-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T2Wlt07nlzWDjjQz5muVanSTdtTvXeuZT+vGj5/fYvSAi1fod1RU7jWwXLeihmnG dGJCiUj6jl0BJvzM9G71yg== 0001021408-02-002752.txt : 20020414 0001021408-02-002752.hdr.sgml : 20020414 ACCESSION NUMBER: 0001021408-02-002752 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 32 FILED AS OF DATE: 20020222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEELCASE INC CENTRAL INDEX KEY: 0001050825 STANDARD INDUSTRIAL CLASSIFICATION: OFFICE FURNITURE (NO WOOD) [2522] IRS NUMBER: 380819050 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-83264 FILM NUMBER: 02556446 BUSINESS ADDRESS: STREET 1: 901 44TH ST CITY: GRAND RAPIDS STATE: MI ZIP: 49508 BUSINESS PHONE: 6162472710 MAIL ADDRESS: STREET 1: 901 44TH ST CITY: GRAND RAPIDS STATE: MI ZIP: 49508 S-4 1 ds4.txt FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 22, 2002 REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------- STEELCASE INC. (Exact Name of Registrant as Specified in its Charter) ----------------- MICHIGAN 2522 38-0819050 (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Incorporation or Organization) Classification Code Number) Identification Number)
901 44th Street Grand Rapids, Michigan 49508 (616) 247-2710 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ----------------- Jon D. Botsford, Esq. 901 44th Street Grand Rapids, Michigan 49508 (616) 247-2710 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) ----------------- COPIES OF ALL COMMUNICATIONS TO: Charles W. Mulaney, Jr., Esq. Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Chicago, Illinois 60606 ----------------- Approximate Date of Commencement of Proposed Sale to the Public: As soon as practicable after this registration statement becomes effective. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: [_] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [_] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [_] ----------------- CALCULATION OF REGISTRATION FEE ================================================================================
Proposed Maximum Title Of Each Class Of Aggregate Amount Of Securities To Be Registered Offering Price(1) Registration Fee(1)(2) --------------------------------------------------------------------- 6.375% Senior Notes Due 2006 $248,743,333 $22,884 ---------------------------------------------------------------------
================================================================================ (1)Pursuant to Rule 457(f)(2) under the Securities Act, the book value of the securities for which the securities being registered are to be exchanged has been used as the basis for calculating the registration fee. (2)Calculated on the basis of the maximum aggregate offering price in accordance with Rule 457(o) under the Securities Act. ----------------- The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED FEBRUARY 22, 2002 PROSPECTUS [LOGO] Steelcase Steelcase Inc. $250,000,000 Exchange Offer for 6.375% Senior Notes Due 2006 Steelcase Inc. is offering to exchange an aggregate principal amount of up to $250,000,000 of its new 6.375% Senior Notes Due 2006 for a like amount of its old 6.375% Senior Notes Due 2006. The form and terms of the new notes will be identical in all material respects to the form and terms of the old notes, except that the new notes: . will have been registered under the Securities Act; . will not bear restrictive legends restricting their transfer under the Securities Act; . will not be entitled to the registration rights that apply to the old notes; and . will not contain provisions relating to an increase in the interest rate borne by the old notes under circumstances related to the timing of the exchange offer. The exchange offer expires at 5:00 p.m., New York City time, on , 2002, unless we extend it. The new notes will not be listed on any national securities exchange or the Nasdaq Stock Market. Each broker-dealer that receives new notes for its own account in exchange for old notes represents that the old notes to be exchanged for the new notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes pursuant to the exchange offer; however, by so acknowledging and by delivering a prospectus, the participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Steelcase Inc. has agreed that, during the period ending 180 days after the expiration date of the exchange offer, subject to extension in limited circumstances, or such shorter period which will terminate when the participating broker-dealers have completed all resales subject to any prospectus delivery requirements, it will use its reasonable best efforts to keep the exchange offer registration statement effective and to make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution and Selling Restrictions." ----------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ----------------- The date of this prospectus is February , 2002. This prospectus incorporates important business and financial information about us that is not included in or delivered with this prospectus. This information is available without charge to holders of the notes upon written or oral request to Steelcase Inc., 901 44th Street, Grand Rapids, Michigan, 49508, Attention: Steelcase Investor Relations, telephone number (616) 247-2200, email: ir@steelcase.com. To obtain timely delivery, note holders must request the information no later than , 2002. ----------------- TABLE OF CONTENTS
Page ---- Where You Can Find More Information.................... ii Incorporation by Reference............................. ii Forward-Looking Statements............................. iii Summary................................................ 1 Use of Proceeds........................................ 9 Capitalization......................................... 10 Selected Financial Data................................ 11 The Exchange Offer..................................... 13 Description of Notes................................... 23 Book-Entry; Delivery and Form.......................... 32 Certain United States Federal Income Tax Considerations 35 Plan of Distribution and Selling Restrictions.......... 36 Legal Matters.......................................... 37 Experts................................................ 37
As used in this prospectus, unless otherwise expressly stated or the context otherwise requires, all references to "Steelcase," "we," "our," "us" and all similar references are to Steelcase Inc. and its consolidated subsidiaries. ----------------- This communication is directed solely at persons who (i) are outside the United Kingdom or (ii) have professional experience in matters relating to investments or (iii) are persons falling within Article 49(2)(a) to (d) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the "Financial Promotion Order"), (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. The distribution of this prospectus and the offer and sale of the new notes may be restricted by law in certain jurisdictions. Persons who come into possession of this prospectus or any of the new notes must inform themselves about and observe any such restrictions. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the new notes or possess or distribute this prospectus and, in connection with any purchase, offer or sale by you of the new notes, must obtain any consent, approval or permission required under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchase, offer or sale. WHERE YOU CAN FIND MORE INFORMATION In connection with the exchange offer, we have filed with the SEC a registration statement relating to the new notes on Form S-4 under the Securities Act of 1933. This prospectus constitutes a part of the registration statement. As permitted under SEC rules, the prospectus does not include all the information contained in the registration statement. We refer you to the registration statement, including all amendments, supplements, schedules and exhibits thereto, for further information about us and the new notes. Statements in this prospectus concerning the provisions of documents are not necessarily summaries of all provisions of those documents. If we have filed any document as an exhibit to the registration statement, you should read the exhibit for a more complete understanding of that document. We are currently subject to the informational requirements of the Securities Exchange Act of 1934. We are required to file annual, quarterly and special reports and other information with the SEC. You may read and copy any of the reports, statements and other information that we file with the SEC at the public reference room maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the public reference room. Our filings are also available to the public from commercial document retrieval services and at the web site maintained by the SEC at http://www.sec.gov. Our Class A Common Stock is listed and traded on the New York Stock Exchange under the trading symbol "SCS." You may also inspect the information that we file with the SEC at the New York Stock Exchange, 20 Broad Street, New York, New York 10005. INCORPORATION BY REFERENCE Rather than include in this prospectus some of the information that we include in reports filed with the SEC, we are incorporating this information by reference, which means that we are disclosing important information to you by referring to those publicly filed documents that contain the information. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information in this prospectus. Accordingly, we incorporate by reference the following documents filed by us: . Annual Report on Form 10-K for the fiscal year ended February 23, 2001 (as amended by Amendment No. 1 on Form 10-K/A filed on May 24, 2001, Amendment No. 2 on Form 10-K/A filed on November 16, 2001, and Amendment No. 3 on Form 10-K/A filed on February 21, 2002, the Form 10-K with Amendments No. 1, No. 2 and No. 3 will be referred to in this prospectus as the Annual Report on Form 10-K for the fiscal year ended February 23, 2001); . Quarterly Report on Form 10-Q for the quarter ended May 25, 2001 (as amended by Amendment No. 1 on Form 10-Q/A filed on November 16, 2001, the Form 10-Q with Amendment No. 1 will be referred to in this prospectus as the Quarterly Report on Form 10-Q for the quarter ended May 25, 2001); . Quarterly Report on Form 10-Q for the quarter ended August 24, 2001; . Quarterly Report on Form 10-Q for the quarter ended November 23, 2001; . Current Report on Form 8-K dated August 27, 2001; . Current Report on Form 8-K dated November 13, 2001; . Current Report on Form 8-K dated November 15, 2001; and . Current Report on Form 8-K dated December 19, 2001. In addition, all reports and other documents we subsequently file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus will be deemed to be incorporated by reference in this prospectus and to be part of this prospectus from the date of the filing of such reports and documents. Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement ii contained in any subsequently filed document which is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We will provide without charge to each person to whom this prospectus is delivered, upon request of such person, a copy of any or all documents that are incorporated in this prospectus by reference, other than exhibits to such documents unless such exhibits are specifically incorporated by reference in the document that this prospectus incorporates. You should direct such requests to Steelcase Inc., 901 44th Street, Grand Rapids, Michigan 49508, Attention: Steelcase Investor Relations, (616) 247-2200, email: ir@steelcase.com. FORWARD-LOOKING STATEMENTS From time to time, in this prospectus and the documents incorporated by reference in this prospectus as well as in other written reports and oral statements, we discuss our expectations regarding future performance. For example, portions of the section entitled "Summary--The Company" contained in this prospectus and portions of the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended February 23, 2001 and our Quarterly Reports on Form 10-Q for the quarters ended May 25, 2001, August 24, 2001, and November 23, 2001, in each case incorporated by reference in this prospectus, contain various "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including those relating to anticipated revenue, earnings, liquidity and capital resource needs and expenditures, as well as anticipated impacts of cost saving measures and various recently issued accounting standards. Such statements involve certain risks and uncertainties that could cause actual results to vary. Our performance may differ materially from that contemplated by such statements for a variety of reasons, including, but not limited to: . competitive and general economic conditions domestically and internationally; . delayed or lost sales or other impacts related to the commercial and economic disruption caused by terrorist attacks on the United States; . major disruptions at our key facilities or in the supply of any key raw materials; . changes in domestic and international government laws and regulations; . competitive pricing pressure; . pricing changes by us or our competitors; . currency fluctuations; . changes in customer demand and order patterns; . changes in relationships with customers, suppliers, employees and dealers; . product (sales) mix; . the success (including product performance and customer acceptance) of new products, current product innovations and platform simplification, and their impact on our manufacturing processes; . possible acquisitions or divestitures by us; . our ability to reduce costs, including ramp-up costs associated with new products, and to improve margins on new products; . the impact of work force reductions (including elimination of temporary workers, hourly layoffs and salaried work force reductions); iii . our success in integrating acquired businesses, initiating and managing alliances and global sourcing, transitioning production of our products to other manufacturing facilities as a result of production rationalization and implementing technology initiatives; . changes in future business strategies and decisions; and . other risks detailed in our filings with the SEC. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. iv SUMMARY The following summary is qualified in its entirety by the more detailed information included elsewhere or incorporated by reference in this prospectus. The Company Overview Steelcase is the world's largest designer and manufacturer of products used to create high-performance work environments. We are focused on helping individuals and organizations around the world to work more effectively by actively pursuing a user-centered product and services strategy, which integrates three core elements of the office environment--architecture, furniture and technology. Our product portfolio includes furniture systems, seating, desks, lighting, storage, interior architecture and technology products and related products and services. In addition, through our Financial Services segment, we provide financing options to our dealers and lease financing services to their customers to facilitate the purchase of our products. Steelcase was founded in 1912 and is headquartered in Grand Rapids, Michigan. We are a Fortune 500 company with fiscal 2001 revenue of $4.05 billion. We have manufacturing facilities in over 30 locations and approximately 20,000 employees worldwide. We distribute products through a network of independent dealers in more than 800 locations worldwide. Each dealership has its own sales force, supported by our sales representatives, who work closely with dealers throughout the sales process. We operate on a global basis and our businesses are organized, managed and reported in three segments: North America, International and Financial Services. Our Products Historically, we were known primarily as an office furniture manufacturer. Today, we are a global work effectiveness company. We are focused on providing knowledge, products and services that enable our customers to create work environments that offer a user-centered solution for people working in offices. As a result of this focus, we have an evolving portfolio of products that addresses the core elements of a typical work environment--architecture, furniture and technology. Through this portfolio of products, we have expanded our reach and can now compete within the office furniture, renovation and new office construction markets. Our Pathways product line is an example of how architecture, furniture and technology products can blend seamlessly together to create work environments that offer exceptional flexibility, affordability and user-control. We offer the following broad array of user-centered products at various price points and with a variety of aesthetic options and performance features: Furniture Panel-based and freestanding furniture systems. Moveable and reconfigurable furniture components that are used to create work environments and can provide space division, acoustic and visual privacy and support for technology. Storage. File cabinets, carts and under-desk pedestals. Seating. High-performance, general use, executive, guest, lounge and stackable chairs. Tables. Meeting, personal, learning and cafe tables. Textiles and surface materials. Upholstery fabric, panel fabric and wall coverings. Desks and office suites. Wood and non-wood casegoods. 1 Architecture Interior architecture. Full and partial height walls, raised floors, doors and modular post and beam products for open plan environments. Lighting. Adjustable and energy-efficient task, ambient and accent lighting. Technology Technology. Infrastructure products, such as modular cabling, and information appliances, such as interactive signs and space scheduling systems. Worktools. Computer support, technology management, organizers, information management products and erasable whiteboards. Business Segments North America Segment. Our North America segment consists of operations in the United States and Canada. We have led the U.S. office furniture industry in revenue since 1974. Our offerings in North America include architecture, furniture and technology products as described above, under the Steelcase brand and the Steelcase Design Partnership (SDP), which is a collection of individual design-oriented companies that offer products for use in lobby and reception areas, cafeteria and gathering spaces, private offices, hospitality, healthcare and learning environments and surface materials for a variety of markets. The North America segment also includes Revest, our remanufactured furniture and refurbishing services subsidiary, IDEO, our design and innovation services subsidiary, and Attwood, our plastic injection and marine accessories subsidiary. In fiscal 2001, the North America segment accounted for $3.2 billion, or 80%, of our total revenue. International Segment. Our International segment primarily consists of Steelcase S.A. (formerly known as Steelcase Strafor) and its subsidiaries and Steelcase International. We conduct most of our European business through these entities, with primary operations in France, Germany and the United Kingdom. We believe we are a leader in the highly-fragmented European market. Steelcase S.A. develops and manufactures its own office furniture products and complements its product offerings with Steelcase brand and SDP offerings. Steelcase International exports products to markets throughout the world, including Australia, Brazil, China, Japan, Mexico, Saudi Arabia, Singapore, Thailand, United Arab Emirates and Venezuela. Products sold to these markets are primarily manufactured in North America and Europe and are supplemented by manufacturing facilities in Brazil and Saudi Arabia. We also manufacture furniture through licensees in Japan, Colombia and Thailand. In fiscal 2001, the International segment accounted for $732.4 million, or 18%, of our total revenue. Financial Services Segment. Our Financial Services segment provides leasing services to customers primarily in North America and, more recently, in Europe. This segment also provides selected financing services to our dealers. In fiscal 2001, the Financial Services segment accounted for $78.2 million, or 2%, of our total revenue. Lease financing provides alternatives to customers, facilitating the acquisition of our products. The dealer financing portion of this segment provides selected financial services to our dealers to facilitate the purchase of our products, to support their business goals and to foster stability in our distribution network. Dealer financing includes three distinct programs: project financing, asset-based lending and term notes. Competitive Strengths We believe that we have many competitive advantages that enable us to compete effectively in the office furniture industry and beyond: Leading Global Market Position and Strong Brand Equity. We are the largest office furniture manufacturer in the world. We are almost twice the size of our nearest competitor based on revenue. We believe that we have strong brand equity among the key constituents that we serve, such as facility managers, architects, 2 designers and real estate managers. We believe that "Steelcase" is one of the most widely recognized brand names in the industry. Global Reach. We are a global office furniture manufacturer with manufacturing capabilities in 14 countries and sales offices in 29 countries. We believe we have the most extensive dealer network in the industry. This global reach uniquely enables us to address the product and service needs of our multinational customers. Through our global infrastructure, our products are generally available throughout the world. Dedication to Research and Development and User-Centered Product Innovation. We believe we consistently invest more in research and development on an annual basis than anyone else in our industry. We supplement part of our extensive research and development effort through our subsidiary, IDEO, which is recognized as one of the world's leading industrial design firms, along with key marketing and product development alliances formed with leaders in related industries. Since 1994, we have won 46 product and design awards at NeoCon, the largest showcase in North America for office design and furniture. Large Installed Base. As a result of our dealer network, longstanding sales leadership and diverse customer base, we believe we have the largest base of installed products in the U.S. office furniture industry. Through this installed base and on-going contractual relationships, we generate significant sales from repeat and expansion orders. Recent Developments As previously disclosed in our report on Form 10-Q for the quarter ended November 23, 2001, consolidated revenue decreased 29.3%, to $731.4 million for the third quarter of fiscal year 2002 and 20.7%, to $2,429.1 million for first three quarters of fiscal year 2002, compared to the same periods last year. Consolidated operating income decreased to $6.7 million for the third quarter of fiscal year 2002 and $67.7 million for the first three quarters of fiscal year 2002, compared to $79.2 million and $269.3 million for the same periods last year. On February 12, 2002, we revised our guidance for the fourth quarter of our current fiscal year ending February 22, 2002 as follows: we expect a fourth quarter fiscal 2002 loss in the range ($0.07) to ($0.12) per share before one-time charges, or ($0.21) to ($0.29) per share on a reported basis. Our revised guidance reflects lower than expected sales volume, particularly in our International segment. We expect that due to the sustained global reduction in business capital spending, our fourth quarter fiscal 2002 revenue could decrease by approximately 35 percent compared to the same quarter of our prior fiscal year. This revised guidance of February 12, 2002 includes anticipated additional International segment reserves related to inventories and dealer receivables. These reserve charges are individually small, but collectively significant. Additionally, we expect North American segment margins to decline in the fourth quarter of our current fiscal year, due to reduced manufacturing overhead absorption partially offset by lower variable compensation. On February 14, 2002, Moody's Investor's Services, Inc. placed the debt ratings for Steelcase under review for possible downgrade. The Exchange Offer On November 27, 2001, Steelcase Inc. issued $250,000,000 principal amount of 6.375% Senior Notes Due 2006, the old notes to which the exchange offer applies, to a group of initial purchasers in reliance on exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In connection with the initial purchasers' purchase of the old notes, we agreed to commence the exchange offer following the initial offering of the old notes. The new notes being offered in the exchange offer and the old notes are sometimes referred to collectively in this prospectus as the "notes." The Exchange Offer..................... We are offering new 6.375% Senior Notes Due 2006, all of which new notes have been registered under the Securities Act, in exchange for your old notes. 3 To exchange your old notes, you must properly tender them, and we must accept them. We will exchange all old notes that you validly tender and do not validly withdraw. Resale of New Notes.................... We believe that, if you are not a broker-dealer, you may offer for resale, resell or otherwise transfer the new notes without complying with the registration and prospectus delivery requirements of the Securities Act if you: . acquire the new notes in the ordinary course of your business; . are not engaged in, do not intend to engage in and have no arrangement or understanding with any person to participate in a distribution of the new notes; and . are not an "affiliate" of Steelcase within the meaning of Rule 405 of the Securities Act. If any of these conditions is not satisfied and you transfer any new notes issued to you in the exchange offer without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. Moreover, our belief that transfers of new notes would be permitted without registration or prospectus delivery under the conditions described above is based on SEC interpretations given to other, unrelated issuers in similar exchange offers. We cannot assure you that the SEC would make a similar interpretation with respect to our exchange offer. We will not be responsible for or indemnify you against any liability you may incur under the Securities Act. Any broker-dealer that acquires new notes for its own account in exchange for old notes must represent that the old notes to be exchanged for the new notes were acquired by it as a result of market-making activities or other trading activities and acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes pursuant to the exchange offer; however, by so acknowledging and by delivering a prospectus, the participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. During the period ending 180 days after the expiration date of the exchange offer, subject to extension in limited circumstances, a participating broker-dealer may use this prospectus for an offer to sell or a sale or other transfer of new notes received in exchange for old 4 notes which it acquired through market-making activities or other trading activities. Expiration Date........................ The exchange offer will expire at 5:00 p.m., New York City time, on , 2002, unless we extend it. Withdrawal............................. You may withdraw your tender of old notes under the exchange offer at any time before the exchange offer expires. Procedures for Tendering Old Notes..... Each holder of old notes that wishes to accept the exchange offer must either: . complete, sign and date the accompanying letter of transmittal or a facsimile copy of the letter of transmittal, have the signatures on the letter of transmittal guaranteed if required and deliver the letter of transmittal, together with the old notes and any other required documents, to the exchange agent; or . arrange for DTC to transmit the required information to the exchange agent in connection with a book-entry transfer. Do not send letters of transmittal or certificates representing old notes to us or DTC. Send these documents only to the exchange agent at the appropriate address given in this prospectus and in the letter of transmittal. Special Procedures for Tenders by Beneficial Owners of Old Notes....... If . you beneficially own old notes; . those notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee; and . you wish to tender your old notes in the exchange offer, please contact the registered holder as soon as possible and instruct it to tender on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal. Guaranteed Delivery Procedures......... If you hold old notes in certificated form or if you 5 own old notes in the form of a book-entry interest in a global note deposited with the trustee, as custodian for DTC, and you wish to tender those old notes but . your old notes are not immediately available; . time will not permit you to deliver the required documents to the exchange agent by the expiration date; or . you cannot complete the procedure for book-entry transfer on time, You may tender your old notes pursuant to the procedures described in "The Exchange Offer--Procedures for Tendering Old Notes--Guaranteed Delivery Procedures." Consequences of Not Exchanging Old Notes If you do not tender your old notes or we reject your tender, your old notes would remain outstanding and would be entitled to the benefits of the indenture governing the notes. You would not be entitled to any further registration rights under the registration rights agreement, except under limited circumstances. Existing transfer restrictions would continue to apply to the old notes. We could reject your tender of old notes if you tender them in a manner that does not comply with the instructions provided in this prospectus and the accompanying letter of transmittal. You do not have any appraisal or dissenters' rights in connection with the exchange offer. United States Federal Income Tax Considerations....................... Your exchange of old notes for new notes will not be treated as a taxable exchange for U.S federal income tax purposes. Conditions............................. The exchange offer is subject to the following conditions: (a) that it not violate applicable law or any applicable interpretation of the staff of the SEC, (b) no action or proceeding shall have been instituted or threatened in any court or before any governmental agency with respect to the exchange offer which, in our judgment, would impair our ability to proceed with the exchange offer, and (c) no law, rule or regulation or applicable interpretations of the staff of the SEC shall have been issued or promulgated which, in our good faith determination, does not permit us to effect the exchange offer. In addition, the exchange offer is conditioned on the tender of the old notes to us by the holders in accordance with the exchange offer. 6 Use of Proceeds........................ We will not receive any proceeds from the exchange offer. The net proceeds from the issuance of the old notes were used to finance our acquisition of PolyVision Corporation, to repay a portion of our outstanding commercial paper and for general corporate purposes. Acceptance of Old Notes and Delivery of New Notes............................ We will accept for exchange any and all old notes properly tendered prior to the expiration of the exchange offer. We will complete the exchange offer and issue the new notes as soon as practicable after the expiration date. Exchange Agent......................... Bank One Trust Company, N.A. is serving as exchange agent for the exchange offer. The address and telephone number of the exchange agent are provided in this prospectus under "The Exchange Offer--Exchange Agent" and in the letter of transmittal. The New Notes The form and terms of the new notes will be identical in all material respects to the form and terms of the old notes, except that the new notes: . will have been registered under the Securities Act; . will not bear restrictive legends restricting their transfer under the Securities Act; . will not be entitled to the registration rights that apply to the old notes; and . will not contain provisions relating to an increase in the interest rate borne by the old notes under circumstances related to the timing of the exchange offer. The new notes represent the same debt as the old notes and are governed by the same indenture, which is governed by New York law. Issuer................................. Steelcase Inc. Notes Offered.......................... $250 million aggregate principal amount of 6.375% Senior Notes Due 2006. Maturity............................... November 15, 2006. Interest............................... We will pay interest on the notes at the rate of 6.375% per year, payable in cash on May 15 and November 15 of each year, beginning on May 15, 2002. Ranking................................ The notes will be Steelcase Inc.'s unsecured unsubordinated obligations and will rank equally with all of Steelcase Inc.'s other unsecured unsubordinated indebtedness. The notes will be effectively subordinated to all of Steelcase Inc.'s 7 secured indebtedness to the extent of the assets so securing such indebtedness and all indebtedness and other liabilities, including, trade payables of Steelcase Inc.'s subsidiaries. Optional Redemption......... We may redeem any or all of the notes at a redemption price equal to the greater of: . 100% of the principal amount of the notes being redeemed; and . the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at the treasury rate plus 35 basis points, plus, in each case, accrued and unpaid interest of the notes being redeemed. Restrictive Covenants of Indenture................. We issued the old notes, and will issue the new notes, under an indenture with Bank One Trust Company, N.A., as trustee. The indenture, among other things, restricts our ability to: . permit certain liens securing debt; . enter into sale and leaseback transactions; and . sell all or substantially all of our assets or merge or consolidate with or into other entities without satisfying certain conditions. Credit Ratings.............. The old notes currently are rated Baa1 by Moody's Investor's Services, Inc. and A- by Standard & Poor's Rating Services. Moody's Investor's Services, Inc. has, however, recently placed the debt ratings for Steelcase under review. See "Recent Developments." A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organization. Our headquarters are located at Steelcase Inc., 901 44th Street, Grand Rapids, Michigan 49508, and our telephone number is (616) 247-2710. Our Class A Common Stock is listed on the New York Stock Exchange under the trading symbol "SCS." 8 USE OF PROCEEDS We will not receive any proceeds from the exchange offer. The exchange offer is intended to satisfy our obligations under the registration rights agreement. The net proceeds from the issuance of the old notes were approximately $246.7 million, after deducting the initial purchasers' discount and certain offering expenses. We used approximately $182 million of the net proceeds to finance our acquisition of PolyVision Corporation. Of that amount, approximately $103 million was used to repay existing debt of PolyVision, which had an average maturity of approximately four years and a weighted average interest rate of 10.21% per year as of June 30, 2001. The remaining $64.7 million of the net proceeds were used to repay a portion of our outstanding commercial paper and for general corporate purposes. As of November 23, 2001, we had outstanding $137.4 million of euro commercial paper with an effective interest rate of 3.77% per year, and $199.9 million of U.S. dollar commercial paper with an effective interest rate of 2.5% per year, in each case with maturities ranging from one to 99 days. 9 CAPITALIZATION The following table sets forth our unaudited capitalization as of November 23, 2001, on an actual basis and as adjusted to give effect to the issuance and sale of the old notes and the use of a portion of the estimated net proceeds therefrom to repay $229.5 million of our outstanding commercial paper (including that used to finance our acquisition of PolyVision) as described under "Use of Proceeds." Operating Company capitalization represents the capitalization of Steelcase Inc. and its subsidiaries, other than the Financial Services segment, on a consolidated basis (excluding certain Financial Services segment debt guaranteed by Steelcase Inc.). Financial Services capitalization represents the capitalization of the Financial Services segment. You should read this summary in conjunction with "Selected Financial Data" included elsewhere in this prospectus and our unaudited consolidated financial statements and related notes contained in our Quarterly Report on Form 10-Q for the quarter ended November 23, 2001 and incorporated by reference in this prospectus. See "Where You Can Find More Information" and "Incorporation by Reference."
As of November 23, 2001 ---------------------------------------------------------------- Actual As Adjusted ------------------------------- ------------------------------- Operating Financial Operating Financial Company Services Total Company Services Total --------- --------- -------- --------- --------- -------- (in millions) (unaudited) Assets Cash and equivalents................. $ 125.3 $ -- $ 125.3 $ 142.3 $ -- $ 142.3 Notes receivable and leased assets... 32.9 535.6 568.5 32.9 535.6 568.5 Other assets......................... 2,442.1 9.6 2,451.7 2,444.3 9.6 2,453.9 -------- ------ -------- -------- ------ -------- Total assets.................. $2,600.3 $545.2 $3,145.5 $2,619.5 $545.2 $3,164.7 ======== ====== ======== ======== ====== ======== Liabilities and Shareholders' Equity Liabilities: Short-term borrowings and current portion of Long-term debt(1)....... $ 229.5(1) $254.4(1) $ 483.9 $ -- (1) $254.4(1) $ 254.4 Long-term debt....................... Senior notes(2).................. -- -- -- 248.7(2) -- 248.7 Other long-term debt(1).......... -- (1) 203.6(1) 203.6 -- (1) 203.6(1) 203.6 -------- ------ -------- -------- ------ -------- Total indebtedness............ 229.5 458.0 687.5 248.7 458.0 706.7 Other liabilities....................... 849.7 10.9 860.6 849.7 10.9 860.6 -------- ------ -------- -------- ------ -------- Total liabilities.................... 1,079.2 468.9 1,548.1 1,098.4 468.9 1,567.3 Shareholders' equity: Common stock......................... 282.0 -- 282.0 282.0 -- 282.0 Accumulated other comprehensive income (loss)...................... (48.4) -- (48.4) (48.4) -- (48.4) Retained earnings.................... 1,287.5 76.3 1,363.8 1,287.5 76.3 1,363.8 -------- ------ -------- -------- ------ -------- Total shareholders' equity....... 1,521.1 76.3 1,597.4 1,521.1 76.3 1,597.4 -------- ------ -------- -------- ------ -------- Total liabilities and shareholders' equity........ $2,600.3 $545.2 $3,145.5 $2,619.5 $545.2 $3,164.7 ======== ====== ======== ======== ====== ======== Total capitalization.................... $1,750.6 $534.3 $2,284.9 $1,769.8 $534.3 $2,304.1 ======== ====== ======== ======== ====== ========
- -------- (1)Approximately $32.5 million of Financial Services segment debt is guaranteed by Steelcase Inc. (but shown only as Financial Services segment debt), and approximately $191.9 million of Financial Services segment debt is intercompany debt as of November 23, 2001. (2)The old notes were issued in the principal amount of $250 million. This amount is shown net of the unaccreted original issue discount of $1.3 million. 10 SELECTED FINANCIAL DATA The following table presents selected financial data about us. Our selected financial data as of and for each of our fiscal years in the five-year period ended February 23, 2001 have been derived from our audited consolidated financial statements. Our selected financial data as of and for each of the nine months ended November 24, 2000 and November 23, 2001 have been derived from our unaudited consolidated financial statements. Operating Company capitalization represents the capitalization of Steelcase Inc. and its subsidiaries, other than the Financial Services segment, on a consolidated basis (excluding certain Financial Services segment debt guaranteed by Steelcase Inc.). Financial Services capitalization represents the capitalization of the Financial Services segment. You should read this information together with our audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended February 23, 2001, our unaudited consolidated financial statements and related notes contained in our Quarterly Report on Form 10-Q for the quarter ended November 23, 2001 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended February 23, 2001 and Quarterly Report on Form 10-Q for the quarter ended November 23, 2001, in each case incorporated by reference in this offering information. See "Where You Can Find More Information" and "Incorporation by Reference." 11
February 28, February 27, February 26, February 25, February 23, 1997(1) 1998 1999 2000 (2) 2001 (2) ------------ ------------ ------------ ------------ ------------ (in millions, except per share data) Statement of Income Data Revenue(3).............................. $2,516.3 $2,884.1 $2,873.3 $3,474.8 $4,049.0 Gross profit............................ $ 869.0 $1,019.0 $1,008.4 $1,130.9 $1,308.7 Operating income........................ $ 150.8 $ 327.7 $ 325.9 $ 274.5 $ 306.4 Net income.............................. $ 27.7 $ 217.0 $ 221.4 $ 184.2 $ 193.7 Balance Sheet Data Cash and equivalents................. $ 174.0 $ 103.1 $ 67.5 $ 73.7 $ 25.3 Notes receivable and leased assets............................... $ 223.6 $ 300.1 $ 349.5 $ 483.1 $ 612.3 Total assets......................... $1,922.1 $2,007.2 $2,182.5 $3,037.6 $3,157.0 Capitalization: Debt: Financial services debt.............. $ -- $ -- $ -- $ 372.8 $ 492.7 Operating company debt............... $ -- $ -- $ -- $ 94.0 $ 44.5 -------- -------- -------- -------- -------- Total indebtedness................ $ -- $ -- $ -- $ 466.8 $ 537.2 ======== ======== ======== ======== ======== Equity: Financial services equity............. $ 25.4 $ 33.4 $ 44.1 $ 61.8 $ 82.0 Operating company equity.............. $1,354.6 $1,299.0 $1,455.9 $1,500.4 $1,554.5 -------- -------- -------- -------- -------- Total shareholders' equity........... $1,380.0 $1,332.4 $1,500.0 $1,562.2 $1,636.5 ======== ======== ======== ======== ======== Total capitalization: Financial services capital(5)......... $ 25.4 $ 33.4 $ 44.1 $ 434.6 $ 574.7 Operating company capital(5).......... $1,354.6 $1,299.0 $1,455.9 $1,594.4 $1,599.0 -------- -------- -------- -------- -------- Total capitalization(5).............. $1,380.0 $1,332.4 $1,500.0 $2,029.0 $2,173.7 ======== ======== ======== ======== ======== Other Data EBITDA(6)............................... $ 130.2 $ 426.7 $ 433.7 $ 451.0 $ 494.3 Ratio of EBITDA to fixed charges(6)(7)........................... 11.1x 35.3x 48.2x 19.3x 11.3x Ratio of operating company debt to LTM EBITDA(6)(8)........................ -- -- -- 0.21x 0.09x Operating company debt as % of operating company capital............... -- -- -- 5.9% 2.8% Ratio of earnings to fixed charges(7)(9) 5.4x 29.1x 38.5x 13.7x 8.0x Net income per common share (basic)..... $ 0.18 $ 1.40 $ 1.44 $ 1.21 $ 1.30 Dividends per share..................... $ 0.27 $ 1.36(10) $ 0.41 $ 0.44 $ 0.44 Capital expenditures.................... $ 122.0 $ 126.4 $ 170.4 $ 188.8 $ 260.5 Net cash provided by (used in): Operating activities................. $ 126.7 $ 402.7 $ 359.9 $ 305.7 $ 209.8 Investing activities................. $ (121.3) $ (219.2) $ (342.2) $ (514.6) $ (220.0) Financing activities................. $ (40.4) $ (254.4) $ (53.3) $ 219.4 $ (40.5)
Nine Months Ended ----------------------- November 24, November 23, 2000 (2) 2001 (2) ------------ ------------ Statement of Income Data Revenue(3).............................. $3,063.3 $2,429.1 Gross profit............................ $1,015.3 $ 756.9 Operating income........................ $ 269.3 $ 67.7 Net income.............................. $ 168.0 $ 35.3 Balance Sheet Data Cash and equivalents................. $ 30.1 $ 125.3 Notes receivable and leased assets............................... $ 614.9 $ 568.5 Total assets......................... $3,190.2 $3,145.5 Capitalization: Debt: Financial services debt.............. $ 483.1 $ 458.0(4) Operating company debt............... $ 53.4 $ 229.5(4) -------- -------- Total indebtedness................ $ 536.5 $ 687.5 ======== ======== Equity: Financial services equity............. $ 80.5 $ 76.3 Operating company equity.............. $1,544.6 $1,521.1 -------- -------- Total shareholders' equity........... $1,625.1 $1,597.4 ======== ======== Total capitalization: Financial services capital(5)......... $ 563.6 $ 534.3(4) Operating company capital(5).......... $1,598.0 $1,750.6(4) -------- -------- Total capitalization(5).............. $2,161.6 $2,284.9 ======== ======== Other Data EBITDA(6)............................... $ 411.6 $ 205.2 Ratio of EBITDA to fixed charges(6)(7)........................... 11.7x 5.3x Ratio of operating company debt to LTM EBITDA(6)(8)........................ 0.10x 0.80x(4) Operating company debt as % of operating company capital............... 3.3% 13.1%(4) Ratio of earnings to fixed charges(7)(9) 8.6x 2.5x Net income per common share (basic)..... $ 1.12 $ 0.24 Dividends per share..................... $ 0.33 $ 0.33 Capital expenditures.................... $ 185.1 $ 91.4 Net cash provided by (used in): Operating activities................. $ 214.6 $ 250.6 Investing activities................. $ (253.8) $ (242.4) Financing activities................. $ (8.5) $ 93.7
- -------- (1)During 1997, we concluded a 17-year patent litigation which (net of reserves) reduced net income by $123.5 million. (2)Beginning in the fiscal year ended February 25, 2000, the selected financial data includes the consolidation of Steelcase S.A. (formerly known as Steelcase Strafor) and its subsidiaries. (3)Revenue has been restated to reflect the reclassification of certain shipping and handling fees and costs in accordance with Emerging Issues Task Force (EITF) 00-10 Accounting for Shipping and Handling Fees and Costs. This change had the effect of increasing both revenue and cost of sales by equal amounts and, therefore, did not impact gross profit, operating income or net income. The annual and quarterly selected financial data in this table reflect this classification. (4)Approximately $32.5 million of Financial Services segment debt is guaranteed by Steelcase Inc. (but shown only as Financial Services segment debt), and approximately $191.9 million of Financial Services segment debt is intercompany debt as of November 23, 2001. (5)Capital consists of debt (both short-term and long-term) and equity. (6)Earnings from continuing operations before deduction for interest, taxes, depreciation and amortization, or EBITDA, is provided because it is commonly used to evaluate a company's ability to service debt and satisfy capital expenditure and working capital requirements. EBITDA is not a measure of financial performance under generally accepted accounting principles and should not be considered an alternative to operating income or net income as a measure of operating performance or to net cash provided by operating activities as a measure of liquidity. EBITDA is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. EBITDA also does not necessarily indicate whether cash flow will be sufficient or available for cash requirements. (7)Fixed charges consist of interest incurred, a portion of rent expense and amortization of deferred debt expense. (8)The ratio of operating company debt to EBITDA uses the last 12 months of EBITDA. (9)For purposes of computing the ratio of earnings to fixed charges, earnings consist of income before taxes and equity in net income of joint ventures and dealer transitions, plus fixed charges. (10)During 1998, we paid a special dividend of $0.97 per share of common stock. 12 THE EXCHANGE OFFER Purpose of the Exchange Offer In connection with the issuance of the old notes on November 27, 2001, we entered into a registration rights agreement with the initial purchasers of the old notes. Under the registration rights agreement, we agreed, among other things, to: . file a registration statement relating to a registered exchange offer for the old notes with the SEC on or prior to the 90th day after the date of the issuance of the old notes; . use our reasonable best efforts to cause the SEC to declare the registration statement effective under the Securities Act no later than the 180th day after the date of the issuance of the old notes; and . use our reasonable best efforts to complete the exchange offer no later than the 210th day after the date of the issuance of the old notes. The exchange offer and the registration statement of which this prospectus is a part are intended to satisfy our obligations under the registration rights agreement. Under some circumstances, we may be required to file and use our reasonable best efforts to cause to become effective, in addition to or in lieu of the exchange offer registration statement, a shelf registration statement covering resales of the old notes. If we fail to meet specified deadlines under the registration rights agreement, we will be obligated to pay additional interest to holders of the old notes. See "--Registration Rights and Additional Interest on the Old Notes." Copies of the registration rights agreement may be obtained by following the instructions under "Where You Can Find More Information" and "Incorporation by Reference." None of us, our board of directors or management recommends that you tender or not tender old notes in the exchange offer or has authorized anyone to make any recommendation. You must decide whether to tender in the exchange offer and, if you decide to tender, the aggregate amount of notes to tender. Terms of the Exchange Offer Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we will accept for exchange old notes which are properly tendered on or before the expiration date and are not withdrawn as permitted below. The exchange offer expires at 5:00 p.m., New York City time, on , 2002, or such later date and time to which we extend the exchange offer. The form and terms of the new notes will be identical in all material respects to the form and terms of the old notes, except that the new notes: . will have been registered under the Securities Act; . will not bear restrictive legends restricting their transfer under the Securities Act; . will not be entitled to the registration rights that apply to the old notes; and . will not contain provisions relating to an increase in the interest rate borne by the old notes under circumstances related to the timing of the exchange offer. Old notes tendered in the exchange offer must be in denominations of the principal amount of $1,000 and any integral multiple of $1,000 in excess thereof. We expressly reserve the right, in our reasonable discretion and in accordance with applicable law: . to extend the expiration date; . to delay accepting any old notes; 13 . if any of the conditions set forth below under "--Conditions to the Exchange Offer" have not been satisfied, to terminate the exchange offer and not accept any old notes for exchange; and . to amend the exchange offer in any manner. In the event of any extension, delay, non-acceptance, termination or amendment, we will as promptly as practicable give oral or written notice to the exchange agent and make a public announcement of the extension, delay, non-acceptance, termination or amendment. In the case of an extension of the exchange offer, we will make an announcement, including disclosure of the approximate number of old notes tendered to date, no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. If we amend the exchange offer in a manner that we consider material, we will: . disclose the amendment by means of a prospectus supplement; and . extend the exchange offer for a period of five to ten business days, depending upon the significance of the amendment and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during the five to ten business day period. During an extension, all old notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us. Any old notes not accepted for exchange for any reason will be returned without cost to the holder that tendered them as promptly as practicable after the expiration or termination of the exchange offer. Resale of New Notes Based on interpretive letters issued by the SEC staff to third parties in transactions similar to the exchange offer, we believe that a holder of new notes, other than a broker-dealer, may offer new notes for resale, resell and otherwise transfer the new notes without delivering a prospectus to prospective purchasers, if the holder acquired the new notes in the ordinary course of business and has no intention of engaging in a "distribution," as defined under the Securities Act, of the new notes. We will not, however, seek our own interpretive letter from the SEC staff and cannot assure you that the SEC staff would take the same position with respect to the exchange offer as it did in the interpretive letters issued to third parties in similar transactions. By tendering old notes, the holder (other than participating broker-dealers) of those old notes will represent to us that, among other things: . the new notes acquired in the exchange offer are being obtained in the ordinary course of business of the person receiving the new notes, whether or not that person is the holder; . neither the holder nor any other person receiving the new notes has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the new notes; and . neither the holder nor any other person receiving the new notes is an "affiliate," as defined under Rule 405 of the Securities Act, of Steelcase, or, if the holder or other person is an affiliate, that the holder or such other person, as the case may be, will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. If any holder or any such other person is an affiliate of Steelcase or is engaged in, intends to engage in or has an arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the new notes, such holder or other person: . may not rely on the applicable interpretations of the staff of the SEC; and . must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. 14 Each broker-dealer that receives new notes for its own account in exchange for old notes must represent that the old notes to be exchanged for the new notes were acquired by it as a result of market-making activities or other trading activities and acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes pursuant to the exchange offer; however, by so acknowledging and by delivering a prospectus, the participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. If a broker-dealer acquired old notes as a result of market-making or other trading activities, it may use this prospectus, as amended or supplemented, in connection with resales of new notes received in exchange for those old notes. We have agreed that, during the period ending 180 days after the expiration date of the exchange offer, subject to extension in limited circumstances or such shorter period which will terminate when the participating broker-dealers have completed all resales subject to any prospectus delivery requirements, we will use our reasonable best efforts to keep the exchange offer registration statement effective and make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution and Selling Restrictions" for a discussion of the exchange and resale obligations of broker-dealers in connection with the exchange offer. Procedures for Tendering Old Notes Valid Tender; Signature Guarantees When the holder of old notes tenders, and we accept, old notes for exchange, a binding agreement between us, on the one hand, and the tendering holder, on the other hand, is created, subject to the terms and conditions set forth in this prospectus and the accompanying letter of transmittal. Except as set forth below, a holder of old notes who wishes to tender old notes for exchange must, on or prior to the expiration date: . transmit a properly completed and duly executed letter of transmittal, including all other documents required by such letter of transmittal, to the exchange agent, Bank One Trust Company, N.A., at the address set forth below under the heading "--Exchange Agent;" or . if old notes are tendered pursuant to the book-entry procedures set forth below, the tendering holder must cause an agent's message to be transmitted to the exchange agent at the address set forth below under the heading "--Exchange Agent." In addition, on or prior to the expiration date, either: . the exchange agent must receive the certificates for the old notes and the letter of transmittal; . the exchange agent must receive a timely confirmation of the book-entry transfer of the old notes being tendered into the exchange agent's account at DTC, along with the letter of transmittal or an agent's message; or . the holder must comply with the guaranteed delivery procedures described below. The term "agent's message" means a message transmitted to the exchange agent by DTC which states that DTC has received an express acknowledgment that the tendering holder agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against such holder. If you beneficially own old notes and those notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old notes in the exchange offer, you should contact the registered holder as soon as possible and instruct it to tender the old notes on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal. 15 The method of delivery of the old notes, the letter of transmittal and all other required documents is at the election and risk of the holders. If delivery is by mail, we recommend registered mail with return receipt requested, properly insured, or overnight delivery service. In all cases, you should allow sufficient time to assure timely delivery. No letters of transmittal or old notes should be sent directly to us. Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the old notes surrendered for exchange are tendered: . by a registered holder of old notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal; or . for the account of an eligible institution. An "eligible institution" is a firm or other entity which is identified as an "Eligible Guarantor Institution" in Rule 17Ad-15 under the Exchange Act, including: . a bank; . a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; . a credit union; . a member of a national securities exchange, registered securities association or clearing agency; or . a savings association that is a participant in a securities transfer association for the account of an eligible institution. If signatures on a letter of transmittal or notice of withdrawal are required to be guaranteed, the guarantor must be an eligible institution. If old notes are registered in the name of a person other than the signer of the letter of transmittal, the old notes surrendered for exchange must be endorsed or accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by us in our sole discretion, duly executed by the registered holder with the holder's signature guaranteed by an eligible institution. We will determine all questions as to the validity, form, eligibility (including time of receipt) and acceptance of old notes tendered for exchange in our sole discretion. Our determination will be final and binding. We reserve the absolute right to: . reject any and all tenders of any old note improperly tendered; . refuse to accept any old note if, in our judgment or the judgment of our counsel, acceptance of the old note may be deemed unlawful; or . waive any defects or irregularities or conditions of the exchange offer as to any particular old notes either before or after the expiration date, including the right to waive the ineligibility of any holder who seeks to tender old notes in the exchange offer, whether or not similar defects, irregularities or conditions are waived in the case of other holders. Our interpretation of the terms and conditions of the exchange offer as to any particular old notes either before or after the expiration date, including the letter of transmittal and the instructions to it, will be final and binding on all parties. Holders must cure any defects and irregularities in connection with tenders of old notes for exchange within such reasonable period of time as we will determine, unless we waive the defects or irregularities. Neither Steelcase, the exchange agent nor any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of old notes for exchange, nor will we incur any liability for failure to give such notification. 16 If trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity sign any letter of transmittal, any old notes or any written instruments of transfer or exchange, such persons should so indicate when signing and must submit proper evidence satisfactory to us of such person's authority to so act unless we waive this requirement. Book-Entry Transfers For tenders by book-entry transfer of old notes cleared through DTC, the exchange agent will make a request to establish an account at DTC for purposes of the exchange offer. Any financial institution that is a DTC participant may make book-entry delivery of old notes by causing DTC to transfer the old notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC may use the Automated Tender Offer Program ("ATOP") procedures to tender old notes. Accordingly, any participant in DTC may make book-entry delivery of old notes by causing DTC to transfer those old notes into the exchange agent's account in accordance with its ATOP procedures for transfer. Notwithstanding the ability of holders of old notes to effect delivery of old notes through book-entry transfer at DTC, either: . the letter of transmittal or facsimile thereof (or an agent's message in lieu of the letter of transmittal) with any required signature guarantees and any other required documents must be transmitted to and received by the exchange agent prior to the expiration date at the address given below under "--Exchange Agent"; or . the guaranteed delivery procedures described below must be complied with. Guaranteed Delivery Procedures If a holder of old notes desires to tender old notes and the holder's old notes are not immediately available, or time will not permit the holder's old notes or other required documents to reach the exchange agent before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if: . the holder tenders the old notes through an eligible institution; . prior to the expiration date, the exchange agent receives from that eligible institution a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided with the form of letter of transmittal, by telegram, telex, facsimile transmission, mail or hand delivery: -- setting forth the name and address of the holder of the old notes being tendered and the amount of the old notes being tendered; -- stating that the tender is being made; and -- guaranteeing that, within three (3) New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed letter of transmittal or agent's message with any required signature guarantees and any other documents required by the letter of transmittal, will be deposited by the eligible institution with the exchange agent; and . the exchange agent receives the certificates for all physically tendered old notes in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed 17 letter of transmittal or agent's message with any required signature guarantees and any other documents required by the letter of transmittal, within three (3) New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery. Acceptance of Old Notes for Exchange; Delivery of New Notes Upon satisfaction or waiver of all of the conditions to the exchange offer, we will accept, promptly after the expiration date, all old notes validly tendered and will issue new notes registered under the Securities Act. For purposes of the exchange offer, we will be deemed to have accepted properly tendered old notes for exchange when, as and if we have given oral or written notice to the exchange agent, with written confirmation of any oral notice to be given promptly thereafter. See "--Conditions to the Exchange Offer" for a discussion of the conditions that must be satisfied before old notes are accepted for exchange. For each old note accepted for exchange, the holder will receive a new note registered under the Securities Act having a principal amount equal to, and in the denomination of, that of the surrendered old note. Accordingly, registered holders of new notes issued in the exchange offer on the relevant record date for the first interest payment date following the consummation of the exchange offer will receive interest accruing from the most recent date to which interest has been paid on the old notes or, if no interest has been paid on the old notes, from November 27, 2001. Old notes accepted for exchange will cease to accrue interest from and after the date of consummation of the exchange offer. In all cases, we will issue new notes in the exchange offer for old notes that are accepted for exchange only after the exchange agent timely receives: . certificates for such old notes or a timely book-entry confirmation of the transfer of such old notes into the exchange agent's account at DTC; . a properly completed and duly executed letter of transmittal or an agent's message; and . all other required documents. If for any reason set forth in the terms and conditions of the exchange offer we do not accept any tendered old notes, or if a holder submits old notes for a greater principal amount than the holder desires to exchange, we will return such unaccepted or non-exchanged old notes without cost to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer. In the case of old notes tendered by book-entry transfer through DTC, the old notes withdrawn will be credited to an account maintained with DTC for the old notes. Withdrawal Rights You may withdraw tenders of your old notes at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal to be effective, you must send a written notice of withdrawal to the exchange agent at the address set forth below under "--Exchange Agent." The notice of withdrawal must: . specify the name of the person having tendered the old notes to be withdrawn; . identify the old notes to be withdrawn, including the principal amount of such old notes; and . where certificates for old notes are transmitted, specify the name in which old notes are registered, if different from that of the withdrawing holder. 18 If certificates for old notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of the certificates, the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible institution unless the withdrawing holder is an eligible institution. If old notes have been tendered pursuant to the procedure for book-entry transfer described above, the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of DTC. We will determine all questions as to the validity, form and eligibility (including time of receipt) of notices of withdrawal and our determination will be final and binding on all parties. Any tendered old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. In the case of old notes tendered by book-entry transfer through DTC, the old notes withdrawn will be credited to an account maintained with DTC. The old notes will be returned or credited to the account maintained with DTC as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Any old notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to the holder. Properly withdrawn old notes may be re-tendered by following one of the procedures described under "--Procedures for Tendering Old Notes" above at any time prior to 5:00 p.m., New York City time, on the expiration date. Conditions to the Exchange Offer Notwithstanding any other provision of the exchange offer, we are not required to accept for exchange, or to issue new notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time prior to 5:00 p.m., New York City time, on the expiration date, we determine that (a) the exchange offer violates applicable law or any applicable interpretation of the staff of the SEC, (b) any action or proceeding shall have been instituted or threatened in any court or before any governmental agency with respect to the exchange offer which, in our judgment, would impair our ability to proceed with the exchange offer, or (c) any law, rule or regulation or applicable interpretation of the staff of the SEC has been issued or promulgated which, in our good faith determination, does not permit us to effect the exchange offer. In addition, the exchange offer is conditioned on the tender of the old notes to us by the holders in accordance with the exchange offer. The foregoing conditions are for the sole benefit of Steelcase, and we may assert them regardless of the circumstances giving rise to any such condition, or we may waive the conditions, completely or partially, whenever or as many times as we choose, in our reasonable discretion. The foregoing rights are not deemed waived because we fail to exercise them, but continue in effect, and we may still assert them whenever or as many times as we choose. If we determine that a waiver of conditions materially changes the exchange offer, the prospectus will be amended or supplemented, and the exchange offer extended, if appropriate, as described under "--Terms of the Exchange Offer." In addition, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any such old notes, at a time when any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or with respect to the qualification of the indenture under the Trust Indenture Act. If we terminate or suspend the exchange offer based on a determination that the exchange offer violates applicable law or SEC staff interpretations, the registration rights agreement requires that we as promptly as practicable but no later than 45 days after such determination file a shelf registration statement with the SEC and 19 use our reasonable best efforts to cause a shelf registration statement to be declared effective by the SEC as promptly as practicable. See "--Registration Rights and Additional Interest on the Old Notes." Exchange Agent We have appointed Bank One Trust Company, N.A. as the exchange agent for the exchange offer. You should direct all executed letters of transmittal to the exchange agent at the address listed below: By Mail or Overnight Delivery: By Hand Delivery: Bank One Trust Company, N.A. Bank One, N.A. Corporate Trust Operations 55 Water Street, 1st Floor 111 Polaris Parkway New York, New York 10041 Suite N1-OH1-0184 Columbus, Ohio 43240 Attention: Ms. Lora Marsch Facsimile Transmissions: (614) 248-9987 Confirm by Telephone: (800) 346-5153 You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent at the address and telephone number listed above. Delivery to an address other than as listed above, or transmissions of instructions by a facsimile number other than as listed above, will not constitute a valid delivery. Fees and Expenses The registration rights agreement provides that we will bear all expenses in connection with the performance of our obligations relating to the registration of the new notes and the conduct of the exchange offer. These expenses include registration fees, fees and expenses of the exchange agent and the trustee, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related documents to their clients and for handling or tendering for their clients. We have not retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person (other than the exchange agent) for soliciting tenders of old notes pursuant to the exchange offer. Transfer Taxes Holders who tender their old notes for exchange will not be obligated to pay any transfer taxes in connection with the exchange. If, however, new notes issued in the exchange offer are to be delivered to, or are to be issued in the name of, any person other than the holder of the old notes tendered, or if a transfer tax is imposed for any reason other than the exchange of old notes in connection with the exchange offer, then the holder must pay any such transfer taxes, whether imposed on the registered holder or on any other person. If satisfactory evidence of payment of, or exemption from, such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to the tendering holder. 20 Accounting Treatment The new notes will be recorded at the same carrying value as the old notes. Accordingly, we will not recognize any gain or loss on the exchange for accounting purposes. We intend to amortize the expenses of the exchange offer and issuance of the old notes over the term of the notes. Consequences of Failure to Exchange Old Notes You do not have any appraisal or dissenters' rights in the exchange offer. Old notes that are not tendered or are tendered but not accepted will, following the consummation of the exchange offer, continue to be subject to the provisions in the indenture regarding the transfer and exchange of the old notes and the existing restrictions on transfer set forth in the legends on the old notes. Except in limited circumstances with respect to specific types of holders of old notes, we will have no further obligation to provide for the registration under the Securities Act of the old notes. In general, old notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will take any action to register the old notes under the Securities Act or under any state securities laws. Consummation of the exchange offer may have adverse consequences to non-tendering old note holders, including that the reduced amount of outstanding old notes as a result of the exchange offer may adversely affect the trading market, liquidity and market price of the old notes. Holders of the new notes and any old notes which remain outstanding after consummation of the exchange offer will vote together as a single class under the indenture. Registration Rights and Additional Interest on the Old Notes If . we are not permitted to effect the exchange offer as contemplated by this prospectus because of any change in law or applicable interpretations of the staff of the SEC; . for any other reason the exchange offer registration statement is not declared effective within 180 days after the date of issuance of the old notes or the exchange offer is not consummated within 210 days after the date of issuance of the old notes (provided that these obligations will terminate if the exchange offer registration statement is declared effective after the 180-day period or the exchange offer is consummated after the 210-day period); . upon written request of any of the initial purchasers within 90 days following consummation of the exchange offer (provided that such initial purchaser shall hold the old notes acquired directly from us and the initial purchaser is not permitted, in the reasonable opinion of counsel to the initial purchaser, pursuant to applicable law or applicable interpretation of the staff of the SEC, to participate in the exchange offer); . any holder of old notes (other than an initial purchaser) is not eligible to participate in the exchange offer; or . any holder of old notes that participates in the exchange offer does not receive fully tradeable new notes in exchange for old notes, then we will file with the SEC as promptly as practicable, but in no event later than the date that is 45 days after the filing obligation arises, which we refer to as the shelf filing date, a shelf registration statement to 21 cover resales of old notes that are "transfer restricted securities" by those holders who satisfy various conditions relating to the provision of information in connection with the shelf registration statement. "Transfer restricted securities" means each old note until the earliest to occur of: . the date on which that old note has been exchanged, other than by a participating broker-dealer, for a freely transferable new note in the exchange offer; . the date on which that old note has been effectively registered under the Securities Act and disposed of in accordance with the shelf registration statement; . the date on which that old note is distributed to the public pursuant to Rule 144 under the Securities Act or may be sold under Rule 144(k) under the Securities Act; . the date on which that old note has ceased to be outstanding; or . the date on which that old note has been exchanged by a participating broker-dealer for a new note and the new note has been sold to a purchaser who receives a prospectus contained in the exchange offer registration statement. If a shelf registration statement filing is required, we must use our reasonable best efforts to: . have the shelf registration statement declared effective by the SEC as promptly as practicable after the filing; and . keep the shelf registration statement effective for a period ending on the earlier of: . two years after the effective date of the shelf registration statement (plus any extensions provided for in the registration rights agreement); and . the date all transfer restricted securities have been sold under the shelf registration statement, cease to be outstanding or become eligible for resale without volume restrictions under Rule 144 under the Securities Act. The registration rights agreement provides that in the event that (i) we have not, by the date that is 90 days after the issuance of the old notes, filed with the SEC a registration statement relating to a registered exchange offer for the old notes under the Securities Act or a shelf registration statement relating to the sale of the old notes; (ii) by the date that is 180 days after the issuance of the old notes, such registration statement or shelf registration statement has not been declared effective under the Securities Act; (iii) we have not, by the date that is 210 days after the issuance of the old notes, consummated a registered exchange offer for the old notes or caused a shelf registration statement with respect to resales of the old notes to be declared effective, or (iv) a shelf registration statement or an exchange offer registration statement is declared effective, but thereafter ceases to be effective or usable in connection with resales of the notes during the period specified in the registration rights agreement, subject to certain exceptions for limited periods of time, we will be obligated to pay additional interest to each holder of the old notes in an amount equal to 0.25% per annum until the applicable registration default in (i), (ii), (iii) or (iv) ceases to occur, as the case may be, whereupon the interest rate will decrease to the original interest rate on the old notes. 22 DESCRIPTION OF NOTES The old notes were, and the new notes will be, issued under an indenture, dated as of November 27, 2001, between Steelcase Inc. and Bank One Trust Company, N.A., as trustee, as supplemented by a first supplemental indenture, dated as of November 27, 2001, between Steelcase Inc. and the trustee, copies of which have been filed as exhibits to our Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2001. The indenture, as supplemented by the first supplemental indenture, is referred to herein as the "indenture." The form and terms of the new notes will be identical in all material respects to the form and terms of the old notes, except that the new notes: . will have been registered under the Securities Act; . will not bear restrictive legends restricting their transfer under the Securities Act; . will not be entitled to the registration rights that apply to the old notes; and . will not contain provisions relating to an increase in the interest rate borne by the old notes under circumstances related to the timing of the exchange offer. Except as otherwise indicated, the following summary relates to both the old notes and the new notes. When we refer to the term "note" or "notes," we are referring to both the old notes and the new notes to be issued in the exchange offer. When we refer to "holder" of the notes, we are referring to those persons who are the registered holders of the notes on the books of the registrar appointed under the indenture. The following discussion summarizes the material provisions of the indenture and the notes. Because this is only a summary, it is not complete and does not describe every aspect of the notes and the indenture. A copy of the indenture is available from us upon request. You should read the indenture for provisions that may be important to you but which are not included in this summary. In this description of notes, references to "Steelcase," "we," "our," "us" and all similar references refer only to Steelcase Inc. and not to subsidiaries of Steelcase Inc. General Terms of the Notes The notes are our direct, unsecured and unsubordinated obligations and rank equally with all of our other unsecured and unsubordinated indebtedness. The notes are effectively subordinated to all of our secured indebtedness to the extent of the assets securing such indebtedness and to all indebtedness and other liabilities of our subsidiaries, including trade payables. The indenture does not limit the amount of notes, debentures or other evidences of indebtedness that we may issue under it or otherwise and provides that notes, debentures or other evidences of indebtedness may be issued from time to time in one or more series. Our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the notes or to make any funds available to us, whether by dividends, loans or other payments. The payment of dividends or the making of loans and advances to us by our subsidiaries may be subject to contractual, statutory or regulatory restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business considerations. The notes were originally issued in the aggregate principal amount of $250,000,000. We may from time to time, without giving notice to or seeking the consent of the holders of the notes, issue additional notes having the same ranking, interest rate, maturity and other terms as the notes. Any additional notes having such similar terms, together with the notes, will constitute a single series of notes under the indenture. 23 The notes bear interest at 6.375% per year from November 27, 2001, payable semi-annually on May 15 and November 15 of each year, commencing May 15, 2002, to the persons in whose names the notes were registered at the close of business on the next preceding May 1 and November 1, respectively. Interest on the notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. The notes will mature on November 15, 2006. Principal and interest will be payable, and the notes will be transferable or exchangeable, at the office or offices or agency maintained by us for this purpose. Payment of interest on the notes may be made at our option by check mailed to the registered holders. Any payment otherwise required to be made in respect of the notes on a date that is not a business day may be made on the next succeeding business day with the same force and effect as if made on that date. No additional interest will accrue as a result of a delayed payment. A business day is defined in the indenture as a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. The notes were issued only in fully registered form without coupons in denominations of $1,000 and any whole multiple of $1,000. No service charge will be made for any transfer or exchange of the notes, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange. The notes are represented by one or more global notes registered in the name of a nominee of The Depository Trust Company ("DTC"). Except as described under "Book-Entry; Delivery and Form" below, the notes will not be issuable in certificated form. Optional Redemption The notes may be redeemed, in whole or in part, at our option, at any time or from time to time. The redemption price for the notes to be redeemed on any redemption date will be equal to the greater of the following amounts: . 100% of the principal amount of the notes being redeemed on the redemption date; or . the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed on that redemption date (not including any portion of any payments of interest accrued to the redemption date) discounted to the redemption date on a semiannual basis at the Treasury Rate (as defined below), plus 35 basis points, as determined by the Reference Treasury Dealer (as defined below), plus, in each case, accrued and unpaid interest on the notes to the redemption date. Notwithstanding the foregoing, installments of interest on notes that are due and payable on interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the registered holders as of the close of business on the relevant record date according to the notes and the indenture. The redemption price will be calculated on the basis of a 360-day year consisting of twelve 30-day months. We will mail notice of any redemption at least 30 days, but not more than 60 days, before the redemption date to each registered holder of the notes to be redeemed. Once notice of redemption is mailed, the notes called for redemption will become due and payable on the redemption date and at the applicable redemption price, plus accrued and unpaid interest to the redemption date. On and after the redemption date, interest will cease to accrue on the notes or any portion of the notes called for redemption (unless we default in the payment of the redemption price and accrued interest). On or before the redemption date, we will deposit with a paying agent (or the trustee) money sufficient to pay the redemption price of and accrued interest on the notes to be redeemed on that date. If less than all of the notes are 24 to be redeemed, the notes to be redeemed will be selected by the trustee by a method the trustee deems to be fair and appropriate. For purposes of determining the optional redemption price, the following definitions are applicable: "Comparable Treasury Issue" means the United States Treasury security selected by the Reference Treasury Dealer as having a maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt notes of comparable maturity to the remaining term of the notes. "Comparable Treasury Price" means, with respect to any redemption date, (A) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if the trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations or (C) if only one Reference Treasury Dealer Quotation is received, such quotation. "Reference Treasury Dealer" means (A) any of the initial purchasers (or their respective affiliates which are Primary Treasury Dealers), and their respective successors; provided, however, that if any of those entities ceases to be a primary U.S. government securities dealer in New York City (a "Primary Treasury Dealer"), we will substitute for those entities another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by the trustee after consultation with us. "Reference Treasury Dealer Quotation" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third business day preceding such redemption date. "Treasury Rate" means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The notes will not be entitled to the benefit of any mandatory redemption or sinking fund. Certain Covenants of the Company Other than as described below, the indenture does not contain any provisions that would limit our ability to incur indebtedness or that would offer protection to security holders in the event of a ratings downgrade or a sudden and significant decline in our credit quality or a highly leveraged transaction, takeover, recapitalization or similar occurrence. There are also no covenants or provisions that prevent a Subsidiary (as defined below), other than a Restricted Subsidiary (as defined below), from incurring indebtedness secured by any assets of that Subsidiary. At the date of this prospectus, only Attwood Corporation and PolyVision Corporation constitute Restricted Subsidiaries. Limitation on Liens The indenture provides that, except as otherwise provided below, we will not, and will not permit any Restricted Subsidiary to, issue, incur, create, assume or guarantee any debt for borrowed money, collectively referred to as "Debt," secured by any mortgage, deed of trust, security interest, pledge, lien, charge or other encumbrance, each a "Lien" and collectively "Liens," upon any Principal Property (as defined below), shares of stock (or other equivalents of or interests in equity) or indebtedness of a Restricted Subsidiary, unless the notes (and, at our option, any other indebtedness or guarantee ranking equally with the notes) are secured equally and ratably with (or, at our option, prior to) such secured Debt. This restriction will not apply to Debt secured by: . Liens existing on the date of the initial issuance of the notes; 25 . Liens on property, shares of stock (or other equivalents of or interests in equity) or indebtedness of an entity existing at the time it becomes a Restricted Subsidiary, provided that such Liens were not created in anticipation of the transaction in which such entity becomes a Restricted Subsidiary; . Liens on property acquired by Steelcase or a Restricted Subsidiary existing at the time of acquisition by Steelcase or a Restricted Subsidiary; . Liens upon any property to secure all or a portion of the purchase price of such property or Debt incurred to finance such purchase price, whether such Debt was incurred prior to, at the time of or within12 months after the date of such acquisition; or Liens upon any property to secure all or part of the cost of improvement, repair or construction thereof or Debt incurred prior to, at the time of or within 12 months after the completion of such improvement, repair or construction or the commencement of full operations thereof (whichever is later) to provide funds for such purpose; . Liens in favor of Steelcase or a Restricted Subsidiary; . Liens on property, shares of stock (or other equivalents of or interests in equity) or indebtedness of an entity existing at the time such entity is merged into or consolidated with Steelcase or a Restricted Subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the properties of an entity as an entirety or substantially as an entirety to Steelcase or a Restricted Subsidiary, provided that the Lien was not incurred in anticipation of such merger or consolidation or sale, lease or other disposition; . Liens on Principal Properties subject to Sale and Lease-Back Transactions (as defined below) not otherwise prohibited by the indenture to the extent attributable to such Sale and Lease-Back Transactions and securing only the related Attributable Debt (as defined below); . Liens on property of Steelcase or a Restricted Subsidiary in favor of governmental bodies to secure payments of amounts owed under contract or statute or to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such Liens; and . any extension, renewal or replacement of any Lien referred to above or of any Debt secured by that Lien, provided that such extension, renewal or replacement Lien will secure no larger an amount of Debt than that existing at the time of such extension, renewal or replacement. In addition, Steelcase or a Restricted Subsidiary may issue, incur, create, assume or guarantee Debt secured by a Lien which would otherwise be subject to the foregoing restrictions without equally and ratably securing the notes, provided that after giving effect to the Debt secured by such Lien, the aggregate amount of all Debt so secured by Liens (not including Liens permitted above), together with the Attributable Debt of Sale and Lease-Back Transactions permitted by the provision described below under "--Limitation on Sale and Lease-Back Transactions" on the basis that Steelcase or a Restricted Subsidiary would be permitted to incur Debt secured by a Lien under this paragraph without equally and ratably securing the notes, does not exceed the greater of $75 million and 15% of Consolidated Net Tangible Assets. Limitation on Sale and Lease-Back Transactions The indenture provides that we will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Lease-Back Transactions of any Principal Property unless: . such Sale and Lease-Back Transaction occurs within 12 months from the date of the acquisition of the Principal Property subject thereto or the date of the completion of the construction or commencement of full operations of such Principal Property (whichever is later); . such Sale and Lease-Back Transaction involves a lease for a term of not more than three years; 26 . such Sale and Lease-Back Transaction is between Steelcase and a Restricted Subsidiary or between Restricted Subsidiaries; . Steelcase or such Restricted Subsidiary would be entitled pursuant to the covenant described above under "--Limitation on Liens" (other than the clause referring to Sale and Lease-Back Transactions not otherwise prohibited by the indenture) without equally and ratably securing the notes, to incur Debt secured by a Lien on the Principal Property involved in such transaction in an amount at least equal to the Attributable Debt with respect to such Sale and Lease-Back Transaction; or . Steelcase or such Restricted Subsidiary, within 12 months after the effective date of such Sale and Lease-Back Transaction, applies or causes to be applied an amount not less than the Attributable Debt from such Sale and Lease-Back Transaction to (1) the prepayment, repayment, redemption, reduction or retirement (other than any mandatory prepayment, mandatory repayment, mandatory redemption or sinking fund payment or payment at maturity) of Debt of Steelcase or any Restricted Subsidiary (other than Debt that is subordinate to the notes or Debt to Steelcase or a Restricted Subsidiary) or (2) expenditures for the acquisition, construction, development or expansion of Principal Property used or to be used in the ordinary course of business of Steelcase or a Restricted Subsidiary. Certain Definitions "Attributable Debt" means, in respect of a Sale and Lease-Back Transaction, the present value (discounted at the rate set forth or implicit in the terms of the lease included in the transaction, as determined in good faith by a principal accounting officer of Steelcase) of the obligation of the lessee for rental payments during the remaining term of the lease included in such transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended or, if earlier, until the earliest date on which the lessee may terminate such lease upon payment of a penalty (in which case the obligation of the lessee for rental payments will include such penalty), after excluding all amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water and utility rates and similar charges. "Consolidated Net Tangible Assets" means, as of any particular time, the total of all the assets appearing on the most recent consolidated balance sheet of Steelcase and its Subsidiaries (other than those principally engaged in leasing or financing activities) as of the end of the last fiscal quarter for which financial information is available (less applicable reserves and other properly deductible items) after deducting from such amount: . all current liabilities, including current maturities of long-term debt and current maturities of obligations under capital leases (other than liabilities of Subsidiaries principally engaged in leasing and financing activities that are not guaranteed by Steelcase or any of its other Subsidiaries); and . the total of the net book values of all assets of Steelcase and its Subsidiaries (other than those principally engaged in leasing or financing activities) properly classified as intangible assets under U.S. generally accepted accounting principles (including goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangible assets). "Principal Property" means the land, improvements, buildings and fixtures (including any leasehold interest thereof) constituting the principal corporate office, any manufacturing plant or any manufacturing, research or engineering facility (whether owned or leased at, or acquired or leased after, the date of the indenture) that is owned or leased by Steelcase or a Restricted Subsidiary and that is located within the continental United States, unless Steelcase's Board of Directors (or a committee thereof) has determined in good faith that such property is not material to the operation of the business conducted by Steelcase and its Subsidiaries taken as a whole. "Restricted Subsidiary" means any Subsidiary (i) substantially all of whose property is located within the continental United States, (ii) which owns a Principal Property and (iii) in which our investment exceeds 27 2.5% of the aggregate amount of assets included on a consolidated balance sheet of Steelcase and its Subsidiaries as of the end of the last fiscal quarter for which financial information is available. However, the term "Restricted Subsidiary" does not include Steelcase Financial Services Inc. (so long as Steelcase Financial Services Inc. is principally engaged in leasing or financing activities) or any other Subsidiary that is principally engaged in leasing or financing activities. "Sale and Lease-Back Transaction" means any arrangement with any person providing for the leasing by Steelcase or any Restricted Subsidiary of any Principal Property, whether owned at the date of the issuance of the notes or thereafter acquired (excluding temporary leases of a term, including renewal periods, of not more than three years), that has been or is to be sold or transferred by Steelcase or any Restricted Subsidiary to such person with the intention of taking back a lease of the property. "Subsidiary" means (i) any corporation at least a majority of whose outstanding voting stock shall at the time be owned, directly or indirectly, by Steelcase, or by one or more of its subsidiaries or by Steelcase and one or more of its subsidiaries and (ii) any general partnership, limited liability company, joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by Steelcase, by one or more of its subsidiaries or by Steelcase and one or more of its subsidiaries. Merger, Consolidation or Sale of Assets Nothing contained in the indenture prevents any consolidation or merger of Steelcase with or into any other entity or entities (whether or not affiliated with Steelcase), or successive consolidations or mergers in which Steelcase or any of its successors is a party, or will prevent any sale, conveyance, lease, transfer or other disposition of all or substantially all of the property of Steelcase or any of its successors, to any other entity (whether or not affiliated with Steelcase or its successors) authorized to acquire and operate the same; provided, however, that upon any such consolidation, merger, sale, conveyance, lease, transfer or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the notes and the due and punctual performance and observance of all the covenants and conditions of the indenture with respect to the notes or established with respect to the notes to be kept or performed by Steelcase (or such successor) will be expressly assumed by supplemental indenture satisfactory in form to the trustee executed and delivered to the trustee by the entity formed by such consolidation (if other than Steelcase), or into which Steelcase (or such successor) will have been merged, or by the entity which will have acquired such property. In case of any such consolidation, merger, sale, conveyance, lease, transfer or other disposition and upon the assumption by the successor entity, by supplemental indenture, executed and delivered to the trustee and satisfactory in form to the trustee, of the due and punctual payment of the principal of, premium, if any, and interest on all of the notes outstanding and the due and punctual performance of all of the covenants and conditions of the indenture or established with respect to the notes pursuant to the indenture to be performed by Steelcase, such successor entity will succeed to and be substituted for Steelcase with the same effect as if it had been named as Steelcase in the indenture, and the predecessor entity will be relieved of all obligations and covenants under the indenture and the notes. If, as a result of any such consolidation, merger, sale, conveyance, lease, transfer or other disposition, properties or assets of Steelcase or a Restricted Subsidiary would become subject to any lien which would not be permitted by the covenant described above under "--Limitation on Liens" without equally and ratably securing the notes, Steelcase or the Restricted Subsidiary, or such successor person, as the case may be, will take the steps as are necessary to secure effectively the notes equally and ratably with, or prior to, all indebtedness secured by those liens as described above. After that time, all of our obligations under the notes and the indenture terminate. Events of Default The following are events of default under the indenture with respect to the notes: . we fail to pay interest when due and continuing for 30 days and the time for payment has not been properly extended or deferred; 28 . we fail to pay the principal or any premium when due and the time for payment has not been properly extended or deferred; . we fail to observe or perform any other covenant contained in the notes, and such failure continues for 60 days after we receive notice from the trustee or holders of at least 25% in aggregate principal amount of the outstanding notes; and . events of our bankruptcy, insolvency or reorganization, whether voluntary or not. If an event of default occurs and is continuing, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes may declare the notes due and payable immediately. In case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) and premium, if any, of all outstanding notes will become and be immediately due and payable without any declaration or other act by the trustee or any holder of outstanding notes. Under certain circumstances, the holders of a majority in principal amount of the outstanding notes may rescind any such acceleration with respect to the notes and its consequences. The holders of a majority in principal amount of the outstanding notes may waive any default or event of default with respect to the notes and its consequences, except defaults or events of default regarding payment of principal, any premium or interest. A waiver will eliminate the default. If an event of default under the indenture occurs and is continuing, the trustee will be under no obligation to exercise any of its rights or powers under the indenture, unless the holders of the notes have offered the trustee reasonable indemnity. The holders of a majority in principal amount of the notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, provided that: . such proceeding or exercise is not in conflict with any law or the indenture; . the trustee may take any other action deemed proper by it that is not inconsistent with directions from the holders; and . unless otherwise provided under the Trust Indenture Act of 1939, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding. A holder of the notes will only have the right to institute a proceeding under the indenture or to appoint a receiver or trustee, or to seek other remedies if: . the holder has given written notice to the trustee of a continuing event of default; . the holders of at least 25% in aggregate principal amount of the outstanding notes have made written request; . those holders have offered reasonable indemnity to the trustee to institute proceedings as trustee; and . the trustee does not institute a proceeding, and does not receive conflicting directions within 60 days. These limitations do not apply to a suit brought by a holder of the notes if Steelcase defaults in the payment of the principal, any premium or interest. Any right of a holder of the notes to receive payments of the principal of (and premium, if any) and any interest on the notes on or after the due dates expressed in the notes and to institute suit for the enforcement of any such payment on or after such dates will not be impaired or affected without the consent of such holder. Steelcase will periodically file statements with the trustee regarding its compliance with the covenants in the indenture. 29 Modification of Indenture Steelcase and the trustee may change the indenture without the consent of any holders to: . fix any ambiguity, defect or inconsistency in the indenture; . evidence the succession of another corporation to Steelcase and the assumption by such party of the obligations of Steelcase; . provide for uncertificated notes in addition to or in place of certificated notes; . add to the covenants of Steelcase for the benefit of all or any series of notes; . add to, delete from, or revise the conditions, limitations and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of notes set forth in the indenture; . change anything that does not materially adversely affect the interests of any holder of the notes; . provide for the issuance of and establish the form and terms and conditions of the notes of any series, establish the form of any certifications required or add to the rights of any holders of any series of notes; . secure the notes; . add any additional events of default; . change or eliminate any of the provisions of the indenture; provided that any such change or elimination shall become effective only when there is no note of any series outstanding created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; . provide for the appointment of a successor trustee; or . comply with the requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act. In addition, the rights of holders may be changed by Steelcase and the trustee with the written consent of the holders of a majority in principal amount of the notes outstanding. However, the following changes may only be made with the consent of each affected holder: . extending the fixed maturity of any notes of any series; . reducing the principal amount of any notes of any series; . reducing the rate or extending the time of payment of interest of any notes of any series; . reducing any premium payable upon redemption; or . reducing the percentage of notes outstanding required to consent to any amendment to the indenture or to the notes. No particular form of supplemental indenture is required. Promptly after the execution of any supplemental indenture, the trustee will mail a notice setting forth in general terms the substance of the supplemental indenture to the holders of notes of all series affected. Failure on the part of the trustee to mail the notice will not affect the validity of the supplemental indenture. Satisfaction and Discharge The indenture will cease to be of further effect with respect to the notes, except as may otherwise be provided in the indenture, if at any time (i) we have delivered to the trustee for cancellation all authenticated notes (other than destroyed, lost or stolen notes and notes for whose payment money has been deposited in trust 30 or segregated and held in trust by us as provided by the indenture) or (ii) all notes not delivered to the trustee for cancellation have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice for redemption, and we deposit with the trustee as trust funds, cash or government securities which through the payment of principal and interest in accordance with their terms will provide money, in an amount sufficient to pay the principal and any premium and interest on the notes and all other sums payable by us under the indenture in connection with the notes. This type of a trust may only be established if, among other things, Steelcase has delivered to the trustee an opinion of counsel meeting the requirements set forth in the indenture. Legal Defeasance and Covenant Defeasance The indenture provides that, subject to conditions specified in the indenture, we may elect either: . legal defeasance, whereby we are discharged from any and all obligations with respect to the notes, except as may be otherwise provided in the indenture; or . covenant defeasance, whereby we are released from our obligations described above under "--Limitation on Liens" and "--Limitation on Sale and Lease-Back Transactions" and the third paragraph under "--Merger, Consolidation or Sale of Assets." We may do so in either case by depositing with the trustee, as trust funds, cash or government securities which through the payment of principal and interest in accordance with their terms will provide money, in an amount sufficient to pay the principal and any premium and interest on the notes and all other sums payable by us under the indenture in connection with the notes. This type of a trust may only be established if, among other things, Steelcase has delivered to the trustee an opinion of counsel meeting the requirements set forth in the indenture. Governing Law The indenture provides that it and the notes are to be governed by, and construed in accordance with, the laws of the State of New York, except to the extent that the Trust Indenture Act otherwise applies. Assignment We will have the right at any time to assign any of our rights or obligations under the indenture to a direct or indirect wholly-owned Subsidiary, provided that we will remain liable for all obligations under the indenture. Relationships with the Trustee Bank One Trust Company, N.A. is trustee under the indenture. Bank One Trust Company, N.A. maintains normal banking relationships with us (and is an affiliate of Bank One, Michigan, which participates in our bank credit facilities and provides other services for us in the normal course of our business, and Banc One Capital Markets, Inc., an initial purchaser in the initial offering). 31 BOOK-ENTRY; DELIVERY AND FORM General The new notes will be represented by one or more notes in registered global form, without interest coupons attached. On the date of closing of the exchange offer, these global notes (the "New Global Note") will be deposited with DTC and registered in the name of Cede & Co., as nominee of DTC or, will remain in the custody of the trustee pursuant to the FAST Balance Certificate Agreement between DTC and the trustee. Ownership of interests in the New Global Note ("Book-Entry Interests") will be limited to persons that have accounts with DTC, or persons that hold interests through such direct participants. Except under the limited circumstances described below, beneficial owners of Book-Entry Interests will not be entitled to physical delivery of new notes in definitive form. Book-Entry Interests will be shown on, and transfers thereof will be effected only through, records maintained in book-entry form by DTC or DTC's nominees and direct participants. The laws of some jurisdictions, including certain states of the United States, may require that certain purchasers of securities take physical delivery of such securities in definitive form. The foregoing limitations may impair your ability to own, transfer or pledge Book-Entry Interests. In addition while the new notes are in global form, holders of Book-Entry Interests will not be considered the owners or "holders" of new notes for any purpose. So long as the new notes are held in global form, DTC or its nominees will be considered the sole holders of the New Global Note for all purposes under the indenture. In addition, direct participants must rely on the procedures of DTC and indirect participants must rely on the procedures of DTC and the direct participants through which they own Book-Entry Interests to transfer their interests or to exercise any rights of holders under the indenture. Neither we nor the trustee will have any responsibility or be liable for any aspect of the records relating to the Book-Entry Interests. Redemption of the New Global Note In the event the New Global Note, or any portion thereof, is redeemed, DTC will redeem an equal amount of the Book-Entry Interests in such New Global Note from the amount received by it in respect of the redemption of such New Global Note. The redemption price payable in connection with the redemption of such Book-Entry Interests will be equal to the amount received by DTC in connection with the redemption of such New Global Note or any portion thereof. We understand that, under existing practices of DTC, if fewer than all of the new notes are to be redeemed at any time, DTC will credit its direct participants' accounts on a proportionate basis, with adjustments to prevent fractions, or by lot or on such other basis as DTC deems fair and appropriate; provided, however, that no Book-Entry Interest of $1,000 principal amount or less may be redeemed in part. Payments on the New Global Note Payments of any amounts owing in respect of the New Global Note, including principal, premium, if any, and interest, will be made by us to DTC or its nominee as the registered holder of such New Global Note under the indenture, which will distribute such payments to its direct participants in accordance with its procedures. Payments of all such amounts will be made without deduction or withholding for or on account of any present or future taxes, duties assessments or governmental charges of whatever nature except as may be required by law. We expect that payments by direct participants to owners of Book-Entry Interests held through such direct participants will be governed by standing customer instructions and customary practices. 32 Under the terms of the indenture, we and the trustee will treat DTC or its nominee as the owner of the New Global Note for the purpose of receiving payments and for all other purposes. Consequently, none of Steelcase, the trustee or any of our agents has or will have any responsibility or liability for: . any aspect of the records of DTC or any direct or indirect participant relating to, or payments made on account of, a Book-Entry Interest or for maintaining, supervising or reviewing the records of DTC or any direct or indirect participant relating to, or payments made on account of, a Book-Entry Interest; or . DTC or any direct or indirect participant. Information Concerning DTC The descriptions of the operations and procedures of DTC set forth below are provided solely as a matter of convenience. These operations and procedures are solely within the control of DTC and are subject to change by DTC from time to time. Neither we nor the trustee take any responsibility for these operations or procedures, and investors are urged to contact DTC or its participants directly to discuss these matters. DTC has advised us that it is (1) a limited purpose trust company organized under the banking laws of the State of New York, (2) a "banking organization" within the meaning of the New York Banking Law, (3) a member of the Federal Reserve System, (4) a "clearing corporation" within the meaning of the New York Uniform Commercial Code, as amended and (5) a "clearing agency" registered pursuant to Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitates the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its direct participants, thereby eliminating the need for physical transfer and delivery of certificates. DTC's direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies, referred to as "indirect participants," that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. Investors who are not participants may beneficially own notes held by or on behalf of DTC only through direct participants or indirect participants. Pursuant to procedures established by DTC, upon deposit of the New Global Note, DTC will credit the accounts of direct participants with an interest in the global notes. Ownership of the notes will be shown on, and the transfer of ownership of notes will be effected only through, records maintained by DTC, with respect to the interests of direct participants, and the records of direct participants and the indirect participants, with respect to the interests of persons other than direct participants. We understand that under existing industry practice, in the event that we request any action of holders of new notes, or an owner of a beneficial interest in the New Global Note desires to take any action that DTC, as the holder of such New Global Note, is entitled to take, DTC would authorize the participants to take the action and the participants would authorize beneficial owners owning through the participants to take the action or would otherwise act upon the instruction of the beneficial owners. Neither we nor the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of notes by DTC, or for maintaining, supervising or reviewing any records of DTC relating to the notes. Certificated Notes If (1) DTC notifies us that it is no longer willing or able to act as a depository or clearing system for the notes or DTC ceases to be registered or in good standing under the Exchange Act, and a successor depository or clearing system is not appointed within 90 days after we have received notice or become aware of this condition, (2) we, at our option, notify the trustee in writing that we elect to cause the issuance of notes in certificated form under the indenture or (3) upon the occurrence and continuation of an event of default under the indenture, then, 33 upon surrender by DTC of the global notes, certificated notes will be issued to each person that DTC identifies as the owner of the notes represented by the global notes. Upon any such issuance, the trustee is required to register the certificated notes in the name of the person or persons or the nominee of any of these persons and cause the same to be delivered to these persons. Neither we nor the trustee will be liable for any delay by DTC or any participant or indirect participant in identifying the beneficial owners of the related notes and each such person may conclusively rely on, and will be protected in relying on, instructions from DTC for all purposes, including with respect to the registration and delivery, and the respective principal amounts, of the certificated notes to be issued. Transfers of New Notes; Global Clearance and Settlement Under the Book-Entry System Unless definitive new notes are issued, the New Global Note may be transferred in whole, and not in part, solely to another nominee of DTC or a successor to DTC or its nominee. Transfers of interests in the New Global Note will be subject to the applicable rules and procedures of DTC and its direct and indirect participants, which are subject to change from time to time. Any secondary market trading in interests in the New Global Note is expected to occur through the direct participants of DTC and the securities custody accounts of investors will be credited with their holdings against payment in same-day funds on the settlement date. We expect that secondary trading in any certificated new notes will be settled in immediately available funds. No service charge will be made for any registration or transfer or exchange of new notes, but the trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Although DTC is expected to follow the foregoing procedures in order to facilitate transfers of interests in a New Global Note among direct participants of DTC, DTC is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither we, the trustee nor any agent of the foregoing will have any responsibility for the performance of DTC or its direct or indirect participants or their respective obligations under the rules and procedures governing their operations. 34 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of the material U.S. federal income tax consequences of the exchange offer to a holder of old notes that acquired its old notes in their original issuance for cash at the initial offering price. The discussion is based upon the Internal Revenue Code of 1986, as amended, Treasury Regulations, judicial authorities, published positions of the Internal Revenue Service (which we refer to as the IRS), and other applicable authorities, all as in effect on the date hereof and all of which are subject to change or differing interpretations (possibly with retroactive effect). The discussion does not address all of the tax consequences that may be relevant to a particular holder or to holders subject to special treatment under U.S. federal income tax laws. This discussion is limited to holders who hold their notes as capital assets. No ruling has been or will be sought from the IRS regarding any matter discussed herein. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax aspects set forth below. Prospective investors must consult their own tax advisors as to the U.S. federal income tax consequences of acquiring, holding and disposing of notes, as well as the effects of other U.S. federal, state, local and non-U.S. tax laws. The exchange of new notes for old notes pursuant to the exchange offer will not be treated as a taxable event for U.S. federal income tax purposes. Rather, the new notes received by a holder will be treated as a continuation of the old notes in the hands of such holder. Accordingly, such a holder will have the same tax basis and holding period in the new notes as it had in the old notes immediately prior to the exchange. 35 PLAN OF DISTRIBUTION AND SELLING RESTRICTIONS The exchange offer is not being made to, nor will we accept surrenders of old notes for exchange from, holders of old notes in any jurisdiction in which the exchange offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. This communication is directed solely at persons who (i) are outside the United Kingdom or (ii) have professional experience in matters relating to investments or (iii) are persons falling within Article 49(2)(a) to (d) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the "Financial Promotion Order"), (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. The distribution of this prospectus and the offer and sale of the new notes may be restricted by law in certain jurisdictions. Persons who come into possession of this prospectus or any of the new notes must inform themselves about and observe any such restrictions. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the new notes or possess or distribute this prospectus and, in connection with any purchase, offer or sale by you of the new notes, must obtain any consent, approval or permission required under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchase, offer or sale. In reliance on interpretations of the staff of the SEC set forth in no-action letters issued to third parties in similar transactions, we believe that the new notes issued in the exchange offer in exchange for the old notes may be offered for resale, resold and otherwise transferred by holders without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the new notes are acquired in the ordinary course of such holders' business and the holders are not engaged in and do not intend to engage in and have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of new notes. This position does not apply to any holder that is . an "affiliate" of Steelcase within the meaning of Rule 405 under the Securities Act; or . a broker-dealer. All broker-dealers receiving new notes in the exchange offer are subject to a prospectus delivery requirement with respect to resales of the new notes. Each broker-dealer receiving new notes for its own account in the exchange offer must represent that the old notes to be exchanged for the new notes were acquired by it as a result of market-making activities or other trading activities and acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes pursuant to the exchange offer; however, by so acknowledging and by delivering a prospectus, the participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. We have agreed that, for a period of 180 days after the expiration date, subject to extension under limited circumstances, or such shorter period which will terminate when the participating broker-dealers have completed all resales subject to any prospectus delivery requirements, we will use our reasonable best efforts to keep the exchange offer registration statement effective and make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with such resales. To date, the SEC has taken the position that broker-dealers may use a prospectus such as this one to fulfill their prospectus delivery requirements with respect to resales of new notes received in an exchange such as the exchange pursuant to the exchange offer, if the old notes for which the new notes were received in the exchange were acquired for their own accounts as a result of market-making or other trading activities. A broker-dealer intending to use this prospectus in the resale of new notes must so notify us on or before the expiration date. This notice may be given in the space provided in the letter of transmittal or may be delivered to the exchange agent. 36 We may, in good faith and for valid business reasons, including, but not limited to an announcement of a pending material corporate transaction, or if otherwise required under applicable laws, issue a notice suspending use of the registration statement of which this prospectus forms a part. If we do so, the period during which the registration statement must remain effective will be extended for a number of days equal to the number of days the registration statement was in suspense. We will not receive any proceeds from any sale of the new notes by broker-dealers. Broker-dealers acquiring new notes for their own accounts may sell the notes in one or more transactions in the over-the-counter market, in negotiated transactions, through writing options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of such new notes. Any broker-dealer that held old notes acquired for its own account as a result of market-making activities or other trading activities, that received new notes in the exchange offer, and that participates in a distribution of new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes. Any profit on these resales of new notes and any commissions or concessions received by a broker dealer in connection with these resales may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not admit that it is an "underwriter" within the meaning of the Securities Act. We have agreed to pay all expenses incident to the exchange offer, including the reasonable expenses of one counsel for the holders of old notes, other than commissions or concessions of any broker-dealers and will indemnify holders of the old notes, including any broker-dealers, against specified types of liabilities, including liabilities under the Securities Act. LEGAL MATTERS Certain legal matters as to the validity of the new notes are being passed upon for us by Skadden, Arps, Slate, Meagher & Flom (Illinois), Chicago, Illinois. EXPERTS Our consolidated financial statements and schedules as of February 23, 2001, and February 25, 2000, and for each of the three years in the period ended February 23, 2001, incorporated by reference in this prospectus, have been audited by BDO Seidman, LLP, independent certified public accountants and are incorporated herein in reliance upon such report given upon the authority of said firm as expert in auditing and accounting. 37 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20. Indemnification of Directors and Officers Steelcase Inc.'s Amended By-laws require it, to the fullest extent authorized or permitted by the Michigan Business Corporation Act, to (a) indemnify any person, and his or her heirs, personal representatives, executors, administrators and legal representatives, who was, is, or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was a director, officer or employee of Steelcase Inc., or is or was serving at the request of Steelcase Inc. as a director, officer, employee or agent of another corporation (including a subsidiary corporation), limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, whether or not for profit, or by reason of anything done by such person in such capacity (collectively, "Covered Matters") and (b) pay or reimburse the reasonable expenses incurred by such person and his or her heirs, executors, administrators and legal representatives in connection with any Covered Matter in advance of final disposition of such Covered Matter. Under the bylaws, Steelcase Inc. may also provide such other indemnification to directors, officers, employees and agents by insurance, contract or otherwise as is permitted by law and authorized by the board of directors. Steelcase Inc.'s Second Restated Articles of Incorporation provide that to the full extent permitted by the Michigan Business Corporation Act or any other applicable laws presently or hereafter in effect, no director of Steelcase Inc. shall be personally liable to Steelcase Inc. or its shareholders for or with respect to any acts or omissions in the performance of his or her duties as a director of Steelcase Inc. Any repeal or modification of that article XII of the Second Restated Articles of Incorporation by the shareholders of Steelcase Inc. shall not adversely affect the right or protection of a director of Steelcase Inc. existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification. Section 561 of the Michigan Business Corporation Act ("Section 561") provides that a Michigan corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative and whether formal or informal), other than an action by or in the right of the corporation, by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys' fees, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders, and with respect to any criminal action or proceeding, if the person had no reasonable cause to believe his or her conduct was unlawful. In addition, Section 562 of the Michigan Business Corporation Act ("Section 562") provides that a Michigan corporation may indemnify a person who was or is a party or is threatened to be made a party to a threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys' fees and amounts paid in settlement actually and reasonably incurred by the person in connection with the action or suit, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders. Section 562 does not permit indemnification for a claim, issue or matter in which the person has been found liable to the corporation unless application for indemnification is made to, and ordered by, the court conducting the proceeding or another court of competent jurisdiction. II-1 Section 563 of the Michigan Business Corporation Act provides that a director or officer who has been successful on the merits or otherwise in defense of an action, suit or proceeding referred to in Sections 561 and 562, or in defense of a claim, issue, or matter in the action, suit, or proceeding, shall be indemnified by the corporation against actual and reasonable expenses, including attorneys' fees, incurred by him or her in connection with the action, suit or proceeding, and an action, suit, or proceeding brought to enforce this mandatory indemnification. The foregoing statements are subject to the detailed provisions of the Michigan Business Corporation Act, Steelcase Inc.'s Second Restated Articles of Incorporation and Steelcase Inc.'s Amended By-laws. Item 21. Exhibit and Financial Statement Schedules (a) Exhibits See Index of Exhibits (page E-1). (b) Financial Statement Schedules: The financial statement schedules are incorporated herein by reference. Item 22. Undertakings (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-2 (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (e) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (f) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-3 SIGNATURES Pursuant to the requirements of the Securities Act, Steelcase Inc. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Grand Rapids, State of Michigan, on February 22, 2002. STEELCASE INC. /s/ J. HACKETT By: _________________________________ James P. Hackett President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints James P. Hackett, James P. Keane and Sheila C. Dayton and each of them his, her or its true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him, her or it and in his, her or its name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he, she or it might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on this 22nd day of February, 2002.
Signature Title --------- ----- /S/ J. HACKETT President and Chief Executive Officer and Director - -------------------------- (principal executive officer) James P. Hackett /S/ JAMES P. KEANE Senior Vice President and Chief Financial Officer (principal - -------------------------- financial and accounting officer) James P. Keane /S/ DAVID BING Director - -------------------------- David Bing /S/ WILLIAM P. CRAWFORD Director - -------------------------- William P. Crawford /S/ EARL D. HOLTON Director - -------------------------- Earl D. Holton /S/ DAVID D. HUNTING, JR. Director - -------------------------- David D. Hunting, Jr.
II-4
Signature Title --------- ----- /S/ DAVID W. JOOS Director - -------------------------- David W. Joos /S/ ELIZABETH VALK LONG Director - -------------------------- Elizabeth (Lisa) Valk Long /S/ FRANK H. MERLOTTI Director - -------------------------- Frank H. Merlotti /S/ ROBERT C. PEW III Director - -------------------------- Robert C. Pew III /S/ PETER M. WEGE, II Director - -------------------------- Peter M. Wege, II /S/ P. CRAIG WELCH, JR. Director - -------------------------- P. Craig Welch, Jr. /S/ KATE PEW WOLTERS Director - -------------------------- Kate Pew Wolters
II-5 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 1.1 Purchase Agreement, dated November 19, 2001, by and among Steelcase Inc., Goldman, Sachs & Co., Salomon Smith Barney Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and BNP Paribas Securities Corp. (filed as Exhibit 1.1 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2001 and incorporated herein by reference). 2.1* Agreement and Plan of Merger by and among Steelcase Inc., PV Acquisition Corp. and PolyVision Corporation dated August 24, 2001, as amended. 3.1 Second Restated Articles of Incorporation of Steelcase Inc. (filed as Exhibit 3.1 to Steelcase Inc.'s Registration Statement on Form S-1 (File No. 333-41647) and incorporated herein by reference). 3.2 Amended Bylaws of Steelcase Inc. (filed as Exhibit 3.2 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended May 26, 2000 and incorporated herein by reference). 4.1 Reserved. 4.2 Credit Agreement dated April 5, 2001, Long Term Multicurrency Revolving Credit Facility (filed as Exhibit 4.2 to Steelcase Inc.'s Quarterly Report for the quarterly period ended May 25, 2001 and incorporated herein by reference). 4.3 Credit Agreement dated April 5, 2001, Short Term Multicurrency Revolving Credit Facility (filed as Exhibit 4.3 to Steelcase Inc.'s Quarterly Report for the quarterly period ended May 25, 2001 and incorporated herein by reference). 4.4 Global Commercial Paper Programme--ECP Issuing and Paying Agency Agreement dated June 20, 2001 (filed as Exhibit 4.4 to Steelcase Inc.'s Quarterly Report for the quarterly period ended August 24, 2001 and incorporated herein by reference). 4.5 Global Commercial Paper Programme--USCP Issuing and Paying Agency Agreement dated June 20, 2001 (filed as Exhibit 4.5 to Steelcase Inc.'s Quarterly Report for the quarterly period ended August 24, 2001 and incorporated herein by reference). 4.6 Indenture dated November 27, 2001, between Steelcase Inc. and Bank One Trust Company, N.A. (filed as Exhibit 4.6 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2001 and incorporated herein by reference). 4.7 First Supplemental Indenture dated November 27, 2001, between Steelcase Inc. and Bank One Trust Company, N.A. (filed as Exhibit 4.7 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2001 and incorporated herein by reference). 4.8 Registration Rights Agreement, dated November 19, 2001, by and among Steelcase Inc., Goldman, Sachs & Co., Salomon Smith Barney Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and BNP Paribas Securities Corp. (filed as Exhibit 4.8 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2001 and incorporated herein by reference). 4.9 Form of Note (included in Exhibit 4.7). 4.10 First Amendment to Credit Agreement dated April 5, 2001, Long Term Multicurrency Revolving Credit Facility. (filed as Exhibit 4.10 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2001 and incorporated herein by reference). 4.11 First Amendment to Credit Agreement dated April 5, 2001, Short Term Multicurrency Revolving Credit Facility (filed as Exhibit 4.11 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended November 23, 2001 and incorporated herein by reference).
E-1
Exhibit No. Description - ----------- ----------- 4.12* Credit Facility Agreement dated as of April 5, 2000, between Steelcase Financial Services Ltd. and Royal Bank of Canada. 4.13* Amendment dated May 24, 2001 to Credit Facility Agreement dated April 5, 2000, between Steelcase Financial Services Ltd. and Royal Bank of Canada. 4.14* Guarantee dated as of April 5, 2000, by Steelcase Inc. in favor of Royal Bank of Canada, pursuant to the Credit Facility Agreement dated as of April 5, 2000, between Steelcase Financial Services Ltd. and Royal Bank of Canada. 4.15* Amendment dated May 24, 2001 to Guarantee dated as of April 5, 2000, by Steelcase Inc. in favor of Royal Bank of Canada, pursuant to the Credit Facility Agreement dated as of April 5, 2000, between Steelcase Financial Services Ltd. and Royal Bank of Canada. 4.16* Amendment dated November 9, 2001 to Credit Facility Agreement between Steelcase Financial Services Ltd. and Royal Bank of Canada, dated April 5, 2000, and the Guarantee by Steelcase Inc. in favor of Royal Bank of Canada, pursuant to the Credit Facility Agreement dated April 5, 2000. 4.17* Credit Facility Agreement dated as of May 24, 2001 by and between Steelcase Financial Services Ltd. and Royal Bank of Canada. 4.18* Guarantee dated as of May 24, 2001, by Steelcase Inc. in favor of Royal Bank of Canada, pursuant to the Credit Facility Agreement dated as of May 24, 2001, between Steelcase Financial Services Ltd. and Royal Bank of Canada. 4.19* Amendment dated November 9, 2001 to Credit Facility Agreement between Steelcase Financial Services Ltd. and Royal Bank of Canada, dated May 24, 2001, and the Guarantee by Steelcase Inc. in favor of Royal Bank of Canada, pursuant to the Credit Facility Agreement dated May 24, 2001. 4.20* Loan Agreement dated April 9, 1999, by and among Steelcase SAS, Steelcase Inc. and Societe Generale. 4.21* Participation Agreement dated as of April 9, 1999, by and between Steelcase Europe LLC and Societe Generale. 4.22* First Amendment to Loan Agreement dated as of June 15, 2001, by and among Steelcase SAS, Steelcase Inc. and Societe Generale. 4.23* Second Amendment to Loan Agreement dated November 12, 2001, by and among Steelcase SAS, Steelcase Inc. and Societe Generale. 4.24* Lease Receivables Transfer Agreement dated as of October 20, 1999 among Steelcase Financial Services Inc., Corporate Asset Funding Company, Inc., the financial institutions from time to time party thereto and Citicorp North America, Inc. 4.25* Amendment No. 1 to Lease Receivables Transfer Agreement dated as of October 18, 2000, among Steelcase Financial Services Inc., Corporate Asset Funding Company, Inc., the financial institutions from time to time party thereto and Citicorp North America, Inc. 4.26* Amendment No. 2 to Lease Receivables Transfer Agreement dated as of November 17, 2000, among Steelcase Financial Services Inc., Corporate Asset Funding Company, Inc., the financial institutions from time to time party thereto and Citicorp North America, Inc. 4.27* Amendment No. 3 to Lease Receivables Transfer Agreement dated as of October 17, 2001, among Steelcase Financial Services Inc., Corporate Asset Funding Company, Inc., the financial institutions from time to time party thereto and Citicorp North America, Inc.
E-2
Exhibit No. Description - ----------- ----------- 4.28* Performance Guaranty dated as of October 20, 1999, made by Steelcase Inc., in favor of Corporate Asset Funding Company, Inc., the financial institutions from time to time party to the Lease Receivables Transfer Agreement and Citicorp North America, Inc. 4.29* Omnibus Amendment No. 1 to that certain Lease Receivables Transfer Agreement, entered into as of November 15, 2001 by and among Steelcase Inc., Steelcase Financial Services Inc., Corporate Asset Funding Company, Inc., Citibank N.A. and Citicorp North America, Inc. 4.30* Amendment No. 4 to Lease Receivables Transfer Agreement dated as of February 21, 2002, by and among Steelcase Financial Services Inc., Corporate Asset Funding Company, Inc., Citibank N.A. and Citicorp North America, Inc. In accordance with Item 601(b)(4)(iii) of Regulation S-K, Steelcase Inc. agrees to furnish to the Securities and Exchange Commission, upon request, copies of such instruments which define the rights of holders of long-term debt and represent debt of less than 10% of total assets. 5.1* Opinion and Consent of Sheila C. Dayton, Vice President, General Counsel and Assistant Secretary of Steelcase Inc. 5.2* Opinion and Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois). 10.1 Deferred Compensation Agreement between Steelcase Inc. and James P. Hackett (filed as Exhibit 10.1 to Steelcase Inc.'s Amendment 2 to Registration Statement on Form S-1 /A (File No. 333-41647) and incorporated herein by reference). 10.2 Deferred Compensation Agreement between Steelcase Inc. and Robert A. Ballard (filed as Exhibit 10.2 to Steelcase Inc.'s Amendment 2 to Registration Statement on Form S-1 /A (File No. 333-41647) and incorporated herein by reference). 10.3 Deferred Compensation Agreement dated January 12, 1998, between Steelcase Inc. and Alwyn Rougier-Chapman (filed as Exhibit 10.3 to Steelcase Inc.'s Amendment 1 to Registration Statement on Form S-1 /A (File No. 333-41647) and incorporated herein by reference). 10.4 Steelcase Inc. Restoration Retirement Plan (filed as Exhibit 10.4 to Steelcase Inc.'s Annual Report on Form 10-K for the fiscal year ended February 26, 1999 and incorporated herein by reference). 10.5 Steelcase Inc. Incentive Compensation Plan (filed as Exhibit 10.5 to Steelcase Inc.'s Registration Statement on Form S-1 (File No. 333-41647) and incorporated herein by reference). 10.6 Amended and Restated Management Incentive Plan of Steelcase Inc. (filed as Exhibit 10.6 to Steelcase Inc.'s Amendment 1 to Registration Statement on Form S-1 /A (File No. 333-41647) and incorporated herein by reference). 10.7 Steelcase Inc. 1994 Executive Supplemental Retirement Plan, amended and restated (filed as Exhibit 10.7 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the period ended May 26, 2000 and incorporated herein by reference). 10.8 Deferred Compensation Agreement dated May 4, 1998, between Steelcase Inc. and William P. Crawford (filed as Exhibit 10.8 to Steelcase Inc.'s Annual Report on Form 10-K for the annual period ended February 27, 1998 and incorporated herein by reference). 10.9 Stock Purchase Agreement between Steelcase Inc. and Strafor Facom S.A. dated as of April 21, 1999 (filed as Exhibit 2.1 to Steelcase Inc.'s Current Report on Form 8-K dated April 22, 1999 and incorporated herein by reference). 10.10 Steelcase Inc. Non-Employee Director Deferred Compensation Plan (filed as Exhibit 10.10 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended August 27, 1999 and incorporated herein by reference). 10.11 Steelcase Inc. Deferred Compensation Plan (filed as Exhibit 10.11 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended November 26, 1999 and incorporated herein by reference). 10.12 First Amendment to Steelcase Inc. Incentive Compensation Plan (filed as Exhibit 10.12 to Steelcase Inc.'s Annual Report on Form 10-K for the annual period ended February 25, 2000 and incorporated herein by reference).
E-3
Exhibit No. Description - ----------- ----------- 10.13 First Amendment to Steelcase Inc. Management Incentive Plan (filed as Exhibit 10.13 to Steelcase Inc.'s Annual Report on Form 10-K for the annual period ended February 25, 2000 and incorporated herein by reference). 10.14 Second Amendment to Steelcase Inc. Incentive Compensation Plan (filed as Exhibit 10.14 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended May 26, 2000 and incorporated herein by reference). 10.15 Aircraft Time Sharing Agreement between Steelcase Inc. and James P. Hackett dated March 30, 2000 (filed as Exhibit 10.15 to Steelcase Inc.'s Annual Report on Form 10-K for the annual period ended February 25, 2000 and incorporated herein by reference). 10.16 Aircraft Time Sharing Agreements between Steelcase Inc. and Robert C. Pew dated May 1, 2000 (filed as Exhibit 10.16 to Steelcase Inc.'s Annual Report on Form 10-K for the annual period ended February 25, 2000 and incorporated herein by reference). 10.17 Aircraft Time Sharing Agreements between Steelcase Inc. and James P. Hackett dated July 1, 2000 (filed as Exhibit 10.17 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended August 25, 2000 and incorporated herein by reference). 10.18 Aircraft Time Sharing Agreements between Steelcase Inc. and Robert C. Pew dated July 1, 2000 (filed as Exhibit 10.18 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended August 25, 2000 and incorporated herein by reference). 10.19 Third Amendment to Steelcase Inc. Incentive Compensation Plan (filed as Exhibit 10.19 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended August 25, 2000 and incorporated herein by reference). 10.20 Retirement Agreement between Steelcase Inc. and Alwyn Rougier-Chapman dated March 5, 2001 (filed as Exhibit 10.20 to Steelcase Inc.'s Annual Report on Form 10-K for the annual period ended February 23, 2001 and incorporated herein by reference). 10.21 Steelcase Inc. Benefit Plan for Outside Directors (filed as Exhibit 10.21 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended May 25, 2001 and incorporated herein by reference). 10.22 First Amendment to Steelcase Inc. Restoration Retirement Plan (filed as Exhibit 10.22 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended May 25, 2001 and incorporated herein by reference). 10.23 First Amendment to Steelcase Inc. Deferred Compensation Plan (filed as Exhibit 10.23 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended May 25, 2001 and incorporated herein by reference). 10.24 2002-1 Amendment to Steelcase Inc.'s Deferred Compensation Plan (filed as Exhibit 10.24 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended May 25, 2001 and incorporated herein by reference). 10.25 Fourth Amendment to Steelcase Inc.'s Incentive Compensation Plan (filed as Exhibit 10.25 to Steelcase Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended August 24, 2001 and incorporated herein by reference). 10.26* Shareholder's Agreement by and among Steelcase Inc., PV Acquisition, Inc. and The Alpine Group, Inc. dated August 24, 2001. 11.1 Statement Regarding Computation of Net Income Per Share of Common Stock (filed as Exhibit 11.1 to Steelcase Inc.'s Amendment 2 to Registration Statement on Form S-1 /A (File No. 333-41647) and incorporated herein by reference). 12.1* Computation of Ratio of Earnings to Fixed Charges.
E-4
Exhibit No. Description - ----------- ----------- 21.1* Subsidiaries of Steelcase Inc. 23.1* Consent of BDO Seidman, LLP. 23.2* Consent of Sheila C. Dayton, Vice President, General Counsel and Assistant Secretary of Steelcase Inc. (included in Exhibit 5.1). 23.3* Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois) (included in Exhibit 5.2). 24.1* Power of Attorney (included on signature pages to the registration statement). 25.1* Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Bank One Trust Company, N.A., as trustee. 99.1* Form of Letter of Transmittal. 99.2* Form of Notice of Guaranteed Delivery. 99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. 99.4* Form of Letter to Clients.
- -------- * Filed herewith. E-5 EX-2.1 3 dex21.txt AGREEMENT & PLAN OF MERGER EXHIBIT 2.1 AGREEMENT AND PLAN OF MERGER by and among STEELCASE INC., PV ACQUISITION, INC. and POLYVISION CORPORATION dated August 24, 2001 (Comformed as per Amendment No. 1 dated October 15, 2001) TABLE OF CONTENTS -----------------
Page ---- Index of Defined Terms ..................................................... Index - i ARTICLE I THE MERGER; EFFECTIVE TIME; CLOSING ........................................ 2 Section 1.1 The Merger ............................................ 2 Section 1.2 Effective Time ........................................ 2 Section 1.3 Closing ............................................... 2 Section 1.4 Effects of the Merger ................................. 2 ARTICLE II THE SURVIVING CORPORATION .................................................. 3 Section 2.1 Certificate of Incorporation .......................... 3 Section 2.2 By-laws ............................................... 3 Section 2.3 Directors and Officers of the Surviving Corporation ... 3 ARTICLE III CONVERSION OF SECURITIES ................................................... 3 Section 3.1 Conversion of Shares .................................. 3 Section 3.2 Appraisal Rights ...................................... 5 Section 3.3 Exchange of Certificates .............................. 5 Section 3.4 Adjustment of Merger Consideration .................... 7 Section 3.5 Stock Options ......................................... 8 Section 3.6 Warrants .............................................. 8 Section 3.7 Convertible Note ...................................... 9 Section 3.8 Withholding Rights .................................... 9 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY .............................. 9 Section 4.1 Organization .......................................... 10 Section 4.2 Subsidiaries and Affiliates ........................... 11 Section 4.3 Capitalization ........................................ 12
i Section 4.4 Authorization; Validity of Agreement; Company Action ...... 14 Section 4.5 Special Committee and Board Approvals ..................... 14 Section 4.6 Consents and Approvals; No Violations ..................... 15 Section 4.7 Company SEC Documents and Financial Statements ............ 16 Section 4.8 Absence of Certain Changes ................................ 17 Section 4.9 No Undisclosed Liabilities; Indebtedness .................. 19 Section 4.10 Litigation ................................................ 20 Section 4.11 Employee Benefit Plans; ERISA ............................. 21 Section 4.12 Taxes ..................................................... 27 Section 4.13 Contracts ................................................. 29 Section 4.14 Real and Personal Property ................................ 31 Section 4.15 Intellectual Property ..................................... 32 Section 4.16 Related Party Transactions ................................ 35 Section 4.17 Labor Matters ............................................. 36 Section 4.18 Compliance with Laws ...................................... 37 Section 4.19 Assets .................................................... 37 Section 4.20 Customers and Suppliers ................................... 37 Section 4.21 Environmental Matters ..................................... 38 Section 4.22 Insurance ................................................. 41 Section 4.23 Proxy Statement ........................................... 42 Section 4.24 Opinion of Financial Advisor .............................. 42 Section 4.25 Brokers ................................................... 42 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB ........................ 42 Section 5.1 Organization .............................................. 42 Section 5.2 Authorization; Validity of Agreement; Necessary Action .... 43 Section 5.3 Consents and Approvals; No Violations ..................... 43 Section 5.4 Information in the Proxy Statement ........................ 44 Section 5.5 Brokers ................................................... 44 Section 5.6 Financing ................................................. 44 Section 5.7 Interim Operations of Merger Sub .......................... 44
ii ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS ..................................................... 45 Section 6.1 Conduct of Business of the Company ....................................... 45 Section 6.2 Notification of Acquisition Proposals .................................... 49 Section 6.3 No Solicitation .......................................................... 50 ARTICLE VII ADDITIONAL AGREEMENTS ......................................................................... 51 Section 7.1 Special Meeting; Proxy Statement; Adoption of Agreement .................. 51 Section 7.2 Reasonable Best Efforts; Consents and Approvals .......................... 53 Section 7.3 Notification of Certain Matters .......................................... 54 Section 7.4 Access; Confidentiality .................................................. 54 Section 7.5 Publicity ................................................................ 55 Section 7.6 Insurance and Indemnification ............................................ 55 Section 7.7 Determination Letters; Multiemployer Plans ............................... 56 Section 7.8 Employment and Benefit Arrangements ...................................... 56 Section 7.9 Transfer of Certain Intellectual Property ................................ 57 Section 7.10 Third Party Standstill Agreements ........................................ 58 Section 7.11 Takeover Laws ............................................................ 58 ARTICLE VIII CONDITIONS .................................................................................... 58 Section 8.1 Conditions to Each Party's Obligation to Effect the Merger ............... 58 Section 8.2 Conditions to the Company's Obligation to Effect the Merger .............. 59 Section 8.3 Conditions to Parent's and Merger Sub's Obligations to Effect the Merger.. 59 ARTICLE IX TERMINATION ................................................................................... 61 Section 9.1 Termination .............................................................. 61 Section 9.2 Effect of Termination .................................................... 63
iii ARTICLE X MISCELLANEOUS ........................................................ 64 Section 10.1 Amendment and Modification ........................ 64 Section 10.2 Non-survival of Representations and Warranties .... 64 Section 10.3 Expenses .......................................... 64 Section 10.4 Notices ........................................... 64 Section 10.5 Interpretation .................................... 66 Section 10.6 Jurisdiction ...................................... 67 Section 10.7 Service of Process ................................ 68 Section 10.8 Specific Performance .............................. 68 Section 10.9 Counterparts ...................................... 68 Section 10.10 Entire Agreement; No Third-Party Beneficiaries .... 68 Section 10.11 Severability ...................................... 68 Section 10.12 Governing Law ..................................... 69 Section 10.13 Assignment ........................................ 69 Section 10.14 Special Committee Enforcement ..................... 69 Annex A ......................................................... A-1 iv Index of Defined Terms Defined Term Section No. - ------------ ----------- Acquisition Proposal ..................................... 6.2 Acquisition Proposal Interest ............................ 6.2 Agreement ................................................ Recitals Average Premium .......................................... 7.6(b) Balance Sheet Date ....................................... 4.8 BCL ...................................................... Recitals Business Intellectual Property ........................... 4.15(a) CERCLIS .................................................. 4.21(b)(ix) Certificate of Merger .................................... 1.2 Certificates ............................................. 3.3(b) Closing .................................................. 1.3 Code ..................................................... 4.11(b)(ii) Common Stock Merger Consideration ........................ 3.1(a) Company................................................... Recitals Company Agreement......................................... 4.6 Company Board of Directors................................ Recitals Company Common Stock ..................................... 3.1(a) Company Disclosure Schedule .............................. Article IV Company Form 10-K......................................... 4.13 Company Material Adverse Change .......................... 4.1(a) Company Material Adverse Effect .......................... 4.1(a) Company Organizational Documents ......................... 4.1(c) Company Preferred Stock .................................. 3.1(b) Company Recommendation ................................... 7.1(a)(iii) Company SEC Documents .................................... 4.7 Company Subsidiary ....................................... 4.2(a) Confidentiality Agreement ................................ 7.4 Convertible Note ......................................... 3.7 Copyrights ............................................... 4.15(a) D&O Insurance ............................................ 7.6(b) Dissenting Shares......................................... 3.2 Effective Time ........................................... 1.2 Employees ................................................ 7.8(a) Encumbrance .............................................. 4.8(n) Environmental Claim ...................................... 4.21(a)(ii) Index - i Environmental Laws ..................................... 4.21(a)(i) ERISA .................................................. 4.11(a) ERISA Affiliate ........................................ 4.11(a) ERISA Plans ............................................ 4.11(a) Exchange Act ........................................... 3.5(b) Financial Advisor....................................... 4.24 Financial Statements ................................... 4.7 FIRPTA Certificate ..................................... 8.3(h) Foreign Benefit Plan ................................... 4.11(u) GAAP ................................................... 4.7 Governmental Entity .................................... 4.6 Hazardous Substances ................................... 4.21(a)(iii) HSR Act ................................................ 4.6 Indemnified Party....................................... 7.6(a) Intellectual Property .................................. 4.15(a) IP License Agreements .................................. 4.15(d) IRS .................................................... 4.11(b)(ii) Listed Company Agreements .............................. 4.13 Merger ................................................. Recitals Merger Consideration ................................... 3.3(a) Merger Sub ............................................. Recitals New York Courts ........................................ 10.6 NPL .................................................... 4.21(b)(ix) Option ................................................. 3.5(a) Option Plans ........................................... 3.5(a) Parent ................................................. Recitals Parent Material Adverse Effect ......................... 5.1 Patents ................................................ 4.15(a) Paying Agent ........................................... 3.3(a) PBGC ................................................... 4.11(c) Person ................................................. 4.2(a) Plans .................................................. 4.11(a) Proprietary Software ................................... 4.15(c) Proxy Statement ........................................ 4.6 Real Property .......................................... 4.14(b) Record Date ............................................ 7.1(a)(i) Representatives ........................................ 6.3(a) SEC .................................................... 4.7 Securities Act ......................................... 4.7 Index - ii Series B Preferred Stock .................................... 3.1(b) Series B Preferred Stock Merger Consideration ............... 3.1(b) Series C Preferred Stock .................................... 3.1(c) Series C Preferred Stock Merger Consideration ............... 3.1(c) Series D Preferred Stock .................................... 3.1(d) Series D Preferred Stock Merger Consideration ............... 3.1(d) Shareholder ................................................. Recitals Shareholder's Agreement ..................................... Recitals Shares ...................................................... 3.3(a) Software..................................................... 4.15(a) Special Committee............................................ Recitals Special Meeting ............................................. 7.1(a)(i) Subsidiary .................................................. 4.2(a) Subsidiary Organizational Documents ........................ 4.2(c) Surviving Corporation ....................................... 1.1 Tax ......................................................... 4.12 Taxes ....................................................... 4.12 Tax Return .................................................. 4.12 Termination Date ............................................ 9.1(b)(ii) Title IV Plan ............................................... 4.11(d) Trade Secrets ............................................... 4.15(a) Trademarks .................................................. 4.15(a) Transactions ................................................ Recitals Voting Debt ................................................. 4.3(b) WARN Act..................................................... 4.17(f) Warrants..................................................... 3.6 Index - iii AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated August --------- 24, 2001, by and among Steelcase Inc., a Michigan corporation ("Parent"), PV ------ Acquisition, Inc., a New York corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), and PolyVision Corporation, a New York corporation formed ---------- under the name RT Acquisition Associates, Inc. (the "Company"). ------- WHEREAS, it is the intention of the parties that, in accordance with the New York Business Corporation Law, as amended (the "BCL"), and upon the --- terms and subject to the conditions set forth herein, Merger Sub shall merge with and into the Company, with the Company being the surviving corporation of such merger (the "Merger"); ------ WHEREAS, each of the board of directors of the Company (the "Company ------- Board of Directors") and a special committee of the Company Board of Directors - ------------------ (the "Special Committee") composed entirely of directors who have no material ----------------- ownership interest in, or any employment or consulting relationship with, the principal shareholder of the Company, The Alpine Group, Inc., a Delaware corporation (the "Shareholder"), and who are not officers of the Company has ----------- unanimously determined that this Agreement and the Merger are advisable, fair to and in the best interests of the Company and its shareholders (other than the Shareholder), and the Company Board of Directors has unanimously adopted this Agreement; WHEREAS, the board of directors of Merger Sub and Parent, as the sole shareholder of Merger Sub, have each approved and adopted this Agreement and have approved the Merger and the other transactions contemplated hereby (collectively, including the Merger, the "Transactions"); ------------ WHEREAS, as a condition and inducement to Parent's and Merger Sub's entering into this Agreement and incurring the obligations set forth herein, the Shareholder is entering into a shareholder's agreement, dated as of the date hereof (the "Shareholder's Agreement"), with Parent and Merger Sub substantially ----------------------- in the form of Exhibit A hereto; and --------- WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with, and also to prescribe certain conditions to, the Merger. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I THE MERGER; EFFECTIVE TIME; CLOSING Section 1.1 The Merger. Subject to the terms and conditions of ---------- this Agreement and in accordance with the BCL, at the Effective Time (as defined in Section 1.2), the Company and Merger Sub shall consummate the Merger pursuant to which (i) Merger Sub shall be merged with and into the Company and the separate corporate existence of Merger Sub shall thereupon cease and (ii) the Company shall be the surviving corporation in the Merger and shall continue to be governed by the laws of the State of New York. The corporation surviving the Merger is sometimes hereinafter referred to as the "Surviving Corporation." --------------------- Section 1.2 Effective Time. Parent, Merger Sub and the Company -------------- shall cause an appropriate certificate of merger (the "Certificate of Merger") --------------------- to be executed and filed on the date of the Closing (as defined in Section 1.3) with the Secretary of State of the State of New York as provided in Section 904 of the BCL. The Merger shall become effective on the date on which the Certificate of Merger has been duly filed with the Secretary of State of the State of New York, or such later date as agreed upon by the parties, such date being hereinafter referred to as the "Effective Time." -------------- Section 1.3 Closing. The closing of the Merger (the "Closing") ------- ------- will take place (a) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York at 10:00 a.m., Eastern time, on the second business day after satisfaction or waiver of all of the conditions set forth in Article VIII or (b) at such other place, time and date as Parent and the Company may agree. Section 1.4 Effects of the Merger. The Merger shall have the --------------------- effects set forth in the BCL and in this Agreement. 2 ARTICLE II THE SURVIVING CORPORATION Section 2.1 Certificate of Incorporation. The certificate of ---------------------------- incorporation of Merger Sub, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation, except as to the name of the Surviving Corporation, which shall be PolyVision Corporation, until thereafter amended in accordance with the BCL. Section 2.2 By-laws. The by-laws of Merger Sub, as in effect ------- immediately prior to the Effective Time, shall be the by-laws of the Surviving Corporation, except as to the name of the Surviving Corporation, which shall be PolyVision Corporation, until thereafter amended in accordance with the BCL and the certificate of incorporation of the Surviving Corporation. Section 2.3 Directors and Officers of the Surviving Corporation. --------------------------------------------------- The directors of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation, until their respective successors shall have been duly elected, designated and qualified, or until their earlier death, resignation or removal in accordance with the Surviving Corporation's certificate of incorporation and by-laws. ARTICLE III CONVERSION OF SECURITIES Section 3.1 Conversion of Shares. At the Effective Time, by -------------------- virtue of the Merger and without any action on the part of the shareholders of the Company or Merger Sub or any of the parties hereto: (a) Each share of Common Stock, par value $.001 per share, of the Company (the "Company Common Stock") issued and outstanding -------------------- immediately prior to the Effective Time (other than any shares of Company Common Stock to be canceled pursuant to Section 3.1(e)) shall be canceled and shall be converted automatically into the right to receive $2.25 in cash (the "Common ------ Stock Merger Consideration") payable, without interest, to the holder of such - -------------------------- share of Company 3 Common Stock, upon surrender, in the manner provided in Section 3.3, of the certificate that formerly evidenced such share of Company Common Stock. (b) Each share of Preferred Stock, par value $.01 per share, of the Company (the"Company Preferred Stock") designated as Series B Preferred (the ----------------------- "Series B Preferred Stock") issued and outstanding immediately prior to the ------------------------ Effective Time (other than any shares of Series B Preferred Stock to be canceled pursuant to Section 3.1(e) and any Dissenting Shares (as hereinafter defined)) shall be canceled and shall be converted automatically into the right to receive an amount in cash equal to the sum of (x) the liquidation preference associated with such share of Series B Preferred Stock (i.e., $50) plus (y) the accrued and unpaid dividends on such share of Series B Preferred Stock (the "Series B -------- Preferred Stock Merger Consideration"), payable, without interest, to the holder - ------------------------------------ of such share of Series B Preferred Stock, upon surrender, in the manner provided in Section 3.3, of the certificate that formerly evidenced such share of Series B Preferred Stock. (c) Each share of Company Preferred Stock designated as Series C Preferred (the "Series C Preferred Stock") issued and outstanding immediately ------------------------ prior to the Effective Time (other than any shares of Series C Preferred Stock to be canceled pursuant to Section 3.1(e) and any Dissenting Shares) shall be canceled and shall be converted automatically into the right to receive an amount in cash equal to the product of (x) the Common Stock Merger Consideration multiplied by (y) the number of shares of Company Common Stock into which such share of Series C Preferred Stock is convertible immediately prior to the Effective Time (the "Series C Preferred Stock Merger Consideration"), payable, --------------------------------------------- without interest, to the holder of such share of Series C Preferred Stock, upon surrender, in the manner provided in Section 3.3, of the certificate that formerly evidenced such share of Series C Preferred Stock. (d) Each share of Company Preferred Stock designated as Series D Preferred (the "Series D Preferred Stock") issued and outstanding immediately ------------------------ prior to the Effective Time (other than any shares of Series D Preferred Stock to be canceled pursuant to Section 3.1(e) and any Dissenting Shares) shall be canceled and shall be converted automatically into the right to receive an amount in cash equal to the sum of (x) the liquidation preference associated with such share of Series D Preferred Stock (i.e., $50) plus (y) the accrued and unpaid dividends on such share of Series D Preferred Stock (the "Series D -------- Preferred Stock Merger Consideration"), payable, without interest, to the holder - ------------------------------------ of such share of Series D Preferred Stock, upon surrender, in the manner provided in Section 3.3, of the certificate that formerly evidenced such share of Series D Preferred Stock. 4 (e) Each share of Company Common Stock and Company Preferred Stock held in the treasury of the Company immediately prior to the Effective Time and each share of Company Common Stock and Company Preferred Stock owned by Parent or any of its Subsidiaries immediately prior to the Effective Time shall be canceled without any conversion thereof, and no payment or distribution shall be made with respect thereto. (f) Each share of common stock of Merger Sub that is issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation with the same rights, powers and privileges as the share so converted, and all such shares of Surviving Corporation common stock shall constitute the only outstanding shares of the Surviving Corporation immediately after the Effective Time. Section 3.2 Appraisal Rights. Notwithstanding any provision of this ---------------- Agreement to the contrary, shares of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock outstanding immediately prior to the Effective Time and held by a holder that has the right to receive payment of the fair value of such holder's shares pursuant to Section 910 of the BCL and has complied with the provisions of Section 623 of the BCL ("Dissenting Shares") ----------------- shall not be converted into the right to receive the Series B Preferred Stock Merger Consideration, Series C Preferred Stock Merger Consideration or Series D Preferred Stock Merger Consideration, as applicable, unless such holder fails to perfect or withdraws or otherwise loses such holder's right to appraisal. If after the Effective Time such holder fails to perfect or withdraws or loses such holder's right to appraisal, such shares shall be treated as if they had been converted as of the Effective Time into the right to receive the Series B Preferred Stock Merger Consideration, Series C Preferred Stock Merger Consideration or Series D Preferred Stock Merger Consideration, as applicable. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of shares, and Parent shall have the right to participate in and to control all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands. Section 3.3 Exchange of Certificates. ------------------------ (a) Paying Agent. Prior to the Effective Time, Parent shall ------------ designate an agent, which shall be reasonably satisfactory to the Company (the "Paying Agent"), for the holders of shares of Company Common Stock, Series B ------------ Preferred 5 Stock, Series C Preferred Stock and Series D Preferred Stock (the "Shares") in ------ connection with the Merger and to receive the funds to which holders of Shares shall become entitled pursuant to Section 3.1. Prior to the Effective Time, Parent or Merger Sub shall make available to the Paying Agent the aggregate of the Common Stock Merger Consideration, Series B Preferred Stock Merger Consideration, Series C Preferred Stock Merger Consideration and Series D Preferred Stock Merger Consideration payable with respect to Shares to be converted pursuant to Section 3.1 ("Merger Consideration"). Such funds shall be -------------------- held by the Paying Agent in a separate account established for the benefit of holders of Shares and may be invested by the Paying Agent in obligations of or guaranteed by the United States government or in other investment-grade debt instruments pending payment thereof by the Paying Agent to the holders of the Shares. Earnings on such funds shall be the sole and exclusive property of Parent and the Surviving Corporation, and no part of such earnings shall accrue to the benefit of holders of Shares. (b) Exchange Procedures. Promptly after the Effective Time, ------------------- Parent shall instruct the Paying Agent to mail to each holder of record of Shares that were converted pursuant to Section 3.1 into the right to receive Merger Consideration (i) a letter of transmittal, which shall specify that delivery shall be effected, and risk of loss and title to the Shares shall pass, only upon delivery to the Paying Agent of the certificates evidencing ownership thereof (the "Certificates") and (ii) instructions for effecting the surrender ------------ of the Certificates in exchange for payment of the applicable Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor the applicable Merger Consideration for each Share formerly represented by such Certificate, and the Certificate so surrendered shall forthwith be cancelled. If payment of the Merger Consideration is to be made to a Person (as hereinafter defined) other than the Person in whose name the surrendered Certificate is registered, it shall be a condition precedent to the making of such payment that (x) the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and (y) the Person requesting such payment shall have paid any transfer and other Taxes (as hereinafter defined) required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation that such Tax either has been paid or is not required to be paid. Until surrendered as contemplated by this Section 3.3, each Certificate shall be deemed from and after the Effective Time to represent only the right to receive the applicable Merger Consideration, without any interest thereon. 6 (c) Transfer Books; No Further Ownership Rights in Shares. At the ----------------------------------------------------- Effective Time, the share records of the Company shall be closed and thereafter there shall be no further registration of transfers of shares of Company Common Stock or Company Preferred Stock on the records of the Company. From and after the Effective Time, the holders of Certificates evidencing ownership of shares of Company Common Stock or Company Preferred Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares, except as otherwise provided for in this Agreement or by applicable law. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Article III. (d) Termination of Fund; No Liability. At any time following six --------------------------------- months after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) made available to the Paying Agent and not disbursed to holders of Certificates, and thereafter such holders shall be entitled to look only to the Surviving Corporation (subject to applicable abandoned property, escheat or other similar laws) only as general creditors thereof with respect to the Merger Consideration payable upon due surrender of their Certificates, without any interest thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying Agent shall be liable to any holder of a Certificate for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Section 3.4 Adjustment of Merger Consideration. The parties understand ---------------------------------- and agree that the per-share Merger Consideration has been calculated based upon the accuracy of the representation and warranty set forth in Section 4.3 and that, in the event the number of outstanding Company shares or Company shares issuable upon the conversion of securities or the exercise of options or other agreements exceeds the amounts specifically set forth in Section 4.3 (including as a result of any stock split, reverse stock split, stock dividend, including any dividend or distribution of securities convertible into stock or stock equivalent of the Company, recapitalization, or other like change occurring after the date of this Agreement), the per-share Merger Consideration shall be appropriately adjusted downward. The provisions of this Section 3.4 shall not, however, affect the representation and warranty set forth in Section 4.3. Section 3.5 Stock Options. ------------- (a) Prior to the Effective Time, the Company shall take all action, including obtaining consents from holders of Options (as defined below), 7 necessary to cause each unexpired and unexercised stock option under the PolyVision 2000 Nonemployee Director Stock Option Plan, the PolyVision 1999 Stock Option Plan, the PolyVision 1994 Stock Option Plan and the Company's 1995 Directors Stock Option Plan (collectively, the "Option Plans") or otherwise ------------ granted by the Company other than pursuant to any of the Option Plans (each an "Option"), whether vested or unvested, to be canceled immediately prior to the ------ Effective Time. In consideration for such cancellation, the holder of each such Option shall receive at or as soon as reasonably practicable after the Effective Time a cash payment from the Company equal to the product of (i) the total number of shares of Company Common Stock subject to such Option immediately prior to the Effective Time and (ii) the excess (if any) of (x) the Common Stock Merger Consideration over (y) the exercise price per share subject to such Option as in effect immediately prior to the Effective Time. (b) The Company shall take all such steps as may be required to cause any dispositions of Company Common Stock (including derivative securities with respect to the Company Common Stock) resulting from the Transactions by each officer or director of the Company who is subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with respect to shares of Company Common Stock to be ------------ exempt under Rule 16b-3 promulgated under the Exchange Act. By adopting or approving this Agreement, the Company Board of Directors shall be deemed to have approved and authorized, and the shareholders of the Company shall be deemed to have approved and ratified, each and every amendment to (and such other actions in respect of) the Option Plans (and any other plan) and the agreements evidencing awards under the Option Plans (and any other plan) as the officers of the Company may deem necessary or appropriate to give effect to the provisions of this Section 3.5. Section 3.6 Warrants. From and after the Effective Time, each of the -------- warrants of the Company to purchase Company Common Stock governed by the Warrant Agreement, dated as of December 30, 1998, among the Company, John Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance Company and Hancock Mezzanine Partners, L.P. (collectively, the "Warrants") issued and outstanding -------- immediately prior to the Effective Time shall, in accordance with the terms of such Warrant, represent the right, upon exercise thereof and payment of the aggregate Exercise Price (as defined in such Warrant), to receive in cash, without interest, a payment equal to the product of (i) the number of shares of Company Common Stock that would have been subject to issuance upon the exercise of such Warrant, had such exercise occurred immediately prior to the Effective Time and (ii) the Common Stock Merger Consideration, such cash payment to be reduced by any required withholding of Taxes. 8 Section 3.7 Convertible Note. From and after the Effective Time, the ---------------- Company's $8,000,000 10% convertible subordinated promissory note, dated November 20, 1998, payable to Wind Point Partners III, L.P. (the "Convertible ----------- Note") shall, in accordance with the terms of the Convertible Note, represent - ---- the right, upon conversion thereof in accordance with its terms, to receive in cash, without interest, a single lump sum cash payment equal to the product of (i) the number of shares of Company Common Stock issuable upon the conversion of such Convertible Note in accordance with its terms immediately prior to the Effective Time and (ii) the Common Stock Merger Consideration, such cash payment to be reduced by any required withholding of Taxes. Section 3.8 Withholding Rights. Each of the Surviving Corporation and ------------------ Parent shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Article III such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of federal, state, local or foreign tax law. If the Surviving Corporation or Parent, as the case may be, so withholds amounts, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares in respect of which the Surviving Corporation or Parent, as the case may be, made such deduction and withholding. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set forth in a schedule prepared and signed by the Company and delivered to Parent prior to the execution of this Agreement (the "Company Disclosure Schedule"), the Company represents and warrants to Parent and Merger - ------------------- Sub as set forth below. Each exception set forth in the Company Disclosure Schedule and each other response to this Agreement set forth in the Company Disclosure Schedule shall be identified by reference to, or be grouped under a heading referring to, a specific individual section, subsection, paragraph or subparagraph of this Agreement and shall relate only to such section, subsection, paragraph or subparagraph, as applicable, except to the extent that one portion of the Company Disclosure Schedule specifically refers to another portion thereof by specific cross reference. Section 4.1 Organization. (a) The Company is a corporation duly ------------ organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full corporate power and authority and all necessary governmental 9 licenses, authorizations, permits, consents and approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such licenses, authorizations, permits, consents or approvals would not, individually or in the aggregate, have a Company Material Adverse Effect. As used in this Agreement, "Company Material ---------------- Adverse Change" or "Company Material Adverse Effect" means any change, event or - -------------- ------------------------------- effect, as the case may be, that, individually or together with any other change, event or effect, is or would reasonably be expected to be materially adverse to (y) the business, operations, properties (including intangible properties), condition (financial or otherwise), results of operations or assets of the Company and the Company Subsidiaries, taken as a whole, or (z) the Company's ability to consummate the Transactions; provided, however, that in -------- determining whether there has occurred a Company Material Adverse Change or Company Material Adverse Effect, any adverse change or effect principally attributable to the breach by Parent or Merger Sub of any of their respective representations, warranties, covenants or obligations under this Agreement shall be disregarded. (b) Except as set forth in Section 4.1(b) of the Company Disclosure Schedule, the Company is duly qualified or licensed to do business and in good standing in each jurisdiction where the Company's ownership or leasing of property or the conduct of its business makes such qualification or licensing necessary, except where the failure to be so qualified or licensed to do business and in good standing would not, individually or in the aggregate, have a Company Material Adverse Effect. Each such jurisdiction is listed in Section 4.1(b) of the Company Disclosure Schedule. (c) Complete and correct copies of the certificate of incorporation and by-laws of the Company, as amended to date (together, the "Company Organizational Documents"), have been delivered to Parent prior to the -------------------------------- date hereof. Such copies are complete and correct copies of such documents as in effect on the date hereof. The Company is not in violation of any provision of the Company Organizational Documents. Section 4.2 Subsidiaries and Affiliates. (a) Section 4.2(a) of the --------------------------- Company Disclosure Schedule sets forth the name, jurisdiction of incorporation or organization and authorized and, as of the date of this Agreement, the outstanding capital of each Company Subsidiary (as defined below). Other than with respect to the Company Subsidiaries, the Company does not own, directly or indirectly, any capital stock or other equity securities of any Person or have any direct or indirect equity or ownership interest in any business. All of the outstanding capital stock (or similar equity interests) of each Company Subsidiary is (or are) owned directly or indirectly by 10 the Company free and clear of any material liens, charges, security interests, options, claims, mortgages, pledges, or other encumbrances and restrictions of any nature whatsoever, and is (or are) validly issued, fully paid and nonassessable, and there are no outstanding options, rights or agreements of any kind relating to the issuance, sale or transfer of any capital stock (or similar equity interests) of any such Company Subsidiary to any person except the Company or another wholly-owned Company Subsidiary. As used in this Agreement, the term "Company Subsidiary" means each Person which is a Subsidiary of the ------------------ Company; the term "Subsidiary" means, with respect to any party, any ---------- corporation, partnership, limited liability company or other organization or entity, whether incorporated or unincorporated, of which (i) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such organization or entity is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries or (ii) such party or any other Subsidiary of such party is a general partner (excluding any such partnership where such party or any Subsidiary of such party does not have a majority of the voting interests in such partnership); and the term "Person" means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Entity (as defined below) or other entity or organization. (b) Each Company Subsidiary (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, (ii) has full power and authority and all necessary governmental licenses, authorizations, permits, consents and approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, and (iii) is duly qualified or licensed to do business as a foreign Person and in good standing in each jurisdiction where such Company Subsidiary's ownership or leasing of property or the conduct of its business makes such qualification or license necessary, except where the failure to have such licenses, authorizations, permits, consents or approvals, and the failure to be so duly qualified or licensed and in good standing would not, individually or in the aggregate, have a Company Material Adverse Effect. Each such jurisdiction is listed in Section 4.2(b) of the Company Disclosure Schedule. (c) Copies of the certificate of incorporation and by-laws or similar organizational documents of each Company Subsidiary, as amended to date (collectively, the "Subsidiary Organizational Documents"), have been delivered ----------------------------------- or made available to Parent prior to the date hereof. Such copies are complete and correct copies of such documents as in effect on the date hereof. No Company Subsidiary is in material violation of any provision of its Subsidiary Organizational Documents. 11 Section 4.3 Capitalization. -------------- (a) The authorized capital stock of the Company consists of 40,000,000 shares of Company Common Stock and 1,500,000 shares of Company Preferred Stock, of which, as the date hereof, (i) 14,168,527 shares of Company Common Stock are issued and outstanding, (ii) no shares of Company Common Stock are held in the treasury of the Company, (iii) 255,000 shares of Series B Preferred Stock are issued and outstanding, all of which are owned of record by the Shareholder, (iv) 140,000 shares of Series C Preferred Stock are issued and outstanding, all of which are owned of record by the Shareholder, (v) 120,000 shares of Series D Preferred Stock are issued and outstanding, all of which are owned of record in equal number by Matthew B. Lawer, Suzanne M. Lawer, the Lawer Family Trust and Michael J. Lawer, (vi) no shares of Company Preferred Stock are held in the treasury of the Company, (vii) an aggregate of 2,519,372 shares of Company Common Stock are reserved for future issuance pursuant to, or upon exercise of the Options, (viii) 5,317,813 shares of Company Common Stock are reserved for issuance upon conversion of the Series B Preferred Stock and accrued dividends thereon, (ix) 4,311,375 shares of Common Stock are reserved for issuance upon conversion of the Series C Preferred Stock and accrued dividends thereon, (x) 1,744,333 shares of Company Common Stock are reserved for issuance upon conversion of the Series D Preferred Stock and accrued dividends thereon, (xi) 2,986,467 shares of Company Common Stock are reserved for issuance pursuant to, or upon exercise of the Warrants, (xii) 3,499,988 shares of Company Common Stock are reserved for issuance upon conversion of the Convertible Note and (xiii) no shares of Company Common Stock are reserved for issuance under the Company's 1995 Directors Stock Grant Plan. Section 4.3(a) of the Company Disclosure Schedule sets forth (A) for each series of Company Preferred Stock, (1) the number of shares outstanding, the per-share conversion price, the aggregate dollar amount of accrued dividends with respect to such shares and the number of shares of Company Common Stock into which such shares and accrued dividends are convertible, in each case as of August 23, 2001 and (2) the name and address of each record holder of shares and the number of shares owned of record by each such holder as of August 23, 2001 (B) the number of shares of Company Common Stock issuable upon conversion of the Convertible Note as of August 23, 2001, (C) the number of shares of Company Common Stock issuable upon exercise of the Warrants and (D) the number of shares issuable upon exercise of all outstanding Options as of August 23, 2001. (b) All of the outstanding shares of the Company's capital stock are, and all shares which may be issued upon conversion of Company Preferred Stock or the Convertible Note or upon the exercise of the Warrants or the Options, when 12 issued in accordance with the terms of the applicable security, will be, duly authorized, validly issued, fully paid and non-assessable. No indebtedness of the Company or any Company Subsidiary having general voting rights (or convertible into securities having such rights) ("Voting Debt") has been issued ----------- or is outstanding. Except as disclosed in this Section 4.3 or as set forth in Section 4.3(b) of the Company Disclosure Schedule, (i) there are no existing options, warrants, calls, pre-emptive rights, subscriptions or other rights, agreements, arrangements or commitments of any kind relating to the issued or unissued capital stock of or other equity interests in the Company or any Company Subsidiary obligating the Company or any Company Subsidiary to issue, transfer, register or sell or cause to be issued, transferred, registered or sold any shares of capital stock or Voting Debt of, or other equity interest in, the Company or any Company Subsidiary or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any Company Subsidiary to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, and (ii) there are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of Company Common Stock or Company Preferred Stock or any of the capital stock of or other equity interests in any Company Subsidiary or any affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any Company Subsidiary or any other entity. (c) Section 4.3(c) of the Company Disclosure Schedule sets forth, with respect to each existing Option, the name of the holder and the number of shares issuable, and the per-share purchase price payable therefor, upon the exercise of such Option. Each such Option has been granted to an employee or director of the Company in the ordinary course of business consistent with past practice and has been granted under one of the Option Plans pursuant to an option award agreement substantially in the form attached to Section 4.3(c) of the Company Disclosure Schedule. (d) Except for the Shareholder's Agreement, there are no voting trusts or other agreements or understandings to which the Company or any Company Subsidiary is a party, or of which the Company is otherwise aware, with respect to the voting of the capital stock of or other equity interests in the Company or any of the Company Subsidiaries. (e) Except as set forth in Section 4.3(e) of the Company Disclosure Schedule, all dividends or distributions in respect of capital stock of the Company or any Company Subsidiary that have been declared or authorized have been paid in full. 13 Section 4.4 Authorization; Validity of Agreement; Company Action. The ---------------------------------------------------- Company has the requisite corporate power and authority to execute and deliver this Agreement, and has the requisite corporate power and authority to perform the Transactions. The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, and the consummation by the Company of the Transactions, have been duly and validly authorized by the Company Board of Directors, and no other corporate action on the part of the Company is necessary to authorize the execution and delivery by the Company of this Agreement and the consummation by the Company of the Transactions, other than the adoption of this Agreement by (i) the holders of not less than 66-2/3% of the outstanding shares of Company Common Stock, Series B Preferred Stock and Series C Preferred Stock, as of the Record Date, voting together as a single class, (ii) holders of a majority of the outstanding shares of Series B Preferred Stock, as of the Record Date, voting as a separate class, and (iii) holders of a majority of the outstanding shares of Series C Preferred Stock, as of the Record Date, voting as a separate class, in each case in accordance with the Company Organizational Documents and Section 903 of the BCL. This Agreement has been duly executed and delivered by the Company and, assuming the due and valid authorization, execution and delivery hereof by Parent and Merger Sub, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors' rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. Section 4.5 Special Committee and Board Approvals. The Special ------------------------------------- Committee, at a meeting duly called and held, has unanimously (a) determined that this Agreement and the Merger are advisable, fair to and in the best interests of the shareholders of the Company (other than the Shareholder) and (b) voted to recommend to the Company Board of Directors that it adopt this Agreement, approve the Shareholder's Agreement and the acquisition thereunder of shares of the Company by Parent or Merger Sub, approve the Merger, approve the other Transactions and submit this Agreement to a vote of the shareholders of the Company, and none of the aforesaid actions by the Special Committee has been amended, rescinded or modified, except to the extent contemplated by Section 6.3 after the date of this Agreement. The Company Board of Directors, at a meeting duly called and held, has unanimously (x) determined that this Agreement and the Merger are advisable, fair to and in the best interests of the shareholders of the Company (other than the Shareholder), (y) duly and validly adopted this Agreement, approved the Shareholder's Agreement and the acquisition thereunder 14 of shares of the Company by Parent or Merger Sub, approved the Merger and the other Transactions and taken all corporate action required to be taken by the Company Board of Directors to authorize the consummation of the Transactions and (z) resolved to submit this Agreement to a vote of the shareholders of the Company and recommend that the shareholders of the Company adopt this Agreement, and none of the aforesaid actions by the Company Board of Directors has been amended, rescinded or modified, except to the extent contemplated by Section 6.3 after the date of this Agreement. Such action taken by the Company Board of Directors constitutes approval by the Company Board of Directors of the Merger and the other Transactions, including the acquisition under the Shareholder's Agreement of shares of the Company by Parent or Merger Sub and the other transactions contemplated by the Shareholder's Agreement, for purposes of Section 912 of the BCL, and, to the Company's knowledge, no other state takeover statute or similar statute or regulation in any jurisdiction in which the Company does business is applicable to the Transactions. Section 4.6 Consents and Approvals; No Violations. Except as ------------------------------------- disclosed in Section 4.6 of the Company Disclosure Schedule, none of the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, or the consummation by the Company of the Transactions or compliance by the Company with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the Company Organizational Documents or Subsidiary Organizational Documents, state securities or blue sky laws or the BCL, (ii) require any material filing by the Company or any Company Subsidiary with, or permit, authorization, consent or approval of, any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency, foreign or domestic (a "Governmental Entity") (except for (A) the filing with the SEC of ------------------- the proxy statement relating to the Special Meeting (as defined in Section 7.1(a)(i)) (such proxy statement, as amended or supplemented from time to time, the "Proxy Statement") and such other statements and reports under the Exchange --------------- Act as may be required in connection with this Agreement and the Transactions, (B) any filings as may be required under the BCL in connection with the Merger, (C) any filings as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and any applicable foreign ------- competition, antitrust or investment laws, (D) any filings as may be required with the American Stock Exchange in connection with this Agreement and the Transactions and (E) any filings as may be required under state securities or "blue sky" laws in connection with this Agreement and the Transactions), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any material Company Agreement (as defined below) or (iv) violate any 15 material order, writ, injunction, decree, statute, rule or regulation applicable to the Company, any Company Subsidiary or any of their respective properties or assets, except in the case of clauses (ii), (iii) and (iv), for any failures to make such filings and failures to obtain such permits, authorizations, consents or approvals and any such violations, breaches or defaults which would not, individually or in the aggregate, impair in any material respect the ability of the Company to perform its obligations under this Agreement or prevent or materially delay the consummation by the Company of the Transactions. As used in this Agreement, "Company Agreement" means any note, bond, mortgage, lien, ----------------- indenture, lease, license, contract, agreement or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which any of them or any of their respective properties or assets may be bound. Section 4.7 Company SEC Documents and Financial Statements. The ---------------------------------------------- Company has filed with the Securities and Exchange Commission (the "SEC") all --- forms, reports, schedules, statements, exhibits and other documents required to be filed by it since December 31, 1997 under the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act") (collectively, the "Company SEC -------------- ----------- Documents"). As of its filing date or, if amended, as of the date of the last - --------- such amendment, each Company SEC Document complied in all material respects with the applicable requirements of the Exchange Act or the Securities Act, as the case may be, and the applicable rules and regulations of the SEC thereunder. As of its filing date or, if amended, as of the date of the last such amendment, each Company SEC Document filed pursuant to the Exchange Act did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Each Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such registration statement or amendment became effective and as of the date of any such supplement, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. None of the Company Subsidiaries is required to file any forms, reports or other documents with the SEC. All of the audited financial statements and unaudited consolidated interim financial statements of the Company included in the Company SEC Documents (collectively, the "Financial Statements") (i) have -------------------- been prepared from, are in accordance with and accurately reflect the books and records of the Company and its consolidated Subsidiaries, (ii) comply in all material respects with the applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis during the ---- 16 periods involved (except as may be indicated therein or in the notes thereto and except, in the case of the unaudited interim statements, as may be permitted under Form 10-Q of the Exchange Act) and (iv) fairly present in all material respects the consolidated financial position and the consolidated results of operations and cash flows (subject, in the case of the unaudited interim financial statements, to normal year-end adjustments and any other adjustments described therein which were not and are not expected, individually or in the aggregate, to be material in amount) of the Company and its consolidated Subsidiaries as of the times and for the periods referred to therein. Section 4.8 Absence of Certain Changes. Except as (i) contemplated by -------------------------- this Agreement or (ii) set forth in Section 4.8 of the Company Disclosure Schedule, since December 31, 2000 (the "Balance Sheet Date"), each of the ------------------ Company and each Company Subsidiary has conducted its respective business only in the ordinary course of business and in a manner consistent with past practice in all material respects. Without limiting the generality of the foregoing, from the Balance Sheet Date through the date of this Agreement, neither the Company nor any Company Subsidiary has: (a) suffered any Company Material Adverse Change; (b) incurred any material liabilities or obligations (absolute, accrued, contingent or otherwise) or increased (except for non-material increases in the ordinary course of business and consistent with past practice), or experienced any change in any assumptions underlying or methods of calculating, any bad debt, contingency or other reserves; (c) paid, discharged or satisfied any material claim, liability or obligation (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice of liabilities and obligations reflected or reserved against in the Company's audited balance sheet as of the Balance Sheet Date or incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date; (d) permitted or allowed any of its material properties or assets (real, personal or mixed, tangible or intangible) to be subjected to any Encumbrance (as defined below); (e) written down the value of any inventory (including write-downs by reason of shrinkage or mark-down) or written off as uncollectible any notes or accounts receivable, except for write-downs and write-offs in the ordinary course of business consistent with past practice; 17 (f) cancelled any material debts or waived any claims or rights of substantial value; (g) sold, transferred, or otherwise disposed of any of its material properties or assets (real, personal or mixed, tangible or intangible), except in the ordinary course of business consistent with past practice; (h) disposed of or permitted to lapse any rights to the use of any material Intellectual Property, or disposed of or disclosed to any person other than representatives of Parent any material trade secret, formula, process, know-how or other material Business Intellectual Property not theretofore a matter of public knowledge; (i) granted any general increase in the compensation or benefits of officers or employees (including any such increase pursuant to any bonus, pension, severance, profitsharing or other plan, agreement or commitment) or any increase in the compensation or benefits payable or to become payable to any officer or employee, except in the ordinary course of business consistent with past practice; (j) made any single capital expenditure or commitment in excess of $100,000 for additions to property, plant, equipment or intangible capital assets or made aggregate capital expenditures and commitments in excess of $500,000 (on a consolidated basis) for additions to property, plant, equipment or intangible capital assets; (k) declared, paid or set aside for payment any dividend or other distribution in respect of its capital stock, except, in the case of the Company, for quarterly dividends (including any accrued and unpaid quarterly dividends) to the extent provided for in, and in an amount not to exceed that required by, the Company's certificate of incorporation with respect to the Company Preferred Stock, provided that in no event shall any such dividend have -------- accrued or become payable at a rate in excess of (A) $4.00 per share at an annual rate in the case of the Series D Preferred Stock and (B) $4.50 per share at an annual rate in the case of the Series B Preferred Stock and the Series C Preferred Stock, and provided further that the record date for any such dividend shall in no event be earlier than 10 days prior to the date on which such dividend is payable, or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of capital stock or other securities of the Company or any Company Subsidiary; (l) made any change in any of the accounting methods used by it materially affecting its assets, liabilities or business, except for such changes 18 required by GAAP, or made or changed any express or deemed election for Tax (as defined below) purposes or any offer to settle or compromise or any settlement or compromise of any liability with respect to Taxes (as defined below); (m) paid, loaned or advanced any amount to, or sold, transferred or leased any properties or assets (real, personal or mixed, tangible or intangible) to, or entered into any agreement or arrangement with, any of its officers or directors or any affiliate or associate of any of its officers or directors except for directors' fees, and compensation to officers at rates not exceeding the rates of compensation paid during the year 2001; or (n) agreed, whether in writing or otherwise, to take any action described in this Section 4.8. As used in this Agreement, the term "Encumbrance" means any lien, charge, ----------- security interest, option, claim, mortgage, pledge, or other encumbrance or restriction of any nature whatsoever, provided, however, that the term Encumbrance shall not include any lien for Taxes not then due and payable, statutory lien or lien not materially interfering with the use or value of the property subject to such lien. Section 4.9 No Undisclosed Liabilities; Indebtedness. Except (i) as ---------------------------------------- disclosed in the Financial Statements as of the Balance Sheet Date, (ii) as disclosed in any Company SEC Documents dated or filed with the SEC since the Balance Sheet Date or (iii) as disclosed in Section 4.9(a) of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary has any material liabilities or obligations of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise. As of the date of this Agreement, the Company had outstanding indebtedness, comprising all liabilities of the Company and the Company Subsidiaries on a consolidated basis, whether primary or secondary or absolute or contingent (including indebtedness for borrowed money; indebtedness evidenced by notes, bonds, debentures or similar instruments; capital lease obligations; and indebtedness secured by liens on any assets of the Company or any Company Subsidiary), of $103,700,000. Section 4.9(b) of the Company Disclosure Schedule sets forth, as of the date hereof, the amount of the principal and unpaid interest outstanding under each instrument evidencing any indebtedness which will accelerate or become due or which provides for a right of redemption or repurchase on the part of the holder of such indebtedness (with or without due notice or lapse of time) as a result of this Agreement or the Transactions, except for any such instruments which individually and in the aggregate, evidence an immaterial amount of such indebtedness. 19 Section 4.10 Litigation. Except as set forth in Section 4.10 of the ---------- Company Disclosure Schedule: (a) (i) there is no material action, suit, claim (including any worker's compensation claim), litigation or other proceeding (including arbitration proceeding or alternative dispute resolution proceeding) or investigation pending or, to the knowledge of the Company, threatened against or naming as a party thereto, and there is no action, suit, claim (including arbitration proceeding or alternative dispute resolution proceeding) or investigation materially affecting, (A) the Company or any Company Subsidiary or (B) to the knowledge of the Company, any of the Company's or any Company Subsidiary's current or former directors or officers, in such capacities, or any other Person who may be entitled to indemnification by the Company or any Company Subsidiary in connection therewith, and (ii) the Company does not know or have any reason to know of any valid basis for any such suit, claim, action or proceeding; and (b) there is no outstanding or, to the knowledge of the Company, threatened material order, judgment, injunction, award or decree of any Governmental Entity against (i) the Company, any Company Subsidiary or any of their respective properties, assets or businesses or (ii) to the knowledge of the Company, any of the Company's or any Company Subsidiary's current or former directors or officers, in such capacities, or any other Person who may be entitled to indemnification by the Company or any Company Subsidiary in connection therewith. Section 4.11 Employee Benefit Plans; ERISA. ----------------------------- (a) Section 4.11(a) of the Company Disclosure Schedule contains a true and complete list of each employment, bonus, deferred compensation, incentive compensation, restricted stock, performance unit, phantom stock, dental, health, accident, life, accidental death and dismemberment, fringe, cafeteria, scholarship, flexible spending arrangement or reimbursement, group legal services, long term care, dependent care, vacation, paid time off, sick leave, educational assistance, wellness, employee assistance program, adoption assistance, vision, voluntary employees beneficiary association, other insurance, stock purchase, stock option, stock appreciation right or other stock-based incentive, severance, change-in-control, or termination pay, hospitalization or other medical, disability, life or other insurance, supplemental unemployment benefits, profit-sharing, pension, or retirement plan, program, agreement or arrangement and each other employee benefit plan, program, agreement or arrangement, sponsored, maintained or contributed to or required to be contributed to by the Company or any Company Subsidiary, or by any trade or business, 20 whether or not incorporated (an "ERISA Affiliate"), that together with the --------------- Company or any Company Subsidiary would be deemed a "single employer" within the meaning of section 4001(b)(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), for the benefit of any current or former employee or ----- director of the Company, or any Company Subsidiary or any ERISA Affiliate, whether formal or informal and with respect to which the Company or any ERISA Affiliate may have any liabilities or obligations (the "Plans"). Section 4.11(a) ----- of the Company Disclosure Schedule separately identifies each of the Plans that is an "employee welfare benefit plan," or "employee pension benefit plan" as such terms are defined, respectively, in sections 3(1) and 3(2) of ERISA (such plans being hereinafter referred to collectively as the "ERISA Plans"). ----------- (b) Except as disclosed in Section 4.11(b) of the Company Disclosure Schedule, with respect to each of the Plans, the Company has heretofore delivered to Parent true and complete copies of each of the following documents, as applicable: (i) the Plan (including all amendments thereto) for each written Plan or a written description of any Plan that is not otherwise in writing; (ii) the annual report on Internal Revenue Service ("IRS") Form 5500 Series, if required under ERISA or the Internal --- Revenue Code of 1986, as amended (the "Code"), with respect to each ---- Plan for the last three plan years ending prior to the date of this Agreement for which such a report was filed; (iii) the actuarial report, if required under ERISA, with respect to each ERISA Plan for the last three plan years ending prior to the date of this Agreement; (iv) the most recent Summary Plan Description, together with all Summary of Material Modifications issued with respect to such Summary Plan Description, if required under ERISA, with respect to each ERISA Plan, and all other material employee communications relating to each ERISA Plan; (v) if the Plan is funded through a trust or any other funding vehicle, the trust or other funding agreement (including all amendments thereto) and the latest financial statements thereof, if any; 21 (vi) all contracts relating to the Plans with respect to which the Company, any Company Subsidiary or any ERISA Affiliate may have any liability, including insurance contracts, investment management agreements, subscription and participation agreements and record keeping agreements; and (vii) the most recent determination letter received from the IRS with respect to each Plan that is intended to be qualified under section 401(a) of the Code. (c) No liability under Title IV of ERISA has been incurred by the Company, any Company Subsidiary or any ERISA Affiliate since the effective date of ERISA that has not been satisfied in full, and, to the Company's knowledge, no condition exists that presents a material risk to the Company, any Company Subsidiary or any ERISA Affiliate of incurring any liability under such Title, other than liability for premiums due to the Pension Benefit Guaranty Corporation ("PBGC"), which payments have been or will be made when due. Insofar ---- as the representation made in this Section 4.11(c) applies to section 4064, 4069 or 4204 of ERISA, it is made with respect to any employee benefit plan, program, agreement or arrangement subject to Title IV of ERISA to which the Company, any Company Subsidiary or any ERISA Affiliate made, or was required to make, contributions during the six-year period ending on the last day of the most recent plan year ended before the date of this Agreement. The PBGC has not instituted proceedings to terminate any Plan and no condition exists that presents a material risk that such proceedings will be instituted. (d) With respect to each of the ERISA Plans that is subject to Title IV of ERISA (a "Title IV Plan"), the present value of projected benefit ------------- obligations under such Plan, as determined by the Plan's actuary based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such Plan's actuary with respect to such Plan, did not, as of its latest valuation date, exceed the then current value of the assets of such Plan allocable to such projected benefit obligations. (e) None of the Company, any Company Subsidiary, any ERISA Affiliate, any of the Plans, any trust created thereunder, nor to the Company's knowledge, any trustee or administrator thereof has engaged in a transaction or has taken or failed to take any action in connection with which the Company, any Company Subsidiary or any ERISA Affiliate could be subject to any material liability for either a civil penalty assessed pursuant to section 409 or 502(i) of ERISA or a tax imposed pursuant to section 4975, 4976 or 4980B of the Code. 22 (f) All contributions and premiums required to be paid under the terms of each of the ERISA Plans and section 302 of ERISA and section 412 of the Code, have, to the extent due, been paid in full or properly recorded on the financial statements or records of the Company or a Company Subsidiary. No Plan or any trust established thereunder has incurred any "accumulated funding deficiency" (as defined in section 302 of ERISA or section 412 of the Code), whether or not waived. (g) With respect to any Title IV Plan that is a "multiemployer pension plan," as such term is defined in section 3(37) of ERISA, (i) neither the Company nor any ERISA Affiliate has, since May 11, 1987, made or suffered a "complete withdrawal" or a "partial withdrawal," as such terms are respectively defined in sections 4203 and 4205 of ERISA, (ii) no event has occurred that presents a material risk of such a complete or partial withdrawal, and neither Company nor any ERISA Affiliate has been assessed any withdrawal liability, (iii) neither the Company nor any ERISA Affiliate has any contingent liability under section 4204 of ERISA, (iv) no circumstances exist that present a material risk that any such Plan will go into reorganization and (v) to the knowledge of the Company, there is no unfunded liability with respect to the Company's participation in any such Plan. The Company has no liability or other obligation under any such Plan other than the liability to make contributions in respect of benefit liabilities arising in the ordinary and ongoing course of business. If any Title IV Plan is a "multiemployer pension plan," neither the Company nor any ERISA Affiliate would have any aggregate withdrawal liability if a complete withdrawal by the Company and the ERISA Affiliates were to occur under each such Plan on the date hereof. (h) No Plan is described in section 4063(a) of ERISA. (i) Except as disclosed in Section 4.11(i) of the Company Disclosure Schedule, each of the Plans has been operated and administered in all material respects in accordance with applicable laws, including but not limited to ERISA and the Code. (j) Each of the ERISA Plans that is intended to be "qualified" within the meaning of section 401(a) of the Code is so qualified or may be retroactively amended within the remedial amendment period under Section 401(b) of the Code to be so qualified. Except as disclosed in Section 4.11(j) of the Company Disclosure Schedule, the Company has applied for and received a currently effective determination letter from the IRS stating that it is so qualified, and no event has occurred which would affect such qualified status. With respect to each ERISA Plan set forth in Section 4.11(j) 23 of the Company Disclosure Schedule, the Company has set forth in Section 4.11(j) of the Company Disclosure Schedule the reasons for any potential failure of such ERISA Plan to be so qualified. (k) Any Plan that is intended to satisfy the requirements of section 501(c)(9) of the Code has so satisfied such requirements. (l) Except as disclosed in Section 4.11(l) of the Company Disclosure Schedule, no amounts payable (individually or collectively and whether in cash, capital stock of the Company or other property) under any of the Plans or any other contract, agreement or arrangement with respect to which the Company or any Company Subsidiary may have any liability will, as a direct or indirect result of the Transactions, fail to be deductible for federal income tax purposes by virtue of section 162(m) or section 280G of the Code or, to the knowledge of the Company, section 162(a) of the Code. (m) No Plan provides benefits, including without limitation death or medical benefits (whether or not insured), with respect to current or former employees after retirement or other termination of service (other than (i) coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, (ii) death benefits or retirement benefits under any "employee pension plan," as that term is defined in section 3(2) of ERISA, (iii) benefits the full cost of which is borne by the current or former employee (or his or her beneficiary) or (iv) deferred compensation benefits accrued as liabilities on the books of the Company or a Company Subsidiary). (n) Except as disclosed in Section 4.11(n) of the Company Disclosure Schedule, the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with any other event, (i) entitle any current or former employee, officer, director or consultant of the Company, any Company Subsidiary or any ERISA Affiliate to severance pay, unemployment compensation or any other similar termination payment, or (ii) accelerate the time of payment or vesting, or increase the amount of, or otherwise enhance, any benefit due to any such employee, officer, director or consultant. (o) There are no pending or, to the Company's knowledge, threatened or anticipated claims by or on behalf of any Plan, by any employee or beneficiary under any such Plan or otherwise involving any such Plan (other than routine claims for benefits). 24 (p) Except as disclosed in Section 4.11(p) of the Company Disclosure Schedule or as expressly permitted by this Agreement, since December 31, 2000, there has not been (i) any acceleration, amendment or change of the period of exercisability or vesting of any options or restricted stock, stock bonus or other awards under any Option Plan (including any discretionary acceleration of the exercise periods or vesting by the Company Board of Directors or any committee thereof or any other persons administering an Option Plan) or authorization of cash payments in exchange for any Options, restricted stock, stock bonus or other awards granted under any of such Option Plans or (ii) any adoption or amendment by the Company or any Company Subsidiary of any collective bargaining agreement or Plan. None of the Company, any Company Subsidiary nor any ERISA Affiliate has any formal plan or commitment to create any additional Plan or modify or change any existing Plan that would affect any current or former employee or director of the Company, any Company Subsidiary or any ERISA Affiliate. (q) Except with respect to changes required by law, there has been no adoption of, amendment to, written interpretation or announcement (whether or not written) by the Company or any Company Subsidiary relating to, or change in employee participation or coverage under, any Plan which would increase materially the expense of maintaining such Plan above the level of the expense incurred in respect thereof for the fiscal year ended on December 31, 2000. (r) Neither the Company nor any ERISA Affiliate is a party to any agreement or understanding, whether written or unwritten, with the PBGC, the IRS, the Department of Labor or the Health Care Financing Administration. (s) No representations or communications, oral or written, with respect to the participation, eligibility for benefits, vesting, benefit accrual or coverage under any Plan have been made to employees, directors or agents (or any of their representatives or beneficiaries) of the Company which are not in accordance with the terms and conditions of the Plans. (t) No "leased employee," as that term is defined in section 414(n) of the Code, performs services for the Company or any ERISA Affiliate. Neither the Company nor any ERISA Affiliate has (i) used the services or workers provided by third party contract labor suppliers, temporary employees, "leased employees," or individuals who have provided services as independent contractors, and who may have become eligible to participate in the Plans or (ii) used the services of individuals to an extent that would reasonably be expected to result in the disqualification of any of the 25 Plans or the imposition of penalties or excise taxes with respect to the Plans by the IRS, the Department of Labor, the PBGC, or any other Governmental Entity. (u) With respect to each Plan established or maintained outside of the United States of America primarily for benefit of employees of the Company or any Company Subsidiary residing outside the United States of America (a "Foreign Benefit Plan"): (i) all employer and employee contributions to each -------------------- Foreign Benefit Plan required by law or by the terms of such Foreign Benefit Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices; (ii) the fair market value of the assets of each funded Foreign Benefit Plan, the liability of each insurer for any Foreign Benefit Plan funded through insurance or the book reserve established for any Foreign Benefit Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations, as of the Effective Time, with respect to all current and former participants in such plan according to the actuarial assumptions and valuations most recently used to determine employer contributions to such Foreign Benefit Plan and no transaction contemplated by this Agreement shall cause such assets or insurance obligations to be less than such benefit obligations; and (iii) each Foreign Benefit Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities. Section 4.12 Taxes. Except as set forth in Section 4.12 of the Company ----- Disclosure Schedule: (a) the Company and each Company Subsidiary has duly and timely filed (or there has been duly and timely filed on its behalf), or a valid extension of time to file has been obtained, with the appropriate governmental authorities all Tax Returns (as hereinafter defined) required to be filed by it and all such Tax Returns are true, correct and complete in all material respects, and (ii) all Taxes for which the Company or any Subsidiary is or may be liable (whether or not shown on any Tax Return) in respect of periods (or portions thereof) ending on or before the Effective Time have been timely paid, or will be timely paid, or have been provided for on the Financial Statements in accordance with GAAP. With respect to any period (or portion thereof) through the Effective Time for which Taxes are not yet due or owing, the Company and each Company Subsidiary has established due and sufficient reserves for the payments of such Taxes in accordance with generally accepted accounting principles, and such current reserves through the Effective Time are duly and fully provided for in the Financial Statements; 26 (b) no deficiencies for Taxes have been claimed, proposed or assessed by any taxing or other governmental authority against the Company or any Company Subsidiary, and none of the Company or any Company Subsidiary has received any notice, or otherwise has any knowledge, of any potential claim, proposal or assessment against the Company or any Company Subsidiary for any such deficiency for Taxes. There are no pending, or to the best of the Company's or any Company Subsidiary's knowledge, threatened audits, investigations or claims for or relating to any liability in respect of Taxes, and there are no matters under discussion with respect to Taxes between the Company or any Company Subsidiary on the one hand, and any governmental authority on the other hand, that are likely to result in a material additional liability of the Company or any Company Subsidiary for Taxes; (c) there are no liens for Taxes upon any property or assets of the Company or any Company Subsidiary, except for liens for Taxes not yet due and payable, and for which adequate reserves have been provided for on the Financial Statements in accordance with GAAP; (d) the Company and each Company Subsidiary has duly and timely withheld, collected, deposited and paid to the proper governmental authority all Taxes required to have been withheld, collected, deposited or paid; (e) no claim has ever been made to the Company or any Company Subsidiary by an authority in a jurisdiction where the Company or Company Subsidiary has not filed Tax Returns that the Company or such Company Subsidiary is or may be subject to taxation by that jurisdiction; (f) there are no consents, agreements, grants or requests for the extension or waiver of any statutes of limitations applicable to any Taxes for which the Company or any Company Subsidiary is or may be liable; (g) there is no contract, plan or arrangement (written or otherwise) covering any current or former employee or independent contractor of the Company or any Company Subsidiary that, individually or in the aggregate, could give rise to the payment of any amount that will not be deductible by the Company or any Company Subsidiary under Sections 162(m) or 280G of the Code; (h) other than an affiliated group (as defined under Section 1504 of the Code) of which the common parent was the Company, none of the Company or any Company Subsidiary has (i) been a member of an affiliated group or (ii) any liability for Taxes of any person (other than the Company or a Company 27 Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise; (i) no power of attorney that is currently in force has been granted with respect to the Company or any Company Subsidiary with respect to any matters relating to Taxes; (j) there are no written or oral tax sharing agreements, contracts or other similar arrangements with respect to or involving the Company or any Company Subsidiary; (k) neither the Company nor any Company Subsidiary is, and during the five-year period ending at the Effective Time has been, a "United States Real Property Holding Corporation," as such term is defined in Section 897(c) of the Code or the Treasury Regulations thereunder; and (l) there are no deferred "intercompany items" (within the meaning of Treasury Regulation Section 1.1502-13 with respect to transactions among members of the affiliated group of corporations of which Company is the parent, and no member of such affiliated group has an "excess loss account" within the meaning of Treasury Regulation Section 1.1502-19 with respect to the stock of another member of such affiliated group. "Tax" or "Taxes" shall mean any and all taxes, charges, fees, duties, --- ----- levies or other assessments, including all net income, gross income, gross receipts, excise, stamp, real or personal property, ad valorem, sales, withholding, estimated, social security, employment, unemployment, occupation, use, service, service use, license, net worth, payroll, franchise, environmental, severance, transfer, recording, escheat, or other taxes, duties, assessments, or charges, whether computed on a separate, consolidated, unitary, combined or any other basis, imposed by any governmental authority and any interest, penalties, or additions to tax attributable thereto. "Tax Return" ---------- shall mean any report, return, document, declaration, information, return or filing (including any related or supporting information and any amendments to any of the foregoing) filed or required to be filed with respect to Taxes. Section 4.13 Contracts. Section 4.13 of the Company Disclosure --------- Schedule contains a true and complete list of all the following Company Agreements which were not included or incorporated by reference as exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed with the SEC on April 2, 2001 (the "Company Form 10-K") (such ----------------- Company Agreements, 28 together with any Company Agreements included or incorporated by reference as exhibits to the Company Form 10-K, being referred to hereinafter as the "Listed ------ Company Agreements"): - ------------------ (a) any lease of, or agreement to purchase or sell, any capital assets accounted for as such by the Company or any Company Subsidiary and having a book value of greater than $50,000; (b) any union labor contract; (c) any management, consulting, employment, personal service, agency or other contracts or contracts providing for employment or rendition of personal services and which (i) are in writing or oral and create other than an at will employment relationship; or (ii) provide for any commission, bonus, profit sharing, incentive, severance, retirement or similar compensation for personal services; (d) any agreement or note evidencing any indebtedness or any guaranty of performance of another Person; (e) any agreement with a dealer, distributor, sales agent, supplier or representative or franchisee; (f) any agreement for the storage, transportation, treatment or disposal of any Hazardous Substances; (g) any power of attorney (whether revocable or irrevocable) given to any Person by the Company or any Company Subsidiary that is in force; (h) any agreement in effect at the date hereof which purports to limit in any respect the manner in which, or the localities in which, the Company, any Company Subsidiary or any other entity is entitled to conduct all or any portion of its business; (i) any agreement restricting the right of the Company or any Company Subsidiary to use or disclose any material information in its possession; (j) any partnership, joint venture or similar arrangement; (k) any material agreement which cannot be terminated without a penalty or requiring more than 60 days prior notice; 29 (l) any agreement or arrangement with any affiliate of the Company or any Company Subsidiary (other than an employment agreement) which involves annual payments to or from the Company or any Company Subsidiary in excess of $10,000; (m) any material agreement by which the Company or any Company Subsidiary indemnifies or holds harmless any other Person; (n) any material agreement pursuant to which a rebate, discount, bonus, commission or other payment with respect to the sale of any product of the Company or any Company Subsidiary is not shown in the Financial Statements and will be payable after the Effective Time; (o) any material agreement containing "change in control," "antitakeover" or similar provisions; (p) any lease of real property or material personal property; (q) any other agreement (other than purchase and sales orders in the ordinary course of business in accordance with past practice) which involves annual payments to or from the Company and the Company Subsidiaries of an amount in excess of $200,000; and (r) any other material Company Agreement. True and complete copies of the written Listed Company Agreements and descriptions of oral Listed Company Agreements, if any, including in each case any amendment or supplement thereto, have previously been delivered to or made available for review by Parent. Each of the Listed Company Agreements is in full force and effect and constitutes the legal and binding obligation of the Company and/or the Company Subsidiaries party thereto and, to the knowledge of the Company, constitutes the legal and binding obligation of the other parties thereto, except to the extent that any such Listed Company Agreement has previously expired in accordance with its terms or the failure of any such Listed Company Agreements to be binding and in full force and effect would not, individually or in the aggregate, have a Company Material Adverse Effect. Except for such breaches and defaults as would not, individually or in the aggregate, have a Company Material Adverse Effect, there are no existing breaches or defaults by the Company or any Company Subsidiary or, to the knowledge of the Company, any other party to a Listed Company Agreement under any Listed Company 30 Agreement and, to the knowledge of the Company, no event has occurred which, with the passage of time or the giving of notice or both, would reasonably be expected to constitute such a breach or default. Section 4.14 Real and Personal Property. (a) Except as disclosed in -------------------------- Section 4.14(a) of the Company Disclosure Schedule, each of the Company and the Company Subsidiaries has good and marketable title to, or valid leasehold interests in, all its material properties and assets, free and clear of all Encumbrances. (b) Section 4.14(b) of the Company Disclosure Schedule sets forth (i) a true and complete list of all real property owned by the Company or any Company Subsidiary and (ii) a true and complete list of all real property leased by the Company or any Company Subsidiary (collectively, the "Real Property"). ------------- Neither the Company nor any Company Subsidiary is a party to any lease, assignment or similar arrangement under which the Company or any Company Subsidiary is a lessor, assignor or otherwise makes available for use by any third party any portion of the Real Property. (c) Each of the Company and the Company Subsidiaries is in compliance in all material respects with the terms of all Real Property leases to which it is a party. (d) Since December 31, 1997, neither the Company nor any Company Subsidiary has received written notice of any material proceedings, claims or disputes affecting any Real Property, and neither the Company nor any Company Subsidiary has received written notice in the past three years, or any written notice which is currently unresolved, from any Governmental Entity having jurisdiction over any Real Property of any threatened suspension, modification or cancellation of certificates of occupancy or permits required under applicable law to occupy and use any material Real Property assets as presently occupied or used, the basis of which has not been cured. (e) To the knowledge of the Company, the Company's and/or the Company Subsidiaries' use and operation of the Real Property as presently conducted is not dependent on a nonconforming use or other waiver from a Governmental Entity, the absence of which would materially limit the use of the Real Property or the operations thereon as presently conducted (unless such waiver has in fact been granted). Section 4.15 Intellectual Property. (a) As used herein, the term --------------------- "Intellectual Property" means all: (i) trademarks, service marks, trade names, --------------------- trade 31 dress, Internet domain names, designs, logos, slogans and general intangibles of like nature, together with goodwill, registrations and applications for any of the foregoing (collectively, "Trademarks"); (ii) issued patents and pending ---------- patent applications, patent disclosures and any divisions, continuations, continuations-in-part, reissues, re-examinations and extensions thereof, and any counterparts claiming priority therefrom for any designs, inventions, processes, machines, manufacture or composition of matter, models and methodologies (collectively, "Patents"); (iii) any issued registrations and pending ------- applications for mask works or for copyrights, including copyrights in drawings, plans, specifications, designs, and content contained on any Internet web site operated by the Company or a Company Subsidiary (collectively, "Copyrights"); ---------- (iv) computer programs, including any and all software implementations of algorithms, models and methodologies whether in source code or object code form, databases and compilations, including any and all data and collections of data, all documentation, including user manuals and training materials, related to any of the foregoing and the content and information contained on any Internet web site (collectively, "Software"); (v) trade secrets and confidential information, -------- which may include know-how, formulae, algorithms, methodologies and customer and/or vendor data (such confidential items, collectively "Trade Secrets"); and ------------- (vi) any licenses to use any of the foregoing. "Business Intellectual Property" ------------------------------ means the Intellectual Property used, or held for use, in the business of the Company or any Company Subsidiary as currently conducted, or as presently contemplated to be conducted. (b) Section 4.15(b) of the Company Disclosure Schedule sets forth, for all Business Intellectual Property owned by the Company or any Company Subsidiary, a complete and accurate list of all U.S., state and foreign: (i) Patents; (ii) Trademarks and material unregistered trademarks and service marks; and (iii) registered Copyrights and material unregistered Copyrights. Except as otherwise disclosed in Section 4.15(b) of the Company Disclosure Schedule, the Company or a Company Subsidiary currently is listed in the records of the appropriate U.S., state or foreign agency as the record owner for each application and registration listed on Section 4.15(b) of the Company Disclosure Schedule. (c) Section 4.15(c) of the Company Disclosure Schedule sets forth a complete and accurate list of all material Software which is licensed, leased or otherwise used by the Company or any Company Subsidiary, and all material Software which is owned by the Company or any Company Subsidiary ("Proprietary ----------- Software"), and identifies which material Software is owned, licensed, leased, - -------- or otherwise used, as the case may be. 32 (d) Section 4.15(d) of the Company Disclosure Schedule sets forth a complete and accurate list of all material agreements granting or obtaining any right to use or practice any rights under any Business Intellectual Property, to which the Company or any Company Subsidiary is a party or otherwise bound, as licensee or licensor thereunder, including license agreements, settlement agreements and covenants not to sue (collectively, the "IP License ---------- Agreements"). - ---------- (e) Except as set forth in Section 4.15(e) of the Company Disclosure Schedule: (i) the Company or a Company Subsidiary owns, or possesses adequate licenses or other legally enforceable rights to use, all Business Intellectual Property, free and clear of all Encumbrances; (ii) the Business Intellectual Property constitutes all the Intellectual Property necessary to conduct the business of the Company and the Company Subsidiaries as currently conducted on the date hereof, including any research and development work on products or Software started prior to the date hereof; (iii) any Trademarks, Patents and Copyrights owned by the Company or any Company Subsidiary and which are the subject of national registrations have been duly maintained, are valid and subsisting, in full force and effect and have not been cancelled, expired or abandoned; (iv) no claims have been asserted, or, to the knowledge of the Company, threatened, by any Person against the Company or any Company Subsidiary related to the use of any Business Intellectual Property in the conduct of the business of Company or a Company Subsidiary or challenging or questioning the ownership, validity or enforceability of such Business Intellectual Property; (v) to the Company's knowledge, the use of the Business Intellectual Property in the conduct of the business of Company and the Company Subsidiaries, as such business is currently conducted, does not infringe, misappropriate or otherwise violate any Intellectual Property rights of any Person; 33 (vi) to the Company's knowledge, no third party is infringing, misappropriating or otherwise violating any Business Intellectual Property owned by the Company or any Company Subsidiary; (vii) neither the Company nor any Company Subsidiary has licensed or sublicensed its rights in any Business Intellectual Property, or received or been granted any such rights, other than pursuant to the IP License Agreements; (viii) the IP License Agreements are binding obligations of the Company or a Company Subsidiary, and there exists no event or condition which will result in a violation or breach of, or constitute a default by the Company or, to the knowledge of the Company, the other party thereto, under any such IP License Agreement; (ix) the Company and the Company Subsidiaries take all reasonable measures to protect the confidentiality of their respective Trade Secrets, including requiring third parties having access thereto to execute written nondisclosure agreements. To the Company's knowledge, no Trade Secret of the Company or any Company Subsidiary has been disclosed or authorized to be disclosed to any third party, except pursuant to a written non-disclosure agreement; (x) the consummation of the Transactions will not result in the loss or impairment of the Company's or any Company Subsidiary's rights to own or use any of the Business Intellectual Property, nor will such consummation require the consent of any third party in respect of any Intellectual Property; and (xi) all Proprietary Software set forth in Section 4.15(c) of the Company Disclosure Schedule, was either developed (a) by employees of the Company or a Company Subsidiary within the scope of their employment; (b) by independent contractors as "works-made-for-hire," as that term is defined under Section 101 of the United States Copyright Act, 17 U.S.C. ss. 101, pursuant to written agreement; or (c) by third parties who have assigned all of their rights therein to the Company pursuant to written agreement. No former or present employees, officers or directors of the Company retain any rights of ownership or use of the Proprietary Software, and no employees or third parties who have developed or participated in the development of the Proprietary Software have any claims to any rights therein. 34 Section 4.16 Related Party Transactions. Since December 31, 2000 there -------------------------- have been no transactions, agreements, arrangements or understandings between the Company or any Company Subsidiary, on the one hand, and their respective affiliates, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act (except for amounts due as normal salaries and bonuses and in reimbursements of ordinary expenses). Except as set forth in Section 4.16 of the Company Disclosure Schedule, no officer or director of the Company or of any Company Subsidiary, no beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of Company Preferred Stock and, to the Company's knowledge, no beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of more than 5% of the outstanding shares of Company Common Stock (i) owns, directly or indirectly, in whole or in part, any Business Intellectual Property or (ii) is a party to any Listed Company Agreement. Section 4.17 Labor Matters. Except as set forth in Section 4.17 of the ------------- Company Disclosure Schedule: (a) There are no material disputes or any grievances or arbitrations pending or, to the knowledge of the Company, threatened between the Company or any Company Subsidiary, on the one hand, and any of their respective employees or labor organizations representing such employees, on the other hand. Since December 31, 2000, to the knowledge of the Company, there has been no labor union or other employee organization organizing any employees of the Company or any Company Subsidiary into one or more collective bargaining units. Neither the Company nor any Company Subsidiary is a party to or bound by any collective bargaining agreements or any other agreements with a labor union, organization or works council. (b) The Company and all Company Subsidiaries are in material compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment, health and safety, and wages and hours. (c) To the Company's knowledge, neither the Company nor any Company Subsidiary has engaged in an unfair labor practice as defined in the National Labor Relations Act, and there is no unfair labor practice complaint or other allegation of labor law violation against the Company or any Company Subsidiary pending before the National Labor Relations Board or any other Governmental Entity. 35 (d) Since December 31, 2000, there has been no and there is no actual or, to the knowledge of the Company, threatened labor dispute, strike, slowdown or work stoppage against the Company or any Company Subsidiary. (e) Since December 31, 2000, neither the Company nor any Company Subsidiary has received notice of any actual or threatened investigation, charge or complaint against the Company or any Company Subsidiary with respect to employees pending before the Equal Employment Opportunity Commission or any other Governmental Entity regarding an unlawful employment practice. (f) Since December 31, 2000, (i) neither the Company nor any Company Subsidiary has effectuated a "plant closing," as defined in the Worker Adjustment and Retraining Notification Act (the "WARN Act"), affecting any site -------- of employment or one or more facilities or operating units within any site of employment or facility, (ii) there has not occurred a "mass layoff" (as defined in the WARN Act) affecting any site of employment or facility of either the Company or any Company Subsidiary and (iii) neither the Company nor any Company Subsidiary has engaged in layoffs or employment terminations sufficient in number to trigger application of the WARN Act or any similar state, local or foreign law or regulation. Section 4.18 Compliance with Laws. Except as set forth in Section 4.18 -------------------- of the Company Disclosure Schedule, since December 31, 1997, the Company and the Company Subsidiaries have complied in a timely manner and in all material respects with all laws, rules and regulations, ordinances, judgments, decrees, orders, writs and injunctions of all Governmental Entities which materially affect the business, properties or assets of the Company and the Company Subsidiaries. Since December 31, 1997, no notice, charge, claim, action or assertion has been received by the Company or any Company Subsidiary or has been filed, commenced or, to the knowledge of the Company, threatened against the Company or any Company Subsidiary alleging any violation of any of the foregoing. All material licenses, permits and approvals required to be held or obtained by the Company or any Company Subsidiary under such laws, rules and regulations are in full force and effect. Section 4.19 Assets. The assets and properties of the Company and the ------ Company Subsidiaries, considered as a whole, constitute all of the material assets and properties which are reasonably required for the business and operations of the Company and the Company Subsidiaries as presently conducted. All of the material property, plant and equipment of the Company and each Company Subsidiary has in all material respects been maintained in reasonable operating condition and repair, ordinary wear and tear excepted, and is in all material respects sufficient to permit the Company 36 and each Company Subsidiary to conduct their operations in the ordinary course of business in a manner consistent with past practice. Section 4.20 Customers and Suppliers. Since December 31, 2000, there ----------------------- has been no termination, cancellation or material curtailment of the business relationship of the Company or any Company Subsidiary with any customer or supplier or group of affiliated customers or suppliers which, individually or in the aggregate, represents in excess of 10% of the Company's consolidated revenues or gross purchase orders, as appropriate, nor has the Company or any Company Subsidiary received any notice of intent to so terminate, cancel or materially curtail. Section 4.21 Environmental Matters. (a) The following terms shall have --------------------- the following meanings for the purposes of this Agreement: (i) "Environmental Laws" shall mean all foreign, ------------------ Federal, interstate, state and local laws, regulations, rules and ordinances relating to pollution or protection of the environment or human health and safety, including laws, regulations, rules and ordinances relating to emissions, discharges, releases or threatened releases of Hazardous Substances into the environment or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, release, transport or handling of Hazardous Substances; all laws and regulations with regard to record-keeping, notification, disclosure and reporting requirements respecting Hazardous Substances; all laws relating to endangered or threatened species of fish, wildlife and plants and the management or use of natural resources; and common law to the extent it relates to or applies to exposure to or impact of Hazardous Substances on persons or property. (ii) "Environmental Claim" shall mean any claim, action, ------------------- cause of action, investigation or notice (written or oral) by any person or entity alleging potential liability (including potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damages, personal injuries or penalties) arising out of, based on or resulting from (a) the presence, or release into the environment, of an Hazardous Substance at any location, whether or not owned or operated by the Company or any Company Subsidiary or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. (iii) "Hazardous Substances" shall mean chemicals, -------------------- pollutants, contaminants, wastes, toxic substances, hazardous substances, radioactive materials, asbestos, petroleum and petroleum products. 37 (b) Except as set forth in Section 4.21 of the Company Disclosure Schedule: (i) The Company and each Company Subsidiary is in full compliance with all applicable Environmental Laws, which compliance includes, but is not limited to, the possession by the Company and each Company Subsidiary of all permits and governmental authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof. Neither the Company nor any Company Subsidiary has received any communication (written or oral), whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any Company Subsidiary is not in such full compliance, and, to the best knowledge of the Company and each Company Subsidiary after due inquiry, there are no circumstances that may prevent or interfere with such full compliance in the future. All permits and other governmental authorizations currently held by the Company or any Company Subsidiary pursuant to the Environmental Laws are identified in Section 4.21 of the Company Disclosure Schedule. (ii) There is no Environmental Claim pending or threatened against the Company or any of the Company Subsidiaries or, to the best knowledge of the Company and the Company Subsidiaries after due inquiry, against any person or entity whose liability for any Environmental Claim the Company or any of the Company Subsidiaries has or may have retained or assumed either contractually or by operation of law. (iii) There are no past or present actions, activities, circumstances, conditions, events or incidents, including the release, emission, discharge, presence or disposal of any Hazardous Substance that could form the basis of any Environmental Claim against the Company or any of the Company Subsidiaries or, to the best knowledge of the Company and the Company Subsidiaries after due inquiry, against any person or entity whose liability for any Environmental Claim the Company or any of the Company Subsidiaries has or may have retained or assumed either contractually or by operation of law. (iv) Without in any way limiting the generality of the foregoing, (A) all on-site and off-site locations where the Company or any of the Company Subsidiaries has stored, disposed or arranged for the disposal of Hazardous Substances are identified in Section 4.21 of the Company Disclosure 38 Schedule, (B) all underground storage tanks, and the capacity and contents of such tanks, located on property owned, operated, or leased by the Company or any of the Company Subsidiaries are identified in Section 4.21 of the Company Disclosure Schedule, (C) except as set forth in Section 4.21 of the Company Disclosure Schedule, there is no asbestos contained in or forming part of any building, building component, structure or office space owned or leased by the Company or any of the Company Subsidiaries, (D) except as set forth in Section 4.21 of the Company Disclosure Schedule, no polychlorinated biphenyls (PCB's) are used or stored at any property owned or leased by the Company or any of the Company Subsidiaries, (E) except as set forth in Section 4.21 of the Company Disclosure Schedule, all underground storage tanks owned, operated, or leased by the Company or any of the Company Subsidiaries and which are subject to regulation under the federal Resource Conservation and Recovery Act (or equivalent state or local law regulating underground storage tanks) meet the technical standards prescribed at Title 40 Code of Federal Regulations Part 280 which became effective December 22, 1998 (or any applicable state or local law requirements which are more stringent than such technical standards or which became effective before such date), and (F) all properties formerly owned or operated by the Company or any of the Company Subsidiaries, or any subsidiary, affiliate, or predecessor thereof, are identified in Section 4.21 of the Company Disclosure Schedule. (v) Neither the Company nor any Company Subsidiary has received any request for information from any Person, including but not limited to any Governmental Entity, related to liability under or compliance with any applicable Environmental Law, except for such matters as would not, if they matured into a claim against the Company or any Company Subsidiary, individually or in the aggregate, have a Company Material Adverse Effect. (vi) With respect to the real property that is currently owned, leased or operated by the Company or any Company Subsidiary, there have been no spills, discharges or releases (as such term is defined by the Comprehensive Environmental Response, Compensation and Liability Act, 42, U.S.C. 9601, et seq.) of Hazardous Substances or any other contaminant or pollutant on or underneath any of such real property that would, individually or in the aggregate, have a Company Material Adverse Effect. (vii) With respect to real property that was formerly owned, leased or operated by the Company or any Company Subsidiary or any of their predecessors in interest, there were no spills, discharges or releases (as 39 such term is defined by the Comprehensive Environmental Response, Compensation and Liability Act, 42, U.S.C. 9601, et seq.) of Hazardous Substances or any other contaminant or pollutant on or underneath any of such real property during or prior to the Company's or any Company Subsidiary's ownership or operation of such real property that would, individually or in the aggregate, result in a Company Material Adverse Effect. (viii) Neither the Company nor any Company Subsidiary has entered into any written agreement or incurred any material legal or monetary obligation to pay to, reimburse, guarantee, pledge, defend, indemnify or hold harmless any Person from or against any liabilities or costs arising out of or related to the generation, manufacture, use, transportation or disposal of Hazardous Substances, or otherwise arising in connection with or under Environmental Laws, other than in each case exceptions which would not, individually or in the aggregate, have a Company Material Adverse Effect. (ix) Neither the Company nor any Company Subsidiary has disposed or arranged for the disposal of Hazardous Substances (or any waste or substance containing Hazardous Substances) at any location that is: (i) listed on the Federal National Priorities List ("NPL") or identified on the --- Comprehensive Environmental Response, Compensation, and Liability Information System ("CERCLIS"), each established pursuant to the ------- Comprehensive Environmental Response, Compensation and Liability Act, 42, U.S.C. 9601, et seq.; (ii) listed on any state or foreign list of hazardous waste sites that is analogous to the NPL or CERCLIS; or (iii) has been subject to environmental investigation or remediation, other than, in each case, exceptions which would not, individually or in the aggregate, have a Company Material Adverse Effect. Section 4.22 Insurance. All material policies of fire, liability, --------- workmen's compensation and other forms of insurance owned or held by the Company and the Company Subsidiaries are with reputable insurance carriers, provide full and adequate coverage for all normal risks incident to the business of the Company and the Company Subsidiaries and their respective businesses and assets, and are in character and amount at least substantially equivalent to that carried by Persons engaged in similar businesses and subject to the same or similar perils or hazards. The Company and the Company Subsidiaries have made all payments required to maintain such policies in full force and effect. Neither the Company nor any Company Subsidiary has received notice of default under any such policies or received notice of any pending or threatened 40 termination, cancellation, material coverage limitation or reduction or material increase in premium with respect to any such policies. Section 4.23 Proxy Statement. The Proxy Statement will comply in all --------------- material respects with the provisions of applicable federal securities laws and, on the date first published or sent or given to the Company's shareholders and at the time of any meeting of the Company's shareholders to be held in connection with the Merger, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except that the Company makes no representation or warranty with respect to information furnished by Parent or Merger Sub in writing for inclusion in the Proxy Statement. Section 4.24 Opinion of Financial Advisor. The Special Committee and ---------------------------- the Company Board of Directors have received the written opinion, dated August 23, 2001, of Deutsche Banc Alex. Brown Inc., financial advisor to the Special Committee (the "Financial Advisor"), to the effect that, as of such date, the ----------------- consideration to be received in the Merger by the Company's shareholders other than the Shareholder is fair to such shareholders from a financial point of view, and a copy of such opinion shall be delivered to Parent and Merger Sub promptly after the date hereof. The Company has been authorized by the Financial Advisor to include such opinion in its entirety in the Proxy Statement. Section 4.25 Brokers. No broker, investment banker, financial advisor ------- or other person, other than the Financial Advisor, the fees and expenses of which will be paid by the Company, is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company. True and correct copies of all agreements between the Company and the Financial Advisor, including any fee arrangements, are included in Section 4.25 of the Company Disclosure Schedule. 41 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB Parent and Merger Sub represent and warrant to the Company as follows: Section 5.1 Organization. Each of Parent and Merger Sub is a ------------ corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority and all necessary governmental licenses, authorizations, permits, consents and approvals to own, lease and operate its properties and to carry on its business as is now being conducted, except where the failure to be so organized and existing or to have such power, authority, and governmental licenses, authorizations, permits, consents and approvals would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of each of Parent and Merger Sub, as the case may be, to perform its obligations under this Agreement, or prevent or materially delay the consummation by Parent or Merger Sub of any of the Transactions (a "Parent ------ Material Adverse Affect"). - ----------------------- Section 5.2 Authorization; Validity of Agreement; Necessary Action. ------------------------------------------------------ Each of Parent and Merger Sub has full corporate power and authority to execute and deliver this Agreement and to consummate the Transactions. The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation of the Transactions have been duly authorized by the boards of directors of each of Parent and Merger Sub and by Parent as the sole shareholder of Merger Sub, and no other corporate authority or approval on the part of Parent or Merger Sub is necessary to authorize the execution and delivery by Parent and Merger Sub of this Agreement and the consummation of the Transactions. This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming due and valid authorization, execution and delivery hereof by the Company, is the valid and binding obligation of each of Parent and Merger Sub enforceable against each of them in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors' rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. Section 5.3 Consents and Approvals; No Violations. None of the ------------------------------------- execution, delivery or performance of this Agreement by Parent or Merger Sub, the 42 consummation by Parent or Merger Sub of the Transactions, or compliance by Parent or Merger Sub with any of the provisions hereof will (a) conflict with or result in any breach of any provision of the articles of incorporation or bylaws of Parent or the certificate of incorporation or by-laws of Merger Sub, (b) require any material filing by Parent or Merger Sub with, or permit, authorization, consent or approval of, any Governmental Entity (except for (i) compliance with any applicable requirements of the Exchange Act, (ii) any filings as may be required under the BCL in connection with the Transactions, (iii) any filings, permits, authorizations, consents and approvals as may be required under the HSR Act and any applicable competition, antitrust or investment laws of foreign jurisdictions, (iv) any filings with and notices to The New York Stock Exchange, Inc. as may be required in connection with this Agreement and the Transactions and (v) such filings and approvals as may be required by any applicable state securities, blue sky or takeover laws in connection with this Agreement and the Transactions), (c) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any material note, bond, mortgage, lien, indenture, lease, license, contract, agreement or other instrument or obligation to which Parent or Merger Sub is a party or by which either of them or any of their respective properties or assets may be bound or (d) violate any material order, writ, injunction, decree, statute, rule or regulation applicable to Parent, any of its Subsidiaries, or any of their respective properties or assets, except in the case of clauses (b), (c) and (d) for any failures to make such filings and failures to obtain such permits, authorizations, consents or approvals and any such violations, breaches or defaults which would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of each of Parent and Merger Sub, as the case may be, to perform its obligations under this Agreement, or prevent or materially delay the consummation by Parent or Merger Sub of the Transactions. Section 5.4 Information in the Proxy Statement. None of the ---------------------------------- information supplied by Parent or Merger Sub in writing (including electronically) expressly for inclusion in the Proxy Statement will, at the date mailed to shareholders and at the time of the Special Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Section 5.5 Brokers. No broker, investment banker, financial advisor ------- or other Person, other than Goldman Sachs & Co., the fees and expenses of which will be paid by Parent, is entitled to any broker's, finder's, financial advisor's or other similar 43 fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent or Merger Sub. Section 5.6 Financing. Either Parent or Merger Sub has available and --------- has reserved, or has received written commitments from third-party lenders to obtain, sufficient funds to consummate the Transactions, including the payment in full of (a) the Merger Consideration, (b) the amounts payable under Sections 3.5, 3.6 and 3.7 hereof and (c) all indebtedness (including principal, accrued interest, prepayment fees and other charges) of the Company outstanding on the date of this Agreement. Section 5.7 Interim Operations of Merger Sub. Merger Sub was formed -------------------------------- solely for the purpose of engaging in the Merger and the other Transactions and has engaged in no business other than in connection with the Merger and the other Transactions. Merger Sub is a wholly-owned Subsidiary of Parent. ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS Section 6.1 Conduct of Business of the Company. The Company covenants ---------------------------------- and agrees that, except (i) as expressly contemplated by this Agreement or (ii) as Parent may consent in writing during the period from the date of this Agreement to the Effective Time: (a) the business of the Company and the Company Subsidiaries shall be conducted only in the ordinary course of business and in a manner consistent with past practice, and each of the Company and the Company Subsidiaries shall use its reasonable efforts to preserve its present business organization intact and maintain good relations with customers, suppliers, employees, independent contractors, dealers, distributors and other Persons with whom the Company or any Company Subsidiary has significant business relations, in each case consistent with past practice; (b) the Company shall not, directly or indirectly, (i) except (A) upon exercise of the Options pursuant to the Option Plans outstanding on the date hereof, (B) for the issuance of shares of Company Common Stock upon exercise of any Warrant pursuant to the terms of such Warrant, (C) for the issuance of shares of Company Common Stock upon conversion of the Convertible Note in accordance with the terms thereof and (D) for the issuance of shares of Company Common Stock upon conversion of Company Preferred Stock outstanding on the date hereof pursuant to the 44 Company Organizational Documents, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury shares of the Company or any capital stock of any Company Subsidiary beneficially owned by it, (ii) amend its certificate of incorporation or by-laws or permit the amendment of any Subsidiary Organizational Documents or (iii) split, combine or reclassify any outstanding shares of the Company; (c) neither the Company nor any Company Subsidiary shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except, in the case of the Company, for quarterly dividends (including any accrued and unpaid quarterly dividends) to the extent provided for in, and in an amount not to exceed that required by, the Company's certificate of incorporation with respect to the Company Preferred Stock, provided that in no event shall any such dividend -------- accrue or have accrued or become payable at a rate in excess of (A) $4.00 per share at an annual rate in the case of the Series D Preferred Stock and (B) $4.50 per share at an annual rate in the case of the Series B Preferred Stock and the Series C Preferred Stock, and provided further that the record date for ---------------- any such dividend shall in no event be earlier than 10 days prior to the date on which such dividend is payable; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire, any shares of capital stock of, the Company or any Company Subsidiary, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to (A) the exercise of the Warrants and Options outstanding on the date hereof and (B) conversion of the Convertible Note and shares of Company Preferred Stock outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its material assets, or incur or modify any material indebtedness or other liability, other than in the ordinary course of business consistent with past practice; or (iv) redeem, purchase or otherwise acquire any shares of its capital stock, or any instrument which includes a right to acquire such shares, except for purchases, redemptions and acquisitions in connection with and in accordance with the Option Plans; (d) except as set forth in Section 6.1(d) of the Company Disclosure Schedule (or as required by applicable law with respect to an employee benefit plan), neither the Company nor any Company Subsidiary shall change the compensation or benefits payable or to become payable to any of its officers, directors or employees (other than increases in wages to employees who are not directors or affiliates, in the ordinary course of business consistent with past practice), enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees or affiliates or change its existing borrowing or lending arrangements for or on behalf of 45 any of such persons pursuant to an employee benefit plan or otherwise, other than such actions taken in the ordinary course of business consistent with past practice; (e) neither the Company nor any Company Subsidiary shall pay or arrange for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or make any arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days, except for payments and accruals made in the ordinary course of business consistent with past practice; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company director, officer or employee, whether past or present; or, except as required by applicable law, amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing; (f) the Company will not modify, amend or terminate any of the Listed Company Agreements in any material respect, and neither the Company nor any Company Subsidiary shall waive, release or assign any material rights or claims under any of the Listed Company Agreements; (g) neither the Company nor any Company Subsidiary will fail to promptly notify Parent if the Company or any Company Subsidiary receives notice that any material insurance policy naming the Company or any Company Subsidiary as a beneficiary or a loss payee is to be cancelled or terminated; (h) neither the Company nor any Company Subsidiary will (i) incur or assume any long-term indebtedness or any short-term indebtedness (which shall not include trade payables), except for (A) short-term indebtedness for working capital in the ordinary course of business not to exceed $100,000 in the aggregate and (B) indebtedness incurred under credit facilities existing on the date hereof and included in the Listed Company Agreements, not exceeding $500,000 in the aggregate and entered into in the ordinary course of business consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, other than in an immaterial amount; (iii) make any loans, advances or capital contributions to, or investments in, any other Person other than in an immaterial amount; (iv) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or 46 other business organization or division thereof or any equity interest therein; or (v) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate); (i) except as required by law or any such agreement neither the Company nor any Company Subsidiary shall enter into or modify any collective bargaining agreement or similar agreement or any successor collective bargaining agreement to any collective bargaining agreement; (j) neither the Company nor any Company Subsidiary shall fail to timely and properly file, or timely and properly file requests for extensions to file, all federal, state, local and foreign Tax returns which are required to be filed, and pay or make provision for the payment of all Taxes owed by them; (k) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it except for such changes required by GAAP or (ii) make any Tax election or change any Tax election already made, adopt any Tax accounting method, change any Tax accounting method, enter into any closing agreement or settle any material claim or assessment relating to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such material claim or assessment; (l) neither the Company nor any Company Subsidiary will pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction of any such material claims, liabilities or obligations in the ordinary course of business consistent with past practice, or of material claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company; (m) neither the Company nor any Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the Merger); (n) neither the Company nor any Company Subsidiary will take, or agree in writing or otherwise to take, any action that would or is reasonably likely to result in any of the conditions set forth in Article VIII not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at or prior to the Effective Time, or that would materially impair 47 the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (o) neither the Company nor any Company Subsidiary shall make any capital expenditure which is not in all material respects in accordance with the annual budget for the fiscal year 2001, a true and correct copy of which has been delivered to Parent; and (p) neither the Company nor any Company Subsidiary will enter into any agreement, contract, binding commitment or binding arrangement to do any of the foregoing, or authorize, recommend, propose in writing or announce an intention to do any of the foregoing; provided, that this subsection (p) shall -------- not be construed to prohibit the Company from seeking on a confidential basis and in good faith Parent's consent in writing as contemplated by the exception set forth in clause (ii) of this Section 6.1. Notwithstanding the foregoing, nothing in this Section 6.1 or any other provision of this Agreement shall prohibit any wholly-owned Company Subsidiary from paying cash dividends or making other cash distributions to the Company or any wholly-owned Company Subsidiary in the ordinary course of business consistent with the Company's cash management procedures. Section 6.2 Notification of Acquisition Proposals. The Company shall ------------------------------------- promptly notify Parent if any proposals are received by, any information is requested from, or any negotiations or discussions are sought to be initiated or continued with the Company or its officers, directors, employees, investment bankers, attorneys, accountants or other agents, in each case, in connection with an Acquisition Proposal (an "Acquisition Proposal Interest"), which notice ----------------------------- shall identify the name of the Person indicating such Acquisition Proposal Interest and, to the extent then known, the material terms and conditions of any Acquisition Proposal. As used in this Agreement, "Acquisition Proposal" means -------------------- (a) any tender or exchange offer involving the Company, (b) any proposal for a merger, consolidation or other business combination involving the Company, (c) any proposal or offer to acquire in any manner any equity or voting debt securities of the Company which, if consummated, would result in any Person acquiring "beneficial ownership" (within the meaning of Rule 13d-3 under the Exchange Act) of securities representing 10% or more of the outstanding combined voting power of the Company, (d) any proposal or offer to acquire in any manner 10% or more of the Company's consolidated assets (including shares of capital stock of the Company Subsidiaries), (e) any proposal or offer with respect to any recapitalization or restructuring with respect to the Company or (f) any proposal or offer 48 with respect to any other transaction similar to any of the foregoing with respect to the Company, other than the Transactions. Section 6.3 No Solicitation. --------------- (a) The Company agrees that it shall immediately cease and cause to be terminated all existing discussions, negotiations and communications with any Persons with respect to any Acquisition Proposal and request the return of all information provided to any third party pursuant to a confidentiality agreement or otherwise in connection with such discussions, negotiations or communications. From the date of this Agreement until the earlier of termination of this Agreement or the Effective Time, the Company shall not and shall not authorize or permit its officers, directors, employees, investment bankers, attorneys, accountants, affiliates or other agents (collectively, "Representatives") to directly or indirectly (i) initiate, solicit, encourage, --------------- or take any action to facilitate the making of, any offer or proposal which constitutes or which may be reasonably likely to lead to an Acquisition Proposal, (ii) enter into any agreement with respect to any Acquisition Proposal, or (iii) in the event of an unsolicited Acquisition Proposal for the Company, engage in any negotiations or discussions with, or provide any information or data to, any Person (other than Parent or any of its affiliates or representatives) relating to any Acquisition Proposal. (b) Notwithstanding the foregoing, nothing contained in this Section 6.3 or elsewhere in this Agreement shall prohibit the Company or the Company Board of Directors (or the Special Committee) from (1) in the event of an unsolicited Acquisition Proposal, requesting all such information from and having such discussions with any Person in connection therewith as may be necessary for the Company Board of Directors (and the Special Committee) to inform themselves fully as to all material terms and conditions (including the price, structure, intended accounting and tax treatment, closing conditions, anticipated closing date, likelihood of consummation, creditworthiness of the intended purchaser and requisite regulatory approvals) of such Acquisition Proposal and providing all such material, non-public information or data with respect to the Company to such Person if (A) prior to providing such information or data and having any such discussions, the Company Board of Directors receives from such Person an executed confidentiality agreement having provisions that are customary in such agreements relative to proposed transactions such as the Acquisition Proposal, as advised by outside legal counsel, and otherwise containing terms and provisions no less restrictive than those contained in the Confidentiality Agreement and (B) the Company Board of Directors (and the Special Committee) shall have determined, in good faith after consultation with outside legal counsel, that the failure to take such action, provide such information or data or have discussions for the purpose of becoming 49 so fully informed would be inconsistent with its fiduciary duties under applicable law; provided that, after having determined in good faith, after -------- consultation with outside legal counsel, that each of the Company Board of Directors and the Special Committee is fully informed with respect to the material terms and conditions of such Acquisition Proposal and the proponent thereof, neither the Company nor any of its Representatives shall be permitted to engage in any discussions with such Person that would violate this Section 6.3, or (2) (i) withdrawing, modifying, or qualifying (or publicly proposing to withdraw, modify, or qualify) the recommendation by the Company Board of Directors (and the Special Committee) to the Company's shareholders to vote in favor of the adoption of this Agreement; provided that the Company Board of -------- Directors (and the Special Committee) shall have determined in good faith, after consultation with outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable law, or (ii) making such other disclosure to the Company's shareholders as in the good faith judgment of the Company Board of Directors (and the Special Committee), after consultation with outside legal counsel, is necessary under applicable law. ARTICLE VII ADDITIONAL AGREEMENTS Section 7.1 Special Meeting; Proxy Statement; Adoption of --------------------------------------------- Agreement. - --------- (a) The Company shall: (i) as promptly as practicable following the execution and delivery of this Agreement, establish a record date in accordance with the Company Organizational Documents and the BCL (the "Record ------ Date") and duly call, give notice of, convene and hold a special ---- meeting of the Company's shareholders (together with all adjournments or postponements thereof, the "Special Meeting") as soon as practicable --------------- after the date hereof for the purpose of considering and taking action upon this Agreement and the Merger; (ii) as promptly as practicable following the date hereof, prepare and cause to be filed with the SEC a preliminary Proxy Statement relating to the matters to be submitted to the Company's shareholders at the Special Meeting. The Company shall use its reasonable best efforts to have the Proxy Statement "cleared" by the SEC's staff and, as promptly as practicable 50 thereafter, cause the Proxy Statement, in definitive form, to be mailed to the Company's shareholders in accordance with Regulation 14A under the Exchange Act, the Company Organizational Documents and the BCL. As promptly as practicable after receipt thereof, the Company shall provide Parent with copies of all written comments and advise Parent of any oral comments with respect to the Proxy Statement received from the SEC's staff. The Company shall provide Parent with a reasonable opportunity to review and comment on all proposed amendments and supplements to the Proxy Statement prior to filing the same with the SEC, and will provide Parent with a true and complete copy of all such filings made with the SEC; (iii) include in the Proxy Statement (A) the opinion of the Financial Advisor referred to in Section 4.24 and (B) the recommendation of the Company Board of Directors (and the Special Committee) that shareholders of the Company vote in favor of the adoption of this Agreement (the "Company Recommendation"), unless, in the case of ---------------------- the foregoing clause (B), in the good-faith judgment of the Company Board of Directors (and the Special Committee), after consultation with outside legal counsel, the inclusion of the Company Recommendation would be inconsistent with its fiduciary duties under applicable law; and (iv) use all reasonable efforts to solicit from shareholders proxies in favor of the adoption of this Agreement and take all actions reasonably necessary or, in the reasonable opinion of Parent, advisable to secure the approval of shareholders required by the BCL, the Company Organizational Documents and any other applicable law to effect the Merger. (b) Parent shall furnish all information concerning it as may reasonably be requested by the Company in connection with the actions required to be taken by the Company under Section 7.1(a)(ii) and the preparation and filing of the Proxy Statement and shall use its reasonable best efforts to have the Proxy Statement "cleared" by the SEC's staff. Parent shall vote any shares of the Company beneficially owned by it, or with respect to which it has the power (by agreement, proxy or otherwise) to vote or cause to be voted, in favor of the adoption of this Agreement and approval of the Merger at the Special Meeting. Section 7.2 Reasonable Best Efforts; Consents and Approvals. ----------------------------------------------- (a) Each of the parties hereto agrees to use all reasonable best efforts to obtain in a timely manner all necessary waivers, consents and approvals and 51 to effect all necessary registrations and filings, and to use all reasonable best efforts to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective as promptly as practicable the Transactions; provided that -------- nothing contained in this Section 7.2 shall require any party to waive or exercise any right hereunder which is waivable or exercisable in the sole discretion of such party. (b) Each of Parent, Merger Sub and the Company shall take all reasonable actions necessary to comply promptly with all legal requirements which may be imposed on it with respect to this Agreement and the Transactions (which actions shall include, without limitation, furnishing all information required under the HSR Act or any comparable laws of foreign jurisdictions and in connection with approvals of, filings with and inquiries or requests from any Governmental Entity); shall promptly cooperate with and, subject to such confidentiality agreements as may be reasonably necessary or requested, furnish information to each other or their counsel in connection with any such requirements imposed upon any of them or any of their Subsidiaries in connection with this Agreement and the Transactions; and shall not take any action that would reasonably be expected to materially delay the obtaining of, or result in not obtaining, any permission, approval or consent from any Governmental Entity necessary to be obtained prior to Closing. Each of the Company, Parent and Merger Sub shall, and shall cause respective Subsidiaries to, take all reasonable actions necessary to obtain (and shall cooperate with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity or other public or private third party required to be obtained or made by Parent, Merger Sub, the Company or any of their respective Subsidiaries in connection with the Transactions or the taking of any action contemplated thereby or by this Agreement. Notwithstanding the foregoing, or any other covenant herein contained, in connection with the receipt of any necessary approvals under the HSR Act or any comparable laws of foreign jurisdictions, neither Parent nor the Company shall be required to divest or hold separate or otherwise take or commit to take any action that limits Parent's or the Company's freedom of action with respect to, or their ability to retain, the Company or any portions thereof or any of the businesses, product lines, properties or assets of the Company or Parent. (c) Prior to the Closing, each party shall promptly consult with the other parties hereto with respect to, provide any necessary information with respect to, and provide the other (or its counsel) copies of, all filings made by such party with any Governmental Entity or any other information supplied by such party to a Governmental Entity in connection with this Agreement and the Transactions. Each party hereto shall promptly inform the other of any communication from any Governmental Entity regarding any of the Transactions unless otherwise prohibited by 52 law. If any party hereto or affiliate thereof receives a request for additional information or documentary material from any such Governmental Entity with respect to the Transactions, then such party shall endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other party, an appropriate response in compliance with such request. To the extent that transfers, amendments or modifications of permits (including environmental permits) are required as a result of the execution of this Agreement or consummation of the Transactions, the Company shall use its commercially reasonable efforts to effect such transfers. Section 7.3 Notification of Certain Matters. The Company shall give ------------------------------- prompt notice to Parent and Parent shall give prompt notice to the Company of any material failure of the Company, Merger Sub or Parent, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 7.3 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice or the representations or warranties of the parties or the conditions to the obligations of the parties hereto. Section 7.4 Access; Confidentiality. From the date hereof until the ----------------------- Effective Time, upon reasonable notice and subject to the terms of the Mutual Confidentiality Agreement, dated August 8, 2000, between Parent and the Company (the "Confidentiality Agreement"), the Company shall (and shall cause each ------------------------- Company Subsidiary to) afford the officers, employees, accountants, counsel, financing sources and other representatives of Parent and Merger Sub reasonable access, during normal business hours, to all of its properties, books, contracts, commitments and records (including but not limited to Tax Returns). Without limitation as to the foregoing, until the Effective Time, the Company shall (and shall cause each Company subsidiary to) afford Parent, Merger Sub and their respective representatives such access to any site located on the Real Property as may reasonably be requested by Parent or Merger Sub for the purpose of conducting Phase I environmental assessments. During the period from the date hereof until the Effective Time, the Company shall (and shall cause each of the Company Subsidiaries to) furnish promptly to Parent and Merger Sub all information concerning its business, properties and personnel as Parent or Merger Sub may reasonably request, including a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal securities laws. Section 7.5 Publicity. Each of Parent and the Company shall consult --------- with the other and agree upon the initial press release with respect to the execution of this Agreement. Thereafter, so long as this Agreement is in effect, neither the Company nor 53 Parent, nor any of their respective affiliates, shall issue any press release or other announcement with respect to any of the Transactions or this Agreement (including pursuant to Rule 14a-12 under the Exchange Act) without the prior consultation of the other party, except as such party believes, after consultation with outside counsel, may be required by law, by any listing agreement with or listing rules of a national securities exchange or by the rules of the Nasdaq Stock Market or any U.S. inter-dealer quotation system of a registered national securities association, provided, however, that each party -------- ------- shall provide, to the extent practicable, notice to and shall consult with the other party prior to issuing any such press release or other announcement. Section 7.6 Insurance and Indemnification. (a) Parent agrees that all ----------------------------- rights to indemnification and advancement of expenses for acts or omissions occurring prior to the Effective Time (including for acts or omissions of directors occurring prior to the Effective Time in connection with the adoption of this Agreement and the approval of the Transactions) now existing in favor of the current or former directors or officers of the Company and the Company Subsidiaries, and their respective heirs and representatives (each an "Indemnified Party"), provided in the Company Organizational Documents or ----------------- Subsidiary Organizational Documents and any indemnification agreements or arrangements of the Company and the Company Subsidiaries or as to the fullest extent permitted by law shall survive the Merger and shall continue in full force and effect in accordance with their terms for a period of six years following the Effective Time. Parent shall cause to be included and to be maintained in effect in the Surviving Corporation's (or any successor's) certificate of incorporation and by-laws, during such six-year period following the Effective Time, provisions regarding elimination of liability of directors, indemnification of officers and directors and advancement of expenses which are, in the aggregate, no less advantageous to the Indemnified Parties than the corresponding provisions contained in the Company Organizational Documents. (b) Parent or the Surviving Corporation shall maintain the Company's existing officers' and directors' liability insurance ("D&O --- Insurance") for a period of not less than three years after the Effective Time; - --------- provided, however, that Parent may substitute therefor policies of substantially - -------- ------- equivalent coverage and amounts containing terms no less favorable to such former directors or officers; provided further, that if the existing D&O -------- ------- Insurance expires or is terminated or cancelled during such period, then Parent or the Surviving Corporation shall use reasonable best efforts to obtain substantially similar D&O Insurance or, if not obtainable, Parent shall obtain as much D&O Insurance as can be obtained for an annual premium not in excess of 200% of the average of the premiums paid by the Company in 1998, 1999 and 2000 for D&O Insurance (the "Average Premium"); provided further, however, that in no --------------- -------- ------- event shall Parent be required to pay annual premiums for insurance under this Section 7.6(b) in 54 excess of 200% of the Average Premium; and provided, further, that if Parent or ------- the Surviving Corporation is unable to obtain the amount of insurance required by this Section 7.6(b) for such annual premium, Parent or the Surviving Corporation shall obtain as much insurance as can be obtained for an annual premium not in excess of 200% of the Average Premium. The premium for D&O Insurance for the 12-month period ending May 2002 is set forth on Section 7.6(b) of the Company Disclosure Schedule. Section 7.7 Determination Letters; Multiemployer Plans. ------------------------------------------ (a) As promptly as practicable following the execution and delivery of this Agreement, with respect to each ERISA Plan set forth on Schedule 4.11(j) of the Company Disclosure Schedule, the Company shall apply (but in no event later than the expiration of the remedial amendment period for such ERISA Plan under Section 401(b) of the Code) for a determination letter from the IRS stating that such ERISA Plan is qualified within the meaning of Section 401(a) of the Code. (b) Prior to the Effective Time, the Company shall deliver to Parent a letter from the board of trustees of each Plan that is a multiemployer plan within the meaning of Section 3(37) of ERISA, dated not more than thirty (30) days before the date of this Agreement, to the effect that there is no unfunded liability with respect to the Company's participation in such Plan and stating that neither the Company nor any Company Subsidiary would have any withdrawal liability upon a "complete withdrawal" from such plan (within the meaning of Section 4203 of ERISA) if such withdrawal occurred as of the date of such letter. Section 7.8 Employment and Benefit Arrangements. ----------------------------------- (a) For a one-year period following the Effective Time, Parent shall cause the Surviving Corporation to continue to provide those employees of the Surviving Corporation at the Effective Time (the "Employees"), --------- so long as they remain employees of the Surviving Corporation, with benefits that are, in the aggregate, no less favorable to such Employees as are the benefits of the Company provided to such Employees immediately prior to the Effective Time. The foregoing sentence shall not apply to severance benefits, and the Surviving Corporation shall not be required to maintain any particular level of severance benefits. (b) For purposes of vesting and eligibility, Parent and the Surviving Corporation shall, with respect to each benefit required to be provided under the terms of this Section 7.8, credit each Employee with all service credited to such 55 Employee under the Company's corresponding plan, policy, program or arrangement applicable to such Employee as of the Effective Time. (c) Parent and the Surviving Corporation shall credit each Employee with any vacation and sick days accrued as of the Effective Time in accordance with the terms of the Company's vacation and sick day policies in effect as of such date. (d) From and after the Effective Time, Parent shall, and shall cause the Surviving Corporation to, waive any pre-existing condition limitations and credit any deductibles and out-of-pocket expenses that are applicable and/or covered under the Benefit Plans providing health and dental and similar benefits and are incurred by the Employees and their beneficiaries during the portion of the calendar year prior to participation (if applicable) in the benefit plans provided by Parent or the Subsidiaries of Parent (other than the Surviving Corporation). (e) The provisions of this Section 7.8 are not intended to create rights of third party beneficiaries. (f) Notwithstanding anything contained herein to the contrary, nothing in this Section 7.8 shall be deemed to be a commitment on the part of Parent or the Surviving Corporation to provide employment to any person for any period of time and, except as otherwise provided in this Section 7.8, nothing herein shall be deemed to prevent Parent or the Surviving Corporation from amending or terminating any benefit plan or arrangement in accordance with its terms. Section 7.9 Transfer of Certain Intellectual Property. The ----------------------------------------- Company shall use its best efforts to cause all right, title and interest to any Intellectual Property listed in Section 4.15(b) of the Company Disclosure Schedule for which the Company or a Company Subsidiary is not listed as the record owner or which is subject to an Encumbrance (other than an Encumbrance pursuant to an agreement referenced in Section 4.14(a) of the Company Disclosure Schedule) to be assigned, transferred, conveyed and delivered, free and clear of such Encumbrances, to Parent, a wholly-owned Subsidiary of Parent, the Company or a Company Subsidiary and to cause such right, title and interest to be vested in Parent, the Company or such Subsidiary, as the case may be, at the Effective Time. Section 7.10 Third Party Standstill Agreements. During the period --------------------------------- from the date of this Agreement through the Effective Time, the Company shall enforce and shall not terminate, amend, modify or waive any standstill provision of any 56 confidentiality or standstill agreement between the Company and other parties entered into prior to the date hereof. Section 7.11 Takeover Laws. If any "fair price," "moratorium," ------------- "control share acquisition" or other form of anti-takeover statute or regulation shall become applicable to any of the Transactions or to the Company, then the Company and the Company Board of Directors shall use all reasonable best efforts to ensure that the Merger may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Transactions. ARTICLE VIII CONDITIONS Section 8.1 Conditions to Each Party's Obligation to Effect the Merger. ----------------------------------------------------------- The respective obligations of each party to effect the Merger shall be subject to the satisfaction or waiver, to the extent permitted by applicable law, at or prior to the Effective Time, of each of the following conditions: (a) This Agreement shall have been adopted by the requisite vote of the shareholders of the Company in accordance with the Company Organizational Documents and the BCL; (b) No statute, law, rule or regulation shall be in effect or have been enacted or promulgated by any Governmental Entity which prohibits the consummation of the Merger, and there shall be no order or injunction of a court of competent jurisdiction in effect prohibiting consummation of the Merger; and (c) The applicable waiting period (and any extension thereof) under the HSR Act shall have expired or been terminated. Section 8.2 Conditions to the Company's Obligation to Effect the ---------------------------------------------------- Merger. The obligation of the Company to effect the Merger is subject to - ------ satisfaction or waiver (to the extent permitted by applicable law) at or prior to the Effective Time of each of the following conditions: (a) Each of the representations and warranties of Parent and Merger Sub set forth in this Agreement, disregarding all qualifications and exceptions 57 contained therein relating to materiality, shall be true and correct as of the date of this Agreement and as of the Effective Time, as if made at and as of such time (except to the extent that such representations and warranties speak as of another date, in which case such representations and warranties shall be true and correct as of such other date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, have a Parent Material Adverse Effect. (b) Each of Parent and Merger Sub shall have performed in all material respects all obligations required to be performed by it at or prior to the Effective Time under this Agreement. (c) The Company shall have received a certificate, dated as of the Effective Time, signed by a senior executive officer or senior financial officer of Parent, to the effect that the conditions set forth in Section 8.2(a) and Section 8.2(b) have been satisfied. Section 8.3 Conditions to Parent's and Merger Sub's Obligations --------------------------------------------------- to Effect the Merger. The obligation of each of Parent and Merger Sub to effect - -------------------- the Merger is subject to satisfaction or waiver (to the extent permitted by applicable law) at or prior to the Effective Time of each of the following conditions: (a) Each of the representations and warranties of the Company set forth in this Agreement, disregarding all qualifications and exceptions contained therein relating to materiality, shall be true and correct both as of the date of this Agreement and as of the Effective Time, as if made at and as of such time (except to the extent that such representations and warranties speak as of another date, in which case such representations and warranties shall be true and correct as of such other date), except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, have a Company Material Adverse Effect. (b) The Company shall have performed in all material respects all obligations required to be performed by it at or prior to the Effective Time under this Agreement. (c) Parent shall have received a certificate, dated as of the Effective Time, signed by the chief executive officer or chief financial officer of the Company, to the effect that the conditions set forth in Section 8.3(a), Section 8.3(b) and Section 8.3(i) have been satisfied. 58 (d) There shall not be pending any action or proceeding by any Governmental Entity that has reasonable likelihood of success seeking (x) to make illegal or to prohibit the consummation of the Merger, (y) to restrain or prohibit Parent's (including its affiliates') ownership or operation of all or any material portion of the business or assets of the Surviving Corporation or the Company, or to compel Parent or any of its affiliates to dispose of or hold separate all or any material portion of the business or assets of the Surviving Corporation or the Company or (z) to impose or confirm material limitations on the ability of Parent or any of its affiliates to effectively control the business or operations of the Surviving Corporation or the Company, and no court, arbitrator or Governmental Entity shall have issued any judgment, order, decree or injunction, and there shall not be any statute, rule or regulation, that is likely, directly or indirectly, to result in any of the consequences referred to in the preceding clauses (x) through (z); provided, however, that Parent and the Company shall use their reasonable efforts to have any such judgment, order, decree or injunction vacated. (e) The Shareholder's Agreement shall be in full force and effect and the Shareholder shall be in compliance with the terms thereof. (f) The employment agreement between Michael H. Dunn and Parent, executed and delivered on the date hereof, shall be in full force and effect, with effect as of the Effective Time; Mr. Dunn shall be serving as the Company's chief executive officer; and Mr. Dunn shall not be subject to any disability or other condition that would materially impair the fulfillment of his responsibilities as chief executive officer of the Surviving Corporation in a manner and to an extent consistent with the performance of his duties as chief executive officer of the Company prior to the date of this Agreement and after December 31, 2000. (g) Each of the employment agreements listed in Section 8.3(g) of the Company Disclosure Schedule, as amended on the date hereof, shall be in full force and effect. (h) The Company shall have provided (or caused to be provided) to Parent a duly executed certificate, in form and substance reasonably satisfactory to Parent, to the effect that Parent is not required to withhold from any of the Merger Consideration under section 1445 of the Code (a "FIRPTA Certificate"). Notwithstanding any provision of this Agreement to the ------------------ contrary, if Parent does not receive a FIRPTA Certificate prior to the Closing, Parent may waive the condition set forth in this Section 8.3(h) and withhold from the Merger Consideration in accordance with the requirements of section 1445 of the Code. 59 (i) All material authorizations, consents and approvals required to be made or obtained prior to the Effective Time by each party hereto from any Governmental Entity or other Person in connection with the execution and delivery of this Agreement and the consummation of the Transactions shall have been made or obtained. (j) Since the date of this Agreement, there shall not have occurred any change, event, occurrence, development or circumstance which, individually or in the aggregate, has had, or would reasonably be expected to have, a Company Material Adverse Effect. ARTICLE IX TERMINATION Section 9.1 Termination. This Agreement may be terminated and the ----------- Merger may be abandoned at any time prior to the Effective Time (notwithstanding any adoption of this Agreement by holders of shares of the Company): (a) by the mutual written consent of Parent and the Company; (b) by either Parent or the Company if: (i) any statute, law, rule or regulation shall have been enacted or promulgated by any Governmental Entity which prohibits the consummation of the Merger, or there shall be an order or injunction of a court of competent jurisdiction in effect prohibiting consummation of the Merger, and such order or injunction shall have become final and nonappealable; (ii) the Merger shall not have been consummated by 5:30 p.m., Eastern time on January 3, 2002 (the "Termination Date"), ---------------- provided that the right to terminate this Agreement pursuant to this -------- Section 9.1(b)(ii) shall not be available to any party whose failure to fulfill any of its obligations under this Agreement results in the failure of the Merger to occur on or before the Termination Date; or (iii) this Agreement shall not have been adopted by the requisite vote of the Company's shareholders at the Special Meeting; 60 (c) by Parent if: (i) the representations and warranties of the Company contained in this Agreement shall not be true and correct such that the condition set forth in Section 8.3(a) cannot be satisfied on or before the Termination Date; (ii) the Company shall have failed to perform in any material respect any obligation required to be performed by it at or prior to the Effective Time under this Agreement, which failure to perform has not been cured within 30 days following receipt by the Company of notice of such failure to perform from Parent or Merger Sub; or (iii) the Company Board of Directors (or the Special Committee) at any time after the date of this Agreement shall have publicly announced that it has withdrawn, or modified or changed in a manner adverse to Parent or Merger Sub, the Company Recommendation (or shall have resolved to do so), irrespective of whether permitted by the express terms of this Agreement; or (d) by the Company if: (i) the representations and warranties of Parent or Merger Sub contained in this Agreement shall not be true and correct such that the condition set forth in Section 8.2(a) cannot be satisfied on or before the Termination Date; or (ii) Parent or Merger Sub shall have failed to perform in any material respect any obligation required to be performed by it at or prior to the Effective Time under this Agreement, which failure to perform has not been cured within 30 days following receipt by Parent of notice of such failure to perform from the Company. Section 9.2 Effect of Termination. (a) In the event of the --------------------- termination of this Agreement as provided in Section 9.1, notice thereof shall forthwith be given to the other party or parties in accordance with Section 10.4, and this Agreement shall forthwith become null and void (except for this Section 9.2 and Sections 10.3, 10.4, 10.5, 10.6, 10.8, 10.11 and 10.12, which shall survive such termination) and there shall be no liability on the part of Parent, Merger Sub or the Company, except (i) as set forth in this Section 9.2, and (ii) nothing herein shall relieve any party from liability for any willful 61 breach of this Agreement. The Confidentiality Agreement shall survive any termination of this Agreement. (b) Provided that neither Parent nor Merger Sub is then in material breach of this Agreement, if (i) (A) the Company shall have terminated this Agreement pursuant to Section 9.1(b)(ii) without the Special Meeting having occurred or pursuant to Section 9.1(b)(iii) or (B) Parent shall have terminated this Agreement pursuant to Section 9.1(b)(iii) or 9.1(c)(iii); and (ii) (A) prior to the time of any such termination there shall have been received by the Company, and there shall continue to be outstanding at the time of termination, an Acquisition Proposal which has been publicly announced and (B) within 12 months following such termination, a definitive agreement with respect to an Acquisition Proposal shall have been entered into by the Company, then the Company shall pay to Parent (by wire transfer of immediately available funds to such account as Parent may designate in writing to the Company), on the second business day next following the date such definitive agreement is executed and delivered, $2,650,000 in cash. It is expressly agreed that the amounts to be paid pursuant to this Section 9.2(b), if any, constitute liquidated damages negotiated at arm's length and do not constitute, and are not intended by the parties to operate as, a penalty. ARTICLE X MISCELLANEOUS Section 10.1 Amendment and Modification. Subject to the provisions of -------------------------- Section 10.14, this Agreement may be amended, modified and supplemented by the parties hereto, whether before or after any approval by the shareholders of the Company of the matters presented in connection with this Agreement and the Merger, provided, however, that after any such approval and the adoption of this Agreement by the shareholders, no amendment shall be made which by law or in accordance with the rules of any national securities exchange or U.S. inter-dealer quotation system of a registered national securities association requires further approval by such shareholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 62 Section 10.2 Non-survival of Representations and Warranties. None of the ---------------------------------------------- representations and warranties in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Effective Time; provided, that this Section 10.2 shall not limit any covenant or -------- agreement of the parties hereto which by its terms contemplates performance after the Effective Time. Section 10.3 Expenses. All fees, costs and expenses incurred in -------- connection with this Agreement, the Merger and the other Transactions shall be paid by the party incurring such fees, costs and expenses except that any transfer, stamp or similar taxes shall be borne by Parent. Section 10.4 Notices. All notices and other communications hereunder ------- shall be in writing and shall be deemed given if delivered personally, upon confirmation of receipt if telecopied or transmitted via facsimile machine, on the first business day following the date of dispatch if sent by a nationally recognized overnight courier service, such as Federal Express or on the fifth business day next following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to Parent or Merger Sub, to: Steelcase Inc. 901 - 44th Street, S.E. Grand Rapids, Michigan 49508 Telephone: (616) 246-9600 Facsimile: (616) 248-7010 Attention: Chief Legal Officer with a copy (which shall not constitute notice pursuant to this Section 10.4) to: Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Chicago, Illinois 60606 Telephone: (312) 407-0700 Facsimile: (312) 407-0411 Attention: Charles W. Mulaney, Jr., Esq. 63 (b) if to the Special Committee of the Company Board of Directors, to: Greenberg Traurig, LLP The Met Life Building 200 Park Avenue New York, New York 10166 Telephone: (212) 801-9200 Facsimile: (212) 801-6400 Attention: Clifford E. Neimeth, Esq. (c) if to the Company, to: PolyVision Corporation 4888 S. Old Peachtree Rd. Norcross, Georgia 30071 Telephone: (770) 447-5043 Facsimile. (770) 446-5951 Attention: Michael H. Dunn, President and Chief Executive Officer with a copy (which shall not constitute notice pursuant to this Section 10.4) to: Greenberg Traurig, LLP The Met Life Building 200 Park Avenue New York, New York 10166 Telephone: (212) 801-9200 Facsimile: (212) 801-6400 Attention: Spencer G. Feldman Clifford E. Neimeth, Esq. and (d) if to the Shareholder, to: The Alpine Group, Inc. 1790 Broadway New York, New York 10019 64 Telephone: (212) 757-3333 Facsimile: (212) 757-3423 Attention: Corporate Secretary with a copy (which shall not constitute notice pursuant to this Section 10.4) to: Proskauer Rose LLP 1585 Broadway New York, New York 10036 Telephone: (212) 969-3000 Facsimile: (212) 969-2900 Attention: Ronald R. Papa, Esq. All notices to the Company pursuant to this Agreement simultaneously shall be delivered to the Special Committee and the Shareholder in the manner provided above. Section 10.5 Interpretation. All terms defined in this -------------- Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless specifically otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as the feminine and neutral genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including in the case of agreements or instruments by waiver or consent, and in the case of statutes, by comparable successor statutes, and references to all attachments thereto and instruments incorporated therein. Each of the parties hereto has participated in the drafting and negotiation of this Agreement such that if any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it was drafted by all of the parties hereto, collectively, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. When a reference is made in this Agreement to Articles, Sections, Exhibits or Schedules such reference shall be to an Article or Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents, index of defined terms and headings contained in this Agreement are for reference purposes only and shall not affect in any way the intended meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation." As used in this 65 Agreement, the term "affiliates" shall have the meaning set forth in Rule 12b-2 of the Exchange Act. Section 10.6 Jurisdiction. Each of Parent, Merger Sub and the Company ------------ hereby expressly and irrevocably submits, with respect to any legal action or proceeding arising out of or in connection with this Agreement or the Transactions, to the non-exclusive personal jurisdiction of the United States District Court for the Southern District of New York and to the jurisdiction of any other competent court of the State of New York (collectively, the "New York -------- Courts"), preserving, however, all rights of removal to such federal court under - ------ 28 U.S.C. Section 1441, in connection with all disputes arising out of or in connection with this Agreement or the Transactions and agrees not to commence any litigation relating to the foregoing except in such courts. Each such party hereby waives the right to any other jurisdiction or venue for any litigation arising out of or in connection with this Agreement or the Transactions to which any of them may be entitled by reason of its present or future domicile. Notwithstanding the foregoing, each such party agrees that each of the other parties shall have the right to bring any action or proceeding for enforcement of a judgment entered by the New York Courts in any other court or jurisdiction. Section 10.7 Service of Process. Each of Parent, Merger Sub and the ------------------ Company irrevocably consents to the service of process outside the territorial jurisdiction of the courts referred to in Section 10.6 hereof in any legal action or proceeding arising out of or in connection with this Agreement or the Transactions by mailing copies thereof by registered or certified U.S. mail, postage prepaid, return receipt requested, to its address as specified in or pursuant to Section 10.4 hereof. However, the foregoing shall not limit the right of a party to effect service of process on the other party by any other legally available method. Section 10.8 Specific Performance. Each of Parent, Merger Sub and the -------------------- Company acknowledges and agrees that in the event of any breach of this Agreement, each non-breaching party would be irreparably and immediately harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties hereto (a) will waive, in any action for specific performance, the defense of adequacy of a remedy at law and (b) shall be entitled, in addition to any other remedy to which they may be entitled at law or in equity, to compel specific performance of this Agreement in any action instituted in accordance with Section 10.6 hereof. Section 10.9 Counterparts. This Agreement may be executed manually or by ------------ facsimile by the parties hereto, in any number of counterparts, each of which shall be considered one and the same agreement and shall become effective when a 66 counterpart hereof shall have been signed by each of the parties and delivered to the other parties. Section 10.10 Entire Agreement; No Third-Party Beneficiaries. This ---------------------------------------------- Agreement, the Shareholder's Agreement and the Confidentiality Agreement: (a) constitute the entire agreement and understanding among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and oral, among the parties or any of them with respect to the subject matter hereof and thereof (provided that the provisions of this Agreement shall supersede any conflicting provisions of the Confidentiality Agreement), and (b) except as provided in Section 7.6, are not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. Section 10.11 Severability. If any term or other provision of this ------------ Agreement is invalid, illegal or incapable of being enforced by rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the extent possible. Section 10.12 Governing Law. This Agreement shall be governed by and ------------- construed in accordance with the internal (procedural and substantive) laws of the State of New York without giving effect to the principles of conflicts of law thereof. Section 10.13 Assignment. This Agreement shall not be assigned by any of ---------- the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that Merger Sub may assign any or all of its rights, interests and obligations hereunder to Parent, one or more direct or indirect wholly-owned Subsidiaries of Parent, or a combination thereof. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and permitted assigns. 67 Section 10.14 Special Committee Enforcement. Until the Effective Time, ----------------------------- all action to be taken by the Company to enforce, waive compliance with or amend or modify the terms and conditions of this Agreement shall require the approval of the Special Committee. [Signature page follows.] 68 IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above. STEELCASE INC. By /s/ James P. Keane ------------------------------------- Name: Title: PV ACQUISITION, INC. By /s/ James P. Keane ------------------------------------ Name: Title: POLYVISION CORPORATION By /s/ M. H. Dunn ------------------------------------- Name: M.H. Dunn Title: President and CEO 69 ANNEX A
- --------------------------------------------------------------------------------------------- Designation and number of shares in Class or series of Name of constituent each class or series Class or series of shares entitled to corporation in the outstanding as of shares entitled to vote as a class or Merger August 24, 2001 vote series - --------------------------------------------------------------------------------------------- PolyVision Common Stock, par Common Stock Corporation value $.001 per share; 14,168,527/1/ Series B Preferred, Series B Preferred Series B Preferred par value $.01 per share; 255,000 /2/ Series C Preferred, Series C Preferred Series C Preferred par value $.01 per share; 140,000 /2/ Series D Preferred, par value $.01 per share; 120,000 /2/ - --------------------------------------------------------------------------------------------- PV Acquisition, Inc. Common Stock, par Common Stock value $.01 per share, 100 /3/ - ---------------------------------------------------------------------------------------------
/1/ Subject to change prior to the Effective Time in the event of the conversion or exercise of securities convertible into or exercisable for Common Stock and otherwise in accordance with the Merger Agreement, the certificate of incorporation and by-laws of PolyVision Corporation and the BCL. /2/ Subject to change prior to the Effective Time in the event of conversion into Common Stock and otherwise in accordance with the Merger Agreement, the certificate of incorporation and by-laws of PolyVision Corporation and the BCL. /3/ Subject to change prior to the Effective Time in accordance with the certificate of incorporation and by-laws of PV Acquisition, Inc. and the BCL. A-1 EX-4.12 4 dex412.txt CREDIT FACILITY AGREEMENT DATED APRIL 5, 2000 EXHIBIT 4.12 April 5, 2000 Steelcase Financial Services Ltd. 1 Steelcase Road West Markham, Ontario L3R 0T3 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 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. -2- 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: -3- 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: -4- Royal Bank of Canada 77 King St West, 9th Floor Toronto Ont M5W 1P9 For Credit of: Royal Bank of Canada Leasing Account Number: 110-568-3, 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, -5- 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 -------- 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; -6- (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 -7- 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; -8- (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 -9- 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; -10- (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 -11- 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 -------- ------- 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. -12- (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 -------- 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 -------- 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 ------------------------- 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 ------------- advanced" have the meanings ascribed to such terms in the Criminal -------- Code, and the "effective annual rate of interest" shall be calculated ---- in accordance with generally accepted actuarial practices and principles. (c) Notices. Any notice or demand hereunder shall be given in writing by ------- 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. 1 Steelcase Road West Markham, Ontario L3R 0T3 Attention: Thomas P. Sullivan, Vice President Telecopier: (616) 698-3863 -13- With a copy to the Guarantor: Steelcase Inc. 901 44th Street SE CH-2E-06 Grand Rapids, MI 49508 Attention: General Counsel Telecopier: (616) 248 7010 as to the Bank: Royal Bank of Canada 33 City Centre Drive Mississauga, Ontario L5B 2N5 Attention: Senior Manager Telecopier: (905) 897-8114 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 ------- 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 ---------------------- 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 ------------------ the request of the Bank take such action and execute and deliver such further -14- 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 ------------ 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. [The remainder of this page has been left blank intentionally.] Yours truly, ROYAL BANK OF CANADA By: /s/ John Liddy ---------------------------------------- Name/Title: John D. Liddy Senior Market Manager & Group Head By: /s/ W. B. Flick ---------------------------------------- Name/Title: W. B. Flick 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/ John D. Botsford ---------------------------------------- Name/Title: John D. Botsford, 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, BAKER & McKENZIE -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, 2000 Royal Bank of Canada 33 City Centre Drive Mississauga, Ontario L5B 2N5 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 Baker & McKenzie, 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, Daniel J. Brondyk Senior Corporate Counsel -32- April __, 2000 Royal Bank of Canada 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 Daniel J. Brondyk, 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. -33- 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. -34- (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, EX-4.13 5 dex413.txt AM CREDIT FACILITY DATED MAY 24, 2001 EXHIBIT 4.13 May 24, 2001 Steelcase Financial Services Ltd. 1 Steelcase Road West Markham, Ontario L3R OT3 Attention: Chief Financial Officer Dear Sirs: We refer to the facility agreement dated as of April 5, 2000 between Royal Bank of Canada (the "Bank") and Steelcase Financial Services Ltd. (the "Borrower"), as borrower, (the "Facilities Agreement") and to the Guarantee dated as of April 5, 2000 (the "Guarantee") made by Steelcase Inc. (the "Guarantor") for the benefit of the Bank relating to the indebtedness of the Borrower to the Bank under the Facilities Agreement. We confirm our agreement to amend the Facilities Agreement, subject to the following terms and conditions. 1. DEFINITIONS: Capitalized terms used and not defined herein have the meanings ascribed to such terms in the Facilities Agreement. 2. PAYMENT ADJUSTMENT: Section 7 of the Facilities Agreement entitled Payment Adjustment is amended to add the following provisions thereto: "(c) If the ratio of the Guarantor's Funded Debt to EBITDA becomes greater than 2.75 to 1.0, as evidenced by the Guarantor's quarterly financial statements delivered by the Guarantor in accordance with the Guarantee, then, in addition to the rights granted to the Bank pursuant to Section 7(a) above, 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 + 0.15%, and (ii) the Discount Rate + 0.50%. 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. (d) If following a payment made pursuant to subsection 7(c) above, the ratio of the Guarantor's Funded Debt to EBITDA becomes less than or equal to 2.75 to 1.0 as evidenced by the Guarantor's quarterly financial statements delivered by the Guarantor in accordance with the Guarantee, then, in addition to the rights granted to the Borrower pursuant to Section 7(b) above, 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 + 0.15%, and (ii) the Discount Rate + 0.50%. 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. The calculation of the ratio of Funded Debt to EBITDA shall in all instances be calculated for a period of four consecutive fiscal quarters." 3. COVENANTS: Section 17 of the Facilities Agreement entitled Covenants is amended to add the following provisions thereto: "(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 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;" 4. EVENTS OF DEFAULT: Section 18 of the Facilities Agreement entitled Events of Default is amended as follows: (a) to delete Event of Default (b) thereof and to substitute therefor the following: 2 "(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);" (b) to add the words "of the Borrower or Guarantor, as the case may be," to Event of Default (i) after subparagraph (iv) thereof and immediately before the words "and in the case of any involuntary proceeding"; and (c) to add a new Event of Default (1) as follows: "(l) an Event of Default occurs under the facility agreement between the Borrower and the Bank dated May 24, 2001 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 the Guarantor and the Bank;" 5. SCHEDULE "D": The reference to the date February 27, 1998 in the four places it appears in section 3 of the officer's certificate set forth as Schedule "D" to the Facility Agreement is amended to refer to the date February 25, 2000, to correspond to an amendment being made to the Guarantee by an amending agreement between the Bank and the Guarantor dated the same date hereof; 6. CONSENT: The Borrower confirms its agreement and consents to all the terms and conditions of this amending agreement and to the amendments to the Guarantee made by an amending agreement between the Bank and the Guarantor dated the same date hereof. 7. GENERAL: (a) The Borrower agrees to take such action and execute and deliver such further documents as shall be reasonably required by the Bank in order to give effect to and carry out the intentions of this amending agreement. (b) The Facility Agreement, as amended hereby, is hereby ratified and confirmed and remains in full force and effect, binding upon the parties in accordance with its terms. 3 (c) This amending agreement shall be construed in accordance with and be governed by the laws of the Province of Ontario and of Canada applicable therein. (d) This amending agreement may be executed and delivered in counterparts, each of which when executed and delivered is an original, but both of which together constitute one and the same agreement. (e) The date on which this amending 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. Baker -------------- Name/Title: B.R. Baker, Senior Manager By: /s/ G.C. Fox ------------- Name/Title: SR Asst. Mgr, Business Development G.C. Fox 4 We acknowledge and accept the terms and conditions of this amending agreement as of the 23rd of May, 2001, which acceptance is effective as of the date first above written. STEELCASE FINANCIAL SERVICES LTD. By: /s/ Thomas P. Sullivan ---------------------- Name/Title: Thomas P. Sullivan, Vice President ---------------------------------- EX-4.14 6 dex414.txt GUARANTEE DATED APRIL 5, 2000 EXHIBIT 4.14 GUARANTEE GUARANTEE, dated as of April 5, 2000 (the "Guarantee") made by Steelcase Inc., a Michigan corporation (the "Guarantor"), in favor of Royal Bank of Canada (the "Bank"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Bank is entering into a Facility Agreement dated as of April 5, 2000 (as amended and modified from time to time, the "Agreement") with Steelcase Financial Services Ltd., a corporation organized under the laws of Ontario, Canada, as borrower (the "Borrower"), pursuant to which the Bank agreed to lend Cdn$45,292,933.28 to the Borrower, subject to the terms and conditions thereof (the "Loan"); WHEREAS, it is a condition to the Bank's obligation to make the Loan under the Agreement that the Guarantor execute this Guarantee in favor of the Bank; and WHEREAS, all capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Bank to enter into the Agreement and as a condition of the advance of the Loan, the Guarantor hereby agrees as follows: SECTION 1. Definitions. As used in this Guarantee, the following terms ----------- shall have the following meanings (such meanings to be equally applicable to both the singular and plural form of the term defined). Capitalized terms used herein but not defined herein shall have the meanings ascribed thereto in the Agreement. "Additions to Capital" means the aggregate net proceeds, including cash and the fair market value of property other than cash, received by the Guarantor from the issue or sale of capital stock of the Guarantor plus the aggregate of 25% of ---- the after tax gains realized from unusual, extraordinary, and major nonrecurring items; "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is a member of the Guarantor's controlled group, or under common control with the Guarantor, within the meaning of Section 414 of the Code and the regulations promulgated and rulings issued thereunder. "ERISA Event" means (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC; (ii) the provision by the administrator of any Pension Plan of a notice of intent to terminate such Pension Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of operations at a facility by the Guarantor or an ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (iv) the withdrawal by the Guarantor or an ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (v) the failure by the Guarantor or any ERISA Affiliate to make a payment to a Pension Plan required under Section 302(f)(1) of ERISA, which Section imposes a lien for failure to make required payments; (vi) the adoption of an amendment to a Pension Plan requiring the provision of security to such Pension Plan, pursuant to Section 307 of ERISA; or (vii) the institution by the PBGC of proceedings to terminate a Pension Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition which, in the reasonable judgment of the Guarantor, might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Pension Plan. "Fiscal Second Quarter End" means, for each Fiscal Year, the last Friday of each August; "Fiscal Year" means the fiscal year of Guarantor and its subsidiaries' "Fiscal Year End" means, for each Fiscal Year, the last Friday of February; "Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which the Guarantor or any ERISA Affiliate of the Guarantor is making, or is obligated to make, contributions or has Withdrawal Liability; "Multiple Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the Guarantor or an ERISA Affiliate and at least one Person other than the Guarantor and its ERISA Affiliates or (ii) was so maintained and in respect of which the Guarantor or an ERISA Affiliate could have liability under Section 4063, 4064 or 4069 of ERISA in the event such plan has been or were to be terminated; "PBGC" means the U.S. Pension Benefit Guaranty Corporation; "Pension Plan" means a Single Employer Plan or a Multiple Employer Plan or both. "Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the Guarantor or any ERISA Affiliate and no Person other than the Guarantor and its ERISA Affiliates or (ii) was so maintained and in respect of which the Guarantor or an ERISA Affiliate could have liability under Section 4062 or 4069 of ERISA in the event such plan has been or were to be terminated; and "Withdrawal Liability" has the meaning given such term under Part I of Subtitle E of Title IV of ERISA. SECTION 2. Guarantee. The Guarantor hereby unconditionally and irrevocably --------- guarantees the punctual, full and prompt payment when due, whether by acceleration or 2 otherwise, of all obligations of the Borrower under the Agreement (collectively, the "Guaranteed Obligations") owed to the Bank. This Guarantee is an absolute guarantee of payment and performance and is not a guarantee of collection. SECTION 3. Guarantee Absolute. The Guarantor guarantees that the Guaranteed ------------------ Obligations will be paid strictly in accordance with the terms of the Agreement, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Bank with respect thereto. The liability of the Guarantor under this Guarantee shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of the Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party) or avoidance or subordination of any of the Guaranteed Obligations; (b) any change in the time, manner or place of payment of, or in any other term of, or any increase in the amount of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from the Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party); (c) the absence of any attempt to collect the Guaranteed Obligations from the Borrower or any other action to enforce the same or the election of any remedy by the Bank; (d) the bankruptcy, insolvency, winding-up, or reorganization of or similar proceeding involving, the Borrower or the Guarantor; (e) the disallowance under the relevant provisions of any applicable law of all or any portion of the claims of the Bank for payment or performance of the Guaranteed Obligations; (f) the waiver, consent, extension, forbearance or granting of any indulgence by the Bank with respect to any provision of the Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party), or (g) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Borrower, the Guarantor or any other guarantor (other than indefeasible payment in full of the Guaranteed Obligations and in respect of any applicable statute of limitations). SECTION 4. Waiver, No Duties of Bank. ------------------------- (a) The Guarantor hereby waives (i) promptness, diligence, notice of acceptance and any and all other notices with respect to any of the Guaranteed Obligations and this Guarantee, (ii) any requirement that the Bank protect, secure, perfect 3 or insure any security interest in or other lien on any property subject thereto or exhaust any right or take any action against the Borrower or any other Person or entity or any collateral, (iii) filing of proofs of claim with a court in the event of receivership or bankruptcy of the Borrower, (iv) protest or notice with respect to nonpayment of any or all of the Guaranteed Obligations, and (v) all demands whatsoever (and any requirement that the same be made on the Borrower as a condition precedent to the Guarantor's obligations hereunder). The Guarantor hereby covenants that this Guarantee will not be discharged, except according to the provisions of Section 14 hereof. (b) The Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower, and of all other circumstances bearing upon the right of nonpayment of the Guaranteed Obligations or any part thereof that diligent inquiry would reveal. The Guarantor hereby agrees that the Bank shall have no duty to advise the Guarantor of information known to the Bank regarding such condition or any such circumstances. In the event the Bank in its sole discretion undertakes at any time or from time to time to provide any such information to the Guarantor, the Bank shall be under no obligation (i) to undertake any investigation not a part of its regular business routine, (ii) to disclose any information which, pursuant to accepted or reasonable banking or commercial finance practices, the Bank chooses to maintain as confidential or (iii) to make any other or future disclosures of such information or any other information to the Guarantor. If in the exercise of any of its rights and remedies, the Bank shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against the Borrower or any other Person, whether because of any applicable laws pertaining to "election of remedies" or the like, the Guarantor hereby consents to such action by the Bank and waives any claim based upon such action, even if such action by and of the Bank shall result in a full or partial loss of any rights of subrogation, contribution or reimbursement which the Guarantor might otherwise have had but for such action by the Bank. Section 5. Representations and Warranties. The Guarantor represents and ------------------------------ warrants to the Bank that as of the date of this Guarantee and unless a representation or warranty relates solely to an express date, as of the date of each quarterly certificate in the form of Schedule D of the Agreement to be delivered to the Bank: (a) it is a corporation duly incorporated and validly existing under the laws of the State of Michigan, United States of America, and that it is duly registered or qualified to carry on business under the laws of each jurisdiction in which failure to be so registered or qualified would have a material adverse effect on the Guarantor; (b) the execution and delivery of this Guarantee has been duly authorized by all necessary actions and do not, to the best knowledge of the Guarantor after due inquiry, (A) violate any law, regulation or rule by which it is bound, (B) violate any provision of its constitutive documents or by-laws, (C) result in a breach of, or a default under, any material contractual restriction binding 4 on or affecting the Guarantor, or (D) result in the creation of any encumbrance on any of its properties or assets; (c) subject to applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting creditors' rights generally, and to the equitable and statutory powers of courts to stay proceedings before them and to stay the execution of judgements, this Guarantee constitutes, a legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms; (d) its most recent audited, consolidated financial statements fairly present in accordance with GAAP, the consolidated financial position of the Guarantor as of the date thereof and its consolidated results of operations and cash flows for the fiscal year covered thereby, and since the date of its most recent 10-K filing, there has occurred no material adverse change in the business or financial condition of the Guarantor in each case taken as a whole; (e) no event has occurred which constitutes, or which with the giving of notice, lapse of time, or both, or the satisfaction of any other condition, would constitute an Event of Default arising by reason of the Guarantor's performance hereunder, the breach by the Guarantor of a representation or warranty made hereunder, or a default having a material adverse effect on its financial condition under or in respect of any agreement, undertaking or instrument to which it or any of its properties or assets may be subject; (f) there is no action, litigation or legal proceeding pending or threatened against the Guarantor or any of its assets or properties before any court or administrative agency which, if adversely determined, might in the reasonable judgement of the Guarantor (A) result in a material adverse change in the financial condition of the Guarantor or its business, properties or other assets, or (B) materially and adversely affect the ability of the Guarantor to perform its obligations under this Guarantee; (g) ERISA. a. No ERISA Event which would reasonably be anticipated to result in liability of the Guarantor or any of its ERISA Affiliates in excess of US$10,000,000 (or, in the case of an event described in clause (v) of the definition of ERISA Event, US$750,000) (other than for premiums payable under Title IV of ERISA) has occurred or is reasonably expected to occur with respect to any Pension Plan. 5 b. Schedule B (Actuarial Information) to the most recently completed annual report (Form 5500 Series) for each Pension Plan, which report has been filed with the Internal Revenue Service by the Guarantor or an ERISA Affiliate, is complete and, to the best knowledge of the Guarantor after due inquiry, accurate, and since the date of such Schedule B there has been no material adverse change in the funding status of any such Pension Plan. c. Neither the Guarantor nor any ERISA Affiliate has incurred, or, to the best knowledge of the Guarantor after due inquiry, is reasonably expected to incur, any Withdrawal Liability to any Multiemployer Plan which has not been satisfied or which is or might be in excess of US$10,000,000. d. Neither the Guarantor nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and, to the best knowledge of the Guarantor after due inquiry, no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated within the meaning of Title IV of ERISA. (h) it is the indirect legal and beneficial owner of at least 50% of the shares of the Borrower. SECTION 6. Covenants. The Guarantor covenants and agrees with the --------- Bank, while the Agreement is in effect or any Borrowing is outstanding: (a) to maintain its corporate existence as a validly existing corporate entity; (b) to provide or cause to be provided to the Bank the following: (i) quarterly consolidated, unaudited, internally prepared financial statements within 55 days of the end of each fiscal quarter, accompanied by a certificate in the form of Schedule "D" to the Agreement executed by a senior financial officer of the Guarantor (such as the financial officer, treasurer, or assistant treasurer); (ii) annual consolidated, audited financial statements within 100 days of each fiscal year end, accompanied by a certificate in the form of Schedule "D" to the Agreement executed by a senior financial officer of the Guarantor (such as the financial officer, treasurer, or assistant treasurer); (iii) annual consolidating financial statements of Borrower (furnished pursuant to the issuance of consolidated financial statements of Steelcase Financial Services Inc.) within 100 days of each fiscal year end of Steelcase Financial Services Inc.; and 6 (iv) such other financial and operating statements and reports as the Bank may reasonably request; (c) to maintain (i) its Shareholders' Equity at least the sum of (I) the Shareholders' Equity as of February 27, 1998, plus (ii) 25% of Net Income (if a ---- positive number) from February 27, 1998 to the then most recent Fiscal Year End or Fiscal Second Quarter End, plus (iii) all Additions to Capital from February ---- 27, 1998 to the then most recent Fiscal Year End or Fiscal Second Quarter End; (ii) its ratio of Funded Debt to EBITDA for each period consisting of the most recently ended four consecutive fiscal quarters, at not more than 3:1, and (iii) its ratio of EBITDA to Interest Expense in each case for the four fiscal quarters ending on the last day of any fiscal quarter at not less than 5:1; (d) as soon as possible and in any event within five days of the occurrence of such event, to give the Bank notice of any event which constitutes, or which, with the giving of notice, lapse of time, or both, or the satisfaction of any other condition, would constitute an Event of Default arising by reason of Guarantor's performance hereunder; (e) to provide the Bank with prompt written notice of any material action, suit, litigation or other proceeding, of the type described in Section 5(f) which is commenced against the Guarantor; (f) to maintain directly or indirectly, at least 50% of the legal and beneficial ownership in the issued and outstanding shares of the Borrower; (g) to ensure that its obligations under the Guarantee rank pari passu with the claims of all its other unsecured and unsubordinated creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other similar laws of general application, provided, further that if the Guarantor grants collateral security for the obligations set forth in that certain Amended and Restated Credit Agreement, dated May 20, 1999 by and among the Guarantor, Citicorp USA Inc., as Administrative Agent, and the several lenders identified on the signatures pages thereto, or any replacement credit facility, the obligations under this Guaranty shall be equally and ratably secured with such obligations; (h) not to, merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or a substantial portion of its assets (whether now owned or hereafter acquired) to any Person (except in the ordinary course of business and on commercially reasonable terms), or enter into any partnership, joint 7 venture, syndicate, pool or other combination, unless no Event of Default has occurred and is continuing or would result therefrom and, in the case of a merger or consolidation, (i) the Guarantor is the surviving entity or (ii) the surviving entity assumes all of the Guarantor's obligations under this Guarantee in a manner satisfactory to the Bank. SECTION 7. Amendments. No amendment or waiver of any provision of this ---------- Guarantee nor consent to any departure by the Guarantor herefrom shall in any event be effective unless the same shall be in writing and signed by the Bank. No amendment, waiver or consent shall, unless in writing and signed by the Bank, limit the liability of the Guarantor hereunder or postpone any date fixed for payment hereunder, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 8. No Waiver; Remedies, Subrogation -------------------------------- (a) No failure on the part of the Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. (b) Failure by the Bank at any time or times hereafter to require strict performance by the Borrower or the Guarantor or any other person of any of the provisions. warranties, terms and conditions contained in any of the Agreement, or the Guarantee or any of the agreements entered into in connection therewith now or at any time or times hereafter executed by the Borrower or the Guarantor and delivered to the Bank shall not waive, affect or diminish any right of the Bank at any time or times hereafter to demand strict performance thereof and such right shall not be deemed to have been modified or waived by any act, course of conduct or knowledge of the Bank, its respective agents, officers or employees, unless such waiver is contained in an instrument in writing specifying such waiver signed by the Bank and directed and delivered to the Borrower. No waiver by the Bank of any default shall operate as a waiver of any other default or the same default on a future occasion, and no action by the Bank permitted hereunder shall in any way affect or impair any of its rights or the obligations of the Guarantor under this Guarantee. Any determination by a court of competent jurisdiction of the amount of any of the Guaranteed Obligations shall be conclusive and binding on the Guarantor irrespective of whether the Guarantor was party to the suit or action in which such determination was made. (c) Until all Guaranteed Obligations have been paid in full, the Guarantor shall not exercise any right of subrogation which it may acquire with respect to amounts paid hereunder. In the event that the Guarantor shall receive any payment on account of any such right of subrogation while any Guaranteed Obligations remain outstanding, the Guarantor agrees to pay all such amounts so received to the Bank to be applied to payment of the Guaranteed Obligations then due and owing in accordance with the terms of the Agreement. 8 SECTION 9. Continuing Guarantee. This Guarantee is a continuing guarantee -------------------- and shall (a) remain in full force and effect until terminated in accordance with Section 14, (b) be binding upon the Guarantor, and its permitted successors and assigns, and (c) inure to the benefit of and be enforceable by the Bank and its permitted successors, transferees, and assigns who shall be permitted to, and who shall, become an assignee of the Bank's interest under the Agreement. SECTION 10. Reinstatement. This Guarantee shall remain in full force and ------------- effect and continue to be effective should any petition be filed by or against the Guarantor or the Borrower (each a "Loan Party" and, collectively, the "Loan Parties") for liquidation or reorganization, should any Loan Party become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of any Loan Party's assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Guaranteed Obligations or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount. or must otherwise be restored or returned by any obligee of the Guaranteed Obligations, whether as a "voidable preference", "fraudulent conveyance", or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored, or returned, the Guaranteed Obligations shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. SECTION 11. Governing Law. This Guarantee shall be governed by, and ------------- construed in accordance with, the laws of the State of New York (including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law), without regard to the provisions thereof relating to conflicts of laws. SECTION 12. Severability. Whenever possible, each provision of this ------------ Guarantee shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guarantee shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Guarantee. SECTION 13. Consent to Jurisdiction. The Guarantor hereby consents to the ----------------------- non-exclusive jurisdiction of any state court or any federal court located in New York City and agrees that all service of process may be made by registered mail directed to the Guarantor at the address and in the manner specified in the Agreement. The Guarantor waives any objection based on forum non conveniens and any objection to venue of any action instituted hereunder and consents to the granting of such legal or equitable relief as is deemed appropriate by the court. Nothing contained in this paragraph shall affect the right of the Bank to serve legal process in any other manner permitted by law or affect its right to bring any action or proceeding against the Guarantor or its property in the courts of any other competent jurisdiction. SECTION 14. Termination. So long as no Event of Default shall have occurred ----------- and then be continuing, this Guarantee shall terminate and, except to the extent expressly provided in Section 2 above with respect to survival of Guaranteed Obligations all obligations hereunder shall be discharged and released upon the payment in full of all of the Guaranteed Obligations. 9 SECTION 15. Currency. -------- (a) Payment shall be in Canadian Dollars or if collected in a different currency at the option of the Bank, such other currency shall be converted into Canadian Dollars at the spot rate of exchange of the Bank (as conclusively determined by the Bank) for purchasing such currency with Canadian Dollars prevailing on the date of actual payment and the Guarantor hereby agrees to indemnify the Bank against the full Canadian Dollar cost incurred by the Bank for such purpose. (b) No payment to the Bank (whether under any judgment or court order or otherwise) shall discharge the Guaranteed Obligations unless and until the Bank shall have received payment in full in the currency in which such Guaranteed Obligations were incurred or which the Bank has elected to accept under paragraph (a) of this Section 15 and to the extent that the amount of such payment shall on actual conversion into such currency fall short of the amount of the Guaranteed Obligations, actual or contingent, expressed in that currency, the Bank shall have a further separate cause of action against the Guarantor to recover the amount of the shortfall. (c) If and to the extent that the Guarantor fails to pay the amount due on demand, the Bank may in its absolute discretion without notice to the Guarantor purchase at any time thereafter so much of any currency as the Bank considers necessary or desirable to cover the Guaranteed Obligations in such currency hereby guaranteed at the then prevailing spot rate of exchange of the Bank (as conclusively determined by the Bank) for purchasing such currency with Canadian Dollars and the Guarantor hereby agrees to indemnify the Bank against the full Canadian Dollar cost incurred by the Bank for such purpose. (d) All moneys received or held by the Bank from the Borrower or under this Guarantee may from time to time after demand has been made by the Bank be converted into such other currency as the Bank considers necessary or desirable to cover the Guaranteed Obligations, actual or contingent, of the Borrower in that other currency at the then prevailing spot rate of exchange of the Bank (as conclusively determined by the Bank) for purchasing that other currency with the existing currency. SECTION 16. Miscellaneous. All references herein to the Borrower and to ------------- the Guarantor shall be deemed to include their respective permitted successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession of or for the Borrower or the Guarantor. All references to the singular shall be deemed to include the plural where the context so requires. [The remainder of this page has been left blank intentionally] 10 IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. STEELCASE INC. By: /s/ Gary P. Malburg ------------------- Its: Vice President, Finance and Treasurer EX-4.15 7 dex415.txt AM GUARANTEE DATED MAY 24, 2001 EXHIBIT 4.15 May 24, 2001 Steelcase Inc. 901 44th Street SE CH-2E-06 Grand Rapids, MI 4508 Attention: Chief Financial Officer Dear Sirs: We refer to the facility agreement dated as of April 5, 2000 between Royal Bank of Canada (the "Bank") and Steelcase Financial Services Ltd. (the "Borrower"), as borrower, (the "Facilities Agreement") and to the Guarantee dated as of April 5, 2000 (the "Guarantee") made by Steelcase Inc. (the "Guarantor") for the benefit of the Bank relating to the indebtedness of the Borrower to the Bank under the Facilities Agreement. We confirm our agreement to amend the Guarantee, subject to the following terms and conditions. 1. DEFINITIONS: Capitalized terms used and not defined herein have the meanings ascribed to such terms in the Facilities Agreement and the Guarantee. 2. COVENANTS: Section 6 of the Guarantee entitled Covenants is amended as follows: (a) Covenant (b)(iii) is deleted in its entirety and replaced with the following: "(b)(iii) annual consolidated financial statements of Steelcase Financial Services Inc. within 100 days of each fiscal year end of Steelcase Financial Services Inc.;" (b) Covenant (c)(i) is amended to change the reference to the date February 27, 1998 in the three places it appears to the date February 25, 2000; (c) Covenant (c)(ii) is amended to change the required ratio of Funded Debt to EBITDA to not more than 3.25:1 rather than 3:1; and (d) Covenant (c)(iii) is amended to change the required ratio of EBITDA to Interest Expense to not less than 4.5:1 rather than 5:1. 3. CONSENT: The Guarantor confirms its agreement and consents to all the terms and conditions of this amending agreement and to the amendments to the Facility Agreement made by an amending agreement between the Bank and the Borrower dated the same date hereof. 4. GENERAL: (a) The Guarantor agrees to take such action and execute and deliver such further documents as shall be reasonably required by the Bank in order to give effect to and carry out the intentions of this amending agreement. (b) The Guarantee, as amended hereby, is hereby ratified and confirmed and remains in full force and effect, binding upon the parties in accordance with their respective terms. (c) This amending agreement shall be construed in accordance with and be governed by the laws of the State of New York. (d) This amending agreement may be executed and delivered in counterparts, each of which when executed and delivered is an original, but both of which together constitute one and the same agreement. (e) The date on which this amending 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. Baker ----------------- Name/Title: B.R. Baker, Senior Manager By: /s/ G. C. Fox ---------------- Name/Title: G. C. Fox SR ASST MGR, Business Development 2 We acknowledge and accept the terms and conditions of this amending agreement as of the 23rd day of May, 2001, which acceptance is effective as of the date first above written. STEELCASE INC. By: /s/ Gary P. Malburg ------------------- Name/Title: Gary P. Malburg, Vice President, Finance ---------------------------------------- and Treasurer EX-4.16 8 dex416.txt AM CREDIT FACILITY & GUARANTEE DATED NOV. 9, 2001 EXHIBIT 4.16 November 9, 2001 Steelcase Inc. 901 44th Street SE CH-2E-06 Grand Rapids, MI 4508 Attention: Chief Financial Officer Steelcase Financial Services Ltd. 1 Steelcase Road West Markham, Ontario L3R OT3 Attention: Chief Financial Officer Dear Sirs: We refer to the facility agreement dated as of April 5, 2000 between Royal Bank of Canada (the "Bank") and Steelcase Financial Services Ltd., as borrower (the "Borrower"), as amended as of May 24, 2001 (the "Facilities Agreement") and to the Guarantee dated as of April 5, 2000, as amended as of May 24, 2001 (the "Guarantee") made by Steelcase Inc. (the "Guarantor") for the benefit of the Bank relating to the indebtedness of the Borrower to the Bank under the Facilities Agreement. We hereby confirm our agreement, and each of you hereby agrees, to amend the Facilities Agreement and the Guarantee, subject to the following terms and conditions. 1. DEFINITIONS: Capitalized terms used and not defined herein have the meanings ascribed to such terms in the Facilities Agreement and the Guarantee. 2. AMENDMENTS: (a) The definition of "Shareholders' Equity" in the Facilities Agreement is hereby deleted in its entirety and replaced with the following: ""Shareholders' Equity" means the aggregate of stated capital, retained earnings and Subordinated Debt; provided that there shall be -------- excluded from the calculation of Shareholders' Equity non-recurring non-cash charges attributable to the implementation of SFAS 142 not in excess of $150,000,000 in the aggregate for any Fiscal Year;" (b) Covenant (c)(i) of Section 6 of the Guarantee is deleted in its entirety and replaced with the following: "(i) its Shareholders' Equity as at the end of each fiscal quarter in an amount not less than the difference between (a) the sum of (i) the Shareholders' Equity as of February 25, 2000, plus (ii) 25% of Net Income (if a positive number) from February 25, 2000 to the then most recent Fiscal Year End or Fiscal Second Quarter End, plus (iii) all Additions to Capital from February 25, 2000 to the then most recent Fiscal Year End or Fiscal Second Quarter End, and (b) $150,000,000;" 3. CONSENT: Each of the Borrower and the Guarantor confirms its agreement and consents to all the terms and conditions of this amending agreement. 4. GENERAL (a) Each of the Borrower and the Guarantor agrees to taken such action and execute and deliver such further documents as shall be reasonably required by the Bank in order to give effect to and carry out the intentions of this amending agreement. (b) Each of the Facilities Agreement and the Guarantee, as amended hereby, is hereby ratified and confirmed and remains in full force and effect, binding upon the parties in accordance with their respective terms. (c) This amendment shall be construed in accordance with and governed by the laws of Ontario, insofar as it relates to the amendment of the Facilities Agreement, and the laws of New York, insofar as it relates to the amendment of the Guarantee. (d) This amending agreement may be executed and delivered in counterparts, each of which when executed and delivered is an original, but both of which together constitute one and the same agreement. (e) The date on which this amending agreement becomes effective is the date appearing on the first page hereof. 2 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. Baker ---------------- Name/Title: B. R. Baker, Sr. Account Manager By: /s/ John Race ------------- Name/Title: JOHN RACE Sr. Acc. Mgr. We acknowledge and accept the terms and conditions of this amending agreement as of the 9th day of November, 2001, which acceptance is effective as of the date first above written. STEEL CASE INC. By: /s/ Gary P. Malburg ------------------- Name/Title: GARY P. MALBURG --------------------- VICE PRESIDENT & TREASURER STEELCASE FINANCIAL SERVICES LTD. By: /s/ Thomas P. Sullivan ---------------------- Name/Title: Thomas P. Sullivan ------------------ V.P. & CFO EX-4.17 9 dex417.txt CREDIT FACILITY AGREEMENT DATED MAY 24, 2001 EXHIBIT 4.17 May 24, 2001 Steelcase Financial Services Ltd. 1 Steelcase Road West Markham, Ontario L3R 0T3 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: -2- 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. -3- - -------------------------------------------------------------------------------- Ratio of Funded * 2:1 ** 2:1 and * 2.75:1 ** 2.75:1 Debt to EBITDA - -------------------------------------------------------------------------------- Margin 65 basis points 80 basis points 115 basis points - -------------------------------------------------------------------------------- 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 -4- 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 77 King St West, 9th Floor Toronto Ontario, M5W 1P9 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: -5- (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 -------- 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: -6- (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". -7- (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; -8- (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 -9- 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; -10- (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 -11- 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: -12- 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 -------- ------- 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 -13- Borrower furnished to the Bank by the Borrower or the Guarantor; provided that, prior to any 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 -------- 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 ------------------------- 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 ------------- advanced" have the meanings ascribed to such terms in the Criminal -------- Code, and the "effective annual rate of interest" shall be calculated ---- in accordance with generally accepted actuarial practices and principles. (c) Notices. Any notice or demand hereunder shall be given in writing by ------- 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. 1 Steelcase Road West Markham, Ontario L3R 0T3 Attention: Thomas P. Sullivan, Vice President Telecopier: (616) 698-3863 With a copy to the Guarantor: -14- Steelcase Inc. 901 44th Street SE CH-2E-06 Grand Rapids, MI 49508 Attention: General Counsel Telecopier: (616) 248-7010 as to the Bank: Royal Bank of Canada 6880 Financial Drive, 2/nd/ Floor, Mezzanine Mississauga, Ontario, L5N 7Y5 Attention: Senior Manager Telecopier: (905) 286-7262 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 ------- 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 ---------------------- 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 ------------------ 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. -15- (g) Severability. If any provision of this Agreement is or becomes ------------ 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 Baker B.R. Baker, Senior Manager ------------------ By: /s/ G C Fox G.C. Fox 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/ Thomas P. Sullivan ----------------------- Name/Title: Thomas P. Sullivan, 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: [ ] - ---------------- McMillan 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 McMillan Binch 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 McMillan 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 Section 18 (e), 18 (f), 18(g) 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: [ ] - ----------------- McMillan Binch [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 24/th/ , 2001 (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 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 Baker McKenzie, 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 McMillan Binch 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. 2 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. 3 (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, EX-4.18 10 dex418.txt GUARNATEE DATED MAY 24, 2001 EXHIBIT 4.18 GUARANTEE GUARANTEE, dated as of May 24, 2001 (the "Guarantee") made by Steelcase Inc., a Michigan corporation (the "Guarantor"), in favour of Royal Bank of Canada (the "Bank"). W I T N E S S E T H: - ------------------- WHEREAS, the Bank has entered into a Facility Agreement dated as of May 24, 2001 (as amended and modified from time to time, the "Agreement") with Steelcase Financial Services Ltd., a corporation organized under the laws of Ontario, Canada, as borrower (the "Borrower"), pursuant to which the Bank agreed to lend Cdn$25,352,679.56 to the Borrower, subject to the terms and conditions thereof (the "Loan"); WHEREAS, it is a condition to the Bank's obligation to make the Loan under the Agreement that the Guarantor execute this Guarantee in favour of the Bank; and WHEREAS, all capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Bank to enter into the Agreement and as a condition of the advance of the Loan, the Guarantor hereby agrees as follows: SECTION 1. Definitions. As used in this Guarantee, the following terms shall ----------- have the following meanings (such meanings to be equally applicable to both the singular and plural form of the term defined). Capitalized terms used herein but not defined herein shall have the meanings ascribed thereto in the Agreement. "Additions to Capital" means the aggregate net proceeds, including cash and the fair market value of property other than cash, received by the Guarantor from the issue or sale of capital stock of the Guarantor plus the aggregate of 25% of ---- the after tax gains realized from unusual, extraordinary, and major nonrecurring items; "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is a member of the Guarantor's controlled group, or under common control with the Guarantor, within the meaning of Section 414 of the Code and the regulations promulgated and rulings issued thereunder. "ERISA Event" means (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto has been waived by the PBGC; (ii) the provision by the administrator of any Pension Plan of a notice of intent to terminate such Pension Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of operations at a facility by the Guarantor or an ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (iv) the withdrawal by the Guarantor or an ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (v) the failure by the Guarantor or any ERISA Affiliate to make a payment to a Pension Plan required under Section 302(f)(1) of ERISA, which Section imposes a lien for failure to make required payments; (vi) the adoption of an amendment to a Pension Plan requiring the provision of security to such Pension Plan, pursuant to Section 307 of ERISA; or (vii) the institution by the PBGC of proceedings to terminate a Pension Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or condition which, in the reasonable judgment of the Guarantor, might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, a Pension Plan. "Fiscal Second Quarter End" means, for each Fiscal Year, the last Friday of each August; "Fiscal Year" means the fiscal year of Guarantor and its Subsidiaries; "Fiscal Year End" means, for each Fiscal Year, the last Friday of February; "Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which the Guarantor or any ERISA Affiliate of the Guarantor is making, or is obligated to make, contributions or has Withdrawal Liability; "Multiple Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the Guarantor or an ERISA Affiliate and at least one Person other than the Guarantor and its ERISA Affiliates or (ii) was so maintained and in respect of which the Guarantor or an ERISA Affiliate could have liability under Section 4063, 4064 or 4069 of ERISA in the event such plan has been or were to be terminated; "PBGC" means the U.S. Pension Benefit Guaranty Corporation; "Pension Plan" means a Single Employer Plan or a Multiple Employer Plan or both; "Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the Guarantor or any ERISA Affiliate and no Person other than the Guarantor and its ERISA Affiliates or (ii) was so maintained and in respect of which the Guarantor or an ERISA Affiliate could have liability under Section 4062 or 4069 of ERISA in the event such plan has been or were to be terminated; and "Withdrawal Liability" has the meaning given such term under Part I of Subtitle E of Title IV of ERISA. SECTION 2. Guarantee. The Guarantor hereby unconditionally and irrevocably --------- guarantees the punctual, full and prompt payment when due, whether by acceleration or otherwise, of all obligations of the Borrower under the Agreement (collectively, the "Guaranteed Obligations") owed to the Bank. This Guarantee is an absolute guarantee of payment and performance and is not a guarantee of collection. 2 SECTION 3. Guarantee Absolute. The Guarantor guarantees that the Guaranteed ------------------ Obligations will be paid strictly in accordance with the terms of the Agreement, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Bank with respect thereto. The liability of the Guarantor under this Guarantee shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of the Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party) or avoidance or subordination of any of the Guaranteed Obligations; (b) any change in the time, manner or place of payment of, or in any other term of, or any increase in the amount of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from the Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party); (c) the absence of any attempt to collect the Guaranteed Obligations from the Borrower or any other action to enforce the same or the election of any remedy by the Bank; (d) the bankruptcy, insolvency, winding-up, or reorganization of or similar proceeding involving, the Borrower or the Guarantor; (e) the disallowance under the relevant provisions of any applicable law of all or any portion of the claims of the Bank for payment or performance of the Guaranteed Obligations; (f) the waiver, consent, extension, forbearance or granting of any indulgence by the Bank with respect to any provision of the Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party), or (g) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Borrower, the Guarantor or any other guarantor (other than indefeasible payment in full of the Guaranteed Obligations and in respect of any applicable statute of limitations). SECTION 4. Waiver, No Duties of Bank. ------------------------- (a) The Guarantor hereby waives (i) promptness, diligence, notice of acceptance and any and all other notices with respect to any of the Guaranteed Obligations and this Guarantee, (ii) any requirement that the Bank protect, secure, perfect or insure any security interest in or other lien on any property subject thereto or exhaust any right or take any action against the Borrower or any other Person or entity or any collateral, (iii) filing of proofs of claim with a court in the event of 3 receivership or bankruptcy of the Borrower, (iv) protest or notice with respect to nonpayment of any or all of the Guaranteed Obligations, and (v) all demands whatsoever (and any requirement that the same be made on the Borrower as a condition precedent to the Guarantor's obligations hereunder). The Guarantor hereby covenants that this Guarantee will not be discharged, except according to the provisions of Section 14 hereof. (b) The Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower, and of all other circumstances bearing upon the right of nonpayment of the Guaranteed Obligations or any part thereof that diligent inquiry would reveal. The Guarantor hereby agrees that the Bank shall have no duty to advise the Guarantor of information known to the Bank regarding such condition or any such circumstances. In the event the Bank in its sole discretion undertakes at any time or from time to time to provide any such information to the Guarantor, the Bank shall be under no obligation (i) to undertake any investigation not a part of its regular business routine, (ii) to disclose any information which, pursuant to accepted or reasonable banking or commercial finance practices, the Bank chooses to maintain as confidential or (iii) to make any other or future disclosures of such information or any other information to the Guarantor. If in the exercise of any of its rights and remedies, the Bank shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against the Borrower or any other Person, whether because of any applicable laws pertaining to "election of remedies" or the like, the Guarantor hereby consents to such action by the Bank and waives any claim based upon such action, even if such action by and of the Bank shall result in a full or partial loss of any rights of subrogation, contribution or reimbursement which the Guarantor might otherwise have had but for such action by the Bank. SECTION 5. Representations and Warranties. The Guarantor represents and ------------------------------ warrants to the Bank that as of the date of this Guarantee and unless a representation or warranty relates solely to an express date, as of the date of each quarterly certificate in the form of Schedule D of the Agreement to be delivered to the Bank: (a) it is a corporation duly incorporated and validly existing under the laws of the State of Michigan, United States of America, and that it is duly registered or qualified to carry on business under the laws of each jurisdiction in which failure to be so registered or qualified would have a material adverse effect on the Guarantor; (b) the execution and delivery of this Guarantee has been duly authorized by all necessary actions and do not, to the best knowledge of the Guarantor after due inquiry, (A) violate any law, regulation or rule by which it is bound, (B) violate any provision of its constitutive documents or by-laws, (C) result in a breach of, or a default under, any material contractual restriction binding on or affecting the 4 Guarantor, or (D) result in the creation of any encumbrance on any of its properties or assets; (c) subject to applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting creditors' rights generally, and to the equitable and statutory powers of courts to stay proceedings before them and to stay the execution of judgements, this Guarantee constitutes, a legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms; (d) its most recent audited, consolidated financial statements fairly present in accordance with GAAP, the consolidated financial position of the Guarantor as of the date thereof and its consolidated results of operations and cash flows for the fiscal year covered thereby, and since the date of its most recent 10-K filing, there has occurred no material adverse change in the business or financial condition of the Guarantor in each case taken as a whole; (e) no event has occurred which constitutes, or which with the giving of notice, lapse of time, or both, or the satisfaction of any other condition, would constitute an Event of Default pursuant to Section 18 (e), 18 (f), 18(g) 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, the breach by the Guarantor of a representation or warranty made hereunder, or a default having a material adverse effect on its financial condition under or in respect of any agreement, undertaking or instrument to which it or any of its properties or assets may be subject; (f) there is no action, litigation or legal proceeding pending or threatened against the Guarantor or any of its assets or properties before any court or administrative agency which, if adversely determined, might in the reasonable judgement of the Guarantor (A) result in a material adverse change in the financial condition of the Guarantor or its business, properties or other assets, or (B) materially and adversely affect the ability of the Guarantor to perform its obligations under this Guarantee; (g) ERISA. (i) No ERISA Event which would reasonably be anticipated to result in liability of the Guarantor or any of its ERISA Affiliates in excess of US$10,000,000 (or, in the case of an event described in clause (v) of the definition of ERISA Event, US$750,000) (other than for premiums payable under Title IV of ERISA) has occurred or is reasonably expected to occur with respect to any Pension Plan. (ii) Schedule B (Actuarial Information) to the most recently completed annual report (Form 5500 Series) for each Pension Plan, which report has been filed with the Internal Revenue Service by the Guarantor or an ERISA Affiliate, is complete and, to the best knowledge of the Guarantor after 5 due inquiry, accurate, and since the date of such Schedule B there has been no material adverse change in the funding status of any such Pension Plan. (iii) Neither the Guarantor nor any ERISA Affiliate has incurred, or, to the best knowledge of the Guarantor after due inquiry, is reasonably expected to incur, any Withdrawal Liability to any Multiemployer Plan which has not been satisfied or which is or might be in excess of US$10,000,000. (iv) Neither the Guarantor nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and, to the best knowledge of the Guarantor after due inquiry, no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated within the meaning of Title IV of ERISA, where such reorganization or termination has resulted or could reasonably be expected to result, through increases in the contribution required to be made to such Multiemployer Plan, in a material adverse effect on the Guarantor. (h) it is the indirect legal and beneficial owner of at least 50% of the shares of the Borrower. SECTION 6. Covenants. The Guarantor covenants and agrees with the Bank, --------- while the Agreement is in effect or any Borrowing is outstanding: (a) to maintain its corporate existence as a validly existing corporate entity; (b) to provide or cause to be provided to the Bank the following: (i) quarterly consolidated, unaudited, internally prepared financial statements of the Guarantor within 55 days of the end of each fiscal quarter, accompanied by a certificate in the form of Schedule "D" to the Agreement, executed by a senior financial officer of the Guarantor (such as the financial officer, treasurer, or assistant treasurer); (ii) annual consolidated, audited financial statements of the Guarantor within 100 days of each fiscal year end, accompanied by a certificate in the form of Schedule "D" to the Agreement, executed by a senior financial officer of the Guarantor (such as the financial officer, treasurer, or assistant treasurer); (iii) annual consolidated financial statements of Steelcase Financial Services Inc. within 100 days of each fiscal year end of Steelcase Financial Services Inc.; and (iv) such other financial and operating statements and reports as the Bank may reasonably request; 6 (c) to maintain (i) Shareholders' Equity of at least the sum of (I) the Shareholders' Equity as of February 25, 2000, plus ---- (ii) 25% of Net Income (if a positive number) from February 25, 2000 to the then most recent Fiscal Year End or Fiscal Second Quarter End, plus (iii) all ---- Additions to Capital from February 25, 2000 to the then most recent Fiscal Year End or Fiscal Second Quarter End; (ii) its ratio of Funded Debt to EBITDA for each period consisting of the most recently ended four consecutive fiscal quarters, at not more than 3.25:1, and (iii) its ratio of EBITDA to Interest Expense in each case for the four fiscal quarters ending on the last day of any fiscal quarter at not less than 4.5:1; (d) as soon as possible and in any event within five days of the occurrence of such event, to give the Bank notice of any event which constitutes, or which, with the giving of notice, lapse of time, or both, or the satisfaction of any other condition, would constitute an Event of Default pursuant to Section 18 (e), 18 (f), 18(g) 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; (e) to provide the Bank with prompt written notice of any material action, suit, litigation or other proceeding, of the type described in Section 5(f) which is commenced against the Guarantor; (f) to maintain directly or indirectly, at least 50% of the legal and beneficial ownership in the issued and outstanding shares of the Borrower; (g) to ensure that its obligations under the Guarantee rank pari passu with the claims of all its other unsecured and unsubordinated creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other similar laws of general application, provided, further that if the Guarantor grants collateral security for the obligations set forth in that certain Credit Agreement (Long Term Multi-currency Revolving Credit Facility) and Credit Agreement (Short Term Multi-currency Revolving Credit Facility), each dated as of April 5, 2001, by and among the Guarantor, Citicorp USA Inc., as Administrative Agent, SG-Chicago Branch, as Syndication Agent, BNP Paribas, Bank One Michigan and Bank of America, N. A., as Co-Documentation Agents, and the several lenders identified on the signatures pages thereto, or any replacement credit facility, the obligations under this Guaranty shall be equally and rateably secured with such obligations; (h) not to, merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or a 7 substantial portion of its assets (whether now owned or hereafter acquired) to any Person (except in the ordinary course of business and on commercially reasonable terms), or enter into any partnership, joint venture, syndicate, pool or other combination, unless no Event of Default has occurred and is continuing or would result therefrom and, in the case of a merger or consolidation, (i) the Guarantor is the surviving entity or (ii) the surviving entity assumes all of the Guarantor's obligations under this Guarantee in a manner satisfactory to the Bank. SECTION 7. Amendments. No amendment or waiver of any provision of this Guarantee ---------- nor consent to any departure by the Guarantor herefrom shall in any event be effective unless the same shall be in writing and signed by the Bank. No amendment, waiver or consent shall, unless in writing and signed by the Bank, limit the liability of the Guarantor hereunder or postpone any date fixed for payment hereunder, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 8. No Waiver; Remedies, Subrogation -------------------------------- (a) No failure on the part of the Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. (b) Failure by the Bank at any time or times hereafter to require strict performance by the Borrower or the Guarantor or any other person of any of the provisions. warranties, terms and conditions contained in any of the Agreement, or this Guarantee or any of the agreements entered into in connection therewith or herewith now or at any time or times hereafter executed by the Borrower or the Guarantor and delivered to the Bank shall not waive, affect or diminish any right of the Bank at any time or times hereafter to demand strict performance thereof and such right shall not be deemed to have been modified or waived by any act, course of conduct or knowledge of the Bank, its respective agents, officers or employees, unless such waiver is contained in an instrument in writing specifying such waiver signed by the Bank and directed and delivered to the Borrower or Guarantor. No waiver by the Bank of any default shall operate as a waiver of any other default or the same default on a future occasion, and no action by the Bank permitted hereunder shall in any way affect or impair any of its rights or the obligations of the Guarantor under this Guarantee. Any determination by a court of ompetent jurisdiction of the amount of any of the Guaranteed Obligations shall be conclusive and binding on the Guarantor irrespective of whether the Guarantor was party to the suit or action in which such determination was made. (c) Until all Guaranteed Obligations have been paid in full, the Guarantor shall not exercise any right of subrogation which it may acquire with respect to amounts paid hereunder. In the event that the Guarantor shall receive any payment on account of any such right of subrogation while any Guaranteed Obligations 8 remain outstanding, the Guarantor agrees to pay all such amounts so received to the Bank to be applied to payment of the Guaranteed Obligations then due and owing in accordance with the terms of the Agreement. SECTION 9. Continuing Guarantee. This Guarantee is a continuing guarantee and -------------------- shall (a) remain in full force and effect until terminated in accordance with Section 14, (b) be binding upon the Guarantor, and its successors and assigns, and (c) inure to the benefit of and be enforceable by the Bank and its permitted successors, transferees, and assigns who shall be permitted to, and who shall, become an assignee of the Bank's interest under the Agreement. SECTION 10. Reinstatement. This Guarantee shall remain in full force and effect ------------- and continue to be effective should any petition be filed by or against the Guarantor or the Borrower (each a "Loan Party" and, collectively, the "Loan Parties") for liquidation or reorganization, should any Loan Party become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of any Loan Party's assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Guaranteed Obligations or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount. or must otherwise be restored or returned by any obligee of the Guaranteed Obligations, whether as a "voidable preference", "fraudulent conveyance", or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored, or returned, the Guaranteed Obligations shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. SECTION 11. Governing Law. This Guarantee shall be governed by, and construed in ------------- accordance with, the laws of the State of New York (including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law), without regard to the provisions thereof relating to conflicts of laws. SECTION 12. Severability. Whenever possible, each provision of this Guarantee ------------ shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guarantee shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Guarantee. SECTION 13. Consent to Jurisdiction. The Guarantor hereby consents to the ----------------------- non-exclusive jurisdiction of any state court or any federal court located in New York City and agrees that all service of process may be made by registered mail directed to the Guarantor at the address and in the manner specified in the Agreement. The Guarantor waives any objection based on forum non conveniens and any objection to venue of any action instituted hereunder and consents to the granting of such legal or equitable relief as is deemed appropriate by the court. Nothing contained in this paragraph shall affect the right of the Bank to serve legal process in any other manner permitted by law or affect its right to bring any action or proceeding against the Guarantor or its property in the courts of any other competent jurisdiction. 9 SECTION 14. Termination. So long as no Event of Default shall have occurred and ----------- then be continuing, this Guarantee shall terminate and, except to the extent expressly provided in Section 2 above with respect to survival of Guaranteed Obligations all obligations hereunder shall be discharged and released upon the payment in full of all of the Guaranteed Obligations. SECTION 15. Currency. -------- (a) Payment shall be in Canadian Dollars or if collected in a different currency at the option of the Bank, such other currency shall be converted into Canadian Dollars at the spot rate of exchange of the Bank (as conclusively determined by the Bank) for purchasing such currency with Canadian Dollars prevailing on the date of actual payment and the Guarantor hereby agrees to indemnify the Bank against the full Canadian Dollar cost incurred by the Bank for such purpose. (b) No payment to the Bank (whether under any judgment or court order or otherwise) shall discharge the Guaranteed Obligations unless and until the Bank shall have received payment in full in the currency in which such Guaranteed Obligations were incurred or which the Bank has elected to accept under paragraph (a) of this Section 15 and to the extent that the amount of such payment shall on actual conversion into such currency fall short of the amount of the Guaranteed Obligations, actual or contingent, expressed in that currency, the Bank shall have a further separate cause of action against the Guarantor to recover the amount of the shortfall. (c) If and to the extent that the Guarantor fails to pay the amount due on demand, the Bank may in its absolute discretion without notice to the Guarantor purchase at any time thereafter so much of any currency as the Bank considers necessary or desirable to cover the Guaranteed Obligations in such currency hereby guaranteed at the then prevailing spot rate of exchange of the Bank (as conclusively determined by the Bank) for purchasing such currency with Canadian Dollars and the Guarantor hereby agrees to indemnify the Bank against the full Canadian Dollar cost incurred by the Bank for such purpose. (d) All moneys received or held by the Bank from the Borrower or under this Guarantee may from time to time after demand has been made by the Bank be converted into such other currency as the Bank considers necessary or desirable to cover the Guaranteed Obligations, actual or contingent, of the Borrower in that other currency at the then prevailing spot rate of exchange of the Bank (as conclusively determined by the Bank) for purchasing that other currency with the existing currency. SECTION 16. Miscellaneous. All references herein to the Borrower and to the ------------- Guarantor shall be deemed to include their respective permitted successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession of or for the Borrower or the Guarantor. All references to the singular shall be deemed to include the plural where the context so requires. 10 IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. STEELCASE INC. By: /s/ Gary P. Malburg ------------------------------------- Gary P. Malburg Its: Vice President, Finance and Treasurer ------------------------------------- 11 EX-4.19 11 dex419.txt AM DATED NOVEMBER 9, 2001 EXHIBIT 4.19 November 9, 2001 Steelcase Inc. 901 44th Street SE CH-23-06 Grand Rapids, MI 4508 Attention: Chief Financial Officer Steelcase Financial Services Ltd. 1 Steelcase Road West Markham, Ontario L3R OT3 Attention: Chief Financial Officer Dear Sirs: We refer to the facility agreement dated as of May 24, 2001 between Royal Bank of Canada (the "Bank") and Steelcase Financial Services Ltd. (the "Borrower"), as borrower, (the "Facilities Agreement") and to the Guarantee dated as of May 24, 2001 (the "Guarantee") made by Steelcase Inc. (the "Guarantor") for the benefit of the Bank relating to the indebtedness of the Borrower to the Bank under the Facilities Agreement. We hereby confirm our agreement, and each of you hereby agrees, to amend the Facilities Agreement and the Guarantee, subject to the following terms and conditions. 1. DEFINITIONS: Capitalized terms used and not defined herein have the meanings ascribed to such terms in the Facilities Agreement and the Guarantee. 2. AMENDMENTS: (a) The definition of "Shareholders' Equity" in the Facilities Agreement is deleted in its entirety and replaced with the following: ""Shareholders' Equity" means the aggregate of stated capital, retained earnings and Subordinated Debt; provided that there -------- shall be excluded from the calculation of Shareholders' Equity non-recurring non-cash charges attributable to the implementation of SFAS 142 not in excess of $150,000,000 in the aggregate for any Fiscal Year;" (b) Covenant (c)(i) of Section 6 of the Guarantee is deleted in its entirety and replaced with the following: (c) "(i) its Shareholders' Equity as at the end of each fiscal quarter in an amount not less than the difference between (a) the sum of (i) the Shareholders' Equity as of February 25, 2000, plus (ii) 25% of Net Income (if a positive number) from February 25, 2000 to the then most recent Fiscal Year End or Fiscal Second Quarter End, plus (iii) all Additions to Capital from February 25, 2000 to the then most recent Fiscal Year End or Fiscal Second Quarter End, and (b) $1,500,000,000;" 3. CONSENT: Each of the Borrower and the Guarantor confirms its agreement and consents to all the terms and conditions of this amending agreement. 4. GENERAL: (a) Each of the Borrower and the Guarantor agrees to take such action and execute and deliver such further documents as shall be reasonably required by the Bank in order to give effect to and carry out the intentions of this amending agreement. (b) Each of the Facilities Agreement and the Guarantee, as amended hereby, is hereby ratified and confirmed and remains in full force and effect, binding upon the parties in accordance with their respective terms. (c) This amendment shall be construed in accordance with and governed by the laws of Ontario, insofar as it relates to the amendment of the Facilities Agreement, and the laws of New York, insofar as it relates to the amendment of the Guarantee. (d) This amending agreement may be executed and delivered in counterparts, each of which when executed and delivered is an original, but both of which together constitute one and the same agreement. (e) The date on which this amending agreement becomes effective as the date appearing on the first page hereof. 2 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. Baker ---------------- Name/Title: B. R. Baker, Sr. Account Manager By: /s/ John Race ------------- Name/Title: JOHN RACE Sr. Acc. Mgr. We acknowledge and accept the terms and conditions of this amending agreement as of the 9th day of November, 2001, which acceptance is effective as of the date first above written. STEEL CASE INC. By: /s/ Gary P. Malburg ------------------- Name/Title: GARY P. MALBURG ---------------- VICE PRESIDENT & TREASURER STEELCASE FINANCIAL SERVICES LTD. By: /s/ Thomas P. Sullivan ---------------------- Name/Title: Thomas P. Sullivan ------------------- VP & CFO EX-4.20 12 dex420.txt LOAN AGREEMENT DATED APRIL 9, 1999 EXHIBIT 4.20 Execution Copy LOAN AGREEMENT US$220,000,000 STEELCASE SAS, as Borrower STEELCASE INC. as Guarantor SOCIETE GENERALE Chicago Branch as Lender dated as of April 9, 1999 Coudert Brothers 1114 Avenue of the Americas New York, NY 10036-7703 * * * * * * TABLE OF CONTENTS Page 1. DEFINITIONS ........................................................... 1 2. THE LOAN .............................................................. 8 2.1 Agreement to Lend ............................................... 8 ----------------- 2.2 Purpose of the Loan ............................................. 9 ------------------- 2.3 Drawdown ........................................................ 9 -------- 2.4 Repayment of Loan; Equity Repayment Option ...................... 9 ------------------------------------------ 2.5 Prepayment of Loan .............................................. 9 ------------------ 2.6 Protections with Respect to Repayment Shares .................... 11 -------------------------------------------- 2.7 Interest on the Loan ............................................ 11 -------------------- 2.8 Default Interest. ............................................... 12 ---------------- 2.9 General Provisions as to Payments ............................... 12 --------------------------------- 3. YIELD PROTECTION ...................................................... 13 3.1 Taxes ........................................................... 13 ----- 3.2 Increased Costs ................................................. 14 --------------- 3.3 Illegality of Maintaining the Loan............................... 15 ---------------------------------- 3.4 Cost Minimization; Adversity Prepayment ......................... 15 --------------------------------------- 3.5 Funding Losses .................................................. 16 -------------- 4. FEES, CHARGES AND INDEMNITY ........................................... 16 4.1 Fees and Expenses ............................................... 16 ----------------- 4.2 Lender's Costs and Expenses ..................................... 16 --------------------------- 4.3 Indemnification ................................................. 16 --------------- 5. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE BORROWER ........................................................ 17 5.1 Incorporation and Qualification ................................. 17 ------------------------------- 5.2 Power and Authority ............................................. 17 ------------------- 5.3 Authorization of Borrowing ...................................... 17 -------------------------- 5.4 Agreement Binding ............................................... 18 ----------------- 5.5 Registrations and Approvals ..................................... 18 --------------------------- 5.6 Litigation ...................................................... 18 ---------- 5.7 Subsidiaries .................................................... 18 ------------ 5.8 Title to Properties and Assets .................................. 19 ------------------------------ 5.9 Compliance with Law ............................................. 19 ------------------- 5.10 Other Obligations ............................................... 19 ----------------- 5.11 Full Disclosure ................................................. 19 --------------- 5.12 No Material Adverse Effect ...................................... 19 -------------------------- 6. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE GUARANTOR ....................................................... 20 6.1 Incorporation and Qualification ................................. 20 ------------------------------- 6.2 Power and Authority ............................................. 20 ------------------- 6.3 Authorization of Borrowing ...................................... 20 -------------------------- 6.4 Agreement Binding ............................................... 20 ----------------- 6.5 Litigation ...................................................... 21 ---------- 6.6 Financial Statements ............................................ 21 -------------------- 6.7 Title to Properties and Assets .................................. 21 ------------------------------ 6.8 Compliance with Law ............................................. 21 ------------------- 6.9 Other Obligations ............................................... 22 ----------------- 6.10 Capital Structure ............................................... 22 ----------------- 6.11 Full Disclosure ................................................. 22 --------------- 6.12 No Material Adverse Effect ...................................... 22 -------------------------- 6.13 Year 2000 Issue.................................................. 22 --------------- 6.14 Employee Benefit Plans........................................... 23 ---------------------- 7. AFFIRMATIVE COVENANTS OF THE BORROWER ................................. 23 7.1 Financial Statements ............................................ 23 -------------------- 7.2 Other Reporting Requirements. ................................... 24 ---------------------------- 7.3 Taxes ........................................................... 24 ----- 7.4 Maintenance and Continuity of Business .......................... 24 -------------------------------------- 7.5 Continuing Governmental Approvals ............................... 25 --------------------------------- 7.6 Further Documents ............................................... 25 ----------------- 7.7 Inspection ...................................................... 25 ---------- 7.8 Payment of Obligations .......................................... 25 ---------------------- 7.9 Pari Passu Ranking............................................... 25 ------------------ 8. AFFIRMATIVE COVENANTS OF THE GUARANTOR ................................ 26 8.1 Financial Statements; Other Reports ............................. 26 ----------------------------------- 8.2 Taxes ........................................................... 26 ----- 8.3 Maintenance and Continuity of Business .......................... 26 -------------------------------------- 8.4 Continuing Governmental Approvals ............................... 27 --------------------------------- 8.5 Maintenance of Properties ....................................... 27 ------------------------- 8.6 Year 2000 Issue ................................................. 27 --------------- 8.7 ERISA ........................................................... 27 ----- 8.8 Post-Closing Deliveries ......................................... 28 ----------------------- 9. NEGATIVE COVENANTS OF THE BORROWER .................................... 28 9.1 Merger; Sale of Assets .......................................... 28 ---------------------- 9.2 Indebtedness Limitation ......................................... 29 ----------------------- 10. NEGATIVE COVENANTS OF THE GUARANTOR ....................................29 10.1 Negative Pledge ................................................. 29 --------------- 10.2 Financial Covenants ............................................. 31 ------------------- ii 11. CONDITIONS PRECEDENT TO DRAWDOWN ..................................... 31 11.1 Authorizations ............................................... 31 -------------- 11.2 Note ......................................................... 32 ---- 11.3 Governmental Approvals ....................................... 32 ---------------------- 11.4 Opinions ..................................................... 32 -------- 11.5 Drawdown Certificate ......................................... 32 -------------------- 11.6 Guaranty ..................................................... 32 -------- 11.7 Financial Statements ......................................... 33 -------------------- 11.8 Receipt of Funds ............................................. 33 ---------------- 11.9 Fees.......................................................... 33 ---- 11.10 Other Documents .............................................. 33 --------------- 12. EVENTS OF DEFAULT .................................................... 33 12.1 Events of Default ............................................ 33 ----------------- 12.2 Right to Accelerate on Payment Default ....................... 34 -------------------------------------- 12.3 Right to Accelerate on Event of Default ...................... 35 --------------------------------------- 13. MISCELLANEOUS ........................................................ 35 13.1 Term ......................................................... 35 ---- 13.2 Entire Agreement ............................................. 35 ---------------- 13.3 Waiver; Cumulative Rights .................................... 35 ------------------------- 13.4 Assignment and Participation ................................. 36 ---------------------------- 13.5 Governing Law ................................................ 36 ------------- 13.6 Submission to Jurisdiction ................................... 36 -------------------------- 13.7 Notices ...................................................... 37 ------- 13.8 Severability ................................................. 38 ------------ 13.9 Confidentiality .............................................. 38 --------------- 13.10 Counterparts ................................................. 38 ------------ 13.11 Right of Setoff .............................................. 38 --------------- 13.12 Survival of Agreement ........................................ 39 --------------------- 13.13 WAIVER OF JURY TRIAL ......................................... 39 --------------------
iii ANNEX, EXHIBITS AND SCHEDULES Resolutions Annex A Promissory Note Exhibit A Drawdown Certificate Exhibit B Corporate Guaranty Exhibit C Opinion of Counsel to the Borrower Exhibit D Opinion of Counsel to the Guarantor Exhibit E Compliance Certificate, Steelcase SAS Exhibit F-1 Form of Compliance Certificate, Steelcase Inc. Exhibit F-2 Repayment Shares Schedule 1.58 Pending or Threatened Litigation of the Guarantor Schedule 6.5 Indebtedness of the Borrower Schedule 9.2 iv THIS LOAN AGREEMENT (the "Agreement") made as of April 9, 1999 by and among: STEELCASE SAS, a Societe par Actions Simplifiee organized and existing under the laws of the Republic of France, with its registered office at Tour Aurore 01, 18 Place des Reflets, 92975 Paris La Defense 2 Cedex, France (the "Borrower"), STEELCASE INC., a corporation organized and existing under the laws of the State of Michigan (the"Guarantor"), and SOCIETE GENERALE, a bank organized and existing under the laws of the Republic of France, acting through its Chicago Branch (the "Lender"), sets forth the binding agreement of the parties. SECTION 1. DEFINITIONS The following terms shall have the meanings set forth below: 1.1 "Additions to Capital" shall mean the aggregate net proceeds, including cash and the fair market value of property other than cash, received by the Guarantor from the issue or sale of capital stock of the Guarantor plus the aggregate of 25% of the after tax gains realized from unusual, extraordinary and major nonrecurring items. 1.2 "Affiliate" means (i) any Person that directly, or indirectly through one or more intermediaries, controls the Borrower (a "Controlling Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is controlled by or is under common control with a Controlling Person. As used herein, the term "control" means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 1.3 "Agreement" shall have the meaning set forth in the preamble. 1.4 "Authorized Representative" shall mean for purposes of this Agreement the following individuals (it being acknowledged that any such individual need not be an officer or employee of such person for other purposes) (a) in respect of any Compliance Certificate, the Secretary, the Chief Financial Officer, Treasurer or Assistant Treasurer; (b) in respect of any other delivery by: (i) the Borrower, any of its Chairman, President Directeur General or Chief Financial Officer or (ii) the Guarantor, any of its Chief Financial Officer, Treasurer or Assistant Treasurer; and (c) in respect of all matters relating to this Agreement, the Note and the Guaranty, another person designated in writing by any individual specified in clause (a) or clause (b) above as duly authorized to act on behalf of the (i) Borrower or (ii) the Guarantor, respectively, under and in respect of this Agreement, the Note or the Guaranty and any person acting under valid corporate power and authority as an officer or director of such person or a valid power of attorney on behalf of the Borrower or the Guarantor, as the case may be. 1.5 "Banking Day" shall mean a day other than a Saturday or Sunday on which commercial banks are open for business in Chicago, Illinois, U.S.A. and Paris, France. 1.6 "Banking Day Adjustment" shall mean, with respect to a day that is not a Banking Day, the next succeeding Banking Day. 1.7 "Beneficial Owner" or "Beneficial Ownership" shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended. 1.8 "Borrower" shall have the meaning set forth in the preamble. 1.9 "Breakage Cost" shall mean any and all losses and expenses incurred by the Lender arising from the termination of accrued or actual time deposits or other long term funding arrangements made in conjunction with funding the Loan during the Initial Period in the event of a prepayment of the Loan or acceleration following an Event of Default, in either case, for any reason. 1.10 "Change in Control" shall mean: (a) with respect to the Guarantor, (i) any Person or two or more Persons acting in concert (other than members of the Existing Control Group) shall have acquired Beneficial Ownership or the right to acquire Beneficial Ownership, directly or indirectly, of securities of the Guarantor (or other securities convertible into such securities) representing 35% or more of the combined voting power of all securities of the Guarantor entitled to vote in the election of directors, other than securities having such power only by reason of the happening of a contingency ("Share Acquisition"); or (ii) individuals who either (x) have been directors of the Guarantor for the prior 24-month period or (y) were nominated or elected by directors in office during such period (but prior to any Share Acquisition) shall cease for any reason to constitute a majority of the board of directors of the Guarantor, or (b) with respect to the Borrower, the Guarantor shall cease to hold Beneficial Ownership of a majority equity interest in the Borrower. 1.11 "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.12 "Commitment" shall mean the commitment of the Lender to advance a first Drawdown in the principal amount of US$100,000,000, plus, subject to the approval of the Lender acting in its sole discretion, one or more subsequent drawdowns not in excess of US$120,000,000 as agreed from time to time among the Borrower, the Lender and the Guarantor. 1.13 "Confidential Information" shall have the meaning set forth in Section 13.9.2. 1.14 "Consolidated Net Tangible Assets" shall mean, as of any particular time, for the Guarantor, the aggregate amount of assets after deducting therefrom (a) all current liabilities, (b) any current liability which has been reclassified as a long-term liability because such liability by its terms is extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed, and (c) all goodwill, excess of cost over assets acquired, patents, 2 copyrights, trademarks, trade names, unamortized debt discount and expense and other like intangibles, all as shown in the most recent consolidated financial statements of the Guarantor and its Subsidiaries prepared in accordance with GAAP. 1.15 "Debt" shall mean (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. 1.16 "Default Interest" shall have the meaning set forth in Section 2.8. 1.17 "Default Interest Rate" shall have the meaning set forth in Section 2.8. 1.18 "Drawdown" shall mean each borrowing by the Borrower of the Loan or a portion thereof. 1.19 "Drawdown Certificate" shall mean the drawdown certificate to be delivered by the Borrower to the Lender in connection with each Drawdown of the Loan, substantially in the form of Exhibit B attached --------- hereto. 1.20 "Drawdown Date" shall mean, with respect to any Drawdown, the date of the occurrence of such Drawdown, following the fulfillment, to the satisfaction of the Lender, of each of the conditions precedent set forth in Section 11 hereof. 1.21 "EBITDA" shall mean, 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. 1.22 "Effective Date" shall mean the date on which this Agreement is duly executed and delivered by all of the parties hereto. 1.23 "Equity Repayment Option" shall mean the option of the Borrower to repay the principal portion of the Loan by issuing the Repayment Shares to the Lender as set forth in Section 2.4.2. 1.24 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time. 1.25 "ERISA Affiliate" shall mean any trade or business (whether or not incorporated) that is a member of a group of which the Guarantor is a member and which is treated as a single employer under Section 414 of the Code. 1.26 "Event of Default" shall have the meaning set forth in Section 12.1. 3 1.27 "Existing Control Group" shall mean all of the Guarantor's directors and executive officers and beneficial owners of the Guarantor's Class B common stock as of the date of this Agreement. 1.28 "Final Maturity Date" shall mean the 30th anniversary of the first Drawdown Date. 1.29 "financial statements" shall include the consolidated statements of income, consolidated balance sheets, consolidated statements of cash flows, consolidated statements of shareholders' equity, and the notes thereto. 1.30 "First Drawdown Amount" shall mean One Hundred Million United States Dollars ($100,000,000), or such other amount as shall be requested by the Borrower and agreed by the Lender. 1.31 "First Drawdown Date" shall mean the Drawdown Date for the Drawdown of the First Drawdown Amount. 1.32 "Funding Losses" shall mean all costs, expenses and losses actually incurred by the Lender as a result of the failure of the Borrower to draw down funds which have been made available by the Lender for the Borrower pursuant to this Agreement as a result of the failure of the satisfaction of any of the conditions precedent to Drawdown after a Drawdown Certificate has been delivered, including the present value (discounted at the Lender's funding rate) of the loss arising from reemployment of such funds for the period from, and including, (i) the date on which funds would have been made available by the Lender (excluding, as applicable, the funds that would have been provided by reason of any participation in the Loan and taking into account the nature of the participation) specifically in order to fund the Loan at rates lower than the actual return to the Lender to (ii) the date on which such funds would have been redeployed by the Lender. 1.33 "GAAP" shall mean generally accepted accounting principles in effect in the United States of America or in France, as the case may be, from time to time, applied on a consistent basis. 1.34 "Guarantor" shall have the meaning set forth in the preamble. 1.35 "Guaranty" shall mean that certain corporate guaranty provided by the Guarantor in favor of the Lender, substantially in the form attached hereto as Exhibit C. 1.36 "Increased Costs" shall have the meaning set forth in Section 3.2.1. 1.37 "Indebtedness" shall mean (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, and (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds 4 referred to in clauses (i) through (iv) above. All amounts owed, directly or indirectly, by a Subsidiary or Affiliate of the Borrower or of the Guarantor (including without limitation, the Borrower) to another Subsidiary or Affiliate of the Borrower or of the Guarantor shall not constitute Indebtedness of such Subsidiary or Affiliate as long as such Subsidiary or Affiliate continues to remain as a Subsidiary or Affiliate of the Borrower or of the Guarantor. 1.38 "Initial Period" shall mean the period commencing on the Drawdown Date and ending on the seventh anniversary of the Drawdown Date, subject to Banking Day Adjustment; provided, however, that if there shall then be due and payable any Obligation in respect of the Initial Period Amount, or any amount payable to the Lender pursuant to Section 3 or Section 4 hereof, the Initial Period shall continue beyond such seventh anniversary date until such amounts have been paid in full. 1.39 "Initial Period Amount" shall mean, as of any date during the Initial Period, the sum of (a) the portion of the principal amount of the Loan equal to the present value of the aggregate amount of interest scheduled to be paid in respect of the Loan from and including such date through and including the last scheduled day of the Initial Period (where such present value shall be determined by discounting such aggregate amount at the Lender's funding rate), (b) any Default Interest due and payable and (c) Breakage, if any. 1.40 "Insolvency Event" means: (a) with respect to the Borrower, the application by the Borrower for the appointment of a conciliator (conciliator), the entering into by the Borrower of an amicable settlement (accord amiable) with its creditors or the cessation by the Borrower of its payments or the issuance of a judgment for the Borrower's judicial liquidation (liquidation judiciaire) or for a transfer of the whole of its business (cession totale de l'entreprise) pursuant to Articles 81 et seq. of the French Law of January 25, 1985, or the Borrower becoming subject to similar proceedings or, in the absence of legal proceedings, the Borrower making a conveyance, assignment or other arrangement for the benefit of its creditors or entering into a composition with its creditors, or passing a resolution for its winding-up or dissolution; (b) with respect to the Guarantor: (i) the Guarantor commences a proceeding or makes an application or petition to a court or other judicial or administrative forum for an order that the Guarantor be declared bankrupt or insolvent or be wound up or that an order be entered for the liquidation, reorganization or for other relief with respect to the debts of such Person or that a provisional liquidator be appointed; (ii) any application is made or any involuntary case or proceeding is commenced against the Guarantor seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency 5 or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, administrator or other similar official of it or any substantial part of its property, (unless the application is withdrawn, struck out or dismissed, or the case or proceeding is dismissed or terminated, within 60 days of it being made); or (c) a liquidator is appointed for the Guarantor. 1.41 "Interest Payment Date" shall mean the last day of each Interest Period. 1.42 "Interest Period" shall mean the semi-annual period commencing on the date of the first Drawdown and lasting until the date six months immediately thereafter (subject to any Banking Day Adjustment) and each successive semi-annual period thereafter commencing on the last day of the then ending Interest Period and ending on the next date six months immediately thereafter (subject to any Banking Day Adjustment) or, with respect to the final Interest Period, ending on the date of repayment of the Loan, whether by reason of a permitted prepayment, acceleration of the Loan following the occurrence of an Event of Default, or otherwise. 1.43 "Interest Rate" shall mean 7.5% per annum. 1.44 "Lender" shall have the meaning set forth in the preamble, and shall include transferees and assignees, if any, of the Lender pursuant to Section 13.4.1. 1.45 "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other) or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, and any lease having substantially the same effect as any of the foregoing). 1.46 "Loan" shall mean a loan in the initial principal amount of US$100,000,000 plus any subsequent drawdowns not in excess of US$120,000,000, in the aggregate, subject to any prepayment or repayment by the Borrower from time to time. 1.47 "Material Adverse Effect" shall mean a material adverse effect on (a) the financial condition or operations of the Guarantor and its consolidated Subsidiaries taken as a whole, (b) the legality, validity or enforceability of this Agreement, the Note or the Guaranty or (c) the ability of the Borrower or the Guarantor to perform their respective obligations under this Agreement, the Note or the Guaranty, as the case may be. 1.48 "Monthly Management Reports" shall have the meaning set forth in Section 6.6. 1.49 "Multiemployer Plan" shall mean a mulitemployer plan as defined in Section 4001(a)(3) of ERISA to which the Guarantor or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions. 6 1.50 "Net Income" shall mean net income in accordance with GAAP. 1.51 "Net Worth" shall mean minority interests, preferred stock and common stock and other equity, as shown on the consolidated balance sheet of the Guarantor and its Subsidiaries, provided, that there shall be excluded from the calculation of Net Worth any unrealized gains or losses (net of taxes) on securities available for sale. 1.52 "Note" shall mean a promissory note or promissory notes of the Borrower evidencing the Loan, being payable to the order of the Lender in the amount of the Loan, which note or notes shall be in the form of Exhibit ------- A attached hereto, or any promissory note(s) delivered by the Borrower - in extension, renewal or substitution therefor and evidencing all or part of such Loan. 1.53 "Obligations" shall mean (a) the unpaid principal of and interest on the Loan (including interest accruing at the then applicable rate provided in this Agreement (each rate being either the Interest Rate or the Default Interest Rate, as the case may be)), (b) all other obligations and liabilities of every nature of the Borrower from time to time owing to the Lender, in each case whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred (including monetary obligations incurred during the pendency of any proceeding based upon or arising out of an Insolvency Event, regardless of whether allowed or allowable in such proceeding), which may arise under, out of, or in connection with, this Agreement or the Note or under any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, premium, if any, interest, fees, indemnities, costs, expenses or otherwise (including all reasonable fees and disbursements of counsel to the Lender) that are required to be paid by the Borrower pursuant to the terms of this Agreement or the Note and, without duplication, (c) all obligations of the Guarantor hereunder and under the Guaranty. 1.54 "Payment Default" shall mean an Event of Default arising under Section 12.1.1 or 12.1.7. 1.55 "Person" or "person" shall mean any natural person, partnership, corporation, company, joint venture or other business entity. 1.56 "PBGC" shall mean the Pension Benefit Guarantee Corporation referred to and defined in ERISA and any successor thereto. 1.57 "Plan" shall mean any pension plan (other than an Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code which is maintained for employees of the Guarantor or any ERISA Affiliate. 1.58 "Repayment Shares" shall mean that number of shares of the Borrower as is set forth on Schedule 1.58 hereto, subject to Section 2.6. 1.59 "Reportable Event" shall mean any reportable event as defined in Section 4043(b) of ERISA or the regulations issued thereunder with respect to a Plan (other than a Plan 7 maintained by an ERISA Affiliate which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code). 1.60 "Subsidiary" shall mean, with respect to any Person, any corporation or other business entity of which such Person (or any other shareholding corporation referred to in the context in which the term is used) directly or indirectly owns more than fifty percent (50%) of the outstanding capital stock or other ownership interest having ordinary voting power to elect directors, managers or trustees of such corporation or other business entity, or any corporation or other business entity which is otherwise controlled directly or indirectly by such Person (or such shareholding corporation). Collectively, two or more subsidiaries of a Person shall be referred to as "Subsidiaries" of such Person. 1.61 "Taxes" shall mean any and all present or future taxes, duties, excises, levies, imposts, deductions, charges, or withholdings of any kind whatsoever levied or imposed by any taxing authority, together with any interest, penalties and additions to tax with respect thereto. 1.62 "Transaction Taxes" shall mean, with respect to the Borrower and the Guarantor, any and all present or future taxes, duties, excises, levies, imposts, deductions, charges, or withholdings of any kind whatsoever levied or imposed by any taxing authority with respect to any payment by the Borrower or the Guarantor, as the case may be, pursuant to this Agreement, the Note, the Guaranty or any other agreement pursuant or relating thereto, together with any interest, penalties and additions to tax with respect thereto other than Taxes imposed on or by reference to the net income of the Lender by any taxing jurisdiction. 1.63 "Unaudited Financial Statements" shall have the meaning set forth in Section 6.6. 1.64 "US Dollar" and "US$" shall mean the lawful money of the United States of America. 1.65 "Withdrawal Liability" shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. 1.66 "Year 2000 Issue" shall mean the failure of material computer software, hardware and firmware systems and equipment containing embedded computer chips to properly receive, transmit, process, manipulate, store, retrieve, re-transmit or in any other way utilize data and information due to the occurrence of the year 2000 or the inclusion of dates on or after January 1, 2000. SECTION 2. THE LOAN 2.1 Agreement to Lend ----------------- Subject to the terms and conditions of this Agreement, the Lender hereby agrees to lend to the Borrower, and the Borrower agrees to borrow from the Lender, the Loan. 8 2.2 Purpose of the Loan ------------------- The Borrower agrees that the Loan will be used for general corporate purposes including, without limitation, the purchase or redemption of shares. 2.3 Drawdown -------- The Borrower shall borrow the First Drawdown Amount in a single Drawdown on the First Drawdown Date and, subject to the approval of the Lender acting in its sole discretion, may borrow any number of subsequent Drawdowns at such time or times and in such amounts (but not to exceed, in the aggregate, the amount of the Commitment) as agreed from time to time among the Borrower, the Lender and the Guarantor. 2.4 Repayment of Loan; Equity Repayment Option ------------------------------------------ 2.4.1 Final Maturity Date. The Loan shall be repaid to the Lender in ------------------- one installment payable on the Final Maturity Date, accompanied by payment of all interest accrued to the Final Maturity Date and not previously paid. 2.4.2 Manner of Repayment; Equity Repayment Option. From and after the -------------------------------------------- seventh anniversary of the First Drawdown Date (subject to any Banking Day Adjustment), the Borrower shall have the right to exercise the Equity Repayment Option to repay the Loan by issuance of the Repayment Shares in lieu of the repayment of money for the principal portion of the Loan; provided that repayment of the principal portion of the Loan shall be accompanied by payment of all interest accrued to the Final Maturity Date and not previously paid. In the event that the Borrower elects the Equity Repayment Option, the Borrower shall issue to the entity entitled thereto the Repayment Shares as duly authorized and fully-paid and non-assessable shares. The Lender and any affected participant shall deliver a receipt acknowledging payment in full of the Loan, and the Lender shall surrender the Note for cancellation, and the Lender shall take all other actions (at the sole cost and expense of the Borrower) reasonably necessary or desirable (including without limitation, execution and delivery of a share subscription instrument (Bulletin de Souscription)) in order to consummate the Equity Repayment Option. 2.5 Prepayment of Loan ------------------ 2.5.1 Restricted Prepayment Right. Except as set forth in Section 3.4 --------------------------- in the context of adversity prepayment, no prepayment of the Loan shall be permitted from the First Drawdown Date until the Interest Payment Date occurring on the seventh anniversary of the First Drawdown Date subject to any Banking Day Adjustment. Any prepayment (including, without limitation, upon acceleration following an Event of Default) prior to the seventh anniversary of the First Drawdown Date subject to any Banking Day Adjustment shall be accompanied by accrued interest thereon to the date of prepayment and Breakage Cost (if any) applicable in respect of such prepayment. Commencing on the Interest Payment Date occurring on the seventh anniversary of the First Drawdown Date subject to any Banking Day Adjustment and continuing until the Final Maturity Date and 9 provided that there shall not then exist on the date of prepayment any default specified in Section 12.1.1, the Borrower shall have the right at any time to either (i) prepay the Loan, in whole or in part, in money or (ii) prepay the Loan in whole, by exercise of the Equity Repayment Option, in either case without any reimbursement to the Lender for Breakage Cost or any other penalty or premium whatsoever. 2.5.2 Voluntary Prepayments. All voluntary prepayments by the Borrower shall --------------------- be subject to the following: (a) The Borrower will give written notice of prepayment of the Loan (which notice shall be irrevocable, except as provided in clause (c) below) to the Lender not less than 30 nor more than 60 days prior to the date fixed for prepayment, specifying (a) such date and (b) the aggregate principal amount of the Loan to be prepaid on such date and a statement indicating whether it is electing to exercise the Equity Repayment Option. Notice of prepayment having been so given, the aggregate principal amount of the Loan specified in such notice, together with the accrued interest thereon shall become due and payable on the prepayment date specified in such notice. Not less than three (3) Banking Days before such prepayment date, the Lender shall deliver to the Borrower a certificate as to the amount of the interest due and payable through such prepayment date on the Loan, together with the amount of Lender's Breakage Cost (if any) due and payable in respect of such prepayment, setting forth the calculation thereof in reasonable detail, which certificate shall be conclusive in the absence of manifest error. (b) If, on or after the Interest Payment Date occurring on the seventh anniversary of the First Drawdown Date subject to any Banking Day Adjustment, the Borrower has elected to exercise the Equity Repayment Option, the Lender shall advise the Borrower of the name of the Person entitled to acquire the Repayment Shares (which shall be (i) the Lender as custodian for the participant or its nominee or (ii) the participant or its nominee). (c) The Borrower shall in no event be required to issue the Repayment Shares to any Person not acceptable to the Borrower, in its discretion, and shall have the right to modify its notice under clause (a) to revoke its election of the Equity Repayment Option if the shareholders of the Repayment Shares would be unacceptable to the Borrower. 2.5.3 Equity Repayment Option. In the event the Borrower elects the Equity ----------------------- Repayment Option (as permitted in Section 2.5.1), the Loan shall be repaid by issuance of the Repayment Shares in lieu of money for the principal portion of the Loan, together with accrued interest thereon to the prepayment date. The Borrower shall issue the Repayment Shares as duly authorized and fully-paid and non-assessable shares. The Lender and any affected participant shall deliver a receipt acknowledging payment in full of the Loan, the Lender shall surrender the Note for cancellation, and the Lender shall take all other actions (at the sole cost and expense of the Borrower) reasonably necessary or desirable (including 10 without limitation, execution and delivery of a share subscription instrument (Bulletin de Souscription) in order to consummate the Equity Repayment Option. 2.5.4 Failure to Prepay. If the Borrower fails to prepay the Loan after ----------------- notice has been given to the Lender in accordance with the terms of Section 2.5.1, the Borrower shall reimburse the Lender within five (5) days after demand for any resulting loss or expense incurred by the Lender, including (without limitation) Breakage Cost (if any) for the period after any such failure to prepay (after taking into account the nature of any participation in the Loan), provided that the Lender -------- shall have delivered to the Borrower a certificate as to the amount of such loss or expense, setting forth the calculation thereof in reasonable detail, which certificate shall be conclusive in the absence of manifest error. 2.6 Protections with Respect to Repayment Shares -------------------------------------------- 2.6.1 Antidilution. In the event of any change in the common stock of ------------ the Borrower, or any securities for which the Equity Repayment Option becomes exercisable as a result of any adjustment hereinafter provided for, by reason of any stock dividend, combination of shares, recapitalization (including any extraordinary cash or property dividend or distribution in the nature of a recapitalization), stock split or other similar event, the number of Repayment Shares shall be appropriately and equitably adjusted as may be necessary to prevent dilution or enlargement of rights. The existence of the Equity Repayment Option shall not limit or affect in any way the right or power of the Borrower to engage in any transaction described in this Section to the extent otherwise permitted by this Agreement. 2.6.2 Consolidations and Mergers. In the case of any permitted -------------------------- consolidation, amalgamation or merger of the Borrower with any other company (other than a consolidation, amalgamation or merger in which the Borrower is the continuing company), the company resulting from such consolidation, amalgamation or merger, as the case may be, shall be entitled to issue in lieu of the Repayment Shares such new shares and other equity securities receivable upon such consolidation, amalgamation or merger which will be as nearly equivalent as may be practicable to the value of the Repayment Shares immediately prior to such consolidation, amalgamation or merger. The existence of the Equity Repayment Option shall not limit or affect in any way the right or power of the Borrower to engage in any transaction described in this Section to the extent otherwise permitted by this Agreement. 2.7 Interest on the Loan. -------------------- 2.7.1 Payment of Interest. Interest on the principal amount of the Loan ------------------- shall be due and payable on each Interest Payment Date. 2.7.2 Computation of Interest. The Loan shall bear interest at the ----------------------- Interest Rate. Interest shall accrue on the basis of 30 day months and a year of 360 days and shall accrue from and including the first day of an Interest Period to but not including the last day of such Interest Period. 11 2.8 Default Interest. ---------------- Any principal of or interest on the Loan or any other amount payable by the Borrower under this Agreement which is not paid when due, whether on its stated due date, by acceleration, upon demand or otherwise, shall bear interest, to the extent permitted by applicable law, payable on demand, for each day from the date any such amount becomes or is declared due until paid in full at a rate (the "Default Interest Rate") per annum equal to the sum of the Interest Rate plus two percent (2%) (the "Default Interest"). Interest accruing under this Section shall be computed on the basis of 30 day months and a year of 360 days and actual days elapsed and shall be payable from time to time upon demand of the Lender. 2.9 General Provisions as to Payments --------------------------------- 2.9.1 Time of Payments. The Borrower shall make each payment of ---------------- interest on, and each payment, if any, of principal of, the Loan and of fees hereunder, not later than 12:00 Noon (Chicago, Illinois time) on the date when due, in immediately available funds in Chicago, Illinois, to the account of the Lender most recently designated by it for such purpose by notice to the Borrower. Any change by the Lender of such designation shall require at least five (5) Banking Days prior notice. Whenever any payment of principal of, or interest on, the Loan or of fees or other amounts shall be due on a day which is not a Banking Day, the date for payment thereof shall be extended to the next succeeding Banking Day unless such Banking Day falls in another calendar month, in which case the date for payment thereof, shall be the next preceding Banking Day. 2.9.2 Payments in United States Dollars. The Borrower shall make all --------------------------------- payments of principal, interest, fees and any other amount due to the Lender under this Agreement in United States Dollars in immediately available funds on the date such amounts are due. 2.9.3 Other Currencies. The tender or payment of any amount payable ---------------- under this Agreement (whether or not by recovery under a judgment) in any currency other than United States Dollars shall not novate, discharge or satisfy the obligation of the Borrower to pay in United States Dollars all amounts payable under this Agreement, except to the extent the Lender actually receives United States Dollars in its account in Chicago. 2.9.4 Exchange Rate Shortfall. If a currency other than United States ----------------------- Dollars is tendered or paid (or recovered under any judgment) and the amount the Lender receives in Chicago, acting in a commercially reasonable manner in purchasing United States Dollars with the amount of the other currency actually received at a rate of exchange that includes any premiums and costs of exchange payable in connection with such purchase, falls short of the full amount of United States Dollars owed to the Lender, then the Borrower shall continue to owe the Lender the amount of such shortfall (regardless of any judgment for any other amounts due under this Agreement). To the extent permitted by applicable law, this indemnity constitutes a separate and independent obligation from the other obligations in this Agreement, will be enforceable as a separate and independent cause of action, will apply notwithstanding any indulgence granted by the Lender and will not be affected by 12 judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement together with interest (at the Default Interest Rate) in respect of which payment is due. SECTION 3. YIELD PROTECTION 3.1 Taxes ----- 3.1.1 Gross-Up Requirements. Provided that the Lender has delivered the --------------------- forms specified in Section 3.1.4, all sums payable by the Borrower and the Guarantor hereunder or pursuant to the Guaranty, whether of principal, interest, fees, expenses or otherwise, shall be paid in full, free of any Transaction Taxes, all of which shall be paid directly to the appropriate taxing authority by the Borrower or the Guarantor, as the case may be, for the account of the Lender, and subject to Section 3.2.1(d) the Borrower or the Guarantor, as the case may be, shall pay such additional amount to or for the benefit of the Lender as may be necessary in order that the actual amount received after payment of Transaction Taxes (and after payment of any additional Transaction Taxes or other charges due as a consequence of the payment of such additional amount) shall equal the amount that would have been received if such payment of Transaction Taxes were not required. Notwithstanding the foregoing, if the Lender is exempt from or subject to a reduced rate of withholding tax and becomes subject to Taxes because of its failure to deliver the forms specified in Section 3.1.4, the Borrower shall take such steps as the Lender may reasonably request to assist the Lender to recover such Taxes. 3.1.2 Payment of Legally Required Taxes. The Borrower and the Guarantor --------------------------------- shall pay directly to the appropriate taxing authority any and all present and future Taxes imposed by law or by any taxing authority on or with regard to any aspect of the transaction contemplated by this Agreement or the execution and delivery of this Agreement or other documentation hereunder. Subject to Section 3.2.1(d), this obligation shall not extend to any Taxes imposed on or by reference to the net income of the Lender by any taxing jurisdiction. Regardless of who is deemed obligated for any Taxes referred to in the first sentence of this Section 3.1.2 by a taxing authority, the Borrower and the Guarantor shall have the right to actively participate in and control the challenge to any such Taxes, subject to the Borrower and the Guarantor providing prior written confirmation of their joint and several indemnification obligation as provided herein to the Lender. The Borrower and the Guarantor shall indemnify and hold the Lender harmless from any liability with respect to the delay or failure by the Borrower or the Guarantor to pay any such Taxes for which they are responsible. 3.1.3 Tax Receipts. If the Borrower or the Guarantor shall pay any ------------ Transaction Taxes, the Borrower or the Guarantor, as the case may be, shall promptly forward to the Lender official receipts or other evidence reasonably acceptable to the Lender establishing payment of such amounts. 3.1.4 United States Tax Forms. At or prior to the First Drawdown (and ----------------------- from time to time thereafter if requested in writing by the Borrower or the Guarantor to do so, but only 13 so long as the Lender remains lawfully able to do so) the Lender shall provide the Borrower and the Guarantor with Internal Revenue Service form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that the Lender is entitled to benefits under an income tax treaty to which the United States is a party which exempts the Lender from United States withholding tax or reduces the rate of withholding tax on the payment of interest for the account of the Lender or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States. 3.2 Increased Costs --------------- 3.2.1 Indemnity. If, by reason of (a) any change in law, rule or --------- regulation or in its interpretation or administration and/or (b) compliance with any future request from or requirement of any central bank or other fiscal, monetary or other authority whether or not having the force of law (including, without limitation, a request or requirement which affects the manner in which the Lender is required to maintain capital resources and, if not having the force of law, only if compliance is customary) with regard to the Lender's obligations hereunder and to amounts owing to it hereunder: (a) the Lender incurs a cost as a result of the Lender's having entered into and/or performing its obligations under this Agreement; (b) the Lender incurs a cost by reason of an increase in the amount of capital required or expected to be maintained by the Lender and the Lender has reasonably determined that a portion of such increase is allocable to the Loan or the Commitment; (c) there is any increase in the cost to the Lender of funding or maintaining all or any part of the Loan made or to be made by the Lender hereunder (excluding amounts participated out); or (d) the Lender becomes liable to make any payment on account of Taxes or otherwise (not being a Tax on the net income of the Lender (i) imposed by the jurisdiction in which it is incorporated or in which its lending office is located or (ii) imposed by a taxing authority of France as a direct result of the Lender's business activities in France other than the making of the Loan or the receipt of payments with respect thereto) on or calculated by reference to the amount of the Loan made by the Lender hereunder and/or to any sum received or receivable by it hereunder (other than as a result of the Lender's failure to deliver the forms specified in Section 3.1.4); then the Borrower shall, from time to time on demand of the Lender, promptly pay to the Lender amounts sufficient to indemnify the Lender against, as the case may be, (1) any such cost, (2) any such allocable cost, as certified by the Lender in reasonable detail (which shall be binding absent manifest error), (3) such increased cost (or such proportion of such increased cost as is, in the reasonable opinion of the Lender, attributable to its 14 funding or maintaining the Loan hereunder) and/or (4) such liability, as the case may be, (collectively, "Increased Costs") provided, however that Borrower shall not be obligated to indemnify the Lender for any Increased Costs to the extent the Lender has actual knowledge of such Increased Costs and fails to give the Borrower notice of such amount within 90 days of the date the Lender acquires such actual knowledge. 3.2.2 Payment of Increased Costs. The Borrower shall pay to the Lender, -------------------------- upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as the Lender shall reasonably determine after consultation with the Borrower) as shall be required to compensate the Lender for such Increased Costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts owed to the Lender, showing the basis for the calculation thereof, submitted to the Borrower by the Lender in good faith shall be conclusive absent manifest error) provided, however that Borrower shall not be obligated to indemnify the Lender for any Increased Costs to the extent the Lender has actual knowledge of such Increased Costs and fails to give the Borrower notice of such amount within 120 days of the date the Lender acquires such actual knowledge. 3.3 Illegality of Maintaining the Loan. ---------------------------------- If, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender with any request or directive of any such authority, central bank or comparable agency shall make it unlawful or impossible to maintain the Loan, then the Lender shall be entitled to require the Borrower to prepay the Loan upon at least ten (10) days notice to the Borrower (or such shorter period as may be required in order to allow the Lender to comply with relevant law). The Lender shall promptly notify the Borrower of any change in the law of which it becomes aware that would result in the Loan becoming illegal and, if requested in writing, shall deliver to the Borrower an opinion of legal counsel supporting such determination not later than thirty (30) days after the date of prepayment. The Borrower shall pay for any and all legal fees and expenses incurred by the Lender in obtaining such opinion pursuant to this Section. 3.4 Cost Minimization; Adversity Prepayment --------------------------------------- If, at any time, the Borrower is required to make a payment to the Lender or any tax authority pursuant to the provisions of any of Sections 3.1, 3.2 or 3.3 and without in any way limiting, reducing or otherwise qualifying the Borrower's obligations under such Sections and provided that the Lender, in its sole discretion, is satisfied that it will not suffer any material economic, legal, regulatory or other disadvantage in taking such action, the Lender agrees that it will act in good faith to minimize the amount of such payment, provided, that if the requirement for such payment is not eliminated, the Borrower shall have the right to prepay the Loan in accordance with Section 2.5.1, 15 provided, further, that in case of any prepayment pursuant to this Section, the Borrower shall not be entitled to the Equity Repayment Option. 3.5 Funding Losses -------------- In the event that a Drawdown does not occur as a result of a failure to satisfy the conditions precedent to Drawdown or the Borrower declines to borrow after delivery of a Drawdown Certificate, the Borrower shall reimburse the Lender on demand for all Funding Losses incurred by the Lender. The Lender shall act in good faith to minimize its Funding Losses and shall certify the amount and a reasonable description thereof to the Borrower in the event that Funding Losses are incurred for which reimbursement from the Borrower is due hereunder, which certificate shall be binding upon the Borrower in the absence of manifest error. SECTION 4. FEES, CHARGES AND INDEMNITY 4.1 Fees and Expenses ----------------- The parties agree that the Lender and any of its affiliates, as the case may be, will be paid the fees and expenses specified in, and under the terms and conditions of, this Agreement, the Note, the Guaranty or any other agreement pursuant or relating thereto, and that the Guarantor shall pay all fees and expenses of the professional advisors to the Lender and any of its affiliates as provided for in such agreements. 4.2 Lender's Costs and Expenses --------------------------- The Borrower shall reimburse the Lender on demand for all costs and expenses, including without limitation, fees and expenses of counsel and fees and expenses of other professional advisers and all other out-of-pocket costs and expenses of the Lender, incurred (i) including the reasonable fees and expenses of counsel in connection with the preparation, execution and delivery of this Agreement and the other agreements entered into in connection herewith any future amendment, modification or supplement hereto, (ii) in the enforcement of this Agreement, the Note or the Guaranty, (iii) the collection of any of the Obligations, (iv) the workout or restructuring thereof and (v) the administration of the Loan after the occurrence of an Event of Default, whether or not the Lender gives notice of such Event of Default or demands acceleration of the Loan or takes other action to enforce this Agreement, the Note or the Guaranty. 4.3 Indemnification --------------- The Borrower agrees to indemnify the Lender and its Subsidiaries and their respective directors, officers, employees, advisors, representatives, agents and controlling persons (collectively the "Indemnified Parties") from and against any and all losses, claims, damages, expenses and liabilities, joint or several, to which any of the Indemnified Parties may become subject related to, arising out of, or in connection with this Agreement, the Note or the Guaranty or any of the transactions contemplated herein or therein or any use of the proceeds of the Loan by the Borrower; provided that none of the 16 Indemnified Parties shall be entitled to any indemnification for any of the foregoing that are finally judicially determined to have resulted primarily from an Indemnified Party's gross negligence or willful misconduct. The Borrower further agrees to reimburse each Indemnified Party immediately upon request for all expenses (including reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for, defense of, or providing evidence in, any commenced or threatened action, claim, proceeding or investigation (including, without limitation, usual and customary per diem compensation for any Indemnified Party's involvement in discovery proceedings or testimony), relating to or arising out of any matter referred to in this Agreement, including, without limitation, the performance by the Indemnified Parties of the services contemplated in this Agreement, the Note or the Guaranty, whether or not such Indemnified Party is a party and whether or not such action, claim, proceeding or investigation is initiated or brought by or on behalf of the Borrower or any of its affiliates, except that the Indemnified Parties shall not be entitled to any reimbursement for any expenses that result from an Indemnified Party's gross negligence or willful misconduct. If and to the extent that the indemnity or reimbursement obligations of the Borrower under this Section may be unenforceable for any reason, the Borrower agrees to make the maximum contribution to the payment and satisfaction of each of such indemnity or reimbursement obligations which is permissible under applicable law. SECTION 5. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE BORROWER The Borrower and the Guarantor each hereby represent and warrant to the Lender as of the Effective Date with respect to the Borrower as follows: 5.1 Incorporation and Qualification ------------------------------- The Borrower has been duly created as a Societe par Actions Simplifiee in accordance with the laws of France, is validly existing under those laws and has power and authority to carry on its business as it is now being conducted. 5.2 Power and Authority ------------------- The Borrower has power to enter into and observe its obligations under this Agreement and the Note. The Borrower has in full force and effect the authorizations necessary to enter into this Agreement and the Note, observe obligations under them and allow them to be enforced. 5.3 Authorization of Borrowing -------------------------- This Agreement and the Note and the transactions under them do not contravene the Borrower's constituent documents or any law, regulation or official directive or any of its 17 obligations or undertakings by which it is bound or cause a limitation on its powers or the powers of its directors to be exceeded. 5.4 Agreement Binding ----------------- This Agreement constitutes, and the Note when executed and delivered pursuant hereto will constitute, the legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general and by general principles of equity. The execution, delivery and performance of this Agreement and the Note and the monetary payment of all amounts due on the dates and in the currency provided for herein and therein (a) will not violate any provision of law or other governmental directive having the force of law, (b) will not conflict with the By-Laws or other governing documents of the Borrower, (c) will not contravene any material governmental guideline or policy statement applicable to the Borrower, (d) will not conflict with the By-laws (Statuts) or other governing documents of the Borrower, (e) will not conflict with or result in the breach of any provision of any material agreement under which the Borrower has incurred Indebtedness and will not conflict with or result in the breach of any provision of any other material agreement to which the Borrower is a party or by which it or any of its properties or assets is bound, (f) will not constitute a default or an event that with the giving of notice or the passing of time, or both, would constitute a default under any such agreement, and (g) will not result in the creation or imposition of any lien, charge or encumbrance on any of the assets or the property of the Borrower. 5.5 Registrations and Approvals --------------------------- All governmental approvals, authorizations, consents, licenses, opinions, filings or registrations with any government agency in France required prior to the execution and delivery of this Agreement and the Note and the consummation of the transactions contemplated hereby and thereby have been obtained and are in full force and effect. All governmental approvals, authorizations, consents, licenses, opinions, filings or registrations with any government agency in France necessary for the performance by the Borrower of its obligations under this Agreement (including, without limitation, foreign exchange permits, if any, regarding US Dollar payments due or payable hereunder) shall have been obtained and shall be in full force and effect prior to the First Drawdown Date. 5.6 Litigation ----------- There are no arbitration or litigation proceedings pending or threatened against the Borrower and no proceedings before any court or government agency pending or threatened against the Borrower or relating to this Agreement or the Note or any of the transactions contemplated hereby or thereby which if adversely determined could singly or in the aggregate have a Material Adverse Effect. 5.7 Subsidiaries ------------ 18 The Borrower has no Subsidiaries other than Steelcase Strafor S.A., (an ownership interest in which will be acquired contemporaneously with the First Drawdown Date) and its Subsidiaries. 5.8 Title to Properties and Assets ------------------------------ The Borrower has good and marketable title (whether ownership or leasehold) to all the material properties and assets used in its business. 5.9 Compliance with Law ------------------- The Borrower is conducting its business and operations in compliance with all material applicable laws, rules and regulations and directives of governmental authorities having the force of law applicable to it or its properties and assets, including but not limited to employment, employee benefit, occupational health and safety, superannuation and environmental laws, rules and regulations and is in compliance with all material applicable government guidelines and policy statements. The Borrower has filed all tax returns other than those for which the deadline for filing, as may have been extended, has not yet passed, and paid all Taxes due in respect of the ownership of its properties and assets or the conduct of its business and operations, except to the extent that the payment of such Taxes is being contested in good faith and by appropriate proceedings, adequate reserves having been provided for the payment thereof in accordance with generally accepted accounting principles in France, consistently applied. The Borrower is not currently subject to audit by any governmental tax authority, which could reasonably be expected to result in an assessment for unpaid Taxes which would, singly or in the aggregate, have a Material Adverse Effect. 5.10 Other Obligations ----------------- The Borrower is not in material default under any agreement relating to, or instrument evidencing, Indebtedness to which it is a party or by which it is bound. 5.11 Full Disclosure --------------- The information, reports, exhibits and schedules furnished in writing to, by or on behalf of the Borrower to the Lender in connection with the negotiation, preparation or delivery of this Agreement and the other loan documents referred to or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. 5.12 No Material Adverse Effect -------------------------- Since the date of the information, reports, exhibits and schedules referred to in Section 5.11, no event has occurred, which could be expected to have a Material Adverse Effect. 19 SECTION 6. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE GUARANTOR The Guarantor hereby represents and warrants to the Lender as of the Effective Date with respect to the Guarantor as follows: 6.1 Incorporation and Qualification ------------------------------- The Guarantor is a company duly organized, validly existing and in good standing under the laws of the State of Michigan. The Guarantor is qualified or registered to do business in every jurisdiction where the failure to be so qualified or registered, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 6.2 Power and Authority ------------------- The Guarantor has full legal right, power and authority, including all approvals, consents, licenses, permits, opinions, filings, registrations and other authorizations of each government agency (collectively, "Authorizations") necessary or advisable to carry on its business as it is presently conducted and to own its properties and assets, except where the failure to possess such Authorizations would not have a Material Adverse Effect. All Authorizations necessary for the performance by the Guarantor of its obligations under this Agreement shall have been obtained and shall be in full force and effect prior to the First Drawdown Date. The Guarantor has full legal right, power and authority to execute and deliver this Agreement and the Guaranty, and to perform its obligations hereunder and under the Guaranty. 6.3 Authorization of Borrowing -------------------------- The Guarantor has taken all necessary and appropriate action to authorize the execution and delivery of this Agreement and the Guaranty and to authorize the performance and observance of the terms hereof and thereof. 6.4 Agreement Binding ----------------- This Agreement constitutes, and the Guaranty when executed and delivered pursuant hereto will constitute, the legal, valid and binding obligations of the Guarantor enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general and by general principles of equity. The execution, delivery and performance of this Agreement and the Guaranty and the monetary payment of all amounts due on the dates and in the currency provided for herein and therein (a) will not violate any provision of law or other governmental directive having the force of law, (b) will not conflict with the Certificate of Incorporation or By-laws or other governing documents of the Guarantor, (c) will not conflict with or result in the breach of any provision of any material agreement under which the Guarantor has incurred Indebtedness and will not conflict with or result in the breach of any provision of any other material agreement to which the Guarantor is a party or by which it or any of its properties or 20 assets is bound, (d) will not constitute a default or an event that with the giving of notice or the passing of time, or both, would constitute a default under any such agreement, and (e) will not result in the creation or imposition of any lien, charge or encumbrance on any of the assets or the property of the Guarantor. 6.5 Litigation ----------- Except as described in Schedule 6.5 hereto, there are no arbitration, ------------ litigation, governmental, administrative or other proceedings pending or threatened against the Guarantor or relating to this Agreement and the Guaranty or any of the transactions contemplated hereby or thereby which, if adversely determined, could singly or in the aggregate have a Material Adverse Effect. 6.6 Financial Statements -------------------- The Guarantor has heretofore delivered to the Lender (i) the audited consolidated financial statements of the Guarantor for the fiscal year ended February 27, 1998 (the "Audited Financial Statements"), the unaudited consolidated financial statements of the Guarantor for the fiscal year ended February 26, 1999 (the "Unaudited Financial Statements"), and (iii) the consolidated monthly management reports of the Guarantor for each of January and February 1999 (the "Monthly Management Reports"). The Audited Financial Statements are complete and correct and fairly present the financial condition and the results of operations of the Guarantor on the date thereof and for the period then ended in accordance with GAAP, subject to normal year-end adjustments in the case of the Unaudited Financial Statements. There are no material liabilities, direct or indirect, fixed or contingent, of the Guarantor as of the date of this Agreement that are not reflected or reserved against in the Audited Financial Statements, the Unaudited Financial Statements or in the notes thereto. 6.7 Title to Properties and Assets ------------------------------ The Guarantor has good and marketable title (whether ownership or leasehold) to all the material properties and assets used in its business, ownership of which is reflected in its most recent balance sheet contained in the Audited Financial Statements and the Unaudited Financial Statements referred to in Section 6.6, except for properties or assets that have been disposed of in the ordinary course of business. 6.8 Compliance with Law ------------------- The Guarantor and each of its Subsidiaries is and are conducting their respective businesses and operations in compliance with all applicable laws, rules and regulations and directives of governmental authorities having the force of law applicable to such Person or its properties and assets, including but not limited to employment, employee benefit, occupational health and safety, superannuation and environmental laws, rules and regulations and are in compliance with all applicable government guidelines and policy statements. The Guarantor and each of its Subsidiaries have filed all tax returns other 21 than those for which the deadline for filing, as may have been extended, has not yet passed, and paid all Taxes due in respect of the ownership of their respective properties and assets or the conduct of their operations except to the extent that the payment of such Taxes is being contested in good faith and by appropriate proceedings, adequate reserves having been provided for the payment thereof in accordance with GAAP, consistently applied. Neither the Guarantor nor any of its Subsidiaries is currently subject to audit by any governmental tax authority, which could reasonably be expected to result in an assessment for unpaid Taxes which could, singly or in the aggregate, have a Material Adverse Effect. 6.9 Other Obligations ----------------- Neither the Guarantor nor any of its Subsidiaries is in material default under any agreement relating to, or instrument evidencing, Indebtedness to which it is a party or by which it is bound. 6.10 Capital Structure ----------------- The Guarantor is the owner, directly or indirectly, of 100% of the issued and outstanding equity of the Borrower. 6.11 Full Disclosure --------------- (a) The annual report of the Guarantor for the year ended February 27, 1998, (b) the financial statements delivered to the Lender in accordance with Section 6.6, and (c) all filings of the Guarantor with the Securities and Exchange Commission preceding the date hereof, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. 6.12 No Material Adverse Effect -------------------------- Since the date of the most recent financial statements or Monthly Management Reports referred to in Section 6.6, no event has occurred, which could reasonably be expected to have a Material Adverse Effect. 6.13 Year 2000 Issue. --------------- The Guarantor and its Subsidiaries have reviewed the effect of the Year 2000 Issue on the computer software, hardware and firmware systems and equipment containing embedded microchips owned or operated by or for the Guarantor and its Subsidiaries or used or relied upon in the conduct of their business (including systems and equipment supplied by others or with which such computer systems of the Guarantor and its Subsidiaries interface). The costs to the Guarantor and its Subsidiaries of any reprogramming required as a result of the Year 2000 Issue to permit the proper functioning of such systems and equipment and the proper processing of data, and the testing of such reprogramming, and of the reasonably foreseeable consequences of the Year 2000 Issue to the Guarantor or 22 any of its Subsidiaries (including reprogramming errors and the failure of systems or equipment supplied by others) are not reasonably expected to result in an Event of Default or to have a Material Adverse Effect. 6.14 Employee Benefit Plans. ---------------------- The Guarantor and each of its ERISA Affiliates is in compliance in all material respect with the applicable provisions of ERISA and the regulations and published interpretations thereunder. No Reportable Event has occurred as to which the Guarantor or any ERISA Affiliate was required to file a report with the PBGC, and the present value of all benefit liabilities under each Plan (based on those assumptions used to fund such Plan) did not, as of the last annual valuation date applicable thereto, exceed by a material amount the value of the assets of such Plan. Neither the Guarantor nor any ERISA Affiliate has incurred any Withdrawal Liability that could result in a Material Adverse Effect. Neither the Guarantor nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated where such reorganization has resulted or could reasonably be expected to result, through increases in the contributions required to be made to such Plan, in a Material Adverse Effect. SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER In addition to the other undertakings herein contained, the Borrower hereby covenants to the Lender that during the term of this Agreement and until all of the Obligations are paid in full, the Borrower shall perform the following obligations: 7.1 Financial Statements -------------------- 7.1.1 Delivery of Statutory Accounts. As soon as available but not ------------------------------ later than 120 days after the end of each of its fiscal years, the Borrower shall deliver to the Lender a copy of its statutory accounts, as at and for the accounting period then ended (prepared in accordance with the requirements for such accounts under French law). 7.1.2 Delivery of Quarterly GAAP Financial Statements. Within 120 days ----------------------------------------------- after the end of each fiscal quarter that is not a fiscal year end, the Borrower shall deliver to the Lender a copy of unaudited quarterly financial statements for such quarter which shall be based on the Steelcase Inc. consolidated unaudited quarterly financial statements prepared in accordance with GAAP, appropriately adjusted to reflect the operations of the Borrower. 7.1.3 Compliance Certificate. At the time the statutory accounts are ---------------------- delivered under Section 7.1.1, the Borrower shall deliver to the Lender a Compliance Certificate substantially in the form of Exhibit F-1 hereto, signed by an Authorized Representative of the Borrower certifying that the Borrower was during the prior fiscal period in compliance with all provisions hereof applicable to the Borrower and that no Event of Default or event that with passage of time or notice or both would constitute an Event of Default occurred 23 during such period and is not continuing on the date of such certificate or if any Event of Default or such other event occurred or is continuing, a statement to that effect and a statement of the actions taken and proposed to be taken with respect thereto. 7.2 Other Reporting Requirements. The Borrower shall furnish the Lender: ---------------------------- 7.2.1 as soon as possible and in any event within five (5) days after the occurrence of each Event of Default set forth in Section 12 (other than Section 12.1.1) and each event which, with the giving of notice or lapse of time, or both, would constitute such an Event of Default, a statement of the chief financial officer of the Borrower setting forth details of such Event of Default or event and the action which the Borrower has taken and proposes to take with respect thereto; 7.2.2 promptly after the sending or filing thereof, copies of any other documents or reports relating to the conduct of its business and the results of its operations which are distributed to other creditors of the Borrower or which they shall reasonably request from time to time; 7.2.3 promptly after (a) the occurrence thereof, notice of the institution of or any material adverse development in any material action, suit or proceeding or any governmental investigation or any arbitration, before any court or arbitrator or any governmental or administrative body, agency or official, against the Borrower or any of its material property, or (b) actual knowledge thereof, notice of the threat of any such action, suit, proceeding, investigation or arbitration; and 7.2.4 any other documents or reports relating to the conduct of the Borrower's business and the results of its operations which the Lender shall reasonably request from time to time. 7.3 Taxes ----- The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge all Taxes and other governmental charges upon it or against any of its properties or assets prior to the date after which penalties attach for failure to pay, except to the extent that the Borrower or such Subsidiary shall be contesting in good faith by appropriate proceedings its obligation to pay such Taxes or charges, adequate reserves having been set aside for the payment thereof in accordance with customary practice in France. The Borrower shall, and shall cause each of its Subsidiaries to, make timely filings of all material tax returns and governmental reports required to be filed or submitted under any applicable laws or regulations. The Borrower shall give written notice to the Lender in accordance with Section 13.7 hereof within five Banking Days of any (i) tax audit or (ii) notice of deficiency with respect to any French tax payable that may concern the Loan. 7.4 Maintenance and Continuity of Business -------------------------------------- 24 The Borrower shall, and shall cause each of its Subsidiaries to, maintain its valid existence under, and in compliance with, all applicable laws, rules and regulations and shall maintain all necessary licenses and the present character of its business, except where such noncompliance or failure to maintain licenses or the present character of business could not have a Material Adverse Effect. The Borrower shall, and shall cause its Subsidiaries to, conduct its business in compliance with all applicable laws, rules and regulations binding on it or any of its operations or properties, including but not limited to employment, employee benefit, occupational health and safety, superannuation and environmental laws, rules and regulations, except where such noncompliance could not have a Material Adverse Effect. 7.5 Continuing Governmental Approvals --------------------------------- The Borrower agrees to take all measures which are necessary to continue in full force and effect all governmental approvals, filings or registrations, if any, obtained or made in connection with this Agreement and the Note. The Borrower further agrees to take all necessary or advisable measures to obtain any new or additional governmental approvals as become necessary or advisable for the performance of all of the terms and conditions of this Agreement and the Note. 7.6 Further Documents ----------------- The Borrower shall execute all such other documents and instruments and perform all such other acts as the Lender may reasonably require to carry out the transactions contemplated herein or in the documents required to be delivered hereunder. 7.7 Inspection ---------- The Borrower shall from time to time upon receipt of at least five (5) Banking Days advance written notice, with reasonable promptness, for purposes pertinent to this Agreement or to a credit decision relating to this Agreement, permit the Lender or any agents or representatives thereof, at their own expense, to visit the properties of the Borrower and its Subsidiaries during normal business hours and to discuss the affairs, finances and accounts of the Borrower with any of its appropriate officials. Any information obtained by the Lender shall be kept confidential as required by Section 13.9 hereof. 7.8 Payment of Obligations ---------------------- The Borrower shall generally pay and discharge all its monetary obligations of whatever nature and kind as and when due in accordance with their terms, where the failure to pay any one or more such obligations individually or in the aggregate would have a Material Adverse Effect, unless such obligations are being contested in good faith in appropriate legal proceedings. 7.9 Pari Passu Ranking. ------------------ 25 The Borrower covenants that the Obligations, including the Note, does and will rank at all times during the term of the Loan as direct, senior obligations of the Borrower, at least pari passu with all of the Borrower's other present and future senior Indebtedness. SECTION 8. AFFIRMATIVE COVENANTS OF THE GUARANTOR For so long as the Guaranty shall remain in effect, the Guarantor shall comply with the covenants set forth in this Section 8. 8.1 Financial Statements; Other Reports ----------------------------------- 8.1.1 Delivery of Financial Statements. As soon as available (a) but not -------------------------------- later than 120 days after the end of each of the Guarantor's fiscal years, the Guarantor shall deliver to the Lender a copy of the Guarantor's audited financial statements, as at and for the fiscal year then ended (prepared in accordance with the requirements of GAAP) and (b) no later than 60 days after the end of each of the first three quarters of the fiscal year of the Guarantor, the Guarantor shall deliver a copy of the Guarantor's unaudited quarterly financial statements for the quarter then ended to the Lender. 8.1.2 Compliance Certificate. At the time the financial statements are ---------------------- delivered under Section 8.1.1, the Guarantor shall deliver to the Lender a Compliance Certificate substantially in the form of Exhibit F-2 hereto, signed by an Authorized Representative of the Guarantor certifying that the Guarantor and the Borrower were during the prior period in compliance with all provisions hereof applicable and that no Event of Default or event that with passage of time or notice or both would constitute an Event of Default occurred during such period and is not continuing on the date of such certificate or if any Event of Default or such other event occurred or is continuing, a statement to that effect and a statement of the actions taken and proposed to be taken with respect thereto. The compliance certificate shall be accompanied by calculations in reasonable detail showing compliance (or non-compliance) with the covenant in Section 10.2, during such period of the term of the Loan as such covenants remain in effect. 8.2 Taxes ----- The Guarantor shall pay and discharge all Taxes and governmental charges upon it or against any of its properties or assets prior to the date after which penalties attach for failure to pay, except to the extent that the Guarantor shall be contesting in good faith by appropriate proceedings its obligations to pay such Taxes or charges, adequate reserves having been set aside for the payment thereof in accordance with GAAP. The Guarantor shall further make timely filings of all material tax returns and governmental reports required to be filed or submitted under any applicable laws or regulations. 8.3 Maintenance and Continuity of Business -------------------------------------- The Guarantor shall maintain its existence in good standing under, and in compliance with, all applicable laws, rules and regulations and shall maintain all necessary licenses and the present character of its business, except where such noncompliance or failure to 26 maintain licenses or the present character of business would not have a Material Adverse Effect. The Guarantor shall conduct its business in compliance with all applicable laws, rules and regulations binding on it or any of its operations or properties, including but not limited to employment, employee benefit, occupational health and safety, superannuation and environmental laws, rules and regulations, except where such noncompliance could not have a Material Adverse Effect. 8.4 Continuing Governmental Approvals --------------------------------- The Guarantor shall take all measures which are necessary to continue in full force and effect all governmental approvals, filings or registrations, if any, obtained or made in connection with its businesses and operations, except where the failure to do so could not have a Material Adverse Effect. 8.5 Maintenance of Properties ------------------------- The Guarantor shall cause all of its properties used or useful in the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Guarantor may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Guarantor from discontinuing the operation or maintenance of any such properties if such discontinuance is, in the judgment of the Guarantor, desirable in the conduct of its business and not disadvantageous in any material respect to the Lender. 8.6 Year 2000 Issue. --------------- The Guarantor shall take, and shall cause each of its Subsidiaries to take, all necessary action to complete in all material respects, the reprogramming of computer software, hardware and firmware systems and equipment containing embedded microchips owned or operated by or for the Guarantor and its Subsidiaries or used or relied upon in the conduct of their business (including systems and equipment supplied by others or with which such systems of the Guarantor or any of its Subsidiaries interface) required as a result of the Year 2000 Issue to permit the proper functioning of such computer systems and other equipment and the testing of such systems and equipment, as so reprogrammed, except where the failure to take such action could not reasonably be expected to have a Material Adverse Effect. At the request of the Lender, the Guarantor shall provide, and shall cause each of its Subsidiaries to provide, to the Lender reasonable assurance of its compliance with this Section. 8.7 ERISA. ----- (a) The Guarantor shall comply in all material respects with the applicable provisions of ERISA and (b) furnish the Lender (i) as soon as possible, and in any event within 30 days 27 after any Authorized Representative of the Guarantor or any ERISA Affiliate either knows or has reason to know that any Reportable Event has occurred that alone or together with any other Reportable Event could reasonably be expected to result in liability of the Guarantor and its ERISA Affiliates to the PBGC in an aggregate amount exceeding US$500,000, a statement of an Authorized Representative setting forth details as to such Reportable Event and the action proposed to be taken with respect thereto, together with a copy of the notice, if any, of such Reportable Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any notice the Borrower or any ERISA Affiliate may receive from the PBGC relating to the intention of the PBGC to terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 412 of the Code) or to appoint a trustee to administer any Plan or Plans, (iii) within 30 days after a filing with the PBGC pursuant to Section 412(n) of the Code of a notice of failure to make a required installment or other payment with respect to a Plan, a statement of an Authorized Representative setting forth details as to such failure and the action proposed to be taken with respect thereto, together with a copy of such notice given to the PBGC and (iv) promptly and in any event within 30 days after receipt thereof by the Guarantor or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each notice received by the Guarantor or any ERISA Affiliate concerning (A) the imposition of Withdrawal Liability by a Multiemployer Plan in an amount exceeding US$500,000 or (B) a determination that a Multiemployer Plan is, or is expected to be, terminated or in reorganization, in each case within the meaning of Title IV of ERISA, an which, in each case, is expected to result in an increase in annual contributions of the Guarantor or an ERISA Affiliate to such Multiemployer Plan in an amount exceeding US$500,000. 8.8 Post-Closing Deliveries. ----------------------- The Guarantor hereby covenants that not later than ten (10) days after the Guarantor's next Board of Directors' meeting (currently scheduled for June 23, 1999), the Guarantor shall deliver, and cause the Borrower to deliver, a certificate of an Authorized Representative of each party certifying that the Guarantor's Board of Directors and the Borrower's shareholders, respectively, have adopted and approved resolutions substantially in the form of Annex A hereto. SECTION 9. NEGATIVE COVENANTS OF THE BORROWER In addition to the other undertakings in this Agreement the Borrower hereby covenants to the Lender that during the term of this Agreement and until all of the Obligations are paid in full, the Borrower shall not permit any of the following to occur: 9.1 Merger; Sale of Assets ---------------------- The Borrower shall not effect any merger, consolidation or reorganization (whether in one transaction or in a series of transactions) with any other person unless (i) either the Borrower is the surviving entity or the surviving entity, if other than the Borrower, shall have expressly assumed in writing all of the obligations of the Borrower under this 28 Agreement and (ii) at the time of effecting the merger, consolidation or reorganization no Event of Default shall have occurred or be continuing or would result therefrom. 9.2 Indebtedness Limitation ----------------------- The Borrower shall not create, incur, assume or suffer to exist any Indebtedness other than: (i) Indebtedness under this Agreement; (ii) unsecured Indebtedness resulting from accounts payable and accrued liabilities for goods and services, incurred in the ordinary course of business; (iii) Indebtedness in existence on the date hereof and listed on Schedule 9.2 hereto; ------------ (iv) Indebtedness owed to Affiliates of the Borrower; and (v) Indebtedness which does not, without the prior written approval of the Lender (such approval not to be unreasonably withheld) exceed such debt-to-equity ratios as are, from time to time, permitted under applicable French law and thin capitalization rules. SECTION 10. NEGATIVE COVENANTS OF THE GUARANTOR For so long as the Guaranty shall remain in effect and except to the extent expressly consented to in writing by the Lender, the Guarantor shall comply with the negative covenants set forth in this Section 10. 10.1 Negative Pledge --------------- 10.1.1 Liens, Etc. The Guarantor shall not create or suffer to exist, or ---------- permit any of its Subsidiaries to create or suffer to exist, any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income, in each case to secure or provide for the payment of any Indebtedness of any Person, if the aggregate amount of the Indebtedness so secured (or for which payment has been provided) would at any time exceed an amount equal to 10% of Consolidated Net Tangible Assets of the Guarantor, provided, however, that the foregoing shall not apply to: (i) Liens for current Taxes not delinquent or for Taxes being contested in good faith and by appropriate proceedings, adequate reserves having been provided for the payment thereof in accordance with GAAP, consistently applied, (ii) Liens arising in the ordinary course of business or by operation of law for sums being contested in good faith and by appropriate proceedings, adequate reserves having been provided for the payment thereof in accordance with GAAP, consistently applied, or for sums not due, and in either case not involving any deposits or advances for borrowed money or the deferred purchase price of property or services, (iii) Liens in connection with the acquisition of fixed assets after the date hereof and attaching only to the property being acquired, (iv) Liens incurred in the ordinary course of business in connection with workers' compensation, unemployment insurance or other forms of governmental insurance or benefits, (v) mechanics', workers', materialmen's and other like Liens arising in the ordinary 29 course of business in respect of obligations which are not delinquent or which are being contested in good faith and by appropriate proceedings, adequate reserves having been provided for the payment thereof in accordance with GAAP, consistently applied, (vi) Liens on assets of any Subsidiary of the Borrower existing at the time such Person becomes a Subsidiary (other than any such Lien created in contemplation of becoming a Subsidiary); (vii) any Lien securing Indebtedness that was incurred prior to or during construction or improvement of property for the purpose of financing all or part of the cost of such construction or improvement, provided that the amount of Indebtedness secured by such Lien does not exceed 100% of the fair market value of such property after giving effect to such construction or improvement; (viii) any Lien securing Indebtedness of a Subsidiary owing to the Borrower, (ix) Liens resulting from any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Indebtedness secured by any Lien referred to in clauses (vi) and (vii) above so long as (A) the aggregate principal amount of such Indebtedness shall not increase as a result of such extension, renewal or replacement and (B) Liens resulting from any such extension, renewal or replacement shall cover only such property which secured the Indebtedness that is being extended, renewed or replaced, or (x) Liens on accounts receivable resulting from the sale of such accounts receivable by the Borrower or a Subsidiary of the Borrower, so long as, at any time, the aggregate outstanding amount of such cash advanced to the Borrower or such Subsidiary, as the case may be, and attributable to the sale of such accounts receivable does not exceed: (A) in fiscal year 2000, US$200,000,000 or (B) in fiscal years after 2000, such greater amount as the Lender and the Guarantor may agree from time to time. 10.1.2 Mergers, Etc. The Guarantor shall not (i) merge or consolidate ------------ with or into any Person, or permit any of its Subsidiaries to do so, or (ii) convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person, or (iii) together with one or more of its consolidated Subsidiaries, convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of the assets of the Guarantor and its consolidated Subsidiaries (whether now owned or hereafter acquired) to any Person; except that any Subsidiary of the Guarantor may merge or consolidate with or into, or transfer assets to, or acquire assets of, any other Subsidiary of the Guarantor and except that any Subsidiary of the Guarantor may merge into or transfer assets to the Guarantor and except that the Guarantor may effect any merger, consolidation or reorganization (whether in one transaction or in a series of transactions) with any other Person if: (A) either the Guarantor is the surviving entity or (B) (i) the surviving entity, if other than the Guarantor, shall have expressly assumed in writing all of the obligations of the Guarantor under this Agreement and the Guaranty, pursuant to documentation in form and substance satisfactory to the Lender (ii) such surviving entity shall meet or exceed the financial covenants set forth in Section 10.2.3 (as conformed to take account of the fiscal year of such surviving entity) and (iii) immediately after giving effect to such merger, consolidation or reorganization, no Event of Default or 30 event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, would exist. 10.2 Financial Covenants ------------------- 10.2.1 Minimum Net Worth. The Guarantor shall not permit at any time ----------------- Net Worth to be less than the sum of (i) Net Worth as of February 27, 1998, plus (ii) 25% of Net Income (if a positive number) from February 27, 1998 to the then most recent August 31 or February 28, plus (iii) all Additions to Capital from February 27, 1998 to the then most recent August 31 or February 28. 10.2.2 Maximum Debt Ratio. The Guarantor will not permit at any time ------------------ the ratio of (i) Debt to (ii) EBITDA, for each period consisting of the most recently ended four consecutive fiscal quarters of the Borrower, to exceed 3.00 to 1.00. 10.2.3 Minimum Interest Coverage Ratio. The Guarantor shall not permit ------------------------------- at any time the ratio of (a) EBITDA to (B) interest expense of the Guarantor and its Subsidiaries, in each case for the four fiscal quarters ending on the last day of any fiscal quarter of the Guarantor to be less than 5.00 to 1.00. SECTION 11. CONDITIONS PRECEDENT TO DRAWDOWN The obligation of the Lender to make available the Loan at each Drawdown Date is subject to the fulfillment, as determined by the Lender and its counsel, of the following conditions precedent: 11.1 Authorizations -------------- The Lender shall have received (except to the extent previously delivered to the Lender), for the benefit of the Lender in form and substance satisfactory to the Lender, the following: (a) copies of the constituent documents as then in effect of the Borrower and the Guarantor certified by an Authorized Representative to be true copies and currently in full force and effect; (b) a certificate of an Authorized Representative certifying the resolutions (i) of the Borrower's shareholders authorizing the execution, delivery and performance of this Agreement and the Note and (ii) the Guarantor's Board of Directors authorizing the execution, delivery and performance of this Agreement and the Guaranty; (c) a certified copy of the K-Bis for the Borrower recently issued by the appropriate Registry of Commerce; (d) an incumbency certificate setting forth the true and correct signatures of the officers or other persons executing this Agreement and the other documents to be 31 delivered in connection herewith and in connection with each Drawdown for each of the Borrower and the Guarantor, in each case certified by an Authorized Representative; and (e) a copy of the power of attorney of the Borrower, if applicable, appointing an attorney-in-fact of the Borrower for purposes of executing and delivering this Agreement, the Note, the Drawdown Certificate and other documents and certificates to be given by the Borrower in connection with the making of the Loan and each Drawdown; and (f) such other documents of authority as shall be reasonably requested by, and in form and substance satisfactory to, the Lender and its counsel. 11.2 Note ---- The Lender shall have received a duly executed copy of the Note, substantially in the form of Exhibit A attached hereto, evidencing the amount of such Drawdown. --------- 11.3 Governmental Approvals ---------------------- The Lender shall have received copies certified by an Authorized Representative of the Borrower (together with English translations thereof) of any governmental consent or approval necessary in connection with the execution and delivery of this Agreement and the Note and all related documentation. 11.4 Opinions -------- The Lender shall have received, for the benefit of and addressed to the Lender, in each case dated the Drawdown Date, the favorable opinions (a) under New York and French law of Coudert Brothers, counsel to the Lender, in form and substance satisfactory to the Lender and (b) (i) under New York and French law of Baker & McKenzie, counsel to the Borrower and (ii) under New York and Michigan law of Baker & McKenzie and Jon O. Botsford, General Counsel of the Guarantor, addressed to the Lender and dated the Drawdown Date, substantially in the form attached hereto as Exhibit D and Exhibits E-1 and E-2, respectively. --------- ------------ --- 11.5 Drawdown Certificate -------------------- The Lender shall have received, for the benefit of the Lender, on or prior to the Drawdown Date, a Drawdown Certificate of the Borrower substantially in the form of Exhibit B attached hereto. -------- 11.6 Guaranty -------- The Lender shall have received a duly executed copy of the Guaranty with respect to the Loan and the Note, which the Borrower shall cause the Guarantor to deliver substantially in the form attached hereto as Exhibit C. ---------- 32 11.7 Financial Statements -------------------- The Lender shall have received a copy of the Borrower's most recently filed statutory accounts. 11.8 Receipt of Funds ---------------- The Lender shall have received in immediately available funds any monies to be advanced to the Lender on or prior to the Drawdown Date pursuant to the terms of any participation agreement entered into by the Lender in connection with the Loan and the terms and conditions of any such participation agreement shall be unconditional and binding on the parties thereto in all respects. 11.9 Fees. ---- All fees payable pursuant to Section 4 hereof and any amounts due and payable under Section 3 hereof shall have been received by the Person entitled thereto. 11.10 Other Documents --------------- The Lender shall have received such other approvals, opinions and documents as it may have reasonably requested in writing prior to Drawdown. SECTION 12. EVENTS OF DEFAULT 12.1 Events of Default ----------------- Each of the following events shall constitute an Event of Default under this Agreement: 12.1.1 Payment Default. The Borrower fails to make payment (a) on the --------------- date when due and payable of any amount of principal of the Loan or (b) of any interest on the Loan within three (3) Banking Days after such item has become due or (c) of any other fee or other amount payable by it hereunder within ten (10) Banking Days after such item has become due. 12.1.2 Representation and Warranty Default. Any representation or ----------------------------------- warranty made by or on behalf of the Borrower or the Guarantor or in this Agreement, the Guaranty or any other document executed and delivered in connection with the Loan shall have been incorrect in any material respect when made or confirmed, or any certificate furnished under this Agreement or the Guaranty proves to have been incorrect as of its date in any material respect. 12.1.3 Other Defaults. (a) The Borrower shall violate or fail to -------------- perform any covenant or other undertaking of this Agreement (other than a default or a violation referred to elsewhere in this Section), (b) the Guarantor shall violate or fail to perform any covenant or other undertaking hereunder or under the Guaranty, in either case where such failure or violation is not remediable or, if remediable, continues unremedied for a period of 30 days 33 after notice from the Lender delivered according to Section 13.7 hereof or (c) there shall occur a Change in Control of the Borrower or the Guarantor. 12.1.4 Government Permits. Any governmental registration, license or ------------------ approval required in connection with the entering into of this Agreement or the maintenance or repayment of the Loan expires and is not renewed or is terminated or revoked or modified in any manner and is not reinstated:(i) within 30 days, or (ii) the next succeeding Interest Payment Date, whichever is sooner unless such expiration, nonrenewal, termination, revocation, modification or failure of reinstatement does not, or could not reasonably be expected to, have a Material Adverse Effect. 12.1.5 Illegality. It becomes unlawful for the Borrower to perform any ---------- material obligation hereunder or for the Guarantor to perform any material obligation under the Guaranty. 12.1.6 Cross Defaults. (a) The Borrower fails to pay when due any -------------- amount due in excess of US$ 50,000,000 individually or in the aggregate, or its equivalent in any other currency, in respect of Indebtedness of the Borrower (other than amounts due under this Agreement and the Note) or there occurs any other event of default under any agreement or instrument relating to Indebtedness in excess of US$50,000,000 individually or in the aggregate, or its equivalent in any other currency, of the Borrower, which results in the acceleration of payment in respect of such Indebtedness and such acceleration is not revoked within three (3) Banking Days or (b) the Guarantor fails to pay when due any amount due in excess of US$50,000,000 individually or in the aggregate, or its equivalent in any other currency, in respect of Indebtedness of the Guarantor or there occurs any other event of default under any agreement or instrument relating to Indebtedness in excess of US$50,000,000 individually or in the aggregate, or its equivalent in any other currency, of the Guarantor, which results in the acceleration of payment in respect of such Indebtedness and in each case such acceleration is not revoked within three (3) Banking Days. 12.1.7 Insolvency. The occurrence of an Insolvency Event with respect ---------- to either the Borrower or the Guarantor. 12.1.8 Judgment Default. (a) Any final non-appealable judgments or ---------------- decrees for money damages or for fines or penalties individually or in the aggregate at any one time outstanding in excess of US$1,000,000 or its equivalent in any other currency, which are not covered by insurance are entered against the Borrower and are not paid, discharged or stayed within 30 days or (b) any final non-appealable judgments or decrees for money damages or for fines or penalties individually or in the aggregate at any one time outstanding in excess of US$5,000,000 or its equivalent in any other currency, which are not covered by insurance are entered against the Guarantor and are not paid, discharged or stayed within 30 days 12.2 Right to Accelerate on Payment Default -------------------------------------- If a Payment Default shall occur, the Lender shall have the right, by notice delivered in accordance with Section 13.7 hereof to (i) the Borrower, or if the Lender so elects, (ii) the 34 Guarantor, to declare the entire Loan together with accrued interest (including any interest payable at the Default Interest Rate) and all other sums payable hereunder (including, without limitation, Breakage Costs) and under the Guaranty to be immediately due and payable and the Loan shall thereupon become due and payable without presentment, demand, protest or notice of any kind, other than the notice specifically required by this Section or the terms of the Guaranty, all of which are expressly waived by the Borrower and the Guarantor. 12.3 Right to Accelerate on Event of Default --------------------------------------- If an Event of Default (other than a Payment Default) shall occur during the Initial Period, the Lender shall have the right, by notice to either the Borrower or the Guarantor delivered in accordance with Section 13.7 hereof to declare the Initial Period Amount to be immediately due and payable in cash, and such amount shall thereupon become immediately due and payable without presentment, demand, protest or notice of any kind other than the notice specifically required by this section, all of which are expressly waived by the Borrower and the Guarantor. SECTION 13. MISCELLANEOUS 13.1 Term ---- The term of this Agreement shall commence on the date first set forth above and shall end on the date of payment in full of all principal, interest and other sums payable by the Borrower hereunder and under the Note in accordance with the terms of this Agreement and the Note. 13.2 Entire Agreement ---------------- This Agreement and the documents referred to herein constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understandings with respect to this transaction. Any amendment hereto shall be in writing, signed by or on behalf of the parties to this Agreement. 13.3 Waiver; Cumulative Rights ------------------------- 13.3.1 Generally. No failure or delay on the part of the Lender to -------- exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. 13.3.2 Effect of Waiver. Failure by the Lender at any time or times ---------------- hereafter to require strict performance by the Borrower or the Guarantor or any other person of any of the provisions, warranties, terms and conditions contained in the Loan Agreement, the Note, the Guaranty or any other related documents now or at any time or times hereafter executed by the Borrower, the Guarantor or any other person and delivered to the Lender 35 shall not waive, affect or diminish any right of the Lender at any time or times hereafter to demand strict performance thereof, and such right shall not be deemed to have been modified or waived by any act, course of conduct or knowledge of the Lender, its agents, officers or employees, unless such waiver is contained in an instrument in writing specifying such waiver signed by the Lender and directed and delivered to the Borrower. No waiver by the Lender of any default shall operate as a waiver of any other default or the same default on a future occasion, and no action by the Lender permitted hereunder shall in any way effect or impair any of their rights or the obligations of the Guarantor under the Guaranty or of the Borrower hereunder. 13.4 Assignment and Participation ---------------------------- 13.4.1 Assignment. This Agreement shall be binding upon and shall be ---------- enforceable by the Borrower, the Lender and their respective permitted successors and assigns; provided that the Borrower shall have no right to assign or transfer its rights or obligations hereunder without the prior written consent of the Lender. The Lender may assign, transfer or participate all or any portion of its rights or entitlements hereunder without the consent of the Borrower or Guarantor. Upon any transfer or assignment by the Lender, the term "Lender" as used herein shall be deemed to refer to such new transferee or assignee, respectively. 13.4.2 Rights of Participants. Except as otherwise expressly provided ---------------------- herein, all participants shall be entitled to share the benefits of all indemnities, tax reimbursements, and other rights of the Lender pursuant to this Agreement as fully as if a party hereto to the extent of their indirect interest in the Loan provided through the participation. 13.5 Governing Law ------------- This Agreement shall be governed by and construed in accordance with the laws of the State of New York (including without limitation Sections 5-1401 and 5-1402 of the New York General Obligations Law), without giving effect to the principles of conflicts of law. 13.6 Submission to Jurisdiction -------------------------- 13.6.1 Consent to the New York Courts. Each of the Borrower and the ------------------------------ Guarantor hereby irrevocably consents that any legal action or proceedings against it or any of its property with respect to this Agreement, the Note or the Guaranty may be brought in any state or Federal court located in the City of New York, United States of America or both, as the Lender may elect, and by execution and delivery of this Agreement each of the Borrower and the Guarantor hereby submits to and accepts with regard to any such action or proceeding, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each of the Borrower and the Guarantor irrevocably consents to the service of process in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to the Borrower or the Guarantor at its address set forth in Section 13.7 or its Process Agent specified in this 36 Section. Such service of process shall be effective upon receipt. The foregoing, however, shall not limit the rights of the Lender to serve process in any other manner permitted by law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction, including without limitation, France. The Borrower hereby appoints the Guarantor as its agent for service of process in New York and hereby covenants and agrees to maintain the effectiveness of such appointment throughout the term of this Agreement. The Borrower hereby agrees that service of process on the Guarantor shall constitute good and sufficient service of process for the purpose of any action or proceeding in the State of New York in connection with this Agreement, the Note or the Guaranty. 13.6.2 Waiver of Forum Non-Conveniens. Each of the Borrower and the ------------------------------ Guarantor hereby irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement, the Note or the Guaranty in the State of New York and hereby further irrevocably waives any claim that the State of New York is not a convenient forum for any such suit, action or proceedings. 13.7 Notices ------- Any notice required or permitted to be given hereunder shall be in writing and shall be (a) personally delivered, (b) delivered by a recognized courier service, (c) transmitted by postage prepaid registered mail (airmail if international), or (d) transmitted by telecopier (with postage prepaid mail confirmation-airmail if international) to the parties as follows (as elected by the party giving such notice): To the Borrower: Steelcase SAS c/o Steelcase Inc. 901 44th Street, S.E. Grand Rapids, MI 49508 Tel: (616) 246-9600 Fax: (616) 248-7010 Attn: General Counsel To the Guarantor: Steelcase Inc. 901 44th Street, S.E. Grand Rapids, MI 49508 Tel: (616) 246-9600 Fax: (616) 248-7010 Attn: General Counsel To the Lender: Societe Generale, Chicago Branch 181 West Madison Chicago, Illinois 60602 Tel: (312) 578-5000 Fax: (312) 578-5099 Attn: Editha Paras, Vice President 37 Except as otherwise specified herein, all notices and other communications shall be deemed to have been duly given on (a) the date of receipt if delivered personally or by courier service, (b) the date five days after posting if transmitted by mail or (c) the date of transmission if transmitted by telecopier, whichever shall first occur. Any party may change its address for purposes hereof by notice to the other party. 13.8 Severability ------------ If any one or more of the provisions contained in this Agreement or the Note shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired. Anything in this Agreement to the contrary notwithstanding, the obligation of the Borrower to pay interest on the Loan and the Note shall be subject to the limitation that no payment of such interest shall be required to the extent that receipt of such payment would be contrary to the applicable penal laws of the State of New York relating to usury. 13.9 Confidentiality --------------- 13.9.1 Generally. The Lender covenants and agrees not to disclose to --------- any person or entity any Confidential Information (as defined below), except (a) as may be necessary or required by law, rule, regulation or court order or legal process or order or request of any banking authority having jurisdiction over the Lender, (b) to its officers, directors, employees, attorneys and other advisors and (c) in connection with any action or proceeding arising out of or in connection with this Agreement, the Note or the Guaranty or in connection with the enforcement or collection of the Obligations or the exercise of any right or remedy under any such agreement or instrument. 13.9.2 Definition of Confidential Information. "Confidential -------------------------------------- Information" shall mean any information with respect to the Borrower and the Guarantor, this Agreement, the Note, the Guaranty, any participation agreement or other related document or matter other than (a) information previously filed, or required to be filed with any governmental agency and available to the public; (b) information previously published in any public medium and (c) information previously disclosed by the Borrower or the Guarantor to any person or entity not associated with the Borrower or the Guarantor free of any restrictions as to further disclosure. 13.10 Counterparts ------------ This Agreement may be signed in any number of counterparts. Any single counterpart or set of counterparts signed, in either case, by all the parties hereto shall constitute a full and original agreement for all purposes. 13.11 Right of Setoff --------------- 38 If an Event of Default shall have occurred and be continuing, the Lender is hereby authorized at any time and from time to time, without notice to the Borrower or the Guarantor, to the fullest extent permitted by law, to set off and apply any and all deposits and any and all indebtedness or other amounts at any time owing by the Lender to or for the credit or the account of the Borrower or the Guarantor against any of and all the Obligations now or hereafter existing under this Agreement, the Guaranty or the Note held by the Lender, irrespective of whether or not the Lender shall have made any demand under this Agreement, the Guaranty or the Note and although such obligations may be unmatured. The rights of the Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which the Lender may have. 13.12 Survival of Agreement --------------------- All covenants, agreements, representations and warranties made by the Borrower and the Guarantor herein, in the Note and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or the Note shall be considered to have been relied upon by the Lender and shall survive the making by the Lender of the Loan, the execution and delivery to the Lender of this Agreement and the Note regardless of any investigation made by the Lender, and shall continue in full force and effect as long as any Obligation is outstanding. Without prejudice to the survival of any other agreements contained herein and related agreements and instruments, the obligations under Sections 3 and 4 hereof shall survive payment in full of the Obligations and termination of this Agreement, unless otherwise agreed. 13.13 WAIVER OF JURY TRIAL -------------------- EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE GUARANTY OR THE NOTE. 39 IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be executed by their respective duly authorized representatives as of the day and year first written above. BORROWER STEELCASE SAS By: /s/ A. Rougier-Chapman ---------------------- Name: Alwyn Rougier-Chapman being duly authorized to enter into this Loan Agreement on behalf of Steelcase SAS pursuant to a resolution of the shareholders of Steelcase SAS adopted by such shareholders at an ordinary shareholders' meeting thereof in April 1999. GUARANTOR STEELCASE INC. By: /s/ A. Rougier-Chapman ---------------------- Name: Alwyn Rougier-Chapman Title: Senior Vice President-Finance, Chief Financial Officer and Treasurer LENDER SOCIETE GENERALE, CHICAGO BRANCH By: /s/ Editha N. Paras ------------------- Name: Editha N. Paras Title: Vice President 40 ANNEX A RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE GUARANTOR RESOLVED, that the Company hereby ratifies and approves in all respects the guaranty dated as of April 9, 1999 (the "Guaranty"), made by the Company in favor of Societe Generale (the "Lender") in connection with the loan agreement dated as of April 9, 1999 (the Loan Agreement") evidencing indebtedness in the aggregate principal amount not exceeding Two Hundred Twenty Million United States Dollars ($220,000,000) among Steelcase SAS, as borrower, the Company, as guarantor and the Lender, as lender. RESOLUTIONS OF THE SHAREHOLDERS OF THE BORROWER [To be mutually agreed] A-1 EXHIBIT A PROMISSORY NOTE Amount: US$[ ] Date: Chicago, Illinois FOR VALUE RECEIVED, STEELCASE SAS (the "Borrower"), hereby promises to pay to the order of Societe Generale, Chicago Branch (the "Lender"), at Societe Generale, Chicago Branch, 181 West Madison, Chicago, Illinois 60602, the principal sum of [ ] Million United States Dollars (US$[ ]) (the "Loan"), pursuant to the terms of a Loan Agreement dated as of April 9, 1999 (the "Loan Agreement") by and among the Borrower, the Lender and Steelcase Inc. (the "Guarantor"), and to which reference is hereby made and which is incorporated herein by reference, in one installment on the Final Maturity Date (as defined in the Loan Agreement), subject to the penultimate paragraph of this Note. Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Loan Agreement. The Borrower further promises to pay interest to the Lender on the Loan until paid in full at the rates, at the times, in the manner and calculated in accordance with the provisions of the Loan Agreement. The interest on this Loan shall be payable in United States Dollars in same day funds and without set-off or counterclaim, free and clear of and without deduction for any present or future Taxes, restrictions or conditions of any nature, except as provided in the Loan Agreement. If the Borrower is required to make any such deduction or withholding from any such payment, the Borrower shall pay such additional amounts in the manner set forth in the Loan Agreement. In case an Event of Default (including a Payment Default) shall occur, the outstanding principal of, and accrued interest on, this Loan may be declared due and payable in the manner and with the effect provided in the Loan Agreement, presentment, demand, protest or notice of any kind being expressly waived by the Borrower, except as provided in the Loan Agreement. The Borrower has the right to prepay this Note in whole or in part in accordance with the terms of the Loan Agreement. Commencing on the Interest Payment Date occurring on the seventh anniversary of the First Drawdown Date subject to any Banking Day Adjustment as provided in the Loan Agreement, the Borrower, at the Borrower's option, shall have the right to prepay (and repay at the Final Maturity Date) all of the principal of the Loan with the Repayment Shares as set forth in the Loan Agreement; provided, however, that there shall not exist on the date of prepayment any default specified in Section 12.1.1 of the Loan Agreement of a monetary amount owed to the Lender under the Loan Agreement accruing up to and including the seventh anniversary of the First Drawdown Date, subject to any Banking Day Adjustment. This Note shall be governed by and construed in accordance with the laws of the State of New York (including without limitation Sections 5-1401 and 5-1402 of the New York General Obligations Law), without giving effect to the principles of conflicts of law. A-1 STEELCASE SAS By: ____________________________________ Name: being duly authorized to execute this Promissory Note on behalf of Steelcase SAS pursuant to a resolution of the shareholders of Steelcase SAS adopted by such shareholders at an ordinary shareholders' meeting thereof in April 1999. A-2 EXHIBIT B DRAWDOWN CERTIFICATE Date: Societe Generale Chicago Branch 181 West Madison Chicago, Illinois 60602 STEELCASE SAS Loan Agreement dated as of April 9, 1999 Ladies and Gentlemen: STEELCASE SAS (the "Borrower") hereby requests that the principal amount of [] United States Dollars (US$ ) be advanced to the Borrower on [ ] (the "Drawdown Date") under the Loan (as defined in the Loan Agreement referred to below) and certifies that as of the date hereof and as of the Drawdown Date: 1. No event has occurred which constitutes, or which, with the giving of notice or the passing of time, or both, would constitute, an Event of Default under the Loan Agreement dated as of April 9, 1999 (the "Loan Agreement") among the Borrower, Steelcase Inc., as Guarantor and yourselves, as Lender. 2. All the representations and warranties of the Borrower and the Guarantor contained in the Loan Agreement are true and correct as if restated in their entirety on the date hereof. 3. The Borrower and the Guarantor have complied, and are in compliance, with all of their respective covenants set forth in the Loan Agreement. 4. All of the conditions precedent specified in Section 11 of the Loan Agreement have been (or will be as of the Drawdown Date) satisfied and all documents heretofore delivered in satisfaction of the conditions precedent remain accurate and correct and continue in full force and effect. 5. The Borrower hereby requests that Lender wire transfer the proceeds of the Loan requested hereby as follows: For: Amount: To: Account: Account No.: B-1 STEELCASE SAS By: _____________________________ Name: [being duly authorized to execute this Drawdown Certificate on behalf of Steelcase SAS pursuant to a resolution of the shareholders of Steelcase SAS adopted by such shareholders at an ordinary shareholders' meeting thereof in April 1999.] CONFIRMED: STEELCASE INC. By: ___________________________ Name: Title: B-2 EXHIBIT C CORPORATE GUARANTY CORPORATE GUARANTY, dated as of April 9, 1999, (the "Guaranty") made by Steelcase Inc., a Michigan corporation (the "Guarantor"), in favor of Societe Generale, Chicago Branch (the "Lender"). W I T N E S S E T H : WHEREAS, the Lender is entering into a Loan Agreement dated as of April 9, 1999 (the "Loan Agreement") with Steelcase SAS, as borrower (the "Borrower") and the Guarantor, as guarantor, pursuant to which the Lender agreed to lend US$220,000,000 to the Borrower, subject to the terms and conditions thereof (the "Loan"); WHEREAS, it is a condition to the Lender's obligation to make the Loan under the Loan Agreement that the Guarantor execute this Guaranty in favor of the Lender; and WHEREAS, all capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Loan Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Lender to enter into the Loan Agreement and as a condition of the advance of the Loan, the Guarantor hereby agrees as follows: SECTION 1. Guaranty. The Guarantor hereby unconditionally and -------- irrevocably guarantees the punctual, full and prompt payment when due, whether by acceleration or otherwise, of all obligations of the Borrower under the Loan Agreement in respect of the period from and including the First Drawdown Date through and including the end of the Initial Period (the "Guaranty Period"), together with any obligations of the Borrower in respect of the Guaranty Period which survive the expiration thereof (collectively, the "Guaranteed Obligations") owed to the Lender. This Guaranty is an absolute guaranty of payment and performance and is not a guaranty of collection. SECTION 2. Guaranty Absolute. The Guarantor guarantees that the ----------------- Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Agreement, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Lender with respect thereto. The liability of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of the Loan Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party) or avoidance or subordination of any of the Guaranteed Obligations; C-1 (b) any change in the time, manner or place of payment of, or in any other term of, or any increase in the amount of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from the Loan Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party); (c) the absence of any attempt to collect the Guaranteed Obligations from the Borrower or any other action to enforce the same or the election of any remedy by the Lender; (d) the bankruptcy, insolvency, winding-up, or reorganization of, or similar proceeding involving, the Borrower or the Guarantor; (e) the disallowance under the relevant provisions of any applicable law of all or any portion of the claims of the Lender for payment or performance of the Guaranteed Obligations; (f) the waiver, consent, extension, forbearance or granting of any indulgence by the Lender with respect to any provision of the Loan Agreement or any other agreement or instrument relating thereto (whether executed by the Borrower, the Guarantor or any other party); or (g) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Borrower, the Guarantor or any other guarantor (other than indefeasible payment in full of the Guaranteed Obligations and in respect of any applicable statute of limitations). SECTION 3. Waiver; No Duties of Lender. --------------------------- (a) The Guarantor hereby waives (i) promptness, diligence, notice of acceptance and any and all other notices with respect to any of the Guaranteed Obligations and this Guaranty, (ii) any requirement that the Lender protect, secure, perfect or insure any security interest in or other lien on any property subject thereto or exhaust any right or take any action against the Borrower or any other person or entity or any collateral, (iii) filing of claims with a court in the event of receivership or bankruptcy of the Borrower, (iv) protest or notice with respect to nonpayment of any or all of the Guaranteed Obligations, and (v) all demands whatsoever (and any requirement that the same be made on the Borrower as a condition precedent to the Guarantor's obligations hereunder). The Guarantor hereby covenants that this Guaranty will not be discharged, except according to the provisions of Section 11 hereof. (b) The Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower, and of all other circumstances bearing upon the right of nonpayment of the Guaranteed Obligations or any part thereof, that diligent inquiry would reveal. The Guarantor hereby agrees that the Lender shall have no duty to advise the Guarantor of information known to the Lender regarding such condition or any such circumstances. In the event the Lender in its sole discretion undertakes at any time or from time to time to provide any C-2 such information to the Guarantor, the Lender shall be under no obligation (i) to undertake any investigation not a part of its regular business routine, (ii) to disclose any information which, pursuant to accepted or reasonable banking or commercial finance practices, the Lender chooses to maintain as confidential or (iii) to make any other or future disclosures of such information or any other information to the Guarantor. If, in the exercise of any of its rights and remedies, the Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against the Borrower or any other Person, whether because of any applicable laws pertaining to "election of remedies" or the like, the Guarantor hereby consents to such action by the Lender and waives any claim based upon such action, even if such action by and of the Lender shall result in a full or partial loss of any rights of subrogation, contribution or reimbursement which the Guarantor might otherwise have had but for such action by the Lender. SECTION 4. Amendments. No amendment or waiver of any provision of this ---------- Guaranty nor consent to any departure by the Guarantor herefrom shall in any event be effective unless the same shall be in writing and signed by the Lender. No amendment, waiver or consent shall, unless in writing and signed by the Lender, limit the liability of the Guarantor hereunder or postpone any date fixed for payment hereunder, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 5. No Waiver; Remedies; Subrogation. -------------------------------- (a) No failure on the part of the Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. (b) Failure by the Lender at any time or times hereafter to require strict performance by the Borrower or the Guarantor or any other person of any of the provisions, warranties, terms and conditions contained in any of the Loan Agreement, the Note or any of the agreements entered into in connection therewith now or at any time or times hereafter executed by the Borrower, the Guarantor or any other person and delivered to the Lender shall not waive, affect or diminish any right of the Lender at any time or times hereafter to demand strict performance thereof, and such right shall not be deemed to have been modified or waived by any act, course of conduct or knowledge of the Lender, its respective agents, officers or employees, unless such waiver is contained in an instrument in writing specifying such waiver signed by the Lender and directed and delivered to the Borrower. No waiver by the Lender of any default shall operate as a waiver of any other default or the same default on a future occasion, and no action by the Lender permitted hereunder shall in any way affect or impair any of its rights or the obligations of the Guarantor under this Guaranty. Any determination by a court of competent jurisdiction of the amount of any of the Guaranteed Obligations shall be conclusive and binding on the Guarantor irrespective of whether the Guarantor was party to the suit or action in which such determination was made. C-3 (c) Until all Guaranteed Obligations have been paid in full, the Guarantor shall not exercise any right of subrogation which it may acquire with respect to amounts paid hereunder. In the event that the Guarantor shall receive any payment on account of any such right of subrogation while any Guaranteed Obligations remain outstanding, the Guarantor agrees to pay all such amounts so received to the Lender to be applied to payment of the Guaranteed Obligations then due and owing in accordance with the terms of the Loan Agreement. SECTION 6. Continuing Guaranty. This Guaranty is a continuing guaranty ------------------- and shall (a) remain in full force and effect until terminated in accordance with Section 11, (b) be binding upon the Guarantor, and its permitted successors and assigns, and (c) inure to the benefit of and be enforceable by the Lender and its permitted successors, transferees, and assigns who shall be permitted to, and who shall, become an assignee of the Lender's interest under the Loan Agreement. SECTION 7. Reinstatement. This Guaranty shall remain in full force and ------------- effect and continue to be effective should any petition be filed by or against the Guarantor or the Borrower (each a "Loan Party" and, collectively, the "Loan Parties") for liquidation or reorganization, should any Loan Party become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of any Loan Party's assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Guaranteed Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Guaranteed Obligations, whether as a "voidable preference", "fraudulent conveyance", or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored, or returned, the Guaranteed Obligations shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. SECTION 8. Governing Law. This Guaranty shall be governed by, and ------------- construed in accordance with, the laws of the State of New York (including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law), without regard to the provisions thereof relating to conflicts of laws. SECTION 9. Severability. Whenever possible, each provision of this ------------ Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Guaranty. SECTION 10. Consent to Jurisdiction. The Guarantor hereby consents to ----------------------- the non-exclusive jurisdiction of any state court or any federal court located in New York City and agrees that all service of process may be made by registered mail directed to the Guarantor at the address and in the manner specified in the Loan Agreement. The Guarantor waives any objection based on forum non conveniens and any objection to venue of any action instituted - ----- --- ---------- hereunder and consents to the granting of such legal or equitable relief as is deemed appropriate by the C-4 court. Nothing contained in this paragraph shall affect the right of the Lender to serve legal process in any other manner permitted by law or affect its right to bring any action or proceeding against the Guarantor or its property in the courts of any other competent jurisdiction. SECTION 11. Termination. So long as no Event of Default shall have ----------- occurred and then be continuing, this Guaranty shall terminate and, except to the extent expressly provided in Section 1 above with respect to survival of Guaranteed Obligations, all obligations hereunder shall be discharged and released upon the earlier to occur of: (a) the payment in full of all of the Guaranteed Obligations or (b) the expiration of the Guaranty Period. SECTION 12. Currency. The Guarantor shall pay all amounts due hereunder -------- in Dollars in immediately available funds to the Lender, at such account as the Lender may designate to the Guarantor from time to time (the "Designated Place of Payment") and shall be solely responsible for obtaining all required foreign exchange and other approvals required for the making of such payments in such currency. The Guarantor's failure to obtain any such approvals shall not relieve it of its obligation to make payments in Dollars. In the event the Guarantor makes a payment in any currency other than Dollars or at any place other than the Designated Place of Payment, such payment shall not constitute payment for purposes of calculation of interest or otherwise constitute satisfaction of the requirements set forth herein unless and until the sums so paid are converted into Dollars and transferred to the Designated Place of Payment. The Guarantor shall bear all risk of currency fluctuation which occurs at any time between the date the non-conforming payments are made by the Guarantor and the date when such payments are converted into Dollars and transferred to the Designated Place of Payment. The Lender shall have a separate cause of action for any shortfall in the amount of Dollars when transferred to the Designated Place of Payment. To the extent permitted by applicable law, the Guarantor hereby further undertakes to maintain such foreign currency holdings and/or conversion availability from time to time as is necessary to meet the Guarantor's obligations hereunder. SECTION 13. Miscellaneous. All references herein to the Borrower and to ------------- the Guarantor shall be deemed to include their respective permitted successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession of or for the Borrower or the Guarantor. All references to the singular shall be deemed to include the plural where the context so requires. IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. STEELCASE INC. By: __________________________ Name: Title: C-5 EXHIBIT D [Opinion under New York and French law of Baker & McKenzie, counsel to the Borrower] [date] Societe Generale, Chicago Branch 181 West Madison Chicago, Illinois 60602 Re: Loan Agreement dated as of [ ], 1999 among Steelcase SAS, Steelcase Inc., and Societe Generale, Chicago Branch -------------------------------- Ladies and Gentlemen: We have acted as counsel to Steelcase SAS, a Societe par Actions Simplifiee organized under the laws of the Republic of France, in connection with the preparation, execution and delivery of the Loan Agreement dated as of [ ], 1999 (the "Loan Agreement") among Steelcase SAS, as borrower (the "Borrower"), Steelcase Inc., as guarantor (the "Guarantor") and Societe Generale, Chicago Branch, as lender (the "Lender"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. In rendering this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents: (i) the Loan Agreement; (ii) the Note to be dated the First Drawdown Date; (iii) the Guaranty (collectively with the Loan Agreement and the Note hereinafter referred to as the "Loan Documents"); (iv) the Participation Agreement dated of even date with the Loan Agreement between Steelcase Europe LLC as participant (the "Participant") and the Lender (the "Participation Agreement"); and such other instruments and documents, and we have made such other inquiries and investigations, as we have deemed necessary or appropriate for rendering the opinions set forth herein. In rendering this opinion we have also, with your permission, relied upon, among D-1 other things, the legal opinion dated on or about the date hereof of Jon O. Botsford, General Counsel of the Guarantor and Participant with respect to certain Michigan law matters. In rendering this opinion, we have assumed, other than with respect to the Borrower [, the Guarantor and the Participant]: (a) the capacity, power and authority of each of the parties to the Loan Documents and Participation Agreement to enter into, execute, deliver and perform their respective obligations under each of such documents; (b) the due authorization of each signatory to the Loan Documents and Participation Agreement to execute and deliver such documents on behalf of the parties thereto and the due execution and delivery of each of such documents; (c) that each party to the Loan Documents and Participation Agreement has taken all necessary action to authorize the execution, delivery and performance of each of such documents to which it is a party; (d) that each party to the Loan Documents and Participation Agreement is duly organized and validly existing under the laws of its place of organization; (e) the authenticity of all Loan Documents, the Participation Agreement and other documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies or certified copies thereof; (f) the genuineness of all signatures and seals on all of the Loan Documents, the Participation Agreement and other documents submitted to us, and that all such documents have been duly executed by the persons authorized. Nothing has come to our attention that would lead us to conclude that reliance on any of the foregoing assumptions is not reasonable. Based upon the foregoing examinations and assumptions, and subject to the other qualifications and limitations set forth below, we are of the opinion that: 1. The Borrower has been duly created as a Societe par Actions Simplifiee in accordance with the laws of France, is validly existing under those laws and has power and authority to carry on its business as it is now being conducted. 2. No approval, consent, license, permit, opinion, filing, registration with or other authorization of any governmental authority of the United States of America, the State of New York or the Republic of France is required on the part of the Borrower for the D-2 executionor delivery by the Borrower of, or the performance or incurrence by the Borrower of any obligations or liabilities under, the Loan Agreement. 3. The Borrower has taken all necessary and appropriate action to authorize the execution and delivery of the Loan Agreement and to authorize the performance and observance of the terms thereof. 4. The Loan Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general and by general principles of equity. 5. The execution, delivery and performance of the Loan Agreement and the monetary payment of all amounts due on the dates and in the currency provided for therein (a) will not violate any provision of law or other governmental directive having the force of law to which the Borrower is subject, (a) will not conflict with the By-Laws (Statuts) or other governing documents of the Borrower, (b) to the best of our knowledge, will not conflict with or result in the breach of any provision of any material agreement under which the Borrower has incurred Indebtedness and will not conflict with or result in the breach of any provision of any other material agreement to which the Borrower is a party or by which it or any of its properties or assets is bound, (c) to the best of our knowledge, will not constitute a default or an event that with the giving of notice or the passing of time, or both, would constitute a default under any such agreement, and (d) to the best of our knowledge, will not result in the creation or imposition of any lien, charge or encumbrance on any of the assets or the property of the Borrower. 6. To the best of our knowledge, there are no arbitration, litigation, governmental, administrative or other proceedings pending or threatened against the Borrower or relating to the Loan Documents or any of the transactions contemplated thereby. 7. The Guarantor is the owner, directly or indirectly, of 100% of the issued and outstanding equity of the Borrower. 8. The execution and delivery by the Borrower of, the performance and incurrence by the Borrower of its obligations and liabilities under, and the consummation by the Borrower of the transactions contemplated by, the Loan Agreement do not and will not violate any law, rule or regulation of the United States of America, the State of New York or the Republic of France applicable to the Borrower. 9. The Borrower is subject to French civil and commercial law with respect to its obligations under the Loan Agreement. The entry into and performance of the Loan Agreement by the Borrower constitute private and commercial acts and neither the Borrower nor any of its assets enjoy any right of immunity from set-off or execution or other legal process in respect of its obligations under the Loan Agreement. D-3 10. The choice of New York law to govern the Loan Agreement would be recognized and upheld by courts of the State of New York and Federal courts located in the State of New York and by courts of the Republic of France, and the submission by the Borrower to the jurisdiction of such New York courts is valid and binding on the Borrower. 11. The submission by the Borrower to the jurisdiction of the courts of the State of New York provided for in the Loan Agreement would be recognized by the courts of France as valid and binding on the Borrower and not subject to revocation. 12. A final and binding judgement obtained in the courts of the State of New York in respect of the Loan Agreement would be enforced by the courts of France without re-examination of the merits of the case. We are attorneys admitted to the Bar of the State of New York and the Republic of France. The opinions set forth herein are limited to matters governed by the laws of the State of New York, the Federal laws of the United States of America, and the laws of the Republic of France and we express no opinion as to any other laws. Very truly yours, D-4 EXHIBIT E-1 [Opinion under New York law of Baker & McKenzie, counsel to the Guarantor] [date] Societe Generale, Chicago Branch 181 West Madison Chicago, Illinois 60602 Re: Loan Agreement dated as of [ ], 1999 among Steelcase SAS, Steelcase Inc., as Guarantor and Societe Generale, Chicago Branch ---------------------------------------------- Ladies and Gentlemen: We have acted as counsel to Steelcase Inc., a Michigan corporation, and Steelcase Europe LLC, a limited liability company organized under the laws of the State of Michigan, in connection with the preparation, execution and delivery of the Loan Agreement dated as of [ ], 1999 (the "Loan Agreement") among Steelcase SAS, as borrower (the "Borrower"), Steelcase Inc., as guarantor (the "Guarantor") and Societe Generale, Chicago Branch, as lender (the "Lender"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. In rendering this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents: (i) the Loan Agreement; (ii) the Note to be dated the First Drawdown Date; (iii) the Guaranty (collectively with the Loan Agreement and the Note hereinafter referred to as the "Loan Documents"); (iv) the Participation Agreement dated of even date with the Loan Agreement between Steelcase Europe LLC as participant (the "Participant") and the Lender (the "Participation Agreement"); and such other instruments and documents, and we have made such other inquiries and investigations, as we have deemed necessary or appropriate for rendering the opinions set forth herein. In rendering this opinion we have also, with your permission, relied upon, among other things, the legal opinion dated on or about the date hereof of Jon O. Botsford, General Counsel of the Guarantor and Participant with respect to certain Michigan law matters. E1-1 In rendering this opinion, we have assumed, other than with respect to the Guarantor and Participant: (a) the capacity, power and authority of each of the parties to the Loan Documents and Participation Agreement to enter into, execute, deliver and perform their respective obligations under each of such documents; (b) the due authorization of each signatory to the Loan Documents and Participation Agreement to execute and deliver such documents on behalf of the parties thereto and the due execution and delivery of each of such documents; (c) that each party to the Loan Documents and Participation Agreement has taken all necessary action to authorize the execution, delivery and performance of each of such documents to which it is a party; (d) that each party to the Loan Documents and Participation Agreement is duly organized and validly existing under the laws of its place of organization; (e) the authenticity of all Loan Documents, the Participation Agreement and other documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies or certified copies thereof; (f) the genuineness of all signatures and seals on all of the Loan Documents, the Participation Agreement and other documents submitted to us, and that all such documents have been duly executed by the persons authorized. Nothing has come to our attention that would lead us to conclude that reliance on any of the foregoing assumptions is not reasonable. Based upon the foregoing examinations and assumptions, and subject to the other qualifications and limitations set forth below, we are of the opinion that: 1. No approval, consent, license, permit, opinion, filing, registration with or other authorization of any governmental authority of the United States of America or the State of New York is required on the part of the Guarantor or the Participant for the execution or delivery by the Guarantor or Participant, of, or the performance or incurrence by the Guarantor or Participant, as the case may be, of any obligations or liabilities under, any of the Loan Documents or Participation Agreement. 2. The Loan Documents constitute, the legal, valid and binding obligations of the Guarantor enforceable in accordance with their respective terms, except as E1-2 enforcement may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general and by general principles of equity. 3. The Participation Agreement constitutes the legal, valid and binding obligation of the Participant enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general and by general principles of equity. 4. The execution, delivery and performance of the Loan Documents and the Participation Agreement and the monetary payment of all amounts due on the dates and in the currency provided for therein (a) will not violate any provision of law or other governmental directive having the force of law to which the Guarantor or Participant are subject, (b) to the best of our knowledge, will not conflict with or result in the breach of any provision of any material agreement under which the Guarantor or Participant has incurred Indebtedness and will not conflict with or result in the breach of any provision of any other material agreement to which the Guarantor or Participant is a party or by which they or any of their properties or assets is bound, (c) to the best of our knowledge, will not constitute a default or an event that with the giving of notice or the passing of time, or both, would constitute a default under any such agreement, and (d) to the best of our knowledge, will not result in the creation or imposition of any lien, charge or encumbrance on any of the assets or the property of the Guarantor. 5. Except as described in Schedule 6.5 to the Loan Agreement and to the best ------------ of our knowledge, there are no arbitration, litigation, governmental, administrative or other proceedings pending or threatened against the Guarantor or the Participant or relating to the Loan Documents, the Participation Agreement or any of the transactions contemplated thereby. 6. The Guarantor is the owner, directly or indirectly, of 100% of the issued and outstanding equity of the Borrower and the Participant, to the best of our knowledge, free and clear of all liens. 7. To the best of our knowledge, the annual report of the Guarantor for the year ended February 27, 1998, (b) the financial statements delivered to the Lender in accordance with Section 6.6, and (c) all filings of the Guarantor with the Securities and Exchange Commission preceding the date hereof, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 8. The execution and delivery by each of the Guarantor and the Participant of, the performance and incurrence by each of the Guarantor or the Participant, as the case may be, of its obligations and liabilities under, and the consummation by each of the Guarantor or the Participant, as the case may be, of the transactions contemplated by, the Loan Documents and the Participation Agreement do not and will not violate any E1-3 law, rule or regulation of the United States of America or the State of New York applicable to the Guarantor or the Participant. 9. The choice of New York law to govern the Loan Documents and the Participation Agreement would be recognized and upheld by courts of the State of New York and Federal courts located in the State of New York, and the submission by the Guarantor and the Participant to the jurisdiction of those courts is valid and binding on the Guarantor and the Participant. We are attorneys admitted to the Bar of the State of New York. The opinions set forth herein are limited to matters governed by the laws of the State of New York and the Federal laws of the United States of America, and we express no opinion as to any other laws. Very truly yours, E1-4 EXHIBIT E-2 [Opinion under Michigan law of Jon O. Botsford, General Counsel of the Guarantor] [date] Societe Generale, Chicago Branch 181 West Madison Chicago, Illinois 60602 Re: Loan Agreement dated as of [ ], 1999 among Steelcase SAS, Steelcase Inc., as Guarantor and Societe Generale, Chicago Branch ----------------------------------------- Ladies and Gentlemen: I have acted as counsel to Steelcase Inc., a Michigan corporation, and Steelcase Europe LLC, a limited liability company organized under the laws of the State of Michigan, in connection with the preparation, execution and delivery of the Loan Agreement dated as of [ ], 1999 (the "Loan Agreement") among Steelcase SAS, as borrower (the "Borrower"), Steelcase Inc., as guarantor (the "Guarantor") and Societe Generale, Chicago Branch, as lender (the "Lender"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. In rendering this opinion, I have examined originals or copies, certified or otherwise identified to my satisfaction, of the following documents: (i) the Loan Agreement; (ii) the Note to be dated the First Drawdown Date; (iii) the Guaranty (collectively with the Loan Agreement and the Note hereinafter referred to as the "Loan Documents"); (iv) the Participation Agreement dated of even date with the Loan Agreement between Steelcase Europe LLC as participant (the "Participant") and the Lender (the "Participation Agreement"); and such other instruments and documents, and I have made such other inquiries and investigations, as I have deemed necessary or appropriate for rendering the opinions set forth herein. In rendering this opinion I have also, with your permission, relied upon, among other E2-1 things, legal opinions dated on or about the date hereof from Baker & McKenzie, counsel to the Borrower, Guarantor and Participant with respect to certain New York and French law matters. In rendering this opinion, I have assumed, other than with respect to the Guarantor and Participant: (a) the capacity, power and authority of each of the parties to the Loan Documents and Participation Agreement to enter into, execute, deliver and perform their respective obligations under each of such documents; (b) the due authorization of each signatory to the Loan Documents and Participation Agreement to execute and deliver such documents on behalf of the parties thereto and the due execution and delivery of each of such documents; (c) that each party to the Loan Documents and Participation Agreement has taken all necessary action to authorize the execution, delivery and performance of each of such documents to which it is a party; (d) that each party to the Loan Documents and Participation Agreement is duly organized and validly existing under the laws of its place of organization; (e) the authenticity of all Loan Documents, the Participation Agreement and other documents submitted to me as originals and the conformity with the originals of all documents submitted to me as copies or certified copies thereof; (f) the genuineness of all signatures and seals on all of the Loan Documents, the Participation Agreement and other documents submitted to me, and that all such documents have been duly executed by the persons authorized. Nothing has come to my attention that would lead us to conclude that reliance on any of the foregoing assumptions is not reasonable. Based upon the foregoing examinations and assumptions, and subject to the other qualifications and limitations 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. The Guarantor is qualified or registered to do business in every jurisdiction where the failure to be so qualified or registered, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect. E2-2 2. The Participant is a limited liability company duly organized and in good standing under the laws of the State of Michigan. 3. No approval, consent, license, permit, opinion, filing, registration with or other authorization of any governmental authority of the United States of America or the State of Michigan is required on the part of the Guarantor or the Participant for the execution or delivery by the Guarantor or Participant, of, or the performance or incurrence by the Guarantor or Participant, as the case may be, of any obligations or liabilities under, any of the Loan Documents or Participation Agreement. 4. The Guarantor and Participant have taken all necessary and appropriate action to authorize the execution and delivery of the Loan Documents and the Participation Agreement and to authorize the performance and observance of the terms thereof. 5. The execution, delivery and performance of the Loan Documents and the Participation Agreement and the monetary payment of all amounts due on the dates and in the currency provided for therein (a) will not violate any provision of law or other governmental directive having the force of law to which the Guarantor or Participant are subject, (b) to the best of our knowledge, will not conflict with the Certificate of Incorporation or By-laws or other governing documents of the Guarantor or the Participant, (c) to the best of our knowledge, will not conflict with or result in the breach of any provision of any material agreement under which the Guarantor or Participant has incurred Indebtedness and will not conflict with or result in the breach of any provision of any other material agreement to which the Guarantor or Participant is a party or by which they or any of their properties or assets is bound, (d) will not constitute a default or an event that with the giving of notice or the passing of time, or both, would constitute a default under any such agreement, and (e) to the best of my knowledge, will not result in the creation or imposition of any lien, charge or encumbrance on any of the assets or the property of the Guarantor. 6. Except as described in Schedule 6.5 to the Loan Agreement and to the ------------ best of my knowledge, there are no arbitration, litigation, governmental, administrative or other proceedings pending or threatened against the Guarantor or relating to the Loan Documents or any of the transactions contemplated thereby. 7. The Guarantor is the owner, directly or indirectly, of 100% of the issued and outstanding equity of the Borrower and the Participant. 8. To the best of my knowledge, the annual report of the Guarantor for the year ended February 27, 1998, (b) the financial statements delivered to the Lender in accordance with Section 6.6, and (c) all filings of the Guarantor with the Securities and Exchange Commission preceding the date hereof, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. E2-3 9. The execution and delivery by the Guarantor and the Participant of, the performance and incurrence by the Guarantor or the Participant, as the case may be, of its obligations and liabilities under, and the consummation by the Guarantor or the Participant, as the case may be, of the transactions contemplated by, the Loan Documents and the Participation Agreement do not and will not violate any law, rule or regulation of the United States of America or the State of Michigan applicable to the Guarantor or the Participant. 10. The choice of New York law to govern the Loan Documents and the Participation Agreement would be recognized and upheld by courts of the State of Michigan and Federal courts located in the State of Michigan, and the submission by the Guarantor and the Participant to the jurisdiction of those courts is valid and binding on the Guarantor and the Participant. I am an attorney admitted to the Bar of the State of Michigan. The opinions set forth herein are limited to matters governed by the laws of the State of Michigan and the Federal laws of the United States of America, and I express no opinion as to any other laws. This opinion is specific to the transactions and documents referred to herein and may not be relied upon, used, published, quoted or referred to by you for any other purpose and should not be assumed to express general principles of law applicable to transactions of this kind. Very truly yours, E2-4 EXHIBIT F-1 COMPLIANCE CERTIFICATE STEELCASE SAS Date: To: Societe Generale, Chicago Branch This Compliance Certificate is furnished pursuant to that certain Loan Agreement dated as of April 9, 1999 (the "Loan Agreement") among Steelcase SAS (the "Borrower"), Steelcase Inc., as Guarantor (the "Guarantor") and Societe Generale, Chicago Branch (the "Lender"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected [________] of the Borrower and an Authorized Representative of the Borrower. 2. I have reviewed the terms of the Loan Agreement and I have made, or have caused to be made under my supervision, a detailed review of the business and financial condition of the Borrower [and its Subsidiaries] during the fiscal period from _____ through and including ________ covered by the attached statutory accounts. 3. During the fiscal period covered by the attached statutory accounts, the Borrower was in compliance with all provisions of the Loan Agreement applicable to the Borrower and as of the end of such period there occurred no Event of Default or event that with passage of time or notice or both would constitute an Event of Default and no such Event of Default or event is continuing on the date hereof. [If any Event of Default or such other event occurred or is continuing, a statement to that effect and a statement of the actions taken and proposed to be taken with respect thereto.] The foregoing certifications are hereby certified to be true and correct and the statutory accounts delivered with this Certificate in support hereof are delivered as of the date first written above. STEELCASE SAS By: _______________________________________ Name: Title: F1-1 EXHIBIT F-2 COMPLIANCE CERTIFICATE STEELCASE INC. Date: To: Societe Generale, Chicago Branch This Compliance Certificate is furnished pursuant to that certain Loan Agreement dated as of April 9, 1999 (the "Loan Agreement") among Steelcase SAS (the "Borrower"), Steelcase Inc., as Guarantor (the "Guarantor") and Societe Generale, Chicago Branch (the "Lender"). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected [________] of the Guarantor and an Authorized Representative of the Guarantor. 2. I have reviewed the terms of the Loan Agreement and I have made, or have caused to be made under my supervision, a detailed review of the business and financial condition of the Guarantor and its Subsidiaries during the fiscal period from ________ through and including _______ covered by the attached financial statements. 3. During the fiscal period covered by the attached financial statements, the Guarantor was in compliance with all provisions of the Loan Agreement applicable to the Guarantor and as of the end of such period there occurred no Event of Default or event that with passage of time or notice or both would constitute an Event of Default and no such Event of Default or event is continuing on the date hereof. [If any Event of Default or such other event occurred or is continuing, a statement to that effect and a statement of the actions taken and proposed to be taken with respect thereto.] The foregoing certifications are hereby certified to be true and correct and the financial statements delivered with this Certificate in support hereof are delivered as of the date first written above. STEELCASE INC. By: _____________________________________ Name: Title: F2-1 EX-4.21 13 dex421.txt PARTICIPATION AGREEMENT EXHIBIT 4.21 Execution Copy PARTICIPATION AGREEMENT This Participation Agreement ("Agreement") entered into as of April 9, 1999, by and between STEELCASE EUROPE LLC, a limited liability company organized under the laws of the State of Michigan ("Participant"), and SOCIETE GENERALE, Chicago Branch, a banking institution organized under the laws of the Republic of France acting through its Chicago branch ("Bank"), sets forth the binding agreement of the parties. R E C I T A L S - - - - - - - - A. Simultaneously herewith, Bank, as lender, is entering into a Loan Agreement (as the same may be amended, supplemented and otherwise modified from time to time, the "Loan Agreement") dated as of the date hereof with Steelcase SAS, an affiliate of Participant, organized as a Societe par Actions Simplifiee under the laws of the Republic of France, with its registered office at Tour Aurore 01, 18 Place des Reflets, 92975 Paris La Defense 2 Cedex, France (the "Borrower"), pursuant to which Bank has agreed to advance a loan (the "Loan") to Borrower in the principal amount of up to US$220,000,000 subject to the terms and conditions set forth in the Loan Agreement and in this Agreement. B. Bank and Participant mutually desire that Bank shall grant to Participant a participation interest (the "Participation Interest") in the Loan on the terms set forth herein, with each party having an interest in the Loan such that Participant will be entitled, subject to the terms and conditions hereof and of the Loan Agreement, to 100% of the Loan Agreement's benefits and rights during the Participation Period (as defined below). 1. PARTICIPATION 1.1 Definitions ----------- Unless otherwise defined herein, all capitalized terms used in this Agreement shall have the respective meanings set forth in the Loan Agreement. 1.2 Agreement to Purchase and Sell ------------------------------ Bank hereby agrees to sell to Participant, and Participant hereby agrees to purchase from Bank, the Participation Interest (including all related payments and recoveries to which Participant is entitled pursuant to Section 2 below), and Bank hereby transfers the Participation Interest to Participant in consideration of the obligation undertaken herein by Participant to pay to Bank a participation purchase price in the amount set forth on Schedule 1.2 hereto, to be completed and attached at least two days prior to the First Drawdown Date (as defined in the Loan Agreement), plus an additional amount with respect to any drawdown subsequent to the first Drawdown of the Loan by the Borrower as may be agreed from time to time among Bank and Participant (the "Participation Purchase Price"). Participant and Bank acknowledge that Participant is purchasing the Participation Interest as of the First Drawdown Date. 1.3 Disclosure of Terms of Loan Agreement. Participant acknowledges ------------------------------------- that it has received a copy of the Loan Agreement as executed and in effect as of the date hereof. Bank agrees that it will furnish to Participant a copy of each Drawdown Certificate of the Loan promptly after such Drawdown Certificate is delivered by Borrower. 1.4 Manner of Payment of Participation Purchase Price. Participant ------------------------------------------------- agrees to provide immediately available funds to the account designated by Bank in sufficient time to permit such funds to be advanced as part of the relevant Drawdown in satisfaction of the obligation of Bank pursuant to its Commitment under the Loan Agreement. The advance of the Participation Purchase Price in such manner shall constitute payment in full for the Participation Interest. 1.5 Nature of Transaction. The transaction contemplated by this --------------------- Agreement is a purchase and sale of an undivided interest in the Loan in consideration for Participant's payment of the Participation Purchase Price. The Participation Interest will be without restriction and Participant will have the same benefits as the Bank with regard to yield protection and increased costs and provision of information on the Borrower. The transfer of funds by Participant to Bank in accordance with Section 1.2 shall not constitute a loan by Participant to Bank, or constitute the making of a loan agreement between Borrower and Participant or a sale of securities by Bank to Participant, and shall not result in the creation of a joint venture between Bank and Participant. The purchase shall be without recourse to Bank, and Participant assumes all risks of non-payment and any other default by Borrower. Bank shall owe Participant no duty except as specifically set forth in this Agreement. 2. PAYMENTS 2.1 Collections and Remittances. --------------------------- 2.1.1 Payments Held in Trust. During the Participation Period ---------------------- (as defined below), Bank shall hold in trust for the benefit of Participant all amounts paid to Bank by Borrower in respect of the Loan pending payment of such amounts to Participant in accordance with Section 2.1.2. 2.1.2 Payment Allocation. Commencing on the first day of the ------------------ Interest Period immediately following the Interest Payment Date that occurs on the seventh anniversary of the first Drawdown Date under the Loan Agreement subject to any Banking Day Adjustment (the "Payment Commencement Date"), and continuing until such date on which the Loan is repaid in full in accordance with its terms (such period being referred to as the "Participation Period"), Bank shall pay to Participant 100% of all consideration accruing and paid by Borrower to Bank on the Loan from and after the Payment Commencement Date including, without limitation, all amounts of principal of and interest on the Loan; provided, however, that if Bank has not been paid all amounts due and owing to Bank under the Loan Agreement up to the Payment Commencement Date, any and all amounts paid on the Loan shall be retained by Bank to the extent necessary to satisfy such amounts before any payment is made to Participant hereunder. Prior to the Payment Commencement Date, Participant shall have no right to receive any payments, except as provided in this section in the case of permitted prepayments or an acceleration of the Loan following the occurrence of an Event of Default, with regard to payments of principal of and interest on the Loan payable to Bank pursuant to the Loan Agreement. Participant hereby acknowledges and agrees that the yield protection provisions in favor of Bank set forth in Section 3 of the Loan Agreement, and the fee payment and indemnification provisions in favor of Bank set forth in Section 4 of the Loan Agreement, respectively, shall survive the commencement of the Participation Period with respect to events occurring and liabilities incurred during the Initial Period, and that prior to the commencement of the Participation Period Participant shall not have any right or claim to participate in the benefits thereof. In the event that the Loan is prepaid prior to the commencement of the Period, whether by acceleration following an Event of Default or by any permitted prepayment in accordance with the terms of the Loan Agreement or otherwise, Bank shall pay Participant an amount equal to the amount received less the Initial Period Amount. 2.1.3 Drawdown. If on any Drawdown Date, Participant shall fail -------- to fund its portion of the Drawdown in a timely manner so as to enable Bank to confirm the availability of funds for the Drawdown prior to the time of the Drawdown, then Bank shall have no obligation to advance its own funds in respect of such portion of the Loan. Participant acknowledges its obligation to pay the relevant portion of the Participation Purchase Price to Bank prior to or concurrently with the making by Bank of each Drawdown and agrees to indemnify and hold harmless Bank against any demand, claim or proceeding asserted or brought by Borrower based upon, arising out of or in connection with Participant's failure to advance funds as set forth herein and Participant agrees to reimburse Bank for all costs and expenses (including any costs of funding Participant's portion of the Drawdown itself and attorneys fees and expenses) incurred in connection with Participant's failure to advance funds as set forth herein. 2.2 Payment Returns and Adjustments ------------------------------- 2.2.1 If, for any reason, Bank makes any payment to Participant of any amounts prior to receiving the related amount from Borrower and Borrower's related payment is not received by Bank within one Banking Day after such payment by Bank to Participant, then promptly upon demand by Bank, Participant shall return the payment to Bank with interest at the Applicable Rate (as defined below) for the period from (and including) the date Participant received such payment to (but excluding) the date such payment is returned in same day funds. 2.2.2 If, as a result of a miscalculation or other mistake, Bank pays an amount to Participant that is less than or greater than the amount then payable to Participant in respect of its Participation Interest, then, promptly upon becoming aware of such discrepancy, Bank shall pay to Participant the amount of the deficiency or Participant shall return to Bank the amount of the excess, as the case may be, together with interest at the floating rate generally available on overnight deposits for funds in the currency received by Participant or Bank, as applicable, in the place where such amount was paid, as determined by Bank in its discretion (the "Applicable Rate"). 2.2.3 If Bank determines at any time that any amount received or collected by Bank in respect of the Loan must be returned to Borrower or paid to any other person or entity pursuant to any insolvency law or otherwise, then, notwithstanding any other provision of this Agreement, Bank shall not be required to distribute any portion thereof to Participant and Participant shall promptly, on demand by Bank, repay any portion thereof that Bank has distributed to Participant, together with interest thereon at such rate and for such period, if any, as and in respect of which Bank is required to pay interest to Borrower or such other person or entity. 2.2.4 If Bank fails to make any payment to Participant of any amounts due to Participant within three (3) Banking Days after receiving the related amount from Borrower or if Bank is subject to any insolvency and/or bankruptcy related proceedings (which shall include the entering of any decree or order of a court for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of Bank or of any of its property, or for the liquidation or winding-up of Bank), then Bank agrees that Participant may give notice of such failure of payment or insolvency or bankruptcy proceedings to Borrower and may direct Borrower, to which direction Bank hereby irrevocably consents, to set off and reduce the amount of any payments owed and payable to Bank in respect of the Loan by the amount of the payment owed to Participant and Participant may direct Borrower to make any further payments in respect of the Loan, during the continuance of the failure of payment by Bank or any such insolvency or bankruptcy proceedings, directly to Participant. In the event that, following the commencement of the Participation Period, Bank is subject to any insolvency and/or bankruptcy proceedings and Bank receives during the pendency of such proceedings any funds from Borrower under or in connection with the Loan Agreement, subject to any restrictions under then applicable laws, regulations, rules or orders, Bank will use reasonable efforts to place, or cause to be placed, such funds in a segregated account in trust for the benefit of Participant. Participant agrees promptly to notify Bank after it has given such notice and direction to Borrower of the amount demanded from Borrower and of each direct payment made by Borrower to Participant, provided, however, that any failure by Participant to give such notice to Bank shall not affect the validity of such direction by Participant to Borrower. The rights of Participant under this section are in addition to any other rights and remedies which Participant may have against Bank by reason of any failure of payment by Bank. The parties intend that this provision will satisfy the requirements of (i) the Financial Accounting Standards Board (FASB) Interpretation No. 39 with respect to off-setting of assets and liabilities for financial statement purposes, and (ii) the Statement of Financial Accounting Standards No. 125 with respect to accounting for transfers and servicing of financial assets and extinguishments of liabilities relating to loan participations. 2.2.5 Bank covenants to Participant that all amounts it receives from Borrower under the Loan during the Participation Period shall be forwarded to Participant free and clear of all taxes, levies, deductions or withholdings imposed on payments from Bank to Participant hereunder and that Bank shall pay such additional amount to Participant as may be necessary in order that the actual amount received after payment of taxes, levies, deductions or withholdings (and after payment of any additional taxes or other charges due as a consequence of the payment of such additional amount) shall equal the amount that would have been received if such taxes, levies, deductions or withholdings were not required; provided, however, that Bank shall be entitled to deduct or withhold all such taxes, levies, deductions and withholdings and shall not be required to pay such additional amount if amounts paid to Participant hereunder would be subject to a U.S. tax, levy, deduction or withholding (including without limitation, pursuant to a change in U.S. tax law) if Bank were a bank chartered or established under the laws of the United States or any state thereof. 2.2.6 The obligations of Participant and Bank under this Section 2.2 shall survive the termination of this Agreement and the Loan Agreement. 2.3 Place and Manner of Payments. All payments pursuant hereto shall ---------------------------- be made by wire transfer of immediately available funds, not later than 12:00 p.m. (Chicago, Illinois time) on the day in question (i) in the case of payments to Bank, to the account of Bank specified to Participant from time to time, (ii) in the case of payments to Participant, to the account of Participant, the details of which Participant shall provide to Bank prior to the Payment Commencement Date and thereafter from time to time or, (iii) to such other person or place as Participant or Bank, as the case may be, may designate in writing from time to time. 3. LOAN ADMINISTRATION BY BANK AS AGENT 3.1 Appointment and Authorization of Bank as Agent. Participant ---------------------------------------------- hereby appoints and authorizes Bank as its agent ("Agent") to take such action as Agent on its behalf and to exercise such powers under this Agreement as are delegated to Agent by the terms hereof, together with all such powers as are reasonably incidental thereto. 3.2 Agent and Affiliates. Notwithstanding its appointment as Agent -------------------- with respect to the Loan and without any obligation to provide notice to Participant, Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with Borrower or Participant or any Subsidiary or Affiliate of Borrower or Participant as if it were not Agent. 3.3 Action by Agent. The obligations of Agent hereunder are only --------------- those expressly set forth herein. Without limiting the generality of the foregoing, Agent shall not be required to take any action with respect to any Event of Default, except as expressly provided in section 2.1.1. 3.4 Sole Administration by Agent. ---------------------------- 3.4.1 During the term of this Agreement, Agent shall maintain in accordance with its usual practice records and accounts in respect of the amounts paid by, and the amounts distributed to, Participant hereunder, and the computation of interest payable to Participant, which records and accounts shall be available for inspection by Participant during customary banking hours upon not less than three (3) Banking Days prior notice, and which shall be binding upon Participant absent manifest error. 3.4.2 Except as expressly set forth in Section 3.4.3, Agent, will administer and manage the Loan in accordance with the Loan Agreement in the ordinary course of business and in accordance with Agent's usual practices, modified from time to time as Agent deems appropriate under the circumstances. Except as expressly set forth in Section 3.4.3, Agent shall be entitled, at any time prior to the Payment Commencement Date, to use its discretion in taking or refraining from taking any actions in connection with the Loan and any related documents, including, without limitation, actions relating to any waiver or amendment of any term thereof, as if Agent were the sole party involved in the Loan and no participation existed; provided, however, to the extent possible under the circumstances, Agent will use its best efforts to give prior notice to Participant pursuant to Section 6.1 hereof and to consult with Participant before taking such action. Notwithstanding the foregoing, Agent shall be fully justified in failing or refusing to take any action in connection with the Loan and any related documents unless Agent shall first receive such advice or concurrence of Participant as Agent shall deem appropriate. 3.4.3 Notwithstanding the foregoing, Agent, shall not, at any time prior to the Payment Commencement Date, without the prior consent of Participant, (i) waive any default by Borrower involving the payment of money to Bank pursuant to the Loan Agreement; (ii) extend the time of payment of any of Borrower's obligations with respect to the Loan; (iii) increase the principal amount of the Loan; (iv) reduce the principal amount of, or the rate at which interest accrues on, the Loan or (v) change the manner of payment of the Loan. If Agent requests Participant's consent to any such action and does not receive a written approval thereof from Participant within ten (10) Banking Days (or such shorter period as may be requested or required by Borrower) after making such request, then Participant shall be deemed to have not given such consent. From and after the Payment Commencement Date, Agent agrees that it shall act solely on behalf of Participant in administering the Loan and shall, if requested by Participant, from time to time, enter into with Borrower any amendment, modification or waiver of any terms or provisions of the Loan Agreement or the Note, or any other related agreement or instrument reasonably requested by Participant; provided, however, that Participant agrees to reimburse Agent for all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) of Agent incurred by Agent in connection with a request by Participant to enter into any such amendment, modification or waiver. During the Participation Period, the Agent hereby agrees that it will not amend the Loan, waive any provision thereof, accelerate the Loan or otherwise exercise any remedies without the prior written consent of Participant. 3.4.4 If Bank is subject to any insolvency and/or bankruptcy related proceedings (which shall include the entering of any decree or order of a court for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of Bank or of any of its property, or for the liquidation or winding-up of Bank), Bank agrees that Participant may either direct Bank (i) to assign all its rights and interest under the Loan Agreement (including, without limitation, all rights with respect to the Repayment Shares) relating to the Participation Period (but not its rights and interest under the Loan Agreement arising before the Participation Period) or (ii) in consideration of payment by Participant of the then outstanding Initial Period Amount, to assign all its rights and interest under the Loan Agreement (including, without limitation, all rights with respect to the Repayment Shares), in each case, either directly to Participant or to another financial institution of Participant's choice, to which assignment Bank hereby irrevocably consents and waives all right of setoff, and upon which assignment Bank's obligations as Agent under this Agreement shall cease. 3.4.5 In no event shall Bank be entitled to own or hold the Repayment Shares and, concurrently with the issuance of the Repayment Shares, shall immediately take all action necessary, including, without limitation, notice to Borrower, to cause the Repayment Shares to be registered in the name of Participant or its nominee. So long as Bank has been paid all amounts due and owing to it under the Loan Agreement, at no time shall Bank hold or exercise any rights in the Repayment Shares, whether in the nature of dividends, voting rights or other rights; all such rights shall be and remain rights of Participant or its nominee. 3.5 Agency Fee. During the Participation Period, Participant shall ---------- pay to Bank in consideration of services Bank provides in its capacity as Agent under this Section 3 a fee (the "Agency Fee"), such fee to be paid annually on the Payment Commencement Date (as defined in Section 2.1.2 herein) and every anniversary thereof. The Agency Fee shall be US$25,000 for the first year of the Participation Period and for succeeding years shall be subject to an adjustment for inflation by an amount determined by reference to the Producer Price Index published by the Bureau of Labor Statistics of the United States Department of Labor (the "PPI"), or a successor index appropriately adjusted. The adjustment of the Agency Fee in each year following the first year of the Participation Period shall be calculated by multiplying the amount of the Agency Fee for the immediately preceding year by a fraction the numerator of which is the PPI of the then current year and the denominator of which is the PPI of the immediately preceding year. Participant's obligation to pay the Agency Fee under this Section shall terminate upon either (i) termination or prepayment of the Loan pursuant to the Loan Agreement or (ii) assignment of the rights and benefits of Bank pursuant to Section 3.4.4. 3.6 Agent Not Liable to Participant in Administering the Loan; ---------------------------------------------------------- Representations of Bank. - ----------------------- 3.6.1 Except as expressly provided herein, Agent shall have no liability or responsibility to Participant for any action or inaction by Agent in connection with the administration of the Loan other than to act in good faith and to exercise the same care in the administration of the Loan as Agent exercises with respect to loans for its own account. Except as expressly provided herein, Agent shall not be liable to Participant for any action taken or not taken by Agent in connection with the enforcement of the Loan or any related documents, except for any actual losses (other than consequential damages) suffered or incurred by Participant that are determined by a final court of competent jurisdiction to have resulted from Agent's gross negligence or willful misconduct. Without limiting the foregoing, Agent (i) may consult with legal counsel, independent public accountants, appraisers and other experts, selected by Agent, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such persons, (ii) shall be entitled to rely on, and shall incur no liability by acting upon, any conversation, notice, consent, certificate, statement, order, or any document or other writing (including, without limitation, telegraph, telex, facsimile, or other telecommunication device) believed by Agent to be genuine and correct and to have been signed, sent, or made by the proper person, (iii) except as expressly stated herein, makes no representation or warranty of any kind or character relating to Borrower and shall not be responsible for any representation or warranty made in or in connection with the Loan, (iv) makes no representation or warranty as to, and shall not be responsible for the correctness as to form, the due execution, legality, validity, enforceability, genuineness, sufficiency, or collectibility of the Loan or any other document relating thereto, or for any failure by Borrower to perform its obligations thereunder, or for Borrower's use of the proceeds therefrom, (v) makes no representation or warranty as to, and assumes no responsibility for, the authenticity, validity, accuracy, or completeness of any notice, financial statement, or other document or information received by Agent in connection with, or otherwise referred to in, the Loan Agreement and (vi) shall not be required to make any inquiry concerning the observance or performance of any agreements contained in, or conditions of, the Loan Agreement or the Note or to inspect the property, books or records of Borrower. 3.6.2 Bank, as Agent, represents and warrants to Participant that, except insofar as Bank has previously notified Participant pursuant to Section 6.1, as of the date hereof and each Drawdown Date (i) the sale of the Participation Interest in the Loan by Bank to Participant has been duly authorized and approved by all necessary action on the part of Bank, (ii) Bank is entitled to the rights and benefits granted to it under the Loan Agreement free and clear of all consensual liens and encumbrances, and Bank has the right, power and authority to sell such Participation Interest to Participant and (iii) Bank has not consented to any amendment or modification in any respect of any of the Loan Agreement, the Note and Drawdown Certificate supplied to Participant. 3.7 Notices to Participant. Bank, as Agent, shall use reasonable ---------------------- efforts to: (i) notify Participant of any Event of Default (as defined in and under the Loan Agreement) or any material breach of any representation, covenant, warranty, or obligation of Borrower coming to the attention of the officers of Bank responsible for the administration of the Loan Agreement whether pursuant to written notice by Borrower to Bank under the Loan Agreement or otherwise; provided, however, no failure to give Participant such notice shall result in any liability of Bank to Participant or relieve Participant of any obligation hereunder; (ii) except as otherwise required by law or by an obligation of confidentiality to which Bank is subject, periodically provide Participant with copies of all material written reports, notices, and other documents that Bank receives pursuant to the terms of the Loan Agreement, provided that Bank shall have no responsibility for the authenticity, validity, accuracy or completeness of any such document; and (iii) notify Participant of each request for any modification to the terms of the Loan Agreement that requires Participant's consent pursuant to 3.4.3 hereof. 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARTICIPANT 4.1 Authorization; Binding Nature. Participant hereby represents and ----------------------------- warrants that this Agreement (i) has been duly authorized by all necessary corporate and other action, (ii) constitutes the legal, valid and binding obligation of Participant, enforceable in accordance with its terms, and (iii) does not violate or contravene the certificate of incorporation or by-laws or other constitutive documents of Participant or any law, rule, regulation, order or judgment applicable to it. 4.2 Independent Investigation by Participant. Participant ---------------------------------------- acknowledges (a) that Participant has received a copy of the Loan Agreement and has been provided with related documentation and access to all such financial data and other information pertaining to Borrower and all other related Persons that Participant has requested in order to enable it to make an independent and informed judgment with respect to the desirability of purchasing the Participation Interest, (b) that, except as expressly stated herein, neither Bank nor any Person on its behalf has made any representations or warranties to Participant and that no prior or future act by Bank or any Person on its behalf, including, without limitation, any review of the affairs of Borrower or any other related Persons shall be deemed to constitute a representation or warranty of Bank or any such Person and (c) that Participant has independently, without reliance upon Bank, and based on such information as Participant has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial condition, and general credit worthiness of Borrower and all other Persons it deemed necessary and made its own decision to execute this Agreement and thereby purchase the Participation Interest. Participant agrees that, independently and without reliance upon Bank or any representations or statements of Bank, and based on such information as Participant deems appropriate at the time, Participant will continue to make and rely upon its own credit analysis and decisions in taking or not taking any action in connection with this Agreement, the Loan Agreement or the related documents. 4.3 Status of Participant's Interest in the Loan. Participant hereby -------------------------------------------- represents and warrants to Bank that the purchase of Participant's participation in the Loan is made for investment for Participant's own account and not with a view to any resale, distribution, transfer or conveyance thereof. 4.4 Indemnification of Certain Costs and Expenses. Participant agrees --------------------------------------------- to indemnify (and Bank is authorized to debit Participant's account, if any, with Bank, or set off against any payments due to Participant from Bank hereunder for the same) Bank and its Subsidiaries and their respective directors, officers, employees, advisors, representatives, agents and controlling persons (collectively the "Indemnified Parties") from and against any and all losses, claims, damages, expenses and liabilities, joint or several, to which any of the Indemnified Parties may become subject related to, arising out of, or in connection with this Agreement or any of the transactions contemplated herein; provided that none of the Indemnified Parties shall be entitled to any indemnification for any of the foregoing that are finally judicially determined to have resulted primarily from an Indemnified Party's gross negligence or willful misconduct. The Borrower further agrees to reimburse each Indemnified Party immediately upon request for all expenses (including reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for, defense of, or providing evidence in, any commenced or threatened action, claim, proceeding or investigation (including, without limitation, usual and customary per diem compensation for any Indemnified Party's involvement in discovery proceedings or testimony), relating to or arising out of any matter referred to in this Agreement, including, without limitation, the performance by the Indemnified Parties of the services contemplated in this Agreement, whether or not such Indemnified Party is a party and whether or not such action, claim, proceeding or investigation is initiated or brought by or on behalf of Participant or any of its Affiliates, except that the Indemnified Parties shall not be entitled to any reimbursement for any expenses that result from an Indemnified Party's gross negligence or willful misconduct. If and to the extent that the indemnity or reimbursement obligations of the Borrower under this Section may be unenforceable for any reason, Participant agrees to make the maximum contribution to the payment and satisfaction of each of such indemnity or reimbursement obligations which is permissible under applicable law. The covenants contained in this Section shall survive the termination of this Agreement. 5. CONFIDENTIALITY 5.1 Bank covenants and agrees not to disclose to any Person any Confidential Information (as defined below), except (i) as may be necessary or advisable under or required by law, rule or regulation or legal process or order or request of any governmental authority, (ii) to its officers, directors, employees, attorneys and other advisors and (iii) in connection with any action or proceeding arising out of or in connection with this Agreement, the Note, the Loan Agreement or the Guaranty or in connection with the enforcement or collection of the Obligations or the exercise of any right and remedy under any such agreement or instrument. 5.2 "Confidential Information" shall mean any information with respect to Borrower, the Loan Agreement and the existence of this Agreement other than (i) information previously filed with any governmental agency and available to the public, (ii) information previously published in any public medium and (iii) information previously disclosed by Borrower or Participant to any Person not associated with Borrower or Participant free of any restrictions as to further disclosure. 6. MISCELLANEOUS 6.1 Notices. Any notice required or permitted to be given hereunder ------- shall be in writing and shall be (a) personally delivered, (b) delivered by a recognized courier service, (c) transmitted by postage prepaid registered mail (airmail if international), or (d) transmitted by telecopier (with postage prepaid mail confirmation airmail if international) to the parties as follows (as elected by the party giving such notice): To Participant: Steelcase Europe LLC c/o Steelcase Inc. 901 44th Street, S.E. Grand Rapids, MI 49508 Tel: (616) 246-9600 Fax: (616) 248-7010 Attn: General Counsel To Bank: Societe Generale, Chicago Branch 181 West Madison Chicago, Illinois 60602 Tel: (312) 578-5000 Fax: (312) 578-5099 Attn: Editha Paras, Vice President Except as otherwise specified herein, all notices and other communications shall be deemed to have been duly given on (a) the date of receipt if delivered personally or by courier service, (b) the date five days after posting if transmitted by mail or (c) the date of transmission if transmitted by telecopier, whichever shall first occur. Any party may change its address for purposes hereof by notice to the other party. 6.2 Headings. Headings are for reference only and are not to be used -------- in interpreting this Agreement. 6.3 Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of New York (including without limitation Sections 5-1401 and 5-1402 of the New York General Obligations Law), without giving effect to the principles of conflicts of law. 6.4 Counterparts. This Agreement may be executed in counterparts, ------------ each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. 6.5 Amendment and Termination. This Agreement may not be modified, ------------------------- amended or terminated except upon the written consent of both parties. 6.6 Severability. Any provision of this Agreement that is invalid or ------------ unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining provisions of this Agreement or affecting the validity or enforceability of any provisions of this Agreement in any other jurisdiction. 6.7 Successors and Assigns. ---------------------- (a) This Agreement and all its provisions shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. (b) Participant shall be permitted to transfer and assign some or all of its rights and benefits, but not its obligations, under this Agreement (including without limitation, a subparticipation), to any Subsidiary or Affiliate and agrees that prior to or concurrently with such transfer, assignment or subparticipation, Participant shall notify Bank in writing of the same and provide Bank with the name of the transferee and the account to which the transferee will receive payments hereunder; provided that (i) no such assignment shall subject Bank to any increased costs in connection with this Agreement and (ii) such transferee shall first agree to be bound by the terms of this Agreement in a written instrument delivered to Participant and Bank in form and substance satisfactory to Bank. Bank shall be permitted to transfer and assign its rights, benefits and obligations under this Agreement to a Person only if (i) Bank concurrently therewith assigns all of its rights, benefits and obligations under the Loan, the Loan Agreement, the Note, the Guaranty and related documentation to the same Person and provided that it is permitted to do so by the terms of the Loan Agreement, (ii) no such assignment shall subject Participant to any increased cost in connection with this Agreement and (iii) such Person shall agree to be bound by the terms of this Agreement in a written instrument delivered to Bank in form and substance satisfactory to Participant. 6.8 Consent to New York Courts; Waiver of Forum Non-Conveniens. ---------------------------------------------------------- (a) Participant and Bank hereby irrevocably consent that any legal action or proceedings against them or any of their property with respect to this Agreement may be brought in any state or Federal court located in the City of New York, United States of America or both, as Bank may elect, and by execution and delivery of this Agreement, Participant and Bank hereby each submit to and accept with regard to any such action or proceeding, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Participant and Bank irrevocably consent to the service of process in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to them at the address set forth in Section 6.1 above. Such service of process shall be effective upon receipt. The foregoing, however, shall not limit the rights of Participant and Bank to serve process in any other manner permitted by law or to bring any legal action or proceeding or to obtain execution of judgment in any jurisdiction, including without limitation, France. (b) Participant and Bank hereby irrevocably waive any objection which they may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement in the State of New York and hereby further irrevocably waive any claim that the State of New York is not a convenient forum for any such suit, action or proceedings. 6.9 Process Agent. Participant hereby appoints the Guarantor as its ------------- agent for service of process in New York and hereby covenants and agrees to maintain the effectiveness of such appointment throughout the term of this Agreement. Participant hereby agrees that service of process on the Guarantor shall constitute good and sufficient service of process for the purpose of any action or proceeding in the State of New York in connection with this Agreement. 6.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES, -------------------- TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY UNDER OR IN CONNECTION WITH THIS AGREEMENT. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives as of the day and year first written above. PARTICIPANT: STEELCASE EUROPE, L.L.C. By: /s/ Alwyn Rougier-Chapman -------------------------- Name: Alwyn Rougier-Chapman Title: Manager BANK: SOCIETE GENERALE, CHICAGO BRANCH By: /s/ Editha N. Paras ----------------------------- Name: Editha N. Paras Title: Vice President EX-4.22 14 dex422.txt FIRST AMENDMENT TO LOAN AGREEMENT EXHIBIT 4.22 EXECUTION VERSION FIRST AMENDMENT TO LOAN AGREEMENT --------------------------------- THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as --------- of June 15, 2001, is by and among Steelcase SAS, a Societe par Actions Simplifie organized and existing under the laws of the Republic of France (the "Borrower"), Steelcase Inc., a Michigan corporation (the "Guarantor"), and -------- --------- Societe Generale, a bank organized and existing under the laws of the Republic of France, acting through its Chicago Branch (the "Lender"). ------ WHEREAS, the Borrower, the Guarantor and the Lender are parties to that certain Loan Agreement dated as of April 9, 1999 (as amended hereby and from time to time hereafter amended, restated, supplemented or otherwise modified and in effect, the "Loan Agreement"), pursuant to which the Lender has -------------- made certain loans to the Borrower; and WHEREAS, the Borrower and the Guarantor have requested that the Lender amend certain provisions of the Loan Agreement, and the Lender is willing to so amend the Loan Agreement pursuant to the terms and conditions set forth in this Amendment. NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto agree as follows: 1. Defined Terms. Capitalized terms used but not defined herein ------------- shall have the meanings ascribed to such terms in the Loan Agreement. 2. Amendment of Loan Agreement. The Loan Agreement is hereby --------------------------- amended as follows: (a) Section 10.1.1. Section 10.1.1 is hereby amended by -------------- deleting clause (x) in its entirety and inserting the following new clause (x): "(x) Liens on receivables securing Indebtedness of Steelcase Financial Services Inc. ("SFSI") or any Subsidiary of SFSI, so ---- long as the obligations of SFSI or such Subsidiary secured by such Liens are nonrecourse to the Guarantor or any of its Subsidiaries other than SFSI or such Subsidiary, provided that the Guarantor may enter into, and be liable in respect to, a limited performance guaranty regarding the accuracy of any customary representations and warranties made by SFSI or such Subsidiary in respect of such receivables and the billing, monitoring and collection functions of SFSI or such Subsidiary, as servicer, in respect of such receivables, and provided further that at any time, the aggregate outstanding amount of Indebtedness of SFSI and its Subsidiaries that is secured by such receivables does not exceed $500,000,000." (b) Section 10.2.1. Section 10.2.1 is hereby deleted in its -------------- entirety and replaced with the following new Section 10.2.1: "10.2.1 Minimum Net Worth. The Guarantor shall not permit at ----------------- any time Net Worth to be less than the sum of (i) Net Worth as of February 25, 2000, plus (ii) 25% of Net Income (if a positive number) from February 25, 2000 to the then most recent fiscal year end or second fiscal quarter end, plus (iii) all Additions to Capital from February 25, 2000 to the then most recent fiscal year end or second fiscal quarter end." (c) Section 10.2.2. Section 10.2.2 is hereby deleted in its -------------- entirety and replaced with the following new Section 10.2.2: "10.2.2 Maximum Debt Ratio. The Guarantor will not permit at ------------------ any time the ratio of (i) Debt of the Guarantor and its Subsidiaries on a consolidated basis to (ii) EBITDA, for each period consisting of the most recently ended four consecutive fiscal quarters of the Guarantor, to exceed 3.25 to 1.00." (d) Section 10.2.3. Section 10.2.3 is hereby deleted in its -------------- entirety and replaced with the following new Section 10.2.3: "10.2.3 Minimum Interest Coverage Ratio. The Guarantor shall ------------------------------- not permit the ratio of (A) EBITDA to (B) interest expense of the Guarantor and its Subsidiaries on a consolidated basis, in each case for the four fiscal quarters ending on the last day of any fiscal quarter of the Guarantor to be less than 4.50:1.00." (e) Section 12.1.6. Section 12.1.6 is hereby deleted in its -------------- entirety and replaced with the following new Section 12.1.6: "12.1.6 Cross Defaults. The Guarantor or any of its -------------- Subsidiaries shall fail to pay any principal of or premium or interest on any Debt which is outstanding in a principal amount of at least $25,000,000 in the aggregate (but excluding Debt arising under this Agreement) of the Guarantor or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or the Guarantor or any of its Subsidiaries shall fail to perform or observe any other agreement, term or condition contained in any agreement or instrument relating to any such Debt (or if any other event or condition of default under any such agreement or instrument shall exist) and such failure, event or condition shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such failure, event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or -2- any such Debt shall be declared to be due and payable as a result of such failure, event or condition." 3. Representations and Warranties. In order to induce the Lender to ------------------------------ enter into this Amendment, each of the Borrower and the Guarantor hereby represents and warrants to the Lender that: (a) Power; Authority. It is validly existing in the jurisdiction ---------------- in which it has been organized; it has the power and authority to enter into this Amendment; and this Amendment constitutes its legal, valid and binding obligations and is enforceable against it in accordance with its terms. (b) No Default. After giving effect to this Amendment, no Event ---------- of Default shall have occurred and be continuing. 4. Ratification. Each of the Guaranty and, except as specifically ------------ amended hereby, the Loan Agreement shall remain unchanged and continue in full force and effect and the Borrower and the Guarantor hereby ratify and confirm such Loan Agreement. After the execution of this Amendment by all parties, any references to the "Loan Agreement" or the "Agreement" in the Loan Agreement, the Note, the Guaranty, the Participation Agreement or any other document in connection therewith shall be to the Loan Agreement, as amended hereby. 5. Miscellaneous. ------------- (a) Successors and Assigns. This Amendment shall be binding upon ---------------------- and shall be enforceable by the Borrower, the Lender and their respective permitted successors and assigns; provided that the Borrower shall have no right to assign or transfer its rights or obligations hereunder without the prior written consent of the Lender. The terms and provisions of this Amendment are for the purpose of defining the relative rights and obligations of Borrower and Lender with respect to the transactions contemplated hereby and there shall be no third party beneficiaries of any of the terms and provisions of this Amendment. (b) Entire Agreement. This Amendment and all documents referred ---------------- to herein constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understandings with respect to this Amendment. (d) Headings. Section headings in this Amendment are included -------- herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. (e) Severability. Wherever possible, each provision of this ------------ Amendment shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment. (g) Counterparts. This Amendment may be executed in any number ------------ of separate counterparts, each of which shall collectively and separately constitute one agreement. -3- Delivery of an executed counterpart of a signature page to this Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this Amendment. [signature page follows] -4- IN WITNESS WHEREOF, this First Amendment to Loan Agreement has been duly executed as of the date first written above. STEELCASE SAS, as Borrower By: /s/ Yvan Stehly ----------------------------- Name: Stehly Yvan ----------------------------- Title: Chief Executive Officer ----------------------------- STEELCASE INC., as Guarantor By: /s/ Gary P. Malburg ----------------------------- Name: Gary P. Malburg ----------------------------- Title: Vice President & Treasurer ----------------------------- SOCIETE GENERALE, as Lender By: /s/ II- ----------------------------- Name: Eric E.O.Siebert Jr. ----------------------------- Title: Director ----------------------------- [First Amendment to Loan Agreement] EX-4.23 15 dex423.txt SECOND AMENDMENT TO LOAN AGREEMENT EXHIBIT 4.23 EXECUTION COPY SECOND AMENDMENT TO LOAN AGREEMENT THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as --------- of November 12, 2001, is by and among Steelcase SAS, a Societe par Actions Simplifiee organized and existing under the laws of the Republic of France (the "Borrower"), Steelcase Inc., a Michigan corporation (the "Guarantor"), and -------- --------- Societe Generale, a bank organized and existing under the laws of the Republic of France, acting through its Chicago Branch (the "Lender"). ------ WHEREAS, the Borrower, the Guarantor and the Lender are parties to that certain Loan Agreement dated as of April 9, 1999, as amended by that certain First Amendment to Loan Agreement dated as of June 15, 2001 (as further amended hereby and from time to time hereafter amended, restated, supplemented or otherwise modified and in effect, the "Loan Agreement"), pursuant to which -------------- the Lender has made certain loans to the Borrower; and WHEREAS, the Borrower and the Guarantor have requested that the Lender amend certain provisions of the Loan Agreement, and the Lender is willing to so amend the Loan Agreement pursuant to the terms and conditions set forth in this Amendment. NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto agree as follows: 1. Defined Terms. Capitalized terms used but not defined herein ------------- shall have the meanings ascribed to such terms in the Loan Agreement. 2. Amendment of Loan Agreement. The Loan Agreement is hereby amended --------------------------- as follows: (a) Section 1.51. Section 1.51 is hereby deleted in its entirety ------------ and the following is substituted in lieu thereof: "1.51 'Net Worth' means, at any time, minority interests, --------- preferred stock and common stock and other equity, as shown on the consolidated balance sheet of the Guarantor and its Subsidiaries for the then most recently completed fiscal quarter of the Guarantor; provided that there shall be excluded from the -------- calculation of Net Worth (i) any unrealized gains or losses (net of taxes) on securities available for sale and (ii) non-recurring non-cash charges attributable to the implementation of SFAS 142 not in excess of $150,000,000 in the aggregate for any fiscal year." (b) Section 10.2.1. Section 10.2.1 is hereby deleted in its -------------- entirety and the following is substituted in lieu thereof: "10.2.1 Minimum Net Worth. The Guarantor will not permit at any ----------------- time Net Worth to be less than the difference between (a) the sum of (i) Net Worth as of February 25, 2000, plus (ii) 25% of Net ---- Income (if a positive number) from February 25, 2000 to the then most recent fiscal year end or fiscal second quarter end, plus ---- (iii) all Additions to Capital from February 25, 2000 to the then most recent fiscal year end or fiscal second quarter end, and (b) $150,000,000." 3. Representations and Warranties. In order to induce the Lender to ------------------------------ enter into this Amendment, each of the Borrower and the hereby represents and warrants to the Lender that: (a) Power; Authority. It is validly existing in the jurisdiction ---------------- in which it has been organized; it has the power and authority to enter into this Amendment; and this Amendment constitutes its legal, valid and binding obligations and is enforceable against it in accordance with its terms. (b) No Default. After giving effect to this Amendment, no Event ---------- of Default shall have occurred and be continuing. 4. Ratification. Each of the Guaranty and, except as specifically ------------ amended hereby, the Loan Agreement shall remain unchanged and continue in full force and effect and the Borrower and the Guarantor hereby ratify and confirm such Loan Agreement. After the execution of this Amendment by all parties, any references to the "Loan Agreement" or the "Agreement" in the Loan Agreement, the Note, the Guaranty, the Participation Agreement or any other document in connection therewith shall be to the Loan Agreement, as amended hereby. 5. Miscellaneous. ------------- (a) Successors and Assigns. This Amendment shall be binding upon ---------------------- and shall be enforceable by the Borrower, the Lender and their respective permitted successors and assigns; provided that the Borrower shall have no right to assign or transfer its rights or obligations hereunder without the prior written consent of the Lender. The terms and provisions of this Amendment are for the purpose of defining the relative rights and obligations of Borrower and Lender with respect to the transactions contemplated hereby and there shall be no third party beneficiaries of any of the terms and provisions of this Amendment. (b) Entire Agreement. This Amendment and all documents referred ---------------- to herein constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understandings with respect to this Amendment. (d) Headings. Section headings in this Amendment are included -------- herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. (e) Severability. Wherever possible, each provision of this ------------ Amendment shall be interpreted in such a manner as to be effective and valid under applicable -2- law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment. (g) Counterparts. This Amendment may be executed in any number ------------- of separate counterparts, each of which shall collectively and separately constitute one agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this Amendment. [signature page follows] -3- IN WITNESS WHEREOF, this Second Amendment to Loan Agreement has been duly executed as of the date first written above. STEELCASE SAS, as Borrower By: /s/ Yvan Stehly --------------------------------- Name: Stehly Yvan --------------------------------- Title: President --------------------------------- STEELCASE INC., as Guarantor By: /s/ Gary P. Malburg --------------------------------- Name: Gary P. Malburg --------------------------------- Title: Vice President & Treasurer --------------------------------- SOCIETE GENERALE, as Lender By: /s/ II - --------------------------------- Name: Eric E.O.Siebert Jr. --------------------------------- Title: Director --------------------------------- [Second Amendment to Loan Agreement] EX-4.24 16 dex424.txt LEASE RECEIVABLES TRANSFER AGREEMENT EXHIBIT 4.24 Execution Copy ============================================================ LEASE RECEIVABLES TRANSFER AGREEMENT among STEELCASE FINANCIAL SERVICES INC., as Transferor and Servicer, CORPORATE ASSET FUNDING COMPANY, INC. as Conduit Transferee, THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO, as Committed Transferees and CITICORP NORTH AMERICA, INC., as Agent Dated as of October 20, 1999 ============================================================ TABLE OF CONTENTS -----------------
Section Page - ------- ---- ARTICLE I DEFINITIONS................................................................................... 1 Section 1.01. Definitions and Rules of Construction........................................... 1 ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES............................................................ Section 2.01. The Advances.................................................................... ------------ Section 2.02. Making the Advances............................................................. ------------------- (b) Notes............................................................................ ----- (c) Maturity of Advances............................................................. -------------------- Section 2.03. Interest and Fees............................................................... ----------------- Section 2.04. Settlement Procedures........................................................... --------------------- Section 2.05. Payments and Computations, Etc.................................................. ------------------------------ Section 2.06. Yield Protection................................................................ ---------------- Section 2.07. Increased Capital............................................................... ----------------- Section 2.08. Taxes........................................................................... ----- Section 2.09. Additional Yield................................................................ ---------------- ARTICLE III CONDITIONS OF ADVANCES........................................................................ Section 3.01. Conditions Precedent to Initial Advance......................................... --------------------------------------- Section 3.02. Conditions Precedent to All Advances............................................ ------------------------------------ ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................ Section 4.01. Representations and Warranties of the Transferor and the Servicer............... ----------------------------------------------------------------- ARTICLE V GENERAL COVENANTS Section 5.01. Affirmative Covenants of the Transferor and the Servicer........................ -------------------------------------------------------- Section 5.02. Reporting Requirements of the Transferor and the Servicer....................... --------------------------------------------------------- Section 5.03. Negative Covenants of the Transferor and Servicer............................... ------------------------------------------------- ARTICLE VI ADMINISTRATION OF RECEIVABLES.......................................................................... Section 6.01. Designation of Servicer......................................................... ----------------------- Section 6.02. Duties of the Servicer.......................................................... ---------------------- Section 6.03. Rights of the Agent............................................................. ------------------- Section 6.04. Responsibilities of the Transferor ............................................. ----------------------------------- Section 6.05. Further Action Evidencing Agent's Interest...................................... ------------------------------------------ Section 6.06. Removal and Substitution of Pledged Assets...................................... ------------------------------------------
2 ARTICLE VII EVENTS OF TERMINATION........................................................... Section 7.01. Events of Termination.................................... --------------------- ARTICLE VIII INDEMNIFICATION........................................................ Section 8.01. Indemnities by the Transferor............................ ----------------------------- ARTICLE IX GRANT OF SECURITY INTEREST............................................. Section 9.01. Security Interest........................................ ----------------- ARTICLE X MISCELLANEOUS.......................................................... Section 10.01. Amendments, Etc......................................... --------------- Section 10.02. Notices, Etc............................................ ------------ Section 10.03. No Waiver; Remedies..................................... ------------------- Section 10.04. Binding Effect; Assignability........................... ----------------------------- Section 10.05 GOVERNING LAW............................................ ------------- Section 10.06. Costs and Expenses...................................... ------------------ Section 10.07. No Proceedings.......................................... -------------- Section 10.08. Execution in Counterparts; Severability................. --------------------------------------- ARTICLE XI THE AGENT.............................................................. SECTION 11.01. Authorization and Action................................ ------------------------ SECTION 11.02. Agent's Reliance, Etc................................... --------------------- SECTION 11.03. Agents and Affiliates................................... --------------------- SECTION 11.04. Transferee's Credit Decision............................ ---------------------------- SECTION 11.05. Delegation of Duties ................................... -------------------- SECTION 11.06. Successor Agent......................................... --------------- 3 LIST OF EXHIBITS EXHIBIT A Description of Credit and Collection Policy EXHIBIT B Fiscal Months EXHIBIT C Form of Interest Rate Hedge Assignment Acknowledgment EXHIBIT D Form of Investor Report EXHIBIT E Form of Funding Request EXHIBIT F Form of Note EXHIBIT G List of Closing Documents EXHIBIT H List of Filing Locations EXHIBIT I List of Offices of Transferor where Records Are Kept 4 LEASE RECEIVABLES TRANSFER AGREEMENT This LEASE RECEIVABLES TRANSFER AGREEMENT is entered into as of October 20, 1999, among STEELCASE FINANCIAL SERVICES INC., a Michigan corporation, as Transferor and as initial Servicer, CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation, as Conduit Transferee, THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO, as Committed Transferees, and CITICORP NORTH AMERICA, INC., a Delaware corporation, as Agent. ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Section 1.01. Certain Defined Terms. The following terms shall --------------------- have the following meanings (equally applicable to both singular and plural forms): "Adjusted Loss Ratio" means, for any Settlement Date, the ------------------- product of (i) the highest Loss Ratio for any Collection Period during the immediately preceding 36 Collection Periods and (ii) one plus the positive percentage difference, if any, between (A) the average of the aggregate outstanding Installment Payments of all Lease Receivables as of the last day of each of the immediately preceding twelve Collection Periods (such twelve Collection Periods being the "Most Recent Twelve Collection Periods") and (B) the average of the aggregate outstanding Installment Payments of all Lease Receivables as of the last day of each of the twelve Collection Periods immediately preceding the Most Recent Twelve Collection Periods. "Advance" means an advance of funds by the Conduit Transferee ------- or the Committed Transferees in accordance with the terms of Sections 2.01 and ------------- 2.02. - ---- "Affected Party" means the Transferees, CNAI, individually and -------------- in its capacity as Agent, any Liquidity Provider and any parent company controlling any of the foregoing. "Affiliate" means, with respect to any Person, any other --------- Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person and, without limiting the generality of the foregoing, shall be presumed to include (a) any Person which beneficially owns or holds 20% or more of any class of voting securities of such specified Person or 20% or more of the equity interest in such specified Person and (b) any Person of which such specified Person beneficially owns or holds 20% or more of any class of voting securities or in which such specified Person beneficially owns or holds 20% or more of the equity interest. For the purposes of this definition, (i) "voting securities" of a Person means any securities which confer upon the holder thereof a right to vote with respect to the election of members of the board of directors or other analogous governing body of such Person (excluding voting power arising only upon the occurrence of a contingency), (ii) "control" when used with respect to any specified Person means the power to direct the management and policies of such specified Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and (iii) the terms "controlling" and "controlled" have meanings correlative to the foregoing clause (ii). ----------- 5 "Agent" means CNAI, in its capacity as agent for the ----- Transferees together with its successors and permitted assigns. "Aggregate Adjusted Installment Payments" means, as of any ---------------------------------------- Settlement Date, the aggregate unpaid Installment Payments (determined as of the end of the immediately preceding Fiscal Month) of all Eligible Lease Receivables minus the Overconcentration Amount as of such Settlement Date. - ----- "Aggregate Advances" means, at any time, the sum of the ------------------ outstanding principal balances of all Advances at such time. "Agreement" means this Lease Receivables Transfer Agreement, --------- as the same may be amended, modified or supplemented from time to time. "Asset Purchase Agreement" means any asset purchase or other ------------------------ agreements pursuant to which the Conduit Transferee may from time to time assign part or all of its Advances to the Liquidity Providers, as such agreements may be amended from time to time. "Assignee Rate" for any Interest Period means a rate per annum ------------- equal to the LIBO Rate plus 1.25%; provided, however, that the Assignee Rate ---- -------- ------- shall be equal to the Base Rate in effect from time to time (i) for any Interest Period not equal to a month, (ii) with respect to any portion of Advances not outstanding during an entire Interest Period and (iii) at any time when it is unlawful for Citibank to obtain funds in, or Citibank is not offering deposits in dollars in, the London interbank market. Following the occurrence, and during the continuation, of any Event of Termination, the Assignee Rate for each Interest Period shall be the sum of the applicable interest rate per annum determined pursuant to provisions set forth above plus one percent (1.0%) per annum. "Bankruptcy Code" means Title 11 of the United States Code (11 --------------- U.S.C. Section 101 et seq.), as amended from time to time, or any successor -- --- statute. "Base Rate" means a fluctuating interest rate per annum equal --------- to the rate of interest announced publicly by Citibank in New York, New York, from time to time as Citibank's base rate. "Breakage Amount" means, for any Interest Period prior to the --------------- Termination Date during which Advances are reduced on any day other than a Settlement Date, the amount, if any, by which (i) the additional Interest (calculated without taking into account any Breakage Amount) which would have accrued on the reductions of such Advances during such Interest Period (as so computed) if such reductions had remained as Advances, exceeds (ii) the income, if any, received by the applicable Transferee or the applicable Liquidity Provider from the investment by such Person of the proceeds of such reductions of Advances (which investment the Transferee and the Liquidity Providers will use reasonable efforts to make under the then applicable conditions and circumstances). "Business Day" means any day other than a Saturday, Sunday or ------------ public holiday or the equivalent for banks in New York City, New York and, if the term "Business Day" is used in 6 connection with the LIBO Rate, which day is a day on which dealings are carried on in the London interbank market. "Citibank" means Citibank, N.A., a national banking -------- association. "CNAI" means Citicorp North America, Inc., a Delaware ---- corporation. "Collateral" has the meaning given to such term in Section ---------- ------- 9.01. - ---- "Collection Account" means the account maintained in the name ------------------ of Agent on behalf of the Transferees at Citibank, N.A. (ABA# 021000089), account no. 40636695, account name: CAFCO Redemption, for the purpose of receiving Collections. "Collection Period" means a period equal to one Fiscal Month, ----------------- provided, however, that the first Collection Period shall be the Transferor's - -------- ------- October Fiscal Month, except that, for purposes of the calculation of the Adjusted Loss Ratio, the Default Ratio and the Delinquency Ratio and the tests thereof under Section 7.01(f), "Collection Period" shall also include the --------------- applicable number of Fiscal Months immediately preceding the Transferor's October Fiscal Month. "Collections" means, with respect to any Lease Receivable, any ----------- and all related cash collections and proceeds and any cash collections of Related Security. "Commitment" means, for any Committed Transferee, the maximum ---------- amount of Advances which may be advanced by such Committed Transferee as set forth opposite such Committed Transferee's name on the signature pages to the Agreement under the caption "Commitment", subject to assignment pursuant to Section 10.04, as such amount may be reduced in accordance with Section 2.01(b). - ------------- "Committed Transferee" means each of the financial -------------------- institutions listed on the signature pages to the Agreement as "Committed Transferees," together with their respective successors and permitted assigns. "Conduit Transferee" means Corporate Asset Funding Company, ------------------ Inc., a Delaware corporation, together with its successors and permitted assigns (other than the Liquidity Providers). "CP Note" means any commercial paper note issued by the ------- Conduit Transferee. "CP Rate" means, for any Interest Period, the per annum rate ------- equal to the weighted average of the per annum rates paid or payable by the Conduit Transferee from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of the CP Notes that are allocated, in whole or in part, by the Agent (on behalf of the Conduit Transferee) to fund or maintain the Conduit Transferee's Advances during such Interest Period, as determined by the Agent (on behalf of the Conduit Transferee) and reported to the Transferor and the Servicer, which rates shall reflect and give effect to the commissions of placement agents and dealers in respect of CP Notes, to the extent such commissions are allocated, in whole or in part, to such CP Notes by the Agent (on behalf of the Conduit Transferee); provided, however, - -------- ------- 7 that if any component of such rate is a discount rate, in calculating the "CP -- Rate" for such Interest Period, the Agent shall for such component use the rate - ---- resulting from converting such discount rate to an interest bearing equivalent rate per annum. "Credit and Collection Policy" means those credit and ---------------------------- collection policies and practices relating to the Lease Receivables and Obligors described in Exhibit A. --------- "Deemed Defaulted Lease Receivable" means a Lease Receivable --------------------------------- which arises under a Lease with respect to which any Installment Payment thereunder remains unpaid for more than 60 days and less than 90 days from the original due date for such payment and which has been removed from the Pledged Assets as a result of a Substitute Receivable becoming a Pledged Asset. "Default Ratio" means, for any Collection Period, a fraction ------------- (expressed as a percentage) determined as of the last day of such Collection Period equal to the sum of the aggregate unpaid Installment Payments under all Lease Receivables which were Defaulted Lease Receivables or Deemed Defaulted Lease Receivables as of such last day (net of any recoveries during such Collection Period with respect to Defaulted Lease Receivables or Deemed Defaulted Lease Receivables) divided by the aggregate unpaid Installment Payments under all Lease Receivables as of the last day of such Collection Period. "Defaulted Lease Receivable" means a Lease Receivable at any -------------------------- time: (i) which arises under a Lease with respect to which any Installment Payment thereunder remains unpaid for more than 90 days from the original due date for such payment, (ii) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section ------- 7.01(e), (iii) as to which foreclosure proceedings have been initiated and are - ------- continuing, or (iv) which, in accordance with the Credit and Collection Policy, has been or should be written off as uncollectible. "Delinquency Ratio" means, for any Collection Period, a ----------------- fraction (expressed as a percentage) determined as of the last day of such Collection Period equal to (a) the sum of the aggregate unpaid Installment Payments under all Lease Receivables which were Delinquent Lease Receivables on the last day of such Collection Period divided by (b) the aggregate unpaid ---------- Installment Payments under all Lease Receivables as of the last day of such Collection Period. "Delinquent Lease Receivable" means a Lease Receivable that is --------------------------- not a Defaulted Lease Receivable and (i) as to which any Installment Payment remains unpaid for more than 60 days from the original due date for such payment or (ii) which, in accordance with the Credit and Collection Policy, has been or should be classified as delinquent. "Discount Rate" means, for each Lease Receivable on any date ------------- of the determination thereof, a per annum rate equal to the sum of (a) the per annum rate that is specified as the fixed rate in the most recent confirmation of the Interest Rate Hedge entered into by Transferor in connection with an Advance hereunder (which reflects a blended rate with all prior Interest Rate Hedges), plus (b) the Margin Rate in effect at the time of the initial Advance ---- with respect to such Lease Receivable. 8 "Dynamic Loss Reserve Percentage" means, as of any Settlement ------------------------------- Date, the higher of (i) a percentage calculated as the product of (A) the Adjusted Loss Ratio for such Settlement Date, (B) the Weighted Average Remaining Life at such time (expressed in years) and (C) 3 and (ii) a fraction (expressed as a percentage) having as its numerator the higher of (x) the sum of the aggregate unpaid Installment Payments under all Lease Receivables of the Obligors that are rated Investment Grade having the two largest aggregate unpaid Installment Payments under all Lease Receivables and (y) the sum of the aggregate unpaid Installment Payments under all Lease Receivables of the Obligors that are not rated or are rated less than Investment Grade having the four largest aggregate unpaid Installment Payments under all Lease Receivables and as its denominator the Receivables Balance at such time. "E-Mail Servicer Report" has the meaning given to such term in ---------------------- Section 5.02(c). - --------------- "Effective Date" means the first Business Day on which all of -------------- the conditions precedent to the first Advance, as described in Section 3.01, ------------ have been satisfied. "Eligible Lease Receivable" means, with respect to a Lease ------------------------- Receivable as of the day it is initially included as a Pledged Asset: (i) the Obligor of which is a United States resident; (ii) which (A) has not been a Defaulted Lease Receivable or (B) on the date of the initial Advance with respect thereto, has no payment remaining unpaid for more than 30 days from the original due date for such payment; (iii) which, on the date of the initial Advance with respect thereto, is due and payable in full no more than eighty-four (84) months following such date, provided, that Eligible Lease Receivables may include Lease -------- Receivables which are due and payable in full between sixty (60) and eighty-four (84) months following such date up to an aggregate Outstanding Balance of such Lease Receivables equal to 30% of the Receivables Balance at such time; (iv) under which all scheduled payments are payable in equal monthly installments and, except with respect to Lease Receivables arising under Leases entered into during August and September, 1999, the first two such Installment Payments thereon have been made; (v) which is denominated and payable only in United States dollars within the United States, the Obligor of which is domiciled in the United States and the Equipment related thereto is located in the United States; (vi) which, together with the Lease related thereto, does not contravene, in any material respect, any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which the Transferor is not in violation of any such law, rule or regulation applicable to such Lease Receivable if such violation would impair the collectibility of such Lease Receivable; 9 (vii) which does not require any consent or authorization or approval of, or notice to, the Obligor thereof that has not been obtained or accomplished in connection with the granting of the Lien thereon by the Transferor in favor of the Agent; (viii) which satisfies, in all material respects, all applicable requirements of the Credit and Collection Policy; (ix) the Obligor of which is not a governmental entity or, to the knowledge of the Transferor, an Affiliate of any of the parties hereto; (x) the Obligor of which has not been released, in whole or in part, from any of its obligations thereunder; (xi) the Obligor of which is not the Obligor under Defaulted Lease Receivables having Outstanding Balances in the aggregate which exceed 20% of the sum of the aggregate Outstanding Balances of all Lease Receivables of such Obligor; and (xii) which arises under a Lease: (A) which is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Lease enforceable against such Obligor in accordance with its terms, except as may be limited by the Enforceability Exceptions; (B) which is "chattel paper", an "account" or a "general intangible" within the meaning of Article 9 the UCC as enacted in any applicable jurisdiction; (C) which constitutes a Finance Lease or a True Lease and the Obligor Filing Requirement has been satisfied with respect thereto; (D) if a True Lease, the security interest in such Equipment has been granted to the Agent hereunder, which security interest has been perfected in the Filing Locations; (E) as of the date of the initial Advance with respect to the related Lease Receivable, (1) there was no default, breach, violation or event (other than the failure to make a payment on the original due date for such payment) that has occurred and is continuing permitting acceleration under the terms of the Lease, and (2) no event (other than the failure to make a payment on the original due date for such payment) had occurred and was continuing that, with notice, the lapse of time, or both, would constitute a default, breach, violation or event permitting acceleration under the terms of such Lease; (F) which was originated by the Transferor in the ordinary course of its business; (G) which constitutes a "hell or high-water" obligation of the Obligor within the meaning of Article 2A of the UCC and requires the Obligor to make all payments of Installment Payments thereunder regardless of the condition of the Equipment to which such Lease relates; 10 (H) which has not been amended, altered, extended or modified in any way, except in accordance with the Credit and Collection Policy; (I) which has not been satisfied, released, canceled, subordinated or rescinded, nor has any instrument been executed by the Transferor which would effect any such satisfaction, release, cancellation, subordination or rescission; (J) which is not subject to any right of rescission, setoff, recoupment, counterclaim or defense (other than the Obligor's right of quiet enjoyment), whether arising out of transactions concerning such Lease or otherwise, and no such right has been asserted in writing by any person with respect thereto; (K) with respect to which all consents, licenses, approvals and authorizations of any Governmental Authority required to be obtained in connection with the granting of the Lien on the Leases, the Lease Receivables, the Related Security and the Collections by the Transferor have been obtained; (L) which requires the Obligor thereunder to maintain the Equipment in good and workable order and provides that, (x) in the event of any damage to the Equipment covered by or the subject of such Lease (other than ordinary wear and tear), the Obligor will repair such Equipment to the extent of such damage and (y) in the event of the loss or destruction of the Equipment, the Obligor will replace such Equipment with the same-or-better model Equipment in same-or-better configuration or the Transferor will receive from an insurer or from the Obligor as self-insurer, an amount not less than the Outstanding Balance of the Lease Receivable; (M) with respect to which, together with the related Pledged Assets, all material taxes, assessments, fines, fees and other liabilities have been paid before they became delinquent, and all filings in respect of any such taxes, assessments, fines, fees and other liabilities have been timely made; (N) the Obligor thereof, if rated, is rated "1", "2", "3", "4" or "8" under the Credit and Collection Policy and is not on the Transferor's "watchlist report"; (O) which does not relate to an equipment upgrade unless such equipment upgrade is set forth in an additional schedule to the related Lease; (P) a first priority Lien in all Lease Receivables thereunder, all Related Security (other than in respect of Equipment) and Collections with respect thereto has been granted by the Transferor to the Agent and for which all UCC filings necessary to perfect such Lien have been accomplished; (Q) which contains enforceable provisions sufficient to enable the Transferor (or its assigns) to realize against the Equipment related thereto, subject to the Obligor's right to quiet enjoyment of the Equipment and to the Enforceability Exceptions; and (R) if such Lease has been extended beyond its original term after the expiration thereof, such extension is in writing and for a minimum term of 12 months. 11 "Enforceability Exceptions" means exceptions to the ------------------------- enforceability of an obligation arising under (i) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally, and (ii) general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance, regardless of whether considered in a proceeding at equity or at law. "Equipment" means all office furniture and similar equipment --------- leased or financed by the Transferor pursuant to a Lease, together with all additions, replacements, substitutions, parts, repairs, accessories, upgrades, accessions or attachments thereto. "Eurocurrency Liabilities" has the meaning assigned to that term ------------------------ in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Eurodollar Reserve Percentage" for any Interest Period means the ----------------------------- reserve percentage applicable to Citibank during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period. "Event of Termination" has the meaning assigned to that term in -------------------- Section 7.01. - ------------ "Excess Discount Payment" means, with respect to any Settlement ----------------------- Date, the positive difference, if any, between (i) an amount equal to the product of (A) the Discount Rate applicable to the Lease Receivables included in the Pledged Assets, (B) the average daily outstanding Aggregate Advances during the Interest Period ending on, or immediately prior to, such Settlement Date and (C) a fraction, having as its numerator, the number of days during such Interest Period and, as its denominator, 360 and (ii) the aggregate amount payable to the Agent pursuant to clauses fourth and fifth of Section 2.04(b). -------------- ----- --------------- "Facility Documents" means collectively, the Agreement, the Asset ------------------ Purchase Agreements, the Fee Letter and all other agreements, documents and instruments delivered pursuant thereto or in connection therewith. "Facility Limit" means at any time $200,000,000, provided, -------------- -------- however, that (i) at all times on and after the Termination Date, the "Facility - ------- -------- Limit" shall mean the Aggregate Advances and (ii) the parties hereto may agree - ----- (each in its discretion) to increase the Facility Limit by executing a letter agreement stating the amount of such increased Facility Limit. "Fee Letter" means that certain Fee Letter dated as of the date ---------- hereof among the Agent and the Transferor. "Filing Locations" means the Secretary of State of the State of ---------------- Michigan. 12 "Final Collection Date" means the date following the Termination --------------------- Date on which the Aggregate Advances have been paid in full and the Affected Parties have received all amounts payable to the Affected Parties (including Interest) pursuant to this Agreement or any other Facility Document. "Finance Lease" means a Lease whereby the Transferor has, for ------------- purposes of applicable state commercial law, made a loan to the Obligor, which loan is secured by the Obligor's ownership interest in the related Equipment, and the lease and installment payments thereon represent repayment of the principal and interest of such loan. "Fiscal Month" means each of the periods described on Exhibit B ------------ --------- hereto for the fiscal years 1997 through 2002 (which Exhibit shall be updated by the Transferor from time to time for subsequent years prior to the Final Collection Date). "Funding Base" means an amount, calculated on each Settlement ------------ Date, equal to the product of (i) the present value of the Aggregate Adjusted Installment Payments, determined by discounting on a monthly basis (assuming a calendar year consisting of twelve thirty-day months) such Aggregate Adjusted Installment Payments at a rate equal to the Discount Rate and (ii) a percentage equal to 100% minus the Required Loss Reserve Percentage with respect to such ----- Settlement Date. "Governmental Authority" means any federal, state, local or ---------------------- foreign government, any political subdivision of any of the foregoing and any agency or instrumentality of any of the foregoing. "Initial Funding Date" means the date on which the first Advance -------------------- is made pursuant to the Agreement. "Installment Payments" means, with respect to any Lease -------------------- Receivable, the aggregate amount of installment payments payable by the Obligor under the related Lease, excluding however, (i) all interim rent or payments and (ii) all supplemental or additional payments, if any, required by the terms of such Lease with respect to sales or use taxes, personal property taxes, insurance, maintenance, purchase option payments, ancillary products and services and other specific charges. "Interest" means, for any Interest Period, an amount equal to: -------- IR x A x ED/DCF where: A = the average daily Aggregate Advances during such Interest Period DCF = 360 or, in the case of Interest calculated by reference to the Base Rate, 365 IR = the weighted average daily (calculated as a function of not only the interest rate but also the portion of Aggregate Advances allocated to such interest rate) Interest Rate for such Interest Period 13 ED = the actual number of days elapsed during such Interest Period. "Interest Period" means (i) with respect to outstanding Advances --------------- that bear interest at the CP Rate, each period commencing on the date which is the second Business Day immediately preceding each Settlement Date and ending on the second Business Day immediately preceding the next Settlement Date (except that the first such Interest Period shall commence on the Initial Funding Date) and (ii) with respect to outstanding Advances that bear interest at the Assignee Rate, the period commencing on, and including, each Settlement Date and ending on, but excluding, the immediately succeeding Settlement Date (except that the first such Interest Period shall commence on, and include, the Initial Funding Date). "Interest Rate" means, for any Interest Period (i) with respect ------------- to Advances made by the Committed Transferees, a rate equal to the Assignee Rate for such Interest Period, and (ii) with respect to Advances made by the Conduit Transferee, (x) the CP Rate, or (y) a rate equal to the Assignee Rate for such Interest Period if at any time and for any reason whatsoever, (1) the Conduit Transferee shall not fund or maintain the relevant Advances during such Interest Period through the issuance of CP Notes in the United States commercial paper market, (2) the Agent shall have required that Settlement Dates occur more frequently than monthly pursuant to the proviso in the definition of "Settlement Date" or (3) the Conduit Transferee shall have assigned the relevant Advances to a Liquidity Provider or to any other permitted assignee pursuant to Section ------- 10.04. - ----- "Interest Rate Hedges" means interest rate swap or similar -------------------- agreements entered into by the Transferor in connection herewith to provide protection to, or minimize the impact upon, the Transferor of increasing interest rates with respect to any Advances. "Interest Rate Hedge Assignment Acknowledgment" means an --------------------------------------------- acknowledgment in substantially the form of Exhibit B executed by a counterparty --------- to an Interest Rate Hedge (if other than Citibank). "Investment Grade" means, with respect to any Person, that the ---------------- long-term unsecured debt of such Person is rated at least BBB- by S&P and at least Baa3 by Moody's, provided, that, if the long-term unsecured debt of such -------- Person is only rated by one of S&P or Moody's, such debt is rated at least the foregoing level from such rating agency. "Investor Report" means a report, in substantially the form of --------------- Exhibit C, furnished by the Servicer to the Agent for the Transferees pursuant - --------- to Section 5.02(c). --------------- "Lease" means a contract in the form of a lease, installment ----- sales contract, unsecured promissory note, promissory note/security agreement or other similar type of agreement (and all rights with respect thereto, including all guaranties and other agreements or arrangements of whatever character from time to time supporting or securing payments of such lease), which is set forth on a Lease Schedule delivered pursuant to Section 2.02 and has not been removed ------------ or released from the Pledged Assets in accordance with Section 6.06. ------------ "Lease Receivable" means, with respect to any Lease at any time, ---------------- all Installment Payments then or thereafter payable by the Obligor under such Lease, or any supplemental or additional payment, if any, required by the terms of such Lease with respect to insurance, 14 maintenance, ancillary products and services and other specific charges, excluding any such payments or charges which constitute sales or use taxes, personal property taxes, or the price for a purchase option payments. "Lease Schedule" has the meaning given to such term in Section -------------- ------- 2.02. - ---- "LIBO Rate" for any Interest Period in respect of a relevant --------- Advance means the rate of interest per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a period equal to one month which appears on Page 3750 of the Telerate Service (or any successor page or successor service that displays the British Bankers' Association Interest Settlement Rates for U.S. Dollar deposits) as of 11:00 a.m. (London, England time) two Business Days before the commencement of such Interest Period. "Lien" means any mortgage, pledge, hypothecation, assignment, ---- deposit arrangement, encumbrance, lien (statutory or otherwise), or preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever. "Liquidity Fee" has the meaning given such term in the Fee ------------- Letter. "Liquidity Provider" means any of the financial institutions from ------------------ time to time party to any Asset Purchase Agreement. "Loss Ratio" means, for any Collection Period, a fraction ---------- (expressed as a percentage) determined as of the last day of such Collection Period equal to (a) the sum of the aggregate unpaid Installment Payments under all Lease Receivables which became Written-Off Receivables during such Collection Period and each of the preceding eleven Collection Periods (net of aggregate recoveries during such twelve Collection Periods) divided by (b) the ---------- average of the aggregate unpaid Installment Payments under all Lease Receivables as of the last day of such Collection Period and as of the last day of each of the preceding eleven Collection Periods. "Margin Rate" means, with respect to the Advance made with ----------- respect to a Lease Receivable, the sum of (i) the per annum rate applicable from time to time to calculate the Servicer Fee, (ii) 1.25% per annum representing the spread set forth in the definition of "Assignee Rate," and (iii) the pro-rated fees (expressed as a percentage of such Advance), if any, payable by the Transferor with respect to Interest Rate Hedges related to such Lease Receivable. "Material Adverse Effect" means a material adverse effect on (i) ----------------------- the ability of the Transferor or the Servicer to perform its obligations under any Facility Document, (ii) the legality, validity or enforceability of this Agreement or any other Facility Document, (iii) the Transferor's, the Agent's, the Transferees' or the Liquidity Providers' interests in the Pledged Assets, or (iv) the collectibility of the Pledged Assets. "Moody's" means Moody's Investors Service, Inc. and any successor ------- thereto. "Note" means that promissory note described as such in Section ---- ------- 2.02(b) hereof. - ------- 15 "Notice of Funding" means a written notice, in substantially the ----------------- form of Exhibit E, delivered by the Transferor to the Agent pursuant to Section --------- -------- 2.02(a). - ------- "Obligations" means all present and future indebtedness and other ----------- liabilities and obligations of the Transferor to the Transferees (including any Transferee in its capacity as a counterparty under an Interest Rate Hedge) and/or any other Affected Party, arising under or in connection with this Agreement and the other Facility Documents, and shall include, without limitation, all liability for principal of the Advances, Interest, fees, expense reimbursements, indemnifications, and other amounts due or to become due from the Transferor to the Transferees (including any Transferee in its capacity as a counterparty under an Interest Rate Hedge) and/or any other Affected Party under this Agreement and under the Interest Rate Hedges. "Obligor" means, with respect to a Lease, the Person(s) obligated ------- to make payments to the Transferor under such Lease. "Obligor Filing Requirement" means, with respect to the -------------------------- Transferor's interest in the Pledged Assets, the Servicer has filed all financing statements against the Obligors in order to perfect the Transferor's security interest in any Equipment covered by such financing statements which is deemed to be owned by the Obligor (or, in the case of a True Lease, would be owned by the Obligor if such Lease was a Finance Lease), and such financing statements have not been terminated, released or assigned (except as provided herein). "Other Fees" means amounts owed by the Transferor hereunder ---------- pursuant to Sections 2.06, 2.07, 2.08, 8.01 and 10.06. ------------- ---- ---- ---- ----- "Outstanding Balance" means, with respect to any Lease Receivable ------------------- on any date of determination thereof, an amount equal to the present value of the Installment Payments relating to such Lease Receivable, determined by discounting on a monthly basis (assuming a calendar year consisting of twelve thirty-day months) such Installment Payments from the end of the calendar month in which each such Installment Payment is due, at a rate equal to the Discount Rate with respect thereto to such determination date. Notwithstanding anything to the contrary contained in this Agreement, if any Installment Payment was not paid when due and if such payment remains unpaid at the time the Outstanding Balance of the related Lease Receivable is calculated for any purpose, then the "Outstanding Balance" of such Lease Receivable shall include such unpaid ------------------- payment. "Overconcentration Amount" means, at any time, an amount equal to ------------------------ the sum of (a) an amount calculated for each Obligor equal to the amount by which (i) the aggregate unpaid Installment Payments under all Eligible Lease Receivables of such Obligor and its Affiliates exceeds (ii) 6.0% of the aggregate unpaid Installment Payments under all Eligible Lease Receivables at such time if such Obligor is rated Investment Grade or 3.0% of the aggregate unpaid Installment Payments under all Eligible Lease Receivables at such time if such Obligor is unrated or rated less than Investment Grade, (b) without duplication of the other amounts described in this definition, the amount by which (x) the aggregate unpaid Installment Payments under all Eligible Lease Receivables of Obligors which, in accordance with the Credit and Collection Policy, have a risk rating of "4" exceeds (y) 17.0% of the aggregate unpaid 16 Installment Payments under all Eligible Lease Receivables at such time (or, in each case, such other percentage for any Obligor designated by the Agent in a writing from time to time), and (c) without duplication of the other amounts described in this definition, the amount by which (x) the aggregate unpaid Installment Payments under all Eligible Lease Receivables of Obligors which, in accordance with the Credit and Collection Policy, have a risk rating of "8" exceeds (y) 7.5% of the aggregate unpaid Installment Payments under all Eligible Lease Receivables at such time (or, in each case, such other percentage for any Obligor designated by the Agent in a writing from time to time), provided, that -------- in respect of each of (a), (b) and (c), the aggregate unpaid Installment Payments will be determined as of the end of the immediately preceding Fiscal Month. "Permitted Liens" means any of the following: --------------- (a) Liens for taxes and assessments (i) which are not yet due and payable or (ii) the validity of which are being contested in good faith by appropriate proceedings and with respect to which the Transferor or, in the case of any Equipment, the relevant Obligor, is maintaining adequate reserves in accordance with generally accepted accounting principles; (b) Liens in favor of the Transferees, any Liquidity Provider (but only in connection with this Agreement) or the Agent; (c) Liens related to storage, work, labor, usage or other Liens of like general nature incurred in the ordinary course of business and not in connection with the borrowing of money, provided in each case, the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings the effect of which is to stay the enforcement of any such Lien; (d) imperfections in title or Liens arising by operation of law not material in amount and which, individually or in the aggregate, do not materially interfere with the rights hereunder of any Transferee or the Agent in the Pledged Assets; and (e) with respect to Equipment, the interest of an Obligor in such Equipment under the related Lease (including the quiet enjoyment rights of such Obligor). "Parent" means Steelcase Inc., a Michigan corporation. ------ "Parent Performance Guaranty" means the Performance Guaranty of --------------------------- even date herewith executed by Parent in favor of the Agent for the benefit of the Transferees. "Person" means an individual, partnership, corporation (including ------ a business trust), joint stock company, limited liability company, trust, unincorporated association, joint venture, Governmental Authority or other entity. "Pledged Assets" means, at any time, (i) all then outstanding -------------- Leases, Lease Receivables, Related Security, payments owing to the Transferor or the Agent on behalf of the Transferees (as applicable) under Interest Rate Hedges covering Lease Receivables and Collections with respect to, and other proceeds of, such Lease Receivables, including, without 17 limitation, all Collections of Lease Receivables relating to payments due thereunder at any time during the month in which such Lease Receivable was the subject of an Advance hereunder and (ii) all Equipment. "Pro Rata Share" means, for any Committed Transferee, a fraction -------------- (expressed as a percentage) computed by dividing such Committed Transferee's Commitment by the Facility Limit. -- "Program Fee" has the meaning given such term in the Fee Letter. ----------- "Receivables Balance" means, at any time, the sum of the ------------------- Outstanding Balances of all Lease Receivables included in the Pledged Assets at such time. "Records" means all agreements, documents, instruments, books, ------- records and other information maintained by or on behalf of the Transferor with respect to the Lease Receivables, the related Obligors and the Related Security. "Related Security" means, with respect to any Lease Receivable, ---------------- (i) all security interests or liens and property subject thereto from time to time to the extent purporting to secure payment of such Lease Receivable, whether pursuant to the related contract with the Obligor or otherwise, (ii) the assignment to the Agent, for the benefit of the Transferees, of all UCC financing statements or other filings covering any collateral to the extent securing payment of such Lease Receivable, (iii) all guarantees, prepayment penalties, indemnities, warranties, letters of credit, insurance policies and proceeds and premium refunds thereof and other agreements or arrangements of whatever character from time to time to the extent supporting or securing payment of such Lease Receivable, (iv) all of the Transferor's right, title and interest in and to any proceeds of the sale or lease of Equipment that was repossessed from or returned by an Obligor of a Lease Receivable that was the subject of such Lease, (v) all Records related to such Lease Receivable, and (vi) all proceeds of the foregoing. "Required Loss Reserve Percentage" means, with respect to any -------------------------------- Settlement Date, the greater of (a) 12%, and (b) the Dynamic Loss Reserve Percentage calculated as of such Settlement Date. "Required Transferees" means Committed Transferees with aggregate -------------------- Commitments totaling an amount greater than sixty-six and two thirds percent (66 K %) of the Facility Limit. "Responsible Officer" means, with respect to any Person, the ------------------- chief executive officer, the chief financial officer, any senior vice president, the treasurer, controller, assistant treasurer or assistant controller, or such other senior officers having titles or responsibilities comparable to such officers, of such Person. "S&P" means Standard & Poor's Rating Services, a division of The --- McGraw-Hill Companies, Inc. or any successor thereto. 18 "Servicer" means at any time the Person(s) then authorized -------- pursuant to Section 6.01 to service, administer, bill and collect Lease ------------ Receivables and for so long as the Transferor is so authorized Servicer shall mean Transferor solely in its capacity as Servicer hereunder. "Servicer Advance" has the meaning given to such term in Section ---------------- ------- 2.04. - ---- "Servicer Fee" means a fee with respect to each Collection ------------ Period, payable in arrears for the account of the Servicer, in an amount equal to the product of (i) the aggregate Outstanding Balances of all Lease Receivables as of the last day of the immediately prior Collection Period and (ii) the per annum rate of (x) 1.0% if the Transferor or an Affiliate thereof is the Servicer and (y) 110% of the reasonable costs and expenses of servicing the Pledged Assets if a Person other than the Transferor or an Affiliate of the Transferor is the Servicer. "Servicer Default" means the occurrence of any of the following: ---------------- (a) The Servicer shall fail to make any payment or deposit to be made by it hereunder when due and such failure shall remain unremedied for three (3) Business Days; or (b) The Servicer shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Facility Document on its part to be performed or observed and any such failure shall remain unremedied for fifteen (15) Business Days after the earlier of (i) written notice from the Agent and (ii) knowledge thereof by a Responsible Officer of the Servicer; or (c) Any representation or warranty made or deemed to be made by the Servicer (or any of its Responsible Officers) under this Agreement, any Investor Report or any Notice of Funding shall prove to have been false or incorrect in any material respect when made; or (d) (i) The Servicer shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Servicer seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property; or (ii) the Servicer's Board of Directors shall vote affirmatively to authorize any of the actions set forth in clause (i). - ---------- "Settlement Date" means the 15th day of each month, provided --------------- -------- that, if such day is not a Business Day, the Settlement Date shall be the immediately succeeding Business Day, and provided, further, that the Agent may, -------- ------- in its discretion following the occurrence, and during the continuation of an Event of Termination, by notice to the Transferor and the Servicer, require that Settlement Dates occur more frequently than monthly. "Specified Termination Date" means October 18, 2000, as such date -------------------------- may be extended pursuant to Section 2.10. ------------ "Substitute Receivable" has the meaning assigned to such term in --------------------- Section 6.06(b). - --------------- 19 "Termination Date" means the earliest to occur of (i) the Specified ---------------- Termination Date, (ii) the declaration or automatic occurrence of the Termination Date pursuant to Section 7.01, and (iii) that Business Day which the ------------ Transferor designates as the Termination Date by notice to the Agent at least two (2) Business Days prior to such Business Day. "Transferee" means the Conduit Transferee or a Committed Transferee, ---------- as applicable, and "Transferees" means the Conduit Transferee and the Committed ----------- Transferees. "Transferor" means Steelcase Financial Services, Inc., and its ---------- successors. "True Lease" means a Lease which is not a Finance Lease. ---------- "UCC" means, as to each applicable jurisdiction, the Uniform --- Commercial Code as from time to time in effect in the specified jurisdiction. "Watch List Ratio" means, for any Collection Period, a fraction ---------------- (expressed as a percentage) determined as of the last day of such Collection Period equal to the sum of the aggregate unpaid Installment Payments under all Lease Receivables that are not Defaulted Lease Receivables, Deemed Defaulted Lease Receivables or Delinquent Lease Receivables and that were added to the Servicer's "watch list" during such Collection Period (net of any recoveries with respect to Deemed Defaulted Lease Receivables and Defaulted Lease Receivables for such period) divided by the aggregate unpaid Installment Payments under all Lease Receivables as of the last day of such Collection Period. "Weighted Average Remaining Life" means, at any time, a term ------------------------------- (calculated in years) equal to: E(P\\n\\ x T\\n\\) n \\n\\ -------- ELRB where: E = The mathematical symbol for summation. The summation is computed from 1 to n, where n is the number of remaining Installment Payments which comprise all Eligible Lease Receivables at such time. P\\n\\ = The amount of the nth Installment Payment which comprises such Eligible Lease Receivables. T\\n\\ = The remaining period, in years, from such time until the scheduled due date of such nth Installment Payment. 20 ELRB = The sum of the remaining Installment Payments on all Eligible Lease Receivables. "Written-Off Receivable" means a Lease Receivable (i) which arises ---------------------- under a Lease with respect to which any Installment Payment thereunder remains unpaid for more than 210 days from the original due date for such payment or (ii) which, in accordance with the Credit and Collection Policy, has been or should be written off as uncollectible. Section 1.02. Other Terms. All accounting terms not specifically ----------- defined herein shall be construed in accordance with generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. Section 1.03. Computation of Time Periods. Unless otherwise stated in --------------------------- the Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding." ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES Section 2.01. Advances. On each Settlement Date during the period from -------- the date hereof to the Termination Date, on the terms and conditions hereinafter set forth, the Conduit Transferee may, in its sole discretion, make Advances, and if the Conduit Transferee declines to so make Advances, the Committed Transferees shall make Advances, in each case, upon the request of the Transferor as reflected in a Notice of Funding. The Transferor may request Advances on any Settlement Date subject to the limitation that, after giving effect to such Advance the Aggregate Advances would not exceed the lesser of (i) the Funding Base on such Settlement Date and (ii) the Facility Limit on such Settlement Date. (b) The Transferor may, upon at least five days' notice to the Agent, terminate in whole or reduce in part (ratably among the Committed Transferees) the unused portion of the Facility Limit; provided that each partial reduction -------- of the Facility Limit shall be in an amount equal to $5,000,000 or an integral multiple of $1,000,000 in excess thereof. Section 2.02. Making of Advances. (a) At least five Business Days ------------------ prior to a Settlement Date on which the Transferor desires the Transferees to make an Advance, the Transferor shall deliver to the Agent a Notice of Funding. Each such Notice of Funding shall include pro forma calculations of the Funding Base in respect of the relevant Settlement Date and shall include a list of Leases (each, a "Lease Schedule") under which the Lease Receivables included in -------------- the Funding Base arise. Following receipt of a Notice of Funding, the Agent will determine whether the Conduit Transferee will make the requested Advance. If the Conduit Transferee declines to make such Advance, the Agent shall promptly notify the Transferor and the Transferor may, on the Business Day on which it receives such notice, if such notice is received at or prior to 1:00 p.m. (New York time) on such day, or the following Business Day, if such notice is received after 1:00 p.m. (New York time) on such day, either (x) cancel the applicable Notice of Funding or (y) request that the Committed Transferees make such Advance, 21 in each case by notice to the Agent. If the Transferor does not so notify the Agent, then the applicable Notice of Funding shall be deemed canceled. On the date of each Advance, upon satisfaction of the applicable conditions precedent set forth in Article III, the Conduit Transferee or each Committed Transferee, ----------- as applicable, shall make available to the Agent at its address referred to in Section 2.05, in immediately available funds, an amount equal to (1) in the case - ------------ of the Conduit Transferee, the amount of such Advance, and (2) in the case of a Committed Transferee, such Committed Transferee's Pro Rata Share of the amount of such Advance, in each case, net of the amount, if any, to be remitted to the Transferor on the relevant Settlement Date pursuant to clause (vi) of Section ------- 2.04(b). After receipt by the Agent of such funds, the Agent will make such - ------- funds available to the Transferor by wire transfer to such account as shall have been designated by the Transferor. (b) Notes. All of the Advances shall be evidenced by a promissory note ----- substantially in the form attached hereto as Exhibit F (the "Note") --------- ---- appropriately completed, duly executed and delivered on behalf of the Transferor and payable to the order of the Agent for the benefit of the Transferees in accordance with the provisions hereof. The funding date and principal amount of each Advance and each repayment or prepayment of principal thereof shall be recorded in the Agent's internal records and, prior to any transfer of such Note, on the grid schedule annexed thereto, and the Transferor hereby authorizes the Agent to make such recordation; provided, however, that the failure of the -------- ------- Agent to set forth any or all of such information on such schedule or any error in such schedule shall not in any manner affect any payment obligation of the Transferor in accordance with the terms hereof and of such Note. Such updated grid schedules, or other proper records maintained by the Agent in lieu thereof, shall, in the absence of demonstrable error, be presumptively correct evidence of the Advances made by the Transferees to the Transferor. The Transferor shall have no obligations in respect of the Advances except as expressly provided herein. (c) Maturity of Advances. The principal amount of each Advance shall -------------------- be due and payable in accordance with the settlement procedures described in Section 2.04. - ------------ Section 2.03. Interest and Fees. (a) Interest shall accrue on the ----------------- outstanding Advances on each day during an Interest Period at the applicable Interest Rate. On each Settlement Date, an amount equal to accrued and unpaid Interest with respect to the immediately preceding Interest Period shall be due and payable to the Agent for the account of the Transferees from Collections in accordance with the settlement procedures described in Section 2.04, provided, ------------ -------- that, if there are not sufficient amounts available for distribution under such Section 2.04 to fully pay accrued and unpaid Interest as a result of Interest - ------------ Rate Hedges not having an aggregate notional amount equal to the Aggregate Advances at such time, the Transferor shall pay to the Agent any such shortfall. (b) On each Settlement Date, an amount equal to the sum of the Program Fees, Liquidity Fees and Other Fees with respect to the immediately preceding Interest Period shall be due and payable to the Agent for the account of the Transferees from Collections in accordance with the settlement procedures described in Section 2.04. ------------ Section 2.04. Settlement Procedures. --------------------- 22 (a) Collections and Other Amounts. ----------------------------- (i) Lease Receivable Collections. On each day, both before and ---------------------------- after the Termination Date, the Servicer shall allocate all Collections of Lease Receivables received on such day as follows: (1) All amounts in respect of such Collections pertaining to sales, use or personal property taxes attributable to the Leases and related Equipment shall be remitted to the Transferor and used to pay such taxes; and (2) All remaining Collections shall be set aside and held in trust by the Servicer (but, unless required under Section 6.02(b), --------------- shall not be held in a segregated account), until the next Settlement Date. (ii) Payments Under Interest Rate Hedges. Each payment from the ----------------------------------- applicable counterparty under an Interest Rate Hedge shall be made on a Settlement Date and set aside by the Servicer (or the Agent, as the case may be) and held in trust for the Transferees, the Liquidity Providers and the Transferor. (iii) Servicer Advances. If the Servicer has not collected any ----------------- scheduled Installment Payment due on a Lease Receivable since the last Settlement Date and the Servicer reasonably believes that such Installment Payment will be received in ordinary course, the Servicer may make an advance ("Servicer Advance") in an amount equal to such payment and remit the amount of such Servicer Advance to the Collection Account on the next Settlement Date. The Servicer shall be reimbursed for any such Servicer Advance from (i) subsequent Collections of such Installment Payment or (ii) if such Servicer Advance is outstanding on the date on which the related Lease Receivable becomes a Defaulted Lease Receivable, from Collections as described in Section 2.04(b)(ii) hereof. ------------------- (b) Settlement Dates. On each Settlement Date, the Servicer shall ---------------- (based upon the allocations specified in the applicable Investor Report) remit from the amounts set aside for the Transferees, the Liquidity Providers and the Transferor pursuant to Section 2.04(a)(i)(2) during or in respect of the --------------------- immediately preceding Collection Period the following amounts for application to the following in the following order of priority: (i) first, to each counterparty under an Interest Rate Hedge, the ----- net amount, if any, due to such counterparty thereunder as of such Settlement Date; (ii) second, to the Servicer the aggregate amount of any unreimbursed ------ Servicer Advances relating to prior Settlement Dates; (iii) third, to the Servicer in payment of the Servicer Fee for such ----- Settlement Date; (iv) fourth, to the Agent for allocation to the Transferees and the ------ applicable Liquidity Providers for application to Interest due and payable on such Settlement Date; 23 (v) fifth, to the Agent for allocation to itself, the Transferees ----- and the Liquidity Providers in payment of the Program Fee and the Liquidity Fee (as the case may be) due and payable on such Settlement Date; (vi) sixth, to the Transferor an amount equal to the Excess Discount ----- Amount for such Settlement Date; (vii) seventh, to the Agent for allocation to the Transferees an ------- amount equal to the Aggregate Advances, provided, that (A) if an Advance is -------- being made on such Settlement Date, the amount otherwise distributable to the Agent pursuant to this clause seventh in an amount up to the amount of ------- such Advance shall be remitted to the Transferor and (B) if such Payment Date occurs on or after the Termination Date, the amount payable to the Agent under this clause seventh shall be capped at an amount such that, ------- after giving effect to such reduction in the Aggregate Advances, the Funding Base would equal 200% of the outstanding Aggregate Advances; (viii) eighth, to the Agent for allocation to itself, the Transferees ------ and the Liquidity Providers in payment of the Other Fees due and payable on such Settlement Date; and (ix) ninth, to the Transferor all remaining amounts (if any) ----- following the payment of the amounts set forth in clauses (i) through ----------- (viii) above. ------ Section 2.05. Payments and Computations, Etc. All amounts to be paid ------------------------------- or deposited by the Transferor or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 1:00 p.m. (New York City time) on the day when due in lawful money of the United States of America in immediately available funds to such account as the Agent may designate from time to time in writing. The Transferor and the Servicer shall, to the extent permitted by law, pay to the Agent interest on all amounts not paid or deposited by such Person when due hereunder at 2% per annum above the Base Rate, payable on demand. Such interest shall be retained by the Agent except to the extent that such failure to make a timely payment or deposit has continued beyond the date for distribution by the Agent of such overdue amount to the applicable Transferee or the applicable Liquidity Provider, in which case such interest accruing after such date shall be for the account of, and distributed by the Agent to, such Transferee or such Liquidity Provider. All computations of Interest, Liquidity Fees, Program Fees, Servicer Fees and Other Fees hereunder shall be made on the basis of a year of 360 days (or, in the case of Interest calculated by reference to the Base Rate, 365 days) for the actual number of days (including the first but excluding the last day) elapsed. In no event shall any provision of this Agreement require the payment or permit the collection of Interest in excess of the maximum permitted by applicable law. In the event that any payment hereunder (whether constituting a payment of Advances, Interest or any other amount) is rescinded or must otherwise be returned for any reason, the amount of such payment shall be restored and such payment shall be considered not to have been made. Section 2.06. Yield Protection. (a) If due to either: (i) the ---------------- introduction of or any change (including, without limitation, any change by way of imposition or increase of reserve 24 requirements) in or in the interpretation by any Governmental Authority of any law or regulation (other than laws or regulations relating to taxes) after the date hereof or (ii) the compliance by any Affected Party with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) imposed after the date hereof, (1) there shall be an increase in the cost to such Affected Party of accepting, funding or maintaining any Advance hereunder, (2) there shall be a reduction in the amount receivable with regard to any Advance or (3) such Affected Party shall be required to make a payment calculated by reference to the Advances made by it or Interest received by it, then the Transferor shall, from time to time, within 15 days of demand by the Agent, pay the Agent for the account of such Affected Party (as a third party beneficiary, in the case of any Affected Party other than one of the Transferees), that portion of such increased costs incurred, amounts not received or required payment made or to be made, which the Agent reasonably determines is attributable to accepting, funding and maintaining any Advance hereunder, provided, that the Transferor shall have no obligation to pay any -------- amount attributable to the period before ninety (90) days prior to the date of such demand. In determining such amount, the Agent may use any reasonable averaging and attribution methods. The applicable Affected Party shall submit to the Transferor a certificate describing in reasonable detail the basis for and the calculation of such increased costs incurred, amounts not received or receivable or required payment made or to be made, which certificate shall, in the absence of manifest error, be conclusive and binding for all purposes. Each of the Agent, each Transferee and each Liquidity Provider agrees to use reasonable efforts to promptly notify the Transferor upon learning that amounts for which it is entitled to seek reimbursement under this Section 2.06 have ------------ begun to accrue. (b) Prior to demand by any Affected Party of amounts owing under this Section 2.06, the Affected Party agrees (in order to receive amounts due - ------------ pursuant to this Section 2.06) that it will use reasonable efforts to reduce or ------------ eliminate any claim for compensation pursuant to said Section 2.06 including, ------------ subject to applicable law, a change in its applicable lending office for this transaction; provided, however, that nothing herein contained shall obligate an -------- ------- Affected Party to take any action which, in the sole opinion of such Affected Party, is unlawful, otherwise adverse to its interests or results in any unreimbursed cost or expense to such Affected Party, which cost or expense would not have been incurred but for such action. Section 2.07. Increased Capital. (a) If either (i) the introduction of ----------------- or any change in or in the interpretation by any Governmental Authority of any law or regulation after the date hereof or (ii) compliance by any Affected Party with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) after the date hereof affects or would affect the amount of capital required or expected to be maintained by such Affected Party or such Affected Party reasonably determines that the amount of such capital is increased by or based upon the existence of any Transferee's agreement, in its discretion, or commitment, as applicable, to make or maintain Advances hereunder and other similar agreements or facilities, then, within 15 days of demand by such Affected Party or the Agent, the Transferor shall immediately pay to such Affected Party (as a third party beneficiary, in the case of any Affected Party other than one of the Transferees) or the Agent for the account of such Affected Party from time to time, as specified by such Affected Party or the Agent, additional amounts sufficient to compensate such Affected Party in light of such circumstances, to the extent that such Affected Party or the Agent on behalf of such Affected Party reasonably determines such increase in capital to be allocable to the existence of the applicable Transferee's 25 agreements hereunder, provided, that the Transferor shall have no obligation to -------- pay any amount attributable to the period before ninety (90) days prior to the date of such demand. A certificate describing in reasonable detail the basis for and calculation of such amounts submitted to the Transferor by such Affected Party or the Agent, shall, in the absence of manifest error, be conclusive and binding for all purposes. (b) If any Affected Party shall incur any loss, cost or expense as a result of any reduction in Advances on any date other than a Settlement Date or as a result of the failure of any Advances to be made on the date specified in the applicable Notice of Funding for any reason, the Transferor shall, upon demand by the Agent, pay the Agent for the account of such Affected Party the amount of such losses, costs and expenses. Such Affected Party shall submit to the Transferor and the Agent a certificate as to such amounts, which certificate shall, in the absence of manifest error, be conclusive and binding for all purposes. (c) Prior to demand by any Affected Party of amounts owing under this Section 2.07, such Affected Party agrees (in order to receive amounts due - ------------ pursuant to this Section 2.07) that it will use its reasonable efforts to reduce ------------ or eliminate any claim for compensation pursuant to said Section 2.07 including, ------------ subject to applicable law, a change in its applicable lending office for this transaction; provided, however, that nothing herein contained shall obligate any -------- ------- Affected Party to take any action which, in the sole opinion of such Affected Party, is unlawful, otherwise adverse to its interests or results in any unreimbursed cost or expense to such Affected Party, which cost or expense would not have been incurred but for such action. Section 2.08. Taxes. (a) Except to the extent required by applicable ----- law, any and all payments and deposits required to be made hereunder or under any instrument delivered hereunder by the Transferor hereunder shall be made, in accordance with Section 2.05, free and clear of and without deduction for any ------------ and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, except for net income taxes that are imposed by the United States and franchise taxes and net income taxes that are imposed on such Affected Party by the state or foreign jurisdiction under the laws of which such Affected Party is organized or in which it is otherwise doing business or any political subdivision thereof (such excepted Taxes being "Excepted Taxes"). If the Transferor or the Servicer shall -------------- be required by law to make any such deduction, (i) the Transferor shall make an additional payment to such Affected Party, in an amount sufficient so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.08), other than deductions in ------------ respect of Excepted Taxes, such Affected Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Transferor or the Servicer, as the case may be, shall make such deductions and (iii) the Transferor or the Servicer, as the case may be, shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Transferor agrees to pay any present or future stamp or other documentary taxes or any other excise or property taxes or similar levies which arise from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any instrument delivered hereunder. 26 (c) Each Affected Party which is not organized under the laws of the United States or any State thereof shall, within thirty (30) days after such Affected Party becomes a party to or obtains rights under this Agreement, and prior to any payment being made by the Transferor to such Affected Party, deliver to the Transferor (i) two duly completed and executed copies of the IRS Form 1001 or 4224 (or any successor form) as applicable; or (ii) an IRS Form W-8 (or any successor form), as applicable; and (iii) such other forms or certificates as may be required under the laws of any applicable jurisdiction (on or before the date that any such form expires or becomes obsolete), in order to permit the Transferor to make payments to, and deposit funds to or for the account of, such Affected Party hereunder and under the other Facility Documents without any deduction or withholding for or on account of any tax. Each such Affected Party shall submit to the Transferor (copied to the Agent) two updated, completed, and duly executed versions of: (i) all forms referred to in the previous sentence upon the expiry of, or the occurrence of any event requiring a change in, the most recent form previously delivered by it to the Transferor or the substitution of such form; and (ii) such extensions or renewals thereof as may reasonably be requested by the Transferor Notwithstanding the provisions of Section 2.08(a), the Transferor shall not be obligated to pay any additional - --------------- amounts resulting from the failure of an Affected Party to comply with this Section 2.08(c). - --------------- Section 2.09. Additional Interest. To the extent Interest is ------------------- calculated during any Interest Period by reference to the LIBO Rate, the Transferor shall pay to the Agent for the account of the Transferees and the Liquidity Providers (without duplication of amounts otherwise payable hereunder) so long as Citibank shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional Interest ("Additional Interest") on outstanding Advances for each day ------------------- during such Interest Period, at a rate per annum equal at all times to the remainder obtained by subtracting (i) the LIBO Rate of such Interest Period from (ii) the rate obtained by dividing such LIBO Rate by the percentage equal to 100% minus the Eurodollar Reserve Percentage for such Interest Period. Section 2.10. Extension of Specified Termination Date. The Transferor --------------------------------------- may, upon not less than 30 days (but not more than 45 days) notice prior to the then current Specified Termination Date to the Agent (which shall notify each Transferee of receipt of such request), proposed to extend the Specified Termination Date for an additional 364 days measured from the Specified Termination Date then in effect. Each Transferee shall endeavor to respond to such request, whether affirmatively or negatively (such determination to be in the sole discretion of such Transferee), by notice to the Transferor the Servicer and the Agent no earlier than 30 days prior to the then current Specified Termination Date (but in any event no later than 20 days prior to the then current Specified Termination Date). Any Transferee which does not give such notice to the Transferor, Servicer and Agent by the date 10 days prior to the Specified Termination Date then in effect shall be deemed to have elected not to extend as requested. In the event an extension of the Specified Termination Date is not agreed to by each of the Transferees, the Specified Termination Date shall not be extended. 27 ARTICLE III CONDITIONS OF ADVANCES Section 3.01. Conditions Precedent to First Advance. The Agent shall ------------------------------------- have received each of the documents, instruments, opinions and other agreements listed on Exhibit G as a condition precedent to the first Advance. --------- Section 3.02. Conditions Precedent to All Advances. Each Advance ------------------------------------ (including the first Advance) by the Transferees to the Transferor shall be subject to the further conditions precedent that on the date of each Advance, each of the following shall be true and correct both before and after giving effect to such Advance: (i) The representations and warranties contained in Article IV are ---------- correct on and as of such day as though made on and as of such date (except for those representations and warranties which are made as of a certain date, which such representations and warranties shall be correct on and as of the date made), and (ii) No event has occurred and is continuing, or would result from such Advance which constitutes an Event of Termination or would constitute an Event of Termination but for the requirement that notice be given or time elapse or both. Each delivery of a Notice of Funding to the Agent, and the acceptance by the Transferor of the proceeds of such Advance, shall constitute a representation and warranty by the Transferor that, as of the date of such Advance, both before and after giving effect thereto and the application of the proceeds thereof, each of the foregoing statements are true and correct. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.01. Representations and Warranties of the Transferor and the -------------------------------------------------------- Servicer. Each of the Transferor and, except in respect of sub-paragraphs (g), - -------- (h), (i), (k) (l) and (m), the Servicer represents and warrants as to itself, on and as of the date of each Advance, as follows: (a) Due Formation and Good Standing. It is a corporation, duly ------------------------------- organized, validly existing and in good standing under the laws of the state of its organization and is duly qualified to do business, and is in good standing, in every jurisdiction in which the nature of its business requires it to be so qualified, except where the failure to be so qualified would not have a Material Adverse Effect. (b) Due Authorization and No Conflict. The execution, delivery and --------------------------------- performance by it of this Agreement and all other Facility Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action on its part, do not contravene (i) its certificate or articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any material lease, contract, mortgage, financing agreement, indenture or similar instrument binding on it or its property or (iv) any order, writ, judgment, award, injunction or decree binding on it or its property, and do not result in or require the 28 creation of any Lien upon or with respect to any of its properties, except, in the case of clauses (ii) and (iv), where such contravention would not have a Material Adverse Effect. This Agreement and the other Facility Documents to which it is a party have been duly executed and delivered on its behalf. (c) Governmental Consent. No authorization or approval or other -------------------- action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by it of this Agreement or any other agreement, document or instrument to be delivered by it hereunder, except for filings specified on Exhibit H hereto. --------- (d) Enforceability of Facility Documents. This Agreement and each ------------------------------------ other Facility Document to be delivered by it constitute the legal, valid and binding obligation of it enforceable against it in accordance with their respective terms, subject to the Enforceability Exceptions. (e) No Litigation. There are no actions, suits or proceedings ------------- pending, or to its knowledge threatened in writing, against it, or its property, in any court, or before any arbitrator of any kind, or before or by any Governmental Authority, which (i) assert the invalidity of this Agreement or any other Facility Document or any action to be taken by it in connection therewith, or (ii) seek to prevent the consummation of the transactions contemplated by this Agreement and the other Facility Documents. It is not in default with respect to any order of any court, arbitrator or Governmental Authority where such default would have a Material Adverse Effect. (f) Accuracy of Information. No Investor Report, Notice of Funding, ----------------------- certificate, report or other information (including any schedule hereto) furnished or to be furnished by it to the Agent, any Transferee or any Liquidity Provider in connection with this Agreement is or shall be inaccurate in any material respect as of the date it is or shall be dated or (except as otherwise disclosed to the Agent, the Transferees or the Liquidity Providers at such time) as of the date so furnished. (g) Perfection of Interest in Lease Receivables and Pledged Assets. -------------------------------------------------------------- Each Lease Receivable is owned by the Transferor free and clear of any Lien (other than Permitted Liens), and the Agent, for the benefit of the Transferees, has acquired a valid and perfected first priority security interest in each Lease Receivable and in the Related Security (other than the Equipment), Collections and other Pledged Assets (other than the Equipment) with respect thereto, in each case free and clear of any Liens (other than Permitted Liens); and no effective financing statement or other instrument similar in effect, is filed in any recording office listing the Transferor as debtor, covering any Lease Receivable, Related Security, Collections or other Pledged Assets except such as may be filed in favor of the Agent. (h) Advances. The Aggregate Advances do not exceed the Funding Base -------- (after giving effect to any Advances made on such date). (i) Location of Chief Executive Office and Records. Its chief place ---------------------------------------------- of business and chief executive office are located at the address referred to in Section 10.02 hereof and the locations of the offices where it keeps all the - ------------- Records are listed on Exhibit I (or at such other --------- 29 locations, notified to the Agent in accordance with Section 5.01(f), in --------------- jurisdictions where all action required by Section 6.05 has been taken and ------------ completed). (j) Taxes. It has filed or caused to be filed all Federal, state and ----- local tax returns which are required to be filed by it, and has paid or caused to be paid all taxes prior to such taxes becoming delinquent, other than any taxes or assessments the validity of which are being contested in good faith by appropriate proceedings, except where the failure to file or pay would not have a Material Adverse Effect. (k) Solvency. It is not "insolvent" (as such term is defined in -------- Section 101(32)(A) of the Bankruptcy Code. (l) Investment Company Act. It is not an "investment company" within ---------------------- the meaning of the Investment Company Act of 1940, as amended. (m) Use of Proceeds. No proceeds of any Advance will be used by the --------------- Transferor to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended. (n) Year 2000. It has reviewed and assessed all of its computer --------- systems which are material to its business with respect to the ability of such computer systems to recognize correctly references to, and abbreviations of, the year 2000 (including without limitation, references to "00" as the year 2000 and not the year 1900) and it reasonably believes, as a result of such reviews and assessments, that its computer systems material to its business are year 2000 ready. ARTICLE V GENERAL COVENANTS Section 5.01. Affirmative Covenants of the Transferor and the ------------------------------------------------ Servicer. From the Initial Funding Date until the later of the Termination Date - -------- or the Final Collection Date, each of the Transferor and, except in respect of sub-paragraphs (d) (i), (e), and (g), the Servicer will, unless the Agent shall otherwise consent in writing: (a) Compliance with Laws, Etc. Comply in all material respects with ------------------------- all applicable laws, rules, regulations and orders with respect to all Leases and the agreements and documents related thereto, except where the failure to so comply would not have a Material Adverse Effect. (b) Preservation of Corporate Existence. Observe all procedures ----------------------------------- required by its certificate or articles of incorporation and by-laws and preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such rights, franchises, privileges and qualifications would have a Material Adverse Effect. 30 (c) Books and Records; Audits; Agreed Upon Procedures. (i) Maintain ------------------------------------------------- and implement administrative and operating procedures (including an ability to recreate records evidencing the Lease Receivables in the event of the destruction of originals) and keep and maintain all documents, books, records and other information as it may determine to be necessary or advisable for the collection of all Lease Receivables; (ii) from time to time upon not less than ten (10) Business Days' prior notice to it and during regular business hours, permit the Agent, or the Agent's agents or representatives, (A) to have access to all records, files, books of account, data bases and information pertaining to all Lease Receivables and Related Security, including the Records, (B) to discuss matters relating to the Lease Receivables with any of its officers or employees having knowledge of such matters, and (C) permit such Persons to inspect, audit and to make extracts therefrom at the Transferor's expense; and (iii) on an annual basis, cause to be delivered to the Agent, a report prepared and delivered by the Servicer's outside accountants with respect to agreed-upon procedures in accordance with Statement on Standards for Attestation Engagements No. 4, Agreed-Upon Procedures Engagements, comparing amounts set forth in the Investor Reports to supporting underlying documentation with the specific procedures and the adequacy thereof being agreed to by the Servicer and the Agent. (d) Performance and Compliance with Leases and Credit and Collection ---------------------------------------------------------------- Policy. At its expense timely and fully perform and comply, in all material - ------ respects, with (i) all provisions, covenants and other promises required to be observed by it under the Leases the failure with which to comply would have a Material Adverse Effect, and (ii) the Credit and Collection Policy in regard to each Lease Receivable. (e) Location of Records. Keep its chief place of business and chief ------------------- executive office, and the offices where it keeps the Records, at the address(es) of the Transferor referred to in Section 4.01(i), or, in any such case, upon 10 --------------- days' prior written notice to the Agent, at such other locations within the United States where all action required by Section 6.05 shall have been taken ------------ and completed. (f) Obligor Filing Requirement. With respect to each Lease -------------------------- Receivable, comply with the Obligor Filing Requirement. (g) Interest Rate Hedges. Maintain at all times Interest Rate Hedges -------------------- (i) between the Transferor and either Citibank and/or such other counterparties as may be acceptable to the Agent and have a long-term rating of at least AA- from S&P and Aa3 from Moody's and a short-term rating of at least A1 from S&P and P1 from Moody's, (ii) with an aggregate notional amount not less than 95% of the aggregate unpaid Installment Payments under the Lease Receivables included in the Pledged Assets at such time, and not greater than 105% of the aggregate unpaid Installment Payments under the Lease Receivables included in the Pledged Assets at such time, and (iii) with respect to which periodic payments are made to the applicable counterparty (solely on a net basis from funds available under Section 2.04(b)(i)) by reference to a fixed rate and the counterparty makes - ------------------- periodic payments to the Transferor or (to the extent the Agent has required such counterparty to remit such payments directly to the Agent) to the Agent (in either case, solely on a net basis) by reference to a rate equal during any Interest Period to the LIBO Rate for such Interest Period. 31 Section 5.02. Reporting Requirements of the Transferor and the ------------------------------------------------ Servicer. From the Initial Funding Date until the later of the Termination Date - -------- or the Final Collection Date, the Transferor and, except in respect of sub-paragraphs (b) and (d), the Servicer will, unless the Agent shall otherwise consent in writing, furnish to the Agent: (a) Event of Termination. As soon as reasonably practicable and in -------------------- any event within three (3) Business Days after a Responsible Officer has actual knowledge thereof, notice of the occurrence of each Event of Termination or each event which, with the giving of notice or lapse of time or both, would constitute an Event of Termination, which such notice shall include a statement of such Responsible Officer setting forth details of such Event of Termination or event and the action which such Person proposes to take with respect thereto. (b) Financial Statements. Furnish to the Agent or cause to be -------------------- furnished to the Agent: (i) promptly after being publicly disclosed, and in any event within fifty-five (55) days after the end of the first, second and third quarters in each fiscal year of Parent, copies of the consolidated financial statements of Parent and its subsidiaries, including a balance sheet of Parent and its subsidiaries on a consolidated basis as of the end of such quarterly accounting period and related statements of net earnings and cash flows for the portion of such fiscal year ended with the last day of such quarter, all in reasonable detail, (ii) promptly after being publicly disclosed, and in any event within one hundred (100) days after the end of each fiscal year of the Parent copies of the consolidated financial statements of Parent and its subsidiaries, including a balance sheet of Parent and its subsidiaries on a consolidated basis as of the end of such fiscal year and related statements of net earnings and cash flows for such fiscal year, all in reasonable detail and prepared and certified by independent public accountants of nationally recognized standing selected by the Parent, and stating in comparative form the respective figures for the end of and for the previous fiscal year, and (iii) as soon as available, and in any event promptly after filing thereof, a copy of any filing made by Parent with the Securities and Exchange Commission, including, without limitation, forms 10-Q and 10-K, or with any national securities exchange. (c) Investor Reports. Provide to the Agent, an Investor Report (i) on ---------------- or prior to the 15th day of any calendar month following the end of each Collection Period with respect to such Collection Period, and (ii) after the occurrence and during the continuation of an Event of Termination at such other times as the Agent may from time to time reasonably request with respect to such periods of time as the Agent may reasonably specify. The Servicer hereby agrees that (A) it will submit each Investor Report by electronic mail (each an "E-Mail ------ Servicer Report"), (B) it will make arrangements with VeriSign, Inc. (or another - --------------- authenticating organization acceptable to the Agent) to enable the Servicer to generate electronic signatures to be used on such E-Mail Servicer Reports, (C) it will format each E-Mail Servicer Report in accordance with the directions of the Agent, (D) it will send each E-Mail Servicer Report to the electronic mail address designated by the Agent from time to time, (E) it authorizes the Agent to rely on such E-Mail Servicer Report for all purposes related to this Agreement to the same extent as if the contents thereof had been otherwise delivered to the Agent and (F) it acknowledges that the Agent may at any time require it to manually submit a written Investor Report instead of such E-Mail Servicer Report. 32 (d) Reporting on Litigation and Adverse Effects. As soon as ------------------------------------------- reasonably practicable and in any event within three (3) Business Days after a Responsible Officer has actual knowledge thereof, notice of the occurrence of any and all litigation or any other matters or events concerning the Transferor which could have a Material Adverse Effect. (e) Changes to Lock-Boxes. As soon as reasonably practicable, notice --------------------- to the Agent of any change in the lock-boxes to which Obligors of Lease Receivables remit Collections. (f) Other Information. As soon as reasonably practicable, from time ----------------- to time, such other information, documents, records or reports respecting the Lease Receivables as the Agent may from time to time reasonably request in order to protect the interests of the Agent or any Transferee under or as contemplated by this Agreement. Section 5.03. Negative Covenants of the Transferor and the Servicer. ----------------------------------------------------- From the Initial Funding Date until the later of the Termination Date or the Final Collection Date, neither the Transferor nor, except in respect of sub-paragraph (d), the Servicer will, without the written consent of the Agent: (a) Sales, Liens, Etc. Against Lease Receivables and Pledged Assets. --------------------------------------------------------------- Except as otherwise provided herein, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist, any Lien other than Permitted Liens (including, without limitation, any Lien arising under the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor statute, or otherwise in favor of the Pension Benefit Guaranty Corporation) upon or with respect to, any Lease Receivable or other Pledged Assets. (b) Extension or Amendment of Lease Receivables. Except in accordance ------------------------------------------- with the Credit and Collection Policy or as otherwise permitted in Section 6.02, ------------ extend, amend, or otherwise modify the terms of any Lease Receivable, or amend, modify or waive any term or condition of any contract related thereto, in either case, if such amendment, modification or waiver decreases the Outstanding Balance of the applicable Lease Receivable or adversely affects the collectibilty thereof. (c) Change in Business or Credit and Collection Policy. Make any -------------------------------------------------- change in the character of its business or in the Credit and Collection Policy in any manner which would have a Material Adverse Effect. (d) Change in Name. Make any change to its name or use any trade -------------- names, fictitious names, assumed names or "doing business as" names unless the Transferor shall have (i) given at least 30 days' prior written notice to the Agent and (ii) taken and completed all action required by Section 6.05. ------------ (e) Terminate or Reject Contracts. Without limiting Section 6.03(b), ----------------------------- --------------- terminate or reject any Lease under which a Lease Receivable has arisen prior to the end of the term of such Lease, whether such rejection or early termination is made pursuant to an equitable cause, statute, regulation, judicial proceeding or other applicable law (including, without limitation, Section 365 of the Bankruptcy Code), unless (i) with respect to Defaulted Lease Receivables, the Transferor has determined in good faith that such termination or rejection will maximize the 33 recovery thereon, or (ii) prior to, or simultaneously with, such termination or rejection, the Transferor pays the Agent, for the benefit of the Transferees and the Liquidity Providers, an amount equal to the Advance outstanding with respect to such Lease Receivables together with all accrued and unpaid Interest on such Advance, accrued and unpaid fees with respect thereto and all breakage costs (but not gains, if any) incurred in connection with any reduction to the notional amount of any Interest Rate Hedge resulting from such payment. (f) Prepayments of Lease Receivables. Permit or accept the proceeds -------------------------------- of any prepayment of a Lease Receivable, unless (i) upon the application of such amounts pursuant to Section 2.04(b) hereof, the Transferor causes the aggregate --------------- notional amount of Interest Rate Hedges to be reduced by the amount of the Advances outstanding with respect to such Lease Receivable, and (ii) the Transferor is entitled to receive and apply such proceeds in an amount sufficient to repay in full the Advances outstanding with respect to such Lease Receivable and any interest (including interest through the end of the related Collection Period), fees, costs or expenses (including early termination payments) resulting from the reduction of the aggregate notional amount of the Interest Rate Hedges. ARTICLE VI ADMINISTRATION OF RECEIVABLES Section 6.01. Designation of Servicer. The servicing, administering ----------------------- and collection of the Lease Receivables shall be conducted by the Servicer so designated from time to time in accordance with this Section 6.01. The Agent ------------ hereby designates the Transferor as Servicer with respect to the Pledged Assets hereunder. Until the Agent gives notice to the Transferor and the Servicer of the designation of a new Servicer as described below, the Transferor hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof. The parties hereto acknowledge that Trinity Capital Corporation and any other Person approved by the Agent may perform certain of the duties and obligations of the Servicer as subservicers, provided, that the Servicer shall -------- remain liable and responsible for the performance of any such duties and obligations. The Agent may at any time following a Servicer Default designate as Servicer any Person (including itself) to succeed the Transferor or any successor Servicer, on the condition in each case that any such Person so designated shall agree to perform the duties and obligations of the Servicer pursuant to the terms hereof. The Transferor agrees that, upon its replacement as Servicer by the Agent, it will take such actions as the Agent may reasonably require and otherwise cooperate with the Agent and the successor Servicer in effecting the termination of its responsibilities and rights as Servicer hereunder including, without limitation, (i) assisting the successor Servicer in enforcing all rights under the Lease Receivables and Related Security, (ii) transferring, promptly upon receipt, to the successor Servicer any Collections or other amounts related to the Lease Receivables received by the Transferor, (iii) transferring to the successor Servicer all Records held by or under the control of the Transferor and (iv) following the replacement of the Transferor as Servicer, permit the successor Servicer to have access to all tapes, discs, diskettes and related property containing information concerning the Lease Receivables and the Records and permit the successor Servicer to use all computer software that may facilitate the Servicer's access to and use of such information. Upon the replacement of the Transferor as Servicer, the Transferor shall no longer be entitled to the Servicer Fee accruing from and after the effective date of such replacement. 34 Section 6.02. Duties of the Servicer. (a) The Servicer shall take or cause ---------------------- to be taken all such actions as it deems necessary or advisable to collect each Lease Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. Each of the Transferor, each Transferee, each Liquidity Provider and the Agent hereby appoints as its nominee the Servicer, from time to time designated pursuant to Section 6.01, to enforce its ------------ respective rights and interests in and under the Leases, the Lease Receivables and the Related Security. In no event shall the Servicer be entitled to make the Agent, any Transferee or any Liquidity Provider a party to any litigation without the Agent's express prior written consent. (b) The Servicer shall set aside for the account of the Transferees and the Liquidity Providers the Collections of Lease Receivables in accordance with Section 2.04, provided, that, until the Agent notifies the Servicer to the - ------------ -------- contrary (as described in the immediately succeeding sentence), neither the Servicer nor the Transferor shall be required to segregate the funds constituting Collections prior to the remittance or deposit thereof into the Collection Account in accordance with Section 2.04. At any time following an ------------ Event of Termination or the downgrade of the Parent's unsecured long-term debt to below BBB by S&P or below, Baa2 by Moody's, if such debt is rated by S&P or Moody's, or below BBB+ if such debt is only rated under the Agent's debt rating model, the Agent may require the Servicer and the Transferor to segregate and deposit the Collections of Lease Receivables into the Collection Account or such other account as shall have been designated by the Agent, set aside for the Transferee and the Liquidity Providers, within two Business Days following receipt by the Servicer of such Collections. At any time following an Event of Termination, the Agent may require the Servicer and the Transferor to engage an independent third-party acceptable to the Agent, to serve as trustee for the receipt of all Collections and the subsequent allocation and distribution thereof. The Transferor shall deliver to the Servicer, and the Servicer shall hold in trust for the Transferor, the Transferees and the Liquidity Providers in accordance with their respective interests, all Records. Notwithstanding anything to the contrary contained herein, the Agent shall, upon the occurrence and continuance of an Event of Termination, have the absolute and unlimited right to direct the Servicer to commence or settle any legal action to enforce collection of any Lease Receivable or to foreclose upon or repossess any Related Security. The Servicer's authorization under this Agreement shall terminate on the Final Collection Date. Section 6.03. Rights of the Agent. At any time following the occurrence and ------------------- continuance of an Event of Termination, (i) the Agent may notify (or may direct the Servicer to notify) at any time the Obligors of Lease Receivables, or any of them, of the Transferees and the Liquidity Providers' interest in Pledged Assets and direct such Obligors, or any of them, that payment of all amounts payable under any Lease Receivable be made directly to the Agent or its designee in which case the Agent or its designee shall apply collections in accordance with Section 2.04(b); (ii) the Transferor shall, at the Agent's request and at the Transferor's expense, give notice of the Transferees' and the Liquidity Providers' interest in the Lease Receivables to each Obligor and direct that payments be made directly to the Agent or its designee; and (iii) each of the Transferor, each Transferee and the Liquidity Providers hereby authorizes the Agent to take any and all steps in the Transferor's name and on behalf of the Transferor, the Transferees and the Liquidity Providers necessary or desirable, in the determination of the Agent, to collect all amounts due under any and all Lease Receivables, including, without 35 limitation, endorsing the Transferor's name on checks and other instruments representing Collections and enforcing such Lease Receivables. Section 6.04. Responsibilities of the Transferor. Anything herein to the ---------------------------------- contrary notwithstanding, the Transferor shall (i) perform all of its obligations under the Leases to the same extent as if Pledged Assets had not been subject to the Lien hereunder and the exercise by Agent of its rights hereunder shall not relieve Transferor from such obligations and (ii) pay when due any taxes, including without limitation, sales, excise and personal property taxes payable in connection with the Pledged Assets. None of the Agent, the Transferees or the Liquidity Providers shall have any obligation or liability with respect to any of the Pledged Assets, nor shall any of them be obligated to perform any of the obligations of the Transferor thereunder. Section 6.05. Further Action Evidencing Agent's Interest. The Transferor ------------------------------------------ agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Agent may reasonably request in order to perfect, protect or more fully evidence the interest of the Agent granted hereunder or enable the Agent to exercise or enforce any of its rights hereunder. Without limiting the generality of the foregoing, the Transferor will upon the request of the Agent (i) mark its master data processing records evidencing such Lease Receivables with a legend, acceptable to the Agent, evidencing that a Lien therein has been assigned to the Agent under this Agreement, (ii) execute and file such financing statements, continuation statements or amendments thereto or assignments thereof, and execute and file such other instruments or notices, as may be necessary or appropriate or as the Agent may reasonably request and (iii) following the occurrence of an Event of Termination or a downgrade of the unsecured long-term debt of Parent to below BBB by S&P or Baa2 by Moody's, if such debt is rated by S&P or Moody's, or below BBB+ if such debt is only rated under the Agent's debt rating model, remit the original copies of all chattel paper evidencing the Lease Receivables to a custodian selected by the Agent. The Transferor hereby authorizes the Agent to file one or more financing statements, continuation statements and amendments thereto and assignments thereof, relative to all or any of the Lease Receivables and the other Pledged Assets now existing or hereafter arising without the signature of the Transferor where permitted by law. A carbon, photographic or other reproduction of this Agreement or any financing statement covering the Pledged Assets, or any part thereof, shall be sufficient as a financing statement. If the Transferor fails to perform any of its agreements or obligations under this Agreement, the Agent may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Agent incurred in connection therewith shall be payable by the Transferor upon the Agent's demand therefor. Section 6.06. Removal and Substitution of Pledged Assets. ------------------------------------------ (a) On any Settlement Date prior to the occurrence of the Termination Date, the Transferor may remove one or more Lease Receivables, together with the related Leases and Related Security, from the Pledged Assets by listing such Lease Receivables in the Investor Report delivered in connection with such Settlement Date, provided, however, that (i) no such removal shall occur unless, -------- ------- after giving effect thereto and the payments made on such Settlement Date, the Funding Base equals or exceeds the Aggregate Advances and (ii) unless otherwise agreed by the Agent, the aggregate Outstanding Balance of Lease Receivables removed from the Pledged Assets pursuant to this Section 6.06(a) which --------------- constitute Defaulted Lease Receivables 36 shall not exceed ten percent (10%) of aggregate Outstanding Balance of the Lease Receivables which become Pledged Assets hereunder. (b) On any Settlement Date prior to the occurrence of the Termination Date, the Transferor may, subject to the conditions set forth in this Section 6.06(b), --------------- replace any Lease Receivable included in the Pledged Assets with one or more other Lease Receivables (each, a "Substitute Receivable"); provided, however, --------------------- -------- ------- that no such replacement shall occur unless each of the following conditions is satisfied as of the date of such replacement and substitution by the Substitute Receivables to be substituted on such date (it being understood that for all purposes hereunder the Outstanding Balance of a Substituted Receivable shall be calculated using the same Discount Rate applicable to the Lease Receivable being replaced): (i) each Substitute Receivable is an Eligible Lease Receivable; (ii) after giving effect to any such substitution, the Funding Base equals or exceeds the Aggregate Advances; (iii) such substitution does not cause an Event of Termination to occur; (iv) no selection procedure adverse to the Transferees was utilized in selecting any such Substitute Receivable from those Leases owned by the Transferor as of the date of such substitution; (v) after giving effect to such substitution, the Transferor will be in compliance with the requirements of Section 5.01(g); and --------------- (vi) the Investor Report with respect to such Settlement Date shall contain a certification by the Transferor that each of the foregoing is true and correct as of such date. (c) Each Substitute Receivable, together with the related Lease, Related Security and Collections with respect thereto shall automatically become Pledged Assets hereunder subject to the security interest granted to the Agent. In connection with any removal or substitution of a Lease Receivable under this Section 6.06, the Agent shall, automatically and without further action, be - ------------ deemed to release its security interest in and lien on such Lease Receivable and related Pledged Assets. ARTICLE VII EVENTS OF TERMINATION Section 7.01. Events of Termination. If any of the following events --------------------- ("Events of Termination") shall occur: --------------------- (a) The Transferor shall fail to make any payment or deposit to be made by it hereunder when due and any such failure shall remain unremedied for three (3) Business Days; or 37 (b) The Transferor shall fail to perform or observe any term, covenant or agreement contained in (i) Section 5.02(a) or Section 5.03 of this Agreement --------------- ------------ or (ii) any other provision of this Agreement or any other Facility Document on its part to be performed or observed and, in the case of clause (ii), any such failure shall remain unremedied for thirty (30) days; or (c) Any representation or warranty made or deemed to be made by the Transferor (or any of its Responsible Officers) under or in connection with this Agreement, any Investor Report, any Notice of Funding or other information or report delivered pursuant hereto shall prove to have been false or incorrect in any material respect when made provided, however that if such representation relates to a Lease Receivable, such Lease Receivable shall cease to be an Eligible Lease Receivable and no Event of Termination shall occur under this Section 7.01(c) if, after giving effect thereto, the Aggregate Advances do not - --------------- exceed the Funding Base; or (d) Except to the extent permitted by the terms hereof, the Transferees shall cease to own or have a valid and perfected security interest in the Pledged Assets or, in the case of the Lease Receivables, such ownership or security interest shall cease to be a first priority ownership or security interest; or (e) (i) The Transferor shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Transferor seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property; or; or (ii) the Transferor's Board of Directors shall vote affirmatively to authorize any of the actions set forth in clause (i) above in this subsection (e); or --------- -------------- (f) As of the last day of any Collection Period, (1) the average of the Delinquency Ratios for such Collection Period and the two immediately preceding Collection Periods shall exceed 1.50%, (2) the average of the Default Ratios for such Collection Period and the two immediately preceding Collection Periods shall exceed 2.0%, (3) the Adjusted Loss Ratio shall exceed 1.50% or (4) the Watch List Ratio shall exceed 6.0%; or (g) A Servicer Default shall have occurred and be continuing; or (h) (i) The Parent shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Parent seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property; or; or (ii) the Parent's Board of Directors shall vote affirmatively to authorize any of the actions set forth in clause (i) above in this subsection (h); or --------- -------------- 38 (i) The Parent shall fail to pay any principal of or premium or interest on any indebtedness which is outstanding in a principal amount of $25,000,000 or greater when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and any such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such indebtedness; or any other default under any agreement or instrument relating to any such indebtedness of the Parent or any other event shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such indebtedness; or any such indebtedness shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof as a result of such default; or (j) The long term unsecured debt obligations of Parent is rated less than Investment Grade or, if not rated by S&P or Moody's, is rated less than BBB under the Agent's internal ratings model; or (k) There shall occur a breach of the Parent Performance Guaranty, then, and in any such event, the Agent shall, at the request, or may with the consent, of the Transferees, by notice to the Transferor declare the Termination Date to have occurred, except that, in the case of any event ------ described in clause (i) of subsection (e) above, the Termination Date shall be ---------- -------------- deemed to have occurred automatically upon the occurrence of such event. Upon any such declaration or automatic occurrence, the Agent and the Transferees shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the UCC of the applicable jurisdiction and other applicable laws, which rights shall be cumulative. Upon the occurrence of the Termination Date, (x) all Advances and (y) Interest, fees, expense reimbursements, indemnifications, and other amounts due or to become due under this Agreement shall be immediately due and payable as provided in Section 2.04. ------------ ARTICLE VIII INDEMNIFICATION Section 8.01. Indemnities by the Transferor. Without limiting any ----------------------------- other rights which any Affected Party may have hereunder or under applicable law, the Transferor hereby agrees to indemnify any Transferee, CNAI, individually and in its capacity as Agent, and any Liquidity Provider (the "Indemnified Parties"), from and against any and all damages, losses, claims, ------------------- liabilities and related costs and expenses, including reasonable attorneys' fees and disbursements (all of the foregoing being collectively referred to as "Indemnified Amounts") awarded against or incurred by such Indemnified Party to ------------------- the extent relating to or arising from this Agreement or the pledge of the Pledged Assets or in respect of any Lease Receivable or any Lease, excluding, however, (i) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of any Indemnified Party or (ii) recourse for an Obligor's inability for credit reasons to make payments of Lease Receivables. Without limiting the foregoing Transferor, shall indemnify each Indemnified Party for Indemnified Amounts relating to or resulting from: 39 (i) the inaccuracy of any representation or warranty made or deemed made by the Transferor, including in its capacity as Servicer, (or any of its officers) under this Agreement; (ii) the failure by the Transferor, including in its capacity as Servicer, to comply with any term, provision or covenant contained in this Agreement or any Facility Document to which it is party or with any applicable law, rule or regulation with respect to any Lease Receivable or the Related Security; (iii) any products liability claim or personal injury or property damage suit or other similar or related claim or action of whatever sort arising out of or in connection with services the sale or provision of which gave rise to any Lease Receivable; (iv) the failure to pay when due any taxes, including, without limitation, sales, excise or personal property taxes payable by the Transferor in connection with the Pledged Assets and taxes and other charges to be paid under Section 2.08; ------------ (v) the failure of the Transferor to have a perfected first priority Lien on any Related Security which secures the payment of a Lease Receivable; (vi) the failure to vest and maintain vested in the Agent, on behalf of the Transferees and the Liquidity Providers, a first priority perfected ownership or security interest in the Lease Receivables (including as a result of any failure to file, or any delay in filing, financing statements or other similar instruments or documents under the UCC or other applicable laws against the Transferor with respect to any Pledged Assets), together with all Collections and Related Security (other than Equipment), free and clear of any Lien, whether existing at the time such Lease Receivable arose or at any time thereafter; (vii) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Lease Receivable (including, without limitation, a defense based on the related Lease not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale or provision of any services related to such Lease or the furnishing or failure to furnish such services; (viii) the commingling of Collections at any time with other funds, whether by the Servicer, the Transferor or any of their respective affiliates; and (ix) the inability of the Transferor to confirm that the first two Installment Payments have been made on Lease Receivables arising under Leases entered into during August and September, 1999. Any amounts subject to the indemnification provisions of this Section 8.01 shall ------------ be paid by the Transferor to the Agent within five Business Days following Agent's demand therefor. 40 ARTICLE IX GRANT OF SECURITY INTEREST; SECTION 9.01. Grant of Security Interest. To secure the prompt -------------------------- and complete payment when due of the Obligations and the performance by the Transferor of all of the covenants and obligations to be performed by it pursuant to this Agreement, the Transferor hereby assigns as security and pledges to the Agent, for the benefit of the Transferees and any successor and assign thereof (including, without limitation, the Liquidity Providers), and grants to the Agent, for the benefit of the Transferees, the counterparties to any Interest Rate Hedges and any successor and assign thereof (including, without limitation, the Liquidity Providers), a security interest in all of the Transferor's right, title and interest in and to all of the following property and interests in property (collectively, the "Collateral"), whether now owned or ---------- existing or hereafter arising or acquired and wheresoever located: (i) all Equipment and substitutions therefor and products and proceeds thereof, including, without limitation, all payments under insurance (whether or not the Agent is the loss payee thereof) or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing; (ii) all Lease Receivables; (iii) all Related Security with respect to the Lease Receivables; (iv) all Leases; (v) all funds on deposit in the Collection Account; (vi) all Collections; and (vii) proceeds and other monies due and to become due to the Transferor in respect of any of the foregoing. ARTICLE X MISCELLANEOUS Section 10.01. Amendments, Etc. No amendment to or waiver of any --------------- provision of this Agreement nor consent to any departure by the Transferor, shall in any event be effective unless the same shall be in writing and signed by (i) the Transferor, the Agent and the Required Transferees (with respect to an amendment) or (ii) the Agent and the Required Transferees (with respect to a waiver or consent by them) or the Transferor (with respect to a waiver or consent by it), as the case may be, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, modification or waiver (i) -------- ------- shall affect the rights or duties of the Servicer hereunder without the prior written consent of the Servicer or (ii) shall, without the prior written consent of each Transferee (A) reduce the principal of, or Interest on, the Advances or any fees or other amounts payable hereunder, (B) postpone any date fixed for any payment of principal of, or 41 Interest on, the Advances or any fees or other amounts payable hereunder, (C) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Advances, or the number of Transferees, which shall be required for the Transferees or any of them to take any action hereunder, (D) amend or modify the calculation of the Required Loss Reserve Percentage, (E) release the Parent from any of its obligations under the Performance Guaranty or (F) amend this Section 10.01. This Agreement contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement (together with the exhibits hereto) among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings. Section 10.02. Notices, Etc. All notices and other communications ------------ provided for hereunder shall, unless otherwise stated herein, be in writing (including telex communication and communication by facsimile copy) and shall be personally delivered or sent by first class mail, postage prepaid, or by courier or by facsimile, to each party hereto, at its address set forth under its name on the signature pages hereof or at such other address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall be effective, upon receipt, or in the case of delivery by mail, three days after being deposited in the mails, or, in the case of notice by facsimile, when electronic communication of receipt is obtained, in each case addressed as aforesaid. Section 10.03. No Waiver; Remedies. No failure on the part of the ------------------- Agent, any Transferee or any Liquidity Provider to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Section 10.04. Binding Effect; Assignability. (a) This Agreement ----------------------------- shall be binding upon and inure to the benefit of the Transferor, the Servicer, the Agent, the Transferees and their respective successors and permitted assigns (which successors of the Transferor shall include a trustee in bankruptcy). This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Final Collection Date; provided, however, that the rights and remedies -------- ------- with respect to any breach of any representation and warranty made by the Transferor pursuant to Article IV and the indemnification and payment provisions ---------- of Sections 2.06, 2.07, 2.08, Article VII and Article VIII shall be continuing ------------- ---- ---- ----------- ------------ and shall survive any termination of this Agreement. (b) The Transferor may not assign any of its rights and obligations hereunder or any interest herein without the prior written consent of the Transferees and the Agent. The Conduit Transferee may, (i) without the consent of the Transferor, assign at any time all or any portion of its rights and obligations hereunder and interests herein to (a) CNAI, any affiliate of CNAI or any special purpose receivables investment vehicle managed by CNAI or any affiliate of CNAI, or (b) any Person pursuant to an Asset Purchase Agreement and (ii) with the consent of the Transferor (such consent not to be unreasonably withheld) and the Agent, assign at any time all or any portion of its rights and obligations hereunder and interests herein to any Person not described in the preceding clause (i). Any Committed Transferee may, with the consent of the Transferor (such consent not to be unreasonably withheld) and the Agent, assign at any time all 42 or any portion of its rights and obligations hereunder and interests herein to any Person. Upon any such assignment, the assignee shall succeed to and become vested with all the rights, powers, privileges and duties of such Transferee, and the resigning Transferee shall be discharged from its duties and obligations as Transferee hereunder. The Transferor and the Servicer agree to execute or obtain such other documentation as may be reasonably requested by the assigning Transferee in order to effectuate such assignment. (c) Notwithstanding any other provisions of this Agreement, any Transferee may at any time create a security interest in all or a portion of its rights under this Agreement or any other Facility Document in favor of the Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System. Section 10.05. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED ------------- BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES), EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE INTERESTS OF THE TRANSFEROR IN THE PLEDGED ASSETS OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Section 10.06. Costs and Expenses. The Transferor agrees to pay ------------------ on demand (i) all reasonable costs and expenses incurred in the periodic auditing of the Transferor or the Servicer pursuant to Section 5.01(c) and (ii) --------------- all reasonable costs and expenses of the Transferees and the Agent in connection with the preparation, execution, amendment, waiver and enforcement of this Agreement and the other agreements and documents to be delivered hereunder. In addition, the Transferor shall pay on demand the reasonable fees and out-of-pocket expenses of counsel for the Conduit Transferee or any counsel for any general or limited partner or shareholder of the Conduit Transferee with respect to (i) advising the Conduit Transferee or such general or limited partner or shareholder as to its rights and remedies under this Agreement, (ii) the enforcement of this Agreement and the other documents to be delivered hereunder or (iii) advising the Conduit Transferee or such general or limited partner or shareholder as to matters relating to the Conduit Transferee's operations; provided, however, that if the Conduit Transferee enters into agreements for the purchase of or the grant of a security interest in receivables from one or more other Persons ("Other Transferors"), the Transferor ----------------- and such Other Transferors shall each be liable for such Other Costs ratably in accordance with the usage under the respective facilities of the Conduit Transferee to acquire by purchase or as security receivables from the Transferor and each Other Transferor; provided, further, that if such Other Costs are attributable to the Transferor and not attributable to any Other Transferor, the Transferor shall be solely liable for such Other Costs, but if such Other Costs are attributable to any Other Transferor and not the Transferor, the Transferor shall not be liable for such Other Costs. Section 10.07. No Proceedings. The Transferor, each Liquidity -------------- Provider and the Agent each hereby agrees that it will not institute against the Conduit Transferee any proceeding of the type referred to in clause (i) of ---------- Section 7.01(e) so long as any CP Notes shall be - --------------- 43 outstanding or there shall not have elapsed one year plus one day since the last day on which any such CP Notes shall have been outstanding. Section 10.08. Execution in Counterparts; Severability. This --------------------------------------- Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. Section 10.09 Confidentiality. The Agent, each Transferee and --------------- each Liquidity Provider agrees, insofar as is legally possible, to use its reasonable best efforts to keep in confidence all financial data and other information relative to the affairs of the Transferor, the Servicer and the Pledged Assets heretofore furnished or which may hereafter be furnished to it pursuant to the provisions of this Agreement; provided, however, that this -------- ------- Section 10.09 shall not be applicable to information which is or becomes available to the Agent, a Transferee or a Liquidity Provider from a source other than the Servicer or the Transferor; and provided further that such obligations -------- ------- of each Agent, each Transferee and each Liquidity Provider shall be subject to each Agent's, each Transferee's and each Liquidity Provider's (a) obligation to disclose such information pursuant to a request or order under applicable laws and regulations or pursuant to a subpoena or other legal process, (b) right to disclose any such information to bank examiners, its affiliates, bank, auditors, accountants and its counsel, and (c) right to disclose any such information, (i) in connection with the transactions set forth herein including assignments and sales of participation interests pursuant to Section 10.04 hereof or (ii) in or in connection with any litigation or dispute involving the Agent, the Transferees and the Transferor, provided that information disclosed pursuant to this proviso shall be so disclosed subject to such procedures as are reasonably calculated to maintain the confidentiality thereof. ARTICLE XI THE AGENT Section 11.01. Authorization and Action. Each Transferee hereby ------------------------ appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto. The provisions of this Article XI are solely for the benefit of the ---------- Agent and the Transferees and the Transferor shall not have any rights as a third-party beneficiary or otherwise under any of the provisions hereof. The Agent shall distribute all Collections and other amounts received or acquired by it hereunder on behalf of the applicable Transferees to such Transferees in accordance with Article II hereof. ---------- Section 11.02. Agent's Reliance, Etc. Neither the Agent nor any --------------------- of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by the Agent under or in connection with this Agreement, except for its or their own gross negligence 44 or willful misconduct. Without limiting the generality of the foregoing, the Agent: (i) may consult with legal counsel (including counsel for the Transferor), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Advance and shall not be responsible to any Transferee for any statements, warranties or representations made in or in connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Transferor or the Servicer or to inspect the property (including the books and records) of the Transferor and the Servicer; (iv) shall not be responsible to any Transferee for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (v) shall incur no liability under or in respect of this Agreement by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telex) believed by it to be genuine and signed or sent by the proper party or parties. Section 11.03. Agent and Affiliates. With respect to any Advance -------------------- (or portion thereof) held by CNAI, CNAI shall have the same rights and powers under this Agreement as would a Transferee if it were holding such Advance (or portion thereof) and may exercise the same as though CNAI was not the Agent hereunder. CNAI and its Affiliates may generally engage in any kind of business with the Transferor or any Obligor, any of their respective Affiliates and any Person who may do business with or own securities of the Transferor or any Obligor or any of their respective Affiliates, all as if CNAI was not the Agent and without any duty to account therefor to any Transferee. Section 11.04. Transferee's Credit Decision. Each Transferee ---------------------------- acknowledges that it has, independently and without reliance upon the Agent, Citibank or any of their respective Affiliates or any other Transferee, and based on such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and, if it so determines, to make Advances hereunder. Each Transferee also acknowledges that it will, independently and without reliance upon the Agent, Citibank or any of their respective Affiliates, and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement. Section 11.05. Delegation of Duties. The Agent may execute any of -------------------- its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. Section 11.06. Successor Agent. The Agent may, upon thirty (30) --------------- days' notice to the Transferor, each Transferee and each other party hereto, resign as Agent. If CNAI shall resign as Agent under this Agreement, then the Required Transferees during such thirty-day period shall appoint a successor agent, whereupon such successor agent shall succeed to the rights, powers and duties of the Agent and references herein to the Agent shall mean such successor agent, effective upon its appointment; and such former Agent's rights, powers and duties in such capacity shall be terminated, without any other or further act or deed on the part of 45 such former Agent or any of the parties to this Agreement. After any retiring Agent's resignation hereunder as such agent, the provisions of Article VIII, ------------ this Article XI and Section 10.06 shall inure to its benefit as to any actions ---------- ------------- taken or omitted to be taken by it while it was Agent under this Agreement. 46 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. TRANSFEROR/SERVICER: STEELCASE FINANCIAL SERVICES INC. By /s/ Thomas P. Sullivan ------------------------------ Name: Title: 901 44th Street, S.E. Grand Rapids, MI 49508 Attn: Chief Financial Officer Telecopy: (616) 698-3863 AGENT: CITICORP NORTH AMERICA, INC., as Agent By /s/ Nancy G. Free ------------------------------ Name: NANCY GEORGI FREE Title: Vice President 450 Mamaroneck Ave. Harrison, New York 10528 Attn: Global Securitization Telecopy: (914) 899-7015 47 CONDUIT TRANSFEREE: CORPORATE ASSET FUNDING COMPANY, INC. By: Citicorp North America, Inc., as Attorney- in-Fact By /s/ Nancy G. Free ------------------------------ Name: NANCY GEORGI FREE Title: Vice President 450 Mamaroneck Ave. Harrison, New York 10528 Attn: Global Securitization Telecopy: (914) 899-7015 COMMITTED TRANSFEREES: Commitment: CITIBANK, N.A. - ---------- $200,000,000 By /s/ Nancy G. Free ------------------------------ Name: NANCY GEORGI FREE Title: Vice President 450 Mamaroneck Ave. Harrison, New York 10528 Attn: Global Securitization Telecopy: (914) 899-7015 48 EXHIBIT A DESCRIPTION OF CREDIT AND COLLECTION POLICY ON FILE WITH THE AGENT EXHIBIT C FORM OF INTEREST RATE HEDGE ASSIGNMENT ACKNOWLEDGMENT [Attached] EXHIBIT C INTEREST RATE HEDGE ASSIGNMENT ACKNOWLEDGMENT [Date] [Name of Hedge Counterparty] [Address of Hedge Counterparty] Attention:___________________________ Re: ISDA Master Agreement dated as of _______, 19_ (the "Hedge Agreement") between [Name of Hedge Counterparty] (the "Counterparty") and Steelcase Financial Services Inc. ("Steelcase") Steelcase hereby notifies you that Steelcase has assigned to Citicorp North America, Inc., as agent under the "Lease Receivables Transfer Agreement" identified below (the "Agent"), all of its right, title and interest in and to any interest rate hedge transaction (each, a "Hedge") entered into pursuant to the Hedge Agreement including, without limitation, (1) all rights of Steelcase to receive moneys due and to become due under or pursuant to the Hedges, (ii) claims of Steelcase for damages arising out of or for breach or default under the Hedges, (iii) the right of Steelcase to terminate the Hedges or the Hedge Agreement, and to compel performance and otherwise exercise all remedies thereunder, and (iv) all proceeds of any and all of the foregoing (the assignment, right, title and interest of Steelcase in and to the Hedges and the Hedge Agreement being referred to as the "Assigned Rights"). As used herein, "Lease Receivables Transfer Agreement" shall mean that certain Lease Receivables Transfer Agreement dated as of October 20,1999 among Steelcase, as "Transferor" and "Servicer," Corporate Asset Funding Company, Inc., as "Conduit Transferee," the financial institutions from time to time party thereto, as "Committed Transferees" and the Agent. The Counterparty hereby agrees that, until the Counterparty receives written notice from the Agent to the contrary, the Counterparty shall make all payments under the Hedge Agreement and the Hedges to Steelcase or as Steelcase may from time to tine direct. Upon the Counterparty's receipt of written notice from the Agent directing the same, (i) the Counterparty will cease to make any such payments to or upon the direction of Steelcase, and shall make all such payments only to the Agent or as the Agent may from time to time direct, and (ii) the Agent shall be entitled to exercise any and all rights and remedies of Steelcase under the Hedge Agreement and the Hedges to receive such payments in accordance with the terms hereof. All payments to be made under the Hedge Agreement and the Hedges by the Counterparty shall be made by the Counterparty irrespective of, and without deduction for, any counterclaim, defense, recoupment or set-off (other than netting for payments owing by Steelcase thereunder in accordance with the terms of the Hedge Agreement and the Hedges) and shall be final, and the Counterparty will not seek to recover from the Agent for any reason any such payment once made. Notwithstanding the foregoing, (a) Steelcase shall remain liable under the Hedge Agreement and each Hedge to perform all of its duties and obligations thereunder to the same extent as if this Acknowledgment had not been executed, (b) the exercise by the Agent of any of the rights thereunder shall not release Steelcase from any of its duties or obligations under the Hedge Agreement or any Hedge, and (c) none of the Agent or any "Transferee" under (and as defined in) the Lease Receivables Transfer Agreement shall have any obligation or liability under the Hedge Agreement or any Hedge by reason of this Acknowledgment, nor shall any of them be obligated to perform any of the obligations or duties of Steelcase thereunder or to take any action to collect or enforce any claim for payment thereunder. Steelcase shall not, without the prior written consent of the Agent (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Assigned Rights, or create or permit to exist any lien, security interest, option or other charge or encumbrance upon or with respect to any of the Assigned Rights, except for the assignment acknowledged hereby; (ii) cancel or exercise any right to terminate the Hedge Agreement or any Hedge or consent to or accept any cancellation thereof; (iii) amend or otherwise modify the Hedge Agreement or any Hedge or give any consent, waiver or approval thereunder; (iv) waive any default under or breach of the Hedge Agreement or any Hedge; or (v) take any other action in connection with the Hedge Agreement or any Hedge which would impair the value of the interest or rights of Steelcase thereunder or which would impair the interests or rights of the Agent. No amendment or waiver of any provision hereof, and no consent to any departure by Steelcase herefrom shall in any event be effective unless the same shall be in writing and signed by the Agent, Steelcase and the Counterparty, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. This letter agreement may be executed in counterparts, each of which when executed by the parties hereto shall be deemed an original and all of which together shall be deemed the same instrument. This letter agreement shall be binding upon Steelcase and the Counterparty and their respective successors and assigns, and shall inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent and the "Transferees" under (and as defined in) the Lease Receivables Transfer Agreement and their respective successors, transferees and permitted assigns. This letter agreement shall be governed by and construed in accordance with the laws (including Section 5-1401 of Page 2 the General Obligations Laws of New York but otherwise without regard to conflicts of law provisions) of the State of New York. Very truly yours, STEELCASE FINANCIAL SERVICES INC. By: _____________________________ Name: Title: Acknowledged and agreed: [NAME OF HEDGE COUNTERPARTY] By: _____________________________ Name: Title: CITICORP NORTH AMERICA, INC. By: _____________________________ Name: Title: Page 3 EXHIBIT E FORM OF FUNDING REQUEST [Attached] EXHIBIT E FORM OF FUNDING REQUEST [Date] The undersigned, Steelcase Financial Services Inc. (the "Transferor"), refers to the Lease Receivables Transfer Agreement (the "Agreement;" capitalized terms used herein and not defined herein shall have the meanings given to such terms in the Agreement) dated as of October 20,1999, among the Transferor, Corporate Asset Funding Company, Inc. (the "`Conduit Transferee"), the financial institutions from time to time party thereto (the "Committed Transferees") and Citicorp North America, Inc. (the "Agent"). Transferor hereby gives you notice, pursuant to Section 2.02(a) of the --------------- Agreement, that the undersigned wishes to request an Advance under the Agreement and in that connection sets forth below the information relating to such Advance: (i) The Business Day of the requested Advance is [________________]. (ii) The amount of the requested Advance is $_______________. (iii) The Aggregate Advances after giving effect to the requested Advance is $__________________. (iv) Attached hereto as Schedule I is a Lease Schedule related to the new Lease Receivables to be included in the Funding Base. (v) The Funding Base (after giving effect to the addition of the Lease Receivables described in item (iv) above) is $_________________. With respect to the Advance occurring on the Initial Funding Date, all conditions precedent pursuant to Section 3.01 have been satisfied and ------------ with respect to all other Advances, all conditions precedent pursuant to Section ------- 3.02 have been satisfied. - ---- In accordance with the Agreement, the undersigned hereby instructs the Agent remit the applicable proceeds to the undersigned. Very truly yours, STEELCASE FINANCIAL SERVICES INC. By: _____________________________ Name: Title: EXHIBIT F FORM OF NOTE [Attached] EXHIBIT F FORM OF PROMISSORY NOTE U.S.$200,000,000 Dated: October 20,1999 FOR VALUE RECEIVED, the undersigned, STEELCASE FINANCIAL SERVICES INC., a Michigan corporation (the "Transferor"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of CITICORP NORTH AMERICA, INC., a Delaware corporation, as agent for the "Transferees" (as defined in the Transfer Agreement referred to below) (the "Agent"), or its registered assigns, in accordance with the provisions of the Transfer Agreement referred to below the principal sum of TWO HUNDRED MILLION DOLLARS AND 00/100 (U.S. $200,000,000), or, if less, the aggregate unpaid principal amount of all Advances made to the undersigned under the Transfer Agreement (as hereinafter defined). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Transfer Agreement. Interest shall be paid on the unpaid principal amount of the Advances in accordance with the provisions of the Transfer Agreement until such is paid in full, at such interest rates and at such times, as are specified in the Transfer Agreement. All payments of principal and interest in respect of this Promissory Note shall be made to the Agent in lawful money of the United States of America in same day funds for the Agent's account at such address notified to the Transferor by the Agent from time to time, Re: Payment for Steelcase Financial Services Inc., or at such other place as shall be designated by the Agent for such purpose. This Promissory Note is the Note referred to in, and is entitled to the benefits of, the Lease Receivables Transfer Agreement dated as of October 20, 1999 (the "Transfer Agreement") among the Transferor, Corporate Asset Funding Company, Inc., as Conduit Transferee, the financial institutions party thereto from time to time, as the Committed Transferees and the Agent and is entitled to the benefit and security of the Transfer Agreement and the Facility Documents referred to therein, to which Transfer Agreement reference is hereby made for a statement of all of the terms and conditions under which the Advances evidenced hereby are to be extended and repaid. Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Transferor. Should the indebtedness represented by this Promissory Note or any part hereof be collected at law or in equity or in bankruptcy, receivership or other court proceeding, or should this Promissory Note be placed in the hands of attorneys for collection after default, the Transferor agrees to pay, in addition to the principal, interest due and payable hereon and any other sums due and payable hereon, all costs of collecting or attempting to collect this Promissory Note, including reasonable attorneys' fees and expenses (including those incurred in connection with any appeal. This Promissory Note shall not require the payment nor permit the collection of interest or any late payment charge in excess of the maximum rate permitted by law. If any excess interest or late payment charge in such respect is provided for under this Promissory Note or shall be adjudicated to provide for such terms, neither the Transferor nor its successors or assigns shall be obligated to pay such interest or late payment charge in excess of the maximum amount permitted by law, and the right to demand the payment of any such excess shall be and hereby is waived. In the event the Agent shall collect monies which are deemed to constitute interest which would increase the effective interest rate to a rate in excess of the maximum rate permitted by law, all such sums deemed to constitute interest in excess of the maximum rate permitted by law shall, upon such determination, at the option of the Agent, be returned to the Transferor or credited against the principal balance of the Transferor's obligation then outstanding under this Promissory Note. This provision shall control any other provision of this Promissory Note. This Promissory Note shall be interpreted, governed by and construed in accordance with the internal laws (as opposed to conflicts of law provisions) of the State of New York. Whenever in this Promissory Note reference is made to the Agent or the Transferor, such reference shall be deemed to include, as applicable, a reference to their respective successors and assigns. The provisions of this Promissory Note shall be binding upon and shall inure to the benefit of said successors and assigns. The Transferor's successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for the Transferor. Very truly yours, STEELCASE FINANCIAL SERVICES INC. By: ----------------------------- Name: Title: EXHIBIT G LIST OF CLOSING DOCUMENTS [Attached) LEASE RECEIVABLES CREDIT FACILITY for STEELCASE FINANCIAL SERVICES INC. Dated as of October 20, 1999 A. CREDIT DOCUMENTS ---------------- 1 . Lease Receivables Transfer Agreement (the "LRTA") among Steelcase Financial Services Inc. ("SFSI"), as Transferor and Servicer, Corporate Asset Funding Company, Inc. ("CAFCO"), as Conduit Transferee, the financial institutions from time to time party thereto, as Committed Transferees and Citicorp North America, Inc., as Agent (the "Agent"). EXHIBITS -------- EXHIBIT A Description of Credit and Collection Policy EXHIBIT B Fiscal Months EXHIBIT C Form of Interest Rate Hedge Assignment Acknowledgment EXHIBIT D Form of Investor Report EXHIBIT E Form of Funding Request EXHIBIT F Form of Note EXHIBIT G List of Closing Documents EXHIBIT H List of Filing Locations EXHIBIT I List of Offices of Transferor where Records are Kept 2. Promissory Note executed by SFSI and payable to the Agent. 3. Performance Guaranty ("Performance Guaranty") executed by Steelcase Inc. ("Parent") in favor of the Conduit Transferee, the Committed Transferees and the Agent. B. SFSI CORPORATE DOCUMENTS ------------------------ 4. Certificate of Incorporation of SFSI certified by the Secretary of State of Michigan. 5. Good Standing Certificate for SFSI issued by the Secretary of State of Michigan. 6. Certificates of the Secretary or an Assistant Secretary of SFSI certifying (A) the resolutions adopted by the Board of Directors of SFSI, attached thereto, approving each of the transactions and the documents executed in connection therewith, (ii) the names and true signatures of the representatives of SFSI authorized on its behalf to sign the documents to be delivered by SFSI and (iii) the accuracy and completeness of SFSI's by-laws attached thereto. C. PARENT CORPORATE DOCUMENTS -------------------------- 7. Articles of Incorporation of the Parent certified by the Secretary of State of Michigan. 8. Good Standing Certificate for the Parent issued by the Secretary of State of Michigan. 9. Certificates of the Secretary or an Assistant Secretary of the Parent certifying (A) the resolutions adopted by the Board of Directors of the Parent, attached thereto, approving each of the transactions and the documents executed in connection therewith, (ii) the names and true signatures of the representatives of the Parent authorized on its behalf to sign the documents to be delivered by Parent and (iii) the accuracy and completeness of Parent's by-laws attached thereto. D. UCC LIEN SEARCHES AND FINANCING STATEMENTS ------------------------------------------ 10. UCC Lien Search Reports listing all effective financing statements which name SFSI as debtor and which were filed in the office of the Secretary of State of Michigan. 11. Tax Lien and Judgment Search Reports relating to SFSI from the Register of Deeds of Kent County, Michigan. 12. UCC-1 Financing Statement naming SFSI as the debtor and the Agent, as secured party filed in the office of the Secretary of State of Michigan. 13. Post-Filing UCC Lien Search Reports listing the financing statements filed against SFSI as debtor and which were filed in the office of the Secretary of State of Michigan. E. OPINIONS -------- 14. Opinion of Sheila C. Dayton, Assistant General Counsel for SFSI. 15. Opinion of Baker & McKenzie, counsel to SFSI. F. MISCELLANEOUS ------------- 16. Notice of Funding executed by SFSI. 17. Initial Investor Report. 18. ISDA Master Agreement between Citibank, N.A., New York and SFSI, together with Schedule to Master Agreement. 19. Fee Letter. EXHIBIT H LIST OF FILING LOCATIONS Secretary of State of Michigan EXHIBIT I LIST OF OFFICES OF TRANSFEROR WHERE RECORDS ARE KEPT 901 44th Street, S.E. Grand Rapids, Michigan 49508 21 EX-4.25 17 dex425.txt AMENDMENT NO. 1 TO LEASE RECEIVABLES TRANS AGREE EXHIBIT 4.25 Execution Copy AMENDMENT NO. 1 TO LEASE RECEIVABLES TRANSFER AGREEMENT AMENDMENT NO. 1 to LEASE RECEIVABLES TRANSFER AGREEMENT ("Amendment") --------- dated as of October 18, 2000 among Steelcase Financial Services Inc., as Transferor and Servicer (the "Company"), Corporate Asset Funding Company, Inc. as Conduit Transferee (the "Conduit Transferee"), the financial institutions from time to time party thereto (individually, a "Committed Transferee" and collectively, the "Committed Transferees") and Citicorp North America, Inc., as Agent (in such capacity, the "Agent"). Capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meanings set forth in the Lease Receivables Transfer Agreement (as defined below). Preliminary Statements. (1) The Company, the Conduit Transferee, the ---------------------- Committed Transferees and the Agent are parties to a Lease Receivables Transfer Agreement dated as of October 20, 1999 (as amended, the "Lease Receivables ----------------- Transfer Agreement"); and - ------------------ (2) The Company, the Conduit Transferee, the Committed Transferees and the Agent desire to amend the Lease Receivables Transfer Agreement. NOW, THEREFORE, the parties agree as follows: SECTION 1. Amendment to the Lease Receivables Transfer Agreement. Upon ----------------------------------------------------- the satisfaction of the conditions precedent set forth in Section 2 below, the Lease Receivables Transfer Agreement is hereby amended, effective as of the date first above written, as follows: 1.01 The defined term "Specified Termination Date" contained in -------------------------- Section 1.01 of the Lease Receivables Transfer Agreement is hereby amended to delete the reference to "October 18, 2000" contained therein and to substitute a reference to "November 17, 2000" therefor. SECTION 2. Conditions Precedent. This Amendment shall become effective -------------------- and be deemed effective as of the date first above written when the parties hereto shall have duly executed six (6) copies of this Amendment. SECTION 3. Representations and Warranties. Each of the parties hereto ------------------------------ represents that this Amendment has been duly authorized, executed and delivered by it pursuant to its corporate powers and constitutes the legal, valid and binding obligation of such party. SECTION 4. Confirmation of Lease Receivables Transfer Agreement. ---------------------------------------------------- Except as herein expressly amended, the Lease Receivables Transfer Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms. Each reference in the Lease Receivables Transfer Agreement to "this Agreement" shall mean the Lease Receivables Transfer Agreement as amended by this Amendment, and as hereinafter amended or restated. SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND ------------- CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS). SECTION 6. Execution in Counterparts. This Amendment may be executed ------------------------- in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Amendment. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. 2 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. STEELCASE FINANCIAL SERVICES INC., as Transferor and Servicer By /s/ Thomas P. Sullivan ------------------------------------ Name: Thomas P. Sullivan Title: VP & CFO CITICORP NORTH AMERICA, INC., as Agent By /s/ K. Neville ------------------------------------- Vice President CORPORATE ASSET FUNDING COMPANY, INC., as Conduit Transferee By: Citicorp North America, Inc., as Attorney-in-Fact By /s/ K. Neville ------------------------------------- Vice President Commitment: $200,000,000 CITIBANK, N.A., - ---------- as a Committed Transferee By /s/ K. Neville ------------------------------------- Vice President 3 EX-4.26 18 dex426.txt AMENDMENT NO. 2 TO LEASE RECEIVABLES TRANSFER AGRE EXHIBIT 4.26 Execution Copy AMENDMENT NO. 2 TO LEASE RECEIVABLES TRANSFER AGREEMENT AMENDMENT NO. 2 to LEASE RECEIVABLES TRANSFER AGREEMENT ("Amendment") dated as of November 17, 2000 among Steelcase Financial Services --------- Inc., as Transferor and Servicer (the "Company"), Corporate Asset Funding Company, Inc., as Conduit Transferee (the "Conduit Transferee"), the financial institutions from time to time party thereto (individually, a "Committed Transferee" and collectively, the "Committed Transferees") and Citicorp North America, Inc., as Agent (in such capacity, the "Agent"). Capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meanings set forth in the Lease Receivables Transfer Agreement (as defined below). Preliminary Statements. (1) The Company, the Conduit ---------------------- Transferee, the Committed Transferees and the Agent are parties to a Lease Receivables Transfer Agreement dated as of October 20, 1999 (as amended, the "Lease Receivables Transfer Agreement"); and ------------------------------------ (2) The Company, the Conduit Transferee, the Committed Transferees and the Agent desire to further amend the Lease Receivables Transfer Agreement. NOW, THEREFORE, the parties agree as follows: SECTION 1. Amendment to the Lease Receivables Transfer ------------------------------------------- Agreement. Upon the satisfaction of the conditions precedent set forth in - --------- Section 2 below, the Lease Receivables Transfer Agreement is hereby amended, effective as of the date first above written, as follows: 1.01 The defined term "Facility Limit" contained in Section -------------- 1.01 of the Lease Receivables Transfer Agreement is hereby amended to delete the reference to "$200,000,000" contained in the first line thereof and to substitute a reference to "$350,000,000" therefor. 1.02 The defined term "Specified Termination Date" contained -------------------------- in Section 1.01 of the Lease Receivables Transfer Agreement is hereby amended to delete the reference to "November 17, 2000" (which date was amended by Amendment No. 1 dated October 18, 2000) contained therein and to substitute a reference to "October 17, 2001" therefor. SECTION 2. Conditions Precedent. This Amendment shall become -------------------- effective and be deemed effective as of the date first above written when the parties hereto shall have (i) duly executed six (6) copies of this Amendment and (ii) the Company shall have paid to the Agent a structuring fee in the amount of $105,000. SECTION 3. Representations and Warranties. Each of the parties ------------------------------ hereto represents that this Amendment has been duly authorized, executed and delivered by it pursuant to its corporate powers and constitutes the legal, valid and binding obligation of such party. SECTION 4. Confirmation of Lease Receivables Transfer ------------------------------------------ Agreement. Except as herein expressly amended, the Lease Receivables Transfer - --------- Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms. Each reference in the Lease Receivables Transfer Agreement to "this Agreement" shall mean the Lease Receivables Transfer Agreement as amended by this Amendment, and as hereinafter amended or restated. SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, ------------- AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS). SECTION 6. Execution in Counterparts. This Amendment may be ------------------------- executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Amendment. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. 2 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. STEELCASE FINANCIAL SERVICES INC., as Transferor and Servicer By /s/ Thomas P. Sullivan ------------------------- Name: Thomas P. Sullivan Title: VP& CFO CITICORP NORTH AMERICA, INC., as Agent By /s/ K. Neville ----------------- Vice President CORPORATE ASSET FUNDING COMPANY, INC., as Conduit Transferee By: Citicorp North America, Inc., as Attorney-in-Fact By /s/ K. Neville ------------------ Vice President Commitment: $350,000,000 CITIBANK, N.A., - ---------- as a Committed Transferee By /s/ K. Neville ------------------ Vice President 3 EX-4.27 19 dex427.txt AMEND NO. 3 TO LEASE RECEIVABLES TRANSFER AGREE EXHIBIT 4.27 Execution Copy AMENDMENT NO. 3 TO LEASE RECEIVABLES TRANSFER AGREEMENT AMENDMENT NO. 3 to LEASE RECEIVABLES TRANSFER AGREEMENT ("Amendment") --------- dated as of October 17, 2001 among Steelcase Financial Services Inc., as Transferor and Servicer (the "Company"), Corporate Asset Funding Company, Inc., as Conduit Transferee (the "Conduit Transferee"), the financial institutions from time to time party thereto (individually, a "Committed Transferee" and collectively, the "Committed Transferees") and Citicorp North America, Inc., as Agent (in such capacity, the "Agent"). Capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meanings set forth in the Lease Receivables Transfer Agreement (as defined below). Preliminary Statements. (1) The Company, the Conduit Transferee, the ---------------------- Committed Transferees and the Agent are parties to a Lease Receivables Transfer Agreement dated as of October 20, 1999 (as amended, the "Lease Receivables ----------------- Transfer Agreement"); and - ------------------ (2) The Company, the Conduit Transferee, the Committed Transferees and the Agent desire to further amend the Lease Receivables Transfer Agreement. NOW, THEREFORE, the parties agree as follows: SECTION 1. Amendment to the Lease Receivables Transfer Agreement. Upon ----------------------------------------------------- the satisfaction of the conditions precedent set forth in Section 2 below, the Lease Receivables Transfer Agreement is hereby amended, effective as of the date first above written, as follows: 1.01 The defined term "Eligible Lease Receivable" contained in Section ------------------------- 1.01 of the Lease Receivables Transfer Agreement is hereby amended to delete the word "equal" contained in the first line of subparagrah (iv) thereof. 1.02 The defined term "Facility Limit" contained in Section 1.01 of -------------- the Lease Receivables Transfer Agreement is hereby amended to delete the reference to "$350,000,000" contained in the first line thereof and to substitute a reference to "$300,000,000" therefor. 1.03 The defined term "Specified Termination Date" contained in -------------------------- Section 1.01 of the Lease Receivables Transfer Agreement is hereby amended to delete the reference to "October 17, 2001" (which date was amended by Amendment No. 2 dated November 17, 2000) contained therein and to substitute a reference to "October 16, 2002" therefor. 1.04 Section 5.01(g) of the Lease Receivables Transfer Agreement is hereby amended to add the following clause (iv) therefor: "and (iv) having an aggregate notional amoritization schedule reasonably acceptable to the Agent which reflects anticipated periodic reductions in the aggregate unpaid Installment Payments under the Lease Receivables included in Pledged Assets at such time. SECTION 2. Conditions Precedent. This Amendment shall become effective -------------------- and be deemed effective as of the date first above written when the parties hereto shall have duly executed copies of this Amendment. SECTION 3. Representations and Warranties. Each of the parties hereto ------------------------------ represents that this Amendment has been duly authorized, executed and delivered by it pursuant to its corporate powers and constitutes the legal, valid and binding obligation of such party. SECTION 4. Confirmation of Lease Receivables Transfer Agreement. ---------------------------------------------------- Except as herein expressly amended, the Lease Receivables Transfer Agreement is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms. Each reference in the Lease Receivables Transfer Agreement to "this Agreement" shall mean the Lease Receivables Transfer Agreement as amended by this Amendment, and as hereinafter amended or restated. SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND ------------- CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS). SECTION 6. Execution in Counterparts. This Amendment may be executed ------------------------- in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Amendment. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. 2 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. STEELCASE FINANCIAL SERVICES INC., as Transferor and Servicer By /s/ S / T. S. ---------------------------------- Name: Thomas P. Sullivan Title: Vice President and CFO CITICORP NORTH AMERICA, INC., as Agent By /s/ David Donofrio ---------------------------------- Vice President CORPORATE ASSET FUNDING COMPANY, INC., as Conduit Transferee By: Citicorp North America, Inc., as Attorney-in-Fact By /s/ David Donofrio ----------------------------------- Vice President Commitment: $300,000,000 - ---------- CITIBANK, N.A., as a Committed Transferee By /s/ David Donofrio ----------------------------------- Attorney-In-Fact 3 EX-4.28 20 dex428.txt PERFORMANCE GUARANTY EXHIBIT 4.28 Execution Copy PERFORMANCE GUARANTY PERFORMANCE GUARANTY (this "Agreement"), dated as of October 20, 1999, --------- made by Steelcase Inc., a Michigan corporation (the "Parent"), in favor of ------ Corporate Asset Funding Company, Inc., a Delaware corporation (the "Conduit ------- Transferee"), the financial institutions from time to time party to the "Lease - ---------- Receivables Transfer Agreement" referred to below, as Committed Transferees (collectively, the "Committed Transferees", and together with the Conduit --------------------- Transferee, the "Transferees"), and CITICORP NORTH AMERICA, INC., a Delaware ----------- corporation, as agent (the "Agent") for the Transferees. ----- PRELIMINARY STATEMENTS 1. The Parent is the direct owner of all of the issued and outstanding shares of common stock of Steelcase Financial Services Inc., a Michigan corporation (together with its successors and assigns, "SFSI"). ---- 2. SFSI, as Transferor and Servicer, has entered into a Lease Receivables Transfer Agreement dated as of October 20, 1999 (as amended, supplemented or otherwise modified from time to time, the "Lease Receivables ----------------- Transfer Agreement") with the Transferees and the Agent, pursuant to which SFSI - ------------------ may receive Advances from the Transferees. The Advances are secured by certain Lease Receivables, Related Security and other Collateral. 3. Capitalized terms used herein and not herein defined, are used herein as defined in the Lease Receivables Transfer Agreement. 4. It is a condition precedent to the effectiveness of the Lease Receivables Transfer Agreement that the Parent shall have executed and delivered this Agreement. NOW, THEREFORE, in consideration of the premises, and the substantial direct and indirect benefit to the Parent from the arrangements contemplated by the Facility Documents and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parent hereby agrees as follows: SECTION 1. Performance Guaranty. The Parent hereby unconditionally and -------------------- irrevocably undertakes and agrees with and for the benefit of the Transferees and the Agent (collectively the "Transferee Parties"), to cause the due and ------------------ punctual performance and observance by SFSI (in its capacity as "Transferor" under the Lease Receivables Transfer Agreement and in its separate capacity as Servicer) of all of the terms, covenants, conditions, agreements and undertakings on the part of SFSI to be performed or observed under the Lease Receivables Transfer Agreement and the other Facility Documents in accordance with the terms thereof, including, without limitation, the punctual payment when due of all obligations of SFSI now or hereafter existing under the Lease Receivables Transfer Agreement and the other Facility Documents, whether for repurchase obligations, indemnification payments, fees, costs, expenses or otherwise (such terms, covenants, conditions, agreements, undertakings and other obligations being the "Obligations") and undertakes and agrees to pay any ----------- and all expenses (including reasonable counsel fees and expenses) incurred by the Transferee Parties, or any of them, in enforcing any rights under this Agreement. In the event that SFSI (in its capacity as the Transferor or the Servicer) shall fail in any manner whatsoever to perform or observe any of its Obligations when the same shall be required to be performed or observed, then promptly after written demand by the Agent, the Parent shall itself duly and punctually perform or observe, or cause to be duly and punctually performed and observed, such Obligation, and it shall not be a condition to the accrual of the obligation of the Parent hereunder to perform or observe any Obligation (or to cause the same to be performed or observed) that any Transferee Party shall have first made any request of or demand upon or given any notice to SFSI or have instituted any action or proceeding against SFSI in respect thereof. SECTION 2. Obligations Absolute. The Parent undertakes and agrees that -------------------- the Obligations will be paid and performed strictly in accordance with the terms of the Facility Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Transferee Party with respect thereto. The obligations of the Parent under this Agreement are independent of the Obligations, and a separate action or actions may be brought and prosecuted against the Parent to enforce this Agreement, irrespective of whether any action is brought against SFSI or whether SFSI is joined in any such action or actions. The liability of the Parent under this Agreement shall be irrevocable, absolute and unconditional irrespective of, and the Parent hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following: (a) any lack of validity or enforceability of any Facility Document or any other document relating thereof; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations under any Facility Document, or any other amendment or waiver of or any consent to departure from any Facility Document; (c) any taking, exchange, release or nonperfection of or failure to transfer title to any asset or collateral, or any taking, release, amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations; (d) any manner of application of any asset or Collateral, or proceeds thereof, to all or any of the Obligations, or any manner of sale or other disposition of any asset or Collateral for all or any of the Obligations; (e) any change, restructuring or termination of the corporate structure or existence of the Parent or SFSI, (f) any failure of any Transferee Party to disclose to the Parent any information relating to the financial condition, operations, properties or prospects of SFSI now or in the future known to such Transferee Party (the Parent waiving any duty on the part of such Transferee Party to disclose such information); 2 (g) any impossibility or impracticality of performance, illegality, force majeure, any act of any government, or any other circumstance (excluding, however, the defense of payment or of any statute of limitations) or any existence of or reliance on any representation by an Transferee Party that might constitute a defense available to, or a discharge of, SFSI or a guarantor of the Obligations; or (h) any other circumstance, event or happening whatsoever, whether foreseen or unforeseen and whether similar or dissimilar to anything referred to above in this Section 2. --------- This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time (x) any payment in connection with any of the Obligations is rescinded or must otherwise be returned by any Transferee Party, or (y) any performance or observance of any Obligation is rescinded or otherwise invalidated, upon the insolvency, bankruptcy or reorganization of SFSI, all as though payment had not been made or as though such Obligation had not been performed or observed. SECTION 3. Waivers and Acknowledgments. (a) The Parent hereby waives --------------------------- promptness, diligence, notice of acceptance and (except as contemplated in Section 1 hereof) any other notice with respect to any of the Obligations and this Agreement and any other document related thereto, and any requirement that any Transferee Party protest, secure, perfect or insure any lien or any property subject thereto or exhaust any right or take any action against SFSI or any other Person or any asset or collateral. (b) The Parent hereby waives any right to revoke this Agreement, and acknowledges that this Agreement is continuing in nature and applies to all Obligations, whether existing now or in the future. SECTION 4. Subrogation. The Parent shall not exercise or assert any ----------- rights that it may now have or hereafter acquire against SFSI that arise from the existence, payment, performance or enforcement of the Parent's obligations under this Agreement or any other Facility Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Transferee Party against SFSI or any asset or collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from SFSI, directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all amounts in connection with the Obligations and all amounts payable under this Agreement shall have been paid in full and all other amounts payable by SFSI to the Transferee Parties under the Facility Documents shall have been paid in full. If any amount shall be paid to the Parent in violation of the preceding sentence at any time prior to the later of (i) the payment in full of the Obligations and all other amounts payable under this Agreement and all amounts payable by SFSI to the Transferee Parties under the Facility Documents and (ii) the Termination Date, such amount shall be held in trust for the benefit of the Transferee Parties and shall forthwith be paid to the Agent to be credited and applied to the Obligations, whether matured or unmatured, in accordance with the terms of the Facility Documents or to be held by 3 the Agent as collateral security for any Obligations payable under this Agreement thereafter arising. SECTION 5. Representations and Warranties. The Parent hereby represents ------------------------------ and warrants as follows: (a) The Parent is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. All of the issued and outstanding shares of common stock of SFSI are owned, directly or indirectly, by the Parent, free and clear of any Lien. (b) The execution, delivery and performance by the Parent of this Agreement and the transactions contemplated hereby are within the Parent's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) the Parent's certificate or articles of incorporation or by-laws, (ii) any law, (iii) any material contractual restriction binding on or affecting the Parent or the Parent's properties or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting the Parent or the Parent's properties, and do not result in or require the creation of any Lien upon or with respect to any of the Parent's properties except, in the case of clauses (ii) and (iv), where such contravention would not have a Material Adverse Effect. This Agreement has been duly executed and delivered on behalf of the Parent. (c) No authorization or approval (including, without limitation, any exchange control agreement) or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the Parent of this Agreement. (d) This Agreement constitutes the legal, valid and binding obligation of the Parent, enforceable against the Parent in accordance with its terms, subject to the Enforceability Exceptions. (e) The consolidated balance sheet of the Parent and its subsidiaries as of February 26, 1999, and the related consolidated statement of income and cash flows of the Parent and its subsidiaries for the fiscal year then ended, in each case certified by BDO Seidman, independent public accountants, copies of which have been furnished to the Agent (whether under this Agreement or otherwise), fairly present the consolidated financial condition of the Parent and its subsidiaries as at such date and the consolidated results of the operations of the Parent and its subsidiaries for the period ended on such date, all in accordance with generally accepted accounting principles as in effect in the United States applied on a consistent basis, and since February 26, 1999, there has been no material adverse change in such condition or operations, except as disclosed in writing prior to the date hereto to the Agent and the Transferees. (f) To the knowledge of Parent, there is no pending or threatened action, suit or proceeding affecting the Parent or any of its subsidiaries, or its property or the property of any of its subsidiaries, before any court, governmental agency or arbitrator that materially adversely affects the ability of the Parent to perform its obligations under this 4 Agreement, or that purports to affect the legality, validity or enforceability of this Agreement. (g) The obligations of the Parent under this Agreement do rank and will rank at least pari passu in priority of payment and in all other respects with all other unsecured and non-subordinated indebtedness for borrowed money of the Parent. (j) As of the date hereof, the Parent (i) is not "insolvent" (as such term is defined in ss.101(32)(A) of the Bankruptcy Code), (ii) is generally able to pay its debts as they mature; and (iii) does not have unreasonably small capital for the business in which it is engaged or for any business or transaction in which it is about to engage. (k) The Parent is neither (i) an "investment company" within the meaning of the Investment Company Act of 1940, as amended from time to time, or any successor statute, nor (ii) a "holding company," or a "subsidiary company" or an "affiliate" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended from time to time, or any successor statute. SECTION 6. Covenants. The Parent covenants and agrees that, until the --------- later of (i) the Termination Date, and (ii) the date on which no Advances shall be outstanding under the Lease Receivables Transfer Agreement, the Parent will, unless the Agent shall otherwise consent in writing: (a) Compliance with Laws, Etc. Comply in all material respects with all ------------------------- applicable laws, rules, regulations and orders with respect to it, its business and properties, except where the failure to so comply would not have a Material Adverse Effect. (b) Preservation of Corporate Existence. Preserve and maintain its ----------------------------------- corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, except to the extent that the failure so to preserve and maintain such existence, rights, franchises and privileges would not have a Material Adverse Effect. (c) Reporting Requirements. Furnish to the Agent: ---------------------- (i) promptly after any change in the rating established by S&P or Moody's, as applicable, with respect to its long-term debt, a notice of such change, which notice shall specify the new rating, the date on which such change was publicly announced and such other information with respect to such change as Agent may reasonably request; (ii) promptly and in no event more than five (5) Business Days after a Responsible Officer of the Parent has actual knowledge thereof, notice of any and all litigation or any other matters or events concerning the Parent which could be reasonably likely to have a Material Adverse Effect; and 5 (iii) such other information, documents, records, or reports respecting the condition or operations, financial or otherwise, of the Parent or any of its subsidiaries as the Agent may from time to time reasonably request. (d) Stock Ownership. Continue to own, directly or indirectly, not less --------------- than a majority of the issued and outstanding shares of the capital stock of SFSI. (e) Merger, Consolidation, Etc. Consolidate with or merge into or with -------------------------- any Person, or sell, transfer, lease or otherwise dispose of all or substantially all of its assets to any Person, unless (i) as a result of any merger or consolidation or sale, transfer, lease or other disposition of assets there does not exist an Event of Termination, and (ii) in the case of a merger or consolidation, (A) the Parent is the surviving entity or (B) the surviving entity assumes all Parent's obligations under this Agreement in a manner satisfactory to the Agent. SECTION 7. Payment Free and Clear of Taxes, Etc. (a) Any and all ------------------------------------ payments made by the Parent hereunder shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Transferee Party, taxes imposed on its income and franchise taxes imposed on it by the jurisdiction under the laws of which such Transferee Party is organized or in which it is otherwise doing business or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Parent shall be required by law to deduct any Taxes from or ----- in respect of any sum payable hereunder to any Transferee Party, (i) the sum payable shall be increased as may be necessary so that after making all required deductions of Taxes (including deductions applicable to additional sums payable under this Section 7) such Transferee Party receives an amount equal to the sum --------- it would have received had no such deductions been made, (ii) the Parent shall make such deductions and (iii) the Parent shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Parent agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as "Other Taxes"). ----------- (c) The Parent shall indemnify each Transferee Party for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 7) --------- paid by such Transferee Party and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within thirty (30) days from the date such Transferee Party makes written demand therefor. (d) Within thirty (30) days after the date of any payment of Taxes, the Parent shall furnish to the Agent, at its address referred to in Section 11, the ---------- original or a certified copy of a receipt evidencing payment thereof. 6 (e) Each Transferee Party which is not organized under the laws of the United States or any State thereof shall, within thirty (30) days after such Transferee Party becomes a party to or obtains rights under this Agreement, and prior to any payment being made by the Parent to such Affected Party, deliver to the Parent (i) two duly completed and executed copies of the IRS Form 1001 or 4224 (or any successor form) as applicable; or (ii) an IRS Form W-8 (or any successor form), as applicable; and (iii) such other forms or certificates as may be required under the laws of any applicable jurisdiction (on or before the date that any form expires or becomes obsolete), in order to permit the Parent to make payments to such Transferee Party hereunder without any deduction or withholding for or on account of any Tax. Each such Transferee Party shall submit to the Parent (copied to the Agent) two updated, completed, and duly executed versions of: (i) all forms referred to in the previous sentence upon the expiry of, or the occurrence of any event requiring a change in, the most recent form previously delivered by it to the Parent or the substitution of such form; and (ii) such extensions or renewals thereof as may reasonably be requested by the Parent. Notwithstanding the other provisions of this Section 7, the Parent shall not be obligated to pay any additional amounts resulting from the failure of a Transferee Party to comply with this Section 7(e). ------------ (f) Without prejudice to the survival of any other agreement of the Parent hereunder, the agreements and obligations of the Parent contained in this Section 7 shall survive any termination of the Lease Receivables Transfer - --------- Agreement. SECTION 8. Consent to Jurisdiction. (a) The Parent hereby irrevocably ----------------------- submits to the jurisdiction of any New York State or federal court sitting in New York City and any appellate court from any thereof in any action or proceeding arising out of or relating to this Agreement, and the Parent hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State court or in such federal court. The Parent hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The Parent agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. (b) Nothing in this Section 8 shall affect the right of any Transferee --------- Party to serve legal process in any manner permitted by law or affect the right of any Transferee Party to bring any action or proceeding against the Parent or its property in the court of other jurisdictions. SECTION 9. Amendments, Etc. No amendment or waiver of any provision of --------------- this Agreement or consent to any departure by the Parent herefrom shall be effective unless in a writing signed by the Agent (and, in the case of any amendment, also signed by the Parent), and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 10. Address for Notices. All notices and other communications ------------------- hereunder shall be in writing (which shall include facsimile communication) and faxed or delivered, if to the Parent, at its address set forth below its name on the signature page hereto, and if to any Transferee Party, at its address set forth in the Lease Receivables Transfer Agreement, or, as to any party, at such other address as shall be designated by such party in a 7 written notice to each other party. Notices and communications by facsimile shall be effective when sent, and notices and communications sent by other means shall be effective when received. SECTION 11. No Waiver; Remedies. No failure on the part of any ------------------- Transferee Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION 12. Continuing Agreement; Assignments under Lease Receivables --------------------------------------------------------- Transfer Agreement. This Agreement is a continuing agreement and shall (i) - ------------------ remain in full force and effect until the later of (x) the payment and performance in full of the Obligations and the payment of all other amounts payable under this Agreement and (y) the Termination Date, (ii) be binding upon the Parent, its successors and permitted assigns, and (iii) inure to the benefit of, and be enforceable by, the Transferee Parties and each of their respective successors, transferees and assigns. Without limiting the generality of clause (iii) of the immediately preceding sentence, (A) any Transferee may assign all or any of its Advances under the Lease Receivables Transfer Agreement to any assignee in accordance with Section 10.04 of such Lease Receivables Transfer Agreement, and (B) the Agent may resign, in accordance with the provisions of Section 11.06 of the Lease Receivables Transfer Agreement and such replacement Agent shall thereupon become vested with all the benefits in respect thereof granted to such Transferee or such Agent herein or otherwise. SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND ------------- CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). SECTION 14. Waiver of Jury Trial. Each of the Parent and the Transferee -------------------- Parties (in accepting this Agreement) irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Facility Documents or the actions of the Agent or any other Transferee Party in the negotiation, administration or enforcement thereof. 8 IN WITNESS WHEREOF, the Parent has cause this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. STEELCASE INC. By /s/ Robert A. Ballard -------------------------- Name: Robert A. Ballard Title: Executive Vice president 901 44th Street Grand Rapids, MI 49508 Attn: Chief Financial Officer Telecopy: (616) 247-2374 9 EX-4.29 21 dex429.txt OMNIBUS AMENDMENT NO. 1 EXHIBIT 4.29 EXECUTION VERSION OMNIBUS AMENDMENT NO. 1 (Lease Receivables Transfer Facility) This OMNIBUS Amendment NO. 1 (this "Amendment") is entered into as of November 15, 2001 by and among STEELCASE INC., a Michigan corporation (the "Guarantor"), as guarantor, STEELCASE FINANCIAL SERVICES INC., a Michigan corporation (the "Transferor"), as transferor and initial servicer, CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation (the "Conduit Transferee"), as conduit transferee, CITIBANK N.A. (the "Committed Transferee") as committed transferee, and CITICORP NORTH AMERICA, INC., a Delaware corporation (the "Agent"), as agent, and is made with reference to that certain Lease Receivables Transfer Agreement dated as of October 20, 1999 (as amended prior to the date hereof, the "Transfer Agreement") among the Transferor, the Conduit Transferee, the Committed Transferee and the Agent. Capitalized terms used, but not otherwise defined herein, shall have the respective meanings ascribed to such terms in the Transfer Agreement. WHEREAS, upon and subject to the terms and conditions of the Transfer Agreement, the Transferees may make Advances to the Transferor; WHEREAS, upon and subject to the terms of the Parent Performance Guaranty, the Guarantor has undertaken and agreed, among other items, to cause the due and punctual performance and observance by the Transferor of all of the agreements and undertakings on the part of the Transferor to be performed or observed under the Transfer Agreement and the other Facility Documents in accordance with the terms thereof; WHEREAS, the parties hereto desire to cancel the Note and to amend the Transfer Agreement and the Parent Performance Guaranty to clarify that the principal amount of each Advance, together with certain interest and fees payable with respect thereto pursuant to Section 2.03 of the Transfer Agreement, shall be payable solely from Collections of Lease Receivables in accordance with the settlement procedures described in Section 2.04 of the Transfer Agreement and not by recourse to the Transferor or the Guarantor; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties agree as follows: Section 1. Cancellation of Note. Without affecting the obligations of the -------------------- Transferor under the Transfer Agreement and other Facility Documents and without constituting a novation of the outstanding Advances, the Note is hereby cancelled and of no further force or effect. The Agent shall mark the note as cancelled and promptly return the Note to the Transferor. Section 2. Amendments to Transfer Agreement. The Transfer Agreement is hereby -------------------------------- amended as follows: (a) Subpart (xii)(P) of the definition of "Eligible Lease Receivable" in Section 1.01 is amended to add at the beginning thereof the phrase "which is owned by, or on behalf of the Transferees or." (b) The definition of "Note" in Section 1.01 is deleted and replaced with the following phrase: "Note" means [Intentionally Omitted]. ---- (c) The definition of "Obligations" in Section 1.01 is amended to add the phrase "but subject to Section 2.02(c)" after the phrase "and shall include, without limitation," beginning in line 4 thereof. (d) The definition of "Other Fees" in Section 1.01 is amended to add "2.09," after "2.08" and before "8.01" in the second line thereof. ---- ---- ---- (e) Section 2.02(b) is deleted in its entirety and replaced with the following: "(b) Each Advance shall be evidenced in the accounts maintained by the Agent in accordance with its usual practices and, absent manifest error, the entries made in such accounts shall be presumptively correct. The Agent shall record in such accounts the date and amount of each Advance, the amount of interest due and payable in respect thereof and all Collections or other amounts applied in respect of such Advance in accordance with Section 2.04(b) hereof." (f) Section 2.02(c) is amended to add the following new sentences at the end thereof: "The Transferees hereby acknowledge and agree that the principal amount of each Advance, Interest in respect thereof and Program Fees, Liquidity Fees and Other Fees are payable solely from Collections in accordance with the settlement procedures set forth in Section 2.04 hereof and that neither the Transferor nor the Parent shall have any personal liability for the payment thereof except to the extent set forth in the proviso to Section 2.3(a) and for the reimbursement or indemnification obligations of the Transferor in Sections 2.06 (increased yield costs), 2.07 (increased capital), 2.08 (taxes), 2.09 (Eurocurrency reserves), 8.01 (indemnification) and 10.06 (costs and expenses) hereof." (g) Subpart (ii) of Section 5.03(f) is amended to read as follows: "(ii) when applied pursuant to Section 2.04(b) hereof such proceeds will be sufficient to repay in full the Advances outstanding with respect to such Lease Receivable and any interest (including interest through the end of the related Collection Period), fees, costs or expenses (including early termination payments) resulting from the reduction of the aggregate notional amount of the Interest Rate Hedges." 2 (h) Section 7.01 is amended to add the phrase "but subject to Section 2.02(c)" after the phrase "Upon the occurrence of the Termination Date". (i) The text of Exhibit F to the Transfer Agreement is deleted in its entirety and replaced with the phrase "[Intentionally Omitted]". Section 3. Amendments to Parent Performance Guaranty. Section 1 of the Parent ----------------------------------------- Performance Guaranty is hereby amended to add the following sentence at the end thereof: "Except to the extent set forth in the proviso to Section 2.03(a) of the Lease Receivables Transfer Agreement and for SFSI's indemnification and reimbursement obligations under Sections 2.06 (increased yield costs), 2.07 (increased capital), 2.08 (taxes), 2.09 (Eurocurrency reserves), 8.01 (indemnification) and 10.06 (costs and expenses) of the Lease Receivables Transfer Agreement, the Obligations guaranteed hereby shall not include the obligation to pay Advances, Interest and Program Fees, Liquidity Fees and Other Fees, which amounts are payable solely from Collections in accordance with the settlement procedures set forth in Section 2.04 of the Lease Receivables Transfer Agreement and the Parent shall have no personal liability for the payment thereof." Section 4. Effectiveness. This Amendment shall become effective upon its ------------- execution and delivery by the Guarantor, the Transferor, the Required Transferees and the Agent. Section 5. Representations. Each party hereto represents to the other that: (i) --------------- it has the power and authority to enter into this Amendment; (ii) the execution and delivery of this Amendment have been duly authorized by all necessary action; (iii) this Amendment has been duly executed and delivered on its behalf and (iv) this Amendment and the Facility Documents, as amended hereby, constitute its legal, valid and binding obligation enforceable against it in accordance with their respective terms subject to the Enforceability Exceptions. Section 6. Ratification. Except as specifically amended or cancelled hereby, ------------ each of the Facility Documents shall remain unchanged and continue in full force and effect and each of the parties hereto hereby ratifies and confirms the Facility Documents. After the effectiveness of this Amendment, any reference to the Transfer Agreement or the Parent Performance Guaranty in any Facility Document shall be to the Transfer Agreement and Parent Performance Guaranty, respectively, as amended hereby. Section 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ------------- ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). Section 8. Costs and Expenses. The Transferor agrees to pay on demand all ------------------ reasonable costs and expenses of the Transferees and the Agent in connection with the preparation of this Amendment. 3 Section 9. Counterparts. This Amendment may be executed in any number of ------------ counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. STEELCASE INC., as Guarantor STEELCASE FINANCIAL SERVICES INC., as Transferor and initial Servicer By: /s/ Gary P. Malburg By: /s/ Thomas P. Sullivan ----------------------------------- ------------------------------- Name: Gary P. Malburg Name: Thomas P. Sullivan Title: Vice President, Finance and Title: Vice President and Treasurer Chief Financial Officer CITICORP NORTH AMERICA, CORPORATE ASSET FUNDING COMPANY, INC., as Agent INC., as Conduit Transferee By: /s/ David L. Donofrio By: /s/ David L. Donofrio ----------------------------------- ------------------------------ Name: David L. Donofrio Name: David L. Donofrio Title: Vice President Title: Vice President CITIBANK, N.A., as Committed Transferee By: /s/ David L. Donofrio ------------------------------ Name: David L. Donofrio Title: ATTORNEY-IN-FACT 4 EX-4.30 22 dex430.txt LEASE RECEIVABLES AGREEMENT EXHIBIT 4.30 EXECUTION VERSION AMENDMENT No. 4 TO LEASE RECEIVABLES TRANSFER AGREEMENT This Amendment NO. 4 to LEASE RECEIVABLES TRANSFER AGREEMENT (this "Amendment") is entered into as of February 21, 2002 by and among STEELCASE FINANCIAL SERVICES INC., a Michigan corporation (the "Transferor"), as transferor and initial servicer, CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation (the "Conduit Transferee"), as conduit transferee, CITIBANK N.A. (the "Committed Transferee") as committed transferee, and CITICORP NORTH AMERICA, INC., a Delaware corporation (the "Agent"), as agent, and is made with reference to that certain Lease Receivables Transfer Agreement dated as of October 20, 1999 (as amended prior to the date hereof, the "Transfer Agreement") among the Transferor, the Conduit Transferee, the Committed Transferee and the Agent. Capitalized terms used, but not otherwise defined herein, shall have the respective meanings ascribed to such terms in the Transfer Agreement. WHEREAS, as of the last day of the Collection Period that occurred in each of October, November and December 2001 and January 2002, the Adjusted Loss Ratio exceeded 1.50% (each of such occurrences being a "Breach"); WHEREAS, the Transferor has requested the Agent and the Required Transferees, and the Agent and the Required Transferees have agreed, to waive the Events of Termination that resulted from each Breach; WHEREAS, to permit the anticipated performance of the portfolio to be realigned so as to comply with the requirements of the Transfer Agreement, the parties hereto desire to amend the Transfer Agreement to make the maximum Adjusted Loss Ratio requirement less restrictive for the Collection Periods scheduled to end during the period from the date hereof through May 31, 2002; WHEREAS, the Transferor also has requested the Agent and the Required Transferees, and the Agent and the Required Transferees have agreed, to amend the Transfer Agreement to reduce the aggregate notional amount of the Interest Rate Hedges that Transferor is required to maintain; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties agree as follows: Section 1. Waiver. The Agent, the Conduit Transferee and the Committed ------ Transferee hereby waive each of the Events of Termination that resulted from the Adjusted Loss Ratio exceeding 1.50% as of the last day of the Collection Periods occurring in October, November and December 2001 and January 2002. Section 2. Amendments to Transfer Agreement. The Transfer Agreement is hereby -------------------------------- amended as follows: (a) Clause (i) of the definition of "Adjusted Loss Ratio" in Section 1.01 is hereby deleted in its entirety and replaced with the following new clause (i): "(i) the highest Loss Ratio for any Collection Period during the immediately preceding 12 Collection Periods and" (b) Section 2.02(a) is hereby amended to delete the reference to "clause (vi) of Section 2.04(b)" contained in the second to last sentence thereof and to substitute a reference to "clause (vii) of Section 2.04(b)" therefor. (c) Clause (ii) of Section 5.01 (g) is hereby amended in its entirety to read as follows: "(ii) with an aggregate notional amount, at any time, not less than 95% of the then Aggregate Advances and not greater than 105% of the then Aggregate Advances, and" (d) Clause (3) of Section 7.01(f) is hereby amended in its entirety to read as follows: "(3) in respect of any Collection Period ending on or prior to April 30, 2002, the Adjusted Loss Ratio shall exceed 2.0%, in respect of the Collection Period ending in May 2002, the Adjusted Loss Ratio shall exceed 1.75% and in respect of any Collection Period ending thereafter, the Adjusted Loss Ratio shall exceed 1.50% or" (e) Section 10.01 is hereby amended to delete the word "or" appearing immediately prior to clause (F) thereof and to substitute a comma therefor and to add the following immediately after such clause (F): "(G) amend or modify the definition of "Eligible Receivable," "Funding Base" or "Overconcentration Amount," (H) amend Section 2.10 or (I) amend or modify the levels or the calculation of the portfolio tests set forth in Section 7.01(f)." Section 3. Effectiveness. This Amendment shall become effective and be deemed ------------- effective as of the date first above written upon (i) its execution and delivery by the Transferor, the Required Transferees and the Agent and (ii) payment by the Transferor to the Agent of an amendment fee in such amount as may be agreed by the Transferor and the Agent. Section 4. Representations. Each party hereto represents to the other that: (i) --------------- it has the power and authority to enter into this Amendment; (ii) the execution and delivery of this Amendment have been duly authorized by all necessary action; (iii) this Amendment has been duly executed and delivered on its behalf and (iv) this Amendment and the Facility Documents, as amended hereby, constitute its legal, valid and binding obligation enforceable against it in accordance with their respective terms subject to the Enforceability Exceptions. Section 5. Ratification. Except as specifically amended or cancelled hereby, ------------ each of the Facility Documents shall remain unchanged and continue in full force and effect and each of the parties hereto hereby ratifies and confirms the Facility Documents. After the effectiveness of this Amendment, any reference to the Transfer Agreement in any Facility Document shall be to the Transfer Agreement, as amended hereby. Section 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ------------- ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). Section 7. Costs and Expenses. The Transferor agrees to pay on demand all ------------------ reasonable costs and expenses of the Transferees and the Agent in connection with the preparation of this Amendment. Section 8. Counterparts. This Amendment may be executed in any number of ------------ counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. IN WITNESS WHEREOF, the parties have caused this Amendment No. 4 to be executed by their respective officers thereunto duly authorized, as of the date first above written. STEELCASE FINANCIAL CITICORP NORTH AMERICA, SERVICES INC., as Transferor INC., as Agent and initial Servicer By: /s/ Thomas P. Sullivan By: /s/ David J. Donofrio ------------------------ ------------------------------ Name: Thomas P. Sullivan Name: David J. Donofrio Title: V.P. & C.F.O. Title: Vice President CORPORATE ASSET FUNDING COMPANY, INC., as Conduit Transferee By: /s/ David J. Donofrio ------------------------------ Name: David J. Donofrio Title: Vice President CITIBANK, N.A., as Committed Transferee By: /s/ David J. Donofrio ------------------------------ Name: David J. Donofrio Title: Attorney-In-Fact EX-5.1 23 dex51.txt OPINION AND CONSENT OF SHEILA C. DAYTON EXHIBIT 5.1 February 22, 2002 Steelcase Inc. 901 44/th/ Street SE Grand Rapids, MI 49508 Re: Steelcase Inc. Registration Statement on Form S-4 Ladies and Gentlemen: I am the Vice President, General Counsel and Assistant Secretary for Steelcase Inc., a Michigan corporation (the "Company"), and have acted as counsel to the Company in connection with the public offering of $250,000,000 aggregate principal amount of the Company's 6.375% Senior Notes Due 2006 (the "Exchange Notes"). The Exchange Notes are to be issued pursuant to an exchange offer (the "Exchange Offer") in exchange for a like principal amount of the Company's issued and outstanding 6.375% Senior Notes Due 2006 (the "Original Notes") under an Indenture dated as of November 27, 2001 (the "Indenture"), between the Company and Bank One Trust Company, N.A., as trustee (the "Trustee"), as contemplated by the Registration Rights Agreement, dated as of November 19, 2001 (the "Registration Rights Agreement"), by and among the Company, Goldman, Sachs & Co., Salomon Smith Barney Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and BNP Paribas Securities Corp. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended. In my examination, I have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. In making my examination of executed documents, I have assumed that the parties thereto, other than the Company, had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery of such documents by the parties to such documents, and the validity and binding effect thereof. As to any facts material to the opinions expressed herein that were not independently established or verified, I have relied upon oral or written statements and representations of officers and other representatives of the Company and others. In rendering the opinions set forth herein, I have examined and relied on originals Steelcase Inc. February 22, 2002 Page 2 or copies of the following: (a) the Registration Statement on Form S-4 to be filed with the Securities and Exchange Commission (the "Commission") on the date hereof (the "Registration Statement"); (b) the form of the Exchange Notes; (c) an executed copy of the Indenture; (d) an executed copy of the Registration Rights Agreement; (e) the Form T-1 of the Trustee to be filed as an exhibit to the Registration Statement; (f) the Second Restated Articles of Incorporation of the Company, as in effect on the date hereof; (g) the Amended Bylaws of the Company, as in effect on the date hereof; and (h) certain resolutions adopted by the board of directors and the executive committee acting under the authority of the board of directors of the Company relating to the Exchange Offer, the issuance of the Original Notes and the Exchange Notes, the Indenture and related matters. I am a member of the Bar in the State of Michigan, and I have also examined originals or copies, certified or otherwise identified to my satisfaction, of such records of the Company and such agreements of the Company, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as I have deemed necessary or appropriate as a basis for the opinions set forth below. My opinion set forth herein is limited to the laws of the State of Michigan and the laws of the State of New York which are normally applicable to transactions of the type contemplated by the Exchange Offer ("Opined on Law"). I do not express any opinion as to the laws of any other jurisdiction other than the Opined on Law or as to the effect of any such non opined law on the opinion herein stated. I have relied as to matters of New York law on the opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois) of even date herewith and to be filed as Exhibit 5.2 to the Registration Statement. Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, I am of the opinion that the Exchange Notes have been duly and validly authorized by the Company and when the Exchange Notes (in the form examined by me) have been duly executed and authenticated in accordance with the terms of the Indenture and have been delivered upon consummation of the Exchange Offer against receipt of Original Notes surrendered in exchange therefor in accordance with the terms of the Exchange Offer, the Exchange Notes will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). I hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. Very truly yours, /s/ Sheila C. Dayton ---------------------------------------- Sheila C. Dayton Vice President, General Counsel and Assistant Secretary 2 EX-5.2 24 dex52.txt OPINION AND CONSENT OF SKADDEN, ARPS, SLATE EXHIBIT 5.2 February 22, 2002 Steelcase Inc. 901 44/th/ Street SE Grand Rapids, MI 49508 Re: Steelcase Inc. Registration Statement on Form S-4 Ladies and Gentlemen: We have acted as special counsel to Steelcase Inc., a Michigan corporation (the "Company"), in connection with the public offering of $250,000,000 aggregate principal amount of the Company's 6.375% Senior Notes Due 2006 (the "Exchange Notes"). The Exchange Notes are to be issued pursuant to an exchange offer (the "Exchange Offer") in exchange for a like principal amount of the Company's issued and outstanding 6.375% Senior Notes Due 2006 (the "Original Notes") under an Indenture dated as of November 27, 2001 (the "Indenture"), between the Company and Bank One Trust Company, N.A., as trustee (the "Trustee"), as contemplated by the Registration Rights Agreement, dated as of November 19, 2001 (the "Registration Rights Agreement"), by and among the Company, Goldman, Sachs & Co., Salomon Smith Barney Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and BNP Paribas Securities Corp. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the "Act"). In connection with this opinion, we have examined and relied upon originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement on Form S-4 to be filed with the Securities and Exchange Commission (the "Commission") on the date hereof (the "Registration Statement"); (ii) an executed copy of the Registration Rights Agreement; (iii) an executed copy of the Indenture; (iv) the Form T-1 of the Trustee to be filed as an exhibit to the Registration Statement; and (v) the form of the Exchange Notes. Steelcase Inc. February 22, 2002 Page 2 We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates of public officials, certificates of officers or other representatives of the Company and others, and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein. In our examination, we have assumed the legal capacity of natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. In making our examination of documents executed or to be executed, we have assumed that all parties thereto, including the Company, had or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and (except to the extent we have opined on such matters below with respect to the Exchange Notes) that such documents constitute valid and binding obligations of such parties. We have also assumed that the Company has been duly organized and is validly existing in good standing under the laws of the State of Michigan and that the Company has complied with all aspects of Michigan law in connection with the transactions contemplated by the Exchange Offer. As to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials. Our opinion set forth herein is limited to the laws of the State of New York that, in our experience, are normally applicable to transactions of the type contemplated by the Exchange Offer and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as "Opined on Law"). We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-opined-on law on the opinions herein stated. We have relied as to matters of New York law on the opinion of Skadden, Arps, Slate, Meagher & Flom LLP dated the date hereof and addressed to us. Sheila C. Dayton, Vice President, General Counsel and Assistant Secretary of the Company, may rely on this opinion in rendering her opinion dated the date hereof and to be filed as Exhibit 5.1 to the Registration Statement. Based upon and subject to the foregoing and the limitations,qualifications, exceptions and assumptions set forth herein, we are of the opinion that when the Exchange Notes (in the form examined by us) have been duly executed and authenticated in accordance with the terms of the Indenture and have been delivered upon consummation of the Exchange Offer against receipt of Original Notes surrendered in exchange therefor in accordance with the terms of the Exchange Offer, the Exchange Notes will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). Steelcase Inc. February 22, 2002 Page 3 In rendering the opinion set forth above, we have assumed that the execution and delivery by the Company of the Indenture and the Exchange Notes and the performance of the Company of its obligations thereunder do not and will not violate, conflict with or constitute a default under any agreement or instrument to which the Company or its properties is subject, except for those agreements and instruments which have been identified to us by the Company as being material to it and which are listed under Item 21(a) in Part II of the Registration Statement or listed as exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended February 23, 2001, pursuant to Item 14(c) thereof. With respect to any agreement or instrument reviewed by us, that by its terms or otherwise is governed by the laws of any jurisdiction other than the laws of the State of New York, our opinion herein is based solely on our understanding of the plain language of such agreement or instrument and we do not express any opinion with respect to the interpretation, validity, binding nature or enforceability of any such agreement or instrument, and we do not assume any responsibility with respect to the affect on the opinions or statements set forth herein of any interpretation thereof inconsistent with such understanding. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission. Very truly yours, /s/ Skadden, Arps, Slate, Meagher & Flom (Illinois) EX-10.26 25 dex1026.txt SHAREHOLDERS' AGREEMENT EXHIBIT 10.26 SHAREHOLDER'S AGREEMENT SHAREHOLDER'S AGREEMENT (the "Agreement"), dated as of August 24, 2001, --------- by and among Steelcase Inc., a Michigan corporation ("Parent"), PV Acquisition, ------ Inc., a New York corporation and a wholly owned subsidiary of Parent ("Merger ------ Sub"), and The Alpine Group, Inc. (the "Shareholder"), a Delaware corporation - --- ----------- and a shareholder of PolyVision Corporation, a New York corporation (the "Company"). Capitalized terms used and not defined herein have the meanings ------- given them in the Agreement and Plan of Merger, dated as of the date hereof, by and among Parent, Merger Sub and the Company (as the same may be amended or supplemented from time to time, the "Merger Agreement"). ---------------- WHEREAS, concurrently herewith, Parent, Merger Sub and the Company are entering into the Merger Agreement, pursuant to which, among other things: (i) each outstanding share of Company Common Stock shall be canceled and shall be converted automatically into the right to receive the Common Stock Merger Consideration; (ii) each outstanding share of Series B Preferred Stock shall be canceled and shall be converted automatically into the right to receive the Series B Preferred Stock Merger Consideration; (iii) each outstanding share of Series C Preferred Stock (all such outstanding shares, together with the outstanding shares of Company Common Stock and Series B Preferred Stock being referred to hereinafter collectively as the "Shares") shall be canceled and shall be converted automatically into the right to receive the Series C Preferred Stock Merger Consideration; (iv) each outstanding share of Series D Preferred Stock shall be cancelled and shall be converted automatically into the right to receive the Series D Preferred Stock Consideration; and (v) Merger Sub will be merged with and into the Company (the "Merger"), upon the terms and ------ subject to the conditions set forth in the Merger Agreement; WHEREAS, the Shareholder Beneficially Owns (as defined in Section 1(a)) 6,820,113 shares of Company Common Stock, 255,000 shares of Series B Preferred Stock, and 140,000 shares of Series C Preferred Stock; WHEREAS, the Shareholder has received a true and correct copy of the Merger Agreement; and WHEREAS, in order to induce Parent and Merger Sub to enter into the Merger Agreement and to perform their obligations thereunder and as a condition thereof, the Shareholder is entering into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual premises, representations, warranties, covenants and agreements contained herein, the parties hereby agree as follows: Section 1. Agreement to Vote; Irrevocable Proxy. (a) The ------------------------------------ Shareholder hereby agrees that during the period commencing on the date of this Agreement and continuing until (x) if the Option (as defined in Section 2(a)) is exercised, the Option Closing (as defined in Section 2(c)) or (y) if the Option is not exercised, the Option Expiration Time (as applicable, the "Voting ------ Expiration Time"), at any meeting of the holders of any of the Shares, however - --------------- called, or in connection with any written consent of the holders of any of the Shares, the Shareholder shall vote (or cause to be voted) the Shares held of record or Beneficially Owned by the Shareholder, whether owned on the date hereof or hereafter acquired, (i) in favor of approval of the Merger Agreement, all transactions contemplated thereby, and any actions required in furtherance thereof and hereof; (ii) against any action or agreement that is intended, or could reasonably be expected, to impede, interfere with, or prevent the Merger or result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company or any of its subsidiaries under the Merger Agreement; and (iii) except as specifically requested in writing in advance by Parent, against any of the following actions (other than the Merger and the transactions contemplated by the Merger Agreement) that are submitted to a vote of the holders of the Shares: (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its Subsidiaries; (B) any sale, lease, transfer or disposition by the Company or any of its Subsidiaries of any assets which in the aggregate are material to the Company and its Subsidiaries taken as a whole, or a reorganization, recapitalization, dissolution or liquidation of the Company or any of its subsidiaries; (C)(1) any change in the present capitalization of the Company or any amendment of the Company's certificate of incorporation or by-laws; (2) any other material change in the corporate structure or business of the Company or any of its subsidiaries; or (3) any other action or agreement that is intended, or could reasonably be expected, to impede, interfere with or prevent the Merger or the transactions contemplated by the Merger Agreement. As used in this Agreement, the term "Beneficially Own" or ---------------- "Beneficial Ownership" with respect to any securities means having "beneficial -------------------- ownership" of such securities as determined pursuant to Rule 13d-3 under the Exchange Act, including pursuant to any agreement, arrangement or understanding, whether or not in writing, except that the term shall not include Shares which the Shareholder has the right to acquire under any options to acquire Shares from the Company ("Company Stock ------------- 2 Options") unless such Shares have been acquired upon exercise of such Company - ------- Stock Options. (b) Effective immediately upon the execution of this Agreement, and in order to secure its obligations hereunder, the Shareholder hereby grants to, and appoints Parent and any designee of Parent, and each of them individually, with full power of substitution and resubstitution, the Shareholder's true and lawful irrevocable (until the Voting Expiration Time) proxy to vote the Shareholder's Shares, or grant a consent or approval in respect of the Shareholder's Shares, solely on such matters and as indicated in Section 1(a) above. The Shareholder (i) agrees to take such further action and execute such other instruments as may be reasonably necessary to effectuate the intent of this proxy, (ii) hereby represents that any proxy heretofore given in respect of the Shareholder's Shares is not irrevocable, and (iii) hereby revokes any proxy previously granted by the Shareholder with respect to its Shares. The Shareholder understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement in reliance on the Shareholder's execution and delivery of this irrevocable proxy. The Shareholder hereby affirms that this irrevocable proxy is given in connection with the execution of this Agreement and the Merger Agreement, and further affirms that this irrevocable proxy is coupled with an interest in this Agreement for the term stated herein and may under no circumstances be revoked prior to the Voting Expiration Time. This proxy is executed and intended to be irrevocable for the above-stated term in accordance with the provisions of Section 609 of the BCL. Section 2. Grant of Option. (a) Subject to the terms of this --------------- Section 2, the Shareholder hereby grants to Parent and Merger Sub an irrevocable option (the "Option") to purchase for cash all, but not less than all, of the ------ Shares held of record or Beneficially Owned by the Shareholder at a purchase price per Share equal to the Common Stock Merger Consideration, the Series B Preferred Stock Merger Consideration, or the Series C Preferred Stock Merger Consideration (in each case, as applicable, the "Per Share Amount"). ---------------- (b) Parent (or Merger Sub) may exercise the Option at any time from and after any termination of the Merger Agreement and prior to 11:59 p.m., Eastern time, on the 30th day after the date of such termination (the "Option Expiration Time"). ---------------------- (c) To exercise the Option, Parent (or Merger Sub) shall give written notice (the "Notice") to the Shareholder specifying the time for ------ the closing (the "Option Closing") of such purchase. The Option Closing shall be -------------- held at the office of Skadden, Arps, Slate, Meagher & Flom LLP on the date that is 10 business days after 3 the date of the Notice, subject to the satisfaction of each of the conditions set forth in Section 2(d) below, or such other date as may be agreed to by the Shareholder and Parent. (d) The occurrence of the Option Closing shall be subject to the satisfaction of each of the following conditions: (i) to the extent necessary, any applicable waiting periods (and any extension thereof) under the HSR Act with respect to the purchase of the Shareholder's Shares following the exercise of the Option shall have expired or been terminated; and (ii) no preliminary or permanent injunction or other order, decree or ruling issued by any court of competent jurisdiction, and no statute, law, rule or regulation enacted or promulgated by any Governmental Entity, prohibiting the exercise of the Option or the delivery of the Shareholder's Shares pursuant thereto shall be in effect. (e) If Parent exercises the Option, Parent may sell or transfer the Shares acquired upon exercise of the Option at any time, without the consent of the Shareholder, to Merger Sub; provided, however, that no such sale or -------- transfer shall relieve Parent of its liabilities and obligations hereunder, including the obligation to pay the consideration described in Section 2(a) and to comply with Section 10. (f) At the Option Closing, (i) Parent (or Merger Sub) shall pay, by wire transfer of immediately available funds to an account designated by the Shareholder, an amount (the "Option Exercise Price") equal to the sum of (A) the --------------------- product of (x) the applicable Per Share Amount and (y) the number of shares of Company Common Stock delivered at the Option Closing, (B) the product of (x) the applicable Per Share Amount and (y) the number of shares of Series B Preferred Stock delivered at the Option Closing and (C) the product of (x) the applicable Per Share Amount and (y) the number of shares of Series C Preferred Stock delivered at the Option Closing; and (ii) the Shareholder shall deliver or shall cause to be delivered to Parent (or Merger Sub) a certificate or certificates evidencing the Shareholder's Shares, and the Shareholder agrees that such Shares shall be transferred free and clear of all liens. All such certificates representing such Shares shall be duly endorsed in blank, or with appropriate stock powers, duly executed in blank, attached thereto, in proper form for transfer, and with all applicable taxes paid or provided for, subject to Section 15(i). 4 Section 3. After-Acquired Shares. Notwithstanding anything herein to --------------------- the contrary, any Shares acquired by the Shareholder after the date hereof, whether by purchase or exchange, shall be subject to all of the representations, warranties, covenants and agreements of the Shareholder contained herein. In the event of a share dividend or distribution, or any change in the Shares by reason of any share dividend, split_up, recapitalization, combination, exchange of shares or the like, the term "Shares" shall be deemed to refer to and include the Shares as well as all such share dividends and distributions and any shares into which or for which any or all of the Shares may be changed or exchanged. Section 4. Other Covenants, Agreements, Representations and ------------------------------------------------ Warranties. The Shareholder hereby represents, warrants and covenants to Parent - ---------- and Merger Sub as of the date hereof and as of the Option Closing as follows: (a) The Shareholder is the record and Beneficial Owner of the number of Shares set forth in the Recitals hereto, which constitute all of the Shares owned of record or Beneficially Owned by the Shareholder on the date hereof. The Shareholder owns such Shares free and clear of all liens, claims, charges, security interests, mortgages or other encumbrances, and such Shares are not subject to any rights of first refusal, put rights, other rights to purchase or encumber such Shares, or to any agreements other than this Agreement as to the encumbrance, disposition or voting of such Shares. The Shareholder has sole voting power and sole power to issue instructions with respect to such Shares, sole power of disposition, sole power of conversion, sole power to demand dissenters' rights and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Shares. (b) The Shareholder is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. (c) The Shareholder has the requisite corporate power and authority to execute and deliver this Agreement, and has the requisite corporate power and authority to perform the transactions provided for or contemplated by this Agreement. The execution, delivery and performance by the Shareholder of this Agreement, and the consummation by it of the transactions contemplated hereby, have been duly and validly authorized by the Shareholder's board of directors, and no other corporate action on the part of the Shareholder is necessary to authorize the execution and delivery by the Shareholder of this Agreement and the consummation by it of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Shareholder and, assuming due and valid authorization, execution and delivery hereof by Parent and Merger Sub, is a valid and binding obligation of the 5 Shareholder enforceable against the Shareholder in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors' rights and remedies generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. (d) None of the execution, delivery or performance of this Agreement by the Shareholder, the consummation by the Shareholder of the transactions contemplated hereby or compliance by the Shareholder with any of the provisions of this Agreement will (i) conflict with or result in any breach of any provision of the certificate of incorporation or the by_laws of the Shareholder, (ii) require any filing by the Shareholder with, or permit, authorization, consent or approval of, any Governmental Entity (except for (A) the filing with the SEC of such reports and statements under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby and (B) any filings as may be required under the HSR Act), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any material note, bond, mortgage, lien, indenture, lease, license, contract, agreement or other instrument or obligation to which the Shareholder or any of its Subsidiaries (which, for the avoidance of any doubt, does not include the Company and its Subsidiaries) is a party or by which any of them or any of their respective properties or assets may be bound, except for those as to which any required consents, approvals or waivers have been obtained or (iv) violate any material order, writ, injunction, decree, statute, rule or regulation applicable to the Shareholder, any of its Subsidiaries (which, for the avoidance of any doubt, does not include the Company and its Subsidiaries) or any of their respective properties or assets. The consummation of the Merger will not conflict with or result in any breach of any of the terms of the Series B Preferred Stock or the Series C Preferred Stock. (e) No broker, finder or investment banker is entitled to any brokerage, finder's or other similar fee or commission in connection with the transactions contemplated by the Merger Agreement based upon arrangements made by or on behalf of the Shareholder. (f) The Shareholder shall not, directly or indirectly, encourage, solicit, participate in or initiate discussions or negotiations with or provide any non-public information to any Person or group (other than Parent and Merger Sub or any designees or Parent and Merger Sub) concerning any Acquisition Proposal. In 6 addition, the Shareholder will not, and will instruct its agents and affiliates not to, directly or indirectly, make or authorize any public statement, recommendation or solicitation in support of any Acquisition Proposal made by any Person or group (other than Parent or Merger Sub). Notwithstanding the foregoing, any action taken by the Company or any member of the Company Board of Directors, in his capacity as such, in accordance with Section 6.3 of the Merger Agreement shall be deemed not to violate this Section 4(f). (g) The Shareholder shall not, directly or indirectly: (i) tender its Shares in any tender offer or exchange offer for the Shares; (ii) except as contemplated by this Agreement or the Merger Agreement, otherwise offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to or consent to the offer for sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of its Shares or any interest therein; (iii) except as contemplated by this Agreement, grant any proxies or powers of attorney, deposit any of its Shares into a voting trust or enter into a voting agreement with respect to any Shares; (iv) take any action that would make any representation or warranty of the Shareholder contained herein untrue or incorrect in any material respect or have the effect of preventing or impairing the Shareholder from performing its obligations under this Agreement; or (v) enter into any agreement, arrangement or understanding with the intent or effect of delaying, terminating, preventing or affecting negatively the consummation of the Merger and the other transactions contemplated by the Merger Agreement. (h) The Shareholder hereby acknowledges and agrees that the Series B Preferred Stock Merger Consideration and the Series C Preferred Stock Merger Consideration, or any higher price as may be paid for any such Shares in the Merger, as the case may be, are in full satisfaction of all obligations of the Company to the Shareholder related to the Series B Preferred Stock and Series C Preferred Stock, and upon receipt of such consideration, any and all claims of the Shareholder against the Company or any of its affiliates relating to the Series B Preferred Stock or the Series C Preferred Stock shall be waived and released. (i) The Shareholder understands and acknowledges that Parent and Merger Sub are relying upon the foregoing representations, warranties and covenants by the Shareholder, and on the Shareholder's execution and delivery of this Agreement in entering into the Merger Agreement. 7 Section 5. Other Representations and Warranties of Parent and Merger --------------------------------------------------------- Sub. Parent and Merger Sub hereby represent and warrant to the Shareholder as of - --- the date hereof and as of the Option Closing as follows: (a) Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. (b) Each of Parent and Merger Sub has the requisite corporate power and authority to execute and deliver this Agreement, and has the requisite corporate power and authority to perform the transactions provided for or contemplated by this Agreement. The execution, delivery and performance by each of Parent and Merger Sub of this Agreement, and the consummation by it of the transactions contemplated hereby, have been duly and validly authorized by its board of directors, and no other corporate action on the part of Parent or Merger Sub is necessary to authorize the execution and delivery by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the transactions contemplated hereby. This Agreement has been duly executed and delivered by each of Parent and Merger Sub and, assuming due and valid authorization, execution and delivery hereof by the Shareholder, is a valid and binding obligation of each of Parent and Merger Sub enforceable against Parent and Merger Sub in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors' rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. (c) None of the execution, delivery or performance of this Agreement by Parent and Merger Sub, the consummation by Parent and Merger Sub of the transactions contemplated hereby or compliance by Parent and Merger Sub with any of the provisions of this Agreement will (i) conflict with or result in any breach of any provision of their respective certificates of incorporation and by_laws, (ii) require any filing by Parent or Merger Sub with, or permit, authorization, consent or approval of, any Governmental Entity (except for (A) the filing with the SEC of such reports and statements under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby and (B) any filings as may be required under the HSR Act), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any material note, bond, mortgage, lien, indenture, lease, 8 license, contract, agreement or other instrument or obligation to which Parent or Merger Sub or any of their respective Subsidiaries is a party or by which any of them or any of their respective properties or assets may be bound, except for those as to which any required consents, approvals or waivers have been obtained or (iv) violate any material order, writ, injunction, decree, statute, rule or regulation applicable to Parent or Merger Sub, any of their respective Subsidiaries or any of their respective properties or assets. (d) Either Parent or Merger Sub has available and has reserved or has received written commitments from third-party lenders to obtain, sufficient funds to consummate the Merger, the Offer and the other transactions contemplated by the Merger Agreement or this Agreement, including payment in full of (a) the Merger Consideration or the Option Exercise Price, (b) the amounts payable under Sections 3.5, 3.6 and 3.7 of the Merger Agreement and (c) all indebtedness (including principal, accrued interest, prepayment fees and other charges) of the Company outstanding on the date of this Agreement. Section 6. Conditions to Obligations of Parent and Merger Sub. The -------------------------------------------------- Shareholder acknowledges that the obligations of Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver (where permissible) of each of the conditions set forth in the Merger Agreement, including the compliance by the Shareholder with the provisions of this Agreement. Section 7. Further Assurances. From time to time, at Parent's ------------------ reasonable request and without further consideration, the Shareholder agrees to execute and deliver such additional documents and take all such further lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement. Section 8. Stop Transfer; Form of Legend. The Shareholder agrees and ----------------------------- covenants to Parent that the Shareholder shall not, prior to the Option Closing or, if the Option is not exercised, prior to the Option Expiration Time, except as otherwise provided herein or pursuant to the Merger Agreement, (a) transfer or encumber or agree to transfer or encumber any of the Shareholder's Shares or (b) request that the Company register the transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any of the Shareholder's Shares, in either case without the consent of the Parent. If reasonably requested by Parent, any certificates representing the Shareholder's Shares shall contain the following legend: "The securities represented by this certificate are subject to certain restrictions on transfer and other terms of a Shareholder's Agreement, 9 dated as of August 24, 2001, among Steelcase Inc., PV Acquisition, Inc., and The Alpine Group, Inc., a copy of which is on file in the principal office of Steelcase Inc." Section 9. Indemnification. (a) The Shareholder agrees to --------------- indemnify, defend and hold Parent, Merger Sub, their officers, directors, employees, agents, representatives and affiliates ("Indemnified Parties") ------------------- harmless from and in respect of any and all losses, damages, costs and expenses (including demands, suits, claims, actions, assessments, liabilities, judgments, amounts paid in settlement, expenses of investigation and reasonable fees and disbursements of counsel and other professionals) (collectively, "Losses"), that ------ they may incur arising out of or due to (i) the inaccuracy or breach of any representation or warranty of the Shareholder contained in this Agreement, (ii) the breach by the Shareholder of any covenant, undertaking or other agreement contained in this Agreement and (iii) enforcing the indemnification rights pursuant to this Section 9(a). (b) If any Indemnified Party shall believe that such Indemnified Party is entitled to indemnification pursuant to this Section 9, such Indemnified Party shall promptly give to the Shareholder written notice thereof. The failure of such Indemnified Party to give notice of any claim for indemnification promptly shall not adversely affect such Indemnified Party's right to indemnity hereunder, except to the extent that the Shareholder is prejudiced by the delay in giving notice. All such claims for indemnification shall be made not later than, and the representations and warranties of the Shareholder contained in this Agreement (other than the representations and warranties set forth in subsections (a), (b), (c) and (e) of Section 4, which shall survive indefinitely) shall not survive beyond, midnight on the date that is one year after the first to occur of the Effective Time and the Option Closing. The right to indemnification hereunder shall not be affected by any investigation or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement. Section 10. Obligation After Option Closing to Acquire All Minority ------------------------------------------------------- Interests. - --------- (a) Parent agrees that, as promptly as reasonably practicable (but, in any case, not later than five business days) after the Option Closing, Parent shall commence (within the meaning of Rule 14d-2 under the Exchange Act) an offer to purchase for cash (the "Offer") all, but not less than all, of the ----- outstanding shares of Company Common Stock owned by the holders of Company Common Stock (other than Parent and Merger Sub) and the outstanding shares of Series D Preferred Stock 10 (collectively, the "Company Securities"), (i) in the case of the Company Common ------------------ Stock, at a price per share, net to the seller in cash, that is not less than the Per Share Amount paid with respect to the Company Common Stock as part of the Option Exercise Price (the "Common Stock Reference Price") and (ii) in the ---------------------------- case of the Series D Preferred Stock, at a price per share, net to the seller in cash, that is not less than the Series D Preferred Stock Merger Consideration (the "Series D Reference Price"). ------------------------ The obligation of Parent to accept for payment and to pay for Company Securities validly tendered in the Offer and not subsequently withdrawn shall be subject only to (i) the condition that there shall not be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced or promulgated by any Governmental Entity which restrains, prevents or prohibits the making or consummation of the Offer or the consummation of the Secondary Merger (as defined below); provided, however, that Parent shall use commercially -------- reasonable efforts to have any such statute, rule, regulation, judgment, order or injunction vacated or lifted; and (ii) such conditions as, after consultation with Parent's outside legal counsel, Parent determines in good faith are required by applicable law with respect to the Offer. (b) Following Parent's or Merger Sub's acceptance for payment of and payment for Company Securities pursuant to the Offer (the "Acceptance Time"), --------------- Parent shall take all action reasonably necessary to cause consummation as promptly as reasonably practicable of a second-step merger (the "Secondary --------- Merger") in which (i) the holders of the outstanding Company Securities will - ------ receive per-share consideration, net to such holders in cash, without interest thereon and less any applicable withholding of taxes, equal to (A) the Series D Reference Price, in the case of Series D Preferred Stock, or (B) the Common Stock Reference Price, in the case of Company Common Stock, and (ii) each option, warrant or other right to purchase Company Common Stock will (1) to the extent consistent with the terms thereof, be canceled immediately prior to the consummation of the Secondary Merger, in consideration for which cancellation the holder of such option, warrant or right shall receive a payment of cash consideration equal to the product of (A) the total number of shares of Company Common Stock subject to such option, warrant or right immediately prior to the consummation of the Secondary Merger and (B) the excess (if any) of (x) the Common Stock Reference Price over (y) the exercise price per share subject to such option, warrant or right as in effect immediately prior to the consummation of the Secondary Merger (such payment to be without interest thereon and net of any withholding of taxes); (2) to the extent consistent with the terms thereof, represent the right, from and after the consummation of the Secondary Merger, upon exercise thereof and payment of the aggregate exercise price with respect thereto, to receive in cash, without interest, a single lump sum cash payment equal to the product of (A) the 11 number of shares of Company Common Stock that would have been subject to issuance upon the exercise of such option, warrant or right, had such exercise occurred immediately prior to the consummation of the Secondary Merger, and (B) the Common Stock Reference Price (such cash payment to be reduced by any required withholding of taxes); or (3) otherwise be treated in accordance with the terms thereof. Without limiting the generality of any of the foregoing, after commencement of the Offer, Parent shall use its reasonable best efforts to acquire (or to cause Merger Sub to acquire) pursuant to the Offer such number of shares of Company Common Stock that, together with the shares of Company Common Stock then owned by Parent and Merger Sub, will be sufficient to enable the Secondary Merger to be consummated pursuant to Section 905 of the BCL (the "Requisite Number"), and, if the Requisite Number is so acquired in the Offer, ---------------- Parent shall, promptly following the Acceptance Time, take all action reasonably necessary to cause the Secondary Merger to be so consummated as promptly as reasonably practicable pursuant to Section 905 of the BCL. (c) The Offer and the Secondary Merger shall be conducted in compliance with all applicable laws. Promptly after the Option Closing, Parent shall make a public announcement stating that it intends promptly to commence the Offer, describing the terms of the Offer, and stating that the Offer will not be subject to any financing contingency and will be unconditional (except as provided in the last sentence of Section 10(a)). It is intended by the parties to this Agreement that the Company shall have the right to take all measures it may deem, in its sole discretion, to be necessary or desirable for the purpose of enforcing the provisions of this Section 10. At all times prior to the date on which Parent or Merger Sub shall have acquired all outstanding shares of Company Common Stock (other than shares owned by Parent or Merger Sub) and options and warrants to purchase Company Common Stock as provided in this Section 10, the authorization of the Continuing Directors (as defined below) shall be required (and such authorization shall constitute the authorization of the full Company Board of Directors and no other action on the part of the Company, including any action by any other directors of the Company, shall be required) to enforce on behalf of the Company and the holders of Company Common Stock (other than Parent or Merger Sub) and options and warrants to purchase Company Common Stock the provisions of this Section 10, including any extension of the time for performance of any obligation or action under this Section 10 or any waiver of compliance by Parent (or Merger Sub) with the provisions of this Section 10. 12 For purposes of this Section 10(c), "Continuing Directors" means the -------------------- members of the Special Committee as constituted on the date hereof or any successor or substitute directors appointed by such members of the Special Committee serving on the date hereof. Section 11. Termination. This Agreement shall terminate at the Option ----------- Expiration Time if the Option has not theretofore been exercised. Section 12. Effect of Termination. In the event of a termination of --------------------- this Agreement as provided in Section 11 hereof, this Agreement shall forthwith become void and there shall be no liability or obligation hereunder on the part of Parent, Merger Sub or the Shareholder thereafter; provided, however, that -------- nothing herein shall relieve any party for liability for any willful breach hereof prior to such termination Section 13. Non-Competition. Except as set forth in this Section 13, --------------- the Shareholder agrees that, to assure that Parent will retain the value of the business of the Company and the Company Subsidiaries as a "going concern," for a period of five years beginning on the earlier of the Effective Time or the Option Closing, the Shareholder shall not, directly or indirectly, through one or more affiliates, engage or have an interest, anywhere in the United States or Europe, alone or in association with others, as partner or stockholder or through the investment of capital, lending of money or property, or otherwise, in any business that competes with the products and services provided by the Company or any Company Subsidiary as of such date; provided, however, that it shall not be a violation of this Section 13 for the Shareholder or any of its affiliates to (i) invest in securities representing less than 10 percent of the outstanding capital stock of any Person, the securities of which are publicly traded or listed on any securities exchange or automated quotation system, or (ii) invest in, own an interest in or acquire, in a single transaction or series of transactions, all or a majority of the equity interests in, or assets of, any Person that did not derive at least 25 percent of its consolidated net revenue during its last completed fiscal year from any business that competes with the products and services provided by the Company or any Company Subsidiary as of the date referenced above. During the three years beginning on the earlier of the Effective Time or the Option Closing, the Shareholder shall not, directly or indirectly, through one or more affiliates, on behalf of itself or any other Person, (i) recruit or otherwise solicit or induce any person who is an employee of, or otherwise engaged by, Parent, the Company or any Company Subsidiary or any of their successors to terminate his or her employment or other relationship with Parent, the Company or any Company Subsidiary or (ii) offer employment to or employ a person who is at that time an employee (other than secretarial or clerical employees) of Parent, the Company or any Company Subsidiary or who was such an employee within two years of the time 13 of such offer of employment. The foregoing shall not, however, prohibit the Shareholder or any of its affiliates from publishing any general public solicitation of employment opportunities. Section 14. Jurisdiction. Each of the parties hereto hereby expressly ------------ and irrevocably submits to the non-exclusive personal jurisdiction of the United States District Court for the Southern District of New York, and to the jurisdiction of any other competent court of the State of New York located in New York County (collectively, the "New York Courts"), preserving, however, all --------------- rights of removal to such federal court under 28 U.S.C. Section 1441, in connection with all disputes arising out of or in connection with this Agreement or the transactions contemplated hereby and agrees not to commence any litigation relating thereto except in such courts. If the aforementioned courts do not have subject matter jurisdiction, then the proceeding shall be brought in any other state or federal court located in the State of New York, preserving, however, all rights of removal to such federal court under 28 U.S.C. Section 1441. Each party hereby waives the right to any other jurisdiction or venue for any litigation arising out of or in connection with this Agreement or the transactions contemplated hereby to which any of them may be entitled by reason of its present or future domicile. Section 14. Miscellaneous. ------------- (a) This Agreement (i) constitutes the entire agreement among Parent, Merger Sub and the Shareholder with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among such parties or any of them with respect to the subject matter hereof and (ii) except as provided in Section 9, and except for the Company's right to enforce Section 10, is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. (b) All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. (c) The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. 14 (d) Subject to applicable law and as otherwise provided in the Agreement, this Agreement may be amended, modified and supplemented in any and all respects, by written agreement of Parent, Merger Sub and the Shareholder, by action taken by their respective boards of directors or equivalent governing bodies. This Agreement may not be amended except by an instrument in writing signed on behalf of each of Parent, Merger Sub and the Shareholder; provided, -------- that no such instrument that amends, modifies or supplements Section 10 shall be effective unless signed by the Company. (e) If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. (f) All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent by a nationally recognized overnight courier service, such as Federal Express (providing proof of delivery), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (i) if to Parent or Merger Sub, to: Steelcase Inc. 901 - 44th Street, S.E. Grand Rapids, Michigan 49508 Telephone: (616) 246-9600 Facsimile: (616) 248-7010 Attention: Chief Legal Officer 15 with a copy to: Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Chicago, Illinois 60606 Telephone: (312) 407-0700 Facsimile: (312) 407-0411 Attention: Charles W. Mulaney, Jr., Esq. (ii) if to the Shareholder, to: The Alpine Group, Inc. 1790 Broadway New York, New York 10019 Telephone: (212) 757-3333 Facsimile: (212) 757-3423 Attention: Corporate Secretary with a copy to: Proskauer Rose LLP 1585 Broadway New York, New York 10036 Telephone: (212) 969-3000 Facsimile: (212) 969-2900 Attention: Ronald R. Papa, Esq. and (iii) if to the Company, to: PolyVision Corporation 4888 S. Old Peachtree Rd. Norcross, Georgia 30071 Telephone: (770) 447-5043 Facsimile. (770) 446-5951 Attention: Michael H. Dunn, President and Chief Executive Officer 16 with a copy to: Greenberg Traurig, LLP The Met Life Building 200 Park Avenue New York, New York 10166 Telephone: (212) 801-9200 Facsimile: (212) 801-6400 Attention: Clifford E. Neimeth, Esq. (g) This Agreement shall be governed by and construed in accordance with the internal (substantive and procedural) laws of the State of New York, without regard to the conflicts of laws principles thereof. (h) When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words "include", "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation." As used in this Agreement, the term "affiliates" shall have the meaning set forth in Rule 12b-2 of the Exchange Act. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. (i) Except as provided in Section 9, all fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs and expenses except that any transfer, stamp or similar taxes shall be borne by Parent. (j) This Agreement shall not be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that Merger Sub may assign any or all of its rights, interests and obligations hereunder to Parent, one or more direct or indirect wholly-owned Subsidiaries of Parent, or a combination thereof. (k) Each of Parent, Merger Sub, the Shareholder and, for purposes of Section 10 hereof, the Company acknowledges and agrees that in the event of any breach of this Agreement, each non-breaching party would be irreparably and immediately harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties hereto (a) will waive, in any action for specific performance, the defense of adequacy of a remedy at law and (b) shall be entitled, in 17 addition to any other remedy to which they may be entitled at law or in equity, to compel specific performance of this Agreement. (l) This Agreement may be executed manually or by facsimile by the parties hereto, in any number of counterparts, each of which shall be considered one and the same agreement and shall become effective when a counterpart hereof shall have been signed by each of the parties and delivered to the other parties. [Signature page follows.] 18 IN WITNESS WHEREOF, the Shareholder, Parent and Merger Sub have caused this Shareholder's Agreement to be duly executed as of the day and year first above written. STEELCASE INC. By: /s/ James P. Keane ---------------------------- Name: Title: PV ACQUISITION, INC. By: /s/ James P. Keane ---------------------------- Name: Title: THE ALPINE GROUP, INC. By: /s/ Bragi F. Schut ----------------------------- Name: Bragi F. Schut Title: EVP Acknowledged and agreed to as of the day and year first above written, solely for the purpose of enforcing the provisions of Section 10 hereof POLYVISION CORPORATION By: /s/ M.H. Dunn ---------------------------------- Name: M.H. Dunn Title: President and CEO EX-12.1 26 dex121.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1 Steelcase Inc. Computation of Ratio of Earnings to Fixed Charges
Year Ended Nine Months Ended ------------------------------------------------------------------ ------------------------- February 28, February 27, February 26, February 25, February 23, November 24, November 23, 1997 1998 1999 2000 2001 2000 2001 ------------ ------------ ------------ ------------ ------------ ----------- ------------- (in millions, except ratios) Income from continuing operations (1) $ 51.3 $ 340.1 $ 337.4 $ 296.4 $ 303.7 $ 267.5 $ 56.2 Interest expense 2.1 1.7 - 15.9 35.5 29.5 29.6 Portion of rent expense 9.6 10.4 9.0 6.8 7.6 5.3 7.9 Amortization of deferred debt expense - - - 0.7 0.5 0.4 1.1 ---------- ------------ ------------ ------------ ------------ ----------- ----------- Earnings $ 63.0 $ 352.2 $ 346.4 $ 319.8 $ 347.3 $ 302.7 $ 94.8 Fixed charges (total of interest expense, portion of rent expense and amortization of deferred debt expense) (2) $ 11.7 $ 12.1 $ 9.0 $ 23.4 $ 43.6 $ 35.2 $ 38.6 Ratio of earnings to Fixed Charges 5.4 x 29.1 x 38.5 x 13.7 x 8.0 x 8.6 X 2.5 X
(1) Income before provision for income taxes and equity in net income of joint ventures and dealer transitions. (2) The interest factor of rent expense has been calculated using the implied rate of 8.0%. EX-21.1 27 dex211.txt SUBSIDIARIES OF STEELCASE INC. Exhibit 21.1 Subsidiaries of the Registrant 1. Steelcase Canada Ltd., a Canadian corporation 2. Steelcase Financial Services Inc., a Michigan corporation 3. Steelcase Development Corporation, a Michigan corporation 4. Revest Inc., a Texas corporation 5. Steelcase SAS, a French corporation 6. DesignTex Fabrics, Inc., a New York corporation* 7. Office Details Inc., a Michigan corporation 8. Attwood Corporation, a Michigan corporation 9. Brayton International Inc., a North Carolina corporation 10. IDEO Product Development Inc., a Michigan corporation 11. J.M. Lynne Co., Inc., a Michigan corporation* 12. Metropolitan Furniture Corporation, a California corporation 13. PolyVision Corporation, a New York corporation * Effective as of February 25, 2002, Design Tex Fabrics, Inc. will be merged with and into J.M. Lynne Co., Inc., a Michigan corporation and a wholly-owned subsidiary of Steelcase Inc. J.M. Lynne Co., Inc. will be the surviving corporation, and will on that same day change its name to The Design Tex Group Inc. EX-23.1 28 dex231.txt CONSENT OF BDO SEIDMAN, LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Steelcase Inc. Grand Rapids, Michigan We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement (Form S-4) of our report dated March 16, 2001, relating to the consolidated financial statements and schedule of Steelcase Inc. appearing in the Company's Annual Report on Form 10-K/A for the year ended February 23, 2001. We also consent to the reference to us under the caption "Experts" in the Prospectus. BDO Seidman, LLP Grand Rapids, Michigan February 22, 2002 EX-25.1 29 dex251.txt FORM T-1 EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 -------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) -------------------------------- BANK ONE TRUST COMPANY, N.A. (Exact name of trustee as specified in its charter) A National Banking Association 31-0838515 (Jurisdiction of incorporation or (I.R.S. employer organization if not a U.S. national bank) identification number) 100 East Broad Street, Columbus, Ohio 43271-0181 (Address of principal executive offices) (Zip Code) Bank One Trust Company, N.A. 100 East Broad Street Columbus, Ohio 43271-0181 Attn: Christopher Holly, Legal Counsel, (312) 732-1643 (Name, address and telephone number of agent for service) --------------------------------- Steelcase Inc. (Exact name of obligor as specified in its charter) Michigan 38-0819050 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification number) 901 44/th/ Street 49508 Grand Rapids, Michigan (Zip Code) (Address of principal executive offices) 6.375% Senior Notes Due 2006 (Title of Indenture Securities) Item 1. General information. Furnish the following information as to -------------------- the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington D.C. (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. Item 2. Affiliations with the obligor. If the obligor is an affiliate ------------------------------ of the trustee, describe each such affiliation. No such affiliation exists with the trustee. Item 16. List of exhibits. List below all exhibits filed as a part of ---------------- this Statement of Eligibility. 1. A copy of the articles of association of the trustee now in effect. 2. A copy of the certificate of authority of the trustee to commence business. 3. A copy of the authorization of the trustee to exercise corporate trust powers. 4. A copy of the existing by-laws of the trustee. 5. Not Applicable. 6. The consents of United States Institutional Trustees required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bank One Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 22nd day of February, 2002. Bank One Trust Company, N.A. ----------------------------- (Trustee) By: /s/ Christopher Holly -------------------------- Christopher Holly Assistant Vice President EXHIBIT 1 A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE NOW IN EFFECT AMENDED AND RESTATED ARTICLES OF ASSOCIATION of Bank One Trust Company, N.A. FIRST. The title of this Association shall be Bank One Trust Company, N.A SECOND. The main office of the Association shall be in the City of Columbus, County of Franklin, State of Ohio. The business of the Association will be limited to the fiduciary powers and the support of activities incidental to the exercise of those powers. The Association will not expand or alter its business beyond that stated in this article without the prior approval of the Comptroller of the Currency. THIRD. The Board of Directors of this Association shall consist of not less than five nor more than twenty-five persons, the exact number to be fixed and determined from time to time by resolution of a majority of the full Board of Directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director shall own common or preferred stock of the Association, or of a holding company owning the Association, with an aggregate par, fair market or equity value of not less than $1,000, as of either (i) the date of purchase, (ii) the date the person became a director, or (iii) the date of that person's most recent election to the Board of Directors, whichever is more recent. Any combination of common or preferred stock of the Association or holding company may be used. Any vacancy in the Board of Directors may be filled by action of a majority of the remaining directors between meetings of shareholders. The Board of Directors may not increase the number of directors between meetings of shareholders to a number which: (1) exceeds by more than two the number of directors last elected by shareholders where the number was 15 or less; or (2) exceeds by more than four the number of directors last elected by shareholders where the number was 16 or more, but in no event shall the number of directors exceed 25. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a director's term, the director shall continue to serve until his or her successor is elected and qualifies or until there is a decrease in the number of directors and his or her position is eliminated. Honorary or advisory members of the Board of Directors, without voting power or power of final decision in matters concerning the business of the Association, may be appointed by resolution of a majority of the full Board of Directors, or by resolution of shareholders at any annual or special meeting. Honorary or advisory directors shall not be counted to determine the number of directors of the Association or the presence of a quorum in connection with any board action, and shall not be required to own qualifying shares. FOURTH. There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the Board of Directors may designate, on the day of each year specified therefor in the Bylaws or, if that day falls on a legal holiday in the state in which the Association is located, on the next following banking day. If no election is held on the day fixed or in the event of a legal holiday on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the Board of Directors or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. In all cases at least 10 days advance notice of the meeting shall be given to the shareholders by first class mail. In all elections of directors, the number of votes each common shareholder may cast will be determined by multiplying the number of shares such shareholder owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder. On all other questions, each common shareholder shall be entitled to one vote for each share of stock held by such shareholder. If the issuance of preferred stock with voting rights has been authorized by a vote of shareholders owning a majority of the common stock of the association, preferred shareholders will have cumulative voting rights and will be included within the same class as common shareholders, for purposes of elections of directors. A director may resign at any time by delivering written notice to the Board of Directors, its chairperson, or to the Association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date. A director may be removed by shareholders at a meeting called to remove him or her, when notice of the meeting stating that the purpose or one of the purposes is to remove him or her is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause, provided, however, that a director may not be removed if the number of votes sufficient to elect him or her under cumulative voting is voted against his or her removal. FIFTH. The authorized amount of capital stock of this Association shall be eighty thousand shares of common stock of the par value of ten dollars ($10.00) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States. No holder of shares of the capital stock of any class of the Association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the Association, whether now or hereafter authorized, or to any obligations convertible into stock of the Association, issued or sold, nor any right of subscription to any thereof other than such, if any, as the Board of Directors, in its discretion, may from time to time determine and at such price as the Board of Directors may from time to time fix. Unless otherwise specified in the Articles of Association or required by law, (1) all matters requiring shareholder action, including amendments to the Articles of Association, must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to one vote per share. Unless otherwise specified in the Articles of Association or required by law, all shares of voting stock shall be voted together as a class on any matters requiring shareholder approval. If a proposed amendment would affect two or more classes or series in the same or a substantially similar way, all the classes or series so affected must vote together as a single voting group on the proposed amendment. Shares of the same class or series may be issued as a dividend on a pro rata basis and without consideration. Shares of another class or series may be issued as share dividends in respect of a class or series of stock if approved by a majority of the votes entitled to be cast by the class or series to be issued unless there are no outstanding shares of the class or series to be issued. Unless otherwise provided by the Board of Directors, the record date for determining shareholders entitled to a share dividend shall be the date the Board of Directors authorizes the share dividend. Unless otherwise provided in the Bylaws, the record date for determining shareholders entitled to notice of and to vote at any meeting is the close of business on the day before the first notice is mailed or otherwise sent to the shareholders, provided that in no event may a record date be more than 70 days before the meeting. If a shareholder is entitled to fractional shares pursuant to preemptive rights, a stock dividend, consolidation or merger, reverse stock split or otherwise, the Association may: (a) issue fractional shares or; (b) in lieu of the issuance of fractional shares, issue script or warrants entitling the holder to receive a full share upon surrendering enough script or warrants to equal a full share; (c) if there is an established and active market in the Association's stock, make reasonable arrangements to provide the shareholder with an opportunity to realize a fair price through sale of the fraction, or purchase of the additional fraction required for a full share; (d) remit the cash equivalent of the fraction to the shareholder; or (e) sell full shares representing all the fractions at public auction or to the highest bidder after having solicited and received sealed bids from at least three licensed stock brokers, and distribute the proceeds pro rata to shareholders who otherwise would be entitled to the fractional shares. The holder of a fractional share is entitled to exercise the rights for shareholder, including the right to vote, to receive dividends, and to participate in the assets of the Association upon liquidation, in proportion to the fractional interest. The holder of script or warrants is not entitled to any of these rights unless the script or warrants explicitly provide for such rights. The script or warrants may be subject to such additional conditions as: (1) that the script or warrants will become void if not exchanged for full shares before a specified date; and (2) that the shares for which the script or warrants are exchangeable may be sold at the option of the Association and the proceeds paid to scriptholders. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. Obligations classified as debt, whether or not subordinated, which may be issued by the Association without the approval of shareholders, do not carry voting rights on any issue, including an increase or decrease in the aggregate number of the securities, or the exchange or reclassification of all or part of securities into securities of another class or series. SIXTH. The Board of Directors shall appoint one of its members president of this Association, and one of its members chairperson of the board and shall have the power to appoint one or more vice presidents, a secretary who shall keep minutes of the directors' and shareholders' meetings and be responsible for authenticating the records of the Association, and such other officers and employees as may be required to transact the business of this Association. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the Board of Directors in accordance with the Bylaws. The Board of Directors shall have the power to: (1) Define the duties of the officers, employees, and agents of the Association. (2) Delegate the performance of its duties, but not the responsibility for its duties, to the officers, employees, and agents of the Association. (3) Fix the compensation and enter into employment contracts with its officers and employees upon reasonable terms and conditions consistent with applicable law. (4) Dismiss officers and employees. (5) Require bonds from officers and employees and to fix the penalty thereof. (6) Ratify written policies authorized by the Association's management or committees of the board. (7) Regulate the manner in which any increase or decrease of the capital of the Association shall be made, provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the association in accordance with law, and nothing shall raise or lower from two-thirds the percentage for shareholder approval to increase or reduce the capital. (8) Manage and administer the business and affairs of the Association. (9) Adopt initial Bylaws, not inconsistent with law or the Articles of Association, for managing the business and regulating the affairs of the Association. (10) Amend or repeal Bylaws, except to the extent that the Articles of Association reserve this power in whole or in part to shareholders. (11) Make contracts. (12) Generally perform all acts that are legal for a Board of Directors to perform. SEVENTH. The Board of Directors shall have the power to change the location of the main office of this Association to any other place within the limits of the City of Columbus, State of Ohio, without the approval of the shareholders; and shall have the power to change the location of the main office of this Association to any other place outside the limits of the City of Columbus, State of Ohio, but not more than thirty miles beyond such limits, with the affirmative vote of shareholders owning two-thirds of the stock of the Association, subject to receipt of a certificate of approval from the Comptroller of the Currency. The Board of Directors shall have the power to establish or change the location of any branch or branches of the Association to any other location permitted under applicable law without the approval of the shareholders, subject to approval by the Office of the Comptroller of the Currency. The Board of Directors shall have the power to establish or change the location of any nonbranch office or facility of the Association without the approval of the shareholders. EIGHTH. The corporate existence of this Association shall continue until termination according to the laws of the United States. NINTH. The Board of Directors of this Association, or any shareholders owning, in the aggregate, not less than 20 percent of the stock of this Association, may call a special meeting of shareholders at any time. Unless otherwise provided by the Bylaws or the laws of the United States, or waived by shareholders, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given by first-class mail, postage prepaid, mailed at least 10, and no more than 60, days prior to the date of the meeting to each shareholder of record at his/her address as shown upon the books of this Association. Unless otherwise provided by the Bylaws, any action requiring approval of shareholders must be effected at a duly called annual or special meeting. TENTH. The Association shall provide indemnification as set forth below: Every person who is or was a Director, officer or employee of the Association or of any other corporation which he served as a Director, officer or employee at the request of the Association as part of his regularly assigned duties may be indemnified by the Association in accordance with the provisions of this Article against all liability (including, without limitation, judgments, fines, penalties, and settlements) and all reasonable expenses (including, without limitation, attorneys' fees and investigative expenses) that may be incurred or paid by him in connection with any claim, action, suit or proceeding, whether civil, criminal or administrative (all referred to hereafter in this Article as "Claims") or in connection with any appeal relating thereto in which he may become involved as a party or otherwise or with which he may be threatened by reason of his being or having been a Director, officer or employee of the Association or such other corporation, or by reason of any action taken or omitted by him in his capacity as such Director, officer or employee, whether or not he continues to be such at the time such liability or expenses are incurred; provided that nothing contained in this Article shall be construed to permit indemnification of any such person who is adjudged guilty of, or liable for, willful misconduct, gross neglect of duty or criminal acts, unless, at the time such indemnification is sought, such indemnification in such instance is permissible under applicable law and regulations, including published rulings of the Comptroller of the Currency or other appropriate supervisory or regulatory authority; and provided further that there shall be no indemnification of Directors, officers, or employees against expenses, penalties, or other payments incurred in an administrative proceeding or action instituted by an appropriate regulatory agency which proceeding or action results in a final order assessing civil money penalties or requiring affirmative action by an individual or individuals in the form of payments to the Association. Every person who may be indemnified under the provisions of this Article and who has been wholly successful on the merits with respect to any Claim shall be entitled to indemnification as of right. Except as provided in the preceding sentence, any indemnification under this Article shall be at the sole discretion of the Board of Directors and shall be made only if the Board of Directors or the Executive Committee acting by a quorum consisting of Directors who are not parties to such Claim shall find or if independent legal counsel (who may be the regular counsel of the Association) selected by the Board of Directors or Executive Committee whether or not a disinterested quorum exists shall render their opinion that in view of all of the circumstances then surrounding the Claim, such indemnification is equitable and in the best interests of the Association. Among the circumstances to be taken into consideration in arriving at such a finding or opinion is the existence or non-existence of a contract of insurance or indemnity under which the Association would be wholly or partially reimbursed for such indemnification, but the existence or non-existence of such insurance is not the sole circumstance to be considered nor shall it be wholly determinative of whether such indemnification shall be made. In addition to such finding or opinion, no indemnification under this Article shall be made unless the Board of Directors or the Executive Committee acting by a quorum consisting of Directors who are not parties to such Claim shall find or if independent legal counsel (who may be the regular counsel of the Association) selected by the Board of Directors or Executive Committee whether or not a disinterested quorum exists shall render their opinion that the Directors, officer or employee acted in good faith in what he reasonably believed to be the best interests of the Association or such other corporation and further in the case of any criminal action or proceeding, that the Director, officer or employee reasonably believed his conduct to be lawful. Determination of any Claim by judgment adverse to a Director, officer or employee by settlement with or without Court approval or conviction upon a plea of guilty or of nolo contendere or its ---- ---------- equivalent shall not create a presumption that a Director, officer or employee failed to meet the standards of conduct set forth in this Article. Expenses incurred with respect to any Claim may be advanced by the Association prior to the final disposition thereof upon receipt of an undertaking satisfactory to the Association by or on behalf of the recipient to repay such amount unless it is ultimately determined that he is entitled to indemnification under this Article. The rights of indemnification provided in this Article shall be in addition to any rights to which any Director, officer or employee may otherwise be entitled by contract or as a matter of law. Every person who shall act as a Director, officer or employee of this Association shall be conclusively presumed to be doing so in reliance upon the right of indemnification provided for in this Article. ELEVENTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this Association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. The Association's Board of Directors may propose one or more amendments to the Articles of Association for submission to the shareholders. EXHIBIT 2 A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE BUSINESS CERTIFICATE I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that: 1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and control of all records pertaining to the chartering of all National Banking Associations. 2. "Bank One Trust Company, N.A.," Columbus, Ohio, (Charter No. 16235) is a National Banking Association formed under the laws of the United States and is authorized thereunder to transact the business of banking on the date of this Certificate. IN TESTIMONY WHEREOF, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the Treasury Department in the City of Washington and District of Columbia, this 19th day of April, 2000. By: /s/ John D. Hawke, Jr. ---------------------- John D. Hawke, Jr. Comptroller of the Currency EXHIBIT 3 A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST POWERS CERTIFICATE I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that: 1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and control of all records pertaining to the chartering of all National Banking Associations. 2. "Bank One Trust Company, N.A.," Columbus, Ohio, (Charter No. 16235) was granted, under the hand and seal of the Comptroller, the right to act in all fiduciary capacities authorized under the provisions of the Act of Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the authority so granted remains in full force and effect on the date of this Certificate. IN TESTIMONY WHEREOF, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the Treasury Department in the City of Washington and District of Columbia, this 19th day of April, 2000. By: /s/ John D. Hawke, Jr. ---------------------- John D. Hawke, Jr. Comptroller of the Currency EXHIBIT 4 A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE Bank One Trust Company, N.A. BY-LAWS ------- ARTICLE I MEETINGS OF SHAREHOLDERS ------------------------ SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the shareholders of - ----------------------------- the Bank for the election of Directors and for the transaction of such business as may properly come before the meeting shall be held at its main office, or other convenient place duly authorized by the Board of Directors, on the same day upon which any regular or special Board meeting is held from and including the first Monday of January to, and including, the fourth Monday of February of each year, or on the next succeeding banking day, if the day fixed falls on a legal holiday. If from any cause, an election of Directors is not made on the day fixed for the regular meeting of the shareholders or, in the event of a legal holiday, on the next succeeding banking day, the Board of Directors shall order the election to be held on some subsequent day, as soon thereafter as practicable, according to the provisions of law; and notice thereof shall be given in the manner herein provided for the annual meeting. Notice of such annual meeting shall be given by or under the direction of the Secretary, or such other officer as may be designated by the Chief Executive Officer, by first-class mail, postage prepaid, to all shareholders of record of the Bank at their respective addresses as shown upon the books of the Bank mailed not less than ten days prior to the date fixed for such meeting. SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of the - ------------------------------- Bank may be called at any time by the Board of Directors or by any three or more shareholders owning, in the aggregate, not less than ten percent of the stock of the Bank. Notice of any special meeting of the shareholders called by the Board of Directors, stating the time, place and purpose of the meeting, shall be given by or under the direction of the Secretary, or such other officer as is designated by the Chief Executive Officer, by first-class mail, postage prepaid, to all shareholders of record of the Bank at their respective addresses as shown upon the books of the Bank mailed not less than ten days prior to the date fixed for such meeting. Any special meeting of shareholders shall be conducted and its proceedings recorded in the manner prescribed in these By-Laws for annual meetings of shareholders. SECTION 1.03. SECRETARY OF MEETING OF SHAREHOLDERS. The Board of Directors may - --------------------------------------------------- designate a person to be the secretary of the meeting of shareholders. In the absence of a presiding officer, as designated by these By-Laws, the Board of Directors may designate a person to act as the presiding officer. In the event the Board of Directors fails to designate a person to preside at a meeting of shareholders and a secretary of such meeting, the shareholders present or represented shall elect a person to preside and a person to serve as secretary of the meeting. The secretary of the meeting of shareholders shall cause the returns made by the judges of election and other proceedings to be recorded in the minute books of the Bank. The presiding officer shall notify the Directors-elect of their election and to meet forthwith for the organization of the new Board of Directors. The minutes of the meeting shall be signed by the presiding officer and the secretary designated for the meeting. SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many as - --------------------------------- three shareholders to be judges of the election, who shall hold and conduct the same, and who shall, after the election has been held, notify, in writing over their signatures, the secretary of the meeting of shareholders of the result thereof and the names of the Directors elected; provided, however, that upon failure for any reason of any judge or judges of election, so appointed by the Directors, to serve, the presiding officer of the meeting shall appoint other shareholders or their proxies to fill the vacancies. The judges of election, at the request of the chairman of the meeting, shall act as tellers of any other vote by ballot taken at such meeting, and shall notify, in writing over their signature, the secretary of the Board of Directors of the result thereof. SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of - ---------------------- record, who is qualified to vote under the provisions of Federal Law, shall have the right to vote the number of shares of record in such shareholder's name for as many persons as there are Directors to be elected, or to cumulate such shares as provided by Federal Law. In deciding all other questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock of record in such shareholder's name. Shareholders may vote by proxy duly authorized in writing. All proxies used at the annual meeting shall be secured for that meeting only, or any adjournment thereof, and shall be dated, if not dated by the shareholder, as of the date of the receipt thereof. No officer or employee of this Bank may act as proxy. SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the - --------------------- capital stock of the Bank, eligible to be voted, present either in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of shareholders, but shareholders present at any meeting and constituting less than a quorum may, without further notice, adjourn the meeting from time to time until a quorum is obtained. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association. ARTICLE II DIRECTORS --------- SECTION 2.01. QUALIFICATIONS. Each Director shall have the qualifications - ----------------------------- prescribed by law. No person elected as a Director may exercise any of the powers of office until such Director has taken the oath of such office. SECTION 2.02. VACANCIES. Directors of the Bank shall hold office for one year or - ------------------------ until their successors are elected and qualified. Any vacancy in the Board shall be filled by appointment of the remaining Directors, and any Director so appointed shall hold office until the next election. SECTION 2.03. ORGANIZATION MEETING. The Directors elected by the shareholders - ----------------------------------- shall meet for organization of the new Board of Directors at the time and place fixed by the presiding officer of the annual meeting. If at the time fixed for such meeting there is no quorum present, the Directors in attendance may adjourn from time to time until a quorum is obtained. A majority of the number of Directors elected by the shareholders shall constitute a quorum for the transaction of business. SECTION 2.04. REGULAR MEETINGS. The regular meetings of the Board of Directors - ------------------------------- shall be held at such date, time and place as the Board may previously designate, or should the Board fail to so designate, at such date, time and place as the Chairman of the Board, Chief Executive Officer, or President may fix. Whenever a quorum is not present, the Directors in attendance shall adjourn the meeting to a time not later than the date fixed by the By-Laws for the next succeeding regular meeting of the Board. Members of the Board of Directors may participate in such meetings through use of conference telephone or similar communications equipment, so long as all members participating in such meetings can hear one another. SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board of Directors shall - ------------------------------- be held at the call of the Chairman of the Board, Chief Executive Officer, or President, or at the request of two or more Directors. Any special meeting may be held at such place and at such time as may be fixed in the call. Written or oral notice shall be given to each Director not later than the day next preceding the day on which the special meeting is to be held, which notice may be waived in writing. The presence of a Director at any meeting of the Board of Directors shall be deemed a waiver of notice thereof by such Director. Whenever a quorum is not present, the Directors in attendance shall adjourn the special meeting from day to day until a quorum is obtained. Members of the Board of Directors may participate in such meetings through use of conference telephone or similar communications equipment, so long as all members participating in such meetings can hear one another. SECTION 2.06. QUORUM. A majority of the Directors shall constitute a quorum at - --------------------- any meeting, except when otherwise provided by law; but a lesser number may adjourn any meeting, from time-to-time, and the meeting may be held, as adjourned, without further notice. When, however, less than a quorum as herein defined, but at least one-third and not less than two of the authorized number of Directors are present at a meeting of the Directors, business of the Bank may be transacted and matters before the Board approved or disapproved by the unanimous vote of the Directors present. SECTION 2.07. COMPENSATION. Each member of the Board of Directors shall receive - --------------------------- such fees for attendance at Board and Board committee meetings and such fees for service as a Director, irrespective of meeting attendance, as from time to time are fixed by resolution of the Board; provided, however, that payment hereunder shall not be made to a Director for meetings attended and/or Board service which are not for the Bank's sole benefit and which are concurrent and duplicative with meetings attended or Board service for an affiliate of the Bank for which the Director receives payment; and provided further that fees hereunder shall not be paid in the case of any Director in the regular employment of the Bank or of one of its affiliates. Each member of the Board of Directors, whether or not such Director is in the regular employment of the Bank or of one of its affiliates, shall be reimbursed for travel expenses incident to attendance at Board and Board committee meetings. SECTION 2.08. EXECUTIVE COMMITTEE. There may be a standing committee of the - ---------------------------------- Board of Directors known as the Executive Committee which shall possess and exercise, when the Board is not in session, all the powers of the Board that may lawfully be delegated. The Executive Committee shall consist of at least three Board members, one of whom shall be the Chairman of the Board, Chief Executive Officer or the President. The other members of the Executive Committee shall be appointed by the Chairman of the Board, the Chief Executive Officer, or the President, with the approval of the Board, and who shall continue as members of the Executive Committee until their successors are appointed, provided, however, that any member of the Executive Committee may be removed by the Board upon a majority vote thereof at any regular or special meeting of the Board. The Chairman, Chief Executive Officer, or President shall fill any vacancy in the Executive Committee by the appointment of another Director, subject to the approval of the Board of Directors. The Executive Committee shall meet at the call of the Chairman, Chief Executive Officer, or President or any two members thereof at such time or times and place as may be designated. In the event of the absence of any member or members of the Executive Committee, the presiding member may appoint a member or members of the Board to fill the place or places of such absent member or members to serve during such absence. Two members of the Executive Committee shall constitute a quorum. When neither the Chairman of the Board, the Chief Executive Officer, nor President are present, the Executive Committee shall appoint a presiding officer. The Executive Committee shall report its proceedings and the action taken by it to the Board of Directors. SECTION 2.09. OTHER COMMITTEES. The Board of Directors may appoint such special - ------------------------------- committees from time to time as are in its judgment necessary in the interest of the Bank. ARTICLE III OFFICERS, MANAGEMENT STAFF AND EMPLOYEES ---------------------------------------- SECTION 3.01. OFFICERS AND MANAGEMENT STAFF. - --------------------------------------------- (a) The executive officers of the Bank shall include a Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary, Security Officer, and may include one or more Senior Managing Directors or Managing Directors. The Chairman of the Board, Chief Executive Officer, President, any Senior Managing Director, any Managing Director, Chief Financial Officer, Secretary, and Security Officer shall be elected by the Board. The Chairman of the Board, Chief Executive Officer, and the President shall be elected by the Board from their own number. Such officers as the Board shall elect from their own number shall hold office from the date of their election as officers until the organization meeting of the Board of Directors following the next annual meeting of shareholders, provided, however, that such officers may be relieved of their duties at any time by action of the Board of Directors, in which event all the powers incident to their office shall immediately terminate. The Chairman of the Board, Chief Executive Officer, or the President shall preside at all meetings of shareholders and meetings of the Board of Directors. (b) The management staff of the Bank shall include officers elected by the Board, officers appointed by the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, the Chief Financial Officer, and such other persons in the employment of the Bank who, pursuant to authorization by a duly authorized officer of the Bank, perform management functions and have management responsibilities. Any two or more offices may be held by the same person except that no person shall hold the office of Chairman of the Board, Chief Executive Officer and/or President and at the same time also hold the office of Secretary. (c) Except as provided in the case of the elected officers who are members of the Board, all officers and employees, whether elected or appointed, shall hold office at the pleasure of the Board. Except as otherwise limited by law or these By-Laws, the Board assigns to the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, the Chief Financial Officer, and/or each of their respective designees the authority to control all personnel, including elected and appointed officers and employees of the Bank, to employ or direct the employment of such officers and employees as he or she may deem necessary, including the fixing of salaries and the dismissal of such officers and employees at pleasure, and to define and prescribe the duties and responsibilities of all officers and employees of the Bank, subject to such further limitations and directions as he or she may from time to time deem appropriate. (d) The Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, the Chief Financial Officer, and any other officer of the Bank, to the extent that such officer is authorized in writing by the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, or the Chief Financial Officer may appoint persons other than officers who are in employment of the Bank to serve in management positions and in connection therewith, the appointing officer may assign such title, salary, responsibilities and functions as are deemed appropriate, provided, however, that nothing contained herein shall be construed as placing any limitation on the authority of the Chairman of the Board, the Chief Executive Officer, the President, any Senior Managing Director, any Managing Director, or the Chief Financial Officer as provided in this and other sections of these By-Laws. (e) The Senior Managing Directors and the Managing Directors of the Bank shall have general and active authority over the management of the business of the Bank, shall see that all orders and resolutions of the Board of Directors are carried into effect, and shall do or cause to be done all things necessary or proper to carry on the business of the Bank in accordance with provisions of applicable law and regulations. Each Senior Managing Director and Managing Director shall perform all duties incident to his or her office and such other and further duties, as may from time to time be required by the Chief Executive Officer, the President, the Board of Directors, or the shareholders. The specification of authority in these By-Laws wherever and to whomever granted shall not be construed to limit in any manner the general powers of delegation granted to a Senior Managing Director or a Managing Director in conducting the business of the Bank. In the absence of a Senior Managing Director or a Managing Director, such officer as is designated by the Senior Managing Director or the Managing Director shall be vested with all the powers and perform all the duties of the Senior Managing Director or the Managing Director as defined by these By-Laws. (f) Each Managing Director who is assigned oversight of one or more trust service offices shall appoint a management committee known as the Investment Management and Trust Committee consisting of the Managing Director of the trust service offices and at least three other members who shall be capable and experienced officers of the Bank appointed from time to time by the Managing Director and who shall continue as members of the Investment Management and Trust Committee until their successors are appointed, provided, however, that any member of the Investment Management and Trust Committee may be removed by the Managing Director as provided in this and other sections of these By-Laws. The Managing Director shall fill any vacancy in the Investment Management and Trust Committee by the appointment of another capable and experienced officer of the Bank. Each Investment Management and Trust Committee shall meet at such date, time and place as the Managing Director shall fix. In the event of the absence of any member or members of the Investment Management and Trust Committee, the Managing Director may, in his or her discretion, appoint another officer of the Bank to fill the place or places of such absent member or members to serve during such absence. A majority of each Investment Management and Trust Committee shall constitute a quorum. Each Investment Management and Trust Committee shall carry out the policies of the Bank, as adopted by the Board of Directors, which shall be formulated and executed in accordance with State and Federal Law, Regulations of the Comptroller of the Currency, and sound fiduciary principles. In carrying out the policies of the Bank, each Investment Management and Trust Committee is hereby authorized to establish management teams whose duties and responsibilities shall be specifically set forth in the policies of the Bank. Each such management team shall report such proceedings and the actions taken thereby to the Investment Management and Trust Committee. Each Managing Director shall then report such proceedings and the actions taken thereby to the Board of Directors. SECTION 3.02. POWERS AND DUTIES OF MANAGEMENT STAFF. Pursuant to the fiduciary - ---------------------------------------------------- powers granted to this Bank under the provisions of Federal Law and Regulations of the Comptroller of the Currency, the Chairman of the Board, the Chief Executive Officer, the President, the Senior Managing Directors, the Managing Directors, the Chief Financial Officer, and those officers so designated and authorized by the Chairman of the Board, the Chief Executive Officer, the President, the Senior Managing Directors, the Managing Directors, or the Chief Financial Officer are authorized for and on behalf of the Bank, and to the extent permitted by law, to make loans and discounts; to purchase or acquire drafts, notes, stocks, bonds, and other securities for investment of funds held by the Bank; to execute and purchase acceptances; to appoint, empower and direct all necessary agents and attorneys; to sign and give any notice required to be given; to demand payment and/or to declare due for any default any debt or obligation due or payable to the Bank upon demand or authorized to be declared due; to foreclose any mortgages; to exercise any option, privilege or election to forfeit, terminate, extend or renew any lease; to authorize and direct any proceedings for the collection of any money or for the enforcement of any right or obligation; to adjust, settle and compromise all claims of every kind and description in favor of or against the Bank, and to give receipts, releases and discharges therefor; to borrow money and in connection therewith to make, execute and deliver notes, bonds or other evidences of indebtedness; to pledge or hypothecate any securities or any stocks, bonds, notes or any property real or personal held or owned by the Bank, or to rediscount any notes or other obligations held or owned by the Bank, whenever in his or her judgment it is reasonably necessary for the operation of the Bank; and in furtherance of and in addition to the powers hereinabove set forth to do all such acts and to take all such proceedings as in his or her judgment are necessary and incidental to the operation of the Bank. SECTION 3.03. SECRETARY. The Secretary or such other officers as may be - ------------------------ designated by the Chief Executive Officer shall have supervision and control of the records of the Bank and, subject to the direction of the Chief Executive Officer, shall undertake other duties and functions usually performed by a corporate secretary. Other officers may be designated by the Secretary as Assistant Secretary to perform the duties of the Secretary. SECTION 3.04. EXECUTION OF DOCUMENTS. Any member of the Bank's management staff - ------------------------------------- or any employee of the Bank designated as an officer on the Bank's payroll system is hereby authorized for and on behalf of the Bank to sell, assign, lease, mortgage, transfer, deliver and convey any real or personal property, including shares of stock, bonds, notes, certificates of indebtedness (including the assignment and redemption of registered United States obligations) and all other forms of intangible property now or hereafter owned by or standing in the name of the Bank, or its nominee, or held by the Bank as collateral security, or standing in the name of the Bank, or its nominee, in any fiduciary capacity or in the name of any principal for whom this Bank may now or hereafter be acting under a power of attorney or as agent, and to execute and deliver such partial releases from any discharges or assignments of mortgages and assignments or surrender of insurance policies, deeds, contracts, assignments or other papers or documents as may be appropriate in the circumstances now or hereafter held by the Bank in its own name, in a fiduciary capacity, or owned by any principal for whom this Bank may now or hereafter be acting under a power of attorney or as agent; provided, however, that, when necessary, the signature of any such person shall be attested or witnessed in each case by another officer of the Bank. Any member of the Bank's management staff or any employee of the Bank designated as an officer on the Bank's payroll system is hereby authorized for and on behalf of the Bank to execute any indemnity and fidelity bonds, trust agreements, proxies or other papers or documents of like or different character necessary, desirable or incidental to the appointment of the Bank in any fiduciary capacity, the conduct of its business in any fiduciary capacity, or the conduct of its other banking business; to sign and issue checks, drafts, orders for the payment of money and certificates of deposit; to sign and endorse bills of exchange, to sign and countersign foreign and domestic letters of credit, to receive and receipt for payments of principal, interest, dividends, rents, fees and payments of every kind and description paid to the Bank, to sign receipts for money or other property acquired by or entrusted to the Bank, to guarantee the genuineness of signatures on assignments of stocks, bonds or other securities, to sign certifications of checks, to endorse and deliver checks, drafts, warrants, bills, notes, certificates of deposit and acceptances in all business transactions of the Bank; also to foreclose any mortgage, to execute and deliver receipts for any money or property; also to sign stock certificates for and on behalf of this Bank as transfer agent or registrar, and to authenticate bonds, debentures, land or lease trust certificates or other forms of security issued pursuant to any indenture under which this Bank now or hereafter is acting as trustee or in any other fiduciary capacity; to execute and deliver various forms of documents or agreements necessary to effectuate certain investment strategies for various fiduciary or custody customers of the Bank, including, without limitation, exchange funds, options, both listed and over-the-counter, commodities trading, futures trading, hedge funds, limited partnerships, venture capital funds, swap or collar transactions and other similar investment vehicles for which the Bank now or in the future may deem appropriate for investment of fiduciary customers or in which non-fiduciary customers may direct investment by the Bank. Without limitation on the foregoing, the Chief Executive Officer, Chairman of the Board, or President of the Bank shall have the authority from time to time to appoint officers of the Bank as Vice President for the sole purpose of executing releases or other documents incidental to the conduct of the Bank's business in any fiduciary capacity where required by state law or the governing document. In addition, other persons in the employment of the Bank or its affiliates may be authorized by the Chief Executive Officer, Chairman of the Board, President, Senior Managing Directors, Managing Directors, or Chief Financial Officer to perform acts and to execute the documents described in the paragraph above, subject, however, to such limitations and conditions as are contained in the authorization given to such person. SECTION 3.05. PERFORMANCE BOND. All officers and employees of the Bank shall be - ------------------------------ bonded for the honest and faithful performance of their duties for such amount as may be prescribed by the Board of Directors. ARTICLE IV STOCKS AND STOCK CERTIFICATES ----------------------------- SECTION 4.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be - -------------------------------- evidenced by certificates which shall bear the signature of the Chairman of the Board, the Chief Executive Officer, or the President (which signature may be engraved, printed or impressed), and shall be signed manually by the Secretary, or any other officer appointed by the Chief Executive Officer for that purpose. In case any such officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Bank with the same effect as if such officer had not ceased to be such at the time of its issue. Each such certificate shall bear the corporate seal of the Bank, shall recite on its face that stock represented thereby is transferable only upon the books of the Bank when properly endorsed and shall recite such other information as is required by law and deemed appropriate by the Board. The corporate seal may be facsimile engraved or printed. SECTION 4.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall be - -------------------------------------- transferable only upon the stock transfer books of the Bank and, except as hereinafter provided, no transfer shall be made or new certificates issued except upon the surrender for cancellation of the certificate or certificates previously issued therefor. In the case of the loss, theft, or destruction of any certificate, a new certificate may be issued in place of such certificate upon the furnishing of an affidavit setting forth the circumstances of such loss, theft, or destruction and indemnity satisfactory to the Chairman of the Board, the Chief Executive Officer, or the President. The Board of Directors or the Chairman of the Board, Chief Executive Officer, or the President may authorize the issuance of a new certificate therefor without the furnishing of indemnity. Stock transfer books, in which all transfers of stock shall be recorded, shall be provided. The stock transfer books may be closed for a reasonable period and under such conditions as the Board of Directors may at any time determine, for any meeting of shareholders, the payment of dividends or any other lawful purpose. In lieu of closing the transfer books, the Board of Directors may, in its discretion, fix a record date and hour constituting a reasonable period prior to the day designated for the holding of any meeting of the shareholders or the day appointed for the payment of any dividend, or for any other purpose at the time as of which shareholders entitled to notice of and to vote at any such meeting or to receive such dividend or to be treated as shareholders for such other purpose shall be determined, and only shareholders of record at such time shall be entitled to notice of or to vote at such meeting or to receive such dividends or to be treated as shareholders for such other purpose. ARTICLE V MISCELLANEOUS PROVISIONS ------------------------ SECTION 5.01. SEAL. The seal of the Bank shall be circular in form with "SEAL" - ------------------ in the center, and the name "Bank One Trust Company, N.A." located clockwise around the upper half of the seal. SECTION 5.02. MINUTE BOOK. The organization papers of this Bank, the Articles of - -------------------------- Association, the returns of judges of elections, the By-Laws and any amendments thereto, the proceedings of all regular and special meetings of the shareholders and of the Board of Directors, and reports of the committees of the Board of Directors shall be recorded in the minute books of the Bank. The minutes of each such meeting shall be signed by the presiding officer and attested by the secretary of the meeting. SECTION 5.03. CORPORATE POWERS. The corporate existence of the Bank shall - ------------------------------ continue until terminated in accordance with the laws of the United States. The purpose of the Bank shall be to carry on the general business of a commercial bank trust department and to engage in such activities as are necessary, incident, or related to such business. The Articles of Association of the Bank shall not be amended, or any other provision added elsewhere in the Articles expanding the powers of the Bank, without the prior approval of the Comptroller of the Currency. SECTION 5.04. AMENDMENT OF BY-LAWS. The By-Laws may be amended, altered or - ---------------------------------- repealed, at any regular or special meeting of the Board of Directors, by a vote of a majority of the Directors. As amended April 24, 1991 Section 3.01 (Officers and Management Staff) Section 3.02 (Chief Executive Officer) Section 3.03 (Powers and Duties of Officers and Management Staff) Section 3.05 (Execution of Documents) As amended January 27, 1995 Section 2.04 (Regular Meetings) Section 2.05 (Special Meetings) Section 3.01(f) (Officers and Management Staff) Section 3.03(e) (Powers and Duties of Officers and Management Staff) Section 5.01 (Seal) Amended and restated in its entirety effective May 1, 1996 As amended August 1, 1996 Section 2.09 (Trust Examining Committee) Section 2.10 (Other Committees) As amended October 16, 1997 Section 3.01 (Officers and Management Staff) Section 3.02 (Powers and Duties of Officers and Management Staff) Section 3.04 (Execution of Documents) As amended January 1, 1998 Section 1.01 (Annual Meeting) EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT February ___, 2002 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of an indenture between Steelcase Inc. and Bank One Trust Company, N.A., as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, Bank One Trust Company, N.A. By: /s/ Christopher Holly --------------------------------- Christopher Holly Assistant Vice President EXHIBIT 7 Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/01 State #: 391581 FFIEC041 Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-1 City, State Zip Columbus, OH 43271 Transit #: 04400003
Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for December 31, 2001 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. Schedule RC--Balance Sheet
Dollar Amounts in thousands --------------------------- RCON c300 ---- ---- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest bearing balances and currency and coin(1) ............... 0081 285,199 1.a b. Interest-bearing balances(2) ........................................ 0071 0 1.b 2. Securities a. Held-to-maturity securities (from Schedule RC-B, column A) .......... 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D) ........ 1773 336 2.b 3. Federal funds sold and securities purchased under agreements to resell .. 1350 1,466,628 3. 4. Loans and lease financing receivables (from Schedule RC-C): a. Loans and leases held for sale ...................................... 5369 0 4.a b. Loans and leases, net of unearned income ............................ B528 195,551 4.b c. LESS: Allowance for loan and lease losses .......................... 3123 292 4.c d. Loans and leases, net of unearned income and allowance (item 4.b minus 4.c) ................................................ B529 195,259 4.d 5. Trading assets (from Schedule RC-D) ...................................... 3545 0 5. 6. Premises and fixed assets (including capitalized leases) ................. 2145 13,065 6. 7. Other real estate owned (from Schedule RC-M) ............................. 2150 0 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) ........................................... 2130 0 8. 9. Customers' liability to this bank on acceptances outstanding ............. 2155 0 9. 10. Intangible assets a. Goodwill ............................................................ 3163 0 10.a b. Other intangible assets (from Schedule RC-M) ........................ 0426 9,224 10.b 11. Other assets (from Schedule RC-F) ........................................ 2160 250,027 11. 12. Total assets (sum of items 1 through 11) ................................ 2170 2,219,738 12.
(1) Includes cash items in process of collection and unposted debts. (2) Includes time certificates of deposit not held for trading. Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/01 State #: 391581 FFIEC041 Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-2 City, State Zip Columbus, OH 43271 Transit #: 04400003
Schedule RC--Balance Sheet
Dollar Amounts in thousands --------------------------- RCON ---- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E) 2200 1,957,028 13.a (1) Noninterest-bearing budget(1) ................................ 6631 1,378,041 13.a1 (2) Interest-bearing ............................................. 6636 587,987 13.a2 b. Not applicable 14. Federal funds purchased and securities sold under agreements to repurchase .......................................................... RCFD 2800 0 14. 15. Trading liabilities (from Schedule RC-D) ............................... RCFD 3548 0 15. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) (from Schedule RC-M) ............. 3190 0 16. 17. Not applicable 18. Bank's liability on acceptances executed and outstanding ............... 2920 0 18. 19. Subordinated notes and debentures (2) .................................. 3200 0 19. 20. Other liabilities (from Schedule RC-G) ................................. 2930 72,264 20. 21. Total liabilities (sum of items 13 through 20) ......................... 2948 2,029,292 21. 22. Minority interest in consolidated subsidiaries ......................... 3000 0 22. EQUITY CAPITAL 23. Perpetual preferred stock and related surplus .......................... 3838 0 23. 24. Common stock ........................................................... 3230 800 24. 25. Surplus (exclude all surplus related to preferred stock) ............... 3839 45,157 25. 26. a. Retained earnings ................................................... 3632 144,485 26.a b. Accumulated other comprehensive income (3) .......................... B530 4 26.b 27. Other equity capital components (4) .................................... A130 0 27. 28. Total equity capital (sum of items 23 through 27)) ..................... 3210 190,446 28. 29. Total liabilities, minority interest, and equity capital (sum of items 21, 22 and 28) ........................................... 3300 2,219,738 29.
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external auditors --------------------- as of any date during 1996 ............................................. RCFD 6724 N/A Number M.1. ---------------------
1= Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2= Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3= Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4= Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5= Review of the bank's financial statements by external auditors 6= Compilation of the bank's financial statements by external auditors 7= Other audit procedures (excluding tax preparation work) 8= No external audit work (1) Includes total demand deposits and noninterest-bearing time and savings deposits. (2) Includes limited-life preferred stock and related surplus. (3) Includes net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, and minimum pension liability adjustments. (4) Includes treasury stock and unearned Employee Stock Ownership Plan shares. EX-99.1 30 dex991.txt FORM OF LETTER OF TRANSMITTAL EXHIBIT 99.1 LETTER OF TRANSMITTAL STEELCASE INC. offer for all outstanding 6.375% Senior Notes Due 2006 in exchange for 6.375% Senior Notes Due 2006 pursuant to the Prospectus dated , 2002 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. The Exchange Agent for the Exchange Offer Is: Bank One Trust Company, N.A. By Mail or Overnight Delivery: By Hand: Bank One Trust Company, N.A. Bank One, N.A. Corporate Trust Operations 55 Water Street, 1st Floor 111 Polaris Parkway New York, New York 10041 Suite N1-OH1-0184 Columbus--Ohio 43240 Attention: Ms. Lora Marsch Facsimile Transmissions: (614) 248-9987 Confirm by Telephone: (800) 346-5153 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned acknowledges that he or she has received and reviewed a prospectus dated , 2002 (the "Prospectus") of Steelcase Inc. (the "Company") and this letter of transmittal (the "Letter of Transmittal"), which together constitute the Company's offer (the "Exchange Offer") to exchange an aggregate principal amount of up to $250,000,000 of the Company's 6.375% Senior Notes Due 2006 (the "New Notes"), for a like principal amount of the Company's issued and outstanding 6.375% Senior Notes Due 2006 (the "Old Notes"). Capitalized terms used but not defined herein shall have the same meaning given to them in the Prospectus. This Letter of Transmittal is to be completed by a holder of Old Notes either if (a) certificates for such Old Notes are to be forwarded herewith or (b) a tender of Old Notes is to be made by book-entry transfer to the account of the exchange agent for the exchange offer (the "Exchange Agent") at DTC, pursuant to the procedures for tender by book-entry transfer set forth under "The Exchange Offer--Procedures for Tendering Old Notes--Book-Entry Transfers" in the Prospectus. Certificates or book-entry confirmation of the transfer of Old Notes into the Exchange Agent's account at DTC, as well as this Letter of Transmittal (or facsimile hereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter of Transmittal. The term "book-entry confirmation" means a confirmation of a book-entry transfer of Old Notes into the Exchange Agent's account at DTC. The term "Agent's Message" means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry transfer, which states that DTC has received an express acknowledgment that the tendering holder agrees to be bound by the Letter of Transmittal and that the Company may enforce the Letter of Transmittal against such holder. If Old Notes are tendered pursuant to book-entry procedures, the Exchange Agent must receive no later than 5:00 p.m., New York City time, on the Expiration Date, book-entry confirmation of the Old Notes being tendered into the Exchange Agent's account at DTC, along with a completed Letter of Transmittal or an Agent's Message. By crediting the Old Notes to the Exchange Agent's account at DTC and by complying with the applicable procedures of DTC's Automated Tender Offer Program ("ATOP") with respect to the tender of the Old Notes, including transmission of an Agent's Message, the holder of Old Notes acknowledges and agrees to be bound by the terms of this Letter of Transmittal, and the participant in DTC confirms on behalf of itself and the beneficial owners of such Old Notes all provisions of this Letter of Transmittal as being applicable to it and such beneficial owners as fully as if such participant and each such beneficial owner had provided the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. Holders of Old Notes whose certificates for such Old Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis may tender their Old Notes according to the guaranteed delivery procedures described in "The Exchange Offer--Procedures for Tendering Old Notes--Guaranteed Delivery Procedures" in the Prospectus. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The undersigned has completed the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. List below the Old Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and principal amount of Old Notes should be listed on a separate, signed schedule affixed hereto. 2
DESCRIPTION OF OLD NOTES - ----------------------------------------------------------------------------------------------------------------- Name(s) and Address(es) of Registered Certificate Aggregate Principal Holder(s) (Please fill in, if blank) Number(s)* Principal Amount Amount of Old Tendered** Notes - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- Total: - -------------------------------------------------------------------------------------------------------------- *Need not be completed if Old Notes are being tendered by book-entry transfer. **Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old Notes represented by the Old Notes indicated in column 2. See Instruction 4. Old Notes tendered hereby must be in denominations of $1,000 or any integral multiple thereof.
[_]CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK ENTRY TRANSFER TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution_____________________________________________________________________________________ DTC Account Number________________________________________________________________________________________________ Transaction Code Number __________________________________________________________________________________________ [_]CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH. [_]CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 1): Name(s) of Registered Holder(s)___________________________________________________________________________________ Window Ticket Number (if any)_____________________________________________________________________________________ Date of Execution of Notice of Guaranteed Delivery________________________________________________________________ Name of Eligible Institution which Guaranteed Delivery____________________________________________________________ If Guaranteed Delivery is to be Made by Book-Entry Transfer: Name of Tendering Institution_____________________________________________________________________________________ DTC Account Number________________________________________________________________________________________________ Transaction Code Number___________________________________________________________________________________________ [_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.* Name:_____________________________________________________________________________________________________________ Address:__________________________________________________________________________________________________________ *You are entitled to as many copies as you reasonably believe necessary. If you require more than 10 copies, please indicate the total number required in the following space: _________________________________________________________________________________________________________________.
3 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to the Company the principal amount of Old Notes indicated above, upon the terms and subject to the conditions of the Exchange Offer. Subject to and effective upon the acceptance for exchange of all or any portion of the Old Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby irrevocably sells, assigns and transfers to or upon the order of the Company all right, title and interest in and to such Old Notes. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent is also acting as agent of the Company in connection with the Exchange Offer and as trustee under the indenture governing the Old Notes and the New Notes) with respect to the tendered Old Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) subject only to the right of withdrawal described in the Prospectus, to (i) deliver certificates representing such Old Notes, together with all accompanying evidences of transfer and authenticity, to or upon the order of the Company upon receipt by the Exchange Agent, as the undersigned's agent, of the New Notes to be issued in exchange for such Old Notes, (ii) present certificates for such Old Notes for transfer and to transfer the Old Notes on the books of the Company and (iii) receive for the account of the Company all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms and conditions of the Exchange Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Old Notes tendered hereby and that, when the same are accepted for exchange, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and that the Old Notes tendered hereby are not subject to any adverse claims, rights or proxies. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company or the Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of the Old Notes tendered hereby. The undersigned has read and agrees to all of the terms and conditions of the Exchange Offer. The name(s) and address(es) of the registered holder(s) of the Old Notes tendered hereby should be printed above, if they are not already set forth above, as they appear on the certificates representing such Old Notes. The certificate number(s) and the Old Notes that the undersigned wishes to tender should be indicated in the appropriate boxes above. If any tendered Old Notes are not exchanged pursuant to the Exchange Offer for any reason, or if certificates are submitted for more Old Notes than are tendered or accepted for exchange, certificates for such nonexchanged or nontendered Old Notes will be returned (or, in the case of Old Notes tendered by book-entry transfer, such Old Notes will be credited to an account maintained at DTC), without expense to the tendering holder, promptly following the expiration or termination of the Exchange Offer. The undersigned understands that tenders of Old Notes pursuant to any one of the procedures described in "The Exchange Offer--Procedures for Tendering Old Notes" in the Prospectus and in the instructions attached hereto will, upon the Company's acceptance for exchange of such tendered Old Notes, constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer and that the tendering holder will be deemed to have waived the right to receive any payment in respect of interest or otherwise on such Old Notes accrued up to the date of issuance of the New Notes. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Old Notes tendered hereby. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, the undersigned hereby directs that the New Notes be issued in the name(s) of the undersigned or, in the case of a book-entry transfer of Old Notes, that such New Notes be credited to the account indicated above maintained at 4 DTC. If applicable, substitute certificates representing Old Notes not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Old Notes, will be credited to the account indicated above maintained at DTC. Similarly, unless otherwise indicated under "Special Delivery Instructions," the undersigned hereby directs that the New Notes be delivered to the undersigned at the address shown below the undersigned's signature. The undersigned recognizes that the Company has no obligation pursuant to "Special Delivery Instructions" to transfer any Old Notes from a registered holder thereof if the Company does not accept for exchange any of the principal amount of such Old Notes so tendered. By tendering Old Notes and executing this Letter of Transmittal, the undersigned (if not a Participating Broker Dealer (as defined below)) hereby represents and agrees that (i) the New Notes acquired in the Exchange Offer are being obtained in the ordinary course of business of the person receiving the New Notes, whether or not that person is the holder; (ii) neither the holder nor any other person receiving the New Notes has an arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the Old Notes or the New Notes; (iii) neither the holder nor any other person receiving the New Notes is an "affiliate," as defined under Rule 405 of the Securities Act, of the Company, or, if the holder or other person is an affiliate, that the holder or such other person, as the case may be, will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; and (iv) it is not acting on behalf of any person who could not truthfully make the foregoing representations. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of the New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities (any such broker-dealer, a "Participating Broker-Dealer"), and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes pursuant to the Exchange Offer; however, by so acknowledging and delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The Company has agreed that, to the extent that any Participating Broker-Dealer participates in the Exchange Offer, the Company shall use its reasonable best efforts to maintain the effectiveness of the registration statement that the Prospectus forms a part of (the "Exchange Offer Registration Statement") for a period of 180 days following the closing of the Exchange Offer or such shorter period which will terminate when the Participating Broker-Dealers have completed all resales subject to applicable prospectus delivery requirements (such period, as the same may be extended as provided in the Registration Rights Agreement, is referred to herein as the "Applicable Period"). The Company has also agreed that, subject to the provisions of the Registration Rights Agreement, the Prospectus, as amended or supplemented, will be made available to Participating Broker-Dealers for use in connection with resales of New Notes received in exchange for Old Notes during the Applicable Period. The Company has agreed to notify promptly any Participating Broker-Dealer that has provided in writing to the Company a telephone or facsimile number and address for notices (which notice shall be accompanied by an instruction to suspend the use of the Prospectus until further notified) (i) of any request by the SEC or any state securities authority for post-effective amendments and supplements to the Exchange Offer Registration Statement and Prospectus or for additional information after the Exchange Offer Registration Statement has become effective, (ii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of the Exchange Offer Registration Statement or the initiation of any proceedings for that purpose, (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the New Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (iv) of the happening of any event or the discovery of any facts during the Applicable Period which (A) results in the Company in good faith and for valid business reasons, including, but not limited to, the acquisition or divestiture of assets or a material corporate transaction or event, deciding that use of the Prospectus should be suspended or (B) makes any statement made in the Exchange Offer Registration Statement or the Prospectus untrue in any material respect or which requires the making of any changes in the Exchange Offer Registration Statement or the Prospectus in order to make the statements therein not misleading or (vii) of any determination by the Company that a post-effective amendment to the Exchange Offer 5 Registration Statement would be appropriate. Each Participating Broker-Dealer tendering Old Notes and executing this Letter of Transmittal agrees, upon receipt of any notice described in (i) through (vii) above, to suspend use of the Prospectus until the Company has amended or supplemented the Prospectus or until the Company has advised the Participating Broker-Dealer that the use of the Prospectus may be resumed. If the Company gives such notice to suspend the sale of the New Notes, the Company shall extend the Applicable Period by the number of days during which the use of the Prospectus was suspended. The Company may suspend the use of the Prospectus for up to 4 periods of up to 45 consecutive days (except for the consecutive 45-day period immediately prior to maturity of the Securities), but no more than an aggregate of 90 days during any 365-day period. As a result, a Participating Broker-Dealer that intends to use the Prospectus in connection with resales of New Notes received in exchange for Old Notes pursuant to the Exchange Offer must notify the Company, or cause the Company to be notified, on or prior to the Expiration Date, that it is a Participating Broker-Dealer. Such notice may be given in the space provided above or may be delivered to the Exchange Agent at the address set forth in the Prospectus under "The Exchange Offer--Exchange Agent." All authority conferred or agreed to be conferred herein and every obligation of the undersigned under this Letter of Transmittal shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned. Except as stated in the Prospectus, this tender is irrevocable. The undersigned, by completing the box entitled "Description of Old Notes" above and signing this Letter of Transmittal, will be deemed to have tendered the Old Notes as set forth in such box. TO BE COMPLETED BY ALL TENDERING HOLDERS (See Instructions 2 and 6) PLEASE SIGN HERE (Please Complete Substitute Form W-9 on Page 14 or a Form W-8; See Instruction 10) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Signature(s) of Holders Date: _______________________________________________________________________ (Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) for the Old Notes tendered or on a security position listing or by person(s) authorized to become the registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 6.) Name(s): ____________________________________________________________________ - -------------------------------------------------------------------------------- (Please Print) Capacity (full title): ______________________________________________________ Address: ____________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Area Code and Telephone No.: ________________________________________________ Taxpayer Identification Number: _____________________________________________ 6 GUARANTEE OF SIGNATURE(S) (See Instruction 2) Authorized Signature: _______________________________________________________ Name: _______________________________________________________________________ - -------------------------------------------------------------------------------- (Please Type or Print) Title: ______________________________________________________________________ Name of Firm: _______________________________________________________________ Address: ____________________________________________________________________ - -------------------------------------------------------------------------------- (Include Zip Code) Area Code and Telephone No.: ________________________________________________ Date: _______________________________________________________________________ 7 SPECIAL ISSUANCE INSTRUCTIONS (Signature Guarantee Required-- See Instructions 2, 7 and 14) TO BE COMPLETED ONLY if New Notes or Old Notes not tendered or not accepted are to be issued in the name of someone other than the registered holder(s) of the Old Notes whose signature(s) appear(s) above, or if Old Notes delivered by book-entry transfer and not accepted for exchange are to be returned for credit to an account maintained at DTC other than the account indicated above. Issue (check appropriate box(es)) [_]Old Notes to: [_]New Notes to: Name ________________________________________________________________________ (Please Print) Address ____________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Include Zip Code) - -------------------------------------------------------------------------------- Taxpayer Identification Number [_]Credit unaccepted Old Notes tendered by book-entry transfer to the following account at DTC: - -------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (Signature Guarantee Required-- See Instructions 2, 7 and 14) TO BE COMPLETED ONLY if New Notes or Old Notes not tendered or not accepted are to be sent to someone other than the registered holder(s) of the Old Notes whose signature(s) appear(s) above, or to such registered holder at an address other than that shown above. Deliver (check appropriate box(es)) [_]Old Notes to: [_]New Notes to: Name ________________________________________________________________________ (Please Print) Address ____________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Include Zip Code) 8 INSTRUCTIONS Forming Part of the Terms and Conditions of the Exchange Offer 1. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery Procedures. This Letter of Transmittal is to be completed by a holder of Old Notes to tender such holder's Old Notes either if (a) certificates are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering Old Notes--Book-Entry Transfers" in the Prospectus and an Agent's Message, as defined on page 1 hereof, is not delivered. Certificates or book-entry confirmation of transfer of Old Notes into the Exchange Agent's account, as well as this Letter of Transmittal (or facsimile hereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date. If the tender of Old Notes is effected in accordance with applicable ATOP procedures for book-entry transfer, an Agent's Message may be transmitted to the Exchange Agent in lieu of an executed Letter of Transmittal. Old Notes may be tendered in whole or in part in integral multiples of $1,000. For purposes of the Exchange Offer, the term "holder" includes any participant in DTC named in a securities position listing as a holder of Old Notes. Only a holder of record may tender Old Notes in the Exchange Offer. Any beneficial owner of Old Notes who wishes to tender some or all of such Old Notes should arrange with DTC, a DTC participant or the record owner of such Old Notes to execute and deliver this Letter of Transmittal or to send an electronic instruction effecting a book-entry transfer on his or her behalf. See Instruction 6. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available; (ii) who cannot deliver their Old Notes, this Letter of Transmittal and all other required documents to the Exchange Agent on or prior to the Expiration Date; or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis, may tender their Old Notes by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer--Procedures for Tendering Old Notes--Guaranteed Delivery Procedures" in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Company, must be received by the Exchange Agent on or prior to the Expiration Date; and (iii) the certificates (or a book-entry confirmation) representing all tendered Old Notes, in proper form for transfer, together with a Letter of Transmittal (or facsimile thereof, or Agent's Message in lieu thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer--Procedures for Tendering Old Notes" in the Prospectus. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile or mail to the Exchange Agent, and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. For Old Notes to be properly tendered pursuant to the guaranteed delivery procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration Date. As used herein, "Eligible Institution" means a firm or other entity which is identified as an "Eligible Guarantor Institution" in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, including a bank; a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; a credit union; a member of a national securities exchange, registered securities association or clearing agency; or a savings association that is a participant in a securities transfer association for the account of an eligible institution. The method of delivery of certificates, this Letter of Transmittal and all other required documents is at the option and sole risk of the tendering holder, and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt 9 requested, properly insured, or overnight delivery service is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. The Company will not accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a Letter of Transmittal (or facsimile thereof) or by causing the transmission of an Agent's Message, waives any right to receive any notice of the acceptance of such tender. 2. Guarantee of Signatures. No signature guarantee on this Letter of Transmittal is required if: a. this Letter of Transmittal is signed by the registered holder (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of the Old Notes) of Old Notes tendered herewith, unless such holder has completed either the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" above; or b. such Old Notes are tendered for the account of a firm that is an Eligible Institution. In all other cases, an Eligible Institution must guarantee the signature(s) on this Letter of Transmittal. See Instruction 6. 3. Inadequate Space. If the space provided in the box captioned "Description of Old Notes" is inadequate, the certificate number(s) and/or the principal amount of Old Notes and any other required information should be listed on a separate, signed schedule which is attached to this Letter of Transmittal. 4. Partial Tenders (not applicable to holders who tender by book-entry transfer). If less than all the Old Notes evidenced by any certificate submitted are to be tendered, fill in the principal amount of Old Notes which are to be tendered in the "Principal Amount Tendered" column of the box entitled "Description of Old Notes" on page 3 of this Letter of Transmittal. In such case, new certificate(s) for the remainder of the Old Notes that were evidenced by your old certificate(s) will be sent only to the holder of the Old Notes promptly after the Expiration Date. All Old Notes represented by certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. Tender of Old Notes will be accepted only in integral multiples of $1,000. 5. Withdrawal Rights. Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective on or prior to that time, a written, telegraphic, telex or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at its address set forth above and in the Prospectus on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Old Notes to be withdrawn, the aggregate principal amount of Old Notes to be withdrawn and (if certificates for Old Notes have been tendered) the name of the registered holder of the Old Notes as set forth on the certificate for the Old Notes, if different from that of the person who tendered such Old Notes. If certificates for the Old Notes have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such certificates for the Old Notes, the tendering holder must submit the serial numbers shown on the particular certificates for the Old Notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Notes tendered for the account of an Eligible Institution. If Old Notes have been tendered pursuant to the procedures for book-entry transfer set forth in the Prospectus under "The Exchange Offer--Procedures for Tendering Old Notes--Book-Entry Transfer," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of Old Notes, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of Old Notes may not be rescinded. Old Notes properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described in the Prospectus under "The Exchange Offer--Procedures for Tendering Old Notes." 10 All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Company, in its sole discretion, which determination shall be final and binding on all parties. The Company, any affiliates or assigns of the Company, the Exchange Agent or any other person shall not be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Old Notes which have been tendered but which are withdrawn will be returned to the holder thereof without cost to such holder promptly after withdrawal. 6. Signatures on Letter of Transmittal, Assignments and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Old Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. If any Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Old Notes are registered in different name(s) on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of certificates. If this Letter of Transmittal or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Company, must submit proper evidence satisfactory to the Company, in its sole discretion, of each such person's authority so to act. When this Letter of Transmittal is signed by the registered owner(s) of the Old Notes listed and transmitted hereby, no endorsement(s) of certificate(s) or separate bond power(s) are required unless New Notes are to be issued in the name of a person other than the registered holder(s). Signature(s) on such certificate(s) or bond power(s) must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Old Notes listed, the certificates must be endorsed or accompanied by appropriate bond powers, signed exactly as the name or names of the registered owner(s) appear(s) on the certificates, and also must be accompanied by such opinions of counsel, certifications and other information as the Company or the trustee for the Old Notes may require in accordance with the restrictions on transfer applicable to the Old Notes. Signatures on such certificates or bond powers must be guaranteed by an Eligible Institution. 7. Special Issuance and Delivery Instructions. If New Notes are to be issued in the name of a person other than the signer of this Letter of Transmittal, or if New Notes are to be sent to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. In the case of issuance in a different name, the U.S. taxpayer identification number of the person named must also be indicated. A holder of Old Notes tendering Old Notes by book-entry transfer may instruct that Old Notes not exchanged be credited to such account maintained at DTC as such holder may designate. If no such instructions are given, certificates for Old Notes not exchanged will be returned by mail to the address of the signer of this Letter of Transmittal or, if the Old Notes not exchanged were tendered by book-entry transfer, such Old Notes will be returned by crediting the account indicated on page 3 above maintained at DTC. See Instruction 6. 8. Irregularities. The Company will determine, in its sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Old Notes, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for 11 which, may, in the view of counsel to the Company be unlawful. The Company also reserves the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer set forth in the Prospectus under "The Exchange Offer--Conditions to the Exchange Offer" or any conditions or irregularity in any tender of Old Notes of any particular holder whether or not similar conditions or irregularities are waived in the case of other holders. The Company's interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding. No tender of Old Notes will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. The Company, any affiliates or assigns of the Company, the Exchange Agent or any other person shall not be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification. 9. Questions, Requests for Assistance and Additional Copies. Questions and requests for assistance may be directed to the Exchange Agent at its addresses and telephone numbers set forth on the front of this Letter of Transmittal. Additional copies of the Prospectus, the Letter of Transmittal, the Notice of Guaranteed Delivery and Forms W-8 (as defined in Instruction 10) may be obtained from the Exchange Agent at the addresses and telephone/facsimile numbers indicated above, or from your broker, dealer, commercial bank, trust company or other nominee. 10. Backup Withholding; Substitute Form W-9; Forms W-8. Under the United States federal income tax laws, interest paid to holders of New Notes received pursuant to the Exchange Offer may be subject to backup withholding. Generally, such payments will be subject to backup withholding unless the holder (i) is exempt from backup withholding or (ii) furnishes the payer with its correct taxpayer identification number ("TIN") and certifies that the number provided is correct and further certifies that such holder is not subject to backup withholding as a result of a failure to report all interest or dividend income. Each holder that wants to avoid backup withholding should provide the Exchange Agent with such holder's correct TIN (or with a certification that such holder is awaiting a TIN) and with a certification that such holder is not subject to backup withholding by completing Substitute Form W-9 below. Certain holders (including, among others, all corporations and certain foreign individuals) are exempt from these backup withholding and reporting requirements. In general, in order for a foreign individual to qualify as an exempt recipient, that holder must submit a statement, signed under the penalties of perjury, attesting to that individual's exempt status. Such statements may be obtained from the Exchange Agent. Exempt holders (other than foreign persons), while not required to file Substitute Form W-9, should file Substitute Form W-9 and write "exempt" on its face to avoid possible erroneous backup withholding. Foreign persons not subject to backup withholding should complete and submit to the Exchange Agent a Form W-8 BEN (Certificate of Foreign Status of Beneficial Owner For U.S. Withholding), and/or other applicable Form(s) W-8 (and any other required certifications), instead of the Substitute Form W-9. See the enclosed Guidelines for Request for Taxpayer Identification Number and Certification on Substitute Form W-9 for additional instructions. If backup withholding applies, the Company may be required to withhold at the applicable rate on interest payments made to a holder of New Notes. Backup withholding is not an additional tax. Rather, the amount of backup withholding is treated, like any other withheld amounts, as an advance payment of a tax liability, and a holder's U.S. federal income tax liability will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained. Purpose of Substitute Form W-9 To prevent backup withholding with respect to interest payments on the New Notes, a holder should notify the Exchange Agent of its correct TIN by completing the Substitute Form W-9 below and certifying on Substitute Form W-9 that the TIN provided is correct (or that the holder is awaiting a TIN). In addition, a holder is required to certify on Substitute Form W-9 that it is (i) exempt from backup withholding, or (ii) not subject to backup withholding due to prior under reporting of interest or dividend income, or (iii) the Internal Revenue Service (the ''IRS'') has notified the holder that the holder is no longer subject to backup withholding. 12 What Number to Give the Depositary To avoid backup withholding with respect to interest payments on the New Notes, a holder is required to give the Exchange Agent the TIN of the registered holder of the New Notes. If such registered holder is an individual, the TIN is the taxpayer's social security number. For most other entities, the TIN is the employer identification number. If the New Notes are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Request for Taxpayer Identification Number and Certification on Substitute Form W-9 for additional guidelines on what number to report. If the Exchange Agent is provided with an incorrect TIN, the holder may be subject to a $500 penalty imposed by the IRS. 11. Waiver of Conditions. To the extent permitted by applicable law, the Company reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus. 12. No Conditional Tenders. No alternative, conditional or contingent tenders will be accepted. All tendering holders of Old Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of Old Notes for exchange. Neither the Company, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Old Notes nor shall any of them incur any liability for failure to give any such notice. 13. Mutilated, Lost, Destroyed or Stolen Certificates. If any certificate(s) representing Old Notes have been mutilated, lost, destroyed or stolen, the holder should promptly notify the Exchange Agent. The holder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificate(s) have been followed. 14. Security Transfer Taxes. Except as provided below, holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, (i) New Notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Notes tendered; (ii) tendered Old Notes are registered in the name of any person other than the person signing this Letter of Transmittal; or (iii) a transfer tax is imposed for any reason other than the exchange of Old Notes in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. The Exchange Agent must receive satisfactory evidence of the payment of such taxes or exemption therefrom prior to the delivery of New Notes. Except as provided in this Instruction 14, it is not necessary for transfer tax stamps to be affixed to the Old Notes specified in this Letter of Transmittal. 15. Incorporation of Letter of Transmittal. This Letter of Transmittal shall be deemed to be incorporated in any tender of Old Notes by any DTC participant effected through procedures established by DTC and, by virtue of such tender, such participant shall be deemed to have acknowledged and accepted this Letter of Transmittal on behalf of itself and the beneficial owners of any Old Notes so tendered. 13 REQUESTER'S NAME: BANK ONE TRUST COMPANY, N.A. - -------------------------------------------------------------------------------- SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service (IRS) Payer's Request for Taxpayer Identification Number (TIN) Please fill in your name and address below. -------------------- Name -------------------- Address (number and street) -------------------- City, State and Zip Code Part 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT OR, IF YOU DO NOT HAVE A TIN, WRITE "APPLIED FOR" AND SIGN THE CERTIFICATION BELOW. ---------------------- Social Security Number OR ---------------------- Taxpayer Identification Number -------------------------------------------------------- Part 2 -- Certification -- Under penalties of perjury, I certify that: (1)The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me). (2)I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been notified by the IRS that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3)I am a U.S. person (as defined for U.S. federal income tax purposes). --------------------------------------------------------- Certification Instructions -- You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). If you are exempt from backup withholding, check the box in Part 4 and see the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9". Signature: __ Date: ________________________ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING ON ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE, AS WELL AS FUTURE DIVIDEND PAYMENTS. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION. YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE "APPLIED FOR" ON SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that until I provide a taxpayer identification number, all reportable payments made to me will be subject to backup withholding, but will be refunded if I provide a certified taxpayer identification number within 60 days. Signature: ______________________ Dated: ____________________________ THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING. 14 GUIDELINES FOR REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 What Name and Number to Give the Requester Name If you are an individual, you must generally enter the name shown on your Social Security card. However, if you have changed your last name, for instance, due to marriage, without informing the Social Security Administration of the name change, enter your first name, the last name shown on your Social Security card, and your new last name. If the account is in joint names, list first and then circle the name of the person or entity whose number you enter in Part I of the form. Sole Proprietor--You must enter your individual name as shown on your Social Security card. You may enter your business, trade or ''doing business as'' name on the business name line. Limited Liability Company (LLC)--If you are a single-member LLC (including a foreign LLC with a domestic owner) that is disregarded as an entity separate from its owner under Treasury regulations (S) 301.7701-3, enter the owner's name. Enter the LLC's name on the business name line. A disregarded domestic entity that has a foreign owner must use the appropriate Form W-8. Other Entities--Enter the business name as shown on required federal income tax documents. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade or ''doing business as'' name on the business name line. Taxpayer Identification Number (TIN) You must enter your taxpayer identification number in the appropriate box. If you are a resident alien and you do not have and are not eligible to get a Social Security number, your taxpayer identification number is your IRS individual taxpayer identification number (ITIN). Enter it in the Social Security number box. If you do not have an individual taxpayer identification number, see How to Get a TIN below. If you are a sole proprietor and you have an employer identification number, you may enter either your Social Security number or employer identification number. However, using your employer identification number may result in unnecessary notices to the requester, and the IRS prefers that you use your Social Security number. If you are an LLC that is disregarded as an entity separate from its owner under Treasury regulations (S) 301.7701-3, and are owned by an individual, enter the owner's Social Security number. If the owner of a disregarded LLC is a corporation, partnership, etc., enter the owner's employer identification number. See the chart below for further clarification of name and TIN combinations. Social Security numbers (SSN's) have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers (EIN's) have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the requester. 15 GUIDELINES FOR REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
- ------------------------------------------------------------------------------ ----------------------------------------- For this type of account: Give Name For this type of account: and SSN of: - ------------------------------------------------------------------------------ ----------------------------------------- 1. Individual The individual 6.A valid trust, estate or pension trust 2. Two or more individuals (joint The actual owner of the 7.Corporation account) account or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) 8.Association, club, religious, (Uniform Gift to Minors Act) charitable, educational or other tax-exempt organization 4. a. Theusual revocable savings The grantor-trustee(1) 9.Partnership trust (grantor is also trustee) b.The so-called trust account The actual owner(1) 10.A broker or registered that is not a legal or valid nominee trust under state law 5. Sole proprietorship The owner(3) 11.Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments - ------------------------------------------------------------------------------ -----------------------------------------
-------------------------------------------------------------- For this type of account: Give Name and SSN of: -------------------------------------------------------------- 6.A valid trust, estate or pension Legal entity(4) trust 7.Corporation The corporation 8.Association, club, religious, The organization charitable, educational or other tax-exempt organization 9.Partnership The partnership 10.A broker or registered The broker or nominee nominee 11.Account with the Department The public entity of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments --------------------------------------------------------------
(1)List first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security number, that person's number must be furnished. (2)Circle the minor's name and furnish the minor's Social Security number. (3)You must show your individual name, but you may also enter your business or ''doing business as'' name. You may use either your Social Security number or employer identification number (if you have one). (4)List first and circle the name of the legal trust, estate or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Note: Ifno name is circled when more than one name is listed, the number will be considered to be that of the first name listed. How to Get a TIN If you do not have a taxpayer identification number, apply for one immediately. To apply for a Social Security number, get Form SS-5, Application for a Social Security Number Card, from your local Social Security Administration office. Get Form W-7 to apply for an individual taxpayer identification number or Form SS-4, Application for Employer Identification Number, to apply for an employer identification number. You can get Forms W-7 and SS-4 from the IRS. If you do not have a taxpayer identification number, write ''Applied For'' in the space for the taxpayer identification number, sign and date the form (including the Certificate of Awaiting Taxpayer Identification Number), and give it to the requester. For interest and dividend payments and certain payments made with respect to readily tradable instruments, you will generally have 60 days to get a taxpayer identification number and give it to the requester before you are subject to backup withholding. Other payments are subject to backup withholding without regard to the 60-day rule, until you provide your taxpayer identification number. Note: Writing ''Applied For'' means that you have already applied for a taxpayer identification number or that you intend to apply for one soon. Exemption From Backup Withholding Payees Exempt From Backup Withholding Individuals (including sole proprietors and LLCs disregarded as entities separate from their individual owners) are NOT automatically exempt from backup withholding. For interest and dividends, the following payees are generally exempt from backup withholding: (1) An organization exempt from tax under section 501(a) of the Internal Revenue Code of 1986, as amended (the ''Code''), an individual retirement account (IRA), or a custodial account under section 403(b)(7) of the Code if the account satisfies the requirements of section 401(f)(2) of the Code. (2) The United States or any of its agencies or instrumentalities. (3) A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. 16 GUIDELINES FOR REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 (4) A foreign government or any of its political subdivisions, agencies or instrumentalities. (5) An international organization or any of its agencies or instrumentalities. (6) A corporation. (7) A foreign bank of central issue. (8) A dealer in securities or commodities required to register in the United States, the District of Columbia or a possession of the United States. (9) A real estate investment trust. (10) An entity registered at all times during the tax year under the Investment Company Act of 1940. (11) A common trust fund operated by a bank under section 584(a) of the Code. (12) A financial institution (as defined for purposes of section 3406 of the Code). (13) A middleman known in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. (14) A trust exempt from tax under section 664 of the Code or described in section 4947 of the Code. For broker transactions, persons listed in items 1-12, above, as well the persons listed in items 15-16, below, are exempt from backup withholding. (15) A futures commission merchant registered with the Commodity Futures Trading Commission. (16) A person registered under the Investment Advisors Act of 1940 who regularly acts as a broker. Payments Exempt From Backup Withholding Dividends and patronage dividends that are generally exempt from backup withholding include: . Payments to nonresident aliens subject to withholding under section 1441 of the Code. . Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner. . Payments of patronage dividends not paid in money. . Payments made by certain foreign organizations. . Payments made by an ESOP pursuant to section 404(k) of the Code. Interest payments that are generally exempt from backup withholding include: . Payments of interest on obligations issued by individuals. Note, however, that such a payment may be subject to backup withholding if the amount of interest paid during a taxable year in the course of the payor's trade or business is $600 or more, and you have not provided your correct taxpayer identification number or you have provided an incorrect taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt-interest dividends under section 852 of the Code). . Payments described in section 6049(b)(5) of the Code to nonresident aliens. . Payments on tax-free covenant bonds under section 1451 of the Code. . Payments made by certain foreign organizations. Payments that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N of the Code, and the Treasury regulations thereunder. If you are exempt from backup withholding, you should still complete and file Substitute Form W-9 to avoid possible erroneous backup withholding. Enter your correct taxpayer identification number in Part 1, write ''Exempt'' in Part 2, and sign and date the form and return it to the requester. If you are a nonresident alien or a foreign entity not subject to backup withholding, give the requester the appropriate completed Form W-8. Privacy Act Notice.-Section 6109 of the Code requires you to give your correct taxpayer identification number to persons who must file information returns with the IRS to report interest, dividends and certain other income paid to you. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The IRS may also provide this information to the Department of Justice for civil and criminal litigation and to cities, states, and the District of Columbia to carry out their tax laws. You must provide your taxpayer identification number whether or not you are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividends and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. Penalties (1) Failure to Furnish Taxpayer Identification Number.-If you fail to furnish your correct taxpayer identification number to a requester, you are subject to a penalty of $50.00 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Civil Penalty for False Information With Respect to Withholding.-If you make a false statement with no reasonable basis which results in no backup withholding, you are subject to a $500.00 penalty. (3) Criminal Penalty for Falsifying Information.-Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. 17 EX-99.2 31 dex992.txt FORM OF NOTICE OF GUARNANTEED DELIVERY Exhibit 99.2 NOTICE OF GUARANTEED DELIVERY STEELCASE INC. offer for all outstanding 6.375% Senior Notes Due 2006 in exchange for 6.375% Senior Notes Due 2006 pursuant to the Prospectus dated , 2002 This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used to accept the Exchange Offer (as defined below) if (i) certificates for Steelcase Inc.'s 6.375% Senior Notes Due 2006 (the "Old Notes") are not immediately available; (ii) Old Notes, the Letter of Transmittal (as defined below) and all other required documents cannot be delivered to Bank One Trust Company, N.A. (the "Exchange Agent") on or prior to the Expiration Date (as defined below); or (iii) the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight carrier or mail, or transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for Tendering Old Notes" in the Prospectus (as defined below). In addition, in order to utilize the guaranteed delivery procedure to tender Old Notes pursuant to the Exchange Offer, a properly completed and duly executed Letter of Transmittal relating to the Old Notes (or facsimile thereof, or Agent's Message in lieu thereof), together with the Old Notes tendered hereby in proper form for transfer or confirmation of the book-entry transfer of such Old Notes to the Exchange Agent's account at DTC, must be received by the Exchange Agent within three (3) New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery. Unless indicated otherwise, capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus or the Letter of Transmittal, as the case may be. THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. The Exchange Agent for the Exchange Offer Is: Bank One Trust Company, N.A. By Mail or Overnight Delivery: By Hand: Bank One Trust Company, N.A. Bank One, N.A. Corporate Trust Operations 55 Water Street, 1st Floor 111 Polaris Parkway New York, New York 10041 Suite N1-OH1-0184 Columbus, Ohio 43240 Attention: Ms. Lora Marsch Facsimile Transmissions: (614) 248-9987 Confirm by Telephone: (800) 346-5153 Delivery of this Notice of Guaranteed Delivery to an address other than as set forth above or transmission of this Notice of Guaranteed Delivery via facsimile to a number other than as set forth above will not constitute a valid delivery. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "eligible institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to Steelcase Inc., a Michigan corporation (the "Company"), upon the terms and subject to the conditions set forth in the prospectus dated , 2002 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related letter of transmittal (the "Letter of Transmittal", and which together with the Prospectus, constitutes the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Procedures for Tendering Old Notes--Guaranteed Delivery Procedures." Aggregate Principal Amount Tendered: $__ * Name(s) of Registered Holder(s): ________________ ---------------------------- Certificate No(s). (if available): __________________________________________ - -------------------------------------------------------------------------------- $ ___________________________________________________________________________ (Total Principal Amount Represented by Old Note Certificate(s)) If Old Notes will be tendered by book-entry transfer, provide the following information: DTC Account Number: ________________________________________________________ Date: _______________________________________________________________________ *Must be in integral multiples of $1,000. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. 2 PLEASE SIGN HERE X ______________________________________________ - X ______________________________________________ - Signature(s) of Owner(s) or Authorized Signatory Telephone Number: _______________________________ Must be signed by the holder(s) of the Old Notes as their name(s) appear(s) on certificates for Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below and, unless waived by the Company, provide proper evidence satisfactory to the Company of such person's authority to so act. Please print name(s) and address(es) Name(s): ____________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Capacity: ___________________________________________________________________ Address(es): ________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3 GUARANTEE OF DELIVERY (Not to be used for signature guarantee) The undersigned, a firm or other entity which is identified as an "Eligible Guarantor Institution" in Rule 17Ad-15 under the Exchange Act, including: a bank; a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; a credit union; a member of a national securities exchange, registered securities association or clearing agency; or a savings association that is a participant in a securities transfer association for the account of an eligible institution (each of the foregoing being referred to as an "Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at the address set forth above, either the Old Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes to the Exchange Agent's account at DTC, pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof, or Agent's Message in lieu thereof) and any other required documents within three (3) New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must deliver to the Exchange Agent the Letter of Transmittal (or facsimile thereof, or Agent's Message in lieu thereof) and the Old Notes tendered hereby in proper form for transfer or confirmation of the book-entry transfer of such Old Notes to the Exchange Agent's account at DTC within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. ------------------ ---------------------- Name of Firm Authorized Signature ------------------ ---------------------- Address Title ------------------ ---------------------- Zip Code (Please Type or Print) Telephone Number: Date: ________________ NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL. 4 EX-99.3 32 dex993.txt FORM OF LETTER TO BROKER DEALERS Exhibit 99.3 BANK ONE TRUST COMPANY, N.A. 55 Water Street, 1st Floor New York, New York 10041 STEELCASE INC. offer for all outstanding 6.375% Senior Notes Due 2006 in exchange for 6.375% Senior Notes Due 2006 pursuant to the Prospectus dated , 2002 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. To Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees: We have been appointed by Steelcase Inc., a Michigan corporation (the "Company"), to act as the exchange agent (the "Exchange Agent") in connection with the offer (the "Exchange Offer") of the Company to exchange an aggregate principal amount of up to $250,000,000 of the Company's 6.375% Senior Notes Due 2006 (the "New Notes"), for a like principal amount of the Company's 6.375% Senior Notes Due 2006 (the "Old Notes") upon the terms and subject to the conditions set forth in the prospectus dated , 2002 (the "Prospectus") and in the related letter of transmittal and the instructions thereto (the "Letter of Transmittal"). Enclosed herewith are copies of the following documents: 1. The Prospectus; 2. The Letter of Transmittal for your use and for the information of your clients, including a substitute Internal Revenue Service Form W-9 for collection of information relating to backup federal income tax withholding; 3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer with respect to Old Notes in certificated form or Old Notes accepted for clearance through the facilities of the Depository Trust Company if (i) certificates for Old Notes are not immediately available, (ii) Old Notes, the Letter of Transmittal and all other required documents cannot be delivered to the Exchange Agent on or prior to the Expiration Date or (iii) the procedures for book-entry transfer cannot be completed on a timely basis; 4. A form of letter which may be sent to your clients for whose account you hold the Old Notes in your name or in the name of a nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer; and 5. Return envelopes addressed to Bank One Trust Company, N.A., the Exchange Agent for the Exchange Offer. PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. The Company has not retained any dealer-manager in connection with the Exchange Offer and will not pay any fee or commission to any broker, dealer, nominee or other person (other than the Exchange Agent) for soliciting tenders of the Old Notes pursuant to the Exchange Offer. You will be reimbursed for customary mailing and handling expenses incurred by you in forwarding the enclosed materials to your clients and for handling or tendering for your clients. Additional copies of the enclosed materials may be obtained by contacting the Exchange Agent as provided in the enclosed Letter of Transmittal. Very truly yours, Bank One Trust Company, N.A. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY OR THE EXCHANGE AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE EXCHANGE OFFER NOT CONTAINED IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL. EX-99.4 33 dex994.txt FORM OF LETTER TO CLIENTS EXHIBIT 99.4 STEELCASE INC. offer for all outstanding 6.375% Senior Notes Due 2006 in exchange for 6.375% Senior Notes Due 2006 pursuant to the Prospectus dated , 2002 THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2002, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. To Our Clients: Enclosed for your consideration is a prospectus dated , 2002 (the "Prospectus") and the related letter of transmittal and instructions thereto (the "Letter of Transmittal") in connection with the offer (the "Exchange Offer") of Steelcase Inc., a Michigan corporation (the "Company"), to exchange an aggregate principal amount of up to $250,000,000 of the Company's 6.375% Senior Notes Due 2006 (the "New Notes"), for a like principal amount of the Company's issued and outstanding 6.375% Senior Notes Due 2006 (the "Old Notes"), upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus. WE ARE THE REGISTERED HOLDER OF OLD NOTES HELD BY US FOR YOUR ACCOUNT. A TENDER OF ANY SUCH OLD NOTES CAN BE MADE ONLY BY US AS THE REGISTERED HOLDER AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER OLD NOTES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish us to tender any or all such Old Notes held by us for your account pursuant to the terms and conditions set forth in the Prospectus and the Letter of Transmittal. WE URGE YOU TO READ THE PROSPECTUS AND THE LETTER OF TRANSMITTAL CAREFULLY BEFORE INSTRUCTING US TO TENDER YOUR OLD NOTES. Your instructions to us should be forwarded as promptly as possible in order to permit us to tender Old Notes on your behalf in accordance with the provisions of the Exchange Offer. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON , 2002, UNLESS EXTENDED. Old Notes tendered pursuant to the Exchange Offer may be withdrawn only under the circumstances described in the Prospectus and the Letter of Transmittal. Your attention is directed to the following: 1. The Exchange Offer is for the entire aggregate principal amount of outstanding Old Notes. 2. Consummation of the Exchange Offer is conditioned upon the terms and conditions set forth in the Prospectus under the captions "The Exchange Offer--Terms of the Exchange Offer" and "The Exchange Offer--Conditions to the Exchange Offer." 3. Tendering holders may withdraw their tender at any time until 5:00 p.m., New York City time, on the Expiration Date. 4. Any transfer taxes incident to the transfer of Old Notes from the tendering holder to the Company will be paid by the Company, except as provided in the Prospectus and the instructions to the Letter of Transmittal. 5. The Exchange Offer is not being made to (nor will the surrender of Old Notes for exchange be accepted from or on behalf of) holders of Old Notes in any jurisdiction in which the Exchange Offer or acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. 6. The acceptance for exchange of Old Notes validly tendered and not validly withdrawn and the issuance of Exchange Notes will be made as promptly as practicable after the Expiration Date. 7. The Company expressly reserves the right, in its reasonable discretion and in accordance with applicable law, (i) to extend the Expiration Date, (ii) to delay accepting any Old Notes, (iii) to terminate the Exchange Offer if any of the conditions to the Exchange Offer (as set forth in the Prospectus) have not been satisfied or (iv) to amend the Exchange Offer in any manner. In the event of any extension, delay, non-acceptance, termination or amendment, the Company will as promptly as practicable give oral and written notice to the Exchange Agent and make a public announcement of extension, delay, non-acceptance, termination or amendment. In the case of an extension, such public announcement shall include disclosure of the approximate number of Old Notes tendered to date and shall be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. 8. Consummation of the Exchange Offer may have adverse consequences to non-tendering Old Note holders, including that the reduced amount of outstanding Old Notes as a result of the Exchange Offer may adversely affect the trading market, liquidity and market price of the Old Notes. If you wish to have us tender any or all of the Old Notes held by us for your account, please so instruct us by completing, executing and returning to us the instruction form that follows. 2 STEELCASE INC. INSTRUCTIONS REGARDING THE EXCHANGE OFFER WITH RESPECT TO THE $250,000,000 6.375% SENIOR NOTES DUE 2006 ("OLD NOTES") THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF YOUR LETTER AND THE ENCLOSED DOCUMENTS REFERRED TO THEREIN RELATING TO THE EXCHANGE OFFER OF STEELCASE INC. WITH RESPECT TO THE OLD NOTES. THIS WILL INSTRUCT YOU WHETHER TO TENDER THE PRINCIPAL AMOUNT OF OLD NOTES INDICATED BELOW HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED PURSUANT TO THE TERMS OF AND CONDITIONS SET FORTH IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL. Box 1 [_] Please tender the Old Notes held by you for my account, as indicated below. Box 2 [_] Please do not tender any Old Notes held by you for my account.
Date:_____________________________________, 2002 _____________________________________________________ _____________________________________________________ Principal Amount of Old Notes to be Tendered: Signature(s) $______________________________________________* _____________________________________________________ (must be in the principal amount of $1,000 or an _____________________________________________________ integral multiple thereof) Please print name(s) here _____________________________________________________ _____________________________________________________ _____________________________________________________ Please type or print address _____________________________________________________ Area Code and Telephone Number _____________________________________________________ Taxpayer Identification or Social Security Number _____________________________________________________ My Account Number with you
- -------- * UNLESS OTHERWISE INDICATED, SIGNATURE(S) HEREON BY BENEFICIAL OWNER(S) SHALL CONSTITUTE AN INSTRUCTION TO THE NOMINEE TO TENDER ALL OLD NOTES OF SUCH BENEFICIAL OWNER(S). 3 -----END PRIVACY-ENHANCED MESSAGE-----