SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 11, 1998
ALABAMA POWER COMPANY
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(Exact name of registrant as specified in its charter)
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Alabama 1-3164 63-0004250
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(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) No.)
600 North 18th Street, Birmingham, Alabama 35291
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 257-1000
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N/A
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
On August 11, 1998, Alabama Power Company (the "Company")
entered into an Underwriting Agreement covering the issue and sale by the
Company of $225,000,000 aggregate principal amount of its Series D 6.50% Senior
Insured Quarterly Notes due September 30, 2018. Said Notes were registered under
the Securities Act of 1933, as amended, pursuant to the shelf registration
statement (Registration Statement Nos. 333-53299, 333-53299-01, 333-53299-02 and
333-53299-03) of the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1 Underwriting Agreement, dated August 11, 1998, among the
Company and Edward D. Jones & Co., Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Prudential
Securities Incorporated as the Underwriters.
4.2 Fourth Supplemental Indenture to Senior Note Indenture dated as
of August 19, 1998, providing for the issuance of the Company's
Series D 6.50% Senior Insured Quarterly Notes due September 30,
2018.
4.7 Form of Series D 6.50% Senior Insured Quarterly Note (included
in Exhibit 4.2 above).
12.1 Computation of ratio of earnings to fixed charges. (Designated in
Form 8-K dated August 10, 1998, File No. 1-3164, as Exhibit 12.1)
12.2 Computation of ratio of earnings to fixed charges
plus preferred dividend requirements (pre-income
tax basis). (Designated in Form 8-K dated August
10, 1998, File No. 1-3164, as Exhibit 12.2)
15.1 Letter re unaudited interim financial information.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: August 18, 1998 ALABAMA POWER COMPANY
By /s/ Wayne Boston
Wayne Boston
Assistant Secretary
$225,000,000 Series D 6.50% Senior Insured Quarterly Notes (IQ Notes)
due September 30, 2018
ALABAMA POWER COMPANY
UNDERWRITING AGREEMENT
August 11, 1998
Edward D. Jones & Co., L.P.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Prudential Securities Incorporated
c/o Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
Ladies and Gentlemen:
Alabama Power Company, an Alabama corporation (the "Company"),
confirms its agreement (the "Agreement") with each of you (the "Underwriters",
which term shall include any underwriter substituted as hereinafter provided in
Section 10 hereof), with respect to the sale by the Company and the purchase by
the Underwriters, acting severally and not jointly, of $225,000,000 principal
amount of the Series D 6.50% Senior Insured Quarterly Notes (IQ Notes) due
September 30, 2018 (the "Senior Notes") as set forth in Schedule I hereto.
The Company understands that the Underwriters propose to make
a public offering of the Senior Notes as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered. The Senior Notes will be
issued pursuant to an indenture, dated as of December 1, 1997, as heretofore
supplemented (the "Base Indenture"), between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"), as supplemented by a fourth supplemental
indenture to the Base Indenture relating to the Senior Notes (the "Supplemental
Indenture," and together with the Base Indenture and any other amendments or
supplements thereto, the "Indenture"), between the Company and the Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The
Company represents and warrants to the Underwriters as follows:
<PAGE>
(a) A registration statement on Form S-3, as amended (File Nos.
333-53299, 333-53299-01, 333-53299-02 and 333-53299-03), in respect of
the Senior Notes and certain other securities has been prepared and
filed in accordance with the provisions of the Securities Act of 1933,
as amended (the "1933 Act"), with the Securities and Exchange
Commission (the "Commission"); such registration statement, as amended,
and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Underwriters, has been declared
effective by the Commission in such form (except that copies of the
registration statement, as amended, and any post-effective amendment
delivered to the Underwriters need not include exhibits but shall
include all documents incorporated by reference therein); and no stop
order suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been initiated or,
to the best knowledge of the Company, threatened by the Commission (any
preliminary prospectus, as supplemented by a preliminary prospectus
supplement, included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the 1933 Act, being hereinafter called a "Preliminary
Prospectus"); such registration statement, as it became effective,
including the exhibits thereto and all documents incorporated by
reference therein pursuant to Item 12 of Form S-3 at the time such
registration statement became effective, being hereinafter called the
"Registration Statement"; the prospectus relating to the Senior Notes,
in the form in which it was included in the Registration Statement at
the time it became effective, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the 1933 Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of
the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; the
Prospectus, as supplemented by a preliminary prospectus supplement
dated August 5, 1998 relating to the Senior Notes, including any
documents incorporated by reference therein as of such date, being
hereinafter called the "Preliminary Supplemented Prospectus"; and the
Prospectus as amended or supplemented in final form by a prospectus
supplement relating to the Senior Notes in the form in which it is
filed with the Commission, pursuant to Rule 424(b) under the 1933 Act
in accordance with Section 3(g) hereof, including any documents
incorporated by reference therein as of the date of such filing, being
hereinafter called the "Final Supplemented Prospectus".
(b) The documents incorporated by reference in the Registration
Statement or Prospectus, when they were filed with the Commission,
complied in all material respects with the applicable provisions of the
1934 Act and the rules and regulations of the Commission thereunder,
and as of such time of filing, when read together with the Prospectus,
none of such documents contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents are filed with the Commission, will comply in all material
respects with the applicable provisions of the 1934 Act and the rules
and regulations of the Commission thereunder and, when read together
with the Prospectus as it otherwise may be amended or supplemented,
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the Company makes no
warranty or representation to the Underwriters with respect to: (A) any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters
expressly for use in the Preliminary Supplemented Prospectus or the
Final Supplemented Prospectus; or (B) any information set forth in the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus under the captions "Description of the Series D Senior Notes
- Book-Entry Only Issuance -- The Depository Trust Company" and "The
Insurer."
(c) The Registration Statement and the Prospectus and, to the extent
not used to confirm sales of the Senior Notes, the Preliminary
Supplemented Prospectus, comply, and the Final Supplemented Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus, when any such post-effective amendments are declared
effective or supplements are filed with the Commission, as the case may
be, will comply, in all material respects with the applicable
provisions of the 1933 Act, the 1934 Act, the 1939 Act (hereinafter
defined) and the General Rules and Regulations of the Commission
thereunder and do not and will not, (i) as of the applicable effective
date as to the Registration Statement and any amendment thereto, (ii)
as of the filing date thereof as to the Preliminary Supplemented
Prospectus and (iii) as of the applicable filing date as to the Final
Supplemented Prospectus and any Prospectus as further amended or
supplemented, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; except that the Company makes no warranties or
representations with respect to (A) that part of the Registration
Statement which shall constitute the Statements of Eligibility (Form
T-1) (collectively, the "Form T-1") under the Trust Indenture Act of
1939, as amended (the "1939 Act"), (B) statements or omissions made in
the Registration Statement, the Preliminary Supplemented Prospectus or
the Final Supplemented Prospectus in reliance upon and in conformity
with information furnished in writing to the Company by the
Underwriters expressly for use therein or (C) any information set forth
in the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus under the captions "Description of the Series D Senior Notes
-Book-Entry Only Issuance -- The Depository Trust Company" and "The
Insurer."
(d) With respect to the Registration Statement, the conditions for use
of Form S-3, as set forth in the General Instructions thereof, have
been satisfied.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, except as
otherwise stated therein, there has been no material adverse change in
the business, properties or financial condition of the Company.
(f) The Company is a corporation duly organized and existing under the
laws of the State of Alabama and has due corporate authority to carry
on the public utility business in which it is engaged and to own and
operate the properties used by it in such business, to enter into and
perform its obligations under this Agreement and the Indenture and to
issue and sell the Senior Notes to the Underwriters.
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
(h) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery of the
Indenture by the Trustee, the Indenture will, on the Closing Date,
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, receivership, liquidation, fraudulent conveyance,
moratorium or other similar laws affecting creditors' rights generally
or (2) general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity) (the "Enforceability
Exceptions"); the Indenture will conform in all material respects to
all statements relating thereto contained in the Final Supplemented
Prospectus; and, on the Closing Date, the Indenture will have been duly
qualified under the 1939 Act.
(i) The issuance and delivery of the Senior Notes have been duly
authorized by the Company and, on the Closing Date, the Senior Notes
will have been duly executed by the Company and, when authenticated in
the manner provided for in the Indenture and delivered against payment
therefor as described in the Final Supplemented Prospectus, will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by the
Enforceability Exceptions, will be in the form contemplated by, and
entitled to the benefits of, the Indenture and will conform in all
material respects to all statements relating thereto in the Final
Supplemented Prospectus.
(j) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the Senior Notes and the consummation by
the Company of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
shall have been duly authorized by all necessary corporate action on
the part of the Company and do not and will not result in any violation
of the charter or bylaws of the Company, and do not and will not
conflict with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound or to which any of its
properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially
adverse to the Company or materially adverse to the transactions
contemplated by this Agreement), or (B) any existing applicable law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, or any
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company, or any of its properties.
(k) The Company has duly authorized all necessary action to be taken by
it for the procurement of an irrevocable financial guarantee insurance
policy (the "Insurance Policy") issued by MBIA Insurance Corporation
(the "Insurer"), insuring the payment of principal and interest on the
Senior Notes, when due.
(l) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale by the Company of the Senior Notes or the
transactions by the Company contemplated in this Agreement, except (A)
such as may be required under the 1933 Act or the rules and regulations
thereunder; (B) such as may be required under the Public Utility
Holding Company Act of 1935, as amended (the "1935 Act"); (C) the
qualification of the Indenture under the 1939 Act; (D) the approval of
the Alabama Public Service Commission (the "Alabama Commission"); and
(E) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter, severally and not
jointly, agrees to purchase from the Company, the principal amount of Senior
Notes set forth in Schedule I to this Agreement opposite the name of such
Underwriter (plus any additional amount of Senior Notes that such Underwriter
may become obligated to purchase pursuant to the provisions of Section 10
hereof), at a price equal to 97.50% of the principal amount thereof.
(b) Payment for and delivery of certificates for the Senior
Notes shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, New York at 10:00 A.M., New York time, on August 19, 1998
(unless postponed in accordance with the provisions of Section 10) or such other
time, place or date as shall be agreed upon by the Underwriters and the Company
(such time and date of payment and delivery being herein called the "Closing
Date"). Payment shall be made to the Company by wire transfer in federal funds
at the Closing Date against delivery of the Senior Notes to the Underwriters.
The delivery of the Senior Notes shall be made in fully
registered form, registered in the name of CEDE & CO., to the offices of The
Depository Trust Company in New York, New York or its designee, and the
Underwriters shall accept such delivery.
The certificate(s) for the Senior Notes will be made available
for examination by the Underwriters not later than 12:00 Noon, New York time, on
the last business day prior to the Closing Date.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants
with the Underwriters as follows:
(a) The Company, on or prior to the Closing Date, will deliver to the
Underwriters conformed copies of the Registration Statement as
originally filed and of all amendments thereto, heretofore or hereafter
made, including any post-effective amendment (in each case including
all exhibits filed therewith, and including unsigned copies of each
consent and certificate included therein or filed as an exhibit
thereto, except exhibits incorporated by reference, unless specifically
requested). As soon as the Company is advised thereof, it will advise
the Underwriters orally of the issuance of any stop order under the
1933 Act with respect to the Registration Statement, or the institution
of any proceedings therefor, of which the Company shall have received
notice, and will use its best efforts to prevent the issuance of any
such stop order and to secure the prompt removal thereof, if issued.
The Company will deliver to the Underwriters sufficient conformed
copies of the Registration Statement, the Prospectus, the Preliminary
Supplemented Prospectus and the Final Supplemented Prospectus and of
all supplements and amendments thereto (in each case without exhibits)
for distribution to the Underwriters and, from time to time, as many
copies of the Prospectus, the Preliminary Supplemented Prospectus and
the Final Supplemented Prospectus as the Underwriters may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act.
(b) The Company will furnish the Underwriters with copies of each
amendment and supplement to the Preliminary Supplemented Prospectus and
the Final Supplemented Prospectus relating to the offering of the
Senior Notes in such quantities as the Underwriters may from time to
time reasonably request. If, during the period (not exceeding nine
months) when the delivery of a prospectus shall be required by law in
connection with the sale of any Senior Notes by an Underwriter, any
event relating to or affecting the Company, or of which the Company
shall be advised in writing by the Underwriters, shall occur, which in
the opinion of the Company or of Underwriters' counsel should be set
forth in a supplement to or an amendment of the Preliminary
Supplemented Prospectus or Final Supplemented Prospectus, as the case
may be, in order to make the Preliminary Supplemented Prospectus or the
Final Supplemented Prospectus not misleading in the light of the
circumstances when it is delivered, or if for any other reason it shall
be necessary during such period to amend or supplement the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus or to file
under the 1934 Act any document incorporated by reference in the
Preliminary Prospectus or Prospectus in order to comply with the 1933
Act or the 1934 Act, the Company forthwith will (i) notify the
Underwriters to suspend solicitation of purchases of the Senior Notes
and (ii) at its expense, make any such filing or prepare and furnish to
the Underwriters a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus which will
supplement or amend the Preliminary Supplemented Prospectus or the
Final Supplemented Prospectus so that, as supplemented or amended, it
will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus is
delivered, not misleading or which will effect any other necessary
compliance. In case any Underwriter is required to deliver a prospectus
in connection with the sale of any Senior Notes after the expiration of
the period specified in the preceding sentence, the Company, upon the
request of such Underwriter, will furnish to such Underwriter, at the
expense of such Underwriter, a reasonable quantity of a supplemented or
amended prospectus, or supplements or amendments to the Final
Supplemented Prospectus, complying with Section 10(a) of the 1933 Act.
During the period specified in the second sentence of this subsection,
the Company will continue to prepare and file with the Commission on a
timely basis all documents or amendments required under the 1934 Act
and the rules and regulations thereunder; provided, that the Company
shall not file such documents or amendments without also furnishing
copies thereof prior to such filing to the Underwriters and Dewey
Ballantine LLP.
(c) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Senior Notes for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Underwriters may designate; provided, however,
that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
file a consent to service of process or to file annual reports or to
comply with any other requirements in connection with such
qualification deemed by the Company to be unduly burdensome.
(d) The Company will make generally available to its security holders
as soon as practicable but not later than 45 days after the close of
the period covered thereby, an earnings statement of the Company (in
form complying with the provisions of Rule 158 of the rules and
regulations under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in Rule 158) of the
Registration Statement.
(e) During a period of 15 days from the date of this Agreement, the
Company will not, without the Underwriters' prior written consent,
directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any Senior Notes or any security
convertible into or exchangeable into or exercisable for the Senior
Notes or any debt securities substantially similar to the Senior Notes
(except for the Senior Notes issued pursuant to this Agreement).
(f) As soon as practicable after the date of this Agreement, and in any
event within the time prescribed by Rule 424 under the 1933 Act, to
file the Final Supplemented Prospectus with the Commission and to
advise the Underwriters of such filing and to confirm such advice in
writing.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all
expenses incidental to the performance of its obligations under this Agreement,
including but not limited to, the expenses of (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the preparation, issuance and delivery of the certificate(s) for the Senior
Notes, (iii) the fees and disbursements of the Company's counsel and
accountants, (iv) the qualification of the Senior Notes under securities laws in
accordance with the provisions of Section 3(c) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any blue sky
survey (such fees and disbursements of counsel shall not exceed $3,500), (v) the
printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto and of the
Prospectus, the Preliminary Supplemented Prospectus, the Final Supplemented
Prospectus, and any amendments or supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of any blue sky survey, (vii) the fee of
the National Association of Securities Dealers, Inc. in connection with its
review of the offering contemplated by this Agreement, if applicable, (viii) the
fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Senior Notes,
(ix) any fees payable in connection with the rating of the Senior Notes, (x) the
cost and charges of any transfer agent or registrar, (xi) the premium payable to
the Insurer in connection with the issuance of the Insurance Policy, and (xii)
the cost of qualifying the Senior Notes with The Depository Trust Company.
Except as otherwise provided in Section 9 hereof, the
Underwriters shall pay all other expenses incurred by them in connection with
their offering of the Senior Notes including fees and disbursements of their
counsel, Dewey Ballantine LLP.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS.
The obligations of the Underwriters to purchase and pay for the Senior Notes
are subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or to the knowledge of the
Company threatened by, the Commission on such date. If filing of the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus, or any supplement thereto, is required pursuant to Rule
424, the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus, and any such supplement, shall have been filed in the
manner and within the time period required by Rule 424.
(b) Any required orders of the Commission permitting the transactions
contemplated hereby substantially in accordance with the terms and
conditions hereof shall be in full force and effect and shall contain
no provision unacceptable to the Underwriters or the Company (but all
provisions of such order or orders heretofore entered, copies of which
have heretofore been delivered to the Underwriters, are deemed
acceptable to the Underwriters and the Company and all provisions of
such order or orders hereafter entered shall be deemed acceptable to
the Underwriters and the Company unless within 24 hours after receiving
a copy of any such order any party to this Agreement shall give notice
to the other parties to the effect that such order contains an
unacceptable provision).
(c) On the Closing Date the Underwriters shall have received:
(1) The opinion, dated the Closing Date, of Balch & Bingham
LLP, general counsel for the Company, substantially in the form
attached hereto as Schedule II-A.
(2) The opinion, dated the Closing Date, of Troutman Sanders
LLP, counsel for the Company, substantially in the form attached hereto
as Schedule II-B.
(3) The opinion, dated the Closing Date, of Cravath, Swaine &
Moore, counsel to the Trustee, substantially in the form attached
hereto as Schedule III.
(4) The opinion, dated as of the Closing Date, of Dewey
Ballantine LLP, counsel for the Underwriters, substantially in the form
attached hereto as Schedule IV.
(5) The opinion, dated the Closing Date, of Kutak Rock,
counsel to the Insurer, substantially in the form attached hereto as
Schedule V.
(6) At the Closing Date, there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Registration Statement and the Final Supplemented
Prospectus, any material adverse change in the business, properties or
financial condition of the Company, whether or not arising in the
ordinary course of business, and the Underwriters shall have received a
certificate of the President or any Vice President of the Company, and
dated as of the Closing Date, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties
in Section 1 hereof are true and correct with the same force and effect
as though expressly made at and as of the Closing Date, (iii) the
Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied on or prior to the Closing
Date, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been initiated or, to the knowledge of the Company,
threatened by the Commission.
(7) On the Closing Date, the Underwriters shall have received
from Arthur Andersen LLP a letter dated the Closing Date to the effect
that: (A) they are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the rules and
regulations under the 1933 Act; (B) in their opinion, the financial
statements audited by them and incorporated by reference in the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the rules and
regulations under the 1934 Act; and (C) on the basis of certain limited
procedures performed through a specified date not more than five
business days prior to the date of such letter, namely (i) reading the
minute books of the Company; (ii) performing the procedures specified
by the American Institute of Certified Public Accountants ("AICPA") for
a review of interim financial information as described in Statement on
Auditing Standards No. 71, "Interim Financial Information", on the
unaudited financial statements, if any, of the Company incorporated in
the Prospectus and of the latest available unaudited financial
statements of the Company, if any, as of a date subsequent to the date
of those incorporated in the Prospectus; and (iii) making inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters regarding such unaudited financial statements or
any specified unaudited amounts derived therefrom (it being understood
that the foregoing procedures do not constitute an audit performed in
accordance with generally accepted auditing standards and they would
not necessarily reveal matters of significance with respect to the
comments made in such letter, and accordingly that Arthur Andersen LLP
make no representations as to the sufficiency of such procedures for
the Underwriters' purposes), nothing came to their attention that
caused them to believe that: (1) any material modifications should be
made to the unaudited condensed financial statements, if any
incorporated in the Prospectus, for them to be in conformity with
generally accepted accounting principles; (2) such unaudited condensed
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act as it
applies to Form 10-Q and the related published rules and regulations
thereunder; (3) the unaudited amounts for Operating Revenues, Income
Before Interest Charges and Net Income After Dividends on Preferred
Stock and the unaudited Ratios of Earnings to Fixed Charges and
Earnings to Fixed Charges Plus Preferred Dividends Requirements
(Pre-Income Tax Basis) set forth in the Prospectus do not agree with
the amounts set forth in or derived from the unaudited financial
statements for the same period or were not determined on a basis
substantially consistent with that of the corresponding audited amounts
or ratios included or incorporated by reference in Registration
Statement; (4) as of a specified date not more than five business days
prior to the date of delivery of such letter, there has been any change
in the capital stock or long-term debt of the Company or any decrease
in net assets as compared with amounts shown in the latest audited
balance sheet incorporated in the Prospectus, except in each case for
changes or decreases which (i) the Prospectus discloses have occurred
or may occur, (ii) are occasioned by the declaration of dividends,
(iii) are occasioned by draw-downs under existing pollution control
financing arrangements, (iv) are occasioned by draw-downs and regularly
scheduled payments of capitalized lease obligations, (v) are occasioned
by the purchase or redemption of bonds or stock to satisfy mandatory or
optional redemption provisions relating thereto, or (vi) are disclosed
in such letter; and (5) the unaudited amounts for Operating Revenues,
Income Before Interest Charges and Net Income After Dividends Preferred
Stock and the unaudited Ratios of Earnings to Fixed Charges Plus
Preferred Dividend Requirements (Pre-Income Tax Basis) for any period
subsequent to those set forth in (3) above, which if available shall be
set forth in such letter, do not agree with the amounts set forth in or
derived from the unaudited financial statements for the same period or
were not determined on a basis substantially consistent with that of
the corresponding audited amounts or ratios included or incorporated by
reference in the Prospectus.
(8) On the Closing Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as it may
reasonably require for the purpose of enabling it to pass upon the
issuance and sale of the Senior Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Senior Notes as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and Dewey Ballantine LLP, counsel for the Underwriters.
(9) That no amendment or supplement to the Registration
Statement, the Preliminary Supplemented Prospectus or the Final
Supplemented Prospectus filed subsequent to the date of this Agreement
(including any filing made by the Company pursuant to Section 13 or 14
of the 1934 Act) shall be unsatisfactory in form to Dewey Ballantine
LLP or shall contain information (other than with respect to an
amendment or supplement relating solely to the activity of the
Underwriters) which, in the reasonable judgment of the Underwriters,
shall materially impair the marketability of the Senior Notes.
(10) The Company shall have performed its obligations when and
as provided under this Agreement.
(11) Evidence that the Insurance Policy has been issued by the
Insurer and confirmation that the Senior Notes have been rated at least
Aaa by Moody's Investors Services, Inc. and at least AAA by Standard &
Poor's Corporation.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to the Company at any time prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Sections 4, 7 and 9(b) hereof.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company shall be subject to the
conditions set forth in the first sentence of Section 5(a) and in Section 5(b).
In case such conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Underwriters. Any such termination shall be without liability of any party to
any other party except as otherwise provided in Sections 4, 7 and 9(b) hereof.
SECTION 7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each of
the Underwriters and each person, if any, who controls any such Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the 1933 Act,
1934 Act or otherwise, and to reimburse any such Underwriter and such
controlling person or persons, if any, for any legal or other expenses incurred
by them in connection with defending any actions, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Preliminary Supplemented Prospectus or the Final Supplemented Prospectus or, if
the Company shall furnish to the Underwriters any amendments or any supplements
thereto, or shall make any filings pursuant to Section 13 or 14 of the 1934 Act
which are incorporated therein by reference, in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Preliminary Supplemented Prospectus
or the Final Supplemented Prospectus as so amended or supplemented, or arise out
of or are based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any such untrue statement
or alleged untrue statement or omission or alleged omission which was made in
such Registration Statement, Preliminary Prospectus, Prospectus, Preliminary
Supplemented Prospectus or Final Supplemented Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters for use therein and except that this indemnity with respect to the
Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus
or the Final Supplemented Prospectus, if the Company shall have furnished any
amendment or supplement thereto, shall not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter) on account of any
losses, claims, damages, liabilities or actions arising from the sale of the
Senior Notes to any person if a copy of the Preliminary Prospectus, the
Prospectus, the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus (exclusive of documents incorporated therein by reference pursuant to
Item 12 of Form S-3), as the same may then be amended or supplemented, shall not
have been sent or given by or on behalf of such Underwriter to such person with
or prior to the written confirmation of the sale involved and the untrue
statement or alleged untrue statement or omission or alleged omission was
corrected in the Preliminary Prospectus, the Prospectus, the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus as supplemented or
amended at the time of such confirmation. Each Underwriter agrees, within ten
days after the receipt by it of notice of the commencement of any action in
respect of which indemnity may be sought by it, or by any person controlling it,
from the Company on account of its agreement contained in this Section 7, to
notify the Company in writing of the commencement thereof but the omission of
such Underwriter so to notify the Company of any such action shall not release
the Company from any liability which it may have to such Underwriter or to such
controlling person otherwise than on account of the indemnity agreement
contained in this Section 7. In case any such action shall be brought against an
Underwriter or any such person controlling such Underwriter and such Underwriter
shall notify the Company of the commencement thereof as above provided, the
Company shall be entitled to participate in (and, to the extent that it shall
wish, including the selection of counsel, to direct) the defense thereof, at its
own expense. In case the Company elects to direct such defense and select such
counsel, any Underwriter or controlling person shall have the right to employ
its own counsel, but, in any such case, the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
the employment of such counsel has been authorized in writing by the Company in
connection with defending such action. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include any statement as
to, or an admission of, fault, culpability or a failure to act, by or on behalf
of any indemnified party. In no event shall any indemnifying party have any
liability or responsibility in respect of the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim effected without its prior written consent.
(b) Each Underwriter agrees severally and not jointly, to
indemnify and hold harmless the Company, its directors and such of its officers
who have signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act to the same extent and upon the same terms as the indemnity
agreement of the Company set forth in Section 7(a) hereof, but only with respect
to alleged untrue statements or omissions made in the Registration Statement,
the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented
Prospectus or the Final Supplemented Prospectus, or such documents as amended or
supplemented, in reliance upon and in conformity with information furnished in
writing to the Company by such Underwriter for use therein.
SECTION 8. EPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY.
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by, or on behalf of the Company and shall survive
delivery of the Senior Notes to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Underwriters may terminate this Agreement, by notice
to the Company, at any time at or prior to the Closing Date if (i) trading in
securities on the New York Stock Exchange shall have been generally suspended,
(ii) minimum or maximum ranges for prices shall have been generally established
on the New York Stock Exchange by the Commission or by the New York Stock
Exchange, (iii) a general banking moratorium shall have been declared by federal
or New York State authorities, or (iv) there shall have occurred any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by the United States Congress or any other substantial
national or international calamity or emergency affecting the United States, in
any such case provided for in clauses (i) through (iv) with the result that, in
the reasonable judgement of the Underwriters, the marketability of the Senior
Notes shall have been materially impaired.
If this Agreement shall be terminated by the Underwriters
pursuant to subsection (a) above or because of any failure or refusal on the
part of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable to perform
its obligations under this Agreement, then in any such case, the Company will
reimburse the Underwriters for the reasonable fees and disbursements of Dewey
Ballantine LLP and for the out of pocket expenses (in an amount not exceeding
$10,000) reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Senior Notes and, upon such reimbursement,
the Company shall be absolved from any further liability hereunder, except as
provided in Sections 4 and 7.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS
If one or more of the Underwriters shall fail on the Closing
Date to purchase the Senior Notes that it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the non-defaulting
Underwriters shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth, if, however, the non-defaulting Underwriters shall not have completed
such arrangements within such 24-hour period, then:
(a) if the principal amount of Defaulted Securities does not
exceed 10% of the Senior Notes, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the principal amount of Defaulted Securities exceeds
10% of the Senior Notes, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the non-defaulting Underwriters or the
Company shall have the right to postpone the Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Final Supplemented Prospectus or in any other documents or
arrangements.
SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Edward D. Jones & Co., L.P., 12555 Manchester
Road, St. Louis, Missouri 63131, Attention: Lawrence Sobol, Legal Department;
notices to the Company shall be mailed to 600 North 18th Street, 17th floor,
Birmingham, Alabama, 35291, Attention: Corporate Secretary, with a copy to
Southern Company Services, Inc., 270 Peachtree Street, N.W., Atlanta, Georgia
30303, Attention: Charles N. Eldred.
SECTION 12. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Section 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Senior Notes from the Underwriters shall be deemed
to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State. Except as
otherwise set forth herein, specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by
any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
ALABAMA POWER COMPANY
By: ______________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
EDWARD D. JONES & CO., L.P.
By:___________________________
Title:
GOLDMAN, SACHS & CO.
By:___________________________
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:___________________________
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:___________________________
Title:
<PAGE>
SCHEDULE I
Principal Amount of
NAME OF UNDERWRITER Senior Notes
Edward D. Jones & Co., L.P. $125,000,000
Goldman, Sachs & Co. 50,000,000
Merrill Lynch, Pierce Fenner & Smith 25,000,000
Incorporated
Prudential Securities Incorporated 25,000,000
TOTAL $225,000,000
<PAGE>
Schedule II-A
[Letterhead of Balch & Bingham LLP]
___________ __, 199_
Edward D. Jones & Co., L.P.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Prudential Securities Incorporated
c/o Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
ALABAMA POWER COMPANY Series D __ %
Senior Insured Quarterly Notes (IQ Notes)
Due September 30, 2018
Ladies and Gentlemen:
We have acted as general counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $______ aggregate
principal amount of its Series D __ % Insured Quarterly Notes (IQ Notes) due
September 30, 2018 (the "Notes") pursuant to a Senior Note Indenture dated as of
December 1, 1997, by and between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"), as heretofore supplemented and as further supplemented
by the Fourth Supplemental Indenture dated as of __________ __, 199_
(collectively, the "Indenture"); and (ii) the purchase by you of the Notes
pursuant to the terms of an Underwriting Agreement dated _______, 1998, among
the Company and you (the "Underwriters") (the "Underwriting Agreement"). This
opinion is being delivered to you pursuant to Section 5(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-53299, 333-53299-01,
333-53299-02 and 333-53299-03) pertaining to the Notes (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated ________, 199_ as supplemented by a final prospectus
supplement dated __________, 199_ (the "Final Supplemented Prospectus"), which
pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of
the Company for the fiscal year ended __________________, 199_, the Quarterly
Reports on Form 10-Q of the Company for the quarters ended ____________ and the
Current Reports on Form 8-K of the Company dated __________ (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the Notes,
of which we have examined a specimen), and we have made such other and further
investigations as we deemed necessary to express the opinions hereinafter set
forth.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
New York law upon the opinion dated the date hereof rendered to you by Dewey
Ballantine LLP, that:
1. The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of the State of Alabama and has
due corporate authority to carry on the public utility business in which it is
engaged and to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents, or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and the sale of the Notes; the issuance and the sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of any Alabama or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity; and the Notes conform as to legal matters in all
material respects to the description thereof in the Final Supplemented
Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above and in the Final Supplemented Prospectus in the second paragraph
under the caption "Experts". In the course of the preparation by the Company of
the Registration Statement, the Final Supplemented Prospectus and the Exchange
Act Documents, we participated in conferences with certain officers and
employees of the Company, with other counsel for the Company and with
representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statement, the Final Supplemented Prospectus and the Exchange Act
Documents, our investigations made in connection with the preparation of the
Registration Statement, the Final Supplemented Prospectus and the Exchange Act
Documents and our participation in the conferences referred to above, (i) we are
of the opinion that the Registration Statement, as of its effective date, and
the Final Supplemented Prospectus, as of __________, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date (including the
Exchange Act Documents on file with the Commission as of such date), contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Final Supplemented Prospectus (including the
Exchange Act Documents) contains any untrue statement therein of a material fact
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the captions
"Description of the Series D Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company" and "The Insurer."
We are members of the State Bar of Alabama and we do not
express any opinion herein concerning any law other than the laws of such State
and, to the extent set forth herein, the law of the States of New York and the
federal law of the United States.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent, except that Troutman Sanders LLP and Dewey Ballantine LLP
may rely on this opinion in giving their opinions pursuant to the Underwriting
Agreement insofar as such opinion relates to matters of Alabama law.
Yours very truly,
BALCH & BINGHAM LLP
<PAGE>
Schedule II-B
[Letterhead of TROUTMAN SANDERS LLP]
__________ __, 199_
Edward D. Jones & Co., L.P.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Prudential Securities Incorporated
c/o Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
ALABAMA POWER COMPANY Series D __ %
Senior Insured Quarterly Notes (IQ Notes)
Due September 30, 2018
Ladies and Gentlemen:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $__________
aggregate principal amount of its Series D __% Senior Insured Quarterly Notes
(IQ Notes) due September 30, 2018 (the "Notes") pursuant to a Senior Note
Indenture dated as of December 1, 1997, by and between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"), as heretofore supplemented and as
further supplemented by the Fourth Supplemental Indenture dated as of __________
__, 199_ (collectively, the "Indenture"); and (ii) the purchase by you (the
"Underwriters") of the Notes pursuant to the terms of an Underwriting Agreement
dated ___________ __, 19__, among the Company and you (the "Underwriting
Agreement"). This opinion is being delivered to you pursuant to Section 5(c)(2)
thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-53299, 333-53299-01,
333-53299-02 and 333-53299-03) pertaining to the Notes (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated ___________, 199_ as supplemented by a final prospectus
supplement dated __________, 199_ (the "Final Supplemented Prospectus"), which
pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of
the Company for the fiscal year ended _____________, 199_, the Quarterly Reports
on Form 10-Q of the Company for the quarters ended ____________ and the Current
Reports on Form 8-K of the Company dated _________ (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to collectively as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
Alabama law upon the opinion dated the date hereof rendered to you by Balch &
Bingham LLP, and relying as to matters of New York law upon the opinion dated
the date hereof rendered to you by Dewey Ballantine LLP, that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Alabama and has due
corporate authority to carry on the public utility business in which it is
engaged, to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and sale of the Notes; the issuance and sale of the Notes
conform in all material respects with the terms of such orders; and no other
order, consent or other authorization or approval of any Alabama or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with other counsel for the Company, with representatives of Arthur Andersen LLP
and with your counsel. Based upon our examination of the Registration Statement,
the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of _______________, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date (including the
Exchange Act Documents on file with the Commission as of such date), contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Final Supplemented Prospectus (including the
Exchange Act Documents) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the captions
"Description of the Series D Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company" and "The Insurer."
We are members of the State Bar of Georgia and we do not
express any opinion herein concerning any law other than the law of the State of
Georgia and the federal law of the United States and, to the extent set forth
herein, the laws of the States of Alabama and New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent.
Yours very truly,
TROUTMAN SANDERS LLP
<PAGE>
Schedule III
[Letterhead of Cravath, Swaine & Moore]
__________ __, 199_
Edward D. Jones & Co., L.P.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Prudential Securities Incorporated
c/o Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Alabama Power Company
Series D __ % Senior Insured Quarterly Notes (IQ Notes)
Due September 30, 2018
Ladies and Gentlemen:
We have acted as counsel to The Chase Manhattan Bank (the
"Bank") in connection with (a) the Senior Note Indenture, dated as of December
1, 1997 as heretofore supplemented (the "Original Indenture"), between Alabama
Power Company (the "Company") and the Bank, as Trustee, and (b) the Fourth
Supplemental Indenture dated as of ___________ (together with the Original
Indenture, herein called the "Indenture"), between the Company and the Bank, as
Trustee.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
records and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, including copies of the Indenture and certain
resolutions adopted by the Board of Directors of the Bank.
Based upon the foregoing, we are of the opinion that:
i) the Bank has been duly incorporated and is validly existing as a
banking corporation in good standing under the laws of the State of New York;
ii) the Bank has the corporate trust power and authority to execute,
deliver and perform its duties under the Indenture, has duly executed and
delivered the Indenture, and, insofar as the laws governing the trust powers of
the Bank are concerned and assuming due authorization, execution and delivery
thereof by the Company, the Indenture constitutes a legal, valid and binding
agreement of the Bank, enforceable against the Bank in accordance with its terms
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights generally
from time to time in effect and to general principles of equity (including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law;
iii) the execution, delivery and performance by the Bank of the Indenture
does not conflict with or constitute a breach of the charter or bylaws of the
Bank; and
(v) no approval, authorization or other action by, or filing with, any
governmental authority of the United States of America or the State of New York
having jurisdiction over the trust powers of the Bank is required in connection
with the execution and delivery by the Bank of the Indenture or the performance
by the Bank of its duties thereunder, except such as have been obtained, taken
or made.
We are admitted to practice only in the State of New York, and
we express no opinion as to matters governed by any laws other than the laws of
the State of New York and the Federal law of the United States of America. We
are furnishing this opinion to you solely for your benefit. This opinion is not
to be relied upon by any other person or used, circulated, quoted or otherwise
referred to for any other purpose.
Very truly yours,
CRAVATH, SWAINE & MOORE
<PAGE>
Schedule IV
[Letterhead of DEWEY BALLANTINE LLP]
__________ __, 199_
Edward D. Jones & Co., L.P.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Prudential Securities Incorporated
c/o Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
ALABAMA POWER COMPANY Series D __ %
Senior Insured Quarterly Notes (IQ Notes)
Due September 30, 2018
Ladies and Gentlemen:
We have represented you (the "Underwriters") in connection
with (i) the issuance by Alabama Power Company (the "Company") of $____________
of its Series D __ % Senior Insured Quarterly Notes (IQ Notes) (the "Notes")
pursuant to a Senior Note Indenture dated as of December 1, 1997, by and between
the Company and The Chase Manhattan Bank, as trustee (the "Trustee"), as
heretofore supplemented and as further supplemented by the Fourth Supplemental
Indenture dated as of __________ __, 199_ (collectively, the "Indenture"); and
(ii) the purchase by you of the Notes pursuant to the terms of an Underwriting
Agreement dated ________________, 1998, among the Company and the Underwriters
(the "Underwriting Agreement"). This opinion is being delivered to you pursuant
to Section 5(c)(4) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-53299, 333-53299-01,
333-53299-02 and 333-53299-03) pertaining to the Notes (the "Registration
Statement"), filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated ________, 199_, as supplemented by a final prospectus
supplement dated _________, which pursuant to Form S-3 incorporates by reference
the Annual Report on Form 10-K of the Company for the fiscal year ended
________________, 199_, the Quarterly Reports on Form 10-Q of the Company for
the quarters ended _________ the Current Reports on Form 8-K of the Company,
dated __________ (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the Notes,
of which we have examined a specimen), and we have made such other and further
investigations as we deemed necessary to express the opinions hereinafter set
forth. In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as aforesaid and
as to all matters covered hereby which are governed by or dependent upon the law
of the State of Alabama upon the opinion of Balch & Bingham LLP, dated the date
hereof and addressed to you that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Alabama and has due corporate authority to carry on the public utility business
in which it is engaged and to own and operate the properties used by it in such
business and to enter into and perform its obligations under the Agreements and
the Notes.
2. The execution, delivery and performance by the Company of
the Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents, or other authorizations or approvals
of the Alabama Public Service Commission and the Commission legally required for
the issuance and sale of the Notes have been obtained; such orders are
sufficient for the issuance and sale of the Notes; the issuance and sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of any Alabama or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject to the qualifications that the enforceability of the
Company's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Final Supplemented
Prospectus.
5. The Notes have been duly authorized and executed by the
Company and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriter pursuant to the
Underwriting Agreement, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with representatives of Arthur Andersen LLP and with counsel to the Company.
Based upon our examination of the Registration Statement, the Final Supplemented
Prospectus and the Exchange Act Documents, our investigations made in connection
with the preparation of the Registration Statement and the Final Supplemented
Prospectus and our participation in the conferences referred to above, (i) we
are of the opinion that the Registration Statement, as of its effective date,
and the Final Supplemented Prospectus, as of ___________, complied as to form in
all material respects with the requirements of the Act and the applicable rules
and regulations of the Commission thereunder and that the Exchange Act
Documents, as of their respective dates of filing with the Commission, complied
as to form in all material respects with the relevant requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, except that in each case we express no opinion as to the financial
statements or other financial or statistical data contained or incorporated by
reference in the Registration Statement, the Final Supplemented Prospectus or
the Exchange Act Documents, and (ii) nothing came to our attention which gives
us reason to believe that the Registration Statement, as of its effective date
(including the Exchange Act Documents on file with the Commission as of such
date), contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Final Supplemented Prospectus
(including the Exchange Act Documents) contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the captions
"Description of the Series D Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company" and "The Insurer."
We are members of the State Bar of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States, and to the extent set forth
herein, the law of the State of Alabama.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by or furnished to any other person without our prior written
consent except that Balch & Bingham LLP and Troutman Sanders LLP may rely on
this opinion in giving their opinions pursuant to Section 5 of the Underwriting
Agreement, insofar as such opinions relate to matters of New York law, and Balch
& Bingham LLP may rely on this opinion in giving its opinion pursuant to
Sections 102, 302 and 904 of the Indenture, insofar as such opinion relates to
matters of New York law.
Very truly yours,
DEWEY BALLANTINE LLP
<PAGE>
Schedule V
[Letterhead of Kutak Rock]
__________ __, 199_
Edward D. Jones & Co., L.P.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Prudential Securities Incorporated
c/o Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
ALABAMA POWER COMPANY Series D __ %
Senior Insured Quarterly Notes (IQ Notes)
Due September 30, 2018
Ladies and Gentlemen:
This opinion has been requested in connection with the
issuance by MBIA Insurance Corporation (the "Insurer") of a certain Financial
Guaranty Insurance Policy, effective as of the date hereof (the "Policy"),
insuring $_____________ in aggregate principal amount of Alabama Power Company
(the "Issuer") Series D __% Senior Insured Quarterly Notes (IQ Notes) due
September 30, 2018 (the "Obligations").
In connection with my opinion herein, we have examined the
Policy, such statutes, documents and proceedings as we have considered necessary
or appropriate under the circumstances to render the following opinion,
including, without limiting the generality of the foregoing, certain statements
contained in the Prospectus Supplement dated ______ __, 19__ to the Prospectus
of the Issuer dated ______ ___, 19__, relating to the Obligations (the
"Prospectus Supplement") under the headings "The Policy", "The Insurer" and
"Appendix A - Form of Policy."
Based upon the foregoing and having regard to legal
considerations we deem relevant, we are of the opinion that:
1. The Insurer is a stock insurance company duly organized and validly
existing under the laws of the State of New York and licenses and
authorized to issue the Policy under the laws of the State of New York.
2. The Insurer has full corporate power and authority to execute and deliver
the Policy and the Policy has been duly authorized, executed and delivered
by the Insurer and constitutes a legal, valid and binding obligation of the
Insurer enforceable in accordance with its terms except to the extent that
the enforceability (but not the validity) of such obligation may be limited
by any applicable bankruptcy, insolvency reorganization, moratorium,
receivership and other similar laws affecting creditors' rights generally
and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
3. The Policy is not required to be registered under the Securities Act of
1933, as amended.
4. The statements contained in the Prospectus Supplement under the headings
"The Policy" and "The Insurer", insofar as such statements constitute
summaries of the matters referred to therein, accurately reflect and fairly
present the information purported to be shown and, insofar as such
statements describe the Insurer, fairly and accurately describe the
Insurer. The form of Policy contained in the Prospectus Supplement under
the heading "Appendix A - Form of Policy" is a true and complete copy of
the form of Policy.
Very truly yours,
Exhibit 4.2
ALABAMA POWER COMPANY
TO
THE CHASE MANHATTAN BANK,
TRUSTEE.
FOURTH SUPPLEMENTAL INDENTURE
DATED AS OF AUGUST 19, 1998
$225,000,000
SERIES D 6.50% SENIOR INSURED QUARTERLY NOTES
DUE SEPTEMBER 30, 2018
<PAGE>
TABLE OF CONTENTS1
PAGE
ARTICLE 1
SECTION 101. Establishment.............................................. 3
SECTION 102. Definitions................................................ 3
SECTION 103. Payment of Principal and Interest.......................... 4
---------------------------------
SECTION 104. Denominations.............................................. 4
SECTION 105. Global Securities.......................................... 4
SECTION 106. Transfer................................................... 5
SECTION 107. Redemption at the Company's Option......................... 5
----------------------------------
SECTION 108. Redemption at the Holder's Option.......................... 6
---------------------------------
ARTICLE 2
SECTION 201. Supplemental Indentures.................................... 8
SECTION 202. Events of Default and Remedies............................. 8
------------------------------
SECTION 203. Insurance Policy Payment Procedures........................ 9
-----------------------------------
SECTION 204. Application of Term "Outstanding" to Series D Notes........ 10
---------------------------------------------------
SECTION 205. Insurer as Third Party Beneficiary......................... 10
----------------------------------
SECTION 206. Notices.................................................... 10
SECTION 207. Concerning the Special Insurance Provisions................ 10
-------------------------------------------
SECTION 208. Amendments or Supplements.................................. 10
-------------------------
ARTICLE 3
SECTION 301. Recitals by Company........................................ 11
-------------------
SECTION 302. Ratification and Incorporation of Original Indenture....... 11
----------------------------------------------------
SECTION 303. Executed in Counterparts................................... 11
------------------------
1This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
<PAGE>
THIS FOURTH SUPPLEMENTAL INDENTURE is made as of the 19th day
of August, 1998, by and between ALABAMA POWER COMPANY, an Alabama corporation,
600 North 18th Street, Birmingham, Alabama 35291 (the "Company"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, 450 West 33rd Street, New York,
New York 10001 (the "Trustee").
<PAGE>
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a Senior Note
Indenture, dated as of December 1, 1997 (the "Original Indenture"), with the
Trustee, as supplemented by a First Supplemental Indenture, dated as of December
12, 1997 (the "First Supplemental Indenture"), a Second Supplemental Indenture
dated as of February 26, 1998 (the "Second Supplemental Indenture"), and a Third
Supplemental Indenture, dated as of April 23, 1998 (the "Third Supplemental
Indenture");
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by the First Supplemental
Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture
and this Fourth Supplemental Indenture, is herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of Senior
Notes may at any time be established pursuant to a supplemental indenture
executed by the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a
new series of Senior Notes;
WHEREAS, additional Senior Notes of other series hereafter
established, except as may be limited in the Original Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution
and delivery of this Fourth Supplemental Indenture and to make it a valid and
binding obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
Series D Senior Notes
. There is hereby established a new series of Senior Notes to be issued under
the Indenture, to be designated as the Company's Series D 6.50% Senior Insured
Quarterly Notes due September 30, 2018 (the "Series D Notes").
There are to be authenticated and delivered $225,000,000 principal
amount of Series D Notes, and no further Series D Notes shall be authenticated
and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the
Original Indenture. The Series D Notes shall be issued in definitive fully
registered form.
The Series D Notes shall be issued in the form of one Global Security
in substantially the form set out in Exhibit A hereto. The Depositary with
respect to the Series D Notes shall be The Depository Trust Company.
The form of the Trustee's Certificate of Authentication for the Series
D Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series D Note shall be dated the date of authentication thereof
and shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.
. The following defined terms used herein shall, unless the context otherwise
requires, have the meanings specified below. Capitalized terms used herein for
which no definition is provided herein shall have the meanings set forth in the
Original Indenture.
"Insurance Paying Agent" means State Street Bank and Trust Company,
N.A., New York, New York, or any successor thereto, as the Fiscal Agent under
the Policy.
"Insurer" means MBIA Insurance Corporation, a New York-domiciled stock
insurance corporation.
"Interest Payment Dates" means March 31, June 30, September 30, and
December 31 of each year.
"Original Issue Date" means August 19, 1998.
"Policy" means the financial guaranty insurance policy issued by the
Insurer with respect to regularly scheduled payments due for principal of and
interest on the Series D Notes as provided in such policy.
"Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day preceding such Interest
Payment Date.
"Stated Maturity" means September 30, 2018.
. The principal of the Series D Notes shall be due at Stated Maturity (unless
earlier redeemed). The unpaid principal amount of the Series D Notes shall bear
interest at the rate of 6.50% per annum until paid or duly provided for.
Interest shall be paid quarterly in arrears on each Interest Payment Date to the
Person in whose name the Series D Notes are registered on the Regular Record
Date for such Interest Payment Date, provided that interest payable at the
Stated Maturity of principal or on a Redemption Date as provided herein will be
paid to the Person to whom principal is payable. Any such interest that is not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holders on such Regular Record Date and may either be paid to the Person or
Persons in whose name the Series D Notes are registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed
by the Trustee, notice whereof shall be given to Holders of the Series D Notes
not less than ten (10) days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Series D Notes shall be listed, and
upon such notice as may be required by any such exchange, all as more fully
provided in the Original Indenture.
Payments of interest on the Series D Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series D Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series D Notes is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable.
Payment of the principal and interest due at the Stated Maturity or
earlier redemption of the Series D Notes shall be made upon surrender of the
Series D Notes at the Corporate Trust Office of the Trustee. The principal of
and interest on the Series D Notes shall be paid in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. Payments of interest (including interest on any
Interest Payment Date) will be made, subject to such surrender where applicable,
at the option of the Company, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Trustee at least
sixteen (16) days prior to the date for payment by the Person entitled thereto.
. The Series D Notes may be issued in the denominations of $1,000, or any
integral multiple thereof.
. The Series D Notes will be issued in the form of one or more Global Securities
registered in the name of the Depositary (which shall be The Depository Trust
Company) or its nominee. Except under the limited circumstances described below,
Series D Notes represented by the Global Security will not be exchangeable for,
and will not otherwise be issuable as, Series D Notes in definitive form. The
Global Securities described above may not be transferred except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or to a successor Depositary
or its nominee.
Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series D Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.
A Global Security shall be exchangeable for Series D Notes registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security and no successor Depositary shall have been
appointed by the Company, or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such Depositary and no successor Depositary shall have been appointed by the
Company, in each case within 90 days after the Company receives such notice or
becomes aware of such cessation, (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable, or (iii) there
shall have occurred an Event of Default with respect to the Series D Notes. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series D Notes registered in such names as the Depositary shall
direct.
. No service charge will be made for any transfer or exchange of Series D Notes,
but payment will be required of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Company shall not be required (a) to issue, transfer or exchange
any Series D Notes except to the Insurer during a period beginning at the
opening of business fifteen (15) days before the day of the mailing of a notice
pursuant to Section 1104 of the Original Indenture identifying the serial
numbers of the Series D Notes to be called for redemption, and ending at the
close of business on the day of the mailing, or (b) to transfer or exchange any
Series D Notes theretofore selected for redemption in whole or in part, except
the unredeemed portion of any Series D Note redeemed in part.
. The Series D Notes shall be subject to redemption at the option of the
Company, in whole or in part, without premium or penalty, at any time or from
time to time on or after September 30, 2002, at a Redemption Price equal to 100%
of the principal amount to be redeemed plus accrued but unpaid interest to the
Redemption Date.
In the event of redemption of the Series D Notes in part only, a new
Series D Note or Notes for the unredeemed portion will be issued in the name or
names of the Holders thereof upon the surrender thereof.
The Series D Notes will not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.
Any redemption of less than all of the Series D Notes shall, with
respect to the principal thereof, be divisible by $1,000.
. For purposes of this Section 108, a "Beneficial Owner" means the Person who
has the right to sell, transfer or otherwise dispose of an interest in a Series
D Note and the right to receive the proceeds therefrom, as well as the interest
and principal payable to the Holder thereof. In general, a determination of
beneficial ownership in the Series D Notes will be subject to the rules,
regulations and procedures governing the Depositary and institutions that have
accounts with the Depositary or a nominee thereof ("Participants").
Unless the Series D Notes have been declared due and payable prior to
their maturity by reason of an Event of Default, the Representative (as
hereinafter defined) of a deceased Beneficial Owner has the right to request
redemption prior to Stated Maturity of all or part of his interest, expressed in
integral multiples of $1,000 principal amount, in the Series D Notes, and the
Company will redeem the same subject to the limitations that the Company will
not be obligated to redeem, during the period from the Original Issue Date
through and including September 1, 1999 (the "Initial Period"), and during any
twelve-month period which ends on and includes each September 1 thereafter (each
such twelve-month period being hereinafter referred to as a "Subsequent
Period"), (i) on behalf of a deceased Beneficial Owner any interest in the
Series D Notes which exceeds an aggregate principal amount of $25,000 or (ii)
interests in the Series D Notes in an aggregate principal amount exceeding
$4,500,000. A request for redemption may be initiated by the Representative of a
deceased Beneficial Owner at any time and in any principal amount in integral
multiples of $1,000. If the Company, although not obligated to do so, chooses to
redeem interests of any deceased Beneficial Owner in the Series D Notes in the
Initial Period or any Subsequent Period in excess of the $25,000 limitation,
such redemption, to the extent that it exceeds the $25,000 limitation for any
deceased Beneficial Owner, shall not be included in the computation of the
$4,500,000 limitation for such Initial Period or such Subsequent Period, as the
case may be, or for any succeeding Subsequent Period.
Subject to the $25,000 and $4,500,000 limitations, the Company will,
after the death of any Beneficial Owner, redeem the interest of such Beneficial
Owner in the Series D Notes within 60 days following receipt by the Trustee of a
Redemption Request (as herein defined). If Redemption Requests exceed the
aggregate principal amount of interests in Series D Notes required to be
redeemed during the Initial Period or during any Subsequent Period, then such
excess Redemption Requests will be applied in the order received by the Trustee
to successive Subsequent Periods, regardless of the number of Subsequent Periods
required to redeem such interests.
A request for redemption of an interest in the Series D Notes may be
initiated by the personal representative or other Person authorized to represent
the estate of the deceased Beneficial Owner or from a surviving joint tenant(s)
or tenant(s) by the entirety (each, a "Representative"). The Representative
shall deliver a request to the Participant through whom the deceased Beneficial
Owner owned such interest, in form satisfactory to the Participant, together
with evidence of the death of the Beneficial Owner, evidence of the authority of
the Representative satisfactory to the Participant, such waivers, notices or
certificates as may be required under applicable state or federal law and such
other evidence of the right to such redemption as the Participant shall require.
The request shall specify the principal amount of the interest in the Series D
Notes to be redeemed. The Participant shall thereupon deliver to the Depositary
a request for redemption substantially in the form attached as Exhibit C hereto
(a "Redemption Request"), accompanied by the documents submitted to the
Participant as above provided, and the Depositary will forward the same to the
Trustee. Documents accompanying Redemption Requests shall be in form
satisfactory to the Company. The Trustee may conclusively assume, without
independent investigation, that the statements contained in each Redemption
Request are true and correct and shall have no responsibility for reviewing any
documents accompanying a Redemption Request or for determining whether the
applicable decedent is in fact the Beneficial Owner of the interest in the
Series D Note to be redeemed or is in fact deceased and whether the
Representative is duly authorized to request redemption on behalf of the
applicable Beneficial Owner.
The price to be paid by the Company for interests in the Series D Notes
to be redeemed pursuant to a Redemption Request is 100% of the principal amount
thereof plus accrued but unpaid interest to the date of payment. Subject to
arrangements with the Depositary, payment for interests in the Series D Notes
which are to be redeemed shall be made to the Depositary upon presentation of
Series D Notes to the Trustee for redemption in the aggregate principal amount
specified in the Redemption Requests submitted to the Trustee by the Depositary
which are to be fulfilled in connection with such payment. The principal amount
of any Series D Notes acquired or redeemed by the Company other than by
redemption at the option of any Representative of a deceased Beneficial Owner
pursuant to this Section 108 shall not be included in the computation of either
the $25,000 or the $4,500,000 limitation for the Initial Period or for any
Subsequent Period.
For purposes of this Section 108, an interest in a Series D Note held
in tenancy by the entirety, joint tenancy or by tenants in common will be deemed
to be held by a single Beneficial Owner and the death of a tenant by the
entirety, joint tenant or tenant in common will be deemed the death of a
Beneficial Owner. The death of a Person who, during his lifetime, was entitled
to substantially all of the rights of a Beneficial Owner of an interest in the
Series D Notes will be deemed the death of the Beneficial Owner, regardless of
the recordation of such interest on the records of the Participant, if such
rights can be established to the satisfaction of the Participant and the
Company. Such interests shall be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act, community property or other similar joint ownership
arrangements, including individual retirement accounts or Keogh [H.R. 10] plans
maintained solely by or for the decedent or by or for the decedent and any
spouse, and trust and certain other arrangements where one Person has
substantially all of the rights of a Beneficial Owner during such Person's
lifetime.
In the case of any Redemption Request which is presented pursuant to
this Section 108 and which has not been fulfilled at the time the Company gives
notice of its election to redeem Series D Notes pursuant to Section 107 hereof,
such interest or portion thereof shall not be subject to redemption pursuant to
such Section 107, but shall remain subject to redemption pursuant to this
Section 108.
Subject to the provisions of the immediately preceding sentence, any
Redemption Request may be withdrawn by the Person(s) presenting the same upon
delivery of a written request for such withdrawal given by the Depositary to the
Trustee prior to payment of such Redemption Request.
During such time or times as, in accordance with Section 105 hereof,
the Series D Notes are not represented by a Global Security and are issued in
definitive form, all references in this Section 108 to Participants and the
Depositary, including the Depositary's governing rules, regulations and
procedures shall be deemed deleted, all determinations which under this Section
108 the Participants are required to make shall be made by the Company
(including, without limitation, determining whether the applicable decedent is
in fact the Beneficial Owner of the interest in the Series D Note to be redeemed
or is in fact deceased and whether the Representative is duly authorized to
request redemption on behalf of the applicable Beneficial Owner), all redemption
requests, to be effective, shall be delivered by the Representative to the
Trustee, with a copy to the Company, and shall be in the form of a Redemption
Request (with appropriate changes to reflect the fact that such Redemption
Request is being executed by a Representative) and, in addition to all documents
that are otherwise required to accompany a Redemption Request, shall be
accompanied by the Series D Note that is the subject of such request.
ARTICLE 2
Special Insurance Provisions
. The consent of the Insurer shall be required with respect to any indenture or
indentures supplemental to the Original Indenture requiring the consent of the
Holders of the Series D Notes pursuant to Section 902 of the Original Indenture.
. Subject to Section 107 of the Original Indenture and to the Trust Indenture
Act, including, without limitation, Sections 316(a)(1) and 317(a) thereof, if an
Event of Default with respect to the Series D Notes occurs and is continuing,
the Insurer shall be entitled to control and direct the enforcement of all
rights and remedies granted to the Holders of the Series D Notes or the Trustee
for the benefit of the Holders of the Series D Notes under the Indenture,
including, without limitation, (i) the right to accelerate the principal of the
Series D Notes as provided in Section 502 of the Original Indenture, and (ii)
the right to annul any such declaration of acceleration, and the Insurer shall
also be entitled to approve any waiver of an Event of Default with respect to
the Series D Notes, the obligation of the Trustee to comply with any such
direction to be subject to compliance with the conditions set forth in Sections
512 and 603(e) of the Original Indenture (as if references in those Sections to
Holders were references to the Insurer) and the protections provided to the
Trustee by Section 601(c)(3) of the Original Indenture shall be applicable with
respect to any direction from the Insurer given pursuant hereto (as if
references in said Section to Holders were references to the Insurer).
. (a) If the Trustee does not have sufficient funds for any payment of principal
or interest on the due date or if the Trustee has notice that any Holder has
been required to disgorge payments of principal or interest on the Series D
Notes to a trustee in bankruptcy or creditors or others pursuant to a final
judgment by a court of competent jurisdiction that such payment constitutes an
avoidable preference to such Holder within the meaning of any applicable
bankruptcy laws, then the Trustee shall notify the Insurer or its designee of
such fact by telephone or telegraphic notice, confirmed in writing by registered
or certified mail.
(b) The Trustee is hereby irrevocably designated, appointed, directed
and authorized to act as attorney-in-fact for Holders of the Series D Notes as
follows:
1. If and to the extent there is a deficiency in amounts
required to pay interest on the Series D Notes, the Trustee shall (a)
execute and deliver to the Insurance Paying Agent, in form satisfactory
to the Insurance Paying Agent, an instrument appointing the Insurer as
agent for such Holders in any legal proceeding related to the payment
of such interest and an assignment to the Insurer of the claims for
interest to which such deficiency relates and which are paid by the
Insurer, (b) receive as designee of the respective Holders (and not as
Trustee) in accordance with the tenor of the Policy payment from the
Insurance Paying Agent with respect to the claims for interest so
assigned, and (c) disburse the same to such respective Holders; and
2. If and to the extent of a deficiency in amounts required to
pay principal of the Series D Notes, the Trustee shall (a) execute and
deliver to the Insurance Paying Agent in form satisfactory to the
Insurance Paying Agent an instrument appointing the Insurer as agent
for such Holders in any legal proceeding relating to the payment of
such principal and an assignment to the Insurer of any of the Series D
Notes surrendered to the Insurance Paying Agent to the extent of the
principal amount thereof as has not previously been paid or for which
moneys are not held by the Trustee and available for such payment (but
such assignment shall be delivered only if payment from the Insurance
Paying Agent is received), (b) receive as designee of the respective
Holders (and not as Trustee) in accordance with the tenor of the Policy
payment therefor from the Insurance Paying Agent, and (c) disburse the
same to such Holders.
(c) Payments with respect to claims for interest on and principal of
Series D Notes disbursed by the Trustee from proceeds of the Policy shall not be
considered to discharge the obligation of the Company with respect to such
Series D Notes, and the Insurer shall become the owner of such unpaid Series D
Note and claims for the interest thereon in accordance with the tenor of the
assignment made to it under the provisions of this subsection or otherwise.
(d) Irrespective of whether any such assignment is executed and
delivered, the Company and the Trustee hereby agree for the benefit of the
Insurer that,
1. They recognize that to the extent the Insurer makes
payments, directly or indirectly (as by paying through the Trustee), on
account of principal of or interest on the Series D Notes, the Insurer
will be subrogated to the rights of such Holders to receive the amount
of such principal and interest from the Company, with interest thereon
as provided and solely from the sources stated in the Indenture and the
Series D Notes; and
2. They will accordingly pay to the Insurer the amount of such
principal and interest (including principal and interest recovered
under subparagraph (ii) of the first paragraph of the Policy, which
principal and interest shall be deemed past due and not to have been
paid), with interest thereon as provided in the Indenture and the
Series D Note, but only from the sources and in the manner provided
herein for the payment of principal of and interest on the Series D
Notes to Holders, and will otherwise treat the Insurer as the owner of
such rights to the extent of the amount of such principal and interest.
. In the event that the principal and/or interest due on the Series D Notes
shall be paid by the Insurer pursuant to the Policy, the Series D Notes shall
remain Outstanding for all purposes of the Indenture, not be considered defeased
or otherwise satisfied and not be considered paid by the Company, and the
Indenture and all covenants, agreements and other obligations of the Company to
the Holders of the Series D Notes shall continue to exist and such covenants,
agreements and other obligations shall run to the benefit of the Insurer, and
the Insurer shall be subrogated to the rights of such Holders to the extent of
each such payment.
. To the extent that the Indenture confers upon or gives or grants to the
Insurer any right, remedy or claim under or by reason of the Indenture, the
Insurer is hereby explicitly recognized as being a third-party beneficiary
hereunder and may enforce any such right, remedy or claim conferred, given or
granted hereunder.
. Any notice that is required to be given to a Holder of the Series D Note or to
the Trustee pursuant to the Indenture shall also be provided to the Insurer. All
notices required to be given to the Insurer under the Indenture shall be in
writing and shall be sent by registered or certified mail addressed to MBIA
Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention:
Surveillance.
. The provisions of this Article 2 shall apply notwithstanding anything in the
Indenture to the contrary, but only so long as the Policy shall be in full force
and effect and the Insurer is not in default thereunder.
. The Trustee, in determining whether any amendments or supplements to the
Indenture may be made without the consent of the Holders, or in determining
whether any action should be taken, shall consider the effect of such action on
the rights of the Holders as if the Policy were not in effect.
ARTICLE 3
Miscellaneous Provisions
. The recitals in this Fourth Supplemental Indenture are made by the Company
only and not by the Trustee, and all of the provisions contained in the Original
Indenture in respect of the rights, privileges, immunities, powers and duties of
the Trustee shall be applicable in respect of Series D Notes and of this Fourth
Supplemental Indenture as fully and with like effect as if set forth herein in
full.
. As heretofore supplemented by the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture and as supplemented
hereby, the Original Indenture is in all respects ratified and confirmed, and
the Original Indenture, the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture and this Fourth
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.
. This Fourth Supplemental Indenture may be simultaneously executed in several
counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this
instrument to be signed in its name and behalf by its duly authorized officers,
all as of the day and year first above written.
<PAGE>
ATTEST: ALABAMA POWER COMPANY
By: By:
Patricia B. Southerland William B. Hutchins, III
Assistant Secretary Executive Vice President,
Chief Financial Officer and
Treasurer
ATTEST: THE CHASE MANHATTAN BANK, as Trustee
By: By:
Senior Trust Officer Senior Trust Officer
<PAGE>
EXHIBIT A
FORM OF SERIES D NOTE
<PAGE>
NO. __ CUSIP NO. 010392DG0
ALABAMA POWER COMPANY
SERIES D 6.50% SENIOR INSURED QUARTERLY NOTE
DUE SEPTEMBER 30, 2018
Principal Amount: $_____________
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: August 19, 1998
Stated Maturity: September 30, 2018
Interest Payment Dates: March 31, June 30, September 30 and December 31
Interest Rate: 6.50% per annum
Authorized Denomination: $1,000
Initial Redemption Date: September 30, 2002
Alabama Power Company, an Alabama corporation (the "Company", which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
_______________________________________________, or registered assigns, the
principal sum of _________ DOLLARS ($__________) on the Stated Maturity shown
above (or upon earlier redemption), and to pay interest thereon from the
Original Issue Date shown above, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, quarterly in arrears on
each Interest Payment Date as specified above, commencing on September 30, 1998,
and on the Stated Maturity (or upon earlier redemption) at the rate per annum
shown above until the principal hereof is paid or made available for payment and
on any overdue principal and on any overdue installment of interest. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date (other than an Interest Payment Date that is the Stated Maturity or
on a Redemption Date) will, as provided in such Indenture, be paid to the Person
in whose name this Note (the "Note") is registered at the close of business on
the Regular Record Date as specified above next preceding such Interest Payment
Date, provided that any interest payable at Stated Maturity or on any Redemption
Date will be paid to the Person to whom principal is payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this Note
is registered at the close of business on a Special Record Date for the payment
of such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Notes of this series shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day, except that, if such
Business Day is in the next succeeding calendar year, payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee is closed for business.
Payment of the principal of and interest due at the Stated Maturity or
earlier redemption of the Series D Notes shall be made upon surrender of the
Series D Notes at the Corporate Trust Office of the Trustee. The principal of
and interest on the Series D Notes shall be paid in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. Payment of interest (including interest on an
Interest Payment Date) will be made, subject to such surrender where applicable,
at the option of the Company, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Trustee at least 16
days prior to the date for payment by the Person entitled thereto.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
<PAGE>
Dated:
ALABAMA POWER COMPANY
By:
Vice President
Attest:
Assistant Secretary
{Seal of ALABAMA POWER COMPANY appears here}
<PAGE>
CERTIFICATE OF AUTHENTICATION
<PAGE>
This is one of the Senior Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Officer
<PAGE>
(Reverse Side of Note)
This Note is one of a duly authorized issue of Senior Notes of the
Company (the "Notes"), issued and issuable in one or more series under a Senior
Note Indenture, dated as of December 1, 1997, as supplemented (the "Indenture"),
between the Company and The Chase Manhattan Bank, Trustee (the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures incidental thereto reference is hereby made for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes issued thereunder and of
the terms upon which said Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof as Series D 6.50%
Senior Insured Quarterly Notes due September 30, 2018 (the "Series D Notes") in
the aggregate principal amount of up to $225,000,000. Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Indenture.
The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note at any time on or after September 30, 2002
at the option of the Company, without premium or penalty, in whole or in part,
at a Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest to the Redemption Date.
In addition, at the option of any deceased Beneficial Owner's
Representative, interests in the Series D Notes are redeemable at 100% of their
principal amount, plus accrued interest, subject to certain limitations provided
in the Indenture.
In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the surrender
hereof. The Notes will not have a sinking fund.
If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the Notes at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and of like tenor and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by the
Holder surrendering the same upon surrender of the Note or Notes to be exchanged
at the office or agency of the Company.
This Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a financial
guaranty insurance policy (the "Policy") containing the following provisions,
such policy being on file at The Chase Manhattan Bank, 450 West 33rd Street, New
York, New York 10001.
The Insurer, in consideration of the payment of the premium and subject
to the terms of the Policy, hereby unconditionally and irrevocably guarantees to
any owner, as hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of the Company to
The Chase Manhattan Bank or its successor (the "Paying Agent") of an amount
equal to (i) the principal of (at the stated maturity) and interest on, the
Obligations (as that term is defined below) as such payments shall become due
but shall not be so paid (except that in the event of any acceleration of the
due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, the payments guaranteed hereby
shall be made in such amounts and at such times as such payments of principal
would have been due had there not been any such acceleration); and (ii) the
reimbursement of any such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes an avoidable preference to such owner within the meaning of
any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii)
of the preceding sentence shall be referred to herein collectively as the
"Insured Amounts." "Obligations" shall mean:
$225,000,000
ALABAMA POWER COMPANY
SERIES D 6.50% SENIOR INSURED QUARTERLY NOTES
DUE SEPTEMBER 30, 2018
Upon receipt of telephonic notice, such notice subsequently confirmed
in writing by registered or certified mail, or upon receipt of written notice by
registered or certified mail, by the Insurer from the Paying Agent or any owner
of an Obligation the payment of an Insured Amount for which is then due, that
such required payment has not been made, the Insurer on the due date of such
payment or within one Business Day after receipt of notice of such nonpayment,
whichever is later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or its successor,
sufficient for the payment of any such Insured Amounts which are then due. Upon
presentment and surrender of such Obligations or presentment of such other proof
of ownership of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due on the
Obligations as are paid by the Insurer, and appropriate instruments to effect
the appointment of the Insurer as agent for such owners of the Obligations in
any legal proceeding related to payment of Insured Amounts on the Obligations,
such instrument being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such
owners or the Paying Agent payment of the Insured Amounts due on such
Obligations, less any amount held by the Paying Agent for the payment of such
Insured Amounts and legally available therefor. The Policy does not insure
against loss of any prepayment premium which may at any time be payable with
respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the Company
or any designee of the Company for such purpose. The term owner shall not
include the Company or any party whose agreement with the Company constitutes
the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its
offices located at 113 King Street, Armonk, New York 10504 and such service of
process shall be valid and binding.
This policy is non-cancellable for any reason. The premium on this
policy is not refundable for any reason including the payment prior to maturity
of the Obligations.
The insurance provided by the Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
MBIA Insurance Corporation
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
<PAGE>
TEN COM- as tenants in UNIF GIFT MIN ACT- _______ Custodian ________
common (Cust) (Minor)
TEN ENT- as tenants by the
entireties under Uniform Gifts to
JT TEN- as joint tenants Minors Act
with right of
survivorship and ________________________
not as tenants (State)
in common
Additional abbreviations may also be used
though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
(please insert Social Security or other identifying number of assignee)
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
agent to transfer said Note on the books of the Company, with full
power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within instrument in every particular
without alteration or enlargement, or any change whatever.
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Officer
<PAGE>
EXHIBIT C
FORM OF REQUEST FOR REDEMPTION
Alabama Power Company
Series D 6.50% Senior Insured Quarterly Notes
due September 30, 2018
CUSIP No. 010392DG0
The undersigned Participant does hereby certify, pursuant to
Section 108 of the Fourth Supplemental Indenture dated as of August 19,
1998 to the Indenture dated as of December 1, 1997 between Alabama
Power Company (the "Company") and The Chase Manhattan Bank, as trustee
(the "Trustee"), to the Company and the Trustee that:
1. [Name of deceased Beneficial Owner] is deceased.
2. [Name of deceased Beneficial Owner] had a
$___________ interest in the Company's Series D 6.50% Senior Insured
Quarterly Notes due September 30, 2018 (the "Series D Senior Notes").
3. [Name of Representative] is [Beneficial Owner's
personal representative/ other person authorized to represent the
estate of the Beneficial Owner/surviving joint tenant/ surviving tenant
by the entirety] of [Name of deceased Beneficial Owner] and has
delivered to the undersigned a request for redemption in form
satisfactory to the undersigned, requesting that $_______ [$1,000 or an
integral multiple thereof] be redeemed pursuant to said Section 108.
Such request and the documents accompanying such request, all of which
are satisfactory to the undersigned, are delivered herewith.
4. [Name of Participant] holds the interest in the
Series D Senior Notes with respect to which this Request for Redemption
is being made on behalf of [Name of deceased Beneficial Owner].
IN WITNESS WHEREOF, the undersigned has executed this Request for Redemption
as of _______________, ------.
[Name of Participant]
By:
Name:
Title:
EXHIBIT 15.1
August 14, 1998
Alabama Power Company
600 North 18th Street
Birmingham, AL 35291
Ladies and Gentlemen:
We are aware that Alabama Power Company has incorporated by reference in the
Company's previously filed Registration Statement File Nos. 333-53299,
333-53299-01, 333-53299-02 and 333-53299-03 its Form 10-Q for the quarter ended
June 30, 1998, which includes our report on Alabama Power Company dated August
7, 1998 covering the unaudited interim financial information contained therein.
Pursuant to Regulation C of the Securities Act of 1933 (the "Act"), such report
is not considered a part of the Registration Statement prepared or certified by
our firm or a report prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
Very truly yours,
