EXHIBIT 4.17
May 24, 2001
Steelcase Financial Services Ltd.
0 Xxxxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Financial Officer
Dear Sirs:
Royal Bank of Canada (the "Bank") is pleased to offer Steelcase Financial
Services Ltd. (the "Borrower") a non-revolving, single advance three year term
credit facility (the "Credit Facility"), subject to the following terms and
conditions. This Credit Facility is in addition to the credit facility made
available pursuant to the facility agreement dated as of April 5, 2000 between
the Bank and the Borrower (the "April 2000 Facility Agreement").
1. DEFINITIONS:
In addition to the terms already defined herein, the definitions
attached hereto in Schedule "A" are incorporated in this agreement by
reference as if set out in full herein (collectively this agreement
and all schedules attached hereto, as amended from time to time, are
referred to as the "Agreement"). Unless otherwise provided, all
accounting terms used herein shall be interpreted in accordance with
GAAP.
2. AMOUNT:
The amount (the "Amount") available under the Credit Facility equals
Twenty Five Million Three Hundred Fifty Two Thousand Six Hundred
Seventy Nine and 56/100 Dollars ($25,352,679.56) and has been
determined by calculating the present value of all remaining lease
payments (excluding taxes) owing to the Borrower by the lessees
pursuant to the Leases. Present value has been calculated by
discounting to the present, at the rate of 6.18 % per annum, all such
remaining lease payments (excluding taxes).
3. CREDIT FACILITY:
The Credit Facility is available in Canadian Dollars by way of a term
advance (the "Borrowing").
4. PURPOSE:
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The Borrower shall use the Credit Facility to repay an inter-company
loan advanced to the Borrower by Steelcase Canada Ltd.
5. AVAILABILITY:
The Borrower may borrow by way of a single advance to be made no later
than May 24, 2001 (or such later date, as the Bank and the Borrower
may agree) by giving to the Bank two (2) Business Days' notice in
writing of its intention to draw.
6. INTEREST RATE:
The interest rate applicable to the Borrowing will be fixed on the
date of advance at the CDOR Rate in effect on such date plus the
Applicable Margin, for the period from, and including, the date of
advance to, but excluding, the first Payment Date, and shall be
calculated in advance and payable in arrears on such Payment Date.
Thereafter, the interest rate will be fixed on each Payment Date at
the CDOR Rate in effect on such Payment Date plus the Applicable
Margin, for the period from, and including, such Payment Date to, but
excluding, the next Payment Date and shall be calculated in advance
and payable in arrears on each such Payment Date, until the Maturity
Date, on which Maturity Date all accrued and unpaid interest shall be
due and payable. Interest on the Borrowing will accrue daily on the
basis of the actual number of days elapsed and a year of 365 days. The
interest rate shall change automatically on each Payment Date without
any notice to the Borrower.
7. MARGIN:
The margin applicable to the Borrowing (the "Applicable Margin"),
expressed in basis points, shall be selected from the following
matrix, as set forth in the applicable column, based upon the ratio of
the Guarantor's Funded Debt to EBITDA on the date of determination, as
evidenced by the Guarantor's most recent quarterly financial
statements delivered by the Guarantor in accordance with the
Guarantee, calculated for the period of four consecutive fiscal
quarters ending on the last day of the fiscal quarter for which the
financial statements have been delivered. Any change in the Applicable
Margin shall be effective as of the first day of the month immediately
next following the fiscal quarter for which the financial statements
giving rise to the change have been delivered.
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Ratio of Funded * 2:1 ** 2:1 and * 2.75:1 ** 2.75:1
Debt to EBITDA
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Margin 65 basis points 80 basis points 115 basis points
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8. TIME AND PLACE OF PAYMENT:
Payments of principal, interest and all other amounts payable by the
Borrower pursuant to this Agreement shall be paid at the Branch of
Account in Canadian Dollars. Each payment under this Agreement shall
be made for value on the day such payment is due, provided that if any
such day is not a Business Day such payment shall be deemed for all
purposes of this Agreement to be due on the Business Day next
following such day and all interest and other fees shall continue to
accrue until payment. Interest and fees payable under this Agreement
are payable both before and after any or all of default, demand and
judgment.
9. PREPAYMENT:
Upon 5 Business Days prior written notice to the Bank, the Borrower
may voluntarily prepay on any Payment Date, without penalty, any
portion of the Borrowing in the minimum amount specified below and
increments thereof.
If any payment of principal is made by the Borrower other than on a
Payment Date, the Borrower shall, upon demand by the Bank, pay to the
Bank any amounts required to compensate the Bank for any additional
losses, costs or expenses which it may reasonably incur as a result of
such prepayment, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Bank to fund or maintain such
Borrowing, the aggregate of such compensation not to exceed interest
at the rate provided for under this Agreement calculated on the amount
prepaid for the period from and including the date of prepayment to
but excluding the next following Payment Date.
Any prepayment made by the Borrower must be in a minimum amount of
Cdn$1,000,000 and increments thereof and shall be applied in the
reverse order of maturity on account of the amounts payable pursuant
to the Repayment Schedule attached hereto as Schedule "B".
10. REPAYMENT OF CREDIT FACILITY:
* less than or equal to
** more than
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Subject to acceleration following an Event of Default, the Amount
shall be repaid by monthly payments on each of the dates specified in
Schedule "B" (each a "Payment Date") in the principal amounts
specified in Schedule "B", plus interest as provided for herein, and
the balance of Borrowings outstanding plus all accrued and unpaid
interest, shall be repaid in full on the Maturity Date. The monthly
payments provided for herein and the balance due on the Maturity Date
shall be paid to the Bank at:
Royal Bank of Canada
00 Xxxx Xx Xxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, X0X 0X0
Any amount payable by the Borrower to the Bank hereunder which is not
paid when due, shall bear interest, from the due date thereof, payable
on demand, and calculated and compounded monthly, both before and
after demand and judgement, at an annual rate of interest fluctuating
with and at all times equal to 2% per annum above the Royal Bank
Prime. The rate of interest charged hereunder shall change
automatically without any notice to the Borrower as and when changes
in Royal Bank Prime occur. Any change in Royal Bank Prime shall be
effective as of the opening of business on the day such change takes
place.
11. EXTENSION REQUEST:
The Borrower may, during the period between 90 and 60 days prior to
the Maturity Date, request an extension of the Maturity Date. The Bank
may, in its discretion, accept or reject any request for an extension
or offer to extend the Maturity Date, subject to such other terms and
conditions as shall be acceptable to the Bank at that time.
12. EVIDENCE OF INDEBTEDNESS:
The Bank shall open and maintain at the Branch of Account accounts and
records evidencing the Borrowing made available to the Borrower by the
Bank under this Agreement. The Bank shall record the principal amount
of the Borrowing, the payment of principal and interest and all other
amounts owing to the Bank.
The Bank's accounts and records constitute, in the absence of manifest
error, conclusive evidence of the indebtedness of the Borrower to the
Bank.
13. INCREASED COSTS:
If, in the reasonable opinion of the Bank, the Bank is now or
hereafter becomes subject to, or there is a change in:
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(a) any reserve, special deposit, deposit insurance or similar requirement
against assets of, or deposits in or for the account of, or credit
extended by, or any acquisition of funds by, the Bank,
(b) any reserve, special deposit or similar requirement with respect to
the Borrowing or the undrawn portion of all or any part of the Credit
Facility,
(c) taxation of, or the basis of, taxation of any payments due to the Bank
hereunder (except for taxes on the overall net income of the Bank),
(d) any requirement relating to capital adequacy, or
(e) any other condition imposed by Applicable Law or any interpretation of
Applicable Law by an entity charged with the administration thereof or
any other condition with which financial institutions operating in
Canada are accustomed to comply or have generally complied, whether or
not having the force of law,
and the result of any of the foregoing, in the reasonable determination of
the Bank, is to increase the cost to, or to reduce any amount received or
receivable by, the Bank hereunder, or to reduce the Bank's effective return
hereunder or on its capital to a level below that which the Bank could have
otherwise achieved (using any reasonable averaging and attribution method),
the Bank shall determine that amount of money which shall compensate it for
such increase in cost, or reduction in income, or reduction in rate of
return on the Bank's capital, and the Borrower shall pay such amount of
money to the Bank upon demand by the Bank, provided that the Borrower shall
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have no obligation to pay an additional amount in respect of any increased
cost attributable to the period before 90 days prior to the date of such
demand. A certificate as to the amount and manner of calculation of such
increased cost or reduction, submitted to the Borrower shall be conclusive
absent manifest error.
14. ILLEGALITY:
If the introduction of or any change in Applicable Law makes it unlawful or
prohibited for the Bank, in its reasonable opinion, to perform its
obligations under this Agreement, the Bank may, by written notice to the
Borrower, terminate its obligations under this Agreement, and the Borrower
shall prepay the Borrowing immediately or at the end of such period as the
Bank may agree, together with all interest which is accrued to the date of
payment and all other amounts payable by the Borrower hereunder.
15. CONDITIONS PRECEDENT TO BORROWING:
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(a) The obligation of the Bank to make available the Borrowing is subject
to and conditional upon the receipt, in form and substance
satisfactory to the Bank, of:
(i) a duly executed copy of this Agreement;
(ii) a certified copy of the constating documents and by-laws of the
Borrower;
(iii) a certified copy of a resolution of the board of directors of
the Borrower relating to the Borrower's authority to execute,
deliver and perform its obligations under this Agreement and the
manner in which and by whom such agreements are to be executed
and delivered;
(iv) a certificate of an officer of the Borrower setting forth
specimen signatures of the individuals authorized to execute
this Agreement as of the date of execution hereof;
(v) a spreadsheet outlining the Leases that are the subject matter
of this Credit Facility identifying the Leases by the Borrower's
contract or file number and setting forth in satisfactory detail
the names of the lessees and all payments due in respect
thereof, by amount and date, which spreadsheet shall be attached
hereto as Schedule F;
(vi) an opinion of legal counsel to the Borrower substantially in the
form of Schedule "C";
(vii) a guarantee from the Guarantor;
(viii)a certified copy of the constitutive documents and by-laws of
the Guarantor;
(ix) a standing resolution of the board of directors of the Guarantor
relating to the Guarantor's general authority to execute,
deliver and perform its obligations under the Guarantee and the
manner in which and by whom such Guarantee is to be signed and
delivered;
(x) a certificate of an officer of the Guarantor setting forth
specimen signatures of the individuals authorized to execute the
Guarantee as of the date of execution thereof;
(xi) the opinions of legal counsel to the Guarantor substantially in
the form of Schedules "E-1 and E-2".
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(b) The obligation of the Bank to make available the Borrowing is further
subject to the following:
(i) 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; and
(ii) the receipt by the Bank of such other documents as the Bank may
reasonably request.
16. REPRESENTATIONS AND WARRANTIES:
The Borrower represents and warrants to the Bank, which representations and
warranties are repeated as of the time at which each payment is due
hereunder, that:
(a) it is a corporation duly incorporated and validly existing under the
laws of the Province of Ontario, Canada, 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 Borrower;
(b) the execution, delivery and performance of the Agreement has been duly
authorized by all necessary actions and does not, to the best
knowledge of the Borrower, (A) violate any law, regulation or rule by
which it is bound, (B) violate any provision of its constating
documents or by-laws, (C) result in a breach of, or a default under,
any material contractual restriction binding on or affecting the
Borrower (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 judgments, the
Agreement constitutes a legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms;
(d) there is no action, litigation or legal proceeding pending or
threatened against the Borrower or any of its assets or properties
before any court or administrative agency which, if adversely
determined, might, in the reasonable judgement of the Borrower, (A)
result in a material adverse change in the financial condition of the
Borrower or its business, properties or other assets, in each case
taken as a whole, or (B) materially and adversely affect the ability
of the Borrower to perform its obligations under this Agreement;
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(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, 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; and
(f) to the best of its knowledge, the Borrower is in compliance with all
Applicable Laws.
17. COVENANTS:
The Borrower covenants and agrees with the Bank, while this Agreement is in
effect or any part of the Borrowing is outstanding:
(a) to maintain its corporate existence as a validly existing corporate
entity;
(b) 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;
(c) to comply in all material respects with all Applicable Laws;
(d) to ensure that its obligations hereunder 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;
(e) 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 joint 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 of the
Borrower, the new entity assumes all of the Borrower's obligations
under this Agreement in a manner satisfactory to the Bank; and
(f) not to, without the prior written consent of the Bank, (i) sell,
transfer, convey or otherwise dispose of the Leases or any rights or
interest of the Borrower therein, save and except on a lease by lease
basis in connection with the Borrower's ongoing administration and
management of the Leases in the ordinary course of
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business or (ii) grant, create, assume or suffer to exist any
mortgage, charge, lien, pledge, security interest or other encumbrance
affecting the Leases or any rights or interest of the Borrower
therein.
18. EVENTS OF DEFAULT:
If any one or more of the following events has occurred and is continuing:
(a) the Borrower fails to make payment of (i) principal or interest within
three Business Days of the date due or (ii) any other amounts due
under this Agreement within five Business Days of the date due;
(b) the Borrower shall fail to perform or observe (i) any term, covenant
or agreement contained in this Agreement (other than any term,
covenant or agreement contained in Section 17(a), 17(b), 17(e) or
17(f)) on its part to be performed or observed and the failure to
perform or observe such term, covenant or agreement shall remain
unremedied for 30 days after the Borrower obtains knowledge of such
breach or (ii) any term, covenant or agreement contained in Section
17(a), 17(b), 17(e) or 17(f);
(c) the Borrower defaults in the payment of any of its Indebtedness in
excess of Cdn$1,000,000 or in the performance or observance of any
agreement or condition in respect of such Indebtedness where, as a
result of such default, the maturity of the Indebtedness is or may be
accelerated;
(d) an Event of Default occurs under the April 2000 Facility Agreement or
a breach or default occurs and is continuing, after the giving of any
required notice and passage of any applicable grace period, under any
other agreement between the Borrower or Guarantor and the Bank;
(e) the Guarantor, with respect to the Guarantee, shall fail to perform or
observe (i) any term, covenant or agreement contained in the Guarantee
(other than any term, covenant or agreement contained in Section 6(a),
6(c), 6(d) or 6(h) of the Guarantee) on its part to be performed or
observed and the failure to perform or observe such term, covenant or
agreement shall remain unremedied for 30 days after the Guarantor
obtains knowledge of such breach or (ii) any term, covenant or
agreement contained in Section 6(a), 6(c), 6(d) or 6(h) of the
Guarantee;
(f) the Guarantor defaults in the payment of any of its Indebtedness in
excess of US$25,000,000 or its equivalent in Cdn$ or in the
performance or observance of any agreement or condition in respect of
such Indebtedness where, as a result of such default, the maturity of
the Indebtedness is or may be accelerated;
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(g) any judgment or order for the payment of money in excess of
US$25,000,000 or its equivalent in Cdn$ shall be rendered against the
Guarantor and either (i) enforcement proceedings shall have been
commenced by any creditor upon a final or non-appealable judgment or
order or (ii) there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect;
(h) any representation or warranty made or deemed to have been made herein
by the Borrower or in the Guarantee by the Guarantor shall be
incorrect in any materially adverse respect when made;
(i) the Borrower or the Guarantor is unable to pay debts as such debts
become due, or is, or is adjudged or declared to be, or admits to
being, bankrupt or insolvent;
(j) any notice of intention is filed or any voluntary or involuntary case
or proceeding is filed or commenced by or against the Borrower or
Guarantor under any Applicable Law for the:
(i) bankruptcy, liquidation, winding-up, dissolution or suspension
of general operations,
(ii) composition, re-scheduling, reorganization, arrangement or
readjustment of, or other relief from, or stay of proceedings to
enforce, some or all of the debts,
(iii) appointment of a trustee, receiver, receiver and manager,
liquidator, administrator, custodian or other official for, a
significant part of the assets, or
(iv) possession, foreclosure or retention, or sale or other
disposition of, or other proceedings to enforce security over, a
significant part of the assets,
of the Borrower or Guarantor, as the case may be, and in the case of
any involuntary proceeding against the Borrower or Guarantor, such
involuntary proceeding shall remain undismissed or unstayed for a
period of 60 days, provided that during such period the Borrower or
the Guarantor, as the case may be, is actively and diligently
defending such proceeding in good faith;
(k) any secured creditor, encumbrancer or lienor, or any trustee,
receiver, receiver and manager, agent, bailiff or other similar
official appointed by or acting for any secured creditor, encumbrancer
or lienor, takes possession of, or forecloses or retains, or sells or
otherwise disposes of, or otherwise proceeds to enforce security
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over, a significant part of the assets of the Borrower or the
Guarantor or gives notice of its intention to do any of the foregoing;
or
(l) the Guarantee is or becomes unenforceable for any reason whatsoever,
then, in such event the Bank shall have no obligation to honour any cheques
or other orders for payment and the Bank may, by written notice to the
Borrower, declare the outstanding Borrowing to be immediately due and
payable and may without notice apply any amounts outstanding to the credit
of the Borrower to repayment of the outstanding Borrowing. Upon receipt of
such written notice, the Borrower shall immediately pay to the Bank all
amounts of the outstanding Borrowing and all other amounts owing to the
Bank hereunder.
19. INDEMNITIES:
The Borrower hereby agrees to indemnify and hold the Bank and its
directors, officers and employees harmless from and against any and all
claims, suits, actions, debts, damages, costs, losses, obligations,
judgments, charges, expenses and liabilities of any nature whatsoever
(including reasonable legal fees on a solicitor and client basis) which are
sustained or incurred as a consequence of:
(a) any breach by the Borrower under any of the provisions of this
Agreement or in any document or instrument delivered in connection
herewith; or
(b) the Bank acting upon instructions given or agreements made over the
telephone or by electronic transmission of any type (either relating
only to the Borrower and the Bank or involving crediting the accounts
of third parties) with Persons reasonably believed by the Bank to have
been acting on the Borrower's behalf.
It is the intention of the Borrower and the Bank that the provisions of
this section shall supersede any other provisions in this Agreement which
in any way limit the liability of the Borrower; and that the Borrower shall
be liable for any obligations arising under this section even if the amount
of the liability incurred exceeds the amount of the Borrowing. The
obligations of the Borrower arising under this section are absolute and
unconditional and shall not be affected by any act, omission, or
circumstance whatsoever, whether or not occasioned by the fault of the Bank
except in respect of bad faith, gross negligence or wilful misconduct by
the Bank. This section shall survive the repayment of the Borrowing and
shall survive the transfer of any or all right, title and interest in and
to the Borrower's property by the Borrower to any party, whether or not
affiliated with the Borrower.
20. SUCCESSORS; ASSIGNS; ASSIGNMENT; AND PARTICIPATION:
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This Agreement shall be binding upon and enure to the benefit of the Bank,
the Borrower and their respective successors and permitted assigns. The
Borrower cannot assign or transfer all or any of its rights and obligations
hereunder without the prior written consent of the Bank.
(a) The Bank may assign or transfer all or any portion of its rights and
obligations under the Credit Facility to any Person; provided, that
for so long as no Event of Default has occurred and is continuing, the
Bank's assignment or transfer hereunder shall require the prior
written consent of the Borrower and the Guarantor, such consent not to
be unreasonably withheld. After any such assignment or transfer to any
Person, such Person shall be deemed to be the "Bank" to the extent of
the rights and obligations assigned and transferred to it, shall be
entitled to the full benefit of this Agreement and shall be subject to
the rights and obligations assigned to it, and the Bank shall be
irrevocably released and discharged accordingly to the same extent. To
the extent that such assignment would, at any time after such
assignment, result in increased costs under Section 13 above those
being applicable to and otherwise charged by the assigning Bank, then
the Borrower shall not be obligated to pay such increased costs.
(b) The Bank may, without the consent of the Borrower or the Guarantor,
grant a participation in all or any portion of the Credit Facility to
any Person (a "Participant"); provided, however, that (i) the Bank's
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obligations under this Agreement shall remain unchanged, (ii) the Bank
shall remain solely responsible to the Borrower for the performance of
such obligations; (iii) the Borrower and the Guarantor shall continue
to deal solely and directly with the Bank in connection with the
Bank's rights and obligations under the Agreement, (iv) the Bank shall
notify the Borrower of the sale of the participation, (v) the Bank
shall not grant any participation under which the Participant shall
have rights to require the Bank to take or omit to take any action
hereunder or under the Guarantee or approve any amendment to or waiver
of this Agreement or the Guarantee, except to the extent such
amendment or waiver would: (A) extend the Maturity Date; or (B) reduce
the interest rate or the amount of principal applicable to Borrowing
in which such Participant is participating or change the date on which
interest or principal applicable to the Borrowing in which such
Participant is participating are payable, and (vii) the Person
purchasing such participation shall agree to customary provisions
relating to the confidentiality of non-public information received by
such Person in connection with its purchase of the participation.
(c) The Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section,
disclose to the assignee or Participant or proposed assignee or
Participant, any information relating to the
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Borrower furnished to the Bank by the Borrower or the Guarantor;
provided that, prior to any such disclosure, the assignee or
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Participant or proposed assignee or Participant shall agree to
preserve the confidentiality of any confidential information relating
to the Borrower or the Guarantor received by it from the Bank.
21. MISCELLANEOUS:
(a) Expenses. The Borrower shall pay the reasonable fees and expenses
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incurred by the Bank in connection with the preparation, negotiation,
documentation and operation of the Credit Facility including the
enforcement of the Bank's rights hereunder and under any other
document delivered pursuant to this Agreement, whether or not any
amounts are advanced hereunder.
(b) Limit on Rate of Interest. The Borrower shall not be obligated to pay
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any interest under or in connection with this Agreement to the extent
such interest exceeds the effective annual rate of interest on the
credit advanced hereunder that would be lawfully permitted under the
Criminal Code. For purposes of this section, "interest" and "credit
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advanced" have the meanings ascribed to such terms in the Criminal
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Code, and the "effective annual rate of interest" shall be calculated
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in accordance with generally accepted actuarial practices and
principles.
(c) Notices. Any notice or demand hereunder shall be given in writing by
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telecopier or letter, at the addresses listed below. A telecopier
communication shall be deemed received on the date of transmission
provided such transmission is received prior to 5:00 p.m. on a day on
which the receiving party's office is open for normal business, and
otherwise on the next such day. A letter shall be deemed received when
hand-delivered to the receiving party, at the address shown herein or
at such other address as the receiving party may notify the other from
time to time. Each party shall be bound by any notice given hereunder
and entitled to act in accordance therewith, unless otherwise agreed.
The addresses of the parties for the purpose hereof shall be:
as to the Borrower:
Steelcase Financial Services Ltd.
0 Xxxxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx, Vice President
Telecopier: (000) 000-0000
With a copy to the Guarantor:
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Steelcase Inc.
000 00xx Xxxxxx XX
XX-0X-00
Xxxxx Xxxxxx, XX 00000
Attention: General Counsel
Telecopier: (000) 000-0000
as to the Bank:
Royal Bank of Canada
0000 Xxxxxxxxx Xxxxx, 0/xx/ Xxxxx, Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxx, X0X 0X0
Attention: Senior Manager
Telecopier: (000) 000-0000
or such other address for delivery as each party from time to time may
notify the other as aforesaid.
(d) Set Off. Upon the occurrence and during the continuance of an Event of
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Default, the Bank may, at any time and without notice, apply any
credit balance (whether or not then due) to which the Borrower is then
beneficially entitled on any account (in any currency) at any branch
or office of the Bank in or towards satisfaction of the obligations
and liabilities of the Borrower due to the Bank under this Agreement.
For that purpose, the Bank is irrevocably authorized to use all or any
part of any such credit balance to buy such other currencies as may be
necessary to effect such application.
(e) Amendments and Waivers. No amendment, modification or waiver of any
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provision of this Agreement or consent to any departure by the
Borrower from any provision of this Agreement will in any event be
effective unless it is in writing signed by the Borrower and the Bank,
and then the amendment, modification, waiver or consent will be
effective only in the specific instance, for the specific purpose and
for the specific length of time for which it is agreed between the
Borrower and the Bank. No failure to exercise and no delay in
exercising on the part of the Bank, any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege preclude any other
right, power or privilege.
(f) Further Assurances. The Borrower shall from time to time promptly upon
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the request of the Bank take such action and execute and deliver such
further documents, as shall be reasonably required in order to fully
perform the terms of, and to carry out the intention of, this
Agreement.
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(g) Severability. If any provision of this Agreement is or becomes
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prohibited or unenforceable in any jurisdiction, such prohibition or
unenforceability shall not invalidate or render unenforceable the
provision concerned in any other jurisdiction nor invalidate, affect
or impair any of the remaining provisions hereof.
(h) Governing Law and Submission to Jurisdiction. This Agreement shall be
---------------------------------------------
construed in accordance with and governed by the laws of the Province
of Ontario and of Canada applicable therein. The Borrower irrevocably
submits to the non-exclusive jurisdiction of the courts of such
Province and acknowledges the competence of such courts and
irrevocably agrees to be bound by a judgement of any such court.
(i) Whole Agreement. This Agreement and any agreements delivered pursuant
---------------
to or referred to in this Agreement constitute the whole and entire
agreement between the parties in respect of the Credit Facility, and
cancel and supersede any prior written or verbal agreements including
undertakings, declarations or representations made with respect
thereto.
(j) Time. Time shall be of the essence in all provisions of this
----
Agreement.
(k) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when executed and delivered is an original
but all of which taken together constitute one and the same
instrument, and any party may execute this Agreement by signing any
counterpart of it.
(l) Effective Date. Except as otherwise provided in this Agreement, the
--------------
date on which this Agreement becomes effective is the date appearing
on the first page hereof.
Please acknowledge your acceptance of the above terms and conditions by signing
the attached copy of this letter in the space provided below and returning it to
the undersigned.
Yours truly,
ROYAL BANK OF CANADA
By: /s/ B R Xxxxx B.R. Xxxxx, Senior Manager
------------------
By: /s/ X X Xxx X.X. Xxx Senior Asst. Mgr. Business Development
------------------
-16-
We acknowledge and accept the terms and conditions of this Agreement
as of the 24th day of May, 2001, which acceptance is effective as of the date
first above written.
STEELCASE FINANCIAL SERVICES LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name/Title: Xxxxxx X. Xxxxxxxx, Vice President
----------------------------------
Schedule "A" to the Agreement dated as of the 24/th/ day of May, 2001 between
Steelcase Financial Services Ltd. as the Borrower and Royal Bank of Canada as
the Bank.
DEFINITIONS
-----------
"Applicable Law" means, in respect of any Person, property, transaction or
event, all present or future applicable laws, statutes, regulations, treaties,
judgments and decrees and (whether or not having the force of law) all
applicable official directives, rules, guidelines, orders, by-laws, approvals,
permits, consents and policies of any governmental or regulatory body, stock
exchange or securities commission having jurisdiction;
"Branch of Account" means the Bank's branch at 6880 Financial Drive, 2/nd/
Floor, Mezzanine, Mississauga, Ontario, L5N 7Y5, Mississauga, Ontario;
"Business Day" means a day, excluding Saturday, Sunday and any other day which
shall be in the City of Toronto a legal holiday or a day on which banking
institutions are closed;
"Canadian Dollars" and the symbols "Cdn$" and "$" each means lawful money of
Canada;
"CDOR Rate" means, on any day, the annual rate of interest which is the Bank's
"BA 1 month" rate applicable to Canadian Dollar bankers' acceptances identified
as such on the Reuters Screen CDOR Page at approximately 10:00 a.m. on such day
(as adjusted by the Bank after 10:00 a.m. to reflect any error in the posted
rate). If the rate does not appear on the Reuters Screen CDOR Page as
contemplated above, then the CDOR Rate on any day shall be the discount rate
applicable to one month Canadian Dollar bankers' acceptances of, and as quoted
by, the Bank as of 10:00 a.m. on the day, or if the day is not a Business Day,
then on the immediately preceding Business Day.
"Criminal Code" means the Canada Criminal Code.
"EBITDA" means, for any period, consolidated net income plus provision for taxes
of the Guarantor and its Subsidiaries (excluding extraordinary, unusual, or
nonrecurring gains or losses), plus interest expense of the Guarantor and its
Subsidiaries, plus depreciation expense of the Guarantor and its Subsidiaries,
plus amortization of intangibles of the Guarantor and its Subsidiaries, as
determined on a consolidated basis in conformity with GAAP;
"Event of Default" means each of the events listed in the section entitled
"Events of Default";
"Funded Debt" means (i) indebtedness for borrowed money or for the deferred
purchase price of property or services, (ii) obligations as lessee under capital
leases, or (iii) obligations under guarantees in respect of indebtedness or in
respect of obligations of others of the kinds referred to in clause (i) or (ii)
above;
"GAAP" means generally accepted accounting principles in effect from time to
time, in the case of the Borrower, in Canada, and in the case of the Guarantor,
the United States of America, in each case applied in a consistent manner from
period to period;
"Guarantor" means Steelcase Inc., a corporation incorporated under the laws of
the state of Michigan, United States of America;
2
"Indebtedness" means (a) indebtedness for borrowed money or for the deferred
purchase price of goods or services (including trade obligations), (b)
obligations under leases which are or should be reported, in accordance with
GAAP, as capital leases, (c) obligations under letters of credit or guarantee,
whether issued for the benefit of the Borrower or another or others, (d)
obligations arising pursuant to bankers' acceptance facilities, (e) obligations
under guarantees, endorsements (other than for collection or deposit in the
ordinary course of business) and other obligations to purchase, provide funds
for payment, provide funds for investment in or otherwise provide financial
assistance to any other entity but "Indebtedness" does not include (x) deferred
---- --- -------
taxes or (y) Subordinated Debt (including the current portion of Subordinated
Debt);
"Interest Expense" has the meaning set forth by GAAP;
"Leases" means those leases identified in Schedule "F";
"Maturity Date" means May 3, 2004, being the last payment date as set forth in
the Repayment Schedule attached hereto as Schedule "B", on which date the
outstanding balance of the Borrowing is repayable in full, unless the Credit
Facility has been extended by the Bank pursuant to Section 11, in which case it
shall be the date to which the Credit Facility has been extended;
"Payment Date" has the meaning given to such term in Section 10 entitled
Repayment of Credit Facility.
"Person" means any individual, firm, partnership, company, corporation,
government, governmental body or agency, instrumentality and unincorporated body
of persons or association;
Reuters Screen CDOR Page means the display designated as page CDOR on the
Reuters Monitor Money Rates Service or other page as may, from time to time,
replace that page on that service for the purpose of displaying bid quotations
for bankers' acceptances accepted by leading Canadian banks.
"Royal Bank Prime" means the annual rate of interest announced by the Bank from
time to time as being a reference rate then in effect for determining interest
rates on Canadian Dollar commercial loans made in Canada;
"Shareholders' Equity" means the aggregate of stated capital, retained earnings
and Subordinated Debt;
"Subordinated Debt" of a Person means indebtedness for borrowed money fully
subordinated, both as to principal and interest, on terms satisfactory to the
Bank, to such Person's obligations to the Bank;
3
"Subsidiary" of a Person means (i) any corporation of which the Person and/or
any one or more of its Affiliates holds, directly or beneficially, other than by
way of security only, securities to which are attached more than 50% of the
votes that may be cast to elect directors, managers or trustees thereof or (ii)
a corporation, association, partnership or other business entity of which the
Person and/or any one or more of its Affiliates has, through operation of law or
otherwise, the ability to elect or cause the election of a majority of the
directors, managers or trustees thereof and "Subsidiaries" of such Person mean
all such corporations; and
"US Dollars" and "US$" each means lawful money of the United States of America
in same day immediately available funds or, if such funds are not available, the
form of money of the United States of America that is customarily used in the
settlement of international banking transactions on the day payment is due
hereunder.
Schedule "B" to the Agreement dated as of the 24/th/ day of May, 2001 between
Steelcase Financial Services Ltd. as the Borrower and Royal Bank of Canada as
the Bank.
REPAYMENT SCHEDULE
------------------
-----------------------------------------------------------------------------------------------------------------------------
Period Payment Dates Principal Balance O/s Principal Balance O/s
Before Principal Payment Total Payment After Principal Payment
-----------------------------------------------------------------------------------------------------------------------------
0 24-May-01 $------ $------ $25,352,679.56
-----------------------------------------------------------------------------------------------------------------------------
1 01-Jun-01 $25,352,679.56 $598,789.51 $24,788,230.78
-----------------------------------------------------------------------------------------------------------------------------
2 03-Jul-01 $24,788,230.78 $598,789.51 $24,323,745.94
-----------------------------------------------------------------------------------------------------------------------------
3 01-Aug-01 $24,323,745.94 $598,789.51 $23,844,389.35
-----------------------------------------------------------------------------------------------------------------------------
4 04-Sep-01 $23,844,389.35 $598,789.51 $23,382,865.13
-----------------------------------------------------------------------------------------------------------------------------
5 01-Oct-01 $23,382,865.13 $598,789.51 $22,890,970.55
-----------------------------------------------------------------------------------------------------------------------------
6 01-Nov-01 $22,890,970.55 $598,789.51 $22,412,330.41
-----------------------------------------------------------------------------------------------------------------------------
7 03-Dec-01 $22,412,330.41 $598,789.51 $21,934,972.75
-----------------------------------------------------------------------------------------------------------------------------
8 02-Jan-02 $21,934,972.75 $593,278.90 $21,453,111.49
-----------------------------------------------------------------------------------------------------------------------------
9 01-Feb-02 $21,453,111.49 $593,278.90 $20,968,802.65
-----------------------------------------------------------------------------------------------------------------------------
10 01-Mar-02 $20,968,802.65 $593,278.90 $20,474,933.10
-----------------------------------------------------------------------------------------------------------------------------
11 01-Apr-02 $20,474,933.10 $590,686.30 $19,991,714.96
-----------------------------------------------------------------------------------------------------------------------------
12 01-May-02 $19,991,714.96 $588,301.61 $19,504,960.31
-----------------------------------------------------------------------------------------------------------------------------
13 03-Jun-02 $19,504,960.31 $588,301.61 $19,025,640.66
-----------------------------------------------------------------------------------------------------------------------------
14 02-Jul-02 $19,025,640.66 $588,301.61 $18,530,757.55
-----------------------------------------------------------------------------------------------------------------------------
15 01-Aug-02 $18,530,757.55 $588,301.61 $18,036,582.04
-----------------------------------------------------------------------------------------------------------------------------
16 03-Sep-02 $18,036,582.04 $588,301.61 $17,549,057.98
-----------------------------------------------------------------------------------------------------------------------------
17 01-Oct-02 $17,549,057.98 $588,301.61 $17,043,953.32
-----------------------------------------------------------------------------------------------------------------------------
18 01-Nov-02 $17,043,953.32 $588,301.61 $16,545,111.46
-----------------------------------------------------------------------------------------------------------------------------
19 02-Dec-02 $16,545,111.46 $552,626.51 $16,079,326.38
-----------------------------------------------------------------------------------------------------------------------------
20 02-Jan-03 $16,079,326.38 $551,523.71 $15,612,199.31
-----------------------------------------------------------------------------------------------------------------------------
21 03-Feb-03 $15,612,199.31 $551,523.71 $15,145,263.78
-----------------------------------------------------------------------------------------------------------------------------
22 03-Mar-03 $15,145,263.78 $548,102.39 $14,668,962.39
-----------------------------------------------------------------------------------------------------------------------------
23 01-Apr-03 $14,668,962.39 $527,547.13 $14,213,441.88
-----------------------------------------------------------------------------------------------------------------------------
24 01-May-03 $14,213,441.88 $517,758.64 $13,767,879.73
-----------------------------------------------------------------------------------------------------------------------------
25 02-Jun-03 $13,767,879.73 $508,829.87 $13,333,645.37
-----------------------------------------------------------------------------------------------------------------------------
26 02-Jul-03 $13,333,645.37 $508,143.03 $12,893,229.95
-----------------------------------------------------------------------------------------------------------------------------
27 01-Aug-03 $12,893,229.95 $467,414.94 $12,491,305.55
-----------------------------------------------------------------------------------------------------------------------------
28 02-Sep-03 $12,491,305.55 $419,815.21 $12,139,169.26
-----------------------------------------------------------------------------------------------------------------------------
29 01-Oct-03 $12,139,169.26 $417,754.80 $11,781,019.45
-----------------------------------------------------------------------------------------------------------------------------
30 03-Nov-03 $11,781,019.45 $415,652.19 $11,431,192.49
-----------------------------------------------------------------------------------------------------------------------------
31 01-Dec-03 $11,431,192.49 $375,503.39 $11,109,880.35
-----------------------------------------------------------------------------------------------------------------------------
32 02-Jan-04 $11,109,880.35 $375,505.39 $10,794,569.20
-----------------------------------------------------------------------------------------------------------------------------
33 02-Feb-04 $10,794,569.20 $370,757.18 $10,480,470.20
-----------------------------------------------------------------------------------------------------------------------------
34 01-Mar-04 $10,480,470.20 $370,493.90 $10,159,662.35
-----------------------------------------------------------------------------------------------------------------------------
35 01-Apr-04 $10,159,662.35 $370,020.11 $ 9,842,786.94
-----------------------------------------------------------------------------------------------------------------------------
36 03-May-04 $ 9,842,786.94 Nil
-----------------------------------------------------------------------------------------------------------------------------
2
Schedule "C" to the Agreement dated as of the 24/th/ day of May, 2001 between
Steelcase Financial Services Ltd. as the Borrower and Royal Bank of Canada as
the Bank.
[ ______], 2001
Royal Bank of Canada
[ADDRESS]
Attention: [ ]
----------------
XxXxxxxx Binch
[ADDRESS]
Attention: [ ]
----------------
Dear Sirs:
Re: Credit Facility Provided by Royal Bank of Canada to Steelcase Financial
-------------------------------------------------------------------------
Services Ltd.
-------------
We are special Canadian counsel to Steelcase Financial Services Ltd.
(the "Borrower") and have represented the Borrower in connection with the
authorization, execution, and delivery by the Borrower of a letter credit
agreement issued by Royal Bank of Canada (the "Bank") and dated as of the [ ]
day of [ ], 2001 and acknowledged and accepted by the Borrower on the [ ] day of
[ ], 2001 (the "Credit Agreement").
Scope of Inquiry
----------------
In connection with the foregoing, we have considered such statutes and
regulations of the Province of Ontario and of Canada of general application to
the Borrower as at the date of this opinion, and have conducted such
examinations and investigations as we have considered necessary as a basis for
the opinions expressed herein. For the purposes of providing this opinion we
have reviewed:
(a) copies of the articles of incorporation and amendment thereto, general
by-law, minutes of meetings of each of the board of directors and the
sole shareholder and directors' and sole shareholder's resolutions in
lieu of such meetings, and shareholders' register of the Borrower
(collectively, the "Corporate Records");
(b) a certificate of status (the "Certificate of Status") in respect of
the Borrower issued under the authority of the Director of Companies
Branch, Ministry of Consumer and Business Services (Ontario) dated the
. day of May, 2001 (a copy of which is attached hereto as Exhibit
"A");
(c) a certificate of the [name of officer/director] of the Borrower dated
the [ ] day of [ ], 2001 respecting various corporate and other
matters relevant to the Credit
2
Agreement (the "Officer's Certificate") (a copy of which is being
delivered herewith); and
(d) a signed copy of the Credit Agreement.
Except with respect to limited matters, we have not acted as counsel
to the Borrower in a capacity other than as stated above and in particular, have
not generally acted as corporate counsel to the Borrower. Furthermore, we have
not been involved in the preparation, drafting, or negotiation of the Credit
Agreement.
We are solicitors qualified in the Province of Ontario, Canada and
accordingly no opinion is expressed herein as to the laws of any jurisdiction
other than Ontario and the laws of Canada applicable therein.
Assumptions
-----------
For purposes of providing this opinion, we have relied solely on the
reviews, investigations and documents as described above and have assumed:
(a) the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to authentic original
documents of all documents submitted to us as copies;
(b) that the Corporate Records of the Borrower provided to us, together
with the resolution of the board of directors attached as Exhibit "D"
to the Officer's Certificate, are true and complete copies of all of
the articles of incorporation and all amendments thereto, all by-laws
which are in full force and effect, all minutes of meetings of each of
the board of directors and the sole shareholder and directors' and
sole shareholder's resolutions in lieu of such meetings, and all
shareholders' registers of the Borrower;
(c) that the Credit Agreement has been properly authorized, executed and
delivered by the Bank and that as of the date of this opinion no steps
or actions have been taken to revoke, rescind or modify any such
authorizations;
(d) that the Certificate of Status continues to be accurate as of the date
hereof; and
(e) that all facts set forth in official public records and certificates
and other documents supplied by public officials or otherwise conveyed
to us by public officials are complete, true and accurate.
3
Qualifications
--------------
Our opinions expressed herein are also subject to the following
qualifications:
(a) the Credit Agreement is only enforceable to the extent that monies
have been advanced by the Bank to the Borrower;
(b) enforceability of the Credit Agreement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforceability of creditors' rights generally;
(c) equitable remedies, including the remedies of specific performance and
injunction, may only be granted in the discretion of a court of
competent jurisdiction;
(d) the Bank may not be able to enforce provisions of the Credit Agreement
which purport to derogate from or waive defences available to the
Borrower;
(e) a court may decline to enforce rights of indemnity under the Credit
Agreement which are found to be contrary to public policy;
(f) enforcement of the Credit Agreement might be affected by or limited by
any collateral agreements or arrangements relating thereto entered
into among the parties thereto, of which we are not aware; this is to
confirm that we are not aware of any such agreement or arrangement;
(g) provisions in the Credit Agreement purporting to sever invalid and
unenforceable provisions may not be enforceable as an Ontario court
may reserve itself a decision as to whether any provision is severable
or otherwise of no force or effect;
(h) the failure of the Bank to exercise or delay in exercising a right of
action or remedy under the Credit Agreement may act as a bar to the
enforcement at any time thereafter, or waiver of, such rights;
(i) the Bank may be precluded by a court of competent jurisdiction from
enforcing the Credit Agreement until after the Borrower has been given
a reasonable time to make payment of any amount demanded under the
Credit Agreement;
(j) no opinion is given as to whether it may be necessary in connection
with the enforcement of the rights under the Credit Agreement for the
Bank or any other persons proposing to acquire, own or operate all or
any part of the assets of the
4
Borrower to obtain or affect any license, franchise, permit, consent,
approval, registration or other authorization or exemption in
connection therewith;
(k) the Bank may not be able to enforce the provisions purporting to limit
the set-off rights of the Borrower;
(l) a certificate, determination, notification, or opinion of the Bank as
to any matter may be held by an Ontario court not to be conclusive if
it can be shown to have any unreasonable or arbitrary basis or in the
event of manifest error;
(m) we express no opinion as to the enforceability of any provision that
could be construed as a "penalty" as opposed to liquidated damages; if
a contractual term requiring payment or specific performance in the
event of default is characterized as a "penalty" as opposed to
liquidated damages, the same would not be enforceable on public policy
grounds; in as much as the determination of this issue is subjective
and factual in nature, we are unable to express an opinion as to same;
(n) counsel fees and disbursements are subject to taxation; in addition,
the costs of and incidental to all proceedings taken in court or
before a judge are within the discretion of the court or judge before
which such proceedings are brought and a court or judge has full power
to determine by whom and to what extent the costs of such proceedings
shall be paid; and
(o) any action on the Credit Agreement may, with the effluxion of time, be
prescribed by the Limitations Act (Ontario).
Opinions
--------
Based upon and subject to the foregoing assumptions and qualifications,
and relying upon the Officer's Certificate with respect to factual matters set
out therein, we are of the opinion that:
1. The Borrower is a corporation incorporated and existing under the laws of
the Province of Ontario.
2. The Borrower has the full corporate power and authority to enter into,
execute, and deliver the Credit Agreement and to observe and perform the
obligations on its part to be observed and performed thereunder.
3. The execution and delivery of the Credit Agreement on behalf of the
Borrower and performance by the Borrower of its obligations thereunder do
not (a) violate any provision of its articles or by-laws, or (b)
contravene any existing law, regulation or
5
authorization of general application applicable in the Province of Ontario
to which the Borrower is subject.
4. The Credit Agreement has been duly authorized by all necessary corporate
action on the part of the Borrower and constitutes a valid and legally
binding obligation of the Borrower enforceable by the Bank against the
Borrower in accordance with its terms.
5. There are no consents, approvals, orders, authorizations, licences,
exemptions or designations or registrations, qualifications, declarations
or filings of or by any governmental or regulatory body or person having
jurisdiction in the Province of Ontario, which are necessary or advisable
in order for the Borrower (a) to execute and deliver the Credit Agreement
and (b) to perform its obligations thereunder.
The opinions expressed herein are limited to matters governed by the
laws of the Province of Ontario and the applicable laws of Canada.
Notwithstanding that our fee for this opinion will be paid by the
Borrower and that we have acted for the Borrower, we acknowledge that the Bank
is relying upon the opinions expressed herein in connection with the Credit
Agreement. We authorize XxXxxxxx Xxxxx to attach a copy of this opinion to any
opinion it may give to the Bank in connection with the Credit Agreement and
consent to reliance by the Bank, its successors and assigns, and XxXxxxxx Binch
on the opinions expressed herein.
Yours very truly,
Schedule "D" to the Agreement dated as of the 24/th/ day of May, 2001 between
Steelcase Financial Services Ltd. as the Borrower and Royal Bank of Canada as
the Bank.
OFFICER'S COMPLIANCE CERTIFICATE
--------------------------------
I, ___________________________________, of the City of __________________ in the
State of _________________, hereby certify as follows:
1. That I am the [_________________________] of Steelcase Inc. (the
"Guarantor").
2. That I am familiar with and have examined the provisions of the Facility
Agreement (the "Agreement") dated as of May 24, 2001, between Royal Bank of
Canada (the "Bank") and Steelcase Financial Services Ltd. (the "Borrower")
and the Guarantee (the "Guarantee") dated May 24, 2001 entered into by the
Guarantor for the benefit of the Bank as a condition of the Agreement and
have made reasonable investigations of corporate records and inquiries of
other officers and senior personnel of the Guarantor and the Borrower.
Terms defined in the Agreement or the Guarantee have the same meanings
where used in this certificate. As of the date of this certificate:
(a) the representations and warranties of the Guarantor contained in the
Guarantee are true and correct;
(b) 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 pursuant to Xxxxxxx 00
(x), 00 (x), 00(x) or 18(l) of the Agreement or, with respect to the
Guarantor, pursuant to Section 18(d), 18(h), 18(i), 18(j) or 18(k) of
the Agreement; and
3. That as of the end of the (fiscal quarter or fiscal year) to which this
certificate applies, on a consolidated basis:
A. Shareholder's Equity
For the Guarantor and its Subsidiaries:
1. Shareholders' Equity as of the February 25, 2000 $________
2. Net Income (if a positive number) from February 25, 2000 to
most recent Fiscal Year End or Fiscal Second Quarter End $________
3. 25% of Net Income [0.25 times (2)] $________
2
4 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
from February 25, 2000 to the most recent Fiscal Year End or
Fiscal Second Quarter End
5. aggregate of 25% of the after tax gains realized from $________
unusual, extraordinary, and major nonrecurring items from
February 25, 2000 to the most recent Fiscal Year End or
Fiscal Second Quarter End
6. Additions to Capital [(4) plus (5)] $________
7. Shareholders Equity $________
8. Minimum Shareholders Equity required under Guarantee $________
B. Funded Debt to EBITDA Ratio.
For the Guarantor and its Subsidiaries (for the period
consisting of the most recently ended four consecutive fiscal
quarters of the Guarantor):
1. indebtedness for borrowed money or for the deferred purchase $________
price of property or services
2. obligations as lessee under leases which shall have been or $________
should be, in accordance with GAAP, recorded as capital
leases
3. obligations under guarantees in respect of indebtedness or $________
obligations of others of the kinds referred to in clauses
(1) and (2) of this Section B
4. Funded Debt [(1) plus (2) plus (3)] $________
5. consolidated net income plus provision for taxes (exclusive $________
of extraordinary, unusual, or non-recurring gains or losses)
6. interest expense $________
7. depreciation expense and amortization of intangibles $________
3
8. EBITDA [(5) plus (6) plus (7)] $________
9. Ratio of Funded Debt to EBITDA [(4) : (8)] ______:1
10. Maximum Funded Debt Ratio required under Guarantee 3.25:1
C. Interest Coverage Ratio
For the Guarantor and its Subsidiaries (for the period
consisting of the most recently ended four consecutive fiscal
quarters of the Borrower)
1. EBITDA [B(8), above] $________
2. Interest Expense $________
3. Interest Expense to EBITDA Ratio [(1) : (2)] ______:1
4. Minimum Interest Expense to EBITDA Ratio 4.5:1
DATED this ________ day of _____________, 2001.
By: ________________________
Its: ________________________
Schedules "E-1 and E-2" to the Agreement dated as of the 24/th/ day of May, 2001
between Steelcase Financial Services Ltd. as the Borrower and Royal Bank of
Canada as the Bank.
FORM OF OPINION FOR GUARANTOR'S COUNSEL
---------------------------------------
May ., 2001
Royal Bank of Canada
[ADDRESS]
Attention: [ ]
-----------------
XxXxxxxx Xxxxx
[ADDRESS]
Attention: [ ]
-----------------
Dear Sirs:
Subject: GUARANTEE PROVIDED TO ROYAL BANK
OF CANADA BY STEELCASE INC.
--------------------------
In my capacity as Senior Corporate Counsel to Steelcase Inc., a
Michigan corporation (the "Guarantor"), I have reviewed a Guarantee dated as of
May 00/xx/ , 0000 (xxx "Xxxxxxxxx"), made by the Guarantor for the benefit of
Royal Bank of Canada (the "Bank"), relating to the indebtedness of Steelcase
Financial Services Ltd. (the "Borrower") to the Bank under a Credit Facility
Agreement dated May 24, 2001, between the Borrower and the Bank.
In addition to the Guarantee, I reviewed such other records and
documents, and have given consideration to such other matters of law and fact
(in accordance with the principles set forth herein) as I have deemed
appropriate, in my professional judgement, to enable me to express the opinions
set forth below. In my review of the Guarantee and such other records and
documents, I have assumed with your permission and without independent
investigation the genuineness of all signatures, the authenticity of documents
submitted to me as originals, and the conformity to originals of all documents
submitted to me as copies. In rendering the opinions expressed in this letter, I
have also, with your permission, relied upon the accuracy of legal opinions
dated on or about the date of this letter from Xxxxx XxXxxxxx, counsel to the
Guarantor and the Borrower, and the opinions set forth below are subject to all
applicable limitations and qualifications contained therein. The law covered by
this opinion letter is limited to the present law of the State of Michigan, and
I express no opinion with respect to the laws of any other jurisdiction.
Based upon the foregoing, and subject to the qualifications set forth
below, I am of the opinion that:
1. The Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Michigan, United States of America.
2
2. The Guarantor has full corporate power and authority to enter into the
Guarantee and to observe and perform the obligations on its part to be
observed and performed thereunder.
3. The execution, delivery and performance of the Guarantee by the Guarantor
will not (a) violate any provision of its articles or by-laws, or (b)
contravene any existing law, rule or regulation of the State of Michigan
applicable to transactions of the type contemplated by the Guarantee, or
(c) to the best of my knowledge, constitute a default under any agreement
or other instrument to which it is a party or by which it is bound.
4. The Guarantee has been duly authorized by all necessary corporate action on
the part of the Guarantor and has been duly executed and delivered on
behalf of the Guarantor.
5. There are no consents, approvals, orders, authorizations, licences,
exemptions or designations or registrations, qualifications, declarations
or filings of or by any governmental or regulatory body or person which are
necessary or advisable in order for the Guarantor (a) to execute and
deliver the Guarantee, and (b) to perform its obligations thereunder.
This opinion letter is being delivered to you in connection with the
transactions contemplated by the Guarantee, and may not be relied upon by you
for any other purpose. This opinion letter may not be relied on by any person or
entity other than the addressees of this letter and their successors and
assigns, without my prior written consent. This opinion letter is based solely
upon current laws and regulations and I have not undertaken any obligation to
update this opinion letter in the event of changes thereto or the passage of
additional legislation.
Yours truly,
May ., 2001
Royal Bank of Canada
XxXxxxxx Xxxxx
Re: Guarantee (the "Guarantee") dated as of May 24, 2001 entered into by
Steelcase Inc. (the "Guarantor") for the benefit of Royal Bank of
Canada (the "Bank")
Ladies and Gentlemen:
We have acted as special counsel to the Guarantor in
connection with the negotiation, execution and delivery of the Guarantee. Terms
defined in the Guarantee and not otherwise defined herein shall have the
meanings given to such terms in the Guarantee.
This opinion is delivered to you pursuant to Section15(a)(xi)
of the Credit Facility Agreement, dated as of May 24, 2001, by and between
Steelcase Financial Services Ltd. and the Bank (the "Credit Agreement").
We have reviewed the Guarantee and such other records and
documents, and have given consideration to such other matters of law and fact
(in accordance with the principles set forth herein), as we have deemed
appropriate, in our professional judgment, to express the opinions expressed
herein under the laws specified below.
In our review of the Guarantee and such other records and
documents, we have assumed with your permission and without independent
investigation (i) that the signatures of persons signing the Guarantee are
genuine, (ii) the authenticity of all documents submitted to us as originals,
and (iii) the conformity to originals of all documents submitted to us as
copies. We have also assumed the due authorization, execution and delivery of
the Guarantee and the validity, binding effect and enforceability thereof by or
on behalf of the parties thereto other than the Guarantor. As to factual matters
material to this opinion letter, we have relied upon the factual representations
and warranties of the Guarantor contained in the Guarantee and upon originals
(or copies certified or otherwise identified to our satisfaction) of such
records, documents, certificates and other written information as in our
judgment are necessary or appropriate to enable us to render the opinions
expressed below. In rendering this opinion letter, we have relied on and assumed
the accuracy of the opinion letter of [insert name] of the Guarantor, delivered
pursuant to Section15(a)(xi) of the Credit Agreement, and the opinions set forth
herein are subject to all applicable limitations and qualifications contained
therein.
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Based upon the foregoing and subject to the qualifications set
forth below, we are of the opinion that:
1. The execution, delivery and performance by the Guarantor of the
Guarantee will not violate any Applicable Law. "Applicable Law" shall
mean, for this purpose, those laws, rules and regulations of the State
of New York and of the United States of America that, in our
experience, are normally applicable to transactions of the type
contemplated by the Guarantee.
2. There are no consents, approvals, orders, authorizations, licenses,
exemptions, designations, registrations, qualifications, declarations
or filings of or by any governmental or regulatory body or person which
are necessary or advisable under the laws of the State of New York in
order for the Guarantor (a) to execute and deliver the Guarantee and
(b) to perform its obligations thereunder.
3. The Guarantee constitutes the legal, valid and binding obligation of
the Guarantor enforceable against the Guarantor in accordance with its
terms.
THE ABOVE OPINIONS ARE SUBJECT TO THE FOLLOWING QUALIFICATIONS:
(a) The enforceability of obligations of the Guarantor under the
Guarantee is subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, and similar
laws affecting the rights and remedies of creditors generally
and the application of principles of equity, whether in an
action at law or a proceeding in equity.
(b) The laws of the State of New York generally impose an
obligation of good faith and reasonableness in the performance
and enforcement of contracts, and, in this regard, we have
assumed that you will exercise your rights and remedies in
good faith and in circumstances and in a manner which is
commercially reasonable.
(c) We express no opinion with respect to the validity, binding
effect or enforceability of any provisions of the Guarantee
that (i) require the Guarantor to make payments without
set-off, deduction, counterclaim or the exercise of any other
right that the Guarantor may have against the Bank, (ii)
provide for rights of indemnification or contribution that are
contrary to public policy, (iii) purport to bind the parties
to conclude an agreement at a future date, (iv) provide for an
absolute and unconditional obligation to perform the Guarantee
or any provision thereof even though the Guarantee or such
provision may be determined to be invalid, terminated or such
other defense to or releases from performance that cannot, as
a matter of law, be effectively waived or (v) waive any right
to a trial by jury.
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(d) We express no opinion as to (i) whether a federal court of the
United States of America would have subject matter
jurisdiction over any action brought against the Guarantor
pursuant to the Guarantee, or (ii) whether a federal or New
York state court would recognize any claim that any action
brought against the Guarantor is brought in an inconvenient
forum or whether such court might determine in its own
discretion that another forum is a more appropriate forum for
such action.
(e) Our opinions are limited to questions arising under the laws
of the State of New York and the federal laws of the United
States of America, and we express no opinion with respect to
the laws of any other jurisdiction.
This opinion letter is being delivered to you in connection with
the above described transaction and may not be relied on by you for any other
purpose. This opinion letter may not be relied on by any Person other than the
addresses and their successors and assigns, without our prior written consent.
This opinion letter is based solely upon current laws and regulations and we
have not undertaken any obligation to update this opinion letter in the event
of changes thereto or additional legislation.
Very truly yours,
