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) February 18, 1999
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.)
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2
Item 5. Other Events.
On February 18, 1999, Alabama Power Company (the "Company") and
Alabama Power Capital Trust III (the "Trust") entered into an Underwriting
Agreement covering the issue and sale by the Trust of 1,000 Capital Auction
Preferred Securities (liquidation amount $50,000 per Preferred Security). Said
Preferred Securities were registered under the Securities Act of 1933, as
amended, pursuant to the shelf registration statement (Registration Statement
Nos. 333-67453, 333-67453-01, 333-67453-02 and 333-67453-03) of the Company and
the Trust. Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
1 Underwriting Agreement, dated February 18, 1999,
among the Company, the Trust, Goldman, Sachs & Co.
and Lehman Brothers Inc.
4.2 Second Supplemental Indenture, dated as of February
25, 1999, to Subordinated Note Indenture, providing
for the issuance of the Company's Series C Junior
Subordinated Notes due February 28, 2029.
4.5 Amended and Restated Trust Agreement of Alabama Power
Capital Trust III.
4.6 Form of Preferred Security of Alabama Power Capital
Trust III (included in Exhibit 4.5 above).
4.7 Form of Series C Junior Subordinated Note (included
in Exhibit 4.2 above).
4.8 Guarantee Agreement relating to Alabama Power Capital
Trust III.
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4.9 Agreement as to Expenses and Liabilities relating to
Alabama Power Capital Trust III (included in Exhibit
4.5 above).
8.1 Tax Opinion of Balch & Bingham LLP.
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 hereunto duly authorized.
Date: February 24, 1999 ALABAMA POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit 1
Alabama Power Capital Trust III
(a Delaware Statutory Business Trust)
1,000 Capital Auction Preferred Securities
(Liquidation Amount $50,000 Per Preferred Security)
UNDERWRITING AGREEMENT
February 18, 1999
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Alabama Power Capital Trust III (the "Trust"), a statutory
business trust organized under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
(ss.) 3801 et seq.), and Alabama Power Company, an Alabama corporation (the
"Company" and, together with the Trust, the "Offerors"), confirm their agreement
(the "Agreement") with you and the other Underwriter named in Schedule I hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom you are
acting as representative (in such capacity, you shall hereinafter be referred to
as the "Representative"), with respect to the sale by the Trust and the purchase
by the Underwriters, acting severally and not jointly, of the respective numbers
of Capital Auction Preferred Securities (liquidation amount $50,000 per
preferred security) of the Trust ("Preferred Securities") set forth in Schedule
I. The Preferred Securities will be guaranteed by the Company with respect to
distributions and payments upon liquidation, redemption and otherwise (the
"Guarantee") pursuant to a Preferred Securities Guarantee Agreement (the
"Guarantee Agreement") between the Company and The Chase Manhattan Bank, as
trustee (the "Guarantee Trustee"). The Preferred Securities and the related
Guarantee are referred to herein as the "Securities."
The Offerors understand that the Underwriters propose to make
a public offering of the Preferred Securities as soon as the Representative
deems advisable after this Agreement has been executed and delivered. The entire
proceeds from the sale of the Securities will be combined with the entire
proceeds from the sale by the Trust to the Company of its common securities (the
"Common Securities") and will be used by the
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Trust to purchase the $51,550,000 aggregate principal amount of Series C Junior
Subordinated Notes (the "Junior Subordinated Notes") to be issued by the
Company. The Preferred Securities and the Common Securities will be issued
pursuant to the Amended and Restated Trust Agreement (the "Trust Agreement"),
among the Company, as Depositor, William E. Zales, Jr. and J. Randy DeRieux (the
"Administrative Trustees"), Chase Manhattan Bank Delaware, a Delaware banking
corporation (the "Delaware Trustee") and The Chase Manhattan Bank, a New York
banking corporation (the "Property Trustee" and, together with the Delaware
Trustee and the Administrative Trustees, the "Trustees"), as trustees, and the
holders from time to time of undivided beneficial interests in the assets of the
Trust. The Junior Subordinated Notes will be issued pursuant to an indenture,
dated as of January 1, 1997 (the "Base Indenture"), between the Company and The
Chase Manhattan Bank, as trustee (the "Debt Trustee"), and a second supplemental
indenture to the Base Indenture (the "Supplemental Indenture," and together with
the Base Indenture and any other amendments or supplements thereto, the
"Indenture"), between the Company and the Debt Trustee.
The Company and the Trust will enter into an Agreement as to
Expenses and Liabilities (the "Agreement as to Expenses and Liabilities")
pursuant to which the Company will guarantee to each person or entity to whom
the Trust may be indebted or liable, the full payment of such obligations. The
Company and the Trust will enter into an Auction Agent Agreement (the "Auction
Agent Agreement") with The Chase Manhattan Bank, as auction agent (the "Auction
Agent"), providing, among other things, that the Auction Agent will follow
certain auction procedures relating to the Preferred Securities.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Offerors jointly and severally represent and warrant to
each Underwriter as follows:
(a) A registration statement on Form S-3 (File Nos. 333-67453,
333-67453-01, 333-67453-02, and 333-67453-03), in respect of the
Preferred Securities, the Guarantee, the Junior Subordinated Notes and
certain other securities (the "Registered Securities") has been
prepared and filed in accordance with the provisions of the Securities
Act of 1933 (the "1933 Act"), with the Securities and Exchange
Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to you, and to you for each of the other
Underwriters, has been declared effective by the Commission in such
form (except that copies of the registration statement and any
post-effective amendment delivered to you for each of the other
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 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 Registered
Securities, 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 February
15, 1999 relating to the Preferred Securities, the Guarantee and the
Junior Subordinated 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
Preferred Securities, the Guarantee and the Junior Subordinated 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 neither the Trust nor the Company makes any
warranty or representation to any Underwriter with respect to: (A) any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust or the Company by an
Underwriter through you 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 caption "Book-Entry-Only
Issuance -- The Depository Trust Company".
(c) The Preliminary Prospectus, at the time of filing thereof, complied in
all material respects with the applicable provisions of the 1933 Act
and the rules and regulations of the Commission thereunder and did 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.
(d) The Registration Statement, the Prospectus and, to the extent not used
to confirm sales of the Securities, 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 Trust Indenture Act of
1939, as amended (the "1939 Act") 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 neither the Company
nor the Trust makes any 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 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 Trust or the Company by an
Underwriter expressly for use therein or (C) any information set forth
in the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus under the caption "Book-Entry Only Issuance -- The
Depository Trust Company".
(e) 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.
(f) 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.
(g) 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 not been any material adverse
change or, to the best of the Company's knowledge, any development
involving a prospective material adverse change in or affecting the
business, properties or financial condition of the Trust (it being
understood that any such change involving only the Company shall not
constitute such a change with respect to the Trust).
(h) 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, the Trust Agreement, the
Indenture and the Guarantee Agreement and to purchase, own, and hold
the Common Securities issued by the Trust and to issue and deliver the
Junior Subordinated Notes and the Guarantee.
(i) The Trust has been duly created and is validly existing and in good
standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in
the Registration Statement and Final Supplemented Prospectus and to
enter into and perform its obligations under this Agreement and the
Trust Agreement; the Trust is duly qualified to transact business as a
foreign company and is in good standing in any other jurisdiction in
which such qualification is necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Trust; the Trust is not a party to or otherwise
bound by any agreement other than those described in the Final
Supplemented Prospectus; the Trust is and will be classified for United
States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(j) The Common Securities have been duly authorized by the Trust Agreement
and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Registration Statement and Final
Supplemented Prospectus, will be validly issued and (subject to the
terms of the Trust Agreement) fully paid and non-assessable undivided
beneficial interests in the Trust and will conform in all material
respects to all statements relating thereto contained in the Final
Supplemented Prospectus; the issuance of the Common Securities is not
subject to preemptive or other similar rights; and, on the Closing Date
(as defined herein), all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Company, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right.
(k) This Agreement has been duly authorized, executed and delivered by each
of the Offerors.
(l) The Trust Agreement has been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered by the Company
and the Administrative Trustees, and assuming due authorization,
execution and delivery of the Trust Agreement by the Delaware Trustee
and the Property Trustee, the Trust Agreement will, on the Closing
Date, be a valid and binding obligation of the Company and the
Administrative Trustees, enforceable against the Company and the
Administrative Trustees 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") and will conform in all material
respects to all statements relating thereto in the Final Supplemented
Prospectus; and, on the Closing Date, the Trust Agreement will have
been duly qualified under the 1939 Act.
(m) The Guarantee Agreement, the Auction Agent Agreement and the Agreement
as to Expenses and Liabilities have 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 Guarantee Agreement, the Auction Agent Agreement and the Agreement
as to Expenses and Liabilities by the other respective parties thereto,
the Guarantee Agreement, the Auction Agent Agreement and the Agreement
as to Expenses and Liabilities 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 the Enforceability Exceptions,
and each of the Guarantee, the Guarantee Agreement, the Auction Agent
Agreement and the Agreement as to Expenses and Liabilities will conform
in all material respects to all statements relating thereto contained
in the Final Supplemented Prospectus; and, on the Closing Date, the
Guarantee Agreement will have been duly qualified under the 1939 Act.
(n) The Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered by the Trust pursuant to this
Agreement against payment of the consideration set forth herein, will
be validly issued and (subject to the terms of the Trust Agreement)
fully paid and non-assessable undivided beneficial interests in the
assets of the Trust, will be entitled to the benefits of the Trust
Agreement and will conform in all material respects to all statements
relating thereto contained in the Final Supplemented Prospectus; the
issuance of the Preferred Securities is not subject to preemptive or
other similar rights; (subject to the terms of the Trust Agreement)
holders of Preferred Securities will be entitled to the same limitation
of personal liability under Delaware law as extended to stockholders of
private corporations for profit.
(o) 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 Debt 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 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.
(p) The issuance and delivery of the Junior Subordinated Notes have been
duly authorized by the Company and, on the Closing Date, the Junior
Subordinated 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.
(q) The Company's obligations under the Guarantee (i) are subordinate and
junior in right of payment to all liabilities of the Company, except
those obligations or liabilities made pari passu or subordinate by
their terms, (ii) are pari passu with the preferred stock issued by the
Company and (iii) are senior to all common stock of the Company.
(r) The Junior Subordinated Notes are subordinated and junior in right of
payment to all "Senior Indebtedness" (as defined in the Indenture) of
the Company.
(s) Each of the Administrative Trustees of the Trust is an employee of the
Company and has been duly authorized by the Company to execute and
deliver the Trust Agreement.
(t) Neither the Trust nor the Company nor any of the Company's other
subsidiaries is and, after giving effect to the offering and sale of
the Preferred Securities, will be an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(u) The execution, delivery and performance by the Offerors of this
Agreement, the Auction Agent Agreement, the Preferred Securities and
the Common Securities, by the Company of the Indenture, the Junior
Subordinated Notes, the Guarantee Agreement, the Trust Agreement, the
Guarantee and the Agreement as to Expenses and Liabilities and the
consummation by the Offerors of the transactions contemplated herein
and therein and compliance by the Offerors with their respective
obligations hereunder and thereunder shall have been duly authorized by
all necessary action (corporate or otherwise) on the part of the
Offerors and do not and will not result in any violation of the charter
or bylaws of the Company, or the Trust Agreement or related Certificate
of Trust 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 Trust or the Company under (A) any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Trust or the Company is a party or
by which either of them may be bound or to which any of their
properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially
adverse to the Trust or 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 Trust or the Company, or any of their
respective properties.
(v) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale of the Common Securities or the offering of the
Preferred Securities, the Junior Subordinated Notes or the Guarantee or
the transactions 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
Trust Agreement, the Guarantee Agreement and 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 UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Trust agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Trust, at the price per security
set forth in Schedule II hereto, the number of Preferred Securities set forth in
Schedule I opposite the name of such Underwriter, plus any additional number of
Preferred Securities that such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
The purchase price per security to be paid by the several
Underwriters for the Preferred Securities shall be an amount equal to the
initial public offering price set forth on Schedule II, which is a fixed price
determined by agreement between the Representative and the Offerors. As
compensation to the Underwriters for their commitments hereunder and in view of
the fact that the proceeds of the sale of the Preferred Securities will be used
to purchase the Junior Subordinated Notes of the Company, the Company hereby
agrees to pay on the Closing Date (as defined below) to the Representative, for
the accounts of the several Underwriters, a commission per Preferred Security as
set forth on Schedule II for the Preferred Securities to be delivered by the
Trust hereunder on the Closing Date.
(b) Payment of the purchase price for, and delivery of certificates for, the
Preferred Securities shall be made at the offices of Dewey Ballantine LLP, 1301
Avenue of the Americas, New York, New York at 9:30 a.m., New York time, on
February 25, 1999 (unless postponed in accordance with the provisions of Section
10) or such other time, place or date as shall be agreed upon by the
Representative, the Trust and the Company (such time and date of payment and
delivery being herein called the "Closing Date"). Payment shall be made to the
Trust by wire transfer in federal funds at the Closing Date, against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the Preferred Securities to be purchased by them. Certificates
for the Preferred Securities shall be in such denominations and registered in
such names as the Representative may request in writing at least two business
days before the Closing Date. It is understood that each Underwriter has
authorized the Representative, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Preferred Securities which
it has agreed to purchase. The Representative, individually and not as
Representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Preferred Securities to be purchased by
any Underwriter whose check has not been received by the Closing Date, but such
payment shall not relieve such Underwriter from its obligations hereunder.
The certificate(s) for the Preferred Securities will be made
available for examination and packaging by the Representative not later than
12:00 Noon, New York time, on the last business day prior to the Closing Date.
On the Closing Date, the Company will pay, or cause to be
paid, the commission payable at such time to the Underwriters under Section 2(a)
hereof by wire transfer payable to the Representative in federal funds.
SECTION 3. COVENANTS OF THE OFFERORS.
Each of the Offerors jointly and severally covenants with each
Underwriter as follows:
(a) The Offerors, 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 Representative 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 Offerors 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 each Underwriter 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 Offerors will furnish the Underwriters with copies of each
amendment and supplement to the Preliminary Supplemented Prospectus and
Final Supplemented Prospectus relating to the offering of the Preferred
Securities 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 Preferred Securities by an Underwriter
or dealer, 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 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 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 Preferred
Securities 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 Final Supplemented Prospectus
which will supplement or amend the Preliminary Supplemented Prospectus
or 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 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 Preferred Securities 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 Representative and Dewey
Ballantine LLP.
(c) The Offerors will endeavor, in cooperation with the Underwriters, to
qualify the Preferred Securities and, to the extent required or
advisable, the Guarantee and the Junior Subordinated Notes, for
offering and sale under the applicable securities laws of such states
and the other jurisdictions of the United States as the Representative
may designate; provided, however, that neither of the Offerors shall 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 earning 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, neither the
Trust nor the Company will, without the Representative's prior written
consent, directly or indirectly, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, any Preferred Securities, any
security convertible into or exchangeable into or exercisable for
Preferred Securities or the Junior Subordinated Notes or any debt
securities substantially similar to the Junior Subordinated Notes or
equity securities substantially similar to the Preferred Securities
(except for the Junior Subordinated Notes and the Preferred Securities
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 Representative of such filing and to confirm such advice in
writing.
SECTION 4. PAYMENT OF EXPENSES.
The Company will pay all expenses incident to the performance
of each Offeror's 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 Preferred Securities to the
Underwriters, (iii) the fees and disbursements of the Company's, the Auction
Agent's and the Trust's counsel and accountants, (iv) the qualification of the
Preferred Securities and, to the extent required or advisable, the Guarantee and
the Junior Subordinated 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 Debt Trustee, including the fees and disbursements of counsel for the Debt
Trustee in connection with the Indenture and the Junior Subordinated Notes, (ix)
the fees and expenses of the Auction Agent, the Delaware Trustee, the Property
Trustee and the Guarantee Trustee, including the fees and disbursements of
counsel for the Delaware Trustee in connection with the Trust Agreement and the
related Certificate of Trust, (x) the fees and disbursements of Delaware counsel
to the Trust, (xi) any fees payable in connection with the rating of the
Preferred Securities and Junior Subordinated Notes, (xii) the fees and expenses
incurred in connection with the listing, if applicable, of the Preferred
Securities and the Junior Subordinated Notes on the New York Stock Exchange,
(xiii) the cost and charges of any transfer agent or registrar and (xiv) the
cost of qualifying the Preferred Securities 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 Preferred Securities, including fees and disbursements of
their counsel, Dewey Ballantine LLP.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the Underwriters to purchase and pay for
the Preferred Securities 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 Final Supplemented Prospectus,
or any supplement thereto, is required pursuant to Rule 424, the
Preliminary Supplemented Prospectus or Final Supplemented Prospectus,
and any such supplement, shall have been filed in the manner and within
the time period required by Rule 424.
(b) Orders of the Alabama Commission and 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 Representative, 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 Representative 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 III-A.
(2) The opinion, dated the Closing Date, of Troutman Sanders LLP,
counsel for the Company, substantially in the form attached
hereto as Schedule III-B.
(3) The opinion, dated the Closing Date, of Richards, Layton &
Finger P.A., Delaware counsel to the Trust, substantially in
the form attached hereto as Schedule IV.
(4) The opinion, dated the Closing Date, of Richards, Layton &
Finger P.A., Delaware counsel to Chase Manhattan Bank
Delaware, as Delaware Trustee under the Trust Agreement,
substantially in the form attached hereto as Schedule V.
(5) The opinion, dated the Closing Date, of Cravath, Swaine &
Moore, counsel to the Auction Agent, the Property Trustee, the
Guarantee Trustee and the Debt Trustee, substantially in the
form attached hereto as Schedule VI.
(6) The favorable opinion, dated as of the Closing Date, of Dewey
Ballantine LLP, counsel for the Underwriters, substantially in
the form attached hereto as Schedule VII.
(7) 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 Trust or
the Company, whether or not arising in the ordinary course of
business, and the Representative shall have received a
certificate of the President or any Vice President of the
Company and a certificate of the Administrative Trustees of
the Trust, 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 Trust
and the Company have complied with all agreements and
satisfied all conditions on their respective parts 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.
(8) On this Closing Date, the Representative 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
calendar quarter 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 Dividend 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 the 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 on Preferred
Stock and the unaudited Ratios of Earnings to Fixed Charges
and Earnings to Fixed Charges Plus Preferred Dividend
Requirements (Pre-Income Tax Basis) for any calendar quarter
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.
(9) On the Closing Date, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Preferred Securities 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 Offerors,
in connection with the issuance and sale of the Preferred
Securities as herein contemplated shall be satisfactory in
form and substance to the Representative and Dewey Ballantine
LLP, counsel for the Underwriters.
(10) On the Closing Date, the Representative shall receive a
certificate of an officer of the Company certifying that a
Special Event (as defined in the Final Supplemented
Prospectus) shall not have occurred and be continuing.
(11) 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 any Underwriter or
Underwriters) which, in the reasonable judgment of the
Representative, shall materially impair the marketability of
the Preferred Securities.
(12) The Company and the Trust shall have performed their
respective obligations when and as provided under this
Agreement.
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 Representative by notice to the Offerors 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 OFFERORS.
The obligations of the Offerors 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 Offerors jointly and severally agree 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 the
Underwriters 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 Offerors 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, the Preliminary Supplemented Prospectus, or the Final
Supplemented Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by, or through the
Representative on behalf of, any Underwriter 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 Offerors 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 Preferred Securities 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 Offerors
on account of its agreement contained in this Section 7, to notify the
Offerors in writing of the commencement thereof but the omission of
such Underwriter so to notify the Offerors of any such action shall not
release the Offerors 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 the Underwriters or any such person
controlling such Underwriters and such Underwriter shall notify the
Offerors of the commencement thereof as above provided, the Offerors
shall be entitled to participate in (and, to the extent that they shall
wish, including the selection of counsel, to direct) the defense
thereof, at their own expense. In case the Offerors elect 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 controlling person unless the employment of such
counsel has been authorized in writing by the Offerors 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) The Company agrees to indemnify the Trust against all loss, liability,
claim, damage and expense whatsoever, as due from the Trust under
Section 7(a) hereunder.
(c) 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, the Trust and each other
Underwriter and each person, if any, who controls the Offerors or any
such other Underwriter 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 Offerors 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 Offerors by, or through the Representative
on behalf of, such Underwriter for use therein.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers or Trustees of the
Offerors 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 Offerors and shall survive
delivery of the Preferred Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representative may terminate this Agreement, by notice to the Offerors,
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 to New York Stock Exchange, (iii) a
general banking moratorium shall have been declared by federal or New York State
authorities, (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 Representative, the marketability of the Preferred Securities shall have
been materially impaired.
(b) 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
Offerors to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Offerors shall be unable to perform their
obligations under this Agreement, then in any such case, the Company will
reimburse the Underwriters, severally, 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 Preferred Securities
and, upon such reimbursement, the Offerors 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 Preferred Securities that it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Representative
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
Representative shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Preferred Securities, 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 number of Defaulted Securities exceeds 10% of the Preferred
Securities, 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 Representative or the Offerors 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 the Representative at 85 Broad Street, New York, New York 10004,
Attention: Don Hansen, Registration; notices to the Offerors shall be directed
to the Company at 600 North 18th Street, Birmingham, Alabama 35291, Attention:
Corporate Secretary.
SECTION 12. PARTIES.
This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Trust, 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 Trust and the Company and their respective successors and the
controlling persons and officers, directors and trustees 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 Trust and
the Company and their respective successors, and said controlling persons and
officers, directors and trustees and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
Preferred Securities from any Underwriter 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 Trust and the Company a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriters and the Trust and the Company in
accordance with its terms.
Very truly yours,
ALABAMA POWER COMPANY
By:
Title:
ALABAMA POWER CAPITAL TRUST III
By: Alabama Power Company, as Depositor
Name:
Title: Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written
GOLDMAN, SACHS & CO.
By:
Goldman, Sachs & Co.
For itself and as Representative of the other Underwriter named in Schedule I
hereto.
<PAGE>
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF SECURITIES
Goldman, Sachs & Co. 750
Lehman Brothers Inc. 250
TOTAL 1,000
<PAGE>
SCHEDULE II
Initial public offering price per Preferred Security
(and purchase price per security to be paid by the
several Underwriters): $50,000.
Compensation per Preferred Security to be paid by the
Company to the several Underwriters in respect of
their commitments: $437.50 per Preferred Securities.
<PAGE>
Schedule III-A
[Letterhead of BALCH & BINGHAM LLP]
___________ __, 1999
Goldman, Sachs & Co.,
as Representative
85 Broad Street
New York, New York 10004
Re: Alabama Power Capital Trust III
____Capital Auction Preferred Securities
Ladies and Gentlemen:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with (i) its formation of Alabama Power Capital Trust
III (the "Trust"), a Delaware statutory business trust, pursuant to the Amended
and Restated Trust Agreement, dated as of __________ __, 1999, among the Company
and the trustees named therein (the "Trust Agreement"); (ii) the Trust's
issuance and sale of Capital Auction Preferred Securities evidencing
approximately a 97% undivided interest in the assets of the Trust (the
"Preferred Securities"); (iii) the Trust's issuance and sale of Common
Securities evidencing approximately a 3% undivided interest in the assets of the
Trust; (iv) the Company's issuance and sale to the Trust of approximately
$_________ of its Series C ____% Junior Subordinated Notes (the "Notes") due
________ __, 20__ pursuant to a Subordinated Note Indenture, dated as of
___________ __, 199_, by and between the Company and The Chase Manhattan Bank,
as trustee, as supplemented by the Second Supplemental Indenture, dated as of
________ __, 1999 (collectively, the "Indenture"); (v) the Agreement as to
Expenses and Liabilities dated as of _____ 1, 1999 between the Company and the
Trust (the "Agreement as to Expenses and Liabilities"); (vi) the Auction Agent
Agreement, dated as of ____ __, 1999, among the Company, the Trust and The Chase
Manhattan Bank, as auction agent (the "Auction Agent Agreement") and (vii) its
issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant
to a Guarantee Agreement, dated as of _________ __, 199_ (the "Guarantee
Agreement"), between the Company and The Chase Manhattan Bank, as trustee. The
Preferred Securities are being sold to you today pursuant to the terms of an
Underwriting Agreement, dated February __, 1999, among the Company, the Trust
and the underwriters named in Schedule I thereto (the "Underwriters") for whom
you are acting as Representative (the "Underwriting Agreement"). This opinion is
being delivered to you as Representative 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, as amended, on Form S-3 (Nos. ________, _________,
________ and ________) pertaining to the Preferred Securities (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
the Prospectus, dated December 4, 1998, as supplemented by a final prospectus
supplement dated February __, 1999 (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 December 31, 1997, 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 Preferred Securities and the Notes, of which we
have examined specimens), and we have made such other and further investigations
as we deemed necessary to express the opinions hereinafter set forth.
The Trust Agreement, the Indenture, the Guarantee Agreement, the
Auction Agent Agreement and the Underwriting Agreement are herein referred to as
the "Agreements."
We are of the opinion, relying as to matters of New York law
upon the opinion dated hereof rendered to you by Dewey Ballantine LLP, and as to
matters of Delaware law upon the opinion dated hereof rendered to you by
Richards, Layton & Finger P.A., 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 delivery of the Notes
and the Guarantee and the issuance and sale of the Preferred
Securities have been obtained; such orders are sufficient for
the issuance and the delivery of the Notes and the Guarantee
and the issuance and sale of the Preferred Securities; the
issuance and delivery of the Notes and the Guarantee and the
issuance and sale of the Preferred Securities 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 delivery of the Notes and the Guarantee and the issuance
and sale of the Preferred Securities 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 Chase Manhattan Bank, as trustee
thereunder, 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 Chase Manhattan Bank,
as trustee thereunder, in the manner provided in the Indenture
and delivered against payment therefor, 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 Guarantee Agreement has been duly authorized, executed and
delivered by the Company and 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 Guarantee 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 Guarantee Agreement conforms as to legal matters
in all material respects to the description thereof in the
Final Supplemented Prospectus.
7. The Trust Agreement has been duly authorized, executed and
delivered by the Company, and, assuming due authorization,
execution and delivery by the trustees named therein, the
Trust Agreement constitutes a valid and binding obligation 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 Trust
Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to
or affecting creditor's rights generally, and by general
principles of equity.
8. Each of the Indenture, the Guarantee Agreement and the Trust
Agreement has been duly qualified under the Trust Indenture
Act of 1939, as amended.
9. Neither the Company nor the Trust is and, after giving effect
to the offering and sale of the Preferred Securities, will be
an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended.
10. The statements and legal conclusions contained in the Final
Supplemented Prospectus under the caption "Certain Federal
Income Tax Considerations" are correct in all material
respects.
11. To the best of our knowledge, all of the issued and
outstanding Common Securities of the Trust are directly owned
by the Company, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
12. The execution, delivery and performance by the Trust of the
Underwriting Agreement and the Auction Agent Agreement; the
issuance by the Trust of the Preferred Securities and the
Common Securities; the consummation by the Trust of the
transactions contemplated thereby; and the compliance by the
Trust with its obligations thereunder do not and will not
result in any violation of the Trust Agreement or related
Certificate of Trust, 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 Trust under (A) any contract,
indenture, mortgage, loan agreement, note, lease or any other
agreement or instrument known to us to which the Trust is a
party or by which it may be bound or to which any of its
properties may be subject (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not
have a material adverse effect on the condition (financial or
otherwise), of the Trust), (B) any existing applicable law,
rule or regulation applicable to the Trust (other than the
securities or blue sky laws of any jurisdiction, as to which
we express no opinion) or (C) any judgment, order or decree
known to us 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 Trust or any of its properties; and the
Trust is not a party to or otherwise bound by any agreement
other than those which are exhibits (or included in exhibits)
to the Registration Statement.
13. The Common Securities have been duly authorized by the Trust
Agreement and (subject to the terms of the Trust Agreement),
when issued and delivered by the Trust to the Company against
payment therefor as described in the Final Supplemented
Prospectus, will be validly issued and (subject to the terms
of the Trust Agreement) fully paid and non-assessable
beneficial interests in the assets of the Trust; and the
issuance of the Common Securities is not subject to preemptive
or other similar rights.
14. The Preferred Securities have been duly authorized by the
Trust Agreement and (subject to the terms of the Trust
Agreement), when delivered to and paid for by the Underwriters
pursuant to the Underwriting Agreement, will be validly
issued, fully paid and nonassessable beneficial interests in
the assets of the Trust; the holders of the Preferred
Securities will (subject to the terms of the Trust Agreement)
be entitled to the same limitation of personal liability under
Delaware law as is extended to stockholders of private
corporations for profit organized under the general
corporation law of the State of Delaware; the issuance of the
Preferred Securities is not subject to preemptive or other
similar rights; and the Preferred Securities conform as to
legal matters in all material respects to the description
thereof in the Final Supplemented Prospectus.
15. The Agreement as to Expenses and Liabilities has been duly
authorized, executed and delivered by the Company and
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
Agreement as to Expenses and Liabilities may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally and by general principals of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law); and the Agreement as to Expenses and
Liabilities conforms as to legal matters in all material
respects to the description thereof in the Final Supplemented
Prospectus.
16. The Auction Agent Agreement has been duly authorized, executed
and delivered by the Company.
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,
5, 6, 10, 14 and 15 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 February __, 1999, 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.
We are members of the State Bar of Alabama, and we do not
express any opinion herein concerning any law other than the law of the State of
Alabama and the federal law of the United States, and, to the extent set forth
herein, the laws of the States of Delaware 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, except that Troutman Sanders LLP and Dewey Ballantine LLP
may rely on this opinion in giving their opinions pursuant to Section 5(c) of
the Underwriting Agreement insofar as such opinion relates to matters of Alabama
law.
Yours very truly,
BALCH & BINGHAM LLP
<PAGE>
Schedule III-B
[Letterhead of TROUTMAN SANDERS LLP]
__________ __, 199_
Goldman, Sachs & Co.,
as Representative
85 Broad Street
New York, New York 10004
Alabama Power Capital Trust III
Capital Auction Preferred Securities
Ladies and Gentlemen:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with (I) its formation of Alabama Power Capital Trust
III, a Delaware statutory business trust (the "Trust"), pursuant to the Amended
and Restated Trust Agreement dated as of __________, 199_ among the Company and
the trustees named therein (the "Trust Agreement"); (II) the Trust's issuance
and sale of Capital Auction Preferred Securities evidencing approximately 97%
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"); (III) the Trust's issuance and sale of Common Securities
evidencing approximately 3% undivided beneficial interests in the assets of the
Trust; (IV) the Company's issuance and sale to the Trust of $___________
aggregate principal amount of its Series C ___% Junior Subordinated Notes due
________ __, 20__ (the "Notes") pursuant to a Subordinated Note Indenture dated
as of __________, 199_, by and between the Company and The Chase Manhattan Bank,
as trustee, as supplemented by the Second Supplemental Indenture dated as of
__________ __, 199_ (collectively, the "Indenture"); (V) the Agreement as to
Expenses and Liabilities dated as of ____ 1, 1999 between the Company and the
Trust (the "Agreement as to Expenses and Liabilities"); (VI) the Auction Agent
Agreement, dated as of _____, 1999, between the Company, the Trust and The Chase
Manhattan Bank, as auction agent (the "Auction Agent Agreement") and (VII) its
issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant
to a Guarantee Agreement dated as of __________, 199_ (the "Guarantee
Agreement") between the Company and The Chase Manhattan Bank, as trustee. The
Preferred Securities are being sold to you today pursuant to the terms of an
Underwriting Agreement dated __________, 199_ (the "Underwriting Agreement"),
among the Company, the Trust and the underwriters named in Schedule I thereto
(the "Underwriters") for whom you are acting as Representative. This opinion is
being delivered to you as Representative pursuant to Section 5(c)(2) of the
Underwriting Agreement.
All capitalized terms not otherwise defined herein shall have
the meaning set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. ________, ________, ________ and
________) filed by the Company and the Trust under the Securities Act of 1933,
as amended (the "Act"), as it became effective under the Act; and the prospectus
of the Company and the Trust 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 December 31, 1997,
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 Preferred Securities and the Notes, of which we
have examined specimens), 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 Trust Agreement, the Indenture, the Guarantee Agreement,
the Auction Agent Agreement 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, relying as to matters of New York law upon the opinion dated the
date hereof rendered to you by Dewey Ballantine LLP and as to matters of
Delaware law upon the opinion dated the date hereof rendered to you by Richards,
Layton & Finger P.A., 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 delivery of the Notes and the Guarantee and the issuance and sale of the
Preferred Securities have been obtained; such orders are sufficient for the
issuance and delivery of the Notes and the Guarantee and the issuance and sale
of the Preferred Securities; the issuance and delivery of the Notes and the
Guarantee and the issuance and sale of the Preferred Securities 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 delivery of the Notes and the
Guarantee and the issuance and sale of the Preferred Securities 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 Debt
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 Debt Trustee in the manner provided in the Indenture and
delivered against payment therefor, 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 Guarantee Agreement has been duly authorized, executed and delivered by
the Company and 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 Guarantee Agreement 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 Guarantee Agreement conforms as to legal matters in all material
respects to the description thereof in the Final Supplemented Prospectus.
7. Each of the Indenture, the Guarantee Agreement and the Trust Agreement has
been duly qualified under the Trust Indenture Act of 1939, as amended.
8. Neither the Company nor the Trust is and, after giving effect to the offering
and sale of the Preferred Securities, will be an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
9. The Preferred Securities have been duly authorized by the Trust Agreement and
(subject to the terms of the Trust Agreement), when delivered to and paid for by
the Underwriters pursuant to the Underwriting Agreement, will be validly issued,
fully paid and nonassessable undivided beneficial interests in the assets of the
Trust; and the Preferred Securities conform as to legal matters in all material
respects to the description thereof in the Final Supplemented Prospectus.
10. The Agreement as to Expenses and Liabilities has been duly
authorized, executed and delivered by the Company and 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 Agreement as to Expenses and Liabilities
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by general
principals of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and the Agreement as to Expenses and
Liabilities conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
11. The Auction Agent Agreement has been duly authorized,
executed and delivered by the Company.
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,
5, 6, 9 and 10 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.
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 Delaware 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 IV
[Letterhead of RICHARDS, LAYTON & FINGER]
__________ __, 199_
Goldman, Sachs & Co.,
as Representative
85 Broad Street
New York, New York 10004
Re: Alabama Power Capital Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Alabama Power
Company, an Alabama corporation (the "Company"), and Alabama Power Capital Trust
III, a Delaware business trust (the "Trust"), in connection with the matters set
forth herein. This opinion is being furnished to you pursuant to Section 5(c)(3)
of the Underwriting Agreement, dated __________, 199_ (the "Underwriting
Agreement"), among the Company, the Trust, Goldman, Sachs & Co. and the other
Underwriters listed in Schedule I thereto.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated November 27, 1996 (the
"Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on November 27, 1996;
(b) The Trust Agreement of the Trust, dated as of _________, 199_, among the
Company and the trustees of the Trust named therein, as amended and restated
pursuant to an Amended and Restated Trust Agreement, (including Exhibits C and E
thereto) dated as of ________ __, 199_, among the Company, the trustees of the
Trust named therein (the "Trustees"), and the holders, from time to time, of the
undivided beneficial interests in the assets of the Trust (collectively, the
"Trust Agreement");
(c) The Underwriting Agreement;
(d) The Prospectus, dated __________ __, 199_ (the "Prospectus"), as
supplemented by the Prospectus Supplement dated __________, 199_ (the
"Prospectus Supplement"), relating to the Capital Auction Preferred Securities
of the Trust representing preferred undivided beneficial interests in the assets
of the Trust (each, a "Preferred Security" and collectively, the "Preferred
Securities");
(e) A Certificate of Good Standing for the Trust, dated ___________ __, 199_,
obtained from the Secretary of State; and
(f) The Auction Agent Agreement, dated _______ __, 1999, among the Trust, the
Company and The Chase Manhattan Bank, as auction agent (the "Auction Agent
Agreement").
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (f) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (f) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due organization or due
formation or due creation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its organization or formation or creation, (iii) the
legal capacity of natural persons who are parties to the documents examined by
us, (iv) except to the extent provided in paragraph 2 below, the power and
authority of each of the parties to the documents examined by us to execute and
deliver, and to perform its obligations under, such documents, (v) except to the
extent provided in paragraph 4 below, the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Trust Security is to be issued by the Trust
(collectively, the "Trust Security Holders") of a Trust Securities Certificate
for such Trust Security and the payment for the Trust Security acquired by it,
in accordance with the Trust Agreement, the Prospectus and the Prospectus
Supplement, and (vii) the issuance and sale of the Trust Securities to the Trust
Security Holders in accordance with the Trust Agreement, the Prospectus and the
Prospectus Supplement. We have not participated in the preparation of the
Prospectus or the Prospectus Supplement.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business
Trust Act, 12 Del. C. ss. 3801, et seq. (the "Business Trust
Act"), and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of
the Trust as a business trust have been made.
2. Under the Business Trust Act and the Trust Agreement, the
Trust has the trust power and authority to (i) own property
and conduct its business, all as described in the Prospectus
and the Prospectus Supplement, (ii) execute and deliver, and
to perform its obligations under, the Underwriting Agreement
and the Auction Agent Agreement, (iii) issue and perform its
obligations under the Trust Securities, and (iv) perform its
obligations under the Trust Agreement.
3. The Trust Securities have been duly authorized by the Trust
Agreement and will be duly and validly issued undivided
beneficial interests in the assets of the Trust. Subject to
the qualifications set forth in paragraph 6 below, the
Preferred Securities are fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
Under the Business Trust Act and the Trust Agreement, the
Trust Securities are not subject to any preemptive or other
similar rights.
4. Under the Business Trust Act and the Trust Agreement, the
Underwriting Agreement and the Auction Agent Agreement have
been duly authorized by all necessary trust action on the part
of the Trust.
5. No authorization, approval, consent or order of any Delaware
court or Delaware governmental authority or Delaware agency is
required to be obtained by the Trust solely as a result of the
issuance and sale of the Preferred Securities.
6. The Persons to whom Preferred Securities are to be issued by
the Trust (collectively, the "Preferred Security Holders"), as
beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the
Preferred Security Holders may be obligated, pursuant to the
Trust Agreement, to (i) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising
from transfers or exchanges of Preferred Securities
Certificates and the issuance of replacement Preferred
Securities Certificates and (ii) provide security or indemnity
in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Trust
Agreement. We also note that the Company, in its capacity as
Depositor and not in its capacity as a Holder, has undertaken
certain payment obligations as set forth in the Trust
Agreement.
7. The Trust Agreement constitutes a valid and binding obligation
of the Company, and is enforceable against the Company, in
accordance with its terms.
8. The issuance and sale by the Trust of the Trust Securities,
the execution, delivery and performance by the Trust of the
Underwriting Agreement, the consummation by the Trust of the
transactions contemplated by the Underwriting Agreement, the
Trust Agreement and the Auction Agent Agreement and compliance
by the Trust with its obligations thereunder do not violate
(i) any of the provisions of the Certificate or the Trust
Agreement or (ii) any applicable Delaware law or Delaware
administrative regulation.
9. We have reviewed the statements in the Prospectus under the
caption "The Trusts" and the statements in the Prospectus
Supplement under the caption "Alabama Power Capital Trust III"
and, insofar as they contain statements of Delaware law, such
statements are fairly presented.
The opinion expressed in paragraph 7 above is subject, as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance and other similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity, including applicable
law relating to fiduciary duties (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions related to indemnification. In
addition, in connection with the opinion expressed in paragraph 7 above, to the
extent that Section [10.05] of the Trust Agreement provides that the Trust
Agreement is governed by New York law, we express no opinion concerning Section
[10.05] of the Trust Agreement or the effect of Section [10.05] of the Trust
Agreement on the Trust Agreement.
We consent to your relying as to matters of Delaware law upon
this opinion in connection with the Underwriting Agreement. We consent to the
law firms of Balch & Bingham LLP, Troutman Sanders LLP and Dewey Ballantine LLP
relying as to matters of Delaware law upon this opinion in connection with
opinions to be rendered by them pursuant to the Underwriting Agreement. Except
as stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER
<PAGE>
Schedule V
[Letterhead of Richards, Layton & Finger]
__________ __, 199_
Goldman, Sachs & Co.,
as Representative
85 Broad Street
New York, New York 10004
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Alabama Power Capital Trust III
c/o Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Re: Alabama Power Capital Trust III
Ladies and Gentlemen:
We have acted as counsel to Chase Manhattan Bank Delaware, a
Delaware banking corporation ("CMBD"), in connection with the formation of
Alabama Power Capital Trust III, a business trust existing under the laws of the
State of Delaware (the "Trust") pursuant to the Trust Agreement, dated as of
__________, 199_, by and between CMBD, not in its individual capacity but solely
as trustee (the "Trustee"), and Alabama Power Company (the "Company"), as
amended and restated pursuant to an Amended and Restated Trust Agreement dated
as of __________ __, 199_, among the Company, the Trustee, the other trustees
named therein and the holders from time to time of the undivided beneficial
interests in the assets of the Trust (collectively, the "Trust Agreement"). This
opinion is being delivered to you pursuant to Section 5(c)(4) of the
Underwriting Agreement, dated as of ___________ __, 199_ (the "Underwriting
Agreement"), among Goldman, Sachs & Co., the several Underwriters named in
Schedule I thereto, Alabama Power Company and the Trust, pursuant to which the
Capital Auction Preferred Securities of the Trust will be sold. All capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Underwriting Agreement.
We have examined an original or a copy of the Trust Agreement.
We have also examined originals or copies of such other documents and such
corporate records, certificates and other statements of governmental officials
and corporate officers and other representatives of the corporations or entities
referred to herein as we have deemed necessary or appropriate for the purposes
of the opinions expressed herein. Moreover, as to certain facts material to the
opinions expressed herein, we have relied upon the representations and
warranties contained in the documents referred to in this paragraph.
Based upon the foregoing and upon an examination of such
questions of law as we have deemed necessary or appropriate, and subject to the
assumptions, exceptions and qualifications set forth below, we advise you that,
in our opinion:
1. CMBD is duly incorporated, validly existing in good
standing as a banking corporation under the laws of
the State of Delaware and has the power and authority
to execute, deliver and perform its obligations under
the Trust Agreement.
2. The Trust Agreement has been duly authorized,
executed and delivered by CMBD and constitutes a
legal, valid and binding obligation of CMBD,
enforceable against CMBD, in accordance with its
terms.
3. The execution and delivery of, and performance of the
terms of, the Trust Agreement by CMBD, does not
conflict with or constitute a breach of, or default
under, the charter or by-laws of CMBD.
4. No consent, approval or authorization of, or
registration, declaration or filing with, any court
or governmental agency or body having jurisdiction in
the premises is required under Delaware law for the
execution, delivery or performance by CMBD of the
Trust Agreement.
The foregoing opinions are subject to the following
exceptions, qualifications and assumptions:
(A) We are admitted to practice law in the State of Delaware and
we do not hold ourselves out as being experts on the law of
any other jurisdiction. The foregoing opinions are limited to
the laws of the State of Delaware and the federal laws of the
United States of America governing the banking and trust
powers of CMBD (except that we express no opinion with respect
to (i) state securities or blue sky laws and (ii) federal
securities laws, including, without limitation, the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, the Trust Indenture Act of 1939, as amended, and
the Investment Company Act of 1940, as amended), and we have
not considered and express no opinion on the laws, rules and
regulations of any other jurisdiction.
(B) The foregoing opinions regarding enforceability are subject to
(i) applicable bankruptcy, insolvency, moratorium,
receivership, reorganization, fraudulent conveyance and
similar laws relating to and affecting the rights and remedies
of creditors generally, (ii) principles of equity (regardless
of whether considered and applied in a proceeding in equity or
at law), and (iii) the effect of federal or state securities
laws on the enforceability of provisions relating to
indemnification or contribution.
(C) We have assumed the due authorization, execution and delivery
by each of the parties thereto, other than CMBD, of the Trust
Agreement, and that each of such parties has the full power,
authority and legal right to execute, deliver and perform such
document.
(D) We have assumed that all signatures (other than those of CMBD)
on documents examined by us are genuine, that all documents
submitted to us as originals are authentic, and that all
documents submitted to us as copies or specimens conform with
the originals, which facts we have not independently verified.
This opinion may be relied upon by you in connection with the
matters set forth herein, and without our prior written consent, may not be
furnished or quoted to, or relied upon by, any other person or entity for any
purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER
<PAGE>
Schedule VI
[Letterhead of Cravath, Swaine & Moore]
__________ __, 199_
Goldman, Sachs & Co.,
as Representative
85 Broad Street
New York, New York 10004
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Alabama Power Capital Trust III
c/o Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Alabama Power Company
Alabama Power Capital Trust III
Dear Sirs:
We have acted as counsel to The Chase Manhattan Bank (the
"Bank") in connection with (a) the Subordinated Note Indenture, dated as of
________ ______, 199_, as heretofore supplemented (the "Original Indenture"),
between Alabama Power Company (the "Company") and the Bank, as Trustee, (b) the
Second Supplemental Indenture, dated as of ___________ (together with the
Original Indenture, herein called the "Indenture"), between the Company and the
Bank, as Trustee, (c) the Guarantee Agreement, dated as of __________ ______,
199_ (the "Guarantee Agreement"), between the Company, as Guarantor, and the
Bank, as Trustee, and (d) the Amended and Restated Trust Agreement, dated as of
_________ ______, 199_ (the "Trust Agreement") among the Company, the Bank, as
Property Trustee, Chase Manhattan Bank Delaware, as Delaware Trustee, and
William E. Zales, Jr. and J. Randy DeRieux, as Administrative Trustees, and (e)
the Auction Agent Agreement, dated as of February __, 199 (the "Auction Agent
Agreement"), among Alabama Power Capital Trust III, the Company and the Bank, as
Auction Agent.
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, the Guarantee
Agreement, the Trust Agreement, the Auction Agent Agreement 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,
the Guarantee Agreement and the Trust Agreement, has duly
executed and delivered the Indenture, the Guarantee Agreement
and the Trust Agreement, and, insofar as the laws governing
the trust powers of the Bank are concerned and assuming due
authorization, execution and delivery thereof by the other
parties thereto, each of the Indenture, the Guarantee
Agreement and the Trust Agreement 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 subject, as to enforceability,
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, the Guarantee Agreement and the Trust Agreement do
not conflict with or constitute a breach of the charter or
bylaws of the Bank;
(iv) 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, the
Guarantee Agreement or the Trust Agreement or the performance
by the Bank of its duties thereunder, except such as have been
obtained, taken or made; and
(v) the Bank has the corporate power and authority to execute,
deliver and perform its duties under the Auction Agent
Agreement, has duly executed and delivered the Auction Agent
Agreement, and, insofar as the laws governing the corporate
powers of the Bank are concerned and assuming due
authorization, execution and delivery thereof by the other
parties thereto, the Auction Agent Agreement 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.
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 VII
[Letterhead of DEWEY BALLANTINE LLP]
__________ __, 199_
Goldman, Sachs & Co.,
as Representative
85 Broad Street
New York, New York 10004
Re: Alabama Power Capital Trust III
Capital Auction Preferred Securities
Ladies and Gentlemen:
In connection with (i) the formation by Alabama Power Company
(the "Company") of Alabama Power Capital Trust III (the "Trust"), a Delaware
statutory business trust, pursuant to the amended and restated trust agreement
dated __________, 199_ among the Company and the trustees named therein (the
"Trust Agreement"); (ii) the Trust's issuance and sale of Preferred Securities
evidencing approximately a 97% undivided interest in the Trust (the "Preferred
Securities"); (iii) the Trust's issuance and sale of Common Securities
evidencing approximately a 3% undivided interest in the Trust; (iv) the
Company's issuance and sale to the Trust of $___________ of its Series C ___%
Junior Subordinated Notes (the "Notes") pursuant to a Subordinated Note
Indenture dated as of __________, 199_, by and between the Company and
____________, as trustee, as supplemented by the Second Supplemental Indenture
dated as of __________ __, 199_ (collectively, the "Indenture"); (v) the
Agreement as to Expenses and Liabilities dated as of _____ 1, 1999 between the
Company and the Trust (the "Agreement as to Expenses and Liabilities"); and (vi)
the Company's issuance of a guarantee (the "Guarantee") of the Preferred
Securities pursuant to a Guarantee Agreement dated as of __________, 199_ (the
"Guarantee Agreement") between the Company and ____________________, as trustee,
we have acted as counsel to you and the other underwriters named in the Schedule
I (the "Underwriters") of the Underwriting Agreement dated __________ __, 199_,
among the Company, the Trust and the Underwriters for whom you are acting as
Representative (the "Underwriting Agreement"). This opinion is being delivered
to you as Representative pursuant to Section 5(c)(6) 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. 33- _______) pertaining to the
Preferred Securities (the "Registration Statement"), filed under the Securities
Act of 1933, as amended (the "Act"), and the prospectus dated , as supplemented
by a final supplemental prospectus 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 December 31, 1997, 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 Preferred Securities and the Notes, of which we
have examined specimens), 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 Trust Agreement, Indenture, Guarantee Agreement 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
laws of the State of Alabama upon the opinion of Balch & Bingham LLP dated the
date hereof and addressed to you, as to all matters covered hereby which are
governed by or dependent upon the laws of the State of Alabama upon the opinion
of Troutman Sanders LLP dated the date hereof and addressed to you, and as to
all matters covered hereby which are governed by or dependent upon the laws of
the State of Delaware upon the opinion of Richards, Layton & Finger P.A., dated
the date hereof and addressed to you and a form of which is attached as Schedule
IV to the Underwriting Agreement, 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 delivery of the Notes
and the Guarantee and the issuance and sale of the Preferred
Securities have been obtained; such orders are sufficient for
the issuance and delivery of the Notes and the Guarantee and
the issuance and sale of the Preferred Securities; the
issuance and delivery of the Notes and the Guarantee and the
issuance and sale of the Preferred Securities 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 delivery of the Notes and the Guarantee and the issuance
and sale of the Preferred Securities 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 Debt 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 Debt Trustee in the
manner provided in the Indenture and delivered against payment
therefor, 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); the Notes
conform as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
6. The Guarantee Agreement has been duly authorized, executed and
delivered by the Company and 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 Guarantee Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally or general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law); and the Guarantee Agreement conforms as to
legal matters in all material respects to the description
thereof in the Final Supplemented Prospectus.
7. Each of the Indenture, the Guarantee Agreement and the Trust
Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended.
8. The Preferred Securities have been duly authorized by the
Trust Agreement and (subject to the terms of the Trust
Agreement), when delivered to and paid for the Underwriters
pursuant to the Underwriting Agreement, will be validly
issued, fully paid and nonassessable beneficial interests in
the assets of the Trust; and the Preferred Securities conform
as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
9. The Agreement as to Expenses and Liabilities has been duly
authorized, executed and delivered by the Company and
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
Agreement as to Expenses and Liabilities may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally and by general principals of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law); and the Agreement as to Expenses and
Liabilities conforms as to legal matters in all material
respects to the description thereof in the Final Supplemented
Prospectus.
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,
5, 6, 8 and 9 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.
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 laws of the States of Delaware, Georgia and 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(c) of the
Underwriting Agreement, insofar as such opinions relate to matters of New York
law.
Very truly yours,
DEWEY BALLANTINE LLP
Exhibit 4.2
ALABAMA POWER COMPANY
TO
THE CHASE MANHATTAN BANK,
TRUSTEE
-----------------------
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 25, 1999
-----------------------
$51,550,000
SERIES C JUNIOR SUBORDINATED NOTES
DUE FEBRUARY 28, 2029
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS1
<S> <C>
Page
ARTICLE 1 Series C Junior Subordinated Notes.......................................................1
SECTION 101. Establishment....................................................................1
SECTION 102. Definitions......................................................................2
SECTION 103. Payment of Principal and Interest...............................................13
SECTION 104. Deferral of Interest Payments...................................................14
SECTION 105. Denominations...................................................................15
SECTION 106. Global Securities...............................................................15
SECTION 107. Transfer........................................................................15
SECTION 108. Redemption......................................................................16
ARTICLE 2 Distributions Procedures................................................................16
SECTION 201. Distributions and Distribution Payments.........................................16
SECTION 202. Distribution Rate...............................................................18
SECTION 203. Distribution Periods............................................................19
ARTICLE 3 Auction Procedures......................................................................20
SECTION 301. Applicable Rate.................................................................20
SECTION 302. Auction Agent...................................................................21
SECTION 303. Broker-Dealers..................................................................21
SECTION 304. Purchaser's Letter..............................................................22
SECTION 305. Auction Date....................................................................23
SECTION 306. Orders..........................................................................24
SECTION 307. Existing Holders................................................................24
SECTION 308. Potential Holders...............................................................26
SECTION 309. Extension Period................................................................26
SECTION 310. Determination of Distribution Rate in an Auction................................27
SECTION 311. Acceptance and Rejection of Orders and Allocation of Preferred Securities.......28
SECTION 312. Notification of Results.........................................................30
ARTICLE 4 Events of Default.......................................................................31
SECTION 401. Restatement of Section 5.01.....................................................31
ARTICLE 5 Miscellaneous Provisions................................................................31
SECTION 501. Recitals by Company.............................................................31
SECTION 502. Ratification and Incorporation of Original Indenture............................32
SECTION 503. Executed in Counterparts........................................................32
1
This table of Contents does not constitute part of the Indenture or have any bearing upon the
interpretation of any of its terms and provisions.
</TABLE>
<PAGE>
THIS SECOND SUPPLEMENTAL INDENTURE is made as of the 25th day
of February, 1999, 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").
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a
Subordinated Note Indenture, dated as of January 1, 1997 (the "Original
Indenture") with The Chase Manhattan Bank;
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by the First Supplemental
Indenture dated as of January 1, 1997 and this Second Supplemental Indenture
dated as of February 25, 1999, is herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of Junior
Subordinated Notes may at any time be established by the Board of Directors of
the Company in accordance with the provisions of the Original Indenture and the
terms of such series may be described by a supplemental indenture executed by
the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture
a new series of Junior Subordinated Notes;
WHEREAS, additional Junior Subordinated 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 Second 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 C Junior Subordinated Notes
SECTION 101. Establishment.
There is hereby established a new series of Junior
Subordinated Notes to be issued under the Indenture, to be designated as the
Company's Series C Junior Subordinated Notes due February 28, 2029 (the "Series
C Notes").
<PAGE>
There are to be authenticated and delivered $51,550,000
principal amount of Series C Notes, and no further Series C Notes shall be
authenticated and delivered except as provided by Sections 203, 303, 304, 907 or
1107 of the Original Indenture. The Series C Notes shall be issued in definitive
fully registered form.
The Series C Notes shall be in substantially the form set out
in Exhibit A hereto. The entire principal amount of the Series C Notes shall
initially be evidenced by one certificate issued to the Property Trustee of
Alabama Power Capital Trust III.
The form of the Trustee's Certificate of Authentication for
the Series C Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series C 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.
SECTION 102. Definitions.
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.
"Additional Interest" with respect to the Series C Notes means
(i) such additional amounts as may be required so that the net amounts received
and retained by the Holder (if the Holder is the Securities Trust) after paying
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States or any other taxing
authority will not be less than the amounts the Holder would have received had
no such taxes, duties, assessments, or other governmental charges been imposed;
and (ii) any interest due and not paid on an Interest Payment Date, together
with interest thereon from such Interest Payment Date to the date of payment on
each Interest Payment Date.
"Administrative Trustee" means each of the individuals
identified as an "Administrative Trustee" in the Trust Agreement.
"Applicable Percentage" has the meaning specified in the
definition of "Maximum Applicable Rate."
"Applicable Rate" means the Distribution Rate determined
pursuant to the Auction Procedures.
"Agent Member" has the meaning specified in Section 304(iii).
"Auction" means the procedure by which the Applicable Rate for
the Preferred Securities shall be determined in accordance with the Auction
Procedures.
"Auction Agent Agreement" means the agreement among the
Company, the Securities Trust and The Chase Manhattan Bank as auction agent
dated as of February 1, 1999.
<PAGE>
"Auction Agent" means The Chase Manhattan Bank, its successors
or assigns, or such other bank or trust company appointed to such capacity by
the Administrative Trustees.
"Auction Date" means the date an Auction is held at the end of
each Distribution Period to determine the Applicable Rate for the subsequent
Distribution Period as provided in Section 305.
"Auction Procedures" means the procedures by which the Auction
Agent will conduct the Auctions as set forth in Article 3.
"Available Preferred Securities" has the meaning specified in
Section 310.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or
in respect of such Person under federal bankruptcy law or any
other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such Person or of any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and the continuance of such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under federal
bankruptcy law or any other applicable federal or state law,
or the consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as
they become due, or the taking of action by such Person in
furtherance of any such action.
"Bid" means (i) with respect to a Potential Holder, an Order
indicating the number of Preferred Securities that such Potential Holder offers
to purchase if the Applicable Rate for the Preferred Securities for the next
Distribution Period is not less than the rate per annum specified in such Bid
and (ii) with respect to an Existing Holder, an Order indicating the number of
Preferred Securities that such Existing Holder desires to continue to hold
provided that the Applicable Rate for the next Distribution Period is not less
than the rate per annum specified in such Bid.
"Bidder" means an Existing Holder or a Potential Holder
placing an Order.
"Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banks in New York, New York are authorized or
obligated by law or executive order to remain closed (iii) a day on which the
Corporate Trust Office or the Indenture Trustee's principal corporate trust
office is closed for business or (iv) a day on which the New York Stock Exchange
is closed.
<PAGE>
"Broker Dealer" has the meaning specified in Section 303.
"Calendar Period" with respect to any date means a period of
fourteen consecutive calendar days ending ten calendar days prior to such date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercial Paper Rate," on any date, means in the case of any
Short-Term Distribution Period of (a) fewer than 45 days, the interest
equivalent of the 30-day rate, (b) 45 days or more but fewer than 70 days, the
interest equivalent of the 60-day rate, (c) 70 days or more but fewer than 85
days, the arithmetic average of the interest equivalent of the 60-day and 90-day
rates, (d) 85 days or more but fewer than 120 days, the interest equivalent of
the 90-day rate, (e) 120 days or more but fewer than 148 days, the arithmetic
average of the interest equivalent of the 90-day and 180-day rates, or (f) 148
days or more but fewer than 184 days, the interest equivalent of the 180-day
rate, in each case, on commercial paper placed on behalf of issuers whose
corporate bonds are rated AA by S&P or Aa by Moody's, or the equivalent of such
rating by another rating agency, as made available on a discount basis or
otherwise by the Federal Reserve Bank of New York for the Business Day
immediately preceding such date. In the event that the Federal Reserve Bank of
New York does not make available the needed rate or rates, then such rate will
be the arithmetic average of the interest equivalent of the rate or average of
rates, in each case, on commercial paper placed on behalf of such issuers, as
quoted on a discount basis or otherwise by Goldman, Sachs & Co. or, in lieu
thereof, their respective affiliates or successors that are engaged in buying or
selling commercial paper ("Commercial Paper Dealers"), to the Auction Agent as
of the close of business on the Business Day immediately preceding such date. In
the event that the Federal Reserve Bank of New York does not make available a
required rate and if any Commercial Paper Dealer does not quote a rate required
to determine the Commercial Paper Rate, the Commercial Paper Rate will be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the
Administrative Trustees to provide such rate or rates not being supplied by any
Commercial Paper Dealer or Commercial Paper Dealers, as the case may be, or, if
the Administrative Trustees do not select any such Substitute Commercial Paper
Dealer or Substitute Commercial Paper Dealers, by the remaining Commercial Paper
Dealer or Commercial Paper Dealers. For purposes of this definition, "interest
equivalent" means the equivalent yield on a 360-day basis of a discount basis
security to an interest bearing security. "Substitute Commercial Paper Dealers"
will mean any substitute recognized dealers in commercial paper selected by the
Administrative Trustees.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means Alabama Power Company.
<PAGE>
"Default Rate" is the higher of: (i) the product of the
Commercial Paper Rate applicable to a 28-day Short-Term Distribution Period,
determined as of the date of the related Trust Agreement Event of Default that
gives rise to the application of such Default Rate, multiplied by the Applicable
Percentage (as in effect on such date) that would be applicable if the Preferred
Securities had a Prevailing Rating of below "baa3"/BBB-; or (ii) the
Distribution Rate in effect for the Distribution Period in respect of which such
Trust Agreement Event of Default occurred.
"Deferred Interest" means each installment of interest not
paid during any Extension Period, and interest thereon. Deferred installments of
interest shall bear interest at the rate of the prevailing Interest Rate per
annum from the applicable Interest Payment Date to the date of payment,
compounded on each Interest Payment Date.
"Distribution Payment Date" means each day on which
Distributions are payable on the Preferred Securities determined based on the
length of the applicable Distribution Period.
"Distribution Period" means the period for which Distributions
are payable on the Preferred Securities.
"Distribution Rate" means the rate at which Distributions will
accrue on the Trust Securities.
"Distributions" means amounts payable in respect of the
referred Securities pursuant to Section 4.01 of the Trust
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Holder" means a person who has signed and delivered
a Purchaser's Letter (if required to do so by its Broker-Dealer) and is listed
as the beneficial owner of the Preferred Securities in the records of the
Auction Agent or such beneficial owner's Broker-Dealer, who may act as the agent
of the Auction Agent for the limited purpose of maintaining such information.
"Extension Period" means any period during which the Company
has elected to defer payments of interest on the Series C Notes, which deferral
may be for a period of up to five years.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"Final Distribution Period" has the meaning specified in
Section 203.
"Hold Order" has the meaning specified in Section 307.
"Indenture Event of Default" shall have the meaning set forth
n Section 401.
"Indenture Redemption Date" means "Redemption Date," as
defined in the Original Indenture.
<PAGE>
"Interest Payment Dates" means the dates on which interest on
the Series C Notes is payable.
"Interest Period" means the period for which interest on the
Series C Notes is payable.
"Interest Rate" is the rate at which interest shall accrue on
the Series C Notes.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Investment Company Event" means that the Administrative
Trustees and the Company shall have received an opinion of independent counsel
(which may be counsel to the Company) to the effect that, as a result of a
change in law or regulation or a written change in interpretation or application
of law or regulation by any legislative body, court, governmental agency or
regulatory authority after the Original Issue Date, there is more than an
insubstantial risk that the Securities Trust is or will be considered an
investment company under the 1940 Act.
"Long-Term Distribution Period" means a Distribution Period
of 365 days or longer.
"Maximum Applicable Rate" on any date means (i) with respect
to an Auction relating to a Short-Term Distribution Period of less than 184
days, the percentage of the Commercial Paper Rate and (ii) with respect to an
Auction relating to a Short-Term Distribution Period of 184 days or more or a
Long-Term Distribution Period, the percentage of the Treasury Index Rate, in
each case as of the close of business on the Business Day next preceding such
date, determined as set forth below based on the Prevailing Rating in effect at
the close of business on such Business Day (such percentage, the "Applicable
Percentage"):
Prevailing Rating* Applicable Percentage
"aa3"/AA- or above 150%
"A3"/A- 200%
"baa3"/BBB- 250%
Below "baa3"/BBB- 300%
* If two ratings do not fall in the same category set forth in this table, the
Applicable Percentage will be determined on the basis of the lower rating. For
example, a rating of "a3"/BBB+ would result in an Applicable Percentage of 250%.
"Minimum Applicable Rate" with respect to any date means (i)
with respect to an Auction relating to a Long-Term Distribution Period or a
Short-Term Distribution Period of 184 days or more, 58% of the Treasury Index
Rate at the close of business on the Business Day next preceding the related
Auction Date and (ii) with respect to an Auction relating to a Short-Term
Distribution Period of less than 184 days, 58% of the Commercial Paper Rate at
the close of business on the Business Day next preceding the related Auction
Date.
<PAGE>
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Non-Auction Rate" means (i) the Maximum Applicable Rate as in
effect on the date of any failure to hold an Auction (except during an Extension
Period or during the continuance of a Trust Agreement Event of Default) or (ii)
if an Auction is not held on two consecutive Auction Dates and the Non-Auction
Rate is applicable, the Non-Auction Rate will be the Special Maximum Applicable
Rate on the Business Day immediately preceding the first day of the next
Distribution Period.
"Original Issue Date" means February 25, 1999.
"Order" means the communication to a Broker-Dealer by an
Existing Holder or Potential Holder of the information necessary for the Auction
Agent to conduct an Auction pursuant to the Auction Procedures.
"Potential Holder" means each prospective purchaser of a
Preferred Security who shall have executed and delivered a Purchaser's Letter
(if required by its Broker-Dealer) or who shall have submitted a Bid.
"Preferred Security" means an undivided beneficial ownership
interest in the assets of the Securities Trust having a Liquidation Amount of
$50,000 and having rights provided therefor in the Trust Agreement, including
the right to receive Distributions and a Liquidation Distribution as provided
herein.
"Prevailing Rating" of the Preferred Securities means:
(i) "aa3"/AA- or above if the Preferred Securities
have a rating of "aa3" or better by Moody's and AA- or better
by S&P;
(ii) if not "aa3"/AA- or above, then "a3"/A- if the
Preferred Securities have a rating of "a3" or better by
Moody's and A- or better by S&P;
(iii) if not "aa3"/AA- or above or "a3"/A-, then
"baa3"/BBB- if the Preferred Securities have a rating of
"baa3" or better by Moody's and BBB- or better by S&P; and
(iv) if not "aa3"/AA- or above, "a3"/A- or
"baa3"/BBB-, then below "baa3"/BBB.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the Trust Agreement solely in its
capacity as Property Trustee of the Trust.
"Purchaser's Letter" shall have the meaning specified in
Section 304.
"Record Date" with respect to any Interest Payment Date means
the opening of business on the Business Day immediately preceding an Interest
Payment Date.
"S&P" means Standard & Poor's Ratings Group or any successor
thereto.
<PAGE>
"Securities Trust" means Alabama Power Capital Trust III, a
statutory business trust formed by the Company under Delaware law to issue Trust
Securities, the proceeds of which will be used to purchase Series C Notes.
"Securityholder" or "Holder" when used with respect to a Trust
Security means a Person in whose name a Trust Security or Securities is
registered in the Securities Register for the Trust Securities; any such Person
is a beneficial owner within the meaning of the Delaware Business Trust Act.
"Sell Order" has the meaning specified in Section 307.
"Short-Term Distribution Period" means a Distribution
Period from seven to 364 days and always divisible evenly by seven.
"Special Event" means an Investment Company Act Event or Tax
Event.
"Special Maximum Applicable Rate" has the meaning specified
in Section 310.
"Special Securities" means securities that can, at the option
of the holder, be surrendered at face value in payment of any federal estate tax
or that provide tax benefits to the holder and are priced to reflect such tax
benefits or that were originally issued at a deep or substantial discount.
"Stated Maturity" means February 28, 2029.
"Submission Deadline" has the meaning specified in Section 306.
"Submitted Bid" has the meaning specified in Section 310.
"Submitted Hold Order" has the meaning specified in Section
310.
"Submitted Sell Order" has the meaning specified in Section
310.
"Sufficient Clearing Bids" shall have the meaning set forth in
Section 310.
"Tax Event" means that the Company shall have received an
Opinion of Counsel experienced in such matters to the effect that, as a result
of (a) any amendment to, or change (including any announced prospective change)
in, laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations, there
is more than an insubstantial risk that (i) the Securities Trust would be
subject to United States federal income tax with respect to income accrued or
received on the Series C Notes, (ii) interest payable on the Series C Notes
would not be deductible by the Company for United States federal income tax
purposes, or (iii) the Securities Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the Original Issue Date.
<PAGE>
"Ten-Year Average Yield" means the average yield to maturity
for actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of ten years).
"Ten-Year Constant Maturity Rate," on any date, means the
arithmetic average of the two most recent weekly per annum Ten-Year Average
Yields (or the one weekly per annum Ten-Year Average Yield, if only one such
yield is published during the Calendar Period with respect to such date), as
published weekly by the Federal Reserve Board during the Calendar Period with
respect to such date. In the event that the Federal Reserve Board does not
publish such a weekly per annum Ten-Year Average Yield during such Calendar
Period, then the Ten-Year Constant Maturity Rate with respect to such date shall
be the arithmetic average of the two most recent weekly per annum Ten-Year
Average Yields (or the one weekly per annum Ten-Year Average Yield, if only one
such yield is published during such Calendar Period), as published weekly during
such Calendar Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Administrative Trustees. In the event that
a per annum Ten-Year Average Yield is not published by the Federal Reserve Board
or by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Ten-Year Constant Maturity Rate with
respect to such date will be the arithmetic average of the two most recent
weekly per annum average yields to maturity (or the one weekly per annum average
yield to maturity, if only one such yield is published during such Calendar
Period) for all of the actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) then having maturities of not
less than eight nor more than 12 years, as published during such Calendar Period
by the Federal Reserve Board or, if the Federal Reserve Board does not publish
such yields, by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Administrative Trustees. In the event that the
Administrative Trustees determine in good faith that for any reason the Auction
Agent cannot determine the Ten-Year Constant Maturity Rate with respect to such
date as provided above in this paragraph, then the Ten-Year Constant Maturity
Rate with respect to such date will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) with a final maturity
date not less than eight nor more than 12 years from the date of each such
quotation, as quoted daily for each Business Day in New York City (or less
frequently if daily quotations are not generally available) to the Auction Agent
by U.S. Government Securities Dealers. The Ten-Year Constant Maturity Rate will
be rounded to the nearest one one-hundredth of a percentage point.
"Thirty-Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of 30 years).
"Thirty-Year Constant Maturity Rate" shall mean, on any date,
the arithmetic average of the two most recent weekly per annum Thirty-Year
Average Yields (or the one weekly per annum Thirty-Year Average Yield, if only
one such yield shall be published during the relevant Calendar Period), as
published or reported weekly by the Federal Reserve Board during the Calendar
Period with respect to such date. In the event that the Federal Reserve Board
does not publish such a weekly per annum Thirty-Year Average Yield during such
Calendar Period, then the Thirty-Year Constant Maturity Rate with respect to
such date shall be the arithmetic average of the two most recent weekly per
<PAGE>
annum Thirty-Year Average Yields (or the one weekly per annum Thirty-Year
Average Yield, if only one such yield shall be published weekly during such
Calendar Period), as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Administrative Trustees. In the event that a per annum Thirty-Year Average Yield
shall not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Thirty-Year Constant Maturity Rate with respect to such date will be
the arithmetic average of the two most recent weekly per annum average yields to
maturity (or the one weekly per annum average yield to maturity, if only one
such yield shall be published during such Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) then having maturities of not less than 28 nor more
than 30 years, as published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board shall not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Administrative Trustees. In the event that the Administrative Trustees
determine in good faith that for any reason the Auction Agent cannot determine
the Thirty-Year Constant Maturity Rate with respect to such date as provided
above in this paragraph, then the Thirty-Year Constant Maturity Rate with
respect to such date will be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such Calendar Period for
each of the issues of actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) with a final maturity date not
less than 28 nor more than 30 years from the date of each such quotation, as
quoted daily for each Business Day in New York City (or less frequently if daily
quotations shall not be generally available) to the Auction Agent by U.S.
Government Securities Dealers. The Thirty-Year Constant Maturity Rate will be
rounded to the nearest one one-hundredth of a percentage point.
"Treasury Bill Rate," on any date, means the interest
equivalent of the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market discount rate, if only
one such rate is published during the Calendar Period with respect to such date)
for three-month U.S. Treasury bills, as published weekly by the Federal Reserve
Board during the Calendar Period with respect to such date. In the event that
the Federal Reserve Board does not publish such a weekly per annum market
discount rate during such Calendar Period, then the Treasury Bill Rate for each
date will be the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market discount rate, if only
one such rate is published during such Calendar Period) for three-month U.S.
Treasury bills, as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Administrative Trustees. In the event that a per annum market discount rate for
three-month U.S. Treasury bills is not published by the Federal Reserve Board or
by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Treasury Bill Rate with respect to such
date will be the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market discount rate, if only
one such rate is published during such Calendar Period) for all of the U.S.
Treasury bills then having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board shall not publish such rates, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Administrative Trustees. In the event that the Administrative Trustees determine
in good faith that for any reason no such U.S. Treasury bill rates are published
as provided above during such Calendar Period, then the Treasury Bill Rate for
such date will be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable non-interest bearing U.S. Treasury securities with a maturity of
not less than 80 nor more than 100 days from the date of each such quotation, as
<PAGE>
quoted daily for each Business Day in New York City (or less frequently if daily
quotations are not generally available) to the Auction Agent by U.S. Government
Securities Dealers. In the event that the Administrative Trustees determine in
good faith that for any reason the Auction Agent cannot determine the Treasury
Bill Rate for any date as provided above in this paragraph, the Treasury Bill
Rate for such date will be the arithmetic average of the per annum market
discount rates based upon the closing bids during such Calendar Period for each
of the issues of marketable interest-bearing U.S. Treasury securities with a
maturity of not less than 80 nor more than 100 days from the date of each such
quotation, as quoted daily for each Business Day in New York City (or less
frequently if daily quotations shall not be generally available) to the Auction
Agent by U.S. Government Securities Dealers. For purposes of this definition,
"interest equivalent" means the equivalent yield on a 360-day basis of a
discount basis security to an interest bearing security. The Treasury Bill Rate
will be rounded to the nearest one one-hundredth of a percentage point.
"Treasury Index Rate," on any date, means the interest
equivalent of the rate for direct obligations of the United States having a
maturity that is equal to, or, if not equal to, next shorter than, the length of
the applicable Distribution Period, as published weekly by the Federal Reserve
Board in "Federal Reserve Statistical Release H.15(519) -- Selected Interest
Rates" or any successor publication, within five Business Days preceding such
date. If such statistical release is not published or is otherwise not available
or does not contain such information, the Treasury Index Rate will be the
arithmetic mean of the secondary market bid rates as of approximately 3:30 p.m.,
New York City time, on the Business Day immediately preceding such date, of U.S.
Government Securities Dealers furnished to the Auction Agent for the issue of
direct obligations of the United States, in an aggregate principal amount of at
least $1 million with a remaining maturity equal to, or next shorter than, the
length of such Distribution Period, as the case may be. If any U.S. Government
Securities Dealer does not quote a rate required to determine the Treasury Index
Rate, such rate shall be determined on the basis of the quotation or quotations
furnished by the remaining U.S. Government Securities Dealer or U.S. Government
Securities Dealers (if any) and any substitute U.S. Government Securities Dealer
or Dealers (each a "Substitute U.S. Government Securities Dealer") selected by
the Administrative Trustees to provide such rate or rates not being supplied by
any U.S. Government Securities Dealer or U.S. Government Securities Dealers, as
the case may be, or, if the Administrative Trustees do not select any such
Substitute U.S. Government Securities Dealer or Substitute U.S. Government
Securities Dealers, by the remaining U.S. Government Securities Dealer or U.S.
Government Securities Dealers; provided that, in the event that the
Administrative Trustees are unable to cause such quotations to be furnished to
the Auction Agent by such sources, the Administrative Trustees may cause the
Treasury Index Rate to be furnished to the Auction Agent by such alternative
source or sources as the Administrative Trustees in good faith deem to be
reliable. For purposes of this definition, "interest equivalent" means the
equivalent yield on a 360-day basis of a discount basis security to an interest
bearing security.
<PAGE>
"Trust Agreement" means the Alabama Power Capital Trust III
Amended and Restated Trust Agreement among the Company and the Trustees dated as
of February 1, 1999.
"Trust Agreement Event of Default" means any one of the
following events (whatever the reason for such Trust Agreement Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(i) the occurrence of an Indenture Event of Default;
or
(ii) default by the Securities Trust in the payment
of any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days or, if
the Distribution Period in which such default occurs is less
than 32 days, the continuation of such default for a period
that is two days less than the length of such Distribution
Period; or
(iii) default by the Securities Trust in the payment
of any redemption price of any Trust Security when it becomes
due and payable; or
(iv) default in the performance, or breach, of any
covenant or warranty of the Trustees in the Trust Agreement
(other than a covenant or warranty a default in whose
performance or breach is dealt with in clause (ii) or (iii)
above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or
certified mail, to the Trustees by the Holders of at least 10%
in liquidation amount of the Outstanding (as defined in the
Trust Agreement) Preferred Securities a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(v) the occurrence of a Bankruptcy Event with respect
to the Securities Trust.
"Trustees" means the Persons identified as "Trustees" in the
Trust Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Security" means any one of the Common Securities (as
defined in the Trust Agreement) or the Preferred Securities.
"U.S. Government Securities Dealers" means at least three
recognized dealers in direct obligations of the United States, selected by
the Administrative Trustees.
"Winning Bid Rate" has the meaning specified in Section 310.
<PAGE>
SECTION 103. ...Payment of Principal and Interest.
The unpaid principal amount of the Series C Notes shall bear
interest at the Interest Rate per annum until paid or duly provided for.
Interest shall be paid on each Interest Payment Date to the Person in whose name
the Series C Notes are registered on the 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. So long as an Extension Period is not occurring, any such interest
that is not so punctually paid or duly provided for will forthwith cease to be
payable to the Holders on such Record Date and may either be paid to the Person
or Persons in whose name the Series C 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 ("Special Record Date"), notice whereof shall be given
to Holders of the Series C 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 C 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.
While the Preferred Securities are outstanding (i) the
Interest Rate will be equal to the Distribution Rate payable on the Preferred
Securities, (ii) the Interest Periods will be the same as Distribution Periods
for the Preferred Securities and (iii) the Interest Payment Dates will be the
same as the Distribution Payment Dates for the Preferred Securities.
If the Securities Trust is terminated and the Series C Notes
are distributed to the holders of the Preferred Securities, the interest
payable, Interest Rate, Interest Periods and Interest Payment Dates will be
determined in the same manner as the Distributions, Distribution Rate,
Distribution Periods and Distribution Payment Dates for the Preferred Securities
and the Auction Procedures shall remain the same except: (i) the effects of the
Trust Agreement Events of Default shall be occasioned only by the Indenture
Events of Default, (ii) the cure and waiver provisions relating to the Trust
Agreement Events of Default shall be superceded by the cure and waiver
provisions relating to the Indenture Events of Default and (iii) the Company
shall enter into an auction agent agreement containing substantially the same
terms as the Auction Agent Agreement.
Payment of the principal and interest (including Additional
Interest, if any) due at the Stated Maturity or earlier redemption of the Series
C Notes shall be made upon surrender of the Series C Notes at the Corporate
Trust Office of the Trustee, 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 Company shall pay, as additional interest on the Series C
Notes, when due to the United States or any other taxing authority, the amounts
set forth in clause (i) of the definition of Additional Interest.
<PAGE>
SECTION 104. ...Deferral of Interest Payments.
The Company has the right to defer payments of interest on the
Series C Notes by extending the interest payment period from time to time on the
Series C Notes (an "Extension Period"). During this Extension Period, (i)
Interest will continue to accrue on the Series C Notes, (ii) Auctions will be
discontinued, (iii) regardless of any notice by the Administrative Trustees to
the contrary, each subsequent Interest Period during such Extension Period will
be a 28-day Short-Term Distribution Period and (iv) the Interest Rate for each
such Interest Period will be the Maximum Applicable Rate (which will be reset at
the end of each 28-day Short-Term Distribution Period during the Extension
Period).
If the Company decides to defer interest payments on the
Series C Notes, the Extension Period shall consist of consecutive 28-day
Short-Term Distribution Periods which in the aggregate shall not exceed five
years (which approximates to a maximum of 65 consecutive 28-day Short-Term
Distribution Periods). An Extension Period shall not extend beyond the stated
maturity of the Series C Notes. Prior to the termination of any Extension
Period, the Company may further defer payments of interest provided that the
Extension Period, together with all previous and further extensions thereof, may
not exceed 65 consecutive 28-day Short-Term Distribution Periods. There could be
multiple Extension Periods of varying lengths throughout the term of the Series
C Notes. Upon the termination of any such Extension Period and upon the payment
of all accrued and unpaid interest and any Additional Interest then due, the
Company may select a new Extension Period, subject to the above limitations and
requirements.
Upon the termination of any Extension Period, which
termination shall be on an Interest Payment Date, the Company shall pay all
Deferred Interest on the next succeeding Interest Payment Date to the Person in
whose name the Series C Notes are registered on the Record Date for such
Interest Payment Date, provided that Deferred Interest payable at Stated
Maturity or on any Redemption Date will be paid to the Person to whom principal
is payable.
If the Company shall have given notice of its election to
select any Extension Period, the Company shall not (i) declare or pay any
dividend or distribution on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock, or make any guarantee
payments with respect to the foregoing and (ii) make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees other than its guarantee of the Preferred
Securities issued by the Securities Trust) issued by the Company that rank pari
passu with or junior to the Series C Notes.
The Company shall give the Holder or Holders of the Series C
Notes, the Trustee and the Auction Agent notice, as provided in Sections 105 and
106, respectively, of the Original Indenture, of its selection or extension of
an Extension Period at least one Business Day prior to the earlier of (i) the
Record Date relating to the Interest Payment Date on which the Extension Period
is to commence or relating to the Interest Payment Date on which an Extension
Period that is being extended would otherwise terminate, or (ii) the date the
Company or Securities Trust is required to give notice to any applicable
self-regulatory organization of the record date or the date such distributions
are payable. The Company shall cause the Securities Trust to give notice of the
Company's selection of such Extension Period to Holders of the Trust Securities
and the Auction Agent.
<PAGE>
At any time any of the foregoing notices are given to the
Trustee, the Company shall give to the Paying Agent for the Series C Notes such
information as said Paying Agent shall reasonably require in order to fulfill
its tax reporting obligations with respect to such Series C Notes.
SECTION 105. ...Denominations.
The Series C Notes may be issued in the denominations of
$50,000, or any integral multiple thereof.
SECTION 106. ...Global Securities.
If the Series C Notes are distributed to Holders of the Trust
Securities of the Securities Trust in liquidation of such Holders' interests
therein, the Series C 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 C Notes represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Series C 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 C 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 C 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, 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, (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 C Notes. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Series C Notes registered in
such names as the Depositary shall direct.
SECTION 107. ...Transfer.
No service charge will be made for any transfer or exchange of
Series C 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.
<PAGE>
The Company shall not be required (a) to issue, transfer or
exchange any Series C Notes during a period beginning at the opening of business
fifteen (15) days before the day of the mailing of a notice identifying the
serial numbers of the Series C 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 C Notes theretofore selected for redemption in whole or in part,
except the unredeemed portion of any Series C Note redeemed in part.
SECTION 108. ...Redemption.
The Series C 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 any Interest Payment Date, at a Redemption Price
equal to 100% of the principal amount to be redeemed plus accrued but unpaid
interest, including Additional Interest, if any, to the Redemption Date. In
addition, upon the occurrence of a Special Event at any time, the Company may,
within ninety (90) days following the occurrence thereof and subject to the
terms and conditions of the Indenture, elect to redeem the Series C Notes, in
whole, at a price equal to 100% of the principal amount to be redeemed plus any
accrued but unpaid interest (including Additional Interest) to the Redemption
Date.
In the event of redemption of the Series C Notes in part only,
a new Series C 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 C 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 C Notes shall,
with respect to the principal thereof, be divisible by $50,000.
ARTICLE 2
Distributions Procedures
Article 2 sets forth the procedures to determine the
Distribution Rate, Distribution Periods and Distribution Payment Dates for the
Preferred Securities. While the Preferred Securities are outstanding, the
Interest Rate, Interest Periods, Interest Payment Dates and associated terms
relating to the Series C Notes shall be the same as the Distribution Rate,
Distribution Periods and Distribution Payment Dates and associated terms
relating to the Preferred Securities. If the Securities Trust is terminated and
the Series C Notes are distributed to the holders of the Preferred Securities,
subject to Section 103 herein, the below described procedures will be directly
applicable to the Series C Notes.
SECTION 201. ...Distributions and Distribution Payments.
The Distribution Payment Date in respect of a Short-Term
Distribution Period will be on the last day of such Short-Term Distribution
Period and, in the case of a Short-Term Distribution Period in excess of 90
days, on such additional Distribution Payment Dates, if any, as the
<PAGE>
Administrative Trustees may specify in connection with the establishment of such
Short-Term Distribution Period. Distributions shall be payable on the
Distribution Payment Date to the holders of record as of the Record Date.
If either (a) any additional Distribution Payment Date for a
Short-Term Distribution Period in excess of 90 days is not a Business Day or (b)
the day immediately succeeding any such additional Distribution Payment Date is
not a Business Day, then Distributions will be payable on the first Business Day
prior to the Distribution Payment Date that is immediately succeeded by a
Business Day, except that if the Depositary changes its current practice of
paying Distributions in next-day funds to paying Distributions in same-day funds
and the Distribution Payment Date is not a Business Day, then Distributions will
be payable, without interest, on the first Business Day following such
Distribution Payment Date, in each case with the same force and effect as if
payment was made on the date such payment was originally payable.
If either (a) the Distribution Payment Date for a Short-Term
Distribution Period which is not an additional Distribution Payment Date
described above or the final Distribution Payment Date for a Short-Term
Distribution Period in excess of 90 days is not a Business Day or (b) the day
immediately succeeding the Distribution Payment Date for such Distribution
Period is not a Business Day, then such Short-Term Distribution Period will end
on the first Business Day prior to the Distribution Payment Date that is
immediately succeeded by a Business Day, except that if the Depositary changes
its current practice of paying Distributions in next-day funds to paying
Distributions in same-day funds and the Distribution Payment Date is not a
Business Day, then the Short-Term Distribution Period will end on the first
Business Day following such Distribution Payment Date.
Distribution Payment Dates in respect of a Long-Term
Distribution Period generally will be on the first day of a month selected by
the Administrative Trustees that is not more than four calendar months after the
commencement of such Long-Term Distribution Period and quarterly thereafter on
the first day of each succeeding third month and on the last day of such
Long-Term Distribution Period. Distributions shall be payable on the
Distribution Payment Date to the holders of record on the Record Date. If any
such Distribution Payment Date is not a Business Day, Distributions on the
Preferred Securities will be payable, without interest, on the immediately
succeeding Business Day, with the same force and effect as if payment was made
on the date such payment was originally payable. If the final Distribution
Payment Date for a Long-Term Distribution Period would otherwise be a day that
is not a Business Day, the immediately succeeding Business Day will be the final
Distribution Payment Date for such Long-Term Distribution Period, with the same
force and effect as if payment was made on the date such payment was originally
payable, with no interest accruing for the intervening period.
The amount of Distributions per Preferred Security payable on
each Distribution Payment Date in respect of a Short-Term Distribution Period
(or a portion thereof) will be computed by multiplying the per annum
Distribution Rate in effect for such Short-Term Distribution Period by a
fraction, the numerator of which will be the actual number of days in such
Short-Term Distribution Period (or portion thereof) (determined by including the
first day thereof and excluding the last thereof) and the denominator of which
<PAGE>
will be 360, and multiplying the rate so obtained by $50,000. The amount of
Distributions per Preferred Security payable on each Distribution Payment Date
in respect of a Long-Term Distribution Period will be computed on the basis of a
360-day year consisting of twelve 30-day months and, in the case of a Long-Term
Distribution Period beginning or ending on a date other than the first day of a
month, portions of any 30-day month based upon the actual number of days
elapsed.
During an Extension Period, (i) Distributions will continue to
accrue on the Preferred Securities, (ii) Auctions will be discontinued, (iii)
regardless of any notice by the Administrative Trustees to the contrary, each
subsequent Distribution Period during such Extension Period will be a 28-day
Short-Term Distribution Period and (iv) the Distribution Rate for each such
Distribution Period will be the Maximum Applicable Rate (which will be reset at
the end of each 28-day Short-Term Distribution Period during the Extension
Period).
SECTION 202. Distribution Rate.
The Distribution Rate on the Preferred Securities for each
Distribution Period following the initial Distribution Period will be the
Applicable Rate, the Maximum Applicable Rate, the Non-Auction Rate or the
Default Rate. Except in the event of (i) the failure to hold an Auction for any
reason (other than because a Trust Agreement Event of Default exists) on the
Auction Date scheduled to occur at the end of the preceding Distribution Period
or (ii) the occurrence of a Trust Agreement Event of Default, the Distribution
Rate for each subsequent Distribution Period will be the Applicable Rate.
The Non-Auction Rate will apply automatically to any
Distribution Period if there is a failure to hold an Auction for any reason on
the Auction Date scheduled to occur at the end of the preceding Distribution
Period, except for circumstances in which the Distribution Rate is the Default
Rate or during an Extension Period.
If a Trust Agreement Event of Default has occurred and is
continuing, (i) Auctions will be discontinued, (ii) regardless of any notice by
the Administrative Trustees on behalf of the Securities Trust to the contrary,
each subsequent Distribution Period commencing after such Trust Agreement Event
of Default but before Auctions are resumed will be a 28-day Short-Term
Distribution Period, and (iii) the Distribution Rate for each such 28-day
Short-Term Distribution Period will be equal to the Default Rate. The foregoing
will continue until the earlier of (i) the occurrence of a Distribution Payment
Date at least one Business Day prior to which the Trust Agreement Event of
Default has been cured or waived in which case Auctions will resume as described
herein for the Distribution Period commencing with such Distribution Payment
Date or (ii) the Preferred Securities are redeemed.
A Trust Agreement Event of Default will be deemed to be cured
or waived if, at any time, (a) after an Trust Agreement Event of Default exists
and payment of interest and principal on the Series C Notes has been accelerated
under the terms of the Indenture or (b) prior to a judgment or decree for the
payment of the money due on the Preferred Securities has been obtained, the
following events occur: (i) the holders of at least 66 2/3% in liquidation
amount of the outstanding Preferred Securities give written notice to the
Property Trustee, the Administrative Trustees and the Company to rescind and
annul such declaration of acceleration of the Series C Notes and its
consequences, (ii) the Securities Trust pays and deposits with the Depositary a
sum sufficient to pay all Distributions (including any accrued interest) and
liquidation amount due on the Preferred Securities otherwise than caused by the
acceleration of the Series C Notes and (iii) all other Trust Agreement Events of
Default are no longer continuing or have been waived.
<PAGE>
SECTION 203. ...Distribution Periods.
Except as otherwise provided herein, upon not less than five
Business Days, nor more than 20 days, written notice to the Auction Agent and
the Depositary prior to (i) the last day of any Distribution Period or (ii) the
last day of the final Distribution Period of any Extension Period or the last
day of the final Distribution Period for which the Default Rate will be in
effect, the Administrative Trustees, acting in their sole discretion, will
select a Long-Term Distribution Period or a Short-Term Distribution Period as
the next Distribution Period; provided that, if the Distribution Period existing
prior to such Extension Period or prior to the first Distribution Period during
which the Default Rate was applicable was a Final Distribution Period or a
Long-Term Distribution Period that would still be in effect but for such
Extension Period or Trust Agreement Event of Default, the next Distribution
Period shall be the remaining term of such Final Distribution Period or
Long-Term Distribution Period. The Administrative Trustees will not be obligated
to provide notice of the selection of a subsequent Distribution Period, and
failure to send notice by the fifth Business Day prior to the end of the then
current Distribution Period will be deemed a selection of a 28-day Short-Term
Distribution Period as the next Distribution Period.
In connection with the selection of Long-Term Distribution
Period, the Company may establish different redemption provisions for the Series
C Notes to be applicable during such Distribution Period.
The initial Distribution Period shall be a Short-Term
Distribution Period, the last day of which shall be March 25, 1999.
The Administrative Trustees may select a Long-Term
Distribution Period which extends to the Stated Maturity of the Series C Notes
and eliminates the need for future Auctions (the "Final Distribution Period").
If the Final Distribution Period is selected and Sufficient Clearing Bids are
received at the Auction immediately prior to the commencement of such
Distribution Period: (i) such Auction will be the final Auction; (ii) the
services of the Auction Agent and of the Broker-Dealers will end and (iii) there
will be no adjustment to the Distribution Rate following the commencement of
such Final Distribution Period, except upon an Trust Agreement Event of Default
or during an Extension Period.
Notwithstanding the above, (i) if the Securities Trust had
duly given notice of a Long-Term Distribution Period, the Securities Trust may,
(a) upon written notice provided by the Administrative Trustees to the Auction
Agent and the Depositary not later than 10:00 a.m., New York City time, on the
Auction Date scheduled to occur at the end of the then-current Distribution
Period, elect to change such subsequent Long-Term Distribution Period (which may
be a Final Distribution Period) to a Short-Term Distribution Period or (b) upon
written notice provided by the Administrative Trustees to the Auction Agent and
the Depositary not less than one Business Day prior to the Auction Date
<PAGE>
scheduled to occur at the end of the then-current Distribution Period, elect to
change the length of such Long-Term Distribution Period; or (ii) if the
Administrative Trustees have selected a Short-Term Distribution Period
(including a deemed selection pursuant to the second preceding paragraph), the
Administrative Trustees may (a) upon written notice provided by the
Administrative Trustees to the Auction Agent and the Depositary not less than
one Business Day prior to the Auction Date scheduled to occur at the end of the
then-current Distribution Period elect to change such subsequent Short-Term
Distribution Period to a Long-Term Distribution Period (which may be a Final
Distribution Period), or (b) upon written notice provided by the Administrative
Trustees to the Auction Agent and the Depositary not later than 10:00 a.m., New
York City time, on the Auction Date scheduled to occur at the end of the
then-current Distribution Period, elect to change the length of such Short-Term
Distribution Period. Any notice regarding the next Distribution Period will
specify: (i) whether the next succeeding Distribution Period will be a
Short-Term Distribution Period or a Long-Term Distribution Period and the length
thereof; (ii) in the case of a Long-Term Distribution Period, the initial
Distribution Payment Date; and (iii) in the case of a Short-Term Distribution
Period of more than 90 days, the additional Distribution Payment Dates, if any,
selected by the Administrative Trustees.
The Administrative Trustees may select a Long-Term
Distribution Period only if on the date of notice of that selection Distribution
payments on the Preferred Securities are current; and
A 28-day Short-Term Distribution Period will automatically
follow the expiration of the preceding Distribution Period if:
(a) the Administrative Trustees do not select a Long-Term Distribution
eriod or a Short-Term Distribution Period; or
(b) Sufficient Clearing Bids are not made for any reason (other than
because all of the Preferred Securities are the subject of Submitted
Hold Orders) in the Auction occurring at the end of such preceding
Distribution Period; or
(c) an Auction is not held, for any reason, on the Auction Date scheduled
to occur at the end of such preceding Distribution Period.
ARTICLE 3
Auction Procedures
Article 3 sets forth the Auction Procedures as set forth in
the Trust Agreement to determine the Applicable Rate for the Preferred
Securities. If the Securities Trust is terminated and the Series C Notes are
distributed to the holders of the Preferred Securities subject to Section 103
herein, the below described procedures will be directly applicable to the Series
C Notes.
SECTION 301. ...Applicable Rate.
The Applicable Rate will ordinarily be the rate per annum that
the Auction Agent advises results from the implementation of the Auction
Procedures. Pursuant to the Auction Procedures, Persons determine to hold or
offer to purchase or sell the Preferred Securities based on the distribution
rates bid by them. The Auction Procedures will be implemented on each Auction
Date. The Company and any affiliate of the Company may submit an Order in any
Auction, subject to compliance with all applicable securities and other laws.
<PAGE>
The Preferred Securities for which a notice of redemption has
been given by the Administrative Trustees will not be eligible to participate in
any Auction for a Distribution Period commencing on or after the date specified
for redemption, and such Preferred Securities will not be included for purposes
of such Auction, whether or not such redemption actually occurs.
SECTION 302. ...Auction Agent.
Prior to the issuance of the Preferred Securities, the Company
and the Securities Trust will enter the Auction Agent Agreement with the Auction
Agent, providing, among other things, that the Auction Agent will follow the
Auction Procedures for the purposes of determining the Applicable Rate. The
Company will pay the Auction Agent compensation for its services under the
Auction Agent Agreement.
The Auction Agent will act solely as agent for the Securities
Trust in connection with each Auction and will not be a fiduciary for holders of
the Preferred Securities. In the absence of bad faith or negligence on its part,
the Auction Agent will not be liable for any action taken, suffered or omitted
or for any error of judgment made by it in the performance of its duties under
the Auction Agent Agreement and will not be liable for any error of judgment
made in good faith unless the Auction Agent has been negligent in ascertaining
the pertinent facts. The Company and the Securities Trust will indemnify the
Auction Agent for, and hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part arising out of or in
connection with its acceptance or administration of its agency duties or
functions under the Auction Agent Agreement.
The Auction Agent may terminate the Auction Agent Agreement
upon notice to the Administrative Trustees on behalf of the Securities Trust,
with such termination being effective on the earlier of (i) the first Business
Day after the second Distribution Payment Date occurring after the delivery of
such notice or 90 days after the delivery of such notice or (ii) the date on
which a successor Auction Agent is appointed by the Administrative Trustees
pursuant to an agreement containing substantially the same terms and conditions
as the Auction Agent Agreement. The Administrative Trustees may also terminate
the Auction Agent Agreement upon 30 days' written notice to the Auction Agent
but only if, prior to such termination, the Company and the Securities Trust
have entered into an agreement with a successor Auction Agent containing
substantially the same terms and conditions as the Auction Agent Agreement. The
Trust Agreement provides that the Company and the Securities Trust will use
their best efforts to maintain an Auction Agent with respect to the Preferred
Securities pursuant to an agreement containing terms and conditions
substantially similar to the terms and conditions of the Auction Agent Agreement
described herein.
<PAGE>
SECTION 303. ...Broker-Dealers.
The Auction Procedures require the participation of one or
more broker-dealers. The Auction Agent will initially enter into a non-exclusive
agreement with each of Goldman, Sachs & Co. ("Goldman Sachs")and Lehman Brothers
Inc. ("Lehman Brothers") and, under certain circumstances, may enter into
similar agreements with one or more other broker-dealers (the "Broker-Dealers")
that provide for the participation by broker-dealers in Auctions as
broker-dealers (collectively, the "Broker-Dealers Agreements"). Subject to
certain exceptions, Goldman Sachs and Lehman Brothers will initially be the
Broker-Dealers. After each Auction, the Company will pay a service charge to
each Broker-Dealer. Existing Holders and Potential Holders must submit Orders
for the Preferred Securities through any Broker-Dealer in order to participate
in an Auction. Each Broker-Dealer may submit Orders and purchase the Preferred
Securities for its own account, either in an Auction or otherwise and, in such
capacity, each Broker-Dealer shall be considered an Existing Holder or a
Potential Holder, as the case may be.
SECTION 304. ...Purchaser's Letter.
As a condition to purchasing the Preferred Securities or
participating in an Auction or otherwise acquiring the Preferred Securities,
each prospective purchaser of the Preferred Securities may be required to sign
and deliver to any Broker-Dealer a purchaser's letter (each, a "Purchaser's
Letter"). Each Broker-Dealer will be required to inform the Auction Agent
whether the Broker-Dealer required the holder or prospective purchaser to
execute a Purchaser's Letter. Each holder or prospective purchaser of the
Preferred Securities may be required to deliver an updated Purchaser's Letter no
less frequently than annually.
In the Purchaser's Letter, the prospective purchaser will
agree, among other things:
(i) to offer, sell, transfer or otherwise dispose of the Preferred
Securities only pursuant to a Bid or a Sell Order in an Auction, or to
or through any Broker-Dealer or to the Company, provided that, in the
case of all transfers other than those pursuant to an Auction, the
selling Existing Holder or its Broker-Dealer advises the Auction Agent
of such transfer and such transfer is made in compliance with the
applicable Purchaser's Letter;
(ii) that any Bid or Sell Order placed by such purchaser will constitute an
irrevocable offer to purchase or sell the Preferred Securities subject
to such Bid or Sell Order, or such lesser number of Preferred
Securities as such purchaser will be required to purchase or sell,
respectively, as a result of such Auction, at a price of $50,000 per
Preferred Security, and that a failure by such purchaser or any
Broker-Dealer to place a Bid or Sell Order with respect to any
Preferred Securities owned by that purchaser will be deemed to
constitute a Hold Order with respect to those Preferred Securities; and
(iii) that it understands and agrees that: (a) so long as there is a
Depositary for the Preferred Securities, the ownership of the Preferred
Securities as to which that purchaser is the Existing Holder will be
maintained in book-entry form by such Depositary, in the account of
that purchaser's agent which is a member of the Depositary ("Agent
Member"), which in turn will maintain records of that purchaser's
ownership; (b) such Agent Member is authorized to disclose to the
Auction Agent such information with respect to such purchaser's
beneficial ownership as the Auction Agent may request; and (c) so long
as there is a Depositary for the Preferred Securities or unless
otherwise required by law, such purchaser will not be entitled to
receive certificates evidencing the Preferred Securities.
<PAGE>
Execution of a Purchaser's Letter, if required, is not a
commitment to purchase the Preferred Securities but may be a condition precedent
to purchasing the Preferred Securities in an Auction or otherwise.
Any transfer of the Preferred Securities contrary to the terms
of a Purchaser's Letter may, among other things, affect the right of the person
acquiring such Preferred Securities to participate in future Auctions.
The Auction Agent may rely upon, as evidence of the identities
of the Existing Holders, a list of the initial owners of the Preferred
Securities provided by the Administrative Trustees or any Broker-Dealer and the
results of Auctions and notices from selling Existing Holders (or any
Broker-Dealer and Agent Members) with respect to transfers of the Preferred
Securities. The Auction Agent will be required to register a transfer of
beneficial ownership of the Preferred Securities from an Existing Holder to
another person only if such transfer is made to a person that has delivered or
caused to be delivered a signed Purchaser's Letter, if required, to any
Broker-Dealer and if (i) such transfer is pursuant to an Auction or (ii) the
Auction Agent has been notified of such transfer in writing by the selling
Existing Holder or its Broker-Dealer, and, in either case, that such transfer is
being made in compliance with the terms of the selling Existing Holder's
Purchaser's Letter, if any. The Auction Agent is not required to accept any
notice of transfer prior to an Auction unless it is received by the Auction
Agent by 3:00 p.m., New York City time, on the Business Day immediately
preceding the related Auction Date. If there has been a failure by the seller of
the Preferred Securities to deliver such Preferred Securities to a purchaser as
a result of an Auction, or if a purchaser of the Preferred Securities has failed
to make payment to the seller of such Preferred Securities, a Broker-Dealer must
send written notice of such failure to the Auction Agent.
SECTION 305. ...Auction Date.
(a) Except as otherwise provided herein, an Auction will be held at the end of
each Distribution Period to determine the Applicable Rate for the subsequent
Distribution Period. Each such Auction will be held, in the case of an Auction
held at the end of a Short-Term Distribution Period, on the Business Day
immediately preceding the last day of such Short-Term Distribution Period, and
in the case of an Auction held at the end of a Long-Term Distribution Period, on
the third Business Day preceding the last day of such Long-Term Distribution
Period.
<PAGE>
SECTION 306. ...Orders.
The Auction Agent is entitled to rely upon the terms of any
Order submitted to it by a Broker-Dealer. The Auction Agent will, if necessary,
round any rate specified in any Order (expressed as a percentage) that contains
more than three figures to the right of the decimal point up to the next highest
one-thousandth of one percent (.001%).
Prior to 12:30 p.m., New York City time, on each Auction Date
or such other time on the Auction Date specified by the Auction Agent (the
"Submission Deadline"), each Broker-Dealer participating in the Auction will
submit to the Auction Agent in writing all Orders obtained by it for such
Auction to be conducted on such Auction Date. The Broker-Dealers must submit
separate Orders for each customer and may not net or aggregate the Orders of
different customers. The Company intends that any Orders submitted by the
Company or any of its affiliates would be submitted as close as practicable to
the applicable Submission Deadline.
SECTION 307. ...Existing Holders.
Prior to the Submission Deadline for each Auction, each
Broker-Dealer will contact Existing Holders of the Preferred Securities, by
telephone or otherwise, to notify such Existing Holders as to: (i) whether the
next Distribution Period is a Short-Term Distribution Period or a Long-Term
Distribution Period and the length thereof; (ii) additional Distribution Payment
Dates, if any, with respect to a Short-Term Distribution Period of more than 90
days; (iii) the initial Distribution Payment Date, with respect to a Long-Term
Distribution Period; and (iv) the Maximum Applicable Rate then in effect; and to
determine whether such Existing Holders desire to place Orders. Each Existing
Holder, with respect to the Preferred Securities that it then holds, may submit
to a Broker-Dealer by telephone or otherwise a:
(i) "Hold Order" -- indicating the number of Preferred Securities that such
Existing Holder desires to continue to hold without regard to the
Applicable Rate for the next Distribution Period;
(ii) "Bid" -- indicating the number of Preferred Securities that such
Existing Holder desires to continue to hold, provided that the
Applicable Rate for the next Distribution Period is not less than the
rate per annum specified in such Bid; or
(iii) "Sell Order" -- indicating the number of Preferred Securities that such
Existing Holder desires to sell without regard to the Applicable Rate
for the next Distribution Period.
A Sell Order submitted by an Existing Holder will constitute
an irrevocable offer to sell the Preferred Securities subject to that Order, and
a Bid submitted by an Existing Holder will constitute an irrevocable offer to
sell the Preferred Securities subject to that Bid if the rate specified in such
Bid is higher than the Applicable Rate determined in the Auction. Any Bid
submitted by an Existing Holder specifying a rate higher than the Maximum
Applicable Rate will be deemed to be a Sell Order.
If, for any Auction, Orders covering all of the outstanding
Preferred Securities held by an Existing Holder are not submitted to the Auction
Agent (through a Broker-Dealer) prior to the Submission Deadline, whether
<PAGE>
because any Broker-Dealer failed to contact such Existing Holder, such Existing
Holder failed to place a Bid or Sell Order or such Broker-Dealer failed to
submit the Existing Holder's Orders or for any other reason, the Auction Agent
will deem a Hold Order to have been submitted by such Existing Holder covering
the number of Preferred Securities held by such Existing Holder and not subject
to any Order submitted to the Auction Agent.
An Existing Holder may submit different types of Orders in an
Auction with respect to Preferred Securities then held by that Existing Holder.
In any Auction, if one or more Orders covering in the aggregate more than the
number of Preferred Securities held by an Existing Holder are submitted to the
Auction Agent (through a Broker-Dealer), those Orders will be considered valid
as follows and in the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder
will be considered valid up to and including the Preferred Securities
held by such Existing Holder, except that if more than one Hold Order
is submitted on behalf of such Existing Holder and the number of
Preferred Securities subject to such Hold Orders exceeds the number of
Preferred Securities held by such Existing Holder, the number of
Preferred Securities subject to each such Hold Order will be reduced
pro rata so that such Hold Orders will cover exactly the number of
Preferred Securities held by such Existing Holder.
(ii) (a) any Bid submitted on behalf of such Existing Holder
will be considered valid up to and including the excess of the number
of Preferred Securities held by such Existing Holder over the number of
Preferred Securities subject to any Hold Orders referred to in clause
(i) above; (b) subject to subclause (a), if more than one Bid with the
same rate is submitted on behalf of such Existing Holder and the number
of Preferred Securities subject to such Bids is greater than such
excess, the number of Preferred Securities subject to each such Bid
will be reduced pro rata so that such Bids will cover exactly the
number of Preferred Securities equal to such excess; (c) subject to
subclause (a), if more than one Bid with different rates is submitted
on behalf of such Existing Holder, such Bids will be considered valid
in the ascending order of their respective rates up to and including
the amount of such excess; and (d) in any such event, the number, if
any, of Preferred Securities subject to Bids not valid under subclause
(a), (b) or (c) of this clause (ii) (i.e., Bids in excess of the
Preferred Securities held by the Existing Holder) will be treated as
the subject of a Bid by such Existing Holder as a Potential Holder of
such Preferred Securities; and
(iii) any Sell Order submitted on behalf of such Existing
Holder will be considered valid up to and including the excess of the
number of Preferred Securities held by such Existing Holder over the
number of Preferred Securities subject to valid Hold Orders by such
Existing Holder referred to in clause (i) and valid Bids by such
Existing Holder referred to in clause (ii), except that if more than
one Sell Order is submitted on behalf of such Existing Holder and the
Preferred Securities subject to such Sell Orders is greater than such
excess, the Preferred Securities subject to such Sell Orders will be
reduced pro rata so that such Sell Orders will cover exactly the number
of Preferred Securities equal to such excess.
<PAGE>
SECTION 308. ...Potential Holders.
Prior to the Submission Deadline for each Auction, each
Broker-Dealer will contact Potential Holders of the Preferred Securities by
telephone or otherwise to notify such Potential Holders as to: (i) whether the
next Distribution Period is a Short-Term Distribution Period or a Long-Term
Distribution Period and the length thereof; (ii) additional Distribution Payment
Dates, if any, with respect to a Short-Term Distribution Period of more than 90
days; (iii) the initial Distribution Payment Date with respect to a Long-Term
Distribution Period; and (iv) the Maximum Applicable Rate then in effect; and to
determine whether such Potential Holders desire to submit Bids.
A Bid submitted by a Potential Holder will constitute an
irrevocable offer to purchase the Preferred Securities subject to such Bid if
the rate specified in the Bid is less than or equal to the Applicable Rate
determined in the related Auction. An Existing Holder who submits a Bid in
excess of the number of Preferred Securities then held by such Existing Holder
will be treated as a Potential Holder to the extent of such excess. Any Bid
submitted by a Potential Holder specifying a rate higher than the Maximum
Applicable Rate will be rejected.
If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted will be deemed a separate Bid with the rate and
number of Preferred Securities specified therein.
SECTION 309. ...Extension Period.
During an Extension Period, (i) Distributions will continue to
accrue on the Preferred Securities, (ii) Auctions will be discontinued, (iii)
regardless of any notice by the Administrative Trustees to the contrary, each
subsequent Distribution Period during such Extension Period will be a 28-day
Short-Term Distribution Period and (iv) the Distribution Rate for each such
Distribution Period will be the Maximum Applicable Rate (which will be reset at
the end of each 28-day Short-Term Distribution Period during the Extension
Period).
Upon not less than five Business Days, nor more than 20 days'
written notice to the Auction Agent and the securities depository prior to the
last day of the final Distribution Period of any Extension Period, the
Administrative Trustees will select a Long-Term Distribution Period or a
Short-Term Distribution Period as the next Distribution Period; provided that if
the Distribution Period existing prior to such Extension Period was a Final
Distribution Period or a Long-Term Distribution Period that would still be in
effect but for such Extension Period, the next Distribution Period shall be the
remaining term of such Final Distribution Period or Long-Term Distribution
Period.
Prior to the end of the final Distribution Period of any
Extension Period, an Auction will be held to determine the Applicable Rate for
the subsequent Distribution Period. Each such Auction will be held (i) in the
case of a Short-Term Distribution Period, on the Business Day immediately
preceding the last day of the final Distribution Period of such Extension Period
and (ii) in the case of a Long-Term Distribution Period, on the third Business
Day preceding the last day of the final Distribution Period of such Extension
Period.
<PAGE>
SECTION 310. ...Determination of Distribution Rate in an Auction.
No earlier than the Submission Deadline on each Auction Date,
the Auction Agent will assemble all Orders submitted or deemed submitted to it
by any Broker-Dealer (each Hold Order, Bid or Sell Order as submitted or deemed
submitted by any Broker-Dealer being referred to herein as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as
a "Submitted Order") and will determine the excess, if any, of the total number
of Preferred Securities over the Preferred Securities subject to Submitted Hold
Orders (such excess called the "Available Preferred Securities"). If all of the
Preferred Securities are subject to Submitted Hold Orders, there will be no
Available Preferred Securities and the Applicable Rate for the next Distribution
Period will be the Minimum Applicable Rate on such Auction Date which shall be
determined by the Auction Agent in consultation with the Administrative
Trustees.
If there are Available Preferred Securities with respect to
any Auction, the Auction Agent will determine whether Sufficient Clearing Bids
have been made in such Auction. "Sufficient Clearing Bids" will have been made
if the number of Preferred Securities that are the subject of Submitted Bids by
Potential Holders (including Existing Holders who have submitted Bids to
purchase additional Preferred Securities and are thus Potential Holders with
respect to such Preferred Securities), specifying rates not higher than the
Maximum Applicable Rate determined by the Auction Agent in consultation with the
Administrative Trustees, equals or exceeds the number of Preferred Securities
that are the subject of Submitted Sell Orders (including the number of Preferred
Securities subject to Submitted Bids by Existing Holders specifying rates higher
than the Maximum Applicable Rate).
If Sufficient Clearing Bids have been made with respect to any
Auction, the Auction Agent will determine the lowest rate specified in the
Submitted Bids of Existing Holders and Potential Holders (the "Winning Bid
Rate") that would result in Existing Holders continuing to hold (pursuant to
Submitted Bids) and Potential Holders (including Existing Holders who have
placed Bids to purchase additional Preferred Securities) purchasing, at such
rate, an aggregate number of Preferred Securities at least equal to the number
of Available Preferred Securities. If Sufficient Clearing Bids have been made,
the Applicable Rate for the next succeeding Distribution Period will be the
Winning Bid Rate.
If Sufficient Clearing Bids have not been made in an Auction
(other than because all of the Preferred Securities are the subject of Submitted
Hold Orders) and no Event of Default exists, the Applicable Rate for the next
succeeding Distribution Period will be equal to the Maximum Applicable Rate on
the date of such Auction, and the related Distribution Period will be a 28-day
Short-Term Distribution Period regardless of whether the Administrative Trustees
have selected a Long-Term Distribution Period or a Short-Term Distribution
Period of any other length prior to such Auction. In such event, Existing
Holders that have placed Sell Orders for Preferred Securities will not be able
to sell all, and may not be able to sell any, Preferred Securities in such
Auction.
<PAGE>
If Sufficient Clearing Bids have not been made in an Auction
(other than because all of the Preferred Securities were the subject of
Submitted Hold Orders) or if an Auction has not been held on a scheduled Auction
Date (other than because an Event of Default exists or an Extension Period has
been elected), the Maximum Applicable Rate with respect to the next succeeding
Auction will be the "Special Maximum Applicable Rate," which will be the higher
of (i) the Applicable Percentage of the Commercial Paper Rate for a 28-day
Short-Term Distribution Period and (ii) 150% of the highest of (a) the Treasury
Bill Rate, (b) the Ten-Year Constant Maturity Rate and (c) the Thirty-Year
Constant Maturity Rate with respect to such date. The Administrative Trustees
may, in their sole discretion, increase the 150% referred to in subclause (ii)
of the previous sentence. In the event that the Administrative Trustees
determine in good faith that for any reason:
(i) any one of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate
or the Thirty-Year Constant Maturity Rate cannot be determined with
respect to any date, then the Special Maximum Applicable Rate with
respect to such date will be determined on the basis of the higher of
whichever two of such rates can be so determined;
(ii) only one of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate
and the Thirty-Year Constant Maturity Rate can be determined with
respect to any date, then the Special Maximum Applicable Rate with
respect to such date will be determined on the basis of whichever such
rate can be so determined; or
(iii) none of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate and
Thirty-Year Constant Maturity Rate can be determined with respect to
any date, then the Special Maximum Applicable Rate will be the rate
otherwise determined under the terms of the Preferred Securities.
If either Moody's or S&P or both do not make ratings on the
Preferred Securities available, the Administrative Trustees will select one or
two nationally recognized statistical rating organizations (as the term is used
in the rules and regulations of the Commission under the 1934 Act), as the case
may be, to act as a substitute rating agency or substitute rating agencies, and
the Administrative Trustees will take all reasonable action to enable such
rating agency or rating agencies to make available the equivalent rating or
ratings for the Preferred Securities. The Administrative Trustees will take all
reasonable action necessary to enable Moody's and S&P to provide a rating for
the Preferred Securities. If necessary, the Special Maximum Applicable Rate
shall be determined by the Auction Agent in consultation with the Administrative
Trustees.
With respect to the Preferred Securities, the Administrative
Trustees may from to time, upon delivery of written notice to the Auction Agent
and the Depositary, increase the Applicable Percentages used to calculate the
Maximum Applicable Rate as follows: the 150% to up to 175%, the 200% to up to
225% and the 250% to up to 275%, with no change to the 300%. The Administrative
Trustees have no obligation to designate a higher Applicable Percentage.
SECTION 311. ...Acceptance and Rejection of Orders and Allocation of
Preferred Securities.
With respect to each Auction, Submitted Bids and Submitted
Sell Orders will be accepted or rejected by the Auction Agent such that the
Existing Holders and Potential Holders of the Preferred Securities will sell,
continue to hold and/or purchase the Preferred Securities as described below and
in such order of priority. Existing Holders that placed or were deemed to have
placed Hold Orders in such Auction will continue to hold Preferred Securities
subject to such Hold Orders, subject to the rounding procedures described
herein.
<PAGE>
If Sufficient Clearing Bids in any Auction have been made:
(i) each Existing Holder that placed a Submitted Bid specifying a rate
higher than the Winning Bid Rate or a Submitted Sell Order will sell
the number of Preferred Securities subject to such Submitted Bid or
Submitted Sell Order;
(ii) each Existing Holder that placed a Submitted Bid specifying a rate
lower than the Winning Bid Rate will continue to hold the number of the
Preferred Securities subject to such Submitted Bid;
(iii) each Potential Holder that placed a Submitted Bid specifying a rate
lower than the Winning Bid Rate will purchase the number of Preferred
Securities subject to such Submitted Bid;
(iv) each Existing Holder that placed a Submitted Bid specifying a rate
equal to the Winning Bid Rate will continue to hold the number of
Preferred Securities subject to such Submitted Bid, unless the number
of Preferred Securities subject to all such Submitted Bids placed by
Existing Holders is greater than the excess of the number of Preferred
Securities over the number of Preferred Securities accounted for in
clauses (ii) and (iii) above, in which event each Existing Holder with
such a Submitted Bid will sell a number of Preferred Securities
determined on a pro rata basis based on the number of Preferred
Securities subject to all such Submitted Bids by such Existing Holders;
and
(v) each Potential Holder that placed a Submitted Bid specifying a rate
equal to the Winning Bid Rate will purchase any Preferred Securities
not accounted for in clause (ii), (iii) or (iv) above on a pro rata
basis based on the number of outstanding Preferred Securities subject
to all such Submitted Bids by such Potential Holders.
If Sufficient Clearing Bids have not been made in any Auction
(other than because all of the Preferred Securities are the subject of Submitted
Hold Orders):
(i) each Existing Holder that placed a Submitted Bid
specifying a rate equal to or lower than the Maximum Applicable Rate
will continue to hold the number of outstanding Preferred Securities
subject to such Submitted Bid;
(ii) each Potential Holder that placed a Submitted Bid
specifying a rate equal to or lower than the Maximum Applicable Rate
will purchase the number of Preferred Securities subject to such
Submitted Bid; and
(iii) each Existing Holder that placed a Submitted Sell Order
(including a Submitted Bid specifying a rate in excess of the Maximum
Applicable Rate) will sell a number of Preferred Securities, determined
on a pro rata basis, such that the aggregate number of Preferred
Securities sold by all such Existing Holders is equal to the number of
Preferred Securities to be purchased pursuant to (ii) above.
<PAGE>
Notwithstanding the above, if Sufficient Clearing Bids have
not been made (other than because all of the Preferred Securities are the
subject of Submitted Hold Orders) in an Auction held for the purpose of
determining the Distribution Rate for a Long-Term Distribution Period, (i) each
Existing Holder will continue to hold its Preferred Securities after such
Auction irrespective of any Orders made by such Existing Holders or by Potential
Holders, (ii) the next-succeeding Distribution Period will be, notwithstanding
any prior notice by the Administrative Trustees, a 28-day Short-Term
Distribution Period and (iii) the Distribution Rate for such Short-Term
Distribution Period will be the Maximum Applicable Rate as of such Auction Date.
If, in any Auction, as a result of the Auction Procedures
described above, any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction of a
Preferred Security on any Auction Date, the Auction Agent will, in such manner
as it may determine (in its sole discretion), round up or down the number of the
Preferred Securities being sold or purchased by any Existing Holder or Potential
Holder on such Auction Date so that the number of the Preferred Securities sold
or purchased by each Existing Holder or Potential Holder will be whole Preferred
Securities, even if such allocation results in one or more of such Potential
Holders not purchasing the Preferred Securities on such Auction Date or one or
more Existing Holders selling all the Preferred Securities previously held by
them.
SECTION 312. ...Notification of Results.
On the Auction Date for each Auction the Auction Agent will
advise each Broker-Dealer with respect to any Bid or Sell Order submitted on
behalf of a Bidder whether any such Order was accepted or rejected in whole or
in part and the Distribution Rate for the next Distribution Period by telephone
by approximately 3:00 p.m., New York City time, on such Auction Date.
The Broker-Dealer Agreements will provide that if any
Broker-Dealer submitted a Bid or Sell Order on behalf of a Bidder in any
Auction, such Broker-Dealer will (i) advise such Bidder as soon as practicable
whether such Bid or Sell Order was accepted or rejected, (ii) advise each such
Bidder that will hold the Preferred Securities following such Auction of the
duration of and the Distribution Rate for the next Distribution Period and (iii)
advise each such Bidder purchasing or selling shares to give instructions to
such Broker-Dealer (or its Agent Member) to pay the purchase price (in same-day
funds) against delivery of such Preferred Securities by book entry ("Delivery")
or to effect Delivery of such Preferred Securities against payment therefor, as
may be appropriate. If any Broker-Dealer submitted a Hold Order on behalf of an
Existing Holder in any Auction, such Broker-Dealer will also advise such
Existing Holder of the duration of and the Distribution Rate for the next
Distribution Period. The Auction Agent will record each transfer of the
Preferred Securities on the registry of Existing Holders to be maintained by the
Registrar and Transfer Agent.
Based on the results of each Auction, the Auction Agent will
determine the aggregate number of Preferred Securities to be purchased and the
aggregate number of Preferred Securities to be sold by Potential Holders and
Existing Holders on whose behalf any Broker-Dealer placed Orders.
<PAGE>
If any Existing Holder selling Preferred Securities in any
Auction fails to instruct its Agent Member to effect Delivery of the Preferred
Securities, a Broker-Dealer may Deliver to a person who was to have purchased
Preferred Securities in such Auction a number of Preferred Securities, that is
less than the number of Preferred Securities that otherwise was to be purchased
by such person. In that event, the number of Preferred Securities to be so
Delivered will be determined by such Broker-Dealer. Neither the Company, the
Securities Trust nor the Auction Agent will have any responsibility or liability
with respect to the failure of a Potential Holder, an Existing Holder or any
Broker-Dealer or Agent Member to effect Delivery of the Preferred Securities or
to pay for the Preferred Securities purchased or sold pursuant to an Auction or
otherwise.
ARTICLE 4.........
Events of Default
SECTION 401. ...Restatement of Section 5.01. Solely, with respect to the Series
C Notes, Subsections (1) and (2) of Section 5.01 of the Original Indenture are
hereby restated in their entirety:
1. default in the payment of any interest upon the Series C Notes when it
becomes due and payable on an Interest Payment Date other than at
Maturity, including Additional Interest (as defined in clause (ii) of
the definition thereof) in respect thereof, and continuance of such
default for a period of ten (10) days (provided, however, if the
Interest Period in which such default occurs is less than 12 days, the
continuance of such default for a period of days that is two days less
than the length of such Interest Period); provided, further, that (i)
a valid extension of the interest payment period by the Company
pursuant to the terms of hereof shall not constitute a default in the
payment of interest for this purpose, (ii) no such default shall be
deemed to exist if, on or prior to the date on which such interest
became due, the Company shall have made a payment sufficient to pay
such interest pursuant to the Guarantee related to the Preferred
Securities, and shall have delivered a notice to the Trustee to that
effect; or
2. default in payment of Additional Interest (as defined in clause (i) of
the definition thereof) and the continuance of such default for a
period of ten (10) days (provided, however, if the Interest Period in
which such default occurs is less than 12 days, the continuance of
such default for a period of days that is two days less than the
length of such Interest Period).
ARTICLE 5.........
Miscellaneous Provisions
SECTION 501. ...Recitals by Company.
The recitals in this Second 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 C Notes and
of this Second Supplemental Indenture as fully and with like effect as if set
forth herein in full.
<PAGE>
SECTION 502. ...Ratification and Incorporation of Original Indenture.
As heretofore supplemented and as supplemented hereby, the
Original Indenture is in all respects ratified and confirmed, and the Original
Indenture, as heretofore supplemented and modified, and this Second Supplemental
Indenture shall be read, taken and construed as one and the same instrument.
SECTION 503. ...Executed in Counterparts.
This Second 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.
ATTEST: ALABAMA POWER COMPANY
By: By:
Assistant Secretary Executive Vice President, Chief
Financial Officer and Treasurer
ATTEST: THE CHASE MANHATTAN BANK
By: By:
Trust Officer Assistant Vice President
<PAGE>
NO. 1 CUSIP NO. __________
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS AND THIS SECURITY IS ISSUED SUBJECT TO THE
PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
ALABAMA POWER COMPANY
SERIES C JUNIOR SUBORDINATED NOTE
DUE FEBRUARY 28, 2029
Principal Amount: $_________
Record Date: Business Day immediately preceding the Interest
Payment Date
Original Issue Date: February 25, 1999
Stated Maturity: February 28, 2029
Interest Rate: Determined by procedures set forth in the Indenture
Interest Payment Dates: Determined by procedures set forth in the Indenture
Authorized Denomination: $50,000
Alabama Power Company, an Alabama corporation (the "Company",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum of ______________
DOLLARS ($_________) 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, on each Interest Payment Date commencing on the
Interest Payment Date next succeeding the Original Issue Date shown above and on
the Stated Maturity (or upon earlier redemption) at the prevailing Interest Rate
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 on the 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 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.
<PAGE>
Payments of interest on this Note in respect of a Short-Term
Distribution Period (or a portion thereof) will be computed by multiplying the
per annum Interest Rate in effect for such Short-Term Distribution Period by a
fraction, the numerator of which will be the actual number of days in such
Short-Term Distribution Period (or portion thereof) (determined by including the
first day thereof and excluding the last thereof) and the denominator of which
will be 360, and multiplying the rate so obtained by the principal amount
hereof. The amount of interest on this Note payable on each Interest Payment
Date in respect of a Long-Term Distribution Period will be computed on the basis
of a 360-day year consisting of twelve 30-day months and, in the case of a
Long-Term Distribution Period beginning or ending on a date other than the first
date of a month, portion of any 30-day month based upon the actual number of
days elapsed.
The Company has the right to defer payments of interest on the
Series C Notes by extending the interest payment period from time to time on the
Series C Notes (an "Extension Period"). During this Extension Period, (i)
Interest will continue to accrue on the Series C Notes, (ii) Auctions will be
discontinued, (iii) regardless of any notice by the Administrative Trustees to
the contrary, each subsequent Distribution Period during such Extension Period
will be a 28-day Short-Term Distribution Period and (iv) the Distribution Rate
for each such Distribution Period will be the Maximum Applicable Rate (which
will be reset at the end of each 28-day Short-Term Distribution Period during
the Extension Period).
If the Company decides to defer interest payments on the
Series C Notes, the Extension Period shall consist of consecutive 28-day
Short-Term Distribution Periods which in the aggregate shall not exceed five
years (which approximates to a maximum of 65 consecutive 28-day Short-Term
Distribution Periods). An Extension Period shall not extend beyond the stated
maturity of the Series C Notes. Prior to the termination of any Extension
Period, the Company may further defer payments of interest provided that the
Extension Period, together with all such previous and further extensions
thereof, may not exceed 65 consecutive 28-day Short-Term Distribution Periods.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Company may select a new Extension Period, subject to the above
requirements. There could be multiple Extension Periods of varying lengths
throughout the term of the Series C Notes.
During an Extension Period unpaid interest (together with
interest thereon) will compound on each Interest Payment Date at the prevailing
Interest Rate ("Deferred Interest"). Upon the termination of each Extension
Period, which shall be an Interest Payment Date, the Company shall pay all
Deferred Interest on the next succeeding Interest Payment Date to the Person in
whose name this Note is registered at the close of business on the Record Date
for such Interest Payment Date, provided that any Deferred Interest payable at
Stated Maturity or on any Redemption Date will be paid to the Person to whom
principal is payable. Prior to the termination of any such Extension Period, the
Company may extend the interest payment period, provided that such Extension
Period together with all such previous and further extensions thereof shall not
exceed 65 consecutive 28-day Short-Term Distributions Periods. Upon the
<PAGE>
termination of any such Extension Period, and the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may select a
new Extension Period, subject to the above requirements. If the Company shall
have given notice of its election to select any Extension Period, the Company
shall not (i) declare or pay any dividend or distribution on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock, or make any guarantee payments with respect to the foregoing and
(ii) make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees other than its
guarantee of the Preferred Securities issued by the Securities Trust) issued by
the Company that rank pari passu with or junior to this Note. The Company shall
give the Holder of this Note, the Trustee and the Auction Agent notice of its
selection or extension of an Extension Period at least one Business Day prior to
the earlier of (i) the Record Date relating to the Interest Payment Date on
which the Extension Period is to commence or relating to the Interest Payment
Date on which an Extension Period that is being extended would otherwise
terminate or (ii) the date the Company or Securities Trust is required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization of the record date or the date distributions are payable.
The Company also shall be obligated to pay when due and
without extension all additional amounts as may be required so that the net
amount received and retained by the Holder of this Note (if the Holder is a
Securities Trust) after paying taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States or any other taxing authority will not be less than the amounts such
Holder would have received had no such taxes, duties, assessments, or other
governmental charges been imposed.
Payment of the principal of and interest (including Additional
Interest, if any) due at the Stated Maturity or earlier redemption of the Series
C Notes shall be made upon surrender of the Series C Notes at the Corporate
Trust Office of the Trustee, 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.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness (as defined in the Indenture),
and this Note is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, waives
all notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
<PAGE>
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.
Dated: ______ __, ____.
ALABAMA POWER COMPANY
By:
William B. Huchins, III
Executive Vice President, Chief Financial
Officer and Treasurer
Attest:
Assistant Secretary
{Seal of ALABAMA POWER COMPANY appears here}
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the 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 Junior
Subordinated Notes of the Company (the "Notes"), issued and issuable in one or
more series under a Subordinated Note Indenture, dated as of January 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 C Junior Subordinated Notes due February
28, 2029 (the "Series C Notes") in the aggregate principal amount of up to
$5l,550,000. Capitalized terms used herein for which no definition is provided
herein shall have the meanings set forth in the Indenture.
While the Preferred Securities are outstanding, (i) the
Interest Rate, Interest Periods, Interest Payment Dates and associated terms
relating to this Note shall be the same as the Distribution Rate, Distribution
Periods, Distribution Payment Dates and associated terms relating to the
Preferred Securities, established in Article 2 of the Second Supplemental
Indenture and (ii) the Auction Procedures relating to this Note shall be the
same as those procedures relating to the Preferred Securities, established in
Article 3 to the Second Supplemental Indenture.
If the Securities Trust is terminated and this Note is
distributed to holders of Preferred Securities, subject to Section 102(c) of the
Second Supplemental Indenture, the terms and procedures relating to the
Preferred Securities established in Articles 2 and 3 of the Second Supplemental
Indenture shall be directly applicable to this Note.
The Company shall have the right, subject to the terms and
conditions of the Indenture, to redeem this Note on any Interest Payment Date 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, including any Additional Interest, if any, to the
Redemption Date. Upon the occurrence of a Special Event (as defined below) at
any time, the Company may, within 90 days following the occurrence thereof and
subject to the terms and conditions of the Indenture, redeem this Note without
premium or penalty, in whole, at a Redemption Price equal to 100% of the
principal amount thereof plus accrued but unpaid interest, including any
Additional Interest, if any, to the Redemption Date. A Special Event may be a
Tax Event or an Investment Company Act Event. "Tax Event" means that the Company
shall have received an Opinion of Counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein or (b) any amendment to, or change in, an interpretation or application
of such laws or regulations, there is more than an insubstantial risk that (i)
the related Securities Trust would be subject to United States federal income
tax with respect to income accrued or received on the Series C Notes, (ii)
interest payable to the related Securities Trust would not be deductible by the
<PAGE>
Company for United States federal income tax purposes, or (iii) the related
Securities Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges, which change or amendment becomes
effective on or after the Original Issue Date. "Investment Company Act Event"
means that the Company shall have received an Opinion of Counsel to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority, there is
more than an insubstantial risk that the related Securities Trust is or will be
considered an "investment company" which is required to be registered under the
Investment Company Act of 1940, as amended, which change becomes effective on or
after the Original Issue Date.
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 a 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.
<PAGE>
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 $50,000 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.
<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:
TEN COM - as tenants in UNIF GIFT MIN ACT- ____ Custodian ____
common (Cust) (Minor)
TEN ENT - as tenants by the under Uniform Gifts to Minors Act
entireties
JT TEN - as joint tenants with __________________
right of survivorship and (State)
not as tenants 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.
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Officer
Exhibit 4.5
ALABAMA POWER CAPITAL TRUST III
AMENDED AND RESTATED
TRUST AGREEMENT
among
ALABAMA POWER COMPANY, as Depositor,
THE CHASE MANHATTAN BANK, as Property Trustee,
CHASE MANHATTAN BANK DELAWARE, as Delaware Trustee,
and
WILLIAM E. ZALES, JR. and J. RANDY DERIEUX,
as Administrative Trustees
Dated as of February 1, 1999
<PAGE>
ALABAMA POWER CAPITAL TRUST III
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
<S> <C>
Trust Indenture Act Section Trust Agreement Section
Section 310(a)(1)...................................................................8.07
(a)(2).....................................................................8.07
(a)(3).....................................................................8.09
(a)(4)...........................................................Not Applicable
(b)........................................................................8.08
Section 311(a)......................................................................8.13
(b)........................................................................8.13
Section 312(a)......................................................................5.07
(b)........................................................................5.07
(c)........................................................................5.07
Section 313(a)...................................................................8.14(a)
(a)(4)..................................................................8.14(b)
(b).....................................................................8.14(b)
(c).....................................................................8.14(a)
(d)............................................................8.14(a), 8.14(b)
Section 314(a)......................................................................8.15
(b)..............................................................Not Applicable
(c)(1)...............................................................8.15, 8.16
(c)(2).....................................................................8.16
(c)(3).....................................................................8.16
(d)..............................................................Not Applicable
(e)........................................................................8.16
Section 315(a)......................................................................8.01
(b)...............................................................8.02, 8.14(b)
(c).....................................................................8.01(a)
(d)..................................................................8.01, 8.03
(e)..............................................................Not Applicable
Section 316(a)............................................................Not Applicable
(a)(1)(A)..................................................................8.19
(a)(1)(B)..................................................................8.19
(a)(2)...........................................................Not Applicable
(b)..............................................................Not Applicable
(c)..............................................................Not Applicable
Section 317(a)(1).........................................................Not Applicable
(a)(2)...........................................................Not Applicable
(b)........................................................................5.09
Section 318(a).....................................................................11.10
- --------------------
Note: This Cross-Reference Table does not constitute part of the Trust Agreement and shall not affect the
interpretation of any of its terms and provisions.
</TABLE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Page
Article I Defined Terms.............................................................................1
Section 1.01 Definitions...................................................................1
Article II Establishment of the Trust..............................................................17
Section 2.01 Name.........................................................................17
Section 2.02 Offices of the Trustees; Principal Place of Business.........................17
Section 2.03 Initial Contribution of Trust Property; Organizational Expenses..............18
Section 2.04 Issuance of the Preferred Securities.........................................18
Section 2.05 Subscription and Purchase of Junior Subordinated Notes;
Issuance of the Common Securities............................................18
Section 2.06 Declaration of Trust.........................................................18
Section 2.07 Authorization to Enter into Certain Transactions.............................19
Section 2.08 Assets of Trust..............................................................24
Section 2.09 Title to Trust Property......................................................24
Section 2.10 Mergers and Consolidations of the Trust......................................24
Article III Payment Account........................................................................25
Section 3.01 Payment Account..............................................................25
Article IV Distributions; Redemption...............................................................25
Section 4.01 Distributions................................................................25
Section 4.02 Distribution Rate............................................................27
Section 4.03 Distribution Periods.........................................................28
Section 4.04 Redemption...................................................................30
Section 4.05 Subordination of Common Securities and Distributions.........................32
Section 4.06 Payment Procedures...........................................................32
Section 4.07 Tax Returns and Reports......................................................33
Article V Trust Securities Certificates............................................................33
Section 5.01 Initial Ownership............................................................33
Section 5.02 The Trust Securities Certificates............................................33
Section 5.03 Authentication of Trust Securities Certificates..............................33
Section 5.04 Registration of Transfer and Exchange of Preferred
Securities Certificates......................................................34
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates...........34
Section 5.06 Persons Deemed Securityholders...............................................35
Section 5.07 Access to List of Securityholders' Names and Addresses.......................35
Section 5.08 Maintenance of Office or Agency..............................................36
Section 5.09 Appointment of Paying Agent..................................................36
Section 5.10 Ownership of Common Securities by Depositor..................................36
<PAGE>
Section 5.11 Book-Entry Preferred Securities Certificates; Common
Securities Certificate.......................................................37
Section 5.12 Notices to Clearing Agency...................................................37
Section 5.13 Definitive Preferred Securities Certificates.................................38
Section 5.14 Rights of Securityholders....................................................38
Article VI Acts of Securityholders; Meetings; Voting...............................................39
Section 6.01 Limitations on Voting Rights.................................................39
Section 6.02 Notice of Meetings...........................................................40
Section 6.03 Meetings of Preferred Securityholders........................................41
Section 6.04 Voting Rights................................................................41
Section 6.05 Proxies, etc.................................................................41
Section 6.06 Securityholder Action by Written Consent.....................................41
Section 6.07 Record Date for Voting and Other Purposes....................................42
Section 6.08 Acts of Securityholders......................................................42
Section 6.09 Inspection of Records........................................................43
Article VII Representations and Warranties of the Trustees.........................................43
Section 7.01 Representations and Warranties of the Trustees...............................43
Article VIII The Trustees..........................................................................44
Section 8.01 Certain Duties and Responsibilities..........................................44
Section 8.02 Notice of Defaults...........................................................45
Section 8.03 Certain Rights of Property Trustee...........................................45
Section 8.04 Not Responsible for Recitals or Issuance of Securities.......................46
Section 8.05 May Hold Securities..........................................................46
Section 8.06 Compensation; Fees; Indemnity................................................46
Section 8.07 Trustees Required; Eligibility...............................................47
Section 8.08 Conflicting Interests........................................................47
Section 8.09 Co-Trustees and Separate Trustee.............................................48
Section 8.10 Resignation and Removal; Appointment of Successor............................49
Section 8.11 Acceptance of Appointment by Successor.......................................51
Section 8.12 Merger, Conversion, Consolidation or Succession to Business..................51
Section 8.13 Preferential Collection of Claims Against Depositor or Trust.................51
Section 8.14 Reports by Property Trustee..................................................52
Section 8.15 Reports to the Property Trustee..............................................52
Section 8.16 Evidence of Compliance with Conditions Precedent.............................52
Section 8.17 Number of Trustees...........................................................53
Section 8.18 Delegation of Power..........................................................53
Section 8.19 Enforcement of Rights of Property Trustee by Securityholders.................53
Section 8.20 Delaware Trustee.............................................................54
Article IX Termination and Liquidation.............................................................55
<PAGE>
Section 9.01 Termination Upon Expiration Date.............................................55
Section 9.02 Early Termination............................................................55
Section 9.03 Termination..................................................................55
Section 9.04 Liquidation..................................................................55
Section 9.05 Bankruptcy...................................................................56
Article X The Auction..............................................................................57
Section 10.01 Applicable Rate..............................................................57
Section 10.02 Auction Agent................................................................57
Section 10.03 Broker-Dealers...............................................................58
Section 10.04 Purchaser's Letter...........................................................58
Section 10.05 Auction Date.................................................................60
Section 10.06 Orders.......................................................................60
Section 10.07 Existing Holders.............................................................60
Section 10.08 Potential Holders............................................................62
Section 10.09 Extension Period.............................................................63
Section 10.10 Determination of Distribution Rate in an Auction.............................63
Section 10.11 Acceptance and Rejection of Orders and Allocation of Preferred Securities....65
Section 10.12 Notification of Results......................................................67
Article XI Miscellaneous Provisions................................................................68
Section 11.01 Guarantee by the Depositor...................................................68
Section 11.02 Limitation of Rights of Securityholders......................................68
Section 11.03 Amendment....................................................................68
Section 11.04 Separability.................................................................69
Section 11.05 GOVERNING LAW................................................................70
Section 11.06 Successors...................................................................70
Section 11.07 Headings.....................................................................70
Section 11.08 Notice and Demand............................................................70
Section 11.09 Agreement Not to Petition....................................................71
Section 11.10 Conflict with Trust Indenture Act............................................71
Exhibit A..............................................................................................A-1
Exhibit B..............................................................................................B-1
Exhibit C..............................................................................................C-1
Exhibit D..............................................................................................D-1
Exhibit E..............................................................................................E-1
</TABLE>
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of
February 1, 1999, by and among (i) Alabama Power Company, an Alabama corporation
(the "Depositor" or the "Company"), (ii) The Chase Manhattan Bank, a banking
corporation duly organized and existing under the laws of New York, as trustee
(the "Property Trustee" and, in its separate corporate capacity and not in its
capacity as Trustee, the "Bank"), (iii) Chase Manhattan Bank Delaware, a banking
corporation duly organized under the laws of Delaware, as Delaware trustee (the
"Delaware Trustee" and, in its separate corporate capacity and not in its
capacity as Delaware Trustee, the "Delaware Bank"), (iv) William E. Zales, Jr.,
an individual, and J. Randy DeRieux, an individual, as administrative trustees
(each an "Administrative Trustee" and together the "Administrative Trustees")
(the Property Trustee, the Delaware Trustee and the Administrative Trustees
referred to collectively as the "Trustees") and (v) the several Holders, as
hereinafter defined.
WITNESSETH:
WHEREAS, the Depositor and the Delaware Trustee have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act by the entering into that certain Trust Agreement,
dated as of November 27, 1996 (the "Original Trust Agreement"), and by the
execution and filing by the Delaware Trustee with the Secretary of State of the
State of Delaware of the Certificate of Trust, dated November 27, 1996; and
WHEREAS, the parties hereto desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the addition of the Bank, William E. Zales, Jr. and J.
Randy DeRieux as trustees of the Trust, (ii) the acquisition by the Trust from
the Depositor of all of the right, title and interest in the Junior Subordinated
Notes, (iii) the issuance of the Common Securities by the Trust to the
Depositor, and (iv) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement.
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, each party, for the benefit of the
other parties and for the benefit of the Securityholders, hereby amends and
restates the Original Trust Agreement in its entirety and agrees as follows:
Article I ...
Defined Terms
Section 1.01 Definitions. For all purposes of this Trust Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
<PAGE>
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, an amount equal to the
Additional Interest (as defined in clause (ii) of the definition of "Additional
Interest" in the Second Supplemental Indenture) paid by the Depositor on a Like
Amount of Junior Subordinated Notes for such period.
"Administrative Trustee" means each of the individuals
identified as an "Administrative Trustee" in the preamble to this Trust
Agreement solely in their capacities as Administrative Trustees of the Trust
formed and continued hereunder and not in their individual capacities, or such
trustee's successor(s) in interest in such capacity, or any successor
"Administrative Trustee" appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Percentage" has the meaning specified in the
definition of "Maximum Applicable Rate."
"Applicable Rate" means the Distribution Rate determined
pursuant to the auction procedures set forth in Article X.
"Auction" means the procedure by which the Applicable Rate
shall be determined in accordance with the Auction Procedures.
"Auction Agent" means The Chase Manhattan Bank, its successors
or assigns, or such other bank or trust company appointed to such capacity by
the Administrative Trustees.
<PAGE>
"Auction Agent Agreement" means the agreement among the
Company, the Trust and The Chase Manhattan Bank, as auction agent, dated as of
February 1, 1999.
"Auction Date" means the date an Auction is held at the end of
each Distribution Period to determine the Applicable Rate for the subsequent
Distribution Period, as provided in Section 10.05.
"Auction Procedures" means the procedures by which the Auction
Agent will conduct Auctions, as set forth in Article X.
"Available Preferred Securities" has the meaning specified in
Section 10.10(a).
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or
in respect of such Person under federal bankruptcy law or any
other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such Person or of any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and the continuance of such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under federal
bankruptcy law or any other applicable federal or state law,
or the consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as
they become due, or the taking of action by such Person in
furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 11.09.
"Bid" means (i) with respect to a Potential Holder, an Order
indicating the number of Preferred Securities that such Potential Holder offers
to purchase if the Applicable Rate for the Preferred Securities for the next
Distribution Period is not less than the rate per annum specified in such Bid
and (ii) with respect to an Existing Holder, an Order indicating the number of
Preferred Securities that such Existing Holder desires to continue to hold;
provided that the Applicable Rate for the next Distribution Period is not less
than the rate per annum specified in such Bid.
<PAGE>
"Bidder" means an Existing Holder or a Potential Holder placing
an Order.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors or a duly authorized committee
thereof and to be in full force and effect on the date of such certification,
and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means
certificates representing Preferred Securities issued in global, fully
registered form to the Clearing Agency as described in Section 5.11.
"Broker-Dealer" has the meaning specified in Section 10.03.
"Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banks in New York, New York are authorized or
obligated by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office or the Indenture Trustee's principal corporate trust
office is closed for business or (iv) a day on which the New York Stock Exchange
is closed.
"Calendar Period" with respect to any date means a period of
fourteen consecutive calendar days ending ten calendar days prior to such date.
"Certificate Depository Agreement" means the agreement among
the Trust, the Property Trustee and The Depository Trust Company, as the initial
Clearing Agency, dated as of February 24, 1999, relating to the Preferred
Securities Certificates.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository Trust Company will be the initial Clearing
Agency.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercial Paper Rate," on any date, means in the case of any
Short-Term Distribution Period of (a) fewer than 45 days, the interest
equivalent of the 30-day rate, (b) 45 days or more but fewer than 70 days, the
interest equivalent of the 60-day rate, (c) 70 days or more but fewer than 85
days, the arithmetic average of the interest equivalent of the 60-day and 90-day
rates, (d) 85 days or more but fewer than 120 days, the interest equivalent of
the 90-day rate, (e) 120 days or more but fewer than 148 days, the arithmetic
average of the interest equivalent of the 90-day and 180-day rates, or (f) 148
days or more but fewer than 184 days, the interest equivalent of the 180-day
rate, in each case, on commercial paper placed on behalf of issuers whose
<PAGE>
corporate bonds are rated AA by S&P or Aa by Moody's, or the equivalent of such
rating by another rating agency, as made available on a discount basis or
otherwise by the Federal Reserve Bank of New York for the Business Day
immediately preceding such date. In the event that the Federal Reserve Bank of
New York does not make available the needed rate or rates, then such rate will
be the arithmetic average of the interest equivalent of the rate or average of
rates, in each case, on commercial paper placed on behalf of such issuers, as
quoted on a discount basis or otherwise by Goldman, Sachs & Co. or, in lieu
thereof, their respective affiliates or successors that are engaged in buying or
selling commercial paper ("Commercial Paper Dealers"), to the Auction Agent as
of the close of business on the Business Day immediately preceding such date. In
the event that the Federal Reserve Bank of New York does not make available a
required rate and if any Commercial Paper Dealer does not quote a rate required
to determine the Commercial Paper Rate, the Commercial Paper Rate will be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the
Administrative Trustees to provide such rate or rates not being supplied by any
Commercial Paper Dealer or Commercial Paper Dealers, as the case may be, or, if
the Administrative Trustees do not select any such Substitute Commercial Paper
Dealer or Substitute Commercial Paper Dealers, by the remaining Commercial Paper
Dealer or Commercial Paper Dealers. For purposes of this definition, "interest
equivalent" means the equivalent yield on a 360-day basis of a discount basis
security to an interest bearing security. "Substitute Commercial Paper Dealers"
will mean any substitute recognized dealers in commercial paper selected by the
Administrative Trustees.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Security" means an undivided beneficial ownership
interest in the assets of the Trust having a Liquidation Amount of $50,000 and
having the rights provided therefor in this Trust Agreement, including the right
to receive Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of a Common Security or Securities, substantially in the form attached
as Exhibit C.
"Company" means Alabama Power Company.
"Corporate Trust Office" means the office of the Property
Trustee at which its corporate trust business shall be principally administered.
"Default Rate" is the higher of: (i) the product of the
Commercial Paper Rate applicable to a 28-day Short-Term Distribution Period,
determined as of the date of the related Event of Default that gives rise to the
application of such Default Rate, multiplied by the Applicable Percentage (as in
effect on such date) that would be applicable if the Preferred Securities had a
Prevailing Rating of below "baa3"/BBB-; or (ii) the Distribution Rate in effect
for the Distribution Period in respect of which such Event of Default occurred.
<PAGE>
"Definitive Preferred Securities Certificates" means either or
both (as the context requires) of (i) Preferred Securities Certificates issued
in certificated, fully registered form as provided in Section 5.11(a) and (ii)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Bank" has the meaning specified in the preamble to this
Trust Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may
be amended from time to time.
"Delaware Trustee" means the commercial bank or trust company
or any other Person identified as the "Delaware Trustee" and has the meaning
specified in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor Delaware Trustee appointed as herein provided.
"Depositor" means Alabama Power Company, in its capacity as
"Depositor" under this Trust Agreement.
"Distribution Payment Date" means each day on which
Distributions are payable determined based on the length of the applicable
Distribution Period.
"Distribution Period" means the period for which Distributions
are payable.
"Distribution Rate" means the rate at which Distributions will
accrue in respect of any Distribution Period, as determined pursuant to the
terms of this Trust Agreement whether by the Auction Procedures or otherwise.
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of an Indenture Event of Default; or
<PAGE>
(ii) default by the Trust in the payment of any
Distribution when it becomes due and payable, and continuation
of such default for a period of 30 days or, if the
Distribution Period in which such default occurs is less than
32 days, the continuation of such default for a period that is
two days less than the length of such Distribution Period; or
(iii) default by the Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(iv) default in the performance, or breach, of any
covenant or warranty of the Trustees in this Trust Agreement
(other than a covenant or warranty a default in whose
performance or breach is dealt with in clause (ii) or (iii)
above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or
certified mail, to the Trustees by the Holders of at least 10%
in Liquidation Amount of the Outstanding Preferred Securities
a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(v) the occurrence of a Bankruptcy Event with respect
to the Trust.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Company and the Trust, substantially in the form
attached as Exhibit D, as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Holder" means a person who has signed and delivered
a Purchaser's Letter (if required to do so by its Broker-Dealer) and is listed
as the beneficial owner of the Preferred Securities in the records of the
Auction Agent or such beneficial owner's Broker-Dealer, who may act as the agent
of the Auction Agent for the limited purpose of maintaining such information.
"Extension Period" has the meaning specified in Section 4.01(d).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"Final Distribution Period" has the meaning specified in Section
4.03(b).
"Guarantee" means the Guarantee Agreement executed and
delivered by the Company and The Chase Manhattan Bank, as Guarantee Trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Preferred Securities, as amended from time to
time.
"Hold Order" has the meaning specified in Section 10.07(a).
<PAGE>
"Indenture Event of Default" means an "Event of Default" as
defined in the Subordinated Indenture.
"Indenture Redemption Date" means "Redemption Date," as defined
in the Subordinated Indenture.
"Indenture Trustee" means the trustee under the Subordinated
Indenture.
"Issue Date" means the date of the delivery of the Trust
Securities.
"Junior Subordinated Notes" means the $51,550,000 aggregate
principal amount of the Depositor's Series C Junior Subordinated Notes due
February 28, 2029, issued pursuant to the Subordinated Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having a Liquidation
Amount equal to the principal amount of Junior Subordinated Notes to be
contemporaneously redeemed in accordance with the Subordinated Indenture and the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities and (ii) Junior Subordinated Notes having a principal amount equal to
the Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Notes are distributed.
"Liquidation Amount" means the stated amount of $50,000 per Trust
Security.
"Liquidation Date" means the date on which Junior Subordinated
Notes are to be distributed to Holders of Trust Securities in connection with a
dissolution and liquidation of the Trust pursuant to Section 9.04.
"Liquidation Distribution" has the meaning specified in Section
9.05.
"Long-Term Distribution Period" means a Distribution Period of
365 days or longer.
"Maximum Applicable Rate" on any date means (i) with respect
to an Auction relating to a Short-Term Distribution Period of less than 184
days, the percentage of the Commercial Paper Rate and (ii) with respect to an
Auction relating to a Short-Term Distribution Period of 184 days or more or a
Long-Term Distribution Period, the percentage of the Treasury Index Rate, in
each case as of the close of business on the Business Day next preceding such
date, determined as set forth below based on the Prevailing Rating in effect at
the close of business on such Business Day (such percentage, the "Applicable
Percentage"):
<PAGE>
Prevailing Rating* Applicable Percentage
"aa3"/AA-or above 150%
"A3"/A- 200%
"baa3"/BBB- 250%
Below "baa3"/BBB- 300%
* If two ratings do not fall in the same category set forth in this table, the
Applicable Percentage will be determined on the basis of the lower rating. For
example, a rating of "a3"/BBB+ would result in an Applicable Percentage of 250%.
"Minimum Applicable Rate" with respect to any date means (i)
with respect to an Auction relating to a Long-Term Distribution Period or a
Short-Term Distribution Period of 184 days or more, 58% of the Treasury Index
Rate at the close of business on the Business Day next preceding the related
Auction Date and (ii) with respect to an Auction relating to a Short-Term
Distribution Period of less than 184 days, 58% of the Commercial Paper Rate at
the close of business on the Business Day next preceding the related Auction
Date.
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"Non-Auction Rate" means a rate equal to either (i) the
Maximum Applicable Rate as in effect on the date of any failure to hold an
Auction (except during an Extension Period or during the continuance of an Event
of Default) or (ii) if an Auction is not held on two consecutive Auction Dates
and the Non-Auction Rate is applicable, the Non-Auction Rate will be the Special
Maximum Applicable Rate on the Business Day immediately preceding the first day
of the next Distribution Period.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.16 shall be the principal executive, financial or accounting officer of the
Depositor. An Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as is necessary, in such officer's opinion, to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
<PAGE>
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Trust, the Trustees or the Depositor, but not an employee
of the Trust or the Trustees, and who shall be reasonably acceptable to the
Property Trustee. Any Opinion of Counsel pertaining to federal income tax
matters may rely on published rulings of the Internal Revenue Service.
"Order" means the communication to a Broker-Dealer by an
Existing Holder or a Potential Holder of the information necessary for the
Auction Agent to conduct an Auction pursuant to the Auction Procedures.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
authenticated and delivered under this Trust Agreement, except:
(i) Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative
Trustees for cancellation;
(ii) Preferred Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with
the Property Trustee or any Paying Agent for the Holders of
such Preferred Securities; provided that if such Preferred
Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Trust Agreement; and
(iii)Preferred Securities in exchange for or in lieu of which
other Preferred Securities have been authenticated and
delivered pursuant to this Trust Agreement;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, the Holder of the Common
Securities, any Trustee or any Affiliate of the Depositor or any Trustee shall
be disregarded and deemed not to be Outstanding, except that (a) in determining
whether any Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
which such Trustee knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the outstanding Preferred
Securities are owned by the Depositor, the Holder of the Common Securities, one
or more Trustees and/or any such Affiliate. Preferred Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
<PAGE>
"Owner" means each Person who is the beneficial owner of a
Book-Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee for the benefit of
the Securityholders in which all amounts paid in respect of the Junior
Subordinated Notes will be held and from which the Property Trustee shall make
payments to the Securityholders in accordance with Section 4.01.
"Person" means an individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Potential Holder" means each prospective purchaser of a
Preferred Security who shall have executed and delivered a Purchaser's Letter
(if required by its Broker-Dealer) or who shall have submitted a Bid.
"Preferred Security" means an undivided beneficial ownership
interest in the assets of the Trust having a Liquidation Amount of $50,000 and
having rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate
evidencing ownership of a Preferred Security or Securities, substantially in the
form attached as Exhibit E.
"Prevailing Rating" of the Preferred Securities means:
(i) "aa3"/AA- or above if the Preferred Securities
have a rating of "aa3" or better by Moody's and AA- or better
by S&P;
(ii) if not "aa3"/AA- or above, then "a3"/A- if the
Preferred Securities have a rating of "a3" or better by
Moody's and A- or better by S&P;
(iii) if not "aa3"/AA- or above or "a3"/A-, then
"baa3"/BBB- if the Preferred Securities have a rating of
"baa3" or better by Moody's and BBB- or better by S&P; and
(iv) if not "aa3"/AA- or above, "a3"/A- or
"baa3"/BBB-, then below "baa3"/BBB.
<PAGE>
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor "Property Trustee" as herein provided.
"Purchaser's Letter" shall have the meaning specified in Section
10.04.
"Record Date" means, with respect to any Distribution Payment
Date, the opening of business on the Business Day immediately preceding such
Distribution Payment Date.
"Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Indenture Redemption Date shall be a Redemption
Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for
redemption of any Trust Security, the Liquidation Amount of such Trust Security,
plus accrued and unpaid Distributions to such date, except to the extent
otherwise provided with respect to redemptions during a Long-Term Distribution
Period.
"Relevant Trustee" shall have the meaning specified in Section
8.10.
"S&P"means Standard & Poor's Ratings Group or any successor
thereto.
"Securities Register" and "Securities Registrar" are described in
Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a
Trust Security or Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act.
"Sell Order" has the meaning specified in Section 10.07(a).
"Short-Term Distribution Period" means a Distribution Period
of from seven to 364 days and always evenly divisible by seven.
"Special Maximum Applicable Rate" has the meaning specified in
Section 10.10(e).
"Special Securities" means securities that can, at the option
of the holder, be surrendered at face value in payment of any federal estate tax
or that provide tax benefits to the holder and are priced to reflect such tax
benefits or that were originally issued at a deep or substantial discount.
"Submission Deadline" has the meaning specified in Section 10.06.
<PAGE>
"Submitted Bid" has the meaning specified in Section 10.10(a).
"Submitted Hold Order" has the meaning specified in Section
10.10(a).
"Submitted Order" has the meaning specified in Section 10.10(a).
"Submitted Sell Order" has the meaning specified in Section
10.10(a).
"Subordinated Indenture" means the Subordinated Note
Indenture, dated as of January 1, 1997, between the Depositor and the Indenture
Trustee, as supplemented by the First Supplemental Indenture by and between the
Depositor and the Indenture Trustee dated as of January 1, 1997 and the
Supplemental Indenture.
"Sufficient Clearing Bids" shall have the meaning set forth in
Section 10.10(b).
"Supplemental Indenture" means the Second Supplemental
Indenture, dated as of February 25, 1999, by and between the Depositor and the
Indenture Trustee.
"Ten-Year Average Yield" means the average yield to maturity
for actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities of ten years).
"Ten-Year Constant Maturity Rate," on any date, means the
arithmetic average of the two most recent weekly per annum Ten-Year Average
Yields (or the one weekly per annum Ten-Year Average Yield, if only one such
yield is published during the Calendar Period with respect to such date), as
published weekly by the Federal Reserve Board during the Calendar Period with
respect to such date. In the event that the Federal Reserve Board does not
publish such a weekly per annum Ten-Year Average Yield during such Calendar
Period, then the Ten-Year Constant Maturity Rate with respect to such date shall
be the arithmetic average of the two most recent weekly per annum Ten-Year
Average Yields (or the one weekly per annum Ten-Year Average Yield, if only one
such yield is published during such Calendar Period), as published weekly during
such Calendar Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Administrative Trustees. In the event that
a per annum Ten-Year Average Yield is not published by the Federal Reserve Board
or by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Ten-Year Constant Maturity Rate with
respect to such date will be the arithmetic average of the two most recent
weekly per annum average yields to maturity (or the one weekly per annum average
yield to maturity, if only one such yield is published during such Calendar
Period) for all of the actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) then having maturities of not
less than eight nor more than 12 years, as published during such Calendar Period
by the Federal Reserve Board or, if the Federal Reserve Board does not publish
such yields, by any Federal Reserve Bank or by any U.S. Government department or
agency selected by the Administrative Trustees. In the event that the
Administrative Trustees determine in good faith that for any reason the Auction
Agent cannot determine the Ten-Year Constant Maturity Rate with respect to such
date as provided above in this paragraph, then the Ten-Year Constant Maturity
Rate with respect to such date will be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
<PAGE>
Period for each of the issues of actively traded marketable U.S. Treasury fixed
interest rate securities (other than Special Securities) with a final maturity
date not less than eight nor more than 12 years from the date of each such
quotation, as quoted daily for each Business Day in New York City (or less
frequently if daily quotations are not generally available) to the Auction Agent
by U.S. Government Securities Dealers. The Ten-Year Constant Maturity Rate will
be rounded to the nearest one one-hundredth of a percentage point.
"Thirty-Year Average Yield" shall mean the average yield to
maturity for actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities of 30 years).
"Thirty-Year Constant Maturity Rate" shall mean, on any date,
the arithmetic average of the two most recent weekly per annum Thirty-Year
Average Yields (or the one weekly per annum Thirty-Year Average Yield, if only
one such yield shall be published during the relevant Calendar Period), as
published or reported weekly by the Federal Reserve Board during the Calendar
Period with respect to such date. In the event that the Federal Reserve Board
does not publish such a weekly per annum Thirty-Year Average Yield during such
Calendar Period, then the Thirty-Year Constant Maturity Rate with respect to
such date shall be the arithmetic average of the two most recent weekly per
annum Thirty-Year Average Yields (or the one weekly per annum Thirty-Year
Average Yield, if only one such yield shall be published weekly during such
Calendar Period), as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Administrative Trustees. In the event that a per annum Thirty-Year Average Yield
shall not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar Period,
then the Thirty-Year Constant Maturity Rate with respect to such date will be
the arithmetic average of the two most recent weekly per annum average yields to
maturity (or the one weekly per annum average yield to maturity, if only one
such yield shall be published during such Calendar Period) for all of the
actively traded marketable U.S. Treasury fixed interest rate securities (other
than Special Securities) then having maturities of not less than 28 nor more
than 30 years, as published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board shall not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency selected by
the Administrative Trustees. In the event that the Administrative Trustees
determine in good faith that for any reason the Auction Agent cannot determine
the Thirty-Year Constant Maturity Rate with respect to such date as provided
above in this paragraph, then the Thirty-Year Constant Maturity Rate with
respect to such date will be the arithmetic average of the per annum average
yields to maturity based upon the closing bids during such Calendar Period for
each of the issues of actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) with a final maturity date not
less than 28 nor more than 30 years from the date of each such quotation, as
quoted daily for each Business Day in New York City (or less frequently if daily
quotations shall not be generally available) to the Auction Agent by U.S.
Government Securities Dealers. The Thirty-Year Constant Maturity Rate will be
rounded to the nearest one one-hundredth of a percentage point.
<PAGE>
"Treasury Bill Rate," on any date, means the interest
equivalent of the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market discount rate, if only
one such rate is published during the Calendar Period with respect to such date)
for three-month U.S. Treasury bills, as published weekly by the Federal Reserve
Board during the Calendar Period with respect to such date. In the event that
the Federal Reserve Board does not publish such a weekly per annum market
discount rate during such Calendar Period, then the Treasury Bill Rate for each
date will be the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market discount rate, if only
one such rate is published during such Calendar Period) for three-month U.S.
Treasury bills, as published weekly during such Calendar Period by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Administrative Trustees. In the event that a per annum market discount rate for
three-month U.S. Treasury bills is not published by the Federal Reserve Board or
by any Federal Reserve Bank or by any U.S. Government department or agency
during such Calendar Period, then the Treasury Bill Rate with respect to such
date will be the arithmetic average of the two most recent weekly per annum
market discount rates (or the one weekly per annum market discount rate, if only
one such rate is published during such Calendar Period) for all of the U.S.
Treasury bills then having maturities of not less than 80 nor more than 100
days, as published during such Calendar Period by the Federal Reserve Board or,
if the Federal Reserve Board shall not publish such rates, by any Federal
Reserve Bank or by any U.S. Government department or agency selected by the
Administrative Trustees. In the event that the Administrative Trustees determine
in good faith that for any reason no such U.S. Treasury bill rates are published
as provided above during such Calendar Period, then the Treasury Bill Rate for
such date will be the arithmetic average of the per annum market discount rates
based upon the closing bids during such Calendar Period for each of the issues
of marketable non-interest bearing U.S. Treasury securities with a maturity of
not less than 80 nor more than 100 days from the date of each such quotation, as
quoted daily for each Business Day in New York City (or less frequently if daily
quotations are not generally available) to the Auction Agent by U.S. Government
Securities Dealers. In the event that the Administrative Trustees determine in
good faith that for any reason the Auction Agent cannot determine the Treasury
Bill Rate for any date as provided above in this paragraph, the Treasury Bill
Rate for such date will be the arithmetic average of the per annum market
discount rates based upon the closing bids during such Calendar Period for each
of the issues of marketable interest-bearing U.S. Treasury securities with a
maturity of not less than 80 nor more than 100 days from the date of each such
quotation, as quoted daily for each Business Day in New York City (or less
frequently if daily quotations shall not be generally available) to the Auction
Agent by U.S. Government Securities Dealers. For purposes of this definition,
"interest equivalent" means the equivalent yield on a 360-day basis of a
discount basis security to an interest bearing security. The Treasury Bill Rate
will be rounded to the nearest one one-hundredth of a percentage point.
"Treasury Index Rate," on any date, means the interest
equivalent of the rate for direct obligations of the United States having a
maturity that is equal to, or, if not equal to, next shorter than, the length of
the applicable Distribution Period, as published weekly by the Federal Reserve
Board in "Federal Reserve Statistical Release H.15(519)--Selected Interest
Rates" or any successor publication, within five Business Days preceding such
date. If such statistical release is not published or is otherwise not available
or does not contain such information, the Treasury Index Rate will be the
arithmetic mean of the secondary market bid rates as of approximately 3:30 p.m.,
New York City time, on the Business Day immediately preceding such date, of U.S.
Government Securities Dealers furnished to the Auction Agent for the issue of
direct obligations of the United States, in an aggregate principal amount of at
least $1 million with a remaining maturity equal to, or next shorter than, the
length of such Distribution Period, as the case may be. If any U.S. Government
Securities Dealer does not quote a rate required to determine the Treasury Index
Rate, such rate shall be determined on the basis of the quotation or quotations
furnished by the remaining U.S. Government Securities Dealer or U.S. Government
Securities Dealers (if any) and any substitute U.S. Government Securities Dealer
or Dealers (each a "Substitute U.S. Government Securities Dealer") selected by
the Administrative Trustees to provide such rate or rates not being supplied by
any U.S. Government Securities Dealer or U.S. Government Securities Dealers, as
<PAGE>
the case may be, or, if the Administrative Trustees do not select any such
Substitute U.S. Government Securities Dealer or Substitute U.S. Government
Securities Dealers, by the remaining U.S. Government Securities Dealer or U.S.
Government Securities Dealers; provided that, in the event that the
Administrative Trustees are unable to cause such quotations to be furnished to
the Auction Agent by such sources, the Administrative Trustees may cause the
Treasury Index Rate to be furnished to the Auction Agent by such alternative
source or sources as the Administrative Trustees in good faith deem to be
reliable. For purposes of this definition, "interest equivalent" means the
equivalent yield on a 360-day basis of a discount basis security to an interest
bearing security.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto, including,
for all purposes of this Amended and Restated Trust Agreement and any
modification, amendment or supplement, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this Amended and Restated Trust
Agreement and any such modification, amendment or supplement, respectively.
"Trustees" means the Persons identified as "Trustees" in the
preamble to this Trust Agreement solely in their capacities as Trustees of the
Trust formed and continued hereunder and not in their individual capacities, or
their successor in interest in such capacity, or any successor trustee appointed
as herein provided.
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Junior Subordinated Notes, (ii)
any cash on deposit in, or owing to, the Payment Account, and (iii) all proceeds
and rights in respect of the foregoing and any other property and assets for the
time being held or deemed to be held by the Property Trustee pursuant to this
Trust Agreement.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities
Certificates.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Underwriting Agreement" means the Underwriting Agreement,
dated as of February 18, 1999, among the Trust, the Depositor and the
underwriters named therein.
"U.S.Government Securities Dealers" means at least three
recognized dealers in direct obligations of the United
States, selected by the Administrative Trustees.
"Winning Bid Rate" has the meaning specified in Section 10.
10(c).
Article II ..
Establishment of the Trust
Section 2.01 .....Name. The Trust continued hereby shall be known as "Alabama
Power Capital Trust III", in which name the Trustees may conduct the business of
the Trust, make and execute contracts and other instruments on behalf of the
Trust and sue and be sued. The Administrative Trustees may change the name of
the Trust from time to time following written notice to the Holders.
Section 2.02 .....Offices of the Trustees; Principal Place of Business. The
address of the Property Trustee is The Chase Manhattan Bank, 450 West 33rd
Street, New York, New York 10001, or at such other address as the Property
Trustee may designate by written notice to the Securityholders and the
Depositor. The principal place of business of the Delaware Trustee is 1201
Market Street, Wilmington, Delaware, 19801, or at such other address in Delaware
as the Delaware Trustee may designate by notice to the Depositor. The address of
the Administrative Trustees is c/o Alabama Power Company, 600 North 18th Street,
Birmingham, Alabama 35291, Attention: Treasurer. The principal place of business
of the Trust is c/o Alabama Power Company, 600 North 18th Street, Birmingham,
Alabama 35291. The Depositor may change the principal place of business of the
Trust at any time by giving notice thereof to the Trustees.
<PAGE>
Section 2.03 .....Initial Contribution of Trust Property; Organizational
Expenses. The Delaware Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of the Trustees,
promptly reimburse the Trustees for any such expenses paid by the Trustees. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.04 .....Issuance of the Preferred Securities. Contemporaneously with
the execution and delivery of this Trust Agreement, the Administrative Trustees,
on behalf of the Trust, shall execute and deliver to the underwriters named in
the Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of
1,000 Preferred Securities having an aggregate Liquidation Amount of
$50,000,000, against receipt of the aggregate purchase price of such Preferred
Securities of $50,000,000, which amount the Administrative Trustees shall
promptly deliver to the Property Trustee.
Section 2.05 .....Subscription and Purchase of Junior Subordinated Notes;
Issuance of the Common Securities. Contemporaneously with the execution and
delivery of this Trust Agreement, the Administrative Trustees, on behalf of the
Trust, shall execute and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
31 Common Securities having an aggregate Liquidation Amount of $1,550,000
against payment by the Depositor of such amount. Contemporaneously therewith,
the Administrative Trustees, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Junior Subordinated Notes, registered in the name of
the Property Trustee, on behalf of the Trust and the Holders, and having an
aggregate principal amount equal to $51,550,000, and, in satisfaction of the
purchase price for such Junior Subordinated Notes, the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the sum of $51,550,000.
Section 2.06 .....Declaration of Trust. The exclusive purposes and functions of
the Trust are (i) to issue and sell the Trust Securities and use the proceeds
from such sale to acquire the Junior Subordinated Notes, and (ii) to engage in
those activities necessary, incidental, appropriate or convenient thereto. The
Depositor hereby appoints each of the Bank, the Delaware Bank, William E. Zales,
Jr. and J. Randy DeRieux as trustees of the Trust, to have all the rights,
powers and duties to the extent set forth herein. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees for the sole and
limited purpose of fulfilling the requirements of the Delaware Business Trust
Act.
<PAGE>
Section 2.07 .....Authorization to Enter into Certain Transactions. The Trustees
shall conduct the affairs of the Trust in accordance with the terms of this
Trust Agreement. Subject to the limitations set forth in paragraph (c) of this
Section, and in accordance with the following paragraphs (a) and (b), the
Trustees shall have the authority to enter into all transactions and agreements
determined by the Trustees to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(a) As among the Trustees, the Administrative Trustees, acting singly or
jointly, shall have the exclusive power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(i) to acquire the Junior Subordinated Notes with the proceeds of the sale
of the Trust Securities; provided, however, the Administrative Trustees
shall cause legal title to all of the Junior Subordinated Notes to be
vested in, and the Junior Subordinated Notes to be held of record in
the name of, the Property Trustee for the benefit of the Trust and
Holders of the Trust Securities;
(ii) to give the Depositor and the Property Trustee prompt written notice of
the occurrence of any Special Event (as defined in the Supplemental
Indenture) and to take any ministerial actions in connection therewith;
provided, that the Administrative Trustees shall consult with the
Depositor and the Property Trustee before taking or refraining to take
any ministerial action in relation to a Special Event;
(iii) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of ss. 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions, and exchanges, and to issue
relevant notices to Holders of the Trust Securities as to such actions
and applicable record dates;
(iv) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 2.07(B)(v), the
Property Trustee has the power to bring such Legal Action;
(v) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(vi) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(vii) to give the certificate to the Property Trustee required by ss.
314(a)(4) of the Trust Indenture Act, which certificate may be executed
by any Administrative Trustee;
<PAGE>
(viii) to take all actions and perform such duties as may be required of the
Administrative Trustees pursuant to the terms of this Trust Agreement
and the Auction Agent Agreement;
(ix) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under
the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of
the Holders of the Trust Securities or to enable the Trust to effect
the purposes for which the Trust has been created;
(x) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Administrative Trustees,
on behalf of the Trust;
(xi) to issue and sell the Trust Securities;
(xii) to cause the Trust to enter into, and to execute, deliver and perform
on behalf of the Trust, the Auction Agent Agreement, the Expense
Agreement and the Certificate Depository Agreement and such other
agreements as may be necessary or desirable in connection with the
consummation hereof;
(xiii) to assist in the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or blue
sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(xiv) to assist in the listing of the Preferred Securities upon such
securities exchange or exchanges, if necessary and, as shall be
determined by the Depositor and the registration of the Preferred
Securities under the Exchange Act, and the preparation and filing of
all periodic and other reports and other documents pursuant to the
foregoing;
(xv) to send notices (other than notices of default) and other information
regarding the Trust Securities and the Junior Subordinated Notes in
accordance with this Trust Agreement and the Auction Agent Agreement;
(xvi) to appoint a Paying Agent (subject to Section 5.09), authenticating
agent, Auction Agent and Securities Registrar in accordance with this
Trust Agreement;
(xvii) to register transfers of the Trust Securities in accordance with
this Trust Agreement;
(xviii) to assist in, to the extent provided in this Trust Agreement, the
winding up of the affairs of and termination of the Trust and the
preparation, execution and filing of the certificate of cancellation
with the Secretary of State of the State of Delaware; and
<PAGE>
(xix) to take any action incidental to the foregoing as the Administrative
Trustees may from time to time determine is necessary, appropriate,
convenient or advisable to protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the effect
of any such action on any particular Securityholder).
(b) As among the Trustees, the Property Trustee shall have the exclusive power,
duty and authority to act on behalf of the Trust with respect to the following
matters:
(i) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Trust Securities
to the extent the Junior Subordinated Notes are redeemed or mature;
(ii) upon notice of distribution issued by the Administrative Trustees in
accordance with the terms of this Trust Agreement, engage in such
ministerial activities as shall be necessary or appropriate to effect
promptly the distribution pursuant to terms of this Trust Agreement of
Junior Subordinated Notes to Holders of Trust Securities;
(iii) subject to the terms hereof, exercise all of the rights, powers and
privileges of a holder of the Junior Subordinated Notes under the
Subordinated Indenture and, if an Event of Default occurs and is
continuing, shall enforce for the benefit of, and subject to the rights
of, the Holders of the Trust Securities, its rights as holder of the
Junior Subordinated Notes under the Subordinated Indenture;
(iv) take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust
Agreement;
(v) take any Legal Action specifically required of the Property Trustee
pursuant to the terms of this Trust Agreement which arises out of or in
connection with an Event of Default or the Property Trustee's duties
and obligations under this Trust Agreement, the Delaware Business Trust
Act or the Trust Indenture Act;
(vi) the establishment and maintenance of the Payment Account;
(vii) the receipt of and holding of legal title to the Junior Subordinated
Notes as described herein;
(viii) the collection of interest, principal and any other payments made in
respect of the Junior Subordinated Notes in the Payment Account;
<PAGE>
(ix) the distribution of amounts owed to the Securityholders in respect
of the Trust Securities;
(x) the sending of notices of default and other information regarding the
Trust Securities and the Junior Subordinated Notes to the
Securityholders in accordance with this Trust Agreement;
(xi) the distribution of the Trust Property in accordance with the terms
of this Trust Agreement;
(xii) as provided in this Trust Agreement, the winding up of the affairs of
and termination of the Trust and the preparation, execution and filing
of the certificate of cancellation with the Secretary of State of
Delaware; and
(xiii) the taking of any action incidental to the foregoing as the Property
Trustee may from time to time determine is necessary, appropriate,
convenient or advisable to protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the effect
of any such action on any particular Securityholder).
(c) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the
Trust Property or interests therein, including to Securityholders, except as
expressly provided herein, (iii) take any action that would cause the Trust to
fail or cease to qualify as a grantor trust for United States federal income tax
purposes, (iv) incur any indebtedness for borrowed money, (v) take or consent to
any action that would result in the placement of a Lien on any of the Trust
Property, (vi) issue any securities other than the Trust Securities, or (vii)
have any power to, or agree to any action by the Depositor that would, vary the
investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of
the Trust or of the Securityholders. The Trustees shall defend all claims and
demands of all Persons at any time claiming any Lien on any of the Trust
Property adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.
(d) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the Commission a registration
statement on Form S-3 under the Securities Act of 1933, as amended, in
relation to the Preferred Securities, including any amendments thereto;
<PAGE>
(ii) to determine the states in which to take appropriate action to qualify
or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by or on
behalf of the Trust, and advise the Trustees of actions they must take
on behalf of the Trust, and prepare for execution and filing any
documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such States;
(iii) to prepare for filing by the Trust an application to the New York Stock
Exchange or any other national stock exchange or the NASDAQ National
Market for listing upon notice of issuance of any Preferred Securities;
(iv) to prepare for filing by the Trust with the Commission a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any
amendments thereto;
(v) to negotiate the terms of the Underwriting Agreement providing for the sale
of the Preferred Securities and to execute, deliver and perform the
Underwriting Agreement on behalf of the Trust;
(vi) to negotiate the terms of the Auction Agent Agreement providing for the
retention of the Auction Agent and the establishment of certain
procedures relating to Auctions; and
(vii) any other actions necessary, incidental, appropriate or convenient to
carry out any of the foregoing activities.
(e) Notwithstanding anything herein to the contrary, the Administrative Trustees
are authorized and directed to conduct the affairs of the Trust and to operate
the Trust so that the Trust will not be deemed to be an "investment company"
required to be registered under the Investment Company Act of 1940, as amended,
or taxed as other than a grantor trust for United States federal income tax
purposes and so that the Junior Subordinated Notes will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of the Depositor and the Administrative
Trustees determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not materially and adversely affect the
interests of the Holders of the Preferred Securities.
Section 2.08 .....Assets of Trust. The assets of the Trust shall consist of
the Trust Property.
Section 2.09 .....Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Securityholders and the Trust in accordance with this Trust Agreement. The
<PAGE>
right, title and interest of the Property Trustee to the Junior Subordinated
Notes shall vest automatically in each Person who may thereafter be appointed as
Property Trustee in accordance with the terms hereof. Such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered.
Section 2.10 .....Mergers and Consolidations of the Trust. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to any
corporation or other body, except as described below or otherwise provided in
this Trust Agreement. The Trust may at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the Holders of
the Trust Securities, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any state; provided,
that (i) such successor entity either (x) expressly assumes all of the
obligations of the Trust with respect to the Trust Securities or (y) substitutes
for the Preferred Securities other securities having substantially the same
terms as the Trust Securities (herein referred to as the "Successor Securities")
so long as the Successor Securities rank the same as the Trust Securities rank
in priority with respect to Distributions and payments upon liquidation,
redemption and otherwise, (ii) the Company expressly appoints a trustee of such
successor entity possessing the same powers and duties as the Property Trustee
as the holder of legal title to the Junior Subordinated Notes, (iii) the
Preferred Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed, (iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the Holders of the Trust
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose substantially identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation, or replacement,
the Company has received an Opinion of Counsel to the effect that (A) such
merger, consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the Holders of the Trust Securities
(including any Successor Securities) in any material respect, and (B) following
such merger, consolidation, amalgamation or replacement, neither the Trust nor
such successor entity will be required to register as an investment company
under the Investment Company Act of 1940, and (viii) the Company guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust
shall not, except with the consent of Holders of 100% in Liquidation Amount of
the Trust Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or the successor
entity to be classified as other than a grantor trust for federal income tax
purposes.
<PAGE>
Article III .
Payment Account
Section 3.01 .....Payment Account.
(a) On or prior to the Issue Date, the Property Trustee shall establish the
Payment Account. The Property Trustee and an agent of the Property Trustee shall
have exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of the
Securityholders and for distribution as herein provided, including (and subject
to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly upon
receipt, all payments of principal or interest on, and any other payments or
proceeds with respect to, the Junior Subordinated Notes. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
Article IV ..
Distributions; Redemption
Section 4.01 .....Distributions.
(a) The Distribution Payment Date in respect of a Short-Term Distribution Period
will be on the last day of such Short-Term Distribution Period and, in the case
of a Short-Term Distribution Period in excess of 90 days, on such additional
Distribution Payment Dates, if any, as the Administrative Trustees may specify
in connection with the establishment of such Short-Term Distribution Period.
Distributions in respect of a Distribution Period shall be payable on the
Distribution Payment Date to the holders of record as of the Record Date.
(i) If either (a) any additional Distribution Payment Date for a Short-Term
Distribution Period in excess of 90 days is not a Business Day or (b) the
day immediately succeeding any such additional Distribution Payment Date is
not a Business Day, then Distributions will be payable on the first
Business Day prior to the Distribution Payment Date that is immediately
succeeded by a Business Day, except that if the Clearing Agency changes its
current practice of paying Distributions in next-day funds to paying
Distributions in same-day funds and the Distribution Payment Date is not a
Business Day, then Distributions will be payable, without interest, on the
first Business Day following such Distribution Payment Date, in each case
with the same force and effect as if payment was made on the date such
payment was originally payable.
(ii) If either (a) the Distribution Payment Date for a Short-Term Distribution
Period which is not an additional Distribution Payment Date described in
Section 4.01(a)(i) or the final Distribution Payment Date for a Short-Term
Distribution Period in excess of 90 days is not a Business Day or (b) the
day immediately succeeding the Distribution Payment Date for such
Distribution Period is not a Business Day, then such Short-Term
Distribution Period will end on the first Business Day prior to the
Distribution Payment Date that is immediately succeeded by a Business Day,
except that if the Clearing Agency changes its current practice of paying
Distributions in next-day funds to paying Distributions in same-day funds
and the Distribution Payment Date is not a Business Day, then the
Short-Term Distribution Period will end on the first Business Day following
such Distribution Payment Date.
<PAGE>
(b) Distribution Payment Dates in respect of a Long-Term Distribution Period
generally will be on the first day of a month selected by the Administrative
Trustees that is not more than four calendar months after the commencement of
such Long-Term Distribution Period and quarterly thereafter on the first day of
each succeeding third month and on the last day of such Long-Term Distribution
Period. Distributions in respect of a Distribution Period shall be payable on
the Distribution Payment Date to the holders of record on the Record Date. If
any such Distribution Payment Date is not a Business Day, Distributions on the
Preferred Securities will be payable, without interest, on the immediately
succeeding Business Day, with the same force and effect as if payment was made
on the date such payment was originally payable. If the final Distribution
Payment Date for a Long-Term Distribution Period would otherwise be a day that
is not a Business Day, the immediately succeeding Business Day will be the final
Distribution Payment Date for such Long-Term Distribution Period, with the same
force and effect as if payment was made on the date such payment was originally
payable, with no interest accruing for the intervening period.
(c) The amount of Distributions per Preferred Security payable in respect of a
Short-Term Distribution Period (or a portion thereof) will be computed by
multiplying the per annum Distribution Rate in effect for such Short-Term
Distribution Period by a fraction, the numerator of which will be the actual
number of days in such Short-Term Distribution Period (or portion thereof)
(determined by including the first day thereof and excluding the last thereof)
and the denominator of which will be 360, and multiplying the rate so obtained
by $50,000. The amount of Distributions per Preferred Security payable in
respect of a Long-Term Distribution Period will be computed on the basis of a
360-day year consisting of twelve 30-day months and, in the case of a Long-Term
Distribution Period beginning or ending on a date other than the first day of a
month, portions of any 30-day month based upon the actual number of days
elapsed.
(d) The Company has the right under the Subordinated Indenture to defer payments
of interest on the Junior Subordinated Notes by extending the interest payment
period from time to time on the Junior Subordinated Notes (an "Extension
Period") which, if exercised, would defer Distributions on the Preferred
Securities during any Extension Period. During an Extension Period, (i)
Distributions will continue to accrue on the Preferred Securities, (ii) Auctions
will be discontinued, (iii) regardless of any notice by the Administrative
Trustees to the contrary, each subsequent Distribution Period during such
Extension Period will be a 28-day Short-Term Distribution Period and (iv) the
Distribution Rate for each such Distribution Period will be the Maximum
Applicable Rate (which will be reset at the end of each 28-day Short-Term
Distribution Period during the Extension Period). The foregoing will continue
until the Extension Period terminates and the Company provides notice to the
Auction Agent that Auctions shall commence for the succeeding Distribution
Period in accordance with the Auction Procedures. The payment of such
Distributions, together with any interest thereon, will be distributed to the
Holders of the Trust Securities as received at the end of any Extension Period.
<PAGE>
(e) Distributions on the Trust Securities shall be made and shall be deemed
payable on each Distribution Payment Date only to the extent that the Trust has
legally and immediately available funds in the Payment Account for the payment
of such Distributions.
(f) Distributions, including Additional Amounts, if any, on the Trust Securities
on each Distribution Date shall be payable to the Holders thereof as they appear
on the Securities Register for the Trust Securities on the Record Date.
Each Trust Security upon registration of transfer of or in
exchange for or in lieu of any other Trust Security shall carry the rights of
Distributions accrued (including Additional Amounts, if any) and unpaid, and to
accrue (including Additional Amounts, if any), which were carried by such other
Trust Security.
Section 4.02 .....Distribution Rate.
(a) The Distribution Rate on the Preferred Securities for each Distribution
Period following the initial Distribution Period will be the Applicable Rate,
the Maximum Applicable Rate, the Non-Auction Rate or the Default Rate. Except in
the event of (i) the failure to hold an Auction for any reason (other than
because an Event of Default exists) on the Auction Date scheduled to occur at
the end of the preceding Distribution Period or (ii) the occurrence of an Event
of Default, the Distribution Rate for each subsequent Distribution Period will
be the Applicable Rate.
(b) The Non-Auction Rate will apply automatically to any Distribution Period if
there is a failure to hold an Auction for any reason on the Auction Date
scheduled to occur at the end of the preceding Distribution Period, except for
circumstances in which the Distribution Rate is the Default Rate or during an
Extension Period.
(c) If an Event of Default has occurred and is continuing, (i) Auctions will be
discontinued, (ii) regardless of any notice by the Administrative Trustees on
behalf of the Trust to the contrary, each subsequent Distribution Period
commencing after such Event of Default but before Auctions are resumed will be a
28-day Short-Term Distribution Period, and (iii) the Distribution Rate for each
such 28-day Short-Term Distribution Period will be equal to the Default Rate.
The foregoing will continue until the earlier of (i) the occurrence of a
Distribution Payment Date at least one Business Day prior to which the Event of
Default has been cured or waived in accordance with Section 6.01(d) in which
case Auctions will resume as described herein for the Distribution Period
commencing with such Distribution Payment Date or (ii) the Preferred Securities
are redeemed.
<PAGE>
(d) In the event that the Company elects an Extension Period under the terms of
the Subordinated Indenture and the provisions of Section 4.01(d) become
applicable, the Distribution Rate will be equal to the Maximum Applicable Rate
(which will be reset at the end of each 28-day Short-Term Distribution Period
during such Extension Period).
Section 4.03 .....Distribution Periods.
(a) Except as otherwise provided herein, upon not less than five Business Days,
nor more than 20 days, written notice to the Auction Agent and the Clearing
Agency prior to (i) the last day of any Distribution Period or (ii) the last day
of the final Distribution Period of any Extension Period or the last day of the
final Distribution Period for which the Default Rate will be in effect, the
Administrative Trustees, acting in their sole discretion, will select a
Long-Term Distribution Period or a Short-Term Distribution Period as the next
Distribution Period; provided that, if the Distribution Period existing prior to
such Extension Period or prior to the first Distribution Period during which the
Default Rate was applicable was a Final Distribution Period or a Long-Term
Distribution Period that would still be in effect but for such Extension Period
or Event of Default, the next Distribution Period shall be the remaining term of
such Final Distribution Period or Long-Term Distribution Period. The
Administrative Trustees will not be obligated to provide notice of the selection
of a subsequent Distribution Period, and failure to send notice by the fifth
Business Day prior to the end of the then current Distribution Period will be
deemed a selection of a 28-day Short-Term Distribution Period as the next
Distribution Period. The initial Distribution Period shall be a Short-Term
Distribution Period, the last day of which shall be March 25, 1999.
(b) The Administrative Trustees on behalf of the Trust may select a Long-Term
Distribution Period which extends to the maturity of the Junior Subordinated
Notes and eliminates the need for future Auctions (the "Final Distribution
Period"). If the Final Distribution Period is selected and Sufficient Clearing
Bids are received at the Auction immediately prior to the commencement of such
Distribution Period: (i) such Auction will be the final Auction; (ii) the
services of the Auction Agent and of the Broker-Dealers will end and (iii) there
will be no adjustment to the Distribution Rate following the commencement of
such Final Distribution Period, except upon an Event of Default or during an
Extension Period.
(c) Notwithstanding Sections 4.03(a) and 4.03(b) hereof, (i) if the Trust had
duly given notice of a Long-Term Distribution Period, the Trust may, (a) upon
written notice provided by the Administrative Trustees to the Auction Agent and
<PAGE>
the Clearing Agency not later than 10:00 a.m., New York City time, on the
Auction Date scheduled to occur at the end of the then-current Distribution
Period, elect to change such subsequent Long-Term Distribution Period (which may
be a Final Distribution Period) to a Short-Term Distribution Period or (b) upon
written notice provided by the Administrative Trustees to the Auction Agent and
the Clearing Agency not less than one Business Day prior to the Auction Date
scheduled to occur at the end of the then-current Distribution Period, elect to
change the length of such Long-Term Distribution Period; or (ii) if the
Administrative Trustees have selected a Short-Term Distribution Period
(including a deemed selection pursuant to Section 4.03(a)), the Administrative
Trustees may (a) upon written notice provided by the Administrative Trustees to
the Auction Agent and the Clearing Agency not less than one Business Day prior
to the Auction Date scheduled to occur at the end of the then-current
Distribution Period elect to change such subsequent Short-Term Distribution
Period to a Long-Term Distribution Period (which may be a Final Distribution
Period), or (b) upon written notice provided by the Administrative Trustees to
the Auction Agent and the Clearing Agency not later than 10:00 a.m., New York
City time, on the Auction Date scheduled to occur at the end of the then-current
Distribution Period, elect to change the length of such Short-Term Distribution
Period. Any notice regarding the next Distribution Period will specify: (i)
whether the next succeeding Distribution Period will be a Short-Term
Distribution Period or a Long-Term Dividend Period and the length thereof; (ii)
in the case of a Long-Term Distribution Period, the initial Distribution Payment
Date; and (iii) in the case of a Short-Term Distribution Period of more than 90
days, the additional Distribution Payment Dates, if any, selected by the
Administrative Trustees.
(d) Notwithstanding Sections 4.03(a), 4.03(b) and 4.03(c):
(i) the Administrative Trustees may select a Long-Term Distribution Period
only if on the date of notice of that selection Distribution payments
on the Preferred Securities are current; and
(ii) a 28-day Short-Term Distribution Period will automatically follow the
expiration of the preceding Distribution Period if:
(a) the Administrative Trustees do not select a Long-Term Distribution Period
or a Short-Term Distribution Period; or
(b) Sufficient Clearing Bids are not made for any reason (other than because
all of the Preferred Securities are the subject of Submitted Hold Orders)
in the Auction occurring at the end of such preceding Distribution Period;
or
(c) an Auction is not held, for any reason, on the Auction Date scheduled to
occur at the end of such preceding Distribution Period.
Section 4.04 .....Redemption.
(a) On each Redemption Date with respect to the Junior Subordinated Notes, the
Trust will be required to redeem a Like Amount of Trust Securities at the
Redemption Price.
<PAGE>
(b) Notice of redemption shall be given by the Property Trustee by first class
mail. postage prepaid, mailed not less than 30 nor more than 60 days Prior to
the Redemption Date to each holder of Trust Securities to be redeemed, at such
holder's address appearing in the Securities Registrar and to the Auction Agent
in accordance with the Auction Agent Agreement. All notices of redemption shall
state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be redeemed, the
total Liquidation Amount of the Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due and
payable upon each such Trust Security to be redeemed and that Distributions
thereon will cease to accrue on and after such date.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the proceeds from the contemporaneous redemption of
Junior Subordinated Notes. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be deemed payable on each Redemption Date only to the
extent that the Trust has funds legally and immediately available in the Payment
Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 2:00 p.m. New York time, on the Redemption Date,
subject to Section 4.04(c), the Property Trustee will, so long as the Preferred
Securities are in book-entry only form, irrevocably deposit with the Clearing
Agency for the Preferred Securities funds sufficient to pay the applicable
Redemption Price. If the Preferred Securities are no longer in book-entry only
form, the Property Trustee, subject to Section 4.04(c), shall irrevocably
deposit with the Paying Agent funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable instructions to pay the
Redemption Price to the Holders thereof upon surrender of their Preferred
Securities Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any Trust Securities called for redemption
shall be payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant Record Dates for
the related Distribution Payment Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of Securityholders holding Trust Securities so called for redemption will
<PAGE>
cease, except the right of such Securityholders to receive the Redemption Price,
but without interest, and such Securities will cease to be outstanding. In the
event that any date on which any Redemption Price is payable is not a Business
Day, then payment of the Redemption Price payable on such date shall be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, payment of such Redemption Price shall be
made on the immediately preceding Business Day, in each case, with the same
force and effect as if made on such date. In the event that payment of the
Redemption Price in respect of Trust Securities is improperly withheld or
refused and not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to accrue at the
then applicable rate, from such Redemption Date originally established by the
Trust for such Preferred Securities to the date such Redemption Price is
actually paid.
(e) Payment of the Redemption Price on the Trust Securities shall be made to the
recordholders thereof as they appear on the Securities Register for the Trust
Securities on the relevant Record Date. In the event that the Redemption Date is
not a Distribution Payment Date, the record date shall be the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be redeemed on a
Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be
redeemed shall be allocated 3% to the Common Securities and 97% to the Preferred
Securities, with such adjustments that each amount so allocated shall be
divisible by $50,000. The particular Preferred Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for a redemption of portions
(equal to $50,000 or integral multiple thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $50,000; provided, however,
that before undertaking redemption of the Preferred Securities on other than a
pro rata basis, the Property Trustee shall have received an Opinion of Counsel
that the status of the Trust as a grantor trust for federal income tax purposes
would not be adversely affected. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred Securities which has been or is to be
redeemed.
(g) Subject to the foregoing provisions of Section 4.04 and to applicable law
(including, without limitation, United States federal securities laws), the
Company or its Affiliates may, at any time and from time to time, purchase
outstanding Preferred Securities by tender, in the open market or by private
agreement.
(h) The Preferred Securities for which a notice of redemption has been given by
the Administrative Trustees will not be eligible to participate in any Auction
for a Distribution Period commencing on or after the date specified for
redemption, and such Preferred Securities will not be included for purposes of
such Auction, whether or not such redemption actually occurs.
<PAGE>
Section 4.05 .....Subordination of Common Securities and Distributions.
(a) Payment of Distributions (including Additional Amounts, if applicable) on,
and the Redemption Price of, the Trust Securities, as applicable, shall be made
pro rata based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Payment Date or Redemption Date an
Indenture Event of Default shall have occurred and be continuing, no payment of
any Distribution (including Additional Amounts, if applicable) on, or Redemption
Price of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions
(including Additional Amounts, if applicable) on all Outstanding Preferred
Securities for all Distribution Periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Preferred Securities, shall have been made or provided
for, and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Indenture Event of Default, the Holder
of Common Securities will be deemed to have waived any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under this Trust Agreement with
respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
(c) Distributions on the Common Securities shall be payable at the same
Distribution Rates, on the same Distribution Payment Dates and for the same
Distribution Periods and to holders as of the same Record Date as for the
Preferred Securities.
Section 4.06 .....Payment Procedures. Payments in respect of the Preferred
Securities shall be made by check mailed to the address of the Person entitled
thereto as such address shall appear on the Securities Register or, if the
Preferred Securities are held by a Clearing Agency, such Distributions shall be
made to the Clearing Agency, which shall credit the relevant Persons' accounts
at such Clearing Agency on the applicable Distribution Payment Dates. Payments
in respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holder of the Common
Securities.
Section 4.07 .....Tax Returns and Reports. The Administrative Trustee(s) shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust. The Administrative
Trustee(s) shall provide or cause to be provided on a timely basis to each
Holder any Internal Revenue Service form required to be so provided in respect
of the Trust Securities.
<PAGE>
Article V ...
Trust Securities Certificates
Section 5.01 .....Initial Ownership. Upon the creation of the Trust by the
contribution by the Depositor pursuant to Section 2.03 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
Section 5.02 .....The Trust Securities Certificates. Each of the Preferred and
Common Securities Certificates shall be issued in minimum denominations of
$50,000 and integral multiples in excess thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of at least one Administrative Trustee. Trust Securities Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Trust Securities Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Securities Certificates. A transferee
of a Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Section 5.04.
Section 5.03 .....Authentication of Trust Securities Certificates. On the Issue
Date, the Administrative Trustees shall cause Trust Securities Certificates, in
an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor signed by its Chairman of the Board, its
President or any Vice President, without further corporate action by the
Depositor, in authorized denominations. No Trust Securities Certificate shall
entitle its holder to any benefit under this Trust Agreement, or shall be valid
for any purpose, unless there shall appear on such Trust Securities Certificate
a certificate of authentication substantially in the form set forth in Exhibit E
or Exhibit C, as applicable, executed by at least one Administrative Trustee by
manual signature; such authentication shall constitute conclusive evidence that
such Trust Securities Certificate shall have been duly authenticated and
delivered hereunder. All Trust Securities Certificates shall be dated the date
of their authentication.
Section 5.04 .....Registration of Transfer and Exchange of Preferred Securities
Certificates. The Securities Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 5.08, a Securities Register in
which, subject to such reasonable regulations as it may prescribe, the
Securities Registrar shall provide for the registration of Preferred Securities
Certificates and the Common Securities Certificates (subject to Section 5.10 in
the case of the Common Securities Certificates) and registration of transfers
and exchanges of Preferred Securities Certificates as herein provided. The
Property Trustee shall be the initial Securities Registrar.
<PAGE>
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustees shall execute, authenticate and deliver in the
name of the designated transferee or transferees one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of authentication by the Administrative
Trustee or Trustees. The Securities Registrar shall not be required to register
the transfer of any Preferred Securities that have been called for redemption.
At the option of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates in authorized denominations of the
same class and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.08.
Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustees and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Securities Registrar in accordance with its customary practice.
No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the Securities
Registrar or the Administrative Trustees may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Preferred Securities Certificates.
Section 5.05 .....Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees or any one of them on behalf of the Trust
shall execute and authenticate and make available for delivery, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Securities
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
<PAGE>
Section 5.06 .....Persons Deemed Securityholders. Prior to due presentation of a
Trust Securities Certificate for registration of transfer, the Trustees or the
Securities Registrar shall treat the Person in whose name any Trust Securities
Certificate shall be registered in the Securities Register as the owner of such
Trust Securities Certificate for the purpose of receiving Distributions (subject
to Section 4.01(d)) and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
Section 5.07 .....Access to List of Securityholders' Names and Addresses. The
Administrative Trustees shall furnish or cause to be furnished to (i) the
Depositor and the Property Trustee semi-annually, not later than June 1 and
December 1 in each year, and (ii) the Depositor or the Property Trustee, as the
case may be, within 15 days after receipt by any Administrative Trustee of a
request therefor from the Depositor or the Property Trustee, as the case may be,
in writing, a list, in such form as the Depositor or the Property Trustee, as
the case may be, may reasonably require, of the names and addresses of the
Securityholders as of a date not more than 15 days prior to the time such list
is furnished. If three or more Securityholders or one or more Holders of Trust
Securities Certificates evidencing not less than 25% of the outstanding
Liquidation Amount apply in writing to the Administrative Trustees, and such
application states that the applicants desire to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities Certificates and such application is accompanied by a copy
of the communication that such applicants propose to transmit, then the
Administrative Trustees shall, within five Business Days after the receipt of
such application, afford such applicants access during normal business hours to
the current list of Securityholders. Each Holder, by receiving and holding a
Trust Securities Certificate, shall be deemed to have agreed not to hold either
the Depositor or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
Section 5.08 .....Maintenance of Office or Agency. The Administrative Trustees
shall maintain in the Borough of Manhattan, New York, an office or offices or
agency or agencies where Preferred Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be served.
The Administrative Trustees initially designate The Chase Manhattan Bank, 450
West 33rd Street, New York, New York 10001, as its principal agency for such
purposes. The Administrative Trustees shall give prompt written notice to the
Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 5.09 .....Appointment of Paying Agent. The Paying Agent shall make
Distributions and other payments provided hereby to Securityholders from the
Payment Account and shall report the amounts of such Distributions and payments
to the Property Trustee and the Administrative Trustees. Any Paying Agent shall
have the revocable power to withdraw funds from the Payment Account for the
<PAGE>
purpose of making the Distributions and payments provided hereby. The
Administrative Trustees may revoke such power and remove the Paying Agent if
such Trustees determine in their sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. The Paying Agent shall initially be the Property Trustee, and it may
choose any co-paying agent that is acceptable to the Administrative Trustees and
the Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees and the
Depositor. In the event that a Paying Agent shall resign or be removed, the
Administrative Trustees shall appoint a successor that is acceptable to the
Depositor to act as Paying Agent (which shall be a bank or trust company). The
Administrative Trustees shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrative Trustees to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.01, 8.03 and 8.06 shall apply to the Property Trustee also in its
role as Paying Agent, for so long as the Property Trustee shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
Section 5.10 .....Ownership of Common Securities by Depositor. On the Issue
Date, the Depositor shall acquire, and thereafter retain, beneficial and record
ownership of the Common Securities. Any attempted transfer of the Common
Securities, except for transfers by operation of law, shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".
Section 5.11 .....Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
definitive Preferred Securities Certificate representing such beneficial owner's
interest in such Preferred Securities, except as provided in Section 5.13.
Unless and until Definitive Preferred Securities Certificates have been issued
to Owners pursuant to Section 5.13:
<PAGE>
(i) the provisions of this Section 5.11(a) shall be in full force and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to deal
with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including
the payment of principal of and interest on the Book-Entry Preferred
Securities and the giving of instructions or directions to Owners of
Book-Entry Preferred Securities) as the sole Holder of Book-Entry
Preferred Securities and shall have no obligations to the Owners
thereof;
(iii) to the extent that the provisions of this Section conflict with any
other provisions of this Trust Agreement, the provisions of this
Section shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless
and until Definitive Preferred Securities Certificates are issued
pursuant to Section 5.13, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments on the Preferred Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common Securities
shall be issued to the Depositor in the form of a definitive Common Securities
Certificate.
Section 5.12 .....Notices to Clearing Agency. To the extent a notice or other
communication to the Owners is required under this Trust Agreement, unless and
until Definitive Preferred Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to the Owners.
Section 5.13 .....Definitive Preferred Securities Certificates. If (i) the
Depositor advises the Trustees in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Preferred Securities Certificates, and the Depositor is unable to locate a
qualified successor, or (ii) the Depositor at its option advises the Trustees in
writing that it elects to terminate the book-entry system through the Clearing
Agency, then the Administrative Trustees shall notify the Clearing Agency and
Holders of the Preferred Securities. Upon surrender to the Administrative
Trustees of the typewritten Preferred Securities Certificate or Certificates
representing the Book-Entry Preferred Securities Certificates by the Clearing
Agency, accompanied by registration instructions, the Administrative Trustees or
any one of them shall execute and authenticate the Definitive Preferred
Securities Certificates in accordance with the instructions of the Clearing
Agency. Neither the Securities Registrar nor the Trustees shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
<PAGE>
Definitive Preferred Securities Certificates, the Trustees shall recognize the
Holders of the Definitive Preferred Securities Certificates as Securityholders.
The Definitive Preferred Securities Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
Section 5.14 .....Rights of Securityholders. The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.09, and the Securityholders shall not have any
right or title therein other than the beneficial ownership interest in the
assets of the Trust conferred by their Trust Securities, and they shall have no
right to call for any partition or division of property, profits or rights of
the Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this Trust
Agreement. The Trust Securities shall have no preemptive or other similar rights
and when issued and delivered to Securityholders against payment of the purchase
price therefor, except as otherwise provided in the Expense Agreement and
Section 10.01 hereof, will be fully paid and nonassessable by the Trust. Except
as otherwise provided in the Expense Agreement and Section 10.01 hereof, the
Holders of the Trust Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
Article VI ..
Acts of Securityholders; Meetings; Voting
Section 6.01 .....Limitations on Voting Rights.
(a) Except as provided in this Section, in Section 8.10 or Section 11.03 of this
Trust Agreement, in the Subordinated Indenture, and as otherwise required by
law, no Holder of Preferred Securities shall have any right to vote or in any
manner otherwise control the administration, operation and management of the
Trust or the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.
(b) So long as any Junior Subordinated Notes are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or executing any
trust or power conferred on the Indenture Trustee with respect to such Junior
Subordinated Notes, (ii) waive any past default which is waivable under Section
513 of the Subordinated Indenture, (iii) exercise any right to rescind or annul
a declaration that the principal of all the Junior Subordinated Notes shall be
due and payable or (iv) consent to any amendment, modification or termination of
the Subordinated Indenture or the Junior Subordinated Notes, where such consent
shall be required, or to any other action, as holder of the Junior Subordinated
Notes, under the Subordinated Indenture, without, in each case, obtaining the
prior approval of the Holders of at least 66-2/3% in Liquidation Amount of the
Preferred Securities; provided, however, that where a consent under the
Subordinated Indenture would require the consent of each holder of Junior
Subordinated Notes affected thereby, no such consent shall be given by the
Trustees without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously authorized or
<PAGE>
approved by a vote of the Holders of Preferred Securities, except pursuant to a
subsequent vote of the Holders of Preferred Securities. The Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Indenture Trustee with respect to the Junior Subordinated
Notes. In addition to obtaining the foregoing approvals of the Holders of the
Preferred Securities, prior to taking any of the foregoing actions, the Trustees
shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced
in such matters to the effect that the Trust will not be classified as other
than a grantor trust for United States federal income tax purposes on account of
such action.
(c) If any proposed amendment to this Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Preferred Securities, whether
by way of amendment to this Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than pursuant to the
terms of this Trust Agreement, then the Holders of Outstanding Preferred
Securities as a class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least 66-2/3% in Liquidation Amount of the Outstanding
Preferred Securities. In addition to obtaining the foregoing approvals of the
Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes on account of such action.
(d) An Event of Default will be deemed to be cured or waived if, at any time,
(i) after an Event of Default exists and payment of interest and principal on
the Junior Subordinated Notes has been accelerated under the terms of the
Subordinated Note Indenture or (ii) prior to a judgment or decree for the
payment of the money due on the Preferred Securities has been obtained, the
following events occur: (A) the holders of at least 66 2/3% in liquidation
amount of the outstanding Preferred Securities give written notice to the
Property Trustee, the Administrative Trustees and the Company to rescind and
annul such declaration of acceleration of the Junior Subordinated Notes and its
consequences, (B) the Trust pays and deposits with the Clearing Agency a sum
sufficient to pay all Distributions (including any accrued interest) and the
liquidation amount due on the Preferred Securities otherwise than caused by the
acceleration of the Junior Subordinated Notes and (C) all other Events of
Default are no longer continuing or have been waived.
<PAGE>
(e) Subject to this Section, Section 11.03(c) and Section 8.19 of this Trust
Agreement, the Holders of at least 66% in Liquidation Amount of the Outstanding
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default hereunder and its consequences, except a
default in the payment of any Distribution or redemption payment or in respect
of a covenant or provision hereof which under Section 11.03(c) cannot be
modified or amended without the consent of the Holder of each Preferred
Security.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Trust Agreement; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Any waiver by the Holders of the Preferred Securities of an
Event of Default with respect to Preferred Securities shall also be deemed to
constitute a waiver by the Holders of Common Securities for all purposes of the
Trust Agreement without any further act, vote or consent of the Holders of
Common Securities.
Section 6.02 .....Notice of Meetings. Notice of all meetings of the Preferred
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Administrative Trustees pursuant to Section 11.08 to each Preferred
Securityholder of record, at his registered address, at least 15 days and not
more than 90 days before the meeting. At any such meeting, any business properly
before the meeting may be so considered whether or not stated in the notice of
the meeting. Any adjourned meeting may be held as adjourned without further
notice. Section 6.03 .....Meetings of Preferred Securityholders. No annual
meeting of Securityholders is required to be held. The Administrative Trustees,
however, shall call a meeting of Securityholders to vote on any matter upon the
written request of the Preferred Securityholders of record of 25% of the
Preferred Securities (based upon their Liquidation Amount) and the
Administrative Trustees or the Property Trustee may, at any time in their
discretion, call a meeting of Preferred Securityholders to vote on any matters
as to which Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by
the Preferred Securityholders of record present, in person or by proxy, holding
more than 66-2/3% of the Preferred Securities (based upon their Liquidation
Amount) held by the Preferred Securityholders of record present, either in
person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
<PAGE>
Section 6.04 .....Voting Rights. Securityholders shall be entitled to one vote
for each $50,000 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to vote.
Section 6.05 .....Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Administrative Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at which
such vote shall be taken. Pursuant to a resolution of the Property Trustee,
proxies may be solicited in the name of the Property Trustee or one or more
officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
Section 6.06 .....Securityholder Action by Written Consent. Any action which may
be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding at least 66-2/3% of all outstanding Trust Securities
entitled to vote in respect of such action (or such other proportion thereof as
shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their Liquidation Amount).
Section 6.07 .....Record Date for Voting and Other Purposes. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or to participate in any Distribution on the
Trust Securities in respect of which a record date is not otherwise provided for
in this Trust Agreement, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
Section 6.08 .....Acts of Securityholders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Trust Agreement to be given, made or taken by Securityholders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Securityholders in person or by an agent appointed in writing; and,
except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to the
Administrative Trustees. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to Section 8.01)
conclusive in favor of the Trustees, if made in the manner provided in this
Section.
<PAGE>
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustees deem sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust Security shall
bind every future Securityholder of the same Trust Security and the
Securityholder of every Trust Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustees or the Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
If any dispute shall arise between the Securityholders of
Trust Securities and the Administrative Trustees or among such Securityholders
or Trustees with respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, consent, waiver or other Act of such
Securityholder or Trustee under this Article VI, then the determination of such
matter by the Property Trustee shall be conclusive with respect to such matter.
Section 6.09 .....Inspection of Records. Upon reasonable notice to the Trustees,
the records of the Trust shall be open to inspection by Securityholders during
normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
Article VII .
Representations and Warranties of the Trustees
Section 7.01 .....Representations and Warranties of the Trustees. The Bank, the
Delaware Bank, the Property Trustee and the Delaware Trustee, each on behalf of
and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Securityholders that:
<PAGE>
(a) the Bank is a banking corporation or trust company duly organized, validly
existing and in good standing under the laws of the State of New York, and the
Delaware Trustee is a banking corporation or trust company duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) each of the Bank and the Delaware Bank has full corporate power, authority
and legal right to execute, deliver and perform their obligations under this
Trust Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered by
each of the Bank and the Delaware Bank and constitutes the valid and legally
binding agreement of each of the Bank and the Delaware Bank, enforceable against
it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(d) the execution, delivery and performance by each of the Bank and the Delaware
Bank of this Trust Agreement have been duly authorized by all necessary
corporate action on the part of the Bank, the Property Trustee, the Delaware
Bank and the Delaware Trustee and do not require any approval of stockholders of
the Bank or the Delaware Bank and such execution, delivery and performance will
not (i) violate the Bank's or the Delaware Bank's Charter or By-laws, or (ii)
violate any law, governmental rule or regulation of the United States or the
State of New York or Delaware, as the case may be, governing the banking or
trust powers of the Bank and the Property Trustee or the Delaware Bank and the
Delaware Trustee, or any order, judgment or decree applicable to the Bank, the
Property Trustee, the Delaware Bank or the Delaware Trustee; and
(e) neither the authorization, execution or delivery by the Bank or the Delaware
Bank of this Trust Agreement, nor the consummation of any of the transactions by
the Bank, the Property Trustee, the Delaware Bank or the Delaware Trustee (as
appropriate in context) contemplated herein or therein, nor the issuance of the
Trust Securities Certificates pursuant to this Trust Agreement require the
consent or approval of, the giving of notice to, the registration with or the
taking of any other action with respect to any governmental authority or agency
under any existing federal, New York or Delaware law governing the banking or
trust powers of the Bank or the Delaware Bank.
<PAGE>
Article VIII
The Trustees
Section 8.01 .....Certain Duties and Responsibilities.
(a) The rights, duties and responsibilities of the Trustees shall be as provided
by this Trust Agreement and, in the case of the Property Trustee, the Trust
Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
them. Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustees shall be subject to the provisions of this
Section.
(b) All payments made by the Property Trustee in respect of the Trust Securities
shall be made only from the income and proceeds from the Trust Property and only
to the extent that there shall be sufficient income or proceeds from the Trust
Property to enable the Property Trustee to make payments in accordance with the
terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees
that it will look solely to the income and proceeds from the Trust Property to
the extent available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in respect
of any Trust Security or for any other liability in respect of any Trust
Security. This Section 8.01(b) does not limit the liability of the Trustees
expressly set forth elsewhere in this Trust Agreement or, in the case of the
Property Trustee, in the Trust Indenture Act.
Section 8.02 .....Notice of Defaults. Within 90 days after the occurrence of any
default, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.08, notice of any default known to the Property Trustee
to the Securityholders, the Administrative Trustees and the Depositor, unless
such default shall have been cured or waived. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
Section 8.03 .....Certain Rights of Property Trustee. Subject to the
provisions of Section 8.01 and except as provided by law:
(a) the Property Trustee may rely and shall be protected in acting or refraining
from acting in good faith upon any resolution, Opinion of Counsel, certificate,
written representation of a Holder or transferee, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
<PAGE>
(b) if (i) in performing its duties under this Trust Agreement the Property
Trustee is required to decide between alternative courses of action, or (ii) in
construing any of the provisions in this Trust Agreement the Property Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein, or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken. The Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) the Property Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(d) the Property Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(e) the Property Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
document, unless requested in writing to do so by one or more Securityholders;
and
(f) the Property Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its agents or
attorneys; provided that the Property Trustee shall be responsible for its own
negligence or recklessness with respect to selection of any agent or attorney
appointed by it hereunder.
Section 8.04 .....Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Trust of the proceeds of the Trust Securities in
accordance with Section 2.05.
<PAGE>
The Property Trustee may conclusively assume that any funds
held by it hereunder are legally available unless an officer of the Property
Trustee assigned to its Corporate Trustee Administrative Department shall have
received written notice from the Company, any Holder or any other Trustee that
such funds are not legally available.
Section 8.05 .....May Hold Securities. Except as provided in the definition of
the term "Outstanding" in Article I, any Trustee or any other agent of the
Trustees or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and may otherwise deal with the Trust with
the same rights it would have if it were not a Trustee or such other agent.
Section 8.06 .....Compensation; Fees; Indemnity.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation for all
services rendered by the Trustees hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustees
upon request for all reasonable expenses, disbursements and advances incurred or
made by the Trustees in accordance with any provision of this Trust Agreement
(including the reasonable compensation and the expenses and disbursements of
their agents and counsel), except any such expense, disbursement or advance as
may be attributable to their willful misconduct, negligence or bad faith; and
(c) to indemnify the Trustees for, and to hold the Trustees harmless against,
any and all loss, damage, claims, liability or expense incurred without willful
misconduct, negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of this Trust Agreement,
including the costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of their powers
or duties hereunder.
The provisions of this Section 8.06 shall survive the
termination of this Trust Agreement.
Section 8.07 .....Trustees Required; Eligibility.
(a) There shall at all times be a Property Trustee hereunder with respect to the
Trust Securities. The Property Trustee shall be a Person that has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
<PAGE>
(b) There shall at all times be one or more Administrative Trustees hereunder
with respect to the Trust Securities. Each Administrative Trustee shall be
either a natural person who is at least 21 years of age or a legal entity that
shall act through one or more persons authorized to bind such entity.
(c) There shall at all times be a Delaware Trustee with respect to the Trust
Securities. The Delaware Trustee shall either be (i) a natural person who is at
least 21 years of age and a resident of the State of Delaware or (ii) a legal
entity authorized to conduct a trust business and with its principal place of
business in the State of Delaware that shall act through one or more persons
authorized to bind such entity.
Section 8.08 .....Conflicting Interests. If the Property Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Trust Agreement. To the extent permitted by the
Trust Indenture Act, the Property Trustee shall not be deemed to have a
conflicting interest by virtue of being trustee under (i) the Guarantee, (ii)
the amended and restated trust agreement dated as of January 1, 1996, among the
Company, as Depositor, Chase Manhattan Bank Delaware (formerly known as Chemical
Bank Delaware), as Delaware Trustee, the Administrative Trustees named therein
and The Chase Manhattan Bank (formerly known as Chemical Bank), as Property
Trustee, relating to Alabama Power Capital Trust I, (iii) the amended and
restated trust agreement dated as of January 1, 1997, among the Company, as
Depositor, Chase Manhattan Bank Delaware (formerly known as Chemical Bank
Delaware), as Delaware Trustee, the Administrative Trustees named therein and
The Chase Manhattan Bank (formerly known as Chemical Bank), as Property Trustee,
relating to Alabama Power Capital Trust II, (iv) the guarantee agreement dated
as of January 1, 1996, between the Company, as Guarantor, and The Chase
Manhattan Bank (formerly known as Chemical Bank), as trustee, relating to
Alabama Power Capital Trust I, and (v) the guarantee agreement dated as of
January 1, 1997, between the Company, as Guarantor, and The Chase Manhattan Bank
(formerly known as Chemical Bank), as trustee, relating to Alabama Power Capital
Trust II.
Section 8.09 .....Co-Trustees and Separate Trustee. At any time or times, for
the purpose of meeting the legal requirements of the Trust Indenture Act or of
any jurisdiction in which any part of the Trust Property may at the time be
located, the Holder of the Common Securities and the Property Trustee shall have
power to appoint, and upon the written request of the Property Trustee, the
Depositor shall for such purpose join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to act as separate trustee of any such Trust
Property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Depositor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Indenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment. Any co-trustee or
separate trustee appointed pursuant to this Section shall satisfy the
requirements of Section 8.07.
<PAGE>
Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(i) The Trust Securities shall be executed, authenticated and delivered and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees hereunder, shall
be exercised, solely by the Trustees.
(ii) The rights, powers, duties, and obligations hereby conferred or imposed
upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to
the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such act, in which event such
rights, powers, duties, and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(iii)The Property Trustee, at any time, by an instrument in writing executed by
it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under
this Section, and, in case an Indenture Event of Default has occurred and
is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery, and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(iv) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Property Trustee, or any other
such trustee hereunder.
<PAGE>
(v) The Trustees shall not be liable by reason of any act of a co-trustee or
separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
Section 8.10 .....Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Relevant Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time by giving written
notice thereof to the Securityholders. If the instrument of acceptance by a
successor Relevant Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 30 days after the giving of such notice
of resignation, the resigning Relevant Trustee may petition any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
Unless an Indenture Event of Default shall have occurred and
be continuing, the Relevant Trustee may be removed at any time by Act of the
Holder of the Common Securities. If an Indenture Event of Default shall have
occurred and be continuing, the Relevant Trustee may be removed at such time by
Act of the Securityholders of a majority in Liquidation Amount of the Preferred
Securities Certificates, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Trust).
If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as Trustee at a time when no Indenture Event of
Default shall have occurred and be continuing, the Holder of the Common
Securities, by Act of the Holder of the Common Securities delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees, and the retiring Relevant Trustee shall comply with the applicable
requirements of Section 8.11. If the Relevant Trustee shall resign, be removed
or become incapable of continuing to act as the Relevant Trustee at a time when
an Indenture Event of Default shall have occurred and be continuing, the Holders
of Preferred Securities, by Act of the Securityholders of a majority in
Liquidation Amount of the Preferred Securities then outstanding delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees, and the Relevant Trustee shall comply with the applicable
requirements of Section 8.11. If no successor Relevant Trustee shall have been
so appointed in accordance with this Section 8.10 and accepted appointment in
the manner required by Section 8.11, any Securityholder who has been a
Securityholder of Trust Securities for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
The retiring Relevant Trustee shall give notice of each
resignation and each removal of the Relevant Trustee, and each appointment of a
<PAGE>
successor Trustee to all Securityholders in the manner provided in Section 10.08
and shall give notice to the Depositor. Each notice shall include the name of
the successor Relevant Trustee and the address of its Corporate Trust Office if
it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee
who is a natural person dies or becomes incompetent or incapacitated, the
vacancy created by such death, incompetence or incapacity may be filled by (i)
the act of the remaining Administrative Trustee or (ii) otherwise by the
Depositor (with the successor in each case being an individual who satisfies the
eligibility requirement for Administrative Trustees set forth in Section 8.07).
Additionally, notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event the Depositor believes that any Administrative Trustee
has become incompetent or incapacitated, the Depositor, by notice to the
remaining Trustees, may terminate the status of such Person as an Administrative
Trustee (in which case the vacancy so created will be filled in accordance with
the preceding sentence).
Section 8.11 .....Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Relevant Trustee, every such successor
Relevant Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Relevant Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Relevant
Trustee shall become effective and such successor Relevant Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Relevant Trustee; but, on the request
of the Depositor or the successor Relevant Trustee, such retiring Relevant
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Relevant Trustee all the rights, powers and
trusts of the retiring Relevant Trustee and shall duly assign, transfer and
deliver to such successor Relevant Trustee all property and money held by such
retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment
unless at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Article.
Section 8.12 .....Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee, Delaware Trustee or any
Administrative Trustee which is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder; provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
<PAGE>
Section 8.13 .....Preferential Collection of Claims Against Depositor or Trust.
If and when the Property Trustee shall be or become a creditor of the Depositor
or the Trust (or any other obligor upon the Junior Subordinated Notes or the
Trust Securities), the Property Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Depositor
or Trust (or any such other obligor). For purposes of Section 311(b)(4) and (6)
of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for goods or
securities sold is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon banks or bankers
and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred by the Depositor or the
Trust (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security; provided the security is received by the Property
Trustee simultaneously with the creation of the creditor relationship with the
Depositor or the Trust (or any such obligor) arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
Section 8.14 .....Reports by Property Trustee.
(a) Within 60 days after May 15 of each year commencing with May 15, 1999, if
required by Section 313(a) of the Trust Indenture Act, the Property Trustee
shall transmit a brief report dated as of such May 15 with respect to any of the
events specified in such Section 313(a) that may have occurred since the later
of the date of this Trust Agreement or the preceding May 15.
(b) The Property Trustee shall transmit to Securityholders the reports required
by Section 313(b) of the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in the manner and to
the Persons required by Sections 313(c) and (d) of the Trust Indenture Act.
Section 8.15 .....Reports to the Property Trustee. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and, within 120 days after the end of each
fiscal year of the Depositor, the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form and in the manner required by
Section 314 of the Trust Indenture Act.
<PAGE>
Section 8.16 .....Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given pursuant to Section 314(c)(1) of the
Trust Indenture Act shall comply with Section 314(e) of the Trust Indenture Act.
Section 8.17 .....Number of Trustees.
(a) The number of Trustees shall initially be four; provided that the Depositor
by written instrument may increase or decrease the number of Administrative
Trustees.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Administrative Trustees shall occur,
until such vacancy is filled by the appointment of an Administrative Trustee in
accordance with Section 8.10, the Administrative Trustees in office, regardless
of their number (and notwithstanding any other provision of this Trust
Agreement), shall have all powers granted to the Administrative Trustees and
shall discharge the duties imposed upon the Administrative Trustees by this
Trust Agreement.
Section 8.18 .....Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.07(A), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time to time
to such of their number the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrative
Trustees or otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
Section 8.19 .....Enforcement of Rights of Property Trustee by Securityholders.
If (i) the Trust fails to pay Distributions in full on the Preferred Securities
for more than 65 consecutive 28-day Short Term Distribution Periods, or (ii) an
Event of Default occurs and is continuing, then the Holders of Preferred
Securities will rely on the enforcement by the Property Trustee of its rights
against the Company as the holder of the Junior Subordinated Notes. In addition,
<PAGE>
the Holders of a majority in aggregate Liquidation Amount of the Preferred
Securities will have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee
under this Trust Agreement, including the right to direct the Property Trustee
to exercise the remedies available to it as a holder of the Junior Subordinated
Notes; provided that such direction shall not be in conflict with any rule of
law or with this Trust Agreement, and could not involve the Property Trustee in
personal liability in circumstances where reasonable indemnity would not be
adequate. If the Property Trustee fails to enforce its rights under the Junior
Subordinated Notes, a Holder of Preferred Securities may, to the fullest extent
permitted by applicable law, institute a legal proceeding against the Company to
enforce its rights under this Trust Agreement without first instituting any
legal proceeding against the Property Trustee or any other Person, including the
Trust; it being understood and intended that no one or more of such Holders
shall have any right in any manner whatsoever by virtue of, or by availing of,
any provision of this Trust Agreement to affect, disturb or prejudice the rights
of any other of such Holders or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Trust Agreement, except in the manner herein provided and for the equal and
ratable benefit of all such Holders. Notwithstanding the foregoing, a Holder of
Preferred Securities may institute a legal proceeding directly against the
Company, without first instituting a legal proceeding against or requesting or
directing that action be taken by the Property Trustee or any other Person, for
enforcement of payment to such Holder of principal of or interest on the Junior
Subordinated Notes having a principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities of such Holder on or after the
due dates therefor specified or provided for in the Junior Subordinated Notes.
The Company shall be subrogated to all rights of the Holders of Preferred
Securities in respect of any amounts paid to such Holders by the Company
pursuant to this Section.
Section 8.20 .....Delaware Trustee.
(a) Notwithstanding any other provision of this Trust Agreement, the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the Administrative
Trustees or the Property Trustee described in this Trust Agreement. The Delaware
Trustee shall be a trustee for the sole and limited purpose of fulfilling the
requirements of ss.3807 of the Delaware Business Trust Act.
(b) It is expressly understood and agreed by the parties hereto that in
fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust
(i) any agreements or instruments executed and delivered by Chase Manhattan Bank
Delaware are executed and delivered not in its individual capacity but solely as
Delaware Trustee under this Trust Agreement in the exercise of the powers and
authority conferred and vested in it, (ii) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as representations, warranties, covenants, undertakings and
agreements by Chase Manhattan Bank Delaware in its individual capacity but is
made and intended for the purpose of binding only the Trust, and (iii) under no
circumstances shall Chase Manhattan Bank Delaware in its individual capacity be
personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Trust Agreement,
except if such breach or failure is due to any gross negligence or willful
misconduct of the Delaware Trustee.
<PAGE>
Article IX ..
Termination and Liquidation
Section 9.01 Termination Upon Expiration Date. The Trust shall
automatically terminate on December 31, 2029 (the "Expiration Date") or
earlier pursuant to Section 9.02.
Section 9.02 .....Early Termination. Upon the first to occur of any of the
following events (such first occurrence, an "Early Termination Event"), the
Trust shall be dissolved and terminated in accordance with the terms hereof:
(i) the occurrence of a Bankruptcy Event in respect of the Depositor,
dissolution or liquidation of the Depositor, or the dissolution of the
Trust pursuant to judicial decree;
(ii) the delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is optional and wholly within
the discretion of the Depositor) to terminate the Trust and distribute
the Junior Subordinated Notes to Securityholders as provided in Section
9.04; and
(iii) the payment at maturity or redemption of all of the Junior Subordinated
Notes, and the consequent payment of the Preferred Securities.
Section 9.03 .....Termination. The respective obligations and responsibilities
of the Trust and the Trustees created hereby shall terminate upon the latest to
occur of the following: (a) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to Section 9.04, or
upon the redemption of all of the Trust Securities pursuant to Section 4.04, of
all amounts or instruments required to be distributed hereunder upon the final
payment of the Trust Securities; (b) the payment of any expenses owed by the
Trust; and (c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.
Section 9.04 .....Liquidation.
(a) If any Early Termination Event specified in clause (ii) of Section 9.02
occurs, the Trust shall be liquidated and the Property Trustee shall distribute
the Junior Subordinated Notes to the Securityholders as provided in this Section
9.04.
(b) In connection with a distribution of the Junior Subordinated Notes, each
Holder of Trust Securities shall be entitled to receive, after the satisfaction
of liabilities to creditors of the Trust (as evidenced by a certificate of the
Administrative Trustees), a Like Amount of Junior Subordinated Notes. Notice of
liquidation shall be given by the Trustees by first-class mail, postage prepaid,
mailed not later than 30 nor more than 60 days prior to the Liquidation Date to
each Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:
<PAGE>
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust Securities
will no longer be deemed to be Outstanding and any Trust Securities
Certificates not surrendered for exchange will be deemed to represent a
Like Amount of Junior Subordinated Notes; and
(iii) provide such information with respect to the mechanics by which Holders
may exchange Trust Securities Certificates for Junior Subordinated
Notes as the Administrative Trustees or the Property Trustee shall deem
appropriate.
(c) In order to effect the liquidation of the Trust and distribution of the
Junior Subordinated Notes to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Junior
Subordinated Notes in exchange for the Outstanding Trust Securities
Certificates.
(d) After the Liquidation Date, (i) the Trust Securities will no longer be
deemed to be Outstanding, (ii) certificates representing a Like Amount of Junior
Subordinated Notes will be issued to Holders of Trust Securities Certificates,
upon surrender of such certificates to the Administrative Trustees or their
agent for exchange, (iii) any Trust Securities Certificates not so surrendered
for exchange will be deemed to represent a Like Amount of Junior Subordinated
Notes, accruing interest at the rate provided for in the Junior Subordinated
Notes from the last Distribution Date on which a Distribution was made on such
Trust Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal will be
made to Holders of Trust Securities Certificates with respect to such Junior
Subordinated Notes) and (iv) all rights of Securityholders holding Trust
Securities will cease, except the right of such Securityholders to receive
Junior Subordinated Notes upon surrender of Trust Securities Certificates.
(e) The Depositor will use its best efforts to have the Junior Subordinated
Notes that are distributed in exchange for the Preferred Securities to be listed
on such securities exchange as the Preferred Securities are then listed. The
Depositor may elect to have the Junior Subordinated Notes issued in book-entry
form to the Clearing Agency or its nominee pursuant to a Certificate Depository
Agreement substantially in the form of Exhibit B.
<PAGE>
Section 9.05 .....Bankruptcy. If an Early Termination Event specified in clause
(i) of Section 9.02 has occurred, the Trust shall be liquidated. The Property
Trustee shall distribute the Junior Subordinated Notes to the Securityholders as
provided in Section 9.04, unless such distribution is determined by the
Administrative Trustees not to be practical, in which event the Holders will be
entitled to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors, an amount equal
to the Liquidation Amount per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on a pro rata
basis (based upon Liquidation Amounts). The Holder of the Common Securities will
be entitled to receive Liquidation Distributions upon any such dissolution,
winding-up or termination pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if an Indenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities.
Article X ...
The Auction
Section 10.01 ....Applicable Rate. The Applicable Rate will ordinarily be the
rate per annum that the Auction Agent advises results from the implementation of
the Auction Procedures. Pursuant to the Auction Procedures, Persons determine to
hold or offer to purchase or sell the Preferred Securities based on the
distribution rates bid by them. The Auction Procedures will be implemented on
each Auction Date. The Company and any affiliate of the Company may submit an
Order in any Auction, subject to compliance with all applicable securities and
other laws.
Section 10.02 ....Auction Agent.
(a) Prior to the issuance of the Preferred Securities, the Company and the Trust
will enter into the Auction Agent Agreement with the Auction Agent, providing,
among other things, that the Auction Agent will follow the Auction Procedures
for the purposes of determining the Applicable Rate. The Company will pay the
Auction Agent compensation for its services under the Auction Agent Agreement.
(b) The Auction Agent will act solely as agent for the Trust in connection with
each Auction and will not be a fiduciary for Holders. In the absence of bad
faith or negligence on its part, the Auction Agent will not be liable for any
action taken, suffered or omitted or for any error of judgment made by it in the
performance of its duties under the Auction Agent Agreement and will not be
liable for any error of judgment made in good faith unless the Auction Agent has
been negligent in ascertaining the pertinent facts. The Company and the Trust
will indemnify the Auction Agent for, and hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part
arising out of or in connection with its acceptance or administration of its
agency duties or functions under the Auction Agent Agreement.
The Auction Agent may terminate the Auction Agent Agreement
upon notice to the Administrative Trustees on behalf of the Trust, with such
termination being effective on the earlier of (i) the first Business Day after
the second Distribution Payment Date occurring after the delivery of such notice
or 90 days after the delivery of such notice or (ii) the date on which a
successor Auction Agent is appointed by the Administrative Trustees pursuant to
an agreement containing substantially the same terms and conditions as the
Auction Agent Agreement. The Administrative Trustees may also terminate the
Auction Agent Agreement upon 30 days written notice to the Auction Agent but
only if, prior to such termination, the Company and the Trust have entered into
an agreement with a successor Auction Agent containing substantially the same
terms and conditions as the Auction Agent Agreement The Company and the Trust
will use their best efforts to maintain an Auction Agent with respect to the
Preferred Securities pursuant to an agreement containing terms and conditions
substantially similar to the terms and conditions of the Auction Agent
Agreement.
<PAGE>
Section 10.03 ....Broker-Dealers. The Auction Procedures require the
participation of one or more broker-dealers. The Auction Agent will initially
enter into a non-exclusive agreement with each of Goldman, Sachs & Co. ("Goldman
Sachs")and Lehman Brothers Inc. ("Lehman Brothers") and, under certain
circumstances, may enter into similar agreements with one or more other
broker-dealers ( the "Broker-Dealers") that provide for the participation by
broker-dealers in Auctions as broker-dealers (collectively, the "Broker-Dealer
Agreements"). Subject to certain exceptions, Goldman Sachs and Lehman Brothers
will initially be the Broker-Dealers. After each Auction, the Company will pay a
service charge to each Broker-Dealer. Existing Holders and Potential Holders
must submit Orders for the Preferred Securities through any Broker-Dealer in
order to participate in an Auction. Each Broker-Dealer may submit Orders and
purchase the Preferred Securities for its own account, either in an Auction or
otherwise and, in such capacity, each Broker-Dealer shall be considered an
Existing Holder or a Potential Holder, as the case may be.
Section 10.04 ....Purchaser's Letter.
(a) As a condition to purchasing the Preferred Securities or participating in an
Auction or otherwise acquiring the Preferred Securities, each prospective
purchaser of the Preferred Securities may be required to sign and deliver to any
Broker-Dealer a purchaser's letter (each, a "Purchaser's Letter"). Each
Broker-Dealer will be required to inform the Auction Agent whether the
Broker-Dealer required the holder or prospective purchaser to execute a
Purchaser's Letter. Each holder or prospective purchaser of the Preferred
Securities may be required to deliver an updated Purchaser's Letter no less
frequently than annually.
<PAGE>
(b) In the Purchaser's Letter, the prospective purchaser will agree, among
other things:
(i) to offer, sell, transfer or otherwise dispose of the Preferred
Securities only pursuant to a Bid or a Sell Order in an Auction, or to
or through any Broker-Dealer or to the Company; provided that, in the
case of all transfers other than those pursuant to an Auction, the
selling Existing Holder or its Broker-Dealer advises the Auction Agent
of such transfer and such transfer is made in compliance with the
applicable Purchaser's Letter;
(ii) that any Bid or Sell Order placed by such purchaser will constitute an
irrevocable offer to purchase or sell the Preferred Securities subject
to such Bid or Sell Order, or such lesser number of Preferred
Securities as such purchaser will be required to purchase or sell,
respectively, as a result of such Auction, at a price of $50,000 per
Preferred Security, and that a failure by such purchaser or any
Broker-Dealer to place a Bid or Sell Order with respect to any
Preferred Securities owned by that purchaser will be deemed to
constitute a Hold Order with respect to those Preferred Securities; and
(iii)that it understands and agrees that: (a) so long as there is a Clearing
Agency for the Preferred Securities, the ownership of the Preferred
Securities as to which that purchaser is the Existing Holder will be
maintained in book-entry form by such Clearing Agency, in the account of
that purchaser's Clearing Agency (Participant), which in turn will maintain
records of that purchaser's ownership; (b) such Agent Member is authorized
to disclose to the Auction Agent such information with respect to such
purchaser's beneficial ownership as the Auction Agent may request; and (c)
so long as there is a Clearing Agency for the Preferred Securities or
unless otherwise required by law, such purchaser will not be entitled to
receive certificates evidencing the Preferred Securities.
Execution of a Purchaser's Letter, if required, is not a
commitment to purchase the Preferred Securities but may be a condition precedent
to purchasing the Preferred Securities in an Auction or otherwise.
(c) Any transfer of the Preferred Securities contrary to the terms of a
Purchaser's Letter may, among other things, affect the right of the Person
acquiring such Preferred Securities to participate in future Auctions.
(d) The Auction Agent may rely upon, as evidence of the identities of the
Existing Holders, a list of the initial owners of the Preferred Securities
provided by the Administrative Trustees or any Broker-Dealer and the results of
Auctions and notices from selling Existing Holders (or any Broker-Dealer and
Clearing Agency Participants) with respect to transfers of the Preferred
Securities. The Auction Agent will be required to register a transfer of
beneficial ownership of the Preferred Securities from an Existing Holder to
another person only if such transfer is made to a person that has delivered or
caused to be delivered a signed Purchaser's Letter, if required, to any
Broker-Dealer and if (i) such transfer is pursuant to an Auction or (ii) the
Auction Agent has been notified of such transfer in writing by the selling
Existing Holder or its Broker-Dealer, and, in either case, that such transfer is
being made in compliance with the terms of the selling Existing Holder's
Purchaser's Letter, if any. The Auction Agent is not required to accept any
notice of transfer prior to an Auction unless it is received by the Auction
Agent by 3:00 p.m., New York City time, on the Business Day immediately
preceding the related Auction Date. If there has been a failure by the seller of
the Preferred Securities to deliver such Preferred Securities to a purchaser as
a result of an Auction, or if a purchaser of the Preferred Securities has failed
to make payment to the seller of such Preferred Securities, a Broker-Dealer must
send written notice of such failure to the Auction Agent.
<PAGE>
Section 10.05 ....Auction Date. Except as otherwise provided herein, an Auction
will be held at the end of each Distribution Period to determine the Applicable
Rate for the subsequent Distribution Period. Each such Auction will be held, in
the case of an Auction held at the end of a Short-Term Distribution Period, on
the Business Day immediately preceding the last day of such Short-Term
Distribution Period, and in the case of an Auction held at the end of a
Long-Term Distribution Period, on the third Business Day preceding the last day
of such Long-Term Distribution Period.
Section 10.06 ....Orders.
(a) The Auction Agent is entitled to rely upon the terms of any Order submitted
to it by a Broker-Dealer. The Auction Agent will, if necessary, round any rate
specified in any Order (expressed as a percentage) that contains more than three
figures to the right of the decimal point up to the next highest one-thousandth
of one percent (.001%).
(b) Prior to 12:30 p.m., New York City time, on each Auction Date or such other
time on the Auction Date specified by the Auction Agent (the "Submission
Deadline"), each Broker-Dealer participating in the Auction will submit to the
Auction Agent in writing all Orders obtained by it for such Auction to be
conducted on such Auction Date. The Broker-Dealers must submit separate Orders
for each customer and may not net or aggregate the Orders of different
customers. The Company intends that any Orders submitted by the Company or any
of its affiliates would be submitted as close as practicable to the applicable
Submission Deadline.
Section 10.07 ....Existing Holders.
(a) Prior to the Submission Deadline for each Auction, each Broker-Dealer will
contact Existing Holders of the Preferred Securities, by telephone or otherwise,
to notify such Existing Holders as to: (i) whether the next Distribution Period
is a Short-Term Distribution Period or a Long-Term Distribution Period and the
length thereof; (ii) additional Distribution Payment Dates, if any, with respect
to a Short-Term Distribution Period of more than 90 days; (iii) the initial
Distribution Payment Date, with respect to a Long-Term Distribution Period; and
(iv) the Maximum Applicable Rate then in effect; and to determine whether such
Existing Holders desire to place Orders. Each Existing Holder, with respect to
the Preferred Securities that it then holds, may submit to a Broker-Dealer by
telephone or otherwise a:
<PAGE>
(i) "Hold Order"--indicating the number of Preferred Securities that such
Existing Holder desires to continue to hold without regard to the
Applicable Rate for the next Distribution Period;
(ii) "Bid"--indicating the number of Preferred Securities that such Existing
Holder desires to continue to hold; provided that the Applicable Rate
for the next Distribution Period is not less than the rate per annum
specified in such Bid; or
(iii) "Sell Order"--indicating the number of Preferred Securities that such
Existing Holder desires to sell without regard to the Applicable Rate
for the next Distribution Period.
(b) A Sell Order submitted by an Existing Holder will constitute an irrevocable
offer to sell the Preferred Securities subject to that Order, and a Bid
submitted by an Existing Holder will constitute an irrevocable offer to sell the
Preferred Securities subject to that Bid if the rate specified in such Bid is
higher than the Applicable Rate determined in the Auction. Any Bid submitted by
an Existing Holder specifying a rate higher than the Maximum Applicable Rate
will be deemed to be a Sell Order.
(c) If, for any Auction, Orders covering all of the outstanding Preferred
Securities held by an Existing Holder are not submitted to the Auction Agent
(through a Broker-Dealer) prior to the Submission Deadline, whether because any
Broker-Dealer failed to contact such Existing Holder, such Existing Holder
failed to place a Bid or Sell Order or such Broker-Dealer failed to submit the
Existing Holder's Orders or for any other reason, the Auction Agent will deem a
Hold Order to have been submitted by such Existing Holder covering the number of
Preferred Securities held by such Existing Holder and not subject to any Order
submitted to the Auction Agent.
(d) An Existing Holder may submit different types of Orders in an Auction with
respect to Preferred Securities then held by that Existing Holder. In any
Auction, if one or more Orders covering in the aggregate more than the number of
Preferred Securities held by an Existing Holder are submitted to the Auction
Agent (through a Broker-Dealer), those Orders will be considered valid as
follows and in the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder will be
considered valid up to and including the Preferred Securities held by
such Existing Holder, except that if more than one Hold Order is
submitted on behalf of such Existing Holder and the number of Preferred
Securities subject to such Hold Orders exceeds the number of Preferred
Securities held by such Existing Holder, the number of Preferred
Securities subject to each such Hold Order will be reduced pro rata so
that such Hold Orders will cover exactly the number of Preferred
Securities held by such Existing Holder.
(ii) (a) any Bid submitted on behalf of such Existing Holder will be considered
valid up to and including the excess of the number of Preferred Securities
<PAGE>
held by such Existing Holder over the number of Preferred Securities
subject to any Hold Orders referred to in clause (i) above; (b) subject to
subclause (a), if more than one Bid with the same rate is submitted on
behalf of such Existing Holder and the number of Preferred Securities
subject to such Bids is greater than such excess, the number of Preferred
Securities subject to each such Bid will be reduced pro rata so that such
Bids will cover exactly the number of Preferred Securities equal to such
excess; (c) subject to subclause (a), if more than one Bid with different
rates is submitted on behalf of such Existing Holder, such Bids will be
considered valid in the ascending order of their respective rates up to and
including the amount of such excess; and (d) in any such event, the number,
if any, of Preferred Securities subject to Bids not valid under subclause
(a), (b) or (c) of this clause (ii) (i.e., Bids in excess of the Preferred
Securities held by the Existing Holder) will be treated as the subject of a
Bid by such Existing Holder as a Potential Holder of such Preferred
Securities; and
(iii) any Sell Order submitted on behalf of such Existing Holder will be
considered valid up to and including the excess of the number of
Preferred Securities held by such Existing Holder over the number of
Preferred Securities subject to valid Hold Orders by such Existing
Holder referred to in clause (i) and valid Bids by such Existing Holder
referred to in clause (ii), except that if more than one Sell Order is
submitted on behalf of such Existing Holder and the Preferred
Securities subject to such Sell Orders is greater than such excess, the
Preferred Securities subject to such Sell Orders will be reduced pro
rata so that such Sell Orders will cover exactly the number of
Preferred Securities equal to such excess.
Section 10.08 ....Potential Holders.
(a) Prior to the Submission Deadline for each Auction, each Broker-Dealer will
contact Potential Holders of the Preferred Securities by telephone or otherwise
to notify such Potential Holders as to: (i) whether the next Distribution Period
is a Short-Term Distribution Period or a Long-Term Distribution Period and the
length thereof; (ii) additional Distribution Payment Dates, if any, with respect
to a Short-Term Distribution Period of more than 90 days; (iii) the initial
Distribution Payment Date with respect to a Long-Term Distribution Period; and
(iv) the Maximum Applicable Rate then in effect; and to determine whether such
Potential Holders desire to submit Bids.
(b) A Bid submitted by a Potential Holder will constitute an irrevocable offer
to purchase the Preferred Securities subject to such Bid if the rate specified
in the Bid is less than or equal to the Applicable Rate determined in the
related Auction. An Existing Holder who submits a Bid in excess of the number of
Preferred Securities then held by such Existing Holder will be treated as a
Potential Holder to the extent of such excess. Any Bid submitted by a Potential
Holder specifying a rate higher than the Maximum Applicable Rate will be
rejected.
<PAGE>
(c) If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted will be deemed a separate Bid with the rate and number of
Preferred Securities specified therein.
Section 10.09 ....Extension Period.
(a) Upon not less than five Business Days, nor more than 20 days written notice
to the Auction Agent and the Clearing Agency prior to the last day of the final
Distribution Period of any Extension Period, the Administrative Trustees will
select a Long-Term Distribution Period or a Short-Term Distribution Period as
the next Distribution Period; provided that if the Distribution Period existing
prior to such Extension Period was a Final Distribution Period or a Long-Term
Distribution Period that would still be in effect but for such Extension Period,
the next Distribution Period shall be the remaining term of such Final
Distribution Period or Long-Term Distribution Period.
(b) Prior to the end of the final Distribution Period of any Extension Period,
an Auction will be held to determine the Applicable Rate for the subsequent
Distribution Period. Each such Auction will be held (i) in the case of a
Short-Term Distribution Period, on the Business Day immediately preceding the
last day of the final Distribution Period of such Extension Period and (ii) in
the case of a Long-Term Distribution Period, on the third Business Day preceding
the last day of the final Distribution Period of such Extension Period.
Section 10.10 ....Determination of Distribution Rate in an Auction.
(a) No earlier than the Submission Deadline on each Auction Date, the Auction
Agent will assemble all Orders submitted or deemed submitted to it by any
Broker-Dealer (each Hold Order, Bid or Sell Order as submitted or deemed
submitted by any Broker-Dealer being referred to herein as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as
a "Submitted Order") and will determine the excess, if any, of the total number
of Preferred Securities over the Preferred Securities subject to Submitted Hold
Orders (such excess called the "Available Preferred Securities"). If all of the
Preferred Securities are subject to Submitted Hold Orders, there will be no
Available Preferred Securities and the Applicable Rate for the next Distribution
Period will be the Minimum Applicable Rate on such Auction Date determined by
the Auction Agent in consultation with the Administrative Trustees.
(b) If there are Available Preferred Securities with respect to any Auction, the
Auction Agent will determine whether Sufficient Clearing Bids have been made in
such Auction. "Sufficient Clearing Bids" will have been made if the number of
Preferred Securities that are the subject of Submitted Bids by Potential Holders
(including Existing Holders who have submitted Bids to purchase additional
Preferred Securities and are thus Potential Holders with respect to such
Preferred Securities), specifying rates not higher than the Maximum Applicable
Rate determined by the Auction Agent in consultation with the Administrative
Trustees, equals or exceeds the number of Preferred Securities that are the
subject of Submitted Sell Orders (including the number of Preferred Securities
subject to Submitted Bids by Existing Holders specifying rates higher than the
Maximum Applicable Rate).
<PAGE>
(c) If Sufficient Clearing Bids have been made with respect to any Auction, the
Auction Agent will determine the lowest rate specified in the Submitted Bids of
Existing Holders and Potential Holders (the "Winning Bid Rate") that would
result in Existing Holders continuing to hold (pursuant to Submitted Bids) and
Potential Holders (including Existing Holders who have placed Bids to purchase
additional Preferred Securities) purchasing, at such rate, an aggregate number
of Preferred Securities at least equal to the number of Available Preferred
Securities. If Sufficient Clearing Bids have been made, the Applicable Rate for
the next succeeding Distribution Period will be the Winning Bid Rate.
(d) If Sufficient Clearing Bids have not been made in an Auction (other than
because all of the Preferred Securities are the subject of Submitted Hold
Orders) and no Event of Default exists, the Applicable Rate for the next
succeeding Distribution Period will be equal to the Maximum Applicable Rate on
the date of such Auction, and the related Distribution Period will be a 28-day
Short-Term Distribution Period regardless of whether the Administrative Trustees
have selected a Long-Term Distribution Period or a Short-Term Distribution
Period of any other length prior to such Auction. In such event, Existing
Holders that have placed Sell Orders for Preferred Securities will not be able
to sell all, and may not be able to sell any, Preferred Securities in such
Auction.
(e) If Sufficient Clearing Bids have not been made in an Auction (other than
because all of the Preferred Securities were the subject of Submitted Hold
Orders) or if an Auction has not been held on a scheduled Auction Date (other
than because an Event of Default exists or an Extension Period has been
elected), the Maximum Applicable Rate with respect to the next succeeding
Auction will be the "Special Maximum Applicable Rate," which will be the higher
of (i) the Applicable Percentage of the Commercial Paper Rate for a 28-day
Short-Term Distribution Period and (ii) 150% of the highest of (a) the Treasury
Bill Rate, (b) the Ten-Year Constant Maturity Rate and (c) the Thirty-Year
Constant Maturity Rate with respect to such date. The Administrative Trustees
may, in their sole discretion, increase the 150% referred to in subclause (ii)
above. In the event that the Administrative Trustees determine in good faith
that for any reason:
(i) any one of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate
or the Thirty-Year Constant Maturity Rate cannot be determined with
respect to any date, then the Special Maximum Applicable Rate with
respect to such date will be determined on the basis of the higher of
whichever two of such rates can be so determined;
(ii) only one of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate
and the Thirty-Year Constant Maturity Rate can be determined with
respect to any date, then the Special Maximum Applicable Rate with
respect to such date will be determined on the basis of whichever such
rate can be so determined; or
<PAGE>
(iii) none of the Treasury Bill Rate, the Ten-Year Constant Maturity Rate and
Thirty-Year Constant Maturity Rate can be determined with respect to
any date, then the Special Maximum Applicable Rate will be the rate
otherwise determined under the terms of the Preferred Securities.
(f) If either Moody's or S&P or both do not make ratings on the Preferred
Securities available, the Administrative Trustees will select one or two
nationally recognized statistical rating organizations (as the term is used in
the rules and regulations of the Commission under the 1934 Act), as the case may
be, to act as a substitute rating agency or substitute rating agencies, and the
Administrative Trustees will take all reasonable action to enable such rating
agency or rating agencies to make available the equivalent rating or ratings for
the Preferred Securities. The Administrative Trustees will take all reasonable
action necessary to enable Moody's and S&P to provide a rating for the Preferred
Securities. If necessary, the Special Maximum Applicable Rate shall be
determined by the Auction Agent in consultation with the Administrative
Trustees.
(g) With respect to the Preferred Securities, the Administrative Trustees may
from to time, upon delivery of written notice to the Auction Agent and the
Clearing Agency, increase the Applicable Percentages used to calculate the
Maximum Applicable Rate as follows: the 150% to up to 175%, the 200% to up to
225% and the 250% to up to 275%, with no change to the 300%. The Administrative
Trustees have no obligation to designate a higher Applicable Percentage.
Section 10.11 ....Acceptance and Rejection of Orders and Allocation of Preferred
Securities.
(a) With respect to each Auction, Submitted Bids and Submitted Sell Orders will
be accepted or rejected by the Auction Agent such that the Existing Holders and
Potential Holders of the Preferred Securities will sell, continue to hold and/or
purchase the Preferred Securities as described below and in such order of
priority. Existing Holders that placed or were deemed to have placed Hold Orders
in such Auction will continue to hold Preferred Securities subject to such Hold
Orders, subject to the rounding procedures described herein.
(b) If Sufficient Clearing Bids in any Auction have been made:
(i) each Existing Holder that placed a Submitted Bid specifying a rate
higher than the Winning Bid Rate or a Submitted Sell Order will sell
the number of Preferred Securities subject to such Submitted Bid or
Submitted Sell Order;
(ii) each Existing Holder that placed a Submitted Bid specifying a rate
lower than the Winning Bid Rate will continue to hold the number of the
Preferred Securities subject to such Submitted Bid;
<PAGE>
(iii) each Potential Holder that placed a Submitted Bid specifying a rate
lower than the Winning Bid Rate will purchase the number of Preferred
Securities subject to such Submitted Bid;
(iv) each Existing Holder that placed a Submitted Bid specifying a rate
equal to the Winning Bid Rate will continue to hold the number of
Preferred Securities subject to such Submitted Bid, unless the number
of Preferred Securities subject to all such Submitted Bids placed by
Existing Holders is greater than the excess of the number of Preferred
Securities over the number of Preferred Securities accounted for in
clauses (ii) and (iii) above, in which event each Existing Holder with
such a Submitted Bid will sell a number of Preferred Securities
determined on a pro rata basis based on the number of Preferred
Securities subject to all such Submitted Bids by such Existing Holders;
and
(v) each Potential Holder that placed a Submitted Bid specifying a rate
equal to the Winning Bid Rate will purchase any Preferred Securities
not accounted for in clause (ii), (iii) or (iv) above on a pro rata
basis based on the number of outstanding Preferred Securities subject
to all such Submitted Bids by such Potential Holders.
(c) If Sufficient Clearing Bids have not been made in any Auction (other than
because all of the Preferred Securities are the subject of Submitted Hold
Orders):
(i) each Existing Holder that placed a Submitted Bid specifying a rate
equal to or lower than the Maximum Applicable Rate will continue to
hold the number of outstanding Preferred Securities subject to such
Submitted Bid;
(ii) each Potential Holder that placed a Submitted Bid specifying a rate
equal to or lower than the Maximum Applicable Rate will purchase the
number of Preferred Securities subject to such Submitted Bid; and
(iii) each Existing Holder that placed a Submitted Sell Order (including a
Submitted Bid specifying a rate in excess of the Maximum Applicable
Rate) will sell a number of Preferred Securities, determined on a pro
rata basis, such that the aggregate number of Preferred Securities sold
by all such Existing Holders is equal to the number of Preferred
Securities to be purchased pursuant to (ii) above.
(d) Notwithstanding Section 10.11(c), if Sufficient Clearing Bids have not been
made (other than because all of the Preferred Securities are the subject of
Submitted Hold Orders) in an Auction held for the purpose of determining the
Distribution Rate for a Long-Term Distribution Period, (i) each Existing Holder
will continue to hold its Preferred Securities after such Auction irrespective
of any Orders made by such Existing Holders or by Potential Holders, (ii) the
next-succeeding Distribution Period will be, notwithstanding any prior notice by
the Administrative Trustees, a 28-day Short-Term Distribution Period and (iii)
the Distribution Rate for such Short-Term Distribution Period will be the
Maximum Applicable Rate as of such Auction Date.
<PAGE>
(e) If, in any Auction, as a result of the Auction Procedures described above,
any Existing Holder would be entitled or required to sell, or any Potential
Holder would be entitled or required to purchase, a fraction of a Preferred
Security on any Auction Date, the Auction Agent will, in such manner as it may
determine (in its sole discretion), round up or down the number of the Preferred
Securities being sold or purchased by any Existing Holder or Potential Holder on
such Auction Date so that the number of the Preferred Securities sold or
purchased by each Existing Holder or Potential Holder will be whole Preferred
Securities, even if such allocation results in one or more of such Potential
Holders not purchasing the Preferred Securities on such Auction Date or one or
more Existing Holders selling all the Preferred Securities previously held by
them.
Section 10.12 ....Notification of Results.
(a) On the Auction Date for each Auction the Auction Agent will advise each
Broker-Dealer with respect to any Bid or Sell Order submitted on behalf of a
Bidder whether any such Order was accepted or rejected in whole or in part and
the Distribution Rate for the next Distribution Period by telephone by
approximately 3:00 p.m., New York City time, on such Auction Date.
(b) The Broker-Dealer Agreements will provide that if any Broker-Dealer
submitted a Bid or Sell Order on behalf of a Bidder in any Auction, such
Broker-Dealer will (i) advise such Bidder as soon as practicable whether such
Bid or Sell Order was accepted or rejected, (ii) advise each such Bidder that
will hold the Preferred Securities following such Auction of the duration of and
the Distribution Rate for the next Distribution Period and (iii) advise each
such Bidder purchasing or selling shares to give instructions to such
Broker-Dealer (or its Agent Member) to pay the purchase price (in same-day
funds) against delivery of such Preferred Securities by book entry ("Delivery")
or to effect Delivery of such Preferred Securities against payment therefor, as
may be appropriate. If any Broker-Dealer submitted a Hold Order on behalf of an
Existing Holder in any Auction, such Broker-Dealer will also advise such
Existing Holder of the duration of and the Distribution Rate for the next
Distribution Period. The Auction Agent will record each transfer of the
Preferred Securities on the registry of Existing Holders to be maintained by the
Registrar and Transfer Agent.
(c) Based on the results of each Auction, the Auction Agent will determine the
aggregate number of Preferred Securities to be purchased and the aggregate
number of Preferred Securities to be sold by Potential Holders and Existing
Holders on whose behalf any Broker-Dealer placed Orders.
(d) If any Existing Holder selling Preferred Securities in any Auction fails to
instruct its Agent Member to effect Delivery of the Preferred Securities, a
Broker-Dealer may Deliver to a person who was to have purchased Preferred
Securities in such Auction a number of Preferred Securities, that is less than
the number of Preferred Securities that otherwise was to be purchased by such
person. In that event, the number of Preferred Securities to be so Delivered
will be determined by such Broker-Dealer. Neither the Company, the Trust nor the
Auction Agent will have any responsibility or liability with respect to the
failure of a Potential Holder, an Existing Holder or any Broker-Dealer or Agent
Member to effect Delivery of the Preferred Securities or to pay for the
Preferred Securities purchased or sold pursuant to an Auction or otherwise.
<PAGE>
Article XI ..
Miscellaneous Provisions
Section 11.01 ....Guarantee by the Depositor. Subject to the terms and
conditions hereof, the Depositor irrevocably and unconditionally guarantees to
each Person to whom the Trust is now or hereafter becomes indebted or liable
(the "Beneficiaries") the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
"Obligations" means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders of any Preferred
Securities or other similar interests in the Trust the amounts due such Holders
pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be. This guarantee is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 11.02 ....Limitation of Rights of Securityholders. The death or
incapacity of any Person having an interest, beneficial or otherwise, in a Trust
Security shall not operate to terminate this Trust Agreement, nor entitle the
legal representatives or heirs of such Person or any Securityholder for such
Person, to claim an accounting, take any action or bring any proceeding in and
for a partition or winding up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Section 11.03 ....Amendment.
(a) This Trust Agreement may be amended from time to time by the Trustees and
the Depositor, without the consent of any Securityholders, (i) to cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement; provided,
however, that any such amendment shall not adversely affect in any material
respect the interests of any Securityholder or (ii) to modify, eliminate or add
to any provisions of this Trust Agreement to such extent as shall be necessary
to ensure that the Trust will not be classified as other than a grantor trust
for United States federal income tax purposes at any time that any Trust
Securities are outstanding; provided, however, that, except in the case of
clause (ii), such action shall not adversely affect in any material respect the
interests of any Securityholder and, in the case of clause (i), any amendments
of this Trust Agreement shall become effective when notice thereof is given to
the Securityholders.
<PAGE>
(b) Except as provided in Section 11.03(c) hereof, any provision in this Trust
Agreement may be amended by the Trust or the Trustees with (i) the consent of
Trust Securityholders representing not less than 66-2/3% (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) receipt by the
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United States federal
income tax purposes or the Trust's exemption from status of an "investment
company" under the Investment Company Act of 1940, as amended.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.03 or 6.06 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date, or (iii) change
the consent required pursuant to Section 11.03.
(d) Notwithstanding any other provisions of this Trust Agreement, the Trustees
shall not enter into or consent to any amendment to this Trust Agreement which
would cause the Trust to fail or cease to qualify for the exemption from status
of an "investment company" under the Investment Company Act of 1940, as amended,
afforded by Rule 3a-5 thereunder.
(e) Without the consent of the Depositor or the Auction Agent, this Trust
Agreement may not be amended in a manner which imposes any additional obligation
on the Depositor or the Auction Agent. In executing any amendment permitted by
this Trust Agreement, the Trustees shall be entitled to receive, and (subject to
Section 8.01) shall be fully protected in relying upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Trust Agreement. Any Trustee may, but shall not be obligated to, enter into any
such amendment which affects such Trustee's own rights, duties, immunities or
liabilities under this Trust Agreement or otherwise.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
Section 11.04 ....Separability. In case any provision in this Trust Agreement or
in the Trust Securities Certificates shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 11.05 ....Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE;
PROVIDED THAT THE IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE SHALL
BE GOVERNED BY NEW YORK LAW.
<PAGE>
Section 11.06 ....Successors. This Trust Agreement shall be binding upon and
shall inure to the benefit of any successor to both the Trust and the Trustees,
including any successor by operation of law.
Section 11.07 ....Headings. The Article and Section headings are for convenience
only and shall not affect the construction of this Trust
Agreement.
Section 11.08 ....Notice and Demand. Any notice, demand or other communication
which by any provision of this Trust Agreement is required or permitted to be
given or served to or upon any Securityholder or the Depositor may be given or
served in writing by deposit thereof, first-class postage prepaid, in the United
States mail, hand delivery or facsimile transmission, in each case, addressed,
(i) in the case of a Preferred Securityholder, to such Preferred Securityholder
as such Securityholder's name and address appear on the Securities Register and
(ii) in the case of the Common Securityholder or the Depositor, to Alabama Power
Company, 600 North 18th Street, Birmingham, Alabama 35291, Attention: Treasurer,
Facsimile No. (205) 257-2445, with a copy to Southern Company Services, Inc.,
270 Peachtree Street, NW, Suite 2000, Atlanta, Georgia 30303, Attention:
Corporate Finance Department, Facsimile No. (404) 506-0674. Such notice, demand
or other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon the Trust or the Trustees shall be given in writing addressed (until
another address is published by the Trust) as follows: (i) with respect to the
Property Trustee and the Delaware Trustee, The Chase Manhattan Bank, 450 West
33rd Street, New York, New York, 10001, Attention: Corporate Trustee
Administration Department; Chase Manhattan Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801, Attention: Corporate Trust Department, as the case
may be; and (ii) with respect to the Administrative Trustees, to them at the
address above for notices to the Depositor, marked Attention: Administrative
Trustees of Alabama Power Capital Trust III c/o Treasurer. Such notice, demand
or other communication to or upon the Trust or the Trustees shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the applicable Trustee.
Section 11.09 ....Agreement Not to Petition. Each of the Trustees and the
Depositor agrees for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
IX, it shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, reorganization, arrangement, insolvency, liquidation or
other similar law (including, without limitation, the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
<PAGE>
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 11.09, the Property Trustee
agrees, for the benefit of Securityholders, that it shall file an answer with
the bankruptcy court or otherwise properly contest the filing of such petition
by the Depositor against the Trust or the commencement of such action and raise
the defense that the Depositor has agreed in writing not to take such action and
should be stopped and precluded therefrom and such other defenses, if any, as
counsel for the Trustees or the Trust may assert. The provisions of this Section
11.09 shall survive the termination of this Trust Agreement.
Section 11.10 ....Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust Indenture Act
that are required to be part of this Trustee Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee for the
purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control.
(d) The application of the Trust Indenture Act to this Trust Agreement shall not
affect the nature of the Trust Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT
TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE
SUBORDINATED INDENTURE AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND
SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Trust Agreement or have caused this Trust Agreement to be executed on their
behalf, all as of the day and year first above written.
ALABAMA POWER COMPANY,
as Depositor
By:______________________________________________________
William B. Hutchins, III
Title: Executive Vice President, Chief
Financial Officer and Treasurer
THE CHASE MANHATTAN BANK,
as Property Trustee
By:______________________________________________________
R. Lorenzen
Title: Assistant Vice President
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By:______________________________________________________
Name:
Title:
William E. Zales, Jr.,
as Administrative Trustee
J. Randy DeRieux,
as Administrative Trustee
<PAGE>
EXHIBIT A
[INTENTIONALLY RESERVED]
<PAGE>
EXHIBIT B
[INTENTIONALLY RESERVED]
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number C- Number of Common Securities
Certificate Evidencing Common Securities
of
Alabama Power Capital Trust III
Common Securities
(liquidation amount $50,000 per Common Security)
Alabama Power Capital Trust III, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that Alabama Power Company (the "Holder") is the registered owner of
_____________ (_______) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the Common
Securities (liquidation amount $50,000 per Common Security) (the "Common
Securities"). In accordance with Section 5.10 of the Trust Agreement (as defined
below) the Common Securities are not transferable, except by operation of law,
and any attempted transfer hereof shall be void. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of February 1, 1999, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, the Administrative Trustees of the Trust
have executed this certificate this ____ day of ______, ____.
Alabama Power Capital Trust II
By:______________________________________________________
William E. Zales, Jr.,
as Administrative Trustee
By:______________________________________________________
J. Randy DeRieux,
as Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned Trust
Agreement.
as Administrative Trustee
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement")
is made as of February 1, 1999, between Alabama Power Company, an Alabama
corporation (the "Company"), and Alabama Power Capital Trust III, a Delaware
business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to and receive Junior Subordinated Notes from the Company
and to issue and sell Alabama Power Capital Trust III Capital Auction Preferred
Securities (the "Preferred Securities") with such powers, preferences and
special rights and restrictions as are set forth in the Amended and Restated
Trust Agreement of the Trust dated as of February 1, 1999, as the same may be
amended from time to time (the "Trust Agreement"); and
WHEREAS, the Company is the issuer of the Junior Subordinated
Notes.
NOW, THEREFORE, in consideration of the purchase by each holder of
the Preferred Securities, which purchase the Company hereby agrees shall benefit
the Company and which purchase the Company acknowledges will be made in reliance
upon the execution and delivery of this Agreement, the Company and the Trust
hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by the Company. Subject to the terms
and conditions hereof, the Company hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any indebtedness, expenses or liabilities of
the Trust, other than obligations of the Trust to pay to holders of any
Preferred Securities or other similar interests in the Trust the amounts due
such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
terminate and be of no further force and effect upon the date on which there are
no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by the Company and The Chase Manhattan
Bank, as guarantee trustee, or under this Agreement for any reason whatsoever.
This Agreement is continuing, irrevocable, unconditional and absolute.
<PAGE>
Section 1.03. Waiver of Notice. The Company hereby waives
notice of acceptance of this Agreement and of any Obligation to which it applies
or may apply, and the Company hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
Section 1.04. No Impairment. The obligations, covenants, agreements and duties
of the Company under this Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the
Trust of all or any portion of the Obligations or for the
performance of any other obligation under, arising out of, or
in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or
exercise any right, privilege, power or remedy conferred on
the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or
extension of any kind; or
(c) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Trust or
any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Company with respect to the happening of any of the
foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this
Agreement directly against the Company and the Company waives any right or
remedy to require that any action be brought against the Trust or any other
person or entity before proceeding against the Company.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements contained in this
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the
Beneficiaries.
Section 2.02. Amendment. So long as there remains any Beneficiary or any
Preferred Securities of any series are outstanding, this Agreement shall
not be modified or amended in any manner adverse to such Beneficiary or to
the holders of the Preferred Securities.
Section 2.03. Notices. Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing by delivering the
same against receipt therefor by facsimile transmission (confirmed by
mail), telex or by registered or certified mail, addressed as follows (and
if so given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
<PAGE>
Alabama Power Capital Trust III
c/o The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Facsimile No.: (212) 946-8159
Attention: Corporate Trustee
Administration Department
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Facsimile No.: (205) 257-2445
Attention: Treasurer
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ALABAMA.
THIS AGREEMENT is executed as of the date and year first above written.
ALABAMA POWER COMPANY
By: _____________________________________________________
William B. Hutchins, III
Executive Vice President, Chief
Financial Officer and Treasurer
ALABAMA POWER CAPITAL TRUST III
By:______________________________________________________
J. Randy DeRieux, as
Administrative Trustee
<PAGE>
1
EXHIBIT E
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to Alabama Power Capital Trust III or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), any transfer, pledge, or
other use hereof for value or otherwise by or to any person is wrongful inasmuch
as the registered owner thereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P-_ CUSIP NO. _______
Certificate Evidencing Preferred Securities
of
Alabama Power Capital Trust III
Capital Auction Preferred Securities
(Liquidation amount $50,000 per Preferred Security)
Alabama Power Capital Trust III, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that Cede & Co. (the "Holder") is the registered owner of _____ (_______)
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust and designated the Alabama Power Capital Trust III
Capital Auction Preferred Securities (liquidation amount $50,000 per Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.04 of the Trust Agreement (as
defined below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust, dated as of February 1, 1999, as the same
may be amended from time to time (the "Trust Agreement"), including the
designation of the terms of Preferred Securities as set forth therein. The
holder of this certificate is entitled to the benefits of a guarantee by Alabama
Power Company, an Alabama corporation (the "Company"), pursuant to a Guarantee
Agreement between the Company and The Chase Manhattan Bank, as guarantee
trustee, dated as of February 1, 1999, as the same may be amended from time to
time (the "Guarantee"), to the extent provided therein. The Trust will furnish a
copy of the Trust Agreement and the Guarantee to the holder of this certificate
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the holder of this
certificate is bound by the Trust Agreement and is entitled to the benefits
thereunder.
IN WITNESS WHEREOF, the Administrative Trustees of the Trust
have executed this certificate this ____ day of _______, ____.
ALABAMA POWER CAPITAL TRUST III
By:______________________________________________________
William E. Zales, Jr.,
as Administrative Trustee
By:______________________________________________________
J. Randy DeRieux,
as Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
as Administrative Trustee
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _________
Signature:________
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
Exhibit 4.8
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
February 1, 1999, between ALABAMA POWER COMPANY, an Alabama corporation (the
"Guarantor"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as
trustee (the "Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of ALABAMA POWER
CAPITAL TRUST III, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of February 1, 1999, among the Trustee, the
other Trustees named therein, Alabama Power Company, as Depositor, and the
holders of undivided beneficial interests in the assets of the Trust, the Trust
is issuing as of February 25, 1999 $50,000,000 aggregate liquidation amount of
its Capital Auction Preferred Securities (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of the Trust
and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Trust
and the proceeds thereof will be used to purchase the Junior Subordinated Notes
(as defined in the Trust Agreement) of the Guarantor, which will be held by the
Trust as trust assets; and
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires to irrevocably and unconditionally
agree, to the extent set forth herein, to pay to the Holders the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the payment for Preferred
Securities by each Holder (as defined herein) thereof, which payment the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders from time to
time of the Preferred Securities.
Article I
DEFINITIONS
Section 1.01. Definitions. As used in this Guarantee Agreement, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement as
in effect on the date hereof.
<PAGE>
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"Event of Default" means a failure by the Guarantor to perform
any of its payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Trust: (i) any accrued and
unpaid distributions that are required to be paid on such Preferred Securities
but if and only if and to the extent the Trust has funds legally and immediately
available therefor to make such payment; (ii) the redemption price, including
all accrued and unpaid distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Trust but if and only if and to the extent that the Trust has funds legally and
immediately available therefor sufficient to make such payment; and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Junior Subordinated Notes to
the holders of Trust Securities or the redemption of all of the Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred Securities to the date of
payment, to the extent the Trust has funds legally and immediately available
therefor, and (b) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust (in either case, the
"Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Trust, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Subordinated Note Indenture dated as of
January 1, 1997, among the Guarantor, as Subordinated Note Issuer, and The Chase
Manhattan Bank, as trustee, as supplemented by the First Supplemental Indenture
dated as of January 1, 1997, by and between the Guarantor and The Chase
Manhattan Bank, as Trustee and the Second Supplemental Indenture dated as of
February 25, 1999 by and between the Guarantor and The Chase Manhattan Bank, as
Trustee.
<PAGE>
"Majority in liquidation amount of Preferred Securities" means
a vote by Holder(s) of Preferred Securities, voting separately as a class, of
more than 50% of the liquidation amount of all Preferred Securities outstanding
at the time of determination.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Guarantor, and delivered to the Trustee. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Responsible Officer" means, with respect to the Trustee, any
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any senior trust officer,
trust officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means The Chase Manhattan Bank until a Successor
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Guarantee Agreement and thereafter means each such Successor
Trustee.
<PAGE>
Article II
TRUST INDENTURE ACT
Section 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust Indenture
Act that are required to be part of this Guarantee Agreement and shall, to the
extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee Agreement limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 2.02. Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to the Trustee (a)
semiannually, not later than June 1 and December 1 in each year, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of a date not more than 15 days prior to the time
such list is furnished, and (b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any such
request, a List of Holders as of a date not more than 15 days prior to the time
such list is furnished; provided that, the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Trustee by the Guarantor. The
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trustee shall comply with its obligations under Sections 311(a), 311(b)
and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Trustee. Within 60 days after May 15 of each year
commencing May 15, 1999, the Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by Section 313(a) of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
Section 2.04. Periodic Reports to Trustee. The Guarantor shall provide to the
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act, and shall provide, within
120 days after the end of each of its fiscal years, the compliance certificate
required by Section 314(a)(4) of the Trust Indenture Act in the form and in the
manner required by such Section.
Section 2.05. Evidence of Compliance with Conditions Precedent. The Guarantor
shall provide to the Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Guarantee Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
<PAGE>
Section 2.06. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of all of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
Section 2.07. Event of Default; Notice.
(a) The Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders, notices
of all Events of Default known to the Trustee, unless such defaults have been
cured before the giving of such notice, provided that the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Trustee shall not be deemed to have knowledge of any Event of Default
unless the Trustee shall have received written notice, or a Responsible Officer
charged with the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.
Section 2.08. Conflicting Interests. The Trust Agreement, the amended and
restated trust agreement dated as of January 1, 1996, among the Guarantor, as
Depositor, Chase Manhattan Bank Delaware (formerly known as Chemical Bank
Delaware), as Delaware Trustee, the Administrative Trustees named therein and
The Chase Manhattan Bank (formerly known as Chemical Bank), as Property Trustee,
relating to Alabama Power Capital Trust I, the amended and restated trust
agreement dated as of January 1, 1997, among the Guarantor, as Depositor, Chase
Manhattan Bank Delaware (formerly known as Chemical Bank Delaware), as Delaware
Trustee, the Administrative Trustees named therein and The Chase Manhattan Bank
(formerly known as Chemical Bank) as Property Trustee, relating to Alabama Power
Capital Trust II, the guarantee agreement dated as of January 1, 1996, between
the Guarantor, as guarantor, and The Chase Manhattan Bank (formerly known as
Chemical Bank), as trustee, relating to Alabama Power Capital Trust I and the
guarantee agreement dated as of January 1, 1997, between the Guarantor, as
guarantor, and The Chase Manhattan Bank (formerly known as Chemical Bank), as
trustee, relating to Alabama Power Capital Trust II shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
Article III
<PAGE>
POWERS, DUTIES AND RIGHTS OF TRUSTEE
Section 3.01. Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for the benefit of the
Holders, and the Trustee shall not transfer this Guarantee Agreement to any
Person except the Trustee shall assign rights hereunder to a Holder to the
extent such assignment is necessary to exercise such Holder's rights pursuant to
Section 5.04 or to a Successor Trustee upon acceptance by such Successor Trustee
of its appointment to act as Successor Trustee. The right, title and interest of
the Trustee shall automatically vest in any Successor Trustee, and such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Trustee.
(b) If an Event of Default has occurred and is continuing, the Trustee shall
enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Trustee, before the occurrence of any Event of Default and after the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Trustee shall
exercise such of the rights and powers vested in it by this Guarantee Agreement,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Guarantee Agreement,
and the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth
in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
<PAGE>
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the Holders of a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if the Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
Section 3.02. Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this Guarantee
Agreement shall be sufficiently evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Guarantee Agreement, the
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and the written
advice or opinion of such counsel with respect to legal matters shall
be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion; such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees; the Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction;
<PAGE>
(v) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee Agreement at the request or direction
of any Holder, unless such Holder shall have provided to the Trustee such
adequate security and indemnity as would satisfy a reasonable person in the
position of the Trustee, against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Trustee; provided that nothing
contained in this Section 3.02(a)(v) shall be taken to relieve the Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement;
(vi) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder; and
(viii) whenever in the administration of this Guarantee Agreement the Trustee
shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Trustee (i) may request instructions from the Holders, (ii) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in acting
in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any duty
or obligation on the Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Trustee shall be construed to be a duty.
<PAGE>
Section 3.03. Compensation; Fees; Indemnity. The Guarantor agrees:
(a) to pay to the Trustee from time to time reasonable compensation for all
services rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustee upon
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Guarantee Agreement
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold the Trustee harmless against, any
and all loss, damage, claims, liability or expense incurred without negligence
or bad faith on its part, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
The provisions of this Section 3.03 shall survive the termination of this
Guarantee Agreement.
Article IV
TRUSTEE
Section 4.01. Trustee; Eligibility.
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.01(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Trustee shall cease to be eligible to so act under
Section 4.01(a), the Trustee shall immediately resign in the manner
and with the effect set out in Section 4.02(c).
<PAGE>
(c) If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee
and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act, subject to the rights of
the Trustee under the penultimate paragraph thereof.
Section 4.02. Appointment, Removal and Resignation of Trustee.
(a) Subject to Section 4.02(b), the Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee has been
appointed and has accepted such appointment by written instrument
executed by such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a Successor
Trustee shall have been appointed or until its removal or resignation.
The Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the
Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such
Successor Trustee and delivered to the Guarantor and the resigning
Trustee.
(d) If no Successor Trustee shall have been appointed and accepted
appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of an instrument of resignation, the
resigning Trustee may petition any court of competent jurisdiction for
appointment of a Successor Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Trustee.
Article V
GUARANTEE
Section 5.01. Guarantee. The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Guarantor
may have or assert against any Person. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Trust to pay such amounts to the
Holders.
Section 5.02. Waiver of Notice and Demand. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Trust or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
<PAGE>
Section 5.03. Obligations Not Affected. The obligation of the Guarantor to make
the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Junior Subordinated Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Trust or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.03 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.04. Rights of Holders. The Guarantor expressly acknowledges that: (i)
this Guarantee Agreement will be deposited with the Trustee to be held for the
benefit of the Holders; (ii) the Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities have the right to direct the
<PAGE>
time, method and place of conducting any proceeding for any remedy available to
the Trustee in respect of this Guarantee Agreement or exercising any trust or
power conferred upon the Trustee under this Guarantee Agreement, provided that
such direction shall not be in conflict with any rule of law or with this
Guarantee Agreement, and could not involve the Trustee in personal liability in
circumstances where reasonable indemnity would not be adequate; and (iv) any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against or requesting or directing that action be taken by the
Trustee or any other Person; it being understood and intended that no one or
more of such Holders shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of this Guarantee Agreement to affect, disturb
or prejudice the rights of any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Guarantee Agreement, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders.
Section 5.05. Guarantee of Payment. This Guarantee Agreement creates a guarantee
of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication) or upon the distribution of Junior Subordinated Notes to the
Holders in exchange for all of the Preferred Securities.
Section 5.06. Subrogation. The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Trust in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if, at the time of
any such payment, any amounts of Guarantee Payments are due and unpaid under
this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
Section 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Trust with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
Article VI
SUBORDINATION
Section 6.01. Subordination. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
Junior Subordinated Notes, except those obligations or liabilities made pari
passu or subordinate by their terms, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference securities of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor.
<PAGE>
Article VII
TERMINATION
Section 7.01. Termination. This Guarantee Agreement shall terminate and be of no
further force and effect upon: (i) full payment of the Redemption Price of all
Preferred Securities, (ii) the distribution of Junior Subordinated Notes to the
Holders in exchange for all of the Preferred Securities, or (iii) full payment
of the amounts payable in accordance with the Trust Agreement upon liquidation
of the Trust. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid with respect to Preferred
Securities or under this Guarantee Agreement.
Article VIII
MISCELLANEOUS
Section 8.01. Successors and Assigns. All guarantees and agreements contained in
this Guarantee Agreement shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding. Except in connection with
a consolidation, merger, conveyance, transfer, or lease involving the Guarantor
that is permitted under Article Eight of the Indenture, the Guarantor shall not
assign its obligations hereunder.
Section 8.02. Amendments. Except with respect to any changes which do not
materially and adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than 66-2/3% in liquidation amount
of all the outstanding Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of Holders shall apply to the giving of such
approval.
Section 8.03. Notices. Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
<PAGE>
(a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice of to the Trustee and the Holders:
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Facsimile No.: (205) 257-2445
Attn: Treasurer
with copy to:
Southern Company Services, Inc.
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Facsimile No.: (404) 506-0674
Attention: Corporate Finance Department
(b) if given to the Trust, in care of the Trustee, or to the Trustee at the
Trust's (and the Trustee's) address set forth below or such other address as the
Trustee on behalf of the Trust may give notice to the Holders:
Alabama Power Capital Trust III
c/o The Chase Manhattan Bank
450 W. 33rd Street
New York, New York 10001
Attn: Corporate Trustee Administration Department
(c) if given to any Holder, at the address set forth on the books and records of
the Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
Section 8.04. Benefit. This Guarantee Agreement is solely for the benefit of the
Holders and, subject to Section 3.01(a), is not separately transferable from the
Preferred Securities.
Section 8.05. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in the
preamble hereto have the respective meanings assigned to them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same meaning
throughout;
<PAGE>
(c) all references to "the Guarantee Agreement" or "this Guarantee Agreement"
are to this Guarantee Agreement as modified, supplemented or amended from time
to time;
(d) all references in this Guarantee Agreement to Articles and Sections are to
Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when used in
this Guarantee Agreement unless otherwise defined in this Guarantee Agreement or
unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
Section 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT
IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN ANY
ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION
WITH THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, AND TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY WAIVES AND AGREES
NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY INSTRUMENT
REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY
SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR AGREES NOT
TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH
COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON
TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. THE GUARANTOR AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR
NOTICES SET FORTH IN THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE
LAWS OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
ALABAMA POWER COMPANY
By: Name: William B. Hutchins, III
Title: Executive Vice President, Chief
Financial Officer, and Treasurer
THE CHASE MANHATTAN BANK
By:
Name: R. Lorenzen
Title: Assistant Vice President
<PAGE>
GUARANTEE AGREEMENT
Between
Alabama Power Company
(as Guarantor)
and
The Chase Manhattan Bank
(as Trustee)
dated as of
February 1, 1999
<PAGE>
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE1
<S> <C>
Section of Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a).............................................................................................4.01(a)
310(b).......................................................................................4.01(c), 2.08
310(c)........................................................................................Inapplicable
311(a).............................................................................................2.02(b)
311(b).............................................................................................2.02(b)
311(c)........................................................................................Inapplicable
312(a).............................................................................................2.02(a)
312(b).............................................................................................2.02(b)
313...................................................................................................2.03
314(a)................................................................................................2.04
314(b)........................................................................................Inapplicable
314(c)................................................................................................2.05
314(d)........................................................................................Inapplicable
314(e)....................................................................................1.01, 2.05, 3.02
314(f)..........................................................................................2.01, 3.02
315(a).............................................................................................3.01(d)
315(b)................................................................................................2.07
315(c)................................................................................................3.01
315(d).............................................................................................3.01(d)
315(e)........................................................................................Inapplicable
316(a).......................................................................................5.04(i), 2.06
316(b)................................................................................................5.03
316(c)................................................................................................2.02
317(a)........................................................................................Inapplicable
317(b)........................................................................................Inapplicable
318(a).............................................................................................2.01(b)
318(b)................................................................................................2.01
318(c).............................................................................................2.01(a)
This Cross-Reference does not constitute part of the Guarantee Agreement and shall not affect
the interpretation of any of its terms or provisions.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Page
Article IDEFINITIONS.....................................................................................1
Section 1.01. Definitions..........................................................................1
Article IITRUST INDENTURE ACT............................................................................4
Section 2.01. Trust Indenture Act; Application.....................................................4
Section 2.02. Lists of Holders of Securities.......................................................4
Section 2.03. Reports by the Trustee...............................................................4
Section 2.04. Periodic Reports to Trustee..........................................................4
Section 2.05. Evidence of Compliance with Conditions Precedent.....................................5
Section 2.06. Events of Default; Waiver............................................................5
Section 2.07. Event of Default; Notice.............................................................5
Section 2.08. Conflicting Interests................................................................5
Article IIIPOWERS, DUTIES AND RIGHTS OF TRUSTEE..........................................................6
Section 3.01. Powers and Duties of the Trustee.....................................................6
Section 3.02. Certain Rights of Trustee............................................................7
Section 3.03. Compensation; Fees; Indemnity........................................................9
Article IVTRUSTEE........................................................................................9
Section 4.01. Trustee; Eligibility.................................................................9
Section 4.02. Appointment, Removal and Resignation of Trustee.....................................10
Article VGUARANTEE......................................................................................10
Section 5.01. Guarantee...........................................................................10
Section 5.02. Waiver of Notice and Demand.........................................................10
Section 5.03. Obligations Not Affected............................................................11
Section 5.04. Rights of Holders...................................................................12
Section 5.05. Guarantee of Payment................................................................12
Section 5.06. Subrogation.........................................................................12
Section 5.07. Independent Obligations.............................................................12
Article VISUBORDINATION.................................................................................13
Section 6.01. Subordination.......................................................................13
Article VIITERMINATION..................................................................................13
Section 7.01. Termination.........................................................................13
Article VIIIMISCELLANEOUS...............................................................................13
Section 8.01. Successors and Assigns..............................................................13
Section 8.02. Amendments..........................................................................14
Section 8.03. Notices.............................................................................14
Section 8.04. Benefit.............................................................................15
Section 8.05. Interpretation......................................................................15
Section 8.06. Governing Law.......................................................................15
</TABLE>
Exhibit 8.1
Balch & Bingham LLP
Post Office Box 306
Birmingham, Alabama 35201
205-251-8100
February 18, 1999
Alabama Power Company
600 North 18th Street
Birmingham, AL 35291
Re: Alabama Power Capital Trust III - Capital Auction Preferred Securities
Ladies and Gentlemen:
We have acted as counsel to Alabama Power Company in connection with
the preparation of a Prospectus Supplement dated February 18, 1999 related to
the Capital Auction Preferred Securities of Alabama Power Capital Trust III (the
"Prospectus Supplement") and the accompanying Prospectus (together with the
Prospectus Supplement, the "Prospectus"), which is filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act").
We have reviewed copies of the Prospectus and such other documents as
we have deemed necessary or appropriate as a basis for the opinion set forth
below.
Based on the foregoing, we are of the opinion that the statements and
legal conclusions contained in the Prospectus Supplement under the caption
"Certain Federal Income Tax Considerations" are correct in all material
respects.
We consent to the filing of this opinion as an exhibit to the
Prospectus Supplement. We also consent to the reference to Balch & Bingham LLP
under the captions "Certain Federal Income Tax Considerations" and "Legal
Opinions" in the Prospectus Supplement.
Very truly yours,
/s/Balch & Bingham LLP
