<PAGE>
File No. 70-8747
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
Amendment No. 2 to
FORM U-1
__________
APPLICATION - 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
BLACKHAWK COAL COMPANY
c/o American Electric Power Service Corporation
161 West Main Street, Lancaster, Ohio 43130
(Names of companies 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
John F. Di Lorenzo, Jr., Associate General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
<PAGE>
Blackhawk Coal Company ("Blackhawk") and Indiana Michigan
Power Company ("I&M") hereby amend their Application-Declaration on
Form U-1 in File No. 70-8747 as follows:
1) By adding the following to ITEM 1. Description of
Proposed Transaction:
C. Compliance with Rule 54
AEP Resources International, Limited ("AEPRI"), an
indirect subsidiary of American Electric Power Company, Inc.
("American"), is an exempt wholesale generator ("EWG"), as
defined in Section 32 of the Act. American, through its
subsidiary, AEP Resources, Inc., invested $115,000 in AEPRI.
This investment represents less than 1% of $1,356,255,000, the
average of the consolidated retained earnings of American
reported on Form 10-K or Form 10-Q, as applicable, for the
four consecutive quarters ended September 30, 1995.
AEPRI will maintain books and records and make available
the books and records required by Rule 53(a)(2). No more than
2% of the employees of the operating subsidiaries of American
will, at any one time, directly or indirectly, render services
to AEPRI. American has submitted and will continue to submit
a copy of Item 9 and Exhibits G and H of American's Form U5S
to each of the public service commissions having jurisdiction
over the retail rates of American's operating utility
subsidiaries.
In accordance with Rule 54, the requirements of Rule
53(a), (b) and (c) are fulfilled.
None of the funds herein authorized will be used directly
or indirectly to finance the acquisition of a foreign utility
company or EWG.
In addition, (i) neither American nor any subsidiary of
American is the subject of any pending bankruptcy or similar
proceedings; (ii) American's average consolidated retained
earnings for the four most recent quarterly periods
($1,356,255,000) represented an increase of approximately
$51,777,000 (or 4.0%) in the average consolidated retained
earnings from the previous four quarterly periods
($1,304,478,000); and (iii) for the year ended December 31,
1994, there were no losses attributable to American's direct
or indirect investments in AEPRI other than $4,000 in start-up
costs.
2) By supplying the following Exhibits and Financial
Statements:
(a) Exhibits
Exhibit B-1 Second Addendum to Lease
Transaction Agreement
Exhibit B-2 Form of Promissory Note
(b) Financial Statments:
Balance Sheets as of September 30, 1995
and Statements of Income and Retained
Earnings, per books and pro forma, for the 12
months ended September 30, 1995, of I&M and of
AEP and its subsidiaries consolidated,
together with journal entries reflecting the
proposed transaction.
SIGNATURES
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned have duly caused this
amendment to be signed on their behalf by the undersigned thereunto
duly authorized.
INDIANA MICHIGAN POWER COMPANY
By:_____/s/ G. P. Maloney_____
Vice President
BLACKHAWK COAL COMPANY
By:_____/s/ G. P. Maloney_____
Vice President
Dated: December 12, 1995<PAGE>
<PAGE>
Exhibit B-1
SECOND ADDENDUM TO
LEASE TRANSACTION AGREEMENT
DATED AS OF JANUARY 31, 1986
AMONG
BLACKHAWK COAL COMPANY,
CASTLE GATE COAL COMPANY,
PRICE RIVER COAL COMPANY AND
MEADOWLARK UTAH, INC.
This Second Addendum to Lease Transaction Agreement ("Addendum
Agreement") made this _____ day of _____________, 1995, among
Blackhawk Coal Company, a Utah corporation, Price River Coal
Company, an Indiana corporation, Amax Coal Company, a Delaware
corporation, and Amax Land Company, a Delaware corporation.
RECITALS
A. Blackhawk Coal Company ("Blackhawk"), Price River Coal Company
("Price River"), Castlegate Coal Company ("Castlegate"), and
Meadowlark Utah, Inc. ("Meadowlark") are all of the original
named parties to that certain Lease Transaction Agreement
("Lease Transaction Agreement") entered into on January 31,
1986, and closed on May 30, 1986.
B. All of the obligations of Castlegate and Meadowlark under the
Lease Transaction Agreement were guaranteed by Amax, Inc.,
parent corporation of Castlegate and Meadowlark, pursuant to
a Guaranty executed by Amax, Inc. on January 31, 1986.
C. At closing of the Lease Transaction Agreement ("Closing I") on
May 30, 1986, Blackhawk and Price River as lessors or
sublessors leased or subleased certain coal lands, facilities,
and equipment to Castlegate and Meadowlark as lessees or
sublessees pursuant to a series of leases and subleases,
including among others, the Crandall Canyon Facilities Lease,
the Preparation Plant Facility Lease, the Miscellaneous Owned
Equipment Lease, and the Surface Lease (hereinafter
collectively referred to as "Original Leases").
D. At Closing I, Blackhawk also subleased to Meadowlark, six
federal coal leases pursuant to Federal Coal Subleases # 1, #
2, # 3, # 4, # 5 and # 6 ("the Federal Coal Subleases").
E. Subsequent to Closing I, Castlegate merged into Amax Coal
Company ("Amax Coal"); Meadowlark changed its name to Amax
Land Company ("Amax Land"); and Amax Inc. merged into Cyprus
Amax Minerals Company (formerly Cyprus Minerals Company)
("Cyprus-Amax").
F. Each of the Original Leases grants the lessee (either
Castlegate or Meadowlark) a purchase option exercisable at the
end of the Initial Term (as defined in the Original Leases) to
purchase the leased property from Blackhawk at a purchase
price equal to fair market sales value (also as defined in the
applicable Original Leases.)
G. Castlegate or Amax Coal (as successor to Castlegate) has
exercised the purchase options and has, prior to this Addendum
Agreement, purchased the property which was the subject of the
Westfalia Shields Lease, and the Miscellaneous Owned Equipment
lease (Class A Equipment).
H. The remaining purchase options under the Original Leases will
become exercisable upon future dates which vary depending on
the Initial Term of the respective Original Lease.
I. Amax Land Company and Amax Coal Company have reached an
agreement with Cyprus Western Coal Company and Cyprus Plateau
Mining Corporation, which agreement will relieve the former of
reclamation costs at the closed Castle Gate mine; however, a
precondition to the consummation of this agreement is the
restructuring of the Lease Transaction Agreement.
J. The parties hereto ("Parties") desire to restructure and amend
the transaction contemplated by the Lease Transaction
Agreement in certain particulars. Specifically, the parties
desire (1) to terminate the remaining Original Leases; (2) to
permit Amax Coal to exercise the purchase options under the
remaining Original Leases of equipment and facilities at a
negotiated fair market value prior to the end of their Initial
Terms and upon purchase terms different from those set forth
in the Original Leases; (3) to permit Amax Land Company to
purchase the real property covered by the Surface Lease; (4)
to grant Amax Land an option to relinquish the Federal Coal
Subleases, and (5) to grant Amax Land a right of first refusal
applicable to Blackhawk's interest in the Federal Coal Leases.
K. The Parties have agreed to make the desired changes pursuant
to this Second Addendum to Lease Transaction Agreement and the
transactions contemplated hereby in accordance with the
following terms and conditions:
AGREEMENT
I. USE OF DEFINITIONS FROM LEASE TRANSACTION AGREEMENT.
The capitalized terms not otherwise defined in this Addendum
Agreement or in the Recitals hereof shall have the meanings
ascribed to them in the Lease Transaction Agreement.
II. ADDITIONAL DEFINITIONS.
a. "Bill of Sale" shall mean the bill of sale in
substantially the form of Exhibit A to be executed by
Blackhawk at Closing II.
b. "Buyers" shall mean Amax Coal Company and Amax Land
Company.
c. "Closing II" shall have the meaning set forth in Article
V.
d. "Date of Closing II" shall have the meaning set forth in
Article V.
e. "Equipment Promissory Notes #1, #2, and #3" shall mean
the promissory notes to be executed at Closing II by Amax
Coal in substantially the form of Exhibit B.
f. "Federal Lease Bonds" shall mean those lease bonds listed
on Exhibit F and applicable to the Federal Coal Lands.
g. "Guaranty Confirmation" shall have the meaning set forth
in Article III hereof and shall be executed by Cyprus
Amax at Closing II in substantially the form of Exhibit
C hereto.
h. "Liens" shall mean Liens as to any property or premises
[shall mean liens, mortgages, encumbrances, pledges,
charges, easements, restrictions, covenants and security
interests of any kind] (including conditional sale or
other title retention agreements) or other rights or
claims of any kind affecting such property or premises.
i. "Mortgage II" shall mean the mortgage between Blackhawk
as mortgagee, and Amax Coal and Amax Land as mortgagors
to be executed at Closing II in substantially the form of
Exhibit G.
j. "New Transaction Documents" shall mean the Bill of Sale,
the Surface Area Deed, the Right of First Refusal
Agreement, the Option to Terminate Federal Coal
Subleases, the Timber Sale Proceeds Agreement, the
Mortgage II, the Security Agreement II, the Equipment
Promissory Notes and the Surface Promissory Note.
k. "Option to Terminate Federal Coal Subleases" shall mean
the Option to Terminate Federal Coal Subleases, in
substantially the form of Exhibit D, to be executed by
Blackhawk and Amax Land at Closing II.
l. "Option to Repurchase" shall mean the Option to
Repurchase Agreement substantially in the form of Exhibit
L attached hereto to be executed at Closing II by
Blackhawk and Amax Land. [_______________________.]
m. "Original Leases" shall mean the Crandall Canyon Facility
Lease, the Preparation Plant Facility Lease, the
Miscellaneous Owned Equipment Lease, and the Surface
Lease.
n. "Purchased Assets" shall have the meaning set forth in
Article IV.
o. "Remaining Leases" shall mean the Coal Lease and the
State Coal Subleases.
p. "Right of First Refusal Agreement" shall mean the right
of first refusal agreement applicable to the Federal Coal
Leases, in substantially the form of Exhibit E, to be
executed at Closing II by Blackhawk and Amax Land.
q. "Security Agreement II" shall mean the Amended and
Restated Security Agreement in substantially the form of
Exhibit I to be executed at Closing II by Amax Coal as
debtor and Blackhawk as secured party.
r. "Surface Area Deed" shall mean the special warranty deed,
in substantially the form of Exhibit J attached hereto,
to be executed at Closing II by Blackhawk.
s. "Surface Interests" shall mean the Crandall Canyon
Facility Surface Area, the Preparation Plant Facility
Surface Area and the Remaining Western Surface, all as
delineated and more fully described on Exhibit O attached
hereto.
t. "Surface Promissory Note" shall mean the promissory note,
in substantially the form of Exhibit P attached hereto to
be executed at Closing II by Amax Land.
u. "Timber Sale Proceeds Agreement" shall mean the Timber
Sale Proceeds Agreement, substantially in the form of
Exhibit K attached hereto, to be executed at Closing II
by Blackhawk and Amax Land.
III. PERFORMANCE AT CLOSING AND POST-CLOSING OBLIGATIONS.
v. At Closing II, Blackhawk shall:
1. Convey to Amax Coal by Bill of Sale, the Crandall
Canyon Facility, the Preparation Plant Facility,
and the Class B and C Miscellaneous Owned
Equipment;
2. Execute and deliver to Amax Land the Option to
Terminate Federal Coal Subleases;
3. Execute and deliver to Amax Land the Surface Area
Deed for the Crandall Canyon Facility Surface Area,
the Preparation Plant Facility Surface Area, and
the Remaining Western Surface;
4. Execute and deliver to Amax Land the Right of First
Refusal Agreement;
5. Execute and deliver to Amax Land the Timber Sale
Proceeds Agreement.
6. Execute and deliver to Amax Land a document in
recordable form acknowledging the termination of
the Surface Lease.
w. At Closing II:
1. Buyers shall pay a portion of the Purchase Price by
tender of immediately available funds in the amount
of $5,700,000;
2. Buyers shall execute and deliver the Security
Agreement II and Mortgage II;
3. Amax Land shall receive and accept the Bill of Sale
and the Surface Area Deed for the Crandall Canyon
Surface Area, Preparation Plant Facility Surface
Area, and the Remaining Western Surface;
4. Amax Land shall execute and deliver to Blackhawk
the Right of First Refusal Agreement;
5. Amax Land shall execute and deliver to Blackhawk
the Timber Sale Proceeds Agreeement.
6. Amax Land shall execute and deliver to Blackhawk a
document in recordable form acknowledging the
termination of the Surface Lease.
x. At Closing II, Cyprus Amax shall execute and deliver the
Guaranty Confirmation, confirming that:
1. Cyprus Amax is successor in interest to AMAX, Inc.
for purposes of the original Guaranty of the
obligations of Castlegate and Meadowlark; and
2. That Cyprus Amax assumes all of the obligations of
AMAX, Inc. under the Guaranty as if Cyprus Amax
had been the original party to the Guaranty in lieu
of Amax, Inc.
3. That all of the obligations of Amax Coal and Amax
Land undertaken pursuant to this Addendum Agreement
and the transactions contemplated hereby will be
added to the obligations guaranteed by Cyprus Amax.
IV. PURCHASE PRICE.
y. The purchase price for the Crandall Canyon Facility, the
Preparation Plant Facility, the Class B and Class C
Miscellaneous Owned Equipment, the Crandall Canyon
Facility Surface Area, the Preparation Plant Facility
Surface Area and the Remaining Western Surface
(collectively the "Purchased Assets") shall be paid to
Blackhawk at Closing II as follows:
1. Five Million Seven Hundred Thousand Dollars
($5,700,000) in immediately available funds,
allocated as follows:
* $2,250,000 for the Crandall Canyon Facility
Surface Area, the Preparation Plant Facility
Surface Area, and the Remaining Western
Surface; and
* $3,450,000 for the Crandall Canyon Facility,
the Preparation Plant Facility, and the Class
B and C Miscellaneous Owned Equipment.
2. Delivery by Buyers of Equipment Promissory Notes
#1, #2, and #3 payable to Blackhawk in the
principal amounts of $________, $________,
$________ and $________ respectively [equalling the
total of remaining lease payments under the
Crandall Canyon Facility Lease, the Preparation
Plant Facility Lease, and the Miscellaneous Owned
Equipment Lease]; and
3. Delivery by Buyers of the Surface Promissory Note
in the principal amount of ________________
[remaining lease payments due under the Surface
Lease].
z. The Equipment Promissory Notes, the Surface Promissory
Note, and Amax Land's obligations under the Right of
First Refusal Agreement and the Timber Sale Proceeds
Agreement shall be secured by the Mortgage II and the
Security Agreement II.
V. CLOSING II.
aa. The closing of the transactions described in this
Addendum Agreement ("Closing II") shall take place at the
offices of Porter, Wright, Morris & Arthur, 41 South High
Street, Columbus, Ohio 43215, on
________________________, 1995, or at such other time and
place as the parties may agree but in no event later than
____________. The date on which Closing II actually
occurs is referred to in this Addendum Agreement as "the
Date of Closing II."
VI. TITLE TO REAL PROPERTY AND TANGIBLE PERSONAL PROPERTY.
ab. At Closing II, Blackhawk shall transfer to Amax Coal all
of Blackhawk's right, title and interest in and to the
Preparation Plant Facility, the Crandall Canyon Facility,
and the Class B and Class C Equipment under the
Miscellaneous Owned Equipment Lease on an "AS IS, WHERE
IS, IF IS" basis without any representation or warranty
whatsoever, express or implied, except that the
facilities and equipment are free of Liens (other than
the Mortgage and Mortgage II) resulting from acts of
Blackhawk.
ac. At Closing II, Blackhawk will convey to Amax Land by
special warranty deed the Preparation Plant Facility
Surface Area and the Crandall Canyon Facility Surface
Area subject to mortgages granted by Amax Land to
Blackhawk, and all other liens, mortgages, encumbrances,
covenants, restrictions, requirements, prior rights,
claims, reservations, easements, agreements, and all
other matters legally existing except such matters
arising from acts of Blackhawk. At Closing II, Blackhawk
will deliver, and Amax Land will accept the Surface Area
Deed as the instrument of transfer for the real property
to be conveyed hereunder.
ad. Upon acceptance of the Surface Area Deed at Closing II,
Amax Land shall be deemed to have waived, for itself, its
Affiliates, successors and assigns any claims against
Blackhawk, its Affiliates, successors, assigns, agents,
officers, directors or employees on account of any defect
in title disclosed by any of the documentation given to
Castlegate and Meadowlark prior to Closing I of the Lease
Transaction Agreement. Blackhawk will, within a
reasonable time following Closing II deliver to Buyers
any documents in Blackhawk's possession which, to
Blackhawk's knowledge reflect any material change in the
state of Blackhawk's title to the Surface Area created
solely by acts of Blackhawk between the Closing I and
Closing II.
VII. PERMITS AND BONDS.
All Permits and Bonds, and the rights and obligations relating
thereto shall remain as stated in the Lease Transaction
Agreement.
VIII. TAXES, ASSESSMENTS AND PRORATIONS.
Buyers shall pay all of the transfer, documentary, filing,
sales, recording and other taxes associated with the sale of
the Purchased Assets.
IX. EASEMENTS.
At Closing II, Amax Land shall execute and deliver to
Blackhawk perpetual appurtenant easements in substantially the
form of Exhibit M attached hereto over the Crandall Canyon
Surface Area, the Preparation Plant Surface Area, and the
Remaining Western Surface.
X. CONDITION OF PURCHASED ASSETS.
Buyers acknowledge and represent that they have examined and
inspected the physical condition and state of repair of all of
the Purchased Assets; that, except as set forth in the
Original Leases, no representations or warranties have been
made by Blackhawk or anyone acting on its behalf as to the
condition or quality of any of the Purchased Assets, and that
all of the Purchased Assets are being sold "AS IS, WHERE IS,
IF IS" at Closing II. Blackhawk makes no warranty or
representation that the items of fixed assets, facilities, and
equipment listed as Exhibits to the Preparation Plant Facility
Lease, the Crandall Canyon Facility Lease or the Equipment B
and C of the Miscellaneous Owned Equipment currently exist or
are or will be located on the properties to be purchased by
Buyers at Closing II. Blackhawk agrees only that to the
extent any or all of the items enumerated and identified on
such Exhibits exist and are located on the properties to be
purchased by Buyers at Closing II, Blackhawk will convey
Blackhawk's title and interest in those items free and clear
of all Liens resulting from acts of Blackhawk, except as
disclosed on Exhibit ___. Except as expressly set forth in
the Lease Transaction Agreement as amended by this Addendum
Agreement or as set forth in the Original Leases, Blackhawk
MAKES NO EXPRESS WARRANTIES WITH RESPECT TO THE CONDITION,
QUALITY, COMPLIANCE WITH LAWS OR REGULATIONS, LOCATION,
WORKING ORDER OR STATE OF REPAIR OF ANY OF THE PURCHASED
ASSETS AND DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER.
XI. WATER RIGHTS.
The Parties hereby acknowledge and confirm that the Water
Rights which are the subject of the Water Rights License, as
defined in the Lease Transaction Agreement and entered into
between Blackhawk and Castlegate on May 30, 1986, have been
quit-claimed by Blackhawk to Cyprus Western by quitclaim deed
executed pursuant to that certain Master Agreement between
Blackhawk and Cyprus Western Coal Company entered into and
made effective on November 1, 1993 ("Master Agreement of
1993"). Upon termination of mining operations by Buyers,
Blackhawk shall have the right to request reassignment of the
Water Rights, and Buyers shall cause such Water Rights to be
assigned by quitclaim to Blackhawk, in accordance with the
terms of the Master Agreement of 1993 as amended.
XII. TIMBER SALE PROCEEDS.
At Closing II, Blackhawk and Amax Land will execute the Timber
Sale Proceeds Agreement to provide for allocation between
Blackhawk and Buyers of proceeds from sales or other transfers
of timber from the Purchased Assets made subsequent to the
Date of Closing II.
XIII. REPURCHASE OPTION.
If Cyprus Western shall exercise its right to terminate the
Master Agreement of 1993 pursuant to Article 3.3 of the Master
Agreement of 1993, Blackhawk shall have the right to
repurchase the Eastern Surface Area in accordance with the
terms of the Amendment to Master Agreement of 1993 executed
by Blackhawk and Cyprus Western Coal Company of even date
herewith.
XIV. TERMINATION OF ORIGINAL LEASES.
ae. As of the Date of Closing II, the Original Leases will be
terminated with the same effect as if they had expired at
the end of their Initial Terms and Amax Land or Amax
Coal, as applicable, had exercised the Purchase Options
contained in each of the Original Leases.
af. As of the Date of Closing II, Blackhawk for itself, its
Affiliates, successors, and assigns, releases and forever
discharges Amax Land and Amax Coal, their Affiliates,
successors, assigns, officers, directors and employees,
from any and all claims, demands or causes of action
whatsoever against Amax Land or Amax Coal, their
predecessors, successors and assigns, arising out of the
Original Leases, or the use and occupancy of the
properties leased thereunder; provided, however, that the
release and discharge shall not apply to the warranties
and covenants made by Amax Land or Amax Coal in this
Second Addendum, nor shall the release apply to (i) the
obligations of indemnity contained in Section ___ of the
Original Leases or (ii) the obligations of Amax Land with
respect to reclamation operations and requirements
contained in Section 9 and Section 13 of the Surface
Lease, which obligations shall remain in full force and
effect notwithstanding this Second Addendum.
ag. As of the Date of Closing II, Amax Land and Amax Coal,
for themselves and their Affiliates, successors and
assigns, release and forever discharge Blackhawk, its
Affiliates, successors, assigns, officers, directors and
employees from any and all claims, demands, or causes of
action against Blackhawk, arising out of the Original
Leases or the use and occupancy of properties leased
thereunder; provided, however, that the release and
discharge shall not apply to the warranties and covenants
made by Blackhawk in this Second Addendum nor to
Blackhawk's obligations of indemnity contained in Section
___ of the Original Leases, which obligations shall
remain in full force and effect notwithstanding this
Second Addendum Agreement.
ah. Between the date of this Addendum Agreement and the Date
of Closing II, (i) the Original Leases remain in full
force and effect, and (ii) all rights and obligations
with respect to the Purchased Assets, including without
limitation, the care, custody and preservation of the
Purchased Assets, remain as stated in the Original
Leases.
ai. Buyers acknowledge and assume sole responsibility for all
reclamation obligations, arising under federal, state or
local law now in effect or which may hereafter come into
effect, applicable to any of the Purchased Assets and
arising from conduct or activitiy undertaken at any time
whether prior to or after Closing I or prior to or after
Closing II. Buyers shall indemnify, defend, and save
harmless Blackhawk, its Affiliates, officers, directors,
employees, and agents, in accordance with Article XXII of
the Lease Transaction Agreement, from and against any
losses, liabilities, damages, demands, obligations,
fines, civil penalties, expenses, costs and fees
(including, without being limited to, court costs and
reasonable attorneys' fees) arising from Buyers' failure
to perform the reclamation and shut-down obligations in
connection with the Purchased Assets.
XV. SURVIVAL OF INDEMNITIES.
All indemnification provisions set forth in the Lease
Transaction Agreement, the Original Leases the Remaining
Leases or any other agreements executed at Closing I shall
survive this Addendum Agreement and Closing II and shall
remain in force and effect to the same extent as if this
Addendum Agreement and the transactions contemplated hereby
had not occurred. All indemnification provisions set forth in
this Addendum Agreement and in the New Transaction Documents
or any other documents executed at Closing II shall survive
Closing II.
XVI. REPRESENTATIONS AND WARRANTIES OF BLACKHAWK.
As an inducement to Buyers to enter into this Addendum
Agreement and to consummate the transactions set forth in or
contemplated by this Addendum Agreement, Blackhawk represents
and warrants to Buyers as follows:
aj. Blackhawk is a corporation duly organized, validly
existing and in good standing under the laws of the state
of its incorporation with full power to own or lease and
operate its properties and to carry on its business as
presently conducted. Blackhawk is in good standing under
the laws of Utah.
ak. Blackhawk is not subject to any provision of its articles
of incorporation or bylaws, to any restriction contained
in any mortgage, agreement, order, decree or instrument
or to any other restriction of any kind or character
which would prevent the execution and delivery of this
Addendum Agreement, the New Transaction Documents or
consummation of the transactions contemplated thereby.
al. The execution and delivery by Blackhawk of this Addendum
Agreement and the New Transaction Documents and the
closing of the transactions contemplated thereby have
been, or prior to Closing II will have been, duly
authorized by all requisite corporate action on the part
of Blackhawk, and the New Transaction Documents when
executed and delivered by Blackhawk will be valid,
binding and fully enforceable against Blackhawk, except
to the extent that enforcement may be limited by
applicable bankruptcy, insolvency, reorganization,
liquidation, moratorium, or similar laws affecting
creditors' rights generally.
am. Blackhawk is not a party to any actions, suits or
proceedings pending, or to the knowledge of Blackhawk
threatened, before any court, arbitrator or governmental
body, which might (i) materially impair or affect the
ability of Blackhawk to perform its obligations under
this Addendum Agreement or the New Transaction Documents
or (ii) materially affect the Purchased Assets.
an. Neither Blackhawk nor any party acting on behalf of
Blackhawk has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or
on account of the transactions set forth in or
contemplated by this Addendum Agreement.
ao. The representations, warranties, agreements,
acknowledgements and waivers of Blackhawk set forth
anywhere in this Addendum Agreement or in any certificate
or instrument delivered or to be delivered by Blackhawk,
pursuant hereto, and any indemnity by Blackhawk set forth
in this Addendum Agreement shall survive Closing II and
be and remain effective notwithstanding any investigation
at any time made by or on behalf of Buyers.
ap. Any authorization, consent, approval, license, exemption
of or filing or registration with any court or
governmental department, commission, board, bureau,
agency or instrumentality necessary for the valid
execution and delivery by Blackhawk of this Addendum
Agreement and the New Transaction Documents has been
obtained or performed or shall have been obtained or
performed prior to Closing II.
XVII. REPRESENTATIONS AND WARRANTIES OF BUYERS.
As an inducement to Blackhawk to enter into this Addendum
Agreement and to consummate the transactions set forth in or
contemplated by this Addendum Agreement, Buyers, jointly and
severally, represent and warrant to Blackhawk as follows:
aq. Each of Buyers is a corporation duly organized, validly
existing and in good standing under the laws of the state
of its incorporation, and is duly qualified to lease and
purchase assets and to conduct business as a foreign
corporation in Utah.
ar. Neither of Buyers is subject to any provision of its
articles of incorporation or bylaws, to any restriction
contained in any mortgage, agreement, order, decree or
instrument or to any other restriction of any kind or
character which would prevent the execution and delivery
of this Addendum Agreement, the New Transaction
Documents, or consummation of the transactions
contemplated thereby.
as. The execution and delivery by Buyers, or either of them
as applicable, of this Addendum Agreement, the New
Transaction Documents and the closing of the transactions
contemplated thereby have been, or prior to Closing II
will have been, duly authorized by all requisite
corporate action on the part of Buyers, and the New
Transaction Documents when executed and delivered by
Buyers, as applicable, will be valid, binding and fully
enforceable against Buyers, as applicable, except to the
extent that enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, liquidation,
moratorium, or similar laws affecting creditors' rights
generally.
at. Any authorization, consent, approval, license, exemption
of or filing or registration with any court or
governmental department, commission, board, bureau,
agency or instrumentality necessary for the valid
execution and delivery by Buyers of this Addendum
Agreement and the New Transaction Documents and for
consummation of the transactions contemplated hereby and
thereby has been obtained or performed or shall have been
obtained or performed prior to Closing II.
au. Neither of Buyers is a party to (i) any actions, suits or
proceedings pending, or to the knowledge of such Buyer
threatened, before any court, arbitrator, or governmental
body under any bankruptcy, insolvency, reorganization,
liquidation or similar law affecting creditors' rights,
or (ii) any other actions, suits or proceedings pending,
or to the knowledge of it threatened before any court,
arbitrator or governmental body, which might materially
impair or affect the ability of Buyers to perform their
obligations under this Addendum Agreement.
av. Except as provided for in the New Transaction Documents,
no mortgage, deed of trust, or other lien of any nature
whatsoever, which now covers or affects any property or
interest therein of Buyers, now attaches or hereafter
will attach to the Purchased Assets hereunder or in any
manner affects or will affect adversely Blackhawk's
right, title and interest therein.
aw. The representations, warranties, agreements,
acknowledgments, and waivers of Buyers set forth anywhere
in this Addendum Agreement or in any certificate or
instrument delivered or to be delivered by Buyers,
pursuant hereto, and any indemnity by Buyers set forth in
this Addendum Agreement, shall survive Closing II and be
and remain effective notwithstanding any investigation at
any time made by or on behalf of Blackhawk.
ax. None of Buyers nor any party acting on behalf of any of
Buyers has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or
on account of the transactions set forth in or
contemplated by this Addendum Agreement.
ay. The execution and delivery of the Guaranty Confirmation
has been, or prior to Closing II will have been,
authorized by all requisite corporate action on the part
of Cyprus-Amax. The Guaranty Confirmation when executed
will be a legal, valid and binding agreement and
obligation of Cyprus-Amax.
az. None of Buyers is in default or violation of any material
obligation or covenant under the Lease Transaction
Agreement, or any agreement or other document executed
pursuant to the Lease Transaction Agreement, which
default or violation constitutes, or with the passage of
time and giving of notice, would constitute, an Event of
Default, as defined in the Lease Transaction Agreement.
XVIII. CONDITIONS PRECEDENT TO BUYERS' OBLIGATIONS.
The obligations of Buyers under this Addendum Agreement are,
at the option of Buyers, subject to the conditions that on or
before Closing II:
ba. Blackhawk shall have executed and delivered the Bill of
Sale, the Option to Terminate Federal Coal Subleases, the
Surface Area Deed, and the Right of First Refusal
Agreement to Amax Coal or Amax Land as applicable.
bb. Blackhawk shall, to the extent required by law, have made
all premerger notification filings required under the
Hart-Scott-Rodino Act, the 30-day waiting period required
thereby shall have expired without a request from any
appropriate governmental agency for additional
information or, if additional information has been
requested, the 20-day extended waiting period shall have
expired and no party shall have received any notice from
the Federal Trade Commission or the Department of Justice
that the transactions contemplated by this Agreement
violate Section 5 of the Federal Trade Commission Act or
Section 7 of the Clayton Act.
bc. Buyers shall have received Certificates of Good Standing
from the Office of the Secretary of State of the States
where Blackhawk is incorporated dated a date near the
date of Closing II showing that Blackhawk is in good
standing in the State of incorporation and a Certificate
of Good Standing dated a date near the date of Closing II
from the Secretary of State of the State of Utah showing
that Price River is in good standing as a foreign
corporation or is qualified to do business in the State
of Utah.
bd. Buyers shall have received an opinion, or opinions, dated
the date of Closing II, from Porter, Wright, Morris &
Arthur, counsel for Blackhawk, at Blackhawk's expense, in
form and substance satisfactory to Buyers to the
following effect. As to matters governed by Utah law,
such counsel shall be entitled to rely on the opinion of
Utah counsel satisfactory to them; provided, however,
that a copy of such opinion of Utah counsel shall be
delivered to Buyers at Closing II.
1. Blackhawk is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Utah.
2. Blackhawk has the corporate power to own or lease
the Purchased Assets and to enter into this
Addendum Agreement, the New Transaction Documents
and the other transactions contemplated hereby and
thereby and to perform their obligations hereunder
and thereunder.
3. The execution and delivery of this Addendum
Agreement, the New Transaction Documents and the
other transactions contemplated hereby and thereby
have been duly authorized by all requisite
corporate action on the part of Blackhawk and no
consent thereto or approval thereof by any other
person, including but not limited to the
shareholders of Blackhawk is required which has not
been obtained, or will not have been obtained on or
prior to Closing II. Such execution and delivery
do not contravene or constitute a default under the
articles of incorporation or by-laws of Blackhawk
or any agreement, indenture, judgment, injunction,
order, decree, or other instrument to which
Blackhawk is a party or by which it is bound and
which materially affects its ability to enter into
this Addendum Agreement, the New Transaction
Documents, or the other transactions contemplated
hereby or thereby or which materially affects the
Purchased Assets.
4. This Addendum Agreement, the New Transaction
Documents, and other transactions contemplated
hereby and thereby, assuming due authorization,
execution and delivery thereof by Buyers and any
other necessary party thereto, constitute valid,
binding and enforceable obligations of Blackhawk,
except to the extent that enforceability may be
limited by (a) applicable bankruptcy, insolvency,
reorganization, liquidation, moratorium or similar
laws affecting creditors' rights generally and (b)
equitable principles of general applicability.
5. Except as listed on Exhibit N hereto or otherwise
previously disclosed to Buyers in writing,
Blackhawk is not a party to any action, suit or
proceeding, pending or, to the knowledge of such
counsel, threatened before any court, arbitrator or
governmental body which might impair or affect the
ability of Blackhawk to perform its obligations
under this Addendum Agreement, the New Transaction
Documents and the transactions contemplated hereby
and thereby.
be. Buyers shall have received certificates signed by duly
authorized officers of Blackhawk certifying as to the
resolutions adopted by the Board of Directors and (if
necessary) the shareholders of Blackhawk authorizing the
execution and delivery of this Addendum Agreement, the
New Transaction Documents, and other transactions
contemplated hereby and thereby.
bf. The representations and warranties made by Blackhawk
herein shall be true and correct in all material respects
at Closing II with the same force and effect as though
such representations and warranties had been made on and
as of Closing II and Blackhawk shall have delivered to
Buyers at Closing II, a certificate to that effect signed
by a duly-authorized officer of Blackhawk.
bg. Blackhawk shall have substantially performed and complied
with all material conditions and all agreements required
by this Addendum Agreement to be performed or complied
with by Blackhawk prior to or at Closing II, and
Blackhawk shall have delivered to Buyers at Closing II a
certificate to that effect signed by a duly authorized
officer of Blackhawk.
bh. Buyers shall not have discovered any material error,
misstatement or omission in the representations and
warranties made by Blackhawk herein.
bi. As of the date of Closing II there shall be no suit,
action, investigation or legal administration or
arbitration or other proceeding pending or, to the
knowledge of Blackhawk, threatened against Blackhawk
before any court or before or by any governmental agency
(i) in which it is sought to restrain, prohibit,
invalidate or set aside in whole or in part the
consummation of this Addendum Agreement, the New
Transaction Documents or the transactions contemplated
hereby or thereby, or (ii) in which it is sought to
obtain substantial damages in connection with the
consummation of this Addendum Agreement, the New
Transaction Documents, or the transactions contemplated
hereby or thereby.
bj. All instruments and documents required to be delivered or
executed by Blackhawk at or prior to Closing II shall
have been approved by counsel to Buyers.
bk. The Board of Directors of Cyprus Amax shall have adopted
resolutions authorizing Cyprus Amax to proceed with the
development and operation of the Willow Creek Mine.
XIX. CONDITIONS PRECEDENT TO BLACKHAWK'S OBLIGATIONS.
The obligations of Blackhawk under this Addendum Agreement
are, at the option of Blackhawk, subject to the conditions
that on or before Closing II:
bl. All actions, proceedings, instruments and documents
required to carry out this Addendum Agreement shall have
been approved by counsel to Blackhawk.
bm. The representations and warranties made by Buyers herein
shall be true and correct in all material respects at
Closing II with the same force and effect as though such
representations and warranties had been made on and as of
Closing II, and Buyers shall have delivered to Blackhawk
at Closing II a certificate to that effect signed by a
duly authorized officer of each of Buyers.
bn. Blackhawk shall have received a certificate signed by a
duly authorized officer of each of Buyers certifying as
to the resolutions adopted by the Board of Directors and,
if necessary, the shareholders of each of Buyers
approving and authorizing the execution and delivery of
this Addendum Agreement and the New Transaction
Documents.
bo. Buyers shall have substantially performed and complied
with all material conditions and all agreements required
by this Addendum Agreement to be performed or complied
with by Buyers prior to or at Closing II, and Buyers
shall have delivered to Blackhawk at Closing II a
certificate to that effect signed by a duly authorized
officer of each of Buyers.
bp. As of the Date of Closing II there shall be no claim,
suit, action, investigation or legal administration or
arbitration or other proceeding pending, or to the
knowledge of any of Buyers, threatened against either of
Buyers or Cyprus Amax before any court or before or by
any governmental agency (i) in which it is sought to
restrain, prohibit, invalidate or set aside in whole or
in part the consummation of this Addendum Agreement or
the transactions contemplated hereby or (ii) in which it
is sought to obtain substantial damages in connection
with the consummation of this Addendum Agreement or the
transactions contemplated hereby.
bq. Buyers shall, to the extent required by law, have made
all premerger notification filings required under the
Hart-Scott-Rodino Act, the 30-day waiting period required
thereby shall have expired without a request from any
appropriate governmental agency for additional
information or, if additional information has been
requested, the 20-day extended waiting period shall have
expired and no Party shall have received any notice from
the Federal Trade Commission or the Department of Justice
that the transaction contemplated by this Agreement
violates Section 5 of the Federal Trade Commission Act or
Section 7 of the Clayton Act.
br. Any approval requested by Blackhawk from (i) the
Securities and Exchange Commission under the Public
Utility Holding Company Act of 1935 or (ii) any other
regulatory agency or authority with respect to this
Addendum Agreement and the transactions contemplated
hereby shall have been obtained in form and substance
satisfactory to Blackhawk.
bs. Amax Coal or Amax Land, as applicable, shall have
executed and delivered the Equipment Promissory Notes,
the Surface Promissory Note, the Right of First Refusal
Agreement, the Option to Terminate Federal Coal
Subleases, the Security Agreement II, and the Timber Sale
Proceeds Agreement.
bt. Blackhawk shall not have discovered any material error,
misstatement or omission in the representations and
warranties made by Buyers herein.
bu. Blackhawk shall have received Certificates of Good
Standing from the Office of the Secretary of State of the
States where each of Buyers is incorporated dated a date
near the Date of Closing II showing that each of Buyers
is in Good Standing and from the Office of the Secretary
of State of the State of Utah for each of Buyers not
incorporated therein dated a date near the date of
Closing II showing that such Buyers are in good standing
in the State of Utah as foreign corporation or are
qualified to do business in the State of Utah.
bv. Buyers shall have delivered to Blackhawk immediately
available funds in the amount of $5,700,000.00
bw. Buyers shall have executed and delivered the Mortgage II
to Blackhawk.
bx. Blackhawk shall have received a certificate signed by a
duly authorized officer of Cyprus Amax certifying as to
the resolutions adopted by the Board of Directors, and if
necessary, the shareholders of Cyprus Amax approving and
authorizing the execution and delivery of the Guaranty
Confirmation.
by. Blackhawk shall have received an opinion, dated the Date
of Closing II, from ____________________ counsel for
Buyers, at Buyers' expense, in form and substance
satisfactory to Blackhawk's counsel, which opinion shall
cover the following matters. As to matters of law
involving states other than __________, such counsel
shall be entitled to rely on the opinion of counsel from
such states satisfactory to them; provided, however, that
a copy of each such opinion shall be delivered to
Blackhawk at Closing II.
1. Buyers are corporations duly organized, validly
existing and in good standing under the laws of the
States of their incorporation and are authorized to
do business as foreign corporations in the State of
Utah.
2. The execution and delivery by Buyers of this
Addendum Agreement, the New Transaction Documents
and the other agreements contemplated hereby and
the execution and delivery by Cyprus Amax of the
Guaranty Confirmation have been duly authorized by
all requisite corporate action on the part of
Buyers and Cyprus Amax and no consent thereof or
approval by any other person, including but not
limited to approval by the shareholders of Buyers
or the shareholders of Cyprus Amax, is required
which has not been obtained. Such execution and
delivery do not contravene or constitute a default
under the Articles of Incorporation or By-Laws of
Buyers or Cyprus Amax or any agreement, indenture,
judgment, injunction, order, decree or other
instrument binding upon Buyers or Cyprus Amax and
materially affecting their ability to enter into
this Addendum Agreement, the New Transaction
Documents, the Guaranty Confirmation and other
transactions contemplated hereby and thereby and to
perform their obligations hereunder or thereunder.
3. This Addendum Agreement, the New Transaction
Documents and consummation of the transactions
contemplated hereby and thereby, assuming due
authorization, execution and delivery thereof by
Blackhawk, constitute valid, binding and
enforceable obligations of Buyers, except to the
extent that enforceability may be limited by (a)
applicable bankruptcy, insolvency, reorganization,
liquidation, moratorium or similar laws affecting
creditors' rights generally, and (b) equitable
principles of general applicability.
4. The Guaranty Confirmation constitutes the valid,
binding and enforceable obligation of Cyprus Amax,
except to the extent that enforceability may be
limited by (a) applicable bankruptcy, insolvency,
reorganization, liquidation, moratorium or similar
laws affecting creditors' rights generally, and (b)
equitable principles of general applicability.
5. Neither Buyers nor Cyprus Amax is a party to any
action, suit, or proceeding, pending or, to the
knowledge of such counsel, threatened before any
court, arbitrator or governmental body which might
impair or affect the ability of Buyers or Cyprus
Amax to perform their respective obligations under
this Addendum Agreement, the New Transaction
Documents, the Guaranty Confirmation, and
transactions contemplated hereby and thereby.
bz. Cyprus Amax shall have executed and delivered the
Guaranty Confirmation to Blackhawk.
ca. Buyers shall have executed and delivered to Blackhawk
such financing statements as shall in the judgment of
Blackhawk be necessary or desirable to evidence and
perfect the security interest granted by the Security
Agreement II.
cb. All approvals, if any, required and requested from the
Bureau of Land Management in connection with the
transactions contemplated by this Addendum Agreement and
the New Transaction Documents shall have been obtained in
form and substance satisfactory to Blackhawk.
XX. MISCELLANEOUS.
cc. Payment of Expenses. Blackhawk and Buyers shall pay
their own respective expenses incident to this Addendum
Agreement and the transactions contemplated hereby
whether or not such transactions shall be consummated.
cd. Bulk Sales Law. Blackhawk and Buyers each waive
compliance by the other with the provisions of Utah Code
Annotated Section 70A-6-101 et seq. (1953, as amended).
ce. Binding Effect. All of the terms and provisions of this
Addendum Agreement shall be binding upon and inure to the
benefit of and be enforceable by the Parties and their
respective successors and assigns.
cf. Notices. Any notice, request, instruction or other
document to be given hereunder by any Party to another
Party shall be in writing and delivered personally or
sent by registered or certified mail:
If to Buyers: Attention: President
9100 East Mineral Circle
Englewood, Colorado 80112
If to Blackhawk: Attention: ________________
American Electric Power Service
Corporation
One Riverside Plaza
Columbus, Ohio 43215
or to such other address as any Party may hereafter
advise the other Parties in writing. Notices to be given
hereunder shall be deemed effectively given upon personal
or courier delivery or three days after deposited with
the United States Post Office, by registered or certified
mail, postage prepaid and addressed.
cg. Effect on Lease Transaction Agreement. Except for the
changes expressly set forth in this Addendum Agreement,
and in the New Transaction Documents to be executed at
Closing II, the Lease Transaction Agreement and the
transactions consummated at Closing I remain unchanged in
all other particulars. To the extent that any provision
of this Addendum Agreement or the New Transaction
Documents is inconsistent with any provision of the Lease
Transaction Agreement, the Original Leases, the Remaining
Leases or other agreements entered into pursuant to the
Lease Transaction Agreement, the provisions of this
Addendum Agreement or the New Transaction Documents, as
applicable, shall control with respect to any matter
specifically addressed by such Addendum Agreement or the
New Transaction Documents, as applicable.
[Further assurances clause to be added]
ch. Entire Agreement. The Lease Transaction Agreement and
the transactions consummated pursuant thereto (including,
without limitation, the Original Leases and the Remaining
Leases), this Addendum Agreement and the exhibits hereto
set forth the entire agreement and understanding of the
parties with respect to the transactions contemplated
hereby and supersede all prior agreements, arrangements,
undertakings, and representations, oral or otherwise,
relating to the subject matter hereof. This Addendum
Agreement may not be changed, modified, altered or
amended except by an agreement in writing signed by the
Party against whom enforcement of any change,
modification, alternation or amendment is sought. The
failure of any Party at any time or times to require
performance of any provision hereof shall in no manner
affect the rights to enforce the same. No waiver by any
Party of any condition, or of the breach of any term,
provision, covenant, representation or warranty contained
in this Addendum Agreement or in the exhibits hereto or
in connection with the transactions contemplated hereby,
whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or of
the breach of any other term, provision, covenant,
representation or warranty.
ci. Confidentiality. Except as required by law, the Parties
agree that they shall each keep confidential the terms
and provisions of this Addendum Agreement and the New
Transaction Documents, and no Party shall release any
publicity with respect to this Addendum Agreement or the
New Transaction Documents except following consultation
with and obtaining the prior written approval of the
other Parties, which shall not be unreasonably withheld.
cj. Section Headings. The section headings in this Addendum
Agreement are for convenience of reference only and shall
not affect the interpretation or construction hereof.
ck. Assignability. This Addendum Agreement shall not be
assignable by any Party; provided, however, that any
Party may assign this Agreement to an Affiliate of such
party.
cl. Applicable Law. This Addendum Agreement has been
executed and delivered in Columbus, Ohio, and shall be
construed under and governed by Ohio law.
cm. Counterparts. This Addendum Agreement may be executed in
one or more counterparts, each of which shall be deemed
to be an original, but all of which taken together shall
constitute one and the same instrument.
cn. Relationship Between the Parties. Nothing contained
herein or implied hereby shall be in any way construed as
creating or constituting any relationship of partnership,
joint venture, agency, or employer and employee, between
Blackhawk and Buyers.
IN WITNESS WHEREOF, the Parties have hereunto set their hands
as of the day and year first above written.
BLACKHAWK COAL COMPANY AMAX LAND COAL COMPANY
By:____________________________ By:___________________________
Its:___________________________ Its:__________________________
AMAX COAL COMPANY
By:___________________________
Its:__________________________
APPROVED BY:
PRICE RIVER COAL COMPANY
By:______________________________
Its:_____________________________
PRICE RIVER IS SIGNING SOLELY AS AN ORIGINAL PARTY TO THE LEASE
TRANSACTION AGREEMENT FOR THE PURPOSE OF GIVING APPROVAL TO THIS
SECOND ADDENDUM.<PAGE>
<PAGE>
LIST OF EXHIBITS
A. Bill of Sale
B. Equipment Promissory Notes
C. Guaranty Confirmation
D. Option to Terminate Federal Coal Subleases
E. Right of First Refusal Agreement
F. Lease Bonds
G. Mortgage II
H. Security Agreement II
I. Surface Area Deeds
J. Timber Sale Proceeds Agreement
K. Easements Granted to Blackhawk
L. Actions, Suits and Proceedings
M. Surface Interests
N. Surface Promissory Notes<PAGE>
<PAGE>
Exhibit B-2
EXHIBIT _____ TO SECOND
ADDENDUM TO LEASE
TRANSACTION AGREEMENT
EQUIPMENT PROMISSORY NOTE #1
[Equipment Type C Note]
$_______________ Columbus, Ohio
FOR VALUE RECEIVED, AMAX Coal Company ("AMAX") promises to pay
to the order of Blackhawk Coal Company (hereinafter called the
"Payee", which term shall include any holder hereof), at such place
as the Payee may designate or, in the absence of such designation,
at any of the Payee's offices, the sum of $__________ (hereinafter
called the "Principal Sum"), together with interest as hereinafter
provided. AMAX promises to pay the Principal Sum and the interest
thereon at the time(s) and in the manner(s) hereinafter provided.
1. INTEREST
Interest will accrue on the unpaid balance of the Principal
Sum until paid at the rate of _____% per year. Upon default,
whether by acceleration or otherwise, interest will accrue on the
unpaid balance of the Principal Sum and unpaid interest, if any,
until paid at a variable rate of interest per year, which will
change in the manner set forth below, equal to three percentage
points in excess of the Prime Commercial Rate of the Huntington
National Bank, Columbus, Ohio ("the Bank"), provided that at no
time will the rate of interest upon default be less than _____% per
year.
As used herein, "Prime Commercial Rate" means the rate
established by the Bank from time to time based on its
consideration of economic, money market, business and competitive
factors, and it is not necessarily the Bank's most favored rate.
Subject to any maximum or minimum interest rate limitation
specified herein or by applicable law, any variable rate of
interest on the obligation evidenced hereby shall change
automatically without notice to AMAX on the first day of each
calendar month following any change or changes in the Prime
Commercial Rate.
2. MANNER OF PAYMENT
The Principal Sum and any accrued interest will be due and
payable in consecutive quarterly installments, beginning on March
1, 1996, as follows:
March 1, 1996 . . $_______ September 1, 1998 . $_______
June 1, 1996. . . $_______ December 1, 1999. . $_______
September 1, 1996 $_______ March 1, 1999 . . . $_______
December 1, 1996. $_______ June 1, 1999. . . . $_______
March 1, 1997 . . $_______ September 1, 1999 . $_______
June 1, 1997. . . $_______ December 1, 1999. . $_______
September 1, 1997 $_______ March 1, 2000 . . . $_______
December 1, 1997. $_______ June 1, 2000. . . . $_______
March 1, 1998 . . $_______ September 1, 2000 . $_______
June 1, 1998. . . $_______ December 1, 2000. . $_______
March 1, 2001 the unpaid Principal Balance plus interest.
3. LATE CHARGE
Any installment or other payment not made within 10 calendar
days of the date such payment or installment is due will be subject
to a late charge equal to 5% of the amount of the installment or
payment.
4. PREPAYMENT
This Note may be prepaid in full, but not partially, at any
time by paying the Payee the present value of the remaining
payments as set forth in Section 3, discounted at 6% per year.
5. SECURITY
The payment of the obligations evidenced hereby, and all other
obligations and liabilities of AMAX and Amax Land Company, and each
of them, to the Payee, whether now existing or hereafter arising,
are secured by a Mortgage of even date herewith and the Amended and
Restated Security Agreement of even date herewith between AMAX and
the Payee.
6. GUARANTY
The obligations of AMAX evidenced by this Note are guaranteed
by Cyprus Amax, Inc. pursuant to that certain Guaranty of January
31, 1986 and Guaranty Confirmation of ___________________, 1995.
7. DEFAULT
Upon the occurrence of any of the following events:
(1) the failure of AMAX to pay any installment when due
hereunder, the failure of AMAX to pay any installment on
any other note of which the Payee is the holder, or the
failure of AMAX to perform any other obligation of AMAX
to the Payee;
(2) AMAX or Amax Land Company, as applicable, shall default
under [list of 1986 agreements still in effect and the
following documents to be executed at Closing II pursuant
to the Addendum Agreement, Equipment Promissory Notes,
Surface Promissory Note, Right of First Refusal
Agreement].
(3) the failure of AMAX to furnish true and complete
financial statements from time to time on request of the
Payee;
(4) the dissolution of AMAX, or the death or dissolution of
any indorser, surety, or guarantor; or
(5) if any representation, warranty, or other information
given to the Payee by AMAX, or by any indorser, surety,
or guarantor, is false, untrue, or misleading;
then the Payee may, at its option, without notice or demand,
accelerate the maturity of the obligations evidenced hereby, which
obligations shall become immediately due and payable. If the Payee
institutes any action for the enforcement or collection of the
obligations evidenced hereby, AMAX agrees to pay all costs and
expenses of such action, including reasonable attorney fees, to the
extent permitted by law.
8. NO SETOFF
The obligations of AMAX under this Note shall not be subject
to any right of setoff against obligations owing to AMAX or any
affiliate of AMAX by Payee or any affiliate of Payee, under any
other agreements.
9. GENERAL PROVISIONS
All of the parties hereto, including AMAX, and any indorser,
surety, or guarantor, hereby severally waive presentment, notice of
dishonor, protest, notice of protest, and diligence in bringing
suit against any party hereto, and consent that, without
discharging any of them, the time of payment may be extended an
unlimited number of times before or after maturity without notice.
The Payee will not be required to pursue any party hereto,
including any guarantor, or to exercise any rights against any
Collateral before exercising any other such rights.
The obligations evidenced hereby may from time to time be
evidenced by another note or notes given in substitution, renewal,
or extension hereof. Any security interest or mortgage which
secures the obligations evidenced hereby will remain in full force
and effect notwithstanding any such substitution, renewal, or
extension.
The captions used herein are for reference only and shall not
be deemed a part of this Note. If any of the terms or provisions
of this Note are deemed unenforceable, the enforceability of the
remaining terms and provisions will not be affected. This Note
shall be governed by and construed in accordance with the law of
the State of Ohio, without reference to Ohio's choice of law rules.
10. CONSENT OF JURISDICTION
AMAX and each surety, guarantor, or endorser hereof jointly
and severally agree that this Note was executed in Columbus, Ohio,
and that in any action arising under this Note, or any guaranty,
for the collection, enforcement, or execution upon the same, the
holder of the Note or guaranty may commence action upon the Note or
guaranty or against any person in any capacity liable hereunder or
thereunder by service of process and a copy of such complaint to
the undersigned or to any surety, guarantor, or endorsee by
certified mail, return receipt requested, at the address for such
person set forth below, in a court of competent jurisdiction in
Franklin County, Ohio, and each such person or entity does hereby
submit to the jurisdiction of such court for actions arising out of
this Note or guaranty and its enforcement or collection and waives
and agrees not to assert the defense of lack of jurisdiction of the
person of the undersigned or of such surety, guarantor or endorser.
AMAX COAL COMPANY
By:___________________________
Title:________________________
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 1
BLACKHAWK COAL COMPANY
BALANCE SHEET
September 30, 1995
(unaudited)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
(in thousands)
<S> <C> <C> <C>
ASSETS
Property and Investments. . . . . . . . . . . . $ 76,427 $12,430 $ 88,857
Current Assets:
Cash and Cash Equivalents . . . . . . . . . . 72 5,700 5,772
Accounts Receivable:
General . . . . . . . . . . . . . . . . . . 13,696 (9,085) 4,611
Affiliated Companies. . . . . . . . . . . . 506 506
Accrued Tax Benefits. . . . . . . . . . . . . 417 (417) -
Other . . . . . . . . . . . . . . . . . . . . 53 53
Total Current Assets. . . . . . . . . 14,744 (3,802) 10,942
Regulatory Assets . . . . . . . . . . . . . . . 12,757 12,757
Total . . . . . . . . . . . . . . . $103,928 $ 8,628 $112,556
The Pro Forma Adjustments are shown on Page 3 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 2
BLACKHAWK COAL COMPANY
BALANCE SHEET
September 30, 1995
(unaudited)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
(in thousands)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Shareowner's Equity:
Common Stock. . . . . . . . . . . . . . . . . $ 39,521 $ 39,521
Paid-in Capital . . . . . . . . . . . . . . . 1,303 1,303
Retained Earnings . . . . . . . . . . . . . . 9,825 $5,879 15,704
Total Shareholder's Equity. . . . . . 50,649 5,879 56,528
Long-term Debt - Notes Payable
to Parent Company . . . . . . . . . . . . . . 34,000 34,000
Other Noncurrent Liabilities. . . . . . . . . . 276 276
Current Liabilities:
Accounts Payable - Affiliated Companies . . . 12 12
Taxes Accrued . . . . . . . . . . . . . . . . - 2,749 2,749
Total Current Liabilities . . . . . . 12 2,749 2,761
Deferred Income Taxes . . . . . . . . . . . . . 16,428 16,428
Deferred Credits. . . . . . . . . . . . . . . . 2,563 2,563
Total . . . . . . . . . . . . . . . $103,928 $8,628 $112,556
The Pro Forma Adjustments are shown on Page 3 of these Financial Statements.
/TABLE
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 3
BLACKHAWK COAL COMPANY
BALANCE SHEET
September 30, 1995
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Property and Investments - Notes Receivable . . . . . . . $21,594
Cash and Cash Equivalents . . . . . . . . . . . . . . . . 5,700
Notes Receivable - Current. . . . . . . . . . . . . . . . 4,433
Property and Investments - Coal Equipment,
Land and Rights . . . . . . . . . . . . . . . . . . . $ 9,164
Accounts Receivable . . . . . . . . . . . . . . . . . . 13,518
Accrued Tax Benefits/Taxes Accrued. . . . . . . . . . . 3,166
Retained Earnings . . . . . . . . . . . . . . . . . . . 5,879
To record the sale of certain western coal mining
equipment, property and interest.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 3A
BLACKHAWK COAL COMPANY
STATEMENT OF INCOME
Twelve Months Ended September 30, 1995
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Gain on Sale of Property $9,045
Federal Income Taxes @ 35% 3,166
To reflect the pro forma changes in nonoperating
income and the related tax effect associated with
the proposed transactions.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 4
BLACKHAWK COAL COMPANY
STATEMENT OF INCOME
Twelve Months Ended September 30, 1995
(unaudited)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
--------- ----------- ---------
(in thousands)
<S> <C> <C> <C>
Nonoperating Income . . . . . . . . . . . . . . $1,456 $9,045 $10,501
Federal Income Taxes. . . . . . . . . . . . . . 1,578 3,166 4,744
Net Income (Loss) . . . . . . . . . . . . . . . $ (122) $5,879 $ 5,757
The Pro Forma Adjustments are shown on Page 3A of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 5
BLACKHAWK COAL COMPANY
STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1995
(unaudited)
<CAPTION>
(in thousands)
<S> <C>
Balance at Beginning of Period. . . . . . . . $9,947
Net Income (Loss) . . . . . . . . . . . . . . (122)
Balance at End of Period. . . . . . . . . . . $9,825
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 6
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . $2,514,884 $2,514,884
Transmission . . . . . . . . . . . . . . . . . . . 864,133 864,133
Distribution . . . . . . . . . . . . . . . . . . . 658,437 658,437
General (including nuclear fuel) . . . . . . . . . 185,396 185,396
Construction Work in Progress. . . . . . . . . . . 80,718 80,718
Total Electric Utility Plant . . . . . . . . . 4,303,568 4,303,568
Accumulated Depreciation and Amortization. . . . . 1,738,733 1,738,733
NET ELECTRIC UTILITY PLANT . . . . . . . . . . 2,564,835 2,564,835
NUCLEAR DECOMMISSIONING AND SPENT NUCLEAR FUEL
DISPOSAL TRUST FUNDS . . . . . . . . . . . . . . . 407,111 407,111
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . 140,063 $12,430 152,493
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . 6,210 5,700 11,910
Accounts Receivable (net). . . . . . . . . . . . . 126,015 (9,085) 116,930
Fuel . . . . . . . . . . . . . . . . . . . . . . . 27,859 27,859
Materials and Supplies . . . . . . . . . . . . . . 63,786 63,786
Accrued Utility Revenues . . . . . . . . . . . . . 35,159 35,159
Prepayments. . . . . . . . . . . . . . . . . . . . 11,948 11,948
TOTAL CURRENT ASSETS . . . . . . . . . . . . . 270,977 (3,385) 267,592
REGULATORY ASSETS. . . . . . . . . . . . . . . . . . 467,124 467,124
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . 25,766 25,766
TOTAL . . . . . . . . . . . . . . . . $3,875,876 $ 9,045 $3,884,921
The Pro Forma Adjustments are shown on Page 8 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 7
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION> Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock . . . . . . . . . . . . . . . . . . . $ 56,584 $ 56,584
Paid-in Capital. . . . . . . . . . . . . . . . . . 731,044 731,044
Retained Earnings. . . . . . . . . . . . . . . . . 234,248 $5,879 240,127
Total Common Shareholder's Equity. . . . . . . 1,021,876 5,879 1,027,755
Cumulative Preferred Stock:
Not Subject to Mandatory Redemption. . . . . . . 52,000 52,000
Subject to Mandatory Redemption. . . . . . . . . 135,000 135,000
Long-term Debt . . . . . . . . . . . . . . . . . . 1,037,790 1,037,790
TOTAL CAPITALIZATION . . . . . . . . . . . . . 2,246,666 5,879 2,252,545
OTHER NONCURRENT LIABILITIES:
Nuclear Decommissioning. . . . . . . . . . . . . . 255,949 255,949
Other. . . . . . . . . . . . . . . . . . . . . . . 171,799 171,799
TOTAL OTHER NONCURRENT LIABILITIES . . . . . . 427,748 427,748
CURRENT LIABILITIES:
Long-term Debt Due Within One Year . . . . . . . . 40,000 40,000
Short-term Debt. . . . . . . . . . . . . . . . . . 22,400 22,400
Accounts Payable . . . . . . . . . . . . . . . . . 51,580 51,580
Taxes Accrued. . . . . . . . . . . . . . . . . . . 46,889 3,166 50,055
Interest Accrued . . . . . . . . . . . . . . . . . 21,787 21,787
Rent Accrued - Rockport Plant Unit 2 . . . . . . . 23,427 23,427
Obligations Under Capital Leases . . . . . . . . . 31,623 31,623
Other. . . . . . . . . . . . . . . . . . . . . . . 73,678 73,678
TOTAL CURRENT LIABILITIES. . . . . . . . . . . 311,384 3,166 314,550
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . 621,613 621,613
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . 158,217 158,217
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . . . 100,759 100,759
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . 9,489 9,489
TOTAL . . . . . . . . . . . . . . . . $3,875,876 $9,045 $3,884,921
The Pro Forma Adjustments are shown on Page 8 of these Financial Statements.
<PAGE>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 8
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Other Property and Investments - Notes Receivable . . . . . . . . $21,594
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . 5,700
Notes Receivable - Current. . . . . . . . . . . . . . . . . . . . 4,433
Other Property and Investments - Coal Equipment,
Land and Rights . . . . . . . . . . . . . . . . . . . . . . . $ 9,164
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . 13,518
Taxes Accrued . . . . . . . . . . . . . . . . . . . . . . . . . 3,166
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . 5,879
To record the sale of certain western coal mining
equipment, property and interest by Blackhawk
Coal Company.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 8A
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1995
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Gain on Sale of Property = $9,045
Federal Income Taxes @ 35% = 3,166
To reflect the pro forma changes in nonoperating income
associated with the proposed transaction and the related
federal income tax effect.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 9
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . $1,256,066 $1,256,066
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . 223,789 223,789
Purchased Power. . . . . . . . . . . . . . 114,204 114,204
Other Operation. . . . . . . . . . . . . . 303,944 303,944
Maintenance. . . . . . . . . . . . . . . . 128,830 128,830
Depreciation and Amortization. . . . . . . 138,076 138,076
Amortization of Rockport Plant Unit 1
Phase-in Plan Deferrals. . . . . . . . . 15,644 15,644
Taxes Other Than Federal Income Taxes. . . 70,405 70,405
Federal Income Taxes . . . . . . . . . . . 46,143 46,143
TOTAL OPERATING EXPENSES. . . . . . 1,041,035 1,041,035
OPERATING INCOME . . . . . . . . . . . . . . 215,031 215,031
NONOPERATING INCOME. . . . . . . . . . . . . 3,738 $5,879 9,617
INCOME BEFORE INTEREST CHARGES . . . . . . . 218,769 5,879 224,648
INTEREST CHARGES . . . . . . . . . . . . . . 71,688 71,688
NET INCOME . . . . . . . . . . . . . . . . . 147,081 5,879 152,960
PREFERRED STOCK DIVIDEND REQUIREMENTS. . . . 11,741 11,741
EARNINGS APPLICABLE TO COMMON STOCK. . . . . $ 135,340 $5,879 $ 141,219
The Pro Forma Adjustments are shown on Page 8A of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 10
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . $208,749
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,081
DEDUCTIONS:
Cash Dividends Declared:
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,791
Cumulative Preferred Stock . . . . . . . . . . . . . . . . . . . . 11,560
Capital Stock Expense. . . . . . . . . . . . . . . . . . . . . . . . 231
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . $234,248
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 11
AMERICAN ELECTRIC POWER COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
ASSETS
ELECTRIC UTILITY PLANT:
Production . . . . . . . . . . . . . . . . . . . . $ 9,231,228 $ 9,231,228
Transmission . . . . . . . . . . . . . . . . . . . 3,299,451 3,299,451
Distribution . . . . . . . . . . . . . . . . . . . 4,109,423 4,109,423
General (including mining assets and nuclear fuel) 1,468,520 1,468,520
Construction Work in Progress. . . . . . . . . . . 313,846 313,846
Total Electric Utility Plant . . . . . . . . . 18,422,468 18,422,468
Accumulated Depreciation and Amortization. . . . . 7,055,191 7,055,191
NET ELECTRIC UTILITY PLANT . . . . . . . . . . 11,367,277 11,367,277
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . 788,874 $12,430 801,304
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . 93,721 5,700 99,421
Accounts Receivable. . . . . . . . . . . . . . . . 504,576 (9,085) 495,491
Allowance for Uncollectible Accounts . . . . . . . (6,545) (6,545)
Fuel . . . . . . . . . . . . . . . . . . . . . . . 265,961 265,961
Materials and Supplies . . . . . . . . . . . . . . 223,996 223,996
Accrued Utility Revenues . . . . . . . . . . . . . 139,122 139,122
Prepayments and Other. . . . . . . . . . . . . . . 118,619 118,619
TOTAL CURRENT ASSETS . . . . . . . . . . . . . 1,339,450 (3,385) 1,336,065
REGULATORY ASSETS . . . . . . . . . . . . . . . . . 1,992,692 1,992,692
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . 211,417 211,417
TOTAL . . . . . . . . . . . . . . . . $15,699,710 $ 9,045 $15,708,755
The Pro Forma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 12
AMERICAN ELECTRIC POWER COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock . . . . . . . . . . . . . . . . . . . $ 1,269,352 $ 1,269,352
Paid-in Capital. . . . . . . . . . . . . . . . . . 1,653,238 1,653,238
Retained Earnings. . . . . . . . . . . . . . . . . 1,390,007 $5,879 1,395,886
Total Common Shareholders' Equity. . . . . . . 4,312,597 5,879 4,318,476
Cumulative Preferred Stocks of Subsidiaries:
Not Subject to Mandatory Redemption. . . . . . . 233,240 233,240
Subject to Mandatory Redemption. . . . . . . . . 515,300 515,300
Long-term Debt . . . . . . . . . . . . . . . . . . 4,845,908 4,845,908
TOTAL CAPITALIZATION . . . . . . . . . . . . . 9,907,045 5,879 9,912,924
OTHER NONCURRENT LIABILITIES . . . . . . . . . . . . 806,667 806,667
CURRENT LIABILITIES:
Preferred Stock Due Within One Year. . . . . . . . 75,085 75,085
Long-term Debt Due Within One Year . . . . . . . . 200,736 200,736
Short-term Debt. . . . . . . . . . . . . . . . . . 212,550 212,550
Accounts Payable . . . . . . . . . . . . . . . . . 200,331 200,331
Taxes Accrued. . . . . . . . . . . . . . . . . . . 255,300 3,166 258,466
Interest Accrued . . . . . . . . . . . . . . . . . 124,972 124,972
Obligations Under Capital Leases . . . . . . . . . 90,063 90,063
Other. . . . . . . . . . . . . . . . . . . . . . . 371,922 371,922
TOTAL CURRENT LIABILITIES. . . . . . . . . . . 1,530,959 3,166 1,534,125
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . 2,639,962 2,639,962
DEFERRED INVESTMENT TAX CREDITS. . . . . . . . . . . 438,044 438,044
DEFERRED GAIN ON SALE AND LEASEBACK -
ROCKPORT PLANT UNIT 2. . . . . . . . . . . . . . . 252,195 252,195
DEFERRED CREDITS . . . . . . . . . . . . . . . . . . 124,838 124,838
TOTAL . . . . . . . . . . . . . . . . $15,699,710 $9,045 $15,708,755
The Pro Forma Adjustments are shown on Page 13 of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 13
AMERICAN ELECTRIC POWER COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 3O, 1995
PRO FORMA ADJUSTMENTS
<CAPTION>
Debit Credit
(in thousands)
<S> <C> <C>
1) Other Property and Investments - Notes Receivable . . . . . . . . $21,594
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . 5,700
Notes Receivable - Current. . . . . . . . . . . . . . . . . . . . 4,433
Other Property and Investments - Coal Equipment,
Land and Rights . . . . . . . . . . . . . . . . . . . . . . . $ 9,164
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . 13,518
Taxes Accrued . . . . . . . . . . . . . . . . . . . . . . . . . 3,166
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . 5,879
To record the sale of certain western coal mining equipment,
property and interest by Blackhawk Coal Company.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 13A
AMERICAN ELECTRIC POWER COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1995
PRO FORMA ADJUSTMENTS
<CAPTION>
Increase
(Decrease)
(in thousands)
<S> <C>
Gain on sale of Property = $9,045
Federal Income Taxes @ 35% = 3,166
To reflect the pro forma changes in nonoperating income
associated with the proposed transaction and the related
federal income tax effect.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 14
AMERICAN ELECTRIC POWER COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
Pro Forma
Per Books Adjustments Pro Forma
(in thousands)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . . $5,527,546 $5,527,546
OPERATING EXPENSES:
Fuel and Purchased Power . . . . . . . . . 1,611,266 1,611,266
Other Operation. . . . . . . . . . . . . . 1,134,909 1,134,909
Maintenance. . . . . . . . . . . . . . . . 528,225 528,225
Depreciation and Amortization. . . . . . . 590,075 590,075
Taxes Other Than Federal Income Taxes. . . 494,259 494,259
Federal Income Taxes . . . . . . . . . . . 228,959 228,959
TOTAL OPERATING EXPENSES. . . . . . 4,587,693 4,587,693
OPERATING INCOME . . . . . . . . . . . . . . 939,853 939,853
NONOPERATING INCOME. . . . . . . . . . . . . 17,113 $5,879 22,992
INCOME BEFORE INTEREST CHARGES AND
PREFERRED DIVIDENDS. . . . . . . . . . . . 956,966 5,879 962,845
INTEREST CHARGES . . . . . . . . . . . . . . 398,576 398,576
PREFERRED STOCK DIVIDEND REQUIREMENTS
OF SUBSIDIARIES. . . . . . . . . . . . . . 56,468 56,468
NET INCOME . . . . . . . . . . . . . . . . . $ 501,922 $5,879 $ 507,801
AVERAGE NUMBER OF SHARES OUTSTANDING . . . . 185,496 185,496
EARNINGS PER SHARE . . . . . . . . . . . . . $2.71 $2.74
CASH DIVIDENDS PAID PER SHARE. . . . . . . . $2.40 $2.40
The Pro Forma Adjustments are shown on Page 13A of these Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
PAGE 15
AMERICAN ELECTRIC POWER COMPANY, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<CAPTION>
(in thousands)
<S> <C>
BALANCE AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . $1,333,193
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,922
DEDUCTIONS:
Cash Dividends Declared. . . . . . . . . . . . . . . . . . . . . . . 444,991
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
BALANCE AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . $1,390,007
</TABLE>
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 76,427
<TOTAL-CURRENT-ASSETS> 14,744
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 12,757
<TOTAL-ASSETS> 103,928
<COMMON> 39,521
<CAPITAL-SURPLUS-PAID-IN> 1,303
<RETAINED-EARNINGS> 9,825
<TOTAL-COMMON-STOCKHOLDERS-EQ> 50,649
0
0
<LONG-TERM-DEBT-NET> 34,000
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 19,279
<TOT-CAPITALIZATION-AND-LIAB> 103,928
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 0
<TOTAL-OPERATING-EXPENSES> 0
<OPERATING-INCOME-LOSS> 0
<OTHER-INCOME-NET> (122)
<INCOME-BEFORE-INTEREST-EXPEN> (122)
<TOTAL-INTEREST-EXPENSE> 0
<NET-INCOME> (122)
0
<EARNINGS-AVAILABLE-FOR-COMM> (122)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 8,257
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 88,857
<TOTAL-CURRENT-ASSETS> 10,942
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 12,757
<TOTAL-ASSETS> 112,556
<COMMON> 39,521
<CAPITAL-SURPLUS-PAID-IN> 1,303
<RETAINED-EARNINGS> 15,704
<TOTAL-COMMON-STOCKHOLDERS-EQ> 56,528
0
0
<LONG-TERM-DEBT-NET> 34,000
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 22,028
<TOT-CAPITALIZATION-AND-LIAB> 112,556
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 0
<TOTAL-OPERATING-EXPENSES> 0
<OPERATING-INCOME-LOSS> 0
<OTHER-INCOME-NET> 5,757
<INCOME-BEFORE-INTEREST-EXPEN> 5,757
<TOTAL-INTEREST-EXPENSE> 0
<NET-INCOME> 5,757
0
<EARNINGS-AVAILABLE-FOR-COMM> 5,757
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 8,257
<EPS-PRIMARY> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,564,835
<OTHER-PROPERTY-AND-INVEST> 547,174
<TOTAL-CURRENT-ASSETS> 270,977
<TOTAL-DEFERRED-CHARGES> 25,766
<OTHER-ASSETS> 467,124
<TOTAL-ASSETS> 3,875,876
<COMMON> 56,584
<CAPITAL-SURPLUS-PAID-IN> 731,044
<RETAINED-EARNINGS> 234,248
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,021,876
135,000
52,000
<LONG-TERM-DEBT-NET> 1,037,790
<SHORT-TERM-NOTES> 22,400
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 40,000
0
<CAPITAL-LEASE-OBLIGATIONS> 109,795
<LEASES-CURRENT> 31,623
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,425,392
<TOT-CAPITALIZATION-AND-LIAB> 3,875,876
<GROSS-OPERATING-REVENUE> 1,256,066
<INCOME-TAX-EXPENSE> 52,957
<OTHER-OPERATING-EXPENSES> 988,078
<TOTAL-OPERATING-EXPENSES> 1,041,035
<OPERATING-INCOME-LOSS> 215,031
<OTHER-INCOME-NET> 3,738
<INCOME-BEFORE-INTEREST-EXPEN> 218,769
<TOTAL-INTEREST-EXPENSE> 71,688
<NET-INCOME> 147,081
11,741
<EARNINGS-AVAILABLE-FOR-COMM> 135,340
<COMMON-STOCK-DIVIDENDS> 109,791
<TOTAL-INTEREST-ON-BONDS> 43,409
<CASH-FLOW-OPERATIONS> 226,838
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 2,564,835
<OTHER-PROPERTY-AND-INVEST> 559,604
<TOTAL-CURRENT-ASSETS> 267,592
<TOTAL-DEFERRED-CHARGES> 25,766
<OTHER-ASSETS> 467,124
<TOTAL-ASSETS> 3,884,921
<COMMON> 56,584
<CAPITAL-SURPLUS-PAID-IN> 731,044
<RETAINED-EARNINGS> 240,127
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,027,755
135,000
52,000
<LONG-TERM-DEBT-NET> 1,037,790
<SHORT-TERM-NOTES> 22,400
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 40,000
0
<CAPITAL-LEASE-OBLIGATIONS> 109,795
<LEASES-CURRENT> 31,623
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,428,558
<TOT-CAPITALIZATION-AND-LIAB> 3,884,921
<GROSS-OPERATING-REVENUE> 1,256,066
<INCOME-TAX-EXPENSE> 52,957
<OTHER-OPERATING-EXPENSES> 988,078
<TOTAL-OPERATING-EXPENSES> 1,041,035
<OPERATING-INCOME-LOSS> 215,031
<OTHER-INCOME-NET> 9,617
<INCOME-BEFORE-INTEREST-EXPEN> 224,648
<TOTAL-INTEREST-EXPENSE> 71,688
<NET-INCOME> 152,960
11,741
<EARNINGS-AVAILABLE-FOR-COMM> 141,219
<COMMON-STOCK-DIVIDENDS> 109,791
<TOTAL-INTEREST-ON-BONDS> 43,409
<CASH-FLOW-OPERATIONS> 226,838
<EPS-PRIMARY> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> All common stock owned by parent company; no EPS required.
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 11,367,277
<OTHER-PROPERTY-AND-INVEST> 788,874
<TOTAL-CURRENT-ASSETS> 1,339,450
<TOTAL-DEFERRED-CHARGES> 211,417
<OTHER-ASSETS> 1,992,692
<TOTAL-ASSETS> 15,699,710
<COMMON> 1,269,352
<CAPITAL-SURPLUS-PAID-IN> 1,653,238
<RETAINED-EARNINGS> 1,390,007
<TOTAL-COMMON-STOCKHOLDERS-EQ> 4,312,597
515,300
233,240
<LONG-TERM-DEBT-NET> 4,845,908
<SHORT-TERM-NOTES> 96,575
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 115,975
<LONG-TERM-DEBT-CURRENT-PORT> 200,736
75,085
<CAPITAL-LEASE-OBLIGATIONS> 311,648
<LEASES-CURRENT> 90,063
<OTHER-ITEMS-CAPITAL-AND-LIAB> 4,902,583
<TOT-CAPITALIZATION-AND-LIAB> 15,699,710
<GROSS-OPERATING-REVENUE> 5,527,546
<INCOME-TAX-EXPENSE> 246,395
<OTHER-OPERATING-EXPENSES> 4,341,298
<TOTAL-OPERATING-EXPENSES> 4,587,693
<OPERATING-INCOME-LOSS> 939,853
<OTHER-INCOME-NET> 17,113
<INCOME-BEFORE-INTEREST-EXPEN> 956,966
<TOTAL-INTEREST-EXPENSE> 398,576
<NET-INCOME> 501,922
56,468 <F1>
<EARNINGS-AVAILABLE-FOR-COMM> 501,922
<COMMON-STOCK-DIVIDENDS> 444,991
<TOTAL-INTEREST-ON-BONDS> 272,104
<CASH-FLOW-OPERATIONS> 963,971
<EPS-PRIMARY> $2.71
<EPS-DILUTED> $2.71
<FN>
<F1> Represents preferred stock dividend requirements of subsidiaries;
deducted before computation of net income.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 11,367,277
<OTHER-PROPERTY-AND-INVEST> 801,304
<TOTAL-CURRENT-ASSETS> 1,336,065
<TOTAL-DEFERRED-CHARGES> 211,417
<OTHER-ASSETS> 1,992,692
<TOTAL-ASSETS> 15,708,755
<COMMON> 1,269,352
<CAPITAL-SURPLUS-PAID-IN> 1,653,238
<RETAINED-EARNINGS> 1,395,886
<TOTAL-COMMON-STOCKHOLDERS-EQ> 4,318,476
515,300
233,240
<LONG-TERM-DEBT-NET> 4,845,908
<SHORT-TERM-NOTES> 96,575
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 115,975
<LONG-TERM-DEBT-CURRENT-PORT> 200,736
75,085
<CAPITAL-LEASE-OBLIGATIONS> 311,648
<LEASES-CURRENT> 90,063
<OTHER-ITEMS-CAPITAL-AND-LIAB> 4,905,749
<TOT-CAPITALIZATION-AND-LIAB> 15,708,755
<GROSS-OPERATING-REVENUE> 5,527,546
<INCOME-TAX-EXPENSE> 246,395
<OTHER-OPERATING-EXPENSES> 4,341,298
<TOTAL-OPERATING-EXPENSES> 4,587,693
<OPERATING-INCOME-LOSS> 939,853
<OTHER-INCOME-NET> 22,992
<INCOME-BEFORE-INTEREST-EXPEN> 962,845
<TOTAL-INTEREST-EXPENSE> 398,576
<NET-INCOME> 507,801
56,468 <F1>
<EARNINGS-AVAILABLE-FOR-COMM> 507,801
<COMMON-STOCK-DIVIDENDS> 444,991
<TOTAL-INTEREST-ON-BONDS> 272,104
<CASH-FLOW-OPERATIONS> 963,971
<EPS-PRIMARY> $2.74
<EPS-DILUTED> $2.74
<FN>
<F1> Represents preferred stock dividend requirements of subsidiaries;
deducted before computation of net income.
</FN>
</TABLE>
