SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
ADDINGTON RESOURCES, INC.
(Name of Issuer)
COMMON STOCK, $1.00 PAR VALUE
(Title of Class of Securities)
006516 108
(CUSIP Number)
Bruce Addington
1500 North Big Run Road
Ashland, Kentucky 41102
(606) 928-3433
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 1, 1995
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box. /__/
Check the following box if a fee is being paid with this
statement. / /CUSIP NO. - 006516 10 8
(1) Name of reporting person. . . . . . . Bruce Addington
S.S. or I.R.S. No. of
above person. . . . . . . . . . . . .
(2) Check the appropriate box
if a member of a group
(see instructions). . . . . . . . . . (a)
(b) X
(3) SEC use only. . . . . . . . . . . . .
(4) Source of funds (see instructions). . 00
(5) Check box if disclosure
of legal proceedings is
required pursuant to
Items 2(d) or 2(e). . . . . . . . . .
(6) Citizenship or place
of organization. . . . . . . . . . . . U.S.
Number of shares beneficially
owned by each reporting person
with:1
(7) Sole voting power. . . . . . . . 1,578,006
(8) Shared voting power. . . . . . . 0
(9) Sole dispositive power . . . . . 1,578,006
(10) Shared dispositive power . . . . 0
(11) Aggregate amount beneficially
owned by each reporting person . . . . 1,578,006<F1>
(12) Check box if the aggregate amount
in Row (11) excludes certain
shares (see instructions). . . . . . . X<F1>
(13) Percent of class represented
by amount in Row (11) . . . . . . . . . 9.9%<F1>
(14) Type of reporting person . . . . . . . IN
<F1>The number of shares beneficially owned by the reporting person
individually. Does not include shares beneficially owned by Larry
Addington and Robert Addington, who, together with the reporting
person, may be deemed to be members of a group. See the response
to Items 3, 4, 5 and 6 of this statement. Larry Addington and
Robert Addington beneficially own 5,633,324 shares (35.5%), and
Robert Addington, Bruce Addington and the reporting person together
own 7,211,330 shares (45.3%) in the aggregate.
Reference is hereby made to that certain Schedule 13D dated
January 29, 1988, as amended, (the "Schedule"), filed by Bruce Addington
with respect to the common stock, $1.00 par value (the "Common Stock"), of
Addington Resources, Inc., a Delaware corporation (the "Issuer").
In accordance with Rule 13d-2(a) and (c) under the Securities
Exchange Act of 1934, the Schedule is hereby amended and restated
as follows:
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is
the common stock, $1.00 par value (the "Common Stock"), of
Addington Resources, Inc., a Delaware corporation (the "Issuer").
The Issuer's principal executive office is located at 1500
North Big Run Road, Ashland, Kentucky 41102.
Item 2. Identity and Background.
(a) The person filing this statement is Bruce Addington.
This statement describes relationships among Bruce Addington, Larry
Addington, and Robert Addington (collectively, the "Addington
Brothers") which may give rise to their status as a group. The
existence of a group is not affirmed.
(b) The business address of the each of the Addington
Brothers is:
Addington Resources, Inc.
1500 North Big Run Road
Ashland, Kentucky 41102
(c)(i) Bruce Addington's Principal Occupation: Vice
President-Operations and Director of the Issuer.
(ii) Larry Addington's Principal Occupation: Chief
Executive Officer and Chairman of the Board of Directors of Issuer.
(iii) Robert Addington's Principal Occupation: Vice
President Operations and Engineering, Director of Issuer.
(d) During the last five years, none of the Addington
Brothers have been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) During the last five years, none of the Addington
Brothers have been a party to a civil proceeding of a judicial or
administrative body resulting in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Each of the Addington Brothers is a United States
citizen.
Item 3. Sources and Amount of Funds or Other Consideration.
The Issuer was incorporated on September 29, 1986, to be a
holding company for various corporate entities owned or controlled
by Larry, Robert, and Bruce Addington, who are brothers. Before
June 23, 1987, the Addington Brothers owned 100% of the issued and
outstanding shares of Addington, Inc., and Addwest Mining, Inc.,
and 95% of the issued and outstanding shares of Ironton Coal
Company.
On June 23, 1987, the Issuer, through a series of exchanges of
stock, acquired all of the issued and outstanding shares of
Addington, Inc., and Addwest Mining, Inc. In addition, Addington,
Inc., acquired the Addington brothers' interest in Ironton Coal
Company.
During January 1988, the Issuer registered its Common Stock
pursuant to Section 12(g) of the Securities Exchange Act of 1934.
On or about February 23, 1995, the Addington Brothers, as a
group, may be deemed to have acquired beneficial ownership of the
shares of Common Stock owned by each of them, individually, as a
result of the agreement or understanding they reached to dispose of
their shares of Common Stock as a part of the "Spin-off Proposal"
described in Item 4. See the response to Item 5(c).
Item 4. Purpose of Transaction.
The June 23, 1987, reorganization discussed in response to
Item 3 was effected in preparation of an initial public offering of
the Issuer's Common Stock. Before the reorganization, the
Addington Brothers owned all or substantially all of the stock of
the Issuer's predecessors. As a result of the reorganization and
initial public offering, the Addington Brothers initially
controlled 66.7% of the Issuer's common stock.
Each of the Addington Brothers is an executive officer and
director of the Issuer and in these capacities intends to influence
the Issuer's activities.
The Addington Brothers have a proposal to acquire the Issuer's
non-environmental businesses, in exchange for the shares of the
Issuer's Common Stock owned by the Addington Brothers, $5 million
cash, and other consideration (the "Spin-off Proposal"). The
Issuer's business units that would be transferred by the Issuer to
the Addington Brothers under the Spin-off Proposal consist of the
Issuer's coal and gold mining operations, its mining equipment
manufacturing and licensing unit, citrus operations and smaller
operations. The terms and conditions of the Spin-off Proposal,
which was presented to the Issuer on March 1, 1995, are set out in
a letter from the Addington Brothers to the Issuer, dated March 1,
1995, a copy of which is attached as Exhibit 1 to this statement
and incorporated herein by reference. Any offer to undertake the
Spin-off Proposal would be contingent upon, among other things,
appropriate financing for the Addington Brothers. Attached as
Exhibit 2 is an outline of a proposal for financing, the proceeds
of which could be used for, among other things, the capital funds
necessary to effectuate the tax-free exchange of stock for assets
of the Issuer and the working capital needs of certain of the
Issuer's subsidiaries proposed to be acquired by the Addington
Brothers in the Spin-off Proposal. There can be no assurances
whether a transaction in accordance with the terms of the Spin-off
Proposal will be consummated. Larry Addington currently owns
4,113,324 shares, Robert Addington currently owns 1,520,000 shares,
and Bruce Addington currently owns 1,578,006 shares of Common
Stock. Together, the Addington Brothers currently own 7,211,330
shares of Common Stock, representing 45.3% of those currently
outstanding.
The Issuer's Board of Directors appointed a special committee
comprised of the Issuer's two outside directors to evaluate the
Spin-off Proposal and to select and retain an investment banking
firm and independent legal counsel to assist the committee in the
evaluation of the Spin-off Proposal. The Addington Brothers may,
as members of the Issuer's Board of Directors, add one or more
additional outside directors to the Issuer's Board of Directors and
the special committee, a matter currently under consideration.
Except as stated above, neither Bruce Addington nor, to the
best of his knowledge, Larry Addington nor Robert Addington, has
any plans or proposals which relate to or would result in: (i) the
acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer, (ii) an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Issuer or any of its
subsidiaries, (iii) a sale or transfer of a material amount of
assets of the Issuer or any of its subsidiaries, (iv) any change in
the present board of directors or management of the Issuer,
including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board, (v) any
material change in the present capitalization or dividend policy of
the Issuer, (vi) any other material change in the Issuer's business
or corporate structure, (vii) changes in the Issuer's charter,
bylaws or instruments corresponding thereto or other actions which
may impede the acquisition of control of the Issuer by any person,
(viii) causing a class of securities of the Issuer to be delisted
from a national securities exchange or cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national
securities association, (ix) a class of equity securities of the
Issuer becoming eligible for termination of registration pursuant
to Section 12(g)(4) of the Securities Exchange Act of 1934, or (x)
any action similar to any of those enumerated above. Bruce
Addington may formulate plans or proposals with respect to one or
more of the foregoing in the future.
Item 5. Interest in Securities of the Issuer.
(a), (b) The following table shows the beneficial ownership
of shares of the Issuer's Common Stock by each of the Addington
Brothers. Each of the Addington Brothers has sole voting and
dispositive power over the shares beneficially owned by him. See
the response to Item 6 concerning security interests granted in
certain of the shares and the agreement/understanding reached with
respect to the Spin-off Proposal.
<TABLE>
<CAPTION>
Name Number (and percentage) of shares of Common Stock
<S> <C>
Larry Addington 4,113,324 shares (25.9%)
Robert Addington 1,520,000 shares (9.6%)
Bruce Addington 1,578,006 shares (9.9%)
TOTAL 7,211,330 shares (45.3%)
</TABLE>
(c) On or about February 23, 1995, the Addington Brothers
reached an agreement or understanding that they would dispose of
the shares of the Issuer's Common Stock owned by them in connection
with the Spin-off Proposal. To the extent that agreement or
understanding resulted in the formation of a group that is a
separate "person" for purposes of Section 13(d) of the Securities
Exchange Act of 1934, that group was deemed to have acquired
beneficial ownership of the shares of the Issuer's Common Stock
beneficially owned by each of the Addington Brothers (7,211,330
shares, or 45.3%, in the aggregate).
Otherwise, none of the Addington Brothers have effected
transactions in the Issuer's Common Stock during the past sixty
days.
(d) Pursuant to loans made to Bruce Addington or Robert
Addington not in connection with the acquisition of the Common
Stock, Bruce Addington has pledged a total of 577,003 shares of the
Issuer's Common Stock. The Addington Brothers have not pledged 5%
or more of the Issuer's Common Stock to any one bank.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
(i) On or about February 23, 1995, the Addington
Brothers reached an agreement or understanding among themselves to
dispose of all of the shares of the Issuer's Common Stock
beneficially owned by them as a part of the Spin-off Proposal
described in response to Item 4 of this statement if that proposal
is consummated.
(ii) Bruce Addington currently has 100,000 shares of the
Issuer's Common Stock pledged pursuant to a security agreement
entered into with a bank on February 17, 1995. Bruce Addington has
77,003 shares of the Issuer's Common Stock pledged pursuant to a
security agreement entered into with the same bank on January 27,
1995. Bruce Addington has also pledged 200,000 shares of the
Issuer's Common Stock to a bank to secure a loan by the bank to his
brother Robert Addington entered into as of November 14, 1994. On
September 23, 1994, Bruce Addington pledged 200,000 shares of the
Issuer's Common Stock to a bank to secure a loan.
(iii) Larry Addington pledged 67,000 shares of the
Issuer's Common Stock on March 3, 1995, to a bank to secure a loan
from the bank to his brother, Robert Addington. Larry Addington
has also pledged 33,000 shares to a bank to secure a loan from a
bank to his brother, Robert Addington, on November 23, 1994. Larry
Addington pledged an additional 100,000 shares of the Issuer's
Common Stock to secure a loan entered into with a bank by his
brother, Robert Addington, on May 19, 1994.
(iv) Robert Addington currently has 600,000 shares of the
Issuer's Common Stock pledged pursuant to a security agreement
entered into with a bank on July 29, 1994. Robert Addington has
400,000 shares of the Issuer's Common Stock pledged pursuant to a
security agreement entered into with a bank on August 19, 1993.
Robert Addington has also pledged 200,000 shares of the Issuer's
Common Stock to a bank pursuant to a security agreement entered
into on March 3, 1995. Robert Addington has pledged 100,000 shares
of the Issuer's Common Stock to a bank pursuant to security
agreement entered into on May 27, 1994. Robert Addington has also
pledged 100,000 shares of the Issuer's Common Stock to a bank
pursuant to a security agreement entered into on November 17, 1993.
Robert Addington pledged 100,000 shares of the Issuer's Common
Stock to a broker on February 17, 1993. The shares are pledged to
secure loans made to Robert Addington or his affiliates not in
connection with the acquisition of the Common Stock.
Item 7. Material to be filed as Exhibits.
Exhibit 1 -- Letter dated March 1, 1995 to the Issuer from
Larry Addington, Robert Addington and Bruce Addington.
Exhibit 2 -- Letter dated February 23, 1995, addressed to
Larry Addington from The CIT Group/Capital Equipment Financing,
Inc.
Exhibit 3 -- Third Party Pledge Agreement, dated March 3,
1995, by Larry Addington and related Agreement among Robert Addington,
Larry Addington and Kentucky Bank & Trust of Greenup County
Exhibit 4 -- Agreement, dated November 23, 1994, by Larry
Addington pledging shares to Kentucky Farmers Bank
Exhibit 5 -- Security Agreement, dated February 17, 1995,
between Bruce Addington and National City Bank
Exhibit 6 -- Security Agreement, dated January 27, 1995,
between Bruce Addington and National City Bank, Kentucky
Exhibit 7 -- Pledge and Hypothecation Agreement, dated
November 14, 1994, between Bruce Addington and Commercial Bank of
Grayson
Exhibit 8 -- Stock Pledge, dated September 23, 1994, between
Bruce Addington and Pikeville National Bank and Trust Company
Exhibit 9 -- Promissory Note, dated July 29, 1994, of Robert
Addington and related letter agreement between Robert Addington and
Harris Trust and Savings Bank
Exhibit 10 -- Security Agreement, dated August 19, 1993,
between Robert Addington and National City Bank
Exhibit 11 -- Security Agreement, dated March 3, 1995, between
Robert Addington and Kentucky Bank & Trust
Exhibit 12 -- Security Agreement, dated May 27, 1994, and
related Addendum, between Robert Addington and Kentucky Farmers
Bank
Exhibit 13 -- Security Agreement and Third Party Pledge
Agreement, each dated November 17, 1993, between Robert Addington
and First National Bank of Grayson
Exhibit 14 -- Pledge Agreement, dated February 17, 1993,
between Robert Addington and Merrill Lynch
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
/s/ Bruce Addington
Bruce Addington
Date: March 30, 1995
Exhibit 1
LARRY C. ADDINGTON
1500 NORTH BIG RUN ROAD
ASHLAND, KENTUCKY 41102-9527
March 1, 1995
Addington Resources, Inc.
Attn: Board Of Directors
1500 North Big Run Road
Ashland, Kentucky 41102-9527
Gentlemen,
Larry, Robert and Bruce Addington (collectively, the
"Addington Brothers") propose to split up the businesses of
Addington Resources, Inc. ("ARI") between the Addington Brothers
and the remaining ARI shareholders on the following terms:
1. The following second and third tier ARI subsidiaries would
be split off from ARI to the Addington Brothers in exchange for all
of their shares of ARI common stock in a tax-free transaction under
IRC sec. 355, 361 and 368(a)(1)(D): Addington Mining, Inc.,
Addwest Mining, Inc., Addwest Transport, Inc., Mining Technologies,
Inc., Addwest Minerals, Inc., Tennessee Mining, Inc., New River
Lime, Inc., Belize River Fruit Company, and Barton Creek Farms,
Inc. (collectively, the "Coal Division Companies").
2. Prior to the closing of the split off, the Addington
Brothers would contribute $5,000,000.00 in cash to ARI's capital.
This capital would remain with ARI in the split off.
3. All liabilities and obligations of the Coal Division
Subsidiaries would go with the Coal Division Subsidiaries in the
split off. All liabilities and obligations of ARI and the non-Coal
Division Subsidiaries would remain liabilities and obligations of
ARI and the non-Coal Division Subsidiaries. Prior to the closing,
all assignments, assumptions and releases would be obtained to
effect such split up of the obligations and liabilities of ARI and
its subsidiaries.
4. All guarantees of obligations or liabilities of ARI and
its non-Coal Division Subsidiaries by the Addington Brothers or the
Coal Division Subsidiaries would be released at or prior to the
closing. All guarantees of obligations or liabilities of the Coal
Division Subsidiaries by ARI or the non-Coal Division Subsidiaries
would be released at or prior to the closing.
5. All intercompany debts and obligations between ARI and the
non-Coal Division Subsidiaries, on the one hand, and the Coal
Division Subsidiaries, on the other hand, would be canceled or
otherwise terminated.
6. ARI and the non-Coal Division Subsidiaries would provide
the Coal Division Subsidiaries, the Addington Brothers, and their
respective directors, officers and agents with a general release
and would agree not to bring any action against such persons and
entities. The Addington Brothers and the Coal Division
Subsidiaries would provide ARI, its non-Coal Division Subsidiaries,
and their respective directors, officers and agents with a general
release and would agree not to bring any action against such
persons and entities.
7. Certain assets, such as the Joy Technologies licensing
agreement, the Tri-State Airport Lease, the helicopter, and the ARI
headquarters in Ashland, Kentucky, would be identified as assets
belonging to the Coal Division Subsidiaries and any interest in
such assets held by ARI and the non-Coal Division Subsidiaries
would be assigned or released prior to the closing. The Addington
Brothers would be willing to remit fifty per cent of the net
revenues received from the Joy Technologies licensing agreement to
ARI as a part of the consideration in this transaction.
8. If the closing of the transaction occurs before the
remaining outstanding stock grants issued to ARI employees under
the 1989 Stock Grant Plan vest on November 18, 1995, all such
grants shall be accelerated to the date of closing so that all such
employees, including those employed by the Coal Division
Subsidiaries, will receive the shares of ARI Common Stock subject
to these outstanding grants.
Any offer to undertake the split off transaction described
above would be contingent upon the negotiation and execution of
definitive transaction documents, appropriate financing for the
Addington Brothers, the approval of the transaction by ARI's
outside directors, the obtaining of a fairness opinion from a
financial advisor, the obtaining of a favorable tax ruling with
respect to the tax free nature of the split off, the approval of
the transaction by ARI's shareholders (excluding the Addington
Brothers), and the obtaining of all necessary governmental,
regulatory and third party consents and releases required or
desirable to effect the split off transaction.
This proposal shall expire August 31, 1995, or upon the
execution of a definitive Agreement between the parties, whichever
occurs first.
If the foregoing is a proposal you would like to consider,
please so indicate by return mail and we will begin negotiation of
a definitive agreement.
Very truly yours,
Addington Brothers
By: /s/ Larry Addington
Larry Addington
/s/ Robert Addington
Robert Addington
/s/Bruce Addington
Bruce Addington
Exhibit 2
The CIT Group/
Capital Equipment Financing
Suite 224
4050 Executive Park Drive
Cincinnati, OH 45241
513 789-0920
THE
CIT
GROUP
February 23, 1995
Mr. Larry Addington
1500 North Big Run Road
Ashland, KY 41102
Dear Larry:
This letter will confirm our offer to make loans in the
aggregate principal amount of up to $40,000,000 to certain of the
corporations listed on Schedule A hereto (collectively the
"Borrowers"), subject to the terms and conditions outlined in the
attached Outline of Terms (the "Outline"). The terms and
conditions described in this letter and in the Outline are intended
as an outline only and do not purport to summarize all of the
terms, conditions, covenants, representations, warranties, defaults
and other provisions which will be contained in the final loan
documentation (the "Loan Documentation").
This letter, the Outline and the financing arrangements
described herein are delivered to Borrowers with the understanding
that neither this letter, the Outline nor the substance of said
financing arrangements shall be disclosed by Borrowers to anyone
outside the Borrowers, except to those professional advisors who
have a confidential relationship with Borrowers and require
knowledge thereof to perform their duties (including legal counsel,
accountants, financial advisors and shareholders of Addington
Resources, Inc.), or where disclosure is required by law. This
letter and the Outline supersede all prior agreements and
understandings relating to the subject matter hereof and, until the
execution of the Loan Documents, embody the entire agreement and
understanding among the parties hereto. This letter and the
Outline are solely for your benefit and cannot be assigned to any
third party.
Mr. Larry Addington, Mr. Robert Addington and Mr. Bruce
Addington (collectively, "Addington") jointly and severally, shall
(a) indemnify the CIT Group/Equipment Financing, Inc. and its
affiliates (collectively, "CIT") and their respective officers,
employees, attorneys, agents and directors ("indemnified Persons")
against any and all losses, claims, damages, or liabilities of
every kind whatsoever to which CIT may become subject in connection
in any way with the transaction which is the subject of this letter
and the Outline, including without limitation, expenses incurred in
connection with investigating or defending against any liability or
action whether or not a party thereto, except to the extent any of
the foregoing is found in a final judgment by a court of competent
jurisdiction to have arisen solely from CIT's gross negligence or
willful misconduct; and (b) assert no claim against CIT or any
other Indemnified Persons, on any theory of liability, for special,
indirect, consequential, incidental or punitive damages. The
obligations described in this paragraph are independent of all
other obligations of Addington hereunder and under the Loan
Documents, shall survive the expiration, revocation or termination
of this letter, and shall be payable whether or not the financing
transactions contemplated by this letter shall close. CIT's
obligations under this letter are enforceable solely by the parties
signing this letter and may not be relied upon by any other
persons.
This letter and the Outline shall be governed by the
internal laws (as opposed to conflicts of law provisions) and
decisions of the State of New York, and may only be amended by a
writing signed by both parties.
ADDINGTON AND CIT HEREBY IRREVOCABLY WAIVE ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATED TO THIS LETTER, THE OUTLINE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
This letter and the Outline have been issued in reliance
upon the accuracy of all information furnished to CIT by Addington
and the accuracy of the terms and provisions thereof.
If this offer, as contained in this letter and the
Outline, is acceptable to you, kindly indicate your acceptance by
returning a signed copy of this letter and a signed copy of the
Outline.
This offer will expire at 5:00 p.m. Eastern Standard Time
on February 25, 1995, unless previously accepted by you in the
manner indicated above.
It is a great pleasure for the CIT Group/Equipment
Financing, Inc. to be able to provide this financing. We hope that
additional opportunities for us to work together will occur in the
near future.
Very truly yours,
/s/ Charles T. Lee
Charles T. Lee
Vice President
The CIT Group/Equipment
Financing, Inc.
/s/ Larry Addington
Larry Addington
By: /s/ Gary L. Gross
Date: 2/25/95 Title: /s/ Vice President
Date: 2/28/95
/s/ Robert Addington
Robert Addington
Date: 2/25/95
/s/ Bruce Addington
Bruce Addington
Date: 2/25/95
SCHEDULE A
Addington Mining, Inc.
Addwest Minerals, Inc.
Mining Technologies, Inc.
Addwest Mining, Inc.
Tennessee Mining Company
Belize River Fruit Company
New River Lime, Inc.
OUTLINE OF TERMS
Lender: The CIT Group/Equipment Financing, Inc. or an affiliate
("Lender").
Borrowers: Certain of the corporations set forth on Schedule A
to the attached letter.
Guarantors: With respect to each Loan made to a Borrower, all
other Borrowers and the parent corporation of the Borrowers
("Parent") shall provide an absolute and unconditional guarantee
("Guarantors").
Structure of Transaction: Term Loan and Revolving Line of
Credit Facility (collectively, the "Loans").
The structure of this transaction is subject to change to satisfy
legal consideration issues among the parties. Loans under a
collective financing agreement ("Loan Agreement") will be made to
the individual Borrowers based upon the respective collateral of
each Borrower. The Borrowers shall be jointly and severally liable
for the payment of all obligations under the Loan Documents. The
loans to each Borrower will be secured by the collateral pledged by
such Borrower as well as the collateral pledged by all the other
Borrowers. The loans to each Borrower will be cross-defaulted to
the loans to the other Borrowers.
Commitment Period: Lender's commitment to make the Loans hereunder
will expire on the earliest of (i) September 30, 1995, (ii) written
notice to Borrowers that one or more of the conditions precedent to
the initial Loans described below will not or cannot be timely
satisfied, or (iii) Lender has been notified that any Borrower is
seeking alternative financing or otherwise requests Lender to
terminate its commitment.
TERM LOAN FACILITY
Amount of Loans:
The Term Loans ("Term Loans") to all Borrowers will not exceed the
aggregate principal amount of $25,000,000 (the "Committed Funds").
Number of Takedowns:
One (1) per Borrower.
Term:
The term loan to each Borrower will mature in eight (8) years.
Interest Rate:
Fixed rate per annum equal to the "Treasury Rate" (as defined
below) plus 3.00%.
"Treasury Rate" shall mean, with respect to the Term Loans, the
rate per annum equal to the yield to maturity on actively traded
U.S. Treasury Securities having a remaining term to maturity
closest to five (5) years at the close of business on the first
business day prior to the date of the making of such loan, as
reported on page 5 ("U.S. Treasury and Money Markets") of the
information ordinarily provided by Telerate Systems Incorporated.
The five (5) year Treasury Rate as of February 14, 1995 was 7.40%.
Repayment Schedule:
Twelve (12) equal consecutive installments of interest only,
payable monthly in arrears, followed by eighty-four (84) equal
consecutive installments of principal and interest, payable monthly
in arrears. Interest shall be calculated based on a year of 360
days and actual days elapsed.
Early Termination Fee:
Provided that Borrowers are not in default under the Loan
Agreement, Borrowers shall be permitted to prepay the Term Loans in
whole or in part on or after the midpoint (on the 48th installment
payment date of the Term Loans) of this transaction, together with
a prepayment fee of 5% of the outstanding principal balance. The
prepayment fee of 5% shall decline by .104% per monthly installment
for the remaining term of the Term Loans.
Mandatory Prepayments:
Borrowers shall make a mandatory prepayment, at each fiscal year
end, equal to 50% of "free cash flow" for such fiscal year which
shall be applied against scheduled principal payments in inverse
order of maturity up to a maximum cumulative prepayment of
$7,500,000. Free cash flow is defined as the sum of net income,
plus depreciation, plus amortization plus depletion minus current
maturities of long-term debt and minus up to a maximum of
$3,600,000 in capital expenditures.
All asset sale proceeds from any fixed asset collateral which
supported the making of the Term Loans shall be applied to prepay
the principal installments of the Term Loans in the inverse order
of maturity. Fifty percent (50%) of all other asset sale proceeds
of fixed asset collateral shall be applied to prepay the principal
installments of the Term Loans in the inverse order of maturity.
No prepayment penalty shall be required in connection with any of
the above mandatory prepayments.
REVOLVING LINE OF CREDIT FACILITY
Amount:
A maximum of $15,000,000.
The Revolving Line of Credit shall be subject to the advance rates
outlined below.
Term:
Three (3) years.
Advance Rates:
Accounts Receivable:
Year 1 - Up to 90% against eligible accounts receivable plus the
lesser of 20% of said receivables or $3,000,000.
Year 2 - Up to 90% against eligible accounts receivable plus the
lesser of 20% of said receivables or $2,000,000.
Year 3 - Up to 90% against eligible accounts receivable plus the
lesser of 20% of said receivables or $1,000,000.
Eligible accounts shall exclude, without limitation, those accounts
more than ninety (90) days past invoice date.
Inventory:
Up to 65% of eligible stockpiled coal inventory subject to a limit
to be agreed upon and valued at the lower of FIFO cost or market
value.
All eligibility criteria shall be acceptable to Lender.
Interest Rate:
Floating rate per annum to be equal to the thirty day London
Interbank Offered Rate plus 2.65%. Interest shall be calculated
based on a year of 360 days and actual days elapsed.
Collections:
The collection of accounts receivable shall be deposited into lock
boxes in the Lender's name at a bank or banks acceptable to the
Borrowers and the Lender and will be governed by a tri-party lock
box agreement. So long as the Borrowers maintain excess Revolving
Line of Credit borrowing availability of at least $3,000,000 and an
event of default has not occurred, the Borrowers shall have use of
such collections for their cash requirements in the ordinary course
of business. Upon the election of the Lender after excess
Revolving Line of Credit borrowing availability falls below
$3,000,000 or the occurrence of an event of default, such
collections shall be applied to the repayment of amounts
outstanding under the Loan Agreement upon the Lender's receipt of
immediately available funds.
Reporting:
The borrowers shall submit to the Lender borrowing base
certificates calculating borrowing availability according to the
Advance Rates under the Revolving Line of Credit on a monthly basis
so long as the Borrowers maintain excess Revolving Line of Credit
borrowing availability of at least $3,000,000 and an event of
default has not occurred. Upon election of the Lender after excess
Revolving Line of Credit borrowing availability falls below
$3,000,000 or the occurrence of an event of default, the Borrowers
shall be required to submit borrowing base certificates on a weekly
basis.
Collateral Management Fee:
$35,000 per annum payable in advance for costs incurred for
collateral administration and periodic field examinations.
Unused Line Fee:
One half of one percent (.50%) on the Revolving Line of Credit
Amount computed on the difference between the Revolving Line of
credit and the average daily outstanding balance of the Revolving
Line of Credit Loans (the "Revolving Loan Balance"), payable
monthly in arrears on the last day of each month.
Early Termination Fee:
Three percent (3%), two percent (2%) or one percent (1%) if the
Revolving Line of Credit is terminated prior to the first, second
or third anniversary, respectively. The Early Termination Fee will
be computed based on the average outstanding Revolving Loan Balance
for the preceding ninety (90) days.
Mandatory Prepayment:
In the event that the Term Loans have been prepaid in full, any
mandatory prepayments required to be made with respect to the Term
Loans shall be applied to the outstanding principal balance of the
Revolving Line of Credit Loans. All asset sale proceeds from any
collateral other than fixed asset collateral ("Non-Fixed Assets")
that supported the making of the Revolving Line of Credit Loans
shall be applied to prepay the outstanding principal balance of the
Revolving Line of Credit Loans. Fifty percent (50%) of the asset
sale proceeds of all other Non-Fixed Assets shall be applied to
prepay the outstanding principal balance of the Revolving Line of
Credit Loans.
No prepayment penalty shall be required in connection with any of
the above mandatory repayments.
TERMS APPLICABLE TO ALL LOANS
Use of Loan Proceeds:
(i) To finance the working capital needs of Borrowers from time to
time.
(ii) To refinance the $4,500,000 existing equipment loan made to
Addington Mining, Inc. by Caterpillar Finance.
(iii) To provide the necessary capital funds to effectuate the tax
free exchange of stock and assets between Addington Resources, Inc.
and Parent.
Security Interest:
Borrowers will grant Lender a first priority (and exclusive)
security interest in substantially all of their respective assets.
Parent will pledge the stock of Borrowers to Lender, and Addington
will pledge the stock of Parent to Lender. All assets shall be
satisfactory to Lender.
Borrowers will grant Lender a second priority security interest on
the "Gold Road" mine assets if N.M. Rothschild consents to such
security interest; otherwise, Borrowers will arrange for Lender to
obtain a first priority (and exclusive) security interest in such
assets upon payment of all debt owing to N.M. Rothschild.
Location of Equipment:
Commonwealth of Kentucky, State of West Virginia, Commonwealth of
Pennsylvania.
Fixed Assets Condition:
So long as any Loans are outstanding, Borrowers shall maintain the
Equipment component of the fixed asset collateral in the conditions
to be specified in the Loan Agreement, including, without
limitation, the following:
(i) All equipment must be capable of passing performance tests
according to manufacturers' specifications.
(ii) Peripherals and additional systems on all pieces of Equipment
must be intact and correctly operational.
(iii) All pneumatic, electrical, hydraulic and mechanical systems
on the Equipment must be operational according to manufacturers'
specifications.
(iv) No cracked or broken glass.
(v) No body or frame damage.
Appraisal:
Borrowers shall provide an appraisal, satisfactory to Lender,
indicating the Fair Market Value and the Orderly Liquidation Value
of the fixed asset collateral.
Insurance:
Borrowers shall provide evidence of all-risk physical property and
damage insurance, business interruption insurance, statutory
workers compensation/employer's liability insurance and
comprehensive general liability insurance, satisfactory to Lender
in form, substance and amount and loss payment endorsements payable
to Lender with respect to Borrowers' non-liability insurance
policies. In addition, there shall be maintained key man life
insurance on the life of Mr. Larry Addington in the amount of at
least $5,000,000 and otherwise in form and substance satisfactory
to Lender, and Lender shall be the assignee or beneficiary of such
life insurance policy.
Environmental and Regulatory Issues:
Lender shall be provided with an environmental audit, and if deemed
necessary by Lender, an environmental risk assessment (which in
each instance must be satisfactory to Lender) of all hazardous
waste disposal practices and all physical sites utilized by
Borrowers. All environmental and regulatory issues relating to the
proposed transaction and the collateral shall be satisfactory to
Lender and its counsel.
Conditions Precedent to Initial Loan:
Lender will have no obligation to make any loan hereunder:
(i) If, at the time of any proposed borrowing, there shall have
occurred, in Lender's sole judgment, a material adverse change in
the business, financial condition or operations of any Borrower,
Parent or any Guarantor.
(ii) Unless all legal matters and all Loan Documents are
satisfactory in form and substance to Lender and its counsel.
(iii) Unless Lender shall have received a written opinion of
Borrowers', Parent's and Guarantor's counsel regarding the
transactions contemplated hereby, which shall be satisfactory in
form and substance to Lender, and shall include inter alia opinions
to the effect that the Hart-Scott-Rodino Anti-Trust Improvements
Act has been fully complied with or that compliance is not
required, that all requirements of the Securities and Exchange
Commission and applicable securities laws (federal and state) and
bulk sale transfer laws have been met, that the interest and fees
to be charged and collected by Lender on and with respect to the
Loans do not violate applicable usury laws, and that the Lender's
security interests in the collateral have been perfected.
(iv) Unless Lender shall have satisfactorily completed its due
diligence investigation of the Borrowers, Parent and the Guarantors
and shall be satisfied with respect to the assets, liabilities,
commitments, contingencies, results of operations and prospects of
the Borrowers, Parent and the guarantors.
(v) Unless there shall be no pending litigation or claims with
respect to (a) any aspect of the transaction contemplated herein,
or (b) Addington Resources, Inc., Mr. Larry Addington, Mr. Robert
Addington, Mr. Bruce Addington, the Borrowers, Parent or any
Guarantor, which, if adversely determined, would in the opinion of
Lender have a material adverse effect on the condition, operations,
properties or prospects of Addington Resources, Inc., Mr. Larry
Addington, Mr. Robert Addington, Mr. Bruce Addington, the
Borrowers, Parent or any Guarantor.
(vi) Unless Lender (a) is satisfied that following the making of
the Term Loans and the initial Revolving Line of Credit Loan and
the consummation of the "spin-off", each Borrower is solvent, is
able to pay its debts as such debts mature and is not left with an
unreasonably small capital and (b) receives evidence thereof in the
form of appraisals prepared by third parties and/or such other
evidence as Lender shall require in its sole and absolute
discretion.
(vii) Unless no event of default shall exist under the Loan
Documents.
(viii) Unless representations and warranties contained in the Loan
Documents will be accurate on the date the Term Loans and the
initial Revolving Line of Credit Loan are to be made.
(ix) Unless Lender shall have received, and found satisfactory,
proof of Borrowers' ownership of the Equipment.
(x) Unless Lender shall have received and found satisfactory in
its sole discretion a physical inspection and appraisal of the
fixed asset collateral.
(xi) Unless Lender shall have reviewed and found satisfactory the
fairness opinion and all terms of the contemplated "spin-off".
(xii) Unless all necessary approvals for the contemplated
"spinoff" shall have been obtained.
(xiii) Unless Borrowers' or Parent's, as applicable, GII aircraft
and associated debt is retired.
(xiv) Unless Borrowers obtain the consent of Cincinnati Gas &
Electric Company (and any other coal sales contracts which require
the support of Addington Resources, Inc.) to the "spin-off" of
Addington Mining, Inc. from Addington Resources, Inc.
(xv) Unless Parent and each guarantor execute and deliver to
Lender an absolute and unconditional guaranty of all obligations of
Borrowers to Lender hereunder as well as all existing obligations
of Borrowers to Lender.
(xvi) Unless the $10,000,000 subordinated debt in favor of
Addington Resources, Inc. shall be specifically subordinated to the
Term Loans and the Revolving Line of Credit Facilities and shall be
subject to an intercreditor agreement on acceptable terms and
conditions to Lender including, but not limited to, interest only
for at least the first five years at an interest rate not to exceed
10% and an interest payment prohibition in the event of a payment
or covenant default.
(xvii) Unless the contemplated $10,000,000 note receivable from
Robert Addington to Borrowers, Parent or Guarantors shall be
pledged to Lender and shall have specific repayment terms
acceptable to Lender.
Representations and Warranties:
Representations and warranties with respect to Borrowers usually
included in secured leveraged buyout financings shall be required,
together with such other representations and warranties that Lender
determines to be appropriate to this transaction.
General Covenants:
Negative and affirmative covenants with respect to Borrowers
usually included in loan agreements for secured leveraged buyout
financings shall be required, together with such other covenants
that Lender determines to be appropriate to this transaction.
Such covenants would include, but not be limited to (i) covenants
limiting investments in or advances to other companies or persons,
including, without limitation, affiliates of Borrowers, (ii)
covenants limiting mergers and acquisitions, sales of assets not in
the ordinary course of business, guarantees, liens and transactions
with affiliates of Borrowers; (iii) covenants prohibiting dividends
and distributions prior to January 1, 1996 and limiting dividends
and distributions to not more than 25% of net income in any
subsequent fiscal year, but only to the extent that said
dividend/distribution amount does not violate the fixed charge
coverage ratio, (iv) covenants regarding compliance with all laws,
including, without limitation, ERISA and environmental laws, (v)
Borrowers and any Guarantors not materially changing their
respective business or stock ownership, (vi) a covenant requiring
Borrowers' annual capital expenditures be limited to $3,600,000
plus 50% of net income (it being understood that Mining
Technologies, Inc. has the capacity to build Highwall Mining
Systems and upon the prior written consent of Lender not to be
unreasonably withheld provided no event of default then exists.
Mining Technologies, Inc. may make expenditures to build such
systems, provided that the associated contract mining agreement(s)
are in full force and effect), (vii) a covenant requiring Borrowers
to promptly notify Lender of the receipt of any notices that
Borrowers have failed to perform under any of their respective
contracts, and (viii) Borrowers to promptly notify Lender of
receipt of any notices that any of Borrowers' coal sales agreements
or contract mining agreements have been terminated.
Financial Covenants:
The Loan Documents shall contain such financial covenants as
follows:
(i) On a consolidated basis, a minimum tangible net worth equal to
Parent's opening balance sheet amount and which said amount shall
increase by $2,000,000 as of December 31, 1995 (if the "spin-off"
is not consummated by August 31, 1995, this $2,000,000 increase
shall not be required); and increase by an additional $5,000,000 as
of December 31, 1996; and increase by an additional $5,000,000 as
of December 31, 1997; and increase by an additional $5,000,000 as
of December 31, 1998; and then remain at no less than that absolute
amount thereafter for the remaining term of the Loans.
(ii) On a consolidated basis, a minimum fixed charge coverage
ratio, tested quarterly, for the immediately preceding twelve month
period just ended as follows:
from Loan inception through June 30, 1996 - 115%, from September
30, 1996 through June 30, 1997 - %120, from September 30, 1997 and
thereafter - 140%. Fixed charge coverage is defined as the sum of
net income plus taxes plus interest expense, plus rent and lease
expense plus depreciation plus amortization plus depletion divided
by the sum of taxes, plus interest expense, plus rent and lease
expense plus current maturities of long-term debt (excluding
mandatory prepayments) plus dividends. Up until the time that
Borrowers complete twelve months of operations, this fixed charge
coverage ratio shall be determined for each quarterly period based
upon the cumulative period of time from the inception of the Loans.
Event of Default:
The Loan Documents shall include events of default (with usual
grace periods and cure provisions) usually included in loan
agreements for secured leveraged buyout financings and such other
events of default that Lender determines to be appropriate to this
transaction. Such defaults shall include, but not be limited to,
payment defaults, breach of covenants and inaccuracy of
representations and warranties, shutdown of any of Borrowers'
mining operations by any governmental authority, change of control
of any Borrower, cross-defaults to other indebtedness and
contingent liabilities of any Borrower, failure of any employee
benefit plan to comply with a material provision of ERISA or the
Internal Revenue Code, environmental defaults, material adverse
change in condition, operations, properties or prospects of any
Borrower, Parent or any Guarantor, material judgements and
reorganization, receivership, bankruptcy or insolvency proceedings
of any Borrower, Parent or any Guarantor.
Net Loan:
All costs of operation, maintenance, appraisals, taxes,
insurance and other associated costs will be paid by Borrowers.
This transaction has been structured by Lender as a net loan.
Assignment:
Lender shall have the right at any time to assign all or any part
of its rights and obligations under the Loan Documents to other
financial institutions. Neither Addington, Borrowers, Parent nor
any Guarantor shall have the right to assign any rights or
obligations under any commitment letters or Loan Documents to any
other person.
Legal Fees, Appraisal Fees and Transaction Expenses:
Addington shall each be jointly and severally liable to pay all (i)
fees and disbursements of counsel to Lender, (ii) appraisal fees,
(iii) UCC lien search and filing fees and (iv) other expenses of
Lender incurred in connection with the contemplated transaction
regardless of whether the contemplated transaction is consummated.
Governing Law:
New York
Financial Statements:
Throughout the term of the Loans, Lender shall receive Borrowers',
Parent's and Guarantors' annual audited financial statements
(certified by an independent accounting firm) within 120 days of
the end of each fiscal year and Borrowers', Parent's and
Guarantors' quarterly financial statements (certified by its chief
financial officer) within 90 days of the end of each fiscal
quarter. On a quarterly basis, Borrowers, Parent and Guarantors
shall provide a Compliance Certificate signed by their respective
Chief Financial Officers certifying that Borrowers, Parent and
Guarantors are not in default of any of their respective
obligations.
Security Deposit/Commitment Fee:
Addington has paid $200,000 as a Security Deposit. As agreed in
the proposal letter, the entire Security Deposit automatically
converted to a commitment fee upon Lender's issuance of this
commitment letter, and is non-refundable regardless of whether
Addington accepts this commitment letter or whether the
contemplated transaction is consummated. Lender's retention of any
commitment fee shall not reduce or relieve Addington of their
obligation to pay the costs and expenses of Lender which are
payable by Addington hereunder.
Upon funding of the proposed transaction and as consideration for
Lender's transaction structuring and review activities and for
providing the funds at closing, Addington shall remit an additional
fee such that the total Commitment Fee shall equal one percent (1%)
of the Committed Term Loans and Revolving Line of Credit Loans.
/s/ Larry Addington The CIT Group/Equipment Financing, Inc.
Larry Addington
By:/s/ Gary L. Gross
Date: 2/25/95 Title: Vice President
Date: 2/28/95
/s/ Robert Addington
Robert Addington
Date: 2/25/95
/s/ Bruce Addington
Bruce Addington
Date: 2/5/95
Exhibit 3
Third Party Pledge Agreement
Date March 3, 1995
Pledgor LARRY ADDINGTON SECURED KENTUCKY BANK & TRUST
PARTY
BUSINESS OR ADDRESS 900 DIEDERICH BOULEVARD
RESIDENCE
ADDRESS
CITY, CITY,
STATE & STATE &
ZIP CODE ZIP CODE RUSSELL, KY 41169
1. Security Interest and Collateral. To secure (check one):
XX the payment and performance of each and every debt,
liability and obligation of every type and description which
ADDINGTON, ROBERT AND DONNA ("Debtor") may now or at any time
hereafter owe to Secured Party (whether such debt, liability or
obligation now exists or is hereafter created or incurred, and
whether it is or may be direct or indirect, due or to become due,
absolute or contingent, primary or secondary, liquidated or
unliquidated, or joint, several or joint and several; all such
debts, liabilities and obligations being herein collectively
referred to as the "Obligations"),
___ the debt, liability or obligation of
___________________ ("Debtor") to Secured Party evidenced by or
arising under the following:
, and any extensions, renewals or replacements thereof (herein
referred to as the "Obligations"),
Pledgor hereby grants Secured Party a security interest (herein
called the "Security Interest") in (check one):
___ all property of any kind now or at any time hereafter
owned by Pledgor, or in which Pledgor may now or hereafter have an
interest, which may now be or may at any time hereafter come into
the possession or control of Secured Party or into the possession
or control of Secured Party's agents or correspondents, whether
such possession or control is given for collateral purposes or for
safekeeping, together with all proceeds of and other rights in
connection with such property (herein called the "Collateral").
XX the property owned by Pledgor and held by Secured Party
that is described as follows: 67,000 SHARES OF ADDINGTON
RESOURCES, INC. STOCK, together with all rights in connection with
that property (herein called the "Collateral").
2. Representations, Warranties and Covenants. Pledgor
represents, warrants and covenants that:
(a) Pledgor will duly endorse, in blank, each and every
instrument constituting Collateral by signing on said instrument or
by signing a separate document of assignment or transfer, if
required by Secured Party.
(b) Pledgor is the owner of the Collateral free and clear
of all liens, encumbrances, security interests and restrictions,
except the Security Interest and any restrictive legend appearing
on any instrument constituting Collateral.
(c) Pledgor will keep the Collateral free and clear of all
liens, encumbrances and security interests, except the Security
Interest.
(d) Pledgor will pay, when due, all taxes and other
governmental charges levied or assessed upon or against any
Collateral.
(e) At any time, upon request by Secured Party, Pledgor
will deliver to Secured Party all notices, financial statements,
reports or other communications received by Pledgor as an owner or
holder of the Collateral.
(f) Pledgor will upon receipt deliver to Secured Party in
pledge as additional Collateral all securities distributed on
account of the Collateral such as stock dividends and securities
resulting from stock splits, reorganizations and recapitalizations.
3. Rights of Secured Party. Pledgor agrees that Secured Party
may at any time, whether before or after the occurrence of an Event
of Default and without notice or demand of any kind, (i) notify the
obligor on or issuer of any Collateral to make payment to Secured
Party of any amounts due or distributable thereon, (ii) in
Pledgor's name of Secured Party's name enforce collection of any
Collateral by suit or otherwise, or surrender, release or exchange
all or any part of it, or compromise, extend or renew for any
period any obligation evidenced by the Collateral, (iii) receive
all proceeds of the Collateral, and (iv) hold any increase or
profits received from the Collateral as additional security for the
Obligations, except that any money received from the Collateral
shall, at Secured Party's option, be applied in reduction of the
Obligations, in such order of application as Secured Party may
determine, or be remitted to Debtor.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGE 2
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
LARRY ADDINGTON
PLEDGOR'S NAME
By
LARRY ADDINGTON
Title:
By
Title:
BANKERS SYSTEMS, INC., ST. CLOUD, MN 56302 (1-800-397-2341 FORM
M-150 5/20/91 (page 1 of 2)
AGREEMENT
WHEREAS, ROBERT ADDINGTON and DONNA ADDINGTON, (hereinafter
"Addington", including also Larry Addington), 3513 Briarwood Drive,
Catlettsburg, Kentucky, have borrowed from KENTUCKY BANK & TRUST OF
GREENUP COUNTY (hereinafter "KBT") the sum of $1,400,000.00
evidenced by a Note dated March 3, 1995, in said amount with a copy
of said Note being attached hereto as Exhibit "A"; and
WHEREAS, said Note is secured by 200,000 shares of Addington
Resources, Inc. common stock owned solely by Robert Addington, and
67,000 shares of Addington Resources, Inc. common stock owned
solely by Larry Addington;
WHEREAS, the parties wish to enlarge the terms and conditions
of the Note between the parties regarding the ability of KBT to
accelerate sums due under said Note, including principal and interest;
NOW BE IT AGREED by and between the parties hereto as follows:
1. That this Agreement shall act as a supplement to the Note
between the parties set forth in Exhibit "A" hereto.
2. That one of the purposes, but not the sole purpose, of
this Agreement is to set forth certain terms and conditions under
which KBT may accelerate the terms of the Note set forth in Exhibit
"A" with the granting of certain rights by Addington to KBT
regarding the security for said Note.
3. Specifically, it is further understood and agreed that if
at any time the fair market value of the collateral to this
agreement only same being 267,000 shares of Addington Resources,
Inc. common stock, (i.e. if the value of KBT's collateral less
commissions falls under $2,000,000, then upon written notice, and
at KBT's sole election, KBT may demand that additional collateral
be pledged against said loan in addition to the 267,000 shares of
Addington Resources, Inc. stock for the purpose of bringing the net
value of the collateral mentioned in this agreement up to
$2,000,000 and if said additional collateral necessary to raise the
value of KBT's collateral under this agreement to a net of
$2,000,000 is not fully pledged within twenty-four (24) hours of
the date of delivery of the notice then KBT, at its sole election,
may forthwith sell the pledged collateral, pay off all principal
and interest and costs of sale, and forward the balance of funds,
if any, to Addington.
Fair market value shall be determined by the published bid
price of the stock of Addington Resources, Inc. at the close of any
trading day as published in The Wall Street Journal.
In the event KBT fails to exercise its rights to request
additional collateral and/or declines to sell the Addington
Resources, Inc. stock on any given occasion when it has the right
to do so, same shall not be deemed a waiver of any sort, and said
option shall extend to KBT on each and every occasion said
collateral falls below the amount specified above.
4. For purposes of execution of this Agreement only, execution
of this Agreement by Robert Addington, individually, and Larry Addington,
individually, shall operate as the Limited Power of Attorney of
Robert Addington, individually, and Larry Addington, individually,
for purposes of negotiating and selling the pledged collateral
only, and said Limited Power of Attorney herein granted, if needed,
shall be effective only in the event that all conditions precedent
herein shall have been met in full.
5. That this agreement in its entirety shall be binding upon
and inure to the Estates of Robert Addington, individually, and
Larry Addington, individually, and each of them, and their heirs
and personal representatives.
6. That nothing herein shall in any way, shape or form void
or otherwise set aside any other loan document executed and in the
possession of KBT by any of the parties hereto, including but not
limited to any additional collateral pledged against the Note which
is Exhibit "A" to this agreement regardless of whether or not said
additional collateral is specifically mentioned in this agreement.
This 3rd day of March, 1995.
/s/ Jeffrey D. Elswick /s/ Robert Addington
WITNESS ROBERT ADDINGTON
(See Notary) /s/ Larry Addington
WITNESS LARRY ADDINGTON
KENTUCKY BANK & TRUST OF
GREENUP COUNTY
/s/ BY: /s/ Jeffrey D. Elswick
WITNESS TITLE: Senior Vice President
STATE OF KENTUCKY:
COUNTY OF GREENUP:
The foregoing instrument was acknowledged before me this 3rd
day of March, 1995, by ROBERT ADDINGTON.
/s/ Jeffrey D. Elswick
NOTARY PUBLIC
My Commission expires: 3-21-97.
STATE OF KENTUCKY:
COUNTY OF BOYD:
The foregoing instrument was acknowledged before me this 6th
day of March, 1995, by LARRY ADDINGTON.
/s/ Crystal Johnson
NOTARY PUBLIC
My Commission expires: 6-10-98.
EXHIBIT "A"
ROBERT ADDINGTON KENTUCKY BANK & TRUST ACCOUNT #: 521497
DONNA ADDINGTON 900 DIEDERICH BOULEVARD LOAN NUMBER 25939
P. O. BOX A RUSSELL, KY 41169 DATE MARCH 3, 1995
OLIVE HILL, KY 41164 MATURITY DATE MARCH 2, 2000
LOAN AMOUNT $1,400,000.00
RENEWAL OF
BORROWER'S NAME AND LENDER'S NAME AND ADDRESS
ADDRESS "I" includes "You" means the lender, its
each borrower above, successors and assigns.
jointly and severally.
For value received, I promise to pay to you, or your order, at your
address listed above the PRINCIPAL sum of ONE MILLION FOUR HUNDRED
THOUSAND AND NO/100 DOLLARS $1,400,000.00
XX Single Advance: I will receive all of this principal sum on
March 3, 1995. No additional advances are contemplated
under this note.
Multiple Advance: The principal sum shown above is the
maximum amount of principal I can borrow under this note.
On _________ I will receive the amount of $ and
future principal advances are contemplated.
Conditions: The conditions for future advances are
Open End Credit: You and I agree that I may borrow up
to the maximum amount of principal more than one
time. This feature is subject to all other
conditions and expires on ________________.
Closed End Credit: You and I agree that I may borrow
up to the maximum only one time (and subject to all
other conditions).
INTEREST: I agree to pay interest on the outstanding principal
balance from MARCH 3, 1995 at the rate of 11.000% per year
until FIRST CHANGE DATE.
XX Variable Rate: This rate may then change as stated below.
XX Index Rate: The future rate will be 2.000% OVER the
following index rate: NEW YORK PRIME RATE AS PUBLISHED
IN THE WALL STREET JOURNAL
No Index: The future rate will not be subject to any
internal or external index. It will be entirely in
your control.
XX Frequency and Timing: The rate on this note may change
as often as DAILY
A change in the interest rate will take effect ON
THE SAME DAY
XX Limitations: During the term of this loan, the
applicable annual interest rate will not be more than
24.000% or less than %. THE RATE MAY NOT CHANGE MORE
OFTEN THAN EVERY DAY NOR MORE THAN 1.0000% EACH DAY
Effect of Variable Rate: A change in the interest rate
will have the following effect on the payments:
XX The amount of each scheduled payment will change.
The amount of the final payment will change.
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance
of this note owing after maturity, and until paid in full, as
stated below:
XX on the same fixed or variable rate basis in effect
before maturity (as indicated above).
at a rate equal to
XX LATE CHARGE: If a payment is made more than 10 days after it
is due, I agree to pay a late charge of 5.000%
OF THE LATE PAYMENT WITH A MAXIMUM OF $25.00
XX ADDITIONAL CHARGES: In addition to interest, I agree to pay
the following charges which XX are are not included in
the principal amount above: DOC. FEE-$1,500
PAYMENTS: I agree to pay this note as follows:
XX Interest: I agree to pay accrued interest WITH PRINCIPAL
XX Principal: I agree to pay the principal ON DEMAND, BUT IF NO
DEMAND IS MADE:
XX Installments: I agree to pay this note in 60 payments. The
first payment will be in the amount of $30,446.80 and will be
due APRIL 2, 1995. A payment of $30,446.80 will be due EACH
MONTH thereafter. The final payment of the entire unpaid
balance of principal and interest will be due MARCH 2, 2000
ADDITIONAL TERMS:
THIS NOTE IS SECURED BY 200,000 SHARES OF ADDINGTON RESOURCES,
INC. COMMON STOCK AND 196 SHARES OF RALEIGH MINE SUPPLY COMMON
STOCK, OWNED BY ROBERT ADDINGTON, AND 67,000 SHARES OF
ADDINGTON RESOURCES, INC. COMMON STOCK, OWNED BY LARRY
ADDINGTON, EVIDENCED BY SECURITY AGREEMENTS OF EVEN DATE.
PURPOSE: The purpose of this loan SIGNATURES: I AGREE TO THE is
BUSINESS: PERSONAL EXPENSE AND TERMS OF THIS NOTE (INCLUDING
WORKING CAPITAL. THOSE ON PAGE 2). I have
received a copy on today's date.
Signature for Lender /s/ Robert Addington
ROBERT ADDINGTON
/s/ Donna Addington
DONNA ADDINGTON
(page 1 of 2)
Exhibit 4
AGREEMENT
WHEREAS, Robert Addington is indebted to Kentucky Farmers
Bank as evidenced by promissory note dated May 27, 1994, in the
original amount of $600,000.00, and
WHEREAS, pursuant to the terms of the above loan, Kentucky
Farmers Bank has demanded additional security from said Robert Addington.
WITNESSETH:
That to induce Kentucky Farmers Bank to forego its rights
under the terms of the above loan to sell Addington Resources, Inc.
stock owned by Robert Addington, the undersigned does hereby pledge
as additional security for said loan 33,000 shares of stock in
Addington Resources, Inc., said shares to be subject to all terms
of the loan referred to above. The undersigned does further agree
to execute any and all documents deemed by Kentucky Farmers Bank
necessary to secure additional stock being pledged.
This the 23rd day of November, 1994.
/s/ Larry Addington
Larry Addington
Exhibit 5
NATIONAL CITY
BANK FIXED RATE SIMPLE INTEREST - NOTE AND SECURITY AGREEMENT
BRANCH
Date 02/17/95
(1) DEBTOR(S) BRUCE ADDINGTON
Address HC 87 BOX 340
City PAINTSVILLE
State & Zip KY 412400000
(2) Terms of Repayment
FOR VALUE RECEIVED, I, the Debtor, promise to pay to the order of
National City Bank, Kentucky, 101 S. 5th St., Louisville, Kentucky
("Bank"), the principal sum of Two Hundred Eighty Two Thousand and
00/100 Dollars, together with interest on the principal sum
outstanding from time to time at the rate of 9.000 percent per
annum. The principal sum hereof, together with interest thereon,
is payable in 012 consecutive monthly installments of Twenty Four
Thousand Eight Hundred Fifty One and 01/100 Dollars ($4,851.01)
each, commencing on the 18 day of April, 1995, and continuing on
the same day of each month thereafter, until paid. The term "per
annum" shall mean a 360-day year, and interests shall be calculated
on the basis of a 360-day year and a 30-day month.
(3) Description of Goods or Real Estate Securing Payment
("Property")____________________________________________________
STOCK CERTIFICATE 100000 SHARES ADDINGTON RESOURCES
YEAR, MAKE, MODEL NEW OR USED MANUFACTURER'S SERIAL NUMBER
(4) Loan Use
I represent to Bank that the loan proceeds are to be used as
follows (state purpose, and if goods or services are to be
purchased, so state giving name and address of seller): OTHER
(PERSONAL)
(5) Disbursement of Proceeds
Bank is authorized to disburse loan proceeds as indicated in the
Itemization of the Amount Financed.
(6) Insurance Agreement
Insurance on the Property must be obtained by me. I may choose the
person through whom such insurance is obtained. Bank may require
Vendors Single Interest insurance for the term of this Note. If I
fail to obtain insurance, Bank may purchase insurance for me, and
I will pay Bank for its cost. Even if the Property is lost,
damaged or destroyed, I must pay Bank whatever I owe under this
Note. Written evidence of insurance, with Bank named as loss payee
will be delivered to Bank. If the security for this loan is a real
estate mortgage, I must maintain proper real estate insurance on
the Property. If this loan is secured by other than a real estate
mortgage, insurance must consist of Fire, Theft, Comprehensive and
Collision with not more than Two Hundred Fifty Dollars ($250.00)
deductible. I may obtain extended warranty coverage, but such
coverage is not required and cannot be obtained from Bank. I
irrevocably make Bank my agent for adjustment of all insurance
losses and settlement thereof for an amount Bank in good faith
deems reasonable and to sign such proofs of loss, applications,
receipts, settlements, releases and other papers necessary for
collection of loss and for return of unearned premiums, and to
endorse and collect any instrument payable to me in connection with
any of the above. All amounts Bank receives may, at its option, be
applied to the indebtedness evidenced by this Agreement or used to
repair or replace the Property. If any credit insurance is
obtained through Bank, the cost and terms are shown on the
Disclosure Statement.
(7) Prepayment of Note
I may prepay the principal sum of this Note in whole or in part at
any time or from time to time. However, if the original principal
sum of this Note exceeds $15,000 and such prepayment is in full,
such prepayment shall be subject to a prepayment charge equal to
the greater of $20 or 1% of the outstanding balance at the time of
prepayment. Prepayments shall be applied to the monthly payment in
the order of their maturities and shall be applied first against
accrued but unpaid interest on the principal sum prepaid, then to
principal. In the event of prepayment, interest on the sum prepaid
shall be computed on the basis of 360-day year, but calculated on
actual days.
(8) Late Charge
If I am in default [as defined (10)] and Bank requires immediate
payment of the whole amount outstanding hereunder, I agree to pay
Bank interest on the remaining balance at the contractual rate in
effect at the time of acceleration. If I am more than ten (10)
days late in paying an installment and Bank does not require
immediate payment of the whole amount outstanding hereunder, I
promise to pay Bank a late charge of $18.00
(9) Security for Debt
I give Bank a security interest in the Property (including, without
limitation, any accessions and all loss proceeds and unearned
premiums of insurance covering the Property as well as unearned
premiums on credit insurance financed) to secure the payment of any
amounts owed under this Agreement. If the Property is not my
principal residence, Bank shall have a security interest in the
Property for all other obligations now or hereafter owing by me to
Bank. However, if Bank now has any earlier lien on my principal
residence as security for future obligations, Bank waives such
security as to this Agreement only.
(10) Default
I will be in default on this Agreement: (i) if I do not pay an
installment on time or do not pay on time any other indebtedness
owing by me to Bank; or (ii) if any creditor tries by legal process
to take funds from any account of mine with Bank or to levy
execution on the Property; or (iii) if there is a filing for my
bankruptcy or insolvency; or (iv) if I die or am declared legally
incompetent; or (v) any statement in my loan application or any
other writing is materially false; or (vi) if I fail to comply with
any other term or condition contained in this Agreement; or (vii)
if a judgment is entered against me in any court of record; or
(viii) if Bank, in good faith, believes my ability to repay is
impaired. If I am in default, Bank can then require immediate
payment of the whole amount outstanding under this Agreement or any
other outstanding indebtedness I have with Bank (except
indebtedness secured by my principal residence), and may use any
right and remedies under the law and the right to go peaceably
without court process upon any premises where the Property may be
and remove it. Bank may sell, lease or otherwise dispose of the
Property. The net proceeds of sale or other disposition of the
Property shall be applied to the amount I then owe Bank in such
manner as Bank decides.
(11) Warranties
I acknowledge that all information I provide to Bank is true and
complete, and that I am a natural person at least eighteen (18)
years of age and fully competent to enter into contracts.
(12) Other Provisions
I further agree that: (1) I will keep the Property insured and in
good condition and will promptly pay all taxes and license fees,
and all repair, maintenance and preservation costs pertaining to
the Property; (2) upon Bank's request, I will promptly deposit with
Bank the certificate of title or any other documents Bank may need
to perfect its security interest; (3) I will promptly notify Bank
of any change of address. Without Bank's prior written approval,
I will not sell, lease, or otherwise dispose of, nor permit any
encumbrance on the Property, nor will I permanently remove nor
permit removal of the Property from the State of Kentucky; (4) this
Agreement will be governed by Kentucky law; (5) I will not use the
Property for any unlawful purpose; (6) if the Property is personal
property, it will not be so attached or affixed to real property
that it becomes a fixture without the Bank's prior written consent;
(7) if this Agreement is signed or guaranteed by more than one
person, all Debtors and Guarantors of Payment are jointly and
severally responsible for payment of the indebtedness evidenced by
this Agreement. Bank can from time to time extend the terms of
payment or release any security or agree with any signer to any
change of terms without notifying or releasing any other signer
from responsibility on this Agreement. Bank may delay enforcing
any of its rights on this Agreement or on any security by
acceptance of late or partial payments or otherwise without losing
any of its rights; (8) principal and interest shall be payable at
the above address of Bank, or at such other place as the holder
hereof may designate in writing, and shall be payable in lawful
money of the United States of America. Payment shall be applied
first to accrued but unpaid interest then to principal; (9) if I
cancel a required authorization of automatic deduction of payments
from a deposit account, Bank may charge a fee of $100.
(13) Loan for Purchase of Goods or Services
The following disclosure applies if you are a natural person who
uses all or a substantial part of the proceeds of this loan to
purchase goods or services for personal, family or household use
from a seller who regularly refers consumers to us or who is
affiliated with us by contract or business arrangement:
NOTICE
ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL
CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE
SELLER OF GOODS OR SERVICES OBTAINED WITH THE PROCEEDS HEREOF,
RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY
THE DEBTOR HEREUNDER.
NOTICE TO COSIGNER
You are being asked to guarantee this debt by signing below. Think
carefully before you do. If the borrower doesn't pay the debt, you
will have to. Be sure you can afford to pay if you have to, and
that you want to accept this responsibility. You may have to pay
up to the full amount of the debt if the borrower does not pay.
You may also have to pay late fees or collection costs, which
increase this amount. The creditor can collect this debt from you
without first trying to collect from the borrower. The creditor
can use the same collection methods against you that can be used
against the borrower, such as suing you, garnishing your wages,
etc. If this debt is ever in default, that fact may become a part
of your credit record. This notice is not the contract that makes
you liable for the debt.
The undersigned acknowledges receipt of this Notice
prior to becoming obligated.
________________________________ _____________________________
Signature Date Signature Date
(14) Copy Received
I agree to all provisions of this Agreement, and acknowledge that
I received a copy of this Agreement together with a Disclosure
Statement with all applicable blanks completed before I signed
below.
BRUCE ADDINGTON 2/17/95 _____________________________
Type or print name of Debtor Date Debtor's Signature Date
_________________________________ _____________________________
Type or print name of Debtor Date Debtor's Signature Date
GUARANTY OF PAYMENT - WAIVER OF RIGHTS
For value received, I guarantee the prompt payment of the
indebtedness evidenced by and arising under the above Agreement
when each payment becomes due, and approve all the provisions of
the above Agreement. My liability under this Guaranty shall remain
in effect until the indebtedness evidenced by this Agreement is
fully paid or until Bank gives me a written release. I agree that:
(1) My liability shall remain in effect even if Bank agrees to
changes in basic terms of the Agreement without my consent, such as
(a) renewals or extensions of time, (b) releases of security or
other obligors other than me, or (c) changes in the rate or method
of computing interest; and (2) Bank need give me no notice of
default, no notice of any change in basic terms of the Agreement
nor any other noitice of any kind; and (3) Bank may proceed
directly against me, whether or not Bank shall have first made any
presentment or demand for payment to anyone and whether or not Bank
proceeds against anyone else or against security (if any); and (4)
I will not use, and I hereby waive any defense to my direct and
absolute obligation to pay the indebtedness evidenced by this
Agreement when due, together with any interest accruing on the
indebtedness evidended by this Agreement.
____________________________________ _____________________________
Type or print name of Guarantor Date Guarantor's Signature Date
____________________________________ _____________________________
Type or print name of Guarantor Date Guarantor's Signature Date
Exhibit 6
SECURITY AGREEMENT
TANGIBLE PERSONAL PROPERTY
(EXCEPT INVENTORY AND RECEIVABLES)
The undersigned borrower, jointly and severally if more
than one, (hereinafter called "Borrower") does hereby sell,
mortgage and grant a security interest to National City Bank,
Kentucky (hereinafter called "Secured Party"), a national banking
association having is principal place of business at 101 South
Fifth Street, Louisville, Kentucky, in all of the Borrower's
machinery, equipment, furniture and fixtures, including but not
limited to the property described below.
SHARES OF ADDINGTON
RESOURCES STOCK -- CERTIFICATE
# AR-3270
together with all accessories, attachments, parts, accessions and
repairs, all substitutions, replacements and additions thereto, all
right, title and interest of the Borrower in and to any of the
foregoing which may be subject to any title retention or other
security agreement the lien of which may be or become superior to
the lien herein created, and all proceeds (including, without
limitation, insurance [illegible text], security for the payment of
the sum of $200,000.00 evidenced by and subject to the provisions
of Borrower's promissory note and/or loan agreement (hereinafter
collectively called the "Note") dated 1/27/95 (including any
renewals, extensions, substitutions or modifications thereof), and
for the payment of any and all liabilities and obligations of
Borrower to Secured Party whether arising under this Agreement or
not, now existing or hereafter incurred, created by loan,
overdraft, guaranty or operation of law, originally contracted with
Secured Party or with any other or others and acquired by Secured
Party by purchase, pledge, participation or otherwise, absolute or
contingent, secured or unsecured, and matured or unmatured,
including without limitation all interest, fees, charges, expenses
and attorney's fees to the extent permitted by law, incurred to
enforce Secured Party's rights against Borrower under this
Agreement or otherwise, or arising out of the defense or
prosecution of any matter growing out of this Agreement or any
security interest granted hereby. The indebtedness evidenced by
the Note and any other indebtedness and obligations secured hereby
are hereinafter called the Borrower's "Obligations."
The Borrower represents and warrants to the Secured
Party, its successors and assigns that (1) the Borrower is the true
and lawful owner of the Collateral, has full right and power to
enter into this Agreement and if the Borrower is not an individual,
that all necessary action has been taken authorizing it to enter
into this Agreement, that the entering into and performance of this
Agreement serves as a valid and lawful business purpose of Borrower
and that it does not contravene the provisions of any document or
writing pursuant to which Borrower is organized or the provisions
of any agreement by which it is bound, (2) the Collateral is free
and clear of all liens, charges and encumbrances other than any
security interest in favor of Secured Party, and that no financing
statement is on file with respect to the Collateral; (3) Borrower's
principal place of business is at N/A
, the Borrower has (no) other places of
business at N/A , if
a corporation, Borrower has its registered office at
N/A , and that Borrower will promptly
notify the Secured Party of any change in any of the foregoing; (4)
Borrower will forever defend the Collateral against any claim by
any person or entity except the Secured Party; and (5) that the
Collateral is now and will hereafter be kept at premises located at
N/A County of ,
State of , unless it is of the type which in the normal
course of business is ordinarily used at more than one location,
such as trucks, construction or road building equipment, etc.
Borrower shall have the possession and use of the
Collateral in any lawful manner not inconsistent with this
Agreement or with the terms and conditions of any insurance policy
until default hereunder.
The proceeds of the Note will ( ) will not ( x ) be
used to _________________________________________________ security
interest with respect thereto. Borrower represents that the
property will be used for commercial or business purposes only.
AND IT IS EXPRESSLY AGREED AS FOLLOWS:
1. EVENTS OF DEFAULT. The occurrence of any of the
following events shall constitute a default, as such term is used
herein: (a) failure to pay, when due, any amount payable on the
Note or any other of the Obligations, (b) if any statement,
representation or warranty made herein or in any related credit
application, or in any supporting financial statement furnished by
or on behalf of Borrower shall be false or misleading in any
material respect; (c) failure to observe or perform any covenant or
agreement herein or in the Note or other instrument between the
parties; (d) death (if a natural person) or dissolution (if a
corporation or a partnership) of Borrower or of any partner of
Borrower (if borrower is a partnership) or of any guarantor or
endorser of any of the Obligations; (e) should Borrower, or any of
them if more than one, or any such guarantor or endorser, become
insolvent (whether on a net worth basis or by reason of inability
to pay debts as they mature, or otherwise), commit any act of
bankruptcy, call a meeting of creditors, make an assignment for the
benefit of creditors, or if any proceeding is instituted by or
against any of them for any relief under any bankruptcy or
insolvency laws, or if a receiver is appointed for any of them; (f)
termination or suspension of the transaction of the usual business
of Borrower; (g) failure to pay any tax or failing to withhold,
collect or remit [missing text] effect such insurance. In the
event any of the aforesaid policies procured by Borrower shall fail
to provide that all losses thereunder shall be payable to Secured
Party, Borrower hereby assigns to Secured Party all of the proceeds
or avails of any and all of such policies and agrees to accept said
proceeds or avails in trust for Secured Party, and to forthwith
deliver the same to Secured Party in the exact form received (with
the endorsement of Borrower where necessary). Secured Party is
irrevocably appointed attorney for the Borrower, with full power of
substitution and revocation, to compromise, settle or release any
claims pertaining to or arising out of said policies, and to take
possession of and endorse in the name of Borrower any check or
other instrument for the payment of money representing the proceeds
or avails of said policies. Borrower shall not effect any
settlement, compromise or release without Secured Party's prior
written consent. Borrower will pay all taxes, assessments and
charges levied against the Collateral, or for the use, storage,
maintenance or repair thereof, and upon Borrower's failure to do
so, Secured Party may pay them. Any premiums, taxes, assessments
and charges so paid shall be part of the Obligations secured by
this Agreement and shall be payable, on demand, with interest at
the rate designated in the Note if permitted by law and, if not, at
the maximum legal rate.
7. In the event Borrower shall fail to pay any sum or
perform any act or keep any promise, warranty or covenant
hereunder, Secured Party may, in its sole discretion, pay the sum,
or perform the said act, or remedy the said breach of promise,
warranty or covenant, for Borrower and on its behalf, and in the
event that Secured Party shall do so, Borrower will immediately
upon written demand therefore, reimburse Secured Party for all its
expenses, disbursements, fees and costs in connection therewith,
together with interest thereon at the rate designated in the Note
if permitted by law and, if not, at the maximum legal rate. It is
expressly understood that Borrower's obligations hereunder are
"Obligations" as defined above. In the event that Borrower shall
fail to make any payment due hereunder or under the Note or upon
any of the Obligations, Secured Party may charge such penalty(ies)
as set forth in the Note.
8. Borrower recognizes that Secured Party will incur
additional administrative expense in handling loans, and
accordingly agrees that it will pay Secured Party an annual
Collateral monitoring fee of 0 % of the approved line of credit,
to be assessed in the first billing period succeeding the Secured
Party's request for collateral reporting.
9. Borrower agrees that nothing contained in this
Agreement shall impair, modify, limit, abolish or in any manner
whatsoever affect Secured Party's unrestricted and absolute right
contained in any demand note secured hereby to demand payment in
accordance therewith, irrespective of whether Borrower shall be in
default hereunder or thereunder.
10. Borrower waives a trial by jury, and the right to
interpose any defense, counterclaim, or offset of any nature and
description in any litigation between Borrower and Secured Party
with respect to this Agreement or any claim arising out of,
relating to or connected with the loan secured thereby, the
Collateral or the repossession thereof, to the full extent
permitted by applicable law.
11. Whenever an attorney is used to collect on or enforce
this Agreement or to enforce, defend, declare or adjudicate any of
Secured Party's rights or interests hereunder or with respect to
any Collateral and/or the Note, whether by suit, negotiation or
otherwise, and regardless of the forum, such attorney's fees shall
be payable by the Borrower to the full extent permitted by law.
12. This Agreement may not be modified, amended or
rescinded except in writing. The rights of Secured Party under
this Agreement are in addition to and not in limitation of any
other rights and remedies Secured Party may have by virtue of any
other instrument or agreement heretofore, contemporaneously
herewith or hereafter executed by Borrower or by law or otherwise.
If any provision of this Agreement is contrary to applicable law,
such provision shall be deemed ineffective without invalidating the
remaining provisions hereof. If and to the extent that applicable
law confers any rights or imposes any duties inconsistent with or
in addition to any of the provisions of this Agreement, the
affected provision shall be considered amended to conform thereto.
Secured Party shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies hereunder. A
waiver by Secured party of any right or remedy hereunder on any one
occasion, shall not be construed as a bar to or waiver of any such
right or remedy which Secured Party would have had on any future
occasion nor shall Secured Party be liable for exercising or
failing to exercise any such right or remedy.
13. Borrower hereby waives all notices except such notices
as are required herein or are required by law and cannot be waived.
It is expressly understood and agreed that whenever the service of
any notice to Borrower is required hereby or is otherwise required,
such notice may be sent to Borrower by ordinary mail to Borrower's
principal place of business and, if so mailed at least five days in
advance, such notice shall be deemed sufficient and reasonable
notice.
14. Secured Party shall not be liable to Borrower for any
damages by reason of delays, temporary withdrawals of the
Collateral from service or other causes.
15. Borrower agrees to join Secured Party in signing and
filing, at Borrower's expense, such financing statements, and title
lien statements, if applicable, as Secured Party may from time to
time require in such public offices as Secured Party may from time
to time require. Borrower agrees that whenever Secured Party
hereafter makes a written request Borrower will, in each case,
execute and deliver to Secured Party such additional writings
(including, without limitation, affidavits, assignments and
endorsements of specific items of collateral, security agreements
and financing statements) and make and do all such further and
other acts and things (including, without limitation, the delivery
to Secured Party of any instrument, documents, chattel paper or
other writing of any kind the possession of which perfects a
security interest therein) as Secured Party may from time to time
require for the better evidence, validation, perfection,
enforcement or other protection of its security interest. Borrower
shall pay the expense of all record searches and public filings
which Secured Party may reasonably require. Borrower hereby
appoints Secured Party as its true and lawful attorney, with powers
of substitution, to prepare, sign and file of record for, Borrower,
in Borrower's name, any financing statements, title lien
statements, assignments, or take any other action deemed necessary
by Secured Party in order to perfect the security interests of
Secured Party hereunder.
16. Secured Party's security interest in the Collateral
shall remain in effect in accordance with this Agreement until
Borrower's Obligations to Secured Party shall have been fully
satisfied and shall not be affected by the lapse of time or by the
fact that there may be a time or times when no Obligations shall be
outstanding. If and when Secured Party's security interest shall
have terminated in accordance with the provisions of this Agree-
ment, Secured Party shall, on request of and at the expense of
Borrower, release its security interest of record.
17. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and assigns,
executors, administrators, heirs and legal representatives. It
shall be binding, jointly and severally, upon all parties described
as Borrower. This Agreement and all rights and obligations
hereunder, including matters of construction, validity and
performance, shall be governed by the laws of Kentucky.
18. Supplemental Provisions:
.
IN WITNESS WHEREOF, the parties have duly executed this
Security Agreement the 27TH day of JANUARY , 1995.
NATIONAL CITY BANK, KENTUCKY BORROWER Bruce Addington
(Secured Party)
By:________________________ By: /s/ A. Bruce Addington
Title:_____________________ Title:_____________________
HC 87 Box 340
Street Address
Paintsville, Kentucky 41240-9624
City, County
and State
By:____________________________
Title:_________________________
If debtor/borrower and owner of
collateral are not the same
(i.e., Individual Borrower with
Corporate owner) then have both
Borrower and Owner sign Security
Agreement.
Exhibit 7
PLEDGE AND HYPOTHECATION AGREEMENT
The undersigned, hereafter called the "owner", in
consideration of the extension of credit to OWNER'S brother and his
wife, Robert and Donna Addington, hereinafter referred to as
"CUSTOMER", and in further consideration of the love and affection
which OWNER has for his brother, Robert Addington, which extension
of credit is evidenced by a note dated the 11th day of November,
1994, in the original principal sum of $900,000.00 by Commercial
Bank of Grayson, hereinafter referred to as "BANK", the undersigned
hereby pledges and grants a security interest in the following
property:
Namely 200,000 shares of Addington Resources, Inc. stock,
including all securities received in addition to or in exchange
for, and all rights to subscribe for securities incident to such
property, together with all additions thereto and substitutions
therefore is hereinafter called the "Collateral." This collateral
shall be deemed as security for the payment of the principal amount
of the above referred to note, including any extensions, renewals
or notifications thereof, plus interest thereon, and all costs of
collection and realization on the Collateral.
Owner warrants to the Bank that he is the lawful owner of
the Collateral, free of all claims and liens other than the
security interest of the Bank, with full right to deliver, pledge,
assign and transfer the Collateral.
Owner shall deliver all securities received in addition
to or in exchange for and all rights to subscribe to, securities
pledged and deposited hereunder to the Bank immediately upon
receipt without notice or demand by the Bank.
Owner will at any time at the Bank's request, sign
financing statements, trust receipts, security agreements or other
agreements with respect to any of the Collateral.
The Bank shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral if it takes such action
for that purpose as the Owner shall request in writing, that failure of
the Bank to comply with any such request shall not of itself be deemed
a failure to exercise reasonable care, and no failure of the Bank to
protect or preserve any rights with respect to the Collateral against
other parties, or to do any act with respect to the protection or
preservation of the Collateral not so requested by the Owner shall be
deemed a failure to exercise reasonable care in the custody or preservation
of the Collateral.
No renewals or extension of time of payment of the
Obligations at any rate of interest, no release, surrender,
exchange or modification of any collateral securing the Obligations
or this Pledge and Security Agreement, no release (including but
not limited to an adjudication in bankruptcy) of any person
primarily or secondarily liable on the Obligations (including any
maker, endorser, guarantor or surety), no delay in enforcement of
payment of the Obligations or this Pledge and Security Agreement
and no delay, omission or forbearance in exercising any right or
power with respect to the Obligations or this Pledge and Security
Agreement shall affect the liability of any owner or the rights of
the Bank hereunder. Further, the Owner authorizes and ratifies any
payment of any part of the obligations by the Customer, Robert and
Donna Addington, or payment of any liability under this Pledge and
Security Agreement by any owner, to the same extent as if made by
Owner, and agrees, consents to and confirms that any extension of
any Statute of Limitations resulting from such payments and
affecting enforcement or collection of the Obligations of the
Customer, Robert and Donna Addington, or of the liabilities of the
Owner under this Pledge and Security Agreement, shall to the same
degree also extend any Statute of Limitations affecting enforcement
and collection of the liabilities under this Pledge and Security
Agreement as to Owner.
Owner hereby waives any and all notice of the acceptance
of this agreement or maturity of any and all of the Obligations or
of any and all renewals or extensions from time to time of the
Obligations of the Customer, Robert and Donna Addington.
Any notice to Owner shall be deemed sufficient if sent to
Owner to the last known address of Robert and Donna Addington appearing
on the Bank's records. Owner hereby designates Robert and Donna
Addington as agent with whom the Bank may deal solely and in all respects
with regard to the Collateral or the Obligations.
Owner agrees that the death of Owner or either of the Customers,
Robert or Donna Addington, or any other endorser or guarantor shall not
terminate the powers of or authority granted to the Bank hereunder.
Owner agrees to pay all costs of the Bank, including
without limitation reasonable attorney fees, in the collection of
any of the Obligations and the enforcement of any of the Bank's
rights hereunder. If any notification of intended disposition of
any of the Collateral is required by law, such notification shall
be deemed reasonably and properly given if mailed at least ten (10)
days before such disposition, postage prepaid, addressed to Owner
at the address shown below.
No delay or failure by the Bank in the exercise of any
right or remedy shall constitute a waiver thereof, and no single or
partial exercise by the Bank of any right or remedy shall preclude
other or further exercise thereof, or the exercise of any other
right or remedy. If any provision of this Agreement shall be
rendered invalid or unenforceable, such provision shall not affect
the validity and enforceability of other provisions hereof.
The parties agree that the terms and conditions of this
Agreement shall be determined in accordance with the laws of the
Commonwealth of Kentucky, including all matters of construction,
validity and performance.
WITNESS OUR HANDS, this 14th day of November, 1994.
OWNER:
/s/ A. Bruce Addington /s/ Brenda Burchett
A. Bruce Addington Witness
HC 87, box 340
Paintsville, KY. 41240
BANK:
COMMERCIAL BANK OF GRAYSON
By: /s/ Jack W. Strother /s/ Brenda Burchett
Jack W. Strother, Jr., its Witness
President
Exhibit 8
STOCK PLEDGE
The undersigned hereby pledges and grants a security
interest to Pikeville National Bank and Trust Company of P.O. Box
2947, Pikeville, KY 41502-2947 in 200,000 common shares of
ADDINGTON RESOURCES, INC. represented by Certificate Number
AR-3263, AR-3264 to secure an Amended Note in the amount of
$500,000.00 of even date at the Bank and any present or future
advances or any extension or renewal thereof.
The undersigned has or simultaneously with the signing
of this agreement delivered the stock together with stock powers
signed in blank by the undersigned and all other properly signed
instruments that may be needed by the Bank to sell or transfer the
stock.
The undersigned shall do such acts as the Bank may require
from time to time to maintain a valid security interest in the
stock in the Bank, free of all other liens and claims, to secure
payment of the indebtedness to the Bank.
The undersigned owns the stock free of any other claim
and no one else has any ownership or security interest in the
stock.
If any notification of an intended disposition of any of
the stock is required by law, such notification shall be deemed
reasonably and properly given if mailed at least 10 days before the
disposition, postage prepaid, addressed to the undersigned at the
address shown below.
The Bank may dispose of the stock upon any failure to pay
any amount when due and payable or when there is any other default
under this agreement, the note or any other agreement signed in
connection with the indebtedness described above.
The undersigned hereby irrevocably constitute and appoint
the President of Pikeville National Bank and Trust Company as my
attorney in fact to transfer such shares with full power of substitution.
The 23rd of September, 1994.
Box 251 /s/ A. Bruce Addington
Ivel, KY 41642-0251 A. BRUCE ADDINGTON
STATE OF KENTUCKY )
) SS
COUNTY OF PIKE )
The foregoing instrument was acknowledged before me this
23rd day of September, 1994, by A. BRUCE ADDINGTON.
/s/ Stephen Belcher
NOTARY PUBLIC
My Commission Expires: 3/16/93
This Instrument Prepared By:
Exhibit 9
HARRIS 111 WEST MONROE STREET
BANK P. O. BOX 755
CHICAGO, IL 60690
PROMISSORY NOTE
Note Dated
BORROWER(S): Robert Addington July 29, 1994
3513 Briarwood Drive
Catlettsburg, KY 41129 Disbursed on
_________, 19__
The Borrower(s) promises to pay to the order of HARRIS TRUST AND
SAVINGS BANK (the "Bank") at its office in Chicago, Illinois:
1. The principal amount of $3,790,000.00 which is payable
x On May 15, 1995
ON DEMAND
In installments of $____________________ each (plus the
amount of interest accrued) commencing on ___________,
19__ and continuing on the same day of each ___________
until ________________, 19__, when the entire remaining
balance of this loan shall be payable.
2. Interest on the unpaid principal balance, payable monthly and
computed as follows:
x At a variable rate of interest determined by adding .50%
per annum to the rate publicly announced by the Bank
from time to time as its Prime Rate. Any change in the
interest rate on this Note resulting from a change in
such Prime Rate shall be effective on the day of the
relevant change in such Prime Rate. The Prime Rate
reflects market rates of interest as well as other
factors, and it is not necessarily our best or lowest
rate.
At a fixed interest rate of _____% per annum.
Interest shall be computed on the basis of a 360 day year for the
actual number of days elapsed.
Fee: $3,200.00
This note is issued in substitution and replacement for and
evidences the indebtedness formerly evidenced by that certain note
the undersigned dated June 8, 1994, payable to the order of the
Bank in its face principal amount of $3,150,000.00.
General Security
If any Borrower signs a separate Security Agreement, Mortgage or
Trust Deed (collectively a "Security Agreement") in connection with
this Note then this Note shall be secured by the property described
in that separate Security Agreement. In addition, this Note may be
secured by collateral which secures other loans which any Borrower
may have outstanding from the Bank at the present time or in the
future. The Bank shall have the right at any time to setoff the
balance of any deposit account that any Borrower may at any time
maintain with the Bank against any amounts at any time owing under
this Note, whether or not (a) a Default shall have occurred as
described below, or (b) the balance of Loans under this Note is
then due.
Additional Security x Does
THIS PARAGRAPH Does Not APPLY TO THIS NOTE
To secure the payment of this Note and any and all other
liabilities of the Borrower(s) to the Bank, the Borrower(s) grants
a security interest to the Bank in all property of the Borrower(s)
of any kind or description now held by the Bank or at any time
hereafter transferred or delivered to the Bank, or coming into the
possession, control or custody of the Bank, whether expressly as
collateral security or for any other purpose, and all dividends and
distributions on or other rights in connection with any such
property (all of the foregoing property is called the
"Collateral"). The Borrower(s) agrees to deliver to the Bank upon
its request any such dividends, distributions and rights which may
at any time come into the possession of any Borrower. The term
"other liabilities of the Borrower(s) to the Bank" includes all
other obligations and liabilities, whether now existing or
hereafter arising, whether absolute or contingent and whether
several, joint, or joint and several. The Bank shall have the
right to call for additional security satisfactory to the Bank if
the value of the Collateral declines or is deemed by the Bank to be
inadequate or unsatisfactory.
YOU AGREE TO THE TERMS SET FORTH ABOVE AND TO THE ADDITIONAL TERMS
AND PROVISIONS APPEARING ON THE REVERSE SIDE OF THIS NOTE. WE ARE
AUTHORIZED TO DATE THIS NOTE AS OF THE DATE THIS LOAN IS DISBURSED.
Signed by Borrower(s)
x /s/ Robert Addington
Robert Addington
-------------------------"FOR BANK USE ONLY"-----------------------
Loan Renewal Checking Prepared by Officer L.A.D.
Account# of # Acct. # Approval Approval
Officer Division Replacement Letter of
of # Direction
Rec'd G.L. 30, 40, 60, 70
Upstairs at the Harris Private Banking Group
Harris Trust and
Savings Bank
111 West Monroe Street
P. O. Box 755
Chicago, Illinois 60690
Telephone (312) 461-2121
July 29, 1994
Mr. Robert Addington
Addington Resources, Inc.
1500 North Big Run Road
Ashland, Kentucky 41102
Dear Robert:
I am pleased to inform you that Harris Bank (the "Bank") has
approved an increase in our loan to you based on the following
terms and conditions --
Amount: $3,790,000
Due Date: The earlier of either:
a) One year from the closing date, or
b) The sale by you of Consolidated
Technologies Corporation (CTC).
Closing Fee: $3,200 payable at closing
Interest Rate Prime + 1/2%, floating. Interest shall be
payable monthly and computed on the basis of a
year of 360 days for the actual number of days
elapsed.
Prepayment: Allowed at any time without penalty.
Security: This loan will be secured by a first lien on
your right, title, and interest in 600,000
shares of Addington Resources, Inc. common
stock. This security interest will be granted
pursuant to collateral documentation acceptable
to the Bank. The outstanding principal balance
under the subject loan shall at no time exceed
50% of the value of such collateral (all as
determined by the Bank). Should the
outstanding principal balance exceed the 50%
advance rate, you agree within five (5) days to
(i) reduce outstandings, or (ii) pledge
additional shares of Addington Resources, Inc.
such that the 50% advance rate is met.
In addition to the collateral listed above, you
will provide the Bank with a negative pledge
for the Robert Addington properties known as
"Tract A" (33.594 acres) and "Tract B" (4.701
acres), located in Olive Hill, Carter County,
Kentucky. The bank agrees to release such
negative pledge upon receipt by you of a new
lending commitment to be secured by the real
estate listed above.
Purpose: To refinance existing debt with the Banc One
Lexington and finance your continuing equity
investment in CTC.
Credit Agreement: To be executed in a form acceptable to the bank
and customary for such transactions. This
agreement will contain representations,
conditions precedent to funding, covenants,
events of default, reporting requirements and
other provisions customarily required by the
bank.
Conditions Precedent:
Prior to disbursement, the credit agreement and
collateral documentation shall have been
executed and all liens shall have been duly
perfected and constitute first liens.
Miscellaneous: You shall reimburse the Bank for all of its out
of pocket costs (including attorneys' fees,
filing, documentation or background check
charges) incurred in connection with the
transaction. Consummation of the transaction
will be contingent upon the execution of
satisfactory loan documentation and the Bank's
satisfaction with the results of credit and
background checks. Our offer to extend this
facility will expire on August 5, 1994, time
being of the essence, and accordingly if a
signed commitment letter has not been returned
to us by that date, we shall have no further
obligations to you under this letter.
The Harris is extremely pleased to make this facility available to
you, and we look forward to additional opportunities to meet your
financing needs.
Very truly yours,
HARRIS TRUST AND SAVINGS BANK
By:/s/ Martin F. Rosa
Martin F. Rosa, Its Vice President
AGREED TO AND ACCEPTED
By:/s/ Robert Addington
Robert Addington
Exhibit 10
SECURITY AGREEMENT
(Business or Consumer Goods)
NATIONAL CITY BANK Customer No. 07-964-2 Robert Addington
ASHLAND, KENTUCKY Loan No. LC #1248 3513 Briarwood Dr.
1000 CARTER AVENUE Loan Amount $1,600,000 Ashland, KY 41101
ASHLAND, KENTUCKY 41101 Loan Date 2/15/93
Security Agreement Debtor's Name
Date 8/19/93 and Address
Secured Party
This is a Security Agreement between the Debtor and the Secured
party listed above as of the Security Agreement Date listed above.
This Security Agreement secures an obligation in excess of $200.
1. Grant of Security Interest. Debtor hereby grants to Secured
Party a security Party a security interest in all of Debtor's
right, title and interest in and to the following described
property, in any and all additions and accessories thereto, and in
the proceeds of any sale or other disposition of that property, all
of which are collectively referred to as the "Collateral".
VEHICLE, BOAT, APPLIANCE, EQUIPMENT
Motor or
Description Manufacturer Year Make & Model Serial No.
OTHER PROPERTY
ADDINGTON RESOURCES, INC. STOCK CERTIFICATE #AR-3137, 3138, 3139,
400,000 Shares 3140, 3141, 3142, 3143
If checked, the above Collateral is or may become fixtures on
the following described real estate:
and this Security Agreement/Financing Statement is to be filed in
the same office as real estate records. If Debtor does not have an
interest of record in the above real estate, the name of a record
owner is:
2. Obligations Secured. The security interest created hereby
secures payment and performance of (a) the indebtedness of Debtor
evidenced by the note of Debtor in the Loan Amount and on the Loan
Date listed above, all obligations contained therein and any
replacements or substitutions thereof; (b) Debtor's obligations
under this Security Agreement; and (c) any and all indebtedness,
obligation or liability of Debtor to Secured Party, however
evidenced, whether now existing or hereafter arising, direct or
indirect, absolute or contingent, joint or several, and however
owned, held or acquired by Security Party, provided that (i) the
Collateral is not Household Goods as defined in 12 CFR 227.12(d);
(ii) the Collateral will not secure existing indebtedness, other
than the Note described above, that is now used as your principal
dwelling; and (iii) the Collateral will not secure future indebted-
ness if it is used as your principal dwelling at the time of the
future credit extension.
Debtor agrees that a carbon, photographic or other reproduction of
this Security Agreement will be sufficient as a financing statement
for recording purposes.
3. Representations and Warranties. To induce Secured Party to
enter into this Security Agreement, Debtor represents, warrants and
covenants as follows:
(a) If Debtor is a corporation, then it is duly organized
and existing under the laws of the state of its incorporation, and
it has full power and authority to enter into this Security Agree-
ment; and the execution, delivery and performance of this Security
Agreement have been duly authorized.
(b) If Debtor is a partnership, then it has full power and
authority to enter into this Security Agreement, and the execution;
delivery and performance of this Security Agreement have been duly
authorized by all of the partners of this partnership.
(c) If Debtor is an individual, then he has full power and
authority to enter into this Security Agreement.
(d) This Security Agreement has been duly entered into and
delivered and constitutes a legal, valid and binding obligation of
Debtor enforceable in accordance with its terms.
(e) Debtor has good and marketable title to the
Collateral, and the Collateral is not subject to any lien, charge,
encumbrance, claim or security interest except the following:
(f) The Collateral will be kept at the following location:
(Number and Street)
(City) (County) (State)
If no address is here given, then the Collateral will be kept at
the address first above given for Debtor. Debtor will not permit
the Collateral to be kept or stored at any location other than that
shown without the prior written consent of Secured Party.
(g) Debtor's place(s) of business is (are): (If none, so
state)
Debtor will immediately notify Secured Party in writing of any
change in the location of Debtor's residence of place of business.
(h) All financial statements, certificates or other
information concerning Debtor's financial condition, or concerning
the Collateral, have been in all respects accurate, true and
correct.
(i) The Collateral is intended for use primarily for
(check one) Business Use or Consumer Use, and (check one) is
or is not being acquired with the proceeds of one of the
obligations secured by this Security Agreement. If the Collateral
is being acquired with the proceeds of one of the obligations
secured by this Security Agreement, Secured Party may disburse
directly to the seller of the Collateral.
THE PROVISIONS PRINTED ON THE REVERSE SIDE OF THE PAGE ARE A
PART OF THIS AGREEMENT AND ARE HEREBY INCORPORATED BY REFERENCE.
IN WITNESS WHEREOF, Debtor and Secured Party have signed this
Security Agreement on August 19, 1993.
SECURED PARTY: DEBTOR: ROBERT ADDINGTON
(Type Name)
NATIONAL CITY BANK
1000 CARTER AVE. /s/ Robert Addington
ASHLAND, KY 41104
Exhibit 11
SECURITY AGREEMENT
(Collateral Pledge Agreement)
Date March 3, 1995
Debtor ROBERT ADDINGTON SECURED PARTY KENTUCKY BANK & TRUST
BUSINESS P.O. BOX A ADDRESS 900 DIEDERICH BOULEVARD
OR
RESIDENCE
ADDRESS
CITY, OLIVE HILL, KY 41164 CITY, RUSSELL, KY 41169
STATE & STATE &
ZIP CODE ZIP CODE
1. Security Interest and Collateral. To secure (check one):
XX the payment and performance of each and every debt,
liability and obligation of every type and description which Debtor
may now or at any time hereafter owe to Secured Party (whether such
debt, liability or obligation now exists or is hereafter created or
incurred, and whether it is or may be direct or indirect, due or to
become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, or joint, several or joint and several;
all such debts, liabilities and obligations being herein
collectively referred to as the "Obligations"),
___ the debt, liability or obligation of the Debtor to
secured party evidenced by the following:_________________________
____________________________________, and any extensions, renewals
or replacements thereof (herein referred to as the "Obligations"),
Debtor hereby grants Secured Party a security interest (herein
called the "Security Interest") in (check one):
___ all property of any kind now or at any time hereafter
owned by Debtor, or in which Debtor may now or hereafter have an
interest, which may now be or may at any time hereafter come into
the possession or control of Secured Party or into the possession
or control of Secured Party's agents or correspondents, whether
such possession or control is given for collateral purposes or for
safekeeping, together with all rights in connection with such
property (herein called the "Collateral"),
XX the property owned by Debtor and held by Secured Party
that is described as follows: 200,000 SHARES OF ADDINGTON
RESOURCES, INC. COMMON STOCK AND 196 SHARES OF RALEIGH MINE SUPPLY
COMMON STOCK, together with all rights in connection with such
property (herein called the "Collateral").
2. Representations, Warranties and Covenants. Debtor
represents, warrants and covenants that:
(a) Debtor will duly endorse, in blank each and every
instrument constituting Collateral by signing on said instrument or
by signing a separate document of assignment or transfer, if
required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear
of all liens, encumbrances, security interests and restrictions,
except the Security Interest and any restrictive legend appearing
on any instrument constituting Collateral.
(c) Debtor will keep the Collateral free and clear of all
liens, encumbrances and security interests, except the Security
Interest.
(d) Debtor will pay, when due, all taxes and other
governmental charges levied or assessed upon or against any
Collateral.
(e) At any time, upon request by Secured Party, Debtor
will deliver to Secured Party all notices, financial statements,
reports or other communications received by Debtor as an owner or
holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in
pledge as additional Collateral all securities distributed on
account of the Collateral such as stock dividends and securities
resulting from stock splits, reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGE 2
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
ROBERT ADDINGTON
DEBTOR'S NAME
By /s/ Robert Addington
ROBERT ADDINGTON
Title:
By
Title:
Exhibit 12
SECURITY AGREEMENT
(Collateral Pledge Agreement)
Date May 27, 1994
DEBTOR Robert Addington, Inc. SECURED PARTY KENTUCKY FARMERS
Consolidated Technology
Corporation
BUSINESS 3513 Briarwood Drive ADDRESS 2500 Broadway OR
RESIDENCE
ADDRESS
CITY, Catlettsburg, KY 41129 CITY, Catlettsburg, KY 41129
STATE & STATE &
ZIP CODE ZIP CODE
1. Security Interest and Collateral. To secure (check one):
the payment and performance of each and every debt,
liability and obligation of every type and description which Debtor
may now or at any time hereafter owe to Secured Party (whether such
debt, liability or obligation now exists or is hereafter created or
incurred, and whether it is or may be direct or indirect, due or to
become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, or joint, several or joint and several;
all such debts, liabilities and obligations being herein
collectively referred to as the "Obligations"),
XX the debt, liability or obligation of the Debtor to
secured party evidenced by the following: promissory note dated May
27, 1994 in the amount of $600,000.00, and any extensions, renewals
or replacements thereof (herein referred to as the "Obligations"),
Debtor hereby grants Secured Party a security interest (herein
called the "Security Interest") in (check one):
___ all property of any kind now or at any time hereafter
owned by Debtor, or in which Debtor may now or hereafter have an
interest, which may now be or may at any time hereafter come into
the possession or control of Secured Party or into the possession
or control of Secured Party's agents or correspondents, whether
such possession or control is given for collateral purposes or for
safekeeping, together with all rights in connection with such
property (herein called the "Collateral"),
XX the property owned by Debtor and held by Secured Party
that is described as follows: 100,000 shares of stock in Addington
Resources, Inc., together with all rights in connection with such
property (herein called the "Collateral").
2. Representations, Warranties and Covenants. Debtors
represents, warrants and covenants that:
(a) Debtor will duly endorse, in blank each and every
instrument constituting Collateral by signing on said instrument or
by signing a separate document of assignment or transfer, if
required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear
of all liens, encumbrances, security interests and restrictions,
except the Security Interest and any restrictive legend appearing
on any instrument constituting Collateral.
(c) Debtor will keep the Collateral free and clear of all
liens, encumbrances and security interests, except the Security
Interest.
(d) Debtor will pay, when due, all taxes and other
governmental charges levied or assessed upon or against any
Collateral.
(e) At any time, upon request by Secured Party, Debtor
will deliver to Secured Party all notices, financial statements,
reports or other communications received by Debtor as an owner or
holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in
pledge as additional Collateral all securities distributed on
account of the Collateral such as stock dividends and securities
resulting from stock splits, reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGE 2
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
ROBERT ADDINGTON
DEBTOR'S NAME
By
ROBERT ADDINGTON
Title:
By
Title:
ADDENDUM
Come now the undersigned and enter into this Addendum to a
Security Agreement between the parties, dated the 27th day of May,
1994, securing the sum of $600,000.00 owed by the debtor herein to
the secured party.
Notwithstanding any other provision of the Security Agreement
mentioned above, it is agreed that if and when the market value of
the stock as quoted in the Wall Street Journal, which is the
collateral herein, becomes equal to or less than 200% of the
outstanding balance of indebtedness, the Secured Party may require
that the debtor deliver such additional collateral as it, in its
sole discretion, determines advisable as security. If said
additional security collateral has not been delivered to the
Secured Party within 24 hours from date of request, the Secured
Party shall immediately be authorized to sell on open market the
stock securing the obligation. Any such sale transacted through a
member firm of the National Association of Security Dealers shall
be deemed to be commercially reasonable.
SECURED PARTY: DEBTOR:
KENTUCKY FARMERS BANK /s/ Robert Addington
Robert Addington, Chairman BY:
/s/ Robert B. Duggan, Jr.
Robert B. Duggan, Jr.
Assistant Vice President
& In-House Counsel
Exhibit 13
SECURITY AGREEMENT
(Collateral Pledge Agreement)
Date November 17, 1993
DEBTOR CONSOLIDATED SECURED FIRST NATIONAL
TECHNOLOGY PARTY BANK OF GRAYSON
CORPORATION
BUSINESS P.O. BOX A ADDRESS 102 E. MAIN ST. OR
P.O. BOX 67
RESIDENCE
ADDRESS
CITY, OLIVE HILL, KY 4116 CITY, GRAYSON, KY 41143
STATE & STATE &
ZIP CODE ZIP CODE
1. Security Interest and Collateral. To secure (check one):
XX the payment and performance of each and every debt,
liability and obligation of every type and description which Debtor
may now or at any time hereafter owe to Secured Party (whether such
debt, liability or obligation now exists or is hereafter created or
incurred, and whether it is or may be direct or indirect, due or to
become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, or joint, several or joint and several;
all such debts, liabilities and obligations being herein
collectively referred to as the "Obligations"),
the debt, liability or obligation of the Debtor to
secured party evidenced by the following:
, and any extensions, renewals
or replacements thereof (herein referred to as the "Obligations").
Debtor hereby grants Secured Party a security interest (herein
called the "Security Interest") in (check one):
___ all property of any kind now or at any time hereafter
owned by Debtor, or in which Debtor may now or hereafter have an
interest, which may now be or may at any time hereafter come into
the possession or control of Secured Party or into the possession
or control of Secured Party's agents or correspondents, whether
such possession or control is given for collateral purposes or for
safekeeping, together with all rights in connection with such
property (herein called the "Collateral"),
XX the property owned by Debtor and held by Secured Party
that is described as follows: 100,000 SHARES OF COMMON STOCK IN
ADDINGTON RESOURCES, INC., together with all rights in connection
with such property (herein called the "Collateral").
2. Representations, Warranties and Covenants. Debtor
represents, warrants and covenants that:
(a) Debtor will duly endorse, in blank, each and every
instrument constituting Collateral by signing on said instrument or
by signing a separate document of assignment or transfer, if
required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear
of all liens, encumbrances, security interests and restrictions,
except the Security Interest and any restrictive legend appearing
on any instrument constituting Collateral.
(c) Debtor will keep the Collateral free and clear of all
liens, encumbrances and security interests, except the Security
Interest.
(d) Debtor will pay, when due, all taxes and other
governmental charges levied or assessed upon or against any
Collateral.
(e) At any time, upon request by Secured Party, Debtor
will deliver to Secured Party all notices, financial statements,
reports or other communications received by Debtor as an owner or
holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in
pledge as additional Collateral all securities distributed on
account of the Collateral such as stock dividends and securities
resulting from stock splits, reorganizations and recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGE 2
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
CONSOLIDATED TECHNOLOGY CORPORATION
DEBTOR'S NAME
By /s/ Robert Addington
ROBERT R. ADDINGTON
Title: CHAIRMAN & CEO
By /s/ Robert Addington
ROBERT R. ADDINGTON
Title: INDIVIDUALLY
Third Party Pledge Agreement
Date November 17, 1993
Pledgor ROBERT R ADDINGTON SECURED FIRST NATIONAL BANK OF
PARTY GRAYSON
BUSINESS OR ADDRESS 102 E. MAIN STREET
RESIDENCE 3513 BRIARWOOD DRIVE PO BOX 67
ADDRESS
CITY, CITY,
STATE & CATLETTSBURG, KY STATE &
ZIP CODE 41129 ZIP CODE GRAYSON, KY 41143
1. Security Interest and Collateral. To secure (check one):
XX the payment and performance of each and every debt,
liability and obligation of every type and description which
CONSOLIDATED TECHNOLOGY CORPORATION ("Debtor") may now or at any
time hereafter owe to Secured Party (whether such debt, liability
or obligation now exists or is hereafter created or incurred, and
whether it is or may be direct or indirect, due or to become due,
absolute or contingent, primary or secondary, liquidated or
unliquidated, or joint, several or joint and several; all such
debts, liabilities and obligations being herein collectively
referred to as the "Obligations"),
___ the debt, liability or obligation of ________________
("Debtor") to Secured Party evidenced by or arising under the
following: , and any
extensions, renewals or replacements thereof (herein referred to as
the "Obligations"),
Pledgor hereby grants Secured Party a security interest (herein
called the "Security Interest") in (check one):
___ all property of any kind now or at any time hereafter
owned by Pledgor, or in which Pledgor may now or hereafter have an
interest, which may now be or may at any time hereafter come into
the possession or control of Secured Party or into the possession
or control of Secured Party's agents or correspondents, whether
such possession or control is given for collateral purposes or for
safekeeping, together with all proceeds of and other rights in
connection with such property (herein called the "Collateral").
XX the property owned by Pledgor and held by Secured Party
that is described as follows: 100,000 SHARES OF ADDINGTON
RESOURCES, INC. STOCK CERT. #AR-1432, together with all rights in
connection with that property (herein called the "Collateral").
2. Representations, Warranties and Covenants. Pledgor
represents, warrants and covenants that:
(a) Pledgor will duly endorse, in blank, each and every
instrument constituting Collateral by signing on said instrument or
by signing a separate document of assignment or transfer, if
required by Secured Party.
(b) Pledgor is the owner of the Collateral free and clear
of all liens, encumbrances, security interests and restrictions,
except the Security Interest and any restrictive legend appearing
on any instrument constituting Collateral.
(c) Pledgor will keep the Collateral free and clear of all
liens, encumbrances and security interests, except the Security
Interest.
(d) Pledgor will pay, when due, all taxes and other
governmental charges levied or assessed upon or against any
Collateral.
(e) At any time, upon request by Secured Party, Pledgor
will deliver to Secured Party all notices, financial statements,
reports or other communications received by Pledgor as an owner or
holder of the Collateral.
(f) Pledgor will upon receipt deliver to Secured Party in
pledge as additional Collateral all securities distributed on
account of the Collateral such as stock dividends and securities
resulting from stock splits, reorganizations and recapitalizations.
3. Rights of Secured Party. Pledgor agrees that Secured Party
may at any time, whether before or after the occurrence of an Event
of Default and without notice or demand of any kind, (i) notify the
obligor on or issuer of any Collateral to make payment to Secured
Party of any amounts due or distributable thereon, (ii) in
Pledgor's name of Secured Party's name enforce collection of any
Collateral by suit or otherwise, or surrender, release or exchange
all or any part of it, or compromise, extend or renew for any
period any obligation evidenced by the Collateral, (iii) receive
all proceeds of the Collateral, and (iv) hold any increase or
profits received from the Collateral as additional security for the
Obligations, except that any money received from the Collateral
shall, at Secured Party's option, be applied in reduction of the
Obligations, in such order of application as Secured Party may
determine, or be remitted to Debtor.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGE 2
HEREOF, ALL OF WHICH ARE MADE A PART HEREOF.
ROBERT R. ADDINGTON
PLEDGOR'S NAME
By /s/ Robert Addington
ROBERT R. ADDINGTON
Title:
By
Title:
Exhibit 14
PLEDGE AGREEMENT FOR LENDING ON
MERRILL LYNCH SHELF-REGISTERED CONTROL OR
RESTRICTED SECURITIES
In consideration of the loan(s) made by Merrill Lynch, Pierce,
Fenner & Smith Incorporated (Pledgee) to the undersigned (Pled-
gor), it is agreed as follows:
PLEDGE
1. the Pledgor agrees to pledge the securities hereinafter
mentioned to the Pledgee as security for the repayment of
indebtedness of the Pledgor to the Pledgee.
INTEREST RATE
2. The Pledgor acknowledges and understands that the interest
rates charged pursuant to this Pledge Agreement are the same rates
charged by the Pledgee on its Investor CreditLineSM
(margin) accounts.
MAINTENANCE REQUIREMENTS
3. The Pledgor acknowledges and understands that the minimum
maintenance imposed by the Pledgee pursuant to the applicable rules
of the New York Stock Exchange for the securities pledged pursuant
to paragraph 1 is currently forty percent (40%) and that the
Pledgee may impose higher maintenance requirements as the result of
the Pledgee's internal policy on concentrated positions or for
other reasons.
NO SHARES PLEDGED ELSEWHERE
4. The Pledgor further represents that there are no shares of the
Corporation that the Pledgor, his spouse, or any relative of either
living in the Pledgor's household own, which are currently pledged
as security for the repayment of a loan elsewhere, and that he will
not pledge any shares of the Corporation as security for the
repayment of a loan elsewhere without the express written consent
of the Pledgee.
REDUCED LINE OF CREDIT
5. In the event of the sale of any class of security of the
Corporation by or on behalf of the Pledgor, the Pledgor agrees and
acknowledges that the Pledgee may reduce or cancel entirely the
line of credit given pursuant to this Pledge Agreement in the same
proportion as the number of shares sold bears to the number of
shares carried in all accounts with the Pledgee to secure the line
of credit immediately prior to such sale. However, the preceding
sentence notwithstanding, if the applicable maintenance
requirements would preclude such a line of credit after such sale,
the line of credit shall be reduced below the maximum line of
credit permitted by such maintenance requirements.
LIQUIDATION OF PLEDGED SECURITIES
6. The Pledgor agrees that if his debit balance related to these
securities pledged herein exceeds the loan made by the Pledgee, a
maintenance call will be issued and the Pledgor must liquidate a
sufficient number of shares of said security to satisfy the call or
deposit cash or non-control non-restricted eligible marginable
securities to satisfy the maintenance call. The Pledgor agrees and
acknowledges that the Pledgee shall be entitled to take market
action against any shares held in the Pledgor's account in order to
satisfy such maintenance call, and where appropriate, the Pledgee
may execute and file the requisite number of Forms 144 on behalf of
the Pledgor.
FAMILIARITY WITH RULES 144 AND 145
7. The Pledgor warrants that he is familiar with Securities and
Exchange Commission Rules 144 and 145 promulgated under the
Securities Act of 1933.
PAYMENT OF INDEBTEDNESS UPON DEMAND
8. The Pledgor shall at all times be liable for the payment upon
demand of the principal and interest on this loan and of any debit
balance or other obligations owing in any of the accounts of the
Pledgor with the Pledgee and the Pledgor shall be liable to the
Pledgee for any deficiency remaining in any such accounts in the
event of the liquidation thereof, in whole or in part, by the
Pledgee or by the Pledgor, and the Pledgor agrees to indemnify and
hold harmless the Pledgee for all costs and liabilities to third
parties as the result of the transfer or attempted transfer,
liquidation or attempted liquidation of any securities pledged
hereby; and the Pledgor shall make payment of such loan, obligations
and indebtedness upon demand.
AGREEMENT TO ARBITRATE CONTROVERSIES
9. * Arbitration is final and binding on the parties.
* The parties are waiving their right to seek remedies in court,
including the right to a jury trial.
* Pre-arbitration discovery is generally more limited than
and different from court proceedings.
* The arbitrators' award is not required to include judicial
findings or legal reasoning and any party's right to appeal
or to seek modification of rulings by the arbitrators is
strictly limited.
* The panel of arbitrators will typically include a minority
of arbitrators who are affiliated with the securities industry.
The Pledgor agrees that all controversies which may arise between
the Pledgor and the Pledgee, including, but not limited to, those
involving any transaction or the construction, performance or
breach of this or any other agreement between the Pledgor and the
Pledgee, whether entered into prior, on or subsequent to the date
hereof, shall be determined by arbitration.
Any arbitration under this agreement shall be conducted only before
the New York Stock Exchange, Inc., the American Stock Exchange,
Inc., or arbitration facility provided by any other exchange of
which the Pledgee is a member, the National Association of Securities
Dealers, Inc., or the Municipal Securities Rulemaking Board, and in
accordance with its arbitration rules then in force.
The Pledgor may elect in the first instance whether arbitration
shall be conducted before the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., or other exchange of which the
Pledgee is a member, the National Association of Securities
Dealers, Inc., or the Municipal Securities Rulemaking Board, but if
the Pledgeor fails to make such election, by registered letter or
telegram addressed to the Pledgee's office where the Pledgor's
account is maintained (or such other address that the Pledgee may
advise the Pledgor of in writing from time to time) before the
expiration of five days after receipt of a written request from the
Pledgee to make such election, then the Pledgee may make such
election. Judgment upon the award of the arbitration may be
entered in court, state or federal, having jurisdiction.
LOAN AMOUNT AND RESTRICTIONS
10. The loan amount will be up to $900,000, which sum is subject
to (i) the then-current market value of the collateral and (ii) the
loan and equity maintenance requirements of applicable regulations
and rules, as well as the Pledgee's own requirements.
DELIVERY OF THE SECURITIES PLEDGED
11. The Pledgor herewith delivers to the Pledgee 100,000 shares of
the Common stock of Addington (the "Corporation") represented by
certificate(s) AR 2155 duly endorsed in blank, or with stock power
attached and does hereby assign such securities to the Pledgee.
MANNER IN WHICH THE PLEDGED SECURITIES WERE OBTAINED
12. The Pledgor represents that the Pledgor obtained the securities
pledged herein on by a private transaction directly
from the Corporation (indicate nature of acquisition and from whom
acquired, for example, on the open market, by exercise of stock
option, in a private transaction directly from the Corporation, etc.)
FULLY PAID PLEDGED SECURITIES
13. The Pledgor represents that he fully paid for the securities
pledged herein on pd in full (if the securities pledged
herein have not yet been fully paid for, so state and provide
applicable details). The Pledgor further represents that he has
not had a short position in, or any put or other option to
dispose of any securities of the Corporation within the twenty-four
(24) preceding months nor will the Pledgor enter into a short
position or obtain any put or other option to dispose of any such
securities without the express written permission of the Pledgee.
PRIOR SALES BY PARTIES OTHER THAN PLEDGOR
14. The Pledgor represents to the Pledgee that he has sold 0
shares of the Corporation during the preceding three months and has
sold 0 convertible securities which are convertible into the
shares of the Corporation during the preceding three months.
Further, the Pledgor represents that he has written 0 call
options against the shares of the Corporation which have been
exercised nor have expired. The Pledgor also represents to the
Pledgee that the Pledgor has no sale orders open with any broker to
sell the shares of the Corporation or to sell convertible securities
which are convertible into the shares of the Corporation and will not
place any such sale orders. In addition, the Pledgor represents to the
Pledgee that the Pledgor will not have at any one time more outstanding
call options written against shares of the Corporation than the number
stated in the second sentence of this Paragraph. Lastly, the Pledgor
represents to the Pledgee that the Pledgor will not exercise any exchange
traded put options relating to the shares of the Corporation.
PRIOR SALES BY PARTIES OTHER THAN PLEDGOR
15. The Pledgor represents that to the best of his knowledge, the
following persons have not sold (have sold 0 ) shares of the
Corporation, or convertible securities which are convertible into
the shares of the Corporation, within the preceding three months:
(1) his spouse; (2) any relative of him or his spouse residing in
his household; (3) any trust of which he or his spouse, or any
relative of him or his spouse residing in his household, acts as
trustee; (4) any estate of which he or his spouse, or any relative
of him or his spouse residing in his household, acts as executor,
administrator, trustee, guardian, conservator or acts in any
similar capacity; (5) any trust in which he or his spouse, or any
relative of him or his spouse residing in his household, has a ten
percent (10%) or greater beneficial interest; (6) any corporation,
partnership or other entity in which he or his spouse, or any
relative of him or his spouse residing in his household, has a ten
percent (10%) or greater equity interest; (7) any of his donees who
have been given shares of the Corporation within the last two
years; (8) any of his donees (including settlors if the Pledgor is
a trust) if the shares of the Corporation were given by any donor
within the last two years; (9) any of his pledgees, unless the
obligation secured by the pledge has been in default for more than
two years; (10) any of his Pledgors, unless the obligation secured
by the pledge has been in default for more than two years; (11) any
person with whom he is acting in concert.
NUMBER OF SHARES OWNED BY PLEDGOR
16. The Pledgor warrants that the total number of shares that he
owns of this class of maturity of the Corporation hereby being
pledged is 700,000. The Pledgor further warrants that the total
number of all other classes of the securities of the Corporation
owned by the Pledgor is (state each series owned and the
number owned).
MISCELLANEOUS
17. The headings used herein are for descriptive purposes and
shall not be deemed to modify or qualify any of the rights or
obligations set forth in each such provision. Whenever the term
"her" or "his" is used, it shall refer to the undersigned
Pledgor, and if there is more than one person signing below as
Pledgor, their undertakings shall be joint and several. Pledgor
represents and warrants to Pledgee that he has executed a "Client
Agreement" for the Investor CreditLineSM (margin) service and
received and read the disclosures relating thereto, which
disclosures also apply to this account.
GOVERNING LAW
18. This agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to its
choice of law or conflict of laws principles.
BY SIGNING BELOW, I ACKNOWLEDGE (1) THAT, IN ACCORDANCE WITH
PARAGRAPH 9 ON FIRST PAGE OF THIS AGREEMENT, I AM AGREEING IN
ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH MAY ARISE WITH
MERRILL LYNCH; AND (2) RECEIPT OF A COPY OF THIS AGREEMENT.
/s/ Robert Addington
Signature of Pledgor Signature of Pledgor (if Joint Account)
26B-10727
Date Account Number
Accepted: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
(PLEDGEE)
By: /s/ Thomas Wille
Title: Resident Manager Date: 2/17/92
(Resident Vice President/Resident Manager)
