<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
-----------------------------------
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 0-15661
--------------------------------------------
AMCOL INTERNATIONAL CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-0724340
- ---------------------------------------- --------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1500 West Shure Drive, Suite 500, Arlington Heights, Illinois 60004-7803
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(708) 394-8730
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 24, 1995
- ------------------------------ -----------------------------------------
(Common stock, $.01 par value) 19,183,983
<PAGE>
AMCOL INTERNATIONAL CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<C> <S> <C>
PART I - FINANCIAL INFORMATION
Item 1 FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet -
September 30, 1995 and December 31, 1994 1
Condensed Consolidated Statement of Operations -
nine months and three months ended September 30, 1995
and 1994 2
Condensed Consolidated Statement of Cash Flows -
nine months ended September 30, 1995 and 1994 3
Notes to Condensed Consolidated Financial Statements 4
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 5
PART II - OTHER INFORMATION
Item 6 EXHIBITS AND REPORTS ON FORM 8-K 13
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
<S> <C> <C>
Current Assets: *
Cash and cash equivalents $ 1,245 $ 10,389
Accounts receivable 71,744 50,908
Inventories 42,116 37,450
Advance mining 2,384 2,363
Prepaid expenses 3,834 2,213
Current deferred tax asset 2,526 2,516
-------- --------
Total current assets 123,849 105,839
-------- --------
Property, plant, equipment and mineral reserves 272,449 225,532
Less accumulated depreciation 96,872 84,112
-------- --------
175,577 141,420
-------- --------
Intangible assets 15,544 9,208
-------- --------
Other long-term assets 4,808 4,580
-------- --------
$319,778 $261,047
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current maturities of debt $ 3,333 $ 3,507
Accounts payable 16,506 19,373
Accrued income taxes 1,627 807
Accrued liabilities 16,001 12,930
-------- --------
Total current liabilities 37,467 36,617
-------- --------
Long-term debt 117,376 71,458
-------- --------
Deferred credits and minority interest 11,244 11,653
-------- --------
Stockholders' equity:
Common stock 213 213
Additional paid-in capital 74,737 74,279
Foreign currency translation adjustment 201 (1,865)
Retained earnings 81,755 72,157
Treasury stock (3,215) (3,465)
-------- --------
153,691 141,319
-------- --------
$319,778 $261,047
-------- --------
-------- --------
</TABLE>
*Condensed from audited financial statements.
The accompanying notes are an integral part of these
condensed financial statements.
-1-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- --------------------------
1995 1994 1995 1994
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net sales $255,388 $192,833 $92,978 $70,975
Cost of sales 198,981 151,179 73,376 54,480
---------- ---------- ---------- ----------
Gross profit 56,407 41,654 19,602 16,495
General, selling and administrative
expenses 32,442 26,001 9,973 9,583
---------- ---------- ---------- ----------
Operating profit 23,965 15,653 9,629 6,912
---------- ---------- ---------- ----------
Other income (expense):
Interest expense, net (4,445) (1,036) (2,095) (349)
Other income, net 1,046 651 146 (98)
---------- ---------- ---------- ----------
(3,399) (385) (1,949) (447)
---------- ---------- ---------- ----------
Income from operations 20,566 15,268 7,680 6,465
Income taxes 7,275 5,110 2,748 2,199
---------- ---------- ---------- ----------
Income before minority interest 13,291 10,158 4,932 4,266
Net income of minority interest (55) (77) (15) (28)
---------- ---------- ---------- ----------
Net income $ 13,236 $ 10,081 $ 4,917 $ 4,238
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average common and common
equivalent shares 19,667,815 19,437,267 19,762,759 19,595,002
---------- ---------- ---------- ----------
Earnings per share $ .67 $ .52 $ .25 $ .22
---------- ---------- ---------- ----------
Dividends declared per share $ .19 $ .18 $ .07 $ .06
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
-2-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------
1995 1994
------------ -----------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 13,236 $ 10,081
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, and amortization 14,842 10,382
Other (228) 720
(Increase)/decrease in current assets (27,350) (16,958)
Increase/(decrease) in current liabilities 1,023 22,249
-------- --------
Net cash provided by operations 1,523 26,474
-------- --------
Cash flow from investing activities:
Acquisition of land, mineral reserves,
depreciable and intangible assets (55,312) (65,654)
Other 1,832 1,194
-------- --------
Net cash used in investing activities (53,480) (64,460)
-------- --------
Cash flow from financing activities:
Net change in outstanding debt 45,744 22,287
Dividends paid (3,639) (3,382)
Other 708 3,588
-------- --------
Net cash provided by financing activities 42,813 22,493
-------- --------
Net decrease in cash and cash equivalents (9,144) (15,493)
Cash and cash equivalents at beginning of period 10,389 20,502
-------- --------
Cash and cash equivalents at end of period $ 1,245 $ 5,009
-------- --------
-------- --------
Supplemental Disclosure of Cash Flows Information (In thousands)
Actual cash paid for:
Interest $ 4,206 $ 1,472
-------- --------
-------- --------
Income taxes $ 5,794 $ 5,878
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these
condensed financial statements.
-3-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS)
NOTE 1: BASIS OF PRESENTATION
The financial information included herein, other than the condensed
consolidated balance sheet as of December 31, 1994, has been prepared by
management without audit by independent certified public accountants who do
not express an opinion thereon. The condensed consolidated balance sheet as
of December 31, 1994, has been derived from and does not include all the
disclosures contained in the audited consolidated financial statements for
the year ended December 31, 1994. The information furnished herein includes
all adjustments which are, in the opinion of management, necessary for a fair
statement of the results of the interim period, and all such adjustments are
of a normal recurring nature. Management recommends the accompanying
consolidated financial information be read in conjunction with the
consolidated financial statements and related notes included in the Company's
1994 Form 10-K which accompanies the 1994 Corporate Report.
The results of operations for the nine-month period ended September 30,
1995, are not necessarily indicative of the results to be expected for the
full year.
NOTE 2: INVENTORIES
Inventories at September 30, 1995, have been valued using the same
methods as at December 31, 1994. LIFO inventory values have been calculated
based upon anticipated ending inventory levels at December 31, 1995, and
anticipated mining costs for fiscal year 1995. The composition of
inventories at September 30, 1995, and December 31, 1994, was as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
Crude stockpile and in-process inventories $28,513 $21,922
Other raw material, container and supplies inventories 13,603 15,528
------- -------
$42,116 $37,450
------- -------
------- -------
</TABLE>
NOTE 3: EARNINGS PER SHARE
Earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding and the dilutive effect of stock
options outstanding at the end of each period.
-4-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying condensed
consolidated financial statements.
NINE MONTHS ENDED SEPTEMBER 30, 1995 VS. 1994
Net sales increased by $62.6 million, or 32.4%, while gross profits and
operating earnings increased by $14.8 million, or 35.4%, and $8.3 million, or
53.1%, respectively. Net interest expense increased by $3.4 million. As of
September 30, 1995, debt (both long and short-term) increased by $62.1
million, or 106.0%, over the prior year period. Also, $.9 million of
interest was capitalized in 1995 compared with $.8 million in the 1994
period. Other income in 1995 included $.6 million related to a gain on the
cancellation of an interest rate swap, while the 1994 period included a
government grant of $.5 million. The effective tax rate was 35.4% in 1995
versus 33.5% in the 1994 period. Earnings were $.67 per share for the 1995
period compared with $.52 per share for the prior-year period on 1.2% more
shares outstanding.
A brief discussion by business segment follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
MINERALS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $116,315 100.0% $112,993 100.0% $3,322 2.9%
Cost of sales 90,443 78.6% 90,708 80.5%
-------- ------ -------- ------
Gross profit 24,872 21.4% 22,285 19.5% 2,587 11.6%
General, selling and administrative expenses 12,348 10.6% 10,395 9.1% 1,953 18.8%
-------- ------ -------- ------
Operating profit 12,524 10.8% 11,890 10.4% 634 5.3%
</TABLE>
Sales increased by $3.3 million, or 2.9%, over the prior-year period.
Continued growth in the durable goods sector, primarily metalcasting, and
sales of cat litter, coupled with incremental sales from an overseas
acquisition provided much of the sales growth. The weaker dollar caused U.K.
revenues to be translated at higher rates, accounting for 25% of the segment
sales improvement. Price increases in certain markets contributed to the
improvement in the gross profit margin. General, selling and administrative
expenses increased as a result of increased research and development, higher
management information systems costs and increased infrastructure costs.
-5-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
ABSORBENT POLYMERS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $86,534 100.0% $42,426 100.0% $44,108 104.0%
Cost of sales 68,070 78.7% 31,320 73.8%
------- ------ ------- ------
Gross profit 18,464 21.3% 11,106 26.2% 7,358 66.3%
General, selling and administrative expenses 6,811 7.9% 5,433 12.8% 1,378 25.4%
------- ------ ------- ------
Operating profit 11,653 13.4% 5,673 13.4% 5,980 105.4%
</TABLE>
Revenues increased by $44.1 million, or 104.0%, over the prior year as
sales volume increased 111.2%. The weaker U.S. dollar resulted in higher
translation rates for U.K. sales, accounting for approximately 6 percent of
the segment sales increase. Gross profit margins declined by 490 basis
points, as raw material costs increased and unit selling prices declined from
the prior year. The cost of acrylic acid, the main raw material component of
superabsorbent polymer, is expected to decrease approximately 2.5% from the
third quarter 1995 level.
Depreciation on the new facilities in the U.S. and U.K. is calculated on
a units-of-production basis for the first twelve months of operation, and on
a straight-line basis thereafter. The U.K. plant will convert to
straight-line depreciation in the fourth quarter of 1995, and the U.S. plant
will switch in the third quarter of 1996. Depreciation expense may increase
when the transition is made.
The Company's current worldwide capacity for production of superabsorbent
polymer is 110,000 metric tons.
-6-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
ENVIRONMENTAL (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $36,324 100.0% $21,955 100.0% $14,369 65.4%
Cost of sales 25,248 69.5% 15,642 71.2%
------- ------ ------- ------
Gross profit 11,076 30.5% 6,313 28.8% 4,763 75.4%
General, selling and administrative expenses 7,395 20.4% 4,379 19.9% 3,016 68.9%
------- ------ ------- ------
Operating profit 3,681 10.1% 1,934 8.9% 1,747 90.3%
</TABLE>
Sales increased by $14.4 million, or 65.4%, over the prior year, with
approximately 51% of the increase coming from businesses acquired during the
past twelve months. The 1994 gross profit was adversely impacted by an
inventory charge of $.5 million. Without the charge, the 1994 gross profit
margin would have been 31.0% compared to the 1995 gross margin of 30.5%.
General, selling and administrative expenses increased by $3.0 million,
reflecting the addition of personnel and costs associated with the acquired
businesses and increased infrastructure costs.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
TRANSPORTATION (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $16,215 100.0% $15,459 100.0% $756 4.9%
Cost of sales 14,220 87.7% 13,509 87.4%
------- ------ ------- ------
Gross profit 1,995 12.3% 1,950 12.6% 45 2.3%
General, selling and administrative expenses 1,161 7.2% 1,156 7.5% 5 0.4%
------- ------ ------- ------
Operating profit 834 5.1% 794 5.1% 40 5.0%
</TABLE>
Revenues increased 4.9% as increased shipments of cat litter offset the
loss of environmental business to more cost effective rail movements.
-7-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
CORPORATE (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- --------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
General, selling and administrative expenses $ 4,727 $ 4,638 $ 89 1.9%
------- -------
Operating loss (4,727) (4,638) (89) 1.9%
</TABLE>
Corporate costs include management information systems, human resources,
investor relations and corporate communications, corporate finance, research
costs for new markets and corporate governance costs.
Management information systems costs and research expenditures increased
while accrued incentive compensation expense was reduced, resulting in a
marginal increase in corporate costs. Incentive compensation accruals are
likely to increase as the consolidated 1995 net profit exceeds the prior
fiscal year net profit.
-8-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
THREE MONTHS ENDED SEPTEMBER 30, 1995 VS. 1994
Net sales increased by $22.0 million, or 31.0%, while gross profits and
operating earnings increased by $3.1 million, or 18.8%, and $2.7 million, or
39.3%, respectively. Net interest expense increased by $1.7 million as debt
levels increased. No interest was capitalized in the 1995 quarter compared
with $.4 million in the 1994 period. The effective income tax rate was 35.8%
for 1995 versus 34.0% in the 1994 quarter. Earnings were $.25 per share for
the 1995 quarter compared with $.22 per share for the prior-year quarter.
A brief discussion by business segment follows:
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
MINERALS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $38,203 100.0% $38,217 100.0% $( 14) 0.0%
Cost of sales 30,579 80.0% 30,363 80.0%
------- ------ ------- ------
Gross profit 7,624 20.0% 7,854 20.0% (230) -2.9%
General, selling and administrative expenses 3,479 9.1% 3,519 9.0% (40) -1.1%
------- ------ ------- ------
Operating profit 4,145 10.9% 4,335 11.0% (190) -4.4%
</TABLE>
Sales were the same as the prior-year period. A key customer for clay
carrier products switched to an alternative, non-clay product. Sales to the
durable goods sector of the domestic market were slightly down from the
prior-year levels. This loss of sales was largely offset by sales from cat
litter and our U.K. operations. Lower bad debt expense and accrued incentive
compensation accounted for the decline in general, selling and administrative
expenses.
-9-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
ABSORBENT POLYMERS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------------ -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $31,286 100.0% $16,084 100.0% $15,202 94.5%
Cost of sales 25,023 80.0% 11,582 72.0%
------- ------ ------- ------
Gross profit 6,263 20.0% 4,502 28.0% 1,761 39.1%
General, selling and administrative expenses 2,394 7.7% 2,033 12.6% 361 17.8%
------- ------ ------- ------
Operating profit 3,869 12.3% 2,469 15.4% 1,400 56.7%
</TABLE>
Revenues increased by $15.2 million, or 94.5%, over the prior year as
sales volume increased 104.7%. The weaker U.S. dollar resulted in higher
translation rates for U.K. sales, accounting for approximately 4% of the
segment sales increase. Gross profit margins declined by 800 basis points,
as raw material costs increased and unit selling prices declined from the
prior year.
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
ENVIRONMENTAL (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- ------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $17,790 100.0% $11,016 100.0% $6,774 61.5%
Cost of sales 12,794 71.9% 7,575 68.8%
------- ------ ------- ------
Gross profit 4,996 28.1% 3,441 31.2% 1,555 45.2%
General, selling and administrative expenses 2,290 12.9% 1,871 17.0% 419 22.4%
------- ------ ------- ------
Operating profit 2,706 15.2% 1,570 14.2% 1,136 72.4%
</TABLE>
Sales increased by $6.8 million, or 61.5%, over the prior year, with
approximately 51% of the increase coming from businesses acquired during the
past twelve months. Gross profit margins declined to 28.1%, or 310 basis
points, as higher volumes of lower margin liner products accounted for much
of the sales increase. General, selling and administrative expenses
increased by $.4 million, reflecting the addition of personnel and costs
associated with the acquired businesses and increased infrastructure costs.
-10-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
TRANSPORTATION (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- -------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $5,699 100.0% $5,658 100.0% $41 0.7%
Cost of sales 4,980 87.4% 4,960 87.7%
------ ------ ------ ------
Gross profit 719 12.6% 698 12.3% 21 3.0%
General, selling and administrative expenses 404 7.1% 394 7.0% 10 2.5%
------ ------ ------ ------
Operating profit 315 5.5% 304 5.3% 11 3.6%
</TABLE>
Revenues were stable as increased shipments of cat litter offset the
loss of environmental business to more cost effective rail movements. A 30
basis point improvement in gross profit margins accounted for the 3.6%
improvement in operating profit compared with the prior year.
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30,
-------------------------------------------------------------------------
1995 1994 1995 VS. 1994
---------------------- ---------------------- -----------------------
CORPORATE (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE
- --------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
General, selling and administrative expenses $ 1,406 $ 1,766 $(360) -20.4%
------- -------
Operating loss (1,406) (1,766) 360 20.4%
</TABLE>
Lower accrued incentive compensation expense accounted for much of the
reduction in corporate expenses.
-11-
<PAGE>
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1995, the Company had outstanding debt of $120.7
million (including both long- and short-term debt) and cash of $1.2 million
compared with $75 million in debt and $10 million in cash and cash
equivalents respectively, at December 31, 1994. The long-term debt to total
capitalization at September 30, 1995, was 43.3% compared with 33.6% at
December 31, 1994.
The Company had a current ratio of 3.31 to 1 at September 30, 1995 with
approximately $86.4 million in working capital compared with 2.89 to 1 and
$69.2 million, respectively, at December 31, 1994.
On September 25, 1995, the Company amended its revolving credit
facility. The amendment included an increase in the amount of the facility
from $50 million to $100 million and an extension of the term to October,
2000.
The Company had $45.6 million in unused, committed credit lines at
September 30, 1995.
During the first nine months of 1995, the Company used its operating
cash flow plus $9.1 million of its cash reserves and $45.7 million of debt to
pay dividends of $3.6 million, and acquire property, equipment and
intangibles totaling $55.3 million. In addition, working capital has
increased by $26.3 million, primarily due to sales growth in the polymer and
environmental segments. Extended terms granted to certain customers are
expected to return to normal over the course of the next six months.
Management continues to explore other growth prospects in all of its
major business segments. The Company has adequate financing to fund the
existing growth plans.
-12-
<PAGE>
PART II - OTHER INFORMATION
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) See Index to Exhibits immediately following the signature page.
(b) No reports on Form 8-K have been filed during the quarter ended
September 30, 1995.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
AMCOL INTERNATIONAL CORPORATION
Date: October 24, 1995 /s/ John Hughes
-------------------------- -------------------------------------
John Hughes
President and Chief Executive Officer
Date: October 24, 1995 /s/ Paul G. Shelton
-------------------------- -------------------------------------
Paul G. Shelton
Senior Vice President and Chief
Financial Officer
-14
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
3.1 Restated Certificate of Incorporation of the Company(5)
3.2 Bylaws of the Company(1)
4 Article Fourth of the Company's Restated Certificate of Incorporation(5)
10.1 American Colloid Company 1983 Incentive Stock Option Plan(1); as amended(3)
10.2 American Colloid Company Pension Plan(3)
10.3 American Colloid Company Salaried Employees' Savings Plan and Trust(1); as amended(4)
10.4 Executive Medical Reimbursement Plan(1)
10.5 Lease Agreement for office space dated September 29, 1986 between the Company and American National Bank and Trust
Company of Chicago(1); as amended (8)
10.6 American Colloid Company 1987 Non-Qualified Stock Option Plan (2); as amended (6)
10.7 Change in Control Agreement dated April 1, 1994 by and between Registrant and John Hughes (6)
10.8 Change in Control Agreement dated April 1, 1994 by and between Registrant and Paul G. Shelton (6)
10.9 Change in Control Agreement dated December 15, 1992 by and between Registrant and Robert C. Steele (4)
10.10 Change in Control Agreement dated December 21, 1992 by and between Registrant and Lawrence E. Washow (4)
10.11 Change in Control Agreement dated December 15, 1992 by and between Registrant and Roger P. Palmer (4)
10.12 Change in Control Agreement dated January 24, 1994 by and between Registrant and Peter L. Maul (6)
10.13 American Colloid Company Dividend Reinvestment and Stock Purchase Plan (4); as amended (6)
10.14 American Colloid Company 1993 Stock Plan (6)
10.15 Credit Agreement by and among American Colloid Company and Harris Trust and Savings Bank, individually and as agent,
NBD Bank, LaSalle National Bank and the Northern Trust Company dated October 4, 1994 (7); as amended, First Amendment to
Credit Agreement dated September 25, 1995
10.16 Note Agreement dated October 1, 1994 between American Colloid Company and Principal Mutual Life Insurance Company (7)
27 Financial Data Schedule
</TABLE>
___________________
(1) Exhibit is incorporated by reference to the Registrant's Form 10 filed
with the Securities and Exchange Commission on July 27, 1987.
(2) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December
31, 1988.
(3) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December
31, 1989.
(4) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December
31, 1992.
(5) Exhibit is incorporated by reference to the Registrant's Form S-3 filed
with the Securities and Exchange Commission on September 15, 1993.
(6) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December
31, 1993.
(7) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed
with the Securities and Exchange Commission for the quarter ended
September 30, 1994.
(8) Exhibit is incorporated by reference to the Registrant's Form 10-K filed
with the Securities and Exchange Commission for the year ended December
31, 1994.
<PAGE>
AMCOL INTERNATIONAL CORPORATION (F.K.A. AMERICAN COLLOID
COMPANY) (THE "COMPANY")
CLOSING DOCUMENTS LIST
FOR INCREASE AND EXTENSION OF $100,000,000 U.S. DOLLAR AND
EUROCURRENCY REVOLVING CREDIT FACILITY
(All documents are dated as of September 25, 1995 unless
noted otherwise.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. First Amendment to Credit Agreement among the Company, the Agent and the
Banks with Guarantors' Consent
2. Guaranty Assumption Agreement from Nanocor, Inc. ("NANOCOR")
3. Certificate of Secretary of the Company as to Incumbency and Resolutions
4. Certificate of Secretary of Nanocor as to Articles, Bylaws, Incumbency and
Resolutions
5. Opinion of Counsel to Company and Nanocor
6. Good Standing Certificates dated as of September 12, 1995
(a) Company
(b) Nanocor
(c) American Colloid Company (f.k.a. AES Acquisition, Inc. and
American Colloid Mineral Company)
<PAGE>
AMCOL INTERNATIONAL CORPORATION
FIRST AMENDMENT TO CREDIT AGREEMENT
Harris Trust and Savings Bank
Chicago, Illinois
NBD Bank
Mt. Prospect, Illinois
LaSalle National Bank
Chicago, Illinois
The Northern Trust Company
Chicago, Illinois
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of October 4,
1994 (the "CREDIT AGREEMENT") by and among the undersigned, AMCOL International
Corporation (formerly known as American Colloid Company), a Delaware corporation
(the "COMPANY"), Harris Trust and Savings Bank in its capacity as Agent (the
"AGENT") and you (collectively, the "BANKS"). The Company applies to the Banks
for their agreement to increase the aggregate amount of the Revolving Credit to
$100,000,000, extend the Termination Date of the Revolving Credit and to amend
certain other terms of the Credit Agreement in the manner and on the terms and
conditions set forth herein. Capitalized terms used in this Amendment and not
otherwise specifically defined have the meaning given such terms in the Credit
Agreement.
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT.
Upon satisfaction of all of the conditions precedent specified in Section 2
of this Amendment, the Credit Agreement shall be amended as follows:
SECTION 1.1. Sections 1.1, 1.3 and 1.7 of the Credit Agreement shall be
amended in their entirety and as so amended shall be restated to read as
follows:
"SECTION 1.1. GENERAL TERMS. Subject to the terms and conditions
hereof, each Bank, by its acceptance hereof, severally agrees to make a
revolving credit (the "REVOLVING CREDIT") available to the Company from time to
time on a revolving basis in the amount of its commitment set forth on the
applicable signature page hereof under the heading "Commitment" (its
"COMMITMENT" and cumulatively for all the Banks the "COMMITMENTS"), subject to
any reductions thereof pursuant to Section 2.4 hereof, through but not including
<PAGE>
the Termination Date. The Revolving Credit may be utilized by the Company in
the form of loans (collectively the "REVOLVING CREDIT LOANS" and individually a
"REVOLVING CREDIT LOAN"), all as more fully hereinafter set forth. At no time
shall the aggregate principal amount of outstanding Revolving Credit Loans
(which, in the case of Eurocurrency Loans denominated in an Alternative
Currency, means the Original Dollar Amount thereof) exceed the Commitments then
in effect."
"SECTION 1.3. [Intentionally Deleted]."
SECTION 1.7. INTEREST RATE MARGIN AND COMMITMENT FEE ADJUSTMENT. The
applicable Eurocurrency Margin specified in Section 1.4(b) hereof and the
commitment fee specified in Section 3.1 hereof shall be subject to quarterly
adjustment (based upon the Funded Debt Ratio and the Senior Funded Debt Ratio
for the quarter ending September 30, 1995) as follows (the margins from time to
time applicable to the Eurocurrency Loans being hereinafter referred to as the
"APPLICABLE EUROCURRENCY MARGIN" and the commitment fee from time to time in
effect being hereinafter referred to as the "APPLICABLE COMMITMENT FEE") with
the Funded Debt Ratio and Senior Funded Debt Ratio being computed as in effect
on the last day of each fiscal quarter:
A. Applicable Eurocurrency Margin:
If as of the last day of any fiscal quarter:
<TABLE>
<CAPTION>
SENIOR FUNDED DEBT Greater than Less than or Less than or Less than
RATIO IS: 2.25 to 1.00 equal to 2.25 to equal to 2.00 to 1.50 to 1.00
1.00 but greater 1.00 but greater
than 2.00 to 1.00 than 1.50 to 1.00
and
FUNDED DEBT RATIO IS:
<S> <C> <C> <C> <C>
Less than 25% .375% .300% .250% .250%
Equal to or greater than
25% but less than 45% .500% .375% .300% .250%
Equal to or greater than
45% but less than 50% .625% .500% .375% .375%
Greater than or equal to
50% .750% .625% .500% .375%
</TABLE>
-2-
<PAGE>
B. Applicable Commitment Fee:
If as of the last day of
any fiscal quarter:
<TABLE>
<CAPTION>
SENIOR FUNDED DEBT Greater than Less than or Less than or Less than
RATIO IS: 2.25 to 1.00 equal to 2.25 to equal to 2.00 to 1.50 to 1.00
1.00 but greater 1.00 but greater
and than 2.00 to 1.00 than 1.50 to 1.00
FUNDED DEBT RATIO IS:
<S> <C> <C> <C> <C>
Less than 25% .150% .150% .125% .100%
Equal to or greater than
25% but less than 45% .150% .150% .125% .100%
Equal to or greater than
45% but less than 50% .150% .150% .125% .100%
Greater than or equal to
50% .150% .150% .125% .100%
</TABLE>
Not later than five Business Days after receipt by the Agent of the
financial statements and the compliance certificate called for by Section 7.14
hereof for the applicable quarter, the Agent shall determine the Senior Funded
Debt Ratio and the Funded Debt Ratio for the applicable period based on the
information contained in such financial statements and compliance certificate
and shall promptly notify the Company and the Banks of such determination and of
any change in the Applicable Eurocurrency Margin and Applicable Commitment Fee
resulting therefrom, any such change in the Applicable Eurocurrency Margin and
Applicable Commitment Fee to be effective as of the date the Agent so notifies
the Company, with such new Applicable Eurocurrency Margin and Applicable
Commitment Fee to continue in effect until the effective date of the next
quarterly redetermination in accordance with the foregoing. It is expressly
understood and agreed that if on any determination date the Senior Funded Debt
Ratio and Funded Debt Ratio as so determined would result in different
Applicable Eurocurrency Margins and Applicable Commitment Fees in accordance
with the tables set forth above, the higher Applicable Eurocurrency Margin and
Applicable Commitment Fee shall apply. Each determination of the Funded Debt
Ratio, Applicable Eurocurrency Margin and Applicable Commitment Fee by the Agent
in accordance with this Section shall be conclusive and binding on the Company
and the Banks absent manifest error."
SECTION 1.2. The definition of Eurocurrency Margin contained in Section
1.4(b) of the Credit Agreement shall be amended in its entirety and as so
amended shall be restated to read as follows:
""EUROCURRENCY MARGIN" means .500% subject to adjustment as provided
in Section 1.7 hereof."
-3-
<PAGE>
SECTION 1.3. Section 2.4 of the Credit Agreement shall be amended in its
entirety and as so amended shall be restated to read as follows:
"SECTION 2.4. COMMITMENT TERMINATIONS. The Company shall have the
right at any time and from time to time, upon five (5) Business Days' prior
written notice to the Agent to terminate without premium or penalty, in
whole or in part, the Commitments, any partial termination to be in an
amount not less than $5,000,000 or any larger amount that is an integral
multiple of $1,000,000, and to reduce ratably the respective Commitments
of each Bank; PROVIDED THAT, the Commitments may not be reduced to an
amount less than the aggregate principal amount of Loans then outstanding
(which, in the case of Eurocurrency Loans denominated in an Alternative
Currency, shall mean the Original Dollar Amount thereof). Any termination
of Commitments pursuant to this Section 2.4 may not be reinstated."
SECTION 1.4. Sections 3.1 and 3.2 of the Credit Agreement shall be
amended in their entirety and as so amended shall be restated to read as
follows:
"SECTION 3.1. COMMITMENT FEE. For the period from the date hereof
to and including the Termination Date, the Company shall pay to the Agent
for the ratable account of the Banks a commitment fee at the rate of .150%
per annum, subject to adjustment as provided in Section 1.7 hereof
(computed on the basis of a year of 365 or 366 days as the case may be for
the actual number of days elapsed) on the average daily unused amount of
the Commitments in effect under this Agreement from time to time, such fee
to be payable in arrears on the last day of each March, June, September and
December (commencing September 30, 1995) to and including, and on, the
Termination Date, unless the Available Commitments are terminated in whole
on an earlier date, in which event the commitment fees payable hereunder
for the period to the date of such termination shall be paid on the date of
such termination.
SECTION 3.2. [Intentionally Deleted]."
SECTION 1.5. Section 3.5 of the Credit Agreement shall be amended by
deleting the last sentence thereof.
SECTION 1.6. Section 4 of the Credit Agreement shall be amended by
deleting the definitions of "Available Commitments", "Tranche A Commitments" and
"Tranche B Commitments" and shall be further amended by adding the following new
definitions thereto which read as follows:
"EBITDA" means, with reference to any period, Consolidated Net Income
for such period plus all amounts deducted in arriving at such Consolidated
Net Income in respect of (i) Interest Expense for such period, plus (ii)
federal, state and local income taxes for such period, plus (iii) all
amounts properly charged for depreciation of fixed assets and amortization
of intangible assets during such period on the books of the Company and its
Restricted Subsidiaries.
-4-
<PAGE>
"INTEREST EXPENSE" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to
Capitalized Lease Obligations and all amortization of debt discount and
expense) of the Company and its Restricted Subsidiaries for such period
determined in accordance with generally accepted accounting principles.
"SENIOR FUNDED DEBT" shall mean Consolidated Funded Debt less
Subordinated Debt.
"SENIOR FUNDED DEBT RATIO" shall mean, as of the date of any
determination thereof, the ratio of (a) Senior Funded Debt to (b) EBITDA
for the four fiscal quarters ending on such date.
"SUBORDINATED DEBT" shall mean Indebtedness of the Company which has
been and remains subordinate in right of payment to the prior payment in
full of all Indebtedness of the Company to the Banks pursuant to written
subordination provisions satisfactory to the Required Banks.
SECTION 1.7. The definition of "TERMINATION DATE" appearing in Section 4
of the Credit Agreement shall be amended by deleting the date "October 4, 1997"
appearing therein and by substituting therefor the date "October 31, 2000".
SECTION 1.8. Section 7 of the Credit Agreement shall be amended by adding
a new Section 7.17 thereto which reads as follows:
"SECTION 7.17. SENIOR FUNDED DEBT RATIO. The Company will not, as
of the end of any fiscal quarter, permit the Senior Funded Debt Ratio to
exceed 2.50 to 1.00."
SECTION 1.9. Section 7.14(f) of the Credit Agreement shall be amended in
its entirety and as so amended shall read as follows:
"(f) OFFICERS' CERTIFICATES. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Company stating that he has reviewed the provisions of this
Agreement and setting forth: (i) a compliance certificate in the form
attached hereto as Exhibit C containing the information and computations
(in sufficient detail) required in order to establish whether the Company
was in compliance with the requirements of Sections 7.6 through 7.10,
inclusive, and Section 7.17 at the end of the period covered by the
financial statements then being furnished, and (ii) whether there existed
as of the date of such financial statements and whether, to the best of his
knowledge, there exists on the date of the certificate or existed at any
time during the period covered by such financial statements any Default or
Event of Default and, if any such condition or event exists on the date of
the certificate, specifying the nature and period of existence thereof and
the action the Company is taking and proposes to take with respect
thereto;"
-5-
<PAGE>
SECTION 1.10. The portion of the Banks' signature pages to the Credit
Agreement designated "Amount of Commitments" shall be amended in its entirety
and as so amended shall read as follows:
<TABLE>
<CAPTION>
AMOUNT AND
PERCENTAGE OF
COMMITMENTS: BANK:
----------- ----
<S> <C>
$45,000,000 Harris Trust and Savings Bank
(45%)
$25,000,000 NBD Bank
(25%)
$15,000,000 LaSalle National Bank
(15%)
$15,000,000 The Northern Trust Company
(15%)
</TABLE>
SECTION 1.11. All references in the Credit Agreement (including all
Exhibits thereto) to the Company's former name, "American Colloid Company" shall
be amended to be references to the Company's new name "AMCOL International
Corporation".
SECTION 2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
SECTION 2.1. The Company, the Agent and the Banks shall have executed
this Amendment (such execution may be in several counterparts and the several
parties hereto may execute on separate counterparts).
SECTION 2.2. The Company's new Domestic Subsidiary, Nanocor, Inc., a
Delaware corporation ("NANOCOR") shall have executed and delivered a Guaranty
Assumption Agreement satisfactory to the Banks.
SECTION 2.3. The Banks have received an executed Guarantor's consent in
the form attached hereto.
SECTION 2.4. The Agent shall have received for the pro rata account of the
Banks the sum of $62,500 as and for a nonrefundable amendment fee.
SECTION 2.5. The Banks shall have received copies (executed or certified
as may be appropriate) of all legal documents or proceedings taken in connection
with the execution and delivery of this Amendment and the other instruments and
documents contemplated
-6-
<PAGE>
hereby and an opinion of counsel to the Company and Nanocor, in the form
satisfactory to the Banks.
SECTION 2.6. Each of the representations and warranties set forth in
Section 5 of the Credit Agreement shall be true and correct. The Company
further represents and warrants that the signatories to the Guarantors' Consent
hereto and Nanocor constitute all of the Company's Domestic Subsidiaries
existing as of the date hereof and that its former Domestic Subsidiary, Hydron,
Inc. was merged into Colloid Environmental Technologies Company.
SECTION 2.7. The Company shall be in full compliance with all of the terms
and conditions of the Credit Agreement and no Event of Default or Default shall
have occurred and be continuing thereunder or shall result after giving effect
to this Amendment.
SECTION 3. MISCELLANEOUS.
SECTION 3.1. Except as specifically amended herein the Credit Agreement
shall continue in full force and effect. Reference to this specific Amendment
need not be made in any note, document, letter, certificate, the Credit
Agreement itself, the Notes, the Guaranty Agreement or any communication issued
or made pursuant to or with respect thereto, any reference to the Credit
Agreement in any of such being sufficient to refer to the Credit Agreement as
amended hereby.
SECTION 3.2. The Company shall pay all fees and expenses (including
attorneys' fees) incurred by Harris Trust and Savings Bank and its counsel
incurred in connection with the drafting and preparation, and supervision of
legal matters in connection with this Amendment.
SECTION 3.3. This Amendment may be executed in any number of counterparts,
and by the different parties on different counterparts, all of which taken
together shall constitute one and the same Agreement. Any of the parties hereto
may execute this Amendment by signing any such counterpart and each of such
counterparts shall for all purposes be deemed to be an original. This Amendment
shall be governed by the internal laws of the State of Illinois.
-7-
<PAGE>
Dated as of this 25th day of September, 1995.
AMCOL INTERNATIONAL CORPORATION (formerly
known as American Colloid Company)
By /s/ Paul G. Shelton
---------------------------------------
Its Senior Vice President
------------------------------------
Accepted and agreed to as of the day and year last above written.
HARRIS TRUST AND SAVINGS BANK,
individually and as Agent
By /s/ Richard Botts
---------------------------------------
Its Vice President
NBD BANK
By /s/ Daniel A. Lange
--------------------------------------
Its Second Vice President
LASALLE NATIONAL BANK
By /s/ Doug Lovette
--------------------------------------
Its Vice President
THE NORTHERN TRUST COMPANY
By /s/ Scott Berlin
--------------------------------------
Its COMMERCIAL BANKING OFFICER
-8-
<PAGE>
GUARANTORS' CONSENT
The undersigned have executed and delivered to the Agent and Banks that
certain Joint and Several Guaranty Agreement dated as of October 4, 1994 (the
"GUARANTY AGREEMENT"), and hereby consent to the amendment of the Credit
Agreement as set forth above and confirm that such Guaranty Agreement and all of
the undersigneds' obligations thereunder remain in full force. Without limiting
the generality of the foregoing, the undersigned acknowledge and agree that all
references to the "Credit Agreement" in the Guaranty Agreement shall be deemed
references to the Credit Agreement as amended by the First Amendment to Credit
Agreement and further agree that any reference in such Guaranty to the Company's
former name, "American Colloid Company" shall be amended to be references to the
Company's new name "AMCOL International Corporation". The undersigned further
agree that the consent of the undersigned to any further amendments of the
Credit Agreement shall not be required as a result of this consent having been
obtained, except to the extent, if any, required by the Guaranty Agreement
referred to above.
Dated as of September 25, 1995.
AMERI-CO CARRIERS, INC.
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
NATIONWIDE FREIGHT SERVICE, INC.
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
CHEMDAL CORPORATION
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
SUPERIOR ABSORBENTS, INC.
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
<PAGE>
MONTANA MINERALS DEVELOPMENT
COMPANY
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
-----------------------------
CHEMDAL INTERNATIONAL CORPORATION
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
-----------------------------
REGENERATION TECHNOLOGIES, INC.
(FKA AMCOL INTERNATIONAL CORP.)
By /s/ Paul G. Shelton
---------------------------------
Its Senior Vice President
COLLOID ENVIRONMENTAL TECHNOLOGIES
COMPANY
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
AMERICAN COLLOID COMPANY (f.k.a. AES
Acquisition, Inc. and American Colloid
Mineral Company)
By /s/ Clarence O. Redman
---------------------------------
Its Secretary
-2-
<PAGE>
GUARANTY ASSUMPTION AGREEMENT
WHEREAS, AMCOL International Corporation, a Delaware corporation formerly
known as American Colloid Company (the "COMPANY"), has entered into that certain
Credit Agreement, dated as of October 4, 1994 as amended by that certain First
Amendment to Credit Agreement (such Credit Agreement as so amended and as the
same may from time to time be amended being hereinafter referred to as the
"CREDIT AGREEMENT"), with Harris Trust and Savings Bank, NBD Bank, LaSalle
National Bank and The Northern Trust Company (collectively "BANKS"). Pursuant
to that certain Guaranty Agreement dated as of October 4, 1994 (as the same may
at any time be amended or modified and in effect, the "GUARANTY AGREEMENT"), the
Domestic Subsidiaries (as such term is defined in the Credit Agreement) have
guaranteed the payment by the Company of all amounts due with respect to the
Notes (as defined in the Credit Agreement) and the performance by the Company of
its obligations under the Credit Agreement.
WHEREAS, the undersigned corporation which is organized under the laws of
the State of Delaware (herein the "NEW DOMESTIC SUBSIDIARY") has become a new
Domestic Subsidiary (as such term is defined in the Credit Agreement) of the
Company;
WHEREAS, to induce the Agent (as defined in the Credit Agreement) and the
Banks to enter into the Credit Agreement, the Company agreed to cause all New
Domestic Subsidiaries to enter into this Agreement;
NOW, THEREFORE, in order to fulfill the requirements of the Credit
Agreement, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the New Domestic Subsidiary agrees as follows:
1. Unless otherwise specified herein, all capitalized terms used but
not otherwise defined herein have the meanings assigned to such terms in
the Guaranty Agreement.
2. The New Domestic Subsidiary hereby unconditionally assumes and
agrees to pay, perform and discharge all of the obligations as a Guarantor
under the Guaranty Agreement; and the New Domestic Subsidiary agrees that
it will, for all purposes of the Guaranty Agreement, be deemed to be a
Guarantor. From and after the date hereof, all references in the Credit
Agreement to the Domestic Subsidiaries or a Domestic Subsidiary shall be
deemed to include reference to the New Domestic Subsidiary. The New
Domestic Subsidiary hereby acknowledges that any reference in the Guaranty
to the Company's former name, "American Colloid Company" shall be amended
to be references to the Company's new name "AMCOL International
Corporation".
3. The New Domestic Subsidiary hereby makes, for the benefit of the
Guaranteed Creditors, all of the representations and warranties made by a
Guarantor
<PAGE>
in the Guaranty Agreement, which representations and warranties are true
and correct as of the date hereof.
4. Anything herein to the contrary notwithstanding, all of the
Guarantors shall at all times remain liable under the Guaranty Agreement to
pay, perform and discharge all of their obligations thereunder to the same
extent as if this Agreement had not been executed.
5. The obligations of the New Domestic Subsidiary hereunder and
under the Guaranty Agreement are independent of any obligations of the
other Guarantors, and a separate action or actions may be brought and
prosecuted against the New Domestic Subsidiary whether or not such action
is brought against the other Guarantors or whether the other Guarantors are
joined in such action or actions.
6. This Agreement is governed by and construed under the internal
laws of the State of Illinois without regard to principles of conflicts of
law.
IN WITNESS WHEREOF, the New Domestic Subsidiary has caused this Agreement
to be authorized by its duly authorized officer as of September 25, 1995.
NANOCOR, INC.
By /s/ Paul G. Shelton
-------------------------------
Its Asst. Secretary
---------------------------
Address:
c/o AMCOL International Corporation
1500 West Shure Drive
Arlington Heights, IL 60004
-2-
<PAGE>
CERTIFICATE OF THE SECRETARY
OF
AMCOL INTERNATIONAL CORPORATION
The undersigned, C. O. Redman, certifies that he is the duly elected,
qualified and acting Secretary of AMCOL International Corporation, a corporation
duly organized and existing under the laws of the State of Delaware, and that as
such Secretary, he is the keeper of the corporate records and seal of said
Corporation.
The undersigned further certifies:
1. Attached hereto as Exhibit A is a true, correct and complete copy of
resolutions adopted by THE BOARD OF DIRECTORS OF SAID CORPORATION AT A MEETING
OF SAID BOARD DULY CALLED, CONVENED AND HELD ON AUGUST 16 AND 17, 1995, AT WHICH
MEETING A MAJORITY AND QUORUM OF DIRECTORS WERE PRESENT AND ACTING THROUGHOUT
VOTED IN FAVOR OF THE ADOPTION OF SAID RESOLUTIONS; and said resolutions do not
contravene any provision of the articles of incorporation or by-laws of said
Corporation, and have not been rescinded or modified in any respect but still
remain in full force and effect.
2. The terms of Amendment referred to in said resolutions as being before
said meeting is similar to the First Amendment to Credit Agreement dated as of
September 25th, 1995, which was actually executed and delivered by said
Corporation to Harris Trust and Savings Bank, Chicago, Illinois, individually
and as agent for itself and various other lenders, excepting only for such
changes therein as were and are approved by the duly authorized officer or
officers of this Corporation executing the same as evidenced by their execution
thereof.
3. The undersigned further certifies that the persons named below are at
the date hereof the duly elected, qualified and acting incumbents of their
respective offices of this Corporation set out at the left of their respective
names, and the signatures at the right of said names, respectively, are the
genuine signatures of said officers:
TITLE NAME SIGNATURE
President and
Chief Executive Officer John Hughes /s/ John Hughes
------------------------
Senior Vice President and
Chief Financial Officer Paul G. Shelton /s/ Paul G. Shelton
------------------------
Secretary Clarence O. Redman /s/ Clarence O. Redman
------------------------
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate
seal of this Corporation this 25th day of September, 1995.
AMCOL International Corporation
by /s/ Clarence O. Redman
-------------------------------
C.O. Redman, Secretary of said
Corporation
2
<PAGE>
EXHIBIT A
RESOLUTIONS OF
AMCOL INTERNATIONAL CORPORATION
WHEREAS, this Corporation is duly authorized to borrow money for its
corporate purposes and execute and deliver its promissory notes and other
obligations for the amounts so borrowed and required for its corporate purposes;
and
WHEREAS, the proper officers of this Corporation have negotiated with
Harris Trust and Savings Bank ("HARRIS"), individually and as agent (in such
capacity for various other lenders parties to the hereinafter defined Credit
Agreement (Harris and such other lenders being herein referred to collectively
as the "LENDERS" and individually as a "LENDER") for an increase in the amount
of the revolving credit made available by the Lenders to this Corporation under
that certain Credit Agreement dated as of October 4, 1994 (the "CREDIT
AGREEMENT") from $50,000,000 to $100,000,000, for an extension in the
availability of such revolving credit to October 31, 2000 and for various other
amendments to the Credit Agreement on such terms and conditions as the Lenders
may negotiate from time to time with the authorized officers of this
Corporation; and
WHEREAS, as a condition precedent to such amendments, the Lenders require
that this Corporation enter into an amendment to the credit agreement with the
Lenders setting forth the terms and conditions applicable thereto; and
WHEREAS, there is now before this Board of Directors a description of terms
of the First Amendment to Credit Agreement (the "AMENDMENT") to be entered into
by this Corporation, the Agent and the Lenders setting forth the terms and
conditions applicable to the amendments to said revolving credit and the
covenants, agreements, representations and warranties to be made by this
Corporation in connection therewith; and
WHEREAS, said Amendment, having been examined by this Board, is in the
judgment of this Board in proper form for its intended purposes; and
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED by this Board of Directors
as follows:
1. The obtaining of the increase and extension of the revolving credit
(in the form of loans and letters of credit), and the other amendments so
applied for from the Lenders, all on the terms and conditions set forth in the
Amendment now before this Board, are in the judgment of this Board in the best
interest of this Corporation and its shareholders.
2. Any one of the following officers of this Corporation:
<PAGE>
NAME OFFICE
John Hughes President and Chief Executive Officer
Paul G. Shelton Senior Vice President and Chief Financial Officer
Clarence O. Redman Secretary
be and the same each is hereby authorized, empowered and directed for, in the
name and on behalf of this Corporation (and when requested by the Agent or any
Lender, under the corporate seal and attested to by the Secretary or Assistant
Secretary) to execute and deliver to the Agent and the Lenders a First Amendment
to Credit Agreement containing substantially the terms, conditions and
provisions as set forth in the description of the Amendment now before this
meeting and hereby approved and/or such additional, modified or revised terms as
may be acceptable to said officer as evidenced by her/his execution thereof and
to also execute and deliver to the Agent and/or the Lenders such other
instruments and documents as may from time to time be required by the Agent
and/or the Lenders in connection with the Credit Agreement or the Amendment, and
any and all amendments and supplements to such other instruments and documents,
all on such terms and conditions and for such consideration as any of the
foregoing officers may in her/his sole discretion deem proper as evidenced by
her/his execution thereof.
3. Any one of the officers of this Corporation mentioned in resolution
number two (2) above, and any other officer of this Corporation appointed by any
one of the foregoing officers pursuant to the Credit Agreement, each is hereby
authorized, empowered and directed for, in the name of and on behalf of this
Corporation, to borrow all or any part of the revolving credit provided for
under the Credit Agreement as amended by the Amendment, to select interest rate
options provided for thereunder and, in connection with extensions of credit in
the form of letters of credit, to execute and deliver to the Agent separate
applications and reimbursement agreements as to each letter of credit issued by
the Agent as any one of the foregoing officers may in her/his sole discretion
deem proper as evidenced by her/his execution thereof.
4. The Agent and the Lenders shall be authorized to rely on telephonic
requests for borrowings and selection of interest rate options with respect
thereto to be made by this Corporation and telephonic wire transfer instructions
when the Agent and the Lenders in good faith believe such telephonic requests
and instructions have been made by a person authorized to act on behalf of this
Corporation and the Agent and the Lenders shall be indemnified by this
Corporation against any costs, liabilities, damages or losses ensuing from such
reliance.
5. Any officer, agent or employee of this Corporation is hereby
authorized, empowered and directed for, in the name and on behalf of this
Corporation, to execute such further instruments and documents and to perform
such further acts and things as may by any one of them be deemed necessary or
appropriate to comply with or evidence compliance with any of the terms,
provisions or conditions of the Credit Agreement or the Amendment and any
2
<PAGE>
other instrument or document executed pursuant to the authority contained in
these resolutions and any other requirement or condition specified by the Agent
or any Lender in respect thereto.
6. The Secretary or Assistant Secretary of this Corporation shall deliver
to the Agent a certified copy of these resolutions and shall file with the Agent
from time to time the names of the officers, agents and employees of this
Corporation at the time authorized by these resolutions to act in the premises
together with the specimen signatures of such officers, agents and employees.
The Agent and the Lenders shall be entitled as against this Corporation
conclusively to presume that the persons so certified continue to be
authorized to act as such on behalf of this Corporation until otherwise notified
in writing by the Secretary or other officer of this Corporation and that each
of the foregoing resolutions shall continue in force until express written
notice of its rescission or modification has been received by the Agent (but no
such rescission or modification shall affect any transaction occurring prior to
the actual receipt by the Agent of such written notice), and if the authority
therein contained shall be terminated by operation of law without such notice,
it is hereby resolved and agreed for the purposes of inducing the Agent and the
Lenders to act hereunder that the Agent and the Lenders shall be saved harmless
from any loss suffered or liability incurred by it in so acting under such
termination without such notice.
7. These resolutions shall be in addition to and supplementary of any and
all other resolutions of this Board of Directors now or hereafter on file with
the Agent, and nothing herein contained shall be deemed to amend, revoke or
modify any of such other resolutions or any of the authority therein contained.
3
<PAGE>
CERTIFICATE OF THE SECRETARY
OF
NANOCOR, INC.
The undersigned, C.O. Redman, certifies that he is the duly elected,
qualified and acting Secretary of Nanocor, Inc., a corporation duly organized
and existing under the laws of the State of Delaware, and that as such
Secretary, he is the keeper of the corporate records and seal of said
Corporation.
The undersigned further certifies:
1. Attached hereto as Exhibit A is a true, correct and complete copy of
the CERTIFICATE OF INCORPORATION and all amendments thereto of said Corporation
as certified by the Secretary of State of Delaware and such CERTIFICATE OF
INCORPORATION remain in full force and effect as of the date hereof.
2. Attached hereto as Exhibit B is a complete and correct copy of the
by-laws of said Corporation as in effect on the date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy of
resolutions adopted by THE UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS
OF SAID CORPORATION; and said resolutions do not contravene any provision of the
articles of incorporation or by-laws of said Corporation, and have not been
rescinded or modified in any respect but still remain in full force and effect.
4. The form of Guaranty Assumption referred to in said resolutions is in
the same form as the Guaranty Assumption Agreement dated as of September 25,
1995, and executed and delivered by said Corporation to Harris Trust and
Savings Bank, 111 West Monroe Street, Chicago, Illinois individually and as
agent for itself and various other lenders, excepting only for such changes
therein as were and are approved by the duly authorized officer or officers of
this Corporation executing the same as evidenced by their execution thereof.
5. The undersigned further certifies that the persons named below are at
the date hereof the duly elected, qualified and acting incumbents of their
respective offices of this Corporation set out at the left of their respective
names, and the signatures at the right of said names, respectively, are the
genuine signatures of said officers:
Title Name Signature
----- ---- ---------
Chairman of the Board John Hughes /s/ John Hughes
----------------------
President Peter L. Maul
----------------------
Asst. Secretary Paul G. Shelton /s/ Paul G. Shelton
----------------------
- ---------------------- ------------------ ----------------------
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand this 25th day of
September, 1995.
Nanocor, Inc.
by: /s/ Clarence O. Redman
---------------------------------
C.O. Redman, Secretary of said
Corporation
2
<PAGE>
EXHIBIT A
CERTIFICATE OF INCORPORATION OF
NANOCOR, INC.
<PAGE>
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "NANOCOR, INC.", FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY
OF AUGUST, A.D. 1995, AT 2:30 O'CLOCK P.M.
/s/ Edward J. Freel
---------------------------------------
[LOGO] EDWARD J. FREEL, SECRETARY OF STATE
AUTHENTICATION: 7649198
2532192 8100 DATE: 09-22-95
950216281
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 02:30 PM 08/21/1995
95O189830 - 2532192
CERTIFICATE OF INCORPORATION
OF
NANOCOR, INC.
FIRST. The name of the Corporation is:
NANOCOR, INC.
SECOND. Its registered office in the State of Delaware is located at
32 Loockerman Square, Suite L-100, Dover, Delaware 19904, County of Kent. The
name of its registered agent at such address is The Prentice-Hall Corporation
System, Inc..
THIRD. The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
To conduct any lawful business, to exercise any lawful purpose
and power, and to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of
Delaware.
In general, to possess and exercise all the powers and privileges
granted by the General Corporation Law of Delaware or by any other law
of Delaware or by this Certificate of Incorporation together with any
power incidental thereto, so far as such powers and privileges are
necessary or conveient to the conduct, promotion or attainment of
the business or purposes of the Corporation.
FOURTH. The total number of shares of stock which the Corporation
shall have authority to issue is Three Thousand (3,000), and the par value of
each of such shares is One Cent
<PAGE>
($0.01) amounting to the aggregate of Thirty Dollars ($30.00).
FIFTH. The name and mailing address of the incorporator are as
follows:
NAME MAILING ADDRESS
---- ---------------
Ingrid J. Scheckel 77 W. Wacker Dr.
49th Floor
Chicago, IL 60601
SIXTH. The Board of Directors shall have the power to adopt, amend or
repeal the By-Laws of the Corporation.
SEVENTH. Elections of directors need not be by ballot unless the By-
Laws of the Corporation shall so provide.
EIGHTH. Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code
-2-
<PAGE>
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
this Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all of the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
NINTH. The Corporation shall indemnify any and all persons whom it has
the power to indemnify under the General Corporation Law of Delaware against any
and all expenses, judgments, fines, amounts paid in settlement, and any other
liabilities to the fullest extent permitted by such Law and may, at the
discretion of the Board of Directors, purchase and maintain insurance, at its
expense, to protect itself and such persons against any such expense, judgment,
fine, amount paid in settle-
-3-
<PAGE>
ment or other liability, whether or not the Corporation would have the power to
so indemnify such person under the General Corporation Law of Delaware.
TENTH. A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, as the same exists or hereafter may be amended, or (iv) for any
transaction from which the director derived an improper personal benefit. Any
repeal or modification of this paragraph by the stockholders of the corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such
repeal or modification.
I, THE UNDERSIGNED, being the incorporator, for the purpose of forming
a corporation pursuant to the General Corporation Law of the State of Delaware,
do make, file and record this Certificate of Incorporation, do hereby certify
the facts
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<PAGE>
herein stated are true, and have accordingly hereunto set my hand this 18th day
of August, 1995.
/s/ Ingrid J. Scheckel
--------------------------------
Ingrid J. Scheckel
-5-
<PAGE>
EXHIBIT B
BY-LAWS OF
NANOCOR, INC.
<PAGE>
BY-LAWS
OF
NANOCOR, INC.
ARTICLE I
OFFICES
Section 1. The registered office of the corporation in the State of
Delaware shall be in the City of Dover and County of Kent.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held at such place either within or without the State of
Delaware as shall be designated from time to time by the board of directors and
stated in the notice of the meeting. Meetings of stockholders for any other
purpose may be held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section 2. Annual meetings of stockholders, commencing with the year
1996, shall be held on the first Tuesday in January of each year, if not a legal
holiday, and if a legal holiday, then on the next business day following, or on
such other date and time as shall be designated from time to time by the board
of directors and stated in the notice of the meeting, at which they shall elect
by a simple majority vote a board of directors, and transact such other business
as may properly be brought before the meeting.
Section 3. Unless otherwise required by law, written notice of the
annual meeting stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not less than ten nor more
than sixty days before the date of the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any
<PAGE>
purpose germane to the meeting, during ordinary business hours, for a period of
at least ten days prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Unless otherwise required by law, written notice of a
special meeting stating the place, date and hour of the meeting and the purpose
or purposes for which the meeting is called, shall be given not less than ten
nor more than sixty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of each class of stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation or these bylaws, a different vote is required,
in which case such express provision shall govern and control the decision of
such question.
-2-
<PAGE>
Section 10. Unless otherwise provided in the certificate of
incorporation, each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on or
after three years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall be not less than three nor more than five, as set by resolution of
the board of directors. The directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 2 of this Article, and each
director elected shall hold office until his or her successor is elected and
qualified or until his or her earlier resignation or removal. Directors need
not be stockholders.
Section 2. Newly-created directorships resulting from any increase in
the authorized number of directors and vacancies in the board of directors from
death, resignation, retirement, disqualification, removal from office or other
cause shall be filled by a majority vote of the directors then in office,
although less than a quorum, or by a sole remaining director, and each director
so chosen shall hold office, for a term expiring at the next annual meeting of
the stockholders and until his or her successor shall be duly elected and
qualified or until his or her earlier resignation or removal. If there are no
directors in office, than an election of directors may be held in the manner
provided by statute. If, at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than a majority
of the whole board (as constituted immediately prior to any such increase), the
Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorship, or
to replace the directors chosen by the directors then in office.
-3-
<PAGE>
Section 3. The business of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these by-laws directed or required to be exercised or done
by the stockholders.
Section 4. Unless otherwise restricted by the certificate of
incorporation or by law, any director or the entire board of directors may be
removed at any time, with or without cause, by the holders of a majority of
shares entitled to vote at an election of directors.
MEETINGS OF THE BOARD OF DIRECTORS
Section 5. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 6. The first meeting of each newly elected board of directors
shall be held without notice immediately after the annual meeting of
stockholders in each year.
Section 7. Regular meetings of the board of directors may be held at
such time and at such place as may from time to time be determined by resolution
of the board, without notice other than such resolution.
Section 8. Special meetings of the board may be called by the
president on three days' notice to each director, either personally or by mail
or by telecopier; special meetings shall be called by the president or secretary
in like manner and on like notice on the written request of one director unless
the board consists of only one director; in which case special meetings shall be
called by the president or secretary in like manner and on like notice on the
written request of the sole director.
Section 9. At all meetings of the board, a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board.
Section 11. Unless otherwise restricted by the certificate of
incorporation or
-4-
<PAGE>
these by-laws, members of the board of directors, or any committee designated
by the board of directors, may participate in a meeting of the board of
directors, or any committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 12. The board of directors may, by resolution passed by a
majority of the directors, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the certificate of incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
by-laws of the corporation; and, unless the resolution or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors.
Section 13. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 14. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
-5-
<PAGE>
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his or her address as it appears on the records of
the corporation, with postage thereon prepaid, and such notice shall be deemed
to be given at the time when the same shall be deposited in the United States
mail. If notice is given by telecopier, a copy of the notice shall also be
mailed to each addressee.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors and shall be a chairman of the board, a president, a
secretary and a treasurer. The board of directors may also choose one or more
vice-presidents, assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting, and at its
first meeting after each annual meeting of stockholders, shall choose a chairman
of the board, a president, a secretary and a treasurer.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify or until their earlier resignation or
removal. Any officer elected or appointed by the board of directors may be
removed at any time, with or without cause, by the affirmative vote of a
majority of the board of directors. Any vacancy occurring
-6-
<PAGE>
in any office of the corporation may be filled by the board of directors.
CHAIRMAN OF THE BOARD
Section 6. The chairman of the board shall be the chief executive
officer of the corporation. He shall preside at all meetings of the
stockholders and of the board of directors. He may vote all securities which
the corporation is entitled to vote. He shall be elected by the board of
directors and shall hold office until the next annual meeting of directors, or
until his successor shall be elected and qualified.
THE PRESIDENT
Section 7. The president shall be the chief operating officer of
the corporation. Subject to the direction and control of the board of
directors, he shall: (a) be in charge of the business of the corporation; (b)
see that the resolutions of the board of directors are carried into effect
except in those instances in which that responsibility is specifically assigned
to some other person by the board of directors; and (c) in general, discharge
all duties incident to the office of chief operating officer and such other
duties as may be prescribed by the board of directors from time to time. Except
in those instances in which the authority to execute is expressly prescribed by
the board of directors or these by-laws, he may execute for the corporation any
instruments (including without limitation contracts, deeds, mortgages, bonds and
certificates for the corporation's shares) which the board of directors has
authorized to be executed, and he may accomplish such execution either under or
without the seal of the corporation and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized by
the board of directors, according to the requirements of the form of the
instrument. He shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. In the absence of the president or in the event of his or
her inability or refusal to act, the vice-president if one shall have been
appointed by the board of directors (or in the event there be more than one
vice-president, the vice-presidents in the order designated by the directors, or
in the absence of any designation, then in the order of their election) shall
perform the duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the president. The vice-
presidents shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
-7-
<PAGE>
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. The secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the board of directors, and
shall perform such other duties as may be prescribed by the board of directors
or president, under whose supervision he or she shall be. The secretary shall
have custody of the corporate seal of the corporation and he or she, or an
assistant secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his or her signature or
by the signature of such assistant secretary. The board of directors may give
general authority to any other officer to affix the seal of the corporation and
to attest the affixing by such officer's signature.
Section 10. The assistant secretary, if any, or if there be more than
one, the assistant secretaries in the order determined by the board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of the secretary's
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. The treasurer shall disburse the funds of the corporation
as may be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his or her transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, the treasurer
shall give the corporation a bond in such sum with such surety or sureties as
shall be satisfactory to the board of directors for the faithful performance of
the duties of his or her office and for the restoration to the corporation, in
case of his or her death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his or her
possession or under his or her control, belonging to the corporation.
Section 14. The assistant treasurer, if any, or if there shall be
more than one,
-8-
<PAGE>
the assistant treasurers in the order determined by the board of directors (or
if there be no such determination, then in the order of their election), shall,
in the absence of the treasurer or in the event of the treasurer's inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by the
president or a vice-president and the treasurer or an assistant treasurer, or
the secretary or an assistant secretary of the corporation, certifying the
number of shares owned by such person in the corporation.
Section 2. If the corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualification,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, provided
that, except as otherwise provided by statute, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the corporation shall issue to represent such class or series of stock, a
statement that the corporation will furnish without charge to each stockholder
who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Section 3. Any of or all the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he or she
were such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 4. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such
-9-
<PAGE>
lost, stolen or destroyed certificate or certificates, or his or her legal
representative, to advertise the same in such manner as it shall require and/or
to give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFERS OF STOCK
Section 5. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 6. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 7. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise required by the laws of
Delaware.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall indemnify any and all persons whom it has the
power to indemnify under the General Corporation Law of Delaware against any and
all expenses, judgments, fines, amounts paid in settlement, and any other
liabilities to the fullest extent
-10-
<PAGE>
permitted by such Law and may, at the discretion of the board of directors,
purchase and maintain insurance, at its expense, to protect itself and such
persons against any such expense, judgment, fine, amount paid in settlement or
other liability, whether or not the corporation would have the power to so
indemnify such person under the General Corporation Law of Delaware.
ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CONTRACTS
Section 3. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
LOANS
Section 4. No loans shall be contracted on behalf of the corporation
and no evidence of indebtedness shall be issued in its name unless authorized by
a resolution of the board of directors. Such authority may be general or
confined to specific instances.
DEPOSITS
Section 5. All funds of the corporation not otherwise employed shall
be deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositories as the board of directors may select.
-11-
<PAGE>
CHECKS
Section 6. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 7. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 8. The corporate sea] shall have inscribed thereon the name of
the corporation and the words "Corporate Seal, Delaware." The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE IX
AMENDMENTS
These by-laws may be altered, amended or repealed or new by-laws may
be adopted by the stockholders entitled to vote or by the board of directors,
when such power is conferred upon the board of directors by the certificate of
incorporation, at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption of new by-
laws be contained in the notice of such special meeting.
-12-
<PAGE>
EXHIBIT C
RESOLUTIONS
OF
NANOCOR, INC.
WHEREAS, this Corporation is duly authorized to guaranty indebtedness,
obligations and liabilities, whether now existing or hereafter arising, of AMCOL
International Corporation, a Delaware corporation (the "BORROWER"); and
WHEREAS, this Corporation is wholly-owned domestic subsidiary of the
Borrower; and
WHEREAS, the Borrower has negotiated with Harris Trust and Savings Bank,
NBD Bank, LaSalle National Bank and The Northern Trust Company (collectively
the "BANKS", Harris Trust and Savings Bank in its capacity as agent for the
Banks being hereinafter referred to as the "AGENT" ) for a revolving credit
facility in an aggregate amount currently available of up to $100,000,000
pursuant to the terms of that certain Credit Agreement by and among the
Borrower, the Agent and the Banks; and
WHEREAS, as a condition precedent to the extension of said credit to the
Borrower, the Banks require that this Corporation guarantee the full and prompt
payment of said loans and other extensions of credit and all other indebtedness,
obligations and liabilities, whether now existing or hereafter arising, incurred
by the Borrower with the Banks under the Credit Agreement; and
WHEREAS, there is now before this meeting a form of Guaranty Assumption
Agreement (the "GUARANTY ASSUMPTION") to be entered into by this Corporation for
the benefit of the Banks and the aforesaid document having been examined by this
Board of Directors is in the judgment of this Board in proper form for its
intended purposes; and
WHEREAS, the Guaranty Assumption is incidental to and in furtherance of the
business of this Corporation, will result in substantial business benefits to
this Corporation and is in the best interests of this Corporation, its
shareholders and its creditors;
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED BY THE BOARD OF DIRECTORS
OF NANOCOR, INC. as follows:
1. That the guaranteeing of the indebtedness, obligations and
liabilities of the Borrower, whether now outstanding or hereafter arising, to
the Banks, all on the terms and conditions described in the form of Guaranty
Assumption now before this Board of Directors or upon such other terms as shall
be satisfactory to the officers of this Corporation, is in the best interests of
this Corporation, in furtherance of its proper purposes, and will benefit
directly or indirectly, this Corporation.
<PAGE>
2. That any one of the following officers of this Corporation: President,
Vice President, Secretary or Assistant Secretary be and the same hereby are
authorized, empowered and directed for, in the name and on behalf of this
Corporation (and when requested by the Banks under the corporate seal of this
Corporation) to execute and deliver to Agent and the Banks a Guaranty Assumption
Agreement in the form now before this Board and hereby approved, or in a form
containing such additional, modified or revised terms as may be acceptable to
such officer as evidenced by his execution thereof and any officer, agent or
employee of this Corporation is hereby authorized for, in the name and on behalf
of this Corporation, to execute and deliver such further documents and to do and
perform such further acts and things as may be necessary or by them deemed
appropriate to comply with or evidence compliance with the terms, conditions and
provisions of the Guaranty as so executed.
3. That the Secretary of this Corporation shall file with the Agent and
the Banks a certified copy of these resolutions and shall certify to the Agent
and the Banks from time to time the names of the officers and employees of this
Corporation at the time authorized by these resolutions to act in the premises
together with the specimen signatures of such officers and shall also file with
said Agent and the Banks the specimen signatures of the employees or other
persons named in these resolutions.
4. That the Agent and the Banks shall be entitled as against this
Corporation conclusively to presume that the persons so certified as officers,
employees or otherwise continue, respectively, to be authorized to act as such
on behalf of this Corporation until otherwise notified in writing by the
Secretary or other officer of this Corporation and that each of the foregoing
resolutions shall continue in force until express written notice of its
rescission or modification has been received by the Agent and the Banks (but no
such rescission or modification shall affect any transaction occurring before
the actual receipt by the Agent and the Banks of such written notice), and if
the authority therein contained shall be terminated by operation of law without
such notice, it is hereby resolved and agreed for the purpose of inducing the
Agent and the Banks to act thereunder that the Agent and the Banks shall be
saved harmless from any loss suffered or liability incurred by any of them in so
acting under such authority without such notice of its termination.
5. That these resolutions shall be in addition to and supplementary of
all resolutions of this Board of Directors now or hereafter on file with the
Agent or any Banks and these resolutions shall not revoke, supersede or modify
any of such other resolutions.
2
<PAGE>
77 WEST WACKER DRIVE
49TH FLOOR
CHICAGO, ILLINOIS 60601-1693
(312) 634-7700
KECK, MAHIN & CATE FAX (312) 634-5000
FILE NUMBER
19280-005
DIRECT DIAL
(312) 634-5004
September 25, 1995
Harris Trust and Savings Bank
Chicago, Illinois 60690
NBD Bank
Schaumburg, Illinois 60173
LaSalle National Bank
Chicago, Illinois 60603
The Northern Trust Company
Chicago, Illinois 60675
Ladies and Gentlemen:
We have served as counsel to AMCOL International Corporation (formerly
known as American Colloid Company), a Delaware corporation (the "COMPANY"),
Nanocor, Inc., a Delaware corporation and subsidiary of the Company ("NANOCOR")
and the Company's other subsidiaries set forth on Schedule I attached hereto
(the "OTHER DOMESTIC SUBSIDIARIES") in connection with a $100,000,000 Credit
being made by Harris Trust and Savings Bank, NBD Bank, LaSalle National Bank and
The Northern Trust Company (the "BANKS") to the Company. As a basis for the
opinions expressed below, we have examined executed counterparts of that certain
First Amendment to Credit Agreement among the Banks, the Agent (as defined
therein) and the Company dated September 25, 1995 (the "AMENDMENT"), the
Guarantors' Consent of the Other Domestic Subsidiaries to be executed and
delivered to the Banks pursuant thereto (the "CONSENT") and the Guaranty
Assumption Agreement to be executed and delivered by Nanocor to the Agent and
the Banks pursuant thereto (the "GUARANTY ASSUMPTION") and have also examined
such other instruments and records and inquired into such other factual matters
and matters of law as we deem necessary or pertinent to the formulation of the
opinions hereinafter expressed. Capitalized terms used herein without
definition shall have the same meaning as such terms are defined in the Credit
Agreement.
In such examination, we have assumed the authenticity of all documents
submitted to us as originals and the conformity to authentic original documents
of all documents submitted to
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
WASHINGTON, D.C. HOUSTON, TEXAS LOS ANGELES, CALIFORNIA NEW YORK, NEW YORK
PEORIA, ILLINOIS SAN FRANCISCO, CALIFORNIA OAKBROOK TERRACE, ILLINOIS
SCHAUMBURG, ILLINOIS
<PAGE>
KECK, MAHIN & CATE
Harris Trust and Savings Bank
NBD Bank
LaSalle National Bank
The Northern Trust Company
September 25, 1995
Page 2
us as copies, that the signatures of persons other than the Company, Nanocor and
the Other Domestic Subsidiaries and their respective officers on all documents
examined by us are genuine, that such other persons were duly authorized to
execute and deliver such documents, that the parties on whose behalf such other
persons have signed have all requisite power and authority to authorize,
execute, deliver and perform their respective obligations under such documents,
and that such documents are valid and binding on such parties, assumptions which
we have not independently verified.
As to all questions of fact material to this opinion, we have assumed,
without independent verification, the accuracy of the certificates of the public
officials and officers of the Company, Nanocor and the Other Domestic
Subsidiaries referred to above, and the representations and warranties of the
Company and the Other Domestic Subsidiaries set forth in the Amendment and the
Guaranty Agreement.
Based upon the foregoing, and subject to the qualifications heretofore
and hereinafter set forth, we are of the opinion that:
1. Each of the Company, Nanocor and the Other Domestic Subsidiaries is a
valid and subsisting corporation duly organized, existing and in good
standing under the laws of the state of its incorporation. Each of the
Company, Nanocor and the Other Domestic Subsidiaries have full power and
authority to carry on their respective business as now conducted and are
duly licensed and qualified to do business in all states or jurisdictions
wherein they carry on a substantial portion of their business or there is
located a substantial portion of their properties and assets, except where
the failure to be so qualified would not have a material adverse effect on
the financial condition, business or results of operations of the Company,
Nanocor or the Other Domestic Subsidiaries.
2. The Company has full right, corporate power and authority to
borrow the sum of up to $100,000,000 from the Banks and to execute and
deliver the Amendment, the Other Domestic Subsidiaries have the full
right, corporate power and authority to execute and deliver the Consent and
Nanocor has the full right, corporate power and authority to execute and
deliver the Guaranty Assumption and each of the Company, Nanocor and the
Other Domestic Subsidiaries have the right, power and authority to observe
and perform all the matters or things provided for therein and the
execution and delivery thereof does not, nor will the observance and
performance of any of the matters or things therein provided for,
contravene any provision of law, rule or regulation applicable to the
Company, Nanocor or the Other Domestic Subsidiaries or of the certificate
or articles of incorporation or by-laws of the Company, Nanocor or the
Other Domestic Subsidiaries
<PAGE>
KECK, MAHIN & CATE
Harris Trust and Savings Bank
NBD Bank
LaSalle National Bank
The Northern Trust Company
September 25, 1995
Page 3
or, to our knowledge, contravene or result in a breach of or require any
consent under or result in the creation of any lien, charge or encumbrance
upon any property or assets of the Company, Nanocor or the Other Domestic
Subsidiaries or, to our knowledge, constitute a default under any indenture
or loan or credit agreement or of any other agreement of or affecting the
Company, Nanocor or the Other Domestic Subsidiaries or their properties.
3. The Amendment, Consent and the Guaranty Assumption have been duly
authorized, executed and delivered by the Company, Nanocor and the Other
Domestic Subsidiaries to the extent each is a party thereto. The Amendment,
Consent and the Guaranty Assumption constitute the legal, valid and binding
agreements of the Company, Nanocor and the Other Domestic Subsidiaries
enforceable against them in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or similar laws affecting creditors' rights generally
and general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
4. To our knowledge, no governmental authorization or consent is required
with respect to the lawful execution, delivery and performance of the
Amendment, Consent or Guaranty Assumption.
5. To our knowledge, there is no action, suit, proceeding (including any
arbitration proceeding) or investigation at law or in equity before or by
any court or public body pending or threatened against or affecting the
Company, Nanocor or the Other Domestic Subsidiaries or their respective
properties, which if adversely determined could result in any material
adverse effect on the financial condition or business of the Company,
Nanocor and the Other Domestic Subsidiaries.
This opinion is limited to the present laws and to the facts as they
presently exist. We assume no obligation to revise or supplement this opinion
should present laws be changed by legislative action, judicial decision or
otherwise.
We are members of the Bar of the State of Illinois and we therefore express
no opinion with respect to any matter (including without limitation, conflict of
laws and choice of law issues) which may be governed by the laws of any
jurisdiction other than the State of Illinois, applicable laws of the United
States of America and applicable provisions of the corporate law of the States
of Delaware, Nebraska and Montana.
<PAGE>
KECK, MAHIN & CATE
Harris Trust and Savings Bank
NBD Bank
LaSalle National Bank
The Northern Trust Company
September 25, 1995
Page 4
Whenever our opinion in this letter, with respect to the existence or
absence of facts, is indicated to be based on our knowledge, it is intended to
signify that during our representation of the Company, Nanocor and the Other
Domestic Subsidiaries no information has come to the attention of attorneys
actually rendering legal services to the Company, Nanocor and the Other Domestic
Subsidiaries which would give such attorneys actual knowledge of such facts
without any independent investigation.
We are delivering this opinion to you pursuant to Section 2.5 of the
Amendment, and it shall not otherwise be used, circulated, quoted, referred to
or relied upon without our prior written consent.
Respectfully submitted,
/s/ Keck, Mahin & Cate
Keck, Mahin & Cate
<PAGE>
KECK, MAHIN & CATE
SCHEDULE I
----------
The Domestic Subsidiaries
Jurisdiction of
Name of Subsidiary Incorporation
- ------------------ -------------
American Colloid Company (F.K.A. AES Acquisition,
Inc. and American Colloid Mineral Company) Delaware
Ameri-co Carriers, Inc. Nebraska
Regeneration Technologies, Inc. (F.K.A.
Amcol International Corp.) Delaware
Chemdal Corporation Delaware
Chemdal International Corporation Delaware
Colloid Environmental Technologies Company Delaware
Montana Minerals Development Company Montana
Nanocor, Inc. Delaware
Nationwide Freight Service, Inc. Nebraska
Superior Absorbents, Inc. Delaware
5002FO33
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY "AMCOL INTERNATIONAL CORPORATION" IS DULY INCORPORATED UNDER THE LAWS OF
THE STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE
EXISTENCE SO FAR AS THE RECORDS OF THIS OFFICE SHOW, AS OF THE TWELFTH DAY OF
SEPTEMBER, A.D. 1995.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE BEEN PAID TO
DATE.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE BEEN FILED TO
DATE.
/s/ Edward J. Freel
[LOGO] --------------------------------------------
EDWARD J. FREEL, SECRETARY OF STATE
545005 8300 AUTHENTICATION: 7636706
950206454 DATE: 09-12-95
<PAGE>
FILE NUMBER 1340-802-5
[ILLINOIS SECRETARY OF STATE LETTERHEAD]
TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:
I, GEORGE H. RYAN, SECRETARY OF STATE OF THE STATE OF ILLINOIS, DO HEREBY
CERTIFY THAT AMCOL INTERNATIONAL CORPORATION, INCORPORATED IN THE STATE OF
DELAWARE AND LICENSED TO TRANSACT BUSINESS IN THIS STATE ON DECEMBER 30, 1959,
APPEARS TO HAVE COMPLIED WITH ALL THE PROVISIONS OF THE BUSINESS CORPORATION ACT
OF THIS STATE RELATING TO THE FILING OF ANNUAL REPORTS AND PAYMENT OF FRANCHISE
TAXES, AND IS AT THIS TIME A FOREIGN CORPORATION IN GOOD STANDING AND AUTHORIZED
TO TRANSACT BUSINESS IN THE STATE OF ILLINOIS***********
[SEAL] IN TESTIMONY WHEREOF, I HERETO SET MY HAND AND CAUSE TO BE
AFFIXED THE GREAT SEAL OF THE STATE OF ILLINOIS THIS 12TH
DAY OF SEPTEMBER A.D., 1995.
/s/ George H. Ryan
----------------------------------------------------------
SECRETARY OF STATE
C-206
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THAT "NANOCOR, INC." IS DULY INCORPORATED UNDER THE LAWS OF THE STATE OF
DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE EXISTENCE NOT HAVING
BEEN CANCELED OR DISSOLVED SO FAR AS THE RECORDS OF THIS OFFICE SHOW AND IS DULY
AUTHORIZED TO TRANSACT BUSINESS.
THE FOLLOWING DOCUMENTS HAVE BEEN FILED:
CERTIFICATE OF INCORPORATION, FILED THE TWENTY-FIRST DAY OF AUGUST, A.D.
1995, AT 2:30 O'CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE
ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE NOT BEEN
ASSESSED TO DATE.
/s/ Edward J. Freel
[LOGO] -------------------------------------------------
EDWARD J FREEL, SECRETARY OF STATE
2532192 8310 AUTHENTICATION: 7636708
950206457 DATE: 09-12-95
<PAGE>
Page 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THAT "AMERICAN COLLOID COMPANY" IS DULY INCORPORATED UNDER THE LAWS OF
THE STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE
EXISTENCE NOT HAVING BEEN CANCELLED OR DISSOLVED SO FAR AS THE RECORDS OF THIS
OFFICE SHOW AND IS DULY AUTHORIZED TO TRANSACT BUSINESS.
THE FOLLOWING DOCUMENTS HAVE BEEN FILED:
CERTIFICATE OF INCORPORATION, FILED THE TWENTY-SIXTH DAY OF APRIL, A.D.
1994, AT 12:15 0'CLOCK P.M.
CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM "AES ACQUISITION, INC." TO
"AMERICAN COLLOID MINERAL COMPANY", FILED THE THIRTIETH DAY OF NOVEMBER, A.D.
1994, AT 9 O'CLOCK A.M.
CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM "AMERICAN COLLOID MINERAL
COMPANY" TO "AMERICAN COLLOID COMPANY", FILED THE NINTH DAY OF MAY, A.D. 1995,
AT 3:25 O'CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE
ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE BEEN PAID TO
DATE.
/s/ Edward J. Freel
[LOGO] --------------------------------------------
EDWARD J.FREEL, SECRETARY OF STATE
2397721 8310 AUTHENTICATION: 7636715
950206460 DATE: 09-12-95
<PAGE>
PAGE 2
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE BEEN FILED TO
DATE.
/s/ Edward J. Freel
[LOGO] --------------------------------------------
EDWARD J. FREEL, SECRETARY OF STATE
2397721 8310 AUTHENTICATION: 7636715
950206460 DATE: 09-12-95
<TABLE> <S> <C>
<PAGE>
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<PERIOD-TYPE> 9-MOS
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<PERIOD-START> JAN-01-1995
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