SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
ADDINGTON RESOURCES, INC.
(Name of Issuer)
COMMON STOCK, $1.00 PAR VALUE
(Title of Class of Securities)
006516 108
(CUSIP Number)
Larry 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)
August 4, 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. / /
<PAGE>
CUSIP NO. - 006516 10 8
(1) Name of reporting person. . . . . . . Larry 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:<F1>
(7) Sole voting power. . . . . . . . 3,913,324 <F2>
(8) Shared voting power. . . . . . . 0
(9) Sole dispositive power . . . . . 3,913,324 <F2>
(10) Shared dispositive power . . . . 0
(11) Aggregate amount beneficially
owned by each reporting person . . . .3,913,324 <F1><F2>
(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) . . . . . . . . . 24.6% <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 Robert Addington and Bruce 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. Robert Addington and Bruce
Addington beneficially own 2,721,003 shares (17.1%), and Robert Addington,
Bruce Addington and the reporting person together own 6,634,327 shares
(41.7%) in the aggregate.
<F2> See responses to Items 4, 5 and 6 concerning a Stock Purchase
Agreement, dated August 4, 1995, that contains, among other things, an
agreement to sell shares and contractual restrictions on voting and
dispositive power.
<PAGE>
Reference is hereby made to that certain Schedule 13D dated January 29,
1988, as amended (the "Schedule"), filed by Larry Addington with respect to
the common stock, $1.00 par value (the "Common Stock"), of Addington
Resources, Inc., a Delaware corporation (the "Issuer"). The purpose of
this amendment is to amend and restate, in their entirety, Items 2, 4, 5,
6 and 7 of the Schedule, to reflect pledges of additional shares by Bruce
Addington, changes in the composition of the board of directors of the
Issuer, the sale of shares, and proposed sale of shares, of Common Stock by
Larry Addington, Robert Addington and Bruce Addington, and agreements
reached by them and HPB Associates, L.P. with respect to, among other
things, their voting and future disposition of shares of Common Stock.
Items 2, 4, 5, 6 and 7 are amended and restated as follows.
Item 1. Security and Issuer.
Not amended.
Item 2. Identity and Background.
(a) The person filing this statement is Larry Addington. This
statement describes relationships among Larry Addington, Robert Addington,
and Bruce 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) Larry Addington's Principal Occupation: Chief Executive
Officer and Director of Issuer.
(ii) Bruce Addington's Principal Occupation: Vice President-
Operations and Director of the Issuer.
(iii) Robert Addington's Principal Occupation: Vice President
Operations and Engineering of the 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.
Not amended.
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.
On or about March 1, 1995, the Addington Brothers formulated and
presented to the Issuer a proposal to spin-off the Issuer's environmental
and non-environmental businesses, with the effect that the non-environmental
businesses (consisting of the Issuer's coal and gold mining operations, its
mining equipment manufacturing and licensing unit, citrus operations and
smaller operations) would be spun-off to the Addington Brothers and the
Issuer's environmental businesses would be spun-off to, or
retained by, the Issuer's shareholders, other than the Addington
Brothers. Following negotiations with a special committee of the board of
directors of the Issuer, the Addington Brothers, on July 11, 1995, withdrew
the spin-off proposal.
On August 4, 1995, the Addington Brothers entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") with HPB Associates,
L.P. ("HPB"), pursuant to which the Addington Brothers agreed, among other
things, to sell an aggregate of 2,000,000 shares of Common Stock to HPB at
a price of $9.00 per share, subject to a price adjustment; to cause the
eight member board of directors of the Issuer to consist of four persons
acceptable to HPB, with Howard P. Berkowitz, an affiliate of HPB, appointed
Chairman of the Board, and to appoint an additional member to the board of
directors acceptable to HPB upon the filing with the Securities and
Exchange Commission and dissemination to shareholders of the Issuer of the
information required by Rule 14f-1 of Regulation 14A promulgated under the
Securities Exchange Act of 1934; to not seek to increase their
representation on the board of directors of the Issuer to more than three
persons (it being agreed that Robert Addington and Bruce Addington would
not stand for re-election to the board), and to vote their shares in favor
of management's slate of nominees in all elections of directors during the
term of the Stock Purchase Agreement so long as the management slate
includes three designees of the Addington Brothers (subject to adjustment
if the size of the board is increased or if the Addington Brothers dispose
of specified numbers of shares of Common Stock); and to not otherwise
dispose or transfer shares of Common Stock except as permitted by Section
6.02(d) of the agreement. The Stock Purchase Agreement will automatically
terminate on August 31, 1997, if not sooner terminated to the extent
permitted by Section 7.01 thereof. A copy of the Stock Purchase Agreement
is attached as Exhibit 17 and is incorporated herein by reference.
On August 4, 1995, the board of directors of the Issuer adopted a
resolution approving HPB's proposed purchase of shares of Common Stock
pursuant to the Stock Purchase Agreement, for purposes of Section 203 of
the General Corporation Law of the State of Delaware; Robert Addington
resigned as a director of the Issuer, and Howard P. Berkowitz, Richard
Ravitch, James Grosfeld and Harold Blumenstein were added as directors of
the Issuer; Larry Addington resigned as Chairman of the Board and Howard
Berkowitz was appointed Chairman of the Board of the Issuer; and the
Initial Closing (as defined in the Stock Purchase Agreement) was held. See
the response to Item 5 concerning the number of shares of Common Stock sold
by the Addington Brothers at the Initial Closing. The closing of the sale
of the remaining shares of Common Stock to be sold by the Addington
Brothers under the Stock Purchase Agreement is subject to, among other
things, the filing of the notice required and the expiration of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
To the knowledge of the reporting person, as of August 4, 1995, the
Addington Brothers and HPB owned in the aggregate 8,166,615 shares (51.3%)
of the outstanding shares of Common Stock and, by virtue of the agreements
contained in Sections 6.02 and 6.03 of the Stock Purchase Agreement, will
represent sufficient voting power to assure the election of management's
slate of nominees in the election of directors of the Issuer.
Each of the Addington Brothers is presently an executive officer
and/or director of the Issuer and in these capacities has the ability to
influence the Issuer's activities and pursue strategic opportunities
available to the Issuer. Larry Addington is interested in purchasing
assets of the Issuer not used in its environmental businesses and might
pursue such purchases to the extent such assets are offered for sale.
By letter dated August 4, 1995, a copy of which is attached as
Exhibit 18 to this Schedule and incorporated herein by reference,
the Addington Brothers granted the Issuer and its subsidiaries the
right, exercisable on or before September 29, 1995, to either (i)
transfer all of their right, title and interest in and to the
Tennessee Mining Company, Inc. (which at such time shall own the
Tennessee coal properties currently owned by it plus the contract
with Tennessee Valley Authority (the "TVA")) to the Addington
Brothers or (ii) to assign to a corporation formed by the Addington
Brothers (and such corporation shall assume the liabilities with
respect to) the Tennessee coal properties and the TVA contract.
The consideration for such transfer or assignment would consist of
the payment to the Issuer, by Tennessee Mining Company, Inc. or the
corporation formed by the Addington Brothers, of $1.00 for each ton
of coal delivered to the TVA under the TVA contract; provided that
the maximum royalty payable to the Issuer shall not exceed $12
million.
Except as stated above, neither Larry Addington nor, to the
best of his knowledge, Robert Addington nor Bruce Addington, has
any present 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. Larry 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 as of the
close of business on August 4, 1995. Each of the Addington Brothers has
sole voting and dispositive power over the shares beneficially owned by him
subject to the terms and conditions of the Stock Purchase Agreement, dated
August 4, 1995, between HPB and the Addington Brothers, a copy of which is
attached as Exhibit 17 to this Schedule and is incorporated herein by
reference. See the response to Item 6 concerning security interests
granted in certain of the shares and Items 4 and 6 concerning the
restrictions on voting and dispositive power contained in the Stock
Purchase Agreement.
<TABLE>
<CAPTION>
Name Number (and %) of shares of Common Stock
<S> <C>
Larry Addington 3,913,324 shares (24.6%) <F1>
Robert Addington 1,320,000 shares (8.3%) <F2>
Bruce Addington 1,401,003 SHARES (8.8%) <F3>
TOTAL 6,634,327 shares (41.7%)
<F1>Of which 800,000 shares (5% of those outstanding) are to
be sold to HPB subject to the terms and conditions of
the Stock Purchase Agreement.
<F2>Of which 300,000 shares (1.9% of those outstanding) are to
be sold to HPB subject to the terms and conditions of the
Stock Purchase Agreement.
<F3>Of which 322,997 shares (2% of those outstanding) are
to be sold to HPB subject to the terms and conditions of
the Stock Purchase Agreement.
</TABLE>
(c) On August 4, 1995, the Addington Brothers sold an aggregate of
577,003 shares of Common Stock to HPB in a privately negotiated transaction
pursuant to the Stock Purchase Agreement, at a price per share of $9.00
cash, subject to adjustment. Pursuant to Section 1.02(d) of the Stock
Purchase Agreement, the purchase price of shares sold will be increased by
$1.00 per share to the extent that, during the term of the Stock Purchase
Agreement, such shares are resold by HPB or its affiliates, general or
limited partners at a price equal to or in excess of $25.00 per share. The
number of shares of Common Stock sold by each of the Addington Brothers on
August 4, 1995 were: Larry Addington, 200,000 shares; Robert Addington,
200,000 shares; and Bruce Addington, 177,003 shares.
Otherwise, none of the Addington Brothers have effected
transactions in the Issuer's Common Stock during the past sixty days or
since the most recent filing of an amendment to this Schedule.
(d) Pursuant to loans made to Robert Addington not in connection with
the acquisition of the Common Stock, Larry Addington has pledged a total of
200,000 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) The Stock Purchase Agreement, dated August 4, 1995, among the
Addington Brothers and HPB contains agreements concerning the disposition
of shares of Common Stock owned by the Addington Brothers and the voting of
shares of Common Stock in the election of directors of the Issuer during
the term of that agreement. The Stock Purchase Agreement is attached
hereto as Exhibit 17 and is incorporated by reference herein.
(ii) The following describes the currently outstanding pledges of
shares by Larry Addington. Larry Addington pledged 67,000 shares of Common
Stock, on March 3, 1995, to a bank to secure a loan from the bank to his
brother, Robert Addington; 33,000 shares of Common stock to a bank to
secure a loan from a bank to his brother, Robert Addington, on November 23,
1994; and 100,000 shares of Common Stock to secure a loan entered into with
a bank by his brother, Robert Addington, on May 19, 1994.
(iii) The following describes the currently outstanding pledges of
shares by Bruce Addington. Bruce Addington pledged 200,000 shares of
Common Stock to a bank to secure a loan by the bank to his brother Robert
Addington entered into as of November 14, 1994; 200,000 shares of Common
Stock to a bank to secure a loan, on September 23, 1994; 200,000 shares to
a broker pursuant to a pledge agreement dated June 26, 1995; and 100,000
shares to a broker pursuant to a pledge agreement.
(iv) The following describes the currently outstanding pledges of
shares by Robert Addington. Robert Addington has pledged 600,000 shares of
Common Stock pursuant to a security agreement entered into with a bank on
July 29, 1994; 400,000 shares of Common Stock pursuant to a security
agreement entered into with a bank on August 19, 1993; 100,000 shares of
Common Stock to a bank pursuant to a security agreement entered into on
March 3, 1995; 100,000 shares of Common Stock to a bank pursuant to a
security agreement entered into on November 17, 1993; and 100,000 shares of
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.
The following lists exhibits to this Schedule which have been
previously filed:
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 and Trust of Greenup County
Exhibit 4 -- Agreement, dated November 23, 1994, by Larry Addington
pledging shares to Kentucky Farmers Bank
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 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
The following lists the exhibits to this Schedule that are filed
herewith:
Exhibit 15 -- Pledge Agreement, dated June 26, 1995, between Bruce
Addington and Prudential Securities
Exhibit 16 -- Control, Restricted, or Shelf Registered Loan
Application between Bruce Addington and Prudential Securities
Exhibit 17 -- Stock Purchase Agreement, dated August 4, 1995, among
HPB Associates, L.P. and Larry Addington, Robert Addington and Bruce
Addington.
Exhibit 18 -- Letter agreement, dated August 4, 1995, between
Addington Resources, Inc. and Larry Addington, Robert Addington and
Bruce Addington.
<PAGE>
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/ Larry Addington
Larry Addington
Date: August 9, 1995
EXHIBIT 15
PLEDGE AGREEMENT PRUDENTIAL SECURITIES INCORPORATED
In consideration of the loan made by Prudential Securities Incorporated
("Pledgee") to the Pledgor in the sum of $_________ and in consideration of
the Pledgee accepting and carrying for the Pledgor one or more accounts, it
is agreed as follows:
1. A Prudential Securities form of customer agreement between the Pledgor
and the Pledgee dated ___________ and executed by the Pledgor is hereby
incorporated by reference as part of this agreement, except that in the
event of conflict the express terms of this agreement shall prevail over
any contrary terms in the customer agreement.
2. The Pledgor agrees to pledge the securities hereinafter mentioned to
the Pledgee as security for the repayment of the aforementioned loan.
3. The Pledgor (herewith delivers) (has already delivered) to the Pledgee
200,000 shares of stock of Addington Resources (the "Issuer") duly endorsed
or with (an) executed stock power(s) attached (the "Securities"). In the
event the Securities are currently in the name of the Pledgor, the Pledgor
does hereby appoint the Pledgee his true and lawful attorney for him and in
his name, place and stead to cause the Securities to be transferred on the
books of the said Issuer to the name of the Pledgee.
4. The Pledgor acknowledges and understands that the minimum margin
maintenance imposed by the Pledgee in accordance with the applicable rules
of the New York Stock Exchange for the Securities pledged pursuant to
paragraph 2 is forty percent (40%) and that the Pledgee may impose higher
margin maintenance requirements as the result of the Pledgee's internal
policy or the rules of the New York Stock Exchange on concentrated
positions or for other reasons.
5. The Pledgor represents that he obtained the Securities pledged herein
on 6/87 INITIAL INVESTOR CASH by (indicate when the securities were
acquired, the nature of acquisition and from whom acquired, for example:
on the open market, by exercise of stock option, in a private transaction
from the company, etc.).
6. The Pledgor represents that he fully paid for the Securities pledged
herein on 6/87.
7. The Pledgor represents that the combined holdings of he, his spouse,
or any relative of either living in the Pledgor's household or any trust,
estate, corporation or any other organization in which he or any of the
persons referred to above own ten or more percent, or as to which he or any
such person serves as a trustee, executor, member of the board of directors
or in any similar capacity, totals 1,578,006 shares of the Issuer. In the
event the Pledgor is not depositing the total amount of shares as set forth
above with the Pledgee, Pledgor hereby represents that said shares are:
(Indicated the physical location of said shares in the space provided
below, and if any of said shares are being used as collateral or are
otherwise encumbered, please describe such encumbrance below):
177,003 collateral at National City Bank, Ashland, KY; 200,000 Commercial
Bank, Grayson, KY; 200,000 Pikeville National Bank, Pikeville, KY; 300,000
at Prudential Securities; 104,000 in my possession; 597,003 in my account
at Prudential Securities not pledged held in account.
8. [Deleted]
9. The Pledgor represents that he (has not sold) (has sold) HAS NOT
(cross out inapplicable language) shares of the Issuer during the preceding
three months and that to the best of his knowledge the persons referred to
in paragraph 7 above, or anyone deemed to be acting in concert with him (has
not sold) (has sold) HAS NOT (cross out inapplicable language) shares of
the Issuer in the past three months.
10. The Pledgor represents that neither he nor any of the persons referred
to in paragraphs 7 and 9 above will sell, transfer or otherwise dispose of
any shares of the Issuer without giving prior written notice to the Pledgee
and that he and/or such persons will give immediate written notice to the
Pledgee in the event that any additional shares of the Issuer are acquired
during the term of the pledge.
11. The Pledgor warrants that he is familiar with Rules 14A and 14B
promulgated under the Securities Act of 1933.
12. The Pledgor represents that the information furnished above is correct
and understands that the Pledgee is relying upon it in making the
aforementioned loan. The Pledgor further represents that he will
immediately notify the Pledgee in writing of any changes in any of the
information provided herein.
13. The Pledgor hereby indemnifies the Pledgee for any loss it may incur
as a result of making the aforementioned loan.
/S/ A. BRUCE ADDINGTON
Signature of Pledgor
A. BRUCE ADDINGTON
Printed Name of Pledgor
JFG - 012334-2-30
Account Number of Pledgor
6-26-95
Date
EXHIBIT 16
Control, Restricted, or Shelf Registered Loan Application
Client Name: Account No.:
A. Bruce Addington 1039-7500
Financial Consultant: Loan Amount:
Michael Raissis
Collateral
Name of Issuer's General Counsel: Phone Number:
Michael Johnson 606-329-2660
Are shares control <square>, restricted 144 <square>, restricted 145
<square>, or shelf registered <square>.
Client's affiliation with corporation:
Corporate Officer & Director
Date of acquisition of shares: July 87
Nature of transaction through which shares were acquired: I.P.O.
Total number of shares owned including shares owned by "person" as defined
in Rule 144: 1,578,006
Will all shares owned be held by us? No
If not, how many shares will be pledged? 100,000
Are any shares not held with us pledged against other loans? yes
If so, how many shares? 400,000
What are the amounts of these loans? $600,000 and $900,000
Number of shares sold within the last 3 months by all "persons" as defined
in Rule 144 whose sales are required to be taken into consideration: 0
By signing this agreement, I consent to the following amendments to the
Wheat First Butcher Singer standard margin agreement.
I agree that all securities I deposit in my margin account as collateral
for any margin loan that I may obtain from you are registered for sale (the
"Transferable Securities), or are available for sale pursuant to an
exemption from registration under any applicable federal or state
securities laws or otherwise ("Saleable Securities"). Any securities not
available for sale pursuant to an exemption from registration or otherwise
are referred to as "Nonsaleable Securities". If I deposit Nonsaleable
Securities in violation of this Agreement and I do not upon demand
immediately replace such Nonsaleable Securities, I agree that I will be in
default under this Agreement and that, at your election, you may take any
or all of the following actions:
(1) Liquidate any Transferable Securities or Saleable Securities held in
my margin account, or any other account with you in which I have an
interest, to satisfy the debit balance secured by the Nonsaleable
Securities;
(2) Set off against the debit balance secured by such margin loan any
amounts held in any other accounts I maintain with you;
(3) Until such time as the default is cured and in substitution for any
other rate of interest specified in Wheat First Butcher Singer standard
margin agreement, charge interest at the default rate of 24% per annum on
the debit balance of all margin accounts which I maintain with you and
debit such accounts from time to time for such interest (provided, however,
that I acknowledge that in no event do you intend to charge a rate of
interest in excess of the maximum rate permitted by applicable law and, in
the event such rate of interest is in excess of the permitted rate, you
agree that any excess interest so charged shall at your option either be
returned to me or applied to my account);
(4) Demand immediate payment in full for the margin loan secured by such
Nonsaleable Securities; or
(5) Assert any other remedies available to you under applicable law to
collect all amounts that I owe to you.
In the event I fail to satisfy a call for additional equity in my account
within seven (7) business days of the date the call was issued, an interest
rate of 5% over and above the rate of interest as specified in Wheat First
Butcher Singer standard margin agreement will be assessed until the
requirements of the call are met.
Failure on my part to obtain your prior approval for the purchase or sale
of the above subject security through a transaction executed by another
institution will result in the substitution of the rate of interest as
specified in Wheat First Butcher Singer standard margin agreement for the
default rate prescribed in paragraph 1 (3) above.
I certify that the above information is true and correct. I will advise
you of any changes and understand my failure to do so could result in the
default of this loan.
Client Signature: /s/ Bruce Addington Compliance Approval _____
Branch Manager Signature: /s/________ Credit Approval _____
EXHIBIT 17
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of August 4, 1995 (the "Agreement"), by and
among HPB Associates, L.P., a Delaware limited partnership (the "Buyer"),
Robert Addington, Bruce Addington and Larry Addington (Robert, Bruce and
Larry Addington are known together as the "Sellers" or the "Addington
Group").
W I T N E S S E T H :
WHEREAS, Robert Addington desires to sell to the Buyer and the
Buyer desires to purchase from Robert Addington an aggregate of 500,000
shares of common stock, $.01 par value (the "ARI Common Stock"), of
Addington Resources, Inc., a Delaware corporation ("ARI") currently owned
by Robert Addington (the "Robert Addington Shares");
WHEREAS, Bruce Addington desires to sell to the Buyer and the
Buyer desires to purchase from Bruce Addington an aggregate of 500,000
shares of the ARI Common Stock currently owned by Bruce Addington (the
"Bruce Addington Shares");
WHEREAS, Larry Addington desires to sell to the Buyer and the
Buyer desires to purchase from Larry Addington an aggregate of 1,000,000
shares of the ARI Common Stock currently owned by Larry Addington (the
"Larry Addington Shares", together with the "Robert Addington Shares" and
the "Bruce Addington Shares", referred to as the "Shares");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
Section 1.01. GENERAL. (a) On the terms and subject to the
conditions set forth in Article IV of this Agreement, on the Initial
Closing Date (as defined in Section 1.03), (a) Robert Addington agrees to
sell, transfer, assign, convey and deliver to the Buyer, and the Buyer
agrees to purchase, acquire and accept from Robert Addington 200,000 of the
Robert Addington Shares (the "Initial Robert Addington Shares"), (b) Bruce
Addington agrees to sell, transfer, assign, convey and deliver to the
Buyer, and the Buyer agrees to purchase, acquire and accept from Bruce
Addington 177,003 of the Bruce Addington Shares (the "Initial Bruce
Addington Shares") and (c) Larry Addington agrees to sell, transfer,
assign, convey and deliver to the Buyer, and the Buyer agrees to purchase,
acquire and accept from Larry Addington 200,000 of the Larry Addington
Shares (the "Initial Larry Addington Shares").
(b) On the terms and subject to the conditions set forth in
Article V of this Agreement, on the Subsequent Closing Date (as defined in
Section 1.03(b)), (a) Robert Addington agrees to sell, transfer, assign,
convey and deliver to the Buyer, and the Buyer agrees to purchase, acquire
and accept from Robert Addington 300,000 of the Robert Addington Shares
(the "Subsequent Robert Addington Shares"), (b) Bruce Addington agrees to
sell, transfer, assign, convey and deliver to the Buyer, and the Buyer
agrees to purchase, acquire and accept from Bruce Addington 322,997 of the
Bruce Addington Shares (the "Subsequent Bruce Addington Shares") and (c)
Larry Addington agrees to sell, transfer, assign, convey and deliver to the
Buyer, and the Buyer agrees to purchase, acquire and accept from Larry
Addington 800,000 of the Larry Addington Shares (the "Subsequent Larry
Addington Shares").
Section 1.02. PURCHASE PRICE. (a) The consideration for the
Robert Addington Shares shall be Nine Dollars ($9.00) per Share, subject to
the purchase price adjustment provided in Section 1.02(d) (the "Robert
Addington Purchase Price").
(b) The consideration for the Bruce Addington Shares shall be
Nine Dollars ($9.00) per Share, subject to the purchase price adjustment
provided in Section 1.02(d) (the "Bruce Addington Purchase Price").
(c) The consideration for the Larry Addington Shares shall be
Nine Dollars ($9.00) per Share, subject to the purchase price adjustment
provided in Section 1.02(d) (the "Larry Addington Purchase Price", known
together with the Robert Addington Purchase Price and the Bruce Addington
Purchase Price as the "Purchase Price").
(d) The Purchase Price shall be subject to adjustment as
follows: if, at any time, or times, during the term of this Agreement, the
Buyer or its affiliates, general or limited partners dispose of any of the
Shares and the consideration received by the Buyer or such affiliates,
general or limited partners in connection with such disposition equals or
exceeds $25.00 per Share, then the Purchase Price shall be increased by the
product of $1.00 and the number of Shares so sold. The Buyer shall,
concurrently with any such disposition of Shares, pay (or in the case of a
disposition buy its affiliates, general or limited partners, cause to be
paid), to Seller pro rata, based on the number of Shares sold by each of
the Sellers pursuant to this Agreement, the amount of such increase in the
Purchase Price. For purposes of this Section, (i) until the aggregate
number of shares of ARI Common Stock disposed of by the Buyer or such
affiliates, general or limited partners after the Subsequent Closing equals
or exceeds 2,000,000, any disposition of ARI Common Stock shall be deemed
to be a disposition of Shares; (ii) any dispositions of ARI Common Stock
following the disposition by the Buyer and its general and limited partners
of ARI Common Stock in excess of 2,000,000 Shares shall not be deemed a
disposition of Shares; and (iii) a distribution or assignment by the Buyer
of ARI Common Stock to an affiliate of the Buyer or to any of its general
or limited partners which is followed by a sale of ARI Common Stock by that
affiliate or general or limited partner during the term of this Agreement,
shall be deemed to be a sale of ARI Common Stock subject to the provisions
of this Section 1.02(d) when the sale by such affiliate, general or limited
partner occurs.
Section 1.03. CLOSINGS AND PAYMENTS OF PURCHASE PRICE. (a) (i)
The Robert Addington Purchase Price for the Initial Robert Addington Shares
shall be paid in full by the Buyer to Robert Addington at a closing (the
"Initial Closing") to be held on the date hereof (or at such other time as
the Buyer and the Sellers may agree) (the "Initial Closing Date"), and (ii)
the Robert Addington Purchase Price for the Subsequent Robert Addington
Shares shall be paid in full by the Buyer to Robert Addington at a closing
(the "Subsequent Closing") to be held on the fifth business day following
the satisfaction of the conditions specified in Article V (or at such other
time as the Buyer and the Sellers may agree) (the "Subsequent Closing
Date"), in each case by wire transfer of immediately available funds by the
Buyer to Robert Addington (or as directed by Robert Addington) and Robert
Addington shall deliver to the Buyer the certificate or certificates
representing the Initial Robert Addington Shares or the Subsequent Robert
Addington Shares, as the case may be, free and clear of all liens, claims
and encumbrances, together with stock powers duly endorsed by Robert
Addington in form sufficient to permit registration of the shares in the
name of the Buyer on the stock transfer books of ARI.
(b) (i) The Bruce Addington Purchase Price for the Initial
Bruce Addington Shares shall be paid in full by the Buyer to Bruce
Addington at the Initial Closing on the Initial Closing Date and (ii) the
Bruce Addington Purchase Price for the Subsequent Bruce Addington Shares
shall be paid in full at the Subsequent Closing on the Subsequent Closing
Date, in each case, by wire transfer of immediately available funds by the
Buyer to Bruce Addington (or as directed by Bruce Addington) and Bruce
Addington shall deliver to the Buyer the certificate or certificates
representing the Initial Bruce Addington Shares or the Subsequent Bruce
Addington Shares, as the case may be, free and clear of all liens, claims
and encumbrances, together with stock powers duly endorsed by Bruce
Addington in form sufficient to permit registration of such shares in the
name of the Buyer on the stock transfer books of ARI.
(c) (i) The Larry Addington Purchase Price for the Initial
Larry Addington Shares shall be paid in full by the Buyer to Larry
Addington at the Initial Closing on the Initial Closing Date and (ii) the
Larry Addington Purchase Price for the Subsequent Larry Addington Shares
shall be paid in full at the Subsequent Closing on the Subsequent Closing
Date, in each case, by wire transfer of immediately available funds by the
Buyer to Larry Addington (or as directed by Larry Addington) and Larry
Addington shall deliver to the Buyer the certificate or certificates
representing the Initial Larry Addington Shares or the Subsequent Larry
Addington Shares, as the case may be, free and clear of all liens, claims
and encumbrances, together with stock powers duly endorsed by Larry
Addington in form sufficient to permit registration of such shares in the
name of the Buyer on the stock transfer books of ARI.
(d) Each adjustment to the Purchase Price, if any, becoming
payable after the Initial Closing shall be paid to the Sellers in full on
the date due by wire transfer of immediately available funds (or as
otherwise directed by the Sellers).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE ADDINGTON GROUP
Section 2.01. REPRESENTATIONS AND WARRANTIES OF EACH OF THE
SELLERS. Each of the Sellers severally represents and warrants to the
Buyer as follows:
(a) AUTHORITY. Such Seller has all requisite power and
authority to enter into this Agreement and to perform its obligations
hereunder, including to sell, transfer and assign to the Buyer his right,
title and interest in and to his respective Shares. No further action on
the part of such Seller is necessary to authorize this Agreement and the
performance of the transactions contemplated herein. The Agreement has
been duly executed and delivered by such Seller and, assuming due
authorization, execution and delivery by the Buyer, constitutes the valid
and binding agreement of such Seller, enforceable against such Seller in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the rights of creditors generally and to general
principles of equitable relief (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(b) NO CONFLICT. Except as set forth in Schedule 2.01 hereto,
neither the execution and delivery of this Agreement nor the performance of
the transactions contemplated herein by such Seller will, with or without
the giving of notice or the lapse of time or both, (i) conflict with or
violate, or constitute a default or a breach under, or result in the
acceleration or termination of (or entitle any person or entity to
accelerate or terminate) any obligation under any mortgage, indenture, deed
of trust, lease, contract, agreement, license or other instrument or any
order, award, writ, decree, judgment or ruling to which such Seller is
subject or to which any of the property of such Seller is bound, or result
in the creation of any lien, security interest, pledge, charge, option,
claim, mortgage, lease, easement, covenant or other restriction or
encumbrance of any kind upon any of the assets of such Seller or the loss
of any license or other contractual right with respect thereto, or (ii)
contravene any law, rule or regulation applicable to such Seller or any of
his assets.
(c) CONSENTS. There are no consents, approvals, declarations,
notices, registrations, applications, filings, permits, licenses or
authorizations required under any law, rule, regulation, agreement or
instrument required for such Seller to consummate the sale of his
respective Shares (other than such consents which have been obtained and
are in full force and effect), other than with respect to the sale of
shares at the Subsequent Closing as required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"). This Agreement has been approved
by the Board of Directors of ARI so as to render inapplicable to the Buyer
the provisions of Section 203 of the Delaware General Corporation Law.
(d) TITLE TO THE SHARES. Except as set forth on Schedule 2.01
hereto, such Seller has good title, beneficially and of record, to his
respective Shares listed free and clear of all security interests, liens,
claims, options, encumbrances and other contractual restrictions of any
kind (including with respect to the voting thereof). The transfer and
delivery of such Shares by such Seller to the Buyer as contemplated by this
Agreement will transfer good and marketable title to such Shares to the
Buyer, free and clear of all security interests, liens, claims, options,
encumbrances and other contractual restrictions of any kind (including with
respect to the voting thereof).
(e) FINDERS. Neither such Seller nor any party acting on its
behalf has paid or become obligated to pay any fee, commission or other
like payments to any broker, finder or intermediary for or on account of
the transactions contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Section 3.01. REPRESENTATIONS AND WARRANTIES OF BUYER. The
Buyer represents and warrants to the Sellers as follows:
(a) ORGANIZATION. The Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
(b) AUTHORITY. The Buyer has all requisite power and authority
to enter into this Agreement and to perform its obligations hereunder. The
execution and delivery by the Buyer of this Agreement and the performance
of the transactions contemplated herein have been duly authorized by the
Buyer and no further action on the part of the Buyer is necessary to
authorize this Agreement and the performance of the transactions
contemplated herein. This Agreement has been duly executed and delivered
by the Buyer and, assuming due authorization, execution and delivery by the
Sellers, constitutes the valid and binding agreement of the Buyer,
enforceable against the Buyer in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting the rights of
creditors generally and general principles of equitable relief (regardless
or whether enforcement is sought in a proceeding at law or in equity).
(c) NO CONFLICT. Neither the execution and delivery of this
Agreement nor the performance of the transactions contemplated hereby by
the Buyer will, with or without the giving of notice or the lapse of time
or both, (i) conflict with or violate any of the provisions of the
agreement of limited partnership of the Buyer, (ii) conflict with or
violate, or constitute a default or a breach under, or result in the
acceleration or termination of (or entitle any person or entity to
accelerate or terminate) any obligation under any mortgage, indenture, deed
of trust, lease, contract, agreement, license or other instrument or any
order, award, writ, decree, judgment or ruling to which the Buyer is
subject or to which any of its property is bound, or (iii) contravene any
law, rule or regulation applicable to the Buyer.
(d) CONSENTS. There are no consents, approvals, declarations,
notices, registrations, applications, filings, permits or licenses or
authorizations required under any law, rule, regulation, agreement or
instrument required for the Buyer to consummate the purchase of the Shares,
other than with respect to the purchase of Shares at the Subsequent
Closing, as required under the HSR Act.
(e) FINDERS. Neither the Buyer nor any party acting on its
behalf has paid or become obligated to pay any fee, commission or other
like payments to an broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
(f) AVAILABLE FUNDS. The Buyer has all funds available to
consummate the purchase of the Shares.
(g) QUALIFIED INSTITUTIONAL BUYER. The Buyer is a qualified
institutional buyer, as such term is defined in Rule 144A of the Securities
Act of 1933, as amended (the "Securities Act"), and acknowledges that the
Sellers may rely on the exemption provided by Rule 144A under the
Securities Act in connection with the sale of Shares contemplated hereby.
(h) INVESTMENT INTENT; INVESTIGATION. The Buyer is purchasing
the Shares for its own account and not with a view to any resale or
distribution, in whole or in part, in violation of the Securities Act,
subject, nevertheless to an understanding that disposition of its property
shall at all times be and remain within its control. The Buyer has
conducted its own investigation of ARI and has had an opportunity to ask
ARI management all questions relevant to its investment decision. The
Buyer, in making its investment decision, is not relying on any
representations or warranties of the Addington Group or any information
provided by the Addington Group, except as expressly set forth herein.
(i) BENEFICIAL OWNERSHIP. The Buyer beneficially owns on the
date hereof 955,285 shares of the outstanding ARI Common Stock (the "HPB
Shares"). On the date of the Subsequent Closing, the Buyer, its general
partners or limited partners will beneficially own the HPB Shares, the
Initial Robert Addington Shares, the Initial Bruce Addington Shares and the
Initial Larry Addington Shares.
ARTICLE IV
CONDITIONS TO THE INITIAL CLOSING
Section 4.01. OBLIGATION OF THE BUYER. The obligation of the
Buyer to consummate the transactions contemplated by this Agreement at the
Initial Closing shall be subject to the satisfaction of the Buyer of the
following conditions (any or all of which may be waived in its sole
discretion):
(a) THE SELLERS' WARRANTIES AND PERFORMANCE. The
representations and warranties of each of the Sellers herein contained
shall be true in all material respects as of and at the time of the Initial
Closing; each of the Sellers shall have performed in all material respects
all obligations and complied in all material respects with all covenants
and other agreements, required of them by this Agreement to be performed or
complied with by them at or prior to the Initial Closing Date.
(b) NO ACTIONS. On the Initial Closing Date, there shall be no
injunction, restraining order or decree of any nature of any governmental
authority of competent jurisdiction that is in effect that has a material
adverse effect on the ability of the parties hereto to consummate the
transactions contemplated by this Agreement.
(c) BOARD OF DIRECTORS. The Board of Directors of ARI shall
have been reconstituted to consist of eight members, four of whom shall be
current members of the Board of Directors and four of whom shall consist of
persons not currently on the Board of Directors who shall be persons
acceptable to Buyer, with Howard P. Berkowitz appointed as Chairman of the
Board.
(d) BOARD RESOLUTIONS. The Buyer shall have received a
certified copy of a resolution of the Board of Directors of ARI (i)
approving the purchase of the Shares pursuant to this Agreement and (ii)
evidencing the actions contemplated by Section 4.01(c).
Section 4.02.OBLIGATION OF THE SELLERS. The obligations of the
Sellers to consummate the transactions contemplated by this Agreement at
the Initial Closing shall be subject to the satisfaction of the Sellers of
the following conditions (any or all of which may be waived at their
discretion):
(a) THE BUYER'S WARRANTIES AND PERFORMANCE. The representations
and warranties of the Buyer herein contained shall be true in all material
respects as of and at the time of the Initial Closing; the Buyer shall have
performed in all material respects all obligations and complied in all
material respects with all covenants and other agreements required of it by
this Agreement to be performed or complied with by it at or prior to the
Initial Closing Date.
(b) NO ACTIONS. On the Initial Closing Date, there shall be no
injunction, restraining order or decree of any nature of any governmental
authority of competent jurisdiction that is in effect that has a material
adverse effect on the ability of the parties hereto to consummate the
transactions contemplated by this Agreement.
(c) QUALIFIED INSTITUTIONAL BUYER CERTIFICATE. The Buyer shall
have delivered to the Sellers a certificate executed by its Managing
Partner certifying that as of the Initial Closing Date, the Buyer is a
qualified institutional buyer, as such term is defined in Rule 144A
promulgated under the Securities Act, which certificate shall address the
matters listed in paragraph (d)(1)(iv) of that Rule.
ARTICLE V
CONDITIONS TO THE SUBSEQUENT CLOSING
Section 5.01. OBLIGATION OF THE BUYER. The obligation of the
Buyer to consummate the transactions contemplated by this Agreement at the
Subsequent Closing shall be subject to the satisfaction of the Buyer of the
following conditions (any or all of which may be waived in its sole
discretion):
(a) THE SELLERS' WARRANTIES AND PERFORMANCE. The
representations and warranties of each of the Sellers herein contained
shall be true in all material respects as of and at the time of the
Subsequent Closing; each of the Sellers shall have performed in all
material respects all obligations and complied in all material respects
with all covenants and other agreements, required of him by this Agreement
to be performed or complied with by him at or prior to the Subsequent
Closing Date; and each Seller shall have delivered to the Buyer a
certificate to such effect.
(b) NO ACTIONS. On the Subsequent Closing Date, there shall be
no injunction, restraining order or decree of any nature of any
governmental authority of competent jurisdiction that is in effect that has
a material adverse effect on the ability of the parties hereto to
consummate the transactions contemplated by this Agreement.
(c) HSR ACT. The applicable waiting period, together with any
extensions thereof, under the HSR Act, shall have expired or been
terminated.
Section 5.02. OBLIGATION OF THE SELLERS. The obligations of the
Sellers to consummate the transactions contemplated by this Agreement at
the Subsequent Closing shall be subject to the satisfaction of the Sellers
of the following conditions (any or all of which may be waived at their
discretion):
(a) THE BUYER'S WARRANTIES AND PERFORMANCE. The representations
and warranties of the Buyer herein contained shall be true in all material
respects as of and at the time of the Subsequent Closing; the Buyer shall
have performed in all material respects all obligations and complied in all
material respects with all covenants and other agreements required of it by
this Agreement to be performed or complied with by it at or prior to the
Subsequent Closing Date; and the Buyer shall have delivered to the Sellers
a certificate to such effect.
(b) NO ACTIONS. On the Subsequent Closing Date, there shall be
no injunction, restraining order or decree of any nature of any
governmental authority of competent jurisdiction that is in effect that has
a material adverse effect on the ability of the parties hereto to
consummate the transactions contemplated by this Agreement.
(c) QUALIFIED INSTITUTIONAL BUYER CERTIFICATE. The Buyer shall
have delivered to the Sellers an updated certificate regarding the matters
set forth in Section 4.02(c)
(d) HSR ACT. The applicable waiting period, together with any
extension thereof, under the HSR Act, shall have expired or been
terminated.
ARTICLE VI
OTHER AGREEMENTS
Section 6.01. REGULATORY FILINGS; CONSENTS. The Sellers and the
Buyer agree to cooperate and promptly (i) prepare and file with the Federal
Trade Commission and the Department of Justice the Notification and Report
Form for Certain Mergers and Acquisitions, as required under the HSR Act
with respect to the sale and purchase of the Shares at the Subsequent
Closing, (ii) prepare and file with the Securities and Exchange Commission
and distribute to ARI stockholders a Schedule 14 F-1 and (iii) prepare and
file a Proxy Statement for the 1995 Annual Meeting of Stockholders (or a
special meeting in lieu thereof) promptly following the Subsequent Closing.
Section 6.02. COVENANTS OF THE ADDINGTON GROUP. Provided that the
purchases contemplated by Section 1.01(a) have been consummated on the
Initial Closing Date, and so long as the Buyer is in compliance with
Section 6.03 each member of the Addington Group agrees that:
(a) if the number of Addington Designees (as hereinafter defined)
specified in Section 6.03 are included as part of the management slate of
nominees for the ARI Board of Directors, each member of the Addington Group
shall vote all of his ARI Common Stock in favor of the management slate of
nominees of the Board of Directors of ARI in each election of directors of
ARI;
(b) no member of the Addington Group shall, directly or indirectly,
solicit, nor participate in the solicitation of, proxies or consents in
opposition to the management slate of nominees to the Board of Directors of
ARI provided it includes the number of Addington Designees specified in
Section 6.03), nor may they, directly or indirectly, solicit, nor
participate in the solicitation of, proxies or consents to increase the
representation of the Addington Group on the Board of Directors of ARI to a
number of persons in excess of the number of Addington Designees
contemplated in Section 6.03 (it being agreed that Robert Addington and
Bruce Addington will not stand for re-election to the Board of Directors of
ARI);
(c) no member of the Addington Group shall, directly or indirectly,
grant proxies for his shares of ARI Common Stock to third parties, other
than to the Board of Directors of ARI, or to persons who agree in writing
with Buyer to vote such shares consistent with the terms of this Agreement
and except as may be required by lenders to whom such shares are pledged as
collateral in accordance with 6.02(d)(vi);
(d) no member of the Addington Group shall, directly or indirectly,
offer, sell or transfer shares of ARI Common Stock, except (i) to another
member of the Addington Group; (ii) pursuant to the volume limitations of
Rule 144 of the Securities Act of 1933, as amended (whether or not then
applicable as a matter of law); (iii) if such sale represents 2% or less of
the then outstanding ARI Common Stock; PROVIDED, that ARI Common Stock sold
by the Addington Group in a series of related transactions shall be
aggregated for purposes of this clause (iii); (iv) pursuant to an
underwritten public offering; (v) pursuant to a bona fide merger or tender
offer in respect to the ARI Common Stock if such merger or tender offer has
been approved or not opposed by the Board of Directors of ARI; (vi) up to
an aggregate (with respect to all member of the Addington Group considered
as a whole) of 2,500,000 shares of ARI Common Stock (excluding the Shares
sold pursuant to this Agreement); (vii) pursuant to a bona fide pledge
arrangement with one or more financial institutions and brokerage firms
(and any resale by such institutions and firms pursuant to such pledge);
and (viii) to any person who agrees to be bound by the provisions of this
Section 6.02; and
(e) promptly following the filing with the Securities and Exchange
Commission and distribution to stockholders of the Schedule 14F-1, and the
expiration of the waiting period with respect thereto, vote in favor of the
appointment of an additional director designated by the Buyer to the Board
of Directors of ARI.
Section 6.03. COVENANTS OF THE BUYER. Provided that the purchases
contemplated by Section 1.01(a) have been consummated on the Initial
Closing Date, the Buyer agrees that it shall recommend inclusion in
management's slate of nominees to the Board of Directors, and vote all of
its ARI Common Stock in favor of, three persons designated by the Addington
Group (one of whom shall be Larry Addington) in each election of directors
of ARI (the "Addington Designees"); PROVIDED, that (x) Buyer shall not be
obligated to recommend inclusion of, or to vote in favor of, (i) more than
two Addington Designees if the Addington Group shall then beneficially own
less than 3,000,000 shares of ARI Common Stock, (ii) more than one
Addington Designee if the Addington Group shall then beneficially own less
than 2,000,000 shares of ARI Common Stock or (iii) any Addington Designee
if the Addington Group shall then beneficially own less than 1,000,000
shares of ARI Common Stock and (y) PROVIDED, that the number of Addington
Designees shall be increased in the event that the Board of Directors is
increased to more than nine, so that the number of Addington Designees as
to which this Section 6.03 applies represents that number of directors on
the ARI Board of Directors that most closely approximates the percentage of
the fully diluted ARI Common Stock beneficially owned by the Sellers.
Section 6.04. TERM.The covenants and agreements in 6.02 and 6.03 this
Article V will continue in full force and effect until August 31, 1997.
Section 6.05. RELEASES. Provided that the purchases contemplated by
Section 1.01(a) have been consummated:
(a) the Buyer for itself and its partners and its employees hereby
(i) agrees not to commence litigation against any member of the Addington
Group and agrees not to commence a shareholder derivative action on behalf
of ARI against any member of the Addington Group and (ii) also releases the
Addington Group and their heirs, executors, administrators and assigns from
all actions, causes of action, suits, debts, dues, sums of money, accounts,
bills, contracts, controversies, agreements, promises, damages, claims, and
demands whatsoever, in law or equity, which any of them have, ever had, or
might have against any of the Addington Group (either individually or in
any of their capacities in respect of ARI or its subsidiaries) in the case
of either clause (i) or (ii) by reason of any matter, up to the date of
this Agreement; and
(b) the Addington Group hereby releases the Buyer, its partners and
employees and their respective successors and assigns (the "Buyer Group")
from all actions, causes of action, suits, debts, dues, sums of money,
accounts, bills, contracts, controversies, agreements, promises, damages,
claims, and demands whatsoever, in law or equity, which against the Buyer
Group, the Addington Group and its successors or assigns ever had, have or
might have by reason of any matter, up to the date of this Agreement.
ARTICLE VII
TERMINATION OF AGREEMENT
Section 7.01. TERMINATION. This Agreement may be terminated at
any time:
(a) by mutual written consent of the Addington Group, on the one
hand, and the Buyer on the other hand; or
(b) by either the Addington Group, on the one hand, or the
Buyer, on the other hand, if the Subsequent Closing shall not have occurred
on or before September 30, 1995 (or such later date as may be mutually
agreed to in writing by the parties hereto); provided that no party that
shall then be in breach of its obligations under this Agreement shall be
entitled to terminate this Agreement pursuant to this Section 7.01(b); or
(c) by the Addington Group, if the Buyer, its affiliates,
general partners or limited partners dispose of 50% or more of the ARI
Common Stock that they will beneficially own immediately after the
Subsequent Closing; or
(d) by the Addington Group, at any time any member of the Buyer
Group violates Section 6.05 of this Agreement.
Section 7.02. AUTOMATIC TERMINATION. This Agreement shall
automatically terminate on August 31, 1997.
Section 7.03. EFFECT OF TERMINATION. Upon termination of this
Agreement pursuant to Section 7.01 or Section 7.02 hereof, this Agreement
and the parties' obligations hereunder shall become null and void and have
no further force or effect; PROVIDED, that nothing herein shall relieve any
party from liability for its willful breach of this Agreement; and
PROVIDED, FURTHER, that the obligations set forth in Section 6.05 shall
survive the termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and agreements in this Agreement shall survive
each of the Initial Closing and the Subsequent Closing.
Section 8.02 EXPENSES. All fees, commissions and other expenses
incurred by any party hereto in connection with the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby, including the fees and expenses of their
respective counsel, shall be borne by the party incurring such fee or
expense.
Section 8.03 NOTICES. Any notice or other communication
required or that may be given hereunder shall be in writing and shall be
delivered personally, telecopied or sent by certified, registered, or
express mail, postage prepaid, to the parties at the following addresses or
at such other addresses as shall be specified by the parties by like
notice, and shall be deemed given when so delivered personally, telecopied
or if mailed, three days after the date of mailing, as follows:
(i) if to Robert Addington:
c/o Addington Resources, Inc.
Route 180
Big Run Road
Ashland, Kentucky 41101
Telephone: (606) 928-3433
Telecopier: (606) 928-0450
(ii) if to Bruce Addington:
c/o Addington Resources, Inc.
Route 180
Big Run Road
Ashland, Kentucky 41101
Telephone: (606) 928-3433
Telecopier: (606) 928-0450
(iii) if to Larry Addington:
c/o Addington Resources, Inc.
Route 180
Big Run Road
Ashland, Kentucky 41101
Telephone: (606) 928-3433
Telecopier: (606) 928-0450
(iv) if to HPB Associates, L.P.:
HPB Associates, L.P.
888 Seventh Avenue
New York, NY 10106
Attention: Howard P. Berkowitz
Telephone: (212) 664-0990
Telecopier: (212) 757-0577
Section 8.04 ENTIRE AGREEMENT. This Agreement (together with
any exhibits and schedules hereto) constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all
prior contracts, agreements, undertakings and understandings, express or
implied, written or oral, between the parties, or any of them, with respect
to the subject matter hereof and, except as otherwise expressly provided
herein, is not intended to confer upon any other person any rights or
remedies hereunder.
Section 8.05 WAIVERS AND AMENDMENTS. This Agreement may be
amended or modified and the terms and conditions hereof may be waived, only
by a written instrument signed by the parties hereto or, in the case of a
waiver, by the party waiving compliance.
Section 8.06 GOVERNING LAW. This Agreement shall be governed
by, and construed and enforced in accordance with and subject to, the laws
of the State of Delaware, without regard to principles of conflicts of
laws.
Section 8.07 BENEFIT; BINDING EFFECT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors. This Agreement may not be assigned by the Buyer
without the express written consent of the Addington Group (PROVIDED, that
the Buyer may assign a portion of its rights to purchase Shares to its
affiliates, general partners or limited partners, but no such assignment
shall relieve the Buyer from any of its obligations hereunder), and may not
be assigned by any party without the express written consent of all other
parties.
Section 8.08 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all
of which taken together shall constitute one and the same instrument.
Section 8.09 HEADINGS. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
HPB ASSOCIATES, L.P.
By: /S/ HOWARD P. BERKOWITZ
Name: Howard P. Berkowitz
Title: Managing Partner
/S/ ROBERT ADDINGTON
Robert Addington
/S/ BRUCE ADDINGTON
Bruce Addington
/S/ LARRY ADDINGTON
Larry Addington
EXHIBIT 18
ADDINGTON RESOURCES, INC.
August 4, 1995
Mr. Larry Addington
Mr. Bruce Addington
Mr. Robert Addington
[address]
Re: Tennessee Mining Properties
Gentlemen:
This will confirm our understanding and for $1,000 in
hand paid and for other good and valuable consideration receipt of
which is hereby acknowledged by each of you that Addington
Resources, Inc. and its subsidiaries shall have the right,
exercisable by delivery to you of ten days prior written notice at
the address specified above, to either (i) transfer to you all of
their right, title and interest in and to the Tennessee Mining
Company, Inc. (which at such time shall own the Tennessee coal
properties currently owned by it plus the contract with Tennessee
Valley Authority (the "TVA")) or (ii) to assign to a corporation
formed by you (and such corporation shall assume the liabilities
with respect to) the Tennessee coal properties and the TVA
contract. The outstanding payables as of the date hereof in
respect of the Tennessee coal properties (not exceeding $2.5
million) shall be borne by Addington Resources, Inc. The rights of
Addington Resources, Inc. under this paragraph shall expire on
September 29, 1995.
In the event the foregoing shall occur, you shall cause
Tennessee Mining Company, Inc. or your corporation to pay a royalty
to Addington Resources, Inc. of $1.00 for each ton of coal
delivered to the TVA under the TVA contract; provided that the
maximum royalty payable to Addington Resources, Inc. shall not
exceed $12 million.
Please indicate your concurrence with our understanding
by executing the enclosed copy of this agreement, whereupon this
letter shall be a binding agreement between us.
Sincerely,
ADDINGTON RESOURCES, INC.
By: /s/ Howard Berkowitz
Accept and Agreed:
/s/ Larry Addington
Larry Addington
/s/ Bruce Addington
Bruce Addington
/s/ Robert Addington
Robert Addington
