Exhibit 1.2
$100,000,000
Series R 4.70% Senior Notes
due December 1, 2010
ALABAMA POWER COMPANY
UNDERWRITING AGREEMENT
November 20, 2002
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the Several Underwriters
Ladies and Gentlemen:
Alabama Power Company, an Alabama corporation (the "Company"),
confirms its agreement (the "Agreement") with each of you and the other
Underwriter named in Schedule I hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof) for whom you are acting as representatives (in such capacity
you shall hereinafter be referred to as the "Representatives"), with respect to
the sale by the Company and the purchase by the Underwriters, acting severally
and not jointly, of $100,000,000 aggregate principal amount of the Series R
4.70% Senior Notes due December 1, 2010 (the "Senior Notes") as set forth in
Schedule I hereto.
The Company understands that the Underwriters are making a
public offering of the Senior Notes pursuant to this Agreement. 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 JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank), as trustee (the
"Trustee"), and as further supplemented by an eighteenth supplemental indenture,
dated as of November 26, 2002, 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. 333-100721, ▇▇▇-▇▇▇▇▇▇-▇▇,
▇▇▇-▇▇▇▇▇▇-▇▇, and 333-100721-03), 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(e) hereof,
including any documents incorporated by reference therein as of the date of such filing, being
hereinafter called the "Final Supplemented Prospectus".
(b) The documents incorporated by reference in the Registration Statement or Prospectus, when they
were filed with the Commission, complied in all material respects with the applicable
provisions of the 1934 Act and the rules and regulations of the Commission thereunder, and as
of such time of filing, when read together with the Prospectus, none of such documents
contained an untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or supplement thereto,
when such documents are filed with the Commission, will comply in all material respects with
the applicable provisions of the 1934 Act and the rules and regulations of the Commission
thereunder and, when read together with the Prospectus as it otherwise may be amended or
supplemented, will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except that the Company
makes no warranty or representation to the Underwriters with respect to: (A) any statements or
omissions made in reliance upon and in conformity with information furnished in writing to the
Company by the Underwriters expressly for use in the Final Supplemented Prospectus; or (B) any
information set forth in the Final Supplemented Prospectus under the caption "Description of
the Series R Senior Notes - Book-Entry-Only Issuance - The Depository Trust Company."
(c) The Registration Statement, the Prospectus and the Final Supplemented Prospectus comply, 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) 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 Underwriters expressly for use therein
or (C) any information set forth in the Final Supplemented Prospectus under the caption
"Description of the Series R Senior Notes - Book-Entry-Only Issuance - The Depository Trust
Company."
(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, whether
or not arising in the ordinary course of business.
(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 (as hereinafter
defined), 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) 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; (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.
(l) The financial statements incorporated by reference in the Registration Statement and the Final
Supplemented Prospectus, together with the related schedules and notes, present fairly, in all
material respects, the financial position, results of operations and cash flows of the Company
as of and for the dates indicated; said financial statements have been prepared in conformity
with accounting principles generally accepted in the United States ("GAAP") applied on a
consistent basis (except that the unaudited financial statements may be subject to normal
year-end adjustments) throughout the periods involved and necessarily include amounts that are
based on the best estimates and judgments of management. The selected financial data and the
summary financial information included in the Final Supplemented Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with that of the audited
and unaudited financial statements incorporated by reference in the Registration Statement. No
material modifications should be made to the unaudited condensed financial statements
incorporated by reference in the Registration Statement and the Final Supplemented Prospectus
for them to be in conformity with GAAP.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
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(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, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company, the principal amount of
the Senior Notes set forth in Schedule I to this Agreement opposite the name of
such Underwriter (plus any additional amount of the Senior Notes that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof), at a price equal to 99.090% of the principal amount thereof.
(b) Payment for and delivery of certificates for the Senior Notes shall be made
at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, Bank of America Plaza, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ at 9:00 A.M., Atlanta time, on November 26, 2002
(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
Representatives. It is understood that each Underwriter has authorized the
Representatives, for each Underwriter's account, to accept delivery of, receipt
for, and make payment of the principal amount of the Senior Notes which each
Underwriter has agreed to purchase. The Representatives, individually and not as
Representatives of the Underwriters, may (but shall not be obligated to) make
payment of the principal amount of the Senior Notes to be purchased by any
Underwriter whose payment has not been received by the Closing Date, but such
payment shall not relieve such Underwriter from its obligations hereunder.
The delivery of the Senior Notes shall be made in fully
registered form, registered in the name of CEDE & CO., to the offices of The
Depository Trust Company in New York, New York or its designee, and the
Underwriters shall accept such delivery.
The certificate(s) for the Senior Notes will be made available
for examination by the 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:
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(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 ▇▇▇▇ ▇▇▇.
(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 Underwriters, shall occur,
which in the opinion of the Company or of Underwriters' counsel should be set forth in a
supplement to or an amendment of the 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇ ▇▇▇) 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) 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.
(f) 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 and $100,000,000 aggregate principal amount of the Company's Series Q 5.50% Senior
Notes due October 15, 2017). The Representatives agree that commercial paper or other debt
securities with scheduled maturities of less than one year are not subject to this Section 3(f).
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 and (xi) 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, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters to
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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 Alabama Commission and the Commission permitting the transactions
contemplated hereby substantially in accordance with the terms and conditions hereof shall be
in full force and effect and shall contain no provision unacceptable to the Underwriters or the
Company (but all provisions of such order or orders heretofore entered, copies of which have
heretofore been delivered to the 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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, general
counsel for the Company, substantially in the form attached hereto as
Schedule II-A.
(2) The opinion, dated the Closing Date, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 & ▇▇▇▇▇,
counsel to the Trustee, substantially in the form attached hereto as
Schedule III.
(4) The opinion, dated as of the Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
counsel for the Underwriters, substantially in the form attached hereto
as Schedule IV.
(5) 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 Representatives 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.
(6) On the Closing Date, the Representatives shall have received from
Deloitte & Touche 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) 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 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 on the latest available unaudited financial statements
of the Company, if any, for any 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 Deloitte & Touche
LLP make no representations as to the sufficiency of such procedures
for the Underwriters' purposes), nothing came to their attention that
caused them to believe that: (1) any material modifications should be
made to the unaudited condensed financial statements, if any,
incorporated in the Prospectus, for them to be in conformity with GAAP;
(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, Earnings Before Interest and Income Taxes and
Net Income After Dividends on Preferred Stock and the unaudited Ratio
of Earnings to Fixed Charges set forth in the Final Supplemented
Prospectus do not agree with the amounts set forth in or derived from
the unaudited financial statements for the same period; (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, (vi) are occasioned by
the reclassification of current maturities of long-term debt, or (vii)
are disclosed in such letter; and (5) the unaudited amounts for
Operating Revenues, Earnings Before Interest and Income Taxes and Net
Income After Dividends on Preferred Stock and the unaudited Ratio of
Earnings to Fixed Charges 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.
(7) 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 Representatives and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters.
(8) 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 ▇▇▇▇ ▇▇▇) shall be unsatisfactory in form to ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ 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.
(9) The Company shall have performed its obligations when and as provided
under this Agreement.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives 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 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, or through
the Representatives on behalf of, the Underwriters 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, or through the
Representatives on behalf of, such Underwriter for use therein.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers 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 or there shall have
been a material disruption in settlement in securities generally, (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, crisis or emergency (including, without limitation, acts of terrorism)
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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the principal amount of Defaulted Securities exceeds 10% of the Senior
Notes, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the 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
the Representatives at ▇▇▇▇▇▇▇, Sachs & Co., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Credit Capital Markets;
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III; notices to the Company shall be
mailed to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Secretary, with a copy to Southern Company Services,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
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 any of 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.
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
▇▇▇▇▇▇▇, SACHS & CO.
-------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:___________________________
Title:
For themselves and as Representatives of the other
Underwriter named in Schedule I hereto
SCHEDULE I
Principal Amount of
Name of Underwriters Senior Notes
▇▇▇▇▇▇▇, Sachs & Co. $40,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated $40,000,000
Credit Lyonnais Securities (USA) Inc. $20,000,000
------------
TOTAL: $ 100,000,000
=============
Schedule II-A
[Letterhead of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP]
_______ _, 2002
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the Several Underwriters
ALABAMA POWER COMPANY
Series R 4.70% Senior Notes
due December 1, 2010
Ladies and Gentlemen:
We have acted as general counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $100,000,000
aggregate principal amount of its Series R 4.70% Senior Notes due December 1,
2010 (the "Notes") pursuant to a Senior Note Indenture dated as of December 1,
1997, by and between the Company and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank), as trustee (the "Trustee"), as heretofore supplemented
and as further supplemented by the Eighteenth Supplemental Indenture dated as of
__________, 2002 (collectively, the "Indenture"); and (ii) the purchase by the
Underwriters of the Notes pursuant to the terms of an Underwriting Agreement
dated November 20, 2002, among the Company and the Underwriters for whom you are
acting as Representatives (the "Underwriting Agreement"). This opinion is being
delivered to you as Representatives 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 (File Nos. 333-100721, ▇▇▇-▇▇▇▇▇▇-▇▇,
▇▇▇-▇▇▇▇▇▇-▇▇, and 333-100721-03) pertaining to the Notes (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated November 6, 2002 as supplemented by a final prospectus
supplement relating to the Notes dated __________, 2002 (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, 2001,
the Quarterly Reports on Form 10-Q of the Company for the quarters ended
________ and the Current Reports on Form 8-K of the Company dated __________
(the "Exchange Act Documents"), each as filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate 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.
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 ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ 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. 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 Deloitte & Touche
LLP and with your counsel. Based upon our examination of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of __________, complied as to form in all material
respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date, 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) contained, as of its date, or contains, on the date
hereof, any untrue statement therein of a material fact or omitted, as of its
date, or omits, on the date hereof, 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 caption "Description of the Series R Senior Notes - Book-Entry-Only Issuance
- The Depository Trust Company."
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 State 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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Schedule II-B
[Letterhead of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP]
November__, 2002
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the Several Underwriters
ALABAMA POWER COMPANY
Series R 4.70% Senior Notes
due December 1, 2010
Ladies and Gentlemen:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $100,000,000
aggregate principal amount of its Series R 4.70% Senior Notes due December 1,
2010 (the "Notes") pursuant to a Senior Note Indenture dated as of December 1,
1997, by and between the Company and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank), as trustee (the "Trustee"), as heretofore supplemented
and as further supplemented by the Eighteenth Supplemental Indenture dated as of
__________, 2002 (collectively, the "Indenture"); and (ii) the purchase by the
Underwriters of the Notes pursuant to the terms of an Underwriting Agreement
dated November 20, 2002 (the "Underwriting Agreement"), among the Company and
the Underwriters for whom you are acting as Representatives. This opinion is
being delivered to you as Representatives 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 (File Nos. 333-100721, ▇▇▇-▇▇▇▇▇▇-▇▇,
▇▇▇-▇▇▇▇▇▇-▇▇, and 333-100721-03) pertaining to the Notes (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated November 6, 2002 as supplemented by a final prospectus
supplement relating to the Notes dated __________, 2002 (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, 2001,
the Quarterly Reports on Form 10-Q of the Company for the quarters ended
_________ and the Current Reports on Form 8-K of the Company dated _________
(the "Exchange Act Documents"), each as filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate 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 ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, and relying as to matters of New York law upon the opinion dated
the date hereof rendered to you by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 Deloitte & Touche
LLP and with your counsel. Based upon our examination of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of _______________, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date, 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) contained, as of its date, or contains, on the date
hereof, any untrue statement of a material fact or omitted as of its date, or
omits, as of the date hereof, 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 caption "Description of the Series R Senior Notes - Book-Entry-Only Issuance
- The Depository Trust Company."
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,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
Schedule III
[Letterhead of Cravath, Swaine & ▇▇▇▇▇]
_____, 2002
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the Several Underwriters
Alabama Power Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Alabama Power Company
Series R 4.70% Senior Notes
due December 1, 2010
Ladies and Gentlemen:
We have acted as counsel to JPMorgan Chase Bank (formerly
known as 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, (b) the Eighteenth Supplemental Indenture, dated as of
___________ (together with the Original Indenture, herein called the
"Indenture"), between the Company and the Bank, as Trustee.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
records and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, including copies of the Indenture and certain
resolutions adopted by the Board of Directors of the Bank.
Based upon the foregoing, we are of the opinion that:
i) the Bank has been duly incorporated and is
validly existing as a banking corporation in good standing under the laws of
the State of New York;
ii) the Bank has the corporate trust power and
authority to execute, deliver and perform its duties under the Indenture, has
duly executed and delivered the Indenture and, insofar as the laws governing
the trust powers of the Bank are concerned and assuming due authorization,
execution and delivery thereof by the Company of 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 & ▇▇▇▇▇
Schedule IV
[Letterhead of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP]
_____, 2002
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the Several Underwriters
ALABAMA POWER COMPANY
Series R 4.70% Senior Notes
due December 1, 2010
Ladies and Gentlemen:
We have represented you in connection with (i) the issuance by
Alabama Power Company (the "Company") of $100,000,000 of its Series R 4.70%
Senior Notes due December 1, 2010 (the "Notes") pursuant to a Senior Note
Indenture dated as of December 1, 1997, by and between the Company and JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank), as trustee (the
"Trustee"), as heretofore supplemented and as further supplemented by the
Eighteenth Supplemental Indenture, dated as of _________, 2002 (collectively,
the "Indenture"); and (ii) the purchase by the Underwriters of the Notes
pursuant to the terms of an Underwriting Agreement __________, 2002, among the
Company and the Underwriters for whom you are acting as Representatives (the
"Underwriting Agreement"). This opinion is being delivered to you as
Representatives 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 (File Nos. 333-100721, ▇▇▇-▇▇▇▇▇▇-▇▇,
▇▇▇-▇▇▇▇▇▇-▇▇, and 333-100721-03) pertaining to the Notes (the "Registration
Statement"), filed under the Securities Act of 1933, as amended (the "Act"), and
the prospectus dated November 6, 2002, as supplemented by a prospectus
supplement dated _________, 2002 (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, 2001, the Quarterly Reports
on Form 10-Q of the Company for the quarters ended _________ and the Current
Reports on Form 8-K of the Company, dated __________ (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the Notes,
of which we have examined specimens), and we have made such other and further
investigations as we deemed necessary to express the opinions hereinafter set
forth. In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
The 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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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 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 representatives of Deloitte & Touche 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
4
Commission thereunder, except that in each case we express no opinion as to the
financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement, the Final Supplemented
Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention
which gives us reason to believe that the Registration Statement, as of its
effective date, 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) contained, as of its date, or
contains, on the date hereof, any untrue statement of a material fact or
omitted, as of its date, or omits, on the date hereof, 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 caption "Description of the Series R Senior
Notes - Book-Entry-Only Issuance - The Depository Trust Company."
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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇
& ▇▇▇▇▇▇▇ 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,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP