolidates or merges with or into Reorganized AMERCO, in either case under this clause, in one transaction or a series of related transactions in which immediately after the consummation thereof persons owning voting stock representing in the aggregate a majority of the total voting power of the voting stock of Reorganized AMERCO immediately prior to such consummation do not own voting stock representing a majority of the total voting power of the voting stock of Reorganized AMERCO or the surviving or transferee Person; or - Reorganized AMERCO adopts a plan of liquidation or dissolution or any such plan will be approved by the stockholders of Reorganized AMERCO. As referenced in connection with the New Debt Securities, Permitted Persons means (i) Edward J. Shoen, Mark V. Shoen, James P. Shoen and the spouse and lineal descendants of each such individual, the spouses of each such lineal descendant and the lineal descendants of such spouses; (ii) any trusts or other entities 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 clause (i); (iii) any corporation or other entity with respect to which all the voting securities thereof is, directly or indirectly owed by any of the individuals or entities referred to in clauses (i) and (ii); and (iv) the AMERCO Employee Savings and Employee Stock Ownership Trust, or any successor thereto. 57 Affirmative and Negative Covenants The New Term Loan B Notes Indenture will contain such other affirmative and negative covenants as agreed to by Reorganized AMERCO and the Creditors' Committee and as are appropriate and customary for debt securities of this type, but which are substantially similar and not more restrictive than those contained in the Exit Financing Facility. Under the commitment letters with Canyon and the Carlson Funds, affirmative covenants pertaining to the issuer and the guarantors include: - Corporate existence, powers and conduct of business; - Compliance with applicable laws and regulations, including, without limitation, ERLSA and environmental regulations; - Payment of taxes, claims and other obligations; - Maintenance of customary insurance and required endorsements; - Reasonable provision of books and records for inspection; and - Further assurances as to maintenance, perfection and priority of liens. Under the commitment letters with Canyon and the Carlson Funds, negative covenants pertaining to the issuer and the guarantors, subject to certain permitted actions, include: - The incurrence and continuation of certain types and amounts of indebtedness; - With certain exceptions, the sale, lease, license or other transfer of assets, including sale and leaseback arrangements, other than the sale of inventory in the ordinary course of business; - Restrictions against negative pledges and subsidiary dividend restrictions above certain amounts; - Investments (by way of debt or equity) in excess of certain amounts, excluding certain permitted investments; - The declaration and payment of dividends and other restricted junior payments including, without limitation, certain repurchases and/or redemptions of stock and repayments, defeasance, repurchases or redemptions of subordinated indebtedness; - Restrictions relating to conduct of business and transactions with shareholders and affiliates; - Mergers, acquisitions, formations of domestic subsidiaries, liquidations, consolidations, dissolutions, amendments of organizational documents and issuance of stock; - The purchase and carrying of margin stock; - Changes in accounting treatment, reporting or reporting practices, unless required by GAAP, the FASB or similar authorities; and - Changes in fiscal year. Absent a default or pending default on the New Term Loan B Notes, non-financial covenants will be automatically amended to follow those contained in the Exit Financing Facility. Within certain limits to be negotiated, material financial covenants can also be automatically amended by amendments to the Exit Financing Facility. 58 Intercreditor Agreement The rights of the holders of the New Term Loan B Notes with respect to the collateral securing the New Term Loan B Notes will be subject to the terms of an agreement (the "Intercreditor Agreement") with the agent (the "Agent") under the Exit Financing Facility. The Intercreditor Agreement will place no restrictions on the right of the Agent to liquidate or otherwise realize upon the value of the collateral, but absent a default under the Exit Financing Facility, the Agent may not release the collateral from the lien of the New Term Loan B Notes without the consent of the holders thereof. There will be no restrictions on the New Term Loan B Notes receiving interest or other payments from collateral proceeds, provided, however, that in the event of a default under the Exit Financing Facility, proceeds of the collateral will be used to pay the Exit Financing Facility in full prior to the New Term Loan B Notes. The Intercreditor Agreement will also include restrictions against the holders of the New Term Loan B Notes: (a) Blocking asset sales by the Agent; (b) In an insolvency proceeding involving the Exit Financing Facility, filing objections to seek adequate protection or to lift the automatic stay, or to the Agent's consenting to the use of cash collateral or debtor-in-possession financing; (c) Seeking relief from the automatic stay to enforce rights against the collateral without the Agent's consent; (d) Challenging the enforceability or priority of the Exit Financing Facility lien or collateral; or (e) Taking liens on assets other than the collateral securing the Exit Financing Facility. Events of Default and Acceleration The New Term Loan B Notes Indenture will contain events of default as are included in indentures of a similar nature. The following are expected to be included as events of default under the New Term Loan B Notes Indenture: - failure by Reorganized AMERCO to pay interest on any of the notes when it becomes due and payable and the continuance of any such failure for 30 days; - failure by Reorganized AMERCO to pay the principal of any of the notes when it becomes due and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise; - failure by Reorganized AMERCO to comply with any of its agreements or covenants described under Sections 5.01 (successor requirements) and 4.15 (offer to purchase upon a change of control) of the New Term Loan B Notes Indenture; - failure by Reorganized AMERCO to comply with any other agreement or covenant in the New Term Loan B Notes Indenture and continuance of this failure for 60 days after notice of the failure has been given to Reorganized AMERCO by the trustee or by the holders of at least 25% of the aggregate principal amount of the notes then outstanding; - default under any mortgage, New Term Loan B Notes Indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced indebtedness of Reorganized AMERCO or any restricted subsidiary, whether such indebtedness now exists or is incurred after the issue date, which default: 59 (a) is caused by a failure to pay when due principal on such Indebtedness within the applicable express grace period, (b) results in the acceleration of such indebtedness prior to its express final maturity or (c) results in the commencement of judicial proceedings to foreclose upon, or to exercise remedies under applicable law or applicable security documents to take ownership of, the assets securing such Indebtedness, and in each case, the principal amount of such indebtedness, together with any other indebtedness with respect to which an event described in clause (i), (ii) or (iii) immediately above has occurred and is continuing, aggregates in excess of an amount to be agreed upon by Reorganized AMERCO and the Creditors' Committee; - - one or more judgments or orders that exceed an agreed upon amount (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against Reorganized AMERCO or any restricted subsidiary and such judgment or judgments have not been satisfied, stayed, annulled or rescinded within 60 days of being entered; - - Reorganized AMERCO or any significant subsidiary pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a custodian of it or for all or substantially all of its assets, or (d) makes a general assignment for the benefit of its creditors; - - a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against Reorganized AMERCO or any significant subsidiary as debtor in an involuntary case, (b) appoints a custodian of Reorganized AMERCO or any significant subsidiary or a custodian for all or substantially all of the assets of Reorganized AMERCO or any significant subsidiary, or (c) orders the liquidation of Reorganized AMERCO or any significant subsidiary; and the order or decree remains unstayed and in effect for 60 days; - - any note guaranty of any significant subsidiary ceases to be in full force and effect (other than in accordance with the terms of such note guaranty and the New Term Loan B Notes Indenture) or is declared null and void and unenforceable or found to be invalid or any guarantor denies its liability under its note guaranty (other than by reason of release of a guarantor from its note guaranty in accordance with the terms of the New Term Loan B Notes Indenture and the note guaranty); or - - an "event of default" occurs and is continuing under any of the security documents governing the New Term Loan B Notes. 60 If an event of default has happened and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the New Term Loan B Notes then outstanding may declare the New Term Loan B Notes, plus any accrued and unpaid cash interest through the date of such declaration, to be immediately due and payable. SEC Registration Reorganized AMERCO will offer to exchange the New Term Loan B Notes issued to the New Term Loan B Investors pursuant to a registered exchange offer filed with the SEC within 60 days of closing, and to be effective within 90 days after such filing date so that the New Term Loan B Notes will be freely and publicly tradable thereafter. Failure to offer the exchange will result in a 0.25% increase in the annul interest rate for the first quarter or portion thereof during such failure and 0.5% for each subsequent quarter or portion thereof up to a maximum aggregate increase of 2.0%. Under the terms of their respective commitment letters, Canyon and the Carlson Funds may also require that the New Term Loan B Notes be rated by Standard & Poor's or other private rating agency. Mergers and Sales of Assets The New Term Loan B Notes Indenture provides that Reorganized AMERCO may not consolidate with or merge into any person or convey, transfer or lease out properties and assets substantially as an entity to another person unless: - the resulting, surviving or transferee person is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia, and such corporation assumes all of Reorganized AMERCO's obligations under the New Term Loan B Notes and the New Term Loan B Notes Indenture; - after giving effect to the transaction no event of default, and no event that, after notice or passage of time, would become an event of default, has occurred and is continuing; and - other conditions described in the New Term Loan B Notes Indenture are met. Upon the assumption of Reorganized AMERCO's obligations by such corporation in such circumstances, subject to certain exceptions, Reorganized AMERCO will be discharged from all obligations under the New Term Loan B Notes and the New Term Loan B Notes Indenture. Although such transactions are permitted under the New Term Loan B Notes Indenture, certain of the foregoing transactions occurring could constitute a change of control of Reorganized AMERCO, permitting each holder to require Reorganized AMERCO to purchase the New Term Loan B Notes of such holder as described above. The New Term Loan B Notes Indenture also provides that a guarantor may not consolidate with or merge into any person or convey, transfer or lease its properties and assets substantially as an entity to another person unless the surviving person assumes the obligations of such guarantor and the surviving person is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia, except if all of the assets or all of the common stock of such guarantor is sold to a non-affiliate of Reorganized AMERCO, in which case the guaranty is released. Modification The trustee and Reorganized AMERCO may modify or amend the New Term Loan B Notes Indenture or the New Term Loan B Notes with the consent of the holders of not less than a majority in 61 aggregate principal amount at maturity of the New Term Loan B Notes then outstanding. However, the consent of the holders of each outstanding note would be required to: - change the maturity of any note; - reduce the amount, extend the due date or otherwise affect the terms of any scheduled payment of interest on or principal of the notes; - change the date on which any notes are subject to redemption or otherwise alter the provisions with respect to the redemption of the notes; - make any note payable in money or currency other than that stated in the notes; - modify or change any provision of the New Term Loan B Notes Indenture or its related definitions to affect the ranking of the notes or any note guaranty in a manner that adversely affects the holders; - reduce the percentage of holders necessary to consent to an amendment or waiver to the New Term Loan B Notes Indenture or the notes; - impair the rights of holders to receive payments of principal of or interest on the notes; - release any guarantor from any of its obligations under its note guaranty or the New Term Loan B Notes Indenture, other than as permitted by the New Term Loan B Notes Indenture; or - make any change in the amendment and waiver provisions of the New Term Loan B Notes Indenture. Without the consent of any holder of notes, the trustee and Reorganized AMERCO may enter into supplemental New Term Loan B Notes Indentures for any of the following purposes: - to provide for uncertificated notes in addition to or in place of certificated notes; - to provide for the assumption of Reorganized AMERCO's obligations to the holders of the notes in case of a merger or acquisition by a successor to Reorganized AMERCO pursuant to the New Term Loan B Notes Indenture; - to cure any ambiguity, defect or inconsistency in the New Term Loan B Notes Indenture; - to make any change that does not adversely affect the rights of any holder of the New Term Loan B Notes; - to release any guarantor from any of its obligations under its note guaranty or the New Term Loan B Notes Indenture (to the extent permitted by the New Term Loan B Notes Indenture); or - to comply with the requirements of the SEC in order to effect or maintain the qualification of the New Term Loan B Notes Indenture under the Trust Indenture Act. The holders of a majority in principal amount of the outstanding notes may, on behalf of all the holders of all notes: - waive compliance by Reorganized AMERCO with restrictive provisions of the New Term Loan B Notes Indenture, as detailed in the New Term Loan B Notes Indenture; and - waive any past default under the New Term Loan B Notes Indenture and its consequences, except a default in the payment of the principal amount at maturity, issue 62 price, accrued and unpaid interest, accrued original issue discount, redemption price, purchase price or change of control purchase price or in respect of any provision which under the New Term Loan B Notes Indenture cannot be modified or amended without the consent of the holder of each outstanding note affected. Discharge of the New Term Loan B Notes Indenture Reorganized AMERCO may satisfy and discharge its obligations under the New Term Loan B Notes Indenture by delivering to the trustee for cancellation all outstanding notes or by depositing with the trustee or the paying agent, if applicable, after the New Term Loan B Notes have become due and payable, whether at stated maturity or any redemption date, or any purchase date, or a change of control purchase date, or otherwise, cash sufficient to pay all of the outstanding notes and paying all other sums payable under the New Term Loan B Notes Indenture. Governing Law The New Term Loan B Notes Indenture and the New Term Loan B Notes and guarantees are governed by, and construed in accordance with, the law of the State of New York. Information Concerning the Trustee Information regarding the trustee, registrar and paying agent will be set forth in the final form of New Term Loan B Notes Indenture for the New Term Loan B Notes. NEW AMERCO NOTES The New AMERCO Notes will be issued by the Reorganized Debtors pursuant to the New AMERCO Notes Indenture to be entered into among the Reorganized Debtors, as issuer, the guarantors (discussed below) and a trustee to be determined prior to the Effective Date. A copy of the proposed form of New AMERCO Notes Indenture will be filed as an exhibit to the Plan. The New AMERCO Notes will be issued to the holders of Allowed Claims (AMERCO Unsecured Claims). The following paragraphs summarize the material provisions of the New AMERCO Notes and the New AMERCO Notes Indenture. The following description does not purport to be complete and is subject to, and qualified by reference to, all of the provisions of the New AMERCO Notes Indenture and the New AMERCO Notes. General The aggregate principal amount of New AMERCO Notes will equal the Allowed Class 7 Claims, minus the amount of cash, New Term Loan B Notes and SAC Holding Senior Notes distributed to the Class 7 Claimholders under the Plan. The New AMERCO Notes will mature seven years from the date of issuance. The New AMERCO Notes will bear cash interest at the rate of 12% per annum. During the term of the New AMERCO Notes, cash interest only is payable quarterly in arrears. Subordination of the New AMERCO Notes The payment of the principal amount of, and interest on, the New AMERCO Notes is subordinated in right of payment to the prior payment in full of senior indebtedness of the Reorganized Debtors. Under the New AMERCO Notes Indenture, the term "senior indebtedness" is defined to mean the obligations of Reorganized AMERCO and the guarantors under the Exit Financing Facility and the New Term Loan B Notes. 63 Under the subordination provisions, Reorganized AMERCO may not make any direct or indirect payment to the trustee or any holder of principal of or interest on, notes, whether pursuant to the terms of the Notes, upon acceleration or otherwise, if at the time of such payment there exists (i) a default in the payment of all or any portion of the obligations owing in connection with any senior indebtedness, or (ii) any other default under any document or instrument governing or evidencing any senior indebtedness, and the trustee has received written notice of such default from an authorized representative of the holders of senior indebtedness, and, in either case, such default will not have been cured or waived in writing; provided, however, that if within the period specified in the next sentence with respect to a default referred to in clause (ii) above, the holders of senior indebtedness have not declared the senior indebtedness to be immediately due and payable (or have declared such senior indebtedness to be immediately due and payable and within such period have rescinded such acceleration), then and in that event, payment of principal of and interest on the Notes will be resumed. With respect to any default under clause (ii) above, the period referred to in the preceding sentence will commence upon receipt by the trustee of a written notice or notices (which will specify all defaults existing under the senior indebtedness on the date of such notice and of which the representative giving such notice had actual knowledge at such time) of the commencement of such period from such representative, and will end at the completion of the 179th day after the beginning of such period. Only one such 179 day period may commence within any 360 consecutive days. Upon termination of any such period, Reorganized AMERCO will resume payments on account of the principal of and interest on notes, subject to the provisions of Article XII of the New AMERCO Notes Indenture. Collateral Securing the New AMERCO Notes The New AMERCO Notes will be secured by a first priority perfected security interest in the following collateral: (i) stock of Oxford; and first priority lien in (ii) real property under contract for sale as of the closing of the Exit Financing Facility; (iii) property defined as surplus property at the closing of the Exit Financing Facility, as defined in such Exit Financing Facility, and (iv) residual, restated Existing SAC Holding Notes, including existing SAC Holding Notes relating to 4 SAC, 5 SAC and 19 SAC, but excluding any Existing SAC Holding Note that is prohibited by an existing contractual relationship from being pledged. Guarantees The New AMERCO Notes will be guaranteed by all subsidiaries of Reorganized AMERCO, including Reorganized AREC, U-Haul and all of their respective subsidiaries, but excluding RepWest, Oxford and all of their respective subsidiaries. The guarantors will jointly and severally guaranty all of the obligations under the New AMERCO Notes. The obligation of each guarantor under its guaranty will be limited to the greatest amount that would not render its obligations under the guaranty subject to avoidance as a fraudulent conveyance or fraudulent transfer under applicable law. The New AMERCO Notes Indenture provides that so long as no default exists or would exist, the guaranty issued by any guarantor will be automatically and unconditionally released and discharged upon any sale to any person that is not affiliated with the Reorganized Debtors of all of the equity interest of such guarantor owned, directly or indirectly, by the Reorganized Debtors which transaction is otherwise in compliance with the New AMERCO Notes Indenture, including, without limitation, the application of the net available proceeds to the New AMERCO Notes from any such sale, to the extent required by the New AMERCO Notes Indenture. 64 Redemption of New AMERCO Notes The New AMERCO Notes will be mandatorily redeemable by Reorganized AMERCO at a redemption price of 100% of the principal amount, plus accrued and unpaid interest to the redemption date, from (i) the net available proceeds of any sale of the collateral securing the New AMERCO Notes and (ii) 75% of the net recoveries realized above $50,000,000 from the PwC Litigation. From and after the Effective Date, Reorganized AMERCO will have the option to redeem the New AMERCO Notes in whole or in part at a redemption price of 100% of the principal amount, plus accrued and unpaid interest to the redemption date. Change of Control Permits Purchase of Notes by the Reorganized Debtors at the Option of the Holder In the event of a change of control, each holder will have the right, at the holder's option, subject to the terms and conditions of the New AMERCO Notes Indenture, to require Reorganized AMERCO to purchase for cash all or any portion of the holder's notes at an amount equal to 100% of the face amount of the New AMERCO Note. AMERCO will be required to purchase the New AMERCO Notes as of a date not earlier than 30 days nor later than 60 days from the date notice of the change of control is mailed at a cash price equal to the sum of the purchase price described above plus accrued and unpaid interest, if any, on such note to such date of purchase. Within 30 days after the occurrence of a change of control, Reorganized AMERCO will be obligated to mail, or cause to be mailed, to all holders of notes at their addresses shown in the register of the registrar and to beneficial owners as required by applicable law a notice: - describing the transaction or transactions that constitute a change of control; - offering to purchase, on a date specified in the notice, all notes properly tendered by a holder pursuant to the such change of control offer; and - describing the procedures that holders must follow to accept the change in control offer. Under, and subject to exceptions specified in, the New AMERCO Notes Indenture, a "change of control" of the Reorganized Debtors will be deemed to have occurred upon the occurrence of any of the following: - any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Persons (as defined above), is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause that person or group will be deemed to have "beneficial ownership" of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of voting stock representing more than 35% of the voting power of the total outstanding voting stock of Reorganized AMERCO, provided, however, that such event will not be deemed to be a change of control so long as the Permitted Persons own voting stock representing in the aggregate a greater percentage of the total voting power of the voting stock of Reorganized AMERCO than such other person or group; - during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors (together with any new directors whose election to such board of directors or whose nomination for election by the stockholders of 65 Reorganized AMERCO was approved by a vote of the majority of the directors of Reorganized AMERCO 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 Reorganized AMERCO; - (a) all or substantially all of the assets of Reorganized AMERCO and the restricted subsidiaries are sold or otherwise transferred to any person other than a wholly-owned restricted subsidiary or (b) Reorganized AMERCO consolidates or merges with or into another person or any person consolidates or merges with or into Reorganized AMERCO, in either case under this clause, in one transaction or a series of related transactions in which immediately after the consummation thereof persons owning voting stock representing in the aggregate a majority of the total voting power of the voting stock of Reorganized AMERCO immediately prior to such consummation do not own voting stock representing a majority of the total voting power of the voting stock of Reorganized AMERCO or the surviving or transferee Person; or - Reorganized AMERCO adopts a plan of liquidation or dissolution or any such plan will be approved by the stockholders of Reorganized AMERCO. Affirmative and Negative Covenants The New AMERCO Notes Indenture will contain such other affirmative and negative covenants as agreed to by the Reorganized Debtors and the Creditors' Committee and as are appropriate and customary for debt securities of this type. Events of Default and Acceleration The following are events of default under the New AMERCO Notes Indenture: - failure by Reorganized AMERCO to pay interest on any of the notes when it becomes due and payable and the continuance of any such failure for 30 days; - failure by Reorganized AMERCO to pay the principal of any of the notes when it becomes due and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise; - failure by Reorganized AMERCO to comply with any of its agreements or covenants described under Sections 5.01 (successor requirements) and 4.15 (offer to purchase upon a change of control) of the New AMERCO Notes Indenture; - failure by Reorganized AMERCO to comply with any other agreement or covenant in the New AMERCO Notes Indenture and continuance of this failure for 60 days after notice of the failure has been given to Reorganized AMERCO by the trustee or by the holders of at least 25% of the aggregate principal amount of the notes then outstanding; - default under any mortgage, New AMERCO Notes Indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced indebtedness of Reorganized AMERCO or any restricted subsidiary, whether such indebtedness now exists or is incurred after the issue date, which default: (d) is caused by a failure to pay when due principal on such Indebtedness within the applicable express grace period, 66 (e) results in the acceleration of such indebtedness prior to its express final maturity or (f) results in the commencement of judicial proceedings to foreclose upon, or to exercise remedies under applicable law or applicable security documents to take ownership of, the assets securing such Indebtedness, and in each case, the principal amount of such indebtedness, together with any other indebtedness with respect to which an event described in clause (i), (ii) or (iii) immediately above has occurred and is continuing, aggregates in excess of an amount to be agreed upon by the Reorganized Debtors and the Creditors' Committee. - one or more judgments or orders that exceed an agreed upon amount (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against Reorganized AMERCO or any restricted subsidiary and such judgment or judgments have not been satisfied, stayed, annulled or rescinded within 60 days of being entered; - Reorganized AMERCO or any significant subsidiary pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a custodian of it or for all or substantially all of its assets, or (d) makes a general assignment for the benefit of its creditors; - a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against Reorganized AMERCO or any significant subsidiary as debtor in an involuntary case, (b) appoints a custodian of Reorganized AMERCO or any significant subsidiary or a custodian for all or substantially all of the assets of Reorganized AMERCO or any significant subsidiary, or (c) orders the liquidation of Reorganized AMERCO or any significant subsidiary; and the order or decree remains unstayed and in effect for 60 days; - any note guaranty of any significant subsidiary ceases to be in full force and effect (other than in accordance with the terms of such note guaranty and the New AMERCO Notes Indenture) or is declared null and void and unenforceable or found to be invalid or any guarantor denies its liability under its note guaranty (other than by reason of release of a guarantor from its note guaranty in accordance with the terms of the New AMERCO Notes Indenture and the note guaranty); or - an "event of default" occurs and is continuing under any of the security documents governing the New AMERCO Notes. If an event of default has happened and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the New AMERCO Notes then outstanding may declare the New AMERCO Notes, plus any accrued and unpaid cash interest through the date of such declaration, to be immediately due and payable. 67 Mergers and Sales of Assets The New AMERCO Notes Indenture provides that Reorganized AMERCO may not consolidate with or merge into any person or convey, transfer or lease our properties and assets substantially as an entity to another person unless: - the resulting, surviving or transferee person is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia, and such corporation assumes all of Reorganized AMERCO's obligations under the New AMERCO Notes and the New AMERCO Notes Indenture; - after giving effect to the transaction no event of default, and no event that, after notice or passage of time, would become an event of default, has occurred and is continuing; and - other conditions described in the New AMERCO Notes Indenture are met. Upon the assumption of Reorganized AMERCO's obligations by such corporation in such circumstances, subject to certain exceptions, Reorganized AMERCO will be discharged from all obligations under the New AMERCO Notes and the New AMERCO Notes Indenture. Although such transactions are permitted under the New AMERCO Notes Indenture, certain of the foregoing transactions occurring could constitute a change of control of the Reorganized Debtors, permitting each holder to require Reorganized AMERCO to purchase the New AMERCO Notes of such holder as described above. The New AMERCO Notes Indenture also provides that a guarantor may not consolidate with or merge into any person or convey, transfer or lease its properties and assets substantially as an entity to another person unless the surviving person assumes the obligations of such guarantor and the surviving person is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia, except if all of the assets or all of the common stock of such guarantor is sold to a non-affiliate of the Reorganized Debtors, in which case the guaranty is released. Modification The trustee and Reorganized AMERCO may modify or amend the New AMERCO Notes Indenture or the New AMERCO Notes with the consent of the holders of not less than a majority in aggregate principal amount at maturity of the New AMERCO Notes then outstanding. However, the consent of the holders of each outstanding note would be required to: - change the maturity of any note; - reduce the amount, extend the due date or otherwise affect the terms of any scheduled payment of interest on or principal of the notes; - change the date on which any notes are subject to redemption or otherwise alter the provisions with respect to the redemption of the notes; - make any note payable in money or currency other than that stated in the notes; - modify or change any provision of the New AMERCO Notes Indenture or its related definitions to affect the ranking of the notes or any note guaranty in a manner that adversely affects the holders; - reduce the percentage of holders necessary to consent to an amendment or waiver to the New AMERCO Notes Indenture or the notes; 68 - impair the rights of holders to receive payments of principal of or interest on the notes; - release any guarantor from any of its obligations under its note guaranty or the New AMERCO Notes Indenture, other than as permitted by the New AMERCO Notes Indenture; or - make any change in the amendment and waiver provisions of the New AMERCO Notes Indenture. Without the consent of any holder of notes, the trustee and Reorganized AMERCO may enter into supplemental New AMERCO Notes Indentures for any of the following purposes: - to provide for uncertificated notes in addition to or in place of certificated notes; - to provide for the assumption of Reorganized AMERCO's obligations to the holders of the notes in case of a merger or acquisition by a successor to Reorganized AMERCO pursuant to Article V of the New AMERCO Notes Indenture; - to cure any ambiguity, defect or inconsistency in the New AMERCO Notes Indenture; - to make any change that does not adversely affect the rights of any holder of the New AMERCO Notes; - to release any guarantor from any of its obligations under its note guaranty or the New AMERCO Notes Indenture (to the extent permitted by the New AMERCO Notes Indenture); or - to comply with the requirements of the SEC in order to effect or maintain the qualification of the New AMERCO Notes Indenture under the Trust Indenture Act. The holders of a majority in principal amount of the outstanding notes may, on behalf of all the holders of all notes: - waive compliance by Reorganized AMERCO with restrictive provisions of the New AMERCO Notes Indenture, as detailed in the New AMERCO Notes Indenture; and - waive any past default under the New AMERCO Notes Indenture and its consequences, except a default in the payment of the principal amount at maturity, issue price, accrued and unpaid interest, accrued original issue discount, redemption price, purchase price or change of control purchase price or in respect of any provision which under the New AMERCO Notes Indenture cannot be modified or amended without the consent of the holder of each outstanding note affected. Discharge of the New AMERCO Notes Indenture Reorganized AMERCO may satisfy and discharge its obligations under the New AMERCO Notes Indenture by delivering to the trustee for cancellation all outstanding notes or by depositing with the trustee or the paying agent, if applicable, after the New AMERCO Notes have become due and payable, whether at stated maturity or any redemption date, or any purchase date, or a change of control purchase date, or otherwise, cash sufficient to pay all of the outstanding notes and paying all other sums payable under the New AMERCO Notes Indenture. 69 Governing Law The New AMERCO Notes Indenture and the New AMERCO Notes and guarantees are governed by, and construed in accordance with, the law of the State of New York. SAC HOLDING SENIOR NOTES The SAC Holding Senior Notes will be issued by SAC Holding Corporation and SAC Holding II Corporation (collectively, "SAC Holding") pursuant to the SAC Holding Senior Notes Indenture to be entered into between SAC Holding, as issuer, and a trustee to be determined prior to the Effective Date. The SAC Holding Senior Notes will be issued to the holders of Class 7 Claims (AMERCO Unsecured Claims) and will constitute senior debt securities under the SAC Holding Senior Notes Indenture. The following paragraphs summarize the material provisions of the SAC Holding Senior Notes and the related SAC Holding Senior Notes Indenture. The following description does not purport to be complete and is subject to, and qualified by reference to, all of the provisions of the SAC Holding Senior Notes Indenture and the SAC Holding Senior Notes. General The SAC Holding Senior Notes will be limited to $200,000,000 in aggregate principal amount. The SAC Holding Senior Notes will mature ten years from the date of issuance. The SAC Holding Senior Notes will bear cash interest at 8.5%. During the term of the SAC Holding Senior Notes, interest is payable quarterly in arrears. Redemption of the SAC Holding Senior Notes SAC Holding will not have the right to redeem the SAC Holding Senior Notes prior to the third anniversary of the date of issuance. Thereafter, SAC Holding may redeem the SAC Holding Senior Notes for cash, as a whole at any time or from time to time in part, at the redemption prices set forth below expressed as a percentage of principal amount, together with accrued and unpaid interest to the date of redemption: (a) After the third anniversary but up to and including the fourth anniversary, at 104%; (b) After the fourth anniversary but up to and including the fifth anniversary, at 103.0%; (c) After the fifth anniversary but up to and including the sixth anniversary, at 101.5%; (d) After the sixth anniversary, at 100.0%. The SAC Holding Senior Notes will be mandatorily redeemable from the net cash proceeds (after payment of or provision for senior secured mortgage indebtedness and applicable fees and taxes) of any sale, refinancing or other form of monetization transaction involving the real estate of any SAC Holding Subsidiary, at redemption prices equal to the then applicable optional redemption price; provided, however, that the redemption price in the case of a sale, refinancing or other monetization of real property of 3 SAC will be 101% of principal, plus accrued and unpaid interest to the redemption date. 70 Ranking of the SAC Holding Senior Notes The SAC Holding Senior Notes will be senior in priority to all existing and future indebtedness of SAC Holding, except for certain third-party senior indebtedness secured by the real property of certain of the SAC Holding Subsidiaries. Collateral Securing the SAC Holding Senior Notes The SAC Holding Senior Notes will not be secured by any collateral. Change of Control Permits Purchase of Notes by SAC Holding at the Option of the Holder In the event of a change of control of either SAC Holding Corporation or SAC Holding II Corporation, each holder will have the right, at the holder's option, subject to the terms and conditions of the SAC Holding Senior Notes Indenture, to require SAC Holding to purchase for cash all or any portion of the holder's notes at an amount equal to 101% of the face amount of the SAC Holding Senior Note. A "change of control" of either SAC Holding Corporation or SAC Holding II Corporation will be deemed to have occurred upon the occurrence of certain events as specified in the SAC Holding Senior Notes Indenture. SAC Holding will be required to purchase the SAC Holding Senior Notes as of a date not earlier than 30 days nor later than 60 days from the date notice of the change of control is mailed at a cash price equal to the sum of the purchase price described above plus accrued and unpaid interest, if any, on such note to such date of purchase. Within 30 days after the occurrence of a change of control, SAC Holding will be obligated to mail, or cause to be mailed, to all holders of notes at their addresses shown in the register of the registrar and to beneficial owners as required by applicable law a notice: - describing the transaction or transactions that constitute a change of control; - offering to purchase, on a date specified in the notice, all notes properly tendered by a holder pursuant to the such change of control offer; and - describing the procedures that holders must follow to accept the change in control offer. Affirmative and Negative Covenants The SAC Holding Senior Notes Indenture will contain such other affirmative and negative covenants as agreed to by SAC Holding, the Reorganized Debtors and the Creditors' Committee and as are appropriate and customary for debt securities of this type. Events of Default and Acceleration The following are events of default under the SAC Holding Senior Notes Indenture: - failure by SAC Holding to pay interest on any of the notes when it becomes due and payable and the continuance of any such failure for 30 days; - failure by SAC Holding to pay the principal of any of the notes when it becomes due and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise; 71 - failure by SAC Holding to comply with certain of its agreements or covenants, as set forth in the SAC Holding Senior Notes Indenture; - failure by SAC Holding to comply with any other agreement or covenant in the SAC Holding Senior Notes Indenture and continuance of this failure for 60 days after notice of the failure has been given to SAC Holding by the trustee or by the holders of at least 25% of the aggregate principal amount of the notes then outstanding; - default under any mortgage, SAC Holding Senior Notes Indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced indebtedness of SAC Holding or any restricted subsidiary, whether such indebtedness now exists or is incurred after the issue date, which default results in the acceleration of such indebtedness prior to its express final maturity and such acceleration is not rescinded or cured within 30 days of notice of such default; - one or more judgments or orders that exceed an agreed upon amount (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against SAC Holding or any SAC Holding Subsidiary and such judgment or judgments have not been satisfied, stayed, annulled or rescinded within 60 days of being entered; - SAC Holding or any significant SAC Holding Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (a) commences a voluntary case, (b) consents to the entry of an order for relief against it in an involuntary case, (c) consents to the appointment of a custodian of it or for all or substantially all of its assets, or (d) makes a general assignment for the benefit of its creditors; or - a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against SAC Holding or any significant SAC Holding Subsidiary as debtor in an involuntary case, (b) appoints a custodian of SAC Holding or any significant SAC Holding Subsidiary or a custodian for all or substantially all of the assets of SAC Holding or any significant SAC Holding Subsidiary, or (c) orders the liquidation of SAC Holding or any significant SAC Holdings Subsidiary; and the order or decree remains unstayed and in effect for 60 days. If an event of default has happened and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the SAC Holding Senior Notes then outstanding may declare the SAC Holding Senior Notes, plus any accrued and unpaid cash interest through the date of such declaration, to be immediately due and payable. Mergers and Sales of Assets The SAC Holding Senior Notes Indenture provides that, subject to certain Permitted Transactions, SAC Holding may not consolidate with or merge into any person or convey, transfer or lease its properties and assets substantially as an entity to another person unless: 72 - the resulting, surviving or transferee person is an entity organized and existing under the laws of the United States, any state thereof, or the District of Columbia, and such entity assumes all obligations of SAC Holding Corporation or SAC Holding II Corporation, as applicable, under the SAC Holding Senior Notes and the SAC Holding Senior Notes Indenture; - after giving effect to the transaction no event of default, and no event that, after notice or passage of time, would become an event of default, has occurred and is continuing; and - other conditions described in the SAC Holding Senior Notes Indenture are met. Upon the assumption of the applicable SAC Holding entity's obligations by such corporation in such circumstances, subject to certain exceptions, the relevant SAC Holding entity will be discharged from all obligations under the SAC Holding Senior Notes and the SAC Holding Senior Notes Indenture. Although such transactions are permitted under the SAC Holding Senior Notes Indenture, certain of the foregoing transactions occurring could constitute a change of control of SAC Holding, permitting each holder to require SAC Holding to purchase the SAC Holding Senior Notes of such holder as described above. Modification The trustee and SAC Holding may modify or amend the SAC Holding Senior Notes Indenture or the SAC Holding Senior Notes with the consent of the holders of not less than a majority in aggregate principal amount at maturity of the SAC Holding Senior Notes then outstanding. However, the consent of the holders of each outstanding note would be required to: - change the maturity of any note; - reduce the amount, extend the due date or otherwise affect the terms of any scheduled payment of interest on or principal of the notes; - change the date on which any notes are subject to redemption or otherwise alter the provisions with respect to the redemption of the notes; - make any note payable in money or currency other than that stated in the notes; - modify or change any provision of the SAC Holding Senior Notes Indenture or its related definitions to affect the ranking of the notes in a manner that adversely affects the holders; - reduce the percentage of holders necessary to consent to an amendment or waiver to the SAC Holding Senior Notes Indenture or the notes; - impair the rights of holders to receive payments of principal of or interest on the notes; or - make any change in the amendment and waiver provisions of the SAC Holding Senior Notes Indenture. Without the consent of any holder of notes, the trustee and SAC Holding may enter into supplemental SAC Holding Senior Notes Indentures for any of the following purposes: - to provide for uncertificated notes in addition to or in place of certificated notes; - to provide for the assumption of the obligations of SAC Holding Corporation or SAC Holding II Corporation, as the case may be, to the holders of the notes in case of a merger or acquisition by a successor to SAC Holding Corporation or SAC Holding II 73 Corporation, as applicable, pursuant to Article V of the SAC Holding Senior Notes Indenture; - to cure any ambiguity, defect or inconsistency in the SAC Holding Senior Notes Indenture; - to make any change that does not adversely affect the rights of any holder of the SAC Holding Senior Notes; - to comply with the requirements of the SEC in order to effect or maintain the qualification of the SAC Holding Senior Notes Indenture under the Trust Indenture Act. The holders of a majority in principal amount of the outstanding notes may, on behalf of all the holders of all notes: - waive compliance by SAC Holding with restrictive provisions of the SAC Holding Senior Notes Indenture, as detailed in the SAC Holding Senior Notes Indenture; and - waive any past default under the SAC Holding Senior Notes Indenture and its consequences, except a default in the payment of the principal amount at maturity, issue price, accrued and unpaid interest, accrued original issue discount, redemption price, purchase price or change of control purchase price or in respect of any provision which under the SAC Holding Senior Notes Indenture cannot be modified or amended without the consent of the holder of each outstanding note affected. Discharge of the SAC Holding Senior Notes Indenture SAC Holding may satisfy and discharge its obligations under the SAC Holding Senior Notes Indenture by delivering to the trustee for cancellation all outstanding notes or by depositing with the trustee or the paying agent, if applicable, after the SAC Holding Senior Notes have become due and payable, whether at stated maturity or any redemption date, or any purchase date, or a change of control purchase date, or otherwise, cash sufficient to pay all of the outstanding notes and paying all other sums payable under the SAC Holding Senior Notes Indenture. Joint and Several Liability SAC Holding Corporation and SAC Holding II Corporation will be jointly and severally liable for the obligations expressed under the SAC Holding Senior Notes Indenture and by the SAC Holding Senior Notes. Governing Law The SAC Holding Senior Notes Indenture and the SAC Holding Senior Notes are governed by, and construed in accordance with, the law of the State of New York. N. PRESERVATION OF CAUSES OF ACTION. In accordance with Section 1123(b)(3) of the Bankruptcy Code, the Reorganized Debtors will retain and may (but are not required to) enforce all Retained Actions. The Debtors or the Reorganized Debtors, in their sole and absolute discretion, will determine whether to bring, settle, release, compromise, or enforce such Retained Actions (or decline to do any of the foregoing), and will not be required to seek further approval of the Bankruptcy Court for such action. The Reorganized Debtors may 74 pursue such litigation claims in accordance with the best interests of the Reorganized Debtors or any successors holding such rights of action. O. EXCLUSIVITY PERIOD. The Debtors intend to retain the exclusive right to amend or modify the Plan, and to solicit acceptances of any amendments to or modifications of the Plan, through and until the Effective Date. P. CORPORATE ACTION. Each of the matters provided for under the Plan involving the corporate structure of any Debtor or Reorganized Debtor or corporate action to be taken by or required of any Debtor or Reorganized Debtor, including, without limitation, the execution by the Reorganized Debtors of the Amended and Restated Articles of Incorporation, will, as of the Effective Date, be deemed to have occurred and be effective as provided herein, and will be authorized, approved and, to the extent taken prior to the Effective Date, ratified in all respects without any requirement of further action by stockholders, creditors, or directors of any of the Debtors or the Reorganized Debtors. Q. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS. Each of the Chief Executive Officer and President, Secretary and General Counsel of the Debtors, or their respective designees, will be authorized to execute, deliver, file, or record such contracts, instruments, releases, indentures, and other agreements or documents, and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan or to otherwise comply with applicable law. The secretary or assistant secretary of the Debtors will be authorized to certify or attest to any of the foregoing actions. R. EXEMPTION FROM CERTAIN TRANSFER TAXES AND RECORDING FEES; SUBSEQUENT ISSUANCES. Pursuant to Section 1146(c) of the Bankruptcy Code, any transfers from a Debtor to a Reorganized Debtor or to any other Person or entity pursuant to the Plan, any agreement regarding the transfer of title to or ownership of any of the Debtors' real or personal property, and any recordation of mortgage liens, deeds of trust or grants of security interests necessary and appropriate to implement the Exit Financing Facility, the New Term Loan B Notes and the New AMERCO Notes, will not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, or other similar tax or governmental assessment, and the Confirmation Order will direct the appropriate state or local governmental officials or agents to forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. All subsequent issuances, transfers or exchanges of securities, or the making or delivery of any instrument of transfer by Debtors on the Reorganized Debtors, as applicable, in the Chapter 11 Cases, whether in connection with a sale, transfer, or the making, delivery or recording of any deed or other instrument or transfer will be deemed in furtherance of the Plan. 75 VIII. EXECUTORY CONTRACTS AND UNEXPIRED LEASES A. ASSUMPTION AND REJECTION OF CONTRACTS AND LEASES. All executory contracts and unexpired leases of the Debtors will be deemed assumed by the applicable Reorganized Debtor, as of the Effective Date, except for any executory contract or unexpired lease: (i) that has been rejected pursuant to an order of the Bankruptcy Court entered prior to the Effective Date; or (ii) as to which a motion for approval of the rejection of such executory contract or unexpired lease, if applicable, has been filed with the Bankruptcy Court prior to the Confirmation Date. Entry of the Confirmation Order will constitute: (i) the approval, pursuant to Section 365(a) of the Bankruptcy Code, of the assumption of the executory contracts and unexpired leases assumed pursuant to the Plan or otherwise during the Chapter 11 Cases; and (ii) the approval, pursuant to Section 365(a) of the Bankruptcy Code, of the rejection of the executory contracts and unexpired leases rejected pursuant to the Plan or otherwise during the Chapter 11 Cases. In addition, under the Insurance First Day Order, AMERCO is required to assume, effective as of the Effective Date, the outstanding insurance contracts with RepWest. As a result of this assumption, the Allowed Claims of RepWest will be assumed by, and become an obligation of, Reorganized AMERCO. B. PAYMENTS RELATED TO ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. On the Effective Date or as soon thereafter as is practicable, the Reorganized Debtors will Cure any defaults under any executory contract or unexpired lease assumed pursuant to the Plan in accordance with Section 365(b)(1) of the Bankruptcy Code. C. REJECTION DAMAGES BAR DATE. All proofs of Claim with respect to Claims arising from the Debtors' rejection of any executory contract or unexpired nonresidential lease will be filed with the Bankruptcy Court on or before the earlier of: (a) 45 days following the entry of the order of the Bankruptcy Court approving such rejection, provided the effectiveness of such order has not been stayed; and (b) 45 days following the Effective Date of the Plan. Any such Claim not so filed by that date will be forever barred. IX. PROVISIONS GOVERNING DISTRIBUTIONS A. TIME OF DISTRIBUTIONS. Except as otherwise provided for herein or ordered by the Bankruptcy Court, distributions under the Plan will commence on the Effective Date or as soon thereafter as practicable. B. NO INTEREST ON CLAIMS OR INTERESTS. Unless otherwise specifically provided for in the Plan, the Confirmation Order, the DIP Credit Agreement, a post-petition agreement in writing between the Debtors and a Claimholder, or as otherwise ordered by the Bankruptcy Court, post-petition interest will not accrue or be paid on Claims, and no Claimholder will be entitled to interest accruing on or after the Petition Date on any Claim. Additionally, and without limiting the foregoing, interest will not accrue or be paid on any Disputed Claim in respect of the period from the Effective Date to the date a final distribution is made when and if such Disputed Claim or Disputed Interest becomes an Allowed Claim or Allowed Interest. 76 C. DISBURSING AGENT. The Reorganized Debtors will serve as the disbursing agent under the Plan and will make all distributions required under the Plan, except with respect to a holder of a Claim whose distribution is governed by an agreement and is administered by a Servicer, which distributions will be deposited with the appropriate Servicer, who will deliver such distributions to the holders of Claims in accordance with the provisions of the Plan and the terms of the governing agreement; provided, however, that if any such Servicer is unable to make such distributions, the Reorganized Debtor, with the cooperation of such Servicer, will make such distributions. D. SURRENDER OF SECURITIES OR INSTRUMENTS. On or before the Distribution Date, or as soon as practicable thereafter, each holder of an instrument evidencing a Claim arising under, from or with respect to an Existing Debt Security (a "Certificate"), will surrender such Certificate to the Reorganized Debtor, or, with respect to indebtedness that is governed by an agreement and administered by a Servicer, the respective Servicer, and such Certificate will be cancelled solely with respect to the Debtors and such cancellation will not alter the obligations or rights of any non-Debtor third parties vis-a-vis one another to such instruments; provided, however, that Article 9.4 of the Plan will not apply to any Claims Reinstated pursuant to the terms of the Plan, including without limitation, those Claims being Reinstated pursuant to Article 11.13 and 11.14 of the Plan. No distribution of property hereunder will be made to or on behalf of any such holder unless and until such Certificate is received by the Reorganized Debtors or the respective Servicer or the unavailability of such Certificate is reasonably established to the satisfaction of the Reorganized Debtors or the respective Servicer. Any holder who fails to surrender or cause to be surrendered such Certificate, or fails to execute and deliver an affidavit of loss and indemnity reasonably satisfactory to the Reorganized Debtors or the respective Servicer prior to the third anniversary of the Effective Date, will be deemed to have forfeited all rights and Claims in respect of such Certificate and will not participate in any distribution hereunder, and all property in respect of such forfeited distribution, including any dividends or interest attributable thereto, will revert to the Reorganized Debtors notwithstanding any federal or state escheat laws to the contrary. Notwithstanding the foregoing, holders of Interests will not be required to surrender Certificates evidencing an equity ownership in the Debtors. E. SERVICES OF INDENTURE TRUSTEES, AGENTS AND SERVICERS. The services, with respect to implementation of the distributions contemplated by the Plan, of Servicers, including Indenture Trustees under the relevant agreements that govern the rights of Claimholders will be as set forth elsewhere in the Plan. Notwithstanding the foregoing, the Reorganized Debtors will reimburse (i) any Servicer for reasonable and necessary services performed by it (including reasonable attorneys' fees) as contemplated by, and in accordance with the Plan, and (ii) any Indenture Trustees for all reasonable fees and expenses and indemnification amounts owned to such Indenture Trustees pursuant to the respective Indentures and arising in connection with the performance of services by the Indenture Trustees under the respective Indentures of the Plan. F. CLAIMS ADMINISTRATION RESPONSIBILITY. Reorganized Debtors. The Reorganized Debtors will retain responsibility for administering, disputing, objecting to, compromising, or otherwise resolving and making distributions (if any) with respect to all Claims against and Interests in the Debtors. 77 Filing of Objections. Unless otherwise extended by the Bankruptcy Court, any objections to Claims or Interests will be served and filed on or before forty-five (45) days following the Effective Date. Notwithstanding any authority to the contrary, an objection to a Claim or Interest will be deemed properly served on the Claimholder or Interestholder if the Debtors or the Reorganized Debtors effect service in any of the following manners: (i) in accordance with Federal Rule of Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (ii) to the extent counsel for a Claimholder or Interestholder is unknown, by first class mail, postage prepaid, on the signatory on the proof of claim or interest or other representative identified on the proof of claim or interest or any attachment thereto: or (iii) by first class mail, postage prepaid, on any counsel that has appeared on the Claimholder's or Interestholder's behalf in the Chapter 11 Cases. Delivery of Distributions. Distributions to Allowed Claimholders will be made by the Reorganized Debtor or the appropriate Servicer (a) at the addresses set forth on the proofs of claim filed by such Claimholders (or at the last known addresses of such Claimholders if no proof of claim is filed or if the Debtors have been notified in writing of a change of address), (b) at the addresses set forth in any written notices of address changes delivered to the Debtors or the Reorganized Debtors, as applicable, after the date of any related proof of claim, (c) at the addresses reflected in the Schedules if no proof of claim has been filed and the Reorganized Debtors have not received a written notice of a change of address, or (d) in the case of a Claimholder whose Claim is governed by an agreement and administered by a Servicer, including an Indenture Trustee, at the addresses contained in the official records of such Servicer or Indenture Trustee. Distributions made to holders of Claims by the Indenture Trustees will be subject to the rights of the Indenture Trustees under the Indentures and/or the Indenture Trustees Charging Liens. If any Claimholder's distribution is returned as undeliverable, no further distributions to such Claimholder will be made unless and until the Reorganized Debtors or the appropriate Servicer or Indenture Trustee is notified of such Claimholder's then-current address, at which time all missed distributions will be made to such Claimholder or Interestholder without interest. Amounts in respect of undeliverable distributions will be returned to the Reorganized Debtors until such distributions are claimed. All funds or other undeliverable distributions returned to the Reorganized Debtors and not claimed within six months of return will revert to the Reorganized Debtors. G. PROCEDURES FOR TREATING AND RESOLVING DISPUTED AND CONTINGENT CLAIMS. No Distributions Pending Allowance. No payments or distributions will be made with respect to all or any portion of a Disputed Claim or Disputed Interest unless and until all objections to such Disputed Claim or Disputed Interest have been settled or withdrawn or have been determined by a Final Order, and the Disputed Claim or Disputed Interest has become an Allowed Claim or Allowed interest. All objections to Claims or Interests must be filed on or before forty-five (45) following the Effective Date. Distributions After Allowance. If a Disputed Claim or Disputed Interest becomes, in whole or in part, an Allowed Claim or Allowed Interest, the Reorganized Debtors will distribute to the holder thereof the distributions, if any, to which such holder is entitled. No interest will be paid on Disputed Claims or Disputed Interests that later become Allowed Claims or Allowed Interests or with respect to any distribution in satisfaction thereof. The Reorganized Debtors will be responsible for all distributions to holders of Disputed Claims or 78 Disputed Interests that become, in whole or in part, Allowed Claims or Allowed Interests. The Reorganized Debtors will not be required to create or maintain a separate distribution reserve to make payments pursuant to Article 9.8 (b) of the Plan. De Minimis Distributions. The Reorganized Debtors or the Servicers, as applicable, will not be required to make distributions of less than one hundred dollars ($100) with respect to any Allowed Claim, unless a request therefor is made in writing to the Reorganized Debtors on or before forty-five (45) days following the Effective Date. Fractional Securities; Fractional Dollars. Neither the Reorganized Debtors nor the Servicer will be required to make distributions or payments of fractions of dollars. Whenever any payment of a fraction of a dollar under the Plan would otherwise be called for, the actual payment will reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars or less being rounded down. X. ALLOWANCE AND PAYMENT OF CERTAIN ADMINISTRATIVE CLAIMS A. DIP FACILITY CLAIM. On the Effective Date, the DIP Facility Claim will be allowed in an amount to be agreed upon by the Debtors and, as applicable, the DIP Lenders, or as ordered by the Bankruptcy Court with notice to the Statutory Committees, not less than five (5) Business Days prior to the Effective Date, and all obligations of the Debtors under the DIP Facility will be paid in full in Cash on the Effective Date; provided, however, that with respect to letters of credit issued under the DIP Facility, such claims may be satisfied in full by the cash collateralization of such letters of credit or by procuring back-up letters of credit. Upon compliance with the foregoing sentence, all liens and security interests granted to secure such obligations will be deemed cancelled and will be of no further force and effect. To the extent that the DIP Lenders or the DIP Agent have filed or recorded publicly any liens and/or security interests to secure the Debtors' obligations under the DIP Facility, the DIP Lenders or the DIP Agent, as the case may be, will take any commercially reasonable steps requested by the Debtors that are necessary to cancel and/or extinguish such publicly filed liens and/or security interests. B. PROFESSIONAL CLAIMS. Final Fee Applications. All final requests for payment of Professional Claims, Ordinary Course Professional Claims, and requests for reimbursement of expenses of members of the Statutory Committees must be filed no later than forty-five (45) days following the Effective Date. Payment of Interim Amounts. Subject to the Holdback Amount, on the Effective Date, the Debtors or Reorganized Debtors will pay all amounts owing to Professionals, Ordinary Course Professionals, and members of the Statutory Committees for all outstanding amounts payable relating to prior periods through the Effective Date. In order to receive payment on the Effective Date for unbilled fees and expenses incurred through such date, the Professionals and Ordinary Course Professionals will estimate fees and expenses due for periods that have not been billed as of the Effective Date and will deliver such estimate to the Debtors, counsel for the Statutory Committees, and the United States Trustee. Within forty-five (45) days after the Effective Date, a Professional receiving payment for the estimated period will submit a detailed invoice covering such period in the manner and providing the detail as set forth in the Professional Fee Order or the Ordinary Course Professional Order, as applicable. Should the estimated payment received by any Professional exceed the actual fees and expenses for such period, this 79 excess amount will be credited against the Holdback Amount for such Professional or, if the award of the Holdback Amount for such matter is insufficient, disgorged by such Professional. Holdback Amount. The Holdback Amount will not be considered property of the Debtors, the Reorganized Debtors or the Estates. The Reorganized Debtors will pay to Professionals the Holdback Amount within ten (10) days following allowance thereof by the Bankruptcy Court. Post-Effective Date Retention. Upon the Effective Date, any requirement that Professionals or Ordinary Course Professionals comply with Sections 327 through 331 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date will terminate, and the Reorganized Debtors will employ and pay Professionals and Ordinary Course Professionals in the ordinary course of business. C. SUBSTANTIAL CONTRIBUTION COMPENSATION AND EXPENSES BAR DATE. Any Person who requests compensation or expense reimbursement for making a substantial contribution in the Chapter 11 Cases pursuant to Sections 503(b)(3), (4), and (5) of the Bankruptcy Code must file an application with the clerk of the Bankruptcy Court on or before the forty-fifth (45th) day after the Effective Date (the "503 Deadline"), and serve such application on counsel for the Debtors and the Reorganized Debtors and as otherwise required by the Bankruptcy Court and the Bankruptcy Code on or before the 503 Deadline, or be forever barred from seeking such compensation or expense reimbursement. D. OTHER ADMINISTRATIVE CLAIMS. All other requests for payment of an Administrative Claim (other than as set forth in Article 10.1, Article 10.2 or Article 10.3 of the Plan) must be filed and served on counsel for the Debtors and the Reorganized Debtors no later than the Administrative Claims Bar Date. Any request for payment of an Administrative Claim pursuant to Article 10.4 of the Plan that is not timely filed and served by the Administrative Claims Bar Date will be disallowed automatically without the need for any objection from the Debtors or the Reorganized Debtors. The Debtors or the Reorganized Debtors may settle an Administrative Claim without further Bankruptcy Court approval. Unless the Debtors or the Reorganized Debtors object to an Administrative Claim, such Administrative Claim will be deemed allowed in the amount requested. In the event that the Debtors or the Reorganized Debtors object to an Administrative Claim, the Bankruptcy Court will determine the allowed amount of such Administrative Claim. Notwithstanding the foregoing, (a) no request for payment of an Administrative Claim need be filed with respect to an Administrative Claim which is paid or payable by the Debtors in the ordinary course of business, and (b) no request for payment of an Administrative Claim need be filled with respect to the fees, expenses, disbursements and indemnity claims incurred by Servicers and Indenture Trustees (including their counsel fees and expenses), in connection with their services as Servicers and Indenture Trustees under the respective Indentures (whether prepetition or postpetition), which fees will be paid in Cash promptly by the Reorganized Debtors without the need for application to, or approval of, any court, or with respect to an Administrative Claim which is paid or payable by the Debtors in the ordinary course of business. XI. EFFECT OF THE PLAN ON CLAIMS AND INTERESTS A. REVESTING OF ASSETS. Except as otherwise explicitly provided in the Plan, on the Effective Date, all property comprising the Estates (including Retained Actions, but excluding property that has been abandoned pursuant to an order of the Bankruptcy Court) will revest in each of the Debtors that owned such property or interest in property as of the Effective Date, free and clear of all Claims, liens, charges, encumbrances, rights and 80 Interests of creditors and equity security holders. As of the Effective Date, the Reorganized Debtors may operate their businesses and use, acquire, and dispose of property and settle and compromise Claims or Interests without supervision of the Bankruptcy Court, free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and the Confirmation Order. B. DISCHARGE OF THE DEBTORS. Pursuant to Section 1141 (d) of the Bankruptcy Code, except as otherwise specifically provided in the Plan or in the Confirmation Order, the distributions and rights that are provided in the Plan will be in complete satisfaction, discharge, and release, effective as of the Confirmation Date (but subject to the occurrence of the Effective Date), of Claims and Causes of Action, whether known or unknown, against, liabilities of liens on, obligations of rights against, the Debtors or any of their assets or properties, regardless of whether any property has been distributed or retained pursuant to the Plan on account of such Claims, and rights, including, but not limited to, Claims that arose before the Confirmation Date, any liability (including withdrawal liability) to the extent such Claims relate to services performed by employees of the Debtors prior to the Petition Date and that arise from a termination of employment or a termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Confirmation Date, and all debts of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, in each case whether or not: (a) a proof of claim based upon such Claim, debt, or right is filed or deemed filed under Section 501 of the Bankruptcy Code; (b) a Claim based upon such Claim, debt, or right is allowed under Section 502 of the Bankruptcy Code; or (c) the holder of such a Claim or right accepted the Plan. The Confirmation Order will be a judicial determination of the discharge of all Claims against the Debtors, subject to the Effective Date occurring. C. COMPROMISES AND SETTLEMENTS. In accordance with Article 9.6 of the Plan, pursuant to Bankruptcy Rule 9019(a), the Debtors may compromise and settle various (a) Claims against them and (b) Causes of Action that they have against other Persons up to and including the Effective Date. After the Effective Date, such right will pass to the Reorganized Debtors as contemplated in Article 11.1 of the Plan, without the need for further approval of the Bankruptcy Court, except as otherwise set forth in the Plan. D. RELEASES, EXCULPATION AND RELATED MATTERS. (a) Releases by the Debtors. Pursuant to Section 1123(b)(3) of the Bankruptcy Code, effective as of the Effective Date, the Debtors, in their individual capacity and as debtors-in-possession for and on behalf of their Estates, will be deemed to release and discharge all Released Parties from all claims, obligations, suits, judgments, damages demands, debts, rights, Causes of Action and liabilities whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to: (i) the Debtors; (ii) the Reorganized Debtors; (iii) the Subsidiaries; (iv) the Chapter 11 Cases and the conduct thereof; and (v) the Plan. The Reorganized Debtors will be bound, to the same extent the Debtors are bound, by all of the releases set forth in this Article 11.4(a) of the Plan. (b) Release by Holders of Certain Impaired Claims. As of the Effective Date, each holder of an Impaired Claim entitled to vote to accept or reject the Plan is also entitled to vote to accept or reject the provisions of this Article 11.4 of the Plan. Any holder of such Impaired Claim that affirmatively elects on the ballot for voting on the Plan to agree to the provisions of 81 this Article 11.4 of the Plan, will in consideration for the obligations of the Debtors and the Reorganized Debtors under the Plan and the securities, contracts, instruments, releases and other agreements or documents to be delivered in connection with the Plan, forever release, waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities (other than the rights to enforce the Debtors' or the Reorganized Debtors' obligations under the Plan and the securities, contracts, instruments, releases and other agreements and documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, forseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the Chapter 11 Cases or the conduct thereof, or the Plan against: (i) the Debtors; (ii) the Reorganized Debtors; and (iii) the Released Parties. (c) Exculpation and Limitation of Liability Regarding Conduct of Chapter 11 Cases. The Debtors, the Reorganized Debtors, the Statutory Committees, the members of the Statutory Committees in their capacities as such, the DIP Lenders, the DIP Agent, the Prepetition Agent, the Prepetition Lenders, the Indenture Trustees, each holder of the AREC Notes, and each such parties' respective professionals, agents, present or former members, officers and directors and any of such parties' successors and assigns, will not have or incur, and are hereby forever released, waived, and discharged from any claims, obligations, suits, judgments, damages demands, debts, rights, Causes of Action, or liabilities to one another or to any Claimholder or Interestholder, or any other party-in-interest, or any of their respective agents, employees, professionals, or any of their successors and assigns, for any act of omission, unless such act or omission is caused by such parties' gross negligence and willful misconduct, in connection with, relating to, or arising out of: (i) the Debtors' Chapter 11 Cases; (ii) the negotiation and filing of the Plan; (iii) the filing of the Chapter 11 Cases; (iv) the pursuit of confirmation of the Plan and the consummation of the Plan; or (v) the administration of the Plan or the property to be distributed under the Plan. (d) Exclusions and Limitations on Exculpation and Releases. Notwithstanding anything in the Plan to the contrary, the Confirmation of the Plan will not (i) enjoin, impact or affect the prosecution of the Derivative Actions, the Class Actions or the Securities Actions, except that the Debtors and the Reorganized Debtors will retain the right to object to the allowance of any Claim filed in the Chapter 11 Cases arising out of or related to the Derivative Actions, the Class Actions or the Securities Actions, or (ii) release or otherwise effect a release of PwC or any other party to the PwC Litigation. In addition, nothing set forth in Article 11.4 of the Plan will preclude or otherwise impair the rights of the SEC to administer and enforce the United States federal securities laws, except that the Debtors and the Reorganized Debtors will retain the right to object to the allowance of any Claim filed by the SEC in the Chapter 11 Cases. E. SETOFFS. The Debtors may, but will not be required to, set off against any Claim, and the payments or other distributions to be made pursuant to the Plan in respect of such Claim, claims of any nature whatsoever that the Debtors may have against such Claimholder, but neither the failure to do so, nor the allowance of any Claim hereunder. will constitute a waiver or release by the Debtors or the Reorganized Debtors of any such claim that the Debtors or the Reorganized Debtors may have against such Claimholder. 82 F. SUBORDINATION RIGHTS. Except as otherwise specifically provided for in the Plan, all Claims against the Debtors and all rights and claims between or among Claimholders relating in any manner whatsoever to distributions on account of Claims against or Interests in the Debtors, based upon any claimed subordination rights, whether asserted or unasserted, legal or equitable, will be deemed satisfied by the distributions under the Plan to Claimholders or Interestholders having such subordination right, and such subordination rights will be deemed waived, released, discharged, and terminated as of the Effective Date. G. INDEMNIFICATION OBLIGATIONS. Indemnification Obligations will be deemed to be, and will be treated as, executory contracts that the Reorganized Debtors will assume pursuant hereto and Section 365 of the Bankruptcy Code as of the Effective Date. Accordingly, such Indemnification Obligations will survive unimpaired and unaffected by entry of the Confirmation Order, irrespective of whether any such Indemnification Right is owed for an act or event occurring before or after the Petition Date. H. INJUNCTION. The satisfaction, release, and discharge pursuant to Article XI of the Plan will act as an injunction against any Person commencing or continuing any action, employment of process, or act to collect, offset, or recover any Claim or Cause of Action satisfied, released, or discharged under the Plan to the fullest extent authorized or provided by the Bankruptcy Code, including, without limitation, to the extent provided for or authorized by Sections 524 and 1141 thereof. Notwithstanding the foregoing, nothing in the Plan, including Article 11.9 of the Plan, or the Confirmation Order will affect, release, enjoin or impact the prosecution of the Claims asserted or to be asserted against the non-Debtor defendants in the Derivative Actions, the Class Actions or the Securities Actions. XII. CERTAIN FACTORS TO BE CONSIDERED The holder of a Claim against a Debtor should read and carefully consider the following factors, as well as the other information set forth in this Disclosure Statement (and the documents delivered together herewith and/or incorporated by reference herein) before deciding whether to vote to accept or to reject the Plan. A. GENERAL CONSIDERATIONS. The formulation of a reorganization plan is the principal purpose of a Chapter 11 case. The plan sets forth the means for satisfying the holders of claims against and interest in the debtors. The recapitalization of the Debtors preserves and realizes the going concern value of the Debtors for their Claimholders and Interestholders. Moreover, reorganization of the Debtors' business and operations under the proposed Plan also avoids the potentially adverse impact of a liquidation on the Debtors' employees and many of its customers, trade vendors, suppliers of goods and services, and lessors. B. CERTAIN BANKRUPTCY CONSIDERATIONS. If the Plan is not confirmed and consummated, there can be no assurance that the Chapter 11 Cases will continue rather than be converted to a liquidation or that any alternative plan of reorganization would be on terms as favorable to the holders of Claims and Interests as the terms of the Plan. If a liquidation or protracted reorganization were to occur, there is a substantial risk that the value of the 83 Debtors' enterprise would be substantially eroded to the detriment of all stakeholders. See Appendix 6 attached to this Disclosure Statement for a liquidation analysis of the Debtors. Although the Debtors believe that the Plan will satisfy all requirements necessary for Confirmation by the Bankruptcy Court, there can be no assurance that the Bankruptcy Court will reach the same conclusion. There can also be no assurance that modifications of the Plan will not be required for Confirmation, that such negotiations would not adversely affect the holders of Allowed Claims and Equity Interests, or that such modifications would not necessitate the re-solicitation of votes. If any impaired class of claims does not accept a plan of reorganization, a bankruptcy court may nevertheless confirm such a plan of reorganization at the proponent's request if at least one impaired class has accepted the plan of reorganization (without including the acceptance of any "insider" in such class) and, as to each impaired class that has not accepted the plan of reorganization, the bankruptcy court determines that the plan of reorganization "does not discriminate unfairly" and is "fair and equitable" with respect to rejecting impaired classes. If any Impaired Class of Claims fails to accept the Plan in accordance with Section 1129(a)(8) of the Bankruptcy Code, the Debtors reserve the right to request nonconsensual Confirmation of the Plan in accordance with Section 1129(b) of the Bankruptcy Code. C. BUSINESS FACTORS AND COMPETITIVE CONDITIONS. The Debtors operate in a highly competitive industry. The truck rental industry is highly competitive and includes a number of significant national and hundreds of regional and local competitors. Competition is generally based on price, product quality, convenience, availability, brand name recognition and service. In the truck rental business, the Debtors face competition from Budget Car and Truck Rental Company and Penske Truck Leasing. Some of the Debtors' competitors may have greater financial resources than the Reorganized Debtors. The Debtors cannot assure that they will not be forced to reduce their rental prices or delay price increases. The Debtors and their Subsidiaries compete with national and regional self-storage operators as well as local operators. Competition in the market areas in which the Debtors operate is significant and affects the occupancy levels, rental rates and operating expenses of the Debtors' facilities. Competition might cause them to experience a decrease in occupancy levels, limit their ability to increase rental rates and compel them to offer discounted rental rates which could have a material adverse effect on the Debtors' operating results. Entry into the self-storage business through acquisition of existing facilities is possible for persons or institutions with the required initial capital. Development of new self-storage facilities is more difficult, however, due to zoning, environmental and other regulatory requirements. The self-storage industry has in the past experienced overbuilding in response to perceived increases in demand. The Debtors cannot assure that they will be able to successfully compete in existing markets or expand into new markets. Control of AMERCO remains in the hands of a small contingent. As of June 30, 2003, Edward J. Shoen, Chairman of the Board of Directors and President of AMERCO, James P. Shoen, a director of AMERCO, and Mark V. Shoen, an executive officer of AMERCO, collectively own 8,893,078 shares (approximately 43.1%) of the outstanding common shares of AMERCO. Accordingly, Edward J. Shoen, Mark V. Shoen and James P. Shoen will be in a position to continue to influence the election of the members of the Board of Directors and approval of significant transactions. In addition, 2,402,456 shares (approximately 11.7%) of the outstanding common shares of 84 AMERCO, including shares allocated to employees and unallocated shares, are held by AMERCO's Employee Savings and Employee Stock Ownership Trust. AMERCO's operations subject it to numerous environmental regulations and the possibility that environmental liability in the future could adversely affect AMERCO's operations. Compliance with environmental requirements of federal, State and local governments significantly affects AMERCO's business. Among other things, these requirements regulate the discharge of materials into the water, air and land and govern the use and disposal of hazardous substances. Under environmental laws, AMERCO can be held strictly liable for hazardous substances that are found on real property AMERCO has owned or operated. AMERCO is aware of issues regarding hazardous substances on some of AMERCO's real estate and AMERCO has put in place a remedial plan at each site where AMERCO believes such a plan is necessary. AMERCO regularly makes capital and operating expenditures to stay in compliance with environmental laws. In particular, AMERCO has managed a testing and removal program since 1988 for AMERCO's underground storage tanks. Under this program, AMERCO spent $43,700,000 between April 1988 and March 31, 2003. Despite these compliance efforts, risk of environmental liability is part of the nature of AMERCO's business. While AMERCO does not expect the future cost of compliance with environmental laws or future environmental liabilities, including compliance and remediation costs, to have a material adverse effect on AMERCO's business, environmental laws and regulations are complex, change frequently and could become more stringent in the future. AMERCO cannot assure that future compliance with these regulations or future environmental liabilities will not have a material adverse effect on AMERCO's business. AMERCO's business is seasonal. AMERCO's business is seasonal and AMERCO's results of operations and cash flows fluctuate significantly from quarter to quarter. Historically, revenues have been stronger in the first and second fiscal quarters due to the overall increase in moving activity during the spring and summer months. The fourth fiscal quarter is generally weakest, when there is a greater potential for adverse weather conditions. AMERCO obtains its rental trucks from a limited number of manufacturers. In the last ten years, AMERCO purchased all of its rental trucks from Ford and General Motors. Although AMERCO believes that it has alternative sources of supply for its rental trucks, termination of one or more of AMERCO's relationships with any of these suppliers could have a material adverse effect on AMERCO's business, financial condition or results of operations. AMERCO's property and casualty insurance business has suffered extensive losses. AMERCO's property and casualty insurance business, RepWest, has experienced significant net losses totaling approximately $77,000,000 for the three calendar years ended December 31, 2002. These losses are primarily attributable to business lines that were unprofitable as underwritten. To restore profitability in RepWest, AMERCO is exiting all non-U-Haul related lines and the exit may result in near term losses as these lines are eliminated. Although AMERCO believes the changes will have a positive impact on the financial position of RepWest, there can be no assurance that AMERCO will be successful in returning RepWest to sustained profitability. AMERCO's inability to sustain profitability could have a material adverse effect on AMERCO's earnings and financial position. 85 AMERCO's insurance businesses have recently suffered downgrades in their ratings from national insurance company rating agencies. A.M. Best has recently downgraded RepWest and Oxford. These downgrades have affected their standing in the insurance industry and caused their premiums to decrease. Ratings have become an increasingly important factor in establishing the competitive position of insurance companies. A.M. Best ratings reflect its opinion of an insurance company's financial strength, operating performance, strategic position and ability to meet its obligations to policyholders. The A.M. Best ratings are C for RepWest and C+ for Oxford. Notes receivable from SAC Holding are a significant portion of AMERCO'S total assets. At March 31, 2003, AMERCO held $394,200,000 of mortgage loans and notes due from SAC Holding. Although these assets have been eliminated in the consolidated financial statements, AMERCO has significant economic exposure to SAC Holding. SAC Holding has total reported indebtedness and other obligations of $982,200,000 at March 31, 2003. AMERCO holds various senior and junior unsecured notes of SAC Holding. The senior unsecured notes of SAC Holding that AMERCO holds rank equal in right of payment with the notes of certain senior mortgage holders, but junior to the extent of the collateral securing the applicable mortgages and junior to the extent of the cash flow waterfalls that favor the senior mortgage holders. If SAC Holding are unable to meet their obligations to their senior lenders, it could trigger a default on their obligations to AMERCO. In such an event of default, AMERCO could suffer a significant loss to the extent the value of the underlying collateral on AMERCO's loans to SAC Holding is inadequate to repay SAC Holdings' senior lenders and AMERCO. There can be no assurance that SAC Holding will not default on their loans to their senior lenders or that the value of SAC Holdings' assets upon liquidation would be sufficient to repay AMERCO in full. AMERCO is a holding company and is dependent on its subsidiaries for cash flow. As a holding company with no business operations, AMERCO's material assets consist only of the stock of its subsidiaries. AMERCO has to rely upon dividends and other payments from its subsidiaries to generate the funds necessary to pay its obligations. AMERCO's subsidiaries, however, are legally distinct from AMERCO and have no obligation, contingent or otherwise, to make funds available to AMERCO. The ability of AMERCO's subsidiaries to make dividend and other payments to AMERCO is subject to, among other things, the availability of funds, the terms of the indebtedness of AMERCO's subsidiaries and applicable state laws and insurance regulations. AMERCO faces risks related to an SEC investigation and securities litigation. The SEC has issued a formal order of investigation to determine whether AMERCO has violated the Federal securities laws. Although AMERCO has fully cooperated with the SEC in this matter and intends to continue to fully cooperate, the SEC may determine that AMERCO has violated Federal securities laws. AMERCO cannot predict when this investigation will be completed or its outcome. If the SEC makes a determination that AMERCO has violated Federal securities laws, AMERCO may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief. In addition, AMERCO has been named a defendant in a number of class action and related lawsuits. The findings and outcome of the SEC investigation may affect the class-action lawsuits that are pending. AMERCO is generally obliged, to the extent permitted by law and the Plan, to indemnify its directors and officers who are named defendants in some of these lawsuits. AMERCO is unable to estimate what its liability in these matters may be, and AMERCO may be required to pay judgments or 86 settlements and incur expenses in aggregate amounts that could have a material adverse effect on AMERCO's financial condition or results of operations. AMERCO faces risks related to a Department of Labor Investigation. The DOL is presently investigating whether there were violations of ERISA involving the AMERCO ESOP. Although AMERCO has fully cooperated with the DOL in this matter and intends to continue to fully cooperate, the DOL may determine that AMERCO has violated ERISA. In that event, AMERCO may face sanctions, including, but not limited to, significant monetary penalties and injunctive relief. AMERCO's common stock may be delisted from the NASDAQ Stock Market. On June 24, 2003, AMERCO received a letter from Nasdaq indicating that, in light of AMERCO's recent Chapter 11 filing, the Panel would consider such filing and associated concerns in rendering a determination regarding AMERCO's continued listing status. Nasdaq has requested, and AMERCO has provided, information regarding AMERCO's Chapter 11 Cases and the anticipated effect of the reorganization process on the shareholders of AMERCO. On August 13, 2003, AMERCO received a letter from Nasdaq indicating that the Panel had determined to continue the listing of AMERCO's common stock on Nasdaq provided that: (1) on or before August 22, 2003, AMERCO files its Annual Report on Form 10-K for the fiscal year ended March 31, 2003, and its Quarterly Report Form 10-Q for the quarter ended June 30, 2003, with the SEC and Nasdaq; (2) on or before deadlines to be determined by the Panel, AMERCO submits to Nasdaq a copy of AMERCO's Plan as filed with the Bankruptcy Court, as well as copies of any amendments to the Plan; documentation evidencing that AMERCO has commenced the solicitation of votes regarding the Plan, as well as documentation evidencing that the Plan has been confirmed by the Bankruptcy Court; and (3) on or before deadlines established by the Panel, AMERCO submits documentation to Nasdaq evidencing its emergence from bankruptcy. In addition to the foregoing, AMERCO must comply with all other requirements for continued listing on Nasdaq. AMERCO has filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2003, and its Quarterly Report Form 10-Q for the quarter ended June 30, 2003, with the SEC and Nasdaq, but did not meet the deadline to file its Form 10-Q as discussed above. Although AMERCO intends to take all actions available to maintain its Nasdaq listing, there can be no assurance that AMERCO will be able to do so. AMERCO's preferred stock may be delisted from the New York Stock Exchange. The New York Stock Exchange has completed a review of the continued listing of the Series A 8 1/2% preferred stock of AMERCO following its filing for protection under Chapter 11. According to NYSE, this assessment has shown that AMERCO is currently in compliance with all of the NYSE's quantitative continued listing standards. The NYSE will continue to closely monitor events at AMERCO in connection with assessing the appropriateness of continued listing of AMERCO's preferred stock. The NYSE has indicated that it will give consideration to immediate suspension of AMERCO's preferred stock if authoritative advice is received that AMERCO's securities, including the common stock, are without value, or if AMERCO subsequently falls below any of the NYSE's quantitative continued listing standards. In addition, the NYSE noted that it may, at any time, suspend a security if it believes that continued dealings in the security on the NYSE are not advisable. Accordingly, there can be no assurance that AMERCO's preferred stock will continue to be listed on NYSE. 87 RepWest has consented to an Order of Supervision issued by the Arizona Department of Insurance. On May 20, 2003, RepWest consented to an Order of Supervision issued by the ADOI. Pursuant to this Order and Arizona law, during the period of supervision, RepWest may not engage in certain activities without the prior approval of the ADOI. The requirements to abate the order are for RepWest to eliminate the specific credit risk associated with the exposures to AMERCO and its affiliates and establish that it possesses surplus sufficient with Arizona law and as the Arizona Director of Insurance may require based on type, volume or nature of its business pursuant to Arizona law. In addition, if RepWest fails to satisfy the requirements to abate ADOI's concerns, the ADOI may take further action, including, but not limited to, commencing a conservatorship. D. INHERENT UNCERTAINTY OF FINANCIAL PROJECTIONS. The Projections set forth in Appendix 4 and Appendix 5 annexed hereto cover the operations of the Reorganized Debtors on a consolidated basis and SAC Holding, respectively, through fiscal year 2007. The Projections are based on numerous assumptions including the timing, confirmation, and consummation of the Plan in accordance with its terms, the anticipated future performance of the Reorganized Debtors and SAC Holding, general business and economic conditions, and other matters, many of which are beyond the control of the Reorganized Debtors and SAC Holding and some or all of which may not materialize. In addition, unanticipated events and circumstances occurring subsequent to the date that this Disclosure Statement is approved by the Bankruptcy Court may affect the actual financial results of the Debtors' and SAC Holding's operations. There are various assumptions that are material and may adversely affect the ability of the Reorganized Debtors and SAC Holding to make payments with respect to post-Effective Date indebtedness and to achieve the Projections. Because the actual results achieved throughout the periods covered by the Projections can be expected to vary from the projected results, the Projections should not be relied upon as a guaranty, representation, or other assurance that the actual results will occur. Except with respect to the Projections and except as otherwise specifically and expressly stated herein, this Disclosure Statement does not reflect any events that may occur subsequent to the date hereof and that may have a material impact on the information contained in this Disclosure Statement. None of the Debtors, the Reorganized Debtors nor SAC Holding intend to update the Projections for the purposes hereof; thus, the Projections will not reflect the impact of any subsequent events not already accounted for in the assumptions underlying the Projections. E. ACCESS TO FINANCING AND TRADE TERMS. The Debtors' and their Subsidiaries' operations are dependent on the availability and cost of working capital financing and may be adversely affected by any shortage or increased cost of such financing. Debtors believe that substantially all of their needs for funds necessary to consummate the Plan and for post-Effective Date working capital financing will be met by projected operating cash flow and the Exit Financing Facility. Moreover, if the Debtors or the Reorganized Debtors require working capital and trade financing greater than that provided by projected operating cash flow, the Exit Financing Facility, and trade financing, they may be required either to: (a) obtain other sources of financing; or (b) curtail their operations. The Debtors believe that the recapitalization to be accomplished through the Plan will facilitate the ability to obtain additional or replacement working capital financing. No assurance can 88 be given, however, that any additional replacement financing will be available on terms that are favorable or acceptable to the Debtors or the Reorganized Debtors. F. CLAIMS ESTIMATIONS. There can be no assurance that the estimated Claim amounts set forth herein are correct. The actual Allowed amount of Claims may differ in some respect from the estimates. The estimated amounts are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions provide incorrect, the actual Allowed amount of Claims may vary from those estimated herein. G. MARKET FOR THE NEW DEBT SECURITIES. There can be no assurance that an active market for the New Debt Securities to be distributed pursuant to the Plan will develop, and no assurance can be given as to the prices at which such securities might be traded. H. DIVIDENDS. The Debtors do not anticipate that cash dividends or other distributions will be paid with respect to the Common Stock in the foreseeable future. XIII. RESALE OF SECURITIES RECEIVED UNDER THE PLAN A. ISSUANCE OF SECURITIES. Section 1145(a)(l) of the Bankruptcy Code exempts the offer and sale of securities under a plan of reorganization from registration under Section 5 of the Securities Act and state laws if three principal requirements are satisfied: (i) the securities must be offered and sold under a plan of reorganization and must be securities of the debtor, of an affiliate participating in a joint plan with the debtor, or of a successor to the debtor under the plan; (ii) the recipients of the securities must hold prepetition or administrative expense claims against the debtor or interests in the debtor; and (iii) the securities must be issued entirely in exchange for the recipient's claim against or interest in the debtor, or principally in exchange for such claims or interests and partly for cash or property. Except as noted below, the Debtors believe that the offer and sale of the debt securities under the Plan to Claimholders satisfy the requirements of Section 1145(a)(l) of the Bankruptcy Code and are, therefore, exempt from registration under the Securities Act and state securities laws. B. SUBSEQUENT TRANSFERS OF NEW DEBT SECURITIES. The New Debt Securities or other securities to be issued pursuant to the Plan may be freely transferred by most recipients following initial issuance under the Plan, and all resales and subsequent transactions in the New Debt Securities or other securities so issued are exempt from registration under federal and state securities laws, unless the holder is an "underwriter" with respect to such securities. Section 1145(b) of the Bankruptcy Code defines four types of "underwriters": (i) persons who purchase a claim against, an interest in, or a claim for an administrative expense against the debtor with a view to distributing any security received in exchange for such claim or interest; 89 (ii) persons who offer to sell securities offered under a plan for the holders of such securities; (iii) persons who offer to buy such securities from the holders of such securities, if the offer to buy is: (A) with a view to distributing such securities; and (B) under an agreement made in connection with the Plan, the consummation of the Plan, or with the offer or sale of securities under the Plan; or (iv) a person who is an "issuer" with respect to the securities as the term "issuer" is defined in Section 2(11) of the Securities Act. Under Section 2(11) of the Securities Act, an "issuer" includes any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control of the issuer. To the extent that Persons who receive New Debt Securities pursuant to the Plan are deemed to be "underwriters." resales by such persons would not be exempted by Section 1145 of the Bankruptcy Code from registration under the Securities Act or other applicable law. Persons deemed to be underwriters would, however, be permitted to sell such New Debt Securities or other securities without registration pursuant to the provisions of Rule 144 under the Securities Act. These rules permit the public sale of securities received by "underwriters" if current information regarding the issuer is publicly available and if volume limitations and certain other conditions are met. Whether or not any particular person would be deemed to be an "underwriter" with respect to the New Debt Securities or other security to be issued pursuant to the Plan would depend upon various facts and circumstances applicable to that person. Accordingly, the Debtors and SAC Holding express no view as to whether any particular Person receiving New Debt Securities or other securities under the Plan would be an "underwriter" with respect to such New Debt Securities or other securities. Given the complex and subjective nature of the question of whether a particular holder may be an underwriter, the Debtors and SAC Holding make no representation concerning the right of any person to trade in the New Debt Securities or other securities. The Debtors and SAC Holding recommend that potential recipients of the New Debt Securities or other securities consult their own counsel concerning whether they may freely trade New Debt Securities or other securities without compliance with the Securities Act or the Exchange Act. XIV. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN A summary description of certain United States federal income tax consequences of the Plan is provided below. This description is for informational purposes only and, due to a lack of definitive judicial or administrative authority or interpretation, substantial uncertainties exist with respect to various tax consequences of the Plan as discussed herein. This disclosure describes only the principal United States federal income tax consequences of the Plan to the Debtors and to the Claimholders who are entitled to vote to accept or reject the Plan. No opinion of counsel has been sought or obtained with respect to any tax consequences of the Plan. No rulings or determinations of the Internal Revenue Service (the "IRS") or any other tax authorities have been sought or obtained with respect to any tax consequences of the Plan, and the discussion below is not binding upon the IRS or such other authorities. No representations are being made to the Debtors or any Claimholder regarding the particular lax 90 consequences of the confirmation and consummation of the Plan. No assurance can be given that the IRS would not assert, or that a court would not sustain, a different position from any discussed herein. The following discussion of United States federal income tax consequences is based on the Internal Revenue Code of 1986, as amended, Treasury Regulations, judicial authorities, published positions of the IRS and other applicable authorities, all as in effect on the date of this document and all of which are subject to change or differing interpretations (possibly with retroactive effect). The following discussion does not address foreign, state, or local tax consequences of the Plan, nor does it purport to address the United States federal income tax consequences of the Plan to special classes of taxpayers (e.g., banks and certain other financial institutions, insurance companies, tax-exempt organizations, governmental entities, the Plan Investors, persons that are, or hold their Claims through, pass-through entities, persons whose functional currency is not the United States dollar, foreign persons, dealers in securities or foreign currency, employees of a Debtor, persons who received their Claims pursuant to the exercise of an employee stock option or otherwise as compensation and persons holding Claims that are a hedge against, or that are hedged against, currency risk or that are part of a straddle, constructive sale, or conversion transaction). Furthermore, the following discussion does not address United States federal taxes other than income taxes. Holders of Claims are strongly urged to consult their own tax advisor regarding the United States federal, state and local and any foreign tax consequences of the transactions described in this Disclosure Statement and in the Plan. A. UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THE DEBTORS Cancellation of Indebtedness Income Under the Plan, some of the Debtors' outstanding indebtedness will be satisfied in exchange for Cash, newly issued Securities, and/or other property. The satisfaction of a debt obligation for an amount of cash and other property having a fair market value (or, in the case of a new debt instrument, an "issue price") less than the "adjusted issue price" of the debt obligation generally gives rise to cancellation of indebtedness ("COD") income to the debtor. However, the debtor does not recognize COD income if the debt discharge occurs in Title 11 bankruptcy case. The debtor instead reduces its tax attributes to the extent of its COD income in the following order: (a) net operating losses ("NOLs") and NOL carryforwards; (b) general business credit carryforwards; (c) minimum tax credit carryforwards; (d) capital loss carryforwards; (e) the tax basis of the Debtors' depreciable and nondepreciable assets (but not below the amount of its liabilities immediately after the discharge); and (f) foreign tax credit carryforwards. In this case, the Debtors have NOLs of approximately $171 million. A debtor may elect to alter the preceding order of attribute reduction and, instead, first reduce the tax basis of its depreciable assets. If the debtor is part of a group of corporations that joins in the filing of a consolidated federal income tax return, both the tax attributes of the consolidated group that are attributable to other group members and the separate attributes of these other members are subject to reduction to the extent that the debtor's COD income exceeds the amount of (i) the consolidated group's tax attributes that are attributable to the debtor member, (ii) the attributes that arose in separate return limitation years of the debtor member, and (iii) the basis of property of the debtor member. The reduction in tax attributes occurs only after the tax for the year of the debt discharge has been determined (i.e., such attributes may be available to offset taxable income that accrues between the date of discharge and the end of the Debtors' tax year). The debtor does not recognize any COD income that exceeds the amount 91 of available tax attributes, and such excess COD income has no other United States federal income tax effect. Because some of the Debtors' outstanding indebtedness will be satisfied in exchange for Cash, newly issued Securities, and/or other property, the amount of COD income, and accordingly the amount of tax attributes required to be reduced, will depend in part on the issue price of the Securities. While this value cannot be known with certainty until after the Effective Date, it is not expected that the Debtors will be required to materially reduce their tax attributes because Debtor will not materially reduce the amount of the Debtors' aggregate outstanding indebtedness due to: (i) the Debtor's issuance of debt pursuant to the Plan and (ii) the terms of the SAC Holding Participation and Subordination Agreement. However, the exact amount of such reduction at this time cannot be predicted. Finally, to the extent permitted for federal income tax purposes, the Debtors and the SAC Holding entities intend to deduct the respective amounts paid by them in Cash and other property pursuant to the Plan. B. FEDERAL INCOME TAX CONSEQUENCES TO CLAIMHOLDERS AND INTERESTHOLDERS The following discusses certain United States federal income tax consequences of the transactions contemplated by the Plan to Claimholders and Interestholders that are "United States holders," as defined below. The United States federal income tax consequences of the transactions contemplated by the Plan to Claimholders (including the character, timing and amount of income, gain or loss recognized) will depend upon, among other things: (1) whether the Claim and the consideration received in respect thereof are "securities" for federal income tax purposes; (2) the manner in which a holder acquired a Claim; (3) the length of time the Claim has been held; (4) whether the Claim was acquired at a discount; (5) whether the holder has taken a bad debt deduction with respect to the Claim (or any portion thereof) in the current tax year or any prior tax year; (6) whether the holder has previously included in its taxable income accrued but unpaid interest with respect to the Claim; (7) the holder's method of tax accounting; and (8) whether the Claim is an installment obligation for federal income tax purposes. Claimholders therefore should consult their own tax advisors regarding the particular tax consequences to them of the transactions contemplated by the Plan. For purposes of the following discussion, a "United States holder" is a Claimholder that is: (1) a citizen or individual resident of the United States; (2) a partnership or corporation created or organized in the United States or under the laws of the United States, a political subdivision thereof, or a State of the United States; (3) an estate the income of which is subject to United States federal income taxation regardless of its source; or (4) a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States fiduciaries have the authority to control all substantial decisions of the trust, or (ii) the trust was in existence on August 20, 1996, and properly elected to be treated as a United States person. Sale or Exchange of Claims Under the Plan, Claimholders will receive Securities, Cash and/or other property in exchange for their Claims. A Claimholder who receives Securities, Cash and/or other property in exchange for its Claim pursuant to the Plan will generally recognize gain or loss for United States federal income tax purposes in an amount equal to the difference between (1) the fair market value of the Securities and/or other property on the Effective Date, plus the amount of Cash received by such holder, and (2) the holder's adjusted tax basis in its Claim. Where the Securities received by a Claimholder are newly issued notes of a Debtor, such notes will be treated as given in exchange for any existing notes of a Debtor held by the Claimholder to the extent that the newly issued notes effect a "significant modification," within the meaning of Treasury Regulation Section 1.1001-3, of the Debtor's existing notes. In such a case, a Claimholder will recognize gain or loss for United States federal income tax purposes in an amount equal to the 92 difference between (1) the issue price of the newly issued notes of the Debtor, the fair market value on the Effective Date of any other Securities and/or other property received by such holder, plus the amount of any Cash received by such holder, and (2) the holder's adjusted tax basis in its Claim. The character of such gain or loss as capital gain or loss or as ordinary income or loss will be determined by a number of factors, including the nature of the Claim as held by the Claimholder, whether the Claim constitutes a capital asset in the hands of the holder, whether the Claim was purchased at a discount, whether any amount received in respect of a Claim constitutes accrued interest, and whether and to what extent the holder has previously claimed a bad debt deduction with respect to its Claim. A Claimholder who recognizes a loss on a transaction conducted pursuant to the Plan may be entitled to a bad debt deduction, either in the taxable year of the Effective Date or a prior taxable year. Accrued Interest Under the Plan, cash or other property may be distributed or deemed distributed to certain Claimholders with respect to their Claims for accrued interest. Holders of Claims for accrued interest that previously have not included such accrued interest in taxable income will be required to recognize ordinary income equal to the amount of cash or other property received with respect to such Claims for accrued interest. Holders of Claims for accrued interest that have included such accrued interest in taxable income generally may take an ordinary deduction to the extent that such Claim is not fully satisfied under the Plan (after allocating the distribution between principal and accrued interest), even if the underlying Claim is held as a capital asset. The adjusted tax basis of any property received in exchange for a Claim for accrued interest will equal the fair market value of such property on the Effective Date, and the holding period for the property will begin on the day after the Effective Date. It is not clear the extent to which consideration that may be distributed under the Plan will be allocable to interest. Claimholders are advised to consult their own tax advisors to determine the amount, if any, of consideration received under the Plan that is allocable to interest. Market Discount In general, a debt obligation, other than one with a fixed maturity of one year or less, that is acquired by a holder in the secondary market (or, in certain circumstances, upon original issuance) is a "market discount bond" as to that holder if the obligation's stated redemption price at maturity (or, in the case of a debt obligation having original issue discount, the revised issue price) exceeds the holder's adjusted tax basis in the debt obligation immediately after its acquisition. However, a debt obligation will not be a "market discount bond" if such excess is less than a statutory de minimis amount. To the extent that a creditor has not previously included market discount in its taxable income, gain recognized by a creditor with respect to a "market discount bond" will generally be treated as ordinary interest income to the extent of the market discount accrued on such bond during the creditor's period of ownership. A holder of a market discount bond that is required to defer deduction of all or a portion of the interest on indebtedness incurred or maintained to acquire or carry the bond may be allowed to deduct such interest, in whole or in part, on the disposition of such bond. Existing Holders of Preferred Stock The Plan will result in no United States federal income tax consequence to an existing Interestholder who holds existing preferred stock of a Debtor, because no Cash, Securities, and/or other property will be transferred to such Interestholders pursuant to the Plan. Existing Holders of Common Stock The Plan will result in no United States federal income tax consequence to an existing 93 Interestholder who holds existing common stock of a Debtor, because no Cash, Securities, and/or other property will be transferred to such Interestholders pursuant to the Plan. Other Claimholders To the extent certain Claimholders reach an agreement with the Debtors to have their Claims satisfied, settled, released, exchanged or otherwise discharged in a manner other than as described in the Plan, such holders should consult with their own tax advisors regarding the tax consequences of such satisfaction, settlement, release, exchange, or discharge. Information Reporting and Backup Withholding Certain payments, including payments in respect of accrued interest or market discount, are generally subject to information reporting by the payor to the IRS. These reportable payments do not include those that give rise to gain or loss on the exchange of a Claim. Moreover, such reportable payments are subject to backup withholding under certain circumstances. A United States holder may be subject to backup withholding at rate of 28% with respect to certain distributions or payments of accrued interest, market discount, or similar items pursuant to the Plan, unless the holder (a) comes within certain exempt categories (which generally include corporations) and, when required, demonstrates this fact or (b) provides a correct United States taxpayer identification number and certifies under penalty of perjury that the holder is a U.S. person, the taxpayer identification number is correct, and that the holder is not subject to backup withholding because of a failure to report all dividend and interest income. Payments that give rise to gain or loss on the exchange of a Claim are not subject to backup withholding. Backup withholding is not an additional tax. Amounts subject to backup withholding are credited against a holder's United States federal income tax liability, and a holder may obtain a refund of any excess backup withholding by filing an appropriate claim for refund with the IRS. Non-confidential Nature of the Tax Treatment and Tax Structure of the Plan A Claimholder's or Interestholder's disclosure of the tax treatment or the tax structure of the Plan is not limited in any manner by an express or implied understanding or agreement with or for the benefit of any person who makes or provides a statement, oral or written, to a Claimholder or Interestholder (or for whose benefit a statement is made or provided to a Claimholder or Interestholder) as to the potential tax consequences that may result from the Plan. Moreover, a Claimholder's or Interestholder's use or disclosure of information relating to the tax treatment or tax structure of the Plan is not limited in any other manner for the benefit of any person who makes or provides a statement, oral or written, to the Claimholder or Interestholder (or for whose benefit a statement is made or provided to the Claimholder or Interestholder) as to the potential tax consequences that may result from the Plan. C. IMPORTANCE OF OBTAINING PROFESSIONAL TAX ASSISTANCE THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. THE ABOVE DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY VARY DEPENDING ON A CLAIMHOLDER'S PARTICULAR CIRCUMSTANCES. ACCORDINGLY, CLAIMHOLDERS ARE STRONGLY URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, STATE AND LOCAL AND APPLICABLE FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF 94 THE PLAN, INCLUDING WITH RESPECT TO TAX REPORTING AND RECORD KEEPING REQUIREMENTS. XV. FEASIBILITY OF THE PLAN AND THE BEST INTERESTS TEST A. FEASIBILITY OF THE PLAN. To confirm the Plan, the Bankruptcy Court must find that confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of the Debtors. This requirement is imposed by Section 1129(a)(11) of the Bankruptcy Code and is referred to as the "feasibility" requirement. The Debtors believe that they will be able to timely perform all obligations described in the Plan, and, therefore, that the Plan is feasible. To demonstrate the feasibility of the Plan, financial Projections for Fiscal Years 2004 through 2007 have been prepared for the Debtors and, in its capacity as a proponent of the Plan, SAC Holding, and attached to this Disclosure Statement as Appendix 4 and Appendix 5. The Projections indicate that the Reorganized Debtors and SAC Holdings should have sufficient cash flow to pay and service their debt obligations and to fund their operations. Accordingly, the Debtors believe that the Plan satisfies the feasibility requirement of Section 1129(a)(11) of the Bankruptcy Code. As noted in the Projections, however, the Debtors and SAC Holding caution that no representations can be made as to the accuracy of the Projections or as to the Reorganized Debtors' or SAC Holdings' ability to achieve the projected results. Many of the assumptions upon which the Projections are based are subject to uncertainties outside the control of the Debtors and SAC Holding. Some assumptions inevitably will not materialize, and events and circumstances occurring after the date on which the Projections were prepared may be different from those assumed or may be unanticipated, and may adversely affect the Debtors' or SAC Holding's financial results. Therefore, the actual results can be expected to vary from the projected results and the variations may be material and adverse. THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TOWARD COMPLIANCE WITH THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. THE PRACTICES RECOGNIZED TO BE IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION REGARDING PROJECTIONS. FURTHERMORE, THE PROJECTIONS HAVE NOT BEEN AUDITED BY THE DEBTORS' OR SAC HOLDING'S INDEPENDENT ACCOUNTANTS. ALTHOUGH PRESENTED WITH NUMERICAL SPECIFICITY, THE PROJECTIONS ARE BASED UPON A VARIETY OF ASSUMPTIONS, SOME OF WHICH IN THE PAST HAVE NOT BEEN ACHIEVED AND WHICH MAY NOT BE REALIZED IN THE FUTURE, AND ARE SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE DEBTORS AND SAC HOLDING. CONSEQUENTLY, THE PROJECTIONS SHOULD NOT BE REGARDED AS A REPRESENTATION OR WARRANTY BY THE DEBTORS, SAC HOLDING, OR ANY OTHER PERSON, THAT THE PROJECTIONS WILL BE REALIZED. ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE PRESENTED IN THE PROJECTIONS. B. ACCEPTANCE OF THE PLAN. As a condition to confirmation, the Bankruptcy Code requires that each Class of Impaired Claims and Interests vote to accept the Plan, except under certain circumstances. Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired Claims as acceptance by holders of at least two-thirds in dollar amount and more than one-half in number of Claims in that Class, but for that 95 purpose counts only those who actually vote to accept or to reject the Plan. Thus, a Class of Claims will have voted to accept the Plan only if two-thirds in amount and a majority in number actually voting cast their Ballots in favor of acceptance. Under Section 1126(d) of the Bankruptcy Code, a Class of Interests has accepted the Plan if holders of such Interests holding at least two-thirds in amount actually voting have voted to accept the Plan. Holders of Claims who fail to vote are not counted as either accepting or rejecting the Plan. C. BEST INTERESTS TEST. Even if a plan is accepted by each class of holders of claims, the Bankruptcy Code requires a bankruptcy court to determine that the plan is in the "best interests" of all holders of claims and interests that are impaired by the plan and that have not accepted the plan. The "best interests" test, as set forth in Section 1129(a)(7) of the Bankruptcy Code, requires a bankruptcy court to find either that: (i) all members of an impaired class of claims or interests have accepted the plan; or (ii) the plan will provide a member who has not accepted the plan with a recovery of property of a value, as of the effective date of the plan, that is not less than the amount that such holder would recover if the debtor was liquidated under Chapter 7 of the Bankruptcy Code. To calculate the probable distribution to members of each impaired class of holders of claims and interests if the debtor were liquidated under Chapter 7, a bankruptcy court must first determine the aggregate dollar amount that would be generated from the debtor's assets if its Chapter 11 case were converted to a Chapter 7 case under the Bankruptcy Code. This "liquidation value" would consist primarily of the proceeds from a forced sale of the debtor's assets by a Chapter 7 trustee. The amount of liquidation value available to unsecured creditors would be reduced by: (1) first, the claims of secured creditors to the extent of the value of their collateral, including the value of goods delivered on consignment to the extent the consignment vendor properly perfected its rights in such goods in accordance with applicable law; and (2) second, by the costs and expenses of liquidation, as well as by other administrative expenses and costs of both the Chapter 7 case and the Chapter 11 case. As a general matter, a liquidation under Chapter 7 will not affect the rights of letter of credit beneficiaries, including certain sureties who posted bonds that the Debtors purchased for various business, litigation, and other reasons. Costs of liquidation under Chapter 7 of the Bankruptcy Code would include the compensation of a trustee, as well as of counsel and other professionals retained by the trustee, asset disposition expenses, all unpaid expenses incurred by the debtor in its bankruptcy case (such as compensation of attorneys, financial advisors, and restructuring consultants) that are allowed in the Chapter 7 case, litigation costs, and claims arising from the operations of the debtor during the pendency of the bankruptcy case. The liquidation itself would trigger certain priority payments that otherwise would be due in the ordinary course of business. Those priority claims would be paid in full from the liquidation proceeds before the balance would be made available to pay general unsecured claims or to make any distribution in respect of equity interests. The liquidation also would prompt the rejection of a large number of executory contracts and unexpired leases and thereby create a significantly higher number of unsecured claims. Once the court ascertains the recoveries in liquidation of secured creditors and priority claimants, it must determine the probable distribution to general unsecured creditors and equity security holders from the remaining available proceeds in liquidation. If such probable distribution has a value greater than the distributions to be received by such creditors and equity security holders under a debtor's plan, then such plan is not in the best interests of creditors and equity security holders. 96 D. APPLICATION OF THE BEST INTERESTS TEST TO THE LIQUIDATION ANALYSIS. Overview A liquidation analysis prepared with respect to the Debtors is attached as Appendix 6 to this Disclosure Statement. The Debtors believe that any liquidation analysis is speculative. For example, the liquidation analysis necessarily contains an estimate of the amount of Claims that will ultimately become Allowed Claims. In preparing the liquidation analysis, the Debtors have projected the amount of Allowed Claims based upon a review of their scheduled and filed proofs of claim. No order or finding has been entered by the Bankruptcy Court estimating or otherwise fixing the amount of Claims at the projected amounts of Allowed Claims set forth in the liquidation analysis. In preparing the liquidation analysis, the Debtors have projected a range for the amount of Allowed Claims with the low end of the range the lowest reasonable amount of Claims and the high end of the range the highest reasonable amount of the Claims, thus allowing assessment of the most likely range of Chapter 7 liquidation dividends to the holders of the Allowed Claims. The estimate of the amount of Allowed Claims set forth in the liquidation analysis should not be relied on for any other purpose, including, without limitation, any determination of the value of any distribution to be made on account of Allowed Claims and Allowed Interests under the Plan. Notwithstanding the difficulties in quantifying recoveries to creditors with precision, the Debtors believe that, taking into account the liquidation analysis, the Plan meets the "best interests" test of Section 1129(a)(7) of the Bankruptcy Code. The Debtors believe that the numbers of each Impaired Class will receive at least as much under the Plan than they would in a liquidation in a hypothetical chapter 7 case. Creditors and Interestholders will receive a better recovery through the distributions contemplated by the Plan because the continued operation of the Debtors as going concerns rather than a forced liquidation will allow the realization of more value for the Debtors' assets. Moreover, Creditors such as the Debtors' employees would retain their jobs and most likely make few if any other claims against the estate. Finally, in the event of liquidation, the aggregate amount of unsecured claims will no doubt increase significantly, and such claims will be subordinated to priority claims that will be created. For example, employees will file claims for wages, pensions and other benefits, some of which will be entitled to priority. The resulting increase in both general unsecured and priority claims will decrease percentage recoveries to unsecured creditors of the Debtors. All of these factors lead to the conclusion that recovery under the Plan would be at least as much, and in many cases significantly greater, than the recoveries available in a Chapter 7 liquidation. E. CONFIRMATION WITHOUT ACCEPTANCE OF ALL IMPAIRED CLASSES: THE 'CRAMDOWN' ALTERNATIVE. Section 1129(b) of the Bankruptcy Code provides that a plan can be confirmed even if it has not been accepted by all impaired classes as long as at least one impaired class of Claims has accepted it. The Bankruptcy Court may confirm the Plan at the request of the Debtors notwithstanding the Plan's rejection (or deemed rejection) by impaired Classes as long as the Plan "does not discriminate unfairly' and is "fair and equitable" as to each impaired Class that has not accepted it. A plan does not discriminate unfairly within the meaning of the Bankruptcy Code if a dissenting class is treated equally with respect to other classes of equal rank. A plan is fair and equitable as to a class of secured claims that rejects such plan if the plan provides: (l)(a) that the holders of claims included in the rejecting class retain the liens securing those claims, whether the property subject to those liens is retained by the debtor or transferred to another entity, to the extent of the allowed amount of such claims; and (b) that each holder of a claim of such class receives on account of that claim deferred cash payments totaling at least the allowed amount of that claim, of a value, as of the effective date of the plan, of at least the value of the holder's interest in the 97 estate's interest in such property; (2) for the sale, subject to Section 363(k) of the Bankruptcy Code, of any property that is subject to the liens securing the claims included in the rejecting class, free and clear of the liens, with the liens to attach to the proceeds of the sale, and the treatment of the liens on proceeds under clause (1) or (2) of this paragraph; or (3) for the realization by such holders of the indubitable equivalent of such claims. A plan is fair and equitable as to a class of unsecured claims which rejects a plan if the plan provides: (1) for each holder of a claim included in the rejecting class to receive or retain on account of that claim property that has a value, as of the effective date of the plan, equal to the allowed amount of such claim; or (2) that the holder of any claim or interest that is junior to the claims of such rejecting class will not receive or retain on account of such junior claim or interest any property at all. A plan is fair and equitable as to a class of equity interests that rejects a plan if the plan provides: (1) that each holder of an interest included in the rejecting class receive or retain on account of that interest property that has a value, as of the effective date of the plan, equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest; or (2) that the holder of any interest that is junior to the interest of such rejecting class will not receive or retain under the plan on account of such junior claim or interest any property at all. F. CONDITIONS TO CONFIRMATION AND EFFECTIVE DATE OF THE PLAN. Conditions to Confirmation. The following are conditions precedent to confirmation of the Plan. These conditions may be satisfied or waived by the Debtors in their sole discretion, without notice to parties in interest or the Bankruptcy Court, and without a hearing: 1. The Bankruptcy Court will have approved by Final Order a Disclosure Statement with respect to the Plan in form and substance acceptable to the Debtors in their sole and absolute discretion. 2. The Confirmation Order will be in form and substance acceptable to the Debtors, in their sole and absolute discretion. Conditions to the Effective Date. The following are conditions precedent to the occurrence of the Effective Date, each of which may be satisfied or waived in accordance with Section 12.3 of the Plan: (a) The Reorganized Debtors will have entered into the Exit Financing Facility and all conditions precedent to the consummation thereof will have been waived or satisfied in accordance with the terms thereof. (b) The Reorganized Debtors and SAC Holding will have entered into the SAC Holding Participation and Subordination Agreement and all conditions precedent to the consummation thereof will have been waived or satisfied in accordance with the terms thereof. (c) The Bankruptcy Court will have entered one or more orders (which may include the Confirmation Order) authorizing the assumption and rejection of unexpired leases and executory contracts by the Debtors as contemplated by Article 8 of the Plan. 98 (d) The Confirmation Order will have been entered by the Bankruptcy Court and will be a Final Order, the Confirmation Date will have occurred, and no request for revocation of the Confirmation Order under Section 1144 of the Bankruptcy Code will have been made, or, if made, will remain pending. G. WAIVER OF CONDITIONS TO CONFIRMATION AND CONSUMMATION OF THE PLAN. The conditions set forth in Article 12.1 and Article 12.2 of the Plan may be waived, in whole or in part, by the Debtors, after consultation with the Statutory Committees, without any notice to any other parties in interest or the Bankruptcy Court and without a hearing. Notwithstanding the foregoing, the condition set forth in Article 12.2(a) of the Plan may only be waived by the Debtors with the prior written consent of JPMorgan, in its capacity as the agent for the holders of the JPMorgan Claims. The failure to satisfy or waive any condition to the Confirmation Date or the Effective Date may be asserted by the Debtors in their sole discretion regardless of the circumstances giving rise to the failure of such condition to be satisfied (including any action or inaction by the Debtors in their sole discretion). The failure of the Debtors to exercise any of the foregoing rights will not be deemed a waiver of any other rights, and each such right will be deemed an ongoing right, which may be asserted at any time. H. RETENTION OF JURISDICTION. Pursuant to Sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy Court will have exclusive jurisdiction of all matters arising out of, and related to, the Chapter 11 Cases and the Plan, including, among others, the following matters: (i) to hear and determine motions for the assumption or rejection of executory contracts or unexpired leases or the assumption and assignment, as the case may be, of executory contracts or unexpired leases to which any of the Debtors are a party or with respect to which any of the Debtors may be liable, and to hear and determine the allowance of Claims resulting therefrom including the amount of Cure, if any, required to be paid; (ii) to adjudicate any and all adversary proceedings, applications, and contested matters that may be commenced or maintained pursuant to the Chapter 11 Cases or the Plan, proceedings to adjudicate the allowance of Disputed Claims and Disputed Interests, and all controversies and issues arising from or relating to any of the foregoing; (iii) to ensure that distributions to Allowed Claimholders and Allowed Interestholders are accomplished as provided herein; (iv) to hear and determine any and all objections to the allowance or estimation of Claims and interests filed, both before and after the Confirmation Date, including any objections to the classification of any Claim or Interest, and to allow or disallow any Claim or Interest, in whole or in part; (v) to enter and implement such orders as may be appropriate if the Confirmation Order is for any reason stayed, revoked, modified, or vacated; (vi) to issue orders in aid of execution, implementation, or consummation of the Plan; (vii) to consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order; 99 (viii) to hear and determine all applications for allowance of compensation and reimbursement of Professional Claims under the Plan or under Sections 330, 331. 503(b), 1103, and 1129(a)(4) of the Bankruptcy Code; (ix) to determine requests for the payment of Claims entitled to priority under Section 507(a) (1) of the Bankruptcy Code, including compensation of and reimbursement of expenses of parties entitled thereto; (x) to hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan, including disputes arising under agreements, documents, or instruments executed in connection with the Plan; (xi) to hear and determine all suits or adversary proceedings to recover assets of the Debtors and property of their Estates, wherever located; (xii) to hear and determine matters concerning state, local, and federal taxes in accordance with Sections 346,505, and 1146 of the Bankruptcy Code; (xiii) to hear any other matter not inconsistent with the Bankruptcy Code; (xiv) to hear and determine all disputes involving the existence, nature, or scope of the Debtors' discharge, including any dispute relating to any liability rising out of the termination of employment or the termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date; (xv) to enter a final decree closing the Chapter 11 Cases; and (xvi) to enforce all orders previously entered by the Bankruptcy Court. XVI. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN The Debtors believe that the Plan affords holders of Claims and Interests the greatest realization on the Debtors' assets and, therefore, is in the best interests of such holders. If the Plan is not confirmed, however, the theoretical alternatives include: (a) continuation of the pending Chapter 11 Cases; (b) an alternative plan or plans of reorganization; or (c) liquidation of the Debtors under Chapter 7 or Chapter 11 of the Bankruptcy Code. A. CONTINUATION OF THE CHAPTER 11 CASES. If the Debtors remain in Chapter 11, they could continue to operate their businesses and manage their properties as debtors-in-possession, but they would remain subject to the restrictions imposed by the Bankruptcy Code. The Debtors may have difficulty sustaining the high costs and the erosion of market confidence that may be caused if the Debtors remain as Chapter 11 debtors-in-possession. A protracted Chapter 11 may also negatively impact RepWest and AMERCO's and U-Haul's uninterrupted access to necessary insurance coverage provided by RepWest. B. ALTERNATIVE PLANS OF REORGANIZATION. If the Plan is not confirmed, the Debtors, or, after the expiration of the Debtors' exclusive period in which to propose and solicit a reorganization plan, any other party in interest in the Chapter 11 Cases, 100 could propose a different plan or plans. Such plans might involve either a reorganization and continuation of the Debtors' businesses, or an orderly liquidation of their assets, or a combination of both. C. LIQUIDATION UNDER CHAPTER 7 OR CHAPTER 11. If no plan is confirmed, the Debtors' Chapter 11 Cases may be converted to a case under Chapter 7 of the Bankruptcy Code. In a Chapter 7 case, a trustee or trustees would be appointed to liquidate the assets of the Debtors. It is impossible to predict precisely how the proceeds of the liquidation would be distributed to the respective holders of Claims against or Interests in the Debtors. However, the Debtors believe that creditors would lose substantially higher going concern value if the Debtors were forced to liquidate. In addition, the Debtors believe that in liquidation under Chapter 7, before creditors received any distribution, additional administrative expenses involved in the appointment of a trustee or trustees and attorneys, accountants and other professionals to assist such trustees would cause a substantial diminution in the value of the Estates. The assets available for distribution to creditors would be reduced by such additional expenses and by Claims, some of which would be entitled to priority, which would arise by reason of the liquidation and from the rejection of leases and other executory contracts in connection with the cessation of operations and the failure to realize the greater going concern value of the Debtors' assets. The Debtors may also be liquidated pursuant to a Chapter 11 plan. In a liquidation under Chapter 11, the Debtors' assets could be sold in an orderly fashion over a more extended period of time than in a liquidation under Chapter 7. Thus, a Chapter 11 liquidation might result in larger recoveries than a Chapter 7 liquidation, but the delay in distributions could result in lower present values received and higher administrative costs. Because a trustee is not required in a Chapter 11 case, expenses for professional fees could be lower than in a Chapter 7 case, in which a trustee must be appointed. However, any distribution to the Claimholders and Interestholders under a Chapter 11 liquidation plan would likely be delayed substantially. The Debtors' liquidation analysis, prepared with their restructuring advisors, is premised upon a hypothetical liquidation in a Chapter 7 case and is attached as Appendix 6 to this Disclosure Statement. In the analysis, the Debtors have taken into account the nature, status, and underlying value of their assets, the ultimate realizable value of their assets, and the extent to which such assets are subject to liens and security interests. The likely form of any liquidation would be the sale of individual assets. Based on this analysis, it is likely that a Chapter 7 liquidation of the Debtors' assets would produce less value for distribution to creditors than that recoverable in each instance under the Plan. In the opinion of the Debtors, the recoveries projected to be available in a Chapter 7 liquidation are not likely to afford holders of Claims and holders of Interests as great a realization potential as does the reorganization proposed in the Plan. XVII. VOTING REQUIREMENTS On December 12, 2003, the Bankruptcy Court approved an order (the "Solicitation Procedures Order"), among other things, approving this Disclosure Statement, setting voting procedures, and scheduling the hearing on confirmation of the Plan. A copy of the Confirmation Hearing Notice is enclosed with this Disclosure Statement. The Confirmation Hearing Notice sets forth in detail, among other things, the voting deadlines and objection deadlines with respect to the Plan. The Confirmation Hearing Notice and the instructions attached to the Ballot should be read in connection with this Section of this Disclosure Statement. If you have any questions about: (i) the procedure for voting your Claim with respect to the packet of materials that you have received; (ii) the amount of your Claim holdings; or (iii) if you wish to 101 obtain, at your own expense, unless otherwise specifically required by Federal Rule of Bankruptcy Procedure 3017(d), an additional copy of the Plan, this Disclosure Statement, or any exhibits to such documents, please contact: THE TRUMBULL GROUP, LLC P.O. Box 721 (Attn: AMERCO) Windsor, Connecticut 06095 Attn: Ronnie Kryjak Telephone: (860) 687-3965 The Bankruptcy Court may confirm the Plan only if it determines that the Plan complies with the technical requirements of Chapter 11 of the Bankruptcy Code and that the disclosures by the Debtors concerning the Plan have been adequate and have included information concerning all payments made or promised by the Debtors in connection with the Plan and the Chapter 11 Cases. In addition, the Bankruptcy Court must determine that the Plan has been proposed in good faith and not by any means forbidden by law, and under Federal Rule of Bankruptcy Procedure 3020(b)(2), it may do so without receiving evidence if no objection is timely filed. In particular, and as described in more detail above, the Bankruptcy Code requires the Bankruptcy Court to find, among other things, that: (a) the Plan has been accepted by the requisite votes of all Classes of impaired Claims unless approval will be sought under Section 1129(b) of the Bankruptcy Code in spite of the nonacceptance by one or more such Classes; (b) the Plan is "feasible," which means that there is a reasonable probability that the Debtors will be able to perform their obligations under the Plan and continue to operate their businesses without further financial reorganization or liquidation; and (c) the Plan is in the "best interests" of all Claimholders and Interestholders, which means that such holders will receive at least as much under the Plan as they would receive in a liquidation under chapter 7 of the Bankruptcy Code. THE BANKRUPTCY COURT MUST FIND THAT ALL CONDITIONS MENTIONED ABOVE ARE MET BEFORE IT CAN CONFIRM THE PLAN. THUS, EVEN IF ALL THE CLASSES OF IMPAIRED CLAIMS WERE TO ACCEPT THE PLAN BY THE REQUISITE VOTES, THE BANKRUPTCY COURT MUST STILL MAKE AN INDEPENDENT FINDING THAT THE PLAN SATISFIES THESE REQUIREMENTS OF THE BANKRUPTCY CODE, THAT THE PLAN IS FEASIBLE, AND THAT THE PLAN IS IN THE BEST INTERESTS OF THE HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS. UNLESS THE BALLOT BEING FURNISHED IS TIMELY SUBMITTED TO THE VOTING AGENT ON OR PRIOR TO JANUARY 20, 2004, AT 4:00 P.M. (PREVAILING EASTERN TIME) TOGETHER WITH ANY OTHER DOCUMENTS REQUIRED BY SUCH BALLOT, THE DEBTORS MAY, IN THEIR SOLE DISCRETION, REJECT SUCH BALLOT AS INVALID AND, THEREFORE, DECLINE TO COUNT IT AS AN ACCEPTANCE OR REJECTION OF THE PLAN. IN NO CASE SHOULD A BALLOT OR ANY OF THE CERTIFICATES BE DELIVERED TO THE DEBTORS OR ANY OF THEIR ADVISORS. A. PARTIES IN INTEREST ENTITLED TO VOTE. Under Section 1124 of the Bankruptcy Code, a class of claims or interests is deemed to be "impaired" under a plan unless: (a) the plan leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder thereof; or (b) notwithstanding any legal right to an accelerated payment of such claim or interest, the plan cures all existing defaults (other than defaults 102 resulting from the occurrence of events of bankruptcy) and reinstates the maturity of such claim or interest as it existed before the default. In general, a holder of a claim or interest may vote to accept or to reject a plan if: (1) the claim or interest is "allowed," which means generally that no party in interest has objected to such claim or interest; and (2) the claim or interest is impaired by the Plan. If the holder of an impaired claim or impaired interest will not receive any distribution under the plan in respect of such claim or interest, the Bankruptcy Code deems such holder to have rejected the plan. If the claim or interest is not impaired, the Bankruptcy Code deems that the holder of such claim or interest has accepted the plan and the plan proponent need not solicit such holder's vote. Under the Plan, each holder of an Impaired Claim is entitled to vote to accept or reject the Plan if: (1) the Plan provides a distribution in respect of such Claim; and (2) either (a) the Claim has been scheduled by one of the Debtors, and such Claim is not scheduled as disputed, contingent, or unliquidated, (b) such Claimholder has timely filed a Proof of Claim as to which no objection has been filed, or (c) such Claimholder has timely filed a motion pursuant to Federal Rule of Bankruptcy Procedure 3018(a) seeking temporary allowance of such Claim for voting purposes only and the Debtors have not opposed the Motion or objected to the Claim, in which case the holder's vote will be counted only upon order of the Bankruptcy Court. A vote may be disregarded if the Bankruptcy Court determines, pursuant to Section 1126(e) of the Bankruptcy Code, that it was not solicited or procured in good faith or in accordance with the provisions of the Bankruptcy Code. The Solicitation Procedures Order also sets forth assumptions and procedures for tabulating Ballots, including Ballots that are not completed fully or correctly. B. CLASSES IMPAIRED UNDER THE PLAN. Impaired Classes of Claims. The following Classes are Impaired under, and are entitled to vote to accept or reject, the Plan: Class 1 (JPMorgan Claims), Class 3 (Citibank Secured Claim and Citibank Guaranty Claim); Class 4 (BMO Secured Claim and BMO Guaranty Claim); Class 6 (AREC Note Claims); and Class 7 (AMERCO Unsecured Claims). Unimpaired Classes of Claims and Interests. The following Classes are Unimpaired under, and are deemed under Section 1126(f) of the Bankruptcy Code to have accepted, the Plan: Class 2 (Other Priority Claims), Class 5 (Other Unsecured Claims), Class 8 (Oxford Note Claims), Class 9 (Miscellaneous Secured Claims), Class 10 (Intercompany Claims), Class 11 (AMERCO/AREC Guaranty Obligations), Class 12 (Preferred Stock Interests and Subordinated Claims (Preferred)) and Class 13 (Existing Common Stock and Other Interests and Subordinated Claims (Common)). XVIII. CONCLUSION A. HEARING ON AND OBJECTIONS TO CONFIRMATION. Confirmation Hearing. The hearing on confirmation of the Plan has been scheduled for February 2, 2004 at 9:30 a.m. (prevailing Pacific time). Such hearing may be adjourned from time to time by announcing such 103 adjournment in open court, all without further notice to parties in interest, and the Plan may be modified by the Debtors pursuant to Section 1127 of the Bankruptcy Code prior to, during, or as a result of that hearing, without further notice to parties in interest. Date Set for Filing Objections to Confirmation of the Plan. The time by which all objections to confirmation of the Plan must be filed with the Bankruptcy Court and received by the parties listed in the Confirmation Hearing Notice has been set for January 16, 2004, at 4:00 p.m. (prevailing Pacific time). A copy of the Confirmation Hearing Notice is enclosed with this Disclosure Statement. 104 B. RECOMMENDATION. The Plan provides for an equitable and early distribution to creditors of the Debtors, preserves the value of the business as a going concern, preserves the equity interests in the Debtors, and preserves the jobs of employees. The Debtors believe that any alternative to confirmation of the Plan, such as liquidation or attempts by another party in interest to file a plan, could result in significant delays, litigation, and costs, as well as the loss of jobs by the employees. Moreover, the Debtors believe that their creditors will receive greater and earlier recoveries under the Plan than those that would be achieved in liquidation or under an alternative plan. FOR THESE REASONS, THE DEBTORS URGE YOU TO RETURN YOUR BALLOT ACCEPTING THE PLAN. Dated: November 26, 2003 Reno, Nevada Respectfully submitted, AMERCO, a Nevada corporation By: /s/ Edward J. Shoen ---------------------------- Chief Executive Officer AMERCO REAL ESTATE COMPANY, a Nevada corporation By: /s/ Carlos Viscarra ---------------------------- President SQUIRE, SANDERS & DEMPSEY L.L.P. By: /s/ Craig D. Hansen ------------------------------- Craig D. Hansen Thomas J. Salerno G. Christopher Meyer Sean T. Cork Two Renaissance Square, Suite 2700 40 North Central Avenue Phoenix, Arizona 85004 Attorneys for AMERCO and Amerco Real Estate Company, debtors and debtors-in- possession 105 (This page intentionally left blank.) APPENDIX 1 JOINT PLAN OF REORGANIZATION OF AMERCO AND AMERCO REAL ESTATE COMPANY, DEBTORS AND DEBTORS-IN-POSSESSION [SEE ATTACHED] (This page intentionally left blank.) APPENDIX 2 SELECTED FINANCIAL DATA - AMERCO (CONSOLIDATED) [SEE ATTACHED] (This page intentionally left blank.) APPENDIX 2 SELECTED FINANCIAL INFORMATION - AMERCO HISTORIC FINANCIAL INFORMATION A. BASIS OF FINANCIAL PRESENTATION. The historic financial information of the Debtors is presented on the following consolidated basis ("Consolidated"), as follows: (i) The financial results of AMERCO, AREC and U-Haul are Consolidated and reflect the elimination of all significant inter-company items; (ii) The financial results of SAC Holding are included to the extent of: (a) interest income earned on the SAC Holding Notes owned by the Debtors or their Subsidiaries; (b) management fees earned by the Debtors or their Subsidiaries related to properties they manage that are owned by SAC Holding; and (c) the Debtors' investment accounts in and accounts receivable due from SAC Holding. The Debtors do not hold equity ownership positions in SAC Holding. SAC Holding's debt obligations are: (i) not legal obligations of the Debtors; (ii) without recourse to the Debtors; and (iii) contain no cross-default provisions with respect to the Debtors' indebtedness; (iii) The financial results of Oxford and RepWest are treated as unconsolidated investments, accounted for under the equity method of accounting, and as such their financial results are included to the extent of: (a) the pre-tax income earned by Oxford and RepWest; and (b) the after-tax earnings from Oxford and RepWest which serve to increase the Debtors' investment account in their unconsolidated Subsidiaries; and (iv) Any and all references to AMERCO's financial statements for the fiscal years ended March 31, 2001 and March 31, 2002, are to those financial statements as restated. B. HISTORIC CONSOLIDATED FINANCIAL INFORMATION The financial information set forth below includes the following: (i) Consolidated statements of operations for the Debtors for the fiscal years ended March 31, 2001, March 31, 2002 and March 31, 2003 and for the three-month period ended June 30, 2003; (ii) Consolidated balance sheets of the Debtors as of March 31, 2002 and March 31, 2003; and as of June 30, 2003. The historic Consolidated financial information should be read in conjunction with the complete audited historical financial statements of AMERCO, including associated notes. The historic Consolidated financial statements set forth herein present the operations of the Debtors on a Consolidated basis; such basis differs from the audited financial statements of AMERCO; and (iii) The historic Consolidated financial statements set forth below present the operating results and financial position of the Debtors and select Subsidiaries, some of which are non-Debtors in these Chapter 11 proceedings. AP2-1 AMERCO & AREC HISTORIC "CONSOLIDATED" STATEMENT OF OPERATIONS ($ IN MILLIONS)
Fiscal Year Ended March 31, ------------------------------------- Three Months Income Statement 2001 2002 2003 30-Jun-03 - ------------------------------------------------------------------------------------------- Revenue Rental Revenue $ 1,370.3 $ 1,428.3 $ 1,435.3 $ 406.7 Retail Sales 195.4 202.4 177.8 55.3 Interest Income 37.8 31.9 41.2 10.3 Commission Expense (146.9) (150.8) (166.4) (47.2) - ----------------------------------------------------------------------------------------- Net Revenue $ 1,456.5 $ 1,511.7 $ 1,487.9 $ 425.1 Cost of Retail Sales $ 117.8 $ 114.6 $ 97.3 $ 26.6 Other Operating Expenses 1,000.0 1,028.4 1,007.7 256.6 Rental Equipment Lease Expense 161.7 159.3 147.1 32.4 Rental Costs Land and Buildings 17.8 24.5 33.1 9.8 Depreciation & Amortization 104.9 93.3 128.5 31.3 (Gain) / Loss PP&E Dispositions (11.9) (3.5) (10.5) 1.5 - ----------------------------------------------------------------------------------------- Earnings from Operations $ 66.2 $ 95.2 $ 84.8 $ 66.9 Pre-Tax (Earnings) / Loss - Insurance Subsidiaries $ 20.7 $ 47.3 $ 6.2 ($ 0.8) Net Interest Expense 86.9 76.7 102.9 20.1 - ----------------------------------------------------------------------------------------- Pre-Tax Net Income ($ 41.5) ($ 28.9) ($ 24.3) $ 47.6 Income Tax Expense (8.7) 6.8 (7.1) 16.6 - ----------------------------------------------------------------------------------------- Net Income ($ 32.8) ($ 35.7) ($ 17.3) $ 31.0 Dividends to Preferred Stockholders $ 13.0 $ 13.0 $ 13.0 $ 3.2 - ----------------------------------------------------------------------------------------- Net Income Available to Common Stockholders ($ 45.8) ($ 48.7) ($ 30.2) $ 27.7 =========================================================================================
AP2-2 The Debtors measure operating results using earnings from operations adjusted to add-back depreciation and amortization and to exclude restructuring expenses and certain unusual and nonrecurring items. AMERCO & AREC HISTORIC "CONSOLIDATED" ADJUSTED EBITDA ($ IN MILLIONS)
Fiscal Year Ended March 31, ------------------------------------- Three Months Adjusted EBITDA Calculation 2001 2002 2003 30-Jun-03 - ------------------------------------------------------------------------------------------- Earnings from Operations $ 66.2 $ 95.2 $ 84.8 $ 66.9 Depreciation and Amortization 104.9 93.3 128.5 31.3 - ------------------------------------------------------------------------------------------- EBITDA $ 171.0 $ 188.5 $ 213.3 $ 98.2 Restructuring Expenses / Other Non- Recurring Items 0.0 0.0 26.3 (a) 14.7 (b) - ------------------------------------------------------------------------------------------- Adjusted EBITDA $ 171.0 $ 188.5 $ 239.5 $ 113.0 ===========================================================================================
(a) Restructuring Expenses / Other Non-Recurring Items include the following: $7.1 million of expenses related to restructuring professionals, $10.6 million related to inventory and other asset write-offs; and $8.6 million related to the reclassification of rental expense as depreciation expense. (b) Restructuring Expenses / Other Non-Recurring Items include the following: $14.7 million of expenses related to restructuring professionals. AP2-3 AMERCO & AREC HISTORIC "CONSOLIDATED" BALANCE SHEETS ($ IN MILLIONS)
As of March 31, ----------------------- As of Balance Sheet 2002 2003 30-Jun-03 - ---------------------------------------------------------------------------- Assets Cash $ 26.4 $ 48.7 $ 74.3 Accounts Receivable 24.7 20.4 32.3 Inventories 62.5 49.2 49.9 Prepaid and Other Current Assets 52.9 62.8 76.6 - ---------------------------------------------------------------------------- Total Current Assets $ 166.5 $ 181.2 $ 233.1 PP&E, Net $ 1,242.9 $ 1,242.1 $ 1,263.7 Investments in Unconsolidated Subsidiaries 323.0 310.2 319.1 SAC Holdings Notes and Other LT Receivables 410.2 396.4 386.4 Other Assets 31.0 155.5 166.7 - ---------------------------------------------------------------------------- Total Assets $ 2,173.6 $ 2,285.4 $ 2,368.9 Liabilities and Shareholders' Equity Accounts Payable $ 17.4 $ 29.8 $ 25.0 Accrued Expenses & Other Current Liabilities 369.1 463.6 503.4 - ---------------------------------------------------------------------------- Total Current Liabilities $ 386.5 $ 493.4 $ 528.4 Total Debt $ 1,049.0 $ 1,053.8 $ 994.1 Other Long-Term Liabilities 29.9 94.1 148.6 Long-Term Deferred Taxes 133.9 117.9 125.7 - ---------------------------------------------------------------------------- Total Liabilities $ 1,599.4 $ 1,759.2 $ 1,796.7 Shareholders' Equity 574.3 526.2 572.2 - ---------------------------------------------------------------------------- Total Liabilities and $ 2,173.6 $ 2,285.4 $ 2,368.9 Shareholders' Equity ============================================================================
AP2-4 APPENDIX 3 SELECTED FINANCIAL DATA - SAC HOLDING [SEE ATTACHED] (This page intentionally left blank.) APPENDIX 3 SELECTED FINANCIAL INFORMATION - SAC HOLDING HISTORIC FINANCIAL INFORMATION A. BASIS OF FINANCIAL PRESENTATION. B. The historic and projected financial information of SAC Holding is presented on a basis that differs from the presentation of SAC Holding Corporation and its consolidating subsidiaries (the "Consolidated Subsidiaries") and SAC Holding Corporation II and its Consolidating Subsidiaries, which were filed as part of AMERCO's audited financial statements. Specifically, non-SAC Holding assets, liabilities, and associated income statement amounts related to properties owned by AMERCO and subject to synthetic lease agreements are not included in the following presentation of financial information. Any and all references to AMERCO's financial statements for the fiscal years ended March 31, 2001 and March 31, 2002, are to those financial statements as restated. C. HISTORIC FINANCIAL INFORMATION. The historic financial information set forth below includes the following: (i) Consolidated statements of operations for SAC Holding for the fiscal years ended March 31, 2002 and March 31, 2003 and for the three-month period ended June 30, 2003; (ii) Consolidated balance sheets of SAC Holding as of March 31, 2002, March 31, 2003; and as of June 30, 2003. (iii) The historic SAC Holding financial information should be read in conjunction with the complete audited historical financial statements of AMERCO, including associated notes. The SAC Holding financial statements set forth herein present the operations of SAC Holding on a stand alone basis; such basis differs from the presentation of SAC Holding as a consolidated entity in the AMERCO audited historical financial statements. AP3 - 1 SAC HOLDING HISTORIC STATEMENT OF OPERATIONS ($ IN MILLIONS)
Fiscal Year Ended March 31, --------------------------- Three Months Income Statement 2002 2003 30-Jun-03 - --------------------------------------------------------------------------------- Rental Revenue $ 104.6 $ 156.9 $ 39.6 Net Sales 24.4 48.8 14.9 - --------------------------------------------------------------------------------- Total Revenue 129.0 205.7 54.5 Operating Expenses 68.2 105.3 28.1 Cost of Sales 12.2 21.4 6.6 Depreciation Expense 12.1 17.9 4.9 - --------------------------------------------------------------------------------- Total Costs and Expenses 92.5 144.6 39.6 - --------------------------------------------------------------------------------- Earnings from Operations 36.5 61.1 14.9 Total Int. Exp. 55.5 75.1 19.3 - --------------------------------------------------------------------------------- Pretax Earnings (Loss) (19.1) (13.9) (4.5) Income Tax (Expense) Benefit 5.4 3.7 0.5 - --------------------------------------------------------------------------------- Net Earnings (Loss) ($ 13.7) ($ 10.2) ($ 3.9) =================================================================================
AP3 - 2 SAC HOLDING HISTORIC BALANCE SHEET ($ IN MILLIONS)
As of March 31, As of ----------------------- ---------- Balance Sheet 2002 2003 30-Jun-03 - --------------------------------------------------------------------------------------- Assets Cash and Equiv. $ 0.0 $ 4.7 $ 5.2 Receivables - - - Inventories, Net 3.3 4.0 4.3 Prepaid Expenses 1.0 0.8 1.0 Other Assets 21.6 24.6 57.3 - --------------------------------------------------------------------------------------- Short Terra Assets 25.9 34.1 67.8 Net PP&E 818.4 830.0 794.3 - --------------------------------------------------------------------------------------- Total Assets $ 844.4 $ 864.2 $ 862.1 ======================================================================================= Liabilities Accounts Payable and Accrued Exp. $ 36.9 $ 48.0 $ 49.4 SAC Holdings' notes and loans payable 839.3 861.0 860.5 Deferred Income 5.1 5.6 4.8 Deferred Income Taxes (14.9) (19.9) (20.8) - --------------------------------------------------------------------------------------- Total Liabilities 866.4 894.6 894.0 Minority Interest 11.3 11.8 12.6 Total Stockholders Equity (33.4) (42.3) (44.5) - --------------------------------------------------------------------------------------- Total Liabilities and Equity $ 844.4 $ 864.2 $ 862.1 =======================================================================================
AP3 - 3 (This page intentionally left blank.) APPENDIX 4 FINANCIAL PROJECTIONS - AMERCO (CONSOLIDATED) [SEE ATTACHED] (This page intentionally left blank.) APPENDIX 4 FINANCIAL PROJECTIONS - AMERCO THESE FINANCIAL PROJECTIONS HAVE BEEN PREPARED BASED ON HISTORICAL PERFORMANCE FOR FISCAL YEAR 2003. THESE PROJECTIONS DO NOT REFLECT ACTUAL FINANCIAL PERFORMANCE FOR FISCAL YEAR 2004. FOR ADDITIONAL INFORMATION WHICH REFLECTS ACTUAL RESULTS FOR FISCAL YEAR 2004, PLEASE CONSULT AMERCO'S MOST RECENT PUBLIC FILINGS, INCLUDING THE FISCAL SECOND QUARTER RESULTS FOR 2004. A. INTRODUCTION. As a condition to confirmation of the Plan, the Bankruptcy Code requires, among other things, that the Bankruptcy Court determine that confirmation is not likely to be followed by the liquidation of, or the need for further financial reorganization of, the Debtors. See "Voting on and Confirmation of the Plan" - "Confirmation" and - "Feasibility". In connection with the development of the Plan, and for purposes of determining whether the Plan satisfies this feasibility standard, the Debtors' management analyzed the ability of the Reorganized Debtors, together with the non-Debtor entities they control, to meet their obligations under the Plan with sufficient liquidity and capital resources to conduct their businesses. In this regard, the Debtors' management have prepared certain projections of the Debtors' operating profit, free cash flow and certain other items, on a Consolidated basis, for the four fiscal years ending March 31, 2007 (the "Projection Period"). Such projections are presented on a Consolidated basis and reflect: (a) the economic, competitive and general business conditions currently prevailing; (b) the terms of the Plan; and (c) various additional assumptions, including those set forth below (the "Projections"). Although, as of the date of the Disclosure Statement, such conditions have not materially changed, any future changes in these conditions may materially impact the Reorganized Debtors' ability to achieve the Projections. THE DEBTORS DO NOT, AS A MATTER OF COURSE, PUBLISH THEIR BUSINESS PLANS AND STRATEGIES OR MAKE EXTERNAL PROJECTIONS OR FORECASTS OF THEIR ANTICIPATED FINANCIAL POSITION OR RESULTS OF OPERATIONS. ACCORDINGLY, THE DEBTORS (INCLUDING THE REORGANIZED DEBTORS) DO NOT ANTICIPATE THAT THEY WILL, AND DISCLAIM ANY OBLIGATION TO, FURNISH UPDATED BUSINESS PLANS OR PROJECTIONS TO HOLDERS OF CLAIMS OR INTERESTS OR OTHER SECURITY HOLDERS, PRIOR TO OR AFTER THE EFFECTIVE DATE, OR TO INCLUDE SUCH INFORMATION IN DOCUMENTS REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR OTHER AGENCIES OR OTHERWISE TO MAKE SUCH INFORMATION PUBLIC. NO PERSON SHOULD RELY ON THE CONTINUED ACCURACY OF ANY PROJECTIONS OR FORECASTS CONTAINED HEREIN FOR THE PURPOSE OF TRADING IN ANY SECURITIES OF THE DEBTORS OR THE REORGANIZED DEBTORS. The financial projections discussed in this section include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21G of the Securities Exchange Act of 1934, as amended. The Projections are based on, and assume the successful implementation of, the Reorganized Debtors' business strategy. The Projections reflect numerous assumptions, including various assumptions regarding the anticipated future performance of the Reorganized Debtors, industry performance, general business and economic conditions, competition in AP4 - 1 the industry, complex tax issues and other matters, most of which are beyond the control of the Debtors. Therefore, although the Projections are necessarily presented with numerical specificity, the actual results of operations achieved during the Projection Period may vary from projected results. These variations may be material. Accordingly, no representation can be or is being made with respect to the accuracy of the Projections or the ability of the Reorganized Debtors to achieve the Projections. Although the Debtors believe that the assumptions underlying the Projections, when considered on an overall basis, are reasonable in light of current circumstances, no assurance can be or is being given that the Projections will be realized. In deciding whether or not to accept or reject the Plan, holders of Claims and Interests must make their own determinations as to the reasonableness of such assumptions and the reliability of the Projections. See "Risk Factors" for a discussion of certain factors that may affect the future financial performance of the Reorganized Debtors and of various risks associated with the Plan. The Projections should be read in conjunction with the assumptions, qualifications and explanations set forth herein and AMERCO's publicly filed audited financial statements, including associated notes. The projections were not prepared with a view towards complying with the guidelines for prospective financial statements published by the American Institute of Certified Public Accountants. The Debtors' independent accountant has neither compiled nor examined the accompanying prospective financial information to determine the reasonableness thereof and, accordingly, has not expressed an opinion or any other form of assurance with respect thereto. B. BASIS OF FINANCIAL PRESENTATION. The historic financial information of the Debtors is presented on the following consolidated basis ("Consolidated"), as follows: (i) The financial results of AMERCO, AREC and U-Haul are Consolidated and reflect the elimination of all significant inter-company items; (ii) The financial results of SAC Holding are included to the extent of: (a) interest income earned on the SAC Holding Notes owned by the Debtors or their Subsidiaries; (b) management fees earned by the Debtors or their Subsidiaries related to properties they manage that are owned by SAC Holding; and (c) the Debtors' investment accounts in and accounts receivable due from SAC Holding. The Debtors do not hold equity ownership positions in SAC Holding. SAC Holding's debt obligations are: (i) not legal obligations of the Debtors; (ii) without recourse to the Debtors; and (iii) contain no cross- default provisions with respect to the Debtors' indebtedness; (iii) The financial results of Oxford and RepWest are treated as unconsolidated investments, accounted for under the equity method of accounting, and as such their financial results are included to the extent of: (a) the pre-tax income earned by Oxford and RepWest; and (b) the after-tax earnings from Oxford and RepWest which serve to increase the Debtors' investment account in their unconsolidated Subsidiaries; and (iv) Any and all references to AMERCO's financial statements for the fiscal years ended March 31, 2001 and March 31,2002, are to those financial statements as recently restated. C. PRINCIPAL ASSUMPTIONS FOR THE PROJECTIONS. The Projections include a number of fundamental underlying assumptions, including the following: AP4 - 2 (i) The Debtors emerge from Chapter 11 bankruptcy protection on January 31, 2004 (the "Effective Date"), to form the Reorganized Debtors, with Allowed Claims treated in accordance with the treatment provided for in the Plan; (ii) Properties subject to the Citibank Master Lease and the BMO Master Lease are assumed and Restated in accordance with the alternative treatment of Class 3 and Class 4 claims, respectively; (iii) The Debtors close a $550 million Exit Financing Facility, obtained from a lending syndicate led by Wells Fargo Foothill, Inc., on the Effective Date. The Exit Financing Facility bears annual interest at a variable rate equivalent to LIBOR plus 400 basis points and is subject to the terms and conditions set forth in the Exit Financing Facility Commitment Letter; (iv) The Debtors raise $30 million of the Term B Loan Notes from third party institution(s) on the Effective Date. The aggregate amount of the Term B Loan Notes is $200 million, inclusive of the $30 million raised from third party institution(s). The Term Loan B Notes bear annual interest at a fixed rate equivalent to 9.00%; (v) Certain tax benefits and attributes will be available and used to off-set taxable income; (vi) The Reorganized Debtors have sufficient capital resources to implement the business strategy underlying the Projections; (vii) Rental equipment currently subject to operating leases are assumed with no alteration of existing contractual terms; and (viii) SAC Holding issues $200 million of SAC Holding Senior Notes to AMERCO general unsecured creditors. D. THE PROJECTIONS. The projected Consolidated financial information of the Debtors set forth below has been prepared based on the assumption that the Effective Date is January 31, 2004. Although the Debtors presently intend to cause the Effective Date to occur as soon as practicable, there can be no assurance as to when the Effective Date will actually occur. The projected Consolidated statements of operations for the Debtors set forth below presents the Consolidated results of operations as follows: (i) for the Debtors, actual results for the fiscal year ended March 31, 2003 and projected results for the ten month period ending January 31, 2004; and (ii) for the Reorganized Debtors, projected results for the two month period ending March 31, 2004 and for each subsequent fiscal year in the Projection Period. The projected Consolidated statements of operations for the fiscal years ending March 31, 2004 through 2007 are based on the actual results for the fiscal year ended March 31, 2003 and are adjusted for assumptions that impact, among other things, pricing, utilization and changes in certain expenses. The pro forma Consolidated balance sheet for the Debtors as of January 31, 2004, set forth below, presents the following: (i) the projected Consolidated financial position of the Debtors prior to the Effective Date of the Plan; (ii) the adjustments to such Consolidated financial position required to reflect the implementation of the Plan and consummation of the financing transactions contemplated by the Plan; and (iii) the projected Consolidated financial position of the Debtors, after giving effect to the reorganization and financing transactions adjustments. The adjustments set forth in the columns bearing the heading "Plan Adjustments" reflect the assumed effect of implementations of the Plan and the AP4 - 3 consummation of the financing transactions contemplated by the Plan, including the settlement of various liabilities and related issuance of securities, cash payments and borrowings. The adjustments are described in greater detail in the notes that follow the pro-forma Consolidated balance sheet. The projected Consolidated balance sheets for the fiscal years ending March 31, 2004 through 2007 are based on actual results for the fiscal year ended March 31, 2003, and are adjusted for assumptions that impact, among other things, the level of capital expenditures and working capital investments. The projected Consolidated statements of cash flows for the Debtors set forth below presents the Consolidated cash flows as follows: (i) for the Debtors, projected cash flows for the ten month period ended January 31, 2003; and (ii) for the Reorganized Debtors, projected cash flows for the two month period ending March 31, 2004 and for each subsequent fiscal year in the Projection Period. E. REVENUE PROJECTIONS. Revenue growth assumptions have been developed for the major lines of business of the Reorganized Debtors. Revenue growth assumptions were developed through a detailed budgeting approach, taking into account individual business strategies, historical trends and general economic and industry conditions. Overall revenue is expected to grow at a rate consistent with historic performance, after adjusting historic results for the sale of select assets to SAC Holdings. (i) Rental Revenue: U-Move Revenue. This category includes revenue generated from renting (on a one-way and in-town basis) trucks, trailers and other supporting rental items ("SRI"), including tow dollies and auto transports. U-Move truck rental revenue is projected to increase as a result of the following: (i) the leasing by the Debtors of new box trucks under their fleet rotation program, which are rented to customers, as new trucks have historically earned higher gross revenue per unit ("GRPU") compared to the average for the existing fleet; and (ii) improvements with respect to the pricing and utilization of the existing, retained fleet. The Debtors plan the sale of select, old box trucks in an aggregate number approximately equal to the number of new box trucks leased, as old box trucks typically realize lower than average GRPU. Revenue growth associated with (i) and (ii) are expected to more than off-set the losses in revenue associated with the sale of select box trucks. U-Move trailer and SRI rental revenue is projected to increase as a result of the following: (i) the purchase of new trailers and SRI equipment and resulting increase in the size of the trailer and SRI fleets; (ii) improvements in the number of transactions and utilization executed by the trailer and SRI fleets; and (iii) improvements in pricing. All assumptions underlying the projections are consistent with historic experience, industry trends and the Debtors' current and expected market position. U-Store Revenue. This category includes revenue generated from owned self-storage facilities, management fees earned (based on revenue managed) from the management of non-owned self-storage properties and other rental revenue received on U-Haul owned properties leased to dealers. U-Store revenue is projected to increase as a result of the following: (i) increases in occupancy rates and pricing at owned self-storage facilities; and (ii) growth in management fees earned as a result of the growth in projected revenue at non- owned self-storage properties. Other Revenue. AP4 - 4 This category includes revenue associated with commissions earned on the sale of select retail sales items to the dealer network, service / cleaning fee income, sale of rebuilt parts and other miscellaneous income. (ii) Retail Sales Revenue. This category includes revenue generated from the retail sale of moving and storage supplies, including: (i) hitches; (ii) propane; and (iii) boxes, rope and sealing tape (collectively, "SSI"). Retail sales revenue is expected to increase due to general growth in the U-Move and U-Store businesses, which drive retail sales revenue, and improvements in product mix and customer service. (iii) Interest Income This category is comprised principally of revenue generated from interest income earnings from the Restated SAC Holding Notes owned by the Debtors. Projected interest income from the Restated SAC Holding Notes is based on the expected financial performance, net operating income and free cash flow (after senior secured and senior unsecured debt service) of SAC Holding. F. EXPENSE PROJECTIONS. Expense growth assumptions have been developed for the major expenditures of the Reorganized Debtors. Expense growth assumptions were developed through a detailed budgeting approach, taking into account historical trends, the level of projected revenue growth and contractual obligations. Overall, expenses are expected to grow as the Debtors increase expenditures due to inflation and in order to support projected revenue growth. (i) Commission Expense. This category includes commissions paid to members of the Debtors' non-owned distributor network related to the rental of moving equipment (i.e., trucks and trailers). Commission expense is projected to grow due to the expected increase in U-Move revenue. Commission expense as a percentage of U-Move sales is projected at a constant rate of 13% of U-Move revenue, which is consistent with recent financial results. (ii) Cost of Retail Sales. This category includes the cost of materials related to retail sales items, non-inclusive of labor cost allocations. Cost of retail sales, for each main category (i.e., hitches, propane and SSI), is projected as a fixed percent of retail sales based on historic experience and expectations with regard to sales mix within each main category. (iii) Other Operating Expense. Insurance Expense. This category includes expenses incurred by the Debtors that are covered under high deductible insurance policies written by RepWest. Insurance expense includes, among other things, expenses related to: (i) the accrual of claims, incurred but not reported claims and legal fees as estimated by actuaries; (ii) premiums on excess insurance policies written by third party insurers; (iii) claims administration fees; and (iv) minimum financial responsibility policy fees. Insurance expense projections rely on actuarial AP4 - 5 determined accruals and historic experience with respect to other expense amounts, as adjusted to reflect the assumed growth in the number of U-Move rental transactions and insurance cost inflation. Other Operating Expense. This category includes personnel, rental equipment maintenance and other operating expenses. Personnel expense consists of amounts paid in the form of wages and benefits for employees. Personnel expense is projected to grow based on historic experience after factoring in expectations with respect to the achievement of operating leverage. Rental equipment maintenance expense is primarily related to repair and maintenance costs on the U-Move truck fleet. Rental equipment maintenance expense is projected based on a historic baseline and adjusted to reflect assumptions, based on historic experience, with respect to the average miles driven and maintenance costs per mile driven for newly leased trucks, sold trucks and retained trucks. Other operating expense also includes selling, general, administrative and other costs. Selling, general, administrative and other costs are projected to increase based on historic experience and expectations of revenue growth. Restructuring Expense. This category includes the payment of professional fees, including legal counsel and financial advisors, to the Debtors and the Creditors' Committee, the Equity Committee, the Pre-Petition Lenders and the AREC Noteholders. Restructuring expenses are projected based on historic results adjusted for expectation with respect to the length of the Bankruptcy process. (iv) Rental Equipment Lease Expense. This category includes rental equipment lease expense associated with the Debtors' existing and new operating leases. Existing operating leases are expected to be assumed with no alteration of contractual terms; thus rental equipment lease expense under existing leases is projected based on the contractual requirements under each lease. The Debtors are expected to enter into new operating lease arrangements to fund the acquisition of new rental trucks and trailers. Projected rental equipment lease expense under new operating leases is based on the following: (i) expectations with respect to the value of new truck and trailer equipment leased annually, which is based on the Debtors' projected fleet rotation program; and (ii) the expected terms of the leases executed, which is based on historic experience. (v) Rental Costs Land and Buildings. This category includes rental expense related to the properties subject to the BMO Master Lease and Citibank Master Lease. The BMO Master Lease and Citibank Master Lease rental costs are projected based on the terms of the Restated BMO Master Lease and Restated Citibank Master Lease, as follows: (i) the amount owed under the respective lease agreements is estimated by adjusting current balances outstanding for payments contemplated to be paid under the Plan of $5.1 million and $3.5 million for the BMO Master Lease and Citibank Master Lease, respectively; (ii) the estimated amount owed under the respective leases is then incorporated into a lease schedule that calculates the rent expense associated with each lease agreement after considering the treatment provided for under the Plan; such treatment is as follows: seven year extension to existing lease term, 7.5% weighted average interest rate and 30 year amortization. To the extent that the Debtors execute the Carey Sale Transaction, the effect would be to reduce projected rental costs land and buildings by the amount of the rent associated with the Restated BMO Master Lease and Restated Citibank Master Lease. However, the positive impact on operating profits associated with the aforementioned expense reduction would be off-set, nearly equivalently, by a AP4 - 6 reduction in operating profits associated with the sale of the properties subject to the BMO Master Lease and Citibank Master Lease. Therefore it is projected that there are no material changes to projected operating profits as a result of the treatment of the BMO Master Lease and Citibank Master Lease under the alternative scenarios outlined above. Rental Costs Land and Buildings also includes rent payments related to other rental arrangements, including intercompany payments, which are projected to grow slightly from historic levels after adjusting historic results for the conclusion of the Royal Bank of Canada lease agreement. AP4 - 7 AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED "CONSOLIDATED" RENTAL COSTS LAND AND BUILDINGS ($ IN MILLIONS)
AMERCO and AREC Reorganized AMERCO and AREC ---------------------- ------------------------------------------------- Twelve Ten Two Twelve Twelve Twelve Months Months Months Months Months Months Rental Costs Land and Buildings 31-Mar-03 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-O7 - --------------------------------------------------------------------------------------------------------------------------- BMO Master Lease $ 8.1 $ 5.0 $ 2.0 $ 12.0 $ 12.0 $ 12.0 Citibank Master Lease 6.2 4.0 1.4 8.2 8.2 8.2 Other Rental Costs 18.8 16.1 3.2 17.9 18.4 18.9 - --------------------------------------------------------------------------------------------------------------------------- Total Rental Costs Land and Buildings $ 33.1 $ 25.1 $ 6.6 $ 38.1 $ 38.6 $ 39.1 ===========================================================================================================================
(vi) Depreciation and Amortization. This category includes depreciation expense associated with owned fixed assets, principally the truck and trailer rental fleet. Depreciation expense projections assume that rental equipment subject to operating leases are purchased at the conclusion of the lease term and accounted for as owned equipment thereafter. The owned rental fleet is assumed to be depreciated over its useful life to an average estimated salvage value at disposition of 15% using the straight-line method of depreciation. Depreciation expense is also projected based on assumptions with respect to the following: (i) the acquisition of new pick-up trucks and vans which are depreciated based on a five year useful life using the straight-line method of depreciation until sold; (ii) the capitalization and depreciation of truck fleet betterments based on a four year useful life using the straight-line method of depreciation; and (iii) the depreciation of purchased trailer and other rental equipment and furniture and fixtures over their useful lives using the straight-line method of depreciation. (vii) Gain / (Loss) on PP&E Dispositions. This category includes the book gain / (loss) incurred due to the sale of rental equipment, including pickups, vans and box trucks, in the normal course of the Debtors' fleet rotation program. Gain / (loss) on PP&E dispositions is projected based on assumptions (derived from historic experience) related to the type and number of vehicles sold and the proceeds realized from such sales. (viii) Pre-Tax Earnings / (Loss) - Insurance Subsidiaries. This category includes the pre-tax earnings / loss of RepWest and Oxford which is projected based on the expected financial performance of RepWest and Oxford. With respect to RepWest, pre-tax earnings are expected to improve as the projected decline in revenue is more than off-set by the projected decline in expenses. With respect to Oxford, pre-tax earnings are expected to improve as the projected increase in revenue off-sets the projected increase in expenses. AP4 - 8 (ix) Income Tax Expense. This category includes income taxes related to federal and state income taxes. A blended, effective income tax rate of 36% is assumed in calculating income tax expense. (x) Dividends to Preferred Stockholders. This category includes dividends to the holders of existing Series A 8.50% preferred stock which are projected based on the stated dividend rate. G. ASSET PROJECTIONS. (i) Cash. Cash balances are based on the March 31, 2003 beginning balance adjusted for the sources and uses of cash. (ii) Accounts Receivable. Accounts receivable, which include trade receivables from customers and dealers and credit card receivables, is projected to change based on assumed U-Move, U-Store and retail sales revenue and historic collection rates. (iii) Inventory. Inventory consists of truck and trailer parts and accessories, hitches and towing components and moving supplies. Inventory is projected to change based on an assumed level of inventory turnover consistent with historic experience. (iv) Prepaid and Other Current Assets. Prepaid and other current assets include prepaid items as well as receivables owed to the Debtors by SAC Holding. All such amounts are not expected to fluctuate materially. (v) PP&E. Net. PP&E, net, reflects the book value, net of accumulated depreciation, of owned real property, including among other things, owned rental equipment and associated capitalized maintenance expense, real estate, and furniture and fixtures. PP&E, net, is project to change based on the expected level of capital expenditures, net of disposition, and off-set by projected depreciation expense. Capital expenditures, net of disposition, during the fiscal years ending March 31, 2004 through March 31, 2007, is projected to be $141.4 million, $136.3 million, $198.0 million and $145.7 million, respectively. (vi) Investments in Unconsolidated Subsidiaries. Investment in unconsolidated Subsidiaries, which represent investments in RepWest and Oxford, is projected to increase based on the pre-tax earnings of RepWest and Oxford, taxed at an assumed blended, effective income tax rate of 36%. No dividends are assumed to flow from RepWest or Oxford to the Reorganized Debtors. AP4 - 9 (vii) SAC Holding Notes and LT Receivables. SAC Holding Notes and LT receivables, which are comprised mainly of the Restated SAC Holding Notes owned by the Debtors, are projected to change based on the expected level of interest expense accrued but not paid related to the SAC Holding Notes. (viii) Other Assets. Other assets include a receivable owed to the Debtors from PMSR arising from the Debtors' non- enforced support party agreement with respect to PMSR indebtedness, which is not expected to fluctuate materially. Other assets are also comprised of deferred financing costs, including arrangement and closing fees and legal and other expenses projected to be paid in connection with the closing of the Exit Financing Facility and the Term Loan B offering. Deferred financing costs are projected to amortize on a straight-line basis over the term of the Exit Financing Facility and Term Loan B offering. H. LIABILITY PROJECTIONS. (i) Accounts Payable. Accounts payable is comprised of mainly vendor payables and is projected to change based on assumed operating expenses (non-inclusive of depreciation and amortization and lease expense) and historic vendor terms and payment frequency. (ii) Accrued Expenses and Other Current Liabilities. Accrued expenses and other current liabilities include accrued employee expenses, accrued commissions payable, accrued dividends, accrued interest payable and other accrued expenses, all of which are not expected to fluctuate materially. Accrued expenses and other current liabilities also include insurance reserves. Insurance reserves represent the actuarial estimates with respect to the liquidated and non-liquidated insurance claims owed by the Debtors to RepWest. Insurance reserves are projected to change based on actuarial estimates and historic experience with respect to the timing of cash payments on insurance claims. (iii) Total Debt. Total debt is comprised of the securities issued pursuant to the Plan. Total debt fluctuates based on the mandatory and optional payment and the required drawdown of the Exit Financing Facility. (iv) Other Long Term Liabilities. PMSR Support Party Agreement Contingent Obligation PMSR Support Agreement contingent obligations are comprised of obligations under the terms of the PMSR Support Agreement entered into by the Debtors in February of 2003 on behalf of PMSR that could require, following certain events of default, the Debtors to assume responsibility for $70 million of PMSR's obligations under the existing $225,000,000 PMSR Facility. PMSR Support Agreement contingent obligations are not expected to fluctuate nor are any monies expected to be actually assumed or paid by the Debtors under the PMSR Support Agreement contingent obligation. AP4 - 10 Long-Term Deferred Credits Long-term deferred credits, which are comprised of deferred gains on sale-lease back transactions related to TRAC leas financings, is not expected to fluctuate materially. (v) Long-Term Deferred Taxes. Long-term deferred taxes represent deferred tax liabilities as off-set by deferred tax assets. It is assumed that the Reorganized Debtors will realize the benefits of net operation losses and other tax attributes, as legally limited by the alternative minimum tax, etc. I. SHAREHOLDERS' EQUITY PROJECTIONS. (i) Preferred Stock. It is assumed that dividends are paid in cash with respect to the existing Series A 8.50% preferred stock beginning on March 1, 2004. (ii) Common Equity. Common equity is projected to change to reflect the net income to common shareholders. J. OFF-BALANCE SHEET FINANCING - RESTATED BMO MASTER LEASE AND CITIBANK MASTER LEASE. Based on the current interpretation of standards under the Financial Accounting Standards Board, the Debtors' synthetic leases are assumed to remain off-balance sheet; thus, obligations resulting from the Restated BMO Master Lease and the Restated Citibank Master Lease are not reflected in the projected balance sheets. Lease expense related to such obligations, however, is projected as part of rental costs land and buildings. AP4 - 11 REORGANIZED AMERCO & AREC PROJECTED PRO FORMA "CONSOLIDATED" BALANCE SHEET JANUARY 31,2004 ($ IN MILLIONS)
Plan Adjustments Projected ---------------------------- Reorganized Pre-Confirmation Financing Settlement Balance Sheet Balance Sheet 31-Jan-04 Transactions of Claims 31-Jan-04 - --------------------------------------------------------------------------------------------------------------------- Assets Cash $ 91.5 ($ 66.5)(a) $ 25.0 Accounts Receivable 32.2 32.2 Inventories 56.8 56.8 Prepaid and Other Current Assets 62.8 62.8 - -------------------------------------------------------------------------------------------------------------------- Total Current Assets $ 243.3 $ 0.0 ($ 66.5) $ 176.8 PP&E, Net $ 1,287.1 $ 1,287.1 Investments in Unconsolidated Subsidiaries 311.6 311.6 SAC Holdings Notes and Other LT Receivables 401.9 (200.0)(c) 201.9 Other Assets 155.5 27.4(b) 182.9 - -------------------------------------------------------------------------------------------------------------------- Total Assets $ 2,399.3 $ 27.4 ($ 266.5) $ 2,160.2 Liabilities and Shareholders' Equity Accounts Payable $ 39.6 $ 39.6 Accrued Expenses & Other Current Liabilities 460.8 (23.5)(d) 437.3 - -------------------------------------------------------------------------------------------------------------------- Total Current Liabilities $ 500.4 $ 0.0 ($ 23.5) $ 476.9 Total Debt $ 1,103.1 $ 837.6(e) ($ 1,045.8)(f) $ 894.9 Other Long-Term Liabilities 94.1 94.1 Long-Term Deferred Taxes 141.0 (2.7)(g) 138.3 - -------------------------------------------------------------------------------------------------------------------- Total Liabilities $ 1,838.6 $ 837.6 ($ 1,071.9) $ 1,604.3 Shareholders' Equity 560.6 (4.7)(g) 555.9 - -------------------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Equity $ 2,399.3 $ 837.6 ($ 1,076.7) $ 2,160.2 ====================================================================================================================
(a) Reflects the settlement of claims in connection with the Plan through the disbursement of excess cash expected to be on hand at the Effective Date. (b) Reflects the capitalization of arrangement and closing fees and legal and other expenses projected to be paid in connection with the closing of the Exit Financing Facility and the New Term Loan B Note offering and payments made in connection with the treatment of Class 3 and Class 4 Claims in accordance with the Plan. (c) Reflects the issuance of the non-recourse SAC Holding Senior Notes in connection with the Plan. (d) Reflects the payment of certain accrued obligations. AP4 - 12 (e) Reflects the issuance of new debt, to existing and new investors, as provided for in the Plan, including the Exit Financing Facility, New Term Loan B Note offering and New AMERCO Notes. (f) Reflects the settlement, in accordance with the provisions for treatment of claims and interests as described in the Plan, of the following claims: the DIP Facility Claim, the AREC Note Claims, the JPMorgan Claims, the AMERCO Unsecured Claims and the Oxford Claim. (g) Reflects the impact on equity and long-term deferred taxes, on a tax adjusted basis, of restructuring payments expected to be paid at the Effective Date. AP4 - 13 AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED CAPITALIZED COSTS AND PAYMENTS ($ IN MILLIONS) - ---------------------------------------------------------------- Fees Related to New Financing $ 14.2 Financing Expenses (Legal and Other) 4.6 Payments to Class 3 and Class 4 Claimants 8.6 - ---------------------------------------------------------------- Total Financing Costs $ 27.4 - ----------------------------------------------------------------

AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED RESTRUCTURING PAYMENTS ($ IN MILLIONS) - ---------------------------------------------------------------- Debtor Advisor Success Fee $ 4.9 Creditor Advisors Success Fees 2.5 - ---------------------------------------------------------------- Total Restructuring Payments $ 7.4 - ----------------------------------------------------------------

AP4 - 14 AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED "CONSOLIDATED" BALANCE SHEETS ($ IN MILLIONS)
AMERCO and AREC Reorganized AMERCO and AREC ----------------------- --------------------------------------------------------------- Balance Sheet 31-Mar-03 31-Jan-04 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - ------------------------------------------------------------------------------------------------------------------------------------ Assets Cash $ 48.7 $ 91.5 $ 25.0 $ 25.0 $ 25.0 $ 25.0 $ 25.0 Accounts Receivable 20.4 32.2 32.2 37.7 43.4 42.8 44.6 Inventories 49.2 56.8 56.8 71.3 67.7 74.9 77.7 Prepaid and Other Current Assets 62.8 62.8 62.8 62.8 62.8 62.8 62.8 - ----------------------------------------------------------------------------------------------------------------------------------- Total Current Assets $ 181.2 $ 243.3 $ 176.8 $ 196.8 $ 199.0 $ 205.5 $ 210.1 PP&E, Net $ 1,242.1 $ 1,287.1 $ 1,287.1 $ 1,275.9 $ 1,305.3 $ 1,391.7 $ 1,425.4 Investments in Unconsolidated Subsidiaries 310.2 311.6 311.6 311.9 317.1 322.8 329.4 SAC Holdings Notes and Other LT Receivables 396.4 401.9 201.9 202.9 206.6 208.6 209.2 Other Assets 155.5 155.5 182.9 182.2 178.5 174.7 171.0 - ----------------------------------------------------------------------------------------------------------------------------------- Total Assets $ 2,285.4 $ 2,399.3 $ 2,160.2 $ 2,169.9 $ 2,206.4 $ 2,303.4 $ 2,345.1 Liabilities and Shareholders' Equity Accounts Payable $ 29.8 $ 39.6 $ 39.6 $ 41.3 $ 48.2 $ 48.4 $ 50.0 Accrued Expenses & Other Current Liabilities 463.6 460.8 437.3 438.7 446.2 452.4 458.8 - ----------------------------------------------------------------------------------------------------------------------------------- Total Current Liabilities $ 493.4 $ 500.4 $ 476.9 $ 480.0 $ 494.4 $ 500.8 $ 508.8 Total Debt $ 1,053.8 $ 1,103.1 $ 894.9 $ 919.1 $ 874.5 $ 873.2 $ 802.9 Other Long-Term Liabilities 94.1 94.1 94.1 94.1 94.1 94.1 94.1 Long-Term Deferred Taxes 117.9 141.0 138.3 132.3 154.8 182.9 208.7 - ----------------------------------------------------------------------------------------------------------------------------------- Total Liabilities $ 1,759.2 $ 1,838.6 $ 1,604.3 $ 1,625.5 $ 1,617.9 $ 1,651.1 $ 1,614.5 Shareholders' Equity 526.2 560.6 555.9 544.3 588.6 652.3 730.6 - ----------------------------------------------------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Equity $ 2,285.4 $ 2,399.3 $ 2,160.2 $ 2,169.9 $ 2,206.4 $ 2,303.4 $ 2,345.1 ===================================================================================================================================
AP4 - 15 AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED "CONSOLIDATED" LIQUIDITY ($ IN MILLIONS)
Reorganized AMERCO and AREC -------------------------------------------------------------- Liquidity 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - ---------------------------------------------------------------------------------------------------------------------- Cash $ 25.0 $ 25.0 $ 25.0 $ 25.0 $ 25.0 Maximum Draw on Revolving Credit Facility $ 200.0 $ 200.0 $ 200.0 $ 200.0 $ 200.0 Borrowing Under Revolving Credit Facility 143.1 167.9 126.8 129.0 62.1 - ---------------------------------------------------------------------------------------------------------------------- Availability Under Revolving Credit Facility $ 56.9 $ 32.1 $ 73.2 $ 71.0 $ 137.9 Total Liquidity (Cash + Revolver Available) $ 81.9 $ 57.1 $ 98.2 $ 96.0 $ 162.9 ======================================================================================================================
AP4 - 16 AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED "CONSOLIDATED" STATEMENT OF OPERATIONS ($ IN MILLIONS)
AMERCO and AREC Reorganized AMERCO and AREC ----------------------- ------------------------------------------------- Twelve Ten Two Twelve Twelve Twelve Months Months Months Months Months Months Income Statement 31-Mar-03 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - ------------------------------------------------------------------------------------------------------------------------ Revenue Rental Revenue $ 1,435.3 $ 1,276.5 $ 212.5 $ 1,562.1 $ 1,629.7 $ 1,700.5 Retail Sales 177.8 159.2 27.0 193.5 201.1 208.9 Interest Income 41.2 34.8 3.2 22.7 25.2 28.0 Commission Expense (166.4) (150.0) (24.5) (183.0) (191.1) (199.6) - ------------------------------------------------------------------------------------------------------------------------ Net Revenue $ 1,487.9 $ 1,320.5 $ 218.2 $ 1,595.4 $ 1,664.9 $ 1,737.9 Cost of Retail Sales $ 97.3 $ 89.4 $ 15.2 $ 108.4 $ 112.4 $ 116.6 Other Operating Expenses 1,007.7 882.5 159.7 1,058.7 1,103.3 1,145.0 Rental Equipment Lease Expense 147.1 106.8 21.4 127.6 113.9 116.5 Rental Costs Land and Buildings 33.1 25.1(a) 6.6 38.1 38.6 39.1 Depreciation & Amortization 128.5 85.8 17.6 102.8 107.5 107.8 (Gain) / Loss PP&E Dispositions (10.5) 3.4 0.7 4.1 4.1 4.1 - ------------------------------------------------------------------------------------------------------------------------ Earnings from Operations $ 84.8 $ 127.5 ($ 3.0) $ 155.6 $ 185.1 $ 208.8 Pre-Tax (Earnings) / Loss - Insurance Subs $ 6.2 ($ 2.2) ($ 0.5) ($ 8.1) ($ 8.9) ($ 10.2) Net Interest Expense 102.9 59.0 12.2 74.3 74.1 76.4 - ------------------------------------------------------------------------------------------------------------------------ Pre-Tax Net Income ($ 24.3) $ 70.7 ($ 14.7) $ 89.5 $ 119.9 $ 142.6 Income Tax Expense (7.1) 25.4 (5.3) 32.2 43.2 51.3 - ------------------------------------------------------------------------------------------------------------------------ Net Income ($ 17.3) $ 45.2 ($ 9.4) $ 57.3 $ 76.7 $ 91.3 Dividends to Preferred Stockholders $ 13.0 10.8 2.2 13.0 13.0 13.0 - ------------------------------------------------------------------------------------------------------------------------ Net Income Available to Common Stockholders ($ 30.2) $ 34.4 ($ 11.6) $ 44.3 $ 63.7 $ 78.3 ========================================================================================================================
AP4 - 17 (a) To the extent that the Debtors execute the Carey Sale Transaction, the effect would be to reduce projected rental costs land and buildings by the amount of the rent associated with the Restated BMO Master Lease and Restated Citibank Master Lease. However, the positive impact on operating profits associated with the aforementioned expense reduction would be off-set, nearly equivalently, by a reduction in operating profits associated with the sale of the properties subject to the BMO Master Lease and Citibank Master Lease. Therefore, it is projected that there is no material change to project operating profit as a result of the treatment of the BMO Master Lease and Citibank Master Lease under the alternative scenarios outlined above. The Debtors measure operating results using earnings from operations adjusted to add-back depreciation and amortization and to exclude a restructuring expenses and certain unusual and non-recurring items. AP4 - 18 AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED "CONSOLIDATED" ADJUSTED EBITDA ($ IN MILLIONS)
AMERCO and AREC Reorganized AMERCO and AREC ----------------------- -------------------------------------------------- Twelve Ten Two Twelve Twelve Twelve Months Months Months Months Months Months Adjusted EBITDA Calculation 31-Mar-03 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - ------------------------------------------------------------------------------------------------------------------------ Earnings from Operations $ 84.8 $ 127.5 ($ 3.0) $ 155.6 $ 185.1 $ 208.8 Depreciation and Amortization 128.5 85.8 17.6 102.8 107.5 107.8 - ------------------------------------------------------------------------------------------------------------------------ EBITDA $ 213.3 $ 213.3 $ 14.6 $ 258.4 $ 292.6 $ 316.6 Restructuring Expenses / Other Non-Recurring Items 26.3 21.0(a) 0.0 0.0 0.0 0.0 - ------------------------------------------------------------------------------------------------------------------------ Adjusted EBITDA $ 239.5 $ 234.3 $ 14.6 $ 258.4 $ 292.6 $ 316.6 ========================================================================================================================
(b) Restructuring Expenses / Other Non-Recurring Items include the following: $21.0 million of expenses related to restructuring professionals. AP4 - 19 AMERCO & AREC AND REORGANIZED AMERCO & AREC PROJECTED "CONSOLIDATED" STATEMENT OF CASH FLOWS ($ IN MILLIONS)
AMERCO and AREC Reorganized AMERCO and AREC ---------- ------------------------------------------------------- Twelve Twelve Ten Two Twelve Months Months Months Months Months 31-Mar- 31-Mar- Statement of Cash Flow 31-Jan-04 31-Mar-04 31-Mar-05 06 07 - -------------------------------------------------------------------------------------------------------------------------- Net Income Available to Common Stockholders $ 34.4 ($ 11.6) $ 44.3 $ 63.7 $ 78.3 Depreciation and Amortization 85.8 17.6 102.8 107.5 107.8 (Gain) / Loss on Equipment Dispositions 3.4 0.7 4.1 4.1 4.1 Changes in Working Capital 37.0 (16.9) 12.2 (0.1) 3.4 Change in Other Assets 0.0 0.6 3.8 3.8 3.8 Change in Long-Term Deferred Taxes 23.1 (6.1) 22.5 28.2 25.8 - -------------------------------------------------------------------------------------------------------------------------- Cash Flow from Operating Activities $ 183.7 ($ 15.6) $ 189.7 $ 207.1 $ 223.2 Change in Investment in Unconsolidated Subsidiary ($ 1.4) ($ 0.3) ($ 5.2) ($ 5.7) ($ 6.6) Change in SAC Holdings Notes and Other LT Receivables (5.4) (1.1) (3.6) (2.1) (0.6) Capital Expenditures, Net of Dispositions (134.2) (7.2) (136.3) (198.0) (145.7) - -------------------------------------------------------------------------------------------------------------------------- Cash Flow from Investing Activities ($ 141.0) ($ 8.7) ($ 145.1) ($ 205.8) ($ 152.8) Cash Flow before Financing Activities $ 42.7 ($ 24.2) $ 44.6 $ 1.3 $ 70.3 Cash Flow from Financing Activities $ 0.0 $ 24.2 ($ 44.6) ($ 1.3) ($ 70.3) Change in Cash $ 42.7 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Cash at the Beginning of Period 48.7 25.0 25.0 25.0 25.0 - -------------------------------------------------------------------------------------------------------------------------- Cash at End of Period $ 91.5 $ 25.0 $ 25.0 $ 25.0 $ 25.0 ==========================================================================================================================
AP4 - 20 APPENDIX 5 FINANCIAL PROJECTIONS - SAC HOLDING [SEE ATTACHED] (This page intentionally left blank.) APPENDIX 5 FINANCIAL PROJECTIONS - SAC HOLDING THESE FINANCIAL PROJECTIONS HAVE BEEN PREPARED BASED ON HISTORICAL PERFORMANCE FOR FISCAL YEAR 2003. THESE PROJECTIONS DO NOT REFLECT ACTUAL FINANCIAL PERFORMANCE FOR FISCAL YEAR 2004. FOR ADDITIONAL INFORMATION WHICH REFLECTS ACTUAL RESULTS FOR FISCAL YEAR 2004, PLEASE CONSULT AMERCO'S MOST RECENT PUBLIC FILINGS, INCLUDING THE FISCAL SECOND QUARTER RESULTS FOR 2004 A. INTRODUCTION. As a condition to confirmation of the Plan, the Bankruptcy Code requires, among other things, that the Bankruptcy Court determine that confirmation is not likely to be followed by the liquidation of or the need for further financial reorganization of, the Debtors. See "Voting on and Confirmation of, the Plan" - "Confirmation" and - "Feasibility". In connection with the development of the Plan, and for purposes of determining whether the Plan satisfies this feasibility standard, the Debtors' management analyzed the ability of the Reorganized Debtors, together with the Non-Debtor Subsidiaries they control, to meet their obligations under the Plan with sufficient liquidity and capital resources to conduct their businesses. In addition, SAC Holding's management has prepared certain projections of SAC Holding operating profit, free cash flow and certain other items, on a stand alone basis, for the four fiscal years ending March 31, 2007 (the "Projection Period"). Such projections are presented on a stand alone basis, and reflect: (a) the economic, competitive and general business conditions currently prevailing: (b) the terms of the Plan; and (c) various additional assumptions, including those set forth below (the "Projections"). Although, as of the date of the Disclosure Statement, such conditions have not materially changed, any future changes in these conditions may materially impact SAC Holding's ability to achieve the Projections. THE DEBTORS AND SAC HOLDING DO NOT, AS A MATTER OF COURSE, PUBLISH THEIR BUSINESS PLANS AND STRATEGIES OR MAKE EXTERNAL PROJECTIONS OR FORECASTS OF THEIR ANTICIPATED FINANCIAL POSITION OR RESULTS OF OPERATIONS. ACCORDINGLY, THE DEBTORS (INCLUDING THE REORGANIZED DEBTORS) AND SAC HOLDING (INCLUDING POST CONFIRMATION SAC HOLDING) DO NOT ANTICIPATE THAT THEY WILL, AND DISCLAIM ANY OBLIGATION TO, FURNISH UPDATED BUSINESS PLANS OR PROJECTIONS TO HOLDERS OF CLAIMS OR INTERESTS PRIOR TO THE EFFECTIVE DATE OR TO STOCKHOLDERS, OR OTHER SECURITY HOLDERS, AFTER THE EFFECTIVE DATE, OR TO INCLUDE SUCH INFORMATION IN DOCUMENTS REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR OTHER AGENCIES OR OTHERWISE TO MAKE SUCH INFORMATION PUBLIC. NO PERSON SHOULD RELY ON THE CONTINUED ACCURACY OF ANY PROJECTIONS OR FORECASTS CONTAINED HEREIN FOR THE PURPOSE OF TRADING IN ANY SECURITIES OF THE DEBTORS, THE REORGANIZED DEBTORS OR SAC HOLDING. The financial projections discussed in this section include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21G of the Securities AP5 - 1 Exchange Act of 1934, as amended. The Projections are based on, and assume the successful implementation of, the Reorganized Debtors' and SAC Holding's business strategies. The Projections reflect numerous assumptions, including various assumptions regarding the anticipated future performance of post-confirmation SAC Holding, industry performance, general business and economic conditions, competition in the industry, complex tax issues and other matters, most of which are beyond the control of the Debtors and SAC Holding. Therefore, although the Projections are necessarily presented with numerical specificity, the actual results of operations achieved during the Projection Period may vary from projected results. These variations may be material. Accordingly, no representation can be or is being made with respect to the accuracy of the Projections or the ability of SAC Holding to achieve the Projections. Although the Debtors and SAC Holding believe that the assumptions underlying the Projections, when considered on an overall basis, are reasonable in light of current circumstances, no assurance can be or is being given that the Projections will be realized. In deciding whether or not to accept or reject the Plan, holders of Claims and Interests must make their own determinations as to the reasonableness of such assumptions and the reliability of the Projections. See "Risk Factors" for a discussion of certain factors that may affect the future financial performance of the Reorganized Debtors and SAC Holding and of various risks associated with the Plan. The Projections should be read in conjunction with the assumptions, qualifications, and explanations set forth herein and in AMERCO's publicly filed audited financial statements, including associated notes. The projections were not prepared with a view towards complying with the guidelines for prospective financial statements published by the American Institute of Certified Public Accountants. The Debtors' and SAC Holding's independent accountants have neither compiled nor examined the accompanying prospective financial information to determine the reasonableness thereof and, accordingly, have not expressed an opinion or any other form of assurance with respect thereto. B. BASIS OF FINANCIAL PRESENTATION. The historic and projected financial information of SAC Holding is presented on a basis that differs from the presentation of SAC Holding Corporation and its consolidating subsidiaries (the "Consolidated Subsidiaries") and SAC Holding Corporation II and its Consolidating Subsidiaries, which were filed as part of AMERCO's audited financial statements. Specifically, non-SAC Holding assets, liabilities, and associated income statement amounts related to properties owned by AMERCO and subject to synthetic lease agreements are not included in the following presentation of financial information. Any and all references to AMERCO's financial statements for the fiscal years ended March 31, 2001 and March 31, 2002, are to those financial statements as recently restated. C. PRINCIPAL ASSUMPTIONS FOR THE PROJECTIONS. The Projections include a number of fundamental underlying assumptions, including the following: (i) The Debtors emerge from Chapter 11 bankruptcy protection on January 31, 2004 (the "Effective Date"), to form the Reorganized Debtors, with Allowed Claims treated in accordance with the treatment provided for in the Plan; (ii) SAC Holding is a co-proponent of the Plan and issues the SAC Holding Senior Notes in the amount of $200 million in accordance with the Plan to the holders of AMERCO Unsecured Claims. The Existing SAC Holding Notes owned by the Debtors and related accrued interest owed to the Debtors are reduced by the amount of $200 million; AP5 - 2 (iii) SAC Holding enters into the SAC Holding Participation and Subordination Agreement which governs the cash distributions to the stakeholders of SAC Holdings and allows for the payment of interest due on the SAC Holding Senior Notes; and (iv) Non-SAC Holding assets, liabilities and associated income statement amounts related to properties owned by AMERCO and subject to synthetic lease agreements are not included in the following presentation of financial information. D. THE PROJECTIONS. The projected financial information of SAC Holding set forth below has been prepared based on the assumption that the Effective Date is January 31, 2004. Although the Debtors presently intend to cause the Effective Date to occur as soon as practicable, there can be no assurance as to when the Effective Date actually will occur. The projected Consolidated statements of operations for SAC Holding set forth below presents the results of operations as follows: (i) for SAC Holding, actual results for the fiscal year ended March 31, 2003 and projected results for the ten month period ending January 31, 2004; and (ii) for post-confirmation SAC Holding, projected results for the two month period ending March 31, 2004 and for each subsequent fiscal year in the Projection Period. The projected statements of operations for the fiscal years ending March 31, 2004 through 2007 are based on the actual results for the fiscal year ended March 31, 2003 and are adjusted for assumptions that impact, among other things, pricing, occupancy and changes in certain expenses. The pro forma SAC Holding balance sheet as of January 31, 2004 set forth below presents the following: (i) the projected financial position of SAC Holding prior to the Effective Date of the Plan; (ii) the adjustments to SAC Holding's financial position required to reflect the implementation of the Plan and consummation of the financing transactions contemplated by the Plan; and (iii) the projected financial position of SAC Holding, after giving effect to the reorganization and financing transaction adjustments. The adjustments set forth in the columns bearing the heading "Plan Adjustments" reflect the assumed effect of implementations of the Plan and the consummation of the financing transactions contemplated by the Plan, including the settlement of liabilities and related issuance of securities. The adjustments are described in greater detail in the notes that follow the pro-forma SAC Holding balance sheet. The projected SAC Holding balance sheets for the fiscal years ending March 31, 2004 through 2007 are based on actual results for the fiscal year ended March 31, 2003, and are adjusted for assumptions that impact, among other things, the level of capital expenditures and working capital investments. The projected statements of cash flows for SAC Holding set forth below present the cash flows as follows: (i) for SAC Holding, projected cash flows for the ten month period ended January 31, 2003; and (ii) for post confirmation SAC Holding, projected cash flows for the two month period ending March 31, 2004 and for each subsequent fiscal year in the Projection Period. E. REVENUE PROJECTIONS. Revenue growth assumptions have been developed for each of the major business lines of SAC Holding. Growth assumptions were developed using a detailed build-up of individual operating subsidiaries. Consideration was given to property maturity, historical trends, company operating strategy, and industry expectations. (i) Rental Revenue. AP5 - 3 Storage Revenue. Storage revenue is projected to grow due primarily to the following factors: increasing storage space capacity, increasing prices and increasing occupancy rates. U-Move Commission and Miscellaneous Revenue. SAC Holding operates as a dealer location for U-Haul, renting equipment such as trucks and trailers, as well as ancillary items such as hand trucks. Revenue is projected to grow in this area on a basis that is consistent with the revenue growth projections for storage revenue, as there is a high level of correlation among these business lines. (ii) Retail Sales Revenue. This category includes revenue generated from the retail sale of moving and storage related supplies, including boxes, rope, tape, hitches, propane and others. Sales revenue growth is projected based on the expected growth in self storage and self moving revenue. F. EXPENSE PROJECTIONS. Expense growth assumptions have been developed based on a detailed build up of operating subsidiaries. Forecasting has been done based on observed historical trends, industry expectations, inflation estimates and as required to support projected revenue growth levels. (i) Operating Expense. This line item includes personnel, property taxes, management fees, insurance, utilities, advertising, and other expenses. With the exception of management fees and SAC Holding expenses, operating expenses are projected to grow yearly at approximately 3% based on historical trends, expected inflation, company operating strategy and self storage business characteristics. Management fees are projected as 6% of total revenue, a standard commission for property management companies in this industry that is consistent with historic experience. SAC Holding Expenses include filing fees, professional fees, certain taxes and other miscellaneous expense items, incurred at the holding company level within SAC Holding. These have been projected based on management expectations and historical trends. (ii) Cost of Retail Sales. This category includes the cost of materials relating to retail sales items, non-inclusive of allocations related to labor costs. Cost of sales is projected as a percent of retail sales, by product line, using historical trends. It is assumed that sales mix remains constant from year to year. (iii) Depreciation Expense. Depreciation expense for SAC Holding is principally driven by buildings and improvements, and partially by equipment and furniture. PP&E is rolled forward based on assumptions for capital improvement, acquisitions, and divestitures. Buildings and associated improvement are depreciated over 39 years and make up the bulk of the PP&E. AP5 - 4 G. Asset PROJECTIONS. (i) Cash. Cash balances are rolled forward from March 31, 2003 actual levels based on sources and uses of Cash. (ii) Receivables. SAC Holding has not carried an account receivable balance historically; it is projected that this trend will continue. (iii) Inventories, Net. Inventory consists primarily of items held for retail sale, including rope, tape, boxes, hitches, propane, etc. Inventory levels are projected based on inventory turnover levels consistent with historic data. (iv) Prepaid Expenses. Pre-paid expenses are not expected to fluctuate materially. This category has been projected based on historic relationship to total revenue. (v) Other Assets. This category is primarily composed of deferred loss associated with the PMSR transaction occurring in the first quarter of fiscal year 2004. It is projected that the balance in Other Assets will not change over the projections horizon. For purposes of cash flow projections, the change in Other Assets in the first quarter of 2004 associated with the PMSR transaction is captured in Cash Flow from Investing Activities along with the change in PP&E from the PMSR transaction. (vi) PP&E, Net. This line item reflects the book value, net of accumulated depreciation, of owned real property, including land, buildings and improvements, and furniture and equipment. PP&E is projected on a rolling basis based on assumed levels of capital improvements and depreciation expense. It is assumed that there will be no acquisitions or divestitures by SAC Holding over the projection horizon. H. LIABILITY AND EQUITY PROJECTIONS. (i) Accounts Payable and Accrued Expenses. This line item largely reflects vendor payables, which are projected to change based on historic and expected vendor terms and payment frequency. Also included in this category are payables to AMERCO relating to the Existing SAC Holding Notes held by the Debtor, which are not expected to fluctuate materially over the projections horizon. AP5 - 5 (ii) Senior Mortgage Notes. This line item relates to first position secured mortgage loans owed by the SAC Holding operating subsidiaries to third parties. Such mortgage loans bear interest between 5.5% and 8.5%. These loans are amortizing (except for 19 SAC, which is interest only), and have been forecast based on contracted principle and interest payments scheduled in the loan documents. It is assumed that any Senior Mortgage Note that matures during the projection horizon will be replaced by a new mortgage loan under substantially similar terms to those precedent. (iii) SAC Holding Senior Notes. This will be non-amortizing debt, so principle balances are not projected to fluctuate. This bond will bear interest at 8.5%. (iv) SAC Holding Junior Notes Held by the Debtors, et al. This line item relates to subordinated debt payable to AMERCO by SAC Holding. These notes resulted from funds provided by AMERCO for the purchase of properties by SAC Holding. The plan provides that there will be a $200 million principle reduction in these notes on consummation of the Plan as a result of the $200 million issuance of the SAC Holding Senior Notes. The Existing SAC Holding Junior Notes accrue interest into the principle balance if stated rates are not paid; accordingly, the balance of the Existing SAC Holding Junior Notes are projected to increase slightly as a result of the accrual of forecasted unpaid interest owed on said notes. (v) Deferred Income. Deferred Income primarily relates to pre-paid storage revenue. This is forecast based on a historical actual relationship to storage revenue. (vi) Deferred Income Taxes. This category represents the accrual of income tax benefits generated by SAC Holding, but not used due to insufficient income before taxes. It is projected to change based on an assumed effective tax rate of 28%. (vii) Minority Interest. This line item represents the investment of RepWest and Oxford in Canadian SAC Holding operations via the entity known as 7 SAC. It is projected that this will decrease by $1.1 million per year, based on actual payments made to RepWest and Oxford by SAC Holding. (viii) Stockholder's Equity. Stockholder's Equity fluctuates based on Net Income's effect on Retained Earnings. AP5 - 6 SAC HOLDING PROJECTED BALANCE SHEET ($ IN MILLIONS)
Projected Pro Forma --------- --------- Balance Sheet 31-Jan-04 Adjustments 31-Jan-04 - ------------------------------------------------------------------------------------------------ Assets Cash and Equiv. $ 8.0 $ 8.0 Receivables - - Inventories, Net 4.2 4.2 Prepaid Expenses 0.7 0.7 Other Assets 57.3 57.3 - ----------------------------------------------------------------------------------------------- Short Term Assets 70.3 70.3 Net PP&E 785.3 785.3 - ----------------------------------------------------------------------------------------------- Total Assets $ 855.6 $ 855.6 =============================================================================================== Liabilities and Shareholder's Equity Accounts Payable and Accrued Exp. $ 50.7 $ 50.7 Sr. Mortgage Notes 459.3 459.3 SACH Senior Notes - 200.0 (a) 200.0 SAC Jr. Notes Held by the Debtors, et al. 400.5 (200.0)(b) 200.5 Deferred Income 5.5 5.5 Deferred Income Taxes (22.9) (22.9) - ----------------------------------------------------------------------------------------------- Total Liabilities 893.1 893.1 Minority Interest 11.0 11.0 Total Stockholders' Equity (48.5) (48.5) - ----------------------------------------------------------------------------------------------- Total Liabilities and Equity $ 855.6 $ 855.6 ===============================================================================================
Notes: (a) Represents the issuance of the SACH Senior Debt as described in the Plan of Reorganization (b) Balance decrease equal to principle amount of SACH Senior Note issued in accordance with the Plan. AP5 - 7 SAC HOLDING PROJECTED BALANCE SHEET ($ IN MILLIONS)
Projected Pro Forma --------- --------------------------------------------------------------------- Balance Sheet 31-Jan-04 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - ----------------------------------------------------------------------------------------------------------------------------------- Assets Cash and Equiv. $ 8.0 $ 8.0 $ 7.6 $ 11.1 $ 14.7 $ 18.4 Receivables - - - - - - Inventories, Net 4.2 4.2 4.3 4.4 4.6 4.8 Prepaid Expenses 0.7 0.7 0.8 0.9 0.9 0.9 Other Assets 57.3 57.3 57.3 57.3 57.3 57.3 - ---------------------------------------------------------------------------------------------------------------------------------- Short Term Assets 70.3 70.3 70.0 73.7 77.5 81.4 Net PP&E 785.3 785.3 782.3 764.4 746.5 728.6 - ---------------------------------------------------------------------------------------------------------------------------------- Total Assets $ 855.6 $ 855.6 $ 852.3 $ 838.1 $ 824.0 $ 810.0 ================================================================================================================================== Liabilities and Shareholders Equity Accounts Payable and Accrued Exp. $ 50.7 $ 50.7 $ 51.3 $ 53.3 $ 55.5 $ 57.7 Sr. Mortgage Notes 459.3 459.3 457.8 448.0 437.4 425.9 SACH Senior Notes - 200.0 200.0 200.0 200.0 200.0 SAC Jr. Notes Held by the Debtors, et al. 400.5 200.5 201.8 205.4 207.5 208.1 Deferred Income 5.5 5.5 5.5 5.8 6.0 6.2 Deferred Income Taxes (22.9) (22.9) (23.9) (26.5) (28.4) (29.7) - ---------------------------------------------------------------------------------------------------------------------------------- Total Liabilities 893.1 893.1 892.5 886.0 877.9 868.2 Minority Interest 11.0 11.0 10.8 9.7 8.6 7.6 Total Stockholders' Equity (48.5) (48.5) (51.0) (57.6) (62.5) (65.7) - ---------------------------------------------------------------------------------------------------------------------------------- Total Liabilities and Equity $ 855.6 $ 855.6 $ 852.3 $ 838.1 $ 824.0 $ 810.0 ==================================================================================================================================
AP5 - 8 SAC HOLDING PROJECTED STATEMENT OF OPERATIONS ($ IN MILLIONS)
SAC Pro Forma SAC ----------------------- --------------------------------------------------- Twelve Ten Two Twelve Twelve Twelve Months Months Months Months Months Months - ------------------------------------------------------------------------------------------------------------------------------ Income Statement 31-Mar-03 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - ------------------------------------------------------------------------------------------------------------------------------ Rental Revenue $ 156.9 $ 141.7 $ 20.2 $ 169.4 $ 176.3 $ 183.3 Net Sales 48.8 43.9 6.3 52.1 54.2 56.4 - ----------------------------------------------------------------------------------------------------------------------------- Total Revenue 205.7 185.6 26.5 221.5 230.5 239.7 Operating Expenses 105.3 96.6 13.8 115.9 119.9 123.9 Cost of Sales 21.4 19.7 2.8 23.5 24.4 25.4 Depreciation Expense 17.9 14.9 3.0 17.9 17.9 17.9 - ----------------------------------------------------------------------------------------------------------------------------- Total Costs and Expenses 144.6 131.3 19.6 157.3 162.2 167.2 Earnings from Operations 61.1 54.3 6.9 64.2 68.2 72.5 Jr. Note Int. Exp. 33.1 2.9 20.7 23.2 26.0 Mortgage Note Int. Exp. 31.9 4.6 35.7 34.9 34.0 SACH Senior Notes - 2.8 17.0 17.0 17.0 - ----------------------------------------------------------------------------------------------------------------------------- Total Int. Exp. 75.1 65.0 10.3 73.4 75.1 77.0 Pretax Earnings (Loss) (13.9) (10.7) (3.4) (9.2) (6.9) (4.5) Income Tax (Expense) Benefit 3.7 3.0 1.0 2.6 1.9 1.3 - ----------------------------------------------------------------------------------------------------------------------------- Net Earnings (Loss) ($ 10.2) ($ 7.7) ($ 2.4) ($ 6.6) ($ 4.9) ($ 3.2) =============================================================================================================================
SAC HOLDING PROJECTED ADJUSTED EBITDA ($ IN MILLIONS)
SAC Pro Forma SAC ------------------------ --------------------------------------------------- Twelve Two Twelve Twelve Twelve Months Ten Months Months Months Months Months Adjusted EBITDA 31-Mar-03 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - --------------------------------------------------------------------------------------------------------------------- Earnings from Operations $ 61.1 $ 54.3 $ 6.9 $ 64.2 $ 68.2 $ 72.5 (Less) NOI From Excluded Subs (4,5,19) (5.3) (5.0) (0.7) (6.9) (7.4) (7.8) Add Depreciation 17.9 14.9 3.0 17.9 17.9 17.9 Add SACH Expenses 5.7 6.6 0.9 9.8 10.5 11.1 - -------------------------------------------------------------------------------------------------------------------- Adjusted EBITDA $ 79.5 $ 70.8 $ 10.1 $ 85.0 $ 89.2 $ 93.7 ====================================================================================================================
AP5 - 9 SAC HOLDING PROJECTED STATEMENT OF CASH FLOWS ($ IN MILLIONS)
SAC Holding Pro Forma SAC Holding --------- --------------------------------------------------- Ten Two Twelve Twelve Twelve Months Months Months Months Months - -------------------------------------------------------------------------------------------------------------------------------- Statement of Cash Flow 31-Jan-04 31-Mar-04 31-Mar-05 31-Mar-06 31-Mar-07 - -------------------------------------------------------------------------------------------------------------------------------- Net Income ($ 7.7) ($ 2.4) ($ 6.6) ($ 4.9) ($ 3.2) Depreciation 14.9 3.0 17.9 17.9 17.9 Decrease (Increase) in Inventory (0.2) (0.0) (0.2) (0.2) (0.2) Decrease (Increase) in Prepaid and Other Current Assets 0.1 (0.1) (0.0) (0.0) (0.0) (Decrease) Increase in AP and Accrued Exp. 2.7 0.5 2.1 2.1 2.2 (Decrease) Increase in Deferred Income (0.1) - 0.3 0.2 0.2 (Decrease) Increase in Deferred Taxes (3.0) (1.0) (2.6) (1.9) (1.3) - ------------------------------------------------------------------------------------------------------------------------------- Total Cash Flows from Operating Activities 6.7 0.0 10.8 13.2 15.6 Capital Expenditures, Net of Dispositions (2.9) - - - - - ------------------------------------------------------------------------------------------------------------------------------- Total Cash Flow from Investing Activities (2.9) - - - - Accumulated Other Comp. Loss - SACH 1.5 - - - - Minority Interest Increase (Decrease) (0.8) (0.2) (1.1) (1.1) (1.1) Proceeds from Notes - - - - - Net Principle (Payments) Increases (1.1) (0.2) (6.2) (8.5) (10.9) - ------------------------------------------------------------------------------------------------------------------------------- Total Cash Flow from Financing Activities (0.5) (0.4) (7.3) (9.6) (12.0) Change in Cash $ 3.4 ($ 0.4) $ 3.5 $ 3.6 $ 3.7 Cash at Beginning of Period 4.7 8.0 7.6 11.1 14.7 - ------------------------------------------------------------------------------------------------------------------------------- Cash at End of Period $ 8.0 $ 7.6 $ 11.1 $ 14.7 $ 18.4
AP5 - 10 APPENDIX 6 LIQUIDATION ANALYSIS [SEE ATTACHED] (This page intentionally left blank.) APPENDIX 6 DEBTORS - LIQUIDATION ANALYSIS As part of the development of the Plan, the following liquidation analysis was performed to address the "Best Interests of Creditors Test" pursuant to Section 1129(a)(7) of the Bankruptcy Code. The basis of this analysis assumes an orderly liquidation of assets under the supervision of a Chapter 7 Trustee over a period of six to twelve months. This analysis encompasses both the Debtors and their Subsidiaries, as it is possible that a Chapter 7 conversion would result in the insolvency of certain related entities that are highly interdependent with the Debtor entities. An analysis of potential liquidation recoveries was conducted at a consolidated AMERCO level, reflecting consolidated U-Haul, AREC, and AMERCO Subsidiaries. It is assumed that RepWest, Oxford and SAC Holding would not be forced into liquidation but would likely undergo transactions as outlined below. This analysis represents a best estimate of potential claims and recovery on assets. However, this analysis has not been audited, and values are subject to economic and financial uncertainties that cannot be foreseen. The Debtors and their Subsidiaries continue to operate, and their asset and liability balances are dynamic, therefore balances will assuredly change between the preparation of this analysis and any possible future liquidation. As a result, there can be no assurances that the results forecast herein would be attained if the Debtors liquidate as contemplated in this analysis. In addition, strategies and decisions reflected in this analysis may change at the time of an actual liquidation, which could materially effect recovery. This analysis is predicated on the specific chain of events outlined herein, and, should the course of an actual liquidation diverge at any step, recovery would be significantly altered. Values used in this analysis are based on the audited book values from the Debtors' June 30, 2003 balance sheet (except as noted). These values are fairly representative of the Debtors' assets and liabilities at the time of a theoretical liquidation. However, the actual value of Allowed Claims and assets available for liquidation may vary materially. This analysis does not incorporate any claim avoidance or preference recovery actions on the part of the Debtors. Such recoveries may be material, but cannot reliably be estimated or anticipated at this point in time. The divestiture of the individual business units that comprise consolidated AMERCO on a going concern basis is not considered in this analysis. Consolidated AMERCO has significant net operating losses, and although transactions contemplated in this analysis may result in taxable events, it assumes that on a consolidated basis a liquidation will result in a net zero cash impact from a taxing perspective. Certain liabilities may arise as a result of the events put forth in this analysis that are not possible to estimate at this point in time. Such events have the potential to be significant and to materially reduce recovery to existing claimholders. Potential sources of these liabilities include tax obligations, litigation, and the allowance of miscellaneous, additional unscheduled claims. AP6 - 1 CONSOLIDATED AMERCO LIQUIDATION ANALYSIS UNAUDITED
Low High ------------------------ ------------------------ 6/30/2003 Recovery Estimated Recovery Estimated Book Value Percentage Value Percentage Value ---------- ------------------------ ------------------------ ASSET SALE PROCEEDS Cash [1] $ 74,258 98% $ 72,758 100% $ 74,258 Receivables Net [2] 62,361 62% 38,503 80% 50,008 PMSR Receivable [3] 125,000 4% 5,000 6% 7,500 Inventory [4] 49,948 13% 6,583 23% 11,604 Prepaid Expenses [5] 24,607 1% 151 1% 298 Investments in Unconsolidated Subsidiaries [6] 319,104 6% 20,546 14% 46,066 SACH Receivables [7] 386,384 66% 256,790 78% 300,868 Other Assets & Long Term Prepaid Expenses [8] 41,653 5% 1,927 8% 3,204 Real Estate [9] 625,180 127% 795,666 141% 879,421 Rental Trucks, Equipment and Other [10] 569,961 38% 214,320 47% 268,912 Furniture & Equipment [11] 68,510 12% 8,517 16% 11,285 --------- ---------- ---------- TOTAL ASSET SALE PROCEEDS 2,346,965 61% 1,420,762 70% 1,653,423 CHAPTER 7 ADMINISTRATIVE CLAIMS Trustee Fees [12] 38,048 45,848 Real Estate Transaction Fees [13] 23,479 25,951 Other Professional Fees [14] 18,000 12,000 Wind-Down Expenses [15] 75,900 67,300 ---------- ---------- TOTAL CHAPTER 7 ADMINISTRATIVE CLAIMS 155,427 151,099 ---------- ---------- Net Proceeds Available to Creditors 1,265,335 1,502,324 ---------- ---------- RECOVERY TO CREDITORS ESTIMATED ALLOWED CLAIMS --------- SECURED CLAIMS [16] DIP Facility 51,250 51,250 51,250 Revolver 153,750 153,750 153,750 RepWest Mortgage 18,399 18,399 18,399 ---------- ---------- ---------- TOTAL SECURED CLAIMS 223,399 100% 223,399 100% 223,399 Remaining Proceeds for Distribution 1,041,936 1,278,925
AP6 - 2 CONSOLIDATED AMERCO LIQUIDATION ANALYSIS UNAUDITED CHAPTER 11 ADMINISTRATIVE CLAIMS [17] Post Petition Liabilities 1,000 1,000 1,000 Insurance Claims 212,254 212,254 212,254 Insurance Administration 16,980 16,980 16,980 ---------- ---------- ---------- TOTAL ADMINISTRATIVE CLAIMS 230,234 100% 230,234 100% 230,234 Remaining Proceeds for 787,702 1,024,691 Distribution PRIORITY CLAIMS [18] Employee Accrued Payroll & Benefits 14,465 14,465 14,465 Tax Claims 19,719 19,719 19,719 Customer Deposits 1,630 1,630 1,630 - ---------- ---------- ---------- TOTAL PRIORITY CLAIMS 35,813 100% 35,813 100% 35,813 Remaining Proceeds for 755,889 1,012,878 Distribution SENIOR UNSECURED CLAIMS [19] AREC Notes 100,000 100,000 100,000 ---------- ---------- ---------- TOTAL ADMINISTRATIVE CLAIMS 100,000 100% 100,000 100% 100,000 Remaining Proceeds for 675,889 912,878 Distribution GENERAL UNSECURED CLAIMS [20] Accounts Payable & Accrued Expenses 358,145 212,054 286,407 Unconsolidated Affiliates 82,845 49,052 66,251 Long Term Debt 653,170 386,735 522,337 Lease Rejection Claims 47,373 28,049 37,884 ---------- ---------- ---------- TOTAL GENERAL UNSECURED CLAIMS 1,141,533 59% 675,889 80% 912,878 Remaining Proceeds for Distribution - - REMAINING INTERESTS [21] Preferred Equity 169,867 - - Common Equity 402,309 - - ---------- ---------- ---------- $ 572,176 $ - $ -

AP6 - 3 NOTES TO LIQUIDATION ANALYSIS 1. Cash and Cash Equivalents. Cash and Cash Equivalents are considered recoverable at full value, with the exception of a portion of cash at the dealer level, which may not be fully recoverable once a shut-down is initiated. An allowance of $1,500,000 for Cash at the field level is taken in a low recovery projection. It is important to note that any scenario in which the Debtors convert to a Chapter 7 may likely involve the considerable depletion of Cash by the time of an actual liquidation. 2. Receivables Net. Net Receivables include amounts owed to the Debtors by third parties, net of reserves taken to adjust for amounts believed to be uncollectable. It is believed that adequate reserves for receivables are maintained on a going concern basis, however, an additional discount must be taken (estimated here at 25%-40%), along with certain specific adjustments, to account for a liquidation scenario. Specific adjustments include the write-off of independent dealer and employee receivables and certain construction related receivables which are believed to be unrecoverable due to the potential for off-setting claims. 3. PMSR Receivable. AMERCO has guaranteed certain obligations of PMSR for which it has booked both a potential liability and a receivable to reflect recourse to PMSR. Currently only $55,000,000 of the total $125,000,000 receivable balance reflects an actual recourse obligation. It is assumed that the remaining $70,000,000 would not come due during the pendency of the liquidation and therefore is excluded from consideration. Recovery on this receivable would likely be realized through a monetization of the obligation. Given the uncertainty of recovery from PMSR, it is expected that a monetization of this receivable would yield a recovery of $5,000,000 to $7,500,000. 4. Inventory. Inventory is held primarily by U-Haul and consists of goods held for resale, recorded at cost. Recovery on inventory is decreased by the geographic distribution of such inventory across the dealer network. It is also anticipated that shrinkage may result in a material reduction to recovery given the distribution and generally portable nature of the Inventory. Certain categories of inventory, including fuel, hitches and propane accessories are expected to have a higher recovery as a percentage of cost than other categories such as repair parts and cores. Existing reserves are believed to be adequate to account for obsolete and impaired inventory. Recovery as a percentage of cost is estimated at between 10%-75% depending on category of inventory and recovery scenario (high vs. low). 5. Prepaid Expenses. Prepaid expenses consist primarily of accrued expenses associated with the DIP Facility and with the BMO and Citibank synthetic lease facilities. No Cash recovery is forecast on these balances, however, a direct offset is taken against the anticipated synthetic lease obligations in determining their allowed claim. Prepaid Expenses also include vehicle and business license fees, which are generally nonrefundable. Vehicle license fees are paid based on the number of miles traveled in each licensing jurisdiction and few jurisdictions provide a refund of prepaid fees. As a result, only 3% to 5% recovery is projected for these items. Also included are prepayments on equipment leases, which are expected to be offset in full against corresponding lease rejection claims. AP6 - 4 6. Investment in Unconsolidated Subsidiaries. Investments in RepWest and Oxford are expected to have minimal recovery value to the Debtors. In regard to RepWest, due to a significant dependence on U-Haul, an assumption is made that RepWest will fall under state receivership should U-Haul liquidate. AMERCO's investment in RepWest is off-set by a significant payable owing to RepWest, and such liquidation proceeds may be sufficient to repay in full. As a result, AMERCO is unlikely to recover any net value from RepWest. With respect to Oxford, value generated from a sale of the business will likely be offset by a pending litigation judgment of $39,000,000 against Oxford which may reduce the value available to equity. Because the implications of a liquidation at Amerco on the operational performance of Oxford are unclear, it is difficult to value Oxford based on forecast operating results. Instead, a suitable measure of value is derived by taking the multiple of market capitalization (share price multiplied by shares outstanding) to book value of equity for comparable public insurance companies, and applying this multiple to Oxford's book value of equity. A survey of public life insurance companies defines a range of trading multiples from 0.7x to 2.2x. A valuation multiple range of 0.7x to l.0x was selected to value Oxford in a liquidation, in an effort to further account for the uncertainty of Oxford's ongoing operating results as a result of the liquidation. In addition, a 20% deduction is taken against Oxford's book value of equity as reported in its GAAP financial statements to account for the potential impairment of certain AMERCO related assets. When the identified multiple range is applied to Oxford's adjusted book value of equity, the resulting value range is approximately $59,500,000 to $85,000,000. However, this value is off-set by the outstanding judgment against OLIC for $39,000,000 resulting in a net value to AMERCO for its investment in Oxford of between $20,500,000 and $46,000,000. It should be noted that to the extent an appeal of the judgment liability is favorably resolved, there may be a material increase in the recovery to AMERCO on its investment in Oxford. 7. SACH Receivables. This account represents the Existing SAC Holding Notes, as such term is defined in the Plan. Additional receivables that arise from management and construction activity are captured under Accounts Receivable. The recovery to AMERCO could be realized by monetizing the projected cash flow stream to the Existing SAC Holding Notes. To value the proceeds of a potential monetization, projected cash flow available to the Existing SAC Holding Notes is adjusted to reflect the impact of the liquidation of the Debtors. Adjustments include the reduction of truck rental commissions and a reduction in retail sales, off-set by a reduction in corresponding personnel costs, cost of sales, and management fees. The revised cash flow available to the Existing SAC Holding Notes, along with the redemption at maturity are then discounted back to arrive at a net present value. The resulting analysis indicates that the proceeds from a liquidation adjusted monetization would only provide for a partial recovery on the notes. 8. Other Assets & Long Term Prepaid Expenses. This account consists primarily of deferred charges, intangible assets, cash surrender value of life insurance policies, deposits and miscellaneous other investments. AMERCO has already fully borrowed against the value of the life insurance polices, so these assets are used to off-set the corresponding liability. Deferred Charges are accounting entries that have zero cash recovery value to the debtors in a liquidation. Miscellaneous deposits are estimated to be recoverable in a range between 15% and 30%. AP6 - 5 9. Real Estate. The liquidation of real estate in a Chapter 7 case would likely result in a lower recovery than could be obtained if adequate time was available to fully market the properties. Recent going concern valuations, obtained by the Debtors in support of their debtor-in-possession borrowing activities, served as the basis for real estate recovery estimates. Adjustments were then taken to reflect the limitations of a liquidation sale and to account for transaction costs. The Debtors' real estate portfolio includes a wide range of properties, some of which are special purpose facilities. The individual factors affecting each category of property were taken into consideration in preparing the projected liquidation recovery estimates. Additionally, Leasehold Improvements are forecast to have zero recovery value to the Debtors as leased properties would be abandoned to their lessors. 10. Rental Trucks, Equipment and Other. Owned primarily by U-Haul, this can be categorized as trucks, trailers, and other equipment held for rent and support of rental equipment. Trucks: Because the Debtors' regularly resell vehicles from their fleet, a preliminary estimation of fair market value is available from past sales history. Given the unprecedented number of trucks and trailers to be liquidated in a relatively short period of time, it is anticipated that a discount must be applied to past sales values to appropriately determine a liquidation recovery. Although little precedent is available, this discount is believed to be between 10% and 50%, depending on the particular class of asset and recovery scenario (high or low). Pickup Trucks and Vans are expected to have the highest recovery, as they are on average the newest vehicles in the fleet, and the secondary market is believed to be larger for these vehicles than for box trucks. The resulting recovery on trucks is expected to be approximately 40% to 50% of book value. Trailers: Trailers are "over-built" to withstand the rigors of rental usage, and as such are significantly more expensive to build than comparable units available in the market. However, given that potential acquirers may not be submitting the trailers to the same use, it is unlikely that the additional investment will be recovered in a liquidation sale. As a result, recovery is estimated at 35% to 45% of book value (which reflects depreciated replacement cost). Other Equipment: Comprises various tow/furniture/refrigerator dollies, and miscellaneous moving materials. This equipment is regularly lost or consumed in operations and, as a result, most items reflected on the balance sheet are relatively new (1-2 years old). This results in lower recovery to book value due to the equipment having taken an initial decline in market value without a corresponding accrual in depreciation. Certain categories of equipment are manufactured in-house to an "over-built" standard at a cost that exceeds that of comparable items available in the market, resulting in a low recovery as a percentage of replacement cost. As a result, recovery is estimated at 10% to 15% of book value. 11. Furniture and Equipment. Recovery on Furniture and Equipment is based on general rates realized in the liquidation marketplace. Based on the relative age and condition of the items, which are generally characterized as ageing, recovery is estimated at 3% to 5% of book value. The exception in this category is Service Vehicles, which are believed to have a recovery value comparable to the rental fleet vehicles (recovery of 40% to 50% of book value). AP6 - 6 12. Trustee Fees. Trustee Fees are estimated in accordance with Section 326 of the Bankruptcy Code. 13. Real Estate Transaction Fees. Real Estate transaction fees are estimated at 3% of gross real estate proceeds and are in addition to any Trustee fees. 14. Other Professional Fees. It is assumed that Professional Fees in liquidation will average $1,000,000 to $2,000,000 per month over the duration of the proceedings based on the run-rate to date and anticipated liquidation activities. 15. Wind-Down Expenses. Expenses during the Wind-Down period are projected to reflect the progress of asset disposals and include facility, personnel, and insurance expenses. It is assumed that revenue from truck rentals will cease immediately upon liquidation, as all equipment rental business is assumed to be halted. Passive revenue streams from storage rental and management commissions from SAC Holding will continue until all of the Debtors' real estate is divested and replacement management is arranged. 16. Secured Claims. Secured claims comprise the Debtors' DIP Facility, and pre-petition revolver balances owing under the JPMorgan Chase Credit Facility and an $18,000,000 mortgage obligation to Oxford. 17. Administrative Claims. Certain accruals that arise subsequent to the Chapter 11 filing are entitled to administrative priority under Section 503(b) of the Bankruptcy Code. These claims are minimized by the expectation that U-Haul does not file Chapter 11 but instead files Chapter 7 directly. As a result, only accrued expenses at the debtor entities (AREC and AMERCO) are eligible for administrative treatment. It is estimated that approximately $ 1,000,000 of the Accounts Payable and Accrued Expense balances will be eligible for administrative treatment. Claims arising from post-conversion operations are captured in the forecast wind-down expense. Also included in administrative claims is $212,000,000 in insurance claims that are granted administrative priority under first day bankruptcy orders. An allowance for the administration of these claims is estimated at 8% of the claim balance and is included as an administrative expense. 18. Priority Claims. Under Section 503(a) of the Bankruptcy Code, certain pre-petition employee, tax, and customer deposit claims are entitled to priority. It is assumed that customer deposits do no exceed the $1,800 limit per individual, and that employee claims do not exceed the $4,650 limit per individual. This is based on average transaction value and total accrued payroll balances. Accrued vacation is assumed to represent less than one year's accrual on average, of which 25% is estimated to have accrued in the 90-days preceding the bankruptcy. AP6 - 7 19. Senior Unsecured Claims. It is assumed that the AREC Notes would request and be granted a senior unsecured status based on their structurally senior position in the corporate structure. The AREC Notes are in effect structurally secured due to their proximity to the unencumbered real estate assets of AREC. 20. General Unsecured Claims. This includes an estimate for all General Unsecured Claims, including the Debtors' outstanding notes and projected lease rejection claims. Claims from Unconsolidated Affiliates reflect amounts owed to RepWest and Oxford. Long Term Debt includes the Debtors' unsecured notes. Lease Rejection claims pertain primarily to the TRAC equipment leases. These claims reflect the total present value of remaining lease obligations, off-set by the estimated value of the early return of collateral as it is assumed the leases would be rejected and the equipment returned to the lessors. Lease present values are calculated using the Internal Rate of Return (IRR) built into the lease. Synthetic lease obligations are expected to be settled in full by the abandonment of the leased property to the lessor. 21. Equity Interests. Equity interests are included for illustrative purposes. Common and preferred equity values reflect additional paid in capital as of June 30, 2003. It is anticipated that there will be no recovery to equity interests in a liquidation. AP6 - 8 ~~EX-31.1 5 p68793exv31w1.htm EX-31.1 exv31w1~~

~~1. I have reviewed this quarterly report on Form 10-Q of AMERCO and U-Haul International, Inc.;~~

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

      (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

      (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

      (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ EDWARD J. SHOEN
_______________________________________
Edward J. Shoen
President and Chairman of the
Board of AMERCO and U-Haul
International, Inc.

~~1. I have reviewed this quarterly report on Form 10-Q of AMERCO and U-Haul International, Inc.;~~

/s/ GARY B. HORTON
_______________________________________
Gary B. Horton
Treasurer of AMERCO and
Assistant Treasurer of
U-Haul International, Inc.


(Mark One)
þ		QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

		For the quarterly period ended December 31, 2003

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

		For the transition period from to


Commission		Registrant, State of Incorporation	I.R.S. Employer
File Number		Address and Telephone Number	Identification No.

	1-11255	AMERCO (A Nevada Corporation) 1325 Airmotive Way, Ste. 100 Reno, Nevada 89502-3239 Telephone (775) 688-6300		88-0106815
	2-38498	U-Haul International, Inc. (A Nevada Corporation) 2727 N. Central Avenue Phoenix, Arizona 85004 Telephone (602) 263-6645		86-0663060


Item 1.	Financial Statements
	a)	Condensed Consolidated Balance Sheets as of December 31, 2003 (unaudited) and March 31, 2003	2
	b)	Condensed Consolidated Statements of Operations for the Quarters ended December 31, 2003 and 2002 (unaudited)	3
	c)	Condensed Consolidated Statements of Operations for the Nine months ended December 31, 2003 and 2002 (unaudited)	4
	d)	Condensed Consolidated Statements of Comprehensive Income for the Quarters ended December 31, 2003 and 2002 (unaudited)	5
	e)	Condensed Consolidated Statements of Comprehensive Income for the Nine months ended December 31, 2003 and 2002 (unaudited)	6
	f)	Condensed Consolidated Statements of Cash Flows for the Nine months ended December 31, 2003 and 2002 (unaudited)	7
	g)	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		45
Item 4.	Controls and Procedures		45
PART II OTHER INFORMATION
Item 1.	Legal Proceedings		45
Item 2	Not applicable
Item 3.	Defaults Upon Senior Securities		46
Item 4.	Submission of Matters to a Vote of Security Holders		47
Item 5	Other Information		47
Item 6.	Exhibits and Reports on Form 8-K		48



			Quarter Ended

			December 31,			December 31,
			2003			2002

						(Restated)

			(In thousands)

			(Unaudited)
Comprehensive income:
	Net earnings/(loss)		$	(21,667	)	$	(45,783	)
		Changes in other comprehensive income:
		Foreign currency translation		9,700			(970	)
		Unrealized gain/(loss) on investments		(3,373	)		18,696

		Total comprehensive income/(loss)	$	(15,340	)	$	(28,057	)



			Nine Months Ended

			December 31,		December 31,
			2003		2002

					(Restated)

			(In thousands)

			(Unaudited)
Comprehensive income:
	Net earnings		$	50,094	$	124
		Changes in other comprehensive income:
		Foreign currency translation		11,074		(3,647	)
		Unrealized gain on investments		22,488		13,675

		Total comprehensive income/(loss)	$	83,656	$	10,152


			December 31,			March 31,
			2003			2003

			(Unaudited)

			(In thousands)
ASSETS
Assets:
Cash and cash equivalents			$	136,866		$	66,834
Trade receivables, net				239,378			255,796
Notes and mortgage receivables, net				17,129			10,809
Inventories, net				55,230			53,270
Prepaid expenses				17,487			21,846
Investments, fixed maturities				763,673			860,600
Investments, other				474,978			389,252
Deferred policy acquisition costs, net				86,603			105,100
Deferred income taxes				—			32,242
Other assets				98,430			63,600

				1,889,774			1,859,349
Property, plant, and equipment, at cost:
	Land			159,508			157,987
	Buildings and improvements			751,877			747,853
	Furniture and equipment			293,173			291,383
	Rental trailers and other rental equipment			156,237			149,707
	Rental trucks			1,208,303			1,140,294
	SAC Holdings — Property, plant and equipment(1)			733,215			757,292

				3,302,313			3,244,516
Less: Accumulated depreciation				1,385,632			1,298,199

	Total property, plant and equipment			1,916,681			1,946,317

	Total Assets		$	3,806,455		$	3,805,666

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
	Payables and accrued expenses		$	359,186		$	387,017
	AMERCO’s notes and loans payable			85,380			954,856
	SAC Holdings’ notes and loans payable			586,558			589,019
	Policy benefits and losses, claims and loss expenses payable			836,221			836,632
	Liabilities from investment contracts			603,992			639,998
	Other policyholders’ funds and liabilities			45,523			30,309
	Deferred income			11,042			40,387
	Deferred income taxes			1,345			—
	Liabilities subject to compromise			875,372			—

Total Liabilities				3,404,619			3,478,218
Stockholders’ equity:
Series preferred stock:
		Series A preferred stock		—			—
		Series B preferred stock		—			—
Series A common stock				1,441			1,441
Common stock				9,122			9,122
Additional paid in-capital				235,784			235,784
Additional paid-in-capital — SAC				3,199			3,199
Accumulated other comprehensive (loss)				(25,801	)		(54,278	)
Accumulated other comprehensive income/(loss) — SAC Holdings				3,598			(1,487	)
Retained earnings, AMERCO				658,054			611,872
Retained earnings, SAC				(49,461	)		(43,650	)
Cost of common shares in treasury, net				(421,378	)		(421,378	)
Unearned ESOP shares				(12,722	)		(13,177	)

Total stockholders’ equity				401,836			327,448

Total Liabilities and Stockholders’ Equity			$	3,806,455		$	3,805,666


					Gross		Gross			Estimated
			Amortized		Unrealized		Unrealized			Market
September 30, 2003			Cost		Gains		(Losses)			Value


			(In thousands)
Available-for-Sale:
Corporate securities			$	535,280	$	35,823	$	(14,456	)	$	556,647
U.S. government agency mortgage-backed securities				10,148		316		(26	)		10,438
Mortgage-backed securities				79,912		2,548		(2,960	)		79,500
U.S. Treasury and government agency securities				29,626		2,674		(14	)		32,286
Municipal securities				3,224		135		—			3,359

		Subtotal		658,190		41,496		(17,456	)		682,230
Common Stock				5,892		1,245		(2,263	)		4,874
Redeemable preferred stocks				67,371		1,299		(151	)		68,519

				731,453		44,040		(19,870	)		755,623

Held-to-Maturity:
U.S. government agency mortgage-backed securities				531		164		—			695
Mortgage-backed securities				7,519		151		(2	)		7,668

				8,050		315		(2	)		8,363

	Total		$	739,503	$	44,355	$	(19,872	)	$	763,986


	Lease
Twelve Months Ending December 31	Commitments

	(In thousands)
2004	$	377,673
2005		90,160
2006		79,047
2007		41,537
2008		12,427
Thereafter		4,060

	$	604,904


6.	Consolidating balance sheets by industry segment as of December 31, 2003 are as follows:


(a)		Balances as of September 30, 2003

(b)		Included in this caption is land of $260,496, buildings and improvements of $727,586 and furniture and equipment of $3,404

(c)		Eliminate investment in subsidiaries

(d)		Eliminate intercompany receivables and payables

(e)		Eliminate intercompany lease income

(f)		Eliminate intercompany premiums

(g)		Eliminate intercompany interest on debt

(h)		Eliminate gain on sale of surplus property from AMERCO to SAC


6.	Consolidating statements of operations by industry segment for the quarter ended December 31, 2003 are as follows:


(a)		Balances for the nine months ending September 30, 2003

(b)		Included in this caption is land of $260,496, buildings and improvements of $727,586 and furniture and equipment of $3,404

(c)		Eliminate investment in subsidiaries

(d)		Eliminate intercompany receivables and payables

(e)		Eliminate intercompany lease income

(f)		Eliminate intercompany premiums

(g)		Eliminate intercompany interest on debt

(h)		Eliminate gain on sale of surplus property from AMERCO to SAC


(a)		Balances are for the nine months ending September 30, 2002

(b)		Included in this caption is land of $260,496, buildings and improvements of $727,586 and furniture and equipment of $3,404

(c)		Eliminate investment in subsidiaries

(d)		Eliminate intercompany receivables and payables

(e)		Eliminate intercompany lease income

(f)		Eliminate intercompany premiums

(g)		Eliminate intercompany interest on debt

(h)		Eliminate gain on sale of surplus property from AMERCO to SAC


6.	Consolidating cash flow statements by industry segment for the nine months ended December 31, 2003 are as follows:


	United								United
	States			Canada		Consolidated			States			Canada		Consolidated


	Quarter Ended								Nine Months Ended


	(In thousands)
December 31, 2003
Total revenues	$	486,963		$	15,620	$	502,583		$	1,655,924		$	54,232	$	1,710,156
Depreciation/amortization		36,780			1,614		38,394			107,855			5,501		113,356
Interest expense		30,125			1,043		31,168			89,426			3,413		92,839
Pretax earnings (loss)		(32,449	)		251		(32,198	)		71,548			9,133		80,681
Income tax benefit (expense)		10,531			0		10,531			(30,587	)		0		(30,587	)
Identifiable assets		3,666,507			139,948		3,806,455			3,666,507			139,948		3,806,455
December 31, 2002
Total revenues		455,016			12,207		467,223			1,639,034			44,357		1,683,391
Depreciation/amortization		31,988			1,326		33,314			98,406			3,996		102,402
Interest expense		30,480			939		31,419			83,054			3,252		86,306
Pretax earnings (loss)		(65,121	)		429		(64,692	)		(544	)		7,431		6,887
Income tax benefit (expense)		18,909			0		18,909			(6,763	)		0		(6,763	)
Identifiable assets		3,642,835			130,620		3,773,455			3,642,835			130,620		3,773,455


Item 1.	*Financial Statements*


	*Organization*


	*Principles of Consolidation*


	*Going Concern Basis*


					Inter-company
	AMERCO		AREC		Eliminations			Total

Debt subject to compromise	$	809,623		101,499		(39,500	)	$	871,622
Accounts payable and accrued expenses		185		3,565		—			3,750

Total liabilities subject to compromise	$	809,808		105,064		(39,500	)	$	875,372


Item 2.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations*


	*Quarter Ended December 31, 2003 Versus Quarter Ended December 31, 2002*


	*Nine months ended December 31, 2003 Versus Nine months Ended December 31, 2002*


		Net Earned Premium		Net Earned Premium		Outstanding		Outstanding
		Nine Months Ended		Nine Months Ended		Reserves at		Reserves at
		September 30,		September 30,		September 30,		September 30,
Insurance Line		2003		2002		2003		2002


				(In thousands)
AMERCO Related Business:
U-Haul business		$	266	$	9,469	$	70,224	$	85,197
Safestor, Safetow, Safemove			11,995		11,531		2,596		2,698
Storage			4,470		4,953		5,712		6,871
NAFCIC			3,018		3,293		3,249		3,628

	Total		19,749		29,246		81,781		98,394

Non-AMERCO Related Business:
Agency			56,366		68,537		277,924		227,776
Assumed business			2,132		29,093		63,019		73,278

	Total		58,498		97,630		340,943		301,054

Total RepWest		$	78,247	$	126,876	$	422,724	$	399,448



	Payments due by Period (as of December 31, 2003)

				Prior to		01-01-05		01-01-07		01-01-09 and
Financial Obligations	Total			12-31-04		12-31-06		12-31-08		thereafter


	(In thousands)
AMERCO’s notes and loans	$	957,002		$	957,002	$	—	$	—	$	—
AMERCO’s operating leases		604,904			377,673		169,207		53,964		4,060
SAC Holdings’ financed lease obligations		122,238			122,238		—		—		—
SAC Holdings’ notes and loans		867,842			32,851		14,803		18,100		802,088
Elimination of SAC Holdings’ Obligations to AMERCO		(403,521	)		—		—		—		(403,521	)

Total Contractual Obligations	$	2,148,465		$	1,489,764	$	184,010	$	72,064	$	402,627


	(In millions)

Bank of Montreal synthetic lease	$	149.0
Citibank synthetic lease		101.7
3yr Credit Agreement		153.8
Amerco Real Estate Notes		100.0
’03 Notes		175.0
’05 Notes		200.0
Medium Term Notes		109.5
BBAT		100.0
Bank of America Obligation (BBAT)		11.3
Citicorp Obligation (BBAT)		15.3
Bank of America Swap		2.1
JP Morgan Swap		3.5

	$	1,121.2


	(In millions)

Revolver Due 2009 (total availability)	$	200.0
Term Loan Due 2009.		350.0
Term Note Due 2009.		200.0
Term Note Due 2011.		144.5

	$	894.5


	*AMERCO has filed for protection under Chapter 11 of the Bankruptcy Code*


	*The terms of AMERCO’s credit facility and the indentures relating to notes to be issued to AMERCO’s existing creditors may restrict our current and future operations*


	*Control of AMERCO remains in the hands of a small contingent*


	*Our operations subject us to numerous environmental regulations and the possibility that environmental liability in the future could adversely affect our operations*


	*We obtain our rental trucks from a limited number of manufacturers*


	*Our property and casualty insurance business has suffered extensive losses*


	*Our insurance businesses suffered downgrades in their ratings from national insurance company rating agencies*


	*Notes receivable from SAC Holdings are a significant portion of AMERCO’S total assets*


	*AMERCO is a holding company and is dependent on its subsidiaries for cash flow*


	*We face risk related to an SEC investigation and securities litigation*


	*Our common stock may be delisted from the NASDAQ Stock Market*


	*RepWest has consented to an Order of Supervision issued by the Arizona Department of Insurance*