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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1996
or
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Transition Period from to
Commission File Number 1--1416
BINKS MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State of incorporation)
36-0808480
(I.R.S. Employer Identification No.)
9201 WEST BELMONT AVENUE
FRANKLIN PARK, ILLINOIS
(Address of principal executive offices)
60131
(Zip Code)
(847) 671-3000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
------------------- ------------------------------------
CAPITAL STOCK, $1.00 AMERICAN STOCK EXCHANGE
PAR VALUE PER SHARE CHICAGO STOCK EXCHANGE
CAPITAL STOCK AMERICAN STOCK EXCHANGE
PURCHASE RIGHTS CHICAGO STOCK EXCHANGE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
-----
The aggregate market value of the voting stock of the Registrant held by
non-affiliates was approximately $101,000,000 as of February 25, 1997. For
purposes of the foregoing statement only, directors and officers of the
Registrant have been assumed to be affiliates.
As of February 25, 1997, the Registrant had outstanding 3,088,837 shares of
Capital Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Selected portions of the definitive Proxy Incorporated into Part III
Statement for the Registrant's Annual
Meeting of Stockholders to be held on
April 29, 1997.
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PART I
ITEM 1. BUSINESS
GENERAL
Binks Manufacturing Company, a Delaware corporation incorporated on January
2, 1929 as a successor to a business founded in 1890, and its subsidiaries
(hereinafter referred to collectively as the "Company") are engaged in the
manufacture and sale of spray finishing and coating application equipment. The
Company sells its products primarily to the automotive industry, general
industrial finishing, and automotive refinishing markets.
The Company serves three primary geographic markets, North and South
America, Europe and the Pacific Rim, and presently generates over 50% of its
sales outside the United States.
The Company divides its products into three general groups: standard
products, engineered (industrial) systems, and automotive paint systems.
Standard products consist of a variety of components used in the spray finishing
process such as spray guns, fluid handling equipment and accessories. Engineered
(industrial) systems consist of specialty products together with standard
components to comprise finishing systems. Automotive products include automatic
electrostatic paint application machines as well as paint circulation equipment
serving the global automotive market. The Company also manufactures equipment
for functional and corrosion control applications.
RESTRUCTURING
Beginning in June 1996, the Company's Board of Directors adopted measures
as part of a comprehensive reorganization and restructuring of the Company. The
initiatives were designed to enhance customer service, strengthen the Company's
positioning in the marketplace, coordinate world wide operations, accelerate
earnings and revenue growth, reduce operating expenditures, and increase
shareholder value. The more significant aspects of the restructuring affecting
the operations of the Company include the following:
- Pending stockholder approval at the Annual Meeting of Stockholders
scheduled for April 29, 1997, the Company will be renamed Binks Sames
Corporation to affirm the global nature of the Company and to
recognize the achievements and stature in the market of the Company's
French subsidiary, Sames S.A.
- A new Chairman and separate Chief Executive Officer have been elected,
with the Board of Directors being expanded to seven members, four of
whom are independent directors. Nominating, compensation, and
executive committees of the Board have been created.
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- The Company and its 13 subsidiaries have reorganized sales and
marketing functions into three geographic groups: the Americas,
Europe, and the Pacific Rim; and one industry group: the Global
Automotive Group.
- Product management has been reorganized into three groups: standard
products, engineered systems, and automotive paint systems.
- Research and development, product manufacturing, and distribution have
been restructured to coordinate activities worldwide.
- The Company has closed its 615,000 square foot manufacturing facility
in Franklin Park, Illinois, shifting production to other smaller and
more profitable plants. Approximately 360 manufacturing and 130
administrative positions will be eliminated as a result.
- Rationalization of the Company's product line was conducted, with
approximately 60% of the Company's engineered systems products and
45% of standard products eliminated, reducing annual sales by
approximately $16 million.
PRODUCTS
The Company's standard products include over forty different models of
spray guns, a wide variety of air and fluid nozzles, a complete line of high and
low pressure material handling pumps, pressure tanks ranging in capacity from
two to sixty gallons, replacement parts for these components, and accessories
such as siphon cups, pressure cups, oil and water extractors, air and fluid
regulators, ball valves, hose connections and fittings, air and fluid hoses, air
respirators and safety products, and paint heaters.
Engineered systems include pre-engineered spray booths for the industrial
market, paint circulating systems, air replacement systems, automatic spray
coating machines, liquid and powder manual and automatic electrostatic
application equipment. Many industrial equipment installations are custom
designed and engineered by the Company to satisfy specific needs of customers
and include various standard and industrial equipment items as components.
Automotive products include automated systems which circulate, distribute,
regulate, and apply coatings used in the painting of automobiles. The Company
supplies equipment and systems capable of handling a multitude of liquid and
powder coatings, such as primers, base coats (color), clear coats, and mastics.
These systems are custom designed to meet the needs of the global automotive
market.
The Company provides products as well as complete systems for the following
six basic coatings application methods: (1) COMPRESSED AIR ATOMIZATION. A
conventional method employing compressed air in the spray gun to atomize,
disperse, and deposit coating
2
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materials. (2) AIRLESS SPRAYING. A high speed spray method in which hydraulic
pressure developed by a material handling pump is used to atomize the coating
material by pumping it at high pressure through the nozzle of the airless spray
gun. (3) HIGH VOLUME LOW PRESSURE (HVLP). An adaptation of the conventional
air spray method, HVLP utilizes larger than normal volumes of air delivered at
lower pressures to produce quality finishes while complying with certain
environmental regulations governing the amounts of volatile organic compounds
emitted into the atmosphere. (4) ELECTROSTATIC SPRAYING. A method which
combines atomization of the coating material by one of the methods described in
(1) and (2) above with delivery of an electrical charge of the coating as it
leaves the spray gun, thereby attracting it to a grounded product in much the
same way as iron filings are attracted to a magnet. (5) POWDER SPRAYING. A
method of applying a coating material in powder form, with delivery of an
electrical charge to the coating as it leaves the spray gun as with
Electrostatic Spraying, and then hardening the coating through the application
of heat. (6) PLURAL COMPONENT SPRAYING. The method used to apply plural
component materials such as polyurethane foams, polyesters, gelcoats, epoxies,
and elastomers, and requiring special equipment for precise metering, mixing and
dispensing of the resins, catalysts and accelerators which create such plural
component materials.
The Company groups its sales revenues into the product categories discussed
previously (standard, engineered, and automotive). In fiscal 1994, 43% of total
revenues consisted of standard products while 57% of total revenues consisted of
engineered and automotive products. In fiscal 1995, 42% of total revenues
consisted of standard products while 58% of total revenues consisted of
engineered and automotive products. In fiscal 1996, 38% of total revenues
consisted of standard products while 19% of total revenues consisted of
engineered products and 43% consisted of automotive products.
RESEARCH AND DEVELOPMENT
The Company is continually engaged in experimental work on various other
coating systems. The Company spent approximately $4.9 million, $4.0 million and
$4.3 million during fiscal years ended November 30, 1996, 1995, and 1994,
respectively, on research activities relating to development of products or
services, none of which was customer sponsored.
DISTRIBUTION AND MARKETING
THE AMERICAS. The Company markets its standard products and engineered
systems in the United States through nine branch offices, seven of which have
warehouse facilities, and approximately 35 sales offices strategically located
throughout the country. In addition, the Company distributes its standard
products and engineered systems through numerous distributors and dealers
serving the industrial finishing, automotive refinishing, and painting
contractor markets throughout the United States, Mexico, Canada, and South
America. The Company has improved its position in South America through
exclusive distribution arrangements.
3
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Although some engineered systems are sold through distributors, the Company
typically sells directly to industrial concerns or manufacturers for larger
installations (contracts in excess of $500 thousand). These jobs require highly
specialized knowledge and experience in engineering, installation, and start up
of a finishing system.
EUROPE. The Company's standard products and engineered systems products
are sold throughout Europe. The Company maintains sales offices in a dozen
countries and utilizes agents to establish its presence in other countries.
PACIFIC RIM. The Company's products have been sold in Japan for over 30
years and the Company has a wholly-owned subsidiary in Australia. The Company is
now expanding further into the Pacific Rim. China and Korea are considered
growth areas with an increase in general industry business through exclusive
distribution arrangements.
Financial information regarding sales, operating income (loss) and
identifiable assets attributable to each of the Company's geographic areas is
contained in the Notes to Consolidated Financial Statements.
THE GLOBAL AUTOMOTIVE MARKET. The Company sells directly to automotive
companies as well as to automotive systems integrators and prime contractors.
Subsidiaries in France, England, and the United States provide high-end
electrostatic application equipment and automatic painting machines, as well as
paint circulation and distribution equipment.
COMPETITION
The Company believes that it is the largest manufacturer of a broad line of
spray finishing and coating application equipment. There are many other
manufacturers of coating application equipment who also engage in other lines of
business, principally Graco Incorporated, Illinois Tool Works, and Nordson
Corporation. The Company also competes in the United States with non-U.S.
manufactured products which up to this time have been unsuccessful in obtaining
a significant share of the available market.
EMPLOYEES
As of November 30, 1996, approximately 1,750 persons were employed by the
Company in the United States, England, Canada, Australia, Sweden, France,
Belgium, Italy, Germany, and Japan.
CONCENTRATION
The amount of business conducted with particular customers varies
significantly from year to year. Sales to the automotive industry as a whole
(which includes several different manufacturers as well as different divisions
or facilities within some manufacturers) generally have accounted for between
25% and 45% of the Company's consolidated net sales in past years.
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BACKLOG OF ORDERS
The dollar amount of the Company's backlog of orders as of November 30,
1996 was approximately $60 million as compared to approximately $55 million as
of November 30, 1995. All of the orders in backlog as of November 30, 1996 are
expected to be filled within the year ended November 30, 1997. The dollar
amount of backlog at any given time is subject to significant variations
depending upon the number of orders received and the degree of completion of
pending industrial equipment products which, by their nature, are completed over
a period of time pursuant to sizable contracts. The difference in backlog
between November 30, 1996 and November 30, 1995 is attributable to these
factors. The business of the Company is not materially affected by seasonal
factors, and the Company's backlog is not generally a result of such factors.
MATERIALS
The Company purchases its requirements of aluminum, brass, and steel in the
form of bar stock, rolls, tubing, and sheeting as well as in the form of
castings and forgings which are manufactured by suppliers, for the most part
from Company-owned dies and patterns. The Company also purchases certain
components which it incorporates into its finished products such as electric
motors, gasoline engines, switches, gauges, and consumable products. The
materials and components purchased by the Company are readily available from a
number of suppliers.
INTELLECTUAL PROPERTY
The Company owns a number of patents in the United States and other
countries pertaining to spray equipment, components, control and memory devices,
pumps, and valves, as well as presently pending applications for patents in the
United States and other countries. The Company does not consider its business
to be materially dependent on any single patent or group of patents, or any
pending applications for patents. The Company has registered its trademark
"Binks" in the United States and 32 other countries and has registered thirteen
additional trademarks in the United States, including its "Sames" trademark.
The "Sames" trademark is registered in numerous other countries as are ten other
Sames product trademarks.
ENVIRONMENTAL
Federal, state, local, and international provisions which have been enacted
or adopted regulating the discharge of materials into the environment, or
otherwise relating to the protection of the environment, have not materially
affected the Company's capital expenditures, earnings, or competitive position.
5
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ITEM 2. PROPERTIES
The Company has closed its manufacturing plant in Franklin Park, Illinois,
which it owns. The facility comprises 615,000 square feet of which 555,000
square feet has been used for manufacturing and 60,000 square feet for office
space. The Company has shifted production conducted at this facility to other
smaller plants.
The Company plans to relocate its offices to leased facilities in the
Chicago area. The new corporate office will incorporate a demonstration and
technical center that includes four product demonstration areas for liquid,
powder, plural component finishing technologies, and infrared curing
technologies. A training center will provide customer and employee product
training and continuing education.
The Company owns its branch office and warehouse in Franklin Park, Illinois
(situated in the premises described above), a branch office and warehouse in
Dallas, Texas, comprising approximately 25,000 square feet, a branch office and
warehouse in Atlanta, Georgia, comprising approximately 23,000 square feet, and
the building and land used by the Company's Poly-Craft Systems Division in
Cottage Grove, Oregon, comprising approximately 24,000 square feet. The
Company's branch and sales offices operate from 35 other locations in the United
States, twelve of which are leased premises and seven of which include
warehousing space. An aggregate of approximately 130,000 square feet is leased
at such locations. The Company does not regard any such leased premises to be
material.
The Company's non-U.S. subsidiaries own and occupy manufacturing and office
facilities aggregating approximately 307,000 square feet and lease property for
such purposes aggregating approximately 130,000 square feet.
The Company considers its plants and physical properties to be in good
condition.
6
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
In a case captioned CONTINENTAL PARTNERS GROUP, INC. V. BINKS
MANUFACTURING CO., No. 91 L 17815, filed on November 5, 1991 in the Circuit
Court of Cook County, Illinois (the "Action"), Continental Partners Group, Inc.
("Continental") seeks recovery from the Company of $902,700 which Continental
alleges is due under the terms of a contract between Continental and the Company
dated February 20, 1990. The Action also seeks interest and costs. The Company
has filed an answer in the Action, denying any liability to Continental under
the contract alleged, and asserting that the contract with Continental was
terminated by the Company without further liability to Continental. The claims
in the Action are being vigorously contested by the Company and the Company
believes that it has meritorious defenses to such claims.
On June 30, 1995, the Court of Appeals for the Federal Circuit, in
GRACO, INC. V. BINKS MANUFACTURING COMPANY, vacated a judgment of infringement
and an award of $2.75 million against the Company regarding certain pumps sold
prior to June 1993. The United States District Court for the Southern District
of Texas previously found that the Company had "willfully" infringed a patent
and awarded Graco treble damages, attorney fees and costs. The Federal Circuit
reversed the district court's finding that the Company "willfully" infringed
Graco's patent and the resulting enhancement of damages and award of attorney
fees. The Federal Circuit remanded the case for findings on the issue of
whether the patent was valid and infringed. Graco asserts that on remand it
will seek damages and interest of approximately $750,000. The Company believes
that there are meritorious defenses to these claims and thus no provision for
any liability has been made in the financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the period covered by this report.
7
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EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are listed below.
JOHN J. SCHORNACK, age 66, has been Chairman of the Board since June 1996 and a
director since February 1994. His present term of office as a director expires
at the 1998 Annual Meeting. Mr. Schornack has been the Chief Executive Officer
of KraftSeal Corporation, a manufacturer of tamper-proof food container lids,
since 1991. Prior to that, Mr. Schornack was Vice Chairman at Ernst & Young, an
international public accounting firm.
DORAN J. UNSCHULD, age 73, has been President and Chief Executive Officer since
June 1996 and a director of the Company since 1982. His present term of office
as a director expires at the 1999 Annual Meeting. Mr. Unschuld has been
employed by the Company in various positions since 1952 and has been a Senior
Vice President from 1995 to 1996, a Vice President from 1971 to 1995 and
Secretary of the Company from 1965 to 1996.
STEPHEN R. KENNEDY, age 63, has been an officer of the Company since 1971. Mr.
Kennedy has been employed by the Company since 1960 and is presently Vice
President of Human Resources of the Company.
ERNEST F. WATTS, age 59, has been an officer of the Company since 1980. Mr.
Watts has been employed by the Company since 1959 and is presently Vice
President of Market Development of the Company.
JEFFREY W. LEMAJEUR, age 35, has been an officer of the Company since 1992. Mr.
Lemajeur has been employed by the Company since 1991 and is presently Vice
President of Finance, Chief Financial Officer and Treasurer of the Company.
TERENCE P. ROCHE, age 38, has been an officer of the Company since 1995. Mr.
Roche has been employed by the Company since 1986 and is presently Executive
Vice President, Assistant Secretary and Assistant Treasurer. Mr. Roche had been
the Industrial Sales Manager of the Company from 1990 to 1996.
CARL M. SPRINGER, age 55, has been an officer of the Company since 1995. Mr.
Springer has been employed by the Company since 1977 and is presently Vice
President - Manufacturing and Engineering, Assistant Secretary and Assistant
Treasurer. Mr. Springer had been the Electronics Product Manager of the Company
from 1978 to 1996.
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SAMUEL W. CULBERTSON, age 54, has been an officer of the Company since June
1996. Mr. Culbertson has been employed by the Company since 1969 and is
presently Vice President - Research and Development. Mr. Culbertson has been
President of Binks Research and Development Corporation, a subsidiary of the
Company, since June 1996. Mr. Culbertson had been Vice President and General
Manager of Binks Research and Development Corporation from 1982 to 1996.
STEPHEN R. MATHERS, age 47, has been an officer of the Company since June 1996.
Mr. Mathers has been employed by the Company since 1974 and is presently Vice
President - Corporate Development. Mr. Mathers has been President and CEO of
Sames Electrostatic, Inc., a subsidiary of the Company, since 1990.
ADRIEN LACCHIA, age 54, has been an officer of the Company since June 1996. Mr.
Lacchia has been employed by the Company since 1970 and is presently Vice
President - Sames. Mr. Lacchia has been Co-Managing Director of Sames, S.A., a
subsidiary of the Company, since 1994. Prior to 1994, Mr. Lacchia had been
Technical Manager of Sames S.A.
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Notes:
1. All officers' terms expire in 1997.
2. Stephen R. Kennedy is married to the niece of William W. Roche, a
director of the Company. Ernest F. Watts is the nephew of William W. Roche.
Terence P. Roche is the son of William W. Roche. Ernest F. Watts and Terence
P. Roche are cousins. There are no other family relationships among the
executive officers of the Company.
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PART II
ITEM 5. MARKET FOR THE COMPANY'S CAPITAL STOCK AND RELATED SECURITY HOLDER
MATTERS
The Company's capital stock is traded on the American and Chicago
Stock Exchanges. The high and low prices for each quarterly period within the
two most recent fiscal years, as reported by such exchanges, and the dividends
declared during such periods with respect to the capital stock of the Company
are as follows:
Cash
(Stock)
Dividend
Declared
Quarter Ending High Low Per Share
-------------- ------ ----- ---------
February 28, 1995 22 1/8 18 1/2 .10
May 31, 1995 24 3/8 21 3/4 .20
August 31, 1995 26 24 .10
November 30, 1995 25 5/8 24 1/8 .10
February 29, 1996 24 1/2 22 ---
May 31, 1996 24 5/8 21 3/8 .10
August 31, 1996 29 22 3/4 .20
November 30, 1996 28 21 1/8 .10
As of February 25, 1997, there were approximately 1,114 registered
holders of the Company's capital stock, which is the only class of equity
securities of the Company outstanding. Harris Trust and Savings Bank, Chicago,
Illinois, is the transfer agent and registrar of the Company's capital stock.
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ITEM 6. SELECTED FINANCIAL DATA
BINKS MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
Five years ended November 30, 1996
(not covered by Independent Auditors' Reports-
in thousands, except per share amounts)
<TABLE>
<CAPTION>
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Year ended November 30
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1996(a) 1995 1994 1993 1992(b)
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<S> <C> <C> <C> <C> <C>
Net sales $ 296,686 266,003 243,599 210,405 223,680
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Cost of goods sold 216,017 178,940 167,261 138,954 149,660
Selling, general, and administrative
expenses 83,111 76,517 68,757 66,506 68,329
Restructuring costs 9,043 - - - -
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Operating income (loss) $ (11,485) 10,546 7,581 4,945 5,691
Other expense 4,672 3,463 2,003 2,923 2,491
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Earnings (loss) before income taxes (16,157) 7,083 5,578 2,022 3,200
Income tax expense (benefit) (5,049) 2,777 2,163 641 1,569
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Net earnings (loss) (11,108) 4,306 3,415 1,331 1,609
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Net earnings (loss) per share $ (3.60) 1.39 1.11 .44 .55
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Cash dividends per share $ .40 .50 .30 .36 1.00
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Total assets $ 230,229 231,101 193,364 179,999 178,250
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Long-term debt $ 44,634 43,202 38,114 34,136 33,391
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</TABLE>
(a) In fiscal 1996, the Company recorded nonrecurring charges of $18.9 million
($12.6 million after tax, or $4.07 per share), as described in note 15 of
the notes to consolidated financial statements. Nonrecurring charges are
included in cost of goods sold ($7.1 million), selling, general, and
administrative expenses ($2.8 million), and restructuring costs
($9 million).
(b) In fiscal 1992, the Company changed its method of accounting for income
taxes. The change resulted in an increase in net earnings of $195 thousand
($.07 per share).
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
FISCAL 1996 COMPARED TO FISCAL 1995
Net sales increased $30.7 million, or 12%, to a record $297 million in fiscal
1996. The Company's operations in Europe and the Pacific Rim had net sales of
$157 million, an increase of $38.9 million, or 33%, over fiscal 1995. Net sales
in Europe and the Pacific Rim would have been $4 million higher in fiscal 1996
if prevailing fiscal 1995 currency exchange rates had remained in effect for
fiscal 1996. The Company's operations in the Americas (principally the U.S. and
Canada) had net sales of $140 million, a decrease of $8.2 million, or 6%, as
compared to the prior year. Net sales in the Americas decreased to 47% of
worldwide sales in fiscal 1996 as compared to 56% in the prior year. Worldwide
sales growth was largely due to increasing market acceptance, particularly in
the automotive industry, of environmentally friendly technologies introduced by
the Company in recent years.
The Company had a net loss of $11.1 million ($3.60 per share) in fiscal 1996 as
compared to net earnings of $4.3 million ($1.39 per share) in fiscal 1995. The
Company recorded $18.9 million of pretax nonrecurring charges in fiscal 1996;
the after-tax effect of such charges was $12.6 million, or $4.07 per share. The
nonrecurring charges recorded in fiscal 1996 are comprised of costs associated
with the restructuring of operations and product lines to enhance the Company's
competitiveness and improve profitability. The Company has eliminated numerous
product lines, reduced employment positions, and substantially reduced its
manufacturing capacity in anticipation of increased levels of outsourcing.
Gross profit declined $6.4 million in fiscal 1996 largely because of product
rationalization and product mix. Included in cost of goods sold is a
nonrecurring charge of $7.1 million relating principally to the elimination of
product lines. Also, the increase in sales was driven by an increase in large
contracts which have inherently lower margins. Gross profit as a percentage of
sales decreased to 27% in fiscal 1996 from 33% in fiscal 1995 primarily for the
same reasons.
Selling, general, and administrative expenses increased $6.6 million, or 9%,
from fiscal 1995 to fiscal 1996, primarily to support the increase in sales.
Included in selling, general, and administrative expenses in fiscal 1996 is a
nonrecurring charge of $2.8 million relating to the resolution of disputes
pertaining to the performance of products sold in prior years.
Restructuring costs of $9.0 million were recorded in fiscal 1996, principally
comprised of employee separation costs of $5.4 million, asset writeoffs of $3.3
million, and consulting fees of $375 thousand. The employee separation costs
reflect the reduction of 567 employees in the U.S., England, Mexico, Belgium,
France, Italy, and Canada. Asset writeoffs consist of the Company's writeoff of
its investment in Binks de Mexico, writeoffs of specific manufacturing assets,
and disposition of the corporate jet. Consulting fees were incurred to help
shape and implement the new strategic direction of the Company.
The Company has changed its approach to serving customers in Mexico.
Previously, customers were supplied with U.S. made products by a subsidiary in
Mexico. The Company is liquidating this distribution subsidiary and
establishing a sales generating operation to take advantage of the North
American Free Trade Agreement. The new Mexican operating unit will generate
sales orders that will be shipped and billed in U.S. dollars (eliminating
currency risk) from the Dallas, Texas warehouse to leverage existing fixed
distribution costs.
Interest expense increased $373 thousand, or 9%, due to higher average levels of
borrowings to support the higher level of sales activity.
Other income and expense, which went from income of $569 thousand in fiscal 1995
to $267 thousand of expense in fiscal 1996, includes interest income, exchange
gains and losses, and gains on the sales of fixed assets. In fiscal 1995, the
Company sold two buildings for pretax gains totaling $258 thousand and in fiscal
1996, the Company sold a property in the United States for a pretax gain of $289
thousand.
Income tax benefits were 31% of pretax losses in fiscal 1996 as compared to an
effective income tax rate of 39% on fiscal 1995 pretax income.
The Company recorded a net loss of $11.1 million in fiscal 1996 as compared to
net earnings of $4.3 million in fiscal 1995, resulting from all of the factors
mentioned above.
12
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONT.
FISCAL 1995 COMPARED TO FISCAL 1994
Net sales increased $22.4 million, or 9%, in fiscal 1995 to $266 million. The
Company's operations in the Americas (principally the U.S. and Canada) had net
sales of $148 million, an increase of $14 million, or 11%, as compared to the
prior year. The Company's operations in Europe and the Pacific Rim had net
sales of $118 million, an increase of $8 million, or 7%, as compared to the
prior year. These increases were the result of improving market acceptance of
environmentally friendly technologies introduced in recent years. Net sales in
the Americas comprised 56% of worldwide sales in fiscal 1995, as compared to 55%
in fiscal 1994.
Gross profit increased $10.7 million in fiscal 1995 largely because of the
increase in sales. The percentage of gross profit to sales increased to 33% in
fiscal 1995 from 31% in fiscal 1994 primarily because of improved margins on
large contracts and price increases in fiscal 1995. Selling, general, and
administrative expenses increased $7.8 million, or 11%, from fiscal 1994 to
fiscal 1995 to support the increase in sales.
Interest expense increased $1.3 million, or 46%, due to higher U.S. interest
rates and increased borrowings to support the higher level of sales activity.
Other income, which decreased $195 thousand in fiscal 1995, includes interest
income, exchange gains and losses, and gains on sales of fixed assets. In
fiscal 1994, the Company sold a parcel of undeveloped land at a pretax gain of
$960 thousand and in fiscal 1995, the Company sold two buildings for pretax
gains totaling $258 thousand.
Income taxes were 39% of pretax income in both fiscal 1995 and fiscal 1994.
Net earnings increased $891 thousand to $4.3 million in fiscal 1995 when
compared to net earnings of $3.4 million in fiscal 1994. This 26% increase is
the result of all of the factors mentioned above.
LIQUIDITY AND CAPITAL RESOURCES
Revenues generated from operations constitute the primary source of the
Company's liquidity. Short-term funds are provided for current operations
through bank loans and the issuance of bankers' acceptances. The Company
maintains substantial lines of credit for general corporate purposes. The total
amount available for borrowing under existing lines of credit in excess of
outstanding borrowings, bankers' acceptances, and letters of credit supporting
export activities was approximately $36 million at November 30, 1996.
The Company's cash and cash equivalents increased $7.7 million during fiscal
1996. The net increase was primarily the result of $9.8 million generated from
operating activities principally due to a decrease in accounts receivable,
offset by $1.7 million used in investing activities chiefly for purchases of
property, plant, and equipment, $235 thousand used in financing activities from
the payment of short-term debt, capital leases, and the payment of dividends
partially offset by proceeds from long-term borrowings. The changes in foreign
exchange rates during the year resulted in a decrease of cash in U.S. dollars of
$207 thousand.
In fiscal 1996, the Company paid cash dividends totaling $1.2 million on its
capital stock compared to $1.5 million in fiscal 1995.
13
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Information on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
(a) Directors. The information required in response to this item
regarding directors of the Company will be contained in the Company's definitive
Proxy Statement (the "Proxy Statement") for its Annual Meeting of Stockholders
to be held on April 29, 1997 under the caption "Election of Directors" and is
incorporated herein by reference.
(b) Executive Officers of the Company. The information required in
response to this item regarding executive officers of the Company is contained
in Part I of this report and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required in response to this item will be contained in
the Proxy Statement under the captions "Executive Compensation" and "Information
Regarding Directors" and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required in response to this item will be contained in
the Proxy Statement under the captions "Election of Directors" and "Voting
Securities" and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required in response to this item will be contained in
the Proxy Statement under the caption "Election of Directors" and is
incorporated herein by reference.
14
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:
1,2 Financial Statements and Schedules
See Index to Financial Information on page F-1.
3 Exhibits
See Exhibit Index beginning on page i.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the last
quarter of its fiscal year.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Binks Manufacturing Company
By:/s/ Doran J. Unschuld
------------------------------
Doran J. Unschuld
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ John J. Schornack Chairman of the Board February 27, 1997
- ------------------------- and Director
John J. Schornack
/s/ Doran J. Unschuld President, Chief Executive February 27, 1997
- ------------------------- Officer, and Director
Doran J. Unschuld
(Principal Executive
Officer)
/s/ Jeffrey W. Lemajeur Vice President of Finance, February 27, 1997
- ------------------------- Chief Financial Officer,
Jeffrey W. Lemajeur and Treasurer
(Principal Financial and
Accounting Officer)
/s/ William W. Roche Director February 27, 1997
- -------------------------
William W. Roche
/s/ Dr. Donald G. Meyer Director February 27, 1997
- -------------------------
Dr. Donald G. Meyer
/s/ Clifford J. Vaughan Director February 27, 1997
- -------------------------
Clifford J. Vaughan
/s/ Dr. Wayne F. Edwards Director February 27, 1997
- -------------------------
Dr. Wayne F. Edwards
16
<PAGE>
BINKS MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
INDEX TO FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
Page(s)
-------
Independent Auditors' Reports. . . . . . . . . . . . . . . . . . . . F-2, 3
Financial Statements:
Consolidated Balance Sheets, November 30, 1996 and 1995. . . . . . F-4,5
Consolidated Statements of Operations, years ended
November 30, 1996, 1995, and 1994 . . . . . . . . . . . . . . . F-6
Consolidated Statements of Stockholders' Equity, years
ended November 30, 1996, 1995, and 1994 . . . . . . . . . . . . F-7
Consolidated Statements of Cash Flows, years ended
November 30, 1996, 1995, and 1994 . . . . . . . . . . . . . . . F-8
Notes to Consolidated Financial Statements . . . . . . . . . . . . F-9-F20
Financial Statement Schedules:
All schedules are omitted as the required information is not applicable, or
the information is presented in the accompanying consolidated financial
statements or related notes.
F-1
<PAGE>
[LOGO]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
and Stockholders
Binks Manufacturing Company:
We have audited the accompanying consolidated balance sheet of Binks
Manufacturing Company (the Company) and consolidated subsidiaries as of November
30, 1996, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years ended November 30, 1996 and 1994. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Binks Manufacturing
Company and consolidated subsidiaries as of November 30, 1996, and the results
of their operations and their cash flows for the years ended November 30, 1996
and 1994 in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
February 21, 1997
F-2
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Binks Manufacturing Company
Franklin Park, Illinois
We have audited the accompanying consolidated balance sheet of Binks
Manufacturing Company and consolidated subsidiaries as of November 30, 1995, and
the related consolidated statements of earnings, stockholders' equity, and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Binks Manufacturing
Company and consolidated subsidiaries as of November 30, 1995, and the results
of their operations and their cash flows for the year then ended in conformity
with generally accepted accounting principles.
/s/ Crowe, Chizek and Company LLP
Crowe, Chizek and Company LLP
Oak Brook, Illinois
February 9, 1996
F-3
<PAGE>
BINKS MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
November 30, 1996 and 1995
(in thousands, except share amounts)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSETS 1996 1995
- --------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 16,200 8,527
Receivables, net 79,433 90,726
Inventories 84,737 86,207
Other current assets 9,644 5,222
- --------------------------------------------------------------------------------
Total current assets 190,014 190,682
- --------------------------------------------------------------------------------
Other noncurrent assets:
Intangible assets 3,287 3,299
Deferred income taxes 4,525 896
Other assets 4,435 5,598
- --------------------------------------------------------------------------------
Total other noncurrent assets 12,247 9,793
- --------------------------------------------------------------------------------
Property, plant, and equipment, at cost:
Land 1,762 1,803
Buildings 21,511 21,719
Machinery and equipment 42,177 41,664
- --------------------------------------------------------------------------------
65,450 65,186
Less accumulated depreciation 37,482 34,560
- --------------------------------------------------------------------------------
Net property, plant, and equipment 27,968 30,626
- --------------------------------------------------------------------------------
$ 230,229 231,101
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
BINKS MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
November 30, 1996 and 1995
(in thousands, except share amounts)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
- --------------------------------------------------------------------------------
Current liabilities:
Bank overdrafts and notes payable to banks $ 8,708 9,955
Current maturities of long-term debt 676 1,085
Accounts payable 52,987 53,969
Accrued expenses:
Payrolls, commissions, etc. 8,989 7,466
Taxes, other than income taxes 1,919 1,583
Other 17,371 8,009
Income taxes 2,909 2,012
- --------------------------------------------------------------------------------
Total current liabilities 93,559 84,079
Deferred compensation 9,564 8,725
Deferred income taxes 425 490
Long-term debt, less current maturities 44,634 43,202
- --------------------------------------------------------------------------------
Total liabilities 148,182 136,496
- --------------------------------------------------------------------------------
Stockholders' equity:
Capital stock, $1 par value. Authorized 12,000,000
shares; issued and outstanding 3,088,837 shares
in 1996 and 1995 3,089 3,089
Additional paid-in capital 24,504 24,504
Retained earnings 54,327 66,671
Foreign currency translation adjustments 127 341
- --------------------------------------------------------------------------------
Total stockholders' equity 82,047 94,605
- --------------------------------------------------------------------------------
$ 230,229 231,101
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F-5
<PAGE>
BINKS MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Operations
Years ended November 30, 1996,1995, and 1994
(in thousands, except per share amounts)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
Net sales $ 296,686 266,003 243,599
Cost of goods sold 216,017 178,940 167,261
- --------------------------------------------------------------------------------
Gross profit 80,669 87,063 76,338
Selling, general, and administrative expenses 83,111 76,517 68,757
Restructuring costs 9,043 - -
- --------------------------------------------------------------------------------
Operating income (loss) (11,485) 10,546 7,581
- --------------------------------------------------------------------------------
Other expense (income):
Interest expense 4,405 4,032 2,767
Other expense (income), net 267 (569) (764)
- --------------------------------------------------------------------------------
4,672 3,463 2,003
- --------------------------------------------------------------------------------
Earnings (loss) before income taxes (16,157) 7,083 5,578
Income tax expense (benefit) (5,049) 2,777 2,163
- --------------------------------------------------------------------------------
Net earnings (loss) $ (11,108) 4,306 3,415
- --------------------------------------------------------------------------------
Net earnings (loss) per share $ (3.60) 1.39 1.11
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
BINKS MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Years ended November 30, 1996, 1995, and 1994
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Foreign
Additional currency
Capital paid-in Retained translation
stock capital earnings adjustments Total
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at November 30, 1993 $ 3,089 24,504 61,420 (4,246) 84,767
Net earnings - - 3,415 - 3,415
Foreign currency translation
adjustments - - - 2,971 2,971
Cash dividends ($.30 per share) - - (926) - (926)
- ----------------------------------------------------------------------------------------------
Balance at November 30, 1994 3,089 24,504 63,909 (1,275) 90,227
Net earnings - - 4,306 - 4,306
Foreign currency translation
adjustments - - - 1,616 1,616
Cash dividends ($.50 per share) - - (1,544) - (1,544)
- ----------------------------------------------------------------------------------------------
Balance at November 30, 1995 3,089 24,504 66,671 341 94,605
Net loss - - (11,108) - (11,108)
Foreign currency translation
adjustments - - - (1,559) (1,559)
Liquidation of foreign subsidiary - - - 1,345 1,345
Cash dividends ($.40 per share) - - (1,236) - (1,236)
- ----------------------------------------------------------------------------------------------
Balance at November 30, 1996 $ 3,089 24,504 54,327 127 82,047
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE>
BINKS MANUFACTURING COMPANY
AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended November 30, 1996, 1995, and 1994
(in thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
1996 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (11,108) 4,306 3,415
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization:
Property, plant, and equipment 4,285 3,765 3,271
Intangible assets 146 177 201
Deferred compensation, net of payments 544 493 465
Deferred income taxes (9,175) (1,295) (352)
Other, net 339 189 (602)
Cash provided by (used in) changes in:
Receivables 11,879 (18,936) (3,099)
Inventories 622 (10,341) (2,077)
Other current assets 1,799 (530) (1,103)
Accounts payable (2,927) 17,589 (6,601)
Accrued expenses 12,912 2,258 2,901
Income taxes 518 1,607 (1,100)
- -----------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 9,834 (718) (4,681)
Cash flows from investing activities:
Purchases of property, plant, and equipment (3,540) (7,664) (4,185)
Proceeds from sale of property, plant, and equipment 1,738 2,025 1,615
Increase in other assets 83 (560) (1,302)
- -----------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,719) (6,199) (3,872)
- -----------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Cash dividends paid (1,236) (1,544) (926)
Proceeds from long-term borrowings 2,983 6,069 4,382
Net increase (decrease) in short-term borrowings (1,061) 3,868 3,810
Principal payments on long-term debt (921) (1,679) (945)
- -----------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (235) 6,714 6,321
- -----------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (207) 166 632
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 7,673 (37) (1,600)
Cash and cash equivalents at beginning of year 8,527 8,564 10,164
- -----------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 16,200 8,527 8,564
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Supplemental cash flow disclosures -
cash paid for:
Interest $ 4,147 4,350 2,559
Income taxes 3,435 3,422 4,012
- -----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-8
<PAGE>
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION AND REPORT PREPARATION
The consolidated financial statements include the accounts of the Company
and consolidated subsidiaries in the U.S., England, Scotland, Sweden,
Australia, Canada, Belgium, Italy, Germany, Japan, and France. The
subsidiaries in England, Scotland, Sweden, and Australia are included on
the basis of their September 30 fiscal year end. All material intercompany
balances and transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions which affect reported earnings, financial
position, and various disclosures. Actual results could differ from those
estimates.
CURRENCY TRANSLATION
The results of operations for non-U.S. subsidiaries are translated from
local currencies into U.S. dollars using average exchange rates during each
period; assets and liabilities are translated using exchange rates at the
end of each period. Adjustments resulting from the translation process are
reported in a separate component of stockholders' equity, and are not
included in the determination of the results of operations.
FORWARD EXCHANGE CONTRACTS
The Company enters into forward exchange contracts as hedges against
accounts receivable and accounts payable denominated in currencies other
than the currency used in preparing financial statements. Market value
gains and losses on the foreign exchange contracts are recognized and
offset the foreign exchange gains or losses on the related accounts
receivable and accounts payable.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand and amounts due from banks
with original maturities of three months or less.
INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or market
(net realizable value).
PROPERTY, PLANT, AND EQUIPMENT
Depreciation of property, plant, and equipment is computed by the
straight-line method. Estimated lives range from 25 to 40 years for
buildings and from 4 to 12 years for machinery and equipment.
INTANGIBLE ASSETS
Intangible assets are comprised of goodwill and patents. Goodwill
represents excess costs of acquired companies over the fair values of their
net tangible assets. All intangibles are amortized by the straight line
method, with goodwill amortized over 40 years and patents over their
respective useful lives.
(Continued)
F-9
<PAGE>
- --------------------------------------------------------------------------------
IMPAIRMENT OF LONG-LIVED ASSETS
In the event that facts and circumstances indicate that the cost of
long-lived assets may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required, the estimated future undiscounted
cash flows associated with the asset would be compared to the asset's
carrying amount to determine if a writedown to market value or discounted
cash flow value is required.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value approximates the carrying value for all financial
instruments, with the exception of long-term debt, for which the fair value
is less than the carrying value by an amount which is immaterial to the
consolidated financial statements.
REVENUE RECOGNITION
Profits on long-term equipment production and installation contracts are
recorded on the basis of the estimated percentage of completion of
individual contracts determined under the cost-to-cost method. Estimated
losses on long-term contracts are charged to the results of operations in
the period in which a loss becomes apparent.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development costs are charged to expense when incurred. Total
research and development costs charged to expense were $4.9 million, $4.0
million, and $4.3 million in fiscal 1996, 1995, and 1994, respectively.
ADVERTISING EXPENSES
Advertising costs are charged to expense when incurred. Total advertising
costs charged to expense were $2.3 million, $1.8 million, and $1.5 million
in fiscal 1996, 1995, and 1994, respectively.
INCOME TAXES
The asset and liability method is used in accounting for income taxes.
Under this method, deferred tax assets and liabilities are recognized for
operating loss and tax credit carryforwards and for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in the results of operations in the period that includes the
enactment date.
NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share are based on the weighted average number of
shares of capital stock outstanding (3,088,837 shares in fiscal 1996, 1995,
and 1994).
F-10
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
RECLASSIFICATIONS
Certain amounts in the fiscal 1995 and fiscal 1994 financial statements, as
previously reported, have been reclassified to conform to the fiscal 1996
presentation.
(2) RECEIVABLES
Net receivables are comprised of the following at November 30 (in thousands):
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Trade $ 74,889 87,440
Costs and estimated earnings in excess of
billings on uncompleted contracts 4,855 600
Other 2,930 4,894
- ---------------------------------------------------------------------------------------
82,674 92,934
Less allowance for doubtful receivables 3,241 2,208
- ---------------------------------------------------------------------------------------
$ 79,433 90,726
- ---------------------------------------------------------------------------------------
Comparative information with respect to uncompleted long-term equipment contracts
at November 30 follows (in thousands):
- ---------------------------------------------------------------------------------------
1996 1995
- ---------------------------------------------------------------------------------------
Expenditures and estimated earnings on
uncompleted contracts $ 38,812 18,219
Less applicable billings 39,468 19,259
- ---------------------------------------------------------------------------------------
$ (656) (1,040)
- ---------------------------------------------------------------------------------------
Included in the accompanying balance sheets:
Costs and estimated earnings in excess of billings
on uncompleted contracts (included in receivables) $ 4,855 600
Billings in excess of costs and estimated earnings
on uncompleted contracts (included in
accounts payable) (5,511) (1,640)
- ---------------------------------------------------------------------------------------
$ (656) (1,040)
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
F-11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(3) INVENTORIES
Inventories at November 30 are summarized as follows (in thousands):
- --------------------------------------------------------------------------------
1996 1995
- --------------------------------------------------------------------------------
Finished goods and service parts $ 41,375 44,928
Work in process 39,673 37,812
Raw material 3,689 3,467
- --------------------------------------------------------------------------------
$ 84,737 86,207
- --------------------------------------------------------------------------------
(4) NON-U.S. SUBSIDIARIES
Financial data relating to non-U.S. subsidiaries is summarized as
follows (in thousands):
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
Total assets $ 122,247 120,399 90,888
Total liabilities 79,104 78,975 52,003
- --------------------------------------------------------------------------------
Equity $ 43,143 41,424 38,885
- --------------------------------------------------------------------------------
Net sales $ 167,324 129,769 117,146
- --------------------------------------------------------------------------------
Earnings (loss) before income taxes $ 4,465 (a) 7,083 5,578
- --------------------------------------------------------------------------------
Net earnings $ 2,413 2,213 856
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) Includes $3.1 million of nonrecurring charges.
(5) CREDIT FACILITIES AND LONG-TERM DEBT
Lines of credit and overdraft facilities aggregate $75 million at November
30, 1996, against which the Company has overdrafts and notes payable to
banks of $8.7 million, bankers' acceptances of $27 million, and letters of
credit supporting export activities of $3.3 million. The remaining unused
lines of credit are available to support the Company's U.S. operations
($15.6 million) and non-U.S. operations ($20.4 million).
F-12
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
Consolidated long-term debt consists of the following at November 30 (in
thousands):
- --------------------------------------------------------------------------------------
1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C>
Bankers' acceptances due in various maturities through
May 30, 1997 under lines of credit expiring in 1998
(6.03% to 6.31% in 1996 and 6.24% to 6.64% in 1995) $ 27,000 25,000
Senior notes maturing through 2008 (7.14%) 15,000 15,000
Obligations under capital leases 593 652
Other loans, maturities at various dates through
2005, weighted average interest rate of 4.8% 2,717 3,635
- --------------------------------------------------------------------------------------
45,310 44,287
Less current maturities 676 1,085
- --------------------------------------------------------------------------------------
Long-term debt, less current maturities $ 44,634 43,202
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
The aggregate maturities of long-term debt due in each of the fiscal years
1998 through 2001 are $28.0 million, $1.7 million, $1.6 million, and $2.2
million, respectively.
(6) INCOME TAXES
The Company files a consolidated Federal income tax return which includes
all U.S. subsidiaries. Federal income taxes for each U.S. subsidiary are
computed separately and are payable to the Parent Company.
No provision is made for U.S. Federal income taxes which would be payable
if undistributed earnings of non-U.S. subsidiaries were paid as dividends
to the Company. If such earnings, which aggregate $33 million at
November 30, 1996, were to be distributed, the resulting U.S. Federal
income taxes would be largely offset by foreign tax credits.
Foreign tax credit carryforwards at November 30,1996 totaled $1.7 million.
Expiration of the foreign tax credit carryforwards is as follows: $870
thousand in fiscal 1998, $528 thousand in fiscal 1999, and $316 thousand in
fiscal 2000.
F-13
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Income tax expense (benefit) is comprised as follows (in thousands):
- -----------------------------------------------------------------------------------------------------------------
State
U.S. and
Federal Non-U.S. local Total
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiscal 1996:
Current $ 98 3,670 358 4,126
Deferred (7,412) (1,763) - (9,175)
- -----------------------------------------------------------------------------------------------------------------
$ (7,314) 1,907 358 (5,049)
- -----------------------------------------------------------------------------------------------------------------
Fiscal 1995:
Current 1,456 2,306 310 4,072
Deferred (434) (861) - (1,295)
- -----------------------------------------------------------------------------------------------------------------
$ 1,022 1,445 310 2,777
- -----------------------------------------------------------------------------------------------------------------
Fiscal 1994:
Current $ 1,708 592 203 2,503
Deferred (212) (128) - (340)
- -----------------------------------------------------------------------------------------------------------------
$ 1,496 464 203 2,163
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Actual income tax expense differed from the amounts computed by applying
the U.S. Federal income tax rate of 34% to pretax income (loss) as a
result of the following (in thousands):
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed "expected" tax expense (benefit) $ (5,493) 2,408 1,897
Difference between U.S. and non-U.S. tax rates 182 277 132
Nondeductible expenses 326 381 319
State and local income taxes, net of
Federal income tax benefit 236 205 134
Research tax credit (94) (267) (60)
Change in the valuation allowance for deferred tax assets (1,021) 1,038 869
Benefit not recorded for non-U.S. net operating loss - (114) 195
Foreign tax credits less than (in excess of) U.S. taxes
on dividends from foreign subsidiaries 1,150 (1,209) (858)
Restructuring costs (639) - -
Other 304 58 (465)
- -----------------------------------------------------------------------------------------------------------------
Provision for income taxes $ (5,049) 2,777 2,163
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
F-14
<PAGE>
- --------------------------------------------------------------------------------
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
November 30, 1996 and 1995 are presented below (in thousands):
- --------------------------------------------------------------------------------
1996 1995
- --------------------------------------------------------------------------------
Deferred tax assets:
Deferred compensation $ 2,458 2,536
Inventories 1,117 615
Allowance for doubtful receivables 450 276
Foreign tax credit carryforwards 1,714 2,864
Accrued expenses 1,499 836
Net operating loss carryforwards 5,379 -
Nonrecurring charges 3,146 -
Other 294 254
- --------------------------------------------------------------------------------
Total gross deferred tax assets 16,057 7,381
Less valuation allowance 886 1,907
- --------------------------------------------------------------------------------
Total deferred tax assets 15,171 5,474
- --------------------------------------------------------------------------------
Deferred tax liabilities:
Plant and equipment, principally due to
differences in depreciation 2,199 2,240
Long-term contracts 515 204
Other 252 -
- --------------------------------------------------------------------------------
Total gross deferred liabilities 2,966 2,444
- --------------------------------------------------------------------------------
Net deferred tax assets $ 12,205 3,030
- --------------------------------------------------------------------------------
The valuation allowance for deferred tax assets as of November 30, 1993 was
zero. The net change in the total valuation allowance for the fiscal years
ended 1996, 1995, and 1994 was a decrease of $1.0 million, an increase of
$1.0 million, and an increase of $869 thousand, respectively.
At November 30, 1996, the Company has net operating loss carryforwards of
$15.2 million which primarily expire in 2011.
The U.S. Federal income tax returns of the Company have been closed by the
IRS through November 30, 1990. An examination of the years ended November
30, 1991 and November 30, 1992 is currently in progress.
(7) EMPLOYEE BENEFITS
The Company and certain subsidiaries maintain profit sharing plans covering
most of their employees. Additionally, the Company maintains deferred
compensation plans for certain officers and key employees. The total
expense related to these plans was $1.6 million in 1996, $1.0 million in
fiscal 1995, and $781 thousand in fiscal 1994.
F-15
<PAGE>
- --------------------------------------------------------------------------------
(8) QUARTERLY FINANCIAL DATA (UNAUDITED)
A summary of quarterly financial data for the years ended November 30, 1996
and 1995 follows (in thousands, except per share data):
- --------------------------------------------------------------------------------
Quarter ended
--------------------------------------------
Fiscal 1996 February 29 May 31 August 31 November 30
- --------------------------------------------------------------------------------
Net sales $ 65,429 62,877 71,535 96,845
- --------------------------------------------------------------------------------
Gross profit $ 21,146 20,790 23,828 14,905
- --------------------------------------------------------------------------------
Net earnings (loss) $ 1,118 (291) 806 (12,741)
Net earnings (loss) per share $ .36 (.09) .26 (4.13)
- --------------------------------------------------------------------------------
Quarter ended
---------------------------------------------
Fiscal 1995 February 28 May 31 August 31 November 30
- --------------------------------------------------------------------------------
Net sales $ 58,994 64,374 67,871 74,764
- --------------------------------------------------------------------------------
Gross profit $ 20,583 21,740 22,680 22,060
- --------------------------------------------------------------------------------
Net earnings $ 1,409 869 1,020 1,008
Net earnings per share $ .46 .28 .33 .32
- --------------------------------------------------------------------------------
(9) OPERATING LEASES
The Company occupies certain offices and uses certain equipment under
operating lease arrangements. Rent expense under such arrangements was
$2.9 million, $2.8 million and $2.7 million in fiscal years 1996, 1995, and
1994, respectively.
The future minimum rental payments required under operating leases that
have initial or remaining noncancelable lease terms in excess of one year
as of November 30, 1996 are $2.0 million, $1.4 million, $663 thousand, $182
thousand, and $156 thousand in 1997 through 2001, respectively.
It is expected that in the normal course of business most leases that
expire will be renewed or replaced by leases on other properties; thus, it
is anticipated that future annual rent expense will not be materially less
than the amount shown for 1996.
F-16
<PAGE>
- --------------------------------------------------------------------------------
(10) CONTINGENCIES
On June 30, 1995, the Court of Appeals for the Federal Circuit, in GRACO,
INC. V. BINKS MANUFACTURING COMPANY, vacated a judgment of infringement and
an award of $2.75 million against the Company regarding certain pumps sold
prior to June 1993. The United States District Court for the Southern
District of Texas previously found that the Company had "willfully"
infringed a patent and awarded Graco treble damages, attorney fees and
costs. The Federal Circuit reversed the district court's finding that the
Company "willfully" infringed Graco's patent and the resulting enhancement
of damages and award of attorneys' fees. The Federal Circuit remanded the
case for findings on the issues of whether the patent was valid and
infringed. Graco asserts that on remand it will seek damages of
approximately $750 thousand. The Company believes that there are
meritorious defenses to these claims and thus no provision for any
liability has been made in the financial statements.
The Company is the defendant in a lawsuit filed by former financial
advisors seeking approximately $900 thousand under terms of a contract.
Management believes that all required payments have been made and no
further amounts have been provided for.
The Company has certain other contingent liabilities resulting from
litigation and claims incident to the ordinary course of business.
Management believes that the probable resolution of such contingencies will
not materially affect the financial position or results of operations of
the Company.
(11) STOCK OPTION PLAN
During fiscal 1996, the Company established a Stock Option Plan (the Plan).
The Plan provides for the granting of options to key employees to purchase
a maximum of 300,000 shares of the Company's capital stock. On October 24,
1996, the Company granted 93,500 options to key employees, exercisable at
the then market price per share of $23-3/8, vesting at 25% annually over
four years. The Plan is subject to approval by the Company's stockholders.
(12) STOCKHOLDER RIGHTS PLAN
On February 2, 1990, the Company declared a dividend distribution of one
Right for each outstanding share of Capital Stock of the Company to the
stockholders of record on February 13, 1990. Certain terms of the Rights
were amended on January 21, 1991. Each Right, when exercisable, entitles
the registered holder to purchase from the Company one share of Capital
Stock, at a price of $100 per share, subject to adjustment. The Rights
become exercisable ten days after the earliest to occur of (i) public
announcement that a person or group of associated or affiliated persons
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding Capital Stock of the Company (the Stock Acquisition
Date); (ii) the commencement of, or an announcement of an intention to
make, a tender offer or exchange offer if, upon consummation thereof, any
person or group of associated or affiliated persons would be the beneficial
owner of 15% or more of the outstanding Capital Stock of the Company; or
(iii) the Board of Directors declares any person owning 10% or more of the
outstanding Capital Stock of the Company to be an "Adverse Person" pursuant
to the criteria set forth in the Rights Agreement.
F-17
<PAGE>
- --------------------------------------------------------------------------------
If a person or group of associated or affiliated persons becomes the
beneficial owner of 15% or more of the outstanding Capital Stock of the
Company, the Company is the surviving corporation in a merger and the
Capital Stock remains outstanding, an acquiring person engages in certain
self-dealing transactions, or the Board of Directors declares any person to
be an "Adverse Person" subject to certain adjustments and other conditions,
each Right not owned or transferred by the acquiring person or Adverse
Person will entitle the holder to purchase one share of Capital Stock of
the Company at a purchase price of 20% of its then market value. In
addition, if the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or
earning power is sold, subject to certain adjustments and other conditions,
each Right will entitle the holder to purchase capital stock of the
acquiring company having a market value of $200 for a purchase price of
$100.
The Rights are redeemable by the Company at any time prior to 20 days after
the Stock Acquisition Date, at $0.01 per Right, at the Company's option.
After the Stock Acquisition Date, the Rights may not be exercised until the
Company's right of redemption has expired. The Rights expire on
February 2, 2000. Until a Right is exercised, the holder of a Right, as
such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or receive dividends.
(13) FORWARD EXCHANGE CONTRACTS
At November 30, 1996, the Company had contracts maturing through
October 31, 1997 to purchase $9.7 million in foreign currency (3.9 million
British pounds sterling and 18.6 million French francs) and $800 thousand
in U.S. dollars.
(14) GAINS ON SALES OF REAL ESTATE
During each of the last three fiscal years, the Company has sold real
estate. The gains on those sales are included in "other income" and
amounted to $289 thousand ($191 thousand after tax) in fiscal 1996, $258
thousand ($127 thousand after tax) in fiscal 1995, and $960 thousand ($575
thousand after tax) in fiscal 1994.
(15) NONRECURRING CHARGES
During fiscal 1996, the Company announced a number of steps for the
strategic restructuring of its operations and product lines to enhance the
Company's competitiveness in global markets and to improve its
profitability. The Company has reduced substantially the number of
individual products that it offers for sale, and has reduced the number of
manufacturing and administrative employment positions. Total nonrecurring
charges of $18.9 million pretax were recorded in fiscal 1996, including
costs recorded as follows (in thousands):
- --------------------------------------------------------------------------------
Cost of goods sold $ 7,086
Selling, general, and administrative expenses 2,780
Restructuring costs 9,043
- --------------------------------------------------------------------------------
18,909
Income tax benefits 6,334
- --------------------------------------------------------------------------------
$ 12,575
- --------------------------------------------------------------------------------
F-18
<PAGE>
- --------------------------------------------------------------------------------
Included in cost of goods sold is a nonrecurring charge of $7.1 million
resulting from the write-down of inventories related to products that have
been eliminated. Included in selling, general, and administrative expenses
is a nonrecurring charge of $2.8 million relating to the resolution of
disputes pertaining to the performance of products sold in prior years.
The principal components of restructuring costs of $9.0 million are (a)
employee separation costs of $5.4 million resulting from the reduction of
567 positions in the U.S., Mexico, Canada, England, Belgium, France, and
Italy; (b) writeoffs of $3.3 million relating to specific manufacturing
assets, the investment in Binks de Mexico, and disposition of the corporate
jet; and (c) other costs of $300 thousand.. At November 30, 1996, accrued
nonrecurring charges were $7.1 million, substantially all of which will
result in cash outflows in fiscal 1997.
The last day of production at the Company's manufacturing facility in
Franklin Park, Illinois was February 20, 1997. The Franklin Park real
estate and a majority of the Franklin Park machinery are being offered for
sale. Costs to dispose or relocate machinery and equipment in fiscal 1997
are expected to be recovered through the proceeds from the sale of the
facility. Standard products are now manufactured in the U.S. in leased
facilities in Longmont, Colorado. U.S. demand for sheet metal products is
now being filled through increased production at the Company's Canadian
subsidiary in Toronto and third-party vendors.
(16) SEGMENT AND GEOGRAPHIC INFORMATION
The Company operates in one industry, the manufacture and distribution of
spray finishing and coating application equipment. The Company's products
are sold to customers in North America, South America, Europe, Asia,
Africa, and Australia. U.S. exports to third-party customers are less than
10% of U.S. sales. No single customer accounts for more than 10% of the
Company's net sales.
The table below presents the Company's operations by geographic area:
Americas (U.S. and Canada); Europe (France, England, Belgium, Germany,
Italy, and Sweden); and the Pacific Rim (Japan and Australia). All sales
are presented by originating area. Interarea transfers comprise
transactions among the Company and its subsidiaries in different geographic
areas; these transfers are eliminated in consolidation.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1996 1995 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales to unaffiliated customers (includes exports):
Americas $ 139,721 147,961 133,668
Europe 139,832 105,174 95,919
Pacific Rim 17,133 12,868 14,012
Interarea transfers from:
Americas 6,871 5,357 4,903
Europe 22,980 23,221 16,798
Eliminations (29,851) (28,578) (21,701)
- -------------------------------------------------------------------------------------------
Total $ 296,686 266,003 243,599
- -------------------------------------------------------------------------------------------
</TABLE>
F-19
<PAGE>
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
Operating income (loss):
Americas $ (17,165) 6,695 5,410
Europe 5,142 3,321 1,368
Pacific Rim 538 530 803
- --------------------------------------------------------------------------------
Total (11,485) 10,546 7,581
- --------------------------------------------------------------------------------
Identifiable assets at November 30:
Americas 117,293 128,882 112,529
Europe 99,384 90,213 69,673
Pacific Rim 13,552 12,006 11,162
- --------------------------------------------------------------------------------
Total $ 230,229 231,101 193,364
- --------------------------------------------------------------------------------
F-20
<PAGE>
EXHIBIT INDEX
Binks Manufacturing Company
Form 10-K for fiscal year ended
November 30, 1996
3.1 Amended and Restated Certificate of Incorporation 1
3.2 Amended and Restated By-laws, as of December 11, 1996 (filed
herewith)
4.1 Revolving Credit Agreement, dated as of February 24, 1992, between the
Company and NBD Bank, N.A., as amended April 1, 1993 1
4.2 Amendment, dated August 25, 1994, to the Revolving Credit Agreement,
dated as of February 24, 1992 between the Company and NBD Bank, N.A. 2
4.3 Fourth Amendment dated November 19, 1996 to Revolving Credit
Agreement, dated as of February 24, 1992, between the Company and NBD
Bank, N.A. (filed herewith)
4.4 Note Purchase Agreement, dated as of November 30, 1993 among Binks
Manufacturing Company and the Purchasers named therein 3
4.5 Amended and Restated Rights Agreement, dated as of February 2, 1990
and amended and restated as of January 21, 1991, between Binks
Manufacturing Company and Harris Trust and Savings Bank, as successor
rights agent 4
10.1(a)* Form of Executive Retirement Income Contracts between the Company and
Doran J. Unschuld, Stephen R. Kennedy, and Ernest F. Watts 5
10.1(b)* Form of Amendment to Executive Retirement Income Contract (for the
individuals named in Item 10.1(a)) 1
10.2* Form of Employment Security Agreement between the Company and Doran J.
Unschuld, Stephen R. Kennedy, Ernest F. Watts and Jeffrey W. Lemajeur 1
10.3* Forms of Employment Security Agreements between the Company and
certain key employees 1
10.4* Form of Insurance Maintenance Agreement between the Company and each
of its directors and officers 1
10.5 Loan Agreement, dated November 27, 1992 between the Company and
Comerica Bank, relating to a $5,000,000 line of credit 6
10.6 Amendment No. 1, dated November 26, 1993, to Loan Agreement dated
November 27, 1992, between the Company and Comerica Bank 7
i
<PAGE>
10.7 Amendment No. 2, dated February 21, 1995, to Loan Agreement dated
November 27, 1992 between the Company and Comerica Bank 8
10.8 Amendment No. 3, dated February 28 ,1996 to Letter Agreement dated
February 27, 1992 and Promissory Note between Registrant and Comerica
Bank (filed herewith)
10.9 Amendment No. 4, dated May 1, 1996, to Letter Agreement dated February
27, 1992, and Promissory Note between the Registrant and Comerica Bank
(filed herewith)
10.10 Amendment No. 5 dated July 18, 1996, to Letter Agreement dated
February 27, 1992, between the Registrant and Comerica Bank (filed
herewith)
10.11 Loan Agreement, dated July 12, 1996, between the Company and LaSalle
National Bank, relating to a $5,000,000 line of credit (filed
herewith)
21.1 List of subsidiaries 1
27.1 Financial Data Schedule (filed herewith)
- ----------------
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit to this Form 10-K pursuant to Item 14(c) of Form
10-K.
1 Filed under corresponding exhibit number to the Company's Form 10-K
for its fiscal year ended November 30, 1993 and incorporated herein by
reference.
2 Filed under corresponding exhibit number to the Company's Form 10-K
for its fiscal year ended November 30, 1994 and incorporated herein by
reference.
3 Filed as Exhibit 4.2 to the Company's Form 10-K for its fiscal year
ended November 30, 1993 and incorporated herein by reference.
4 Filed as Exhibit 4.3 to the Company's Form 10-K for its fiscal year
ended November 30, 1993 and incorporated herein by reference.
5 Filed under corresponding exhibit number to the Company's Form 10-K
for its fiscal year ended November 30, 1995 and incorporated herein by
reference.
6 Filed as Exhibit 10.6 to the Company's Form 10-K for its fiscal year
ended November 30, 1993 and incorporated herein by reference.
7 Filed as Exhibit 10.7 to the Company's Form 10-K for its fiscal year
ended November 30, 1994 and incorporated herein by reference.
8 Filed as Exhibit 10.8 to the Company's Form 10-K for its fiscal year
ended November 30, 1995 and incorporated herein by reference.
<PAGE>
Exhibit 3.2
BY-LAWS
OF
BINKS MANUFACTURING COMPANY
(As Amended and Restated through June 6, 1996)
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located in the City of Wilmington, County of New Castle and State of
Delaware, and the name of the agent therein and in charge thereof, and upon whom
legal process against the Corporation may be served (until otherwise determined
by the Board of Directors) is the Corporation Trust Company of America.
Section 2. OTHER OFFICE. Another office of the Corporation, where
meetings of the stockholders and directors may be held, shall be, and is hereby,
established at the Village of Franklin Park, County of Cook and State of
Illinois.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. ANNUAL MEETING. The annual meeting of stockholders of the
Corporation shall be held at the office of the Corporation in Franklin Park,
Illinois, at the hour of 10:00 o'clock A.M., on the last Tuesday of April of
each year, if not a legal holiday, and if a legal holiday then on the next
succeeding day not a legal holiday, for the purpose of electing directors and
for the transaction of only such other business as is properly brought before
the meeting in accordance with these By-Laws. If for any reason said annual
meeting shall not be held at the time herein provided, the same may be held at
any time thereafter, upon notice as hereinafter provided, or the business
thereof may be transacted at any special meeting called for that purpose.
To be properly brought before the meeting, business must be either (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board, (b) otherwise properly brought before the meeting by
or at the direction of the Board, or (c) otherwise properly brought before the
meeting by a stockholder. In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation, no
earlier than February 1 and no later than February 25 immediately preceding the
annual meeting of stockholders. A
<PAGE>
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual
meeting, (ii) the name and record address of the stockholder proposing such
business, (iii) the class and number of shares of the Corporation which are
beneficially owned by the stockholder, and (iv) any material interest of the
stockholder in such business.
Notwithstanding anything in the By-Laws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Section 1, PROVIDED, HOWEVER, that nothing in this Section 1 shall
be deemed to preclude discussion by any stockholder of any business properly
brought before the annual meeting.
The Chairman of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 1, and if he should so
determine, he shall so declare to the meeting and any such business not properly
brought before the meeting shall not be transacted.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may
be called by the President or by order of the Board of Directors whenever they
deem it necessary. Such special meetings shall be held at the principal office
of the Corporation in Franklin Park, Illinois, or such place as may be
designated in the call, and the business of such special meeting shall be
confined to the objects stated in the notice thereof.
Section 3. NOTICE OF MEETINGS. Notice of the time and place of the
annual, and of any special, meeting of the stockholders shall be given by the
Secretary to each of the stockholders entitled to vote at such meeting by
posting same in a postage prepaid letter, addressed to each such stockholder at
the address left with the Secretary of the Corporation, or at his last known
address, or by delivering the same personally, at least ten days prior to such
meeting. The notice of a special meeting shall also set forth the objects of
the meeting. All or any of the stockholders may waive notice of the annual or
any special meeting, and the presence of a stockholder at any meeting, in person
or by proxy, shall be deemed a waiver of notice thereof by him. Meetings of the
stockholders may be held at any time and place and for any purpose, without
notice, when all of the stockholders entitled to vote at such meeting are
present in person or by proxy, or when all of such stockholders waive notice and
consent to the holding of such meeting.
It shall be the duty of the officer who shall have charge of the stock
ledger of the Corporation to prepare and make, at least ten days before every
stockholders' meeting for the election of directors, a complete list of
stockholders entitled to vote thereat, arranged in alphabetical order. Such
list shall be open at the place where said election is to be held for said ten
days, to the examination of any stockholder, and shall be produced and kept at
the time and place of election during the whole time thereof, and subject to the
inspection of any stockholder who may be present.
Section 4. VOTING AT STOCKHOLDERS' MEETINGS. At all meetings of the
stockholders, each holder of stock entitled to be voted at such meeting shall be
entitled to one vote for each
2
<PAGE>
such share of capital stock standing registered in his name at the time of the
closing of the transfer books for said meeting, or if such transfer books shall
not have been closed for such meeting, then for each such share of stock
standing registered in his name at such date, if any, as the Board of Directors
shall have fixed in advance as hereinafter provided, as a record for the
determination of the stockholders entitled to notice of and to vote at such
meeting, or in case the transfer books shall not have been closed for such
meeting and no such record date shall have been fixed in advance by the Board of
Directors, then for each such share of stock standing registered in his name at
the time of the meeting; provided, however, that except where the transfer books
of the Corporation shall have been closed, or a date shall have been fixed as a
record date for the determination of the stockholders entitled to vote, as
hereinafter provided, no share of stock shall be voted on at any election of
directors which shall have been transferred on the books of the Corporation
within twenty days next preceding such election of directors. Such vote may be
given personally or by proxy authorized in writing. Only the persons in whose
names shares of stock shall stand on the books of the Corporation at the time
aforesaid shall be entitled to vote in person or by proxy upon the shares of
stock standing in their names. No proxy shall be voted on or after three years
from its date, unless such proxy provides for a longer period.
Section 5. QUORUM. The holders for the time being of a majority of the
total number of shares of stock issued and outstanding, and for the time being
entitled to be voted at any meeting, represented in person or by proxy, shall
constitute a quorum for the transaction of business, unless the representation
of a larger number shall be required by law. In the absence of a quorum, the
stockholders attending or represented at the time and place at which a meeting
shall have been called may adjourn the meeting from time to time until a quorum
shall be present. At any such adjourned meeting at which a quorum shall be
present any business may be transacted which might have been transacted by a
quorum of the stockholders at the meeting as originally convened.
Section 6. PRESIDING OFFICER AND SECRETARY. The President shall call
meetings of the stockholders to order and shall act as Chairman of such
meetings. The Board of Directors may appoint any stockholder to act as Chairman
at any meeting in the absence of the President and Vice President, and in
default of any appointment by the Board of Directors of a Chairman, the
stockholders may elect a Chairman to preside at the meeting. The Secretary, or
an Assistant Secretary, of the Corporation shall act as Secretary at all
meetings of the stockholders, but in their absence the stockholders or presiding
officers may appoint any person to act as Secretary of the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. ELECTION, QUALIFICATION AND FILLING OF VACANCIES. The
property and business of the Corporation shall be managed and controlled by a
Board of Directors. A director of the Corporation need not be a stockholder
thereof. The Board of Directors shall consist of nine (9) directors. Such
number may be increased or decreased to such number as
3
<PAGE>
shall hereafter be fixed from time to time by amendment of these By-Laws,
provided the number of directors shall never be less than three.
Only persons who are nominated in accordance with the following procedures
shall be eligible for election as directors. Nominations for the election of
directors may be made by the Board of Directors or by a committee appointed by
the Board of Directors, or by any stockholder entitled to vote in the election
of directors generally provided that such stockholder has given actual written
notice of such stockholder's intent to make such nomination or nominations to
the Secretary of the Corporation not later than (a) with respect to an election
to be held at an annual meeting of stockholders, no earlier than February 1 and
no later than February 25 immediately preceding the annual meeting of
stockholders and (b) with respect to an election to be held at a special meeting
of stockholders for the election of directors, the close of business on the
fifteenth day following (i) the date on which notice of such meeting is first
given to stockholders or (ii) the date on which public disclosure of such
meeting is made, whichever is earlier.
Each such notice shall set forth: (a) the name and record address of the
stockholder who intends to make the nomination and the name, age, business
address and resident address of the person or persons to be nominated; (b) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice and stating the number of shares held by such stockholder; (c) a
description of all arrangements or understandings involving any stockholder,
each such nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
stockholder or relating to the Corporation or its securities or to such
nominee's service as a director if elected; (d) such other information regarding
such nominee proposed by such stockholder as would be required to be disclosed
in solicitations for proxies for election of directors pursuant to Rule 14a
under the Securities Exchange Act of 1934, as amended; and (e) the consent of
each nominee to serve as a director of the Corporation if so elected.
The Chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
Vacancies and newly created directorships resulting from any increase in
the authorized number of directors may be filled by a majority of the directors
then in office, although less than a quorum, or by a sole remaining director.
Any director elected to fill a vacancy as hereinabove set forth shall hold
office until the next election of the class for which such director shall have
been chosen, and until his successor shall have been elected and qualified.
When one or more directors shall resign from the Board effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies; the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as hereinbefore
provided with respect to the filling of other vacancies.
4
<PAGE>
Section 2. PLACE OF MEETING. Any meeting of the Board of Directors may
be held at the principal office of the Corporation in Wilmington, Delaware, or
at the office of the Corporation in the Village of Franklin Park, Illinois, or
at any other place within or without the State of Delaware which may be from
time to time established by the By-Laws of the Corporation or by resolution of
the Board, or which may be agreed to in writing by all the directors of the
Corporation.
Section 3. REGULAR AND SPECIAL MEETINGS. The regular annual meeting of
the Board o Directors shall be held without notice at the same place and
immediately following the close of the annual stockholders' meeting in each year
for the election of officers and the transaction of such other business as may
come before the Board. Other regular meetings of the Board may be held at such
times and places, either within or without the State of Delaware, and upon such
notice, or without notice, as the Board of Directors may by resolution from time
to time determine. Special meetings of the Board shall be held whenever called
by the President or any two directors, in writing. Notice of each special
meeting of the Board shall be delivered personally to each director, mailed to
him or transmitted by telephone, telegraph or facsimile transmission to his
residence or usual place of business, at least three days before the meeting or
such shorter period before the meeting as the person or persons calling such
meeting deem appropriate in the circumstances. Meetings of the Board may be
held at any time and place either within or without the State of Delaware, and
for any purpose, without notice, when all of the directors are present, or shall
waive notice of and consent to the holding of such meeting. All or any of the
directors may waive notice of any meeting, and the presence of a director at any
meeting of the Board shall be deemed a waiver of notice thereof by him.
Section 4. QUORUM AND ADJOURNMENT. A majority of the directors in
office at a meeting regularly called shall constitute a quorum. In the absence
of a quorum, the directors present at the time and place at which a meeting
shall have been duly called, may adjourn the meeting from time to time and place
to place until a quorum shall be present.
Section 5. SUBMISSION OF ACTS TO APPROVAL OF STOCKHOLDERS. The Board
of Directors, in its discretion, may submit any contract or act for approval or
ratification at any annual meeting of the stockholders, or at any special
meeting of the stockholders called for that purpose, and any contract or act
that shall be approved or ratified by the vote of the holders of a majority of
the capital stock of the Corporation, which is represented in person or by proxy
at such meeting, provided that a lawful quorum of stockholders be there
represented in person or by proxy, shall, unless the approval or ratification of
the holders of a larger proportion of the capital stock is required by law, or
by the Certificate of Incorporation of the Corporation, be as valid and as
binding upon the Corporation and upon all the stockholders as if it had been
approved or ratified by every stockholder of the Corporation.
Section 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) The Corporation shall, to the fullest extent to which it is
empowered to do by the General Corporation Law of Delaware or any other
applicable laws, as may from time to time be in effect, indemnify any person who
was or is, or is threatened to be made, a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
5
<PAGE>
administrative or investigative (other than an action by or in the right of the
corporation,) by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, against all expenses (including attorneys' fees,) judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. The Corporation may
make advances against any such expenses upon terms determined by the Board of
Directors.
(b) The Corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any 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 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, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnify for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
Section 6, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this Section
6 (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsections (a) and (b)
of this Section 6. Such determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a
6
<PAGE>
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.
(e) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of Directors in
the specific case upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this section.
(f) Persons who are not covered by the foregoing provisions of this
Section 6 and who are or were employees or agents of the Corporation, or are or
were serving at the request of the Corporation as employees or agents of another
corporation, partnership, joint venture, trust or other enterprise, may be
indemnified to the extent authorized at any time or from time to time by the
Board of Directors.
(g) The indemnification provided by this Section 6 shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
Section 7. AUDIT COMMITTEE. The directors shall appoint from their
number an Audit Committee which shall consist of three (3) Unaffiliated
Directors, who shall hold office until their successors are elected, or until
they resign. The Audit Committee shall perform the functions designated by the
Corporation's Board of Directors. The Audit Committee may make its own rules of
procedure and shall meet as and where provided by rules or as designated by its
Chairman. The members of the Audit Committee shall select a member as Chairman.
Section 8. COMPENSATION COMMITTEE. The directors shall appoint a
Compensation Committee which shall consist of three (3) Unaffiliated Directors
who shall hold office until their successors are elected, or until they resign.
The Compensation Committee shall perform the functions designated by the
Corporation's Board of Directors. The Compensation Committee may make its own
rules of procedure and shall meet as and where provided by rules or as
designated by its Chairman. The members of the Compensation Committee shall
select a member as Chairman.
Section 9. EXECUTIVE AND FINANCE COMMITTEE. The directors shall
appoint from their number an Executive and Finance Committee which shall consist
of five (5) directors who shall hold office until their successors are elected,
or until they resign. The Executive and Finance Committee shall perform the
functions designated by the Corporation's Board of Directors. The Executive and
Finance Committee may make its own rules of procedure and shall meet as and
where provided by rules or as designated by its Chairman. The members of the
Executive and Finance Committee shall select a member as Chairman.
7
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Section 10. NOMINATING AND GOVERNANCE COMMITTEE. The directors shall
appoint from their number a Nominating and Governance Committee who shall
consist of three (3) Unaffiliated Directors, who shall hold office until their
successors are elected, or until they resign. The Nominating and Governance
Committee shall perform the functions designated by the Corporation's Board of
Directors. The Nominating and Governance Committee may make its own rules of
procedure and shall meet as and where provided by rules or as designated by its
Chairman. The members of the Nominating and Governance Committee shall select a
member as Chairman.
Section 11. UNAFFILIATED DIRECTORS. An Unaffiliated Director is a
director that is not a present or former employee of the Corporation or any of
its affiliates and does not have any direct or indirect material economic
relationships with the Corporation or any of its affiliates other than as a
result of customary director's compensation or stock ownership.
ARTICLE IV
OFFICERS
Section 1. DESIGNATION, TERM AND VACANCIES. The officers of the
Corporation shall be a Chairman of the Board, a President and Chief Executive
Officer (herein referred to as "President"), one or more Vice Presidents, a
Secretary and a Treasurer, all of whom shall be elected by the Board of
Directors. The Board of Directors may appoint one or more Assistant Treasurers
and one or more Assistant Secretaries and such other officers as may be deemed
necessary, who shall have such authority and shall perform such duties as may
from time to time be prescribed by the Board. Vacancies occurring among the
officers of the Corporation shall be filled by the Board of Directors. Officers
selected by the Board shall hold office until the next annual meeting of the
directors and until their successors are elected and qualified, provided that
any officer may be removed at any time by the affirmative vote of a majority of
the whole Board. All other officers, agents, and employees shall hold office
during the pleasure of the Board or the officers appointing them. Any number of
offices may be held by the same person.
Section 2. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
chosen from among the directors. He shall preside at all meetings of the Board
of Directors. He shall make recommendations to the Board regarding corporation
policies and, as requested by the President, furnish advice and counsel to the
Corporation. He shall also perform such other duties as may be assigned to him
by the Board of Directors.
Section 3. PRESIDENT. The President shall be chosen from among the
directors. He shall preside at all meetings of the stockholders. Subject to
the Board of Directors, he shall have general charge of the entire business of
the Corporation. He may sign and seal certificates of stock and bonds,
contracts or other obligations authorized by the Board, and may, without
previous authority of the Board, make such contracts as the ordinary conduct of
the Corporation's business requires. He shall have the general superintendence
and direction of all of the other officers of the Corporation, and shall have
the usual powers and duties vested in the President of a corporation. He shall
have the power to select and appoint all necessary officers
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and servants of the Corporation, except those selected by the Board of
Directors, and to remove all such officers and servants, except those selected
by the Board of Directors, and make new appointments to fill the vacancies. He
may delegate any of his powers to a Vice President of the Corporation. He shall
at all times be subject to the Board of Directors.
Section 4. VICE PRESIDENT. Each Vice President shall have the same
powers and duties as the President, in the event of the latter's absence or
disability, and also such of said President's powers and duties as the President
may from time to time delegate to him. He shall have such other powers and
perform such other duties as may be assigned to him by the Board of Directors.
Section 5. TREASURER. The Treasurer shall have the custody of such
funds and securities of the Corporation as may come to his hands or be committed
to his care by the Board of Directors. When necessary or proper he shall
endorse on behalf of the Corporation for collection checks, notes or other
obligations, and shall deposit the same to the credit of the Corporation in such
bank or banks or depositaries as the Board of Directors, or President, may
designate. He may sign receipts or vouchers for payments made to the
Corporation, and the Board of Directors may require that such receipts or
vouchers shall also be signed by some other officer to be designated by them.
Whenever required by the Board of Directors he shall render a statement of his
accounts and such other statements respecting the affairs of the corporation as
may be requested. He shall keep proper and accurate books of account. He shall
perform all acts incident to the office of Treasurer, subject to the control of
the Board. He shall, with the President, sign all certificates of stock of the
Corporation and may affix the seal of the Corporation thereto. In the
discretion of the Board of Directors, he may be required to give a bond in such
amount and containing such conditions as the Board of Directors may approve, and
such bond may be the undertaking of a surety company, and the premium therefor
may be paid by the Corporation.
Section 6. SECRETARY. The Secretary shall be sworn to the faithful
discharge of his duty. He shall record the votes and proceedings of the
stockholders and the Board of Directors in a book or books kept for that
purpose, and shall attend all meetings of the directors and stockholders. He
shall keep in safe custody the seal of the Corporation, and when required by the
Board of Directors, or when any instrument shall have first been signed by the
President or a Vice President duly authorized to sign the same, or when
necessary to attest any proceedings of the stockholders or directors, shall
affix it to any instrument requiring the same, and shall attest the same with
his signature. He shall attend to the giving and serving of notices of
meetings. He shall have charge of such books and papers as properly belong to
his office or as may be committed to his care by the Board of Directors. He
shall perform such other duties as appertain to his office or as may be required
by the Board of Directors. In the absence of the Secretary and Assistant
Secretary from any meeting of the Board, the proceedings of such meeting shall
be recorded by such other person as may be appointed at the meeting for that
purpose.
Section 7. ASSISTANT SECRETARY. Each Assistant Secretary shall be
vested with the same powers and duties as the Secretary, and any act may be done
or duty performed by an Assistant Secretary with like effect as though done or
performed by the Secretary. Each
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<PAGE>
Assistant Secretary shall have such powers and perform such other duties as may
be assigned to him by the Board of Directors.
Section 8. ASSISTANT TREASURER. Each Assistant Treasurer shall be
vested with the same powers and duties as the Treasurer, and any act may be done
or duty performed by the Assistant Treasurer with like effect as though done or
performed by the Treasurer. Each Assistant Treasurer shall have such other
powers and perform such other duties as may be assigned to him by the Board of
Directors.
Section 9. EXECUTION OF CHECKS, ETC. Checks, drafts, acceptances,
bills of exchange and promissory notes of the Corporation shall be signed in
such manner as may be from time to time ordered by a resolution of the Board of
Directors.
ARTICLE V
SHARES OF STOCK
Section 1. CERTIFICATES OF STOCK. All certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
the Certificate of Incorporation of the Corporation, as the same may from time
to time be amended, as shall be approved by the Board of Directors, and shall be
signed by the President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Corporation, and shall not be valid
unless so signed. All certificates shall be consecutively numbered, and the
name of the person owning the shares represented thereby, with the number of
such shares and the date of issue, shall be entered on the Corporation's books.
All certificates surrendered shall be cancelled, and no new certificate issued
until the former certificate for the same number of shares shall have been
surrendered and cancelled, except in cases provided for in Section 4 of this
Article.
Section 2. TRANSFER OF SHARES. Transfers of stock shall be made upon
the books of the Corporation by the holder in person or by attorney, upon the
surrender and cancellation of the certificate or certificates for such shares.
But the Board of Directors may appoint some suitable bank or trust company in
the City of Chicago, Illinois, or elsewhere, as transfer agent or registrar of
transfers for facilitating transfers by stockholders under such regulations as
the Board of Directors may from time to time prescribe. Upon such appointment
being made, all stock certificates thereafter issued shall be countersigned by
such transfer agent or registrar of transfers, or both, as the case may be, and
shall not be valid unless so countersigned.
The Board of Directors shall have power to close the stock transfer books
of the Corporation for a period not exceeding forty days preceding the date of
any meeting of stockholders or the date for the payment of any dividend or the
date for the allotment of rights or the date when any change or conversion of
exchange of capital stock shall go into effect; provided, however, that in lieu
of closing the stock transfer books as aforesaid, said Board of Directors may
fix in advance a date, not exceeding sixty days preceding the date of any
meeting of stockholders or the date for the payment of any dividend, or the date
of the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, as a record date for the
determination of the stockholders entitled to notice of and to vote
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<PAGE>
at any such meeting, or entitled to receive payment of any such dividend, or to
any such allotment or rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to receive payment
of such dividend, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any such record date fixed as aforesaid.
Section 3. ADDRESS OF STOCKHOLDERS. Every stockholder shall furnish
the Secretary with an address to which notices of meetings and all other notices
may be served upon or mailed to him, and in default thereof notices may be
addressed to him at his last known address or at the office of the Corporation
in Franklin Park, Illinois.
Section 4. LOST AND DESTROYED CERTIFICATES. The Board of Directors may
direct that a new certificate or certificates may be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, and the Board of Directors, when authorizing the
issuance of such new certificate or certificates, may in their discretion, and
as a condition precedent thereto, require the owner of such lost or destroyed
certificate or certificates, or his legal representatives to give to the
Corporation a bond in such sum as they may direct, as indemnify against any
claim that may be made against the Corporation.
Section 5. REGULATIONS. The Board of Directors shall have power and
authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer and registration of certificates for shares of
the capital stock of the Corporation.
ARTICLE VI
DIVIDENDS AND WORKING CAPITAL
The Board of Directors may declare dividends from the surplus or net
earnings of the Corporation. Such dividends may be declared by the Board at any
meeting, either regular or special, at which a quorum is present.
ARTICLE VII
SEAL
The common corporate seal is, and until otherwise ordered and directed by
the Board of Directors shall be, an impression upon wax or paper bearing the
name of the Corporation and the words "CORPORATE SEAL. DELAWARE." One or more
duplicate dies for impressing such seal may be kept and used.
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ARTICLE VIII
AMENDMENT TO BY-LAWS
These By-Laws may be altered, amended or repealed by a vote of a majority
of the directors at any regular or special meeting of the Board, provided notice
of such proposed alteration, amendment or repeal shall have been included in the
notice of such meeting or shall have been waived by all the Directors. These
By-Laws may also be altered, amended or repealed in accordance with the
provisions of the Certificate of Incorporation of the Corporation at any annual
meeting of the stockholders, or at any special meeting of the stockholders,
provided notice of the proposed alteration, amendment or repeal shall have been
included in the notice of such special meeting or shall have been waived by all
the stockholders.
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Exhibit 4.3
FOURTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Fourth Amendment to Revolving Credit Agreement (this "Amendment") is
entered into as of the 19th day of November, 1996, by and between Binks
Manufacturing Company, a Delaware corporation (the "Company"), and NBD Bank, a
Michigan banking corporation (f/k/a NBD Bank, N.A.) (the "Bank").
WITNESSETH:
WHEREAS, the Company and the Bank have entered into that certain Revolving
Credit Agreement, dated as of February 24, 1992 (as amended, extended, modified,
or supplemented from time to time, the "Credit Agreement");
WHEREAS, the undersigned parties desire to amend the Credit Agreement in
certain respects;
NOW, THEREFORE, for good and valuable consideration the receipt and
adequacy of which is hereby acknowledged, the undersigned parties agree as
follows:
I. DEFINITIONS
Capitalized terms used herein but not defined herein shall have the meaning
ascribed thereto in the Credit Agreement, as amended hereby.
II. AMENDMENTS
The Credit Agreement is hereby amended to as follows:
(a) The definition of "Termination Date" in Section 1.1 of the Credit
Agreement is hereby deleted in its entirety and replaced as follows:
"TERMINATION DATE" MEANS THE EARLIER TO OCCUR OF
(A) MARCH 31, 1998 AND (B) THE DATE ON WHICH THE
REVOLVING COMMITMENT SHALL BE TERMINATED PURSUANT
TO THE PROVISIONS OF THIS AGREEMENT.
(b) The number "$10,000,000" is deleted from Section 6.2(a)(x) and
replaced with the number "$15,000,000".
<PAGE>
(c) The number "1.3" is deleted from Section 6.3(c) and replaced with
the number "1.6".
III. RATIFICATION AND AFFIRMATION
The Credit Agreement, as amended hereby, is hereby ratified and affirmed
and shall in all other respects remain in full force and effect. Nothing
contained herein shall be construed to waive any Default or Event of Default
existing under the Credit Agreement.
IV. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Bank that:
(a) The execution, delivery and performance of this Amendment has been
duly authorized by all necessary corporate action and will not require any
consent or approval of its stockholders, violate any provision of any law, rule,
regulations, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to it or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Company is a party or by which it or its properties may
be bound or affected;
(b) No consent, approval or authorization of or declaration or filing with
any governmental authority or any non-governmental person or entity, including
without limitation, any creditor or partner of the Company is required on the
part of the Company, in connection with the execution, delivery and performance
of this Amendment or transactions contemplated hereby and thereby;
(c) The Credit Agreement, as amended hereby, is the legal, valid and
binding obligation of the Company, enforceable against it in accordance with the
terms thereof;
(d) After giving effect to the amendments contained herein and effective
pursuant hereto, the representations and warranties contained in Article V of
the Credit Agreement are true and correct on and as of the date hereof in the
same force and effect as if made on such date;
(e) There has been no adverse material change in the condition of the
business, properties, operations or condition, financial or otherwise, of the
Company and its Subsidiaries since the date of the Company's most recent
financial statements submitted to the Bank pursuant to the Credit Agreement.
There are no liabilities of the Company and its Subsidiaries fixed or
contingent, which are material but not reflected on such financial statements or
in the notes thereto; and
(f) No Event of Default or Default has occurred or exists under the Credit
Agreement, as amended hereby, as of the date hereof.
-2-
<PAGE>
V. CONDITIONS
This Amendment shall not become effective unless and until:
(a) All of the representations and warranties contained in Section IV
hereof shall be true and correct in all material respects; and
(b) All the undersigned parties shall have each executed and delivered
this Amendment.
VI. MISCELLANEOUS
(a) This Amendment shall be governed by the internal laws of the State of
Illinois;
(b) This Amendment may be executed in any number of counterparts with the
intention that all such counterparts, taken together, shall constitute one
original agreement. Any counterpart of this Amendment may be delivered by
facsimile, with the intention that such facsimile delivery will have the same
effect as delivery of an original counterpart thereof;
(c) The provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective legal representatives, successors and
assigns; and
(d) The Company shall reimburse the Bank upon demand for all costs, fees
and expenses in the preparation, negotiation and implementation of this
Amendment and all related documentation including, without limitation, the
Bank's reasonable attorneys' fees.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK.]
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<PAGE>
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the
day and year first above written.
BINKS MANUFACTURING COMPANY
By: /S/ DORAN UNSCHULD
-----------------------------------
Its: PRESIDENT AND CEO
-----------------------------------
NBD BANK
By: /S/
-----------------------------------
Its: FIRST VICE PRESIDENT
-----------------------------------
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<PAGE>
Exhibit 10.8
AMENDMENT NO. 3 TO
LETTER AGREEMENT AND PROMISSORY NOTE
THIS AMENDMENT NO. 3, dated as of the 28th day of February, 1996, by and
between BINKS MANUFACTURING COMPANY, a Delaware corporation, of Franklin Park,
Illinois (herein called "Company"), and COMERICA BANK, a Michigan banking
corporation, of Detroit, Michigan (herein called "Bank");
WITNESSETH:
WHEREAS, said parties desire to amend that certain Letter Agreement dated
November 27, 1992, entered into by and between Company and Bank, as amended by
Amendment No. 1 dated as of November 26, 1993, and by Amendment No. 2 dated as
of February 21, 1995 (herein called the "Agreement");
WHEREAS, said parties further desire to amend that certain Promissory Note
dated November 27, 1992, executed by Company to Bank in the original amount of
Five Million Dollars ($5,000,000.00), as amended by said Amendment No. 1 and
Amendment No. 2 (herein called the "Note").
NOW THEREFORE, in consideration of the premises, and for other valuable
consideration, Company and Bank and Bank hereby agree as follows:
1. Section 1(v) of the Agreement is hereby amended in its entirety as follows:
"(v) 'Termination Date' means May 1, 1996."
2. The maturity date of the Note shall be May 1, 1996, in lieu of February 28,
1996.
Company hereby acknowledges that Bank has extended to Binks de Mexico, S.A.
de C.V. (herein called "Binks de Mexico"), a Subsidiary (as defined in the
Agreement) of Company, a line of credit in the principal amount of One Hundred
Fifty Thousand Dollars ($150,000.00), subject to a Letter Agreement dated as of
February 28, 1995, by and between Bank and Binks de Mexico (herein called the
"Binks de Mexico Agreement"). Company previously executed and delivered unto
Bank a Guaranty dated January 19, 1993, wherein Company unconditionally
guaranteed the repayment of all indebtedness of Binks de Mexico to Bank, and
Company hereby acknowledges, ratifies and affirms its liabilities and
obligations under said Guaranty. Company further acknowledges and agrees that,
to the extent of the principal amount outstanding at any time under the Binks de
Mexico Agreement, the maximum amount available for borrowing under and pursuant
to the terms and conditions of the Agreement, whether Loans or Acceptances,
shall be reduced by a like amount.
Company hereby represents and warrants that, after giving effect to the
amendments contained herein, (a) execution, delivery and performance of this
Amendment and any other
<PAGE>
documents and instruments required under this Amendment or the Agreement are
within Company's corporate powers, have been duly authorized, are not in
contravention of law or the terms of Company's Articles of Incorporation or
Bylaws, and do not require the consent or approval of any governmental body,
agency, or authority; and this Amendment and any other documents and instruments
required under this Amendment or the Agreement, will be valid and binding in
accordance with their terms; (b) the continuing representations and warranties
of Company set forth in Sections 15(a) through 15(f) of the Agreement are true
and correct on and as of the date hereof with the same force and effect as if
made on and as of the date hereof; (c) the continuing representations and
warranties of Company set forth in Section 15(g) of the Agreement are true and
correct as of the date hereof with respect to the most recent financial
statements furnished to the Bank by Company in accordance with Section 16(a) of
the Agreement; and (d) no Default or Event of Default has occurred and is
continuing as of the date hereof.
This Amendment shall be effective as of the date hereof.
Except as modified hereby, all of the terms and conditions of the Agreement
shall remain in full force and effect.
Capitalized terms used but not otherwise expressly defined herein shall
have the meanings ascribed to them in the Agreement.
WITNESS the due execution hereof on the day and year first above written.
COMERICA BANK BINKS MANUFACTURING COMPANY
By: ______________________________ By: /s/ Burke B. Roche
Its: _____________________________ Its: President
By: _________________________________
Its: ________________________________
<PAGE>
Exhibit 10.9
AMENDMENT NO. 4 TO
LETTER AGREEMENT AND PROMISSORY NOTE
THIS AMENDMENT NO. 4, dated as of the 1st day of May, 1996, by and between
BINKS MANUFACTURING COMPANY, a Delaware corporation, of Franklin Park, Illinois
(herein called "Company") and COMERICA BANK, a Michigan banking corporation, of
Detroit, Michigan (herein called "Bank");
WITNESSETH:
WHEREAS, said parties desire to amend that certain Letter Agreement dated
November 27, 1992, entered into by and between Company and Bank, as amended by
Amendment No. 1 dated as of November 26, 1993, by Amendment No. 2 dated as of
February 21, 1995, and by Amendment No. 3 dated as of February 28, 1996 (herein
called the "Agreement");
WHEREAS, said parties further desire to amend that certain Promissory Note
dated November 27, 1992, executed by Company to Bank in the original amount of
Five Million Dollars ($5,000,000.00), as amended by said Amendment No. 1,
Amendment No. 2 and Amendment No. 3 (herein called the "Note").
NOW THEREFORE, in consideration of the premises, and for other valuable
consideration, Company and Bank and Bank hereby agree as follows:
1. Section 1(v) of the Agreement is hereby amended in its entirety as follows:
"(v) 'Termination Date' means August 1, 1996."
2. The maturity date of the Note shall be August 1, 1996, in lieu of May 1,
1996.
Company hereby acknowledges that Bank has extended to Binks de Mexico, S.A.
de C.V. (herein called "Binks de Mexico"), a Subsidiary (as defined in the
Agreement) of Company, a line of credit in the principal amount of One Hundred
Fifty Thousand Dollars ($150,000.00), subject to a Letter Agreement dated as of
February 28, 1995, by and between Bank and Binks de Mexico (herein called the
"Binks de Mexico Agreement"). Company previously executed and delivered unto
Bank a Guaranty dated January 19, 1993, wherein Company unconditionally
guaranteed the repayment of all indebtedness of Binks de Mexico to Bank, and
Company hereby acknowledges, ratifies and affirms its liabilities and
obligations under said Guaranty. Company further acknowledges and agrees that,
to the extent of the principal amount outstanding at any time under the Binks de
Mexico Agreement, the maximum amount available for borrowing under and pursuant
to the terms and conditions of the Agreement, whether Loans or Acceptances,
shall be reduced by a like amount.
Company hereby represents and warrants that, after giving effect to the
amendments contained herein, (a) execution, delivery and performance of this
Amendment and any other
<PAGE>
documents and instruments required under this Amendment or the Agreement are
within Company's corporate powers, have been duly authorized, are not in
contravention of law or the terms of Company's Articles of Incorporation or
Bylaws, and do not require the consent or approval of any governmental body,
agency or authority; and this Amendment and any other documents and instruments
required under this Amendment or the Agreement, will be valid and binding in
accordance with their terms; (b) the continuing representations and warranties
of Company set forth in Sections 15(a) through 15(f) of the Agreement are true
and correct on and as of the date hereof with the same force and effect as if
made on and as of the date hereof; (c) the continuing representations and
warranties of Company set forth in Section 15(g) of the Agreement are true and
correct as of the date hereof with respect to the most recent financial
statements furnished to the Bank by Company in accordance with Section 16(a) of
the Agreement; and (d) no Default or Event of Default has occurred and is
continuing as of the date hereof.
This Amendment shall be effective as of the date hereof.
Except as modified hereby, all of the terms and conditions of the Agreement
shall remain in full force and effect.
Capitalized terms used but not otherwise expressly defined herein shall
have the meanings ascribed to them in the Agreement.
WITNESS the due execution hereof on the day and year first above written.
COMERICA BANK BINKS MANUFACTURING COMPANY
By: /s/ By: /s/ Burke B. Roche
------------------------------- -------------------------------
Its: Vice President Its: President
-------------------------------- ------------------------------
By:
------------------------------
Its:
------------------------------
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Exhibit 10.10
AMENDMENT NO. 5 TO LETTER AGREEMENT
THIS AMENDMENT NO. 5, dated as of the 18th day of July, 1996, by and
between BINKS MANUFACTURING COMPANY, a Delaware corporation, of Franklin Park,
Illinois (herein called "Company"), and COMERICA BANK, a Michigan banking
corporation, of Detroit, Michigan (herein called "Bank");
WITNESSETH:
WHEREAS, Company and Bank are parties to that certain Letter Agreement
dated November 27, 1992, entered into by and between Company and Bank, as
amended by Amendment No. 1 dated as of November 26, 1993, by Amendment No. 2
dated as of February 21, 1995, by Amendment No. 3 dated as of February 28, 1996,
and by Amendment No. 4 dated as of May 1, 1996 (herein called the "Agreement");
WHEREAS, to evidence the indebtedness of Company to Bank in respect of
Loans made by Bank to or in favor of Company under or pursuant to the Agreement,
Company executed and delivered unto Bank that certain Promissory Note dated
November 27, 1992, made in the original principal amount of Five Million Dollars
($5,000,000.00), as amended by said Amendment No. 1, Amendment No. 2, Amendment
No. 3 and Amendment No. 4 (herein called the "Existing Note");
WHEREAS, Company and Bank desire to further amend the Agreement, as herein
provided;
NOW THEREFORE, in consideration of the premises, and for other valuable
consideration, Company and Bank and Bank hereby agree as follows:
1. The Agreement is hereby amended as follows:
(a) Section 1(1) is hereby amended and restated to read in its entirety as
follows:
"(1) 'Note' shall mean an Amended and Restated Promissory
Note, in form similar to that attached Amendment No. 5 to
this Agreement as Exhibit "A," with appropriate insertions,
executed and delivered by Company unto Bank to evidence
Company's liabilities and obligations to repay Bank the
Loans, and the indebtedness of Company to Bank in respect
thereof, and any and all extensions, renewals, amendments
and/or restatements thereof."
(b) Section 1(t) is hereby amended and restated to read in its entirety as
follows:
"(t) 'Request for Loan' means a request substantially in the
form of Exhibit "B" attached to said Amendment No. 5 to this
Agreement issued by Company to Bank and requesting that Bank
make a Loan to or in favor of Company under this Agreement,
as the same may be amended and/or restated from time to
time."
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(c) Section 1 (v) is hereby amended and restated to read in its entirety
as follows:
"(v) 'Termination Date' means June 1, 1997."
(d) Sections 2 and 6 are each hereby amended by deleting each of the
references therein to the term "Five Million Dollars ($5,000,000.00)",
and inserting "Ten Million Dollars ($10,000,000.00)" in place thereof.
2. In consideration of the increase in the amount of the credit facilities
made available by Bank to Company under or pursuant to the Agreement, as
herein provided, Company hereby agrees to execute and deliver unto Bank an
Amended and Restated Promissory Note in form similar to that attached
hereto as Exhibit "A", with appropriate insertions, in the principal amount
of Ten Million Dollars ($10,000,000.00), to evidence the liabilities and
obligations of Company to repay Bank all Loans made by Bank to or in favor
of Company, and the indebtedness of Company to Bank in respect thereof,
which Amended and Restated Promissory Note shall amend and restate, in its
entirety, the existing Note.
3. The form of Request for Loan originally attached to the Agreement as
Exhibit B is hereby amended and restated to conform to the form of Request
for Loan attached hereto as Exhibit "B".
Company hereby acknowledges that Bank has extended to Binks de Mexico, S.A.
de C.V. (herein called "Binks de Mexico"), a Subsidiary (as defined in the
Agreement) of Company, a line of credit in the principal amount of One Hundred
Fifty Thousand Dollars ($150,000.00), subject to a Letter Agreement dated as of
February 28, 1995, by and between Bank and Binks de Mexico (herein called the
"Binks de Mexico Agreement"). Company previously executed and delivered unto
Bank a Guaranty dated January 19, 1993, wherein Company unconditionally
guaranteed the repayment of all indebtedness of Binks de Mexico to Bank, and
Company hereby acknowledges, ratifies and affirms its liabilities and
obligations under said Guaranty. Company further acknowledges and agrees that,
to the extent of the principal amount outstanding at any time under the Binks de
Mexico Agreement, the maximum amount available for borrowing under and pursuant
to the terms and conditions of the Agreement, whether Loans or Acceptances,
shall be reduced by a like amount.
Company hereby represents and warrants that, after giving effect to the
amendments contained herein, (a) execution, delivery and performance of this
Amendment and any other documents and instruments required under this Amendment
or the Agreement are within Company's corporate powers, have been duly
authorized, are not in contravention of law or the terms of the Company's
Articles of Incorporation or Bylaws, and do not require the consent or approval
of any governmental body, agency, or authority; and this Amendment and any other
documents and instruments required under this Amendment or the Agreement, will
be valid and binding in accordance with their terms; (b) the continuing
representations and warranties of Company set forth in Section 15(a) through
15(f) of the Agreement are true and correct on and
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as of the date hereof with the same force and effect as if made on and as of the
date hereof; (c) the continuing representations and warranties of Company set
forth in Section 15(g) of the Agreement are true and correct as of the date
hereof with respect to the most recent financial statements furnished to the
Bank by Company in accordance with Section 16(a) of the Agreement; and (d) no
Default or Event of Default has occurred and is continuing as of the date
hereof.
This Amendment shall be effective as of the date hereof.
Except as modified hereby, all of the terms and conditions of the Agreement
shall remain in full force and effect.
Capitalized terms used but not otherwise expressly defined herein shall
have the respective meanings ascribed to them in the Agreement, as amended
hereby.
WITNESS the due execution hereof on the day and year first above written.
COMERICA BANK BINKS MANUFACTURING COMPANY
By: /s/ By: /s/ Doran J. Unshuld
----------------------------- -------------------------------
Its: Vice President Its: President and CEO
----------------------------- --------------------------------
<PAGE>
Exhibit 10.11
LOAN AGREEMENT
This Loan Agreement (this "Loan Agreement") is made and entered into as of
July 12, 1996, by and between LaSalle National Bank, a national banking
association, with its principal place of business at 120 South LaSalle Street,
Chicago, Illinois 60603 ("LaSalle"), and Binks Manufacturing Company, a Delaware
corporation, with its principal place of business at 9201 West Belmont Avenue,
Franklin Park, Illinois 60131 ("Binks").
W I T N E S S E T H:
WHEREAS, Binks desires LaSalle to provide certain extensions of credit,
loans or other financial accommodations (the "Financial Accommodations") to
Binks in a maximum aggregate principal amount not to exceed Five Million and
no/100 dollars ($5,000,000.00); and
WHEREAS, LaSalle shall provide the Financial Accommodations to Binks, but
solely on the terms and subject to the conditions set forth in this Loan
Agreement and the "Revolving Note" (hereinafter defined).
NOW, THEREFORE, in consideration of the Financial Accommodations, the
mutual promises and understandings of LaSalle and Binks set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which
consideration is hereby acknowledged, LaSalle and Binks hereby agree as set
forth in this Loan Agreement.
1. DEFINITIONS AND TERMS
1.1 The following words, terms or phrases shall have the following
meanings:
"ADVANCE": shall mean any advance made or to be made by LaSalle to Binks as
provided in SECTION 3.1(B) hereof.
"AFFILIATE": shall mean any "Person" (hereinafter defined) that directly or
indirectly, through one or more intermediaries, owns, controls or is controlled
by, or is under common control with, Binks. A Person shall be presumed to
control Binks if such Person is the direct or indirect legal or beneficial owner
of more than ten percent (10%) of the securities having ordinary voting power
with respect to the election of directors of Binks.
"ANB LOAN DOCUMENTS": shall mean that certain Letter Agreement dated
January 16, 1996, by and between American National Bank and Trust Company of
Chicago ("ANB") and Binks (the "ANB Agreement"), the "Note" (as defined in the
ANB Agreement), the documents, instruments and agreements executed in connection
therewith and any modifications, amendments, renewals, substitutions or
replacements therefor.
"ANB OBLIGATIONS": shall mean the payment and performance obligations of
Binks under the ANB Loan Documents.
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"BANKERS ACCEPTANCE RATE": shall mean the daily rate equivalent quoted by
LaSalle to Binks from time to time for the applicable "Bankers Acceptance
Interest Period" (hereinafter defined), which may not be the most favorable or
lowest rate of interest offered or charged by LaSalle to its commercial or other
borrowers. Binks shall give LaSalle written notice or telecopy notice of each
proposed Advance at the Bankers Acceptance Rate on or before the date of each
Advance at the Bankers Acceptance Rate. Such notice shall include (A) the date
and amount of the requested Advance at the Bankers Acceptance Rate; and (B) the
duration of the Bankers Acceptance Interest Period applicable to such Advance.
Binks may not prepay any Advance bearing interest at the Bankers Acceptance
Rate, without penalty. Each such notice shall be accompanied by a Request for
Advance at the Bankers Acceptance Rate in the form of Exhibit "A" to this Loan
Agreement. "Bankers Acceptance Interest Period" shall mean the period
commencing the day of each Advance at the Bankers Acceptance Rate and, as set
forth in Binks' notice to LaSalle, continuing for either a thirty (30), sixty
(60), ninety (90), one hundred twenty (120) or one hundred eighty (180) day
period. Binks may not select a Bankers Acceptance Interest Period which expires
after July 12, 1997. If, at the end of the Bankers Acceptance Interest Period,
Binks (i) fails to notify LaSalle in the manner provided for a new Advance that
Binks desires to continue the Advance and the rate option and interest period
applicable thereto or (ii) repay the Advance in full, then such Advance bearing
interest at the Bankers Acceptance Rate shall automatically be converted to an
Advance bearing interest at the "Prime Rate" (hereinafter defined). If, for any
reason, LaSalle is unable to make Advances at the Bankers Acceptance Rate,
whether due to illegality, LaSalle's inability to ascertain a rate or such
pricing does not adequately reflect LaSalle's cost of funds, then Binks may only
select interest at the "LIBOR Rate" (hereinafter defined) or the Prime Rate.
Binks may not prepay any Advance bearing interest at the LIBOR Rate unless
contemporaneously therewith, Binks pays the amounts described in SECTION 2.9
hereof.
"BINKS' LIABILITIES": shall mean any and all obligations, liabilities,
indebtedness, fees, costs and expenses, now or hereafter owed or owing by Binks
to LaSalle hereunder or under the Other Agreements, including, but not limited
to, all principal, interest, debts, claims and indebtedness of any and every
kind and nature, howsoever created, arising or evidenced, whether primary or
secondary, direct or indirect, absolute or contingent, insured or uninsured,
liquidated or unliquidated, or otherwise, and whether arising or existing under
written or oral agreement or by operation of law, together with all costs, fees
and expenses of LaSalle, including, but not limited to, attorneys' and
paralegals' fees or charges relating to the preparation of this Loan Agreement
and the Other Agreements and the enforcement of LaSalle's rights and remedies
pursuant to this Loan Agreement, the Other Agreements, at law, in equity or
otherwise. Any indebtedness, liability or obligation of any sort whatsoever,
however arising, whether present or future, fixed or contingent, secured or
unsecured, due or to become due, paid or incurred, arising or incurred in
connection with any deferred payment obligations or under any Foreign Exchange
Contract (herein part of the "Binks' Liabilities" heretofore defined) shall be
incurred solely as an accommodation to Binks and for Binks' account. "Binks'
Liabilities" shall include, without being limited to: all amounts due or which
may become due under any Foreign Exchange Contracts, any other bank charges,
fees and commissions, duties and taxes, costs of insurance, and all such
2
<PAGE>
other charges and expenses which may pertain to deferred payment obligations or
to any Foreign Exchange Contract
"BUSINESS DAY": shall mean any day other than a day on which banks located
in Chicago, Illinois are authorized or required to be closed.
"CODE": shall mean the Internal Revenue Code of 1986, as amended, and any
successor or replacement statute, as in effect from time to time.
"COMERICA LOAN DOCUMENTS": shall mean that certain Letter Agreement dated
as of November 27, 1992, by and between Binks and Comerica Bank ("Comerica"),
the documents, instruments and agreements executed in connection therewith and
any modifications, amendments, renewals, substitutions or replacements therefor.
"COMERICA OBLIGATIONS": shall mean the payment and performance obligations
of Binks under the Comerica Loan Documents.
"CONSOLIDATED" or "CONSOLIDATED": shall mean, when used with reference to
any financial term in this Loan Agreement, the aggregate for Binks and its
Subsidiaries whose account would be consolidated with those of Binks in Binks'
consolidated financial statements at such date of the amounts signified by such
term for all such Persons determined on a consolidated basis in accordance with
GAAP.
"COVENANTS": shall mean all of the covenants, duties, obligations and
agreements of Binks to and with LaSalle, whether pursuant to this Loan
Agreement, the "Other Agreements" (hereinafter defined) or otherwise.
"DEFAULT RATE" shall mean, with respect to Binks' Liabilities, the daily
rate equivalent of two percent (2%) per annum in excess of the interest rate
which would otherwise be applicable with respect thereto.
"ENVIRONMENTAL LAWS" shall mean the Federal Clean Air Act (42 U.S.C.
Sections 7501 ET SEQ.), the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 ET SEQ.), the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Sections 6901 ET SEQ.) the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C Sections 9601 ET SEQ.), any so-called
"Superfund" or "Superlien" law, the Toxic Substances Control Act (15 U.S.C.
Sections 2601), any Occupational Safety and Health Law (29 U.S.C. Sections 655),
and any other federal, state or local statute, law, ordinance, code, rule,
regulation, permit, license, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning any Hazardous Materials,
or any other hazardous, toxic, special or dangerous waste, substance or
constituent, whether solid, liquid or gas, or employee health and/or safety, as
from time to time hereafter in effect.
"ERISA": shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations issued thereunder.
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"ERISA AFFILIATE": shall mean, with respect to any Person or any trade or
business (whether or not incorporated) which, would be treated as a single
employer under Section 414(b) or (c) of the Code.
"ERISA DEFAULT": shall mean the occurrence of a Reportable Event that
results in material liability of Binks or any of its Subsidiaries or their ERISA
Affiliates to the PBGC or to any Plan and such Reportable Event is not corrected
within thirty (30) days after the occurrence thereof; or the occurrence of any
Reportable Event which could constitute grounds for termination of any Plan of
Binks or any of its Subsidiaries or their ERISA Affiliates by the PBGC or for
the appointment by the appropriate United States District Court of a trustee to
administer any such Plan and such Reportable Event is not corrected within
thirty (30) days after the occurrence thereof; or Binks or any of its
Subsidiaries or any of their ERISA Affiliates shall fail to pay when due any
material liability to the PBGC or to a Plan; or the PBGC shall have instituted
proceedings to terminate, or to cause a trustee to be appointed to administer,
any Plan of Binks or any of its Subsidiaries or their ERISA Affiliates; or any
Person engages in a Prohibited Transaction with respect to any Plan which
results in material liability of Binks or any of its Subsidiaries, any of their
ERISA Affiliates, any Plan of Binks or any of its Subsidiaries or their ERISA
Affiliates or any fiduciary of any such Plan; or failure by Binks or any of its
Subsidiaries or any of their ERISA Affiliates to make a required installment or
other payment to any Plan within the meaning of Section 302(f) of ERISA or
Section 412(n) of the Code that results in material liability of Binks or any of
its Subsidiaries or any of their ERISA Affiliates to the PBGC or any Plan; or
the withdrawal of Binks or any of its Subsidiaries or any of their ERISA
Affiliates from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA.
"EQUITABLE NOTES": shall mean those certain 7.14% Senior Notes due 2008
issued by Binks and made payable to The Equitable Life Assurance Society of the
United States and Equitable Variable Life Insurance Company in the original
aggregate principal amount of Fifteen Million and no/100 Dollars
($15,000,000.00) and any subsequent issuances of any additional series of such
7.14% Senior Notes.
"FINANCIALS": shall mean all year-end financial statements, projections,
interim financial statements, tax returns, reports and similar documentation and
information previously delivered by Binks to LaSalle and the documents described
in SECTION 5.3, individually or collectively.
"FOREIGN EXCHANGE CONTRACT": shall mean any contract between LaSalle and
Binks requested by Binks and executed by Binks pursuant to the terms of SECTION
3.2 hereof that requires payment or delivery of a currency other than U.S.
Dollars.
"FOREIGN EXCHANGE EXPOSURE": shall mean, with respect to any Foreign
Exchange Contract (excluding spot contracts), an amount equal to the product of
(A) the U.S. Dollar equivalent (as reasonably determined by LaSalle, in good
faith, from time to time) of the foreign currency obligation under such Foreign
Exchange Contract, and (B) ten percent (10%), with respect to Foreign Exchange
Contracts with a maturity of less than one hundred and eighty (180)
4
<PAGE>
days, and twenty percent (20%) with respect to Foreign Exchange Contracts with a
maturities of one hundred and eighty days or more but one (1) year or less.
"FOREIGN EXCHANGE OBLIGATIONS": shall mean, at any time, the sum of (A) the
outstanding Foreign Exchange Exposure under Foreign Exchange Contracts at such
time, PLUS (B) the aggregate amount of all payments under Foreign Exchange
Contracts for which LaSalle is entitled to be and has not at such time been
reimbursed, whether by payment to LaSalle by way of a loan (as contemplated by
SECTION 3.2 hereof) or otherwise.
"GAAP": shall mean accounting principles set forth as generally accepted in
the then-currently effective Statements of the Auditing Standards Board of the
American Institute of Certified Public Accountants, consistently applied from
period to period.
"GOVERNMENTAL REGULATIONS": shall mean any and all laws, statutes,
ordinances, rules, regulations, treaties, judgments, writs, injunctions,
decrees, orders, awards and standards, or any similar requirement, of the
government of the United States or any foreign government or any state,
province, municipality or other political subdivision thereof or therein or any
court, agency, instrumentality, regulatory authority or commission of any of the
foregoing.
"HAZARDOUS MATERIALS": shall mean asbestos-containing materials, mono or
polychlorinated biphenyls, urea formaldehyde products, radon, radioactive
materials and any "hazardous substance", "hazardous waste", "pollutant", "toxic
pollutant", "oil" or "contaminant" as used in, or defined pursuant to, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 USC Sections 9601 ET SEQ.; the Federal Clean Air Act, as amended, 42
USC Sections 7401 ET SEQ., and regulations thereunder; the Resource Conservation
and Recovery Act, 42 USC Sections 6901 ET SEQ., as amended, and regulations
thereunder; the Federal Water Pollution Control Act, 33 USC Sections 1251 ET
SEQ., as amended, and regulations thereunder; 40 CFR Sections 116.1 ET SEQ.,
Sections 129.1 ET SEQ. and Sections 302.1 ET SEQ.; and any other substance,
waste, pollutant, contaminant or material, including petroleum products and
derivatives, the use, transport, disposal, storage, treatment, recycling,
handling, discharge, release, threatened release or omission of which is
regulated or governed by any Environmental Laws.
"INDEBTEDNESS": shall mean all obligations and liabilities of Binks to any
Person other than LaSalle, including, but not limited to, (A) all indebtedness
whether primary or secondary, direct or indirect, absolute or contingent,
liquidated or unliquidated, insured or uninsured, fixed or otherwise,
heretofore, now or from time to time hereafter owing, due or payable, however
evidenced, created, incurred or acquired, and howsoever arising, whether by
written or oral agreement, operation of law or otherwise; (B) all obligations or
liabilities of any Person that are secured by any lien, claim, encumbrance or
security interest upon any assets of Binks, whether or not Binks has assumed or
become liable for the payment thereof; and (C) that portion of any obligation or
liability created or arising under any capitalized lease of real or personal
property, or conditional sale or other title retention agreement which is
properly recorded on Binks' balance sheet as a liability in accordance with
GAAP, whether or not the rights and remedies of the
5
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lessor, seller or lender thereof are limited to repossession of the property
giving rise to such obligations or liabilities.
"INTEREST RATE": shall mean, at Binks' option, either the Bankers
Acceptance Rate, the Prime Rate or the LIBOR Rate, payable in connection with
the Financial Accommodations, excepting only the Foreign Exchange Obligations.
"LIBOR RATE": shall mean the daily rate equivalent of one percent (1%) per
annum in excess of the per annum offered rate of interest for deposits in United
States of America Dollars for the applicable "LIBOR Interest Period"
(hereinafter defined), which appears on the Telerate Screen page 3750 (British
Bankers Association LIBOR setting) at approximately 11:00 a.m., London time, two
(2) business days prior to commencement of the LIBOR Interest Period for
delivery on the first day of such LIBOR Interest Period for the number of days
contained therein and in the amount of the loan at the LIBOR Rate to be
outstanding during the LIBOR Interest Period. If two or more such offered rates
appear on the Telerate Screen, then the LIBOR Rate will be the daily rate
equivalent of one percent (1%) per annum in excess of the arithmetic mean of
such offered rates. If the Telerate Screen is not reasonably available to
LaSalle, then the LIBOR Rate shall be the daily rate equivalent of one percent
(1%) per annum in excess of the per annum rate of interest at which deposits in
United States of America Dollars for such LIBOR Interest Period are offered to
LaSalle by other prime banks in the London interbank market, at approximately
11:00 a.m., London time, two (2) business days preceding the applicable LIBOR
Interest Period, as determined in good faith by LaSalle. Binks shall give
LaSalle at least three (3) Business Days prior written notice or telecopy notice
of each proposed Advance at the LIBOR Rate. Such notice shall include (A) the
date and amount of the requested Advance at the LIBOR Rate; provided, however,
an Advance bearing interest at the LIBOR Rate shall be in the minimum amount of
One Million and no/100 Dollars ($1,000,000.00), with integral amounts of One
Hundred Thousand and no/100 Dollars ($100,000.00) thereafter; and (B) the
duration of the LIBOR Interest Period applicable to such Advance. Binks may not
prepay any Advance bearing interest at the LIBOR Rate, unless contemporaneously
therewith, Binks pays the amounts described in SECTION 2.9 hereof. Each such
notice shall be accompanied by a Request for Advance at the LIBOR Rate in the
form of Exhibit "B" to this Loan Agreement.
"LIBOR INTEREST PERIOD": shall mean the period commencing the day of each
Advance at the LIBOR Rate and, as set forth in Binks' notice to LaSalle,
continuing for either a thirty (30), sixty (60), ninety (90), one hundred twenty
(120), or one hundred eighty (180) day period. Binks may not select a LIBOR
Interest Period which expires after July 12, 1997. At the end of the LIBOR
Interest Period, if Binks fails (i) to notify LaSalle in the manner provided for
a new Advance that Binks desires to continue the Advance and the rate option and
interest period applicable thereto or (ii) repay the Advance in full, then such
Advance bearing interest at the LIBOR Rate shall automatically be converted to
an Advance bearing interest at the Prime Rate.
"LIEN": shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing
(other than a precautionary financing statement with respect
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to a lease that is not in the nature of a security interest), lessor's or
lessee's interest under any lease, subordination of any claim or right, or any
other type of lien, charge, encumbrance, preferential arrangement or other claim
or right.
"MATERIAL ADVERSE EVENT": shall mean any event, occurrence or state of
facts which has or would reasonably be expected to have a material adverse
effect on the business, properties, assets, operations or condition (financial
or otherwise) of Binks itself or of Binks and its consolidated Subsidiaries as a
whole.
"MULTIEMPLOYER PLAN": shall mean any "multiemployer" plan as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NBD LOAN DOCUMENTS": shall mean that certain Thirty-Three Million and
no/100 Dollars ($3,000,000.00) Revolving Credit Agreement dated as of
February 24, 1992, by and between Binks and NBD Bank, N.A. ("NBD"), the
documents, instruments and agreements executed in connection therewith and any
modification, amendments, renewals, substitutions or replacements therefor.
"NYBD OBLIGATIONS": shall mean the payment and performance obligations of
Binks under the NBD Loan Documents.
"OTHER AGREEMENTS": shall mean all agreements, instruments and documents,
including, but not limited to, guaranties, mortgages, deeds of trust, pledges,
powers of attorney, consents, assignments, contracts, notices, security
agreements, leases, financing statements and all other writings heretofore, now
or from time to time hereafter executed by or on behalf of Binks or any other
Person and delivered to LaSalle in connection with Binks' Liabilities or any of
the transactions contemplated herein, together with any amendments,
modifications, extensions or renewals thereto, including, but not limited to,
that certain Revolving Note of even date herewith executed and delivered by
Binks to LaSalle in a maximum aggregate principal amount not to exceed Five
Million and no/100 Dollars ($5,000,000.00), together with any amendments,
modifications, renewals or substitutions thereto (collectively, the "Revolving
Note"), and the other documents, instruments and agreements described in
SECTION 6.1 of this Loan Agreement.
"PBGC": shall mean the Pension Benefit Guaranty Corporation and any
successor or replacement agency.
"PERMITTED INDEBTEDNESS": shall mean, collectively:
(A) the NBD Obligations, the Indebtedness evidenced by the Equitable Notes
and the other Indebtedness identified on SCHEDULE 5.2(J) hereto;
(B) Indebtedness secured by Permitted Liens;
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(C) Indebtedness of Subsidiaries (as to which Binks does not have any
contingent liability), if and to the extent that the incurring or continuing
such Indebtedness is not in violation of Section 5.1(S);
(D) Indebtedness of Binks and its Subsidiaries to each other;
(E) Indebtedness created, incurred or assumed by Binks in the ordinary
course of its business to obtain bid, proposal or performance bonding during the
course of any construction project undertaken by Binks;
(F) Indebtedness resulting from the endorsement by Binks of instruments or
items of payment made in the ordinary course of business;
(G) Indebtedness of another company in connection with the acquisition of
such company as expressly permitted in this Loan Agreement;
(H) Indebtedness in respect of capitalized leases described on
SCHEDULE 5.2(J) hereto plus an amount not to exceed Two Million and no/100
Dollars ($2,000,000.00);
(I) unsecured Indebtedness (including Binks' Liabilities) of Binks
incurred in the ordinary course of business in an aggregate principal amount not
to exceed Fifteen Million and no/100 Dollars ($15,000,000.00);
(J) Indebtedness in respect of judgments or awards which have been in
force for less than the applicable appeal period so long as execution is not
levied thereunder (or in respect of which Binks shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of which a
stay of execution shall have been obtained pending such appeal or review) and
which does not, in the aggregate, exceed Ten Million and no/100 Dollars
($10,000,000.00) or for which adequate reserves have been established;
(K) Indebtedness constituting Subordinated Debt;
(L) Contingent liabilities of Binks and its Subsidiaries set forth on
SCHEDULE 5.2(J) hereto; and
(M) Indebtedness which in the aggregate does not exceed One Million and
no/100 Dollars ($1,000,000.00), but in any event together with Indebtedness
described in clause (J) of this definition of "Permitted Indebtedness" does not
exceed Fifteen Million and no/100 ($15,000,000.00).
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"PERMITTED INVESTMENTS": shall mean the following: (A) investments in cash
and cash equivalents; (B) investments of Binks which are outstanding on the date
of this Loan Agreement, as specified in SCHEDULE 5.2(E) hereto: (C) Advances to
employees made in the ordinary course of business not to exceed an aggregate of
Five Hundred Thousand and no/100 Dollars ($500,000.00) outstanding at any time
plus the amounts set forth on SCHEDULE 5.2(E) hereto; (D) loans or advances in
the nature of accounts receivables or notes receivables arising from the sale of
goods and services in the ordinary course of business; (E) investments of any
Subsidiary of Binks in Binks or another Subsidiary of Binks; (F) investments
made in connection with Permitted Transactions; and (G) other Investments by
Binks and its Subsidiaries not to exceed One Million and no/100 Dollars
($1,000,000.00) in the aggregate.
"PERMITTED LIENS": shall mean, collectively:
(A) Liens for taxes not delinquent or for taxes being contested in good
faith by appropriate proceedings and as to which adequate financial reserves (or
other appropriate provisions as may be required by GAAP) have been established
on its books and records;
(B) Liens created and maintained in the ordinary course of business which
are not material in the aggregate, and which would not constitute or result in a
Material Adverse Event and which constitute (1) pledges or deposits under
worker's compensation laws, unemployment insurance laws or similar legislation;
(2) good faith deposits in connection with bids, tenders, contracts or leases to
which Binks or any of its Subsidiaries is a party for a purpose other than
borrowing money or obtaining credit, including rent security deposits; (3) Liens
imposed by law, such as those of carriers, warehousemen, mechanics, materialmen
and repairmen and other like statutory Liens arising in the ordinary course of
business which are not overdue for a period of more than thirty (30) days or
which are being contested in good faith, if payment of the obligation secured
thereby is not yet due; (4) Liens securing taxes, assessments or other
governmental charges or levies not yet subject to penalties for non-payment; and
(5) pledges or deposits to secure public or statutory obligations of Binks or
any of its Subsidiaries, or surety, customs or appeal bonds to which Binks or
any of its Subsidiaries is a party;
(C) Liens affecting real property which constitute minor survey exceptions
or defects or irregularities in title, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of such real property, provided that all of the
foregoing, in the aggregate, do not at any time materially detract from the
value of said properties or materially impair their use in the operations of the
businesses of Binks or any of its Subsidiaries;
(D) Purchase money Liens upon or in property of Binks or any of its
Subsidiaries acquired after the date of this Loan Agreement; provided, however,
that (1) no such Lien shall extend to or cover any other property of Binks or
any of its Subsidiaries; and (2) the aggregate outstanding amount of
Indebtedness secured by all such purchase money Liens shall not exceed One
Million and no/100 Dollars ($1,000,000.00) at any time after the date of this
Loan Agreement;
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(E) Liens arising in respect of capitalized leases not otherwise
prohibited under this Loan Agreement, but only if such Liens cover only the
property financed under such capitalized leases;
(F) Mortgages, pledges or security interests on the properties or assets
of a Subsidiary in favor of Binks, or between Subsidiaries;
(G) Liens created pursuant to applications or reimbursement arrangements
pertaining to letters of credit which encumber only the goods, or documents of
title covering the goods, which are sold or shipped in the transaction for which
such letters of credit were issued;
(H) Any attachment or judgment Liens with respect to a judgment not
exceeding One Million and no/100 Dollars ($1,000,000.00), unless the judgment it
secures shall not, within thirty (30) days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not have been
discharged within thirty (30) days after the expiration of any such stay;
(I) Liens securing Indebtedness not to exceed Two Hundred Fifty Thousand
and no/100 Dollars ($250,000.00) in the aggregate; and
(J) Other liens or encumbrances incidental to the conduct of the business
of Binks or a Subsidiary or to the ownership of its respective properties or
assets, which were not incurred in connection with the borrowing of money or the
obtaining of credit (other than letters of credit) and which do not materially
detract from the value of the properties or assets of Binks or of Binks and its
Subsidiaries taken as a whole or materially affect the use thereon in the
operation of their business.
Each Lien described in this definition of "Permitted Liens" may be suffered
to exist upon the same terms as those existing on the date hereof in accordance
with past business practices of Binks and its Subsidiaries.
"PERMITTED TRANSACTION": shall mean any one of the following: (A) the
merger, consolidation or amalgamation of a Subsidiary of Binks into Binks (where
Binks is the surviving corporation) or with another subsidiary of Binks; (B) any
liquidation of any Subsidiary of Binks into Binks or another Subsidiary of
Binks; (C) any transaction or transactions which in the aggregate do not exceed
Five Million and no/100 Dollars ($5,000,000.00); (D) inventory or other assets
sold or disposed of in the ordinary course of business and sales or dispositions
of obsolete or damaged material or equipment; (E) sales or dispositions of
assets by one Subsidiary of Binks to Binks or another Subsidiary of Binks, if in
compliance with SECTION 5.2(L); and (F) other sales or dispositions of assets
(other than accounts receivable) to Persons which are Affiliates of Binks if the
value of such assets (which, for these purposes, shall mean the greater of such
assets' book value at the time of sale or other disposition or the proceeds
realized by Binks or its Subsidiaries under this clause (F) after the date of
this Loan Agreement), does not exceed five percent (5%)
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of the consolidated total assets of Binks and its consolidated Subsidiaries
determined as of the end of the fiscal year immediately preceding each such sale
or disposition.
"PERSON": shall mean any individual, sole proprietorship, partnership,
joint venture, trust, trustee, estate, unincorporated organization, association,
corporation, institution, entity, party or foreign or United States government,
whether federal, state, county, city, municipal or otherwise, including, but not
limited to, any instrumentality, division, agency, body or department thereof.
"PLAN": shall mean with respect to any Person, any pension plan subject to
Title IV of ERISA or to the minimum funding standards of Section 412 of the Code
which has been established or maintained by such Person, any Subsidiary of such
Person or any ERISA Affiliate, or by an other Person, if such Person, any
Subsidiary of such Person or any ERISA Affiliate could have liability with
respect to such pension plan.
"PRIME RATE": shall mean the floating annual rate of interest announced
from time to time by LaSalle as its corporate prime, reference or base rate of
interest, as the case may be, which rate may not be the most favorable or lowest
rate of interest offered or charged by LaSalle to its commercial or other
borrowers.
"PROHIBITED TRANSACTION": shall mean a non-exempt prohibited transaction as
described in Section 4975 of ERISA.
"REPORTABLE EVENT": shall mean a reportable event as described in Section
4043(b) of ERISA including those events as to which the 30-day notice period is
waived under Part 2615 of the regulations promulgated by the PBGC under ERISA.
"REQUEST FOR LOAN": shall mean a Request for Advance at the Bankers
Acceptance Rate in the form attached hereto as Exhibit "A", a Request for
Advance at the LIBOR Rate in the form attached hereto as Exhibit "B" or a
Request for Advance at the Prime Rate in the form attached hereto as Exhibit
"C".
"RESTRICTED PAYMENTS": shall mean any dividend (other than dividends
payable solely in capital stock of such Person) or returns of capital to any
stockholder of such Person, or any other distribution, payment or delivery of
property or cash to any of such Person's stockholders, or any redemption,
retirement, purchase or other acquisition of capital Stock of such Person.
"SECURITIES ACT": shall mean the Securities Act of 1933, as amended from
time to time, and any successor statute of similar import, together with the
regulations thereunder as in effect from time to time.
"SECURITIES EXCHANGE ACT": shall mean the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute of similar import,
together with the regulations thereunder, as in effect from time to time.
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"STOCK": shall mean any and all shares and other equity and ownership
interests, however designated, of or in a corporation, whether or not voting,
including, but not limited to, common stock, warrants, preferred stock,
convertible debentures and all agreements, instruments and documents
convertible, in whole or in part, into any one or more of the foregoing.
"SUBORDINATED DEBT": shall mean Indebtedness subordinated to Binks'
Liabilities and incurred on terms reasonably acceptable to LaSalle.
"SUBSIDIARY": shall mean any other Person (whether now existing or
hereafter organized or acquired) in which (other than directors' qualifying
shares required by law) at least a majority of the securities or other ownership
interest of each class having ordinary voting power or analogous right (other
than securities or other ownership interest which have such power or right only
by reason of the happening of a contingency), at the time as of which any
determination is being made, are owned, beneficially and of record, by such
Person or by one or more of the other subsidiaries of such Person or by any
combination thereof, including, without limitation, when used with respect to
Binks, the Subsidiaries identified on Exhibit "C" hereto.
"UNFUNDED BENEFIT LIABILITIES": shall mean, with respect to any Plan as of
any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA.
1.2 Except as otherwise defined in this Loan Agreement or the Other
Agreements, any accounting terms used in this Loan Agreement which are not
specifically defined herein shall have the meanings given them in accordance
with GAAP. Unless the context indicates otherwise, all other words, terms or
phrases used herein shall be defined by the applicable definition therefor, if
any, in the Uniform Commercial Code as adopted by the State of Illinois
2. LOANS: GENERAL TERMS
2.1 Except as otherwise provided in this Loan Agreement or the Other
Agreements, if not sooner paid, that portion of Binks' Liabilities consisting
of: (A) all principal payable on account of that portion of the Financial
Accommodations provided by LaSalle to Binks hereunder as evidenced by the
Revolving Note shall be payable in full by Binks to LaSalle on July 12, 1997;
(B) Binks' obligations to LaSalle with respect to Foreign Exchange Contracts
shall be payable in accordance with the terms thereof and SECTION 3.2 hereof;
(C) all costs, fees and expenses payable pursuant to this Loan Agreement and the
Other Agreements shall be payable by Binks to LaSalle, or to such other Person
designated by LaSalle, on demand; (D) interest payable pursuant to this Loan
Agreement and the Other Agreements shall be payable by Binks to LaSalle as
follows: (1) Interest on Advances made at the Prime Rate shall be payable
monthly in arrears; (2) Interest on Advances made a the LIBOR Rate shall be
payable in arrears on the last day of the LIBOR Interest Period during which
such interest accrued; provided that if the relevant LIBOR Interest Period
exceeds ninety (90) days, accrued interest shall also be payable upon the 90-day
anniversary of such LIBOR Interest Period; and (3) Interest on Advances made at
the Bankers Acceptance Rate shall be payable in arrears on the last day of the
Bankers
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Acceptance Interest Period during which such interest accrued; provided that if
the relevant Bankers Acceptance Interest Period exceeds ninety (90) days accrued
interest shall also be payable upon the 90-day anniversary or such Bankers
Acceptance Interest Period; and (E) the balance of Binks' Liabilities, if any,
shall be payable by Binks to LaSalle on demand. All such payments to LaSalle
shall be payable at LaSalle's principal place of business as provided in SECTION
8.14 of this Loan Agreement, or at such other place or places as LaSalle may
designate in writing to Binks. All of such payments to Persons other than
LaSalle shall be payable at such place or places as LaSalle may designate in
writing to Binks. Binks' Liabilities may be prepaid at any time in whole or in
part, without premium or penalty, but subject to Binks' obligation to compensate
LaSalle for its losses, costs and expenses pursuant to SECTION 2.9 hereof.
2.2 LaSalle's failure to record any portion of Binks' Liabilities upon the
ledgers, books, records or computer records for LaSalle shall not limit or
otherwise affect the obligations and liabilities of Binks to repay Binks'
Liabilities due and owing to LaSalle pursuant to this Loan Agreement and the
Other Agreements.
2.3 Binks represents and warrants to LaSalle that Binks shall use the
proceeds of all loans and the other Financial Accommodations made by LaSalle to
Binks pursuant to this Loan Agreement and the Other Agreements solely for proper
business purposes and consistent with all applicable laws and statutes,
including, but not limited to, Illinois Compiled Statutes, Chapter 815, Section
205/4 (815 ILCS 205/4). Binks further represents and warrants to LaSalle that
Binks does not and will not at any time hereafter own any margin securities, and
that none of the proceeds of the loans hereunder shall be used for the purpose
of (A) purchasing or carrying any margin securities; (B) reducing or retiring
any indebtedness which was originally incurred to purchase any margin
securities; or (C) any other purpose not permitted by Regulation G or Regulation
U of the Board of Governors of the Federal Reserve System, as in effect from
time to time. Binks represents, warrants and covenants unto LaSalle that all
loan proceeds will be used exclusively by Binks and its Subsidiaries.
2.4 Notwithstanding anything contained in this Loan Agreement or the Other
Agreements to the contrary, the principal amount of Binks' Liabilities
outstanding at any one time, or from time to time, shall not exceed Five Million
and no/100 Dollars ($5,000.000.00).
2.5 Each Request for Loan made by Binks pursuant to this Loan Agreement
and the Other Agreements shall constitute an automatic representation and
warranty by Binks to LaSalle that there does not then exist an "Event of
Default" (hereinafter defined) or any event or condition which with notice,
lapse of time or both would constitute an Event of Default.
2.6 Binks hereby authorizes and directs LaSalle to disburse for and on
behalf of Binks, and for Binks' account, the proceeds of loans made by LaSalle
to Binks pursuant to this Loan Agreement to such Person or Persons as Binks
shall direct.
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2.7 Binks hereby authorizes LaSalle to debit Binks' accounts with LaSalle
for all amounts due LaSalle, including, but not limited to, the principal,
interest and other costs, fees and expenses arising under or pursuant to this
Loan Agreement, the Other Agreements or otherwise.
2.8 Binks' Liabilities are equal in rank and priority and are PARI PASSU
with all other Unsecured Senior Debt. As used in this SECTION 2.11, "Unsecured
Senior Debt" shall mean all Indebtedness of Binks which is (A) not secured by a
Permitted Lien; and (B) not subordinated in right of payment to any other
indebtedness of Binks.
2.9 If any payment of principal of any Advance bearing interest at the
LIBOR Rate or the Bankers Acceptance Rate is made other than on the last day of
the applicable LIBOR Interest Period or the Bankers Acceptance Interest Period,
respectively, then Binks shall, upon demand by LaSalle, pay to LaSalle any
amounts necessary to compensate LaSalle for any additional losses, costs or
expenses which LaSalle may reasonably incur as a result of such payment,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation of reemployment of
deposits or other funds acquired by LaSalle to fund or maintain such Advance.
3. LOANS: DISBURSEMENTS
3.1 ADVANCES AND INTEREST.
(A) Provided that an Event of Default does not then exist, and provided
that all of the conditions precedent in SECTION 6 of this Loan Agreement have
been satisfied, LaSalle shall make Advances to Binks an aggregate amount not to
exceed Five Million and no/100 Dollars ($5,000,000.00) at any time, minus the
aggregate amount of any Foreign Exchange Obligations. Excepting only the
Foreign Exchange Obligations, all Advances pursuant to this SECTION 3 shall bear
interest at the interest Rate accrued on the outstanding daily unpaid principal
of each Advance (based upon a 360-day year) from the date thereof until payment
in full is made.
(B) LaSalle will disburse the proceeds of the loan in one or more Advances
(each such disbursement, an "Advance") as requested by Binks. Each request by
Binks for an Advance shall be made pursuant to a Request for Loan received by
LaSalle, not later than 12:00 noon, Chicago time, (a) with respect to a request
for an Advance at the Prime Rate or at the Bankers Acceptance Rate, on the
Business Day which is the first day of the applicable interest period, and
(b) with respect to a request for an Advance at the LIBOR Rate, on the Business
Day which is two Business Days prior to the first day of the LIBOR Interest
Period.
3.2 FOREIGN EXCHANGE CONTRACTS.
(A) Subject to and upon the terms and conditions of this Loan Agreement,
Binks may request, and LaSalle will, from time to time on or after the date of
this Loan Agreement, enter into one or more Foreign Exchange Contracts; PROVIDED
THAT in no event shall LaSalle execute a Foreign Exchange Contract if (1) the
Foreign Exchange Exposure thereunder, together with the
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then aggregate unpaid principal amount of the Advances made under SECTION 3.1
hereof and all then outstanding Foreign Exchange Obligations shall exceed Five
Million and no/100 Dollars ($5,000,000.00); or (2) the aggregate amount of the
Foreign Exchange Obligations, including the Foreign Exchange Obligations
thereunder, shall exceed Five Hundred Thousand and no/100 Dollars ($500,000.00).
Binks shall give LaSalle written notice thereof no later than 11:00 a.m.
(Chicago time) at least two (2) business days prior to entering into such
Foreign Exchange Contract (or such shorter period of time to which LaSalle may
agree), together with a summary of all material provisions of such Foreign
Exchange Contract and the date on which such Foreign Exchange Contract is to be
executed. Each Foreign Exchange Contract shall be in form, scope and substance
reasonably satisfactory to LaSalle and shall have an expiration date of the
earlier to occur of (a) one year from the date thereof; or (b) July 12, 1997.
Each payment by LaSalle with respect to or under a Foreign Exchange Contract
shall be promptly reimbursed by Binks, together with interest thereon at the
Prime Rate, and if not so reimbursed, any such payments made under such Foreign
Exchange Contract by LaSalle shall be deemed an Advance under SECTION 3.1 hereof
made at the Prime Rate.
(B) Each request for the execution of a Foreign Exchange contract made
pursuant to and in accordance with the procedures described herein shall
constitute a representation and warranty by the Borrowers that all conditions
precedent to the execution thereof have been satisfied. The execution of any
such Foreign Exchange Contract shall be subject to and upon the terms and
conditions of this Loan Agreement.
3.3 INDEMNIFICATION. Binks hereby agrees to unconditionally indemnify
LaSalle and hold LaSalle harmless from any and all loss, claim or liability
arising from any transactions or occurrences relating to the Foreign Exchange
Contracts and all Binks' Liabilities thereunder, except where such loss, claim
or liability is due to the gross negligence or willful misconduct of LaSalle.
Except as provided in the preceding sentence, Binks' unconditional obligation to
LaSalle hereunder shall not be modified or diminished for any reason or in any
manner whatsoever.
4. REPRESENTATIONS, WARRANTIES, AND COVENANTS: INSURANCE AND TAXES
4.1 Binks and each of its Subsidiaries, at its sole cost and expense,
shall keep and maintain: (A) its assets insured for the full insurable value
against loss or damage by fire, theft, explosion, sprinklers and all other
hazards and risks ordinarily insured against by other owners or users of such
properties in similar businesses; and (B) business interruption insurance,
public liability insurance and property damage insurance relating to Binks' and
such Subsidiaries' ownership and use of its assets.
4.2 Binks and each of its Subsidiaries have each filed all material tax
returns required by Governmental Regulations to be filed and have paid (or made
adequate provision for the payment of) all material taxes due and required by
Governmental Regulations to be paid, including interest and penalties, or have
established adequate financial reserves on their respective
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books and records for payment thereof. Binks does not know of any actual
proposed tax assessment the effect of which would constitute a Material Adverse
Event.
4.3 Except as otherwise disclosed in the latest balance sheet delivered
pursuant to SECTION 5.3, each of Binks and its Subsidiaries has a valid and
indefeasible ownership interest in all of the properties and assets reflected in
such balance sheet or subsequently acquired. All of such properties and assets
are free and clear of any Lien, except for Permitted Liens.
4.4 Binks and each of its Subsidiaries are in compliance in all material
respects with all Governmental Regulations applicable to such Person or its
business or properties, unless the failure to so comply would not constitute a
Material Adverse Event. Without limiting the generality of the foregoing, all
licenses, permits, orders or approvals which are required under any Governmental
Regulations in connection with any of the business or properties of Binks or any
subsidiaries (collectively, "Permits") are in full force and effect, no notice
of any violation has been received in respect of any such Permits and no
proceeding is pending or, to the knowledge of Binks, threatened to terminate,
revoke or limit any such Permits if the effect of any of the foregoing would
constitute a Material Adverse Event.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS: GENERAL
5.1 Binks represents, warrants and covenants unto LaSalle that: (A) each
of Binks and its Subsidiaries is, and at all times hereafter shall be, a
corporation, duly organized and existing and in good standing under the laws of
the jurisdiction of its organization and qualified or licensed to do business in
all jurisdictions in which the laws thereof require Binks or any such Subsidiary
to be so qualified or licensed, except where the failure to be so qualified or
licensed would not create a Material Adverse Event; (B) Binks has the right,
power and capacity and is duly authorized and empowered to enter into, execute,
deliver and perform this Loan Agreement and the Other Agreements; (C) the
execution, delivery and performance by Binks of this Loan Agreement and the
Other Agreements shall not, by the lapse of time, the giving of notice or
otherwise, constitute a violation of any applicable law or a breach of any
provision contained in Binks' Articles of Incorporation or By-Laws, or contained
in any agreement, instrument or document to which Binks or any of its
Subsidiaries is now or hereafter party or by which it is or may become bound;
(D) Binks (1) was and is solvent; (2) had and has adequate cash flow to pay its
debts as they mature or otherwise become due; and (3) had and has sufficient
capital to conduct its business in the ordinary course; (E) the value of Binks'
property and assets, at fair market valuation, was and is greater than the sum
of its debts and liabilities; (F) except as otherwise disclosed on Exhibit "F"
hereof, there are no actions or proceedings which are pending or, to Binks'
knowledge, threatened, against Binks or any of its Subsidiaries which would be
reasonably likely to result, either individually or collectively, in any
Material Adverse Event or in any material adverse effect on the legality,
validity or enforceability of this Loan Agreement or the Revolving Note; (G)
neither Binks nor any of its Subsidiaries is subject to the renegotiation of any
government contracts; (H) Binks and each of its Subsidiaries possesses adequate
assets, licenses, patents, copyrights, trademarks and trade names to continue to
conduct its business as currently conducted by it; (I) Binks and each of its
Subsidiaries has been and is in good standing
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with respect to all governmental permits, certificates, consents and franchises
necessary to continue to conduct its business as previously conducted by it and
to own or lease and operate its properties as now owned or leased by it, except
for permits, certificates, consents and franchises, the absence of which is not
reasonably likely to result in a Material Adverse Event; (J) neither Binks nor
any of its Subsidiaries is a party to any contract or agreement or subject to
any charge, restriction, judgment, decree or order which is reasonably likely to
result in a Material Adverse Event; (K) neither Binks nor any of its
Subsidiaries is in violation of any applicable statute, regulation or ordinance
of the United States of America, of any state, city, town, municipality, county,
or of any other jurisdiction, or of any agency thereof in any respect affecting
its business, property, assets, operations or condition, financial or otherwise,
which is reasonably likely to result in a Material Adverse Event; (L) neither
Binks nor any of its Subsidiaries is in default with respect to any financial or
negative covenants in any indenture, loan agreement, mortgage, deed or other
similar agreement relating to the borrowing of monies to which it is a party or
by which it is bound, including, but not limited to, the NBD Loan Documents, the
Comerica Loan Documents, the ANB Loan Documents and the Equitable Notes; (M) the
Financials fairly and accurately present the information set forth therein which
may include, but is not limited to, the assets, liabilities, financial
conditions and results of operations of Binks, its consolidated Subsidiaries and
such other Persons described therein as of and for the period ending on such
dates and have been prepared in accordance with GAAP; (N) all outstanding shares
of capital stock of each class of each Subsidiary of Binks are and will be
validly issued and will be fully paid and nonassessable and are and will be
owned, beneficially and of record, by Binks or a Subsidiary of Binks, free and
clear of any Liens; (O) except as required by statute in any jurisdiction
governing Binks or any of its Subsidiaries, none of the Subsidiaries of Binks is
subject to any Governmental Regulation or any limitation under its charter or
by-laws (or other governing documents) or any agreement or other instruments
which restricts or limits the ability of such Subsidiary to declare or make any
Restricted Payments to Binks or any other Subsidiary of Binks; (P) there has
been no material and adverse change in the assets, liabilities or financial
condition of Binks and its consolidated Subsidiaries since the date of the
Financials; (Q) Binks shall comply with each of the financial covenants as set
forth in Section 6.3 of the NBD Loan Documents, notwithstanding any earlier
termination or expiration of the NBD Loan Documents; provided, however, that in
the event that Binks enters into a new facility with NBD or with another
financial institution, the proceeds of which facility replace the NBD
Obligations, the financial covenants set forth in the documents representing
such new facility, Binks shall instead comply with each of the financial
covenants set forth in such documents as of the effective date thereof; and (R)
Binks shall maintain a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial
statements in accordance with GAAP and to comply with the requirements of this
Loan Agreement and, at any reasonable time and from time to time, permit LaSalle
or any of LaSalle's agents or representatives to examine and make copies of
abstracts from the records and books of account of, and visit the properties of,
such Person and to discuss the affairs, finances and accounts of such Person
with their respective directors, officers, employees and independent auditors,
and by this provision, Binks, for itself and its Subsidiaries (with each such
Person's consent) does hereby authorize the same
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5.2 Binks represents, warrants and covenants unto LaSalle that neither
Binks nor any of its Subsidiaries shall now or at any time hereafter: (A) permit
or suffer any security interest or lien, levy, attachment or restraint to be
made affecting any of its assets other than Permitted Liens; (B) permit or
suffer any receiver, trustee or assignee for the benefit of creditors to be
appointed to take possession of all or any of Binks' or any Subsidiary's
material assets; (C) merge, consolidate with or acquire any Person other than
pursuant to a Permitted Transaction; (D) except as permitted under this Loan
Agreement, enter into any transaction not in the ordinary course of business;
(E) other than in the ordinary course of business and pursuant to a Permitted
Investment, make any investment in the securities of any Person; (F) guarantee
or otherwise, in any way, become liable with respect to the obligations or
liabilities of any Person other than Permitted Indebtedness; ( G) make any
material change in Binks' or any Subsidiary's capital structure or in any of its
business objectives, purposes and operations which might in any way materially
adversely affect the repayment of Binks' Liabilities; (H) encumber, sell,
pledge, mortgage, lease, or otherwise dispose of or transfer, whether by merger,
consolidation or otherwise, any of Binks' or its Subsidiary's assets other than
pursuant to a Permitted Transaction; (I) make any Restricted Payments other than
(1) Restricted Payments of a Subsidiary of Binks to Binks or another Subsidiary
of Binks; and (2) Restricted Payments by Binks if and so long as no Default or
Event of Default has occurred and is continuing or would result from such
Restricted Payment; (J) incur Indebtedness, except (1) renewals or extensions of
existing Indebtedness; (2) trade payables arising in the ordinary course of
business; and (3) Permitted Indebtedness; (K) enter into, or permit or suffer to
exist, any agreement or other instrument (including any limitation in charter,
bylaws or other governing documents) pursuant to which: (1) Binks agrees with
any other Person (other than NBD Bank and LaSalle) not to permit or suffer to
exist any Liens on any or all of its assets, properties or rights, other than
Permitted Liens; or (2) any restriction or limitation is established on the
ability of any Subsidiary of Binks to declare or make dividends, returns of
capital or other distributions to Binks or any other Subsidiary of Binks; and
(L) enter into, or permit or suffer to exist, any transaction or arrangement
with any affiliate, except: (1) on terms which are no less favorable to each of
Binks and its subsidiaries, as the case mad be, than could be obtained from
Persons who are not Affiliates; and (2) Permitted Investments.
5.3 Binks represents, warrants and covenants unto LaSalle that it will
deliver to LaSalle the following financial information, all of which shall
accurately reflect the financial condition of Binks at and for the periods of
time described therein and shall be prepared in accordance with GAAP
consistently applied from period to period:
(A) As soon as available but in no event later than ninety (90) days after
the close of each fiscal year of Binks, the audited financial statements of
Binks, including, but not limited to, (1) a balance sheet; (2) a statement of
income and retained earnings; and (3) a statement of cash flows together with
the unqualified opinion of a firm of external independent certified public
accountants selected by Binks and reasonably acceptable to LaSalle.
(B) Concurrently with the delivery of the audited financial statements
described in SECTION 5.3(A) above, a certificate of the Chief Financial Officer
of Binks certifying to LaSalle
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that, based upon such financial statements, (1) Binks is in compliance with all
financial covenants and ratios described in SECTION 5.1(Q) hereof, together with
the calculations for the financial covenants and ratios described therein; and
(2) the Chief Financial Officer is not aware of any event or occurrence which
constitutes or upon notice, lapse of time or both would constitute an Event of
Default.
(C) As soon as available but in no event later than forty-five (45) days
after the end of each fiscal quarter, unless such fiscal quarter is the last
quarter of such fiscal year, Binks' quarterly consolidated and consolidating
financial statements, including, but not limited to, (1) a balance sheet; (2) a
statement of income and retained earnings; (3) a statement of cash flows, and
the year-to-date statement for that portion of Binks' fiscal year then elapsed;
and (4) a comparison for the same portion of the preceding fiscal year.
(D) Concurrently with the delivery of Binks' internally prepared financial
statements pursuant to SECTION 5.3(C) above, a certificate of the Chief
Financial Officer of Binks certifying to LaSalle that, based upon the internally
prepared financial statements, (1) the Chief Financial Officer is not aware of
any event or occurrence which constitutes or upon notice, lapse of time or both
would constitute an Event of Default; and (2) Binks is in compliance with all
financial covenants described in SECTION 5.1(Q), together with the calculations
for the financial covenants and ratios described therein.
(E) Immediately upon the riling thereof, copies of each (1) annual report,
proxy, financial statement or other communication sent to Binks' shareholders;
and (2) annual, regular, periodic, special and other reports and registration
statements which Binks files with the Securities and Exchange Commission, the
National Association of Securities Dealers or with any other securities exchange
or other similar commission or organization.
(F) Concurrently with the delivery of the financial statements described
in SECTION 5.3(A), a brief management discussion and analysis of the financial
condition and results of operations of Binks and its Subsidiaries as of the end
of and for the period covered by such financial statements (including a
comparison thereof with the financial condition and results of operations of
Binks and its Subsidiaries as of the end of, and for the comparable period in,
the prior fiscal year) and describing any significant events relating to Binks
or its Subsidiaries occurring during such period.
(G) Such other data and information, financial and otherwise as LaSalle,
from time to time, may reasonably request.
5.4 Binks represents, warrants and covenants unto LaSalle that Binks has
filed and will continue to file with the Securities and Exchange Commission, in
accordance with applicable law, all forms, reports, documents, proxy statements
and registration statements required to be filed by Binks under the Securities
Act or the Securities Exchange Act, and none of such forms, reports, documents,
proxy statements or registration statements contained or will contain any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be
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stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which such statements were made.
5.5 Binks, its Subsidiaries, their ERISA Affiliates and their respective
Plans are in compliance in all material respects with those provisions of ERISA
and of the Code which are applicable with respect to any such Plan. No
Prohibited Transaction and no Reportable Event has occurred with respect to any
such Plan. None of Binks or any of its Subsidiaries or any of their ERISA
Affiliates is a contributing employer with respect to any Multiemployer Plan.
Binks, its Subsidiaries and each of their ERISA Affiliates have met the minimum
funding requirements under ERISA and the Code with respect to each of their
respective Plans, if any, and have not incurred any liability to the PBGC (other
than for the payment of insurance premiums) or any Plan, other than to make
contributions in the ordinary course of business. The execution, delivery and
performance of this Loan Agreement and the other Agreements does not constitute
a Prohibited Transaction. There is no material Unfunded Benefit Liability, with
respect to any Plan of Binks, its Subsidiaries or their ERISA Affiliates.
5.6 (A) Binks and each Subsidiary is in substantial compliance with all
material Environmental Laws in jurisdictions in which Binks or any Subsidiary
owns or operates, or has owned or operated, a facility or site, or arranges or
has arranged for disposal or treatment of Hazardous Materials, accepts or has
accepted for transport any Hazardous Materials or holds or has held any such
interest in real property, except where the failure to so comply would not
constitute a Material Adverse Event
(B) No material written demand, claim, notice, suit in equity, action,
administrative action, investigation or inquiry whether brought by any
governmental authority, private Person or otherwise, arising under, relating to
or in connection with any Environmental Laws has been received by Binks, or, to
the best of Binks's knowledge, threatened against Binks or any Subsidiary, any
real property or any past or present operation of Binks or any Subsidiary which
would result in a Material Adverse Event.
(C) Except as set forth in SCHEDULE 5.6(C), neither Binks nor any
Subsidiary (1) has received any notice that it is the subject of any
governmental investigation evaluating whether any remedial action is needed to
respond to a release of any Hazardous Materials into the environment; or (2) has
received any notice of any Hazardous Materials in or upon any of its properties
in violation of any Environmental Laws.
(D) To the best of Binks' knowledge, no release, threatened release or
disposal of Hazardous Materials is occurring or has occurred on, under or to any
property in which Binks or any of its Subsidiaries holds any interest or
performs any of its operations, in violation of any Environmental Laws to the
extent that any such release, threatened release or disposal would constitute a
Material Adverse Event.
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6. CONDITIONS PRECEDENT
6.1 LaSalle's obligation to make the initial loan and execute and deliver
the initial Foreign Exchange Contract pursuant to this Loan Agreement and the
Other Agreements is subject to the full and timely performance of the following
covenants prior to or contemporaneously with the making of the initial loan.
(A) LaSalle shall have received each of the following, in form and
substance reasonably satisfactory to LaSalle and its counsel:
(1) (a) A copy of the Articles of Incorporation of Binks certified by
the Secretary of State of Delaware, and a certificate or other satisfactory
evidence as to the qualification to conduct business and good standing of
Binks from the Secretaries of State of Illinois and Delaware; (b)
certificates of the Secretary or an Assistant Secretary of Binks dated the
date hereof, and certifying (i) that attached thereto are true and complete
copies of the by-laws of Binks and true and complete copies of resolutions
duly adopted by the Board of Directors of Binks authorizing the execution,
delivery and performance of this Loan Agreement and any Other Agreements
and the borrowing by Binks hereunder and all aspects of the financing
transactions with LaSalle requiring approval by Binks; (ii) that such
resolutions have not been modified, rescinded or amended and are in full
force and effect and that the Articles of Incorporation of Binks have not
been amended as shown on the good standing certificate furnished pursuant
to (a) above; and (iii) as to the incumbency and specimen signature of each
officer of Binks executing this Loan Agreement and the Other Agreements;
and (c) such other instruments, documents and agreements as LaSalle or its
counsel may reasonably request
(2) A fully executed original of the Revolving Note in a maximum
aggregate principal amount not to exceed Five Million and no/100 Dollars
($5,000,000.00) duly executed and delivered by Binks to LaSalle.
(3) A fully executed original of this Loan Agreement.
(4) A favorable opinion of Binks' counsel, Skadden, Arps, Meagher,
Slate & Flom, addressed to LaSalle and covering such matters as may be
reasonably requested by LaSalle.
(5) Such other documents, instruments or agreements as LaSalle may
reasonably request.
(B) No Event of Default shall have occurred and be continuing.
(C) LaSalle shall have received Uniform Commercial Code, tax lien and
judgment searches reports from the Secretary of State of Illinois and the
Recorder of Deeds of Cook
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County, Illinois which disclose no liens or security interests with respect to
Binks' assets other than Permitted Liens.
(D) No Material Adverse Event shall have occurred.
(E) The representations and warranties contained in this Loan Agreement
shall be true and correct as of the making of the initial loan and the execution
and delivery of the initial Foreign Exchange Contract.
6.2 LaSalle's obligation to make any loans and execute and deliver any
Foreign Exchange Contracts pursuant to this Loan Agreement and the Other
Agreements is subject to the full and timely performance or each or the
following covenants either prior to or contemporaneously with the making of each
loan and execution and delivery of each Foreign Exchange Contract.
(A) No Event of Default shall have occurred and be continuing.
(B) No material claims, litigation, arbitration proceedings or
governmental proceedings not disclosed in writing to LaSalle prior to the date
of the last previous loan or Foreign Exchange Contract shall be pending or known
to be threatened against Binks and no known material development not so
disclosed shall have occurred in any claims, litigation, arbitration proceedings
or governmental proceedings so disclosed which in the opinion of LaSalle is
reasonably likely to result in a Material Adverse Event.
(C) No Material Adverse Event shall have occurred since the latest of (1)
the date of Binks' then most recently delivered Financials, (2) the previous
Advance, or (3) the previous Foreign Exchange Contract.
(D) The representations and warranties of Binks contained in this Loan
Agreement shall be true and correct as of the making of any loan or execution
and delivery of any Foreign Exchange Contract with the same effect as though
made on such date of each loan or Foreign Exchange Contract.
7. DEFAULT
7.1 The occurrence and continuance of any one of the following events
shall constitute a default ("Event of Default") by Binks under this Loan
Agreement: (A) Binks fails to fully and timely pay Binks' Liabilities, within
five (5) business days after the date when due and payable or declared due and
payable; (B) Binks fails or neglects to perform, keep or observe any Covenant
and such failure or neglect continues thirty (30) days after delivery of notice
thereof by LaSalle to Binks; (C) any material statement, report or certificate
made or delivered by Binks, or any of its officers, employees, or agents, to
LaSalle is not materially true and correct when so made or delivered; (D) any of
Binks' material assets are attached, seized, subjected to a writ or distress
warrant or are levied upon, or come within the possession of any receiver,
trustee,
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custodian or assignee for the benefit of creditors and is not released, vacated
or fully bonded within sixty (60) days thereof; (E) a petition under the United
States Bankruptcy Code or any similar federal, state or local law, statute or
regulation shall be filed by or against Binks and, in the case of a petition
filed against Binks and not acquiesced in or consented to by Binks such petition
is not dismissed within sixty (60) days of the filing thereof; (F) Binks shall
make an assignment for the benefit of creditors, or an application is made by or
against Binks for the appointment of a receiver, trustee, custodian or
conservator for Binks or any of Binks' assets; (G) Binks is enjoined, restrained
or in any way prevented by court order from conducting any part of its business
affairs in a manner that will result in a Material Adverse Effect; (H) a lawsuit
or other proceeding is filed by or against Binks to liquidate any of Binks'
assets; (I) a notice of lien, levy or assessment is filed of record, with
respect to any of Binks' assets by the United States of America or any
department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental department, agency or instrumentality including,
without limitation, the Pension Benefit Guaranty Corporation; (J) one or more
judgments or orders (not covered by insurance) for the payment of money in an
aggregate amount of One Million and no/100 Dollars ($1,000,000.00) or more shall
be rendered against Binks or any of its Subsidiaries, or any other judgment or
order (whether or not for the payment of money) shall be rendered against or
shall affect Binks or any its Subsidiaries which causes a Material Adverse Event
and either (1) such judgment or order shall have remained unsatisfied for at
least 30 days from the date of entry thereof and Binks or such Subsidiary, as
the case may be, shall not have taken action necessary to stay enforcement
thereof by reason of pending appeal or otherwise prior to the expiration of the
applicable period of limitations for taking such actions, or if such action
shall have been taken, a initial order denying such stay shall have been
rendered; or (2) enforcement proceedings shall have been commenced by any
creditor upon such judgement; (K) Binks or any of its Subsidiaries fails to pay
any part of the principal of, the premium, if any, or the interest on, or any
other payment of money due under any of its Indebtedness beyond any period of
grace provided with respect thereto, which collectively is in excess of Five
Hundred Thousand and no/100 Dollars ($500,000.00), or Binks or any of its
Subsidiaries fails to perform or observe any other term, covenant, or agreement
contained in any agreement, document or instrument evidencing or securing any
such Indebtedness in an aggregate outstanding principal amount in excess of Five
Hundred Thousand and no/100 Dollars ($500,000.00), or under which any such
Indebtedness was issued or created beyond any period of grace, if any provided,
with respect thereto if the effect of such failure is either (1) to cause or
permit the holders of such Indebtedness (or a trustee on behalf of such holders)
to cause, any payment in respect of such Indebtedness to become due prior to its
due date: or (2) permit the holders of such Indebtedness (or a trustee on behalf
of such holders ) to elect a majority of the board of directors of Binks; (L)
Binks is in default under any of the Other Agreements; (M) a breach, default or
Event of Default with respect to a financial or negative covenant occurs under
the NBD Loan Documents; or (N) if any Person other than shareholders of record
as of the effective date oft his Agreement, together with any Affiliate(s) of
such Person, directly or indirectly, acquired 51% or more of the capital Stock,
including, without limitation, all rights, warrants and options to acquire
capital Stock of Binks.
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7.2 Upon the occurrence and during the continuation of an Event of Default
without notice or demand by LaSalle to Binks, LaSalle shall have no further
obligation to and may immediately cease advancing monies and executing and
delivering Foreign Exchange Contracts or otherwise extending credit to or for
the benefit of Binks under this Loan Agreement and the Other Agreements. Upon
an Event of Default, without notice or demand by LaSalle to Binks, Binks'
Liabilities shall be immediately due and payable. LaSalle shall be entitled to
exercise any and all rights and remedies pursuant to this Loan Agreement, the
Other Agreements, at law, in equity or otherwise. All of LaSalle's rights and
remedies under this Loan Agreement and the Other Agreements are cumulative and
non-exclusive.
8. GENERAL
8.1 Any payments at any time or times hereafter received by LaSalle on
account of Binks' Liabilities shall be applied FIRST, to the costs and expenses
of LaSalle, as set forth herein, SECOND, to the payment of accrued and unpaid
interest due under this Loan Agreement and the Other Agreements to and including
the date of such application, and THIRD, to the payment of all other amounts
(including principal and fees) then owing to LaSalle under the Loan Agreement
and the Other Agreements.
8.2 (A) This Loan Agreement and the Other Agreements may not be modified,
altered or amended, except by an agreement in writing signed by Binks and
LaSalle. Binks may not sell, assign or transfer this Loan Agreement, the Other
Agreements or any portion thereof, including, without limitation, Binks' rights
titles, interests, remedies, powers or duties thereunder.
(B) LaSalle shall have the right to sell or transfer participation
interest in this Loan Agreement and the Other Agreements so long as LaSalle's
obligations to Binks hereunder and under the Other Agreements shall remain
unchanged, and so long as the consent of such participant shall not be required
for amendments of or waivers of provisions of this Loan Agreement or the Other
Agreements other than an increase in the maximum amount of advances to be made
hereunder, an extension of the final maturity date for Advances hereunder or a
reduction in the rate of interest payable hereunder. LaSalle may assign
portions of its interest in this Loan Agreement and the Other Agreements to a
bank or other financial institution reasonably acceptable to Binks; PROVIDED
that such assignment shall be in writing, and shall be in a minimum amount of
$1,000,000 and such assignee has a minimum net worth of $200 million. In no
event will LaSalle sell or transfer participations or assign its interest in
this Loan Agreement and the Other Agreements such that LaSalle's interest in
this Loan Agreement or the Other Agreements is less than fifty-one percent
(51%).
8.3 LaSalle's failure at any time or times hereafter to require strict
performance by Binks of any provision of this Loan Agreement shall not waive,
affect or diminish any right of LaSalle thereafter to demand strict compliance
and performance therewith. Any suspension or waiver by LaSalle of an Event of
Default by Binks under this Loan Agreement or the Other Agreements shall not
suspend, waive or affect any other Event of Default by Binks under this Loan
Agreement or the Other Agreements, whether the same is prior or subsequent
thereto and
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whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Binks contained in this
Loan Agreement or the Other Agreements and no Event of Default by Binks under
this Loan Agreement or the Other Agreements shall be deemed to have been
suspended or waived by LaSalle unless such suspension or waiver is in writing
signed by an officer of LaSalle and directed to Binks specifying such suspension
or waiver.
8.4 Wherever possible, each provision of this Loan Agreement shall be
interpreted in such manner as to be valid and enforceable under applicable law,
but if any provision of this Loan Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
severed herefrom and such invalidity or unenforceability shall not affect any
other provision of this Loan Agreement, the balance of which shall remain in and
have its intended full force and effect; provided, however, if such provision
may be modified so as to be valid and enforceable as a matter of law, such
provision shall be deemed to be modified so as to be valid and enforceable to
the maximum extent permitted by law.
8.5 This Loan Agreement and the Other Agreements shall be binding on Binks
and upon the successors of Binks, and shall inure to the benefit of LaSalle, its
permitted successors, assigns, affiliates, divisions and parents. This
provision, however, shall not be deemed to modify SECTION 8.2 hereof.
8.6 The terms and provisions of the Other Agreements are incorporated
herein by this reference thereto. The Exhibits and Schedules referred to herein
are attached hereto, made a part hereof and incorporated herein by this
reference thereto.
8.7 Except as otherwise provided in this Loan Agreement or the Other
Agreements, no termination or cancellation of this Loan Agreement or the Other
Agreements shall in any way affect or impair the powers, obligations, duties,
rights and liabilities of Binks or LaSalle in any way or respect relating to
(A) any transaction or event occurring prior to such termination or
cancellation; or (B) any of the undertakings, agreements, covenants, warranties
and representations of Binks contained in this Loan Agreement or the Other
Agreements. All such undertakings, agreements, representations, warranties and
covenants shall survive such termination or cancellation.
8.8 Except as expressly required of LaSalle herein, Binks waives any and
all notices or demands which Binks might be entitled to receive with respect to
this Loan Agreement or the Other Agreements by virtue of any applicable law,
statute or regulation, and waives presentment, demand, protest, notice, default,
dishonor, non-payment, maturity, release, compromise, settlement, extension or
renewal of this Loan Agreement and the Other Agreements.
8.9 Until LaSalle is notified by Binks to the contrary in writing in
accordance with SECTION 8.12 of this Loan Agreement, the signature upon this
Loan Agreement or upon any of the Other Agreements of (A) a "Designated Person"
(as defined in that certain secretary's Certificate of even date herewith
executed and delivered by Binks to LaSalle); or (B) any other
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Person designated in writing to LaSalle by any of the foregoing, shall bind
Binks and be deemed to be the duly authorized act of Binks.
8.10 Binks shall reimburse LaSalle for all reasonable costs, fees and
expenses incurred by LaSalle, or for which LaSalle becomes obligated, in
connection with the negotiation, preparation, administration, enforcement and
conclusion of this Loan Agreement and the Other Agreements, including, but not
limited to, attorneys' and paralegals' fees, costs and expenses, search fees,
costs and expenses, filing and recording fees and all taxes payable in
connection with this Loan Agreement or the Other Agreements.
8.11 This Loan Agreement and the Other Agreements are submitted by Binks to
LaSalle, for LaSalle's acceptance or rejection thereof, at LaSalle's principal
place of business in Chicago, Illinois, as an offer by Binks to borrow monies
from LaSalle and shall not be binding upon LaSalle or become effective until and
unless accepted by LaSalle, in writing, at said place of business. This Loan
Agreement and the Other Agreements shall be interpreted, construed and governed
by and under the laws of the State of Illinois as to interpretation,
enforcement, validity, construction, effect, choice of law and in all other
respects including, but not limited to, the legality of the interest rate and
other charges.
8.12 Any and all notices, demands, requests, consents, designations,
waivers and other communications required or desired hereunder shall be in
writing and shall be deemed effective upon personal delivery, upon receipted
delivery by Federal Express or another overnight carrier, or three (3) days
after mailing if mailed by registered or certified mail, return receipts
requested, postage prepaid, to Binks or LaSalle at the following address or such
other address as Binks or LaSalle may specify in like manner; provided, however,
that notices of a change of address shall be effective only upon receipt
thereof.
If to Binks, then to: with a copy to:
Binks Manufacturing Company Skadden, Arps, Slate, Meagher & Flom
9201 West Belmont 333 West Wacker Drive, Suite 2100
Franklin Park, Illinois 60131 Chicago, Illinois 60606
Attention: Mr. Jeffrey W. Lemajeur Attention: Randall J. Rademaker, Esq.
Telephone Number: 847/671-5690 Telephone Number: 312/407-0930
Facsimile Transmission No.: 847/671-3000 Facsimile Transmission No.: 312/407-
0411
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If to LaSalle, then to: with a copy to:
LaSalle National Bank Fagel & Haber
120 South LaSalle Street 140 South Dearborn Street, Suite 140
Chicago, Illinois 60603 Chicago, Illinois 60603
Attention: Mr. Steven M. Cohen Attention: Gina M. Gentili, Esq.
Telephone Number: 312/781-7621 Telephone Number: 312/580-2303
Facsimile Transmission No.: 312/750-6242 Facsimile Transmission No.: 312/580-
2201
8.13 The captions contained in this Loan Agreement are inserted only as a
matter of convenience and shall in no way define, limit or extend the scope or
intent of this Loan Agreement or any provision of this Loan Agreement, and shall
not affect the construction or interpretation of this Loan Agreement.
8.14 It is the intent of Binks and LaSalle that the rate of interest and
the other charges of Binks under this Loan Agreement shall be lawful; therefore,
if for any reason, the interest or other charges payable under this Loan
Agreement are found by a court of competent jurisdiction to exceed the limit
which LaSalle may lawfully charge Binks, then the obligation to pay interest and
other charges shall automatically be reduced to such limits. If Binks has paid
an amount in excess of such limit, then such amount shall be applied to reduce
the principal portion of Binks' Liabilities.
8.15 Any provision of this Loan Agreement which requires a party to perform
any act shall be construed as requiring the party to perform the act or cause
such act to be performed. Any provision of this Loan Agreement which requires a
party to refrain from taking any act shall be construed as requiring the party
to refrain from taking the act, to refrain from causing such act to be taken and
to cause those under his control from taking the act. Wherever the term
"including" is used, the same shall be deemed to mean, "including, but not
limited to." "Any" shall be deemed to mean "any and all" whenever applicable.
The singular shall be deemed to include the plural, and the plural shall be
deemed to include the singular. The masculine pronoun shall be deemed to
include the feminine and neuter pronouns, and vice versa. "Copies" shall mean
photostatic or other reproduced originals which accurately, truly, correctly and
completely present the original of the document copied.
8.16 To the extent that LaSalle receives any payment on account of Binks'
Liabilities, and any such payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by LaSalle to Binks, its estate, trustee, receiver or any other party
under the United States Bankruptcy Code or any similar federal, state or local
law, statute or regulation, then, to the extent of such payment received, Binks'
Liabilities shall be revived and continue in full force and effect, as if such
payment had not been received by LaSalle and applied on account of Binks'
Liabilities.
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8.17 Binks hereby acknowledges and agrees that if (A) the NBD Loan
Documents, the Comerica Loan Documents, the ANB Loan Documents or the Equitable
Notes are amended modified, supplemented or terminated; or (B) a default, breach
or event of default pursuant to the NBD Loan Documents, the Comerica Loan
Documents, the ANB Loan Documents or the Equitable Notes is waived, Binks shall
immediately notify LaSalle thereof. Binks covenants and agrees with LaSalle to
deliver, within forty-five days of execution, copies of all amendments,
renewals, substitutions, additions or other similar documentation in connection
with the NBD Loan Documents, the Comerica Loan Documents, the ANB Loan Documents
or the Equitable Notes. Binks hereby acknowledges and agrees that in the event
that and so long as the aggregate principal amount of Binks' Liabilities exceeds
the aggregate principal amount of "Obligations" (as defined in the NBD Loan
Documents), no waiver of any Event of Default under the NBD Loan Documents shall
constitute a waiver of an Event of Default arising under SECTION 7.1(M) of this
Loan Agreement. Except as otherwise provided in the immediately preceding
sentence, LaSalle hereby acknowledges and agrees that any amendment,
modification or waiver by NBD or any successor thereto of the financial
covenants referred to in SECTION 5.1(Q) hereof or any waiver of Binks' failure
to comply with such financial covenants by NBD or any successor thereto shall
constitute an amendment, modification or waiver, as applicable, by LaSalle of
SECTION 5.1(Q) hereof.
8.18 Binks hereby indemnifies and holds LaSalle harmless in connection with
any written or verbal instructions received from an authorized officer of Binks
or any instructions received by LaSalle from any Person purporting to be or
otherwise identifying himself as a authorized officer of Binks, without any duty
to make any inquiry as to the genuineness of such instructions other than the
exercise of reasonable business judgment. All such verbal instructions shall be
confirmed in writing by Binks, either via first class mail, postage prepaid, or
telefax within twenty-four (24) hours of such verbal instructions. If such
verbal instructions differ in any respect from the written confirmation, the
verbal instructions shall govern as to all Advances prior to the receipt of such
written confirmation. Binks acknowledges that if LaSalle Advances any sum based
on any oral or any telefaxed request, confirmation or instructions, it shall be
for Binks' convenience, and all risks involved in the use of such procedures
shall be born by Binks, and Binks shall indemnify and hold LaSalle harmless
therefor.
8.19 This Loan Agreement constitutes the entire agreement between LaSalle
and the Borrower with regard to the subject matter hereof, and supersedes all
prior and contemporaneous communications, agreements and assurances, whether
verbal or written.
8.20 Binks and LaSalle irrevocably agree, and hereby consent and submit to
the exclusive jurisdiction of the Circuit Court of Cook County, Illinois, and
the United States District Court for the Northern District of Illinois, Eastern
Division, with regard to any actions or proceedings arising from, relating to or
in connection with Binks' Liabilities, this Loan Agreement or the Other
Agreements. Binks hereby irrevocably appoints and designates CT Corporation, as
Binks' true and lawful attorney-in-fact and duly authorized agent to accept any
notice which, notwithstanding Binks' waiver of notice contained in this Loan
Agreement, LaSalle desired or elects to provide to Binks and for service of
legal process, and agrees that service of
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process upon such attorney-in-fact shall constitute personal service of process
upon Binks. Binks shall direct such attorney-in-fact to forward any such notice
or service of process to Binks at an address designated by Binks. Binks hereby
waives any rights Binks may have to transfer or change the venue of any
litigation filed in the Circuit Court of Cook County, Illinois, or the United
States District Court for the Northern District of Illinois, Eastern Division,
and further waives any objection to service of process upon such
attorney-in-fact in accordance with this Loan Agreement. BINKS AND LA SALLE
EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY.
8.21 CONFIDENTIALITY. LaSalle agrees to hold any confidential information
that it may receive from Binks pursuant to this Agreement in confidence, EXCEPT
for disclosure:
(A) to legal counsel, accountants and other professional advisors to
LaSalle;
(B) to regulatory officials having jurisdiction over LaSalle;
(C) as required by applicable law or legal process (PROVIDED that in the
event LaSalle is so required to disclose any such confidential information,
LaSalle shall endeavor promptly to notify Binks, so that Binks may seek a
protective order or other appropriate remedy) or in connection with any legal
proceeding to which LaSalle and Binks are adverse parties; and
(D) to another financial institution in connection, with a proposed
assignment or participation hereunder provided that such disclosure is made
subject to an appropriate confidentiality agreement on terms substantially
similar to this Section.
For purposes of the foregoing, "confidential information" shall mean all
information respecting Binks or its Subsidiaries, OTHER THAN:
(E) information previously filed with any governmental agency and
available to the public;
(F) information previously published in any public medium from a source
other than, directly or indirectly, LaSalle; and
(C) information previously disclosed by Binks to any Person not associated
with Binks without a written confidentiality agreement.
29
<PAGE>
IN WITNESS WHEREOF, LaSalle and Binks have caused this Loan Agreement to be
executed and delivered by their duly authorized officers as of the date first
set forth above.
LASALLE NATIONAL BANK, BINKS MANUFACTURING COMPANY,
a national banking association a Delaware corporation
By: /S/ By: /S/ DORAN J. UNSCHULD
--------------------- ------------------------------
Title: VICE PRESIDENT Title: PRESIDENT AND CEO
--------------------- ---------------------------
ATTEST:
By: /S/ JEFFREY W. LEMAJEUR
------------------------------
Title: CHIEF FINANCIAL OFFICER
---------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1994
<PERIOD-END> NOV-30-1996
<CASH> 16,200
<SECURITIES> 0
<RECEIVABLES> 79,433
<ALLOWANCES> 0
<INVENTORY> 84,737
<CURRENT-ASSETS> 190,014
<PP&E> 65,450
<DEPRECIATION> 37,482
<TOTAL-ASSETS> 230,229
<CURRENT-LIABILITIES> 93,559
<BONDS> 44,634
0
0
<COMMON> 3,089
<OTHER-SE> 78,958
<TOTAL-LIABILITY-AND-EQUITY> 230,229
<SALES> 296,686
<TOTAL-REVENUES> 296,686
<CGS> 216,017
<TOTAL-COSTS> 216,017
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,405
<INCOME-PRETAX> (16,157)
<INCOME-TAX> (5,049)
<INCOME-CONTINUING> (11,108)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,108)
<EPS-PRIMARY> (3.60)
<EPS-DILUTED> (3.60)
</TABLE>
