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) May 19, 1999
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ALABAMA POWER COMPANY
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(Exact name of registrant as specified in its charter)
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Alabama 1-3164 63-0004250
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(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) No.)
600 North 18th Street, Birmingham, Alabama 35291
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 257-1000
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N/A
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
On May 19, 1999, Alabama Power Company (the "Company") entered
into an Underwriting Agreement covering the issue and sale by the Company of
$200,000,000 aggregate principal amount of its Series J 6.75% Senior Notes due
June 30, 2039 (the "Series J Senior Notes"). Said Notes were registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to the
shelf registration statement (Registration Statement Nos. 333-67453,
333-67453-01, 333-67453-02 and 333-67453-03) of the Company. Incorporation of
Certain Documents by Reference
Pursuant to Rule 411of Regulation C under the Securities Act and
in reliance on MBIA Insurance Corporation, SEC No-Action Letter (September 6,
1996), the Company does hereby incorporate by reference the consolidated
financial statements of MBIA Insurance Corporation and Subsidiaries as of
December 31, 1998 and December 31, 1997, and for each of the three years in the
period ended December 31, 1998, included in the Annual Report on Form 10-K of
MBIA Inc. (which was filed with the Securities and Exchange Commission on March
30, 1999) into (i) this Current Report on Form 8-K; (ii) the Company's
Registration Statement on Form S-3 (File Nos. 333-67453, 333-67453-01,
333-67453-02 and 333-67453-03); and (iii) the final prospectus supplement dated
May 19, 1999 relating to the Series J Senior Notes filed pursuant to Rule 424(b)
under the Securities Act.
In connection with the incorporation of such documents by
reference, the Company is hereby filing the consent of PricewaterhouseCoopers
LLP, independent accountants for MBIA Insurance Corporation, insurer of the
Series J Senior Notes, to the use of its name in such prospectus supplement. The
consent of PricewaterhouseCoopers LLP is filed herewith as Exhibit 23.2.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1 Underwriting Agreement, dated May 19, 1999, among the
Company and Morgan Stanley & Co. Incorporated, A. G.
Edwards & Sons, Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, PaineWebber Incorporated,
Prudential Securities Incorporated and Salomon Smith
Barney Inc., for themselves and representatives of
the other Underwriters named in Schedule I thereto.
4.2 Tenth Supplemental Indenture to Senior Note Indenture
dated as of May 26, 1999, providing for the issuance
of the Series J Senior Notes.
4.7 Form of Series J Senior Note (included in Exhibit 4.2
above).
12.1 Computation of ratio of earnings to fixed charges.
12.2 Computation of ratio of earnings to fixed charges
plus preferred dividend requirements (pre-income tax
basis).
23.1 Consent of Balch & Bingham LLP.
23.2 Consent of PricewaterhouseCoopers 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: May 25, 1999 ALABAMA POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary
Exhibit 1
$200,000,000 Series J 6.75% Senior Notes
due June 30, 2039
ALABAMA POWER COMPANY
UNDERWRITING AGREEMENT
May 19, 1999
Morgan Stanley & Co. Incorporated
A.G. Edwards & Sons, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Alabama Power Company, an Alabama corporation (the "Company"),
confirms its agreement (the "Agreement") with you and each of the other
Underwriters named in Schedule I hereto (the "Underwriters", which term shall
include any underwriter substituted as hereinafter provided in Section 10
hereof) for whom you are acting as representatives (the "Representatives"), with
respect to the sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of $200,000,000 principal amount of the Series J
6.75% Senior Notes due June 30, 2039 (the "Senior Notes") as set forth in
Schedule I hereto.
The Company understands that the Underwriters propose to make
a public offering of the Senior Notes as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered. The Senior Notes will be
issued pursuant to an indenture, dated as of December 1, 1997, as heretofore
supplemented (the "Base Indenture"), between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"), as supplemented by a tenth supplemental
indenture to the Base Indenture relating to the Senior Notes (the "Supplemental
Indenture," and together with the Base Indenture and any other amendments or
supplements thereto, the "Indenture"), between the Company and the Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to the Underwriters as follows:
(a) A registration statement on Form S-3, as amended (File Nos. 333-67453,
333-67453-01, 333-67453-02 and 333-67453-03), in respect of the Senior
Notes and certain other securities has been prepared and filed in
accordance with the provisions of the Securities Act of 1933, as
amended (the "1933 Act"), with the Securities and Exchange Commission
(the "Commission"); such registration statement, as amended, and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Underwriters, has been declared effective by
the Commission in such form (except that copies of the registration
statement, as amended, and any post-effective amendment delivered to
the Underwriters need not include exhibits but shall include all
documents incorporated by reference therein); and no stop order
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or, to the
best knowledge of the Company, threatened by the Commission (any
preliminary prospectus, as supplemented by a preliminary prospectus
supplement, included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the 1933 Act, being hereinafter called a "Preliminary
Prospectus"); such registration statement, as it became effective,
including the exhibits thereto and all documents incorporated by
reference therein pursuant to Item 12 of Form S-3 at the time such
registration statement became effective, being hereinafter called the
"Registration Statement"; the prospectus relating to the Senior Notes,
in the form in which it was included in the Registration Statement at
the time it became effective, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the 1933 Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of
the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and the
Prospectus as amended or supplemented in final form by a prospectus
supplement relating to the Senior Notes in the form in which it is
filed with the Commission, pursuant to Rule 424(b) under the 1933 Act
in accordance with Section 3(g) hereof, including any documents
incorporated by reference therein as of the date of such filing, being
hereinafter called the "Final Supplemented Prospectus".
(b) The documents incorporated by reference in the Registration Statement
or Prospectus, when they were filed with the Commission, complied in
all material respects with the applicable provisions of the 1934 Act
and the rules and regulations of the Commission thereunder, and as of
such time of filing, when read together with the Prospectus, none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents are filed with the Commission, will comply in all material
respects with the applicable provisions of the 1934 Act and the rules
and regulations of the Commission thereunder and, when read together
with the Prospectus as it otherwise may be amended or supplemented,
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the Company makes no
warranty or representation to the Underwriters with respect to: (A) any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives
expressly for use in the Final Supplemented Prospectus; or (B) any
information set forth in the Final Supplemented Prospectus under the
captions "Description of the Series J Senior Notes - Book-Entry Only
Issuance -- The Depository Trust Company" and "The Insurer."
(c) The Registration Statement and the Prospectus and the Final
Supplemented Prospectus and any further amendments or supplements to
the Registration Statement or the Prospectus, when any such
post-effective amendments are declared effective or supplements are
filed with the Commission, as the case may be, will comply, in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, the 1939 Act (hereinafter defined) and the General Rules and
Regulations of the Commission thereunder and do not and will not, (i)
as of the applicable effective date as to the Registration Statement
and any amendment thereto and (ii) as of the applicable filing date as
to the Final Supplemented Prospectus and any Prospectus as further
amended or supplemented, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; except that the Company makes no warranties
or representations with respect to (A) that part of the Registration
Statement which shall constitute the Statements of Eligibility (Form
T-1) (collectively, the "Form T-1") under the Trust Indenture Act of
1939, as amended (the "1939 Act"), (B) statements or omissions made in
the Registration Statement or the Final Supplemented Prospectus in
reliance upon and in conformity with information furnished in writing
to the Company by the Representatives expressly for use therein or (C)
any information set forth in the Final Supplemented Prospectus under
the captions "Description of the Series J Senior Notes - Book-Entry
Only Issuance -- The Depository Trust Company" and "The Insurer."
(d) With respect to the Registration Statement, the conditions for use of
Form S-3, as set forth in the General Instructions thereof, have been
satisfied.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, except as
otherwise stated therein, there has been no material adverse change in
the business, properties or financial condition of the Company.
(f) The Company is a corporation duly organized and existing under the laws
of the State of Alabama and has due corporate authority to carry on the
public utility business in which it is engaged and to own and operate
the properties used by it in such business, to enter into and perform
its obligations under this Agreement and the Indenture and to issue and
sell the Senior Notes to the Underwriters.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery of the
Indenture by the Trustee, the Indenture will, on the Closing Date,
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, receivership, liquidation, fraudulent conveyance,
moratorium or other similar laws affecting creditors' rights generally
or (2) general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity) (the "Enforceability
Exceptions"); the Indenture will conform in all material respects to
all statements relating thereto contained in the Final Supplemented
Prospectus; and, on the Closing Date, the Indenture will have been duly
qualified under the 1939 Act.
(i) The issuance and delivery of the Senior Notes have been duly authorized
by the Company and, on the Closing Date, the Senior Notes will have
been duly executed by the Company and, when authenticated in the manner
provided for in the Indenture and delivered against payment therefor as
described in the Final Supplemented Prospectus, will constitute valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions,
will be in the form contemplated by, and entitled to the benefits of,
the Indenture and will conform in all material respects to all
statements relating thereto in the Final Supplemented Prospectus.
(j) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the Senior Notes and the consummation by
the Company of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
shall have been duly authorized by all necessary corporate action on
the part of the Company and do not and will not result in any violation
of the charter or bylaws of the Company, and do not and will not
conflict with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound or to which any of its
properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially
adverse to the Company or materially adverse to the transactions
contemplated by this Agreement), or (B) any existing applicable law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, or any
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company, or any of its properties.
(k) The Company has duly authorized all necessary action to be taken by it
for the procurement of an irrevocable financial guarantee insurance
policy (the "Insurance Policy") issued by MBIA Insurance Corporation
(the "Insurer"), insuring the payment of principal and interest on the
Senior Notes, when due.
(l) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale by the Company of the Senior Notes or the
transactions by the Company contemplated in this Agreement, except (A)
such as may be required under the 1933 Act or the rules and regulations
thereunder; (B) such as may be required under the Public Utility
Holding Company Act of 1935, as amended (the "1935 Act"); (C) the
qualification of the Indenture under the 1939 Act; (D) the approval of
the Alabama Public Service Commission (the "Alabama Commission"); and
(E) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, the principal amount of Senior Notes set forth in
Schedule I to this Agreement opposite the name of such Underwriter (plus any
additional amount of Senior Notes that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof), at a price equal to
96.85% of the principal amount thereof (except sales to institutions whereby the
price shall equal 98.00% of the principal amount thereof).
(b) Payment for and delivery of certificates for the Senior Notes shall be made
at the offices of Troutman Sanders LLP, 600 Peachtree Street, N.E., Atlanta,
Georgia 30308 at 9 A.M., Atlanta time, on May 26, 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 Representatives and the Company (such time and
date of payment and delivery being herein called the "Closing Date"). Payment
shall be made to the Company by wire transfer in federal funds at the Closing
Date against delivery of the Senior Notes to the Underwriters.
The delivery of the Senior Notes shall be made in fully
registered form, registered in the name of CEDE & CO., to the offices of The
Depository Trust Company in New York, New York or its designee, and the
Representatives shall accept such delivery.
The certificate(s) for the Senior Notes will be made available
for examination by the Representatives not later than 12:00 Noon, New York time,
on the last business day prior to the Closing Date.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the Underwriters
as follows:
(a) The Company, on or prior to the Closing Date, will deliver to the
Underwriters conformed copies of the Registration Statement as
originally filed and of all amendments thereto, heretofore or hereafter
made, including any post-effective amendment (in each case including
all exhibits filed therewith, and including unsigned copies of each
consent and certificate included therein or filed as an exhibit
thereto, except exhibits incorporated by reference, unless specifically
requested). As soon as the Company is advised thereof, it will advise
the Representatives orally of the issuance of any stop order under the
1933 Act with respect to the Registration Statement, or the institution
of any proceedings therefor, of which the Company shall have received
notice, and will use its best efforts to prevent the issuance of any
such stop order and to secure the prompt removal thereof, if issued.
The Company will deliver to the Representatives sufficient conformed
copies of the Registration Statement, the Prospectus and the Final
Supplemented Prospectus and of all supplements and amendments thereto
(in each case without exhibits) for distribution to the Underwriters
and, from time to time, as many copies of the Prospectus and the Final
Supplemented Prospectus as the Underwriters may reasonably request for
the purposes contemplated by the 1933 Act or the 1934 Act.
(b) The Company will furnish the Underwriters with copies of each amendment
and supplement to the Final Supplemented Prospectus relating to the
offering of the Senior Notes in such quantities as the Underwriters may
from time to time reasonably request. If, during the period (not
exceeding nine months) when the delivery of a prospectus shall be
required by law in connection with the sale of any Senior Notes by an
Underwriter, any event relating to or affecting the Company, or of
which the Company shall be advised in writing by the Representatives,
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
Final Supplemented Prospectus, as the case may be, in order to make the
Final Supplemented Prospectus not misleading in the light of the
circumstances when it is delivered, or if for any other reason it shall
be necessary during such period to amend or supplement the Final
Supplemented Prospectus or to file under the 1934 Act any document
incorporated by reference in the Preliminary Prospectus or Prospectus
in order to comply with the 1933 Act or the 1934 Act, the Company
forthwith will (i) notify the Underwriters to suspend solicitation of
purchases of the Senior Notes and (ii) at its expense, make any such
filing or prepare and furnish to the Underwriters a reasonable number
of copies of a supplement or supplements or an amendment or amendments
to the Final Supplemented Prospectus which will supplement or amend the
Final Supplemented Prospectus so that, as supplemented or amended, it
will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Final Supplemented
Prospectus is delivered, not misleading or which will effect any other
necessary compliance. In case any Underwriter is required to deliver a
prospectus in connection with the sale of any Senior Notes after the
expiration of the period specified in the preceding sentence, the
Company, upon the request of such Underwriter, will furnish to such
Underwriter, at the expense of such Underwriter, a reasonable quantity
of a supplemented or amended prospectus, or supplements or amendments
to the Final Supplemented Prospectus, complying with Section 10(a) of
the 1933 Act. During the period specified in the second sentence of
this subsection, the Company will continue to prepare and file with the
Commission on a timely basis all documents or amendments required under
the 1934 Act and the rules and regulations thereunder; provided, that
the Company shall not file such documents or amendments without also
furnishing copies thereof prior to such filing to the Representatives
and Dewey Ballantine LLP.
(c) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Senior Notes for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Representatives may designate; provided, however,
that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
file a consent to service of process or to file annual reports or to
comply with any other requirements in connection with such
qualification deemed by the Company to be unduly burdensome.
(d) The Company will make generally available to its security holders as
soon as practicable but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Company (in form
complying with the provisions of Rule 158 of the rules and regulations
under the 1933 Act) covering a twelve-month period beginning not later
than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in Rule 158) of the Registration
Statement.
(e) During a period of 15 days from the date of this Agreement, the Company
will not, without the Representatives' prior written consent, directly
or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any Senior Notes or any security convertible
into or exchangeable into or exercisable for the Senior Notes or any
debt securities substantially similar to the Senior Notes (except for
the Senior Notes issued pursuant to this Agreement).
(f) The Company will use its best efforts to effect the listing of the
Senior Notes on the New York Stock Exchange.
(g) 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 Representatives of such filing and to confirm such advice in
writing.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses incidental to
the performance of its obligations under this Agreement, including but not
limited to, the expenses of (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the
preparation, issuance and delivery of the certificate(s) for the Senior Notes,
(iii) the fees and disbursements of the Company's counsel and accountants, (iv)
the qualification of the Senior Notes under securities laws in accordance with
the provisions of Section 3(c) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any blue sky survey (such fees and
disbursements of counsel shall not exceed $3,500), (v) the printing and delivery
to the Underwriters of copies of the Registration Statement as originally filed
and of each amendment thereto and of the Prospectus, the Final Supplemented
Prospectus, and any amendments or supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of any blue sky survey, (vii) the fee of
the National Association of Securities Dealers, Inc. in connection with its
review of the offering contemplated by this Agreement, if applicable, (viii) the
fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Senior Notes,
(ix) any fees payable in connection with the rating of the Senior Notes, (x) the
cost and charges of any transfer agent or registrar, (xi) the premium payable to
the Insurer in connection with the issuance of the Insurance Policy, (xii) the
fees and expenses incurred in the connection with the listing of the Senior
Notes on the New York Stock Exchange, and (xiii) the cost of qualifying the
Senior Notes with The Depository Trust Company.
Except as otherwise provided in Section 9 hereof, the
Underwriters shall pay all other expenses incurred by them in connection with
their offering of the Senior Notes including fees and disbursements of their
counsel, Dewey Ballantine LLP.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Senior Notes are subject to the
following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or to the knowledge of the
Company threatened by, the Commission on such date. If filing of the
Final Supplemented Prospectus, or any supplement thereto, is required
pursuant to Rule 424, the Final Supplemented Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424.
(b) Any required orders of the Commission permitting the transactions
contemplated hereby substantially in accordance with the terms and
conditions hereof shall be in full force and effect and shall contain
no provision unacceptable to the Underwriters or the Company (but all
provisions of such order or orders heretofore entered, copies of which
have heretofore been delivered to the Representatives, 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 Representatives shall have received:
(1) The opinion, dated the Closing Date, of Balch & Bingham LLP, general
counsel for the Company, substantially in the form attached hereto as
Schedule II-A.
(2) The opinion, dated the Closing Date, of Troutman Sanders LLP, counsel
for the Company, substantially in the form attached hereto as Schedule
II-B.
(3) The opinion, dated the Closing Date, of Cravath, Swaine & Moore,
counsel to the Trustee, substantially in the form attached hereto as
Schedule III.
(4) The opinion, dated as of the Closing Date, of Dewey Ballantine LLP,
counsel for the Underwriters, substantially in the form attached hereto
as Schedule IV.
(5) The opinion, dated as of the Closing Date, of Kutak Rock, counsel for
the Insurer, substantially in the form attached hereto as Schedule V.
(6) At the Closing Date, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, any
material adverse change in the business, properties or financial
condition of the Company, whether or not arising in the ordinary course
of business, and the Underwriters shall have received a certificate of
the President or any Vice President of the Company, and dated as of the
Closing Date, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1
hereof are true and correct with the same force and effect as though
expressly made at and as of the Closing Date, (iii) the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied on or prior to the Closing Date, and (iv)
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or, to the knowledge of the Company, threatened by the
Commission.
(7) On the Closing Date, the Underwriters shall have received from Arthur
Andersen LLP a letter dated the Closing Date to the effect that: (A)
they are independent public accountants with respect to the Company
within the meaning of the 1933 Act and the rules and regulations under
the 1933 Act; (B) in their opinion, the financial statements audited by
them and incorporated by reference in the Prospectus comply as to form
in all material respects with the applicable accounting requirements of
the 1934 Act and the rules and regulations under the 1934 Act; and (C)
on the basis of certain limited procedures performed through a
specified date not more than five business days prior to the date of
such letter, namely (i) reading the minute books of the Company; (ii)
performing the procedures specified by the American Institute of
Certified Public Accountants ("AICPA") for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, "Interim Financial Information", on the unaudited financial
statements, if any, of the Company incorporated in the Prospectus and
of the latest available unaudited financial statements of the Company,
if any, as of the 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 Underwriter's purposes), nothing came to their attention that
caused them to believe that: (1) any material modifications should be
made to the unaudited condensed financial statements, if any
incorporated in the Prospectus, for them to be in conformity with
generally accepted accounting principles; (2) such unaudited condensed
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act as it
applies to Form 10-Q and the related published rules and regulations
thereunder; (3) the unaudited amounts for Operating Revenues, Income
Before Interest Charges and Net Income After Dividends on Preferred
Stock and the unaudited Ratios of Earnings to Fixed Charges and
Earnings to Fixed Charges Plus Preferred Dividends Requirements
(Pre-Income Tax Basis) set forth in the Prospectus do not agree with
the amounts set forth in or derived from the unaudited financial
statements for the same period or were not determined on a basis
substantially consistent with that of the corresponding audited amounts
or ratios included or incorporated by reference in Registration
Statement; (4) as of a specified date not more than five business days
prior to the date of delivery of such letter, there has been any change
in the capital stock or long-term debt of the Company or any decrease
in net assets as compared with amounts shown in the latest audited
balance sheet incorporated in the Prospectus, except in each case for
changes or decreases which (i) the Prospectus discloses have occurred
or may occur, (ii) are occasioned by the declaration of dividends,
(iii) are occasioned by draw-downs under existing pollution control
financing arrangements, (iv) are occasioned by draw-downs and regularly
scheduled payments of capitalized lease obligations, (v) are occasioned
by the purchase or redemption of bonds or stock to satisfy mandatory or
optional redemption provisions relating thereto, or (vi) are disclosed
in such letter; and (5) the unaudited amounts for Operating Revenues,
Income Before Interest Charges and Net Income After Dividends Preferred
Stock and the unaudited Ratios of Earnings to Fixed Charges Plus
Preferred Dividend Requirements (Pre-Income Tax Basis) for any 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.
(8) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as it may reasonably require
for the purpose of enabling it to pass upon the issuance and sale of
the Senior Notes as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Senior Notes as herein contemplated shall
be satisfactory in form and substance to the Underwriters and Dewey
Ballantine LLP, counsel for the Underwriters.
(9) That no amendment or supplement to the Registration Statement or the
Final Supplemented Prospectus filed subsequent to the date of this
Agreement (including any filing made by the Company pursuant to Section
13 or 14 of the 1934 Act) shall be unsatisfactory in form to Dewey
Ballantine LLP or shall contain information (other than with respect to
an amendment or supplement relating solely to the activity of the
Underwriters) which, in the reasonable judgment of the Representatives,
shall materially impair the marketability of the Senior Notes.
(10) The Company shall have performed its obligations when and as provided
under this Agreement.
(11) Evidence that the Insurance Policy has been issued by the Insurer and
confirmation that the Senior Notes have been rated at least Aaa by
Moody's Investors Services, Inc. and at least AAA by Standard & Poor's
Corporation.
(12) On the Closing Date, the Senior Notes shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to the Company at any time prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Sections 4, 7 and 9(b) hereof.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company shall be subject to the
conditions set forth in the first sentence of Section 5(a) and in Section 5(b).
In case such conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Representatives. Any such termination shall be without liability of any party to
any other party except as otherwise provided in Sections 4, 7 and 9(b) hereof.
SECTION 7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each of the Underwriters
and each person, if any, who controls any such Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the 1933 Act, 1934 Act or otherwise, and to
reimburse any such Underwriter and such controlling person or persons, if any,
for any legal or other expenses incurred by them in connection with defending
any actions, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Final Supplemented Prospectus or, if the
Company shall furnish to the Underwriters any amendments or any supplements
thereto, or shall make any filings pursuant to Section 13 or 14 of the 1934 Act
which are incorporated therein by reference, in any Preliminary Prospectus, the
Registration Statement, the Prospectus 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 or Final Supplemented Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by the
Representatives for use therein and except that this indemnity with respect to
the Preliminary Prospectus, the Prospectus or the Final Supplemented Prospectus,
if the Company shall have furnished any amendment or supplement thereto, shall
not inure to the benefit of any Underwriter (or of any person controlling such
Underwriter) on account of any losses, claims, damages, liabilities or actions
arising from the sale of the Senior Notes to any person if a copy of the
Preliminary Prospectus, the Prospectus 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 or the Final Supplemented Prospectus as
supplemented or amended at the time of such confirmation. Each Underwriter
agrees, within ten days after the receipt by it of notice of the commencement of
any action in respect of which indemnity may be sought by it, or by any person
controlling it, from the Company on account of its agreement contained in this
Section 7, to notify the Company in writing of the commencement thereof but the
omission of such Underwriter so to notify the Company of any such action shall
not release the Company from any liability which it may have to such Underwriter
or to such controlling person otherwise than on account of the indemnity
agreement contained in this Section 7. In case any such action shall be brought
against an Underwriter or any such person controlling such Underwriter and such
Underwriter shall notify the Company of the commencement thereof as above
provided, the Company shall be entitled to participate in (and, to the extent
that it shall wish, including the selection of counsel, to direct) the defense
thereof, at its own expense. In case the Company elects to direct such defense
and select such counsel, any Underwriter or controlling person shall have the
right to employ its own counsel, but, in any such case, the fees and expenses of
such counsel shall be at the expense of such Underwriter or such controlling
person unless the employment of such counsel has been authorized in writing by
the Company in connection with defending such action. No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include any statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party. In no event shall any
indemnifying party have any liability or responsibility in respect of the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim effected without its prior
written consent.
(b) Each Underwriter agrees severally and not jointly, to indemnify and hold
harmless the Company, its directors and such of its officers who have signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act to
the same extent and upon the same terms as the indemnity agreement of the
Company set forth in Section 7(a) hereof, but only with respect to alleged
untrue statements or omissions made in the Registration Statement, the
Preliminary Prospectus, the Prospectus or the Final Supplemented Prospectus, or
such documents as amended or supplemented, in reliance upon and in conformity
with information furnished in writing to the Company by the Representatives 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 of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by, or on behalf of the Company and shall survive
delivery of the Senior Notes to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by notice to the Company,
at any time at or prior to the Closing Date if (i) trading in securities on the
New York Stock Exchange shall have been generally suspended, (ii) minimum or
maximum ranges for prices shall have been generally established on the New York
Stock Exchange by the Commission or by the New York Stock Exchange, (iii) a
general banking moratorium shall have been declared by federal or New York State
authorities, or (iv) there shall have occurred any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of war
by the United States Congress or any other substantial national or international
calamity or emergency affecting the United States, in any such case provided for
in clauses (i) through (iv) with the result that, in the reasonable judgment of
the Representatives, the marketability of the Senior Notes shall have been
materially impaired.
(b) If this Agreement shall be terminated by the Representatives pursuant to
subsection (a) above or because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, then in any such case, the Company will
reimburse the Underwriters for the reasonable fees and disbursements of Dewey
Ballantine LLP and for the out of pocket expenses (in an amount not exceeding
$10,000) reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Senior Notes and, upon such reimbursement,
the Company shall be absolved from any further liability hereunder, except as
provided in Sections 4 and 7.
SECTION 10. DEFAULT BY AN UNDERWRITER
If an Underwriter shall fail on the Closing Date to purchase
the Senior Notes that it is obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for 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 Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the principal amount of Defaulted Securities does not
exceed 10% of the Senior Notes, the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all such non-defaulting Underwriters (or in such
other proportions as the Representatives may specify), or
(b) if the principal amount of Defaulted Securities exceeds
10% of the Senior Notes, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Final Supplemented Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to Morgan Stanley & Co. Incorporated, 1585 Broadway, Attention: 30th
Floor, New York, New York 10036; notices to the Company shall be mailed to 600
North 18th Street, 17th floor, Birmingham, Alabama, 35291, Attention: Corporate
Secretary, with a copy to Southern Company Services, Inc., 270 Peachtree Street,
N.W., Atlanta, Georgia 30303, Attention: Charles N. Eldred.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Section 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Senior Notes from the Underwriters shall be deemed
to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Except as otherwise set forth
herein, specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
ALABAMA POWER COMPANY
By: ______________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
BY: Morgan Stanley & Co. Incorporated
A.G. Edwards & Sons, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
SALOMON SMITH BARNEY INC.
As Representatives of the other Underwriters named in Schedule I hereto
BY: MORGAN STANLEY & CO. INCORPORATED
By:___________________________________________
Title:
<PAGE>
SCHEDULE I
Principal Amount
NAME OF UNDERWRITER of Senior Notes
Morgan Stanley & Co. Incorporated 26,125,000
A.G. Edwards & Sons, Inc. 26,075,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 26,075,000
PaineWebber Incorporated 26,075,000
Prudential Securities Incorporated 26,075,000
Salomon Smith Barney Inc. 26,075,000
CIBC Oppenheimer Corp. 5,000,000
Credit Suisse First Boston Corporation 5,000,000
The Robinson-Humphrey Company, LLC 5,000,000
Warburg Dillon Read LLC 5,000,000
ABN AMRO Incorporated 1,750,000
Bear, Stearns & Co., Inc. 1,750,000
J.C. Bradford & Co. 1,750,000
SG Cowen Securities Corporation 1,750,000
Robert W. Baird & Co. Incorporated 750,000
Banc One Capital Markets, Inc. 750,000
BB&T Capital Markets, 750,000
a division of Scott & Stringfellow
Blaylock & Partners, L.P. 750,000
Dain Rauscher Incorporated 750,000
Doley Securities, Inc. 750,000
Fidelity Capital Markets 750,000
A division of National Financial Services Corporation
First Union Capital Markets Corp. 750,000
J.J.B. Hilliard, W.L. Lyons, Inc. 750,000
Legg Mason Wood Walker, Incorporated 750,000
McDonald Investments Inc. 750,000
Morgan Keegan & Company, Inc. 750,000
OLDE Discount Corporation 750,000
Pershing/Division of Donaldson, Lufkin & Jenrette 750,000
Raymond James & Associates, Inc. 750,000
Roney Capital Markets, A Division of Banc One 750,000
Capital Markets, Inc.
Charles Schwab & Co., Inc. 750,000
Muriel Siebert & Co., Inc. 750,000
Southwest Securities, Inc. 750,000
U.S. Bancorp Piper Jaffray Inc. 750,000
Utendahl Capital Partners, L.P. 750,000
Williams Capital Group, L.P. 750,000
TOTAL $200,000,000
<PAGE>
Schedule II-A
[Letterhead of Balch & Bingham LLP]
___________ __, 199_
Morgan Stanley & Co. Incorporated
A.G. Edwards & Sons, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
ALABAMA POWER COMPANY
Series J ___% Senior Notes
Due June 30, 2039
Ladies and Gentlemen:
We have acted as general counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $200,000,000
aggregate principal amount of its Series J ____% Senior Notes due June 30, 2039
(the "Notes") pursuant to a Senior Note Indenture dated as of December 1, 1997,
by and between the Company and The Chase Manhattan Bank, as trustee (the
"Trustee"), as heretofore supplemented and as further supplemented by the Tenth
Supplemental Indenture dated as of May __, 1999 (collectively, the "Indenture");
and (ii) the purchase by you of the Notes pursuant to the terms of an
Underwriting Agreement dated May __, 1999 (the "Underwriting Agreement"), among
the Company and you (the "Underwriters"). This opinion is being delivered to you
pursuant to Section 5(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-67453, 333-67453-01,
333-67453-02 and 333-67453-03) pertaining to the Notes (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 May __, 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, 1998, the Quarterly Report on
Form 10-Q of the Company for the quarter ended March 31, 1999 and the Current
Reports on Form 8-K of the Company dated __________ (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the Notes,
of which we have examined a specimen), and we have made such other and further
investigations as we deemed necessary to express the opinions hereinafter set
forth.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
New York law upon the opinion dated the date hereof rendered to you by Dewey
Ballantine LLP, that:
1. The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of the State of Alabama and has
due corporate authority to carry on the public utility business in which it is
engaged and to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents, or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and the sale of the Notes; the issuance and the sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of any Alabama or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity; and the Notes conform as to legal matters in all
material respects to the description thereof in the Final Supplemented
Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above and in the Final Supplemented Prospectus in the second paragraph
under the caption "Experts". In the course of the preparation by the Company of
the Registration Statement, the Final Supplemented Prospectus and the Exchange
Act Documents, we participated in conferences with certain officers and
employees of the Company, with other counsel for the Company and with
representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statement, the Final Supplemented Prospectus and the Exchange Act
Documents, our investigations made in connection with the preparation of the
Registration Statement, the Final Supplemented Prospectus and the Exchange Act
Documents and our participation in the conferences referred to above, (i) we are
of the opinion that the Registration Statement, as of its effective date, and
the Final Supplemented Prospectus, as of __________, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of the date of filing of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(including the Exchange Act Documents on file with the Commission as of such
date), contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Final Supplemented Prospectus
(including the Exchange Act Documents) contains any untrue statement therein of
a material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the captions
"Description of the Series J Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company" and "The Insurer."
We are members of the State Bar of Alabama and we do not
express any opinion herein concerning any law other than the laws of such State
and, to the extent set forth herein, the law of the States of New York and the
federal law of the United States.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent, except that Troutman Sanders LLP and Dewey Ballantine LLP
may rely on this opinion in giving their opinions pursuant to the Underwriting
Agreement insofar as such opinion relates to matters of Alabama law.
Yours very truly,
BALCH & BINGHAM LLP
<PAGE>
Schedule II-B
[Letterhead of TROUTMAN SANDERS LLP]
__________ __, 199_
Morgan Stanley & Co. Incorporated
A.G. Edwards & Sons, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
ALABAMA POWER COMPANY
Series J ____% Senior Notes
Due June 30, 2039
Ladies and Gentlemen:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $200,000,000
aggregate principal amount of its Series J ____% Senior Notes due June 30, 2039
(the "Notes") pursuant to a Senior Note Indenture dated as of December 1, 1997,
by and between the Company and The Chase Manhattan Bank, as trustee (the
"Trustee"), as heretofore supplemented and as further supplemented by the Tenth
Supplemental Indenture dated as of May __, 1999 (collectively, the "Indenture");
and (ii) the purchase by you (the "Underwriters") of the Notes pursuant to the
terms of an Underwriting Agreement dated May __, 1999, among the Company and the
Underwriters (the "Underwriting Agreement"). This opinion is being delivered to
you pursuant to Section 5(c)(2) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-67453, 333-67453-01,
333-67453-02 and 333-67453-03) pertaining to the Notes (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 May __, 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, 1998, the Quarterly Report on
Form 10-Q of the Company for the quarter ended March 31, 1999 and the Current
Reports on Form 8-K of the Company dated _________ (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to collectively as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
Alabama law upon the opinion dated the date hereof rendered to you by Balch &
Bingham LLP, and relying as to matters of New York law upon the opinion dated
the date hereof rendered to you by Dewey Ballantine LLP, that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Alabama and has due
corporate authority to carry on the public utility business in which it is
engaged, to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and sale of the Notes; the issuance and sale of the Notes
conform in all material respects with the terms of such orders; and no other
order, consent or other authorization or approval of any Alabama or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with other counsel for the Company, with representatives of Arthur Andersen LLP
and with your counsel. Based upon our examination of the Registration Statement,
the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of _______________, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of the date of filing of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(including the Exchange Act Documents on file with the Commission as of such
date), contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Final Supplemented Prospectus
(including the Exchange Act Documents) contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the captions
"Description of the Series J Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company" and "The Insurer."
We are members of the State Bar of Georgia and we do not
express any opinion herein concerning any law other than the law of the State of
Georgia and the federal law of the United States and, to the extent set forth
herein, the laws of the States of Alabama and New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent.
Yours very truly,
TROUTMAN SANDERS LLP
<PAGE>
Schedule III
[Letterhead of Cravath, Swaine & Moore]
__________ __, 199_
Morgan Stanley & Co. Incorporated
A.G. Edwards & Sons, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Alabama Power Company
Series J ____% Senior Notes
Due June 30, 2039
Ladies and Gentlemen:
We have acted as counsel to The Chase Manhattan Bank (the
"Bank") in connection with (a) the Senior Note Indenture, dated as of December
1, 1997 as heretofore supplemented (the "Original Indenture"), between Alabama
Power Company (the "Company") and the Bank, as Trustee, and (b) the Tenth
Supplemental Indenture dated as of May __, 1999 (together with the Original
Indenture, herein called the "Indenture"), between the Company and the Bank, as
Trustee.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
records and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, including copies of the Indenture and certain
resolutions adopted by the Board of Directors of the Bank.
Based upon the foregoing, we are of the opinion that:
i) the Bank has been duly incorporated and is validly existing as a
banking corporation in good standing under the laws of the State of New York;
ii) the Bank has the corporate trust power and authority to execute,
deliver and perform its duties under the Indenture, has duly executed and
delivered the Indenture, and, insofar as the laws governing the trust powers of
the Bank are concerned and assuming due authorization, execution and delivery
thereof by the Company, the Indenture constitutes a legal, valid and binding
agreement of the Bank, enforceable against the Bank in accordance with its terms
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights generally
from time to time in effect and to general principles of equity (including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law;
iii) the execution, delivery and performance by the Bank of the
Indenture does not conflict with or constitute a breach of the charter or bylaws
of the Bank; and
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 or the performance
by the Bank of its duties thereunder, except such as have been obtained, taken
or made.
We are admitted to practice only in the State of New York, and
we express no opinion as to matters governed by any laws other than the laws of
the State of New York and the Federal law of the United States of America. We
are furnishing this opinion to you solely for your benefit. This opinion is not
to be relied upon by any other person or used, circulated, quoted or otherwise
referred to for any other purpose.
Very truly yours,
CRAVATH, SWAINE & MOORE
<PAGE>
Schedule IV
[Letterhead of DEWEY BALLANTINE LLP]
__________ __, 199_
Morgan Stanley & Co. Incorporated
A.G. Edwards & Sons, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
ALABAMA POWER COMPANY
Series J _____% Senior Notes
Due June 30, 2039
Ladies and Gentlemen:
We have represented you (the "Underwriters") in connection
with (i) the issuance by Alabama Power Company (the "Company") of $200,000,000
of its Series J ____% Senior Notes (the "Notes") pursuant to a Senior Note
Indenture dated as of December 1, 1997, by and between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"), as heretofore supplemented and as
further supplemented by the Tenth Supplemental Indenture dated as of May __,
1999 (collectively, the "Indenture"); and (ii) the purchase by you of the Notes
pursuant to the terms of an Underwriting Agreement dated May __, 1999, among the
Company and the Underwriters (the "Underwriting Agreement"). This opinion is
being delivered to you pursuant to Section 5(c)(4) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (Nos. 333-67453, 333-67453-01,
333-67453-02 and 333-67453-03) pertaining to the Notes (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 _________, 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, 1998, the Quarterly Report on Form 10-Q of the Company for the quarter ended
March 31, 1999 the Current Reports on Form 8-K of the Company, dated __________
(the "Exchange Act Documents"), each as filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the Notes,
of which we have examined a specimen), and we have made such other and further
investigations as we deemed necessary to express the opinions hereinafter set
forth. In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as aforesaid and
as to all matters covered hereby which are governed by or dependent upon the law
of the State of Alabama upon the opinion of Balch & Bingham LLP, dated the date
hereof and addressed to you that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Alabama and has due corporate authority to carry on the public utility business
in which it is engaged and to own and operate the properties used by it in such
business and to enter into and perform its obligations under the Agreements and
the Notes.
2. The execution, delivery and performance by the Company of
the Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents, or other authorizations or approvals
of the Alabama Public Service Commission and the Commission legally required for
the issuance and sale of the Notes have been obtained; such orders are
sufficient for the issuance and sale of the Notes; the issuance and sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of any Alabama or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject to the qualifications that the enforceability of the
Company's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Final Supplemented
Prospectus.
5. The Notes have been duly authorized and executed by the
Company and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriter pursuant to the
Underwriting Agreement, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with representatives of Arthur Andersen LLP and with counsel to the Company.
Based upon our examination of the Registration Statement, the Final Supplemented
Prospectus and the Exchange Act Documents, our investigations made in connection
with the preparation of the Registration Statement and the Final Supplemented
Prospectus and our participation in the conferences referred to above, (i) we
are of the opinion that the Registration Statement, as of its effective date,
and the Final Supplemented Prospectus, as of ___________, complied as to form in
all material respects with the requirements of the Act and the applicable rules
and regulations of the Commission thereunder and that the Exchange Act
Documents, as of their respective dates of filing with the Commission, complied
as to form in all material respects with the relevant requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, except that in each case we express no opinion as to the financial
statements or other financial or statistical data contained or incorporated by
reference in the Registration Statement, the Final Supplemented Prospectus or
the Exchange Act Documents, and (ii) nothing came to our attention which gives
us reason to believe that the Registration Statement, as of the date of filing
of the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 (including the Exchange Act Documents on file with the Commission as of
such date), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Final Supplemented
Prospectus (including the Exchange Act Documents) contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the captions
"Description of the Series J Senior Notes - Book-Entry Only Issuance - The
Depository Trust Company" and "The Insurer."
We are members of the State Bar of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States, and to the extent set forth
herein, the law of the State of Alabama.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by or furnished to any other person without our prior written
consent except that Balch & Bingham LLP and Troutman Sanders LLP may rely on
this opinion in giving their opinions pursuant to Section 5 of the Underwriting
Agreement, insofar as such opinions relate to matters of New York law, and Balch
& Bingham LLP may rely on this opinion in giving its opinion pursuant to
Sections 102, 302 and 904 of the Indenture, insofar as such opinion relates to
matters of New York law.
Very truly yours,
DEWEY BALLANTINE LLP
<PAGE>
Schedule V
[Letterhead of Kutak Rock]
__________ __, 199_
Morgan Stanley & Co. Incorporated
A.G. Edwards & Sons, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
ALABAMA POWER COMPANY
Series J __ % Senior Notes
Due June 30, 2039
Ladies and Gentlemen:
We have acted as special counsel to the MBIA Insurance Corporation (the
"Corporation") in connection with the issuance of Financial Guaranty Insurance
Policy No. _____ (the "Policy") relating to $200,000,000 ALABAMA POWER COMPANY
Series J ____% Senior Notes due June 30, 2039.
We are familiar with and have examined a copy of the Policy and such
other relevant documents as we have deemed necessary.
Based upon the foregoing, we are of the following opinion:
1. The Corporation is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New
York, and is licensed and authorized to issue the Policy under the laws
of the State of New York.
2. The Policy has been duly executed and is a valid and
binding obligation of the Corporation enforceable in accordance with
its terms except that the enforcement of the Policy may be limited by
laws relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights
generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
3. The Policy is not required to be registered under the
Securities Act of 1933, as amended.
4. The statements set forth under the caption "THE POLICY" in
the Prospectus Supplement dated May __, 1999 (the "Prospectus
Supplement") insofar as such statements constitute a description of the
Policy, accurately summarize the Policy.
We have not reviewed and render no opinion with respect to any
financial information contained in the Prospectus Supplement.
Very truly yours,
Exhibit 4.2
ALABAMA POWER COMPANY
TO
THE CHASE MANHATTAN BANK,
TRUSTEE.
TENTH SUPPLEMENTAL INDENTURE
DATED AS OF MAY 26, 1999
$200,000,000
SERIES J 6.75% SENIOR NOTES
DUE JUNE 30, 2039
<PAGE>
TABLE OF CONTENTS1
PAGE
ARTICLE 1Series J Senior Notes.........................4
SECTION 101. Establishment.............................................4
SECTION 102. Definitions...............................................4
SECTION 103. Payment of Principal and Interest.........................5
SECTION 104. Denominations.............................................5
SECTION 105. Global Securities.........................................5
SECTION 106. Transfer..................................................6
SECTION 107. Redemption at the Company's Option........................6
ARTICLE 2Special Insurance Provisions.....................7
SECTION 201. Supplemental Indentures...................................7
SECTION 202. Events of Default and Remedies............................7
SECTION 203. Insurance Policy Payment Procedures.......................7
SECTION 204. Application of Term "Outstanding"
to Series J Notes.......................................8
SECTION 205. Insurer as Third Party Beneficiary........................9
SECTION 206. Notices...................................................9
SECTION 207. Concerning the Special Insurance Provisions...............9
SECTION 208. Amendments or Supplements.................................9
ARTICLE 3Miscellaneous Provisions.......................9
SECTION 301. Recitals by Company.......................................9
SECTION 302. Ratification and Incorporation
of Original Indenture...................................9
SECTION 303. Executed in Counterparts..................................9
- --------
1This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.
<PAGE>
THIS TENTH SUPPLEMENTAL INDENTURE is made as of the 26th day
of May, 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 Senior Note
Indenture, dated as of December 1, 1997 (the "Original Indenture"), with the
Trustee, as supplemented by a First Supplemental Indenture, dated as of December
12, 1997 (the "First Supplemental Indenture"), a Second Supplemental Indenture,
dated as of February 26, 1998 (the "Second Supplemental Indenture"), a Third
Supplemental Indenture, dated as of April 23, 1998 (the "Third Supplemental
Indenture"), a Fourth Supplemental Indenture, dated as of August 19, 1998 (the
"Fourth Supplemental Indenture"), a Fifth Supplemental Indenture, dated as of
September 17, 1998 (the "Fifth Supplemental Indenture"), a Sixth Supplemental
Indenture, dated as of September 24, 1998 (the "Sixth Supplemental Indenture"),
a Seventh Supplemental Indenture, dated as of October 15, 1998 (the "Seventh
Supplemental Indenture"), an Eighth Supplemental Indenture, dated as of November
3, 1998 (the "Eighth Supplemental Indenture") and a Ninth Supplemental
Indenture, dated as of November 17, 1998 (the "Ninth Supplemental Indenture");
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as heretofore supplemented and as
supplemented by this Tenth Supplemental Indenture, is herein called the
"Indenture";
WHEREAS, under the Original Indenture, a new series of Senior
Notes may at any time be established pursuant to a supplemental indenture
executed by the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a new
series of Senior Notes;
WHEREAS, additional Senior Notes of other series hereafter
established, except as may be limited in the Original Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution
and delivery of this Tenth 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:
<PAGE>
ARTICLE 1
Series J Senior Notes
SECTION 101. Establishment. There is hereby established a new series of
Senior Notes to be issued under the Indenture, to be designated as the Company's
Series J 6.75% Senior Notes due June 30, 2039 (the "Series J Notes").
There are to be authenticated and delivered $200,000,000 principal
amount of Series J Notes, and no further Series J Notes shall be authenticated
and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the
Original Indenture. The Series J Notes shall be issued in definitive fully
registered form.
The Series J Notes shall be issued in the form of one Global Security
in substantially the form set out in Exhibit A hereto. The Depositary with
respect to the Series J Notes shall be The Depository Trust Company.
The form of the Trustee's Certificate of Authentication for the Series
J Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series J 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.
"Insurance Paying Agent" means State Street Bank and Trust Company,
N.A., New York, New York, or any successor thereto, as the Fiscal Agent under
the Policy.
"Insurer" means MBIA Insurance Corporation, a New York-domiciled stock
insurance corporation.
"Interest Payment Dates" means March 31, June 30, September 30, and
December 31 of each year.
"Original Issue Date" means May 26, 1999.
"Policy" means the financial guaranty insurance policy issued by the
Insurer with respect to regularly scheduled payments due for principal of and
interest on the Series J Notes as provided in such policy.
"Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day preceding such Interest
Payment Date.
<PAGE>
"Stated Maturity" means June 30, 2039.
SECTION 103. Payment of Principal and Interest. The principal of the
Series J Notes shall be due at Stated Maturity (unless earlier redeemed). The
unpaid principal amount of the Series J Notes shall bear interest at the rate of
6.75% per annum until paid or duly provided for. Interest shall be paid
quarterly in arrears on each Interest Payment Date to the Person in whose name
the Series J Notes are registered on the Regular Record Date for such Interest
Payment Date, provided that interest payable at the Stated Maturity of principal
or on a Redemption Date as provided herein will be paid to the Person to whom
principal is payable. Any such interest that is not so punctually paid or duly
provided for will forthwith cease to be payable to the Holders on such Regular
Record Date and may either be paid to the Person or Persons in whose name the
Series J Notes are registered at the close of business on a Special Record Date
for the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Series J 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 J Notes shall be listed, and upon such notice as may
be required by any such exchange, all as more fully provided in the Original
Indenture.
Payments of interest on the Series J Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series J Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series J Notes is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable.
Payment of the principal and interest due at the Stated Maturity or
earlier redemption of the Series J Notes shall be made upon surrender of the
Series J Notes at the Corporate Trust Office of the Trustee. The principal of
and interest on the Series J Notes shall be paid in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. Payments of interest (including interest on any
Interest Payment Date) will be made, subject to such surrender where applicable,
at the option of the Company, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer or other electronic 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.
SECTION 104. Denominations. The Series J Notes may be issued in the
denominations of $25, or any integral multiple thereof.
<PAGE>
SECTION 105. Global Securities. The Series J 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 J Notes represented by
the Global Security will not be exchangeable for, and will not otherwise be
issuable as, Series J 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 J 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 J Notes registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security and no successor Depositary shall have been
appointed by the Company, or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such Depositary and no successor Depositary shall have been appointed by the
Company, in each case within 90 days after the Company receives such notice or
becomes aware of such cessation, (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable, or (iii) there
shall have occurred an Event of Default with respect to the Series J Notes. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series J Notes registered in such names as the Depositary shall
direct.
SECTION 106. Transfer. No service charge will be made for any transfer
or exchange of Series J Notes, but payment will be required of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.
The Company shall not be required (a) to issue, transfer or exchange
any Series J Notes except to the Insurer during a period beginning at the
opening of business fifteen (15) days before the day of the mailing of a notice
pursuant to Section 1104 of the Original Indenture identifying the serial
numbers of the Series J 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 J Notes theretofore selected for redemption in whole or in part, except
the unredeemed portion of any Series J Note redeemed in part.
SECTION 107. Redemption at the Company's Option. The Series J Notes
shall be subject to redemption at the option of the Company, in whole or in
part, without premium or penalty, at any time or from time to time on or after
May 26, 2004 at a Redemption Price equal to 100% of the principal amount to be
redeemed plus accrued but unpaid interest to the Redemption Date.
In the event of redemption of the Series J Notes in part only, a new
Series J 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 J Notes will not have a sinking fund.
<PAGE>
Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.
Any redemption of less than all of the Series J Notes shall, with
respect to the principal thereof, be divisible by $25.
ARTICLE 2
Special Insurance Provisions
SECTION 201. Supplemental Indentures. The consent of the Insurer shall
be required with respect to any indenture or indentures supplemental to the
Original Indenture requiring the consent of the Holders of the Series J Notes
pursuant to Section 902 of the Original Indenture.
SECTION 202. Events of Default and Remedies. Subject to Section 107 of
the Original Indenture and to the Trust Indenture Act, including, without
limitation, Sections 316(a)(1) and 317(a) thereof, if an Event of Default with
respect to the Series J Notes occurs and is continuing, the Insurer shall be
entitled to control and direct the enforcement of all rights and remedies
granted to the Holders of the Series J Notes or the Trustee for the benefit of
the Holders of the Series J Notes under the Indenture, including, without
limitation, (i) the right to accelerate the principal of the Series J Notes as
provided in Section 502 of the Original Indenture, and (ii) the right to annul
any such declaration of acceleration, and the Insurer shall also be entitled to
approve any waiver of an Event of Default with respect to the Series J Notes,
the obligation of the Trustee to comply with any such direction to be subject to
compliance with the conditions set forth in Sections 512 and 603(e) of the
Original Indenture (as if references in those Sections to Holders were
references to the Insurer) and the protections provided to the Trustee by
Section 601(c)(3) of the Original Indenture shall be applicable with respect to
any direction from the Insurer given pursuant hereto (as if references in said
Section to Holders were references to the Insurer).
SECTION 203. Insurance Policy Payment Procedures. (a) If the Trustee
does not have sufficient funds for any payment of principal or interest on the
due date or if the Trustee has notice that any Holder has been required to
disgorge payments of principal or interest on the Series J Notes to a trustee in
bankruptcy or creditors or others pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes an avoidable preference to
such Holder within the meaning of any applicable bankruptcy laws, then the
Trustee shall notify the Insurer or its designee of such fact by telephone or
telegraphic notice, confirmed in writing by registered or certified mail.
(b) The Trustee is hereby irrevocably designated, appointed, directed
and authorized to act as attorney-in-fact for Holders of the Series J Notes as
follows:
<PAGE>
1. If and to the extent there is a deficiency in amounts
required to pay interest on the Series J Notes, the Trustee shall (a)
execute and deliver to the Insurance Paying Agent, in form satisfactory
to the Insurance Paying Agent, an instrument appointing the Insurer as
agent for such Holders in any legal proceeding related to the payment
of such interest and an assignment to the Insurer of the claims for
interest to which such deficiency relates and which are paid by the
Insurer, (b) receive as designee of the respective Holders (and not as
Trustee) in accordance with the tenor of the Policy payment from the
Insurance Paying Agent with respect to the claims for interest so
assigned, and (c) disburse the same to such respective Holders; and
2. If and to the extent of a deficiency in amounts required to
pay principal of the Series J Notes, the Trustee shall (a) execute and
deliver to the Insurance Paying Agent in form satisfactory to the
Insurance Paying Agent an instrument appointing the Insurer as agent
for such Holders in any legal proceeding relating to the payment of
such principal and an assignment to the Insurer of any of the Series J
Notes surrendered to the Insurance Paying Agent to the extent of the
principal amount thereof as has not previously been paid or for which
moneys are not held by the Trustee and available for such payment (but
such assignment shall be delivered only if payment from the Insurance
Paying Agent is received), (b) receive as designee of the respective
Holders (and not as Trustee) in accordance with the tenor of the Policy
payment therefor from the Insurance Paying Agent, and (c) disburse the
same to such Holders.
(c) Payments with respect to claims for interest on and principal of
Series J Notes disbursed by the Trustee from proceeds of the Policy shall not be
considered to discharge the obligation of the Company with respect to such
Series J Notes, and the Insurer shall become the owner of such unpaid Series J
Notes and claims for the interest thereon in accordance with the tenor of the
assignment made to it under the provisions of this subsection or otherwise.
(d) Irrespective of whether any such assignment is executed and
delivered, the Company and the Trustee hereby agree for the benefit of the
Insurer that,
1. They recognize that to the extent the Insurer makes
payments, directly or indirectly (as by paying through the Trustee), on
account of principal of or interest on the Series J Notes, the Insurer
will be subrogated to the rights of such Holders to receive the amount
of such principal and interest from the Company, with interest thereon
as provided and solely from the sources stated in the Indenture and the
Series J Notes; and
2. They will accordingly pay to the Insurer the amount of such
principal and interest (including principal and interest recovered
under subparagraph (ii) of the first paragraph of the Policy, which
principal and interest shall be deemed past due and not to have been
paid), with interest thereon as provided in the Indenture and the
Series J Note, but only from the sources and in the manner provided
herein for the payment of principal of and interest on the Series J
Notes to Holders, and will otherwise treat the Insurer as the owner of
such rights to the extent of the amount of such principal and interest.
<PAGE>
SECTION 204. Application of Term "Outstanding" to Series J Notes. In the
event that the principal and/or interest due on the Series J Notes shall be paid
by the Insurer pursuant to the Policy, the Series J Notes shall remain
Outstanding for all purposes of the Indenture, not be considered defeased or
otherwise satisfied and not be considered paid by the Company, and the Indenture
and all covenants, agreements and other obligations of the Company to the
Holders of the Series J Notes shall continue to exist and such covenants,
agreements and other obligations shall run to the benefit of the Insurer, and
the Insurer shall be subrogated to the rights of such Holders to the extent of
each such payment.
SECTION 205. Insurer as Third Party Beneficiary. To the extent that the
Indenture confers upon or gives or grants to the Insurer any right, remedy or
claim under or by reason of the Indenture, the Insurer is hereby explicitly
recognized as being a third-party beneficiary hereunder and may enforce any such
right, remedy or claim conferred, given or granted hereunder.
SECTION 206. Notices. Any notice that is required to be given to a
Holder of a Series J Note or to the Trustee pursuant to the Indenture shall also
be provided to the Insurer. All notices required to be given to the Insurer
under the Indenture shall be in writing and shall be sent by registered or
certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk,
New York 10504, Attention: Surveillance.
SECTION 207. Concerning the Special Insurance Provisions. The provisions
of this Article 2 shall apply notwithstanding anything in the Indenture to the
contrary, but only so long as the Policy shall be in full force and effect and
the Insurer is not in default thereunder.
SECTION 208. Amendments or Supplements. The Trustee, in determining
whether any amendments or supplements to the Indenture may be made without the
consent of the Holders, or in determining whether any action should be taken,
shall consider the effect of such action on the rights of the Holders as if the
Policy were not in effect.
ARTICLE 3
Miscellaneous Provisions
SECTION 301. Recitals by Company. The recitals in this Tenth
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 J Notes and of this Tenth Supplemental Indenture
as fully and with like effect as if set forth herein in full.
SECTION 302. 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, the First
Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth
Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh
Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth
Supplemental Indenture and this Tenth Supplemental Indenture shall be read,
taken and construed as one and the same instrument.
SECTION 303. Executed in Counterparts. This Tenth 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:
Patricia B. Southerland William B. Hutchins, III
Assistant Secretary Executive Vice President,
Chief Financial Officer and
Treasurer
ATTEST: THE CHASE MANHATTAN BANK, as Trustee
By: By:
Trust Officer Vice President
<PAGE>
EXHIBIT A
FORM OF SERIES J NOTE
NO. __ CUSIP NO. 010392587
ALABAMA POWER COMPANY
SERIES J 6.75% SENIOR NOTE
DUE JUNE 30, 2039
- ------------------------- -----------------------------------------------------
Principal Amount: $_____________
- ------------------------- -----------------------------------------------------
- ------------------------- -----------------------------------------------------
Regular Record Date: 15th calendar day prior to Interest Payment Date
- ------------------------- -----------------------------------------------------
- ------------------------- -----------------------------------------------------
Original Issue Date: May 26, 1999
- ------------------------- -----------------------------------------------------
- ------------------------- -----------------------------------------------------
Stated Maturity: June 30, 2039
- ------------------------- -----------------------------------------------------
- ------------------------- -----------------------------------------------------
Interest Payment Dates: March 31, June 30, September 30 and December 31
- ------------------------- -----------------------------------------------------
- ------------------------- -----------------------------------------------------
Interest Rate: 6.75% per annum
- ------------------------- -----------------------------------------------------
- ------------------------- -----------------------------------------------------
Authorized Denomination: $25
- ------------------------- -----------------------------------------------------
- ------------------------- -----------------------------------------------------
Initial Redemption Date: May 26, 2004
- ------------------------- -----------------------------------------------------
<PAGE>
Alabama Power Company, an Alabama corporation (the "Company", which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
_______________________________________________, or registered assigns, the
principal sum of _________ DOLLARS ($__________) on the Stated Maturity shown
above (or upon earlier redemption), and to pay interest thereon from the
Original Issue Date shown above, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, quarterly in arrears on
each Interest Payment Date as specified above, commencing on June 30, 1999, and
on the Stated Maturity (or upon earlier redemption) at the rate per annum shown
above until the principal hereof is paid or made available for payment and on
any overdue principal and on any overdue installment of interest. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date (other than an Interest Payment Date that is the Stated Maturity or on a
Redemption Date) will, as provided in such Indenture, be paid to the Person in
whose name this Note (the "Note") is registered at the close of business on the
Regular Record Date as specified above next preceding such Interest Payment
Date, provided that any interest payable at Stated Maturity or on any Redemption
Date will be paid to the Person to whom principal is payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this Note
is registered at the close of business on a Special Record Date for the payment
of such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Notes of this series shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day, except that, if such
Business Day is in the next succeeding calendar year, payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee is closed for business.
Payment of the principal of and interest due at the Stated Maturity or
earlier redemption of the Series J Notes shall be made upon surrender of the
Series J Notes at the Corporate Trust Office of the Trustee. The principal of
and interest on the Series J Notes shall be paid in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. Payment of interest (including interest on an
Interest Payment Date) will be made, subject to such surrender where applicable,
at the option of the Company, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer or other electronic transfer at such place and to such account
at a banking institution in the United States as may be designated in writing to
the Trustee at least 16 days prior to the date for payment by the Person
entitled thereto.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
ALABAMA POWER COMPANY
By:
Vice President
Attest:
Assistant Secretary
{Seal of ALABAMA POWER COMPANY appears here}
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Officer
<PAGE>
(Reverse Side of Note)
This Note is one of a duly authorized issue of Senior Notes of the
Company (the "Notes"), issued and issuable in one or more series under a Senior
Note Indenture, dated as of December 1, 1997, as supplemented (the "Indenture"),
between the Company and The Chase Manhattan Bank, Trustee (the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures incidental thereto reference is hereby made for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes issued thereunder and of
the terms upon which said Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof as Series J 6.75%
Senior Notes due June 30, 2039 (the "Series J Notes") in the aggregate principal
amount of up to $200,000,000. Capitalized terms used herein for which no
definition is provided herein shall have the meanings set forth in the
Indenture.
The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note at any time on or after May 26, 2004 at
the option of the Company, without premium or penalty, in whole or in part, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest to the Redemption Date.
In the event of redemption of this Note in part only, a new Note or
Notes of this Series for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the surrender hereof. The Notes will not have a
sinking fund.
If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the Notes at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes of each series at the time Outstanding, on behalf of the Holders of
all Notes of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
<PAGE>
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and of like tenor and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Notes of this series are issuable only in registered form without
coupons in denominations of $25 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>
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a financial
guaranty insurance policy (the "Policy") containing the following provisions,
such policy being on file at The Chase Manhattan Bank, 450 West 33rd Street, New
York, New York 10001.
The Insurer, in consideration of the payment of the premium and subject
to the terms of the Policy, hereby unconditionally and irrevocably guarantees to
any owner, as hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of the Company to
The Chase Manhattan Bank or its successor (the "Paying Agent") of an amount
equal to (i) the principal of (at the stated maturity) and interest on, the
Obligations (as that term is defined below) as such payments shall become due
but shall not be so paid (except that in the event of any acceleration of the
due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, the payments guaranteed hereby
shall be made in such amounts and at such times as such payments of principal
would have been due had there not been any such acceleration); and (ii) the
reimbursement of any such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes an avoidable preference to such owner within the meaning of
any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii)
of the preceding sentence shall be referred to herein collectively as the
"Insured Amounts." "Obligations" shall mean:
$200,000,000
ALABAMA POWER COMPANY
SERIES J 6.75% SENIOR NOTES
DUE JUNE 30, 2039
<PAGE>
Upon receipt of telephonic notice, such notice subsequently confirmed
in writing by registered or certified mail, or upon receipt of written notice by
registered or certified mail, by the Insurer from the Paying Agent or any owner
of an Obligation the payment of an Insured Amount for which is then due, that
such required payment has not been made, the Insurer on the due date of such
payment or within one Business Day after receipt of notice of such nonpayment,
whichever is later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or its successor,
sufficient for the payment of any such Insured Amounts which are then due. Upon
presentment and surrender of such Obligations or presentment of such other proof
of ownership of the Obligations, together with any appropriate instruments of
assignment to evidence the assignment of the Insured Amounts due on the
Obligations as are paid by the Insurer, and appropriate instruments to effect
the appointment of the Insurer as agent for such owners of the Obligations in
any legal proceeding related to payment of Insured Amounts on the Obligations,
such instrument being in a form satisfactory to State Street Bank and Trust
Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such
owners or the Paying Agent payment of the Insured Amounts due on such
Obligations, less any amount held by the Paying Agent for the payment of such
Insured Amounts and legally available therefor. The Policy does not insure
against loss of any prepayment premium which may at any time be payable with
respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the Company
or any designee of the Company for such purpose. The term owner shall not
include the Company or any party whose agreement with the Company constitutes
the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its
offices located at 113 King Street, Armonk, New York 10504 and such service of
process shall be valid and binding.
This policy is non-cancellable for any reason. The premium on this
policy is not refundable for any reason including the payment prior to maturity
of the Obligations.
The insurance provided by the Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
MBIA Insurance Corporation
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM- as tenants in UNIF GIFT MIN ACT- _______ Custodian ________
common (Cust) (Minor)
TEN ENT- as tenants by the
entireties under Uniform Gifts to
JT TEN- as joint tenants Minors Act
with right of
survivorship and ________________________
not as tenants (State)
in common
Additional abbreviations may also be used
though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
(please insert Social Security or other identifying number of assignee)
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
agent to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
Authorized Officer
Exhibit 12.1
5/18/99
ALABAMA POWER COMPANY
Computation of ratio of earnings to fixed charges for the
the five years ended December 31, 1998
and the twelve months ended March 31, 1999
<TABLE>
<CAPTION>
Twelve
Months
Ended
Year ended December 31, March 31,
=======================================================================
1994 1995 1996 1997 1998 1999
---------------------------Thousands of Dollars-----------------------
EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K:
<S> <C> <C> <C> <C> <C> <C>
Income Before Interest Charges $594,669 $628,304 $627,627 $645,449 $702,409 $692,168
Federal and state income taxes 242,569 186,856 191,167 222,956 141,332 124,671
Deferred income taxes, net (32,536) 32,047 16,715 (12,879) 79,323 93,207
Deferred investment tax credits (4) (75) - - - -
AFUDC - Debt funds 3,590 7,109 6,517 4,855 4,664 5,746
-------- --------- -------- --------- --------- ---------
Earnings as defined 808,288 $854,241 842,026 $860,381 $927,728 $915,792
======== ========= ======== ========= ========= =========
FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
Interest on long-term debt $180,182 $183,199 $171,689 $169,536 $194,559 $194,803
Interest on interim obligations 5,939 16,917 20,617 22,787 11,012 9,281
Amort of debt disc, premium and expense, net 9,655 20,270 9,520 9,657 42,506 42,800
Other interest charges 19,909 27,064 34,227 57,799 67,129 61,583
-------- --------- -------- --------- --------- ---------
Fixed charges as defined 215,685 $247,450 236,053 $259,779 $315,206 $308,467
======== ========= ======== ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES 3.75 3.45 3.57 3.31 2.94 2.97
</TABLE>
Note: The above figures have been adjusted to give effect to Alabama Power
Company's 50% ownership of Southern Electric Generating Company.
Exhibit 12.2
5/18/99
ALABAMA POWER COMPANY
Computation of ratio of earnings to fixed charges plus preferred
dividend requirements for the five years ended December 31, 1998
and the twelve months ended March 31, 1999
<TABLE>
<CAPTION>
Twelve
Months
Ended
Year ended December 31, March 31,
======================================================================
1994 1995 1996 1997 1998 1999
--------------------------Thousands of Dollars------------------------
EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K:
<S> <C> <C> <C> <C> <C> <C>
Income Before Interest Charges $594,669 $628,304 $627,627 $645,449 $702,409 $692,168
Federal and state income taxes 242,569 186,856 191,167 222,956 141,332 124,671
Deferred income taxes, net (32,536) 32,047 16,715 (12,879) 79,323 93,207
Deferred investment tax credits (4) (75) - - - -
AFUDC - Debt funds 3,590 7,109 6,517 4,855 4,664 5,746
-------- --------- -------- --------- --------- ---------
Earnings as defined $808,288 $854,241 842,026 $860,381 $927,728 $915,792
======== ========= ======== ========= ========= =========
FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
Interest on long-term debt $180,182 $183,199 $171,689 $169,536 $194,559 $194,803
Interest on interim obligations 5,939 16,917 20,617 22,787 11,012 9,281
Amort of debt disc, premium and expense, net 9,655 20,270 9,520 9,657 42,506 42,800
Other interest charges 19,909 27,064 34,227 57,799 67,129 61,583
-------- --------- -------- --------- --------- ---------
Fixed charges as defined 215,685 247,450 236,053 259,779 315,206 308,467
Tax deductible preferred dividends 1,605 1,605 1,605 1,589 1,236 1,236
-------- --------- -------- --------- --------- ---------
217,290 249,055 237,658 261,368 316,442 309,703
-------- --------- -------- --------- --------- ---------
Non-tax deductible preferred dividends 24,630 25,464 24,997 12,997 13,407 13,953
Ratio of net income before taxes to net income x 1.549 x 1.564 x 1.522 x 1.538 x 1.563 x 1.559
-------- --------- -------- --------- --------- ---------
Pref dividend requirements before income taxes 38,152 39,826 38,045 19,989 20,955 21,753
-------- --------- -------- --------- --------- ---------
Fixed charges plus pref dividend requirements $255,442 $288,881 $275,703 $281,357 $337,397 $331,456
======== ========= ======== ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES PLUS
PREFERRED DIVIDEND REQUIREMENTS 3.16 2.96 3.05 3.06 2.75 2.76
</TABLE>
Note: The above figures have been adjusted to give effect to Alabama Power
Company's 50% ownership of Southern Electric Generating Company.
Exhibit 23.1
Balch & Bingham LLP
Birmingham, Alabama
May 19, 1999
Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291
Ladies and Gentlemen:
We hereby consent to the reference to our firm under the caption
"Experts" in the Prospectus Supplement of Alabama Power Company (the "Company")
dated May 19, 1999, relating to $200,000,000 aggregate principal amount of
Series J 6.75% Senior Notes due June 30, 2039, and to the filing hereof with the
Securities and Exchange Commission as an exhibit to the Company's Current Report
on Form 8-K dated May 19, 1999.
Very truly yours,
/s/Balch & Bingham LLP
EXHIBIT 23.2
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus Supplement dated
May 19, 1999 (to Prospectus dated December 4, 1998) of Alabama Power Company
(the "Company") relating to Series J Senior Notes, which is incorporated by
reference in Form 8-K of the Company dated May 19, 1999, of our report dated
February 2, 1999 on our audits of the consolidated financial statements of MBIA
Insurance Corporation and Subsidiaries as of December 31, 1998 and 1997, and for
each of the three years in the period ended December 31, 1998. We also consent
to the reference to our Firm under the caption "Experts" in the Prospectus
Supplement.
/s/ PricewaterhouseCoopers LLP
New York, New York
May 19, 1999
