Exhibit 1.1
$35,000,000 Series G 5.75% Senior Notes
due December 1, 2044
SAVANNAH ELECTRIC AND POWER COMPANY
UNDERWRITING AGREEMENT
December 2, 2004
X.X. Xxxxxxx & Sons, Inc.
As Representative of the Several Underwriters listed on Schedule I hereto
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Savannah Electric and Power Company, a Georgia corporation
(the "Company"), confirms its agreement (the "Agreement") with you and the other
Underwriters named in Schedule I hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof) for whom you are acting as representative (in such capacity
you shall hereinafter be referred to as the "Representative"), with respect to
the sale by the Company and the purchase by the Underwriters, acting severally
and not jointly, of $35,000,000 aggregate principal amount of the Series G 5.75%
Senior Notes due December 1, 2044 (the "Senior Notes") as set forth in Schedule
I hereto.
The Company understands that the Underwriters propose to make
a public offering of the Senior Notes as soon as the Representative deems
advisable after this Agreement has been executed and delivered. The Senior Notes
will be issued pursuant to an indenture, dated as of March 1, 1998 as heretofore
supplemented (the "Base Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee"), as further supplemented by a seventh
supplemental indenture, dated as of December 9, 2004 to the Base Indenture
relating to the Senior Notes (the "Supplemental Indenture" and, together with
the Base Indenture and any other amendments or supplements thereto, the
"Indenture"), between the Company and the Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to the Underwriters as follows:
(a) A registration statement on Form S-3, as amended (File Nos.
333-115381 and 333-115381-01), in respect of the Senior Notes and
certain other securities has been prepared and filed in accordance with
the provisions of the Securities Act of 1933, as amended (the "1933
Act"), with the Securities and Exchange Commission (the "Commission");
such registration statement, as amended, and any post-effective
amendment thereto, each in the form heretofore delivered or to be
delivered to the Underwriters, has been declared effective by the
Commission in such form (except that copies of the registration
statement, as amended, and any post-effective amendment delivered to
the Underwriters need not include exhibits but shall include all
documents incorporated by reference therein); and no stop order
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or, to the
best knowledge of the Company, threatened by the Commission (any
preliminary prospectus 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 1933 Act, being
hereinafter called a "Preliminary Prospectus"); such registration
statement, as amended, as it became effective, including the exhibits
thereto and all documents incorporated by reference therein pursuant to
Item 12 of Form S-3 at the time such registration statement, as
amended, became effective, being hereinafter called the "Registration
Statement"; the prospectus relating to the Senior Notes, in the form in
which it was included in the Registration Statement at the time it
became effective, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act,
as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by
reference in such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment to the Registration Statement shall
be deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and the Prospectus as amended
or supplemented in final form by a prospectus supplement relating to
the Senior Notes in the form in which it is filed with the Commission,
pursuant to Rule 424(b) under the 1933 Act in accordance with Section
3(f) hereof, including any documents incorporated by reference therein
as of the date of such filing, being hereinafter called the "Final
Supplemented Prospectus".
(b) The documents incorporated by reference in the Registration
Statement or Prospectus, when they were filed with the Commission,
complied in all material respects with the applicable provisions of the
1934 Act and the rules and regulations of the Commission thereunder,
and as of such time of filing, when read together with the Prospectus,
none of such documents contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents are filed with the Commission, will comply in all material
respects with the applicable provisions of the 1934 Act and the rules
and regulations of the Commission thereunder and, when read together
with the Prospectus as it otherwise may be amended or supplemented,
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the Company makes no
warranty or representation to the Underwriters with respect to: (A) any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters
through the Representative expressly for use in the Final Supplemented
Prospectus; or (B) any information set forth in the Final Supplemented
Prospectus under the captions "Description of the Series G Senior Notes
-- Book-Entry Only Issuance -- The Depository Trust Company", "The
Policy and the Insurer" and "Experts" (as it relates to information
with respect to the Insurer) or in Appendix A thereto.
(c) The Registration Statement, the Prospectus and the Final
Supplemented Prospectus comply, and any further amendments or
supplements to the Registration Statement or the Prospectus, when any
such post-effective amendments are declared effective or supplements
are filed with the Commission, as the case may be, will comply, in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, the 1939 Act (as hereinafter defined) and the General Rules
and Regulations of the Commission thereunder and do not and will not,
(i) as of the applicable effective date as to the Registration
Statement and any amendment thereto, and (ii) as of the date of the
Final Supplemented Prospectus and any Prospectus as further amended or
supplemented, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein
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 Final Supplemented
Prospectus and any Prospectus as further amended or 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 the Registration Statement or the Final Supplemented
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriters through the
Representative expressly for use therein or (C) any information set
forth in the Final Supplemented Prospectus under the captions
"Description of the Series G Senior Notes -- Book-Entry Only Issuance
-- The Depository Trust Company", "The Policy and the Insurer" and
"Experts" (as it relates to information with respect to the Insurer) or
in Appendix A thereto.
(d) With respect to the Registration Statement, the conditions for use
of Form S-3, as set forth in the General Instructions thereof, have
been satisfied.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Final Supplemented Prospectus, except as
otherwise stated therein, there has been no material adverse change in
the business, properties or financial condition of the Company.
(f) The Company is a corporation duly organized and existing under the
laws of the State of Georgia and has due corporate authority to carry
on the public utility business in which it is engaged and to own and
operate the properties used by it in such business, to enter into and
perform its obligations under this Agreement and the Indenture and to
issue and sell the Senior Notes to the Underwriters.
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
(h) The Indenture has been duly authorized by the Company and, on the
Closing Date (as hereinafter defined), will have been duly executed and
delivered by the Company, and, assuming due authorization, execution
and delivery of the Indenture by the Trustee, the Indenture will, on
the Closing Date, constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, receivership, liquidation,
fraudulent conveyance, moratorium or other similar laws affecting
creditors' rights generally or (2) general principles of equity
(regardless of whether enforcement is considered in a proceeding at law
or in equity) (the "Enforceability Exceptions"); the Indenture will
conform in all material respects to all statements relating thereto
contained in the Final Supplemented Prospectus; and, on the Closing
Date, the Indenture will have been duly qualified under the 1939 Act.
(i) The issuance and delivery of the Senior Notes have been duly
authorized by the Company and, on the Closing Date, the Senior Notes
will have been duly executed by the Company and, when authenticated in
the manner provided for in the Indenture and delivered against payment
therefor as described in the Final Supplemented Prospectus, will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by the
Enforceability Exceptions, will be in the form contemplated by, and
entitled to the benefits of, the Indenture and will conform in all
material respects to all statements relating thereto in the Final
Supplemented Prospectus.
(j) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the Senior Notes and the consummation by
the Company of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
shall have been duly authorized by all necessary corporate action on
the part of the Company and do not and will not result in any violation
of the charter or bylaws of the Company, and do not and will not
conflict with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound or to which any of its
properties may be subject (except for conflicts, breaches or defaults
which would not, individually or in the aggregate, be materially
adverse to the Company or materially adverse to the transactions
contemplated by this Agreement), or (B) any existing applicable law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, or any
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company, or any of its properties.
(k) The Company has duly authorized all necessary action to be taken by
it for the procurement of an irrevocable surety bond (the "Insurance
Policy") issued by Financial Guaranty Insurance Company (the
"Insurer"), insuring the payment of principal and interest on the
Senior Notes, when due.
(l) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the
issuance and sale by the Company of the Senior Notes or the
transactions by the Company contemplated in this Agreement, except (A)
such as may be required under the 1933 Act or the rules and regulations
thereunder; (B) such as may be required under the Public Utility
Holding Company Act of 1935, as amended; (C) the qualification of the
Indenture under the 1939 Act; (D) the approval of the Georgia Public
Service Commission (the "Georgia Commission"); and (E) such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or "blue sky" laws.
(m) The financial statements incorporated by reference in the
Registration Statement and the Final Supplemented Prospectus, together
with the related schedules and notes, present fairly, in all material
respects, the financial position, results of operations and cash flows
of the Company as of and for the dates indicated; said financial
statements have been prepared in conformity with accounting principles
generally accepted in the United States ("GAAP") applied on a
consistent basis (except that the unaudited financial statements may be
subject to normal year-end adjustments) throughout the periods involved
and necessarily include amounts that are based on the best estimates
and judgments of management. The selected financial data and the
summary financial information included in the Registration Statement
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.
(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 Senior Notes set forth in Schedule I to this Agreement
opposite the name of such Underwriter (plus any additional amount of Senior
Notes that such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof), at a price equal to 96.85% of the principal
amount thereof.
(b) Payment for and delivery of certificates for the Senior
Notes shall be made at the offices of Xxxxxxxx Xxxxxxx LLP, Bank of America
Plaza, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000-0000 at
10:00 A.M., Atlanta time, on December 9, 2004 (unless postponed in accordance
with the provisions of Section 10) or such other time, place or date as shall be
agreed upon by the Representative and the Company (such time and date of payment
and delivery being herein called the "Closing Date"). Payment shall be made to
the Company by wire transfer in federal funds at the Closing Date against
delivery of the Senior Notes to the Representative. It is understood that each
Underwriter has authorized the Representative, for each Underwriter's account,
to accept delivery of, receipt for and make payment of the principal amount of
the Senior Notes which each Underwriter has agreed to purchase. The
Representative, 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 Representative not later than 12:00 Noon, New York City
time, on the last business day prior to the Closing Date.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants
with the Underwriters as follows:
(a) The Company, on or prior to the Closing Date, will deliver to the
Underwriters conformed copies of the Registration Statement as
originally filed and of all amendments thereto, heretofore or hereafter
made, including any post-effective amendment (in each case including
all exhibits filed therewith, and including unsigned copies of each
consent and certificate included therein or filed as an exhibit
thereto, except exhibits incorporated by reference, unless specifically
requested). As soon as the Company is advised thereof, it will advise
the Representative orally of the issuance of any stop order under the
1933 Act with respect to the Registration Statement, or the institution
of any proceedings therefor, of which the Company shall have received
notice, and will use its best efforts to prevent the issuance of any
such stop order and to secure the prompt removal thereof, if issued.
The Company will deliver to the Representative sufficient conformed
copies of the Registration Statement, the Prospectus and the Final
Supplemented Prospectus and of all supplements and amendments thereto
(in each case without exhibits) for distribution to the Underwriters
and, from time to time, as many copies of the Prospectus and the Final
Supplemented Prospectus as the Underwriters may reasonably request for
the purposes contemplated by the 1933 Act or the 0000 Xxx.
(b) The Company will furnish the Underwriters with copies of each
amendment and supplement to the Final Supplemented Prospectus relating
to the offering of the Senior Notes in such quantities as the
Underwriters may from time to time reasonably request. If, during the
period (not exceeding nine months) when the delivery of a prospectus
shall be required by law in connection with the sale of any Senior
Notes by an Underwriter, any event relating to or affecting the
Company, or of which the Company shall be advised in writing by the
Underwriters, shall occur, which in the opinion of the Company or of
Underwriters' counsel should be set forth in a supplement to or an
amendment of the Final Supplemented Prospectus in order to make the
Final Supplemented Prospectus not misleading in the light of the
circumstances when it is delivered, or if for any other reason it shall
be necessary during such period to amend or supplement the Final
Supplemented Prospectus or to file under the 1934 Act any document
incorporated by reference in the Preliminary Prospectus or the
Prospectus in order to comply with the 1933 Act or the 1934 Act, the
Company forthwith will (i) notify the Underwriters to suspend
solicitation of purchases of the Senior Notes and (ii) at its expense,
make any such filing or prepare and furnish to the Underwriters a
reasonable number of copies of a supplement or supplements or an
amendment or amendments to the Final Supplemented Prospectus which will
supplement or amend the Final Supplemented Prospectus so that, as
supplemented or amended, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances when the
Final Supplemented Prospectus is delivered, not misleading or which
will effect any other necessary compliance. In case any Underwriter is
required to deliver a prospectus in connection with the sale of any
Senior Notes after the expiration of the period specified in the
preceding sentence, the Company, upon the request of such Underwriter,
will furnish to such Underwriter, at the expense of such Underwriter, a
reasonable quantity of a supplemented or amended prospectus, or
supplements or amendments to the Final Supplemented Prospectus,
complying with Section 10(a) of the 1933 Act. During the period
specified in the second sentence of this subsection, the Company will
continue to prepare and file with the Commission on a timely basis all
documents or amendments required under the 1934 Act and the rules and
regulations thereunder; provided, that the Company shall not file such
documents or amendments without also furnishing copies thereof prior to
such filing to the Representative and Xxxxx Xxxxxxxxxx LLP.
(c) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Senior Notes for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Representative may designate; provided, however,
that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
file a consent to service of process or to file annual reports or to
comply with any other requirements in connection with such
qualification deemed by the Company to be unduly burdensome.
(d) The Company will make generally available to its security holders
as soon as practicable but not later than 45 days after the close of
the period covered thereby, an earnings statement of the Company (in
form complying with the provisions of Rule 158 of the rules and
regulations under the 0000 Xxx) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in Rule 158) of the
Registration Statement.
(e) During a period of 15 days from the date of this Agreement, the
Company will not, without the Representative's prior written consent,
directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any 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
Underwriters agree that commercial paper or other debt securities with
scheduled maturities of less than one year are not subject to this
Section 3(e).
(f) As soon as practicable after the date of this Agreement, and in any
event within the time prescribed by Rule 424 under the 1933 Act, the
Company will file the Final Supplemented Prospectus with the Commission
and advise the Representative of such filing and confirm such advice in
writing.
(g) The Company will use its best efforts to effect the listing of the
Senior Notes on the New York Stock Exchange.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all
expenses incidental to the performance of its obligations under this Agreement,
including but not limited to, the expenses of (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the preparation, issuance and delivery of the certificate(s) for the Senior
Notes, (iii) the fees and disbursements of the Company's counsel and
accountants, (iv) the qualification of the Senior Notes under securities laws in
accordance with the provisions of Section 3(c) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any blue sky
survey (such fees and disbursements of counsel shall not exceed $3,500), (v) the
printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto and of the
Prospectus, the Final Supplemented Prospectus and any amendments or supplements
thereto, (vi) the printing and delivery to the Underwriters of copies of any
blue sky survey, (vii) the fee of the National Association of Securities
Dealers, Inc. in connection with its review of the offering contemplated by this
Agreement, if applicable, (viii) the fees and expenses of the Trustee, including
the fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Senior Notes, (ix) any fees payable in connection with the
rating of the Senior Notes, (x) the cost and charges of any transfer agent or
registrar, (xi) the premium payable to the Insurer in connection with the
issuance of the Insurance Policy, (xii) the fees and expenses incurred in
connection with the listing of the Senior Notes on the New York Stock Exchange
and (xiii) the cost of qualifying the Senior Notes with The Depository Trust
Company.
Except as otherwise provided in Section 9 hereof, the
Underwriters shall pay all other expenses incurred by them in connection with
their offering of the Senior Notes including fees and disbursements of their
counsel, Xxxxx Xxxxxxxxxx LLP.
SECTION 5. 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 shall be pending before, or to the knowledge of the
Company threatened by, the Commission on such date. If filing of the
Final Supplemented Prospectus, or any supplement thereto, is required
pursuant to Rule 424, the Final Supplemented Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424.
(b) Any required orders of the Georgia Commission and the Commission
permitting the transactions contemplated hereby substantially in
accordance with the terms and conditions hereof shall be in full force
and effect and shall contain no provision unacceptable to the
Underwriters or the Company (but all provisions of such order or orders
heretofore entered, copies of which have heretofore been delivered to
the Representative, are deemed acceptable to the Underwriters and the
Company and all provisions of such order or orders hereafter entered
shall be deemed acceptable to the Underwriters and the Company unless
within 24 hours after receiving a copy of any such order any party to
this Agreement shall give notice to the other parties to the effect
that such order contains an unacceptable provision).
(c) On the Closing Date the Representative shall have received:
(1) The opinion, dated the Closing Date, of Bouhan, Xxxxxxxx &
Levy LLP, general counsel for the Company, substantially in the form
attached hereto as Schedule II-A.
(2) The opinion, dated the Closing Date, of Xxxxxxxx Xxxxxxx
LLP, counsel for the Company, substantially in the form attached hereto
as Schedule II-B.
(3) The opinion, dated the Closing Date, of Pillsbury Winthrop
LLP, counsel to the Trustee, substantially in the form attached hereto
as Schedule III.
(4) The opinion, dated the Closing Date, of Xxxxx Xxxxxxxxxx
LLP, counsel for the Underwriters, substantially in the form attached
hereto as Schedule IV.
(5) The opinion, dated the Closing Date, of counsel to the
Insurer, substantially in the form attached hereto as Schedule V.
(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 Representative shall have received a certificate
of the President or any Vice President of the Company, and dated as of
the Closing Date, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as
though expressly made at and as of the Closing Date, (iii) the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied on or prior to the Closing Date, and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or, to the knowledge of the Company, threatened by the
Commission.
(e) On the Closing Date, the Representative shall have received from
Deloitte & Touche LLP a letter dated the Closing Date to the effect
that: (A) they are an independent registered public accounting firm
with respect to the Company within the meaning of the 1933 Act and the
rules and regulations under the 1933 Act; (B) in their opinion, the
financial statements audited by them and incorporated by reference in
the Final Supplemented Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act
and the rules and regulations under the 1934 Act; and (C) on the basis
of certain limited procedures performed through a specified date not
more than five business days prior to the date of such letter, namely
(i) reading the minute books of the Company; (ii) performing the
procedures specified by the 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
Final Supplemented Prospectus and on the latest available unaudited
financial statements of the Company, if any, for any calendar quarter
subsequent to the date of those incorporated by reference in the Final
Supplemented Prospectus; and (iii) making inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters regarding such unaudited financial statements or any
specified unaudited amounts derived therefrom (it being understood that
the foregoing procedures do not constitute an audit performed in
accordance with generally accepted auditing standards and they would
not necessarily reveal matters of significance with respect to the
comments made in such letter, and accordingly that Deloitte & Touche
LLP make no representations as to the sufficiency of such procedures
for the Underwriters' purposes), nothing came to their attention that
caused them to believe that: (1) any material modifications should be
made to the unaudited condensed financial statements, if any,
incorporated by reference in the Final Supplemented Prospectus, for
them to be in conformity with GAAP; (2) such unaudited condensed
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act as it
applies to Form 10-Q and the related published rules and regulations
thereunder; (3) the unaudited amounts for Operating Revenues, Earnings
Before Income Taxes and Net Income After Dividends on Preferred Stock
and the unaudited Ratio of Earnings to Fixed Charges set forth in the
Final Supplemented Prospectus do not agree with the amounts set forth
in or derived from the unaudited financial statements for the same
period included or incorporated by reference in the Registration
Statement; (4) as of a specified date not more than five business days
prior to the date of delivery of such letter, there has been any change
in the capital stock or long-term debt of the Company or any decrease
in net assets as compared with amounts shown in the latest unaudited
balance sheet incorporated by reference in the Final Supplemented
Prospectus, except in each case for changes or decreases which (i) the
Final Supplemented Prospectus discloses have occurred or may occur,
(ii) are occasioned by the declaration of dividends, (iii) are
occasioned by 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 draw
downs under existing pollution control financing arrangements, (vi) are
occasioned by the reclassification of current maturities of long-term
debt, or (vii) are disclosed in such letter; and (5) the unaudited
amounts for Operating Revenues, Earnings Before Income Taxes and Net
Income After Dividends on Preferred Stock and the unaudited Ratio of
Earnings to Fixed Charges for any calendar quarter subsequent to those
set forth in (3) above, which, if available, shall be set forth in such
letter, do not agree with the amounts set forth in or derived from the
unaudited financial statements for the same period or were not
determined on a basis substantially consistent with that of the
corresponding audited amounts or ratios included or incorporated by
reference in the Final Supplemented Prospectus.
(f) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as it may reasonably require
for the purpose of enabling it to pass upon the issuance and sale of
the Senior Notes as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Senior Notes as herein contemplated shall
be satisfactory in form and substance to the Representative and Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters.
(g) On the Closing Date, the Senior Notes shall be approved for listing
on the New York Stock Exchange upon notice of issuance.
(h) 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 0000 Xxx) 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 Representative,
shall materially impair the marketability of the Senior Notes.
(i) The Company shall have performed its obligations when and as
provided under this Agreement.
(j) On the closing date, the Representative shall have received
evidence that the Insurance Policy has been issued by the Insurer and
confirmation that the Senior Notes have been rated at least Aaa by
Xxxxx'x Investors Service, Inc. and at least AAA by Standard & Poor's,
a division of The XxXxxx-Xxxx Companies.
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 Representative by notice to the Company at any time prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Sections 4, 7 and 9(b) hereof.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company shall be subject to the
conditions set forth in the first sentence of Section 5(a) and in Section 5(b).
In case such conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Representative. Any such termination shall be without liability of any party to
any other party except as otherwise provided in Sections 4, 7 and 9(b) hereof.
SECTION 7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each of
the Underwriters and each person, if any, who controls any such Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the 1933 Act, the
1934 Act or otherwise, and to reimburse any such Underwriter and such
controlling person or persons, if any, for any legal or other expenses incurred
by them in connection with defending any actions, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus or the Final
Supplemented Prospectus or, if the Company shall furnish to the Underwriters any
amendments or any supplements thereto, or shall make any filings pursuant to
Section 13 or 14 of the 1934 Act which are incorporated therein by reference, in
any Preliminary Prospectus, the Registration Statement, the Prospectus or the
Final Supplemented Prospectus as so amended or supplemented, or arise out of or
are based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in such
Registration Statement, Preliminary Prospectus, Prospectus or Final Supplemented
Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by any Underwriter through the Representative for use
therein and except that this indemnity with respect to the Preliminary
Prospectus, the Prospectus or the Final Supplemented Prospectus, if the Company
shall have furnished any amendment or supplement thereto, shall not inure to the
benefit of any Underwriter (or of any person controlling such Underwriter) on
account of any losses, claims, damages, liabilities or actions arising from the
sale of the Senior Notes to any person if a copy of the Preliminary Prospectus,
the Prospectus or the Final Supplemented Prospectus (exclusive of documents
incorporated therein by reference pursuant to Item 12 of Form S-3), as the same
may then be amended or supplemented, shall not have been sent or given by or on
behalf of such Underwriter to such person with or prior to the written
confirmation of the sale involved and the untrue statement or alleged untrue
statement or omission or alleged omission was corrected in the Preliminary
Prospectus, the Prospectus or the Final Supplemented Prospectus as supplemented
or amended at the time of such confirmation. Each Underwriter agrees, within ten
days after the receipt by it of notice of the commencement of any action in
respect of which indemnity may be sought by it, or by any person controlling it,
from the Company on account of its agreement contained in this Section 7, to
notify the Company in writing of the commencement thereof but the omission of
such Underwriter so to notify the Company of any such action shall not release
the Company from any liability which it may have to such Underwriter or to such
controlling person otherwise than on account of the indemnity agreement
contained in this Section 7. In case any such action shall be brought against an
Underwriter or any such person controlling such Underwriter and such Underwriter
shall notify the Company of the commencement thereof as above provided, the
Company shall be entitled to participate in (and, to the extent that it shall
wish, including the selection of counsel, to direct) the defense thereof, at its
own expense. In case the Company elects to direct such defense and select such
counsel, any Underwriter or controlling person shall have the right to employ
its own counsel, but, in any such case, the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
the employment of such counsel has been authorized in writing by the Company in
connection with defending such action. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include any statement as
to, or an admission of, fault, culpability or a failure to act, by or on behalf
of any indemnified party. In no event shall any indemnifying party have any
liability or responsibility in respect of the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim effected without its prior written consent.
(b) Each Underwriter agrees severally and not jointly, to
indemnify and hold harmless the Company, its directors and such of its officers
who have signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act to the same extent and upon the same terms as the indemnity
agreement of the Company set forth in Section 7(a) hereof, but only with respect
to alleged untrue statements or omissions made in the Registration Statement,
the Preliminary Prospectus, the Prospectus or the Final Supplemented Prospectus,
or such documents as amended or supplemented, in reliance upon and in conformity
with information furnished in writing to the Company by any Underwriter through
the Representative for use therein.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY.
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by, or on behalf of the Company and shall survive
delivery of the Senior Notes to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representative may terminate this Agreement, by notice
to the Company, at any time at or prior to the Closing Date if (i) trading in
securities on the New York Stock Exchange shall have been generally suspended or
there shall have been a material disruption in settlement of securities
generally, (ii) minimum or maximum ranges for prices shall have been generally
established on the New York Stock Exchange by the Commission or by the New York
Stock Exchange, (iii) a general banking moratorium shall have been declared by
federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by the United States Congress or any other
substantial national or international calamity, crisis or emergency (including
without limitation, acts of terrorism) affecting the United States, in any such
case provided for in clauses (i) through (iv) with the result that, in the
reasonable judgment of the Representative, the marketability of the Senior Notes
shall have been materially impaired.
(b) If this Agreement shall be terminated by the
Representative pursuant to subsection (a) above or because of any failure or
refusal on the part of the Company to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement, then in any such case,
the Company will reimburse the Underwriters for the reasonable fees and
disbursements of 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 4 and 7.
SECTION 10. DEFAULT BY AN UNDERWRITER.
If an Underwriter shall fail on the Closing Date to purchase
the Senior Notes that it is obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representative shall have the right, within 24
hours thereafter, to make arrangements for the non-defaulting Underwriters, or
any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth. If, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
(a) if the 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 Representative or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Final Supplemented Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at X.X. Xxxxxxx & Sons,
Inc., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxx
Xxxxx; notices to the Company shall be mailed to 000 Xxx Xxxxxx, Xxxx, Xxxxxxxx,
Xxxxxxx 00000, Attention: Corporate Secretary, with a copy to Southern Company
Services, Inc., 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxx X. Xxxxxx.
SECTION 12. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Section 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Senior Notes from any of the Underwriters shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State. Except as
otherwise set forth herein, specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by
any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
SAVANNAH ELECTRIC AND POWER COMPANY
By: /s/Xxxxx Boston
Title: Assistant Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written
X.X. XXXXXXX & SONS, INC.
As Representative of the Several Underwriters
named in Schedule I hereto
By: X.X. XXXXXXX & SONS, INC.
By: /s/Xxxxxx X. Xxxxx
Title: Xxxxxx X. Xxxxx
Managing Director
Investment Banking
Schedule I
Principal Amount of
Name of Underwriters Senior Notes
X.X. Xxxxxxx & Sons, Inc. $31,150,000
SunTrust Capital Markets, Inc. $ 1,750,000
BB&T Capital Markets, a division
of Xxxxx and Xxxxxxxxxxxx, Inc. $ 700,000
Xxxx Xxxxx Xxxx Xxxxxx Incorporated $ 700,000
RBC Xxxx Xxxxxxxx Inc. $ 700,000
TOTAL: $35,000,000
-----------
Schedule II-A
[Letterhead of Bouhan, Xxxxxxxx & Xxxx LLP]
December 9, 2004
X.X. Xxxxxxx & Sons., Inc.
As Representative of the Several Underwriters
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
SAVANNAH ELECTRIC AND POWER COMPANY
SERIES G 5.75% SENIOR NOTES
DUE DECEMBER 1, 2044
Ladies and Gentlemen:
We have acted as general counsel to Savannah Electric and
Power Company (the "Company") in connection with (i) the Company's issuance of
$35,000,000 aggregate principal amount of its Series G 5.75% Senior Notes due
December 1, 2044 (the "Notes") pursuant to a Senior Note Indenture dated as of
March 1, 1998, by and between the Company and The Bank of New York, as trustee
(the "Trustee"), as heretofore supplemented and as supplemented by the Seventh
Supplemental Indenture dated as of December 9, 2004 (collectively, the
"Indenture"); and (ii) the purchase by the Underwriters (as defined herein) of
the Notes pursuant to the terms of an Underwriting Agreement (the "Underwriting
Agreement") dated December 2, 2004, among the Company and the underwriters named
in Schedule I thereto (the "Underwriters") for whom you are acting as
Representative (the "Representative"). This opinion is being delivered to you as
Representative pursuant to Section 5(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3, as amended (File Nos. 333-115381 and
333-115381-01), pertaining to the Notes and certain other securities (the
"Registration Statement") filed under the Securities Act of 1933, as amended
(the "Act"), and the prospectus dated May 21, 2004 as supplemented by the final
prospectus supplement dated December 2, 2004 (the "Final Supplemented
Prospectus"), which pursuant to Form S-3 incorporates by reference the Annual
Report on Form 10-K of the Company for the fiscal year ended December 31, 2003,
the Quarterly Reports on Form 10-Q of the Company for the quarters ended March
31, 2004, June 30, 2004 and September 30, 2004 and the Current Reports on Form
8-K of the Company dated May 7, 2004, May 18, 2004, May 27, 2004, July 30, 2004,
October 25, 2004, November 30, 2004, December 2, 2004 and December 2, 2004 (the
"Exchange Act Documents"), each as filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures, 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 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 Georgia 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
Georgia Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and sale of the Notes; the issuance and sale of the Notes
conform in all material respects with the terms of such orders; and no other
order, consent or other authorization or approval of any Georgia or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with other counsel for the Company, with representatives of Deloitte & Touche
LLP and with your counsel. Based upon our examination of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of December 2, 2004, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date (including the
Exchange Act Documents on file with the Commission as of such date), contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Final Supplemented Prospectus (including the
Exchange Act Documents) contained, as of its date, or contains, on the date
hereof, any untrue statement therein of a material fact or omitted, as of its
date, or omits, on the date hereof, to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that in each case we express no opinion
or belief with respect to the financial statements or other financial or
statistical data contained or incorporated by reference in the Registration
Statement, the Final Supplemented Prospectus or the Exchange Act Documents and
with respect to information set forth in the Final Supplemented Prospectus under
the captions "Description of the Series G Senior Notes -- Book-Entry Only
Issuance -- The Depository Trust Company" and "The Policy and the Insurer" or in
Appendix A thereto.
We are members of the State Bar of Georgia and we do not
express any opinion herein concerning any law other than the law of such State
and the federal law of the United States and, to the extent set forth herein,
the law of the State of New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent, except that Xxxxx Xxxxxxxxxx LLP may rely on this opinion
in giving its opinion pursuant to Section 5(c) of the Underwriting Agreement
insofar as such opinion relates to matters of Georgia law.
Yours very truly,
BOUHAN, XXXXXXXX & LEVY LLP
Schedule II-B
[Letterhead of XXXXXXXX XXXXXXX LLP]
December 9, 2004
X.X. Xxxxxxx & Sons, Inc.
As Representative of the Several Underwriters
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
SAVANNAH ELECTRIC AND POWER COMPANY
Series G 5.75% Senior Notes due December 1, 2044
Ladies and Gentlemen:
We have acted as counsel to Savannah Electric and Power
Company (the "Company") in connection with (i) the Company's issuance and sale
of $35,000,000 aggregate principal amount of its Series G 5.75% Senior Notes due
December 1, 2044 (the "Notes") pursuant to a Senior Note Indenture dated as of
March 1, 1998, by and between the Company and The Bank of New York, as trustee
(the "Trustee"), as heretofore supplemented and as further supplemented by the
Seventh Supplemental Indenture dated as of December 9, 2004 (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 December 2,
2004 (the "Underwriting Agreement"), among the Company and the underwriters
named in Schedule I thereof (the "Underwriters") for whom you are acting as
Representative. This opinion is being delivered to you as Representative
pursuant to Section 5(c)(2) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3, as amended (File Nos. 333-115381 and
333-115381-01), pertaining to the Notes and certain other securities (the
"Registration Statement") filed under the Securities Act of 1933, as amended
(the "Act"), and the prospectus of the Company dated May 21, 2004 as
supplemented by a final prospectus supplement relating to the Notes dated
December 2, 2004 (the "Final Supplemented Prospectus"), which pursuant to Form
S-3 incorporates by reference the Annual Report on Form 10-K of the Company for
the fiscal year ended December 31, 2003, the Quarterly Reports on Form 10-Q of
the Company for the quarters ended March 31, 2004, June 30, 2004 and September
30, 2004 and the Current Reports on Form 8-K of the Company dated May 7, 2004,
May 18, 2004, May 27, 2004, July 30, 2004, October 25, 2004, November 30, 2004,
December 2, 2004 and December 2, 2004 (the "Exchange Act Documents"), each as
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures, 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 collectively as the "Agreements."
Based on 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 incorporated and is validly existing as a
corporation in good standing under the laws of the State of Georgia, 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
Georgia Public Service Commission and the Commission legally required for the
issuance and sale of the Notes have been obtained; such orders are sufficient
for the issuance and sale of the Notes; the issuance and sale of the Notes
conform in all material respects with the terms of such orders; and no other
order, consent or other authorization or approval of any Georgia or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Final Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with other counsel for the Company, with representatives of Deloitte & Touche
LLP and with your counsel. Based upon our examination of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents and
our participation in the conferences referred to above, (i) we are of the
opinion that the Registration Statement, as of its effective date, and the Final
Supplemented Prospectus, as of December 2, 2004, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations of the Commission thereunder and that the Exchange Act Documents, as
of their respective dates of filing with the Commission, complied as to form in
all material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Final Supplemented Prospectus or the Exchange Act
Documents, and (ii) nothing came to our attention which gives us reason to
believe that the Registration Statement, as of its effective date (including the
Exchange Act Documents on file with the Commission as of such date), contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Final Supplemented Prospectus (including the
Exchange Act Documents) contained, as of its date, or contains, on the date
hereof, any untrue statement of a material fact or omitted, as of its date, or
omits, on the date hereof, to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Final Supplemented Prospectus under the captions
"Description of the Series G Senior Notes -- Book-Entry Only Issuance -- The
Depository Trust Company" and "The Policy and the Insurer" or in Appendix A
thereto.
We are members of the State Bar of Georgia and we do not
express any opinion herein concerning any law other than the law of the State of
Georgia and the federal law of the United States and, to the extent set forth
herein, the laws of the State of New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose or relied upon by or furnished to any other person without our
prior written consent, except that Xxxxx Xxxxxxxxxx LLP may rely on this opinion
in giving its opinion pursuant to Section 5(c) of the Underwriting Agreement
insofar as such opinion relates to matters of Georgia law.
Yours very truly,
XXXXXXXX XXXXXXX LLP
Schedule III
[Letterhead of Pillsbury Winthrop LLP]
December 9, 2004
Savannah Electric and Power Company
000 Xxx Xxxxxx, Xxxx
Xxxxxxxx, Xxxxxxx 00000
X.X. Xxxxxxx & Sons, Inc.
as Representative of the Several Underwriters (the "Underwriters") named in the
Underwriting Agreement dated December 2, 2004 between Savannah Electric and
Power Company, a Georgia corporation (the "Company"), and the Underwriters
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel to The Bank of New York, a New York banking corporation
("BNY"), in connection with the purchase by the Underwriters, for whom X.X.
Xxxxxxx & Sons, Inc. has acted as representative, of $35,000,000 aggregate
principal amount of Series G 5.75% Senior Notes due December 1, 2044 (the
"Notes") issued by the Company. The Notes are being issued under the Senior Note
Indenture, dated as of March 1, 1998 between the Company and BNY, as trustee (in
such capacity, the "Trustee"), as amended and supplemented by the Seventh
Supplemental Indenture dated as of December 9, 2004 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 upon 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 the Trustee
and constitutes a valid and binding agreement of the Trustee enforceable against
the Trustee 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 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 by or furnished to any other person, without
our prior written consent.
Very truly yours,
PILLSBURY WINTHROP LLP
Schedule IV
[Letterhead of XXXXX XXXXXXXXXX LLP]
December 9, 2004
X.X. Xxxxxxx & Sons, Inc.
As Representative of the Several Underwriters
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
SAVANNAH ELECTRIC AND POWER COMPANY
Series G 5.75% Senior Notes due December 1, 2044
Ladies and Gentlemen:
We have represented the Underwriters (as hereinafter defined)
in connection with (i) the issuance by Savannah Electric and Power Company (the
"Company") of $35,000,000 of its Series G 5.75% Senior Notes due December 1,
2044 (the "Notes") pursuant to a Senior Note Indenture dated as of March 1, 1998
by and between the Company and The Bank of New York, as trustee (the "Trustee"),
as heretofore supplemented and as further supplemented by the Seventh
Supplemental Indenture, dated as of December 9, 2004 (collectively, the
"Indenture"); and (ii) the purchase by you of the Notes pursuant to the terms of
an Underwriting Agreement dated December 2, 2004, among the Company and the
underwriters named in Schedule I thereof (the "Underwriters") for whom you are
acting as Representative (the "Underwriting Agreement"). This opinion is being
delivered to you as Representative pursuant to Section 5(c)(4) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the registration statement on Form S-3, as amended (File Nos. 333-115381 and
333-115381-01), pertaining to the Notes and certain other securities (the
"Registration Statement"), filed under the Securities Act of 1933, as amended
(the "Act"), and the prospectus dated May 21, 2004, as supplemented by a final
prospectus supplement relating to the Notes dated December 2, 2004, 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, 2003, the Quarterly Reports
on Form 10-Q of the Company for the quarters ended March 31, 2004, June 30, 2004
and September 30, 2004 and the Current Reports on Form 8-K of the Company dated
May 7, 2004, May 18, 2004, May 27, 2004, July 30, 2004, October 25, 2004,
November 30, 2004, December 2, 2004 and December 2, 2004 (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificate representing the Notes, of which we have examined a specimen), and
we have made such other and further investigations as we deemed necessary to
express the opinions hereinafter set forth. In such examination, we have assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein
referred to collectively as the "Agreements".
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as aforesaid and
as to all matters covered hereby which are governed by or dependent upon the law
of the State of Georgia upon the opinions of Xxxxxxxx Xxxxxxx LLP and Bouhan,
Xxxxxxxx & Levy LLP, dated the date hereof and addressed to you, that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Georgia 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 Georgia Public Service Commission and the Commission legally required for
the issuance and sale of the Notes have been obtained; such orders are
sufficient for the issuance and sale of the Notes; the issuance and sale of the
Notes conform in all material respects with the terms of such orders; and no
other order, consent or other authorization or approval of any Georgia or United
States governmental body (other than in connection or in compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, as to which
we express no opinion) is legally required for the issuance and sale of the
Notes in accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in accordance with
its terms, subject to the qualifications that the enforceability of the
Company's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Final Supplemented
Prospectus.
5. The Notes have been duly authorized and executed by the
Company and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Final Supplemented Prospectus or the Exchange Act Documents and take no
responsibility therefor, except as and to the extent set forth in paragraphs 4
and 5 above. In the course of the preparation by the Company of the Registration
Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we
participated in conferences with certain officers and employees of the Company,
with representatives of Deloitte & Touche LLP and with counsel to the Company.
Based upon our examination of the Registration Statement, the Final Supplemented
Prospectus and the Exchange Act Documents, our investigations made in connection
with the preparation of the Registration Statement and the Final Supplemented
Prospectus and our participation in the conferences referred to above, (i) we
are of the opinion that the Registration Statement, as of its effective date,
and the Final Supplemented Prospectus, as of December 2, 2004, complied as to
form in all material respects with the requirements of the Act and the
applicable rules and regulations of the Commission thereunder and that the
Exchange Act Documents, as of their respective dates of filing with the
Commission, complied as to form in all material respects with the relevant
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder, except that in each case we express no opinion as to the
financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement, the Final Supplemented
Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention
which gives us reason to believe that the Registration Statement, as of its
effective date (including the Exchange Act Documents on file with the Commission
as of such date), contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Final Supplemented
Prospectus (including the Exchange Act Documents) contained, as of its date, or
contains, on the date hereof, any untrue statement of a material fact or
omitted, as of its date, or omits, on the date hereof, to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case we express no opinion or belief with respect to the financial statements or
other financial or statistical data contained or incorporated by reference in
the Registration Statement, the Final Supplemented Prospectus or the Exchange
Act Documents and with respect to information set forth in the Final
Supplemented Prospectus under the captions "Description of the Series G Senior
Notes -- Book-Entry Only Issuance -- The Depository Trust Company" and "The
Policy and the Insurer" or in Appendix A thereto.
We are members of the State Bar of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States and, to the extent set forth
herein, the law of the State of Georgia.
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 Bouhan, Xxxxxxxx & Xxxx LLP and Xxxxxxxx Xxxxxxx LLP may
rely on this opinion in giving their opinions pursuant to Section 5(c) of the
Underwriting Agreement, insofar as such opinions relate to matters of New York
law, and Xxxxxxxx Xxxxxxx LLP may rely on this opinion in giving its opinions
(i) pursuant to Sections 102, 302 and 904 of the Indenture and (ii) in
connection with the Company's listing application with respect to the Notes to
the New York Stock Exchange, insofar as such opinions relate to matters of New
York law.
Very truly yours,
XXXXX XXXXXXXXXX LLP
Schedule V
[Letterhead of Financial Guaranty Insurance Company]
December 9, 2004
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
As Representative of the Several Underwriters
Savannah Electric and Power Company
000 Xxx Xxxxxx, Xxxx
Xxxxxxxx, Xxxxxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Savannah Electric and Power Company
Series G 5.75% Senior Notes
due December 1, 2044
Ladies and Gentlemen:
I am Senior Counsel of Financial Guaranty Insurance Company ("Financial
Guaranty"), and have been requested to render an opinion concerning the issuance
by Financial Guaranty of its Surety Bond No. ______ (the "Surety Bond") in
connection with the issuance of the captioned obligations (the "Notes"). I have
examined such documents and records as I have deemed relevant for purposes of
this opinion, including (a) the Certificate of Incorporation of Financial
Guaranty, including all amendments thereto, (b) the amended By-laws of Financial
Guaranty as in effect on the date hereof, (c) the certificate of authority
issued to Financial Guaranty by the Superintendent of Insurance of the State of
New York, (d) the certificate of authority issued to Financial Guaranty by the
Commissioner of Insurance of the State of Georgia, (e) the executed Surety Bond,
(f) the statements in the Prospectus Supplement dated December 2, 2004 (the
"Prospectus Supplement") relating to the Notes under the caption "The Policy and
the Insurer" and in Appendix A thereto and (g) the Insurance Agreement, dated as
of December 9, 2004, between Financial Guaranty and Savannah Electric and Power
Company (the "Insurance Agreement").
On the basis of the foregoing, it is my opinion that:
(1) Financial Guaranty is a stock insurance corporation validly existing
and in good standing under the laws of the State of New York and
qualified to do business therein and is licensed and authorized to
issue its financial guaranty insurance policies under the laws of the
State of Georgia.
(2) The Surety Bond has been duly authorized, executed and delivered and is
valid and binding upon Financial Guaranty and enforceable in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally as such laws would apply in the event of the liquidation,
conservation or rehabilitation of, or other similar occurrence with
respect to Financial Guaranty.
(3) The execution and delivery by Financial Guaranty of the Surety Bond,
and the performance by Financial Guaranty of the terms thereof, will
not: (i) conflict with any of the terms, conditions or provisions of
(A) the Certificate of Incorporation of Financial Guaranty, including
any amendments thereto, (B) the amended By-laws of Financial Guaranty
as in effect on the date hereof, or (C) to my actual knowledge, any
covenant contained in any contract, agreement or instrument to which
Financial Guaranty is bound, which contract, agreement or instrument is
material to the financial condition of Financial Guaranty; (ii) to my
actual knowledge, constitute a default under any such contract,
agreement or instrument or (iii) contravene any law or governmental
regulation or order presently binding on Financial Guaranty the
contravention of which would affect the validity and enforcement of the
Surety Bond.
(4) The Insurance Agreement has been duly authorized, executed and
delivered by Financial Guaranty and, assuming the due authorization,
execution and delivery thereof by Savannah Electric and Power Company,
constitutes a valid and legally binding instrument of Financial
Guaranty, enforceable against Financial Guaranty in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar
laws affecting the enforcement of creditors' rights generally as such
laws would apply in the event of the liquidation, conservation or
rehabilitation of, or other similar occurrence with respect to,
Financial Guaranty.
(5) Financial Guaranty, as an insurance company, is not eligible for relief
under the Federal Bankruptcy Laws. Any proceedings for the liquidation,
conservation or rehabilitation of Financial Guaranty would be governed
by the provisions of the Insurance Law of the State of New York.
(6) The statements described above in the Prospectus Supplement relating to
Financial Guaranty and the Surety Bond accurately and fairly present
the summary information set forth therein and do not omit any material
fact with respect to the description of Financial Guaranty relative to
the material terms of the Surety Bond or the ability of Financial
Guaranty to meet its obligations under the Surety Bond, except that no
opinion is expressed as to any financial statements or other financial
information included or referred to in, or incorporated by reference
into, the Prospectus Supplement relating to Financial Guaranty, and no
opinion is expressed as to the omission of Financial Guaranty's
financial statements from the Prospectus Supplement. The form of Surety
Bond contained in the Prospectus Supplement is a true and complete form
of the Surety Bond.
(7) The Surety Bond constitutes an "insurance policy" within the meaning of
Section 3(a)(8) of the Securities Act of 1933, as amended (the "Act"),
and is not required to be registered under the Act.
Very truly yours,
Senior Counsel
