-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MhDmP7ew3gp7DKIpILM2Z5usJMPcUpQIH5alRuCsGfF29E44lZ6IFUggRw8Zf20K zt11Sv4LwOo3Ogt494PmNg== 0000003153-98-000038.txt : 19981014 0000003153-98-000038.hdr.sgml : 19981014 ACCESSION NUMBER: 0000003153-98-000038 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981007 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981013 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALABAMA POWER CO CENTRAL INDEX KEY: 0000003153 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 630004250 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03164 FILM NUMBER: 98724648 BUSINESS ADDRESS: STREET 1: 600 N 18TH ST STREET 2: P O BOX 2641 CITY: BIRMINGHAM STATE: AL ZIP: 35291 BUSINESS PHONE: 2052571000 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 7, 1998 ALABAMA POWER COMPANY - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) - ------------------------------------------------------------------------------- Alabama 1-3164 63-0004250 - ------------------------------------------------------------------------------- (State or other jurisdiction (Commission File (IRS Employer Identification of incorporation) Number) No.) 600 North 18th Street, Birmingham, Alabama 35291 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (205) 257-1000 ---------------------------- N/A - ------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 5. Other Events. On October 7, 1998, Alabama Power Company (the "Company") entered into a Purchase Contract covering the issue and sale by the Company of $160,000,000 aggregate principal amount of its Series G 5 3/8% Senior Notes due October 1, 2008 (the "Series G Senior Notes"). Said Notes were registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to the shelf registration statement (Registration Statement Nos. 333-53299, 333-53299-01, 333-53299-02 and 333-53299-03) of the Company. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 1 Form of Proposal for the purchase of $160,000,000 aggregate principal amount of Series G 5 3/8% Senior Notes due October 1, 2008, dated October 7, 1998, submitted by Credit Suisse First Boston Corporation, with Purchase Contract attached thereto. 4.2 Seventh Supplemental Indenture to Senior Note Indenture dated as of October 15, 1998, providing for the issuance of the Series G Senior Notes. 4.7 Form of Series G Senior Note (included in Exhibit 4.2 above). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 13, 1998 ALABAMA POWER COMPANY By /s/Wayne Boston Wayne Boston Assistant Secretary EX-1 2 Exhibit 1 FORM OF PROPOSAL For the Purchase of ALABAMA POWER COMPANY $160,000,000 SERIES G ___% SENIOR NOTES DUE OCTOBER 1, 2008 Dated: October 7, 1998 ALABAMA POWER COMPANY c/o Southern Company Services, Inc. 270 Peachtree Street, N.W. Atlanta, Georgia 30303 Ladies and Gentlemen: Referring to the terms and conditions dated October 2, 1998 (the "Terms and Conditions"), relating to proposals for the purchase of Series G ___% Senior Notes due October 1, 2008 (the "Series G Senior Notes") of Alabama Power Company (the "Company"), the persons, firms and corporations named in Exhibit A attached hereto (the "Bidders") have submitted and confirm herewith the following proposal for the purchase of $160,000,000 aggregate principal amount of the Series G Senior Notes (the "Designated Principal Amount"): 1. The interest rate of the Series G Senior Notes shall be 5-3/8% per annum. 2. The price to be paid to the Company for the Series G Senior Notes shall be 99.063%* of the Designated Principal Amount thereof, each of the Bidders hereby offering, severally and not jointly, to purchase from the Company, at said price and upon the terms and conditions set forth in the form of purchase contract attached hereto as Exhibit B (the "Purchase Contract"), the principal amount of Series G Senior Notes set forth opposite its name in Exhibit A attached hereto, or the principal amount of Series G Senior Notes to be set forth opposite its name in Exhibit A attached hereto as provided in Section 3 of the Terms and Conditions, which together aggregate the Designated Principal Amount of the Series G Senior Notes. Exhibit A attached hereto, when completed, is hereinafter and in the Purchase Contract called "Exhibit A to the Form of Proposal". 3. In consideration of the agreement of the Company set forth in the Terms and Conditions that, subject to the provisions thereof, the Company will accept the proposal which results in the lowest "annual cost of money" to it for the Series G Senior Notes, each of the Bidders agrees (a) that the offer of such Bidder included in this proposal shall be irrevocable until three hours after the time fixed for the submission of proposals, unless sooner rejected by the Company; (b) that, if this proposal shall be accepted in writing by the Company, such Bidder, either in person or by the Representative(s) on its behalf, will forthwith furnish to the Company in writing the information referred to in Section 8 of the Terms and Conditions; and (c) that, if this proposal shall be so accepted by the Company, the Purchase Contract shall thereupon become effective without any separate execution thereof and shall constitute the agreement between the Company and the Bidders and, upon performance by the Bidders, and the Representative(s), of their obligations under Sections 3, 4 and 8 of the Terms and Conditions, all rights of the Company and of the Bidders shall be determined solely in accordance with the terms thereof, subject, however, to such modifications therein (including Exhibit A to the Form of Proposal) as may be necessary and as are contemplated by the Terms and Conditions. 4. This proposal must be accepted or rejected by the Company in its entirety within three hours after the time fixed for the submission thereof. 5. This proposal may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Each of the Bidders acknowledges receipt of a copy of the prospectus in respect of the Series G Senior Notes furnished by the Company to the Bidders pursuant to the last paragraph of Section 5 of the Terms and Conditions. Very truly yours, Credit Suisse First Boston Corporation Name(s) of Representative(s) By: Title: On behalf of and as Representative(s) of the persons, firms and corporations named in Exhibit A hereto. Credit Suisse First Boston Corporation Eleven Madison Avenue New York, NY 10010-3629 Accepted: ALABAMA POWER COMPANY By: Title: * May not be less than 98.75% EXHIBIT A The names of the Bidders and the respective principal amounts of the Series G Senior Notes which they severally offer to purchase are as follows: Name Principal Amount Credit Suisse First Boston $80,000,000 Chase Securities Inc. $80,000,000 Total $160,000,000 EXHIBIT B ALABAMA POWER COMPANY PURCHASE CONTRACT For Purchase of Series G Senior Notes of the Company AGREEMENT made between Alabama Power Company, a corporation organized and existing under the laws of the State of Alabama ("Company"), party of the first part, and the several persons, firms and corporations (the "Purchasers") named as Bidders in Exhibit A to the Form of Proposal to which this agreement is attached as Exhibit B (the "Form of Proposal"), parties of the second part, W I T N E S S E T H: WHEREAS, the Company proposes to issue and sell the Designated Principal Amount (as defined in the Form of Proposal) of its Series G Senior Notes due October 1, 2008 (the "Series G Senior Notes"), to be issued under the Senior Note Indenture dated as of December 1, 1997, as supplemented and as to be supplemented (the "Indenture"), between the Company and The Chase Manhattan Bank, as Trustee (the "Trustee"), and to bear interest at the rate per annum specified in paragraph 1 of the Form of Proposal; and WHEREAS, the Purchasers have authorized the person or persons signing the Form of Proposal (the "Representative") to execute the Form of Proposal on behalf of the respective Purchasers and to act for the respective Purchasers in the manner provided in this agreement; and WHEREAS, the Company has prepared and filed, in accordance with the provisions of the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement and prospectus relating to the Series G Senior Notes and certain other securities, and such registration statement has become effective (such registration statement, as it became effective, including the exhibits thereto and all documents incorporated by reference in the prospectus at such time pursuant to Item 12 of Form S-3, being herein called the "Registration Statement"); and WHEREAS, the prospectus referred to in the last paragraph of the Form of Proposal (such prospectus, including all documents incorporated therein by reference pursuant to Item 12 of Form S-3 as of the time of the acceptance of the Form of Proposal, being herein called the "Bidding Prospectus") is to be supplemented by a prospectus supplement (the "Prospectus Supplement"), including certain information relating to the Purchasers, the price and the terms of offering, and the interest rate, maturity date and redemption provisions of the Series G Senior Notes (the Bidding Prospectus as supplemented by the Prospectus Supplement being herein called the "Prospectus"). NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, it is agreed between the parties as follows: 1. Purchase and Sale: Upon the basis of the warranties and representations and on the terms and subject to the conditions herein set forth, the Company agrees to sell to the respective Purchasers, severally and not jointly, and the respective Purchasers, severally and not jointly, agree to purchase from the Company, at the price specified in paragraph 2 of the Form of Proposal, the respective principal amounts of Series G Senior Notes set opposite their names in Exhibit A to the Form of Proposal, which together aggregate the Designated Principal Amount of the Series G Senior Notes. 2. Payment and Delivery: Payment for the Series G Senior Notes shall be made to the Company or its order by wire transfer of federal funds, upon the delivery of the Series G Senior Notes as hereinafter provided to the Representative for the respective accounts of the Purchasers, against receipt therefor signed by the Representative on behalf of itself and as agent for the other Purchasers. Such payment and delivery shall be made at the offices of Troutman Sanders LLP, 600 Peachtree Street, N.E., Suite 5200, Atlanta, Georgia 30308-2216 (or at such other place as may be agreed upon by the Representative and the Company) at 10 a.m. New York time on the eighth day (which shall be a full business day) after this agreement becomes effective (or at such other time or on such other day as may be agreed upon by the Representative and the Company), unless postponed in accordance with the provisions of Section 7 hereof. The time at which payment and delivery are to be made is herein sometimes called the "time of purchase." Delivery of definitive Series G Senior Notes is expected to be made in fully registered form, registered in the name of Cede & Co. or other nominee of The Depository Trust Company ("DTC"). One or more global Series G Senior Notes certificates will be issued and deposited with DTC or its designee. Such certificate or certificates 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 time of purchase. 3. Conditions of Purchasers' Obligations: The several obligations of the Purchasers hereunder are subject to the accuracy of the warranties and representations on the part of the Company herein contained and to the following other conditions: (a) That all legal proceedings to be taken by the Company in connection with the issue and sale of the Series G Senior Notes and the legal opinions provided for in Sections 3(b)(1) and (2) hereof shall be satisfactory in form and substance to Dewey Ballantine LLP, counsel to the Purchasers, and such counsel shall have been furnished with such documents and opinions as it may reasonably require to pass upon the issuance and sale of the Series G Senior Notes as herein contemplated and related proceedings, or in order to evidence the accuracy of any representations or warranties, or the fulfillment of any of the conditions, herein contained. (b) That, at the time of purchase, the Representative shall be furnished the following opinions and letter and copies or signed counterparts thereof for each of the Purchasers, with such changes therein as may be agreed upon by the Company and the Representative with the approval of Dewey Ballantine LLP: (1) Opinion of Balch & Bingham LLP, of Birmingham, Alabama, general counsel for the Company, substantially in the form attached hereto as Exhibit 1. (2) Opinion of Troutman Sanders LLP, of Atlanta, Georgia, counsel to the Company, substantially in the form attached hereto as Exhibit 2. (3) Opinion of Dewey Ballantine LLP, of New York, New York, substantially in the form attached hereto as Exhibit 3. (4) Opinion of Cravath, Swaine & Moore, of New York, New York, counsel to the Trustee, substantially in the form attached hereto as Exhibit 4. (5) Letter dated the date of payment and delivery from Arthur Andersen LLP to the effect that: (A) they are independent public accountants with respect to the Company within the meaning of the Securities Act and the applicable published rules and regulations thereunder; (B) in their opinion, the financial statements and schedules audited by them and incorporated by reference in the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the related published rules and regulations; (C) they have performed certain limited procedures through a specified date not more than five business days prior to the date of such letter, namely (i) reading the minute books of the Company; (ii) performing the procedures specified by the American Institute of Certified Public Accountants ("AICPA") for a review of interim financial information as described in Statement on Auditing Standards No. 71, "Interim Financial Information", on the unaudited financial statements, if any, of the Company incorporated in the Prospectus and on the latest available unaudited financial statements of the Company, if any, as of a date subsequent to the date of those incorporated in the Prospectus; and (iii) making inquiries of certain officials of the Company who have responsibility for financial and accounting matters regarding such unaudited financial statements or any specified unaudited amounts derived therefrom (it being understood that the foregoing procedures do not constitute an audit performed in accordance with generally accepted auditing standards and they would not necessarily reveal matters of significance with respect to the comments made in such letter, and accordingly that Arthur Andersen LLP make no representations as to the sufficiency of such procedures for the Purchasers' 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 Exchange Act as it applies to Form 10-Q and the related published rules and regulations thereunder; (3) the unaudited amounts for Operating Revenues, Income Before Interest Charges and Net Income After Dividends on Preferred Stock and the unaudited Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis) set forth in the Prospectus do not agree with the amounts set forth in or derived from the unaudited financial statements for the same period or were not determined on a basis substantially consistent with that of the corresponding audited amounts or ratios included or incorporated by reference in Registration Statement; (4) as of a specified date not more than five business days prior to the date of delivery of such letter, there has been any change in the capital stock or long-term debt of the Company or any decrease in net assets as compared with amounts shown in the latest audited balance sheet incorporated in the Prospectus, except in each case for changes or decreases which (i) the Prospectus discloses have occurred or may occur, (ii) are occasioned by the declaration of dividends, (iii) are occasioned by draw-downs under existing pollution control financing arrangements, (iv) are occasioned by draw-downs and regularly scheduled payments of capitalized lease obligations, (v) are occasioned by the purchase or redemption of bonds or stock to satisfy mandatory or optional redemption provisions relating thereto, or (vi) are disclosed in such letter; and (5) the unaudited amounts for Operating Revenues, Income Before Interest Charges and Net Income After Dividends Preferred Stock and the unaudited Ratios of Earnings to Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis) for any period subsequent to those set forth in (3) above, which if available shall be set forth in such letter, do not agree with the amounts set forth in or derived from the unaudited financial statements for the same period or were not determined on a basis substantially consistent with that of the corresponding audited amounts or ratios included or incorporated by reference in the Prospectus. (c) That no amendment or supplement (including the Prospectus Supplement) to the registration statement or prospectus filed subsequent to the time this agreement becomes effective (including any filing made by the Company pursuant to Section 13 or 14 of the Exchange Act) shall be unsatisfactory in form to Dewey Ballantine LLP or shall contain information (other than with respect to an amendment or supplement relating solely to the activity of any Purchaser or Purchasers) which, in the reasonable judgment of the Representative, shall materially impair the marketability of the Series G Senior Notes. (d) That, at or before 8 p.m. New York time on the first business day after the date this agreement becomes effective, or at such later time and date as the Representative may from time to time consent to in writing or by telephone, confirmed in writing, an appropriate order or orders of the Alabama Public Service Commission necessary to permit the issue and sale of the Series G Senior Notes shall be in effect; and that, prior to the time of purchase, no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Securities Act by the Commission or proceedings therefor initiated or threatened. (e) That, prior to the time of purchase, there shall have 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) from that set forth in or contemplated by the Prospectus, and that the Company shall, at the time of purchase, have delivered to the Representative a certificate to such effect of an executive officer of the Company. For the purpose of this condition, the sale by the Company of, or its failure to sell, any issue of other securities shall not be deemed to be such a change. (f) That the Company shall have performed such of its obligations under this agreement as are to be performed at or prior to the time of purchase by the terms hereof. 4. Certain Covenants of the Company: In further consideration of the agreements of the Purchasers herein contained, the Company covenants as follows: (a) As soon as practicable after this agreement becomes effective, and in any event within the time prescribed by Rule 424 under the Securities Act, to file the Prospectus Supplement with the Commission and to advise the Representative of such filing and to confirm such advice in writing. (b) As soon as the Company is advised thereof, to advise the Representative and confirm the advice in writing of any request made by the Commission for amendments to the Registration Statement or Prospectus, including any amendment to any of the documents incorporated therein by reference pursuant to Item 12 of Form S-3, or of the issuance of a stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceedings for that purpose and, if such a stop order should be issued by the Commission, to make every reasonable effort to obtain the lifting or removal thereof as soon as possible. (c) To deliver to the Purchasers, without charge, as soon as practicable on or after the date this agreement becomes effective, and from time to time thereafter during such period of time (not exceeding nine months) after this agreement becomes effective as the Purchasers are required by law to deliver a prospectus, as many copies of the Prospectus (as supplemented or amended if the Company shall have made any supplements or amendments thereto) as the Representative may reasonably request; and, in case any Purchaser is required by law to deliver a prospectus after the expiration of nine months after the date this agreement becomes effective, to furnish to such Purchaser, upon request of the Representative, at the expense of such Purchaser, a reasonable quantity of a supplemental prospectus or of supplements to the Prospectus complying with Section 10(a)(3) of the Securities Act. (d) During such period of time after the date this agreement becomes effective as the Purchasers are required by law to deliver a prospectus, to file timely all documents required to be filed with the Commission pursuant to Section 13 or 14 of the Exchange Act. (e) To furnish to the Representative, or if such Representative consists of two or more persons to one of such persons, one copy, certified by an officer of the Company, of the registration statement as initially filed with the Commission, all amendments thereto and all documents incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3 as of the time of purchase (in each case, exclusive of exhibits), and to furnish to the Representative sufficient plain copies of said registration statement and all amendments thereto (exclusive of exhibits) for distribution of two each, and all said documents incorporated therein as of the time of purchase (exclusive of exhibits) for distribution of one each, to the other Purchasers. (f) In the event that the Purchasers constitute "underwriters" within the meaning of Section 2(11) of the Securities Act, then, for such period of time (not exceeding nine months) after the date this agreement becomes effective as they are required by law to deliver a prospectus, if any event shall have occurred as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, forthwith to amend or supplement the Prospectus by either (i) preparing and furnishing, at its own expense, to the Purchasers and to dealers (whose names and addresses are furnished to the Company by the Representative) to whom Series G Senior Notes may have been sold by the Representative on behalf of the Purchasers and, upon request, to any other dealers making such request, either amendments to the Prospectus or supplements thereto, or (ii) making an appropriate filing pursuant to Section 13 or 14 of the Exchange Act which would supplement or amend the Prospectus, so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading. (g) To make generally available to the Company's security holders, as soon as practicable, an earning statement (which need not be audited) covering a period of at least twelve months beginning not later than the first day of the Company's fiscal quarter next following the "effective date" of the Registration Statement as defined in Rule 158(c) under the Securities Act, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder. (h) To use its best efforts to qualify the Series G Senior Notes for offer and sale under the securities or blue sky laws of such jurisdictions as the Representative may designate within six months after the date this agreement becomes effective and to pay filing fees and disbursements in connection therewith in an amount not exceeding $3,500 in the aggregate (including filing fees and disbursements paid or incurred prior to the date this agreement becomes effective), provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a consent to service of process or to file annual reports or to comply with any other requirements deemed by the Company to be unduly burdensome. (i) To pay expenses, fees and taxes (other than transfer taxes) in connection with (1) the preparation and filing of the Registration Statement and Prospectus, (2) the preparation and execution of the new supplemental indenture pursuant to which the Series G Senior Notes are to be issued, (3) the issue and delivery of the Series G Senior Notes to the Purchasers, and (4) the furnishing of the opinions, letter and certificates referred to in Section 3 hereof, except that the Company shall be required to pay the fees and disbursements (other than filing fees and disbursements referred to in paragraph (h) of this Section 4) of Dewey Ballantine LLP only in an event provided in paragraph (j) of this Section 4, the Purchasers hereby agreeing to pay such fees and disbursements in any other event and, if such fees should be less than the amount stated by such counsel to the Representative, to repay the Company the amount of any reduction. (j) If the Purchasers shall not take up and pay for the Series G Senior Notes due to the failure of the Company to comply with any of the conditions specified in Section 3 hereof, or if this agreement shall be terminated in accordance with the provisions of Section 7 or 8 hereof, to pay the reasonable fees and disbursements of Dewey Ballantine LLP, and, if the Purchasers shall not take up and pay for the Series G Senior Notes due to the failure of the Company to comply with any of the conditions specified in Section 3 hereof, to reimburse the Purchasers for their reasonable out-of-pocket expenses, in an amount not exceeding a total of $10,000, incurred in connection with the financing contemplated by this agreement. (k) During the period of 15 days from the date this agreement becomes effective, without the prior written consent of the Representative, not to issue or sell directly or indirectly any senior notes (other than the Series G Senior Notes) or any other long-term debt of the Company having terms and provisions substantially similar to the Series G Senior Notes. 5. Warranties of and Indemnity by the Company: (a) The Company warrants and represents to each of the Purchasers that: (i) The Registration Statement, when it became effective, did not contain any 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 not misleading and the Bidding Prospectus, on said date, did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; when the Prospectus Supplement is filed with the Commission, and at the time of purchase, the Registration Statement and the Prospectus, as they may be amended or supplemented, will comply, or be deemed to comply, in all material respects with the provisions of the Securities Act and the rules and regulations of the Commission thereunder, the Registration Statement, as it may be amended or supplemented, will not contain any 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 not misleading, and the Prospectus, as it may be amended or supplemented, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and all documents incorporated therein by reference pursuant to Item 12 of Form S-3 as of such dates complied or will comply in all material respects with the applicable provisions of the Exchange Act and the rules and regulations of the Commission thereunder, and, on said dates, when read together with the Prospectus, or the Prospectus as it may be otherwise amended or supplemented, will not contain an untrue statement of a material fact or omit to state a material fact 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 any Purchaser with respect to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representative on behalf of, any Purchaser for use in the Registration Statement or the Prospectus, or to any statements in or omissions from that part of the Registration Statement that shall constitute the Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of the Trustee under the Indenture. (ii) The consummation of the transactions herein contemplated and the performance by the Company of the terms of this agreement will not violate any of the terms, conditions or provisions of, or constitute a default under, any indenture or other contract or agreement to which the Company is now a party or the charter or by-laws of the Company or any order of any court or administrative agency entered in any proceedings to which the Company is now a party. (b) The Company agrees to indemnify and hold harmless each of the Purchasers and each person, if any, who controls any such Purchaser within the meaning of Section 15 of the Securities 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 Securities Act or otherwise, and to reimburse the Purchasers 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 the Bidding Prospectus (if used prior to the date this agreement becomes effective), or in the Registration Statement, or in the Prospectus or, if the Company shall furnish to the Purchasers any amendments or any supplements to the Prospectus, or shall make any filings pursuant to Section 13 or 14 of the Exchange Act which are incorporated therein by reference, in the Prospectus as so amended or supplemented (provided that, if such Prospectus or such Prospectus as amended or supplemented is used after the expiration of the period of time specified in Section 4(f) hereof, it shall contain such amendments or supplements as the Company deems necessary to comply with Section 10(a)(3) of the Securities Act), 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 omission or alleged untrue statement or omission which was made in such Registration Statement or Prospectus in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representative on behalf of, any Purchaser for use therein and except that this indemnity with respect to the Bidding Prospectus, and with respect to the Prospectus if the Company shall have furnished any amendment or supplement thereto, shall not inure to the benefit of any Purchaser (or of any person controlling such Purchaser) on account of any losses, claims, damages, liabilities or actions arising from the sale of Series G Senior Notes to any person if a copy of the 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 Purchaser 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 Prospectus as amended or supplemented at the time of such confirmation. Each Purchaser 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 5(b), to notify the Company in writing of the commencement thereof, but the omission of such Purchaser so to notify the Company of any such action shall not release the Company from any liability which it may have to such Purchaser or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 5(b). In case any such action shall be brought against any Purchaser or any such person controlling such Purchaser and such Purchaser 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 Purchaser 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 Purchaser or 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. The Company's indemnity agreement contained in this Section 5(b), and its covenants, warranties and representations contained in this agreement, shall remain in full force and effect regardless of any investigation made by or on behalf of any Purchaser or controlling person, and shall survive the delivery of and payment for the Series G Senior Notes hereunder. 6. Warranties of and Indemnity by Purchasers: (a) Each Purchaser warrants and represents to the Company, its directors and such of its officers as shall have signed the Registration Statement, and to each other Purchaser that the information furnished in writing to the Company by, or through the Representative on behalf of, such Purchaser for use in the Registration Statement or the Prospectus does not contain an untrue statement of a material fact and does not omit to state a material fact in connection with such information required to be stated therein or necessary to make such information not misleading. (b) Each Purchaser agrees to indemnify and hold harmless the Company, its directors and such of its officers as shall have signed the Registration Statement, and each other Purchaser and each person, if any, who controls the Company or any such other Purchaser within the meaning of Section 15 of the Securities Act, to the same extent and upon the same terms as the indemnity agreement of the Company set forth in Section 5(b) hereof, but only with respect to untrue statements or omissions or alleged untrue statements or omissions made in the Registration Statement or the Prospectus, or the Prospectus 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 Purchaser for use therein. The indemnity agreement on the part of each Purchaser contained in this Section 6(b), and the warranties and representations of such Purchaser contained in this agreement, shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or other Purchaser or controlling person, and shall survive the delivery of and payment for the Series G Senior Notes hereunder. 7. Substitution of Purchasers: If any Purchaser under this agreement shall fail or refuse (whether for some reason sufficient to justify, in accordance with the terms hereof, the termination of its obligations to purchase or otherwise) to purchase the principal amount of the Series G Senior Notes which it has agreed to purchase, the Company shall immediately notify the Representative, and the Representative may, within 24 hours of receipt of such notice, procure some other responsible party or parties satisfactory to the Company, who may include one or more of the remaining Purchasers, to purchase or agree to purchase such principal amount of the Series G Senior Notes on the terms herein set forth; and, if the Representative shall fail to procure a satisfactory party or parties to purchase or agree to purchase such principal amount of the Series G Senior Notes on such terms within such period after the receipt of such notice, then the Company shall be entitled to an additional period of 24 hours within which to procure another party or parties to purchase or agree to purchase such principal amount of the Series G Senior Notes on the terms herein set forth. In any such case, either the Representative or the Company shall have the right to postpone the time of purchase for a period not to exceed five full business days from the date determined as provided in Section 2 hereof, in order that the necessary changes in the Registration Statement and Prospectus and any other documents and arrangements may be effected. If the Representative shall fail to procure a satisfactory party or parties to purchase or agree to purchase such principal amount of the Series G Senior Notes, and if the Company also does not procure another party or parties to purchase or agree to purchase such principal amount of the Series G Senior Notes, as above provided, then this agreement shall terminate. In the event of any such termination, the Company shall not be under any liability to any Purchaser (except to the extent, if any, provided in Section 4(j) hereof), nor shall any Purchaser (other than a Purchaser who shall have failed or refused to purchase Series G Senior Notes without some reason sufficient to justify, in accordance with the terms hereof, its termination of its obligations hereunder) be under any liability to the Company. 8. Termination of Agreement: This agreement may be terminated at any time prior to the time of purchase by the Representative with the consent of Purchasers who have agreed to purchase in the aggregate 50% or more of the Designated Principal Amount of the Series G Senior Notes, if, after this agreement becomes effective and prior to the time of purchase, (i) trading in securities on the New York Stock Exchange shall have been generally suspended, (ii) minimum or maximum ranges for prices shall have been generally established on the New York Stock Exchange by the Commission or by the New York Stock Exchange, (iii) a general banking moratorium shall have been declared by federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by the United States Congress or any other substantial national or international calamity or emergency affecting the United States, in any such case provided for in clauses (i) through (iv) with the result that, in the reasonable judgment of the Representative, the marketability of the Series G Senior Notes shall have been materially impaired. If the Representative elects to terminate this agreement, as provided in this Section 8, the Company and each other Purchaser shall be notified promptly by the Representative by telephone, confirmed in writing. If this agreement shall not be carried out by any Purchaser for any reason permitted hereunder, or if the sale of the Series G Senior Notes to the Purchasers as herein contemplated shall not be carried out because the Company is not able to comply with the terms hereof, the Company shall not be under any obligation under this agreement and shall not be liable to any Purchaser or to any member of any selling group for the loss of anticipated profits from the transactions contemplated by this agreement (except that the Company shall remain liable to the extent provided in Section 4(j) hereof) and the Purchasers (other than a defaulting Purchaser) shall be under no liability to the Company nor be under any liability under this agreement to one another. 9. Notices: All notices hereunder shall, unless otherwise expressly permitted, be in writing and be delivered at or mailed to the following addresses: if to the Purchasers or the Representative, to the Representative at the address set forth following its signature in the Form of Proposal, and, if to the Company, to the Company at 600 North 18th Street, Birmingham, Alabama 35291, Attention: William B. Hutchins, III, Executive Vice President, Chief Financial Officer and Treasurer, with a copy to Southern Company Services, Inc., 270 Peachtree Street, N.W., Atlanta, Georgia 30303, Attention: Charles N. Eldred. 10. Parties in Interest: The agreement herein set forth has been and is made solely for the benefit of the Purchasers and the Company, its directors and such of its officers as shall have signed the Registration Statement, and the controlling persons, if any, referred to in Sections 5 and 6 hereof, and their respective successors, assigns, executors and administrators, and, subject to the provisions of Section 7 hereof, no other person shall acquire or have any right under or by virtue of this agreement. 11. Definitions of Certain Terms: If there be two or more persons, firms or corporations named in Exhibit A to the Form of Proposal, the term "Purchasers", as used herein, shall be deemed to mean the several persons, firms or corporations so named (including any substitute purchaser or purchasers procured as provided by Section 7 hereof and the Representative hereinafter mentioned, if so named), and the term "Representative", as used herein, shall be deemed to mean the person or persons designated as representative or representatives of the Purchasers by, or in the manner authorized by, the Purchasers, who, by signing the Form of Proposal, represent that it or they have been authorized by the Purchasers to execute the Form of Proposal on their behalf and to act for them in the manner herein provided. In the event that all the Purchasers execute the Form of Proposal and no one or more of them are designated to act as representative or representatives, then the term "Representative" shall be deemed to mean all the persons signing the Form of Proposal. If the Representative consists of more than one person, the Representative may act by any one thereof. All obligations of the Purchasers hereunder are several and not joint. If there shall be only one person, firm or corporation named in Exhibit A to the Form of Proposal, the term "Purchasers" and the term "Representative", as used herein, shall mean such person, firm or corporation. EXHIBIT 1 [Letterhead of Balch & Bingham LLP] [Date] as the several Purchasers under Purchase Contract effective October __, 1998, between Alabama Power Company and said Purchasers (the "Purchase Contract") for the purchase of Alabama Power Company Series G ___% Senior Notes due October 1, 2008 (the "Series G Senior Notes") c/o Ladies and Gentlemen: As counsel to Alabama Power Company (the "Company"), we have represented the Company in connection with the purchase by you pursuant to the Purchase Contract of $160,000,000 aggregate principal amount of the Series G Senior Notes, issued under the Senior Note Indenture dated as of December 1, 1997, between the Company and The Chase Manhattan Bank, as trustee (the "Trustee"), as heretofore supplemented and as supplemented by the Seventh Supplemental Indenture dated as of October __, 1998 (said Indenture, as so supplemented and amended, being hereinafter called the "Indenture"). We have examined the Registration Statement on Form S-3 (File Nos. 333-53299, 333-53299-01, 333-53299-02 and 333-53299-03) filed by the Company under the Securities Act of 1933, as amended (the "Act"), as it became effective under the Act (the "Registration Statement"); the Company's prospectus dated June 30, 1998, as supplemented by the prospectus supplement dated October __, 1998 (the "Prospectus"), filed by the Company pursuant to Rule 424 of the rules and regulations of the Securities and Exchange Commission (the "Commission") under the Act, which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1997, the Quarterly Reports on Form 10-Q of the Company for the quarters ended March 31, 1998 and June 30, 1998 and the Current Reports on Form 8-K of the Company dated February 11, 1998, February 20, 1998, April 17, 1998, August 5, 1998, August 10, 1998, August 11, 1998, September 8, 1998, September 16, 1998 and October __, 1998 (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the Indenture. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the Series G Senior Notes, of which we have examined a specimen), and we have made such other and further investigations as we deemed necessary to enable us 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. 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 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 Purchase Contract, the Indenture and the Series G Senior Notes. 2. The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and, assuming 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 and the Series G Senior Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and 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 Prospectus. 3. The Series G Senior Notes have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Purchase Contract and subject to the qualifications set forth in paragraph 2 above, will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms; and the Series G Senior Notes conform as to legal matters in all material respects to the description thereof in the Prospectus. 4. All orders, consents or other authorizations or approvals of the Alabama Public Service Commission and the Commission legally required for the issuance of the Series G Senior Notes have been obtained; 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 of the Series G Senior Notes by the Company in accordance with the terms of the Purchase Contract. 5. The Purchase Contract has been duly authorized, executed and delivered by the Company. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs 2 and 3 above and in the Prospectus in the second paragraph under the caption "Experts". In the course of the preparation by the Company of the Registration Statement, the Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with other counsel for the Company and with representatives of Arthur Andersen LLP. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement, the 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 Prospectus, as of October __, 1998, complied as to form in all material respects with the requirements of the Act, the Trust Indenture 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 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 on 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 Prospectus (including the Exchange Act Documents) contains any untrue statement of a material fact or omits to state any 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 Prospectus or the Exchange Act Documents and with respect to information set forth in the Prospectus under the caption "Description of the Series G 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 law of the State of Alabama and the federal law of the United States and, to the extent set forth herein, the law of the State of New York. This opinion is rendered to you in connection with the above described transactions. This opinion may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation 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 3(b) of the Purchase Contract insofar as such opinions relate to matters of Alabama law. Very truly yours, BALCH & BINGHAM LLP EXHIBIT 2 [Letterhead of Troutman Sanders LLP] [Date] as the several Purchasers under Purchase Contract effective October __, 1998, between Alabama Power Company and said Purchasers (the "Purchase Contract") for the purchase of Alabama Power Company Series G ___% Senior Notes due October 1, 2008 (the "Series G Senior Notes") c/o Ladies and Gentlemen: We have acted as counsel to Alabama Power Company (the "Company") in connection with the purchase by you pursuant to the Purchase Contract of $160,000,000 aggregate principal amount of the Series G Senior Notes, issued under the Senior Note Indenture dated as of December 1, 1997, between the Company and The Chase Manhattan Bank, as trustee (the "Trustee"), as heretofore supplemented and as supplemented by the Seventh Supplemental Indenture dated as of October __, 1998 (said Indenture, as so supplemented and amended, being hereinafter called the "Indenture"). We have examined the Registration Statement on Form S-3 (File Nos. 333-53299, 333-53299-01, 333-53299-02 and 333-53299-03) filed by the Company under the Securities Act of 1933, as amended (the "Act"), as it became effective under the Act (the "Registration Statement"); the Company's prospectus dated June 30, 1998, as supplemented by the prospectus supplement dated October __, 1998 (the "Prospectus"), filed by the Company pursuant to Rule 424 of the rules and regulations of the Securities and Exchange Commission (the "Commission") under the Act, which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1997, the Quarterly Reports on Form 10-Q of the Company for the quarters ended March 31, 1998 and June 30, 1998 and the Current Reports on Form 8-K of the Company dated February 11, 1998, February 20, 1998, April 17, 1998, August 5, 1998, August 10, 1998, August 11, 1998, September 8, 1998, September 16, 1998 and October __, 1998 (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the Indenture. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the Series G Senior Notes, of which we have examined a specimen), and we have made such other and further investigations as we deemed necessary to enable us 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. We are of the opinion, relying as to matters of Alabama law upon the opinion of 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 Purchase Contract, the Indenture and the Series G Senior Notes. 2. The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and, assuming 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 and the Series G Senior Notes may be limited by (a) bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and (b) 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 Prospectus. 3. The Series G Senior Notes have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Purchase Contract and subject to the qualifications set forth in paragraph 2 above, will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms; and the Series G Senior Notes conform as to legal matters in all material respects to the description thereof in the Prospectus. 4. All orders, consents or other authorizations or approvals of the Alabama Public Service Commission and the Commission legally required for the issuance of the Series G Senior Notes have been obtained; 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 of the Series G Senior Notes by the Company in accordance with the terms of the Purchase Contract. 5. The Purchase Contract has been duly authorized, executed and delivered by the Company. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs 2 and 3 above. In the course of the preparation by the Company of the Registration Statement, the Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with other counsel for the Company and with representatives of Arthur Andersen LLP. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement, the 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 Prospectus, as of October __, 1998, complied as to form in all material respects with the requirements of the Act, the Trust Indenture 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 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 on 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 Prospectus (including the Exchange Act Documents) contains any untrue statement of a material fact or omits to state any 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 Prospectus or the Exchange Act Documents and with respect to information set forth in the Prospectus under the caption "Description of the Series G 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 law of the States of Alabama and New York. This opinion is rendered to you in connection with the above described transactions. This opinion may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, TROUTMAN SANDERS LLP EXHIBIT 3 [Letterhead of Dewey Ballantine LLP] [Date] as the several Purchasers under Purchase Contract effective October __, 1998, between Alabama Power Company and said Purchasers (the "Purchase Contract") for the purchase of Alabama Power Company Series G ___% Senior Notes due October 1, 2008 (the "Series G Senior Notes") c/o Ladies and Gentlemen: We have acted as your counsel in connection with the purchase by you pursuant to the Purchase Contract of $160,000,000 aggregate principal amount of the Series G Senior Notes, issued under the Indenture dated as of December 1, 1997, between Alabama Power Company (the "Company") and The Chase Manhattan Bank, as Trustee (the "Trustee"), as heretofore supplemented and as supplemented by the Seventh Supplemental Indenture dated as of October __, 1998 (said Indenture, as so supplemented and amended, being hereinafter called the "Indenture"). We have examined the Registration Statement on Form S-3 (File Nos. 333-53299, 333-53299-01, 333-53299-02 and 333-53299-03) filed by the Company under the Securities Act of 1933, as amended (the "Act"), as it became effective under the Act (the "Registration Statement"); the Company's prospectus dated June 30, 1998, as supplemented by the prospectus supplement dated October __, 1998 (the "Prospectus"), filed by the Company pursuant to Rule 424 of the rules and regulations of the Securities and Exchange Commission (the "Commission") under the Act, which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 1997, the Quarterly Reports on Form 10-Q of the Company for the quarters ended March 31, 1998 and June 30, 1998 and the Current Reports on Form 8-K of the Company dated February 11, 1998, February 20, 1998, April 17, 1998, August 5, 1998, August 10, 1998, August 11, 1998, September 8, 1998, September 16, 1998 and October __, 1998 (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the Indenture. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the Series G Senior Notes, of which we have examined a specimen), and we have made such other and further investigations as we deemed necessary to enable us 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. We are of the opinion, relying as to matters of Alabama law upon the opinion of Balch & Bingham LLP, referred to below, 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 Purchase Contract, the Indenture and the Series G Senior Notes. 2. The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and, assuming 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 and the Series G Senior Notes may be limited by (a) bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and (b) 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 Prospectus. 3. The Series G Senior Notes have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Purchase Contract and subject to the qualifications set forth in paragraph 2 above, will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms; and the Series G Senior Notes conform as to legal matters in all material respects to the description thereof in the Prospectus. 4. All orders, consents or other authorizations or approvals of the Alabama Public Service Commission and the Commission legally required for the issuance of the Series G Senior Notes have been obtained; 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 of the Series G Senior Notes by the Company in accordance with the terms of the Purchase Contract. 5. The Purchase Contract has been duly authorized, executed and delivered by the Company. All legal proceedings taken by the Company in connection with the authorization and delivery of the Series G Senior Notes, and the legal opinions dated the date hereof rendered to you by Balch & Bingham LLP and Troutman Sanders LLP, counsel for the Company, pursuant to the Purchase Contract, are in form satisfactory to us. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs 2 and 3 above. In the course of the preparation by the Company of the Registration Statement, the Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with representatives of Arthur Andersen LLP and with counsel for the Company. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement and the 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 Prospectus, as of October __, 1998, complied as to form in all material respects with the requirements of the Act, the Trust Indenture 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 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 on 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 Prospectus (including the Exchange Act Documents) contains any untrue statement of a material fact or omits to state any 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 Prospectus or the Exchange Act Documents and with respect to information set forth in the Prospectus under the caption "Description of the Series G Senior Notes - Book-Entry Only Issuance - The Depository Trust Company." We are members of the Bar of the State 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 to you in connection with the above described transactions. This opinion may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation 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 3(b) of the Purchase Contract insofar as such opinions relate to matters of New York law. Very truly yours, DEWEY BALLANTINE LLP EXHIBIT 4 [Letterhead of Cravath, Swaine & Moore] [Date] as the several Purchasers under Purchase Contract effective October __, 1998, between Alabama Power Company and said Purchasers for the purchase of Alabama Power Company Series G ___% Senior Notes due October 1, 2008 c/o Alabama Power Company 600 North 18th Street Birmingham, Alabama 35291 Ladies and Gentlemen: We have acted as counsel to The Chase Manhattan Bank (the "Bank") in connection with (a) the Senior Note Indenture, dated as of December 1, 1997 as heretofore supplemented (the "Original Indenture"), between Alabama Power Company (the "Company") and the Bank, as Trustee, and (b) the Seventh Supplemental Indenture dated as of October __, 1998 (together with the Original Indenture, herein called the "Indenture"), between the Company and the Bank, as Trustee. In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, records and other instruments as we have deemed necessary or appropriate for the purpose of this opinion, including copies of the Indenture and certain resolutions adopted by the Board of Directors of the Bank. Based upon the foregoing, we are of the opinion that: i) the Bank has been duly incorporated and is validly existing as a banking corporation in good standing under the laws of the State of New York; ii) the Bank has the corporate trust power and authority to execute, deliver and perform its duties under the Indenture, has duly executed and delivered the Indenture, and, insofar as the laws governing the trust powers of the Bank are concerned and assuming due authorization, execution and delivery thereof by the Company, the Indenture constitutes a legal, valid and binding agreement of the Bank, enforceable against the Bank in accordance with its terms subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law; iii) the execution, delivery and performance by the Bank of the Indenture does not conflict with or constitute a breach of the charter or bylaws of the Bank; and iv) no approval, authorization or other action by, or filing with, any governmental authority of the United States of America or the State of New York having jurisdiction over the trust powers of the Bank is required in connection with the execution and delivery by the Bank of the Indenture or the performance by the Bank of its duties thereunder, except such as have been obtained, taken or made. We are admitted to practice only in the State of New York, and we express no opinion as to matters governed by any laws other than the laws of the State of New York and the Federal law of the United States of America. We are furnishing this opinion to you solely for your benefit. This opinion is not to be relied upon by any other person or used, circulated, quoted or otherwise referred to for any other purpose. Very truly yours, CRAVATH, SWAINE & MOORE EX-4.2 3 Exhibit 4.2 ALABAMA POWER COMPANY TO THE CHASE MANHATTAN BANK, TRUSTEE. SEVENTH SUPPLEMENTAL INDENTURE DATED AS OF OCTOBER 15, 1998 $160,000,000 SERIES G 5 3/8% SENIOR NOTES DUE OCTOBER 1, 2008 TABLE OF CONTENTS1 PAGE ARTICLE 1 Series G Senior Notes 4 SECTION 101. Establishment 4 SECTION 102. Definitions 4 SECTION 103. Payment of Principal and Interest 5 SECTION 104. Denominations 6 SECTION 105. Global Securities 6 SECTION 106. Transfer 6 SECTION 107. Redemption at the Company's Option 7 ARTICLE 2 Miscellaneous Provisions 7 SECTION 201. Recitals by Company 7 SECTION 202. Ratification and Incorporation of Original Indenture 8 SECTION 203. Executed in Counterparts 8 - -------- 1This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. THIS SEVENTH SUPPLEMENTAL INDENTURE is made as of the 15th day of October, 1998, by and between ALABAMA POWER COMPANY, an Alabama corporation, 600 North 18th Street, Birmingham, Alabama 35291 (the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, 450 West 33rd Street, New York, New York 10001 (the "Trustee"). W I T N E S S E T H: WHEREAS, the Company has heretofore entered into a Senior Note Indenture, dated as of December 1, 1997 (the "Original Indenture"), with the Trustee, as supplemented by a First Supplemental Indenture, dated as of December 12, 1997 (the "First Supplemental Indenture"), a Second Supplemental Indenture dated as of February 26, 1998 (the "Second Supplemental Indenture"), a Third Supplemental Indenture, dated as of April 23, 1998 (the "Third Supplemental Indenture"), a Fourth Supplemental Indenture, dated as of August 19, 1998 (the "Fourth Supplemental Indenture"), a Fifth Supplemental Indenture, dated as of September 17, 1998 (the "Fifth Supplemental Indenture") and a Sixth Supplemental Indenture, dated as of September 24, 1998 (the "Sixth Supplemental Indenture"). WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as supplemented by this Seventh Supplemental Indenture, is herein called the "Indenture"; WHEREAS, under the Original Indenture, a new series of Senior Notes may at any time be established pursuant to a supplemental indenture executed by the Company and the Trustee; WHEREAS, the Company proposes to create under the Indenture a new series of Senior Notes; WHEREAS, additional Senior Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and WHEREAS, all conditions necessary to authorize the execution and delivery of this Seventh Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed. NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 Series G Senior Notes SECTION 101. Establishment. There is hereby established a new series of Senior Notes to be issued under the Indenture, to be designated as the Company's Series G 5 3/8% Senior Notes due October 1, 2008 (the "Series G Notes"). There are to be authenticated and delivered $160,000,000 principal amount of Series G Notes, and no further Series G Notes shall be authenticated and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Series G Notes shall be issued in definitive fully registered form. The Series G Notes shall be issued in the form of one Global Security in substantially the form set out in Exhibit A hereto. The Depositary with respect to the Series G Notes shall be The Depository Trust Company. The form of the Trustee's Certificate of Authentication for the Series G Notes shall be in substantially the form set forth in Exhibit B hereto. Each Series G Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for. SECTION 102. Definitions. The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture. "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Series G Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Series G Notes. "Comparable Treasury Price" means, with respect to any Redemption Date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such Redemption Date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "H.15(519)" or (ii) if such release (or any successor release) is not published or does not contain such prices on such Business Day, the Reference Treasury Dealer Quotation for such Redemption Date. "Interest Payment Dates" means April 1 and October 1 of each year. "Independent Investment Banker" means an independent investment banking institution of national standing appointed by the Company and reasonably acceptable to the Trustee. "Original Issue Date" means October 15, 1998. "Reference Treasury Dealer" means a primary U.S. Government securities dealer in New York City appointed by the Company and reasonably acceptable to the Trustee. "Reference Treasury Dealer Quotation" means, with respect to the Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount and quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date). "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the 15th calendar day preceding such Interest Payment Date. "Stated Maturity" means October 1, 2008. "Treasury Yield" means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. SECTION 103. Payment of Principal and Interest. The principal of the Series G Notes shall be due at Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Series G Notes shall bear interest at the rate of 5 3/8% per annum until paid or duly provided for. Interest shall be paid semi-annually in arrears on each Interest Payment Date to the Person in whose name the Series G Notes are registered on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable. Any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series G Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Series G Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series G Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture. Payments of interest on the Series G Notes will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Series G Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Series G Notes is not a Business Day, then a payment of the interest payable on such date will be made on the next succeeding day that is a Business Day with the same force and effect as if made on the date the payment was originally payable. Payment of the principal and interest due at the Stated Maturity or earlier redemption of the Series G Notes shall be made upon surrender of the Series G Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Series G Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. SECTION 104. Denominations. The Series G Notes may be issued in the denominations of $1,000, or any integral multiple thereof. SECTION 105. Global Securities. The Series G Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series G Notes represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Series G Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee. Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series G Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary. A Global Security shall be exchangeable for Series G Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company, in each case within 90 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series G Notes. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series G Notes registered in such names as the Depositary shall direct. SECTION 106. Transfer. No service charge will be made for any transfer or exchange of Series G Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. The Company shall not be required (a) to issue, transfer or exchange any Series G Notes during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice pursuant to Section 1104 of the Original Indenture identifying the serial numbers of the Series G Notes to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to transfer or exchange any Series G Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any Series G Note redeemed in part. SECTION 107. Redemption at the Company's Option. The Series G Notes will be redeemable by the Company in whole or in part at any time upon not less than 30 nor more than 60 days' notice, at Redemption Prices equal to the greater of (i) 100% of the principal amount of the Series G Notes being redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Series G Notes being redeemed discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Yield plus 12.5 basis points, plus, for (i) and (ii) above, whichever is applicable, accrued interest on the Series G Notes to the Redemption Date. The Trustee shall not be responsible for the calculation of the Redemption Price. The Company shall calculate the Redemption Price and promptly notify the Trustee thereof. In the event of redemption of the Series G Notes in part only, a new Series G Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof. The Series G Notes will not have a sinking fund. Notice of redemption shall be given as provided in Section 1104 of the Original Indenture except that any Notice of Redemption shall not specify the Redemption Price but only the manner of calculation thereof. Any redemption of less than all of the Series G Notes shall, with respect to the principal thereof, be divisible by $1,000. ARTICLE 2 Miscellaneous Provisions SECTION 201. Recitals by Company. The recitals in this Seventh Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series G Notes and of this Seventh Supplemental Indenture as fully and with like effect as if set forth herein in full. SECTION 202. Ratification and Incorporation of Original Indenture. As heretofore supplemented and as supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, and this Seventh Supplemental Indenture shall be read, taken and construed as one and the same instrument. SECTION 203. Executed in Counterparts. This Seventh Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written. ATTEST: ALABAMA POWER COMPANY By: By: Patricia B. Southerland William B. Hutchins, III Assistant Secretary Executive Vice President, Chief Financial Officer and Treasurer ATTEST: THE CHASE MANHATTAN BANK, as Trustee By: By: Senior Trust Officer Senior Trust Officer EXHIBIT A FORM OF SERIES G NOTE NO. __ CUSIP NO. 010392DK1 ALABAMA POWER COMPANY SERIES G 5 3/8%SENIOR NOTE DUE OCTOBER 1, 2008 - -------------------------------------------------------------------------- Principal Amount: $_____________ - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Regular Record Date: 15th calendar day prior to Interest Payment Date - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Original Issue Date: October 15, 1998 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Stated Maturity: October 1, 2008 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Interest Payment Dates: April 1 and October 1 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Interest Rate: 5 3/8% per annum - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Authorized Denomination: $1,000 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Alabama Power Company, an Alabama corporation (the "Company", which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to _______________________________________________, or registered assigns, the principal sum of _________ DOLLARS ($__________) on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on each Interest Payment Date as specified above, commencing on April 1, 1999, and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the "Note") is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture. Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Note is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day with the same force and effect as if made on the date the payment was originally payable. A "Business Day" shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business. Payment of the principal of and interest due at the Stated Maturity or earlier redemption of the Series G Notes shall be made upon surrender of the Series G Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Series G Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on an Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: ALABAMA POWER COMPANY By: Vice President Attest: Assistant Secretary {Seal of ALABAMA POWER COMPANY appears here} CERTIFICATE OF AUTHENTICATION This is one of the Senior Notes referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By: Authorized Officer (Reverse Side of Note) This Note is one of a duly authorized issue of Senior Notes of the Company (the "Notes"), issued and issuable in one or more series under a Senior Note Indenture, dated as of December 1, 1997, as supplemented (the "Indenture"), between the Company and The Chase Manhattan Bank, Trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof as Series G 5 3/8% Senior Notes due October 1, 2008 (the "Series G Notes") in the aggregate principal amount of up to $160,000,000. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture. The Series G Notes will be redeemable by the Company in whole or in part at any time upon not less than 30 nor more than 60 days' notice, at Redemption Prices equal to the greater of (i) 100% of the principal amount of the Series G Notes being redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Series G Notes being redeemed discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Yield plus 12.5 basis points, plus, for (i) and (ii) above, whichever is applicable, accrued interest on the Series G Notes to the Redemption Date. The Trustee shall not be responsible for the calculation of the Redemption Price. The Company shall calculate the Redemption Price and promptly notify the Trustee thereof. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. The Series G Notes will not have a sinking fund. If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Notes of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company. This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM- as tenants in UNIF GIFT MIN ACT- _______ Custodian ________ common (Cust) (Minor) TEN ENT- as tenants by the entireties under Uniform Gifts to JT TEN- as joint tenants Minors Act with right of survivorship and ________________________ not as tenants (State) in common Additional abbreviations may also be used though not on the above list. FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto (please insert Social Security or other identifying number of assignee) PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE the within Note and all rights thereunder, hereby irrevocably constituting and appointing agent to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever. EXHIBIT B CERTIFICATE OF AUTHENTICATION This is one of the Senior Notes referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By: Authorized Officer -----END PRIVACY-ENHANCED MESSAGE-----