<PAGE> File No. 70-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM U-1
_______________________________
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
INDIANA MICHIGAN POWER COMPANY
One Summit Square, P.O. Box 60, Fort Wayne, Indiana 46801
(Name of company filing this statement and
addresses of principal executive offices)
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
* * *
G. P. Maloney, Executive Vice President
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
A. Joseph Dowd, General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
<PAGE>
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
Indiana Michigan Power Company ("I&M") requests authorization
herein to acquire a promissory note from Steel Dynamics, Inc.
("SDI") an Indiana corporation, which is constructing a new steel
manufacturing facility in I&M's service territory. The note will
evidence a loan by I&M to SDI in an amount up to $15,000,000, which
will be used by SDI to construct a 345 kv-34.5 kv substation in
order for I&M to supply electric service to SDI's manufacturing
facility.
The loan will be made under a Substation Facilities Agreement,
a copy of which is filed as Exhibit B hereto, and a promissory note
in the form of Exhibit A hereto. The loan will bear interest at 8%
per year, mature in not more than 15 years and be secured by a
first lien on the substation.
Under the Substation Facilities Agreement, SDI has assigned
the construction contract for the substation to I&M, I&M has agreed
to pay the costs of construction as they are incurred and will own
the substation as it is constructed. I&M will sell the substation
to SDI after I&M receives authorization from this Commission to
acquire the promissory note of SDI.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
No fees, commissions or expenses, other than expenses
(including the Commission's $2,000 filing fee), which are estimated
not to exceed $10,000, billed at cost by American Electric Power
Service Corporation are to be paid or incurred by I&M or any
associate company in connection with the proposed transaction.<PAGE>
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
I&M considers Sections 9(a) and 10 of the Public Utility
Holding Company Act of 1935 (the "1935 Act") to be applicable to
the proposed acquisition of the promissory note of SDI and Section
12(d) of the 1935 Act and Rule 44 thereunder to be applicable to
the sale of the substation if it is a utility asset at the time of
the transfer.
ITEM 4. REGULATORY APPROVAL.
No commission other than the Securities and Exchange
Commission has jurisdiction over the proposed transactions.
ITEM 5. PROCEDURE.
It is requested, pursuant to Rule 23(c) of the Rules and
Regulations of the Commission, that the Commission's order
granting, and permitting to become effective, this Application or
Declaration be issued on or before September 6, 1994. I&M waives
any recommended decision by a hearing officer or by any other
responsible officer of the Commission and waives the 30-day waiting
period between the issuance of the Commission's order and the date
it is to become effective, since it is desired that the
Commission's order, when issued, become effective forthwith. I&M
consents to the Office of Public Utility Regulation assisting in
the preparation of the Commission's decision and/or order in this
matter, unless the Office opposes the matter covered by this
Application or Declaration.<PAGE>
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
The following exhibits and financial statements are filed
herewith:
Exhibit A Proposed form of Promissory Note
Exhibit B Substation Facilities Agreement
Exhibit F Opinion of Counsel
Exhibit G Form of Notice
It is not believed that financial statements are necessary or
relevant to a disposition of this Application or Declaration.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
It is believed that the granting and permitting to become
effective of this Application or Declaration will not constitute a
major Federal action significantly affecting the quality of the
human environment. No other Federal agency has prepared or is
preparing an environmental impact statement with respect to the
proposed transactions.<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has duly
caused this statement to be signed on their behalf by the under-
signed thereunto duly authorized.
INDIANA MICHIGAN POWER COMPANY
By_/s/ G. P. Maloney_____
Vice President
Dated: July 5, 1994
imfinan.94\formu-1
<PAGE>
Exhibit A
PROMISSORY NOTE
$15,000,000 , 199_
STEEL DYNAMICS, INC., an Indiana corporation (the "Company"),
for value received, hereby promises to pay to the order of INDIANA
MICHIGAN POWER COMPANY, an Indiana corporation ("I&M"), the principal
amount of FIFTEEN MILLION DOLLARS ($15,000,000) or, if less, the
unpaid principal amount of I&M's Loans under the Substation
Facilities Agreement dated as of June 1, 1994, between the Company
and I&M (the "Substation Agreement"). Capitalized terms used herein
but not otherwise defined shall have the meanings given to them in
the Substation Agreement. The principal of the Loans must be paid
to I&M in accordance with the Substation Agreement. The Company also
promises to pay interest to I&M on the unpaid principal amount of
the Loans at 8.0% per year from the date of the respective loan on
the last day of each month. All such principal and interest shall
be payable in lawful money of the United States of America in same
day or immediate funds at One Summit Square, Fort Wayne, Indiana.
The date and amount of each Loan and each payment of principal
must be endorsed by I&M on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof,
provided that the failure to make any such endorsement on such
schedule shall not limit, extinguish or in any way modify the
obligation of the Company to repay I&M's Loans.
This Note may be prepaid in whole or in part at any time and
is subject to acceleration upon the terms provided in the Substation
Agreement. This Note also is secured by a Purchase Money Mortgage
and Security Agreement, dated , 199_ between the Company
and I&M.
The Company hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF INDIANA.
STEEL DYNAMICS, INC.
By:___________________________
Name:
Title:
SCHEDULE OF LOANS
Principal
Amount of Payments Balance Notation
Date Loan of Principal Outstanding Made By
<PAGE> Exhibit B
SUBSTATION FACILITIES AGREEMENT
This Agreement, dated as of the 1st day of June, 1994, by
and between INDIANA MICHIGAN POWER COMPANY ("I&M"), an Indiana
corporation, and STEEL DYNAMICS, INC. ("SDI"), an Indiana
corporation.
W I T N E S S E T H:
WHEREAS, SDI has entered into a contract (the "Construction
Contract"), a copy of which is attached hereto as Exhibit A, with
GE Power Delivery Systems (the "Contractor") for the construction
of a 345 kv-34.5 kv substation and related facilities (the
"Substation") on the parcel of real estate described on Exhibit B
hereto (the "Premises"), in connection with the construction of
SDI's new manufacturing facility (the "Plant") near Butler,
Indiana; and
WHEREAS, SDI is willing to assign the ownership of the
Substation to I&M in exchange for I&M's agreement to pay the
Contractor the amounts due under the Construction Contract; and
WHEREAS, after I&M obtains certain authorization from the
Securities and Exchange Commission ("SEC") under the Public
Utility Holding Company Act of 1935 ("PUHCA"), I&M desires to
sell its interest in the Substation and to loan SDI the cost of
construction up to $15,000,000 as such amounts are due under the
Construction Contract, all on the terms and conditions set forth
below; and
WHEREAS, SDI desires to purchase the Substation at that time
and to borrow the purchase price thereof and the remaining cost
of construction from I&M, all on the terms and conditions set
forth below;
NOW, THEREFORE, in consideration of the respective represen-
tations, warranties and covenants contained herein, I&M and SDI
hereby agree as follows:
ARTICLE I
Assignment of Construction Contract
1.01 Assignment of Construction Contract. SDI hereby
assigns to I&M all right, title and interest of SDI in, to and
under the Construction Contract, including all claims for damages
arising under the representations, indemnities, warranties,
guaranties and agreements made to or for the benefit of SDI by
the Contractor; provided, however, that (a) SDI shall at all
times remain liable to the Contractor under the Construction
Contract to perform all the obligations of SDI thereunder as if
this assignment had not been made, (b) I&M shall not be liable
for any of the obligations of SDI under the Construction
Contract, nor shall this assignment give rise to any obligation
whatsoever on the part of I&M owing to the Contractor, (c) I&M
shall not be obligated to take any action under the Construction
Contract, including making any claim for damages, and (d) SDI
shall retain the right to cure any default or non-performance
under the Construction Contract (which cure shall not relieve I&M
from any of its obligations hereunder) and shall retain the right
to compel performance of the terms of the Construction Contract.
So long as no Event of Default (as defined in Section 9.01 of
this Agreement) has occurred and is continuing, I&M will not
agree to any amendment, revision or change to, or grant any
waiver under, the Construction Contract without the prior written
consent of SDI.
1.02 Agreement of I&M to Pay Cost of Construction.
Subject to the terms and conditions of Sections 1.03, 1.04 and
4.01 hereof, I&M agrees, solely for the benefit of SDI and not
for the benefit of the Contractor, to pay all amounts due to
Contractor under the Construction Contract when and as due up to
the Commitment Limit (as defined in Article IV hereof).
1.03 Conditions of I&M to Make Initial Payment. I&M's
obligation to make the initial payment under the Construction
Contract is subject to the following conditions precedent:
(a) I&M shall have received evidence reasonably
satisfactory to it that SDI has commitments for debt and
equity financing in the aggregate of $250,000,000 and that
SDI has agreed to construct the Plant; and
(b) the Assignment of Contracts by SDI in favor of
Mellon Bank, N.A., as agent, which assigns among other
contracts, the Construction Contract ("Bank Assignment"),
shall be subject to the rights granted to I&M in Section
1.01 hereof;
(c) the Contractor shall have executed and delivered
to I&M the Consent and Agreement in the form of Exhibit D
hereto; and
(d) I&M shall have received an opinion of counsel for
SDI in form and substance reasonably satisfactory to I&M,
generally addressing these matters covered in Section
6.01(a), (b), (c) and (f).
1.04 Conditions of I&M to Make Second Payment. I&M's
obligation to make the second payment under the Construction
Contract is subject to the following conditions precedent:
(a) SDI shall have granted I&M an easement on the
Premises substantially in the form of Exhibit C hereto (the
"Easement");
(b) I&M shall have received a current survey of the
Premises in form reasonably satisfactory to it; and
(c) the Mortgage of Mellon Bank, N.A., as Agent, on
the Premises (the "Bank Mortgage") shall be subject to the
Easement.
ARTICLE II
Agreement of Purchase and Sale
2.01 Sale and Purchase of Facilities. On the Transfer
Date, subject to the terms and conditions of this Agreement, SDI
shall purchase the Substation and I&M shall sell the Substation
to SDI. In connection with the sale, I&M shall execute and
deliver a Bill of Sale substantially in the form of Exhibit E
hereto, release the Easement and assign any and all rights in the
Construction Contract and any warranties regarding the Substation
to SDI. The "Transfer Date" shall be the earlier of (a) the date
designated by I&M which shall be no more than 60 days after it
obtains all necessary authorizations from the SEC under Section
2(a)(18) of PUHCA to perform the transactions contemplated by
Articles II and III hereof or (b) the date designated by SDI upon
not less than 10 days' prior notice to I&M, if no part of the
Substation is a "utility asset" as defined in Section 2(a)(18) of
PUHCA at that time.
2.02 Purchase Price. SDI shall pay I&M the Purchase Price
on the Transfer Date. The "Purchase Price" shall be the total of
(a) the payments made by I&M to the Contractor under the
Construction Contract that have been approved by SDI in
accordance with Section 4.01(c) hereof, (b) an amount equal to 8%
per annum from the date of payment to the Transfer Date on such
payments and other costs of construction, and (c) all other
reasonable costs and expenses incurred by I&M in connection with
construction and ownership of the Substation, minus (d) all
amounts paid to I&M under Section 2.03 hereof prior to the
Transfer Date. Upon reasonable notice, SDI may review the
records of I&M related to any cost described in Subsection
2.02(c) hereof.
2.03 Delay of Transfer Date. If the Transfer Date is
delayed beyond the Payment Commencement Date, then SDI will begin
to pay the Purchase Price in installments which are payable in
the same amounts and on the same terms as if the Purchase Price
was a Loan pursuant to Section 5.02 hereof.
2.04 Warranties of Title, etc. I&M will transfer to SDI
such title to the Substation as it received from the Contractor,
free and clear of the Mortgage and Deed of Trust dated as of June
1, 1939 between I&M and The Bank of New York and other liens
arising through I&M. EXCEPT AS EXPRESSLY PROVIDED IN THE
PRECEDING SENTENCE, SDI ACKNOWLEDGES AND AGREES THAT THE
SUBSTATION IS BEING SOLD IN ITS THEN CURRENT 'AS IS' CONDITION
AND THAT I&M HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION,
WARRANTY OR COVENANT WITH RESPECT TO TITLE, MERCHANTABILITY,
CONDITION, QUALITY, DURABILITY OR SUITABILITY OF THE SUBSTATION
IN ANY RESPECT OR IN CONNECTION WITH, OR FOR THE PURPOSE OR USE
OF SDI, OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY
KIND OR CHARACTER EXPRESSED OR IMPLIED WITH RESPECT THERETO.
ARTICLE III
Loan of Cost of Construction
3.01 Commitment for Loan. Subject to Sections 3.03 and
4.01 hereof, I&M agrees, solely for the benefit of SDI and not
for the benefit of the Contractor, to loan (the "Loans") SDI (a)
the Purchase Price on the Transfer Date; (b) the amounts due to
the Contractor under the Construction Contract; and (c) the
amounts required to pay interest on the Loans until the Payment
Commencement Date; provided that the total of the Loans will not
exceed the Commitment Limit.
3.02 Method of Payment. I&M will transfer the Loans in
respect of the Purchase Price and the interest on the Loans,
which amounts are owed by SDI to I&M, directly to I&M and will
pay the Contractor directly amounts owed by SDI under Construc-
tion Contract. None of the proceeds of the Loans will be paid to
SDI, unless SDI has paid such amount to the Contractor.
3.03 Conditions Precedent to Initial Loan. I&M's
obligation to make the initial loan to SDI is subject to the
following conditions precedent:
(a) I&M shall have received the promissory note in the
form of Exhibit F hereto duly executed by SDI;
(b) I&M shall have received the Purchase Money
Mortgage and Security Agreement in the form of Exhibit G
hereto (the "Mortgage") duly executed by SDI, together with
all financing statements necessary to perfect the security
interest of I&M in the Substation duly executed by SDI;
(c) I&M shall have received an opinion of counsel for
SDI in form and substance reasonably satisfactory to I&M
generally addressing those matters covered in Section
6.01(a), (b), (c), (f) (as to generally applicable laws) and
(g) (other than matters of title and priority);
(d) I&M shall have received certificates of insurance
or other evidence reasonably acceptable to I&M certifying
that the insurance then carried or maintained on the
Substation complies with Article VIII hereof;
(e) I&M shall have received an American Land Title
Association mortgagee's policy of title insurance issued by
Lawyers Title Insurance Corporation (which policy shall
include future advance endorsement), insuring I&M's mortgage
lien on the Premises in an amount equal to the value of the
Construction Contract and the Premises up to $15,000,000,
with only the exceptions described in Items 6, 7, 8, 9 and
11 of the Commitment No. 0694-882 of Lawyers Title Insurance
Corporation, and exceptions for the Bank Mortgage (as long
as the Bank Mortgage is subject to the Mortgage) and related
financing statements and other restrictions, charges or
encumbrances of record that do not materially adversely
affect the use or enjoyment of the Premises;
(f) I&M shall have received an agreement subordinating
the lien of the Bank Mortgage to the lien of the Mortgage in
the form of Exhibit I hereto;
(g) I&M shall have received authorization from the SEC
under PUHCA to perform the transactions contemplated by this
Article III; and
(h) SDI shall have assigned the Construction Contract
to I&M by an Assignment of Contracts substantially in the
form of Exhibit J hereto (the "Collateral Assignment") and
the Bank Assignment shall be subject to the Collateral
Assignment.
ARTICLE IV
Conditions Precedent of I&M; Commitment Limit
4.01 General Conditions Precedent of I&M. All of I&M's
obligations under Articles I and III of this Agreement are
subject to the following conditions precedent:
(a) All representations and warranties of SDI made in
this Agreement are and remain true as of the date they were
made and no Event of Default or Default under this Agreement
shall have occurred and be continuing;
(b) SDI shall furnish I&M with any additional or
updated documents, reports, certificates, affidavits and
other information, in form and substance reasonably
satisfactory to I&M, as I&M may reasonably require to
evidence compliance by SDI with all provisions of this
Agreement;
(c) I&M shall receive a payment request in the form of
Exhibit K hereto, duly executed by SDI, together with a copy
of the related invoice of the Contractor, at least 15 days
prior to the date payment is due under the Construction
Contract; and
(d) I&M shall make such inspection or inspections of
the work under the Construction Contract as it deems
reasonably necessary to determine that such amounts are due
under the Construction Contract; provided, that unless I&M
undertakes such inspection promptly following receipt of the
payment request, this condition shall be deemed to be
waived.
4.02 Commitment Limit. The total of (1) the amount of the
Loans, (2) any other amounts owed by SDI to I&M under this
Agreement, the Note, the Mortgage or any other document entered
into in connection with this Agreement, and (3) if prior to the
Transfer Date, the Purchase Price calculated as if the Transfer
Date is the date on which the requested payment is to be made,
shall not exceed $15,000,000 (the "Commitment Limit").
ARTICLE V
Repayment of Loan and Rate
5.01 Interest. The Loans will bear interest at 8.0% per
annum from the date they are made until they are paid, payable on
the last day of each month; provided that during an Event of
Default, the Loans shall bear interest at the higher of 10% per
annum or 4% over the base rate announced from time to time by
Citibank, N.A. in New York, New York.
5.02 Repayment of Principal. A portion of the principal
of the Loans shall be payable on the last day of each month,
beginning the first such date after the Payment Commencement
Date. The portion of the principal due on each such date shall
be the amount which, when added to the interest payment due on
such date calculated at 8% per annum, will provide for (a) the
total payment due on such date to equal the total payments due on
each other payment date and (b) all principal of the Loans to be
repaid no later than 15 years after the Payment Commencement
Date. SDI may prepay the Loans in whole or in part at any time
without penalty or premium.
5.03 Payment and Computations. SDI will make each payment
hereunder and under the Note not later than 12:00 noon (Fort
Wayne, Indiana time) on the day due in lawful money of the United
States of America and in same day funds to I&M at the address set
forth in the Note. All computations of interest under the Note
shall be made on the basis of a year of 360 days and 30 day
months. Whenever any payment to be made hereunder or under the
Note shall be stated to be due on a Saturday, Sunday or a public
or bank holiday for banks in Fort Wayne or Indianapolis, Indiana
(any other day being a "Business Day"), such payment may be made
on the next succeeding Business Day.
5.04 Payment Commencement Date. The "Payment Commencement
Date" shall be the earlier of the date on which the Plant
commences commercial operation or December 31, 1996; provided,
that if the transmission line to serve the Substation has not
been completed and placed in service by I&M on or prior to such
date, then the Payment Commencement Date shall be the date on
which such line is placed in service by I&M.
ARTICLE VI
Representations and Warranties
6.01 Representations and Warranties of SDI. SDI
represents and warrants to I&M that:
(a) SDI is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Indiana.
(b) The execution, delivery and performance by SDI of
this Agreement and the transactions contemplated hereby are
within SDI's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (1)
SDI's charter or by-laws or (2) law or any contractual
restriction binding on or affecting SDI.
(c) This Agreement is, and the Easement, Note,
Mortgage, Collateral Assignment and any other documents
delivered in connection with this Agreement when delivered
will be, legal, valid and binding obligations of SDI
enforceable against SDI in accordance with their respective
terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, or other similar laws affecting
the enforcement of creditors' rights in general, and except
as the availability of the remedy of specific performance is
subject to general principles of equity (regardless of
whether such remedy is sought in proceeding in equity or at
law).
(d) Since June 1, 1994, there has been no material
adverse change in the financial condition of SDI.
(e) There is no pending or threatened action or
proceeding affecting SDI before any court, governmental
agency or arbitrator (i) which questions the validity of
this Agreement or (ii) which could reasonably be expected to
have a material adverse effect on the ability of SDI to
perform its obligations under this Agreement or on the
financial condition, operations or business of SDI.
(f) There are no consents, licenses, orders, authori-
zations, approvals, waivers, extensions or variances of, or
notices to or registrations or filings with any governmental
authority or regulatory body which are or will be required
in connection with the valid execution, delivery and
performance of this Agreement and the Construction Contract
by SDI except as may be required for the construction or
operation of the Substation and have been or will be timely
obtained.
(g) After the initial Loan, (i) SDI will have good
title to the Substation and the Mortgage will be effective
to create in favor of I&M a legal, valid and enforceable
first lien on and security interest in the Substation and
Premises, subject to no mortgage, deed of trust, pledge,
lien, security interest or other charge or encumbrance of
any nature ("Liens") except for: (A) the lien of the Bank
Mortgage which will be subordinate to the lien of the
Mortgage; (B) liens for taxes, assessments and other
governmental charges which are not yet due or if due are
contested in good faith; (C) materialmen's, mechanics,
workmen's and other statutory liens for amounts which are
not yet due or if due are contested in good faith; (D) an
easement previously conveyed to I&M, dated December 22,
1993, and recorded January 28, 1994 in Deed Record 206 at
page 365 of the DeKalb County, Indiana Recorder's Office; or
(E) other restrictions, charges or encumbrances of record
that do not materially adversely affect the use or enjoyment
of the Premises ("Permitted Liens") and (ii) the Collateral
Assignment will be effective to assign to I&M the rights
purported to be assigned thereby and the Bank Assignment
will be subject to the Collateral Assignment.
6.02 Representations and Warranties of I&M. I&M
represents and warrants to SDI that:
(a) I&M is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Indiana.
(b) The execution, delivery and performance by I&M of
this Agreement and the transactions contemplated hereby are
within I&M's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (1)
I&M's charter or by-laws or (2) law or any contractual
restriction binding on or affecting I&M.
(c) This Agreement is a legal, valid and binding
obligation of I&M enforceable against I&M in accordance with
its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights in general,
and except as the availability of the remedy of specific
performance is subject to general principles of equity
(regardless of whether such remedy is sought in proceeding
in equity or at law).
(d) There is no pending or threatened action or
proceeding affecting I&M before any court, governmental
agency or arbitrator, which questions the validity of this
Agreement or the ability of I&M to perform its obligations
hereunder.
(e) There are no consents, licenses, orders, authori-
zations, approvals, waivers, extensions or variances of, or
notices to or registrations or filings with any governmental
authority or regulatory body which are or will be required
in connection with the valid execution, delivery and
performance of this Agreement by I&M except for the
authorization of the SEC under PUHCA.
ARTICLE VII
Covenants
7.01 Covenants of SDI.
(a) Financial Information. SDI covenants that (i)
within ninety (90) days after the end of each quarter of the
fiscal year of SDI, it will deliver to I&M (A) a certificate
that it has a net worth of at least $30,000,000 at the end
of such quarter, in the case of the certificate for each of
the first three quarters of the fiscal year, signed by the
chief accounting officer of SDI and in the case of a
certificate for the final quarter of the fiscal year, signed
by an independent public accountant of recognized standing,
or (B) the financial statements described in Subsection
7.01(a)(ii) hereof; (ii) while it is subject to the periodic
reporting requirements of Section 13 or 15 of the Securities
Exchange Act of 1934, it will deliver to I&M (A) as soon as
available and in any event within ninety (90) days after the
end of each of the first three (3) quarters of each fiscal
year of SDI, the balance sheet of SDI as of the end of each
such quarter and the statement of income and retained
earnings of SDI for the period commencing at the end of the
previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer of SDI,
and (B) as soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year
of SDI, the balance sheet of SDI as of the end of the year
and the statement of income and retained earnings of SDI for
such year, certified by an independent public accountant of
recognized standing; and (iii) it will allow I&M to review
and inspect such other information respecting the Substation
or the condition or operations, financial or otherwise, of
SDI as I&M may from time to time reasonably request. I&M
agrees not to disclose or permit to be disclosed any
information provided to it in accordance with Subsection
7.01(a)(i) that is clearly marked as Confidential except as
may be required by law. Review and inspection of informa-
tion under Subsection 7.01(a)(iii) other than respecting the
Substation shall be conducted by an independent certified
public accounting firm retained by I&M, which accounting
firm will enter into a reasonable confidentiality agreement
with SDI.
(b) Compliance with Laws. SDI covenants that it shall
comply in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include,
without limitation, laws, rules, regulations and orders
relating to the construction, operation, use and physical
condition of the Substation and paying before the same
become delinquent, all taxes, assessments and governmental
charges imposed upon it or any of its properties, except to
the extent contested in good faith.
(c) Notices. SDI covenants that forthwith upon
obtaining knowledge of an Event of Default or Default, it
will deliver to I&M an officer's certificate specifying the
nature and period of existence thereof and what action SDI
proposes to take with respect thereto.
(d) Limitations on Transfer of and Liens on Substa-
tion. SDI covenants that after the Transfer Date, SDI will
not sell, assign, transfer or otherwise dispose of any of
the Substation to any other person and will not create,
permit or suffer to exist, and will defend the Substation
against and take such other action as is necessary to
remove, any Liens other than Permitted Liens.
(e) Inspection. Upon reasonable notice, SDI will give
I&M the right to visit and inspect, at its expense, the
Substation and any other properties of SDI, to examine its
books of account and to discuss the affairs, finances and
accounts of SDI with their officers and accountants, all at
such reasonable times and as often as I&M may reasonably
request.
(f) Maintenance. SDI will operate, service, maintain
and repair the Substation and replace all necessary
components thereof so that it will have the capacity and
functional ability to perform, on a continuing basis in
normal operations, the functions for which it was designed
and will maintain the Substation in accordance with industry
standards, normal wear and tear excepted.
7.02 Covenant of I&M. I&M covenants that it will use all
reasonable efforts promptly to obtain such authorization from the
SEC pursuant to PUHCA as shall be necessary for it to perform its
obligations under Articles II and III.
7.03 Access Easement. I&M and SDI agree to cooperate
prior to the time I&M is required to make the initial Loan to SDI
in obtaining access to the Premises for I&M.
7.04 UCC Statements. SDI shall sign and file such
continuation statements and other documents as are necessary to
maintain the first lien on and security interest in the
Substation, Construction Contract and Premises. Upon payment of
all amounts owed to I&M under this Agreement, I&M will file such
termination statements and releases as are necessary to release
its security interest and mortgage in the Substation, Construc-
tion Contract and Premises.
ARTICLE VIII
Insurance
8.01 Required Insurance. Until the Note and all amounts
due under this Agreement are paid in full, SDI shall carry and
maintain, or cause to be carried and maintained, at least the
following insurance coverage, in each case with insurers of
recognized responsibility.
(a) 'All risk' property insurance covering physical
loss with respect to the Substation in such amounts and with
such other terms as are in accordance with property
insurance standards prevalent in the industry, but in no
event in an amount less than the amount of the principal
remaining to be paid on the Loans, endorsed to provide that
(1) I&M is included as a loss payee, as its interest may
appear, but shall not be liable for the payment of premiums;
(2) any payment thereunder for loss or damage shall be made
to I&M and SDI; (3) the insurer thereunder waives all rights
to subrogation against I&M with respect to its interest in
the Substation; and (4) such insurance shall be primary
without right of contribution of any other insurance carried
by or on behalf of I&M with respect to its interest in the
Substation; and
(b) Bodily injury and property damage liability
insurance (including product liability, completed operations
and personal injury insurance) covering claims arising out
of the ownership, operation, maintenance, condition or use
of the Substation in such amounts and with such other terms
as are in accordance with prudent industry practice with
single-limit coverage in an amount not less than
$10,000,000, endorsed to provide that (1) I&M is included as
an additional insured; (2) the insurer thereunder waives all
rights to subrogation against I&M; and (3) such insurance
shall be primary without right of contribution of any other
insurance carried by or on behalf of I&M with respect to its
interest in the Substation.
ARTICLE IX
Events of Default
9.01 Acceleration. If any of the following events (an
"Event of Default"; a "Default" means any of such events whether
any requirement for notice or lapse of time shall have occurred)
shall occur and be continuing:
(a) (i) SDI shall fail to pay within 10 days after
it is due the Purchase Price, any amount due on the Note or
any other amounts payable under this Agreement or the
Transmission Facilities Agreement dated as of June 1, 1994
between SDI and I&M or (ii) SDI shall fail to pay within 17
days after it is due any amount payable under the Contract
for Electric Service dated June 1, 1994 between SDI and I&M
(the "Electric Service Contract");
(b) SDI shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement, the
Easement or the Mortgage on its part to be performed or
observed and any such failure shall remain unremedied for
thirty (30) days after written notice thereof shall have
been given to SDI by I&M;
(c) Any representation or warranty made herein or
contained in any certificate, document or financial or other
statement furnished to I&M pursuant to this Agreement shall
prove to have been incorrect in any material respect when
made;
(d) SDI shall fail to pay the principal of, or
interest on, any obligation of SDI for borrowed money in
excess of $15,000,000 when due, whether by acceleration, by
required prepayment or otherwise, for a period longer than
any period of grace provided in such obligation, or fail to
perform any other term, condition or covenant contained in
any such obligation, the effect of any of the foregoing of
which is to cause such obligation then to become due prior
to its stated maturity, unless such failure shall have been
cured;
(e) SDI shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be
instituted by or against SDI seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official
for it or for any substantial part of its property and if
the proceeding is instituted against SDI, it is not
dismissed within 60 days; or SDI shall take any corporate
action to authorize any of the actions set forth above in
this clause (d);
(f) The Electric Service Contract shall terminate or
be terminated, or SDI shall abandon construction or
operation of the Plant;
then (i) if such event is an Event of Default specified in clause
(e) of this Section 9.01 with respect to SDI, the Note shall
automatically become immediately due and payable at par together
with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by
SDI, and (ii) if such event is any other Event of Default, I&M
may at its option, by notice in writing to SDI, declare the Note
to be, and the Note shall thereupon be and become, immediately
due and payable at par together with interest accrued thereon
without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by SDI.
9.02 Other Remedies. If any Event of Default or Default
shall occur and be continuing, I&M may proceed to protect and
enforce its rights under this Agreement and the Note by
exercising such remedies as are available to it in respect
thereof under the Mortgage or applicable law, either by suit in
equity or by action at law, or both, whether for specific
performance of any covenant or other agreement contained in this
Agreement or in aid of the exercise of any power granted in this
Agreement. No remedy conferred in this Agreement upon I&M is
intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law
or in equity or by statute or otherwise.
ARTICLE X
Liability
10.01 Indemnification. To the extent permitted by law, SDI
shall protect, indemnify, save harmless, and defend I&M from and
against any losses, liabilities, costs, expenses, suits, actions,
claims, and all other obligations and proceedings whatsoever,
including, without limitation, all judgments rendered against,
and all fines and penalties imposed upon I&M, and any reasonable
attorneys' fees and any other costs of defense (collectively the
"Liabilities") arising out of injuries to persons, including
death, or damage to property, to the extent caused by, or
occurring in connection with any act or omission of SDI, its
employees, its agents, its contractors or subcontractors, or in
any way attributable to I&M's or SDI's ownership, or the
construction, use or operation of the Substation, except that
SDI's obligation to indemnify I&M shall not apply to any
Liabilities to the extent caused by I&M's negligence or wilful
misconduct.
10.02 I&M and SDI Responsibility. I&M assumes no
responsibility of any kind with respect to construction,
maintenance or operation of the Substation and shall not be
liable for any loss, injury (including death), damage to or
destruction of property (including loss of use thereof) arising
out of such construction, maintenance or operation or out of any
use by SDI or others, of the Substation, except to the extent
such damage or injury shall be caused by I&M's negligence or
wilful misconduct and except as provided in Section 2.04 hereof.
10.03 Limitation on Damages. I&M shall not be liable for
indirect, special, incidental or consequential damages, including
loss of profits due to business interruptions or otherwise, in
connection with this Agreement or the Substation. The total
liability of I&M in connection with this Agreement or the
Substation, whether arising out of contract, tort (including
negligence), strict liability, or other cause or form of action,
shall not exceed $15,000,000.
10.04 Affiliates and Others. Any indemnification of I&M or
any limitation of I&M's liability which is made or granted under
this Article X shall to the same extent apply to I&M's directors,
officers, employees and agents, and to I&M's affiliated
companies, including any directors, officers, employees and
agents thereof.
ARTICLE XI
Miscellaneous
11.01 Modification; Waiver. This Agreement may be
modified, amended or supplemented in any manner and at any time
only by a written instrument executed by SDI and I&M. The
failure of either party to enforce or insist upon compliance with
any of the terms or conditions of this Agreement shall not
constitute a general waiver or relinquishment of any such terms
or conditions, but the same shall be and remain at all times in
full force and effect.
11.02 Entire Agreement. This Agreement supersedes any and
all other understandings, contracts or agreements, oral or
written, among the parties hereto in respect of the subject
matter of this Agreement.
11.03 Costs and Expenses. SDI agrees to pay or reimburse
I&M for the payment of (i) all reasonable out-of-pocket expenses,
including reasonable attorney's fees, arising in connection with
the enforcement or preservation of any rights under this
Agreement, the Note, the Mortgage and the Collateral Assignment,
and (ii) any and all present and future stamp and other taxes
(including interest and penalties, if any) which may be assessed
or payable in respect of the Note, or any modification of the
Note, or of the Mortgage.
11.04 Rights and Remedies. The rights and remedies granted
under this Agreement shall not be exclusive rights and remedies
but shall be in addition to all other rights and remedies
available at law or in equity.
11.05 Further Actions. Each Party shall execute and
deliver such other certificates, agreements, conveyances,
certificates of title and other documents and take such other
actions as may reasonably be requested by the other Party in
order to consummate or implement the transactions contemplated by
this Agreement.
11.06 Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered or mailed, registered mail,
first-class postage paid,
If to I&M:
G. P. Maloney, Vice President
Indiana Michigan Power Company
c/o 1 Riverside Plaza
Columbus, OH 43215
If to SDI:
Keith E. Busse, President
Steel Dynamics, Inc.
Suite 325
2780 Waterfront Parkway East Drive
Indianapolis, IN 46214
or to such other address or to such other person as any Party
hereto shall have last designated by notice to the other Party.
11.07 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned, by operation of law
or otherwise, by SDI without the prior written consent of I&M,
except that SDI may assign this Agreement to the same person or
entity to whom it properly assigns the Electric Service Contract
and collaterally assign this Agreement under the Bank Assignment.
Except as aforesaid, nothing in this Agreement, express or
implied, is intended to confer upon any person other than the
parties hereto and their said successors and assigns, any rights,
remedies or obligations under or by reason of this Agreement.
11.08 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect.
11.09 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall constitute one and the
same instrument.
11.10 Headings. The article and section headings in this
Agreement are for convenience of reference only and shall not be
deemed to alter or affect the meaning or interpretation of any
provisions hereof.
11.11 Governing Law. This Agreement shall be construed,
performed and enforced in accordance with the laws of the State
of Indiana.
11.12 Termination. This Agreement shall terminate upon the
sale of the Substation to SDI and the payment to I&M of the then
applicable Purchase Price and all Loans, interest thereon and
other amounts owed to I&M under this Agreement, the Note or the
Mortgage, if any, and either (a) all payments due to the
Contractor under the Construction Contract have been made or (b)
I&M no longer has any obligation to make Loans under Section 3.01
of this Agreement because the Commitment Limit has been reached;
provided, however, that the provisions of Section 2.04 and
Article X and the confidentiality provisions of Section 7.01
shall survive the termination of this Agreement pursuant to this
Section 11.12.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed as of the date first above written.
INDIANA MICHIGAN POWER COMPANY STEEL DYNAMICS, INC.
By:_/s/ Richard C. Menge___ By:_/s/ Keith E. Busse__
Richard C. Menge Keith E. Busse
President President
<PAGE> Exhibit F
614/223-1632
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C.
July 5, 1994
Gentlemen:
With respect to the Application or Declaration on Form
U-1 of Indiana Michigan Power Company (the "Company")
relating to the acquisition of the promissory note (the
"Note") of Steel Dynamics, Inc., I wish to advise you
as follows:
I am further of the opinion that, in the event that the
proposed transactions are consummated in accordance
with said Application or Declaration, as the same may
be approved by the Commission:
(a) All state laws applicable to the proposed
transactions will have been complied with;
(b) The Company will legally acquire the Note;
and
(c) Consummation of the proposed transactions
will not violate the legal rights of the
holders of any securities issued by the
Company or any associate company thereof.
I hereby consent to the filing of this opinion as an
exhibit to the above-mentioned Application or
Declaration.
Very truly yours,
/s/ John M. Adams, Jr.
John M. Adams, Jr.
Counsel for
Indiana Michigan Power Company
imfinan.94\opincoun.u-1
<PAGE> Exhibit G
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. / , 1994
_________________________________________
:
In the Matter of :
:
INDIAN MICHIGAN POWER COMPANY :
One Summit Square :
Fort Wayne, Indiana 46801 :
:
(70- ) :
__________________________________________:
NOTICE OF PROPOSED ACQUISITION OF SECURITY
Indiana Michigan Power Company ("I&M"), a utility subsidiary of
American Electric Power Company. Inc., a registered holding company,
has filed with the Commission an Application or Declaration pursuant
to the Public Utility Holding Company Act of 1935 (the "Act"),
designating Sections 9(a), 10, 12(b) and Rule 44 promulgated
thereunder as applicable the proposed transactions.
I&M proposes to acquire a promissory note from Steel Dynamics, Inc.
("SDI") an Indiana corporation, which is constructing a new steel
manufacturing facility in I&M's service territory. The note will
evidence a loan by I&M to SDI in an amount up to $15,000,000, which
will be used by SDI to construct a 345 kv-34.5 kv substation in order
for I&M to supply electric service to SDI's manufacturing facility.
The loan will be made under a Substation Facilities Agreement and
a promissory note. The loan will bear interest at 8% per year,
mature in not more than 15 years and be secured by a first lien on
the substation.
Under the Substation Facilities Agreement, SDI has assigned the
construction contract for the substation to I&M, I&M has agreed to
pay the costs of construction as they are incurred and will own the
substation as it is constructed. I&M will sell the substation to
SDI after I&M receives authorization from this Commission to acquire
the promissory note of SDI.
imfinan.94\notice.sec
