EXHIBIT 1
$200,000,000 Series E 6.375% Senior Notes due November 15, 2036
SOUTHERN POWER COMPANY
UNDERWRITING AGREEMENT
November 13, 2006
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the Several Underwriters named on Schedule I hereto
Ladies and Gentlemen:
Southern Power Company, a Delaware corporation (the
"Company"), confirms its agreement (the "Agreement") with you and each of the
other Underwriters named in Schedule I hereto (collectively, the "Underwriters",
which term shall also include any underwriter substituted as hereinafter
provided in Section 11 hereof) for whom you are acting as representatives (in
such capacity you shall hereinafter be referred to as the "Representatives"),
with respect to the sale by the Company and the purchase by the Underwriters,
acting severally and not jointly, of $200,000,000 aggregate principal amount of
the Series E 6.375% Senior Notes due November 15, 2036 (the "Senior Notes") as
set forth in Schedule I hereto.
The Company understands that the Underwriters are making a
public offering of the Senior Notes pursuant to this Agreement. The Senior Notes
will be issued pursuant to an indenture, dated as of June 1, 2002, as heretofore
supplemented (the "Base Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee"), and as further supplemented by a third
supplemental indenture, dated as of November 21, 2006, to the Base Indenture
relating to the Senior Notes (the "Supplemental Indenture" and, together with
the Base Indenture and any other amendments or supplements thereto, the
"Indenture"), between the Company and the Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
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warrants to the Underwriters as follows:
(a) A registration statement on Form S-3, as amended, (File Nos. 333-134219) in
respect of the Senior Notes and certain other securities has been prepared
and filed in accordance with the provisions of the Securities Act of 1933,
as amended (the "Securities Act"), with the Securities and Exchange
Commission (the "Commission"); such registration statement, as amended, and
any post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Underwriters, has been declared effective by the
Commission in such form (except that copies of the registration statement,
as amended, and any post-effective amendment delivered to the Underwriters
need not include exhibits but shall include all documents incorporated by
reference therein); and no stop order suspending the effectiveness of such
registration statement, as amended, has been issued and no proceeding for
that purpose or pursuant to Section 8A of the Securities Act against the
Company or related to the offering has been initiated or, to the best
knowledge of the Company, threatened by the Commission (any preliminary
prospectus, as supplemented by a preliminary prospectus supplement,
included in such registration statement, as amended, or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act, being hereinafter called a
"Preliminary Prospectus"); such registration statement, as amended, as used
with respect to the Senior Notes, including the information deemed a part
thereof pursuant to Rule 430B(f)(1) under the Securities Act on the date of
such registration statement's effectiveness for purposes of Section 11 of
the Securities Act, as such Section applies to the Company and the
Underwriters for the Senior Notes pursuant to Rule 430B(f)(2) under the
Securities Act (the "Effective Date"), including the exhibits thereto and
all documents incorporated by reference therein pursuant to Item 12 of Form
S-3 at the Effective Date, being hereinafter called the "Registration
Statement"; the base prospectus relating to the Senior Notes and certain
other securities of the Company, in the form in which it has most recently
been filed with the Commission on or prior to the date of this Agreement
relating to the Senior Notes, being hereinafter called the "Basic
Prospectus"; the Basic Prospectus as amended and supplemented by a
preliminary prospectus supplement dated November 13, 2006 relating to the
Senior Notes and as further amended and supplemented immediately prior to
the Applicable Time (as defined below) has been filed with the Commission
pursuant to Rule 424(b) under the Securities Act (such document is
hereinafter called the "Pricing Prospectus"); the Basic Prospectus as
amended or supplemented in final form, including by a prospectus supplement
relating to the Senior Notes in the form in which it is filed with the
Commission, pursuant to Rule 424(b) under the Securities Act in accordance
with Section 4(e) hereof is hereinafter called the "Final Supplemented
Prospectus"; any reference herein to any Preliminary Prospectus, the Basic
Prospectus, the Pricing Prospectus or the Final Supplemented Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act,
as of the date of such Preliminary Prospectus, Basic Prospectus, Pricing
Prospectus or Final Supplemented Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus, the
Basic Prospectus, the Pricing Prospectus or the Final Supplemented
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus, Basic Prospectus, Pricing
Prospectus or Final Supplemented Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus, Basic Prospectus,
Pricing Prospectus or Final Supplemented Prospectus, as the case may be;
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any reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Registration Statement that is incorporated by reference in the
Registration Statement.
For purposes of this Agreement, the "Applicable Time" is 4:15
p.m. EST (New York Time) on the date of this Agreement; the documents listed in
Schedule III, taken together and attached hereto, are collectively referred to
as the "Pricing Disclosure Package."
(b) The documents incorporated by reference in the Registration Statement or
the Pricing Prospectus, when they were filed with the Commission, complied
in all material respects with the applicable provisions of the Exchange Act
and the rules and regulations of the Commission thereunder, and as of such
time of filing, when read together with the Pricing Prospectus and any
Permitted Free Writing Prospectus (as defined in Section 3(a) hereof), none
of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Final Supplemented Prospectus or any
further amendment or supplement thereto, when such documents are filed with
the Commission, will comply in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations of the
Commission thereunder and, when read together with the Final Supplemented
Prospectus as it otherwise may be amended or supplemented, will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the Company makes no warranty or representation to
the Underwriters with respect to: (A) any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by the Underwriters through the Representatives expressly for
use in the Pricing Prospectus, any Permitted Free Writing Prospectus and
the Final Supplemented Prospectus; or (B) any information set forth in the
Pricing Prospectus or the Final Supplemented Prospectus under the caption
"Description of the Series E Senior Notes - Book-Entry-Only Issuance - The
Depository Trust Company."
(c) The Registration Statement and the Final Supplemented Prospectus comply,
and any further amendments or supplements thereto, when any such amendments
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become effective or supplements are filed with the Commission, as the case
may be, will comply, in all material respects with the applicable
provisions of the Securities Act, the Exchange Act, the 1939 Act
(hereinafter defined) and the General Rules and Regulations of the
Commission thereunder and the Registration Statement, the Pricing
Disclosure Package and the Final Supplemented Prospectus do not and will
not, (i) as of the Effective Date as to the Registration Statement and any
amendment thereto, (ii) as of the Applicable Time as to the Pricing
Disclosure Package and (iii) as of the date of the Final Supplemented
Prospectus as to the Final Supplemented Prospectus or as of the date when
any supplement is filed as to the Final Supplemented Prospectus as further
supplemented, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the case of the Registration Statement and any amendment
thereto, and, in the light of the circumstances under which they were made,
not misleading in the case of the Pricing Disclosure Package and the Final
Supplemented Prospectus as further supplemented; except that the Company
makes no warranties or representations with respect to (A) that part of the
Registration Statement which shall constitute the Statements of Eligibility
(Form T-1) under the Trust Indenture Act of 1939, as amended (the "1939
Act"), (B) statements or omissions made in a Permitted Free Writing
Prospectus, the Registration Statement, the Pricing Prospectus or the Final
Supplemented Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters through the
Representatives expressly for use therein or (C) any information set forth
in the Pricing Prospectus or the Final Supplemented Prospectus under the
caption "Description of the Series E Senior Notes - Book-Entry-Only
Issuance - The Depository Trust Company."
(d) Each Permitted Free Writing Prospectus listed on Schedule III hereto does
not include anything that conflicts with the information contained in the
Registration Statement, the Pricing Prospectus or the Final Supplemented
Prospectus and each such Permitted Free Writing Prospectus, as supplemented
by and taken together with the Pricing Disclosure Package as of the
Applicable Time, did not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the Company makes no warranty or representation to
the Underwriters with respect to any statement or omissions made in a
Permitted Free Writing Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters through
the Representatives expressly for use therein.
(e) With respect to the Registration Statement, the conditions for use of
Form S-3, as set forth in the General Instructions thereof, have been
satisfied.
(f) At the determination date for purposes of the Senior Notes within the
meaning of Rule 164(h) under the Securities Act, the Company was not an
"ineligible issuer" as defined in Rule 405 under the Securities Act.
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(g) Since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, except as otherwise
stated therein, there has been no material adverse change in the
business, properties or financial condition of the Company, whether or
not arising in the ordinary course of business.
(h) The Company is a corporation duly organized and existing under the laws
of the State of Delaware and has due corporate authority to conduct its
business and to own and operate the properties used by it in such
business, to enter into and perform its obligations under this
Agreement and the Indenture and to issue and sell the Senior Notes to
the Underwriters.
(i) This Agreement has been duly authorized, executed and delivered by the
Company.
(j) The Indenture has been duly authorized by the Company and, on the Closing
Date (as hereinafter defined), will have been duly executed and delivered
by the Company, and, assuming due authorization, execution and delivery of
the Indenture by the Trustee, the Indenture will, on the Closing Date,
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, receivership, liquidation, fraudulent conveyance,
moratorium or other similar laws affecting creditors' rights generally or
(2) general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) (the "Enforceability
Exceptions"); the Indenture will conform in all material respects to all
statements relating thereto contained in the Pricing Disclosure Package and
the Final Supplemented Prospectus; and, on the Closing Date, the Indenture
will have been duly qualified under the 1939 Act.
(k) The issuance and delivery of the Senior Notes have been duly authorized by
the Company and, on the Closing Date, the Senior Notes will have been duly
executed by the Company and, when authenticated in the manner provided for
in the Indenture and delivered against payment therefor as described in
this Agreement, will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except to the extent that enforcement thereof may be limited by the
Enforceability Exceptions, will be in the form contemplated by, and
entitled to the benefits of, the Indenture and will conform in all material
respects to all statements relating thereto in the Pricing Disclosure
Package and the Final Supplemented Prospectus.
(l) The execution, delivery and performance by the Company of this Agreement,
the Indenture and the Senior Notes and the consummation by the Company of
the transactions contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder shall have been duly
authorized by all necessary corporate action on the part of the Company and
do not and will not result in any violation of the charter or bylaws of the
Company, and do not and will not conflict with, or result in a breach of
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any of the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company under (A) any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to
which the Company is a party or by which it may be bound or to which any of
its properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially adverse to
the Company or materially adverse to the transactions contemplated by this
Agreement), or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or administrative agency or
other governmental body having jurisdiction over the Company, or any of its
properties.
(m) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale by the Company of the Senior Notes or the
transactions by the Company contemplated in this Agreement, except (A)
such as may be required under the Securities Act or the rules and
regulations thereunder; (B) such as may be required under the Federal
Power Act; (C) such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or "blue
sky" laws and (D) the qualification of the Indenture under the 1939
Act.
(n) The financial statements incorporated by reference in the Registration
Statement, the Pricing Prospectus and the Final Supplemented Prospectus,
together with the related schedules and notes, present fairly, in all
material respects, the financial position, results of operations and cash
flows of the Company as of and for the dates indicated; said financial
statements have been prepared in conformity with accounting principles
generally accepted in the United States ("GAAP") applied on a consistent
basis (except that the unaudited financial statements may be subject to
normal year end adjustments) throughout the periods involved and
necessarily include amounts that are based on the best estimates and
judgments of management. The selected financial data and the summary
financial information included in the Pricing Prospectus and the Final
Supplemented Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited and
unaudited financial statements incorporated by reference in the
Registration Statement.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
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(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company, the principal amount of
the Senior Notes set forth in Schedule I to this Agreement opposite the name of
such Underwriter (plus any additional amount of the Senior Notes that such
Underwriter may become obligated to purchase pursuant to the provisions of
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Section 11 hereof), at a price equal to 99.125% of the principal amount thereof.
(b) Payment for and delivery of certificates for the Senior Notes shall be made
at the offices of Xxxxx & Xxxxxxx LLP, 00 Xxxxx Xxxxx, Xxxxx 000, 00 Xxxx Xxxxx,
Xx. Xxxx., XX, Xxxxxxx, Xxxxxxx 00000 at 10:00 A.M., New York time, on November
21, 2006 (unless postponed in accordance with the provisions of Section 11) or
such other time, place or date as shall be agreed upon by the Representatives
and the Company (such time and date of payment and delivery being herein called
the "Closing Date"). Payment shall be made to the Company by wire transfer in
federal funds at the Closing Date against delivery of the Senior Notes to Xxxxxx
Brothers Inc. It is understood that each Underwriter has authorized Xxxxxx
Brothers Inc., for each Underwriter's account, to accept delivery of, receipt
for, and make payment of, the principal amount of the Senior Notes which each
Underwriter has agreed to purchase. Xxxxxx Brothers Inc., individually and not
as a representative of the Underwriters, may (but shall not be obligated to)
make payment of the principal amount of the Senior Notes to be purchased by any
Underwriter whose payment has not been received by the Closing Date, but such
payment shall not relieve such Underwriter from its obligations hereunder.
The delivery of the Senior Notes shall be made in fully
registered form, registered in the name of CEDE & CO., to the offices of The
Depository Trust Company in New York, New York or its designee, and the
Underwriters shall accept such delivery.
The certificate(s) for the Senior Notes will be made available
for examination by the Representatives not later than 12:00 Noon, New York time,
on the last business day prior to the Closing Date.
SECTION 3. FREE WRITING PROSPECTUSES.
(a) The Company represents and agrees that, without the prior consent of the
Representatives, it has not made and will not make any offer relating to
the Senior Notes that would constitute a "free writing prospectus" as
defined in Rule 405 under the Securities Act, other than a Permitted Free
Writing Prospectus; each Underwriter, severally and not jointly, represents
and agrees that, without the prior consent of the Company and the
Representatives, it has not made and will not make any offer relating to
the Senior Notes that would constitute a "free writing prospectus" as
defined in Rule 405 under the Act, other than a Permitted Free Writing
Prospectus or a free writing prospectus that is not required to be filed by
the Company pursuant to Rule 433; any such free writing prospectus (which
shall include the pricing term sheet discussed in Section 3(b) hereof), the
use of which has been consented to by the Company and the Representatives,
is listed on Schedule III and herein called a "Permitted Free Writing
Prospectus."
(b) The Company agrees to prepare a pricing term sheet, substantially in
the form of Schedule II hereto and approved by the Representatives, and
to file such pricing term sheet pursuant to Rule 433(d) under the
Securities Act within the time period prescribed by such Rule.
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(c) The Company and the Representatives have complied and will comply with
the requirements of Rule 433 under the Securities Act applicable to any
free writing prospectus, including timely Commission filing where
required and legending.
(d) The Company agrees that if at any time following issuance of a Permitted
Free Writing Prospectus any event occurred or occurs as a result of which
such Permitted Free Writing Prospectus would conflict with the information
in the Registration Statement, the Pricing Prospectus or the Final
Supplemented Prospectus or include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances then prevailing, not
misleading, the Company will give prompt notice thereof to the
Representatives and, if requested by the Representatives, will prepare and
furnish without charge to each Underwriter a free writing prospectus or
other document, the use of which has been consented to by the
Representatives, which will correct such conflict, statement or omission;
provided, however, that this representation and warranty shall not apply to
any statements or omissions in a Permitted Free Writing Prospectus made in
reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through the Representatives, expressly for
use therein.
(e) The Company agrees that if there occurs an event or development as a
result of which the Pricing Disclosure Package would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances then prevailing, not misleading, the Company will notify
the Representatives so that any use of the Pricing Disclosure Package
may cease until it is amended or supplemented.
SECTION 4. COVENANTS OF THE COMPANY. The Company covenants with the
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Underwriters as follows:
(a) The Company, on or prior to the Closing Date, will deliver to the
Underwriters conformed copies of the Registration Statement as originally
filed and of all amendments thereto, heretofore or hereafter made,
including any post-effective amendment (in each case including all exhibits
filed therewith, and including unsigned copies of each consent and
certificate included therein or filed as an exhibit thereto, except
exhibits incorporated by reference, unless specifically requested). As soon
as the Company is advised thereof, it will advise the Representatives
orally of the issuance of any stop order under the Securities Act with
respect to the Registration Statement, or the institution of any
proceedings for that purpose or pursuant to Section 8A of the Securities
Act against the Company or related to the offering, of which the Company
shall have received notice, and will use its best efforts to prevent the
issuance of any such stop order and to secure the prompt removal thereof,
if issued. The Company will deliver to the Representatives sufficient
conformed copies of the Registration Statement, the Basic Prospectus, the
Pricing Prospectus and the Final Supplemented Prospectus and of all
supplements and amendments thereto (in each case without exhibits) for
distribution to the Underwriters and, from time to
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time, as many copies of the Basic Prospectus, the Pricing Prospectus
and the Final Supplemented Prospectus as the Underwriters may reasonably
request for the purposes contemplated by the Securities Act or the
Exchange Act.
(b) The Company will furnish the Underwriters with written or electronic copies
of each amendment and supplement to the Final Supplemented Prospectus
relating to the offering of the Senior Notes in such quantities as the
Underwriters may from time to time reasonably request. If, during the
period (not exceeding nine months) when the delivery of a prospectus (or in
lieu thereof, the notice referred to in Rule 173(a) under the Securities
Act) shall be required by law in connection with the sale of any Senior
Notes by an Underwriter, any event relating to or affecting the Company, or
of which the Company shall be advised in writing by the Underwriters, shall
occur, which in the opinion of the Company or of Underwriters' counsel
should be set forth in a supplement to or an amendment of the Final
Supplemented Prospectus, as the case may be, in order to make the Final
Supplemented Prospectus not misleading in the light of the circumstances
when it (or in lieu thereof, the notice referred to in Rule 173(a) under
the Securities Act) is delivered, or if for any other reason it shall be
necessary during such period to amend or supplement the Final Supplemented
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Final Supplemented Prospectus in order to comply with the
Securities Act or the Exchange Act, the Company forthwith will (i) notify
the Underwriters to suspend solicitation of purchases of the Senior Notes
and (ii) at its expense, make any such filing or prepare and furnish to the
Underwriters a reasonable number of copies of a supplement or supplements
or an amendment or amendments to the Final Supplemented Prospectus which
will supplement or amend the Final Supplemented Prospectus so that, as
supplemented or amended, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances when the Final
Supplemented Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act) is delivered, not misleading or which will
effect any other necessary compliance. In case any Underwriter is required
to deliver a prospectus in connection with the sale of any Senior Notes
after the expiration of the period specified in the preceding sentence, the
Company, upon the request of such Underwriter, will furnish to such
Underwriter, at the expense of such Underwriter, a reasonable quantity of a
supplemented or amended prospectus, or supplements or amendments to the
Final Supplemented Prospectus, complying with Section 10(a) of the
Securities Act. During the period specified in the second sentence of this
subsection, the Company will continue to prepare and file with the
Commission on a timely basis all documents or amendments required under the
Exchange Act and the rules and regulations thereunder; provided, that the
Company shall not file such documents or amendments without also furnishing
copies thereof prior to such filing to the Representatives and Xxxxx
Xxxxxxxxxx LLP.
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(c) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Senior Notes for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Representatives may designate provided, however,
that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
file a consent to service of process or to file annual reports or to
comply with any other requirements in connection with such
qualification deemed by the Company to be unduly burdensome.
(d) The Company will make generally available to its security holders as
soon as practicable but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Company (in form
complying with the provisions of Rule 158 of the rules and regulations
under the Securities Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following
the "effective date" (as defined in Rule 158) of the Registration
Statement.
(e) As soon as practicable after the date of this Agreement, and in any
event within the time prescribed by Rule 424 under the Securities Act,
to file the Final Supplemented Prospectus, in a form approved by the
Representatives, such approval not to be unreasonably withheld, with
the Commission and to advise the Representatives of such filing and to
confirm such advice in writing. Furthermore, the Company will make any
other required filings pursuant to Rule 433(d)(1) of the Securities Act
within the time required by such Rule.
(f) During a period of 15 days from the date of this Agreement, the Company
will not, without the Representatives' prior written consent, directly
or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any Senior Notes or any security convertible
into or exchangeable into or exercisable for the Senior Notes or any
debt securities substantially similar to the Senior Notes (except for
the Senior Notes issued pursuant to this Agreement). The
Representatives agree that commercial paper or other debt securities
with scheduled maturities of less than one year are not subject to this
Section 4(f).
SECTION 5. PAYMENT OF EXPENSES.
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(a) The Company agrees to pay all expenses incidental to the performance of its
obligations under this Agreement, including, but not limited to, the
expenses of (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation,
issuance and delivery of the certificate(s) for the Senior Notes, (iii) the
fees and disbursements of the Company's counsel and accountants, (iv) the
qualification of the Senior Notes under securities laws in accordance with
the provisions of Section 4(c) hereof, including filing fees and the
reasonable fees and disbursements of Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, in connection therewith and in connection with the
preparation of any blue sky survey (such fees and disbursements of counsel
shall not exceed $3,500), (v) the printing and delivery to the Underwriters
of copies of the Registration Statement as originally filed and of each
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amendment thereto and of the Pricing Prospectus, any Permitted Free Writing
Prospectus, the Final Supplemented Prospectus, and any amendments or
supplements thereto, (vi) the printing and delivery to the Underwriters of
copies of any blue sky survey, (vii) the fee of the National Association of
Securities Dealers, Inc. in connection with its review of the offering
contemplated by this Agreement, if applicable, (viii) the fees and expenses
of the Trustee, including the fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Senior Notes, (ix) any
fees payable in connection with the rating of the Senior Notes, (x) the
cost and charges of any transfer agent or registrar, and (xi) the cost of
qualifying the Senior Notes with The Depository Trust Company.
(b) Except as otherwise provided in Section 10 hereof, the Underwriters
shall pay all other expenses incurred by them in connection with their
offering of the Senior Notes including fees and disbursements of their
counsel, Xxxxx Xxxxxxxxxx LLP.
SECTION 6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Senior Notes are subject to the
following conditions:
(a) No stop order suspending the effectiveness of the Registration Statement
shall be in effect on the Closing Date and no proceedings for that purpose
or pursuant to Section 8A of the Securities Act against the Company or
related to the offering shall be pending before, or to the knowledge of the
Company threatened by, the Commission on such date. If filing of the
Pricing Prospectus or the Final Supplemented Prospectus, or any supplement
thereto, is required pursuant to Rule 424, the Pricing Prospectus and the
Final Supplemented Prospectus, and any such supplement, as applicable,
shall have been filed in the manner and within the time period required by
Rule 424. The pricing term sheet contemplated by Section 3(b) hereto, and
any other material required to be filed by the Company pursuant to Rule
433(d) under the Securities Act, shall have been filed by the Company with
the Commission within the applicable time periods prescribed for such
filings by Rule 433.
(b) Any required orders of any applicable state commission or the Federal
Energy Regulatory Commission permitting the transactions contemplated
hereby substantially in accordance with the terms and conditions hereof
shall be in full force and effect and shall contain no provision
unacceptable to the Underwriters or the Company (but all provisions of
such order or orders heretofore entered, copies of which have
heretofore been delivered to the Representatives, are deemed acceptable
to the Underwriters and the Company and all provisions of such order or
orders hereafter entered shall be deemed acceptable to the Underwriters
and the Company unless within 24 hours after receiving a copy of any
such order any party to this Agreement shall give notice to the other
parties to the effect that such order contains an unacceptable
provision).
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(c) On the Closing Date the Representatives shall have received:
(1) The opinion, dated the Closing Date, of Xxxxx & Xxxxxxx LLP,
counsel for the Company, substantially in the form attached
hereto as Schedule IV-A.
(2) The opinion, dated the Closing Date, of Xxxxxxxx Xxxxxxx LLP,
counsel for the Company, substantially in the form attached
hereto as Schedule IV-B.
(3) The opinion, dated the Closing Date, of Xxxxxx, Xxxxxx & Xxxxxx,
LLP, counsel to the Trustee, substantially in the form
attached hereto as Schedule V.
(4) The opinion, dated the Closing Date, of Xxxxx Xxxxxxxxxx LLP, counsel
for the Underwriters, substantially in the form attached hereto as
Schedule VI.
(d) At the Closing Date, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, any material
adverse change in the business, properties or financial condition of the
Company, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or any
Vice President of the Company, and dated as of the Closing Date, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of the
Closing Date, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied on or
prior to the Closing Date and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose or pursuant to Section 8A of the Securities
Act against the Company or related to the offering have been initiated or,
to the knowledge of the Company, threatened by the Commission.
(e) The Representatives shall have received on the date hereof and shall
receive on the Closing Date from Deloitte & Touche LLP, a letter or letters
addressed to the Representatives (which may refer to letters previously
delivered to the Representatives) dated the respective dates of delivery
thereof to the effect that: (A) they are an independent registered public
accounting firm with respect to the Company within the meaning of the
Securities Act and the rules and regulations under the Securities Act; (B)
in their opinion, the financial statements audited by them and incorporated
by reference in the Registration Statement and the Pricing Prospectus or
the Registration Statement, the Pricing Prospectus and the Final
Supplemented Prospectus, as applicable, comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act
and the rules and regulations under the Exchange Act; and (C) on the basis
12
of certain limited procedures performed through a specified date not more
than three 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 standards of the Public Company Accounting Oversight Board
(United States) ("PCAOB") for a review of interim financial statement
information as described in PCAOB Interim Standard AU 722, "Interim
Financial Information", on the unaudited financial statements, if any, of
the Company incorporated by reference in the Registration Statement and the
Pricing Prospectus or the Registration Statement, the Pricing Prospectus
and the Final Supplemented Prospectus, as applicable, and on the latest
available unaudited financial statements of the Company, if any, for any
calendar quarter subsequent to the date of those incorporated by reference
in the Registration Statement and the Pricing Prospectus or the
Registration Statement, the Pricing Prospectus and the Final Supplemented
Prospectus, as applicable; and (iii) making inquiries of certain officials
of the Company who have responsibility for financial and accounting matters
regarding such unaudited financial statements or any specified unaudited
amounts derived therefrom (it being understood that the foregoing
procedures do not constitute an audit performed in accordance with
generally accepted auditing standards and they would not necessarily reveal
matters of significance with respect to the comments made in such letter,
and accordingly that Deloitte & Touche LLP make no representations as to
the sufficiency of such procedures for the Underwriters' purposes), nothing
came to their attention that caused them to believe that: (1) any material
modifications should be made to the unaudited condensed financial
statements, if any, incorporated by reference in the Registration Statement
and the Pricing Prospectus or the Registration Statement, the Pricing
Prospectus and the Final Supplemented Prospectus, as applicable for them to
be in conformity with GAAP; (2) such unaudited condensed financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it applies to
Form 10-Q and the related published rules and regulations thereunder; (3)
the unaudited amounts for Operating Revenues, Earnings Before Income Taxes
and Net Income and the unaudited Ratio of Earnings to Fixed Charges set
forth in the Registration Statement and the Pricing Prospectus or the
Registration Statement, the Pricing Prospectus and the Final Supplemented
Prospectus, as applicable, do not agree with the amounts set forth in or
derived from the unaudited financial statements for the same period
included or incorporated by reference in the Registration Statement; (4) as
of a specified date not more than three 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 unaudited balance sheet, incorporated by
reference in the Registration Statement and the Pricing Prospectus or the
Registration Statement, the Pricing Prospectus and the Final Supplemented
Prospectus, as applicable, except in each case for changes or decreases
which (i) the Registration Statement and the Pricing Prospectus or the
Registration Statement, the Pricing Prospectus and the Final Supplemented
Prospectus, as applicable, disclose, have occurred or may occur, (ii) are
occasioned by the declaration of dividends, (iii) are occasioned by
13
draw-downs and regularly scheduled payments of capitalized lease
obligations, (iv) are occasioned by the purchase or redemption of bonds or
stock to satisfy mandatory or optional redemption provisions relating
thereto, (v) are occasioned by the reclassification of current maturities
of long-term debt, or (vi) are disclosed in such letter; and (5) the
unaudited amounts for Operating Revenues, Earnings Before Income Taxes and
Net Income and the unaudited Ratio of Earnings to Fixed Charges for any
calendar quarter subsequent to those set forth in (3) above, which, if
available, shall be set forth in such letter, do not agree with the amounts
set forth in or derived from the unaudited financial statements for the
same period or were not determined on a basis substantially consistent with
that of the corresponding audited amounts or ratios included or
incorporated by reference in the Registration Statement and the Pricing
Prospectus or the Registration Statement, the Pricing Prospectus and the
Final Supplemented Prospectus, as applicable.
(f) On the Closing Date, Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Senior Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Senior Notes as herein
contemplated shall be satisfactory in form and substance to the
Representatives and Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters.
(g) No amendment or supplement to the Registration Statement or the Final
Supplemented Prospectus filed subsequent to the date of this Agreement
(including any filing made by the Company pursuant to Section 13 or 14
of the Exchange Act) shall be unsatisfactory in form to Xxxxx
Xxxxxxxxxx LLP or shall contain information (other than with respect to
an amendment or supplement relating solely to the activity of the
Underwriters) which, in the reasonable judgment of the Representatives,
shall materially impair the marketability of the Senior Notes.
(h) The Company shall have performed its obligations when and as provided
under this Agreement.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Sections 5, 8 and 10(b) hereof.
14
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
--------------------------------------------
The obligations of the Company shall be subject to the
conditions set forth in the first sentence of Section 6(a) and in Section 6(b).
In case such conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Representatives. Any such termination shall be without liability of any party to
any other party except as otherwise provided in Sections 5, 8 and 10(b) hereof.
SECTION 8. INDEMNIFICATION.
---------------
(a) The Company agrees to indemnify and hold harmless each of the Underwriters
and each person, if any, who controls any such Underwriter within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange 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, the Exchange
Act or otherwise, and to reimburse such Underwriter and such controlling person
or persons, if any, for any legal or other expenses incurred by them in
connection with defending any actions, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Basic Prospectus, the Pricing
Prospectus, any Permitted Free Writing Prospectus or the Final Supplemented
Prospectus or, if the Company shall furnish to the Underwriters any amendments
or any supplements thereto, or shall make any filings pursuant to Section 13 or
14 of the Exchange Act which are incorporated therein by reference, in any
Preliminary Prospectus, the Registration Statement, the Basic Prospectus, the
Pricing Prospectus, any Permitted Free Writing Prospectus, the Final
Supplemented Prospectus as so amended or supplemented, or in any free writing
prospectus used by the Company other than a Permitted Free Writing Prospectus,
or arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any such untrue
statement or alleged untrue statement or omission or alleged omission which was
made in such Preliminary Prospectus, Registration Statement, Basic Prospectus,
Pricing Prospectus, Permitted Free Writing Prospectus or Final Supplemented
Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by any Underwriter, through the Representatives for use
therein. Each Underwriter agrees, within ten days after the receipt by it of
notice of the commencement of any action in respect of which indemnity may be
sought by it, or by any person controlling it, from the Company on account of
its agreement contained in this Section 8, to notify the Company in writing of
the commencement thereof but the omission of such Underwriter so to notify the
Company of any such action shall not release the Company from any liability
which it may have to such Underwriter or to such controlling person otherwise
than on account of the indemnity agreement contained in this Section 8. In case
any such action shall be brought against an Underwriter or any such person
controlling such Underwriter and such Underwriter shall notify the Company of
15
the commencement thereof as above provided, the Company shall be entitled to
participate in (and, to the extent that it shall wish, including the selection
of counsel, to direct) the defense thereof, at its own expense. In case the
Company elects to direct such defense and select such counsel, any Underwriter
or controlling person shall have the right to employ its own counsel, but, in
any such case, the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless the employment of such
counsel has been authorized in writing by the Company in connection with
defending such action. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include any statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party. In no event shall any indemnifying party have any liability
or responsibility in respect of the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim effected without its prior written consent.
(b) Each Underwriter agrees severally and not jointly, to indemnify and hold
harmless the Company, its directors and such of its officers who have signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act to the same extent and upon the same terms as the indemnity agreement of the
Company set forth in Section 8(a) hereof, but only with respect to alleged
untrue statements or omissions made in the Registration Statement, the
Preliminary Prospectus, the Basic Prospectus, the Pricing Prospectus, any
Permitted Free Writing Prospectus or the Final Supplemented Prospectus, or such
documents as amended or supplemented, in reliance upon and in conformity with
information furnished in writing to the Company by any Underwriter through the
Representatives for use therein.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
--------------------------------------------------------------
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by, or on behalf of the Company and shall survive
delivery of the Senior Notes to the Underwriters.
SECTION 10. TERMINATION OF AGREEMENT.
------------------------
(a) The Representatives may terminate this Agreement, by notice to the Company,
at any time at or prior to the Closing Date if (i) trading in securities on
the New York Stock Exchange shall have been generally suspended or there
shall have been a material disruption in settlement in securities
generally, (ii) minimum or maximum ranges for prices shall have been
generally established on the New York Stock Exchange by the Commission or
by the New York Stock Exchange, (iii) a general
16
banking moratorium shall have been declared by federal or New York State
authorities, or (iv) there shall have occurred any outbreak or escalation
of major hostilities in which the United States is involved, any
declaration of war by the United States Congress or any other substantial
national or international calamity, crisis or emergency (including, without
limitation, acts of terrorism) affecting the United States, in any such
case provided for in clauses (i) through (iv) with the result that, in the
reasonable judgment of the Representatives, the offering, sale or delivery
of the Senior Notes on the terms and in the manner contemplated by this
Agreement and the Final Supplemented Prospectus shall have been materially
impaired.
(b) If this Agreement shall be terminated by the Representatives pursuant to
subsection (a) above or because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason the Company shall be unable to perform
its obligations under this Agreement, then in any such case, the Company
will reimburse the Underwriters for the reasonable fees and disbursements
of Xxxxx Xxxxxxxxxx LLP and for the out of pocket expenses (in an amount
not exceeding $10,000) reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Senior Notes and,
upon such reimbursement, the Company shall be absolved from any further
liability hereunder, except as provided in Sections 5 and 8.
SECTION 11. DEFAULT BY AN UNDERWRITER
If an Underwriter shall fail on the Closing Date to purchase
the Senior Notes that it is obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for the non-defaulting Underwriters, or
any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth. If, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the principal amount of Defaulted Securities does not exceed 10% of the
Senior Notes, the non-defaulting Underwriters shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the principal amount of Defaulted Securities exceeds 10% of the Senior
Notes, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
17
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement, the
Pricing Prospectus or Final Supplemented Prospectus or in any other documents or
arrangements.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Citigroup
Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: General Counsel and Xxxxxx Brothers Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Debt Capital
Markets, Power Group; notices to the Company shall be mailed to 00 Xxxx
Xxxxx Xx. Xxxxxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Chief
Financial Officer, with a copy to Southern Company Services, Inc., 00 Xxxx
Xxxxx Xx. Xxxxxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Xxxx X. Xxxx.
SECTION 13. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Section 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Senior Notes from any of the Underwriters shall be
deemed to be a successor by reason merely of such purchase. The Company
acknowledges and agrees that in connection with all aspects of each transaction
contemplated by this Agreement, the Company and the Underwriters have an
arms-length business relationship that creates no fiduciary duty on the part of
any party and each expressly disclaims any fiduciary or financial advisory
relationship.
SECTION 14. GOVERNING LAW AND TIME. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Except as otherwise set forth
herein, specified times of day refer to New York City time.
SECTION 15. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
18
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters and the Company in accordance with its terms.
Very truly yours,
SOUTHERN POWER COMPANY
By: /s/ Xxxxxxx X. Southern
-------------------------------
Name: Xxxxxxx X. Southern
------------------------------------------
Title: SVP and CFO
---------------------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: Director
XXXXXX BROTHERS INC.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
As Representatives of the Several Underwriters
named in Schedule I hereto
SCHEDULE I
Principal Amount of Series
Name of Underwriters E Senior Notes
Citigroup Global Markets Inc. $82,000,000
Xxxxxx Brothers Inc. 82,000,000
Xxxxxx Xxxxxx & Company, Inc. 20,000,000
Lazard Capital Markets LLC 16,000,000
--------------
Aggregate Principal Amount $200,000,000
SCHEDULE II
PRICING TERM SHEET
(To Preliminary Prospectus Supplement dated November 13, 2006)
Issuer: Southern Power Company
Security: Series E 6.375% Senior Notes due November 15, 2036
Ratings: Baa1/BBB+/BBB+ (Xxxxx'x/S&P/Fitch)
Size: $200,000,000
Public Offering Price: 100.00%
Maturity: November 15, 2036
Treasury Benchmark: 4.50% due February 15, 2036
US Treasury Yield: 4.705%
Spread to Treasury: 167 basis points
Redemption Terms: Prior to November 15, 2016, make-whole call at
T+35 bps.
On or after November 15, 2016, at 100% of the
principal amount.
Coupon: 6.375%
Interest Payment Dates: May 15 and November 15 of each year beginning
May 15, 2007
Format: SEC Registered
Transaction Date: November 13, 2006
Expected Settlement Date: November 21, 2006 (T+6)
Joint Lead Managers: Citigroup Global Markets Inc.
Xxxxxx Brothers Inc.
Co-Managers: Lazard Capital Markets LLC
Xxxxxx Xxxxxx & Company, Inc.
The issuer has filed a registration statement (including a prospectus) with the
SEC for the offering to which this communication relates. Before you invest, you
should read the prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the issuer
and this offering. You may get these documents for free by visiting XXXXX on the
SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus if
you request it by calling Southern Power Company collect at 404-506-5000,
Citigroup Global Markets Inc. toll-free at 1-877-858-5407 or Xxxxxx Brothers
Inc. toll-free at 0-000-000-0000.
SCHEDULE III
PRICING DISCLOSURE PACKAGE
1) Prospectus dated November 9, 2006
2) Preliminary Prospectus Supplement dated November 13, 2006 (which
shall be deemed to include documents incorporated by reference therein)
3) Permitted Free Writing Prospectuses
a) Pricing Term Sheet attached as Schedule II hereto
5
Schedule IV-A
[Letterhead of Xxxxx & Xxxxxxx LLP]
___, 2006
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the Several Underwriters
SOUTHERN POWER COMPANY
Series E _____% Senior Notes
due November 15, 2036
Ladies and Gentlemen:
We have acted as counsel to Southern Power Company (the
"Company") in connection with (i) the Company's issuance of $200,000,000
aggregate principal amount of its Series E ____% Senior Notes due November 15,
2036 (the "Notes") pursuant to a Senior Note Indenture dated as of June 1, 2002,
by and between the Company and The Bank of New York, as trustee (the "Trustee"),
as heretofore supplemented and as further supplemented by the Third Supplemental
Indenture dated as of _______, 2006 (collectively, the "Indenture"); and (ii)
the purchase by the Underwriters (as defined herein) of the Notes pursuant to
the terms of an Underwriting Agreement dated ________, 2006 (the "Underwriting
Agreement"), among the Company and the Underwriters named in Schedule I thereto
(the "Underwriters") for whom you are acting as representatives (the
"Representatives"). This opinion is being delivered to you as Representatives
pursuant to Section 6(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3, as amended (File No. 333-134219)
pertaining to the Notes and certain other securities 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 November
9, 2006 (the "Basic Prospectus") as supplemented by a preliminary prospectus
supplement dated November 13, 2006 (the "Pricing Prospectus"), filed by the
Company pursuant to Rule 424(b) 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, 2005, the Quarterly Reports on
Form 10-Q of the Company for the quarterly periods ended March 31, 2006, June
30, 2006 and September 30, 2006 and the Current Reports on Form 8-K of the
Company dated May 6, 2006, May 31, 2006, July 7, 2006 and August 31, 2006 (the
"Pricing Exchange Act Documents"), and a prospectus supplement dated
___________, 2006 (together with the Basic Prospectus, the "Final Supplemented
Prospectus"), filed by the Company pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act, which, pursuant to Form S-3,
incorporates by reference the Pricing Exchange Act Documents and the Current
Report on Form 8-K of the Company dated ________, 2006 (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); and the Indenture. We have also examined the free writing
prospectus prepared by the Company and filed with the Commission on _________,
2006 pursuant to Rule 433 of the Act (the "Permitted Free Writing Prospectus").
The documents listed in Schedule III to the Underwriting Agreement, taken
together, are collectively referred to as the "Pricing Disclosure Package."
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures (other than those of the Company), the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements."
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
New York law upon the opinion dated the date hereof rendered to you by Xxxxx
Xxxxxxxxxx LLP and relying as to Florida law upon the attached opinion of Xxxxx
& Lane to the Company, that:
1. The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the State of Delaware
and has due corporate authority to carry on the public utility business in which
it is engaged, to own and operate the properties used by it in such business and
to enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of
the Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
2
3. All orders, consents or other authorizations or approvals
of the Federal Energy Regulatory Commission and the Commission legally required
for the issuance and sale of the Notes have been obtained; such orders are
sufficient for the issuance and the sale of the Notes; the issuance and the sale
of the Notes conform in all material respects with the terms of such orders; and
no other order, consent or other authorization or approval of the states of
Delaware, Georgia, Florida or Alabama or any United States governmental body
(other than in connection or in compliance with the provisions of the securities
or "blue sky" laws of any jurisdiction, as to which we express no opinion) is
legally required for the issuance and sale of the Notes in accordance with the
terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject to the qualifications that the enforceability of the
Company's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Pricing Disclosure Package
and the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the
Company and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Pricing
Disclosure Package and the Final Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Pricing Disclosure Package, the Final Supplemented Prospectus or the
Exchange Act Documents and take no responsibility therefor, except as and to the
extent set forth in paragraphs 4 and 5 above. In the course of the preparation
by the Company of the Registration Statement, the Pricing Disclosure Package,
the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with other counsel for the Company, with representatives of Deloitte & Touche
LLP and with your counsel. Based upon our examination of the Registration
Statement, the Pricing Disclosure Package, the Final Supplemented Prospectus and
the Exchange Act Documents, our investigations made in connection with the
preparation of the Registration Statement, the Pricing Disclosure Package, the
Final Supplemented Prospectus and the Exchange Act Documents and our
3
participation in the conferences referred to above, (i) we are of the opinion
that the Registration Statement, on the Effective Date, and the Final
Supplemented Prospectus, as of __________, 2006, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package, the Final Supplemented
Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention
which gives us reason to believe that the Registration Statement, on the
Effective Date (including the Exchange Act Documents on file with the Commission
as of such date), contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, that the Pricing Disclosure
Package, as of the Applicable Time, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or that the Final Supplemented Prospectus (including the
Exchange Act Documents) contained, as of its date, or contains, on the date
hereof, any untrue statement therein of a material fact or omitted, as of its
date, or omits, on the date hereof, to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that in each case we express no opinion
or belief with respect to the financial statements or other financial or
statistical data contained or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package, the Final Supplemented Prospectus or
the Exchange Act Documents and with respect to information set forth in the
Pricing Prospectus and the Final Supplemented Prospectus under the caption
"Description of the Series E Senior Notes - Book-Entry-Only Issuance - The
Depository Trust Company."
We are members of the State Bar of Alabama and Georgia and we
do not express any opinion herein concerning any law other than the laws of such
States, the federal law of the United States and, to the extent set forth
herein, the laws of the States of New York and Florida and the Delaware General
Corporation Law.
4
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent.
Yours very truly,
XXXXX & XXXXXXX LLP
5
Schedule IV-B
[Letterhead of XXXXXXXX XXXXXXX LLP]
___, 2006
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the Several Underwriters
SOUTHERN POWER COMPANY
Series E _____% Senior Notes
due November 15, 2036
Ladies and Gentlemen:
We have acted as counsel to Southern Power Company (the
"Company") in connection with (i) the Company's issuance of $200,000,000
aggregate principal amount of its Series E ____% Senior Notes due November 15,
2036 (the "Notes") pursuant to a Senior Note Indenture dated as of June 1, 2002,
by and between the Company and the Bank of New York, as trustee (the "Trustee"),
as heretofore supplemented and as further supplemented by the Third Supplemental
Indenture dated as of _______, 2006 (collectively, the "Indenture"); and (ii)
the purchase by the Underwriters (as defined herein) of the Notes pursuant to
the terms of an Underwriting Agreement dated ________, 2006, (the "Underwriting
Agreement"), among the Company and the Underwriters named in Schedule I thereto
(the "Underwriters") for whom you are acting as representatives (the
"Representatives"). This opinion is being delivered to you as Representatives
pursuant to Section 6(c)(2) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3, as amended (File No. 333-134219)
pertaining to the Notes and certain other securities 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 November
9, 2006 (the "Basic Prospectus"), as supplemented by a preliminary prospectus
supplement dated November 13, 2006 (the "Pricing Prospectus"), filed by the
Company pursuant to Rule 424(b) 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, 2005, the Quarterly Reports on
Form 10-Q of the Company for the quarterly periods ended March 31, 2006, June
30, 2006 and September 30, 2006 and the Current Reports on Form 8-K of the
Company dated May 6, 2006, May 31, 2006, July 7, 2006 and August 31, 2006 (the
"Pricing Exchange Act Documents"), and as supplemented by a prospectus
supplement dated __________, 2006 (together with the Basic Prospectus, the
"Final Supplemented Prospectus"), filed by the Company pursuant to Rule 424(b)
of the rules and regulations of the Commission under the Act, which, pursuant to
Form S-3, incorporates by reference the Pricing Exchange Act Documents and the
Current Report on Form 8-K of the Company dated __________, 2006 (the "Exchange
Act Documents"), each as filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); and the Indenture. We have also examined the free
writing prospectus prepared by the Company and filed with the Commission on
_________, 2006 pursuant to Rule 433 of the Act (the "Permitted Free Writing
Prospectus"). The documents listed in Schedule III to the Underwriting
Agreement, taken together, are collectively referred to as the "Pricing
Disclosure Package."
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to collectively as the "Agreements."
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
New York law upon the opinion dated the date hereof rendered to you by Xxxxx
Xxxxxxxxxx LLP, that:
1. The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the State of Delaware
and has due corporate authority to carry on the public utility business in which
it is engaged, to own and operate the properties used by it in such business and
to enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of
the Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents or other authorizations or approvals
of the Federal Energy Regulatory Commission and the Commission legally required
2
for the issuance and sale of the Notes have been obtained; such orders are
sufficient for the issuance and sale of the Notes; the issuance and sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of the State of Georgia
or any United States governmental body (other than in connection or in
compliance with the provisions of the securities or "blue sky" laws of any
jurisdiction, as to which we express no opinion) is legally required for the
issuance and sale of the Notes in accordance with the terms of the Underwriting
Agreement.
4. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject to the qualifications that the enforceability of the
Company's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Pricing Disclosure Package
and the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the
Company and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Pricing
Disclosure Package and the Final Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
Pricing Disclosure Package, the Final Supplemented Prospectus or the Exchange
Act Documents and take no responsibility therefor, except as and to the extent
set forth in paragraphs 4 and 5 above. In the course of the preparation by the
Company of the Registration Statement, the Pricing Disclosure Package, the Final
Supplemented Prospectus and the Exchange Act Documents, we participated in
conferences with certain officers and employees of the Company, with other
counsel for the Company, with representatives of Deloitte & Touche LLP and with
your counsel. Based upon our examination of the Registration Statement, the
Pricing Disclosure Package, the Final Supplemented Prospectus and the Exchange
Act Documents, our investigations made in connection with the preparation of the
Registration Statement, the Pricing Disclosure Package, the Final Supplemented
Prospectus and the Exchange Act Documents and our participation in the
conferences referred to above, (i) we are of the opinion that the Registration
3
Statement, on the Effective Date, and the Final Supplemented Prospectus, as of
_________, 2006, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package, the Final Supplemented
Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention
which gives us reason to believe (A) that the Registration Statement, on the
Effective Date (including the Exchange Act Documents on file with the Commission
as of such date), contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, (B) that the Pricing Disclosure
Package, as of the Applicable Time, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (C) that the Final Supplemented Prospectus (including the
Exchange Act Documents) contained, as of its date, or contains, on the date
hereof, any untrue statement of a material fact or omitted, as of its date, or
omits, on the date hereof, to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Pricing Disclosure Package, the Final Supplemented Prospectus or the Exchange
Act Documents and with respect to information set forth in the Pricing
Prospectus and the Final Supplemented Prospectus under the caption "Description
of the Series E Senior Notes - Book-Entry-Only Issuance - The Depository Trust
Company."
The attorneys in this firm that are rendering this opinion 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, the federal law
of the United States, the Delaware General Corporation Law and, to the extent
set forth herein, the law of New York.
4
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent.
Yours very truly,
XXXXXXXX XXXXXXX LLP
Schedule V
[Letterhead of XXXXXX, XXXXXX & XXXXXX, LLP]
__________, 2006
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As representatives of the several underwriters (the "Underwriters") named
on Schedule I to the Underwriting Agreement dated ____, 2006 among the
Underwriters and Southern Power Company (the "Company")
Southern Power Company
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Southern Power Company
Series E ___% Senior Notes due November 15, 2036
Ladies and Gentlemen:
We have acted as counsel for The Bank of New York, a New York banking
corporation ("BNY") in connection with the several purchases by the Underwriters
of $200,000,000 aggregate principal amount of Series E ___% Senior Notes due
November 15, 2036 (the "Notes") issued by the Company. The Notes are being
issued under the Senior Note Indenture dated as of June 1, 2002 between the
Company and BNY, as trustee (in such capacity, the "Trustee"), as heretofore
supplemented and as further supplemented by the Third Supplemental Indenture
dated as of _____, 2006 between the Company and the Trustee (collectively, the
"Indenture").
For purposes of this opinion, we have reviewed the Indenture
and such other documents, records and papers, and satisfied ourselves as to such
other matters, as we have deemed necessary or appropriate for this opinion. As
to questions of fact material to this opinion, we have relied on certificates of
BNY and of public officials. In such review, 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 the originals of all
documents submitted to us as copies or forms and the authenticity of the
originals of such latter documents. We have assumed that BNY has been duly
incorporated and that the Indenture has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding agreement of, and
is enforceable in accordance with its terms against, the Company.
Based upon the foregoing and subject to the qualifications
below, we are of the opinion that:
1) BNY is a banking corporation validly existing under the laws
of the State of New York with corporate power and authority to enter into and
perform its obligations under the Indenture.
2) The Indenture has been duly authorized, executed and
delivered by BNY and constitutes a valid and binding agreement of BNY
enforceable against BNY in accordance with its terms, except as may be limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or
at law) and by an implied covenant of reasonableness, good faith and fair
dealing.
We are members of the Bar of the State of New York and, for
purposes of this opinion, do not hold ourselves out as experts on the laws of
any jurisdiction other than the State of New York. The opinions expressed herein
are limited to matters governed by the laws of the State of New York
This opinion is solely for the benefit of the Company and the
several Underwriters in connection with the issuance and sale by the Company of
the Notes and may not be relied upon by the Company or the several Underwriters
for any other purpose, or relied upon or furnished to any other person, without
our prior written consent.
Very truly yours,
XXXXXX, XXXXXX & XXXXXX, LLP
2
Schedule VI
[Letterhead of XXXXX XXXXXXXXXX LLP]
___, 2006
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the Several Underwriters
SOUTHERN POWER COMPANY
Series E _____% Senior Notes
due November 15, 2036
Ladies and Gentlemen:
We have represented the Underwriters (hereinafter defined) in
connection with (i) the issuance and sale by Southern Power Company (the
"Company") of $200,000,000 aggregate principal amount of its Series E ____%
Senior Notes due November 15, 2036 (the "Notes") pursuant to a Senior Note
Indenture dated as of June 1, 2002, by and between the Company and The Bank of
New York, as trustee (the "Trustee"), as heretofore supplemented and as further
supplemented by the Third Supplemental Indenture, dated as of _____________,
2006 (collectively, the "Indenture"); and (ii) the purchase by the Underwriters
(as defined herein) of the Notes pursuant to the terms of an Underwriting
Agreement dated _________, 2006 (the "Underwriting Agreement"), among the
Company and the Underwriters named in Schedule I thereto (the "Underwriters")
for whom you are acting as representatives (the "Representatives"). This opinion
is being delivered to you as Representatives pursuant to Section 6(c)(4)
thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3, as amended (File No. 333-134219)
pertaining to the Notes and certain other securities 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 November
9, 2006 (the "Basic Prospectus") as supplemented by a preliminary prospectus
supplement dated November 13, 2006 (the "Pricing Prospectus"), filed by the
Company pursuant to Rule 424(b) 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, 2005, the Quarterly Reports on
Form 10-Q of the Company for the quarterly periods ended March 31, 2006, June
30, 2006 and September 30, 2006 and the Current Reports on Form 8-K of the
Company dated May 6, 2006, May 31, 2006, July 7, 2006 and August 31, 2006 (the
"Pricing Exchange Act Documents"), and a prospectus supplement dated _______,
2006 (together with the Basic Prospectus, the "Final Supplemented Prospectus"),
filed by the Company pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act, which, pursuant to Form S-3, incorporates by reference
the Pricing Exchange Act Documents and the Current Report on Form 8-K of the
Company dated __________, 2006 (the "Exchange Act Documents"), each as filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
the Indenture. We have also examined the free writing prospectus prepared by the
Company and filed with the Commission on ________, 2006 pursuant to Rule 433 of
the Act (the "Permitted Free Writing Prospectus"). The documents listed in
Schedule III to the Underwriting Agreement, taken together, are collectively
referred to as the "Pricing Disclosure Package."
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to as the "Agreements."
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, that:
1. The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the State of Delaware
and has due corporate authority to carry on the public utility business in which
it is engaged, to own and operate the properties used by it in such business and
to enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of
the Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents or other authorizations or approvals
of the Federal Energy Regulatory Commission and the Commission legally required
for the issuance and sale of the Notes have been obtained; such orders are
sufficient for the issuance and sale of the Notes; the issuance and sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of the State of New York
or United States governmental body (other than in connection or in compliance
with the provisions of the securities or "blue sky" laws of any jurisdiction, as
to which we express no opinion) is legally required for the issuance and sale of
the Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject to the qualifications that the enforceability of the
Company's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Pricing Disclosure Package
and the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the
Company and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Pricing
Disclosure Package and the Final Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Pricing Disclosure Package, the Final Supplemented Prospectus or the
Exchange Act Documents and take no responsibility therefor, except as and to the
extent set forth in paragraphs 4 and 5 above. In the course of the preparation
by the Company of the Registration Statement, the Pricing Disclosure Package,
the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with representatives of Deloitte & Touche LLP and with counsel to the Company.
Based upon our examination of the Registration Statement, the Pricing Disclosure
Package, the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Pricing Disclosure Package and the Final Supplemented Prospectus
and our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, on the Effective Date, and the Final
Supplemented Prospectus, as of _____________, 2006, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package, the Final Supplemented
Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention
which gives us reason to believe that the Registration Statement, on the
Effective Date (including the Exchange Act Documents on file with the Commission
as of such date), contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, that the Pricing Disclosure
Package, as of the Applicable Time, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or that the Final Supplemented Prospectus (including the
Exchange Act Documents) contained, as of its date, or contains, on the date
hereof, any untrue statement of a material fact or omitted, as of its date, or
omits, on the date hereof, to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Pricing Disclosure Package, the Final Supplemented Prospectus or the Exchange
Act Documents and with respect to information set forth in the Pricing
Prospectus and the Final Supplemented Prospectus under the caption "Description
of the Series E Senior Notes - Book-Entry-Only Issuance - The Depository Trust
Company."
We are members of the State Bar of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by or furnished to any other person without our prior written
consent except that Xxxxx & Xxxxxxx LLP and Xxxxxxxx Xxxxxxx LLP may rely on
this opinion in giving their opinions pursuant to Section 6 of the Underwriting
Agreement, insofar as such opinions relate to matters of New York law, and Xxxxx
& Xxxxxxx LLP may rely on this opinion in giving its opinion pursuant to
Sections 102, 302 and 904 of the Indenture, insofar as such opinion relates to
matters of New York law.
Very truly yours,
XXXXX XXXXXXXXXX LLP
