EXHIBIT 1.1
1,250 Shares
of
Flexible Money Market Class A Preferred Stock
(Series 2003A)
Par Value $1 Per Share
($100,000 Stated Capital Per Share)
ALABAMA POWER COMPANY
UNDERWRITING AGREEMENT
February 5, 2003
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
As Representative of the Several Underwriters
Ladies and Gentlemen:
Alabama Power Company, an Alabama corporation (the "Company"),
confirms its agreement (the "Agreement") with you and the other underwriters
named in Schedule I hereto (collectively, the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom you are acting as representative (in such capacity you shall
hereinafter be referred to as the "Representative"), with respect to the sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of Shares of Flexible Money Market Class A
Preferred Stock (Series 2003A), par value $1 per share, stated capital $100,000
per share, of the Company (the "Preferred Stock") set forth in Schedule I
hereto.
The Company understands that the Underwriters propose to make
a public offering of the Preferred Stock as soon as the Underwriters deem
advisable after this Agreement has been executed and delivered.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to the Underwriters as follows:
(a) A registration statement on Form S-3 (File Nos. 333-100721,
333-100721-01, 333-100721-02 and 333-100721-03), in respect of the
Preferred Stock 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 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 Preferred Stock, in the form in which it was included
in the Registration Statement at the time it became effective, being
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective
date of the Registration Statement that is incorporated by reference
in the Registration Statement; the Prospectus as supplemented by a
preliminary prospectus supplement dated February 3, 2003, relating to
the Preferred Stock, including any documents incorporated by reference
therein, as of such date, being herein called the "Preliminary
Supplemented Prospectus"; and the Prospectus as amended or
supplemented in final form by a prospectus supplement relating to the
Preferred Stock which it is filed with the Commission, pursuant to
Rule 424(b) under the 1933 Act in accordance with Section 3(f) 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, through the Representative, expressly for use in the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus; (B) any information set forth in 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"); or (C) any information set forth in the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus under the caption "Certain Terms of the New Stock -
Book-Entry Only Issuance - The Depository Trust Company".
(c) The Preliminary Prospectus, at the time of filing thereof, complied in
all material respects with the applicable provisions of the 1933 Act
and the rules and regulations of the Commission thereunder and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Registration Statement, the Prospectus and, to the extent not used
to confirm sales of the Preferred Stock, the Preliminary Supplemented
Prospectus comply, and the Final Supplemented Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus, when any such post-effective amendments are declared
effective or supplements are filed with the Commission, as the case
may be, will comply, in all material respects with the applicable
provisions of the 1933 Act, the 1934 Act, the 1939 Act and the General
Rules and Regulations of the Commission thereunder and do not and will
not, (i) as of the applicable effective date as to the Registration
Statement and any amendment thereto, (ii) as of the filing date
thereof as to the Preliminary Supplemented Prospectus and (iii) as of
the applicable filing date as to the Final Supplemented Prospectus and
any Prospectus as further amended or supplemented, contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the Company makes no warranties or representations with respect to
statements or omissions made in the Registration Statement, the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters, through the
Representative, expressly for use therein or any information set forth
in the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus under the caption "Certain Terms of the New Stock -
Book-Entry Only Issuance - The Depository Trust Company".
(e) With respect to the Registration Statement, the conditions for use of
Form S-3, as set forth in the General Instructions thereof, have been
satisfied.
(f) Since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, except
as otherwise stated therein, there has been no material adverse change
in the business, properties or financial condition of the Company,
whether or not arising in the ordinary course of business.
(g) 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 to issue and sell the
Preferred Stock to the Underwriters.
(h) This Agreement has been duly authorized, executed and delivered by the
Company.
(i) The auction agent agreement dated as of the Closing Date (as
hereinafter defined) between the Company and The Bank of New York (the
"Auction Agent Agreement") has been duly authorized, executed and
delivered by the Company.
(j) The issuance and delivery of the Preferred Stock has been duly
authorized by the Company and, on the Closing Date, the Preferred
Stock will have been duly executed by the Company and, when issued and
delivered against payment therefor as described in the Final
Supplemented Prospectus, will be validly issued and fully paid and
non-assessable and will conform in all material respects to all
statements relating thereto in the Final Supplemented Prospectus.
(k) The execution, delivery and performance by the Company of this
Agreement and the Auction Agent Agreement 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 action
(corporate or otherwise) on the part of the Company and does not and
will not result in any violation of the charter or bylaws of the
Company, and does 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.
(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 Preferred Stock 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 approval of the
Alabama Public Service Commission (the "Alabama Commission"); and (D)
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or "blue sky"
laws.
(m) The financial statements incorporated by reference in the Registration
Statement, the Preliminary Supplemented Prospectus 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 Registration Statement, the Preliminary
Supplemented Prospectus and 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,
the Preliminary Supplemented Prospectus and the Final Supplemented
Prospectus for them to be in conformity with GAAP.
SECTION 2. SALE AND DELIVERY TO 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, (i) 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 number of shares set forth in Schedule I hereto
opposite the name of such Underwriter at a price equal to $100,000 per
share of Preferred Stock (plus any additional amount of the shares
that such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof) and (ii) the Company agrees to pay
the Underwriters as compensation hereunder, a commission equal to
$1,250 per share of Preferred Stock.
(b) Payment for and delivery of certificates for the Preferred Stock shall
be made at the offices of Balch & Bingham LLP, 1901 Sixth Avenue
North, Suite 2600, Birmingham, AL 35203 at 10:00 A.M., New York time,
on February 12, 2003 unless postponed in accordance with the
provisions of Section 10 hereof, or such other time, place or date as
shall be agreed upon by the Representative 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 certificates for
the shares of Preferred Stock to the Representative. It is understood
that each Underwriter has authorized the Representative, for its
account, to accept delivery of, receipt for and make payment on the
Preferred Stock which it has agreed to purchase. The Representative,
individually and not as Representative of the Underwriters, may (but
shall not be obligated to) make payment on the Preferred Stock 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 Preferred Stock 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 shares of Preferred Stock will be
made available for examination by the Representative not later than 12:00 Noon,
New York time, on the last business day prior to the Closing Date.
On the Closing Date, the Company will pay the commission
payable to the Underwriter pursuant to paragraph (a) of this Section 2 by wire
transfer in federal funds against receipt therefor by the Underwriter.
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 Representative orally of the issuance of any stop
order under the 1933 Act with respect to the Registration Statement,
or the institution of any proceedings therefor, of which the Company
shall have received notice, and will use its best efforts to prevent
the issuance of any such stop order and to secure the prompt removal
thereof, if issued. The Company will deliver to the Representative
sufficient conformed copies of the Registration Statement, the
Prospectus, the Preliminary Supplemented Prospectus and the Final
Supplemented Prospectus and of all supplements and amendments thereto
for distribution to the Underwriters (in each case without exhibits)
and, from time to time, as many copies of the Prospectus, the
Preliminary Supplemented Prospectus and the Final Supplemented
Prospectus as the Underwriters may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act.
(b) The Company will furnish the Underwriters with copies of each
amendment and supplement to the Preliminary Supplemented Prospectus
and the Final Supplemented Prospectus relating to the offering of the
Preferred Stock in such quantities as the Underwriters may from time
to time reasonably request. If, during the period (not exceeding nine
months) when the delivery of a prospectus shall be required by law in
connection with the sale of any Preferred Stock by an Underwriter or a
dealer, any event relating to or affecting the Company, or of which
the Company shall be advised in writing by the Underwriters, shall
occur, which in the opinion of the Company or of Underwriters' counsel
should be set forth in a supplement to or an amendment of the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus, as the case may be, in order to make the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus not
misleading in the light of the circumstances when it is delivered, or
if for any other reason it shall be necessary during such period to
amend or supplement the Preliminary Supplemented Prospectus or the
Final Supplemented Prospectus or to file under the 1934 Act any
document incorporated by reference in the Preliminary Prospectus or
Prospectus in order to comply with the 1933 Act or the 1934 Act, the
Company forthwith will (i) notify the Underwriters to suspend
solicitation of purchases of the Preferred Stock and (ii) at its
expense, make any such filing or prepare and furnish to the
Underwriters a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus which
will supplement or amend the Preliminary Supplemented Prospectus or
the Final Supplemented Prospectus so that, as supplemented or amended,
it will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus is
delivered, not misleading or which will effect any other necessary
compliance. In case any Underwriter is required to deliver a
prospectus in connection with the sale of any Preferred Stock after
the expiration of the period specified in the preceding sentence, the
Company, upon the request of such Underwriter, will furnish to such
Underwriter, at the expense of such Underwriter, a reasonable quantity
of a supplemented or amended prospectus, or supplements or amendments
to the Final Supplemented Prospectus, complying with Section 10(a) of
the 1933 Act. During the period specified in the second sentence of
this subsection, the Company will continue to prepare and file with
the Commission on a timely basis all documents or amendments required
under the 1934 Act and the rules and regulations thereunder; provided,
that the Company shall not file such documents or amendments without
also furnishing copies thereof prior to such filing to the
Representative and Dewey Ballantine LLP.
(c) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Preferred Stock for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Representative may designate; provided, however,
that 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 Representative's prior written consent, directly
or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any share of Preferred Stock or any security
convertible into or exchangeable into or exercisable for preferred
stock of the Company or any securities substantially similar to the
Preferred Stock (except for the Preferred Stock issued pursuant to this
Agreement).
(f) As soon as practicable after the date of this Agreement, and in any
event within the time prescribed by Rule 424 under the 1933 Act, to
file the Final Supplemented Prospectus with the Commission and to
advise the Representative of such filing and to confirm such advice in
writing.
(g) The Company will file in the office of the Secretary of the State of
Alabama a charter amendment creating the Preferred Stock.
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 shares of
Preferred Stock to the Underwriters, (iii) the fees and disbursements of the
Company's counsel and accountants, (iv) the qualification of the Preferred Stock
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 cost and charges of
any transfer agent or registrar, (ix) the fees to rating agencies in connection
with rating the Preferred Stock and (x) the cost of qualifying the Preferred
Stock with The Depository Trust Company.
Except as otherwise provided in Section 9 hereof, the
Underwriters shall pay all other expenses incurred by it in connection with its
offering of the Preferred Stock including fees and disbursements of its counsel,
Dewey Ballantine LLP.
SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGA-TIONS. The
obligations of the Underwriters to purchase and pay for the
shares of Preferred Stock are subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for
that purpose shall be pending before, or to the knowledge of the
Company threatened by, the Commission on such date. If filing of the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus, or any supplement thereto, is required pursuant to Rule
424, the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus, and any such supplement, shall have been filed in the
manner and within the time period required by Rule 424.
(b) Any required orders of the Alabama Commission and the Commission
permitting the transactions contemplated hereby substantially in
accordance with the terms and conditions hereof shall be in full force
and effect and shall contain no provision unacceptable to the
Underwriters or the Company (but all provisions of such order or orders
heretofore entered, copies of which have heretofore been delivered to
the Representative, are deemed acceptable to the Underwriters and the
Company and all provisions of such order or orders hereafter entered
shall be deemed acceptable to the Underwriters and the Company unless
within 24 hours after receiving a copy of any such order any party to
this Agreement shall give notice to the other parties to the effect
that such order contains an unacceptable provision).
(c) On the Closing Date the Representative shall have received:
(1) The opinion, dated the Closing Date, of Balch & Bingham LLP, general
counsel for the Company, substantially in the form attached hereto
as Schedule 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 as of the Closing Date, of Dewey Ballantine LLP,
counsel for the Underwriters, substantially in the form attached hereto
as Schedule III.
(4) 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 Representative 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.
(5) On the Closing Date, the Representative 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; and (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
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, Earnings
Before Interest and Income Taxes and Net Income After Dividends on
Preferred Stock and the unaudited Ratios of Earnings to Fixed Charges
and Earnings to Fixed Charges Plus Preferred Dividend Requirements
(Pre-Income Tax Basis) set forth in the 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 Ratios of
Earnings to Fixed Charges and Earnings to Fixed Charges Plus Preferred
Dividend Requirements (Pre-Income Tax Basis) for any calendar quarter
subsequent to those set forth in (3) above, which, if available, shall
be set forth in such letter, do not agree with the amounts set forth in
or derived from the unaudited financial statements for the same period.
(6) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Preferred Stock 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 Preferred Stock as
herein contemplated shall be satisfactory in form and substance to the
Representative and Dewey Ballantine LLP, counsel for the Underwriters.
(7) That no amendment or supplement to the Registration Statement, the
Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus filed subsequent to the date of this Agreement (including
any filing made by the Company pursuant to Section 13 or 14 of the 1934
Act) shall be unsatisfactory in form to Dewey Ballantine LLP or shall
contain information (other than with respect to an amendment or
supplement relating solely to the activity of the Underwriters) which,
in the reasonable judgment of the Representative, shall materially
impair the marketability of the Preferred Stock.
(8) 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 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.
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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
Representative. 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.
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(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, the Preliminary Supplemented Prospectus or the Final
Supplemented Prospectus or, if the Company shall furnish to the Underwriters any
amendments or any supplements thereto, or shall make any filings pursuant to
Section 13 or 14 of the 1934 Act which are incorporated therein by reference, in
any Preliminary Prospectus, the Registration Statement, the Prospectus, the
Preliminary Supplemented Prospectus or the Final Supplemented Prospectus as so
amended or supplemented, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or actions arise out of or are based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission which was made in such Registration Statement, Preliminary
Prospectus, Prospectus, the Preliminary Supplemented Prospectus or the Final
Supplemented Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by, or through the Representative on behalf
of, any Underwriter for use therein and except that this indemnity with respect
to the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented
Prospectus or the Final Supplemented Prospectus, if the 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
Preferred Stock to any person if a copy of the Preliminary Prospectus, the
Prospectus, the Preliminary Supplemented Prospectus or the Final Supplemented
Prospectus (exclusive of documents incorporated therein by reference pursuant to
Item 12 of Form S-3), as the same may then be amended or supplemented, shall not
have been sent or given by or on behalf of such Underwriter to such person with
or prior to the written confirmation of the sale involved and the untrue
statement or alleged untrue statement or omission or alleged omission was
corrected in the Preliminary Prospectus, the Prospectus, the Preliminary
Supplemented Prospectus or the Final Supplemented Prospectus as supplemented or
amended at the time of such confirmation. Each Underwriter agrees, within ten
days after the receipt by it of notice of the commencement of any action in
respect of which indemnity may be sought by it, or by any person controlling it,
from the Company on account of its agreement contained in this Section 7, to
notify the Company in writing of the commencement thereof but the omission of
such Underwriter so to notify the Company of any such action shall not release
the Company from any liability which it may have to such Underwriter or to such
controlling person otherwise than on account of the indemnity agreement
contained in this Section 7. In case any such action shall be brought against an
Underwriter or any such person controlling such Underwriter and such Underwriter
shall notify the Company of the commencement thereof as above provided, the
Company shall be entitled to participate in (and, to the extent that it shall
wish, including the selection of counsel, to direct) the defense thereof, at its
own expense. In case the Company elects to direct such defense and select such
counsel, such Underwriter or any controlling person shall have the right to
employ its own counsel, but, in any such case, the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless the employment of such counsel has been authorized in writing by the
Company in connection with defending such action. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include any
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party. In no event shall any indemnifying party
have any liability or responsibility in respect of the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim effected without its prior written consent.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors and such of its officers who have signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act to
the same extent and upon the same terms as the indemnity agreement of the
Company set forth in Section 7(a) hereof, but only with respect to alleged
untrue statements or omissions made in the Registration Statement, the
Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus
or the Final Supplemented Prospectus, or such documents as amended or
supplemented, in reliance upon and in conformity with information furnished in
writing to the Company by, or through the Representative on behalf of, such
Underwriter for use therein.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
--------------------------------------------------------------
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers 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 Preferred Stock to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
------------------------
(a) The Representative 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 of 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
Representative, the marketability of the Preferred Stock shall have been
materially impaired.
(b) If this Agreement shall be terminated by the Representative 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 shares of Preferred Stock 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 Preferred Stock that it is obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representative 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 Representative shall not
have completed such arrangements within such 24-hour period, then:
(a) if the amount of Defaulted Securities does not exceed 10% of the Preferred
Stock, 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 amount of Defaulted Securities exceeds 10% of the Preferred Stock,
this Agreement shall terminate without liability on the part of the any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representative or the 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 Representative at Lehman Brothers
Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Managing
Director, Utilities Investment Banking with a copy to the General Counsel;
notices to the Company shall be delivered to 600 North 18th Street,
Birmingham, Alabama 35291, Attention: Corporate Secretary, with a copy to
Southern Company Services, Inc., 270 Peachtree Street, N.W., Atlanta,
Georgia 30303, Attention: Christopher J. Kysar.
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 Preferred Stock 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
LEHMAN BROTHERS INC.
By:__________________________
Title:
For itself and as Representative of
the other Underwriters named in Schedule I hereto
SCHEDULE I
Name of Underwriters Number of Shares
Lehman Brothers Inc. 874
Banc One Capital Markets, Inc. 94
Blaylock & Partners, L.P. 94
Morgan Keegan & Company, Inc. 94
Wachovia Securities Inc. 94
------------
TOTAL: 1,250
Schedule II-A
[Letterhead of Balch & Bingham LLP]
___________ __, 200_
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
As Representative of the Several Underwriters
ALABAMA POWER COMPANY
1,250 Shares
of
Flexible Money Market Class A Preferred Stock
(Series 2003A)
Ladies and Gentlemen:
We have acted as general counsel to Alabama Power Company (the
"Company") in connection with the purchase by you of 1,250 Shares of Flexible
Money Market Class A Preferred Stock (Series 2003A) of the Company (the
"Preferred Stock") pursuant to the terms of an Underwriting Agreement dated
_______, 2003 (the "Underwriting Agreement"), among the Company and the
Underwriters for whom you are acting as Representative. This opinion is being
delivered to you as Representative pursuant to Section 5(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3 (File Nos. 333-100721, 333-100721-01,
333-100721-02 and 333-100721-03) pertaining to the Preferred Stock (the
"Registration Statement") filed under the Securities Act of 1933, as amended
(the "Act"), and the prospectus dated _________, 200__ as supplemented by a
final prospectus supplement dated __________, 200_ (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 __________________,
200_, the Quarterly Reports on Form 10-Q of the Company for the quarters ended
_____________ and the Current Reports on Form 8-K of the Company dated
_____________(the "Exchange Act Documents"), each as filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Preferred Stock, 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.
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 Underwriting Agreement.
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 Preferred Stock have been obtained; such orders are
sufficient for the issuance and the sale of the Preferred Stock; the issuance
and the sale of the Preferred Stock 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 Preferred Stock in accordance with the terms of
the Underwriting Agreement.
4. The Auction Agent Agreement has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by The Bank of New York, 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 Auction Agent Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5. The Preferred Stock has been duly authorized by the Company and,
upon payment and delivery in accordance with the Underwriting Agreement, will be
validly issued, fully paid and nonassessable.
6. The statements made in the Final Supplemented Prospectus under the
captions "Description of the new Stock" and "Certain Terms of the New Stock"
constitute accurate summaries of the terms of the articles of incorporation of
the Company and the Preferred Stock in all material respects.
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 5
and 6 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 (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) 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 "Certain Terms of the New Stock - 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 law 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 Troutman Sanders LLP and Dewey Ballantine LLP
may rely on this opinion in giving their opinions pursuant to Section 5(c) of
the Underwriting Agreement insofar as such opinion relates to matters of Alabama
law.
Yours very truly,
BALCH & BINGHAM LLP
Schedule II-B
[Letterhead of TROUTMAN SANDERS LLP]
__________ __, 200_
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
As Representative of the Several Underwriters
ALABAMA POWER COMPANY
1,250 Shares
of
Flexible Money Market Class A Preferred Stock
(Series 2003A)
Ladies and Gentlemen:
We have acted as counsel to Alabama Power Company (the
"Company") in connection with the purchase by you of 1,250 Shares of Flexible
Money Market Class A Preferred Stock (Series 2003A) of the Company (the
"Preferred Stock") pursuant to the terms of an Underwriting Agreement dated
________, 2003 (the "Underwriting Agreement"), among the Company and the
Underwriters for whom you are acting as Representative. 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 (File Nos. 333-100721, 333-100721-01,
333-100721-02 and 333-100721-03) pertaining to the Preferred Stock (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 dated __________, 200_ (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 _____________, 200
_, the Quarterly Reports on Form 10-Q of the Company for the quarters ended
____________ and the Current Reports on Form 8-K of the Company dated _________
(the "Exchange Act Documents"), each as filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Preferred Stock, 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.
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.
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 Preferred Stock have been obtained; such orders are
sufficient for the issuance and sale of the Preferred Stock; the issuance and
sale of the Preferred Stock 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 Preferred Stock in accordance with the terms of the
Underwriting Agreement.
4. The Auction Agent Agreement has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by The Bank of New York, 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 Auction Agent Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5. The Preferred Stock has been duly authorized by the Company and,
upon payment and delivery in accordance with the Underwriting Agreement, will be
validly issued, fully paid and nonassessable.
6. The statements made in the Final Supplemental Prospectus under the
captions "Description of the new Stock" and "Certain Terms of the New Stock"
constitute accurate summaries of the terms of the articles of incorporation of
the Company and the Preferred Stock in all material respects.
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 5
and 6 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 (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) 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 "Certain Terms of the New Stock - 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,
TROUTMAN SANDERS LLP
4
Schedule III
[Letterhead of DEWEY BALLANTINE LLP]
__________ __, 200_
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
As Representative of the Several Underwriters
ALABAMA POWER COMPANY
1,250 Shares
of
Flexible Money Market Class A Preferred Stock
(Series 2003A)
Ladies and Gentlemen:
We have represented you in connection with the purchase by you
of 1,250 Shares Class A Flexible Money Market Preferred Stock (Series 2003A) of
the Company (the "Preferred Stock") pursuant to the terms of an Underwriting
Agreement dated ________________, 2003 (the "Underwriting Agreement"), among the
Company and the Underwriters for whom you are acting as Representative. This
opinion is being delivered to you pursuant to Section 5(c)(3) 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, 333-100721-01,
333-100721-02 and 333-100721-03) pertaining to the Preferred Stock (the
"Registration Statement"), filed under the Securities Act of 1933, as amended
(the "Act"), and the prospectus dated __________, 200_, as supplemented by a
final prospectus supplement dated November 6, 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
certificates representing the Preferred Stock, 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.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as aforesaid and
as to all matters covered hereby which are governed by or dependent upon the
laws of the State of Alabama upon the opinion of Balch & Bingham LLP dated the
date hereof and addressed to you and a form of which is attached as Schedule
II-A to the Underwriting Agreement, that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Alabama and has due corporate authority to carry on the public utility business
in which it is engaged and to own and operate the properties used by it in such
business and to enter into and perform its obligations under the Underwriting
Agreement.
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 Preferred Stock have been obtained; such orders are
sufficient for the issuance and sale of the Preferred Stock; the issuance and
sale of the Preferred Stock 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 Preferred Stock in accordance with the terms of the
Underwriting Agreement.
4. The Auction Agent Agreement has been duly authorized,
executed and delivered by the Company and, assuming the due authorization,
execution and delivery thereof by The Bank of New York, 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 Auction Agent Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5. The Preferred Stock has been duly authorized by the Company
and, upon payment and delivery in accordance with the Underwriting Agreement,
will be validly issued, fully paid and nonassessable.
6. The statements made in the Final Supplemented Prospectus
under the captions "Description of the new Stock" and "Certain Terms of the New
Stock" constitute accurate summaries of the terms of the articles of
incorporation of the Company and Preferred Stock in all material respects.
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 5
and 6 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 Commission
thereunder, except that in each case we express no opinion as to the financial
statements or other financial or statistical data contained or incorporated by
reference in the Registration Statement, the Final Supplemented Prospectus or
the Exchange Act Documents, and (ii) nothing came to our attention which gives
us reason to believe that the Registration Statement, as of its effective date
(including the Exchange Act Documents on file with the Commission as of such
date), contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Final Supplemented Prospectus
(including the Exchange Act Documents) 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 or
with respect to information set forth in the Final Supplemented Prospectus under
the caption "Certain Terms of the New Stock - 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 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.
Very truly yours,
DEWEY BALLANTINE LLP