EXHIBIT 4.14
GUARANTEE
GUARANTEE, dated as of April 5, 2000 (the "Guarantee") made by Steelcase
Inc., a Michigan corporation (the "Guarantor"), in favor of Royal Bank of Canada
(the "Bank").
W I T N E S S E T H:
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WHEREAS, the Bank is entering into a Facility Agreement dated as of April
5, 2000 (as amended and modified from time to time, the "Agreement") with
Steelcase Financial Services Ltd., a corporation organized under the laws of
Ontario, Canada, as borrower (the "Borrower"), pursuant to which the Bank agreed
to lend Cdn$45,292,933.28 to the Borrower, subject to the terms and conditions
thereof (the "Loan");
WHEREAS, it is a condition to the Bank's obligation to make the Loan under
the Agreement that the Guarantor execute this Guarantee in favor of the Bank;
and
WHEREAS, all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the Bank to
enter into the Agreement and as a condition of the advance of the Loan, the
Guarantor hereby agrees as follows:
SECTION 1. Definitions. As used in this Guarantee, the following terms
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shall have the following meanings (such meanings to be equally applicable to
both the singular and plural form of the term defined). Capitalized terms used
herein but not defined herein shall have the meanings ascribed thereto in the
Agreement.
"Additions to Capital" means the aggregate net proceeds, including cash and the
fair market value of property other than cash, received by the Guarantor from
the issue or sale of capital stock of the Guarantor plus the aggregate of 25% of
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the after tax gains realized from unusual, extraordinary, and major nonrecurring
items;
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is a
member of the Guarantor's controlled group, or under common control with the
Guarantor, within the meaning of Section 414 of the Code and the regulations
promulgated and rulings issued thereunder.
"ERISA Event" means (i) the occurrence of a reportable event, within the meaning
of Section 4043 of ERISA, unless the 30-day notice requirement with respect
thereto has been
waived by the PBGC; (ii) the provision by the administrator of any Pension Plan
of a notice of intent to terminate such Pension Plan pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (iii) the cessation of operations at a
facility by the Guarantor or an ERISA Affiliate in the circumstances described
in Section 4062(e) of ERISA; (iv) the withdrawal by the Guarantor or an ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (v) the failure
by the Guarantor or any ERISA Affiliate to make a payment to a Pension Plan
required under Section 302(f)(1) of ERISA, which Section imposes a lien for
failure to make required payments; (vi) the adoption of an amendment to a
Pension Plan requiring the provision of security to such Pension Plan, pursuant
to Section 307 of ERISA; or (vii) the institution by the PBGC of proceedings to
terminate a Pension Plan, pursuant to Section 4042 of ERISA, or the occurrence
of any event or condition which, in the reasonable judgment of the Guarantor,
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, a Pension Plan.
"Fiscal Second Quarter End" means, for each Fiscal Year, the last Friday of each
August;
"Fiscal Year" means the fiscal year of Guarantor and its subsidiaries'
"Fiscal Year End" means, for each Fiscal Year, the last Friday of February;
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Guarantor or any ERISA Affiliate of the
Guarantor is making, or is obligated to make, contributions or has Withdrawal
Liability;
"Multiple Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, which (i) is maintained for employees of the Guarantor or
an ERISA Affiliate and at least one Person other than the Guarantor and its
ERISA Affiliates or (ii) was so maintained and in respect of which the Guarantor
or an ERISA Affiliate could have liability under Section 4063, 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated;
"PBGC" means the U.S. Pension Benefit Guaranty Corporation;
"Pension Plan" means a Single Employer Plan or a Multiple Employer Plan or both.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, which (i) is maintained for employees of the Guarantor or
any ERISA Affiliate and no Person other than the Guarantor and its ERISA
Affiliates or (ii) was so maintained and in respect of which the Guarantor or an
ERISA Affiliate could have liability under Section 4062 or 4069 of ERISA in the
event such plan has been or were to be terminated; and
"Withdrawal Liability" has the meaning given such term under Part I of Subtitle
E of Title IV of ERISA.
SECTION 2. Guarantee. The Guarantor hereby unconditionally and irrevocably
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guarantees the punctual, full and prompt payment when due, whether by
acceleration or
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otherwise, of all obligations of the Borrower under the Agreement (collectively,
the "Guaranteed Obligations") owed to the Bank. This Guarantee is an absolute
guarantee of payment and performance and is not a guarantee of collection.
SECTION 3. Guarantee Absolute. The Guarantor guarantees that the Guaranteed
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Obligations will be paid strictly in accordance with the terms of the Agreement,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Bank with respect
thereto. The liability of the Guarantor under this Guarantee shall be absolute
and unconditional irrespective of:
(a) any lack of validity or enforceability of the Agreement or any
other agreement or instrument relating thereto (whether executed by the
Borrower, the Guarantor or any other party) or avoidance or subordination
of any of the Guaranteed Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the
Guaranteed Obligations, or any other amendment or waiver of or any consent
to departure from the Agreement or any other agreement or instrument
relating thereto (whether executed by the Borrower, the Guarantor or any
other party);
(c) the absence of any attempt to collect the Guaranteed Obligations
from the Borrower or any other action to enforce the same or the election
of any remedy by the Bank;
(d) the bankruptcy, insolvency, winding-up, or reorganization of or
similar proceeding involving, the Borrower or the Guarantor;
(e) the disallowance under the relevant provisions of any applicable
law of all or any portion of the claims of the Bank for payment or
performance of the Guaranteed Obligations;
(f) the waiver, consent, extension, forbearance or granting of any
indulgence by the Bank with respect to any provision of the Agreement or
any other agreement or instrument relating thereto (whether executed by the
Borrower, the Guarantor or any other party), or
(g) any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of the Borrower, the Guarantor or any other
guarantor (other than indefeasible payment in full of the Guaranteed
Obligations and in respect of any applicable statute of limitations).
SECTION 4. Waiver, No Duties of Bank.
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(a) The Guarantor hereby waives (i) promptness, diligence, notice of
acceptance and any and all other notices with respect to any of the
Guaranteed Obligations and this Guarantee, (ii) any requirement that the
Bank protect, secure, perfect
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or insure any security interest in or other lien on any property subject
thereto or exhaust any right or take any action against the Borrower or any
other Person or entity or any collateral, (iii) filing of proofs of claim
with a court in the event of receivership or bankruptcy of the Borrower,
(iv) protest or notice with respect to nonpayment of any or all of the
Guaranteed Obligations, and (v) all demands whatsoever (and any requirement
that the same be made on the Borrower as a condition precedent to the
Guarantor's obligations hereunder). The Guarantor hereby covenants that
this Guarantee will not be discharged, except according to the provisions
of Section 14 hereof.
(b) The Guarantor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower, and of all other
circumstances bearing upon the right of nonpayment of the Guaranteed
Obligations or any part thereof that diligent inquiry would reveal. The
Guarantor hereby agrees that the Bank shall have no duty to advise the
Guarantor of information known to the Bank regarding such condition or any
such circumstances. In the event the Bank in its sole discretion undertakes
at any time or from time to time to provide any such information to the
Guarantor, the Bank shall be under no obligation (i) to undertake any
investigation not a part of its regular business routine, (ii) to disclose
any information which, pursuant to accepted or reasonable banking or
commercial finance practices, the Bank chooses to maintain as confidential
or (iii) to make any other or future disclosures of such information or any
other information to the Guarantor.
If in the exercise of any of its rights and remedies, the Bank shall forfeit any
of its rights or remedies, including its right to enter a deficiency judgment
against the Borrower or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or the like, the Guarantor hereby consents
to such action by the Bank and waives any claim based upon such action, even if
such action by and of the Bank shall result in a full or partial loss of any
rights of subrogation, contribution or reimbursement which the Guarantor might
otherwise have had but for such action by the Bank.
Section 5. Representations and Warranties. The Guarantor represents and
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warrants to the Bank that as of the date of this Guarantee and unless a
representation or warranty relates solely to an express date, as of the date of
each quarterly certificate in the form of Schedule D of the Agreement to be
delivered to the Bank:
(a) it is a corporation duly incorporated and validly existing under
the laws of the State of Michigan, United States of America, and
that it is duly registered or qualified to carry on business
under the laws of each jurisdiction in which failure to be so
registered or qualified would have a material adverse effect on
the Guarantor;
(b) the execution and delivery of this Guarantee has been duly
authorized by all necessary actions and do not, to the best
knowledge of the Guarantor after due inquiry, (A) violate any
law, regulation or rule by which it is bound, (B) violate any
provision of its constitutive documents or by-laws, (C) result in
a breach of, or a default under, any material contractual
restriction binding
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on or affecting the Guarantor, or (D) result in the creation of
any encumbrance on any of its properties or assets;
(c) subject to applicable bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors' rights
generally, and to the equitable and statutory powers of courts to
stay proceedings before them and to stay the execution of
judgements, this Guarantee constitutes, a legal, valid and
binding obligation of the Guarantor, enforceable in accordance
with its terms;
(d) its most recent audited, consolidated financial statements fairly
present in accordance with GAAP, the consolidated financial
position of the Guarantor as of the date thereof and its
consolidated results of operations and cash flows for the fiscal
year covered thereby, and since the date of its most recent 10-K
filing, there has occurred no material adverse change in the
business or financial condition of the Guarantor in each case
taken as a whole;
(e) no event has occurred which constitutes, or which with the giving
of notice, lapse of time, or both, or the satisfaction of any
other condition, would constitute an Event of Default arising by
reason of the Guarantor's performance hereunder, the breach by
the Guarantor of a representation or warranty made hereunder, or
a default having a material adverse effect on its financial
condition under or in respect of any agreement, undertaking or
instrument to which it or any of its properties or assets may be
subject;
(f) there is no action, litigation or legal proceeding pending or
threatened against the Guarantor or any of its assets or
properties before any court or administrative agency which, if
adversely determined, might in the reasonable judgement of the
Guarantor (A) result in a material adverse change in the
financial condition of the Guarantor or its business, properties
or other assets, or (B) materially and adversely affect the
ability of the Guarantor to perform its obligations under this
Guarantee;
(g) ERISA.
a. No ERISA Event which would reasonably be anticipated to
result in liability of the Guarantor or any of its ERISA
Affiliates in excess of US$10,000,000 (or, in the case of an
event described in clause (v) of the definition of ERISA
Event, US$750,000) (other than for premiums payable under
Title IV of ERISA) has occurred or is reasonably expected to
occur with respect to any Pension Plan.
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b. Schedule B (Actuarial Information) to the most recently
completed annual report (Form 5500 Series) for each Pension
Plan, which report has been filed with the Internal Revenue
Service by the Guarantor or an ERISA Affiliate, is complete
and, to the best knowledge of the Guarantor after due
inquiry, accurate, and since the date of such Schedule B
there has been no material adverse change in the funding
status of any such Pension Plan.
c. Neither the Guarantor nor any ERISA Affiliate has incurred,
or, to the best knowledge of the Guarantor after due
inquiry, is reasonably expected to incur, any Withdrawal
Liability to any Multiemployer Plan which has not been
satisfied or which is or might be in excess of
US$10,000,000.
d. Neither the Guarantor nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and,
to the best knowledge of the Guarantor after due inquiry,
no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated within the meaning of
Title IV of ERISA.
(h) it is the indirect legal and beneficial owner of at least 50% of
the shares of the Borrower.
SECTION 6. Covenants. The Guarantor covenants and agrees with the
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Bank, while the Agreement is in effect or any Borrowing is outstanding:
(a) to maintain its corporate existence as a validly existing
corporate entity;
(b) to provide or cause to be provided to the Bank the following:
(i) quarterly consolidated, unaudited, internally prepared
financial statements within 55 days of the end of each fiscal quarter,
accompanied by a certificate in the form of Schedule "D" to the Agreement
executed by a senior financial officer of the Guarantor (such as the financial
officer, treasurer, or assistant treasurer);
(ii) annual consolidated, audited financial statements within
100 days of each fiscal year end, accompanied by a certificate in the form of
Schedule "D" to the Agreement executed by a senior financial officer of the
Guarantor (such as the financial officer, treasurer, or assistant treasurer);
(iii) annual consolidating financial statements of Borrower
(furnished pursuant to the issuance of consolidated financial statements of
Steelcase Financial Services Inc.) within 100 days of each fiscal year end of
Steelcase Financial Services Inc.; and
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(iv) such other financial and operating statements and reports as
the Bank may reasonably request;
(c) to maintain
(i) its Shareholders' Equity at least the sum of (I) the
Shareholders' Equity as of February 27, 1998, plus (ii) 25% of Net Income (if a
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positive number) from February 27, 1998 to the then most recent Fiscal Year End
or Fiscal Second Quarter End, plus (iii) all Additions to Capital from February
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27, 1998 to the then most recent Fiscal Year End or Fiscal Second Quarter End;
(ii) its ratio of Funded Debt to EBITDA for each period consisting
of the most recently ended four consecutive fiscal quarters, at not more than
3:1, and
(iii) its ratio of EBITDA to Interest Expense in each case for the
four fiscal quarters ending on the last day of any fiscal quarter at not less
than 5:1;
(d) as soon as possible and in any event within five days of the
occurrence of such event, to give the Bank notice of any event
which constitutes, or which, with the giving of notice, lapse of
time, or both, or the satisfaction of any other condition, would
constitute an Event of Default arising by reason of Guarantor's
performance hereunder;
(e) to provide the Bank with prompt written notice of any material
action, suit, litigation or other proceeding, of the type described
in Section 5(f) which is commenced against the Guarantor;
(f) to maintain directly or indirectly, at least 50% of the legal and
beneficial ownership in the issued and outstanding shares of the
Borrower;
(g) to ensure that its obligations under the Guarantee rank pari passu
with the claims of all its other unsecured and unsubordinated
creditors save those whose claims are preferred solely by any
bankruptcy, insolvency, liquidation or other similar laws of
general application, provided, further that if the Guarantor
grants collateral security for the obligations set forth in that
certain Amended and Restated Credit Agreement, dated May 20, 1999
by and among the Guarantor, Citicorp USA Inc., as Administrative
Agent, and the several lenders identified on the signatures pages
thereto, or any replacement credit facility, the obligations under
this Guaranty shall be equally and ratably secured with such
obligations;
(h) not to, merge or consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or a substantial portion of its assets
(whether now owned or hereafter acquired) to any Person (except in
the ordinary course of business and on commercially reasonable
terms), or enter into any partnership, joint
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venture, syndicate, pool or other combination, unless no
Event of Default has occurred and is continuing or would
result therefrom and, in the case of a merger or
consolidation, (i) the Guarantor is the surviving entity or
(ii) the surviving entity assumes all of the Guarantor's
obligations under this Guarantee in a manner satisfactory to
the Bank.
SECTION 7. Amendments. No amendment or waiver of any provision of this
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Guarantee nor consent to any departure by the Guarantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Bank.
No amendment, waiver or consent shall, unless in writing and signed by the Bank,
limit the liability of the Guarantor hereunder or postpone any date fixed for
payment hereunder, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 8. No Waiver; Remedies, Subrogation
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(a) No failure on the part of the Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
(b) Failure by the Bank at any time or times hereafter to require strict
performance by the Borrower or the Guarantor or any other person of any of the
provisions. warranties, terms and conditions contained in any of the Agreement,
or the Guarantee or any of the agreements entered into in connection therewith
now or at any time or times hereafter executed by the Borrower or the Guarantor
and delivered to the Bank shall not waive, affect or diminish any right of the
Bank at any time or times hereafter to demand strict performance thereof and
such right shall not be deemed to have been modified or waived by any act,
course of conduct or knowledge of the Bank, its respective agents, officers or
employees, unless such waiver is contained in an instrument in writing
specifying such waiver signed by the Bank and directed and delivered to the
Borrower. No waiver by the Bank of any default shall operate as a waiver of any
other default or the same default on a future occasion, and no action by the
Bank permitted hereunder shall in any way affect or impair any of its rights or
the obligations of the Guarantor under this Guarantee. Any determination by a
court of competent jurisdiction of the amount of any of the Guaranteed
Obligations shall be conclusive and binding on the Guarantor irrespective of
whether the Guarantor was party to the suit or action in which such
determination was made.
(c) Until all Guaranteed Obligations have been paid in full, the
Guarantor shall not exercise any right of subrogation which it may acquire with
respect to amounts paid hereunder. In the event that the Guarantor shall receive
any payment on account of any such right of subrogation while any Guaranteed
Obligations remain outstanding, the Guarantor agrees to pay all such amounts so
received to the Bank to be applied to payment of the Guaranteed Obligations then
due and owing in accordance with the terms of the Agreement.
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SECTION 9. Continuing Guarantee. This Guarantee is a continuing guarantee
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and shall (a) remain in full force and effect until terminated in accordance
with Section 14, (b) be binding upon the Guarantor, and its permitted successors
and assigns, and (c) inure to the benefit of and be enforceable by the Bank and
its permitted successors, transferees, and assigns who shall be permitted to,
and who shall, become an assignee of the Bank's interest under the Agreement.
SECTION 10. Reinstatement. This Guarantee shall remain in full force and
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effect and continue to be effective should any petition be filed by or against
the Guarantor or the Borrower (each a "Loan Party" and, collectively, the "Loan
Parties") for liquidation or reorganization, should any Loan Party become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any Loan
Party's assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Guaranteed Obligations or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount. or must otherwise be restored or
returned by any obligee of the Guaranteed Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored, or returned, the Guaranteed
Obligations shall, to the fullest extent permitted by law, be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
SECTION 11. Governing Law. This Guarantee shall be governed by, and
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construed in accordance with, the laws of the State of New York (including,
without limitation, Sections 5-1401 and 5-1402 of the New York General
Obligations Law), without regard to the provisions thereof relating to conflicts
of laws.
SECTION 12. Severability. Whenever possible, each provision of this
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Guarantee shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guarantee shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guarantee.
SECTION 13. Consent to Jurisdiction. The Guarantor hereby consents to the
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non-exclusive jurisdiction of any state court or any federal court located in
New York City and agrees that all service of process may be made by registered
mail directed to the Guarantor at the address and in the manner specified in the
Agreement. The Guarantor waives any objection based on forum non conveniens and
any objection to venue of any action instituted hereunder and consents to the
granting of such legal or equitable relief as is deemed appropriate by the
court. Nothing contained in this paragraph shall affect the right of the Bank to
serve legal process in any other manner permitted by law or affect its right to
bring any action or proceeding against the Guarantor or its property in the
courts of any other competent jurisdiction.
SECTION 14. Termination. So long as no Event of Default shall have occurred
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and then be continuing, this Guarantee shall terminate and, except to the extent
expressly provided in Section 2 above with respect to survival of Guaranteed
Obligations all obligations hereunder shall be discharged and released upon the
payment in full of all of the Guaranteed Obligations.
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SECTION 15. Currency.
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(a) Payment shall be in Canadian Dollars or if collected in a
different currency at the option of the Bank, such other currency
shall be converted into Canadian Dollars at the spot rate of
exchange of the Bank (as conclusively determined by the Bank) for
purchasing such currency with Canadian Dollars prevailing on the
date of actual payment and the Guarantor hereby agrees to
indemnify the Bank against the full Canadian Dollar cost incurred
by the Bank for such purpose.
(b) No payment to the Bank (whether under any judgment or court order
or otherwise) shall discharge the Guaranteed Obligations unless
and until the Bank shall have received payment in full in the
currency in which such Guaranteed Obligations were incurred or
which the Bank has elected to accept under paragraph (a) of this
Section 15 and to the extent that the amount of such payment shall
on actual conversion into such currency fall short of the amount
of the Guaranteed Obligations, actual or contingent, expressed in
that currency, the Bank shall have a further separate cause of
action against the Guarantor to recover the amount of the
shortfall.
(c) If and to the extent that the Guarantor fails to pay the amount
due on demand, the Bank may in its absolute discretion without
notice to the Guarantor purchase at any time thereafter so much of
any currency as the Bank considers necessary or desirable to cover
the Guaranteed Obligations in such currency hereby guaranteed at
the then prevailing spot rate of exchange of the Bank (as
conclusively determined by the Bank) for purchasing such currency
with Canadian Dollars and the Guarantor hereby agrees to indemnify
the Bank against the full Canadian Dollar cost incurred by the
Bank for such purpose.
(d) All moneys received or held by the Bank from the Borrower or under
this Guarantee may from time to time after demand has been made by
the Bank be converted into such other currency as the Bank
considers necessary or desirable to cover the Guaranteed
Obligations, actual or contingent, of the Borrower in that other
currency at the then prevailing spot rate of exchange of the Bank
(as conclusively determined by the Bank) for purchasing that other
currency with the existing currency.
SECTION 16. Miscellaneous. All references herein to the Borrower and to
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the Guarantor shall be deemed to include their respective permitted successors
and assigns, including, without limitation, a receiver, trustee or
debtor-in-possession of or for the Borrower or the Guarantor. All references to
the singular shall be deemed to include the plural where the context so
requires.
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IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
STEELCASE INC.
By: /s/ Xxxx X. Xxxxxxx
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Its: Vice President, Finance
and Treasurer
