-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MZkEd8DjFPoPIsVc+wUx7ERNJYvSH3ZTbNeB54dd8VAL3cZeveTYUEyCrJYLq1KC mq5FEoaE1cU6ffzGLhcRfQ== 0000044545-96-000002.txt : 19960125 0000044545-96-000002.hdr.sgml : 19960125 ACCESSION NUMBER: 0000044545-96-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19960117 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960124 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GULF POWER CO CENTRAL INDEX KEY: 0000044545 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 590276810 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-02429 FILM NUMBER: 96506508 BUSINESS ADDRESS: STREET 1: 500 BAYFRONT PKWY CITY: PENSACOLA STATE: FL ZIP: 32501 BUSINESS PHONE: 9044446111 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 17, 1996 GULF POWER COMPANY (Exact name of registrant as specified in its charter) Maine 0-2429 59-0276810 (State or other jurisdiction (Commission File (IRS Employer Identification of incorporation) Number) No.) 500 Bayfront Parkway, Pensacola, Florida 32501 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (904) 444-6111 N/A (Former name or former address, if changed since last report.) Item 5. Other Events. On January 17, 1996, Gulf Power Company (the "Company") entered into a Purchase Contract covering the issue and sale of $30,000,000 aggregate principal amount of First Mortgage Bonds, 6 7/8% Series due January 1, 2026. Said First Mortgage Bonds were registered under the Securities Act of 1933, as amended, pursuant to the Company's shelf registration statement (Registration Statement No. 33-50165). Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 1 Form of Proposal for Purchase of First Mortgage Bonds, dated January 17, 1996, between the Company and the Purchaser named therein, with Purchase Contract attached thereto. 4 Supplemental Indenture, dated as of January 1, 1996, between the Company and The Chase Manhattan Bank (National Association), as Trustee. 12 Computation of ratio of earnings to fixed charges. 23 (a) Consent of Beggs & Lane. 23 (b) Consent of Arthur Andersen LLP. 26 (a) Notice of Invitation for Proposals. 26 (b) Terms and Conditions Relating to Proposals. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: January 23, 1996 GULF POWER COMPANY By /s/Wayne Boston Wayne Boston Assistant Secretary EX-1 2 Exhibit 1 FIRST UNION CAPITAL MARKETS CORP. _________________________________ Name of Bidder FORM OF PROPOSAL For Purchase of GULF POWER COMPANY FIRST MORTGAGE BONDS Dated: 1/17/96 GULF POWER COMPANY c/o Southern Company Services, Inc. 64 Perimeter Center East Atlanta, Georgia 30346 Dear Ladies and Gentlemen: Referring to the terms and conditions dated January 9, 1996 (the "Terms and Conditions"), relating to proposals for the purchase of First Mortgage Bonds (the "Bonds") of Gulf Power Company (the "Company"), and the notice dated the date hereof (the "Notice") given by the Company pursuant thereto, the persons, firms and corporations named in Exhibit A attached hereto (the "Bidders") have submitted and confirm herewith the following proposal for the purchase of $30,000,000 principal amount of the Bonds, as designated by the Company in the Notice (the "Designated Principal Amount"): 1. The interest rate of the Bonds shall be 6 7/8% per annum. The interest rate must be an integral multiple of .01% or 1/8 of 1%. 2. The price to be paid to the Company for the Bonds shall be 98.768422% of the Designated Principal Amount thereof, plus accrued interest from the first day of the calendar month during which the Bonds are issued to the date of payment and delivery, each of the Bidders hereby offering, severally and not jointly, to purchase from the Company, at said price and upon the terms and conditions set forth in the form of purchase contract attached hereto as Exhibit B (the "Purchase Contract"), the principal amount of Bonds set forth opposite its name in Exhibit A attached hereto, or the principal amount of Bonds to be set forth opposite its name in Exhibit A attached hereto as provided in Section 3 of the Terms and Conditions, which together aggregate the Designated Principal Amount of the Bonds. Exhibit A attached hereto, when completed, is hereinafter and in the Purchase Contract called "Exhibit A to the Form of Proposal". 3. In consideration of the agreement of the Company set forth in the Terms and Conditions that, subject to the provisions thereof, the Company will accept the proposal which results in the lowest "annual cost of money" to it for the Bonds, each of the Bidders agrees (a) that the offer of such Bidder included in this proposal shall be irrevocable until three hours after the time fixed for the submission of proposals, unless sooner rejected by the Company; (b) that, if this proposal shall be accepted in writing by the Company, such Bidder, either in person or by the Representative(s) on its behalf, will forthwith furnish to the Company in writing the information referred to in Section 8 of the Terms and Conditions; and (c) that, if this proposal shall be so accepted by the Company, the Purchase Contract shall thereupon become effective without any separate execution thereof and shall constitute the agreement between the Company and the Bidders and, upon performance by the Bidders, and the Representative(s), of their obligations under Sections 3, 4 and 8 of the Terms and Conditions, all rights of the Company and of the Bidders shall be determined solely in accordance with the terms thereof, subject, however, to such modifications therein (including Exhibit A to the Form of Proposal) as may be necessary and as are contemplated by the Terms and Conditions. 4. This proposal must be accepted or rejected by the Company in its entirety within three hours after the time fixed for the submission thereof. 5. This proposal may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Each of the Bidders acknowledges receipt of a copy of the prospectus in respect of the Bonds furnished by the Company to the Bidders pursuant to the last paragraph of Section 5 of the Terms and Conditions. Very truly yours, T. RICHARD KENDRICK IV MANAGING DIRECTOR On behalf of and as Representative(s) of the persons, firms and corporations named in Exhibit A hereto. FIRST UNION CAPITAL MARKETS CORP. Address ONE FIRST UNION PLAZA DC-8 CHARLOTTE, NC 28288-0600 Accepted: GULF POWER COMPANY By: WAYNE BOSTON Title: Assistant Secretary -3- EXHIBIT A The names of the Bidders and the respective principal amounts of the Bonds which they severally offer to purchase are as follows: Name Principal Amount FIRST UNION CAPITAL MARKETS CORP. 30,000,000 -4- EXHIBIT B GULF POWER COMPANY PURCHASE CONTRACT For Purchase of First Mortgage Bonds of the Company AGREEMENT made between Gulf Power Company, a corporation organized and existing under the laws of the State of Maine ("Company"), party of the first part, and the several persons, firms and corporations (the "Purchasers") named as Bidders in Exhibit A to the Form of Proposal to which this agreement is attached as Exhibit B (the "Form of Proposal"), parties of the second part, W I T N E S S E T H: WHEREAS, the Company proposes to issue and sell the Designated Principal Amount (as defined in the Form of Proposal) of its First Mortgage Bonds (the "Bonds"), to be issued under and secured by the Indenture dated as of September 1, 1941, as supplemented and as to be supplemented (the "Indenture"), between the Company and The Chase Manhattan Bank (National Association), as Trustee (the "Trustee"), and to bear interest at the rate per annum specified in paragraph 1 of the Form of Proposal; and WHEREAS, the Purchasers have authorized the person or persons signing the Form of Proposal (the "Representative") to execute the Form of Proposal on behalf of the respective Purchasers and to act for the respective Purchasers in the manner provided in this agreement; and WHEREAS, the Company has prepared and filed, in accordance with the provisions of the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement and prospectus relating to the Bonds, and such registration statement has become effective (such registration statement, as it became effective, including the exhibits thereto and all documents incorporated by reference in the prospectus at such time pursuant to Item 12 of Form S-3, being herein called the "Registration Statement"); and WHEREAS, the prospectus referred to in the last paragraph of the Form of Proposal (such prospectus, including all documents incorporated therein by reference pursuant to Item 12 of Form S-3 as of the time of the acceptance of the Form of Proposal, being herein called the "Bidding Prospectus") is to be supplemented by a prospectus supplement (the "Prospectus Supplement"), including certain information relating to the Purchasers, the price and the terms of offering, the interest rate, maturity date and redemption provisions of the Bonds (the Bidding Prospectus as supplemented by the Prospectus Supplement being herein called the "Prospectus"). -5- NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, it is agreed between the parties as follows: 1. Purchase and Sale: Upon the basis of the warranties and representations and on the terms and subject to the conditions herein set forth, the Company agrees to sell to the respective Purchasers, severally and not jointly, and the respective Purchasers, severally and not jointly, agree to purchase from the Company, at the price specified in paragraph 2 of the Form of Proposal, plus accrued interest from the first day of the calendar month during which the Bonds are issued to the date of payment and delivery, the respective principal amounts of Bonds set opposite their names in Exhibit A to the Form of Proposal, which together aggregate the Designated Principal Amount of the Bonds. 2. Payment and Delivery: Payment for the Bonds shall be made to the Company or its order in federal funds or in other funds which are, as shown by written evidence satisfactory to the Company, immediately available at the time of purchase, at the office of Dewey Ballantine, 1301 Avenue of the Americas, New York, New York (or at such other place as may be agreed upon by the Representative and the Company), upon the delivery of the Bonds to the Representative for the respective accounts of the Purchasers against receipt therefor signed by the Representative on behalf of itself and as agent for the other Purchasers. Such payment and delivery shall be made at 10 a.m. New York Time on the eighth day (which shall be a full business day) after this agreement becomes effective (or at such other time or on such other day as may be agreed upon by the Representative and the Company), unless postponed in accordance with the provisions of Section 7 hereof. The time at which payment and delivery are to be made is herein sometimes called the "time of purchase". Delivery of definitive Bonds is expected to be made in registered form without coupons in denominations of $1,000 and multiples thereof, registered in such name or names as the Representative may request not later than 10 a.m. New York Time on the third business day prior to the time of purchase, or, if no such request is received, in the names of the respective Purchasers in denominations selected by the Company. If the Representative shall request that any of the Bonds be registered in a name or names other than that of the Purchaser agreeing to purchase such Bonds, such Purchaser shall pay any transfer taxes resulting from such request. The Company agrees to make the Bonds available for inspection by the Representative at the office of the Trustee at least 20 hours prior to the time of purchase. In the event that it becomes necessary to make initial delivery of the Bonds in temporary form, such Bonds will be exchangeable at said office of the Trustee, upon request, for definitive fully registered Bonds of authorized denominations without charge to the holders thereof as soon as is reasonably practicable. 3. Conditions of Purchasers' Obligations: The several obligations of the Purchasers hereunder are subject to the accuracy of the warranties and representations on the part of the Company herein contained and to the following other conditions: -6- (a) That all legal proceedings to be taken by the Company in connection with the issue and sale of the Bonds and the legal opinions provided for in Sections 3(b)(1) and (2) hereof shall be satisfactory in form and substance to Dewey Ballantine, counsel to the Purchasers. (b) That, at the time of purchase, the Representative shall be furnished the following opinions and letter and copies or signed counterparts thereof for each of the Purchasers, with such changes therein as may be agreed upon by the Company and the Representative with the approval of Dewey Ballantine: (1) Opinion of Beggs & Lane, of Pensacola, Florida, general counsel for the Company, substantially in the form attached hereto as Exhibit 1. (2) Opinion of Troutman Sanders LLP, of Atlanta, Georgia, counsel to the Company, substantially in the form attached hereto as Exhibit 2. (3) Opinion of Dewey Ballantine, of New York, New York, substantially in the form attached hereto as Exhibit 3. (4) Letter dated the date of payment and delivery from Arthur Andersen LLP to the effect that: (A) they are independent public accountants with respect to the Company within the meaning of the Securities Act and the applicable published rules and regulations thereunder; (B) in their opinion, the financial statements and schedules audited by them and incorporated by reference in the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the related published rules and regulations; (C) they have performed certain limited procedures through a specified date not more than five business days prior to the date of such letter, namely (i) reading the minute books of the Company; (ii) reading the unaudited financial statements, if any, of the Company incorporated in the Prospectus and agreeing the amounts therein with the Company's accounting records; (iii) making inquiries of certain officials of the Company who have responsibility for financial and accounting matters regarding whether the unaudited financial statements, if any, incorporated in the Prospectus (a) are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements incorporated in the Prospectus and (b) comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the related published rules and regulations; (iv) reading the unaudited amounts for Operating Revenues, Income Before Interest Charges and Net Income After Dividends on Preferred Stock and the -7- unaudited Ratio of Earnings to Fixed Charges set forth in the Prospectus, which amounts shall include such amounts for the latest period subsequent to that covered by the financial statements incorporated by reference in the Prospectus for which such amounts are available at the time this agreement becomes effective; (v) reading the unaudited financial statements from which the amounts and ratios described in (iv) were derived and agreeing the amounts therein to the Company's accounting records; (vi) making inquiries of certain officials of the Company who have responsibility for financial and accounting matters regarding whether (a) the unaudited amounts and ratios referred to in (iv) above and the unaudited financial statements referred to in (v) above are stated on a basis substantially consistent with that of the corresponding audited amounts or ratios included or incorporated by reference in the Prospectus and (b) as of a specified date not more than five business days prior to the date of delivery of such letter, there has been any change in the capital stock or long-term debt of the Company or any decrease in net assets as compared with amounts shown in the latest audited balance sheet incorporated in the Prospectus, except in each case for changes or decreases which (I) the Prospectus discloses have occurred or may occur, (II) are occasioned by the declaration of dividends, (III) are occasioned by draw-downs under existing pollution control financing arrangements, (IV) are occasioned by draw-downs and regularly scheduled payments of capitalized lease obligations, (V) are occasioned by the purchase or redemption of bonds or stock to satisfy mandatory or optional redemption provisions relating thereto, or (VI) are disclosed in such letter; (vii) reading the unaudited amounts for Operating Revenues, Income Before Interest Charges and Net Income After Dividends on Preferred Stock and the unaudited Ratio of Earnings to Fixed Charges for any period subsequent to those set forth in (iv) above, which if available shall be set forth in such letter; (viii) reading the unaudited financial statements from which the amounts and ratios described in (vii) above were derived and which will be attached to such letter and agreeing the amounts therein to the Company's accounting records; and (ix) making inquiries of certain officials of the Company who have responsibility for financial and accounting matters regarding whether the unaudited amounts and ratios referred to in (vii) above and the unaudited financial statements referred to in (viii) above are stated on a basis substantially consistent with that of the corresponding audited amounts or ratios included or incorporated by reference in the Prospectus; and (D) reporting their findings as a result of performing the limited procedures set forth in (C) above. It is 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 -8- accordingly that Arthur Andersen LLP make no representations as to the sufficiency of such procedures for the several Purchasers' purposes. (c) That no amendment or supplement (including the Prospectus Supplement) to the registration statement or prospectus filed subsequent to the time this agreement becomes effective (including any filing made by the Company pursuant to Section 13 or 14 of the Exchange Act) shall be unsatisfactory in form to Dewey Ballantine or shall contain information (other than with respect to an amendment or supplement relating solely to the activity of any Purchaser or Purchasers) which, in the reasonable judgment of the Representative, shall materially impair the marketability of the Bonds. (d) That, at or before 8 p.m. New York Time on the first business day after the date this agreement becomes effective, or at such later time and date as the Representative may from time to time consent to in writing or by telephone, confirmed in writing, an appropriate order or orders of the Florida Public Service Commission and of the Commission under the Public Utility Holding Company Act of 1935, as amended, necessary to permit the issue and sale of the Bonds shall be in effect; and that, prior to the time of purchase, no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Securities Act by the Commission or proceedings therefor initiated or threatened. (e) That, prior to the time of purchase, there shall have been no material adverse change in the business, properties or financial condition of the Company from that set forth in or contemplated by the Prospectus, and that the Company shall, at the time of purchase, have delivered to the Representative a certificate to such effect of an executive officer of the Company. For the purpose of this condition, the sale by the Company of, or its failure to sell, any issue of other securities shall not be deemed to be such a change. (f) That the Company shall have performed such of its obligations under this agreement as are to be performed at or prior to the time of purchase by the terms hereof. 4. Certain Covenants of the Company: In further consideration of the agreements of the Purchasers herein contained, the Company covenants as follows: (a) As soon as practicable after this agreement becomes effective, and in any event within the time prescribed by Rule 424 under the Securities Act, to file the Prospectus Supplement with the Commission and to advise the Representative of such filing and to confirm such advice in writing. -9- (b) As soon as the Company is advised thereof, to advise the Representative and confirm the advice in writing of any request made by the Commission for amendments to the Registration Statement or Prospectus, including any amendment to any of the documents incorporated therein by reference pursuant to Item 12 of Form S-3, or of the issuance of a stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceedings for that purpose and, if such a stop order should be issued by the Commission, to make every reasonable effort to obtain the lifting or removal thereof as soon as possible. (c) To deliver to the Purchasers, without charge, as soon as practicable on or after the date this agreement becomes effective, and from time to time thereafter during such period of time (not exceeding nine months) after this agreement becomes effective as the Purchasers are required by law to deliver a prospectus, as many copies of the Prospectus (as supplemented or amended if the Company shall have made any supplements or amendments thereto) as the Representative may reasonably request; and, in case any Purchaser is required by law to deliver a prospectus after the expiration of nine months after the date this agreement becomes effective, to furnish to such Purchaser, upon request of the Representative, at the expense of such Purchaser, a reasonable quantity of a supplemental prospectus or of supplements to the Prospectus complying with Section 10(a)(3) of the Securities Act. (d) During such period of time after the date this agreement becomes effective as the Purchasers are required by law to deliver a prospectus, to file timely all documents required to be filed with the Commission pursuant to Section 13 or 14 of the Exchange Act. (e) To furnish to the Representative, or if such Representative consists of two or more persons to one of such persons, one copy, certified by an officer of the Company, of the registration statement as initially filed with the Commission, all amendments thereto and all documents incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3 as of the time of purchase (in each case, exclusive of exhibits), and to furnish to the Representative sufficient plain copies of said registration statement and all amendments thereto (exclusive of exhibits) for distribution of two each, and all said documents incorporated therein as of the time of purchase (exclusive of exhibits) for distribution of one each, to the other Purchasers. (f) In the event that the Purchasers constitute "underwriters" within the meaning of Section 2(11) of the Securities Act, then, for such period of time (not exceeding nine months) after the date this agreement becomes effective as they are required by law to deliver a prospectus, if any event shall have occurred as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is -10- delivered to a purchaser, not misleading, forthwith to amend or supplement the Prospectus by either (i) preparing and furnishing, at its own expense, to the Purchasers and to dealers (whose names and addresses are furnished to the Company by the Representative) to whom Bonds may have been sold by the Representative on behalf of the Purchasers and, upon request, to any other dealers making such request, either amendments to the Prospectus or supplements thereto, or (ii) making an appropriate filing pursuant to Section 13 or 14 of the Exchange Act which would supplement or amend the Prospectus, so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading. (g) To make generally available to the Company's security holders, as soon as practicable, an earning statement (which need not be audited) covering a period of at least twelve months beginning with the first day of the month immediately following the effective date of the Registration Statement as defined in Rule 158(c) under the Securities Act, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act. (h) To use its best efforts to qualify the Bonds for offer and sale under the securities or blue sky laws of such jurisdictions as the Representative may designate within six months after the date this agreement becomes effective and to pay filing fees and disbursements in connection therewith in an amount not exceeding $3,500 in the aggregate (including filing fees and disbursements paid or incurred prior to the date this agreement becomes effective), provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a consent to service of process or to file annual reports or to comply with any other requirements deemed by the Company to be unduly burdensome. (i) To pay expenses, fees and taxes (other than transfer taxes) in connection with (1) the preparation and filing of the Registration Statement and Prospectus, (2) the preparation, execution, filing and recording of the new supplemental indenture pursuant to which the Bonds are to be issued, (3) the issue and delivery of the Bonds to the Purchasers, and (4) the furnishing of the opinions, letter and certificate referred to in Section 3 hereof, except that the Company shall be required to pay the fees and disbursements (other than filing fees and disbursements referred to in paragraph (h) of this Section 4) of Dewey Ballantine only in an event provided in paragraph (j) of this Section 4, the Purchasers hereby agreeing to pay such fees and disbursements in any other event and, if such fees should be less than the amount stated by such counsel to the Representative, to repay the Company the amount of any reduction. -11- (j) If the Purchasers shall not take up and pay for the Bonds due to the failure of the Company to comply with any of the conditions specified in Section 3 hereof, or if this agreement shall be terminated in accordance with the provisions of Section 7 or 8 hereof, to pay the reasonable fees and disbursements of Dewey Ballantine, and, if the Purchasers shall not take up and pay for the Bonds due to the failure of the Company to comply with any of the conditions specified in Section 3 hereof, to reimburse the Purchasers for their reasonable out-of-pocket expenses, in an amount not exceeding a total of $10,000, incurred in connection with the financing contemplated by this agreement. (k) On and after the date this agreement becomes effective and through the time of purchase, without the prior written consent of the Representative, not to issue or sell any first mortgage bonds (other than the Bonds) or any other long-term debt of the Company having terms and provisions substantially similar to the Bonds. 5. Warranties of and Indemnity by the Company: (a) The Company warrants and represents to each of the Purchasers that: (i) The Registration Statement, when it became effective, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and the Bidding Prospectus, on said date, did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; when the Prospectus Supplement is filed with the Commission, and at the time of purchase, the Registration Statement and the Prospectus, as they may be amended or supplemented, will comply, or be deemed to comply, in all material respects with the provisions of the Securities Act and the rules and regulations of the Commission thereunder, the Registration Statement, as it may be amended or supplemented, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as it may be amended or supplemented, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and all documents incorporated therein by reference pursuant to Item 12 of Form S-3 as of such dates complied or will comply in all material respects with the applicable provisions of the Exchange Act and the rules and regulations of the Commission thereunder, and, on said dates, when read together with the Prospectus, or the Prospectus as it may be -12- otherwise amended or supplemented, will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Company makes no warranty or representation to any Purchaser with respect to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representative on behalf of, any Purchaser for use in the Registration Statement or the Prospectus, or to any statements in or omissions from that part of the Registration Statement that shall constitute the Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of the Trustee under the Indenture. (ii) The consummation of the transactions herein contemplated and the performance by the Company of the terms of this agreement will not violate any of the terms, conditions or provisions of, or constitute a default under, any indenture or other contract or agreement to which the Company is now a party or the articles of incorporation or by-laws of the Company or any order of any court or administrative agency entered in any proceedings to which the Company is now a party. (b) The Company agrees to indemnify and hold harmless each of the Purchasers and each person, if any, who controls any such Purchaser within the meaning of Section 15 of the Securities Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or otherwise, and to reimburse the Purchasers and such controlling person or persons, if any, for any legal or other expenses incurred by them in connection with defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a preliminary prospectus (if used prior to the effective date of the Registration Statement), or in the Bidding Prospectus (if used prior to the date this agreement becomes effective), or in the Registration Statement, or in the Prospectus or, if the Company shall furnish to the Purchasers any amendments or any supplements to the Prospectus, or shall make any filings pursuant to Section 13 or 14 of the Exchange Act which are incorporated therein by reference, in the Prospectus as so amended or supplemented (provided that, if such Prospectus or such Prospectus as amended or supplemented is used after the expiration of the period of time specified in Section 4(f) hereof, it shall contain such amendments or supplements as the Company deems necessary to comply with Section 10(a)(3) of the Securities Act), or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or actions arise out of or are -13- based upon any such untrue statement or omission or alleged untrue statement or omission which was made in such Registration Statement or Prospectus in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representative on behalf of, any Purchaser for use therein and except that this indemnity with respect to a preliminary prospectus and the Bidding Prospectus, and with respect to the Prospectus if the Company shall have furnished any amendment or supplement thereto, shall not inure to the benefit of any Purchaser (or of any person controlling such Purchaser) on account of any losses, claims, damages, liabilities or actions arising from the sale of Bonds to any person if a copy of the Prospectus (exclusive of documents incorporated therein by reference pursuant to Item 12 of Form S-3), as the same may then be amended or supplemented, shall not have been sent or given by or on behalf of such Purchaser to such person with or prior to the written confirmation of the sale involved. Each Purchaser agrees, within ten days after the receipt by it of notice of the commencement of any action in respect of which indemnity may be sought by it, or by any person controlling it, from the Company on account of its agreement contained in this Section 5(b), to notify the Company in writing of the commencement thereof, but the omission of such Purchaser so to notify the Company of any such action shall not release the Company from any liability which it may have to such Purchaser or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 5(b). In case any such action shall be brought against any Purchaser or any such person controlling such Purchaser and such Purchaser shall notify the Company of the commencement thereof, as above provided, the Company shall be entitled to participate in (and, to the extent that it shall wish, including the selection of counsel, to direct) the defense thereof at its own expense. In case the Company elects to direct such defense and select such counsel, any Purchaser or controlling person shall have the right to employ its own counsel, but, in any such case, the fees and expenses of such counsel shall be at the expense of such Purchaser or controlling person unless the employment of such counsel has been authorized in writing by the Company in connection with defending such action. The Company's indemnity agreement contained in this Section 5(b), and its covenants, warranties and representations contained in this agreement, shall remain in full force and effect regardless of any investigation made by or on behalf of any Purchaser or controlling person, and shall survive the delivery of and payment for the Bonds hereunder. 6. Warranties of and Indemnity by Purchasers: (a) Each Purchaser warrants and represents to the Company, its directors and such of its officers as shall have signed the Registration Statement, and to each other Purchaser that the information furnished in writing to the Company by, or through the Representative on behalf of, -14- such Purchaser for use in the Registration Statement or the Prospectus does not contain an untrue statement of a material fact and does not omit to state a material fact in connection with such information required to be stated therein or necessary to make such information not misleading. (b) Each Purchaser agrees to indemnify and hold harmless the Company, its directors and such of its officers as shall have signed the Registration Statement, and each other Purchaser and each person, if any, who controls the Company or any such other Purchaser within the meaning of Section 15 of the Securities Act, to the same extent and upon the same terms as the indemnity agreement of the Company set forth in Section 5(b) hereof, but only with respect to untrue statements or omissions or alleged untrue statements or omissions made in the Registration Statement or the Prospectus, or the Prospectus as amended or supplemented, in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representative on behalf of, such Purchaser for use therein. The indemnity agreement on the part of each Purchaser contained in this Section 6(b), and the warranties and representations of such Purchaser contained in this agreement, shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or other Purchaser or controlling person, and shall survive the delivery of and payment for the Bonds hereunder. 7. Substitution of Purchasers: If any Purchaser under this agreement shall fail or refuse (whether for some reason sufficient to justify, in accordance with the terms hereof, the termination of its obligations to purchase or otherwise) to purchase the principal amount of the Bonds which it has agreed to purchase, the Company shall immediately notify the Representative, and the Representative may, within 24 hours of receipt of such notice, procure some other responsible party or parties satisfactory to the Company, who may include one or more of the remaining Purchasers, to purchase or agree to purchase such principal amount of the Bonds on the terms herein set forth; and, if the Representative shall fail to procure a satisfactory party or parties to purchase or agree to purchase such principal amount of the Bonds on such terms within such period after the receipt of such notice, then the Company shall be entitled to an additional period of 24 hours within which to procure another party or parties to purchase or agree to purchase such principal amount of the Bonds on the terms herein set forth. In any such case, either the Representative or the Company shall have the right to postpone the time of purchase for a period not to exceed five full business days from the date determined as provided in Section 2 hereof, in order that the necessary changes in the Registration Statement and Prospectus and any other documents and arrangements may be effected. If the Representative shall fail to procure a satisfactory party or parties to purchase or agree to purchase such principal amount of the Bonds, and if the Company also does not procure another party or parties to purchase or agree to purchase such -15- principal amount of the Bonds, as above provided, then this agreement shall terminate. In the event of any such termination, the Company shall not be under any liability to any Purchaser (except to the extent, if any, provided in Section 4(j) hereof), nor shall any Purchaser (other than a Purchaser who shall have failed or refused to purchase Bonds without some reason sufficient to justify, in accordance with the terms hereof, its termination of its obligations hereunder) be under any liability to the Company. 8. Termination of Agreement: This agreement may be terminated at any time prior to the time of purchase by the Representative with the consent of Purchasers who have agreed to purchase in the aggregate 50% or more of the Designated Principal Amount of the Bonds, if, after this agreement becomes effective and prior to the time of purchase, (i) trading in securities on the New York Stock Exchange shall have been generally suspended, (ii) minimum or maximum ranges for prices shall have been generally established on the New York Stock Exchange by the Commission or by the New York Stock Exchange, (iii) a general banking moratorium shall have been declared by federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by the United States Congress or any other substantial national or international calamity or emergency affecting the United States, in any such case provided for in clauses (i) through (iv) with the result that, in the reasonable judgment of the Representative, the marketability of the Bonds shall have been materially impaired. If the Representative elects to terminate this agreement, as provided in this Section 8, the Company and each other Purchaser shall be notified promptly by the Representative by telephone, confirmed in writing. If this agreement shall not be carried out by any Purchaser for any reason permitted hereunder, or if the sale of the Bonds to the Purchasers as herein contemplated shall not be carried out because the Company is not able to comply with the terms hereof, the Company shall not be under any obligation under this agreement and shall not be liable to any Purchaser or to any member of any selling group for the loss of anticipated profits from the transactions contemplated by this agreement (except that the Company shall remain liable to the extent provided in Section 4(j) hereof) and the Purchasers (other than a defaulting Purchaser) shall be under no liability to the Company nor be under any liability under this agreement to one another. 9. Notices: All notices hereunder shall, unless otherwise expressly permitted, be in writing and be delivered at or mailed to the following addresses: if to the Purchasers or the Representative, to the Representative at the address set forth following its signature in the Form of Proposal, and, if to the Company, to the Company, attention Carol A. Falcone, c/o Southern Company Services, Inc., One Wall Street, 42nd Floor, New York, N. Y. 10005, and attention of A. E. Scarbrough, Vice President-Finance, 500 Bayfront Parkway, Pensacola, Florida 32501. -16- 10. Parties in Interest: The agreement herein set forth has been and is made solely for the benefit of the Purchasers and the Company, its directors and such of its officers as shall have signed the Registration Statement, and the controlling persons, if any, referred to in Sections 5 and 6 hereof, and their respective successors, assigns, executors and administrators, and, subject to the provisions of Section 7 hereof, no other person shall acquire or have any right under or by virtue of this agreement. 11. Definitions of Certain Terms: If there be two or more persons, firms or corporations named in Exhibit A to the Form of Proposal, the term "Purchasers", as used herein, shall be deemed to mean the several persons, firms or corporations so named (including any substitute purchaser or purchasers procured as provided by Section 7 hereof and the Representative hereinafter mentioned, if so named), and the term "Representative", as used herein, shall be deemed to mean the person or persons designated as representative or representatives of the Purchasers by, or in the manner authorized by, the Purchasers, who, by signing the Form of Proposal, represent that it or they have been authorized by the Purchasers to execute the Form of Proposal on their behalf and to act for them in the manner herein provided. In the event that all the Purchasers execute the Form of Proposal and no one or more of them are designated to act as representative or representatives, then the term "Representative" shall be deemed to mean all the persons signing the Form of Proposal. If the Representative consists of more than one person, the Representative may act by any one thereof. All obligations of the Purchasers hereunder are several and not joint. If there shall be only one person, firm or corporation named in Exhibit A to the Form of Proposal, the term "Purchasers" and the term "Representative", as used herein, shall mean such person, firm or corporation. -17- EXHIBIT 1 [Letterhead of Beggs & Lane] [Date] as the several Purchasers under Purchase Contract effective between Gulf Power Company and said Purchasers (the "Purchase Contract") for the purchase of Gulf Power Company First Mortgage Bonds, % Series due (the "Bonds") c/o Ladies and Gentlemen: We have acted as counsel to Gulf Power Company (the "Company") in connection with the purchase by you pursuant to the Purchase Contract of $ principal amount of the Bonds, issued under the Indenture dated as of September 1, 1941, between the Company and The Chase Manhattan Bank (National Association), as trustee (the "Trustee"), as supplemented and amended by various indentures supplemental thereto including the Supplemental Indenture dated as of (said Indenture, as so supplemented and amended, being hereinafter called the "Indenture"). We have examined the Registration Statement on Form S-3 (File No. 33- ) 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 , as supplemented by the prospectus supplement dated (the "Prospectus"), filed by the Company pursuant to Rule 424 of the rules and regulations of the Securities and Exchange Commission (the "Commission") under the Act, which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, _____, the Quarterly Reports on Form 10-Q of the Company for the quarters ended ___________________ and the Current Reports on Form 8-K of the Company dated ___________________ (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the Indenture. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the Bonds, of which we have examined a specimen), and we have made such other and further investigations as we deemed necessary to enable us to express the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such latter documents. We are of the opinion, relying as to matters of Georgia law and with respect to the Act, the Exchange Act, the Trust Indenture Act (as hereinafter defined) and the Public Utility Holding Company Act of 1935, as amended, on the opinion dated the date hereof rendered to you by Troutman Sanders LLP, that: 1. The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Maine, is duly qualified to carry on its business as a foreign corporation in the States of Florida, Georgia and Mississippi 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. 2. The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and legally binding instrument of the Company enforceable in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Bonds may be limited by (a) laws of the States of Florida, Georgia and Mississippi, where the property covered thereby is located, affecting the remedies for the enforcement of the security provided for in the Indenture, which laws do not, in our opinion, make inadequate the remedies necessary for the realization of the benefits of such security, (b) bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and (c) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 3. The Indenture (other than the Supplemental Indenture dated as of ______________, which is in proper form for recordation) has been duly recorded in all counties in which the property specifically described therein is located and the Indenture is effective to create the lien intended to be created thereby. 4. The Bonds have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Purchase Contract and -2- subject to the qualifications set forth in paragraph 2 above, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms and entitled to the benefits and security of the Indenture equally and ratably with the first mortgage bonds of the other series presently outstanding under the Indenture. 5. The statements made in the Prospectus under the captions "Description of New Bonds" and "Certain Terms of the New Bonds", insofar as they purport to constitute summaries of the terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. 6. All orders, consents or other authorizations or approvals of the Florida Public Service Commission and the Commission legally required for the issuance of the Bonds have been obtained; the issuance and the sale of the Bonds are in conformity with the terms of such orders; and no other order, consent or other authorization or approval of any governmental body (other than in connection or in compliance with the provisions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) is legally required for the issuance of the Bonds by the Company or the carrying out by the Company of the provisions of the Purchase Contract. 7. The Purchase Contract has been duly authorized, executed and delivered by the Company. 8. Except as otherwise stated under "Item 2-Properties" in the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, ____, the Company has good and marketable title in fee simple to the Company's interests in the principal plants and other important units of the Company's property therein described, and the Indenture constitutes, as security for the Bonds, a direct first lien on substantially all the fixed property and franchises owned by the Company, used and useful in its public utility business, subject only to excepted encumbrances, as therein defined, and upon the acquisition hereafter by the Company of similar property in the States of Florida, Georgia and Mississippi, will create such lien thereon, subject to liens existing thereon at the time of acquisition and to the due recordation of the Indenture in the counties in which such property is located, and except as the enforceability of such lien may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and general principles of equity. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraph 5 above and in the Prospectus in the third paragraph under the caption "Legal Opinions and -3- Experts". In the course of the preparation by the Company of the Registration Statement, the Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with other counsel for the Company and with representatives of Arthur Andersen LLP. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement, the Prospectus and the Exchange Act Documents and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of , complied as to form in all material respects with the requirements of the Act, the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents, as of their respective dates of filing with the Commission, complied as to form in all material respects with the relevant requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion as to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents, and (ii) we have no reason to believe that the Registration Statement, as of its effective date (including the Exchange Act Documents on file with the Commission on such effective date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Prospectus (including the Exchange Act Documents) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents. We are members of the State Bar of Florida and we do not express any opinion herein concerning any law other than the law of the States of Florida and Mississippi and the federal law of the United States. This opinion is rendered to you in connection with the above described transactions. This opinion may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, BEGGS & LANE -4- EXHIBIT 2 [Letterhead of Troutman Sanders LLP] [Date] as the several Purchasers under Purchase Contract effective between Gulf Power Company and said Purchasers (the "Purchase Contract") for the purchase of Gulf Power Company First Mortgage Bonds, % Series due (the "Bonds") c/o Ladies and Gentlemen: We have acted as counsel to Gulf Power Company (the "Company") in connection with the purchase by you pursuant to the Purchase Contract of $ principal amount of the Bonds, issued under the Indenture dated as of September 1, 1941, between the Company and The Chase Manhattan Bank (National Association), as trustee (the "Trustee"), as supplemented and amended by various indentures supplemental thereto including the Supplemental Indenture dated as of (said Indenture, as so supplemented and amended, being hereinafter called the "Indenture"). We have examined the Registration Statement on Form S-3 (File No. 33- ) 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 , as supplemented by the prospectus supplement dated (the "Prospectus"), filed by the Company pursuant to Rule 424 of the rules and regulations of the Securities and Exchange Commission (the "Commission") under the Act, which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, _____, the Quarterly Reports on Form 10-Q of the Company for the quarters ended ______________________ and the Current Reports on Form 8-K of the Company dated ___________________ (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the Indenture. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the Bonds, of which we have examined a specimen), and we have made such other and further investigations as we deemed necessary to enable us to express the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such latter documents. We are of the opinion, relying as to matters of Florida and Mississippi law upon the opinion of Beggs & Lane, referred to below, that: 1. The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Maine, is duly qualified to carry on its business as a foreign corporation in the States of Florida, Georgia and Mississippi 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. 2. The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and legally binding instrument of the Company enforceable in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Bonds may be limited by (a) laws of the States of Florida, Georgia and Mississippi, where the property covered thereby is located, affecting the remedies for the enforcement of the security provided for in the Indenture, which laws do not, in our opinion, make inadequate the remedies necessary for the realization of the benefits of such security, (b) bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and (c) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 3. The Bonds have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Purchase Contract and subject to the qualifications set forth in paragraph 2 above, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms and entitled to the benefits and security of the Indenture equally and ratably with the first mortgage bonds of the other series presently outstanding under the Indenture. -2- 4. The statements made in the Prospectus under the captions "Description of New Bonds" and "Certain Terms of the New Bonds", insofar as they purport to constitute summaries of the terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. 5. All orders, consents or other authorizations or approvals of the Florida Public Service Commission and the Commission legally required for the issuance of the Bonds have been obtained; the issuance and the sale of the Bonds are in conformity with the terms of such orders; and no other order, consent or other authorization or approval of any governmental body (other than in connection or in compliance with the provisions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) is legally required for the issuance of the Bonds by the Company or the carrying out by the Company of the provisions of the Purchase Contract. 6. The Purchase Contract has been duly authorized, executed and delivered by the Company. We are not passing upon matters relating to the lien of the Indenture on property now owned or hereafter acquired by the Company, the recordation or filing of the Indenture or any related financing statements, the title of the Company to its properties or the franchises of the Company. As to certain of such matters there is being furnished to you the opinion, dated the date hereof, of Beggs & Lane, general counsel to the Company. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraph 4 above. In the course of the preparation by the Company of the Registration Statement, the Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with other counsel for the Company and with representatives of Arthur Andersen LLP. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement, the Prospectus and the Exchange Act Documents and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of , complied as to form in all material respects with the requirements of the Act, the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents, as of their respective dates of filing with the Commission, complied as to form in all material respects with the relevant requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion as to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents, -3- and (ii) we have no reason to believe that the Registration Statement, as of its effective date (including the Exchange Act Documents on file with the Commission on such effective date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Prospectus (including the Exchange Act Documents) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents. 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. This opinion is rendered to you in connection with the above described transactions. This opinion may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, TROUTMAN SANDERS LLP -4- EXHIBIT 3 [Letterhead of Dewey Ballantine] [Date] as the several Purchasers under Purchase Contract effective , between Gulf Power Company and said Purchasers (the "Purchase Contract") for the purchase of Gulf Power Company First Mortgage Bonds, % Series due (the "Bonds") c/o Ladies and Gentlemen: We have acted as your counsel in connection with the purchase by you pursuant to the Purchase Contract of $ principal amount of the Bonds, issued under the Indenture dated as of September 1, 1941, between Gulf Power Company (the "Company") and The Chase Manhattan Bank (National Association), as trustee (the "Trustee"), as supplemented and amended by various indentures supplemental thereto including the Supplemental Indenture dated as of (said Indenture, as so supplemented and amended, being hereinafter called the "Indenture"). We have examined the Registration Statement on Form S-3 (File No. 33- ) 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 , as supplemented by the prospectus supplement dated (the "Prospectus"), filed by the Company pursuant to Rule 424 of the rules and regulations of the Securities and Exchange Commission (the "Commission") under the Act, which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, ____, the Quarterly Reports on Form 10-Q of the Company for the quarters ended __________________ and the Current Reports on Form 8-K of the Company dated ___________ (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the Indenture. In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the Bonds, of which we have examined a specimen), and we have made such other and further investigations as we deemed necessary to enable us to express the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such latter documents. We are of the opinion, relying as to matters of Florida and Mississippi law upon the opinion of Beggs & Lane, referred to below, and as to matters of Georgia law upon the opinion of Troutman Sanders LLP, referred to below, that: 1. The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Maine, is duly qualified to carry on its business as a foreign corporation in the States of Florida, Georgia and Mississippi 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. 2. The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and legally binding instrument of the Company enforceable in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Bonds may be limited by (a) laws of the States of Florida, Georgia and Mississippi, where the property covered thereby is located, affecting the remedies for the enforcement of the security provided for in the Indenture, which laws do not, in our opinion, make inadequate the remedies necessary for the realization of the benefits of such security, (b) bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and (c) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 3. The Bonds have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Purchase Contract and subject to the qualifications set forth in paragraph 2 above, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms and entitled to the benefits and security of the Indenture equally and ratably with the first mortgage bonds of the other series presently outstanding under the Indenture. 4. The statements made in the Prospectus under the captions "Description of New Bonds" and "Certain Terms of the New Bonds", insofar as they purport to constitute summaries of the terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. -2- 5. All orders, consents or other authorizations or approvals of the Florida Public Service Commission and the Commission legally required for the issuance of the Bonds have been obtained; the issuance and the sale of the Bonds are in conformity with the terms of such orders; and no other order, consent or other authorization or approval of any governmental body (other than in connection or in compliance with the provisions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) is legally required for the issuance of the Bonds by the Company or the carrying out by the Company of the provisions of the Purchase Contract. 6. The Purchase Contract has been duly authorized, executed and delivered by the Company. All legal proceedings taken by the Company in connection with the authorization and delivery of the Bonds, and the legal opinions dated the date hereof rendered to you by Beggs & Lane and Troutman Sanders LLP, counsel for the Company, pursuant to the Purchase Contract, are in form satisfactory to us. Insofar as the opinions expressed herein relate to or are dependent upon matters governed by the laws of the States of Florida, Georgia and Mississippi, we have relied upon the aforesaid opinions of Beggs & Lane and Troutman Sanders LLP. We are not passing upon matters relating to the lien of the Indenture on property now owned or hereafter acquired by the Company, the recordation or filing of the Indenture or any related financing statements, the title of the Company to its properties or the franchises of the Company. As to certain of such matters there is being furnished to you the above-mentioned opinion of Beggs & Lane. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraph 4 above. In the course of the preparation by the Company of the Registration Statement, the Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with representatives of Arthur Andersen LLP and with counsel for the Company. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement and the Prospectus and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of , complied as to form in all material respects with the requirements of the Act, the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents, as of their respective dates of filing with the Commission, complied as to form in all material respects with the relevant requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion as -3- to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents, and (ii) we have no reason to believe that the Registration Statement, as of its effective date (including the Exchange Act Documents on file with the Commission on such effective date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Prospectus (including the Exchange Act Documents) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents. We are members of the Bar of the State of New York and we do not express any opinion herein concerning any law other than the law of the State of New York and the federal law of the United States. This opinion is rendered to you in connection with the above described transactions. This opinion may not be relied upon by you for any other purpose, or relied upon by, or furnished to, any other person, firm or corporation without our prior written consent. Very truly yours, DEWEY BALLANTINE -4- EX-4 3 Exhibit 4 ================================================== GULF POWER COMPANY TO THE CHASE MANHATTAN BANK (National Association) (Formerly The Chase Manhattan Bank, Successor by Merger to The Chase National Bank of the City of New York) As Trustee. ____________________ SUPPLEMENTAL INDENTURE providing among other things for FIRST MORTGAGE BONDS 6 7/8% Series due January 1, 2026 ____________________ Dated as of January 1, 1996 ================================================== This instrument was prepared by G. Edison Holland, Jr., Seventh Floor, Blount Building, 3 West Garden Street, Pensacola, Florida 32501, and Thomas J. Hartland, Jr., 600 Peachtree Street, N.E., Suite 5200, Atlanta, Georgia 30308-2216. SUPPLEMENTAL INDENTURE, dated as of January 1, 1996, made and entered into by and between GULF POWER COMPANY, a corporation organized and existing under the laws of the State of Maine (hereinafter commonly referred to as the "Company"), and THE CHASE MANHATTAN BANK (National Association), a corporation organized and existing under the laws of the United States of America, with its principal office in the Borough of Manhattan, The City of New York, formerly The Chase Manhattan Bank, successor by merger to The Chase National Bank of the City of New York, as trustee (hereinafter commonly referred to as the "Trustee"), as Trustee under the Indenture dated as of September 1, 1941 between the Company and The Chase National Bank of the City of New York, as trustee, and The Citizens & Peoples National Bank of Pensacola, as trustee (hereinafter commonly referred to as the "Co-Trustee"), the Trustee and the Co-Trustee being hereinafter commonly referred to as the "Trustees", securing bonds issued and to be issued as provided therein (hereinafter sometimes referred to as the "Indenture"). WHEREAS the Company and the Trustees have executed and delivered the Indenture for the purpose of securing an issue of bonds of the 1971 Series described therein and such additional bonds as may from time to time be issued under and in accordance with the terms of the Indenture, the aggregate principal amount of bonds to be secured thereby being not limited, and the Indenture fully describes and sets forth the property conveyed thereby and is of record in the Office of the Clerk of the Circuit, Superior or Chancery Court of each county in the States of Florida, Georgia and Mississippi in which this Supplemental Indenture is to be recorded and is on file at the principal office of the Trustee, above referred to; and WHEREAS the Company and the Trustees, or the Trustee, as the case may be, have executed and delivered various supplemental indentures for the purpose, among others, of further securing said bonds and of setting forth the terms and provisions relating to the bonds of other series described therein, which supplemental indentures describe and set forth additional property conveyed thereby and are also of record in the Offices of the Clerks of the Circuit, Superior or Chancery Courts of some or all of the counties in the States of Florida, Georgia and Mississippi in which this Supplemental Indenture is to be recorded and are on file at the principal office of the Trustee, above referred to; and WHEREAS effective December 9, 1993, the Company and the Trustee have accepted the resignation of the Co-Trustee pursuant to Section 16.20 of the Indenture; and WHEREAS the Indenture provides for the issuance of bonds thereunder in one or more series and the Company, by appropriate corporate action in conformity with the terms of the Indenture, has duly determined to create a series of bonds under the Indenture to be designated as "6 7/8% Series due January 1, 2026" (hereinafter sometimes referred to as the "Forty-fourth Series"), each of which bonds shall also bear the descriptive title "First Mortgage Bond", the bonds of such series to bear interest at the annual rate designated in the title thereof and to mature January 1, 2026; and WHEREAS each of the bonds of the Forty-fourth Series is to be substantially in the following form, to-wit: [FORM OF BOND OF THE FORTY-FOURTH SERIES] [FACE] GULF POWER COMPANY First Mortgage Bond, 6 7/8% Series Due January 1, 2026 No. $ Gulf Power Company, a Maine corporation (hereinafter called the "Company"), for value received, hereby promises to pay to __________ or registered assigns, the principal sum of _________ Dollars on January 1, 2026, and to pay to the registered holder hereof interest on said sum from the latest semi-annual interest payment date to which interest has been paid on the bonds of this series preceding the date hereof, unless the date hereof be an interest payment date to which interest is being paid, in which case from the date hereof, or unless the date hereof is prior to July 1, 1996, in which case from January 1, 1996 (or, if this bond is dated between the record date for any interest payment date and such interest payment date, then from such interest payment date, provided, however, that if the Company shall default in payment of the interest due on such interest payment date, then from the next preceding semi-annual interest payment date to which interest has been paid on the bonds of this series, or if such interest payment date is July 1, 1996, from January 1, 1996), at the rate per annum, until the principal hereof shall have become due and payable, specified in the title of this bond, payable on January 1 and July 1 in each year. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. This bond shall not be valid or become obligatory for any purpose unless and until it shall have been authenticated by the execution by the Trustee or its successor in trust under the Indenture of the certificate endorsed hereon. IN WITNESS WHEREOF, Gulf Power Company has caused this bond to be executed in its name by its President or one of its Vice Presidents by his signature or a facsimile thereof, and its -2- corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries by his signature or a facsimile thereof. Dated, GULF POWER COMPANY, By ____________________ President Attest: ____________________ Secretary [FORM OF TRUSTEE'S CERTIFICATE] TRUSTEE'S CERTIFICATE This bond is one of the bonds, of the series designated therein, described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK (National Association), as Trustee, By ____________________ Authorized Officer [REVERSE] GULF POWER COMPANY FIRST MORTGAGE BOND, 6 7/8% SERIES DUE JANUARY 1, 2026 The interest payable on any January 1 or July 1 will, subject to certain exceptions provided in the Indenture hereinafter mentioned, be paid to the person in whose name this bond is registered at the close of business on the record date, which shall be the December 15 or June 15, as the case may be, next preceding such interest payment date, or, if such December 15 or June 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, The City of New York, are authorized to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so -3- authorized to close. The principal of and the premium, if any, and interest on this bond shall be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, designated for that purpose, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts. This bond is one of the bonds issued and to be issued from time to time under and in accordance with and all secured by an indenture of mortgage or deed of trust dated as of September 1, 1941, between the Company and The Chase National Bank of the City of New York to which The Chase Manhattan Bank (now The Chase Manhattan Bank (National Association)) is successor by merger (hereinafter sometimes referred to as the "Trustee"), and The Citizens & Peoples National Bank of Pensacola, as Trustees, and indentures supplemental thereto, to which indenture and indentures supplemental thereto (hereinafter referred to collectively as the "Indenture") reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security and the rights, duties and immunities thereunder of the Trustee and the rights of the holders of said bonds and of the Trustee and of the Company in respect of such security, and the limitations on such rights. By the terms of the Indenture the bonds to be secured thereby are issuable in series which may vary as to date, amount, date of maturity, rate of interest and in other respects as in the Indenture provided. Prior to January 1, 2006, the bonds of this series may not be redeemed by the Company at its option or by operation of the improvement fund or the replacement provisions of the Indenture or by the use of proceeds of released property. On or after January 1, 2006, upon notice given by mailing the same, by first class mail postage prepaid, not less than thirty nor more than forty-five days prior to the date fixed for redemption to each registered holder of a bond to be redeemed (in whole or in part) at the last address of such holder appearing on the registry books, any or all of the bonds of this series may be redeemed by the Company, at its option, or by operation of various provisions of the Indenture, at any time and from time to time by the payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, together (a), if redeemed otherwise than by the operation of the improvement fund or the replacement provisions of the Indenture and otherwise than by the use of proceeds of released property, as more fully set forth in the Indenture, with a premium equal to a percentage of the principal amount thereof determined as set forth in the tabulation below under the heading "Regular Redemption Premium", and (b), if redeemed by the operation of the improvement fund or the replacement provisions of the Indenture or by the use of proceeds of released property, as more fully set forth in the Indenture, without premium: -4- If redeemed during the twelve months' period ending the last day of December, Regular Redemption Year Premium 2006 2.88% 2007 2.59% 2008 2.30% 2009 2.02% 2010 1.73% 2011 1.44% 2012 1.15% 2013 0.87% 2014 0.58% 2015 0.29% and without premium if redeemed on or after January 1, 2016. In case of certain defaults as specified in the Indenture, the principal of this bond may be declared or may become due and payable on the conditions, at the time, in the manner and with the effect provided in the Indenture. No recourse shall be had for the payment of the principal of or premium, if any, or interest on this bond, or for any claim based hereon, or otherwise in respect hereof or of the Indenture, to or against any incorporator, stockholder, director or officer, past, present or future, as such, of the Company, or of any predecessor or successor company, either directly or through the Company, or such predecessor or successor company, under any constitution or statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such liability of incorporators, stockholders, directors and officers, as such, being waived and released by the holder and owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Indenture. Every bond of this series shall be dated as of the date of authentication. This bond is transferable by the registered owner hereof, in person or by attorney duly authorized, at the office or agency of the Trustee, in the Borough of Manhattan, The City of New York, but only in the manner prescribed in the Indenture, upon the surrender and cancellation of this bond and the payment of charges for transfer, and upon any such transfer a new bond or bonds of the same series and maturity date and for the same aggregate principal amount, in authorized denominations, will be issued to the transferee in exchange herefor. The Company and the Trustee may deem and treat the person in whose name this bond -5- is registered as the absolute owner for the purpose of receiving payment and for all other purposes. Bonds of this series shall be exchangeable for bonds of other authorized denominations having the same aggregate principal amount, in the manner and upon the conditions prescribed in the Indenture. However, notwithstanding the provisions of the Indenture, no charge shall be made upon any transfer or exchange of bonds of this series other than for any tax or taxes or other governmental charge required to be paid by the Company. AND WHEREAS all acts and things necessary to make the bonds, when authenticated by the Trustee and issued as in the Indenture, as heretofore supplemented and amended, and this Supplemental Indenture provided, the valid, binding and legal obligations of the Company, and to constitute the Indenture, as heretofore supplemented and amended, and this Supplemental Indenture valid, binding and legal instruments for the security thereof, have been done and performed, and the creation, execution and delivery of the Indenture, as heretofore supplemented and amended, and this Supplemental Indenture and the creation, execution and issue of bonds subject to the terms hereof and of the Indenture, have in all respects been duly authorized. NOW, THEREFORE, in consideration of the premises, and of the acceptance and purchase by the holders thereof of the bonds issued and to be issued under the Indenture, and of the sum of One Dollar duly paid by the Trustee to the Company, and of other good and valuable considerations, the receipt whereof is hereby acknowledged, and for the purpose of securing the due and punctual payment of the principal of and premium, if any, and interest on the bonds now outstanding under the Indenture, or the Indenture as supplemented and amended, and the $30,000,000 principal amount of bonds of the Forty-fourth Series proposed to be initially issued and all other bonds which shall be issued under the Indenture, or the Indenture as supplemented and amended, and for the purpose of securing the faithful performance and observance of all covenants and conditions therein and in any indenture supplemental thereto set forth, the Company has given, granted, bargained, sold, transferred, assigned, hypothecated, pledged, mortgaged, warranted, aliened and conveyed and by these presents does give, grant, bargain, sell, transfer, assign, hypothecate, pledge, mortgage, warrant, alien and convey unto The Chase Manhattan Bank (National Association), as Trustee, as provided in the Indenture, and its successor or successors in the trust thereby and hereby created and to its or their assigns forever, all the right, title and interest of the Company in and to the property described in Exhibit "A" attached hereto and by this reference made a part hereof, together (subject to the provisions of Article X of the Indenture) with the tolls, rents, revenues, issues, earnings, income, products and profits thereof, and does hereby confirm that the Company will not cause or consent to a partition, either voluntary or through legal -6- proceedings, of property, whether herein described or heretofore or hereafter acquired, in which its ownership shall be as a tenant in common except as permitted by and in conformity with the provisions of the Indenture and particularly of Article X thereof. TOGETHER WITH all and singular the tenements, hereditaments and appurtenances belonging or in any wise appertaining to the premises, property, franchises and rights, or any thereof, referred to in the foregoing granting clauses, with the reversion and reversions, remainder and remainders and (subject to the provisions of Article X of the Indenture) the tolls, rents, revenues, issues, earnings, income, products and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid premises, property, franchises and rights and every part and parcel thereof. TO HAVE AND TO HOLD all said premises, property, franchises and rights hereby conveyed, assigned, pledged or mortgaged, or intended so to be, unto the Trustee, its successor or successors in trust, and its or their assigns forever; BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and proportionate benefit and security of the holders of all bonds and interest coupons now or hereafter issued under the Indenture, as supplemented and amended, pursuant to the provisions thereof, and for the enforcement of the payment of said bonds and coupons when payable and the performance of and compliance with the covenants and conditions of the Indenture, as supplemented and amended, without any preference, distinction or priority as to lien or otherwise of any bond or bonds over others by reason of the difference in time of the actual issue, sale or negotiation thereof or for any other reason whatsoever, except as otherwise expressly provided in the Indenture, as supplemented and amended; and so that each and every bond now or hereafter issued thereunder shall have the same lien, and so that the principal of and premium, if any, and interest on every such bond shall, subject to the terms of the Indenture, as supplemented and amended, be equally and proportionately secured thereby and hereby, as if it had been made, executed, delivered, sold and negotiated simultaneously with the execution and delivery of the Indenture. AND IT IS EXPRESSLY DECLARED that all bonds issued and secured thereunder and hereunder are to be issued, authenticated and delivered, and all said premises, property, franchises and rights hereby and by the Indenture, as supplemented and amended, conveyed, assigned, pledged or mortgaged, or intended so to be (including all the right, title and interest of the Company in and to any and all premises, property, franchises and rights of -7- every kind and description, real, personal and mixed, tangible and intangible, thereafter acquired by the Company and whether or not specifically described in the Indenture or in any indenture supplemental thereto, except any therein expressly excepted), are to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes in the Indenture, as supplemented and amended, expressed, and it is hereby agreed as follows: SECTION 1. There is hereby created a series of bonds designated as hereinabove set forth (said bonds being sometimes herein referred to as the "bonds of the Forty-fourth Series") and the form thereof shall be substantially as hereinabove set forth. Bonds of the Forty-fourth Series shall mature on the date specified in the form thereof hereinabove set forth, and the definitive bonds of such series shall be issued only as registered bonds without coupons. Bonds of the Forty-fourth Series shall be in such denominations as the Board of Directors shall approve, and execution and delivery thereof to the Trustee for authentication shall be conclusive evidence of such approval. The serial numbers of bonds of the Forty-fourth Series shall be such as may be approved by any officer of the Company, the execution thereof by any such officer to be conclusive evidence of such approval. Bonds of the Forty-fourth Series, until the principal thereof shall have become due and payable, shall bear interest at the annual rate designated in the title thereof, payable semi-annually on January 1 and July 1 in each year. The principal of and premium, if any, and the interest on the bonds of the Forty-fourth Series shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts, at the office or agency of the Company in the Borough of Manhattan, The City of New York, designated for that purpose. Bonds of the Forty-fourth Series may be transferred at the office or agency of the Trustee, in the Borough of Manhattan, The City of New York. Bonds of the Forty-fourth Series shall be exchangeable for other bonds of the same series, in the manner and upon the conditions prescribed in the Indenture, upon the surrender of such bonds at said office or agency of the Trustee. However, notwithstanding the provisions of Section 2.05 of the Indenture, no charge shall be made upon any transfer or exchange of bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company. The person in whose name any bond of the Forty-fourth Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such -8- interest payment date notwithstanding the cancellation of such bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such bond (or any bond or bonds issued, directly or after intermediate transactions, upon transfer or exchange or in substitution thereof) is registered on a subsequent record date for such payment established as hereinafter provided. A subsequent record date may be established by the Company by notice mailed to the holders of bonds not less than ten days preceding such record date, which record date shall be not less than five nor more than thirty days prior to the subsequent interest payment date. The term "record date" as used in this Section with respect to any regular interest payment date shall mean the December 15 or June 15, as the case may be, next preceding such interest payment date, or, if such December 15 or June 15 shall be a legal holiday or a day on which banking institutions in the Borough of Manhattan, The City of New York, are authorized by law to close, the next preceding day which shall not be a legal holiday or a day on which such institutions are so authorized to close. Bonds of the Forty-fourth Series shall be dated as of the date of authentication and shall bear interest from the latest semi-annual interest payment date to which interest has been paid on the bonds of such series preceding the date of authentication, unless such date of authentication be an interest payment date to which interest is being paid on the bonds of such series, in which case they shall bear interest from such date of authentication, provided that bonds authenticated prior to the first interest payment date shall bear interest from a date six months prior to such date. However, so long as there is no existing default in the payment of interest on such bonds, the holder of any bond authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim against the Company with respect thereto; provided, further, that if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such bond shall bear interest from the January 1 or July 1, as the case may be, next preceding the date of such bond, to which interest has been paid or, if the Company shall be in default with respect to the interest due on July 1, 1996, then from January 1, 1996. Prior to January 1, 2006, the bonds of the Forty-fourth Series shall not be redeemable at the option of the Company, or by the operation of Section 4 of the Supplemental Indenture dated as of October 1, 1964 or of Section 2 of this Supplemental Indenture or of the improvement fund provisions of any -9- supplemental indenture other than this Supplemental Indenture or by the use of proceeds of released property. On or after January 1, 2006, any or all of the bonds of the Forty-fourth Series shall be redeemable at the option of the Company, or by operation of various provisions of the Indenture, as supplemented and amended, at any time and from time to time, prior to maturity, upon notice given by mailing the same, by first class mail postage prepaid, not less than thirty nor more than forty-five days prior to the date fixed for redemption to each registered holder of a bond of the Forty-fourth Series to be redeemed (in whole or in part) at the last address of such holder appearing on the registry books, at the principal amount thereof and accrued interest thereon to the date fixed for redemption, together (a), if redeemed otherwise than by the operation of Section 4 of the Supplemental Indenture dated as of October 1, 1964 or of Section 2 of this Supplemental Indenture or of the improvement fund provisions of any supplemental indenture other than this Supplemental Indenture and otherwise than by the use of proceeds of released property, with a regular redemption premium equal to a percentage of the principal amount thereof determined as set forth in the tabulation appearing in the form of the bonds of the Forty-fourth Series hereinbefore set forth, and (b), if redeemed by the operation of Section 4 of the Supplemental Indenture dated as of October 1, 1964 or of Section 2 of this Supplemental Indenture or of the improvement fund provisions of any supplemental indenture other than this Supplemental Indenture or by the use of proceeds of released property, either (i) with a special redemption premium, if any, equal to a percentage of the principal amount thereof determined as set forth in the tabulation appearing in the form of the bonds of the Forty-fourth Series hereinbefore set forth or (ii), if no special redemption premium is so set forth, then without premium. SECTION 2. The Company covenants that, so long as any bonds of the Forty-fourth Series shall be outstanding under the Indenture, it will, on or before June 1 in each year commencing with June 1, 1997: (a) deposit with the Trustee subject to the provisions of this Section cash and/or bonds of any series authenticated under the Indenture then outstanding (taken at their principal amount) in an amount equal to the "improvement fund requirement" (which term, as used in this Section, shall mean for any year an amount equal to one per centum (1%) of the aggregate principal amount of bonds of the Forty-fourth Series authenticated and delivered by the Trustee pursuant to the provisions of Articles IV, V and VI of the Indenture, prior to January 1 of that year, after deducting from such aggregate principal amount the -10- principal amount of bonds of the Forty-fourth Series which, prior to January 1 of that year, have been deposited with the Trustee for cancellation as the basis for the release of property or for the withdrawal of cash representing proceeds of released property or have been purchased or redeemed by the use of proceeds of released property); or (b) to the extent that it does not so deposit cash and/or bonds, certify to the Trustee unfunded net property additions in an amount equal to one hundred sixty-six and two-thirds per centum (166 2/3%) of the portion of the improvement fund requirement not so satisfied. The term "improvement fund certificate", as used in this Section, shall mean an accountant's certificate filed by the Company with the Trustee pursuant to this Section. Such certificate may be a separate certificate or it may be combined with an improvement fund certificate or certificates filed pursuant to the improvement fund provisions of the Indenture or of any other indenture or indentures supplemental thereto. On or before the first day of June in each year, beginning June 1, 1997, so long as any bonds of the Forty-fourth Series are outstanding under the Indenture, the Company shall deliver to the Trustee an improvement fund certificate showing the improvement fund requirement for that year, the amount of cash, if any, and the principal amount of bonds authenticated under the Indenture then outstanding, if any, then to be deposited by the Company with the Trustee and, if the Company elects to satisfy the improvement fund requirement for that year in whole or in part by the certification of unfunded net property additions, the amount, if any, of unfunded net property additions to be certified. The Company shall, concurrently with the delivery to the Trustee of such certificate, deposit with the Trustee the amount of cash, if any, and the principal amount of bonds, if any, shown in such certificate. No property additions shall be certified in any improvement fund certificate pursuant to the provisions of this Section unless there shall be delivered to the Trustee with such certificate the applicable certificates, opinion of counsel, instruments and cash, if any, required by paragraphs (3), (4), (5), (7), (9) and (10) of Section 4.05 of the Indenture showing that the Company has unfunded net property additions equal to the amount so certified. The Trustee shall hold any cash deposited with it under the provisions of this Section as a part of the mortgaged and pledged property until paid out as hereinafter provided. Any cash deposited with the Trustee under the provisions of this Section -11- may, upon receipt by the Trustee of the written order of the Company signed by its President or a Vice President, of a treasurer's certificate such as is described in paragraph (2) of Section 4.05 of the Indenture and of an opinion of counsel, (1) be withdrawn, used or applied by the Company in accordance with the provisions of paragraph (2), (3) or (4) of Section 10.05 of the Indenture, except that any premium required to be paid to purchase or redeem bonds shall be paid out of funds held by the Trustee under this Section and the Company shall not be required to furnish the Trustee with additional funds for such purpose or to reimburse the Trustee or the improvement fund for moneys so paid out. Interest and expenses in connection with purchases or redemptions pursuant to this Section shall be dealt with as provided in Section 9.05 of the Indenture; or (2) be withdrawn by the Company to the extent of sixty per centum (60%) of the amount of unfunded net property additions certified to the Trustee for such purpose, but only upon receipt by the Trustee of the applicable certificates, opinion of counsel, instruments and cash, if any, required by paragraphs (3), (4), (5), (7), (9) and (10) of Section 4.05 of the Indenture, showing that the Company has unfunded net property additions equal to the amount so certified. Bonds deposited with the Trustee pursuant to this Section, or purchased or redeemed by the use of cash deposited pursuant to this Section, shall be cancelled and shall not be thereafter made the basis for the authentication of bonds, the withdrawal, use or application of cash, or the release of property, under any of the provisions of the Indenture, or thereafter used to satisfy the requirements of this Section or of any other improvement fund provided for in the Indenture or in any indenture supplemental thereto or to satisfy any replacement deficit pursuant to Section 4 of the Supplemental Indenture dated as of October 1, 1964. To the extent that unfunded net property additions are certified to the Trustee to satisfy the improvement fund requirement for any year in whole or in part or as a basis for the withdrawal of cash deposited with the Trustee under the provisions of this Section, the amount of such unfunded net property additions shall thereafter be deducted in computing the amount of unfunded net property additions under Section 1.11 of the Indenture and in computing gross property additions under Section 7.07 of the Indenture. SECTION 3. The Company covenants that the provisions of Section 4 of the Supplemental Indenture dated as of October 1, 1964, which are to remain in effect so long as any bonds of the Tenth Series shall be outstanding under the Indenture, shall -12- remain in full force and effect so long as any bonds of the Forty-fourth Series shall be outstanding under the Indenture. The Company covenants that it will not, in any calendar year subsequent to 2005, redeem any bonds of the Forty-fourth Series through the operation of Section 4 of the Supplemental Indenture dated as of October 1, 1964 or this Section in a principal amount that would exceed one per centum (1%) of the aggregate principal amount of bonds of the Forty-fourth Series initially authenticated and delivered under this Supplemental Indenture. SECTION 4. The Company covenants that, so long as any bonds of the Forty-fourth Series shall be outstanding under the Indenture, it will not declare or pay any dividends, or make any other distributions (except (a) dividends payable or distributions made in shares of common stock of the Company and (b) dividends payable in cash in cases where, concurrently with the payment of the dividend, an amount in cash equal to the dividend is received by the Company as a capital contribution or as the proceeds of the issue and sale of shares of its common stock), on or in respect of its common stock, or purchase or otherwise acquire for a consideration any shares of its common stock, if the aggregate of such dividends, distributions and consideration for purchase or other acquisition of shares of its common stock after December 31, 1995, shall exceed (i) the earned surplus of the Company accumulated after December 31, 1995 (determined in accordance with generally accepted accounting principles and without giving effect to charges to earned surplus on account of such dividends, distributions or acquisitions or on account of the disposition of any amounts which may then be classified by the Company on its books as amounts in excess of the original cost of utility plant or to charges or credits to earned surplus on account of items inherent in the balance sheet at December 31, 1995), plus (ii) the earned surplus of the Company accumulated prior to January 1, 1996 in an amount not exceeding $55,500,000, plus (iii) such additional amount as shall be authorized or approved, upon application by the Company, by the Securities and Exchange Commission, or by any successor commission thereto, under the Public Utility Holding Company Act of 1935, as amended. For the purposes of this Section, in determining the earned surplus of the Company accumulated after December 31, 1995, there shall be deducted the dividends accruing subsequent to December 31, 1995 on preferred stock of the Company and the total amount, if any, by which the charges to income or earned surplus since -13- December 31, 1995 as provision for depreciation of the mortgaged and pledged property (other than specially classified property) shall have been less than the sum of the amounts equal to the product of the applicable percentage (as defined in Section 4 of the Supplemental Indenture dated as of October 1, 1964) and the mathematical average of the amounts of depreciable property (as defined in said Section 4) at the opening of business on the first day and at the close of business on the last day of each calendar year (and, proportionately, of each period of months which is less than a calendar year) subsequent to December 31, 1995 included in the period for which earned surplus is being determined. The term "consideration", as used in this Section, shall mean the cash or fair value if the consideration be other than cash, and the term "provision for depreciation", as used in this Section, shall not be deemed to include provision for the amortization of any amounts classified by the Company on its books as amounts in excess of the original cost of utility plant. SECTION 5. As supplemented by this Supplemental Indenture, the Indenture, as heretofore supplemented and amended, is in all respects ratified and confirmed and the Indenture, as heretofore supplemented and amended, and this Supplemental Indenture shall be read, taken and construed as one and the same instrument. SECTION 6. Nothing in this Supplemental Indenture contained shall, or shall be construed to, confer upon any person other than a holder of bonds issued under the Indenture, the Company and the Trustee any right or interest to avail himself of any benefit under any provision of the Indenture, as heretofore supplemented and amended, or of this Supplemental Indenture. SECTION 7. The Trustee assumes no responsibility for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company. SECTION 8. This Supplemental Indenture may be executed in several counterparts and all such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. -14- IN WITNESS WHEREOF, said Gulf Power Company has caused this Supplemental Indenture to be executed in its corporate name by its President or one of its Vice Presidents and its corporate seal to be hereunto affixed and to be attested by its Secretary or one of its Assistant Secretaries, and said The Chase Manhattan Bank (National Association), as Trustee, has caused this Supplemental Indenture to be executed in its corporate name by one of its Vice Presidents and its corporate seal to be hereunto affixed and to be attested by one of its Assistant Secretaries or one of its Trust Officers, in several counterparts, all as of the day and year first above written. GULF POWER COMPANY [SEAL] By:___________________________ A. E. Scarbrough Vice President 500 Bayfront Parkway Pensacola, Florida 32501 Attest: __________________________ Warren E. Tate, Secretary 500 Bayfront Parkway Pensacola, Florida 32501 Signed, sealed and delivered this 22nd day of January, 1996 by GULF POWER COMPANY, in the County of Escambia, State of Florida, in the presence of: __________________________ Linda Malone __________________________ Valerie Blackmon THE CHASE MANHATTAN BANK (National Association), as Trustee By:___________________________ Valerie Dunbar Vice President 4 Chase Metrotech Center Brooklyn, New York 11245 Attest: __________________________ Janet Robinson Corporate Trust Officer 4 Chase Metrotech Center Brooklyn, New York 11245 Signed, sealed and delivered this 23rd day of January 1996 by THE CHASE MANHATTAN BANK (National Association) in the presence of: __________________________ Deirdra N. Ross __________________________ Della K. Benjamin STATE OF FLORIDA ) ) COUNTY OF ESCAMBIA ) The foregoing instrument was acknowledged before me this 22nd day of January, 1996, by A. E. Scarbrough, Vice President of GULF POWER COMPANY, a Maine corporation, on behalf of the corporation. He is personally known to me and did take an oath. ___________________________ Candace Klinglesmith Notary Public - State of Florida County of Escambia [NOTARIAL SEAL] My Commission Expires: 5/18/99 Commission No.: CC 446149 STATE OF NEW YORK ) ) COUNTY OF KINGS ) The foregoing instrument was acknowledged before me this 23rd day of January, 1996, by Valerie Dunbar, a Vice President of THE CHASE MANHATTAN BANK (National Association), a United States corporation, on behalf of the corporation. She is personally known to me and did take an oath. _____________________________ Margaret M. Price Notary Public State of New York [NOTARIAL SEAL] No. 24-4980599 Qualified in Kings County Commission Expires 4/22/97 EX-12 4 Exhibit 12 1/19/96 GULF POWER COMPANY Computation of ratio of earnings to fixed charges for the the five years ended December 31, 1994 and the twelve months ended December 31, 1995 Twelve Months Ended Year ended December 31, December 31, 1990 1991 1992 1993 1994 1995 -------------------------------Thousands of Dollars------------------------------- EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K: Income Before Interest Charges $ 91,083 $ 107,854 $ 98,422 $ 96,088 $ 93,407 $ 92,693 Federal and state income taxes 21,640 36,181 28,569 28,304 40,848 24,871 Deferred income taxes, net 1,837 (3,392) 3,322 5,347 (6,986) 9,315 Deferred investment tax credits - - - - - - AFUDC - Debt funds (1) 95 46 454 656 187 ----------- ---------- ----------- ----------- ----------- ----------- Earnings as defined $ 114,559 $ 140,738 $ 130,359 $ 130,193 $ 127,925 $ 127,066 =========== ========== =========== =========== =========== =========== FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K: Interest on long-term debt $ 43,215 $ 41,665 $ 35,792 $ 31,344 $ 27,124 $ 23,294 Interest on interim obligations 693 280 1,041 870 1,509 2,931 Amort of debt disc, premium and expense, net 603 699 1,032 1,412 1,834 2,014 Other interest charges 2,422 2,272 1,410 2,877 2,442 1,674 ----------- ---------- ----------- ----------- ----------- ----------- Fixed charges as defined $ 46,933 $ 44,916 $ 39,275 $ 36,503 $ 32,909 $ 29,913 =========== ========== =========== =========== =========== =========== RATIO OF EARNINGS TO FIXED CHARGES 2.44 3.13 3.32 3.57 3.89 4.25 ==== ==== ==== ==== ==== ====
EX-23.A 5 Exhibit 23(a) BEGGS & LANE POST OFFICE BOX 12950 PENSACOLA, FLORIDA 32576-2950 (904) 432-2451 January 23, 1996 Gulf Power Company 500 Bayfront Parkway Pensacola, Florida 32501 Ladies and Gentlemen: We hereby consent to the reference to our firm under the caption "Legal Opinions and Experts" in the Prospectus Supplement of Gulf Power Company (the "Company") dated January 17, 1996, relating to $30,000,000 aggregate principal amount of First Mortgage Bonds, 6 7/8% Series due January 1, 2026, and to the filing hereof with the Securities and Exchange Commission as an exhibit to the Company's Current Report on Form 8-K dated January 17, 1996. Very truly yours, /s/Beggs & Lane EX-23.B 6 Exhibit 23(b) ARTHUR ANDERSEN LLP Gulf Power Company: As independent public accountants, we hereby consent to the reference to our firm under the caption "Legal Opinions and Experts" in the Prospectus Supplement of Gulf Power Company dated January 17, 1996. /s/Arthur Andersen LLP January 23, 1996 EX-26.A 7 Exhibit 26(a) GULF POWER COMPANY ____________ NOTICE OF INVITATION FOR PROPOSALS FOR THE PURCHASE OF FIRST MORTGAGE BONDS AND CLASS A PREFERRED STOCK GULF POWER COMPANY is inviting proposals for the purchase from it of its First Mortgage Bonds and Class A Preferred Stock, Cumulative, Par Value $10 Per Share (Stated Capital $25 Per Share), aggregating up to $230,500,000 in principal amount or stated capital, as the case may be. The Bonds and the Stock each may be issued and sold by the Company in one or more series. Proposals are to be submitted to the Company in accordance with such procedures and at such time or times on such day or days as shall be designated by the Company by notice to prospective bidders in writing or by telephone, confirmed in writing, as provided in the terms and conditions relating to proposals. Such notice or notices will also designate the principal amount of Bonds or the number of shares of Stock for which proposals are to be submitted and the term of the Bonds, which shall be not more than 40 years. Copies of a prospectus relating to the Bonds and the Stock and of the terms and conditions relating to proposals for the purchase of the Bonds and the Stock may be obtained at the office of Southern Company Services, Inc., One Wall Street, 42nd Floor, New York, N.Y. Proposals will be considered only from persons who have received copies of such prospectus and only if made in accordance with and subject to such terms and conditions and any notice given by the Company pursuant thereto. Prior to the acceptance of any bid, the bidder will be furnished a copy of a prospectus which meets the requirements of Section 10(a) of the Securities Act of 1933 at that time. GULF POWER COMPANY By TRAVIS J. BOWDEN President and Chief Executive Officer Dated: January 9, 1996. EX-26.B 8 Exhibit 26(b) GULF POWER COMPANY _____________________________ TERMS AND CONDITIONS Relating to Proposals for the Purchase of First Mortgage Bonds and Class A Preferred Stock January 9, 1996 GULF POWER COMPANY (the "Company") hereby invites proposals, subject to the terms and conditions hereof, for the purchase from it of its First Mortgage Bonds, to mature on a date or dates to be determined as provided in Section 4 hereof, and Class A Preferred Stock (Par Value $10 Per Share, Stated Capital $25 Per Share), aggregating up to $230,500,000 in principal amount or stated capital, as the case may be. Such First Mortgage Bonds and such Class A Preferred Stock (collectively, the "Securities") each may be issued and sold by the Company in one or more series. As used herein, the terms "Bonds" and "Stock" mean the First Mortgage Bonds or Class A Preferred Stock of each such series. A brief summary of the terms of the Securities is contained in the Registration Statement and Prospectus referred to below. 1. INFORMATION RESPECTING THE COMPANY AND THE SECURITIES Prospective bidders may examine, at the office of Southern Company Services, Inc., One Wall Street, 42nd Floor, New York, N.Y. 10005, at any time during business hours, the following: (a) the form of proposed Supplemental Indenture, between the Company and The Chase Manhattan Bank (National Association), New York, New York, as Trustee, under which the Bonds are to be issued and secured; (b) the form of the proposed amendment to the Company's articles of incorporation creating the Stock; (c) the Registration Statement (including exhibits) with respect to the Securities, in the form in which it has become effective, and the related Prospectus (including the documents incorporated therein by reference pursuant to Item 12 of Form S-3); (d) the separate forms of proposal, to be used by bidders in offering to purchase the Bonds and the Stock (each a "Form of Proposal"), which include the forms of contract for the purchase of the Bonds and the Stock (each a "Purchase Contract"); (e) the form of questionnaire, to be used by prospective bidders in furnishing information to the Company and the Trustee and, in the case of a group of bidders, in designating the Representative of the members of such group, referred to in Section 2 hereof; (f) the statement on Form U-1 (including exhibits) as filed with the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935, as amended, with respect to the Securities, and the order or orders of the Securities and Exchange Commission with respect thereto; (g) the order or orders of the Florida Public Service Commission with respect to the issuance of the Securities; and (h) memorandum by Dewey Ballantine (referred to in Section 9 hereof) with respect to the necessity for the qualification of the Securities for sale under the securities or "blue sky" laws of various jurisdictions. Copies of said documents in reasonable quantities (except certain exhibits to the Registration Statement and statement on Form U-1) will be supplied on request, so long as available, to prospective bidders. The Company reserves the right to amend or supplement such Registration Statement, Prospectus (including the documents incorporated therein by reference pursuant to Item 12 of Form S-3) and statement on Form U-1, and to make changes in the form of any documents relating to the issuance of the Securities. The Company will furnish copies of such amendments, supplements or changes and of any filing pursuant to Section 13 or 14 of the Securities Exchange Act of 1934, as amended, to Dewey Ballantine (referred to in Section 9 hereof) and, on request, to any prospective bidder who shall have furnished a questionnaire to the Company as provided in Section 2 hereof, or to the Representative of any group of prospective bidders designated as provided in Section 2 hereof. 2. INFORMATION RESPECTING THE BIDDERS TO BE FURNISHED THE COMPANY No proposal will be considered unless the bidder (or, in the case of a group of bidders, each bidder) shall have furnished to the Company in triplicate, at the office of Southern Company Services, Inc., One Wall Street, 42nd Floor, New York, N.Y. 10005, not less than two hours prior to the time for submission of proposals, the form of questionnaire referred to above, properly filled out and signed. The Company, however, reserves the right to waive any irregularity in any questionnaire and to extend, either generally or in specific instances, the time for furnishing questionnaires and to permit the furnishing of information required by the form of questionnaire by facsimile transmission or other means of communication satisfactory to it. Notwithstanding the furnishing of such questionnaires to the Company, any prospective bidder or group of prospective bidders may thereafter determine not to bid, or any of the several members of a group may withdraw therefrom and may thereafter determine not to bid or determine to bid as a member of some other group. One or more additional members may be included in a group, with the consent of the Company, after the time (or any extended time) for furnishing questionnaires, if the information required by the form of questionnaire as to each such additional member is furnished to the Company, at or before the time fixed by the Company for such purpose, by means of a -2- questionnaire properly filled out and signed or by such other means as the Company may have approved for such purpose. In the case of a proposal by a group of bidders, the several bidders in the group shall act through a duly authorized representative or representatives (the "Representative"), who may be included in such group, and who shall be designated by each member of such group in, or in the manner authorized by, the form of questionnaire furnished by such member. In case the Representative so designated consists of two or more persons, the Company shall be entitled to assume in all matters contemplated hereby that any one of such persons is fully authorized to act on behalf of the Representative. 3. CONTENTS OF PROPOSALS Each proposal must be for the purchase of all the Bonds or Stock, as the case may be, designated by the Company as provided in Section 4 hereof and may be made by a single bidder or by a group of bidders. In case the proposal of a group of bidders is accepted in writing by the Company, the obligations of the members of the group shall be several, and not joint, to purchase the respective principal amounts of the Bonds or numbers of shares of Stock, as the case may be, indicated in the proposal. No bidder (including in such term for the purpose of this restriction any and all affiliates of a specified bidder) may submit or participate in more than one proposal for the purchase of a particular series of the Securities. Each proposal for the purchase of Bonds shall specify the interest rate (which shall be an integral multiple of .01% or 1/8 of 1%) and the price (exclusive of accrued interest) to be paid to the Company for the Bonds (which shall not be less than 98%, nor more than 101 3/4%, of the principal amount of the Bonds proposed to be purchased). Accrued interest from the first day of the calendar month during which the Bonds are issued to the date of payment and delivery also will be paid to the Company by the purchaser or purchasers. Each proposal for the purchase of Stock shall specify (a) the annual dividend rate (which shall be an integral multiple of .01%) or, if the Company shall have given notice as provided in Section 4 hereof that the Stock will have an adjustable dividend rate, the Applicable Rate Adjustment (hereinafter defined), (b) the price to be paid to the Company for the Stock (which shall be not less than 100% nor more than 102% of the stated capital per share), which shall also be the price (exclusive of accrued dividends, if any) at which the Stock shall be initially offered to the public, and (c) the amount per share to be paid by the Company as compensation to the Representative for the accounts of the respective purchasers under the Purchase Contract for their services in purchasing and making a public offering of the Stock. The "Applicable Rate Adjustment" (which shall be an integral multiple of .01%) is the premium or discount to be used in calculating the Applicable Rate (as defined in a supplement to the Prospectus with respect to the Securities) from time to time in effect if the Stock will have an adjustable dividend rate. -3- A proposal confirmed in writing as provided in Section 4 hereof on behalf of a group of bidders shall give the names of the members in the group but may, at the time of submission, omit the amounts or numbers of Securities to be purchased by the members of such group; but, in the case of such omission, the Representative, on behalf of the successful bidders, shall, and by the submission of such proposal agrees to, insert promptly in Exhibit A to the Form of Proposal, prior to its acceptance in writing by the Company and in any event within one hour after the time fixed for the submission of proposals, the respective amounts or numbers of Securities to be purchased severally by such bidders, all with the same force and effect as if the same had been included in such proposal at the time of the submission thereof. The Representative submitting a successful proposal may, forthwith upon discovery, correct any error which it has made in the proposal in specifying the bidders or the amount or number of Securities to be purchased by any bidder or bidders at a different amount or number than authorized by such bidder or bidders; and if, after all such corrections, a proposal is accepted which provides for the purchase of less than all or more than all of the Securities, the Representative submitting such proposal shall be deemed to have increased or decreased, as the case may be, to the extent of the discrepancy, the amount or number of Securities offered to be purchased by it. In case such Representative consists of two or more persons, such increase or decrease in the amount or number of Securities shall be allocated between or among them as they shall agree; provided that, if there shall be no such agreement, then such increase or decrease shall be allocated between or among them in proportion to the amount or number of Securities set forth opposite their respective names in Exhibit A attached to the Form of Proposal. If in the case of a decrease the discrepancy is greater than the amount or number of Securities offered to be purchased by the Representative, then to the extent that the discrepancy is greater than such amount or number, the amount or number of Securities offered to be purchased by each other bidder shall be proportionately reduced. Any correction or adjustment in the amount or number of Securities or in the specification of any bidder made or provided for hereunder shall, for all purposes of the Purchase Contract, be or be deemed to have been reflected in Exhibit A attached to the Form of Proposal. 4. SUBMISSION OF PROPOSALS All proposals must be submitted to the Company in accordance with such procedures and at such time or times on such day or days as shall be designated by the Company by notice in writing or by telephone, confirmed in writing. The Company in its discretion may, but will not be obligated to, give any such notice to any prospective bidder who shall have furnished a questionnaire to the Company as provided in Section 2 hereof, or to the Representative of any group of prospective bidders designated as provided in Section 2 hereof, or to any other prospective bidders. The Company shall designate in each such notice the principal amount of Bonds or the number of shares of Stock, as the case may be, for which proposals are to be submitted at such time. Each such notice with respect to Bonds will also designate the -4- term thereof, which shall be not more than 40 years. Each such notice with respect to Stock also will state whether there will be any sinking or purchase fund therefor and, if so, the terms and conditions thereof; and whether the Stock will have an adjustable dividend rate and, if so, (a) the minimum and maximum dividend rates, (b) the "Base Rate" to be used in calculating the "Initial Dividend Rate" and (c) the date through which the "Initial Dividend Rate" shall be in effect. In the event that the Company shall give notice that the Stock will have an adjustable dividend rate, the "Initial Dividend Rate", applicable only through the date designated by the Company in such notice, shall be the "Base Rate" so designated plus or minus the Applicable Rate Adjustment specified in the successful proposal. All proposals must be confirmed in writing on the appropriate Form of Proposal, signed by the Representative on behalf of the members of a group of bidders, or in the case of a single bidder by such bidder with appropriate changes in the text of the Form of Proposal. The Company reserves the right in its discretion from time to time to postpone any time for submission of proposals designated as provided herein. 5. ACCEPTANCE OR REJECTION OF PROPOSALS All proposals will be received by the Company in accordance with the procedures and at the time or times designated as provided in Section 4 hereof. Within three hours after each time designated for the submission of proposals, the Company (subject to the provisions of the next following paragraph) will by announcement accept the proposal which results in the lowest "annual cost of money" to it for the Bonds or Stock, as the case may be, determined by the Company in accordance with the formulae set forth in Section 6 hereof, and any proposal not so accepted within such time shall be deemed to have been rejected. Each proposal will be accepted or rejected in its entirety. In case the Company shall receive two or more proposals resulting in an identical lowest "annual cost of money" for the Bonds or Stock, as the case may be, the Company (subject to the provisions of the next following paragraph) will forthwith afford to the bidders making such identical proposals an opportunity to improve their bids. Thereupon, if no improved bid shall be made, or if two or more proposals again result in an identical lowest "annual cost of money" for the Bonds or Stock, as the case may be, the Company may accept any one of such proposals in its discretion. If in the case of identical proposals a bid is not being improved, the proposal submitted by the bidder or group of bidders making such proposal need not be resubmitted to be considered. The Company reserves the right (a) to reject all proposals at or after the submission thereof, and (b) to reject the proposal of any bidder or of any group of bidders (i) if such bidder or any member of such group of bidders is in such relationship with The Chase Manhattan Bank (National Association) or its parent, The Chase Manhattan Corporation, as would disqualify said bank from acting as Trustee under the Company's Indenture dated as of September 1, -5- 1941, as supplemented, if the proposal of such bidder or group of bidders should be accepted; (ii) if the Company, in the opinion of its counsel, may not lawfully sell the Bonds or Stock, as the case may be, to such bidder or to any member of such group of bidders and, in either of such events in the case of a group of bidders, if within one hour after the time at which the bids are required to be submitted, the member or members of such group causing such disqualification or illegality have not withdrawn from the group and the remaining members, including substituted members, if any, have not agreed to purchase the Bonds or Stock, as the case may be, which such withdrawing member or members had proposed to purchase; (iii) if, in the opinion of the Company, such bidder or group of bidders would not be able to comply with the terms of the Purchase Contract if such proposal were accepted; or (iv) if, in the opinion of counsel for the Company, the Company would not be able to comply with the terms of the Purchase Contract if such proposal were accepted. The proposal of any bidder or group of bidders rejected by the Company by reason of clause (b) of this paragraph shall be disregarded solely for the purpose of determining the proposal which results in the lowest "annual cost of money" for the Bonds or Stock, as the case may be. Prior to the acceptance by the Company of any proposal, the bidder or bidders thereunder will be furnished a copy of a prospectus relating to the Securities which meets the requirements of Section 10(a) of the Securities Act of 1933, as amended, at that time. 6. DETERMINATION OF "ANNUAL COST OF MONEY" The "annual cost of money" to the Company for the Securities will be determined by the Company, such determination by the Company to be final, as follows: The "annual cost of money" with respect to each proposal for the purchase of Bonds will be determined as twice the semi-annual rate necessary to discount the semi-annual debt service payments (interest or interest and principal, as due) to amounts which in the aggregate equal the purchase price for the Bonds, exclusive of accrued interest. For this purpose the entire principal amount of the Bonds shall be deemed to remain outstanding during the term thereof designated by the Company as provided in Section 4 hereof. The "annual cost of money" for each bid will be expressed as a percentage and will be rounded to the fourth decimal place. The "annual cost of money" with respect to each proposal for the purchase of Stock shall be determined by dividing the annual dollar amount of the dividend based upon the dividend rate specified in such proposal (or, if the Stock will have an adjustable dividend rate, the annual dollar amount of the dividend based upon a rate equal to the "Base Rate" designated by the Company plus or minus the Applicable Rate Adjustment specified in such proposal) by the price per share specified in such proposal to be paid to the Company after deducting the compensation per share to be paid by the Company. -6- 7. DETERMINATION OF REDEMPTION PROVISIONS As soon as practicable after the acceptance in writing of a successful proposal for Bonds, the premiums payable upon redemption of the Bonds will be determined by the Company, such determination by the Company to be final, as follows: (a) The term "redemption period" shall mean the twelve months' period beginning on the first day of the calendar month during which the Bonds are issued, beginning with the calendar year during which the Bonds are issued, and ending on the last day of the preceding calendar month of the next succeeding calendar year. (b) The regular redemption price for the first redemption period shall be the initial public offering price of the Bonds (stated as a percentage of their principal amount) plus a percentage of their principal amount equal to the interest rate of the Bonds, such redemption price being hereinafter referred to as the "initial redemption price"; and for each redemption period thereafter, the regular redemption price, before any adjustment pursuant to paragraph (d) below, shall be the initial redemption price decreased for each one of such redemption periods by an amount equal to the Applicable Fraction (as defined below) of the excess of the initial redemption price over the principal amount until the redemption period, if any, for which the regular redemption price shall be reduced to the principal amount of the Bonds; provided that, if the regular redemption price for any redemption period as so calculated would be less than the special redemption price for the same redemption period calculated as hereinafter provided (except for any redemption period for which the regular redemption price would be reduced to the principal amount of the Bonds), then the regular redemption price for such period shall be increased to and shall be the same as the special redemption price for such period; in each case, together with accrued interest to the date fixed for redemption; provided, however, that, except as the Company may otherwise specify by notice, none of the Bonds shall be redeemed at a regular redemption price prior to a date five years from the first day of the calendar month during which the Bonds are issued if such redemption is for the purpose or in anticipation of refunding such Bond through the use, directly or indirectly, of funds borrowed by the Company at an effective interest cost to the Company (computed in accordance with generally accepted financial practice) of less than the effective interest cost to the Company of the Bonds. The term "Applicable Fraction", as used herein, means a fraction the numerator of which is one and the denominator of which is the lesser of (i) 20 and (ii) the term of the Bonds minus three; provided, however, that the denominator shall never be less than four. (c) The special redemption price for any redemption period shall be such amount as will produce a yield from the first day of the period -7- to the date of maturity which will be equal to the yield to maturity calculated on the initial public offering price, a term equal to the term of the Bonds and the interest rate of the Bonds; provided that, if the yield to maturity, as so computed, does not result in a multiple of 1/100th of 1%, it shall be reduced to the next lower such multiple; and except that, for any redemption period for which the regular redemption price shall be the principal amount of the Bonds, the special redemption price for such period shall likewise be the principal amount of the Bonds; and except that, if the initial public offering price of the Bonds is the principal amount thereof or less, the special redemption price during all redemption periods shall be the principal amount of the Bonds; in each case, together with accrued interest to the date fixed for redemption. (d) For any period in which the excess of the redemption price over the principal amount is a multiple of 1/100th of 1% (determined by expressing the redemption price as a percentage and rounding to the fourth decimal place), the excess shall be the redemption premium; for each other period the excess increased to the next higher such multiple of 1/100th of 1% shall be the redemption premium; provided that the special redemption price shall never be more than the greater of the principal amount of the Bonds or the initial public offering price of the Bonds. The initial public offering price of the Bonds for the purpose of the above determinations shall be the price (exclusive of accrued interest) at which the Bonds are to be initially offered for sale to the public by the successful bidder or bidders as set forth in the Prospectus Supplement to be prepared following the acceptance of a successful bid; provided, however, that in the event the successful bidder or bidders shall specify at the time of acceptance of the successful bid that they do not intend to make an immediate public offering of the Bonds, the initial public offering price shall, for this purpose, be deemed to be the price (exclusive of accrued interest) to be paid by the successful bidder or bidders to the Company. As soon as practicable after the acceptance in writing of a successful proposal for Stock, the redemption prices of the Stock will be determined by the Company, such determination by the Company to be final, and shall be an amount equal to the initial public offering price of the Stock, plus an amount per share (expressed in dollars and cents) equal to (a) if the Stock will not have an adjustable dividend rate, the annual dividend if the date of redemption is on or prior to the fifth anniversary of the first day of the calendar month during which the Stock is issued (the "Key Date"), and without premium for redemptions thereafter, or (b) if the Stock will have an adjustable dividend rate, the annual dividend calculated based upon the "Initial Dividend Rate" if the date of redemption is on or prior to the fifth anniversary of the Key Date, and without premium for redemptions thereafter, to which shall be added accrued dividends in each case to the date of redemption; provided, however, that no share of the Stock shall be redeemed -8- prior to the fifth anniversary of the Key Date, if such redemption is for the purpose or in anticipation of refunding such share directly or indirectly through the incurring of debt, or through the issuance of stock ranking equally with or prior to the Stock as to dividends or assets, if such debt has an effective interest cost to the Company (computed in accordance with generally accepted financial practice) or such stock has an effective dividend cost to the Company (so computed) of less than the effective dividend cost to the Company of the Stock (if the Stock will have an adjustable dividend rate, the effective dividend cost to the Company of the Stock to be based upon the "Initial Dividend Rate"). If any redemption price, as so computed, does not result in a multiple of one cent, it shall be increased to the next higher such multiple. The initial public offering price of the Stock for the purpose of the above determinations shall be the price (exclusive of accrued dividends, if any) at which the Stock is to be initially offered for sale to the public by the successful bidder or bidders as set forth in the Prospectus Supplement to be prepared following the acceptance of the successful bid. 8. PURCHASE CONTRACT AND PROSPECTUS SUPPLEMENT Forthwith upon the acceptance in writing of a proposal, (a) the Purchase Contract shall become effective without any separate execution thereof and shall constitute the agreement between the Company and the successful bidder or bidders; (b) the successful bidder, or, in the case of a proposal by a group of bidders, the Representative on behalf of the successful bidders, shall furnish to the Company in writing the information regarding the bidders and the public offering, if any, as is required to complete a Prospectus Supplement and any further information regarding the bidders and the public offering, if any, as is required to complete the statement in respect of the Securities filed by the Company under the Pubic Utility Holding Company Act of 1935, as amended, or which may be required by the Florida Public Service Commission; and (c) upon performance by the successful bidder or bidders, and their Representative, of their obligations under Sections 3, 4 and 8 hereof, all rights of the Company and of the successful bidder or bidders under an accepted proposal shall be determined solely in accordance with the terms of the Purchase Contract. 9. OPINION OF COUNSEL FOR THE PURCHASERS Dewey Ballantine, 1301 Avenue of the Americas, New York, New York, have been selected by the Company as counsel for the purchasers to give to each successful bidder or bidders an opinion with respect to the Bonds or Stock, as the case may be, substantially in the respective forms attached as Exhibit 3 to the Purchase Contract. Such counsel have participated in the preparation of certain of the documents under which the Securities are to be issued and have reviewed or will review the corporate proceedings with respect to the Securities and the proceedings before the Florida Public Service Commission and the Securities and Exchange Commission and the order or orders of said -9- commissions with respect to the Securities. Their compensation and disbursements are, under the terms of the Purchase Contract, to be paid by the successful bidder or bidders, except as otherwise provided in the Purchase Contract. Such counsel will, on request, advise any prospective bidder, or the Representative of any group of prospective bidders, of the amount of such compensation and of the estimated amount of such disbursements to be paid by the successful bidder or bidders for the Securities. -10- 10. WAIVER OF IRREGULARITIES The Company reserves the right to waive any failure on the part of any bidder or group of bidders to comply with the terms and conditions hereof. GULF POWER COMPANY By TRAVIS J. BOWDEN President and Chief Executive Officer -11- -----END PRIVACY-ENHANCED MESSAGE-----