EXHIBIT 4.12
April 5, 2000
Steelcase Financial Services Ltd.
0 Xxxxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Financial Officer
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Dear Sirs:
Royal Bank of Canada (the "Bank") is pleased to offer Steelcase Financial
Services Ltd. (the "Borrower") a non-revolving, single advance term credit
facility (the "Credit Facility"), subject to the following terms and conditions.
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
Forty Five Million Two Hundred Ninety Two Thousand Nine Hundred Thirty
Three and 28/100 Dollars ($45,292,933.28) 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 shall be calculated by discounting to the
present at the Interest Rate (as defined in Section 6 hereof) all such
remaining lease payments (excluding taxes).
3. CREDIT FACILITY:
The Credit Facility is available by way of a fixed rate term advance
(the "Borrowing").
4. PURPOSE
The Borrower shall use the Credit Facility to repay an inter-company
loan advanced to the Borrower by Steelcase Canada Ltd.
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5. AVAILABILITY:
The Borrower may borrow by way of a single advance to be made no later
than April 28, 2000 (or such later date, as the Bank and the Borrower
may agree) by giving two (2) Business Days' notice of its intention to
draw.
6. INTEREST RATE:
The per annum interest rate applicable to the Borrowing shall be equal
to 6.58% (the "Interest Rate"). The Interest Rate shall be calculated
on the basis of actual number of days elapsed and a year of 365 days.
7. PAYMENT ADJUSTMENT:
(a) If the ratio of the Guarantor's Funded Debt to EBITDA becomes
greater than 2.0 to 1.0, as evidenced by the Guarantor's
quarterly financial statements delivered by the Guarantor in
accordance with the Guarantee, then, the Bank may calculate the
present value of all the then remaining lease payments (excluding
taxes) owing to the Borrower by the lessees pursuant to the
Leases using (i) the Discount Rate, and (ii) the Discount Rate +
0.15%. Following any such calculation, the Bank may deliver a
written notice to the Borrower requiring that the Borrower pay
the Bank an amount equal to the difference obtained when the
present value as calculated in (i) above is deducted from the
present value as calculated in (ii) above. Any such requirement
given by the Bank shall be accompanied by the Bank's supporting
calculations which shall constitute prima facie evidence of the
amount required to be paid. Payment shall be made within 5
Business Days of receipt of such written requirement for payment.
(b) If following a payment made pursuant to subsection 7(a) above,
the ratio of the Guarantor's Funded Debt to EBITDA becomes less
than or equal to 2.0 to 1.0 as evidenced by the Guarantor's
quarterly financial statements delivered by the Guarantor in
accordance with the Guarantee, then the Borrower may calculate
the present value of all the then remaining lease payments
(excluding taxes) owing to the Borrower by the lessees pursuant
to the Leases using (i) the Discount Rate, and (ii) the Discount
Rate + 0.15%. Following any such calculation, the Borrower may
deliver a written notice to the Bank requiring that the Bank
advance a Borrowing at the rate, amortization and other terms
described herein to the Borrower of an amount equal to the
difference obtained when the present value as calculated in (i)
above is deducted from the present value as calculated in (ii)
above. Any such requirement given by the Borrower shall be
accompanied by the Borrower's supporting calculations which shall
constitute prima facie evidence of the amount required to be
paid. Payment shall be made within five Business Days of receipt
of such written requirement for payment.
8. TIME AND PLACE OF PAYMENT:
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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 any portion of the Borrowing in
the minimum amount of Cdn$1,000,000 and increments thereof. Any
such prepayment shall be applied in the reverse order of maturity
and payable pursuant to the Repayment Schedule attached hereto as
Schedule B.
If the Bank shall make a claim to the Borrower pursuant to
Sections 13 (Increased Costs) or 19 (Indemnities) hereof, the
Borrower, upon 5 Business Days prior written notice to the Bank,
shall have the option at its sole discretion to voluntarily
prepay all of the Borrowing without paying breakage costs
referenced in Section 10 hereof to the Bank.
10. BREAKAGE COSTS:
In the event of a voluntary prepayment pursuant to Section 9
hereof or an acceleration pursuant to Section 18, the Borrower
shall be subject to breakage costs as described in this Section
10. Breakage costs shall be assessed in addition to amounts owing
for principal and accrued interest on the Borrowings. Breakage
costs shall equal the difference (but only if a positive number)
between (a) the present value of the scheduled payments of
principal and interest subject to prepayment (calculated in the
inverse order of maturity in the case of any partial prepayment
of the Borrowings), in each case discounted at the Discount Rate
less (b) the present value of the scheduled payments of principal
and interest subject to prepayment (calculated in the inverse
order of maturity in the case of any partial prepayment of the
Borrowings), in each case discounted at the Interest Rate and in
each case reasonably determined by the Bank on the Business Day
following the date of such voluntary prepayment or acceleration
following an Event of Default.
11. REPAYMENT OF CREDIT FACILITY:
Subject to acceleration following an Event of Default, the Amount
shall be repaid in blended payments of principal and interest in
the amounts, at the times specified in Schedule "B", and in
accordance with the following wiring instructions:
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Royal Bank of Canada
00 Xxxx Xx Xxxx, 0xx Xxxxx
Xxxxxxx Xxx X0X 0X0
For Credit of: Royal Bank of Canada Leasing
Account Number: 000-000-0, Transit 05512:003
Reference: Steelcase Financial Services Ltd. Ref. #33615, Contract #60180
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 occurs.
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:
(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,
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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 have no obligation
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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 and fees which are accrued to the date
of payment.
15. CONDITIONS PRECEDENT TO BORROWING:
(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 lessees and payments, by
amount and date, due pursuant to the Leases which
shall be attached hereto as Schedule F;
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(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 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".
(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
(iii) 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
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which it is bound, (B) violate any provision of its
constating documents, 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;
(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;
(f) to the best of its knowledge, the Borrower is in
compliance with all Applicable Laws; and
17. COVENANTS:
The Borrower covenants and agrees with the Bank, while this Agreement is in
effect or 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;
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(c) to comply with all Applicable Laws except where failure to so
comply would not have a material adverse effect on the business
of the Borrower;
(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; and
(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.
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) an term, covenant or
agreement contained in this Agreement (other than any term, covenant
or agreement contained in Section 17(a), 17(b) or 17(e)) on its part
to be performed or observed and the failure to perform or observe such
other 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) or 17(e);
(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) the Guarantor, with respect to the Guarantee, shall fail to perform or
observe (i) an 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 other term,
covenant or agreement shall remain unremedied for 30 days after the
Guarantor obtains knowledge of such breach or (ii) any
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term, covenant or agreement contained in Section 6(a), 6(c), 6(d) or
6(h) of the Guarantee;
(e) 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;
(f) 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 nonappealable 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;
(g) 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;
(h) 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;
(i) any notice of intention is filed or any voluntary or involuntary case
or proceeding is filed or commenced by or against 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
and in the case of any involuntary proceeding against Borrower or the
Guarantor, such involuntary proceeding shall remain undismissed or
unstayed for a period of 60 days;
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(j) 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 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; and
(k) 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 together with any breakage costs as
determined by the Bank in accordance with Section 10 hereof.
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
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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:
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, 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 such 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.
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(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 Borrower furnished to the
Bank by the Borrower or the Guarantor; provided that, prior to any
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such disclosure, the assignee or 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 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
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With a copy to the Guarantor:
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
00 Xxxx Xxxxxx Xxxxx
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
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documents, as shall be reasonably required in order to fully perform
the terms of, and to carry out the intention of, this Agreement.
(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
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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
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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.
[The remainder of this page has been left blank intentionally.]
Yours truly,
ROYAL BANK OF CANADA
By: /s/ Xxxx Xxxxx
----------------------------------------
Name/Title: Xxxx X. Xxxxx
Senior Market Manager & Group Head
By: /s/ X. X. Xxxxx
----------------------------------------
Name/Title: X. X. Xxxxx
Senior Manager
We acknowledge and accept the terms and conditions of this Agreement on the
5/th/ day of April, 2000 which acceptance is effective as of the date first
above written.
STEELCASE FINANCIAL SERVICES LTD.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name/Title: Xxxx X. Xxxxxxxx, Secretary
--------------------------------
-16-
Schedule "A" to the Agreement dated as of the 5/th/ day of April, 2000 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 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;
"Criminal Code" means the Canada Criminal Code.
"Discount Rate" means, at any time, the lesser of (a) the Interest Rate less one
half of one percent (.5%) and (b) the bid rate at such time, expressed as a
percentage per annum, on Government of Canada bonds or notes falling due on the
date closest to the weighted average maturity of the payments subject to
discounting.
"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;
-17-
"Guarantor" means Steelcase Inc., a corporation incorporated under the laws of
the state of Michigan, United States of America;
"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 the last payment date as set forth in the Repayment
Schedule attached hereto as Schedule B as such Schedule B may be modified
pursuant to a prepayment by the Borrower, unless the Credit Facility has been
extended by the Bank, in which case it shall be the date to which the Credit
Facility has been extended;
"Person" means any individual, firm, partnership, company, corporation,
government, governmental body or agency, instrumentality and unincorporated body
of persons or association;
"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;
"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
-18-
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.
-19-
Schedule "B" to the Agreement dated as of the 5/th/ day of April, 2000 between
Steelcase Financial Services Ltd. as the Borrower and Royal Bank of Canada as
the Bank.
REPAYMENT SCHEDULE
------------------
Schedule "B"
Repayment of Credit Facility
----------------------------
Date Payments Balance O/S
---- -------- -----------
May 1, 2000 1,073,388.03 51,586,554.97
June 1, 2000 1,072,963.67 50,513,591.30
July 1, 2000 1,069,067.53 49,444,523.77
August 1, 2000 1,058,740.10 48,385,783.67
September 1, 2000 1,058,740.10 47,327,043.57
October 1, 2000 1,058,335.30 46,268,708.27
November 1, 2000 1,054,219.15 45,214,489.12
December 1, 2000 1,052,907.53 44,161,581.59
January 1, 2001 1,038,775.63 43,122,805.96
February 1, 2001 1,032,599.68 42,090,206.28
March 1, 2001 1,024,248.98 41,065,957.30
April 1, 2001 1,012,563.25 40,053,394.05
May 1, 2001 1,010,129.18 39,043,264.87
June 1, 2001 996,088.27 38,047,176.60
July 1, 2001 990,209.18 37,056,967.42
August 1, 2001 983,894.41 36,073,073.01
September 1, 2001 981,333.87 35,091,739.14
October 1, 2001 978,413.92 34,113,325.22
November 1, 2001 975,569.30 33,137,755.92
December 1, 2001 968,313.42 32,169,442.50
January 1, 2002 964,471.58 31,204,970.92
February 1, 2002 959,191.60 30,245,779.32
March 1, 2002 957,608.88 29,288,170.44
April 1, 2002 953,940.73 28,334,229.71
May 1, 2002 927,227.43 27,407,002.28
June 1, 2002 918,531.47 26,488,470.81
July 1, 2002 907,127.78 25,581,343.03
August 1, 2002 886,470.54 24,694,872.49
September 1, 2002 850,384.47 23,844,488.02
October 1, 2002 844,195.46 23,000,292.56
November 1, 2002 826,002.30 22,174,290.26
December 1, 2002 816,778.87 21,357,511.39
January 1, 2003 804,924.83 20,552,586.56
-20-
February 1, 2003 790,670.77 19,761,915.79
March 1, 2003 789,925.74 18,971,990.05
April 1, 2003 769,838.60 18,202,151.45
May 1, 2003 766,799.00 17,435,352.45
June 1, 2003 757,274.53 16,678,077.92
July 1, 2003 741,020.00 15,937,057.92
August 1, 2003 721,808.35 15,215,249.57
September 1, 2003 720,314.98 14,494,934.59
October 1, 2003 712,195.17 13,782,739.42
November 1, 2003 705,046.84 13,077,692.58
December 1, 2003 704,607.66 12,373,084.92
January 1, 2004 690,476.68 11,682,608.24
February 1, 2004 649,748.10 11,032,860.14
March 1, 2004 645,568.43 10,387,291.71
April 1, 2004 632,368.15 9,754,923.56
May 1, 2004 623,282.18 9,131,641.38
June 1, 2004 615,631.20 8,516,010.18
July 1, 2004 601,604.71 7,914,405.47
August 1, 2004 592,280.84 7,322,124.63
September 1, 2004 564,907.88 6,757,216.75
October 1, 2004 552,274.74 6,204,942.01
November 1, 2004 544,368.17 5,660,573.84
December 1, 2004 526,778.87 5,133,794.97
January 1, 2005 496,622.70 4,637,172.27
February 1, 2005 459,499.15 4,177,673.12
March 1, 2005 454,992.08 3,722,681.04
April 1, 2005 443,817.32 3,278,863.72
May 1, 2005 431,473.66 2,847,390.06
June 1, 2005 410,194.90 2,437,195.16
July 1, 2005 389,012.40 2,048,182.76
August 1, 2005 378,330.11 1,669,852.65
September 1, 2005 366,491.98 1,303,360.67
October 1, 2005 191,433.08 1,111,927.59
November 1, 2005 122,032.60 989,894.99
December 1, 2005 113,241.74 876,653.25
January 1, 2006 112,825.51 763,827.74
February 1, 2006 104,141.53 659,686.21
March 1, 2006 101,502.83 558,183.38
April 1, 2006 99,306.03 458,877.35
May 1, 2006 87,855.96 371,021.39
June 1, 2006 64,326.67 306,694.72
July 1, 2006 63,139.45 243,555.27
August 1, 2006 62,309.32 181,245.95
-21-
September 1, 2006 181,245.95 0.00
Gross Payments 52,659,943.00
-22-
Schedule "C" to the Agreement dated as of the 5/th/ day of April, 2000 between
Steelcase Financial Services Ltd. as the Borrower and Royal Bank of Canada as
the Bank.
[ ______], 2000
Royal Bank of Canada
[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 [ ], 2000 and acknowledged and accepted by the Borrower on the [ ] day of
[ ], 2000(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
-23-
Consumer and Commercial Relations (Ontario) dated
the 24/th/ day of March, 2000 (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 [ ], 2000 respecting various
corporate and other matters relevant to the Credit Agreement
(the "Officer's Certificate") (a copy of which is being
delivered herewith); and
(d) a signed copy of the Credit Agreement forwarded to us by
telefax.
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 Credit Agreement has been executed and delivered to
the Bank by a director or officer of the Borrower;
(e) that the Certificate of Status continues to be accurate as of
the date hereof;
-24-
and
(f) 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.
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;
(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
-25-
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
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, including without limitation, the breakage
costs referred to in section 10 of the Credit Agreement; 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) We express no opinion as to whether the "interest" payable
pursuant to the Credit Agreement is or is not a criminal rate
of interest within the meaning of the Canada Criminal Code and
any resultant implications if such rate of interest is in fact
a criminal rate;
(o) 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
(p) 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
-26-
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
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. Furthermore,
the opinions expressed herein are provided solely for your benefit in connection
with the transactions contemplated in the Credit Agreement and may not be used
or relied on by any other person or for any other purpose.
Yours very truly,
XXXXX & XxXXXXXX
-27-
Schedule "D" to the Agreement dated as of the 5/th/ day of April, 2000 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
Guarantee (the "Agreement") dated [______________] entered into by the
Guarantor for the benefit of Royal Bank of Canada (the "Bank") and
have made reasonable investigations of corporate records and inquiries
of other officers and senior personnel of the Borrower. Terms defined
in the Agreement 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 Agreement 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 by
reason of the Guarantor's performance under 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
27, 1998 $_________
2. Net Income (if a positive number) from February
27, 1998 to most recent Fiscal Year End or
Fiscal Second Quarter End $_________
3. 25% of Net Income [0.25 * (2)] $_________
-28-
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 27, 1998 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 27, 1998 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 Ratio.
For the Guarantor and its Subsidiaries (for each 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. 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 $_________
8. EBITDA [(5) plus (6) plus (7)] $_________
-29-
9. Ratio of Funded Debt to EBITDA [(4):(8)] $_________
10. Maximum Funded Debt Ratio required under Guarantee $_________
C. Minimum Interest Coverage Ratio
For the Guarantor and its Subsidiaries (for each period
consisting of the most recently ended four consecutive
fiscal quarters of the Borrower)
1. EBITDA [B(8), above] $_________
2. Interest expense $_________
3. Interest Coverage Ratio [(1)/(2)] $_________
4. Minimum Interest Coverage Ratio 5.00:1.00
DATED this ________ day of _____________, 2000.
By:_____________________
Its:____________________
-30-
Schedules "E-1 and E-2" to the Agreement dated as of the 5/th/ day of April,
2000 between Steelcase Financial Services Ltd. as the Borrower and Royal Bank of
Canada as the Bank.
FORM OF OPINION FOR GUARANTOR'S COUNSEL
---------------------------------------
April 7, 0000
Xxxxx Xxxx xx Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
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 April 5,
2000 (the "Guarantee"), 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 April 5, 2000, 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. 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
-31-
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 other
person or entity without my prior written consent. Copies of this opinion letter
may not be furnished to any other person or entity, nor may any portion of this
opinion letter be quoted, circulated or referred to in any other document,
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,
Xxxxxx X. Xxxxxxx
Senior Corporate Counsel
-32-
April __, 0000
Xxxxx Xxxx xx Xxxxxx
Re: Guarantee (the "Guarantee") dated as of April 5, 2000 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 Section 15(a)(xi) of the
Credit Facility Agreement, dated as of April 5, 2000 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 Xxxxxx X. Xxxxxxx, Senior Corporate Counsel of the Guarantor,
delivered pursuant to Section 15(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 performance would be
illegal or that provide a waiver or any other defense to or releases
from performance 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 other Person without our prior
written consent. Copies of this opinion letter may not be furnished to any other
Person (other than to bank examiners and other regulatory authorities should
they so request or in connection with their normal examination), nor may any
portion of this opinion letter be quoted, circulated or referred to in any other
document, 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,
