Document:

Exhibit 10.1

                                EXECUTION VERSION

                                CREDIT AGREEMENT

                          Dated as of November 15, 2001

                                      Among

                             SOUTHERN POWER COMPANY
                                   as Borrower

                                       and

                        THE INITIAL LENDERS NAMED HEREIN
                               as Initial Lenders

                                       and

                                 CITIBANK, N.A.
                                    as Agent

                            SALOMON SMITH BARNEY INC.
                     as Lead Arranger and Syndication Agent

                       THE BANK OF TOKYO-MITSUBISHI, LTD.
                                 as Co-Arranger

            BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH
                                 as Co-Arranger

               COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
                                 as Co-Arranger

                      THE INDUSTRIAL BANK OF JAPAN, LIMITED
                                 as Co-Arranger

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<TABLE>
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                                TABLE OF CONTENTS

                                                                                                                Page

                                    Article I

                        DEFINITIONS AND ACCOUNTING TERMS

<S>                   <C>                                                                                        <C>
SECTION 1.01.         Certain Defined Terms.......................................................................1
SECTION 1.02.         Computation of Time Periods................................................................30
SECTION 1.03.         Accounting Terms...........................................................................30
SECTION 1.04.         Interpretation.............................................................................30

                                   Article II

                        AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01.         The Advances...............................................................................31
SECTION 2.02.         Making the Advances........................................................................32
SECTION 2.03.         Fees.......................................................................................34
SECTION 2.04.         Termination or Reduction of the Commitments................................................34
SECTION 2.05.         Repayment of the Advances..................................................................34
SECTION 2.06.         Interest on the Advances...................................................................34
SECTION 2.07.         Interest Rate Determination................................................................35
SECTION 2.08.         Optional Conversion of the Advances........................................................37
SECTION 2.09.         Prepayments................................................................................37
SECTION 2.10.         Increased Costs............................................................................39
SECTION 2.11.         Illegality.................................................................................39
SECTION 2.12.         Payments and Computations..................................................................40
SECTION 2.13.         Taxes......................................................................................41
SECTION 2.14.         Sharing of Payments, Etc...................................................................43
SECTION 2.15.         Reservation of CP Commitments..............................................................44
SECTION 2.16.         Use of Proceeds............................................................................45

                                   Article III

                     CONDITIONS TO EFFECTIVENESS AND LENDING

SECTION 3.01.         Conditions Precedent to Effectiveness of Sections 2.01 and 2.15............................45
SECTION 3.02.         Conditions Precedent to the Initial Advances for Each Initial Project......................47
SECTION 3.03.         Conditions Precedent to Subsequent Advances for an Initial Project.........................48
SECTION 3.04.         Conditions Precedent to the Initial Advances for Each Subsequent Project...................49
SECTION 3.05.         Conditions Precedent to Subsequent Advances for a Subsequent Project.......................54
SECTION 3.06.         Conditions Precedent to CP Commitment Reservations.........................................55
SECTION 3.07.         Conditions Precedent to the Working Capital and CP Advances................................56
SECTION 3.08.         Determinations Under Sections 3.01 Through 3.07, Inclusive.................................56
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                                   Article IV

                         REPRESENTATIONS AND WARRANTIES

SECTION 4.01.         Representations and Warranties of the Borrower.............................................57

                                    Article V

                            COVENANTS OF THE BORROWER

SECTION 5.01.         Affirmative Covenants......................................................................60
SECTION 5.02.         Negative Covenants.........................................................................66

                                   Article VI

                                EVENTS OF DEFAULT

SECTION 6.01.         Events of Default..........................................................................70

                                   Article VII

                                    THE AGENT

SECTION 7.01.         Authorization and Action...................................................................72
SECTION 7.02.         Agent's Reliance, Etc......................................................................72
SECTION 7.03.         Citibank and Affiliates....................................................................73
SECTION 7.04.         Lender Credit Decision.....................................................................73
SECTION 7.05.         Indemnification............................................................................73
SECTION 7.06.         Successor Agent............................................................................73

                                  Article VIII

                                  MISCELLANEOUS

SECTION 8.01.         Amendments, Etc............................................................................74
SECTION 8.02.         Notices, Etc...............................................................................75
SECTION 8.03.         No Waiver; Remedies........................................................................76
SECTION 8.04.         Costs and Expenses, Etc....................................................................76
SECTION 8.05.         Right of Set-off...........................................................................79
SECTION 8.06.         Binding Effect.............................................................................79
SECTION 8.07.         Assignments and Participations.............................................................79
SECTION 8.08.         Confidentiality............................................................................83
SECTION 8.09.         Governing Law..............................................................................85
SECTION 8.10.         Execution in Counterparts..................................................................85
SECTION 8.11.         Jurisdiction, Etc..........................................................................85
SECTION 8.12.         No Bankruptcy Proceedings..................................................................86
SECTION 8.13.         Waiver of Jury Trial.......................................................................86
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Schedules
---------

Schedule I        -        List of Commitments and Applicable Lending Offices

Schedule II       -        Terms of Subordination

Schedule III      -        Project Limits for Initial Projects

Schedule IV       -        Scheduled Completion Date, Guaranteed Heat Rate and Guaranteed Output for Each Initial Project

Schedule V        -        Testing Procedures and Reliability Test

Exhibits

Exhibit A         -        Form of Note

Exhibit B         -        Form of Notice of Utilization

Exhibit C         -        Form of Assignment and Acceptance

Exhibit D         -        Form of Confidentiality Agreement

Exhibit E         -        Form of Opinions of Counsel for the Loan Parties

Exhibit F         -        Form of Designation Agreement

Exhibit G         -        Form of Southern Equity Agreement

Exhibit H         -        Form of Southern Completion Guarantee

Exhibit I-1       -        Form of Independent Engineer and Environmental Consultant Certificate (for Funds Availability Date)

Exhibit I-2       -        Form of Independent Engineer and Environmental Consultant Certificate (other than for Funds Availability
                           Date)

Exhibit I-3       -        Form of Independent Engineer and Environmental Consultant Bring-Down Certificate

Exhibit J-1       -        Form of Independent Insurance Consultant Certificate (for Funds Availability Date)

Exhibit J-2       -        Form of Independent Insurance Consultant Certificate (other than for Funds Availability Date)

Exhibit J-3       -        Form of Independent Insurance Consultant Bring-Down Certificate

Exhibit K-1       -        Form of Independent Market Consultant Certificate (for Funds Availability Date)

Exhibit K-2       -        Form of Independent Market Consultant Certificate  (other than for Funds Availability Date)

Exhibit K-3       -        Form of Independent Market Consultant Bring-Down Certificate

Exhibit L-1       -        Form of Substantial Completion Certificate

Exhibit L-2       -        Form of Final Completion Certificate

Exhibit M         -        Form of Development Authority Sale/Leaseback Letter

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                                CREDIT AGREEMENT

                          Dated as of November 15, 2001

                  SOUTHERN POWER COMPANY, a Delaware corporation (the
"Borrower"), the financial institutions listed on the signature pages of this
agreement (the "Initial Lenders") and CITIBANK, N.A. ("Citibank"), as
administrative agent (the "Agent") for the Lenders (as hereinafter defined),
agree as follows:

Article I

                        DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.     Certain Defined Terms.
                  ---------------------

                  As used in this Agreement, the following terms shall have the
following meanings:

                  "Acceptable Credit Party" means any Person whose corporate
         credit rating is, or whose unsecured, non-credit enhanced long-term
         debt securities are, rated not less than "BBB" and "Baa2" by S&P and
         Moody's, respectively.

                  "Acceptable Credit Support" means, with respect to any Power
         Purchase Agreement, any of the following in form and substance
         reasonably satisfactory to the Majority Lenders: (a) a guaranty from an
         Acceptable Credit Party; (b) an irrevocable standby letter of credit,
         with a tenor not less than the term of such Power Purchase Agreement
         (or, if shorter than such term, which may be drawn if not automatically
         renewed prior to the stated maturity of such Power Purchase Agreement)
         and issued by a financial institution organized under the laws of the
         United States, or any state thereof, or the New York City branch of a
         commercial bank organized under the laws of any other country that is a
         member of the Organization for Economic Cooperation and Development or
         has concluded special lending arrangements with the International
         Monetary Fund associated with its General Arrangements to Borrow, or a
         political subdivision of any such country, in each case, whose
         unsecured, non-credit enhanced long-term debt securities are rated at
         least "A" by S&P and "A2" by Moody's and which has a combined capital
         and surplus of at least $1,000 million; or (c) any other instrument
         reasonably acceptable to the Majority Lenders.

                  "Acceptable PPA Counterparty" means, with respect to any Power
         Purchase Agreement, any Person which is (a) an Acceptable Credit Party,
         or whose obligations under such Power Purchase Agreement are secured by
         Acceptable Credit Support until the stated maturity of such Power
         Purchase Agreement; or (b) with respect to Power Purchase Agreements
         for not more than twenty percent (20%) of the total output of all
         Plants only, any Person (i) whose corporate credit rating is, or whose
         unsecured, non-credit enhanced long-term debt securities are, rated not
         less than "BBB-" and "Baa3" by S&P and Moody's, respectively; or (ii)
         whose obligations under such Power Purchase Agreement are secured by a
         Person whose corporate credit rating is, or whose unsecured, non-credit
         enhanced long-term debt securities are, rated not less than "BBB-" and
         "Baa3" by S&P and Moody's, respectively, until the stated maturity of
         such Power Purchase Agreement.

                  "Adjusted Project Budget" means, for each Project, the project
         budget for such Project setting forth the adjusted Project Costs for
         such Project (as compared to its Initial Project Budget), prepared in
         the same format as its Initial Project Budget and certified by the
         Borrower to be complete and correct, and delivered to the Agent by the
         Borrower at (a) the time of any change in the Project Limit for such
         Project pursuant to Section 2.01(b); and (b) the earlier of the
         Non-Recourse Date for such Project and the Refinancing Date with
         respect to such Project.

                  "Advance" means an advance by a Lender to the Borrower
         pursuant to Article II and refers, as the context may require, (a) to a
         Base Rate Advance or a Eurodollar Rate Advance (each of which shall be
         a "Type" of Advance); or (b) to a Project Advance, a Working Capital
         Advance or a CP Advance (each of which shall be a "Category" of
         Advance).

                  "Affiliate" means, as to any Person (other than an
         individual), any other Person (other than an individual) that, directly
         or indirectly through one or more intermediaries, Controls, is
         Controlled by or is under common Control with such Person.

                  "Affiliate Subordinated Debt" means Debt of the Borrower which
         is subordinated to the Borrower's obligations under the Facility on
         terms and conditions specified in Schedule II and which is owed to or
         held by an Affiliate of the Borrower other than a Subsidiary of the
         Borrower.

                  "Agent" has the meaning set forth in the introductory
paragraph to this Agreement.

                  "Agent's Account" means the account of the Agent maintained by
         the Agent at Citibank with its office at 2 Penns Way, Suite 200, New
         Castle, DE 19720, Account No. 36852248, Attention: Dave Graber re
         Southern Power Company.

                  "Agreement" means this agreement.

                  "Applicable Commitment Fee Percentage" means, as of any date,
         a percentage per annum determined by reference to the Rating Level in
         effect on such date and whether such date is a Low Use Date or a High
         Use Date, as set forth below:

                             Applicable Commitment      Applicable Commitment
             Rating Level      Fee Percentage on          Fee Percentage on
                                 Low Use Date               High Use Date
           ---------------------------------------------------------------
                Level 1             0.300%                     0.200%
           ---------------------------------------------------------------
                Level 2             0.350%                     0.250%
           ---------------------------------------------------------------
                Level 3             0.400%                     0.300%
           ---------------------------------------------------------------
                Level 4             0.475%                     0.375%
           ---------------------------------------------------------------
                Level 5             0.550%                     0.450%
           ---------------------------------------------------------------

                  "Applicable Lending Office" means, with respect to each
         Lender, such Lender's Domestic Lending Office in the case of a Base
         Rate Advance and such Lender's Eurodollar Lending Office in the case of
         a Eurodollar Rate Advance.

                  "Applicable Margin" means, as of any date:

(a)      with respect to Base Rate Advances, 0% per annum; and

(b)               with respect to Eurodollar Rate Advances, a percentage per
                  annum determined by reference to the Rating Level in effect on
                  such date and whether such date is a Low Use Date or a High
                  Use Date, as set forth below:

                  --------------------------------------------------------------
                   Rating Level  Applicable Margin    Applicable Margin on High
                                 on Low Use Date               Use Date
                 ---------------------------------------------------------------
                      Level 1          1.125%                        1.250%
                 ---------------------------------------------------------------
                      Level 2          1.250%                        1.375%
                 ---------------------------------------------------------------
                      Level 3          1.500%                        1.625%
                 ---------------------------------------------------------------
                      Level 4          2.500%                        2.625%
                 ---------------------------------------------------------------
                      Level 5          2.750%                        2.875%
                 ---------------------------------------------------------------

                  "Arrangers" means, collectively, the Lead Arranger and the
          Co-Arrangers; each individually, an "Arranger".

                  "Assets" means, with respect to any Person, all or any part of
         its business, property and assets, both tangible and intangible,
         wherever situated.

                  "Assignment and Acceptance" means an assignment and acceptance
         entered into by a Lender and one or more Eligible Assignees (or other
         Persons approved by the Borrower and the Agent), and, if required under
         this Agreement, accepted by the Agent and the Borrower, in
         substantially the form of Exhibit C.

                  "Autaugaville 1 Project" means the approximately 618MW
         gas-fired electric generation plant constructed or to be constructed by
         the Borrower or an Affiliate of the Borrower in Autauga County, Alabama
         with an expected completion date in June 2003, and which is not the
         Autaugaville 2 Project.

                  "Autaugaville 2 Project" means the approximately 618MW
         gas-fired electric generation plant constructed or to be constructed by
         the Borrower or an Affiliate of the Borrower in Autauga County, Alabama
         with an expected completion date in June 2003, and which is not the
         Autaugaville 1 Project.

                  "Availability Period" means the period from the Funds
         Availability Date until the Final Maturity Date.

                  "Base Case Projections" means the Initial Base Case
         Projections or, if the Agent has received any Project Base Case
         Projections pursuant to Section 3.04, the then most recent Updated Base
         Case Projections.

                  "Base Rate" means for any day, a rate per annum (rounded
         upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
         (a) the Federal Funds Effective Rate as in effect at such time plus
         0.5%; and (b) the per annum rate of interest from time to time publicly
         announced by the Agent at its principal office in the United States as
         its base lending rate for domestic (United States) commercial loans
         (which rate may not be the lowest rate of interest charged by the Agent
         in connection with extensions of credit to its other customers);
         provided that (i) if for any reason the Agent shall have determined
         (which determination shall be conclusive absent manifest error) that it
         is unable to ascertain the Federal Funds Effective Rate for any reason,
         the Base Rate shall be determined without regard to clause (a) of this
         definition until the circumstances giving rise to such inability no
         longer exist; and (ii) any change in the Base Rate due to a change in
         the rate referred to in clause (b) of this definition or in the Federal
         Funds Effective Rate shall be effective as of the opening of business
         on the date of such change in the rate referred to in such clause (b)
         or the Federal Funds Effective Rate, respectively.

                  "Base Rate Advance" means an Advance that bears interest as
         provided in Section 2.06(a)(i).

                  "Baseload" means, on any date, an electric generation plant
         which is projected (in the then most recent Independent Market
         Consultant report delivered pursuant to Article III or Section 5.01(r))
         to have an average Capacity Factor of 65% or more during the Remaining
         Base Case Period.

                  "Borrower" has the meaning set forth in the introductory
         paragraph to this Agreement.

                  "Borrower Group Members" means, collectively, the Borrower and
         all Relevant Subsidiaries; each individually, a "Borrower Group
         Member".

                  "Borrowing" means a borrowing consisting of simultaneous
         Advances of the same Type and Category made by each of the Lenders
         pursuant to Section 2.01.

                  "Borrowing Limit" means, with respect to (a) all Utilizations
         for any Project, the Project Limit applicable to such Project; and (b)
         Working Capital Advances, $25,000,000.

                  "Business Day" means any day other than a Saturday, Sunday or
         any day on which any Lender specifically or banking institutions
         generally are not required or authorized by law to close in New York
         City and, if the applicable Business Day relates to any Eurodollar Rate
         Advances, on which dealings in Dollars are carried on in the London
         interbank market.

                  "Buydown Amount" means, with respect to any Substantially
         Completed Project, the aggregate principal amount of all Project Debt
         with respect to such Substantially Completed Project required to be
         prepaid upon the occurrence of a Southern Event of Default or the
         Buydown Date for such Substantially Completed Project pursuant to
         Sections 2.09(b)(i)(B) and 2.09(b)(ii)(B), respectively, in each case,
         so as to result in the minimum and average Portfolio Adjusted Base Case
         Projections, calculated on the assumptions that (a) all Recourse Debt
         of the Borrower Group Members (other than Recourse Debt incurred with
         respect to Uncompleted Plants) outstanding immediately after such
         prepayment is repaid in full on or prior to the end of the Remaining
         Base Case Period; and (b) all liquidated damages for completion of such
         Substantially Completed Project at a reduced capacity from that
         contracted for under each Power Purchase Agreement for such
         Substantially Completed Project which are then payable or which, after
         the date of determination, would become payable as a result thereof (in
         each case, calculated by reference to the performance of such
         Substantially Completed Plant, as certified by Southern to the Agent
         for purposes of its Substantial Completion), are paid in full when due.
         If on any date the Buydown Amount for more than one Substantially
         Completed Project is to be calculated, for purposes of calculating the
         Buydown Amount for each such Substantially Completed Project, all other
         Substantially Completed Projects shall be deemed to be Uncompleted
         Projects.

                  "Buydown Date" means, with respect to any Project, the date
         which is twenty-four (24) months after the Scheduled Completion Date
         for such Project, or such earlier date as may be notified in writing to
         the Agent by Southern.

                  "Buydown Event" means, with respect to any Project which
         achieves Substantial Completion, the occurrence of the Buydown Date for
         such Project before such Project achieves Final Completion.

                  "Capacity Factor" means, with respect to an electric
         generation plant in connection with determining the Required Project
         DSCR applicable to such plant at any time, the ratio, expressed as a
         percentage, of (a) the total electrical energy expected to be generated
         by such electric generation plant during the relevant period, as
         projected in the then most recent Independent Market Consultant report
         delivered pursuant to Article III or Section 5.01(r), to (b) the
         maximum possible electrical energy such electric generation plant could
         have generated during such period if operated at its maximum capacity
         rating, (i) as determined for purposes of the Power Purchase Agreement
         in effect with respect to such electric generation plant at such time,
         if any (or, if there is more than one such Power Purchase Agreement,
         the lowest such output under all such Power Purchase Agreements); or
         (ii) if there is no such Power Purchase Agreement then in effect, as
         determined as of the Non-Recourse Date for such Project.

                  "Cash Available for Corporate Debt Service" for any period
         means, without duplication, (a) cash earnings from operations prior to
         interest, principal and tax payments based on income with reference to
         the Borrower's consolidated financial statements (but excluding any
         such cash earnings attributable to Unrestricted Subsidiaries); plus (b)
         cash received (net of transaction costs and expenses) during such
         period by the Borrower and its consolidated Subsidiaries (other than
         Unrestricted Subsidiaries) from Sales or other dispositions of Assets
         not required to prepay Debt; plus (c) cash received by the Borrower
         from Southern in the form of equity contributions (other than Equity
         Contributions) or Affiliate Subordinated Debt, which cash is received
         during such period; plus (d) cash dividends or cash distributions
         received by the Borrower from Unrestricted Subsidiaries.

                  "Category" has the meaning specified in the definition of
         "Advance".

                  "Citibank" has the meaning set forth in the introductory
         paragraph to this Agreement.

                  "Co-Arrangers" means The Bank of Tokyo-Mitsubishi, Ltd.,
         Bayerische Landesbank Girozentrale, Cayman Islands Branch, Commerzbank
         AG, New York and Grand Cayman Branches and The Industrial Bank of
         Japan, Limited.

                  "Code" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  "Commercial Paper" means commercial paper issued by the
         Borrower (a) rated at least "A-2" or better by S&P and at least "P-2"
         or better by Moody's; (b) having a maturity not exceeding 180 days from
         its issuance and occurring on or before the Final Maturity Date; and
         (c) the obligations with respect to which are not secured by any Liens
         or subject to any form of credit enhancement other than liquidity
         support provided pursuant to this Facility.

                  "Commitment" has the meaning specified in Section 2.01.

                  "Commitment Termination Date" means the date on which the
         Commitments of all Lenders have been terminated or cancelled in
         accordance with this Agreement.

                  "Completed Plants" means, as at any relevant time, (a) all
         Projects which (i) have then achieved Final Completion; or (ii) have
         then achieved Substantial Completion, the relevant Buydown Dates for
         which have occurred and for which the relevant Buydown Amounts, if
         required, have been paid; and (b) all other Plants which have then
         commenced commercial operation and achieved Substantial Completion.

                  "Completed Project Advances" means, at any time, all Advances
         then outstanding with respect to Completed Projects; each individually,
         a "Completed Project Advance".

                  "Completed Projects" means all Projects the Non-Recourse Date
         for which has occurred; each individually, a "Completed Project".

                  "Confidential Information" means information concerning the
         Borrower or its Affiliates which is non-public, confidential or
         proprietary in nature, or any information that is marked or designated
         confidential by or on behalf of the Borrower, which is furnished to any
         Lender by the Borrower or any of its Affiliates directly or through the
         Agent or any Arranger in connection with this Agreement or the
         transactions contemplated hereby (at any time on, before or after the
         date of this Agreement), together with all analyses, compilations or
         other materials prepared by such Lender or its respective directors,
         officers, employees, agents, auditors, attorneys, consultants or
         advisors (collectively, "Representatives") which contain or otherwise
         reflect such information.

                  "Control" has the meaning set forth in rule 12b-2 promulgated
         under the Securities Exchange Act of 1934.

                  "Controlled Group" means (a) the controlled group of
         corporations as defined in Section 414(b) of the Code and the
         applicable regulations thereunder; or (b) the group of trades or
         businesses under common control as defined in Section 414(c) of the
         Code and the applicable regulations thereunder, of which the Borrower
         is a part or may become a part.

                  "Convert", "Conversion" and "Converted" each refers to a
         conversion of Advances of one Type into Advances of the other Type
         pursuant to Section 2.07 or 2.08.

                  "Corporate Interest" means, for any period, the sum of (a) the
         aggregate of interest expense accrued during such period by the
         Borrower and the Relevant Subsidiaries on Recourse Debt less the amount
         of interest, if any, included in such interest expense which was
         capitalized in accordance with GAAP, plus (b) to the extent not
         included in clause (a), rent or similar payments on Recourse Debt
         consisting of Finance Leases, capital leases, sale-leasebacks that are
         capitalized in accordance with GAAP, Synthetic Leases, all
         amortizations of the discount on Debt issued at discount, or other
         similar arrangements.

                  "CP Advance" has the meaning specified in Section 2.16.

                  "CP Commitment" has the meaning specified in Section 2.15.

                  "CP Commitment Reservation" means the simultaneous creation of
         CP Commitments by each of the Lenders pursuant to Section 2.15, and
         refers, as the context may require, to a CP Commitment (Original CP)
         Reservation or a CP Commitment (Refinancing CP) Reservation (each of
         which shall be a "Kind" of CP Commitment Reservation).

                  "CP Commitment (Original CP) Reservation" means a CP
         Commitment Reservation which is made with respect to Original
         Commercial Paper.

                  "CP Commitment (Refinancing CP) Reservation" means a CP
         Commitment Reservation which is made with respect to Refinancing
         Commercial Paper.

                  "Dahlberg Project" means the ten unit, approximately 810MW
         gas-fired electric generation plant constructed by Georgia Power
         Company and located in Jackson County, Georgia.

                  "Debt" means for any Person any obligations of such Person for
         or in respect of (a) moneys borrowed or raised (whether or not for
         cash) by whatever means (including acceptances, deposits, discounting,
         letters of credit, factoring (other than on a non-recourse basis),
         Finance Leases, Lease Obligations and any other form of financing which
         is recognized in accordance with GAAP in such Person's financial
         statements as being in the nature of a borrowing (excluding for the
         avoidance of doubt, share capital, share premium account and any
         capital prepayment reserve) or is treated as "off-balance" sheet
         financing (including all amounts financed under any Synthetic Lease or
         other synthetic financing transaction (excluding, in the case of any
         Person other than Southern, such portion of such amounts for which
         Southern is also directly liable and such portion of such amounts equal
         to any committed equity amounts from Southern in respect thereof) and
         all minority equity investments)); (b) the deferred purchase price of
         Assets or services (other than goods and services obtained on normal
         commercial terms in the ordinary course of business or operations); and
         (c) guarantees by such Person of obligations which constitute Debt of
         another Person under clause (a) or (b) above; provided that (i) for any
         Subsidiary of the Borrower, "Debt" shall not include any such
         obligation owed to the Borrower or to any Relevant Subsidiary; (ii)
         except for purposes of Section 6.01(d), "Debt" shall not include any
         obligations in connection with Trust Preferred Securities; and (iii)
         with respect to the Borrower, "Debt" for purposes of Section 5.01(a)
         shall not include up to $10,000,000 of obligations, in the aggregate
         amount at any time outstanding, which are secured by Liens referred to
         in any of paragraphs (iv), (vii), (viii), (ix), (xv) and (xvi) of
         Section 5.02(c).

                  "Debt/Equity Ratio" means with respect to any (a) Initial
         Project, 60:40; and (b) Subsequent Project, the ratio of (i) the
         Project Limit for such Project to (ii) the amount by which the Project
         Costs for such Project (as set forth in its Project Budget) exceeds
         such Project Limit.

                  "Default" means any Event of Default or any event that would
         constitute an Event of Default but for the requirement that notice be
         given or time elapse or both.

                  "Designated Lender" means a special purpose corporation that
         is identified as such on the signature pages of this Agreement, as well
         as each special purpose corporation that (a) shall have become a party
         to this Agreement pursuant to Section 8.07(i); and (b) is not otherwise
         a Lender.

                  "Designated Lender Note" means a Note evidencing the
         obligation of the Borrower to repay Advances made by a Designated
         Lender.

                  "Designating Lender" means each Lender that is identified as
         such on the signature pages of this Agreement, as well as each Lender
         that shall designate a Designated Lender pursuant to Section 8.07(i).
                  "Designation Agreement" means a designation agreement in
         substantially the form of Exhibit F, entered into by a Lender and a
         Designated Lender and accepted by the Agent.

                  "Development Authority Sale/Leaseback" means (a) the Wansley
         Sale/Leaseback; and (b) any sale of a Project (other than the Wansley
         Project) to a development authority created and existing under the laws
         of the State of Georgia (or any political sub-division thereof), where
         (i) such development authority is a political sub-division or agency of
         a local government of the State of Georgia; (ii) the purchase price for
         such Project is paid for with proceeds from the issuance of Project
         Bonds which are purchased by the Borrower or a wholly owned Subsidiary
         of the Borrower; (iii) such Project is leased by a Borrower Group
         Member which has the right to purchase such Project at any time at a
         nominal purchase price so long as all Project Bonds relating thereto
         have been repaid in full, (iv) Southern has issued a support letter in
         the form of Exhibit M; and (v) all such Project Bonds are issued at par
         with a repayment or maturity date which is subsequent to the Final
         Maturity Date and with no amortization of the Debt thereunder occurring
         prior thereto.

                  "Dollars" means the lawful currency of the United States.

                  "Domestic Lending Office" means, with respect to any Lender,
         the office of such Lender specified as its "Domestic Lending Office"
         opposite its name on Schedule I or in the Assignment and Acceptance
         pursuant to which it became a Lender, or such other office of such
         Lender as such Lender may from time to time specify to the Borrower and
         the Agent.

                  "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
         Lender; (c) a commercial bank organized under the laws of the United
         States, or any State thereof; (d) a savings and loan association or
         savings bank organized under the laws of the United States, or any
         State thereof; (e) a commercial bank organized under the laws of any
         other country that is a member of the Organization for Economic
         Cooperation and Development or has concluded special lending
         arrangements with the International Monetary Fund associated with its
         General Arrangements to Borrow, or a political subdivision of any such
         country, so long as such bank is acting through a branch or agency
         located in the country in which it is organized or another country that
         is described in this clause (e); (f) a finance company, insurance
         company or other financial institution or fund (whether a corporation,
         partnership, trust or other entity) that is engaged in making,
         purchasing or otherwise investing in commercial loans in the ordinary
         course of its business; and (g) the central bank of any country that is
         a member of the Organization for Economic Cooperation and Development;
         provided that neither the Borrower nor an Affiliate of the Borrower
         shall qualify as an Eligible Assignee; provided further that the
         entities listed in clauses (c)-(g) above shall have a short-term credit
         rating of at least "Prime-2" (or the then equivalent grade) by Moody's
         or "A-2" (or the then equivalent grade) by S&P or "F-2" (or the then
         equivalent grade) by Fitch, or, if no short-term credit rating is
         available, a long-term credit rating of at least "Baa2" (or the then
         equivalent grade) by Moody's or "BBB" (or the then equivalent grade) by
         S&P or Fitch; provided further that if any entity listed in clause (g)
         above shall have no short-term or long-term credit rating, the relevant
         credit rating shall be the short-term or long-term credit rating of the
         country of which such entity is the central bank.

                  "Equity Contributions" means, with respect to any Project, (a)
         all equity contributed to the Borrower by Southern with respect to such
         Project, if any, which, if contributed after the date of this
         Agreement, is contributed pursuant to the Southern Equity Agreement;
         and (b) all retained earnings of the Borrower available for the making
         of a Restricted Payment in accordance with Section 5.02(b), if any,
         which are applied to pay outstanding Project Costs with respect to such
         Project.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and the regulations promulgated and
         the rulings issued thereunder.

                  "ERISA Affiliate" means each person (as defined in Section
         3(9) of ERISA) which together with the Borrower or any Subsidiary of
         the Borrower would be deemed to be a member of the same "controlled
         group" within the meaning of Sections 414(b), (c), (m) and (o) of the
         Code.

                  "Eurocurrency Reserve Requirements" means for any day as
         applied to a Eurodollar Rate Advance, the aggregate (without
         duplication) of the rates (expressed as a decimal fraction) of reserve
         requirements in effect on such day (including basic, supplemental,
         marginal and emergency reserves under any regulations of the Board of
         Governors of the Federal Reserve System or other Governmental Authority
         having jurisdiction with respect thereto) dealing with reserve
         requirements prescribed for eurocurrency funding (currently referred to
         as "Eurocurrency Liabilities") in Regulation D of such Board maintained
         by a member bank of such System.

                  "Eurodollar Base Rate" means, with respect to each day during
         each Interest Period pertaining to a Eurodollar Rate Advance, the rate
         per annum equal to the average (rounded upward, if necessary, to the
         nearest 1/16 of 1%) of the respective rates notified to the Agent by
         each of the Reference Banks as the rate at which such Reference Bank is
         offered Dollar deposits at or about 11:00 A.M., London time, two
         Business Days prior to the beginning of such Interest Period in the
         London interbank eurodollar market for delivery on the first day of
         such Interest Period, for the number of days comprised therein and in
         an amount comparable to the amount of its Eurodollar Rate Advance to be
         outstanding during such Interest Period.

                  "Eurodollar Lending Office" means, with respect to any Lender,
         the office of such Lender specified as its "Eurodollar Lending Office"
         opposite its name on Schedule I or in the Assignment and Acceptance
         pursuant to which it became a Lender (or, if no such office is
         specified, its Domestic Lending Office), or such other office of such
         Lender as such Lender may from time to time specify to the Borrower and
         the Agent.

                  "Eurodollar Rate" means with respect to each day during each
         Interest Period pertaining to a Eurodollar Rate Advance, a rate per
         annum determined for such day in accordance with the following formula
         (rounded upward, if necessary, to the nearest 1/100 of 1%):

                              Eurodollar Base Rate
                    1.00 - Eurocurrency Reserve Requirements

                  "Eurodollar Rate Advance" means an Advance that bears interest
         as provided in Section 2.06(a)(ii).

                  "Events of Default" has the meaning specified in Section 6.01.

                  "Exempt Asset Sale Proceeds" means the proceeds from any sale
         of Assets (a) in the ordinary course, which sale would not reasonably
         be expected to result in a material adverse effect to the operation and
         maintenance of the Projects; (b) other than Assets relating to any
         Project, to conform with governmental regulations; (c) consisting of
         short-term readily marketable investments purchased for cash management
         purposes; or (d) owned by an Unrestricted Subsidiary.

                  "Facility" means the senior unsecured revolving credit
         facility made or to be made available by the Lenders to the Borrower
         under this Agreement.

                  "Facility Rating" means, as of any date, the credit rating
         then in effect by S&P, Moody's or Fitch as the case may be, for the
         Debt under the Facility, as demonstrated by written evidence delivered
         to the Agent which is in form and substance reasonably satisfactory to
         the Agent.

                  "Federal and State Energy Law and Regulation" includes the
         Federal Power Act, as amended, the Public Utility Regulatory Policies
         Act of 1978, as amended, the Powerplant and Industrial Fuel Use Act of
         1978, as amended, the Public Utility Holding Company Act of 1935, as
         amended, the Energy Policy Act of 1992, as amended, any State law
         regulating public utility companies, electric utilities, public service
         companies, or any similar entity, as well as any regulation
         implementing any of the foregoing.

                  "Federal Funds Effective Rate" means, with respect to each
         day, the rate per annum (rounded upwards, if necessary, to the nearest
         1/100th of 1%) equal to the weighted average of the rates on overnight
         federal funds transactions with members of the Federal Reserve System
         arranged by federal funds brokers on such day, as published by the
         Federal Reserve Bank of New York on the Business Day next succeeding
         such day; provided that (a) if such day is not a Business Day, the
         Federal Funds Effective Rate for such day shall be such rate on such
         transactions on the next preceding Business Day as so published on the
         next succeeding Business Day; and (b) if no such rate is so published
         on such next succeeding Business Day, the Federal Funds Effective Rate
         for such day shall be the average rate quoted to the Agent on such day
         on such transactions as the Agent may reasonably determine.

                  "FERC" means the Federal Energy Regulatory Commission.
                   ----

                  "Filing Condition" means, with respect to any order, approval,
         permit or authorization issued by FERC, (a) a ministerial subsequent
         filing, reporting or notification condition customarily imposed on
         sellers with market-based rate approval from FERC; or (b) with respect
         to a Power Purchase Agreement only, a condition that an unredacted
         version of such contract be filed on a non-confidential basis but with
         the requirement to make such filing held in abeyance pending resolution
         of a proceeding as to whether a redacted or unredacted version of such
         Power Purchase Agreement is to be filed on a non-confidential basis.

                  "Final Completion" means the date on which Southern certifies
         in the form of Exhibit L-2 to the Agent that, in the case of (a) any
         Project, (i) such Project has achieved Substantial Completion; and (ii)
         the tested output in megawatts for such Project has achieved 100% of
         its Guaranteed Output and such Project has achieved a tested heat rate
         not greater than 100% of its Guaranteed Heat Rate, in each case, as set
         forth in the Project Schedule for such Project and as tested in
         accordance with the testing procedures applicable to such Project set
         forth in, or determined in accordance with, Schedule V; and (b) any
         other electric generation plant owned or leased by the Borrower or any
         Relevant Subsidiary, the equivalent thereof has occurred.

                  "Final Maturity Date" means November 15, 2004.
                   -------------------

                  "Finance Lease" means, for any Person, any lease, or any hire
         purchase, conditional sale or other form of title retention agreement
         which is recognized, in accordance with GAAP, in such Person's
         financial statements as being in the nature of a borrowing.

                  "Fitch" means Fitch IBCA, Duff & Phelps, a division of Fitch,
         Inc.

                  "Funds Availability Date" has the meaning specified in Section
          3.01.

                  "Generally Accepted Accounting Principles" or "GAAP" means
         those accounting principles, standards and practices generally accepted
         in the United States consistent with those applied by the Borrower, as
         in effect at the relevant time.

                  "Goat Rock 1 Project" means the approximately 571MW gas-fired
         electric generation plant constructed or to be constructed by the
         Borrower or an Affiliate of the Borrower in Lee County, Alabama with an
         expected completion date in April 2002.

                  "Goat Rock 2 Project" means the approximately 615MW gas-fired
         electric generation plant constructed or to be constructed by the
         Borrower or an Affiliate of the Borrower in Lee County, Alabama with an
         expected completion date in June 2003.

                  "Governmental Authority" means any nation or government, any
         state, province or other political subdivision thereof, and any
         governmental, executive, legislative, judicial, administrative or
         regulatory agency, department, authority, instrumentality, commission,
         board or similar body, whether federal, state, provincial, territorial,
         local or foreign.

                  "Granting Lender" has the meaning specified in Section
         8.07(j).

                  "Guaranteed Heat Rate" means, with respect to (a) any Initial
         Project, the average heat rate associated with such Project while
         operating in base mode (namely, at 100% combustion turbine load) at the
         average ambient rated conditions for such Project, as set forth in
         Schedule IV; and (b) any Subsequent Project, the average heat rate
         associated with such Project, as set forth in the Project Schedule
         delivered pursuant to Section 3.04 for such Project, while operating in
         the mode of operation and at the rated conditions set forth therein.

                  "Guaranteed Output" means, with respect to (a) any Initial
         Project, the capability of such Project with all possible modes of
         operation in use at rated summer conditions for such Project, including
         the following: operation in base load (namely, 100% combustion turbine
         load), full pressure operation, evaporative cooling, and power
         augmentation modes, as set forth in Schedule IV; and (b) any Subsequent
         Project, the capability of such Project, as set forth in the Project
         Schedule delivered pursuant to Section 3.04 for such Project, while
         operating in the mode of operation and at the rated conditions set
         forth therein.

                  "High Use Date" means each day on which the aggregate amount
         of all outstanding Advances exceeds 33% of the aggregate of the
         Commitments of all Lenders.

                  "Indemnified Costs" has the meaning specified in Section 7.05.

                    "Indemnified  Party" has the  meaning specified  in Section
               8.04(b)(i).

                  "Independent  Engineer and  Environmental Consultant" means
               R.W.  Beck,  Inc. or any  successor  consultant appointed by the
               Agent and reasonably acceptable to the Borrower.

                    "Independent  Insurance Consultant" means Marsh USA Inc. or
               any successor  consultant  appointed by the Agent and reasonably
               acceptable to the Borrower.

                    "Independent Market Consultant" means PA Consulting, Inc. or
               any successor  consultant appointed by the Agent and  reasonably
               acceptable to the Borrower.

                  "Information Memorandum" means the information memorandum
         dated October 8, 2001 and used by the Arrangers in connection with the
         syndication of the Commitments by the Arrangers (excluding, however,
         the report of the Independent Market Consultant, the Independent
         Engineer and Environmental Consultant and the Independent Insurance
         Consultant, and the information in such information memorandum the
         source of which is identified as the report of the Independent Market
         Consultant, the Independent Engineer and Environmental Consultant or
         the Independent Insurance Consultant).

                  "Initial Base Case Projections" means a projection prepared by
         the Borrower of the operating results for the Initial Projects for a
         period from the date of this Agreement up to and including December 31,
         2023.

                    "Initial   Lenders"   has  the  meaning  set  forth in  the
               introductory paragraph to this Agreement.

                  "Initial Project Budget" means, for each Project, the project
         budget setting forth the Projects Costs incurred or to be incurred for
         such Project delivered to the Agent by the Borrower prior to the first
         Utilization related to such Project pursuant to Section 3.01, 3.02 or
         3.06, as applicable (in the case of an Initial Project) or Section 3.04
         or 3.06, as applicable (in the case of a Subsequent Project).

                  "Initial Project Limit" means, with respect to each Project,
         the aggregate amount of all Utilizations related to such Project that
         is permitted under this Agreement, which amount with respect to (a)
         each Initial Project, is set forth in Schedule III; and (b) each
         Subsequent Project, shall be calculated by the Borrower (and agreed to
         by the Agent) based upon the Initial Project Budget and the Project
         Base Case Projections for such Project as the maximum principal amount
         of Utilizations permitted with respect to such Project, such
         determination to be consistent with the Required Project DSCR for such
         Project (but which shall not, in any event, exceed 60% of the Project
         Costs, as set forth in the Initial Project Budget for such Project).

                  "Initial Projects" means, collectively, the Autaugaville 1
         Project, the Autaugaville 2 Project, the Dahlberg Project, the Goat
         Rock 1 Project, the Goat Rock 2 Project and the Wansley Project, in
         each case, owned or leased (pursuant to a Development Authority
         Sale/Leaseback) by the Borrower, and including all buildings,
         structures and improvements, and easements with respect thereto, all
         alterations thereto or replacements thereof, all fixtures, attachments,
         appliances, equipment, machinery and other articles attached thereto or
         used in connection therewith and all parts which may from time to time
         be incorporated or installed in or attached thereto, all contracts and
         agreements for the purchase or sale of commodities or other personal
         property related thereto, all leases of personal property related
         thereto, and all other real and tangible and intangible personal
         property related thereto; each individually, an "Initial Project".

                  "Insurance Account" means an account of the Borrower
         established with the Agent pursuant to Section 5.01(l)(ii) and
         maintained with the Agent for purposes of holding Loss proceeds (other
         than business interruption insurance proceeds) in excess of $1,000,000,
         which are, or may become, payable with respect to Completed Projects.

                  "Interest Period" means, for each Eurodollar Rate Advance
         comprising part of the same Borrowing, the period commencing on the
         date of such Eurodollar Rate Advance or the date of the Conversion of
         any Base Rate Advance into such Eurodollar Rate Advance and ending on
         the last day of the period selected by the Borrower pursuant to the
         provisions below and, thereafter with respect to each Eurodollar Rate
         Advance, each subsequent period commencing on the last day of the
         immediately preceding Interest Period and ending on the last day of the
         period selected by the Borrower pursuant to the provisions below. The
         duration of each such Interest Period shall be one (1), two (2), three
         (3) or six (6) months, or such other period agreed between the Borrower
         and the Agent (acting on the instructions of all Lenders), as the
         Borrower may, upon notice received by the Agent not later than 11:00
         A.M. (New York City time) on the third Business Day prior to the first
         day of such Interest Period, select; provided that:

                    (a) the  Borrower  may not select any  Interest  Period that
               ends after the Final Maturity Date;

                    (b)  Interest  Periods  commencing  on  the  same  date  for
               Eurodollar  Rate Advances  comprising  part of the same Borrowing
               shall be of the same duration;

                    (c)  whenever  the last  day of any  Interest  Period  would
               otherwise occur on a day other than a Business Day, such Interest
               Period shall be extended to end on the next  succeeding  Business
               Day;  provided that if such extension would cause the last day of
               such  Interest  Period  to occur in the next  following  calendar
               month,  the last day of such  Interest  Period shall occur on the
               next preceding Business Day;

                    (d) whenever the first day of any Interest  Period occurs on
               a day  of  an  initial  calendar  month  for  which  there  is no
               numerically corresponding day in the calendar month that succeeds
               such initial  calendar month by the number of months equal to the
               number of months in such Interest  Period,  such Interest  Period
               shall end on the last  Business Day of such  succeeding  calendar
               month; and

                    (e) no more than three (3)  different  Interest  Periods may
               exist  concurrently  with respect to all outstanding  Advances of
               each Category.

                  "Intermediate (High)" means, on any date, any electric
         generation plant which is projected, in the then most recent
         Independent Market Consultant report delivered pursuant to Article III
         or Section 5.01(r), to have an average Capacity Factor of 45% or more,
         but less than 65%, in each case, during the Remaining Base Case Period.

                  "Intermediate (Low)" means, on any date, any electric
         generation plant which is projected, in the then most recent
         Independent Market Consultant report delivered pursuant to Article III
         or Section 5.01(r), to have an average Capacity Factor of 20% or more,
         but less than 45%, in each case, during the Remaining Base Case Period.

                  "Investment Grade Rating" means (a) with respect to any Person
         other than the Borrower, a rating of any class of its
         non-credit-enhanced long-term senior unsecured Debt of at least "Baa3"
         by Moody's and "BBB-" by S&P; and (b) with respect to the Borrower, a
         rating of the Debt under the Facility (giving effect to the Southern
         Completion Guarantee) of at least "Baa3" by Moody's and "BBB-" by each
         of S&P and Fitch.

                  "Kind" has the meaning specified in the definition of "CP
         Commitment Reservation".

                  "Law" means any constitution, decree, judgment, legislation,
         order, ordinance, regulation, statute, treaty or other legislative
         measure having the force of law (and "lawful" and "unlawful" shall be
         construed accordingly).

                  "Lead Arranger" means Salomon Smith Barney Inc.
                   -------------

                  "Lease Obligations" means, with respect to any Person who is a
         lessee under any lease which is not a Synthetic Lease or a Finance
         Lease, the present value of all payment obligations (without
         double-counting) that are in the nature of a rental payment obligation
         or are otherwise not avoidable at the option of the lessee without
         incurring other costs or risks (including for this purpose purchase
         rights for which the failure to exercise results in other payment
         obligations and guarantees of value) such Person may have under such
         lease and related documents, provided that (i) payments which such
         Person may be entitled unilaterally to determine not to pay without
         incurring other payment obligations, (ii) termination value obligations
         which may be due if events not expected to happen occur (but not
         excluding any which are expected to be payable), and (iii) indemnity
         obligations, shall not be included in the meaning of "Lease
         Obligations". For this purpose, the present value of such "Lease
         Obligations" with respect to any such lease shall equal the amount
         obtained by discounting all relevant obligations from their respective
         due dates to the date of determination in accordance with accepted
         financial practice and at a discount factor of 10% per annum.

                  "Lenders" means the Initial Lenders, each Person that shall
         become a party to this Agreement pursuant to Section 8.07(a) and the
         Designated Lenders, if any; provided that the term "Lender" shall
         exclude each Designated Lender when used in reference to an Advance
         (except to the extent a Designated Lender is the obligee of an Advance
         actually funded by it pursuant to Section 2.01(c)), terms relating to
         the Advances (except as noted above) and the Commitments.

                  "Lien" means any mortgage, pledge, lien, hypothecation,
         security interest or other charge, encumbrance or other arrangement in
         the nature of a security interest in property; provided that the term
         "Lien" shall not mean any easements, rights-of-way, zoning
         restrictions, leases, subleases, licenses, sublicenses, other
         restrictions on the use of property, defects in title to property or
         other similar encumbrances, in each case, that do not interfere
         materially with the use of such property for its intended purpose.

                  "Liquidity Lender" means, with respect to any Designated
         Lender, any Person (other than its Designating Lender) which may be
         liable for the Debt of such Designated Lender.

                  "Loan Documents" means, collectively, this Agreement, the
         Notes, the Southern Completion Guarantee and the Southern Equity
         Agreement; each individually, a "Loan Document".

                    "Loan  Parties"  means,   collectively,   the Borrower and
         Southern; each individually, a "Loan Party".

                  "Loss" means, with respect to any Completed Project (a) any
         total or partial loss, as a result of a casualty of such Project; or
         (b) if such Project (or a substantial portion thereof) is condemned,
         seized, compulsorily acquired or otherwise expropriated by any
         Governmental Authority under power of eminent domain.

                  "Low Use Date" means each day which is not a High Use Date.

                  "Majority Lenders" means at any time Lenders owed at least a
         majority of the then aggregate unpaid principal amount of the Advances
         owing to the Lenders, or, if no such principal amount is then
         outstanding, Lenders having at least a majority of the aggregate amount
         of the Commitments.

                  "Material Adverse Effect" means a material adverse change in,
         or material adverse effect on, (a) the financial condition, operations,
         business or properties of the Borrower or Southern, as the case may be,
         which would have a material adverse effect on the ability of the
         Borrower or Southern to pay amounts owed by, or to perform obligations
         of, the Borrower from time to time under any Loan Document, or Southern
         under the Southern Completion Guarantee or the Southern Equity
         Agreement, as the case may be; or (b) the rights or remedies of the
         Lenders under, or the validity, enforceability or legality of, any Loan
         Document.

                  "Material Documents" means the Loan Documents and the PPA
         Documents.

                  "Mechanical Completion" means, with respect to any electric
         generation plant owned or to be owned, or leased or to be leased, by a
         Borrower Group Member (including the Projects), the time at which the
         construction manager for such plant certifies to the Borrower (a) that
         all construction work for such plant is complete according to the
         proper scope of work and such plant is ready for performance testing
         with the exception of Punch List Items; (b) of the satisfactory
         completion of the materials and equipment associated with individual
         turnover packages (all items within the turnover package shall be
         completed to the satisfaction of the Borrower's start-up or testing
         manager, all equipment shall be capable of operation in a safe and
         proper manner without voiding warranties, all equipment systems
         installed associated with the turnover package, including remote
         control systems, shall be ready to commence start-up and testing) and
         the satisfactory completion and documentation of the construction
         completion testing; and (c) of the removal of all construction,
         temporary facilities that may interfere with or disrupt the Borrower's
         start-up and plant testing activities, waste material and rubbish from
         the work area.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Nature" means, with respect to any Advance, a Completed
         Project Advance or an Uncompleted Project Advance, as the context may
         require.

                  "Non-Recourse Date" means, with respect to any Project, the
         earlier to occur of Final Completion of, and the Buydown Date (but, if
         a Buydown Amount is payable with respect to such Project, only if the
         Buydown Amount has been paid) for, such Project.

                  "Note" means a promissory note of the Borrower payable to the
         order of any Lender, in substantially the form of Exhibit A, evidencing
         the aggregate maximum indebtedness of the Borrower to such Lender
         resulting from the Advances made by such Lender.

                  "Notice of Utilization" has the meaning specified in Section
         2.02(a).

                  "Original Commercial Paper" means Commercial Paper other than
         (a) Refinancing Commercial Paper; or (b) Rollover Commercial Paper.

                  "Other Taxes" has the meaning specified in Section 2.13(a).

                  "Participant" means any Person to whom a participation has
         been granted by a Lender of its rights and obligations under this
         Agreement pursuant to Section 8.07(f).

                  "Peaker" means (a) a quickstart gas-fired simple cycle
         electric generation plant; or (b) on any date, any electric generation
         plant which is projected, in the then most recent Independent Market
         Consultant report delivered pursuant to Article III or Section 5.01(r),
         to have an average Capacity Factor of less than 20% during the
         Remaining Base Case Period.

                  "Permitted Encumbrances" shall mean liens for taxes not yet
         due and payable or being contested in good faith, mechanics' and
         similar liens arising or incurred in the ordinary course of business
         and representing obligations not yet due, and such other liens,
         imperfections in or failure of title, charges, easements, restrictions
         and encumbrances which do not materially detract from the value of the
         Projects for their contemplated use or materially interfere with the
         contemplated use thereof.

                  "Person" means any individual, company, corporation, firm,
         partnership, joint venture, undertaking, association, organization,
         trust, state or agency of a state (in each case, whether or not having
         separate legal personality).

                  "Plan" means any single-employer plan as defined in Section
         4001 of ERISA and to which ERISA applies, which is maintained, or at
         any time during the five (5) calendar years preceding the date of this
         Agreement was maintained, for employees of the Borrower, any Subsidiary
         of the Borrower or an ERISA Affiliate.

                  "Plants" means the Projects and other electric generation
         plants owned or leased by the Borrower or any Relevant Subsidiary.

                  "Portfolio Adjusted Base Case Projections" means, with respect
         to any Relevant Event, the weighted average of each of the minimum
         Required Project DSCRs (for each year, or part thereof, during the
         Remaining Base Case Period) and the average Required Project DSCRs (for
         the Remaining Base Case Period) applicable, in each case, to all
         Relevant Completed Plants immediately after such Relevant Event, with
         such weighted average determined, in each case, based upon the cash
         earnings from operations (after all operating expenses but prior to
         interest and principal payments and income taxes) for each such
         Relevant Completed Plant during the Remaining Base Case Period,
         determined (a) with respect to each Plant which has achieved (i)
         Substantial Completion but not Final Completion, by reference to the
         performance of such Plant, as certified by Southern to the Agent for
         purposes of its Substantial Completion; and (ii) Final Completion, by
         reference to the performance of such Plant, as certified by Southern to
         the Agent for purposes of its Final Completion; and (b) using the
         figures in an updated Independent Market Consultant report provided in
         connection with such Relevant Event pursuant to Section 5.01(r).

                  "Power Purchase Agreement" means any contract for the sale of
         electric capacity and energy by a Borrower Group Member with a term in
         excess of one year.

                  "PPA Documents" means all Power Purchase Agreements and, if
         any such Power Purchase Agreement is not with an Acceptable PPA
         Counterparty, all Acceptable Credit Support relating thereto.

                  "PPA Parameters" means, with respect to any electric
         generation plant, any Power Purchase Agreement not previously provided
         in the form necessary to satisfy Section 3.01(c)(ix)(D):

                           (a)      with a purchaser or off-taker which is an
                  Acceptable PPA Counterparty;

                           (b) which provides for capacity or fixed or other
                  payments to the Seller which are payable regardless of
                  availability (except to the extent caused by the Seller or by
                  force majeure) or actual dispatch of such plant, and which are
                  sufficient to achieve the Required Project DSCR applicable to
                  such plant (in each case, prorated if such Power Purchase
                  Agreement is not for the entire capacity of such plant);

                           (c) pursuant to which (i) if such plant has not yet
                  achieved Substantial Completion, upon Substantial Completion,
                  all conditions precedent for commencement of the obligations
                  of the purchaser or off-taker with respect to payment for
                  capacity, energy or ancillary services provided under such
                  Power Purchase Agreement (other than the passage of time) will
                  have been satisfied; (ii) if such plant has achieved
                  Substantial Completion, all conditions precedent for
                  commencement of the obligations of the purchaser or off-taker
                  with respect to payment for capacity, energy or ancillary
                  services provided under such Power Purchase Agreement (other
                  than the passage of time) have been satisfied; and (iii)
                  penalties or liquidated damages for delay in completion of
                  construction or completion of such plant at a reduced capacity
                  from that contracted for under such Power Purchase Agreement
                  (or equivalent sums), if any, are payable by the Seller at or
                  are only accrued as of or prior to Substantial Completion;

                           (d) pursuant to which the obligations of the Seller
                  (i) with respect to the date when, and the extent to which,
                  such plant is available for dispatch, is consistent with the
                  Scheduled Completion Date for such Project (or the equivalent
                  thereof, as applicable), as confirmed by the Independent
                  Engineer and Environmental Consultant, or may otherwise be met
                  with other resources available to the Seller; and (ii) which
                  relate to performance of such plant (with respect to output,
                  heat rate and availability) are consistent with the design of,
                  and technical and performance parameters applicable to, such
                  plant, as confirmed by the Independent Engineer and
                  Environmental Consultant, or may otherwise be met with other
                  resources available to the Seller;

                           (e) pursuant to which substantially all costs and
                  expenses payable by the Seller with respect to fuel (including
                  any transportation thereof) for the generation of capacity,
                  energy and/or ancillary services provided to the purchaser or
                  off-taker thereunder are (i) subject to a full "pass-through"
                  to, or may otherwise be recovered in full from, the purchaser
                  or off-taker; or (ii) recoverable from the purchaser or
                  off-taker, based on a fuel price index that matches with
                  reasonable closeness the projected fuel type and fuel costs of
                  such Project, to the extent that the heat rate of such plant
                  satisfies applicable heat rates agreed between the parties in
                  such Power Purchase Agreement;

                           (f) pursuant to which fixed and variable operations
                  and maintenance costs and expenses will be provided for either
                  in the capacity payment under such Power Purchase Agreement or
                  in a separate $/kW-year or $/MWh payment;

                           (g) which would not subject the Seller to market
                  damages to cover replacement costs incurred by the purchaser
                  or off-taker for any failure by the Seller to perform its
                  obligations under such Power Purchase Agreement, to the extent
                  such failure is due to planned or scheduled outages of such
                  plant or events of force majeure (whether expressly provided
                  or after taking into account the availability factor utilized
                  in such Power Purchase Agreement);

                           (h)      which does not require the granting of any
                  Lien in connection therewith; and

                           (i) which is not assignable, except to another
                  Acceptable PPA Counterparty or unless such assignment does not
                  release the original Acceptable Counterparty from its
                  obligations.

                  "Project Advance" has the meaning specified in Section 2.16.

                  "Project Base Case Projections" means, with respect to any
         Subsequent Project, projections prepared by the Independent Engineer
         and Environmental Consultant (and approved by the Borrower) for such
         Project in the same format as the Initial Base Case Projections and
         reflecting the prices, costs and other relevant amounts set forth in
         the certificates from the Independent Market Consultant and the
         Independent Engineer and Environmental Consultant delivered in
         connection with such Project pursuant to Section 3.04.

                  "Project Bonds" means industrial development revenue bonds
         issued by any development authority created and existing under the laws
         of the State of Georgia in connection with a Development Authority
         Sale/Leaseback.

                  "Project Budget" means, for each Project, its Initial Project
         Budget or, if an Adjusted Project Budget has been received by the Agent
         for such Project pursuant to Section 2.01(b) or 5.01(r), the then most
         recent Adjusted Project Budget.

                  "Project Costs" means, with respect to any Project, the cost
         of the development, design, engineering, acquisition, installation,
         equipping, construction, assembly, inspection, testing, completion, and
         start-up of such Project, including (without duplication): (a) all
         amounts payable under any construction contracts, any contractor
         bonuses, site acquisition and preparation costs, any interconnection
         and transmission upgrade costs payable by any Borrower Group Member,
         all steam and water interconnection costs, all costs related to water
         clarification facilities and/or water treatment facilities, all costs
         of acquisition and construction of natural gas fuel handling and
         processing equipment (if any) and interconnection expenses payable by
         any Borrower Group Member and all other costs payable by any Borrower
         Group Member under all Power Purchase Agreements and other contracts
         relating to such Project; (b) all other costs, including fuel-related
         costs and prepaid fuel costs, management services fees and expenses and
         expenses to complete the development, acquisition, construction and
         financing of such Project; and (c) interest on Advances made with
         respect to, and commitment fees on the unused portion of the
         Commitments available to, such Project; provided that in the case of
         Projects that are not wholly owned or leased (pursuant to a Development
         Authority Sale/Leaseback) by the Borrower or a wholly owned Subsidiary
         (other than an Unrestricted Subsidiary) of the Borrower, Project Costs
         shall consist of a pro rata portion (based on the Borrower's ownership
         or leasehold interest percentage in such Project or direct or indirect
         ownership percentage in the Person owning such Project, as the case may
         be) of the amounts of costs described above.

                  "Project Debt" means, at any time with respect to any Project,
         all Advances then outstanding and all Commercial Paper then outstanding
         (and as to which a CP Commitment Reservation is then in effect), in
         each case, with respect to such Project.

                  "Project DSCR" means, at any time with respect to any electric
         generation plant, a pro forma ratio, for each of the twenty (20) years
         (or part thereof) after the Scheduled Completion Date for such electric
         generation plant (or equivalent thereof if such plant is not a
         Project), of (a) all cash earnings from operations of such electric
         generation plant, prior to interest, principal and any income tax
         payments during such year (or part thereof, as the case may be), to (b)
         all Debt service during such year (or part thereof, as the case may be)
         with respect to Debt incurred with respect to such electric generation
         plant (assuming such Debt is fully amortized during such twenty (20)
         year period and a fixed interest rate of 8.25% per annum).

                  "Project Finance Debt" means Debt incurred or existing in
         connection with the financing or refinancing of any Asset (other than a
         Project or the Assets comprising a Project, or any portion thereof),
         the repayment of which Debt is to be made from the revenues arising out
         of, or other proceeds of realization from, the acquired or created
         Asset or project, with recourse to those revenues and proceeds and
         Assets forming the subject matter of such Asset or project (including
         insurance, contracts and shares or other rights of ownership in the
         entity(ies) which own the relevant Assets or project) and other Assets
         ancillary thereto but without substantial recourse to any other Asset
         (other than Assets of any Unrestricted Subsidiary) or otherwise to the
         Borrower or any Relevant Subsidiary; provided that substantial recourse
         shall not be deemed to exist by reason of normal and customary sponsor
         support arrangements if (a) the Borrower's obligations under such
         arrangements, together with all other such arrangements then in
         existence, does not exceed the net cash available for Restricted
         Payments by the Borrower pursuant to Section 5.02(b) in its two (2)
         fiscal quarters immediately preceding the incurrence thereof; and (b)
         the Borrower has an Investment Grade Rating which is reaffirmed by S&P
         and Moody's immediately after the incurrence of such obligations.

                  "Project Limit" means, with respect to each Project, the
         aggregate amount of all Utilizations related to such Project that is
         permitted under this Agreement, which amount with respect to (a) each
         Initial Project, is set forth in Schedule III; and (b) each Subsequent
         Project, shall be calculated by the Borrower (and agreed to by the
         Agent) based upon the Initial Project Budget and the Project Base Case
         Projections for such Subsequent Project as the maximum principal amount
         of Utilizations permitted with respect to such Project, such
         determination to be consistent with the Required Project DSCR for such
         Project (but which shall not, in any event, exceed the amount equal to
         60% of the Project Costs, as set forth in the Initial Project Budget
         for such Project), in each case, as amended pursuant to Section
         2.01(b); provided that the "Project Limit" for (i) each Project which
         is an Uncompleted Project on the date of the first Utilization with
         respect to such Project shall, from and after the Non-Recourse Date for
         such Project, be the aggregate principal amount of all Utilizations
         outstanding as of the date of determination (including the
         Utilizations, if any, made on the Non-Recourse Date or repaid or
         reduced (in the case of a repayment of Commercial Paper and the
         corresponding reduction in the outstanding CP Commitments, if any, made
         with respect to such Commercial Paper) on or after the Non-Recourse
         Date); and (ii) each Project which is a Completed Project on the date
         of the first Utilization with respect to such Project shall, as of each
         date after the date of such first Utilization, be the aggregate
         principal amount of all Utilizations outstanding on the date of
         determination (including the Utilizations, if any, made on such date or
         repaid or reduced (in the case of a repayment of Commercial Paper and
         the corresponding reduction in the outstanding CP Commitments, if any,
         made with respect to such Commercial Paper) on such date).

                  "Project Schedule" means, with respect to each Project, a
         schedule for such Project which, with respect to each (a) Initial
         Project, is set forth in Schedule IV; and (b) Subsequent Project, is
         delivered by the Borrower to the Agent prior to the first Utilization
         related to such Project pursuant to Section 3.04 or 3.06 (as the case
         may be), setting forth such Project's Scheduled Completion Date (if
         such Project has not yet achieved Final Completion) and the Guaranteed
         Output and Guaranteed Heat Rate for such Project.

                  "Projects" means, collectively, the Initial Projects and the
         Subsequent Projects; each individually, a "Project".

                  "PUHCA" means the Public Utility Holding Company Act of 1935,
         as amended.

                  "Punch List Items" means, with respect to the construction of
         any electric generation plant, those incomplete work items that do not
         have a material effect on the operations and maintenance of such plant,
         including painting, platforms, and damaged instrument glass.

                  "Rating Level" means, with respect to any date, any of the
         following levels (with Level 1 being the "highest" of such Rating
         Levels and Level 5 being the "lowest"), as determined by reference to
         the Facility Ratings, if any, on such date issued by S&P, Fitch and
         Moody's:

        ----------------------------------------------------
                                        Facility Rating:
           Rating Level                 S&P/Moody's/Fitch
        ----------------------------------------------------
              Level 1               BBB+/Baa1/BBB+ or higher
        ----------------------------------------------------
              Level 2                     BBB/Baa2/BBB
        ----------------------------------------------------
              Level 3                    BBB-/Baa3/BBB-
        ----------------------------------------------------
              Level 4                 BB+/Ba1/BB+ or lower
        ----------------------------------------------------
              Level 5                Unrated/Partially Rated
        ----------------------------------------------------

         provided that (i) if on any day the Facility Ratings established by
         S&P, Fitch and Moody's fall within different Rating Levels, the Rating
         Level for such day shall be determined by reference to the lowest such
         Facility Rating; (ii) if any Facility Rating established by S&P, Fitch
         or Moody's shall be changed, such change shall be effective as of the
         date on which such change is notified in writing to the Borrower, or is
         announced publicly, by the rating agency making such change; and (iii)
         if S&P, Fitch or Moody's shall change the basis on which ratings are
         established, each reference to a Facility Rating announced by S&P,
         Fitch or Moody's, as the case may be, shall refer to the then
         equivalent rating by S&P, Fitch or Moody's, as the case may be.

                  "Recourse Debt" means all Debt of the Borrower and each
         Relevant Subsidiary (including subordinated debt) other than Affiliate
         Subordinated Debt.

                  "Reference Banks" means Citibank, The Bank of Tokyo-
          Mitsubishi, Ltd. and Commerzbank AG.

                  "Refinancing" means the incurrence of Debt by the Borrower or
         any Subsidiary (other than pursuant to the issuance of Original
         Commercial Paper or Rollover Commercial Paper) for purposes of
         refinancing Project Costs for, or outstanding Utilizations made with
         respect to, one or more Projects.

                  "Refinancing Commercial Paper" means Commercial Paper the
         proceeds of which are used to refinance outstanding Project Advances
         made with respect to the same Project.

                  "Refinancing Date" means, with respect to any Project, the
         date on which there are no outstanding Advances made with respect to
         such Project and no Commitments available with respect to such Project.

                  "Register" has the meaning specified in Section 8.07(d).

                  "Relevant Completed Plants" means, when used to determine (a)
         the Buydown Amount to be paid in connection with the occurrence of the
         Buydown Date for any Substantially Completed Project, all Completed
         Plants as of such Buydown Date (other than any other Substantially
         Completed Project for which a Buydown Amount is also paid or to be paid
         on such Buydown Date) and such Substantially Completed Project; (b) the
         Buydown Amount to be paid with respect to any Substantially Completed
         Project upon the occurrence of a Southern Event of Default, all
         Completed Plants as of such Buydown Date (other than any other
         Substantially Completed Project for which a Buydown Amount is also paid
         or to be paid as a result of such Southern Event of Default) and such
         Substantially Completed Project; and (c) the amount, if any, to be
         prepaid pursuant to Section 2.09(b)(iii) on the Sale Prepayment Date
         relating to any Sale, all Completed Plants as of such Sale Prepayment
         Date.

                  "Relevant Event" means, as the context may require, a Buydown
         Event, a Southern Event of Default or a Sale Event.

                  "Relevant Subsidiaries" means, collectively, all Subsidiaries
         (other than Unrestricted Subsidiaries) of the Borrower; each
         individually, a "Relevant Subsidiary".

                  "Remaining Base Case Period" means, as of any date, the period
         from the first day of the fiscal quarter in which such day occurs up to
         and including December 31, 2023.

                  "Reportable Event" means a "reportable event" as defined in
         Section 403 of ERISA with respect to which the notice requirements to
         the Pension Benefit Guaranty Corporation established under ERISA (or
         any successor thereto) have not been waived.

                  "Representatives" has the meaning specified in the definition
         of "Confidential Information".

                  "Required Lenders" means at any time Lenders owed at least 75%
         of the then aggregate unpaid principal amount of the outstanding
         Advances, or, if no such principal amount is then outstanding, Lenders
         having at least 75% of the aggregate amount of the Commitments.

                  "Required Project DSCR" means, at any date with respect to any
         electric generation plant, the following minimum Project DSCR for each
         of the years (or part thereof) thereafter during the 20 years after the
         Scheduled Completion Date of such plant (if it is a Project), or the
         equivalent thereof (if such plant is not a Project), and the following
         average Project DSCR for such period: (a) if such electric generation
         plant is a Baseload, an average Project DSCR of 3.30:1.00 and a minimum
         Project DSCR of 2.50:1.00; (b) if such electric generation plant is an
         Intermediate (High), an average Project DSCR of 3.60:1.00 and a minimum
         Project DSCR of 2.80:1.00; (c) if such electric generation plant is an
         Intermediate (Low), an average Project DSCR of 4.30:1.00 and a minimum
         Project DSCR of 3.70:1:00; and (d) if such electric generation plant is
         a Peaker, an average Project DSCR of 5.00:1.00 and a minimum Project
         DSCR of 4.50:1.00; provided that (i) an average and a minimum Project
         DSCR of 1.60:1.00 shall be applicable during the term of any Power
         Purchase Agreement entered into with respect to the entire capacity of
         such electric generation plant which is owned by the Borrower or any
         Relevant Subsidiary, if the Agent has received a Required Project DSCR
         Certificate, dated as of such date, with respect to such electric
         generation plant; and (ii) if the entire capacity of such electric
         generation plant which is owned by the Borrower or any Relevant
         Subsidiary is not contracted for under all such Power Purchase
         Agreements, the average and minimum Project DSCRs applicable to such
         electric generation plant shall be determined by reference to the
         weighted average of 1.60:1.00 and the minimum and average Project DSCR
         (as the case may be) applicable to such electric generation plant if
         there were no such Power Purchase Agreement, with such weighted average
         determined based upon the portion of the capacity of such electric
         generation plant which is the subject of such Power Purchase
         Agreement(s) at any relevant time.

                  "Required Project DSCR Certificate" means a certificate of the
         Borrower certifying, with respect to each Power Purchase Agreement and
         related Acceptable Credit Support, if any, entered into with respect to
         (a) any Project, and which PPA Documents were previously delivered to
         the Agent in satisfaction of Section 3.01(c)(ix)(D), 3.02(c)(ii),
         3.04(c) or 3.06(a) or (d), that each such PPA Document remains in full
         force and effect, all necessary approvals under all Federal and State
         Energy Laws and Regulations required to be obtained with respect
         thereto under Section 3.02, 3.04 or 3.06 (as applicable) remain in full
         force and effect, and there is no litigation, arbitration or
         administrative proceeding currently pending against any Borrower Group
         Member concerning (i) the pricing terms under such Power Purchase
         Agreement; or (ii) any such PPA Document which has had or would
         reasonably be expected to have a Material Adverse Effect; and (b) any
         other Plant which is not a Project, and which PPA Documents are
         delivered to the Agent together with such certificate, that (i) such
         Power Purchase Agreement complies with all of the PPA Parameters and
         does not contain any additional terms not set forth in the PPA
         Parameters which impose additional material obligations outside the
         ordinary course of business of the industry generally on, or otherwise
         materially reduce the benefit to, any Borrower Group Member thereunder;
         (ii) such PPA Documents are in full force and effect; and (iii) all
         necessary approvals required to be obtained with respect to such PPA
         Documents under all Federal and State Energy Laws and Regulations have
         been obtained, are in full force and effect and are final and
         non-appealable but for any Filing Conditions, and do not contain any
         restrictions, conditions or requirements which are then required to be
         satisfied and have not been satisfied, other than any Filing
         Conditions.

                  "Restricted Payments" means, with respect to any Person, any
         dividend payment or other distribution of assets, properties, cash,
         rights, obligations or securities on account of any class of capital
         stock of such Person.

                  "Rollover Commercial Paper" means any Commercial Paper which
         is issued in the amount of, and for the repayment of, existing
         Commercial Paper on the maturity thereof and for which CP Commitments
         are then outstanding under the Facility.

                  "S&P" means Standard & Poor's Ratings Services, a division of
         The McGraw-Hill Companies, Inc.

                  "Sale" means the sale (including by way of sale/leaseback
         other than a Development Authority Sale/Leaseback), in whole or in
         part, of any Asset of the Borrower or any of its Relevant Subsidiaries
         or the ownership interest in any direct or indirect Relevant Subsidiary
         to a Person which is not a Borrower Group Member.

                  "Sale Event" means, with respect to any Sale, the earlier to
         occur of (a) the date which is six (6) months after receipt of all or
         any part of the Sale Proceeds arising from such Sale; and (b) issuance
         of a prepayment notice from the Borrower with respect to the Sale
         Proceeds from such Sale.

                  "Sale Prepayment Date" has the meaning specified in Section
         2.09(b)(iii).

                  "Sale Proceeds" means, with respect to any Sale, the proceeds
         arising from such Sale, net of customary transaction costs and
         expenses, other than (a) Exempt Asset Sale Proceeds; and (b) proceeds
         which are applied to repay all Recourse Debt of the Borrower and its
         Relevant Subsidiaries, other than Debt under the Facility, incurred in
         connection with the acquisition, improvement, development, ownership or
         operation of such Asset.

                  "Scheduled Completion Date" means, with respect to each
         Project, the date on which its Final Completion is expected to occur,
         as set forth in the Project Schedule for such Project.

                  "Seller" means, with respect to any electric generation plant,
         the Borrower or any Relevant Subsidiary which owns or leases such
         plant, as the case may be.

                  "Similar Asset" means any gas-fired electric generation plant
         (other than an Initial Project or a Subsequent Project) in, or to be
         constructed in, the United States, which is, or is to be, owned wholly
         or partially (as tenants-in-common) or leased (pursuant to a
         Development Authority Sale/Leaseback) by the Borrower or by any
         Relevant Subsidiary which is wholly or majority owned by, and is
         controlled by, the Borrower, including all buildings, structures and
         improvements, and easements with respect thereto, all alterations
         thereto or replacements thereof, all fixtures, attachments, appliances,
         equipment, machinery and other articles attached thereto or used in
         connection therewith and all parts which may from time to time be
         incorporated or installed in or attached thereto, all contracts and
         agreements for the purchase or sale of commodities or other personal
         property related thereto, all leases of personal property related
         thereto, and all other real and tangible and intangible personal
         property related thereto.

                  "Southern" means The Southern Company, a Delaware corporation.

                  "Southern Completion Guarantee" means the agreement executed
         or to be executed among the Borrower, the Agent and Southern in the
         form or substantially in the form of Exhibit H.

                  "Southern Equity Agreement" means the agreement executed or to
         be executed among the Borrower, the Agent and Southern in the form or
         substantially in the form of Exhibit G.

                  "Southern Event" means any Southern Event of Default or any
         event, occurrence or circumstance which with the passage of time and/or
         giving of any notice would become a Southern Event of Default.

                  "Southern Event of Default" has the meaning specified for the
         terms "Guarantor Event of Default" and "Southern Event of Default" in
         Section 5 of the Southern Completion Guarantee and Section 2(i) of the
         Southern Equity Agreement, respectively.

                  "SPV" has the meaning specified in Section 8.07(j).

                  "Stub Period" means, with respect to any Project and any Power
         Purchase Agreement relating to such Project, the period from the
         Scheduled Completion Date for such Project up to and including the date
         when all obligations of the purchaser or off-taker under such Power
         Purchase Agreement commences.

                  "Subsequent Projects" means, collectively, (a) gas-fired
         electric generation plants (other than the Initial Projects) in, or to
         be constructed in, the United States, which are or are to be wholly or
         partially financed by the Facility, owned wholly or partially (as
         tenants-in-common) or leased (pursuant to a Development Authority
         Sale/Leaseback) by the Borrower or by any Relevant Subsidiary which is
         wholly or majority owned by, and is controlled by, the Borrower,
         including all buildings, structures and improvements, and easements
         with respect thereto, all alterations thereto or replacements thereof,
         all fixtures, attachments, appliances, equipment, machinery and other
         articles attached thereto or used in connection therewith and all parts
         which may from time to time be incorporated or installed in or attached
         thereto, all contracts and agreements for the purchase or sale of
         commodities or other personal property related thereto, all leases of
         personal property related thereto, and all other real and tangible and
         intangible personal property related thereto; and (b) each Similar
         Asset acquired in accordance with Section 5.01(l)(iii) or pursuant to a
         reinvestment of Sale Proceeds made in accordance with Section 5.01(m);
         each individually, a "Subsequent Project".

                  "Subsidiary" means, as to any Person, a corporation,
         partnership, limited liability company or other entity of which (or in
         which) shares of stock or other ownership interests having ordinary
         voting power (other than stock or such other ownership interests having
         such power only by reason of the happening of a contingency) to elect a
         majority of the board of directors or other managers of such
         corporation, partnership or other entity are at the time owned, or the
         management of which is otherwise controlled, directly or indirectly,
         through one or more intermediaries, or both, by such Person.

                  "Substantial Completion" means the date on which Southern
         certifies in the form of Exhibit L-1 to the Agent that, in the case of
         (a) any Project, (i) such Project has achieved Mechanical Completion;
         (ii) such Project has passed an emissions test demonstrating that it
         can operate in accordance with its permits; (iii) such Project has
         achieved at least 95% of its Guaranteed Output and has achieved a heat
         rate not greater than 105% of its Guaranteed Heat Rate, in each case,
         as set forth in the Project Schedule for such Project and as tested in
         accordance with the testing procedures applicable to such Project set
         forth in, or determined pursuant to, Schedule V; (iv) such Project has
         successfully completed the reliability run applicable thereto, as set
         forth in, or determined pursuant to, Schedule V; (v) such Project has
         obtained final, non-appealable permits required to operate as designed
         as of such date; and (vi) all necessary facilities for the
         transportation of natural gas to, the necessary electric interconnect
         facilities for, and all necessary facilities for the procurement,
         transportation and discharge of water to and from, such Project have
         been completed; and (b) any other electric generation plant owned or
         leased by the Borrower or any Relevant Subsidiary, the equivalent
         thereof has occurred.

                  "Substantially Completed Projects" means, as at any date, all
         Projects which have achieved Substantial Completion but not Final
         Completion as of such date; each individually, a "Substantially
         Completed Project".

                  "Synthetic Lease" means a financing for any Asset which is
         characterized as an operating lease under GAAP, but which is treated as
         a financing under the Code.

                  "Taxes" has the meaning specified in Section 2.13(a).

                  "Total Capitalization" means the sum of (a) the aggregate of
         the capital stock and other equity accounts (including retained
         earnings and paid-in capital) of the Borrower; (b) to the extent not
         included under clause (a) or (d), the aggregate amount of any funded
         Equity Contributions; (c) Recourse Debt; and (d) Affiliate Subordinated
         Debt; provided that "Total Capitalization" shall not include (i) the
         obligations of any Borrower Group Member with respect to any Trust
         Preferred Securities; and (ii) any capital stock or other equity
         (including paid-in capital and retained earnings, other than retained
         earnings which are permitted to be distributed by an Unrestricted
         Subsidiary to a Borrower Group Member) attributable, directly or
         indirectly, to an Unrestricted Subsidiary.

                  "Total Project Costs" means, with respect to each Completed
         Project, the Project Costs incurred with respect to such Project as of
         the Non-Recourse Date for such Project (including all Project Costs
         incurred on such date).

                  "Trust Preferred Securities" means deferrable interest debt
         securities, and any related securities issued by a trust or other
         special purpose entity in connection therewith, as long as (a) the
         maturity date of all such Debt is subsequent to the Final Maturity Date
         and there is no amortization of such Debt prior to the Final Maturity
         Date; (b) the obligations with respect thereto are not secured by any
         Liens (other than Liens on such debt securities and any proceeds
         thereof); and (c) the Borrower's obligations under the Facility are
         senior in right of payment in full in cash to such Debt, and such Debt
         is expressly made fully subordinated in right of payment in full in
         cash to all obligations of the Borrower with respect to the Facility.

                  "Type" has the meaning specified in the definition of
         "Advance".

                  "Uncompleted Plants" means all Plants which are not Completed
         Plants; each individually, an "Uncompleted Plant".

                  "Uncompleted Project Advances" means, at any time, all
         Advances then outstanding with respect to Uncompleted Projects; each
         individually, an "Uncompleted Project Advance".

                  "Uncompleted Projects" means all Projects which are not
         Completed Projects; each individually, an "Uncompleted Project".

                  "United States" means the United States of America.

                  "Unrated/Partially Rated" means the Debt under the Facility is
         not rated by each of S&P, Fitch and Moody's.

                  "Unrestricted Subsidiary" means any Subsidiary of the Borrower
         (other than any Subsidiary of the Borrower which directly or indirectly
         owns a Project or any portion thereof) all the Debt of which (a) is
         nonrecourse to the Borrower or any of the Borrower's other Subsidiaries
         (other than any other Unrestricted Subsidiary), other than with respect
         to stock or other ownership interest of the Borrower or any of its
         other Subsidiaries in such Subsidiary or to the extent permitted with
         respect to Project Finance Debt; and (b) is not secured by any Assets
         of the Borrower or any of its Subsidiaries (other than the Assets of,
         or stock or other ownership interests in, an Unrestricted Subsidiary).

                  "Unused" means, with respect to each Lender's Commitment, the
         amount which is equal to such Lender's Commitment minus all outstanding
         Advances made by such Lender.

                  "Updated Base Case Projections" means, as of any date, the
         Initial Base Case Projections, as supplemented by all Project Base Case
         Projections previously delivered pursuant to Section 3.04, in each
         case, for a period from such date up to and including December 31,
         2023.

                  "U.S. Tax Law Change" has the meaning specified in Section
         2.13(a).

                  "Utilizations" means a Borrowing or a CP Commitment
         Reservation, as the context may require; each individually, a
         "Utilization".

                  "Wansley Project" means the approximately 1,134MW gas-fired
         electric generation plant constructed or to be constructed by the
         Borrower or an Affiliate of the Borrower in Heard County, Georgia with
         an expected completion date in June 2002.

                  "Wansley Sale/Leaseback" means the sale/leaseback of the
         Wansley Project, pursuant to the Lease Agreement dated as of December
         1, 2000 between the Development Authority of Heard County (a public
         body corporate and politic created and existing under the laws of the
         State of Georgia), as lessor, and the Borrower (as assignee of Georgia
         Power Company), as lessee (as amended, modified and supplemented from
         time to time to extend such lease to additional real or personal
         property comprising the Wansley Project), and all documents relating
         thereto.

                  "Working Capital Advance" has the meaning specified in Section
         2.16.

                    SECTION 1.02. Computation of Time Periods. In this Agreement
               in the  computation of periods of time from a specified date to a
               later  specified date, the word "from" means "from and including"
               and the words "to" and "until" each mean "to but excluding".

                    SECTION 1.03.  Accounting  Terms.  All accounting terms not
               specifically defined herein shall be construed in accordance with
               GAAP.

                    SECTION   1.04.    Interpretation.  In  this Agreement:

                         (a) the  singular  includes  the  plural and the plural
                    includes the singular;

                         (b) the word "or" is not exclusive;

                         (c) the words "include", "includes" and "including" are
                    not limiting;

                         (d) a  reference  to an Article,  Section, Schedule or
                    Exhibit is to the Article,  Section,  Schedule or Exhibit of
                    this Agreement unless otherwise indicated, and Schedules and
                    Exhibits to this Agreement  shall be deemed  incorporated by
                    reference in this Agreement;

                         (e) references to any document, instrument or agreement
                    shall  include  (i)  all   schedules,  exhibits  and  other
                    attachments thereto; and (ii) all documents, instruments or
                    agreements issued or executed in replacement thereof;

                         (f) references to any document or agreement, including
                    this  Agreement, shall be deemed to include references  to
                    such document or  agreement as  amended,  supplemented,
                    modified or restated  and in effect  from time to time in
                    accordance  with its terms and subject to the conditions set
                    forth herein and therein;

                         (g)  references  to "days"  shall mean  calendar  days,
                    unless the term "Business Days" shall be used; and

                         (h) the Loan  Documents are the result of  negotiations
                    among the Loan Parties,  the Agent,  each Initial Lender and
                    their respective  counsel.  Accordingly,  the Loan Documents
                    shall be deemed the product of all parties  thereto,  and no
                    ambiguity shall be construed in favor of or against the Loan
                    Parties, the Agent or any Lender.

                                   Article II

                        AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Advances. (a) The Advances. Each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Advances to the
Borrower from time to time on any Business Day during the period from the Funds
Availability Date to the Final Maturity Date in an aggregate amount not to
exceed at any time outstanding the amount set forth opposite such Lender's name
on Schedule I or, if such Lender has entered into any Assignment and Acceptance,
set forth for such Lender in the Register maintained by the Agent pursuant to
Section 8.07(d), as such amount may be reduced pursuant to Section 2.04 (such
Lender's "Commitment"); provided that (i) only one Borrowing of Project Advances
shall be permitted with respect to each of the Dahlberg Project and any
Subsequent Project which, as of the date of acquisition thereof by a Borrower
Group Member, is a Completed Project; (ii) Project Advances for any Project
shall be made in an aggregate amount not to exceed the Project Limit for such
Project (as reduced, in accordance with Section 2.15, to reflect the aggregate
amount of all outstanding CP Commitment Reservations, if any, relating to such
Project); (iii) CP Advances for any Project shall be made in an aggregate amount
not to exceed the aggregate of all CP Commitment Reservations for such Project;
(iv) Working Capital Advances shall be made in an aggregate amount not to exceed
the lesser of (A) the Borrowing Limit for Working Capital Advances; and (B) the
aggregate of all Unused Commitments minus all CP Commitment Reservations; and
(v) the aggregate principal amount of all outstanding Advances and CP Commitment
Reservations shall not exceed $850,000,000. Each Borrowing shall be in an
aggregate amount of $5,000,000 and an integral multiple of $1,000,000 in excess
thereof, except for any Borrowing of the remaining Unused portion of the
Commitments available for the making of Advances within the applicable Borrowing
Limit. Each Borrowing shall consist of Advances of the same Type and Category
made on the same day by the Lenders ratably according to their respective
Commitments. The Borrower may make more than one Borrowing on the same day;
provided that (x) such Borrowings are of different Categories; and (y) no more
than two Borrowings of each Category may be made during any one calendar month.
Within each Lender's Commitment, the applicable Borrowing Limit and the
Availability Period, and subject to the conditions set forth in Article III, the
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.09 and
reborrow under this Section 2.01.

          (b) Project  Limit  Modification.  The Borrower  shall have the right,
     upon at least thirty (30) days' notice to the Agent,to modify the Project
     Limit applicable to any Uncompleted Project; provided that:

                         (i) the aggregate  principal amount of all outstanding
                    Advances  and CP  Commitment  Reservations shall not exceed
                    $850,000,000;

                         (ii) the  aggregate  of all  increases  in the Project
                    Limit for any  Project  may not  exceed  10% of the Initial
                    Project Limit for such Project;

                         (iii)  other  than  with  respect to any modification
                    reducing  such Project Limit to zero,  the Agent shall have
                    received an Adjusted Project Budget for such Project; and

                         (iv) the aggregate  principal amount of all outstanding
                    Advances and CP Commitment Reservations with respect to such
                    Project  shall  not  exceed  the  Project  Limit, upon such
                    modification, for such Project.

          (c) Designated Lenders.  For any Lender which is a Designating Lender,
     any  Advance to be made by such Lender may from time to time be made by its
     Designated Lender in such Designated Lender's sole discretion,  and nothing
     herein shall  constitute a commitment to make  Advances by such  Designated
     Lender;  provided that if any Designated Lender elects not to, or fails to,
     make any such Advance,  its Designating  Lender hereby agrees that it shall
     make such  Advance  pursuant  to the terms of this  Agreement.  Any Advance
     actually  funded by a Designated  Lender shall  constitute a utilization of
     the Commitment  and, in the case of a CP Advance,  the CP Commitment of the
     Designating Lender for all purposes under this Agreement.

          SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made on
     notice,  given not later than 11:00 A.M.  (New York City time) on the third
     Business Day prior to the date of the  proposed  Borrowing in the case of a
     Borrowing  consisting of Eurodollar Rate Advances,  or not later than 11:00
     A.M. (New York City time) on the date of the proposed Borrowing in the case
     of a Borrowing  consisting  of Base Rate  Advances,  by the Borrower to the
     Agent, which shall give to each Lender prompt notice thereof by telecopier.
     Each such notice of a  Borrowing  (a "Notice of  Utilization")  shall be by
     telephone, confirmed immediately by telecopier in substantially the form of
     Exhibit B, (i) specifying therein the requested (A) date of such Borrowing;
     (B) Type and Category of Advances comprising such Borrowing;  (C) aggregate
     amount of such Borrowing; (D) in the case of a Borrowing comprising Project
     Advances or CP Advances,  aggregate  principal amount of the Advances to be
     made  with  respect  to each  Project;  and (E) in the case of a  Borrowing
     consisting of Eurodollar  Rate Advances,  initial  Interest Period for each
     such  Advance;  (ii)  in the  case of a  Borrowing  comprising  of  Project
     Advances,  specifying  therein the  relevant  Project(s)  and  containing a
     representation  that  proceeds of the requested  Borrowing  will be used to
     finance  Project Costs for such Project(s)  (including,  in the case of any
     Project,  repayment  of any  Affiliate  Subordinated  Debt  incurred by the
     Borrower to fund the costs of acquiring such Project and Project Costs paid
     in respect of such  Project  prior to the  initial  Advances  hereunder  in
     respect of such  Project);  (iii) in the case of a Borrowing  comprising CP
     Advances,   specifying   the   relevant   Project(s)   and  CP   Commitment
     Reservation(s)  pursuant  to which such CP  Advances  are  requested;  (iv)
     containing  a  representation  that such  Borrowing  will not result in the
     applicable Borrowing Limit to be exceeded or the aggregate principal amount
     of all  outstanding  Advances  and CP  Commitment  Reservations  to  exceed
     $850,000,000;  and (v)  specifying  the aggregate  principal  amount of all
     outstanding Advances and the unused Commitments and CP Commitments, in each
     case,  after giving  effect to the proposed  Borrowing.  Each Lender shall,
     before 11:00 A.M. (New York City time) on the date of such Borrowing,  make
     available for the account of its Applicable  Lending Office to the Agent at
     the Agent's  Account,  in same day funds,  such Lender's ratable portion of
     such  Borrowing;  provided that if a Notice of  Utilization in respect of a
     proposed Borrowing consisting of Base Rate Advances is given on the date of
     such Borrowing,  the Lenders shall so make available their ratable portions
     of such Borrowing before 3:00 P.M. (New York City time) on such date. After
     the Agent's  receipt of such funds and upon  fulfillment  of the applicable
     conditions  set  forth in  Article  III,  the Agent  will  make such  funds
     available  to the  Borrower at the Agent's  address  referred to in Section
     8.02.

          (b) Anything in subsection (a) above to the contrary notwithstanding,
     the Borrower may not select  Eurodollar  Rate Advances for any Borrowing if
     the obligation of the Lenders to make  Eurodollar  Rate Advances shall then
     be suspended pursuant to Section 2.07(e) or 2.11.

          (c) The Borrower  shall indemnify  each Lender against any actual and
     documented  loss  (excluding  any loss of profit  and/or  margin),  cost or
     expense  reasonably  incurred  by  such  Lender  as a  result  of  (i)  the
     revocation by the Borrower of (A) any Notice of Utilization for a Borrowing
     that such Notice of Utilization specifies is to be comprised of Eurodollar
     Rate Advances;  or (B) any notice given by the Borrower pursuant to Section
     2.08 of the  Conversion of Base Rate Advances to Eurodollar Rate Advances;
     and (ii) any failure to fulfill on or before the date specified in a Notice
     of  Utilization  for a Borrowing  the  applicable conditions  set forth in
     Article III,  including,  in each such case,  any loss  (excluding  loss of
     profit and/or margin), cost or expense reasonably incurred by reason of the
     liquidation  or  reemployment  of deposits or other funds  acquired by such
     Lender  to fund  the  Advance  to be made  by such  Lender  as part of such
     Borrowing or as a result of such Conversion when such Advance,  as a result
     of such revocation or failure,  is not made on the date specified  therefor
     in the relevant Notice of Utilization or when such Base Rate Advances, as a
     result of such  revocation,  are not converted to Eurodollar Rate Advances,
     but excluding,  however, any such losses, costs and expenses resulting from
     any such  revocation  or failure  which has occurred  more than ninety (90)
     days  prior  to  demand  being  made to the  Borrower  by such  Lender  for
     indemnification.  The payment of such  indemnity  to a Lender shall be made
     within thirty (30) days of a demand by such Lender  complying  with Section
     8.04(d).

          (d) With  respect  to any  Borrowing,  unless  the  Agent shall  have
     received  notice from a Lender prior to the date of such Borrowing (in the
     case of a proposed Borrowing  consisting of Eurodollar Rate Advances) or on
     or before 1:00 P.M. (New York City time) on the date of such  Borrowing (in
     the case of a Borrowing  consisting of Base Rate Advances) that such Lender
     will not make available to the Agent such Lender's  ratable portion of such
     Borrowing,  the Agent may assume  that such  Lender  has made such  portion
     available  to the Agent on the date of such  Borrowing in  accordance  with
     Section 2.02(a) and the Agent may, in reliance upon such  assumption,  make
     available to the Borrower on such date a  corresponding  amount.  If and to
     the extent that such  Lender  shall not have so made such  ratable  portion
     available  to the Agent,  such Lender and the Borrower  severally  agree to
     repay to the Agent forthwith on demand such  corresponding  amount together
     with  interest  thereon,  for each day from the date  such  amount  is made
     available  to the  Borrower  until  the date  such  amount is repaid to the
     Agent, at (i) in the case of the Borrower,  the interest rate applicable at
     the time to Advances  comprising  such  Borrowing;  and (ii) in the case of
     such Lender,  the Federal Funds  Effective Rate. If such Lender shall repay
     to the Agent  such  corresponding  amount,  such  amount  so  repaid  shall
     constitute such Lender's  Advance as part of such Borrowing for purposes of
     this Agreement.

          (e) The  failure of any Lender to make the Advance to be made by it as
     part of any Borrowing shall not relieve any other Lender of its obligation,
     if any,  under  this  Agreement  to make  its  Advance  on the date of such
     Borrowing,  but no Lender shall be responsible for the failure of any other
     Lender to make the  Advance to be made by such other  Lender on the date of
     any Borrowing.

          SECTION 2.03.  Fees. (a) Commitment Fee. The Borrower shall pay to the
     Agent for the account of each Lender a  commitment  fee on the daily Unused
     portion  of such  Lender's  Commitment,  (i) in the  case  of each  Initial
     Lender, from the date of this Agreement; and (ii) in the case of each other
     Lender (other than a Designated Lender),  from the effective date specified
     in the Assignment and Acceptance  pursuant to which it became a Lender,  in
     each case, until the Commitment  Termination Date at a rate per annum equal
     to the  Applicable  Commitment  Fee Percentage in effect from time to time,
     payable in arrears on the fifteenth day of each March, June,  September and
     December, and on the Commitment Termination Date.

          (b)  Agent's  Fees.  The  Borrower shall pay to the Agent for its own
     account  such fees as may from time to time be agreed between the Borrower
     and the Agent.

          SECTION  2.04.  Termination  or  Reduction  of  the  Commitments. The
     Borrower  shall  have the right,  upon at least  three (3)  Business  Days'
     notice to the Agent,  to terminate  in whole or reduce  ratably in part the
     unused portions of the respective Commitments of the Lenders; provided that
     (a) each partial  reduction shall be in the aggregate amount of $10,000,000
     or an  integral  multiple  of  $1,000,000  in excess  thereof;  and (b) the
     aggregate of all Commitments,  upon such reduction,  shall not be less than
     the aggregate principal amount of all Utilizations then outstanding.

          SECTION 2.05.  Repayment of the Advances. The Borrower shall repay to
     the Agent for the ratable account of the Lenders on the Final Maturity Date
     the aggregate principal amount of the Advances then outstanding.

          SECTION 2.06. Interest on the Advances.  (a) Scheduled Interest. The
     Borrower shall pay interest on the unpaid  principal amount of each Advance
     owing to each Lender  from the date of such  Advance until such  principal
     amount shall be paid in full, at the following rates per annum:

               (i) Base Rate Advances.  During such periods as such Advance is a
          Base Rate  Advance,  a rate per annum equal at all times to the sum of
          (A) the Base Rate in effect from time to time plus (B) the  Applicable
          Margin  in  effect  from  time to  time,  payable  in  arrears  on the
          fifteenth day of each March, June,  September and December during such
          periods and on the date such Base Rate  Advance  shall be Converted or
          paid in full.

               (ii)  Eurodollar  Rate  Advances.  During  such  periods  as such
          Advance is a Eurodollar  Rate  Advance,  a rate per annum equal at all
          times during each  Interest  Period for such Advance to the sum of (A)
          the Eurodollar Rate for such Interest Period for such Advance plus (B)
          the Applicable Margin in effect from time to time,  payable in arrears
          on the last day of such Interest  Period and, if such Interest  Period
          has a duration of more than three (3) months,  on each day that occurs
          during such  Interest  Period every three months from the first day of
          such  Interest  Period and on the date such  Eurodollar  Rate  Advance
          shall be Converted or paid in full.

     (b) Default Interest.  Upon the occurrence and during the continuance of an
Event of Default  under  Section  6.01(a) or any  failure to prepay or repay any
Project Debt in accordance with Section 2.09(b), the Borrower shall pay interest
on (i) the unpaid  principal amount of each Advance owing to each Lender (in the
case of such an Event of Default or any failure to prepay or repay  Project Debt
in  accordance  with any of  Section  2.09(b)(ii),  (iii),  (iv) or (v)) or each
Advance so required to be prepaid  pursuant to Section  2.09(b)(i),  as the case
may be, in each case,  payable in  arrears on the dates  referred  to in Section
2.06(a)(i)  or  (a)(ii)  above and on demand,  at a rate per annum  equal at all
times to 2% per  annum  above  the rate per  annum  required  to be paid on such
Advance pursuant to Section 2.06(a)(i) or (a)(ii) above; and (ii) to the fullest
extent permitted by Law, the amount of any interest, fee or other amount payable
under this  Agreement or under any Note that is not paid when due, from the date
such  amount  shall be due until such amount  shall be paid in full,  payable in
arrears on the date such amount  shall be paid in full and on demand,  at a rate
per annum equal at all times to 2% per annum  above the rate per annum required
to be paid on Base Rate Advances pursuant to Section 2.06(a)(i) above.

SECTION 2.07. Interest Rate Determination. (a) Each Reference Bank agrees to
furnish to the Agent, at its request, timely information for the purpose of
determining each Eurodollar Rate. If any one or more of the Reference Banks
shall not furnish such timely information to the Agent for the purpose of
determining any such interest rate, the Agent shall determine such interest rate
on the basis of timely information furnished by the remaining Reference Banks.
The Agent shall give prompt notice to the Borrower and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section
2.06(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for
the purpose of determining the interest rate under Section 2.06(a)(ii).

(b) If (i) the Agent is unable for any reason to determine the Eurodollar Rate
for any Interest Period; (ii) if applicable, fewer than two Reference Banks
furnish timely information to the Agent for determining the Eurodollar Rate for
any Interest Period pursuant to Section 2.07(a); or (iii) the Majority Lenders
notify the Agent by 12:00 noon (London time) two Business Days prior to the
first day of any Interest Period that the Majority Lenders were unable to
obtain, at approximately 11:00 A.M. (London time) on such Business Day and at
the applicable Eurodollar Rate, Dollar deposits for a period equal to such
Interest Period and in amounts substantially equal to such Majority Lenders'
respective Eurodollar Rate Advances comprising part of the Borrowing to be
outstanding during such Interest Period, the Agent shall promptly notify the
Borrower and the Lenders of such event, whereupon:

     (A) within  five (5)  Business  Days of receipt of such  notification,  the
Agent and the Borrower shall enter into good faith  negotiations for a period of
fifteen  (15)  days (or  such  shorter  period  as is  required  to agree to the
alternative  basis referred to in this clause (A)) with a view to agreeing on an
alternative  basis  for  determining  the rate of  interest  applicable  to such
Eurodollar Rate Advances;

     (B) any  alternative  basis agreed under clause (A) above with the approval
of the Majority  Lenders and any interest rate determined  pursuant thereto will
be binding on all the parties to this Agreement and will be retroactive  to, and
take effect from, the first day of the applicable Interest Period;

     (C) if no  alternative  basis is agreed  under  clause (A) above within the
15-day period there  specified,  the Agent,  upon  instructions  of the Majority
Lenders, shall, on behalf of each of the Lenders, set forth an alternative basis
for determining the rate of interest applicable to such Eurodollar Rate Advances
on or before  the last day of the  Interest  Period  to which  the  notification
relates or, if earlier,  within ten (10) days after the expiration of the 15-day
period set forth in clause (A) above. Each Lender shall certify to the Agent and
to the Borrower  such Lender's  actual cost of funds for funding its  applicable
Eurodollar  Rate Advances,  and the Majority  Lenders shall certify to the Agent
and the Borrower in reasonable  detail the alternative basis for determining the
rate of interest to be  applicable  to such  Eurodollar  Rate  Advances and such
interest rate as so determined;

     (D) any interest rate determined pursuant to clause (C) above shall not, in
any event, exceed (1) the Majority Lenders' reasonable determination of the cost
to the Lenders,  as certified by them  pursuant to clause (C) above,  of funding
their applicable Eurodollar Rate Advances plus (2) the Applicable Margin;

     (E) each alternative basis so certified by the Majority Lenders pursuant to
clause (C) above and each interest  rate  determined  pursuant  thereto shall be
binding on the  Borrower and the Lenders and shall be  retroactive  to, and take
effect from, the first day of the applicable Interest Period; and

     (F) so long as any  alternative  basis  referred to above is in force,  the
Agent, in consultation  with the Borrower and the Majority  Lenders,  shall from
time to time, but not less  frequently  than monthly,  review whether or not the
circumstances  referred to in this Section  2.07(b) still prevail with a view to
returning to the normal  provisions of this  Agreement in relation to the method
of determining interest as soon as practicably possible.

     (c) If the  Borrower  shall fail to select  the  duration  of any  Interest
Period for any  Eurodollar  Rate  Advances  in  accordance  with the  provisions
contained in the  definition of "Interest  Period" in Section 1.01,  then on the
last day of the then existing  Interest Period  therefor,  if the Borrower could
have selected an Interest Period for such Eurodollar Rate Advances in accordance
with such  provisions,  an  Interest  Period with a duration of three (3) months
shall be applicable to such  Eurodollar  Rate Advances or, if the Borrower could
not have  selected  any Interest  Period for such Eurodollar  Rate  Advances in
accordance   with  such   provisions,   such   Eurodollar   Rate  Advances  will
automatically,  on such last day, Convert into Base Rate Advances, and the Agent
shall promptly notify the Borrower and the Lenders thereof.

     (d) On  the  date  on  which  the  aggregate  unpaid  principal  amount  of
Eurodollar Rate Advances  comprising any Borrowing shall be reduced,  by payment
or prepayment  or  otherwise,  to less than  $10,000,000,  such  Advances  shall
automatically Convert into Base Rate Advances.

     (e) Upon the  occurrence  and  during the  continuance  of (i) any Event of
Default,  (A) each Eurodollar Rate Advance then outstanding will  automatically,
on the last day of the then existing  Interest Period  therefor, Convert into a
Base Rate Advance;  and (B) the obligation of the Lenders to make, or to Convert
Base Rate Advances into,  Eurodollar  Rate Advances shall be suspended until all
Events of Default have been cured or waived;  and (ii) any failure to prepay any
Eurodollar  Rate  Advance  in  accordance  with  Section  2.09(b)(i),  (A) each
Eurodollar  Rate Advance  required to be so prepaid will  automatically,  on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance;  and (B) the Lenders  shall have no obligation to Convert any Base Rate
Advances  required to be prepaid pursuant to Section  2.09(b)(i) into Eurodollar
Rate Advances.

SECTION 2.08. Optional Conversion of the Advances. The Borrower may on any
Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.07 and 2.11, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided that any Conversion of Eurodollar Rate Advances into Base Rate
Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances and any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.01(a). Each such notice of a Conversion shall, within the
restrictions specified above, specify (a) the date of such Conversion; (b) the
Advances to be Converted; and (c) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for each such Advance.

SECTION 2.09. Prepayments. (a) Optional Prepayments. The Borrower may, upon at
least three (3) Business Days' notice (in the case of Eurodollar Rate Advances)
or upon at least one Business Day's notice (in the case of Base Rate Advances)
to the Agent stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided that (i) each
partial prepayment shall be in an aggregate principal amount of $10,000,000 or
an integral multiple of $1,000,000 in excess thereof; and (ii) in the event of
any such prepayment of a Eurodollar Rate Advance, the Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to Section
8.04(c).

(b) Mandatory Prepayments. (i) Upon the occurrence of a Southern Event of
Default, the Borrower shall prepay, (A) with respect to all Projects which have
not yet achieved Substantial Completion, all Project Debt then outstanding with
respect to such Projects; and (B) with respect to each Substantially Completed
Project the Buydown Date for which has not then occurred, such portion of
Project Debt then outstanding with respect to such Substantially Completed
Project as is equal to the Buydown Amount for such Substantially Completed
Project, in each case, in accordance with clause (c) below.

(ii) Upon the occurrence of the Buydown Date for any Project, the Borrower shall
prepay (A) if Substantial Completion of such Project has not then been achieved,
all Project Debt then outstanding with respect to such Project; or (B) if
Substantial Completion of such Project has then been achieved, such portion of
such Project Debt as is equal to the Buydown Amount for such Project, in each
case, in accordance with clause (c) below.

(iii) On the date (the "Sale Prepayment Date") which is either (1) the earlier
of (A) the date falling six (6) months after any Sale; and (B) the prepayment
date specified in a prepayment notice from the Borrower with respect to the Sale
Proceeds from such Sale, or (2) the date specified in sub-clauses (B), (D) or
(F) below, if applicable, to the extent any Sale Proceeds from such Sale have
not been reinvested in a Similar Asset in accordance with Section 5.01(m), the
Borrower shall use such Sale Proceeds to prepay the then outstanding Project
Debt (but in no event more than in an amount equal to such Sale Proceeds) to the
extent necessary to result in the minimum and average Portfolio Adjusted Base
Case Projections, calculated on the assumption that all Recourse Debt of the
Borrower and the Relevant Subsidiaries outstanding immediately following such
prepayment is repaid in full on or prior to the end of the Remaining Base Case
Period, with such Debt being prepaid or repaid (as the case may be) in the
following order of priority: (A) Completed Project Advances, if any, on a pro
rata basis, together with interest thereon; (B) to the extent of any such Sale
Proceeds remaining thereafter, Commercial Paper, if any, then outstanding with
respect to Completed Projects, on the maturity date thereof and on a pro rata
basis, together with interest thereon (if any); (C) to the extent of any such
Sale Proceeds remaining thereafter, Advances, if any, then outstanding with
respect to the Asset the sale of which resulted in such Sale Proceeds, on a pro
rata basis, together with interest thereon; (D) to the extent of any such Sale
Proceeds remaining thereafter, Commercial Paper, if any, then outstanding with
respect to such Asset, on the maturity date thereof and on a pro rata basis,
together with interest thereon; (E) to the extent of any such Sale Proceeds
remaining thereafter, all other Advances, if any, then outstanding, on a pro
rata basis, together with interest thereon; and (F) to the extent of any such
Sale Proceeds remaining thereafter, all other Commercial Paper, if any, then
outstanding, on the maturity date thereof and on a pro rata basis, together with
interest thereon.

                  Contemporaneously with (AA) such prepayment of Advances, the
Project Limit for the relevant Project shall automatically be reduced by the
amount of such prepayment; and (BB) such repayment of Commercial Paper, each of
the Project Limit for the relevant Project and the CP Commitments of the Lenders
with respect to such Commercial Paper, if any, shall automatically be reduced
(on a pro rata basis) by the amount of such repayment.

(iv) Upon any Loss with respect to a Completed Project, the Borrower shall
repay, if required, the relevant Project Debt then outstanding in accordance
with Section 5.01(l).

(v) Within five (5) Business Days after receipt of the proceeds of any
Refinancing relating to any Project, and upon at least three (3) Business Days'
notice (in the case of Eurodollar Rate Advances) or upon at least one Business
Day's notice (in the case of Base Rate Advances) to the Agent stating the
proposed date and aggregate principal amount of the payment, apply such proceeds
to repay Project Debt then outstanding with respect to such Project, and
interest thereon, in accordance with clause (c) below.

(c) All prepayments or repayments (as the case may be) of Project Debt with
respect to any particular Project pursuant to clause (b)(i), (ii), (iv) and (v)
above and Section 5.01(l) shall be made using funds other than the proceeds of
any Borrowing or any Commercial Paper as to which CP Commitments are outstanding
or requested, in the following order of priority:

     (i) firstly, to all Project Advances and all CP Advances, if any, made with
respect to such Project,  on a pro rata basis,  together with interest  thereon;
and

     (ii) secondly,  upon the maturity thereof, to all Commercial Paper, if any,
then outstanding with respect to such Project and as to which CP Commitments are
then in effect, on a pro rata basis, together with interest thereon (if any).

                  Contemporaneously with (A) such prepayment of Advances, the
Project Limit for the relevant Project shall automatically be reduced by the
amount of such prepayment; and (B) such repayment of Commercial Paper, each of
the Project Limit for the relevant Project and the CP Commitments of the Lenders
with respect to such Commercial Paper, if any, shall automatically be reduced
(on a pro rata basis) by the amount of such repayment.

SECTION 2.10. Increased Costs. The Borrower agrees to indemnify each Lender for
its actual and documented losses (whether due to decreased revenues or increased
costs) that are the result of a change of Law or in the official interpretation
thereof or compliance with any guideline or request from any central bank or
other Governmental Authority having jurisdiction over such Lender (whether or
not having the force of law) adopted or made (a) in the case of the Initial
Lenders, after the date of this Agreement; and (b) in the case of any other
Lender, after the date such Lender shall have become a party to this Agreement
by executing and delivering an Assignment and Acceptance or a Designation
Agreement (as the case may be), which costs are reasonably incurred by such
Lender and are the result of (i) such Lender agreeing to make or making, funding
or maintaining Eurodollar Rate Advances; or (ii) any increase in the amount of
capital required to be maintained by such Lender or any corporation controlling
such Lender, based upon the existence of such Lender's commitment to lend under
this Agreement and other commitments of this type, to the extent that such
Lender reasonably determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend under this Agreement. The
foregoing indemnity shall not apply to (A) any such change of Law or
interpretation or any adoption or making of any such guideline or request that
is anticipated on the date of this Agreement, (B) any period or periods ending
more than one hundred and twenty (120) days prior to demand for indemnification
being made or (C) any such losses resulting from (1) Taxes or Other Taxes (as to
which Section 2.13 shall govern); or (2) changes in the basis of taxation of
overall net income or overall gross income by the United States or by the
foreign jurisdiction or state under the laws of which such Lender is organized
or has its Applicable Lending Office or any political subdivision thereof. The
Borrower shall from time to time, within thirty (30) days following demand by
such Lender complying with Section 8.04(d) (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such losses.

SECTION 2.11. Illegality. If as a result of a change in Law or in the official
interpretation thereof (a) in the case of the Initial Lenders, after the date of
this Agreement; and (b) in the case of any other Lender, after the date such
Lender shall have become a party to this Agreement by executing and delivering
an Assignment and Acceptance or a Designation Agreement (as the case may be), it
shall have become unlawful, or if after the applicable date set forth above any
central bank or other Governmental Authority having jurisdiction over such
Lender asserts that it is unlawful, for such Lender to (i) allow all or part of
its commitment to make Eurodollar Rate Advances to remain outstanding; or (ii)
make, fund or allow to remain outstanding all or part of its Eurodollar Rate
Advances, such Lender may notify the Borrower and the Agent thereof in
reasonable detail (together with supporting documentation) of such event,
whereupon:

                  (A) such Lender's obligations to make Eurodollar Rate Advances
         shall be suspended and, forty-five (45) days following such
         notification, shall be canceled if such unlawfulness shall then be
         continuing; and

                  (B) the Borrower will prepay such Lender's Eurodollar Rate
         Advances or convert them to Base Rate Advances at the time or times and
         to the extent necessary to avoid such unlawfulness, together with
         unpaid accrued interest thereon, unpaid accrued fees and any other
         amounts due and payable to such Lender,

unless, in either case, prior thereto, the Borrower shall have given notice to
such Lender that the Borrower will require such Lender to assign and transfer
all of its interests in this Agreement pursuant to Section 8.07(b) and shall
have caused such Lender to have so assigned and transferred such interests.

     SECTION 2.12.  Payments and Computations.  (a) The Borrower shall make each
payment under this  Agreement and under the Notes not later than 11:00 A.M. (New
York  City  time) on the day when due in  Dollars  to the  Agent at the  Agent's
Account  in same day  funds.  The Agent  will  promptly  thereafter  cause to be
distributed  like funds  relating  to the  payment of  principal  or interest or
commitment  fees to the Lenders ratably in accordance with such amounts owing to
the Lenders for the account of their respective  Applicable Lending Offices, and
like funds  relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending Office, in each case to be
applied in  accordance  with the terms of this  Agreement;  provided that unless
otherwise expressly provided in this Agreement, funds so paid by the Borrower on
account of any principal or interest due under this  Agreement  shall be applied
first to satisfy such amounts due with  respect to  Completed  Project  Advances
and,  after all such  amounts are paid,  to the  corresponding  amounts due with
respect to Uncompleted  Project  Advances.  Upon its acceptance of an Assignment
and  Acceptance  or a Designation  Agreement  and  recording of the  information
contained  therein in the Register  pursuant to Section 8.07(d),  from and after
the effective  date  specified in such  Assignment and Acceptance or Designation
Agreement (as the case may be), the Agent shall make all payments  hereunder and
under the Notes in  respect  of the  interest  assigned  thereby  to the  Lender
assignee  thereunder,  and the  parties to such  Assignment  and  Acceptance  or
Designation   Agreement  (as  the  case  may  be)  shall  make  all  appropriate
adjustments  in such payments for periods prior to such  effective date directly
between themselves.

               (b) All  computations of interest based on the Base Rate shall be
          made by the Agent on the  basis of a year of 365 or 366  days,  as the
          case may be, and all  computations of interest based on the Eurodollar
          Rate or the Federal Funds  Effective Rate and of commitment fees shall
          be made by the Agent on the basis of a year of 360 days,  in each case
          for the actual number of days  (including  the first day but excluding
          the last day)  occurring  in the  period for which  such  interest  or
          commitment  fees are payable.  Each  determination  by the Agent of an
          interest rate under this Agreement shall be conclusive and binding for
          all purposes, absent manifest error.

               (c) Whenever any payment under this Agreement or under the Notes
          shall be stated to be due on a day other  than a  Business Day, such
          payment shall be made on the next  succeeding Business Day;  provided
          that if such extension would cause payment of interest on or principal
          of Eurodollar Rate Advances to be made in the next following  calendar
          month, such payment shall be made on the next preceding  Business Day.
          Any such  extension  or  reduction  of time shall be  included in the
          computation of payment of interest or commitment  fee, as the case may
          be.

               (d) Unless the Agent shall have received notice from the Borrower
          prior to the date on which any  payment  is due to the  Lenders under
          this  Agreement  that the Borrower will not make such payment in full,
          the Agent may assume that the  Borrower  has made such payment in full
          to the Agent on such date and the Agent  may,  in  reliance  upon such
          assumption, cause to be distributed to each Lender on such due date an
          amount equal to the amount then due such Lender.  If and to the extent
          the Borrower shall not have so made such payment in full to the Agent,
          each Lender  shall repay to the Agent  forthwith on demand such amount
          distributed to such Lender  together with interest  thereon,  for each
          day from the date such amount is  distributed to such Lender until the
          date such Lender repays such amount to the Agent, at the Federal Funds
          Effective Rate.

     SECTION 2.13.  Taxes.  (a) Any and all payments by the Borrower under this
Agreement or under the Notes shall be made,  in  accordance with Section  2.12,
without deduction for any Taxes or Other Taxes (each as defined below).

                  "Taxes" means any and all present or future taxes, levies,
         imposts, deductions, charges or withholdings with respect to any
         payment by the Borrower pursuant to this Agreement or any Note, and all
         liabilities with respect thereto, excluding (i) in the case of each
         Lender and the Agent, taxes imposed on its income, net worth or gross
         receipts and franchise or similar taxes imposed on it by a jurisdiction
         under the laws of which such Lender or the Agent (as the case may be)
         is organized or in which its principal executive office is located or
         any political subdivision thereof or, in the case of each Lender, in
         which its Applicable Lending Office is located or any political
         subdivision thereof; and (ii) in the case of each Lender, any United
         States withholding tax imposed on such payments except to the extent
         that such Lender is subject to United States withholding tax by reason
         of a U.S. Tax Law Change.

                  "Other Taxes" means any present or future stamp or documentary
         taxes and any other excise or property taxes, or similar charges or
         levies, which arise from any payment made pursuant to this Agreement or
         under any Note or from the execution or delivery of, or otherwise with
         respect to, this Agreement or any Note.

                  "U.S. Tax Law Change" means with respect to any Lender the
         occurrence (i) in the case of the Initial Lenders, after the date of
         this Agreement; and (ii) in the case of any other Lender, after the
         date such Lender shall have become a party to this Agreement by
         executing and delivering an Assignment and Acceptance or a Designation
         Agreement (as the case may be), of the adoption of any applicable
         United States federal law or regulation relating to taxation, or any
         change therein or in the official interpretation thereof, or the entry
         into force, modification or revocation of any income tax convention or
         treaty to which the United States is a party.

                  If the Borrower shall be required by Law to deduct any Taxes
or Other Taxes from or in respect of any sum payable under this Agreement or
under any Note to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.13) such Lender or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made; (ii) the
Borrower shall make such deductions; (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable Law; and (iv) the Borrower shall furnish to the
Agent, at its address referred to in Section 8.02, the original or a certified
copy of a receipt evidencing payment thereof.

     (b) The Borrower agrees to indemnify each Lender and the Agent for the full
amount of actual and  documented  Taxes or Other Taxes  (including  taxes of any
kind imposed by any  jurisdiction  on amounts  payable  under this Section 2.13)
paid by such  Lender  or the  Agent (as the case may be) as a result of any U.S.
Tax Law Change and any actual and  documented  liability  (including  penalties,
interest and expenses)  arising  therefrom or with respect  thereto paid by such
Lender or the Agent (as the case may be), but excluding,  however,  any Taxes or
Other Taxes so paid by such Lender or the Agent more than one hundred and twenty
(120) days  prior to demand  being made to the  Borrower  by such  Lender or the
Agent for  indemnification.  The payment of such indemnity  shall be made within
thirty  (30) days  from the date  such  Lender or the Agent (as the case may be)
makes written demand therefor complying with Section 8.04(d).

     (c) Each  Lender  organized  under the laws of a  jurisdiction  outside the
United  States,  on or prior to the date of its  execution  and delivery of this
Agreement in the case of the Initial  Lenders and on the date of the  Assignment
and Acceptance or  Designation  Agreement (as the case may be) pursuant to which
it  becomes  a Lender  in the case of any  other  Lender,  and from time to time
thereafter  as  requested  in writing by the  Borrower or the Agent (but only so
long as such Lender  remains  lawfully able to do so), shall provide each of the
Agent and the Borrower with two completed  and duly executed  original  Internal
Revenue Service forms W-8 W-8ECI or W-8BEN, as appropriate,  or any successor or
other form prescribed by the Internal  Revenue Service,  or other  documentation
reasonably  requested by the Borrower or the Agent,  certifying that such Lender
is exempt from or entitled to a reduced rate of United States withholding tax on
payments  pursuant to this  Agreement  or the Notes.  If the form  provided by a
Lender at the time such Lender first becomes a party to this Agreement indicates
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate  shall be  considered  excluded  from  Taxes  unless and until such
Lender  provides the  appropriate  forms  certifying that a lesser rate applies,
whereupon  withholding tax at such lesser rate only shall be considered excluded
from Taxes for periods  governed by such form. If any form or document  referred
to in this  subsection  (c) requires the disclosure of  information,  other than
information necessary to compute the tax payable and information required on the
date of this Agreement by Internal  Revenue  Service form W-8, W-8ECI or W-8BEN,
that the Lender reasonably  considers to be confidential,  the Lender shall give
notice  thereof to the  Borrower  and shall not be  obligated to include in such
form or document such confidential information.

     (d) For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form or document (or information  required by such
form or document)  described in Section  2.13(c)  (other than if such failure is
due to a U.S.  Tax Law  Change),  such Lender  shall not be entitled to payments
without deduction and indemnification  under Section 2.13(a) or (b) with respect
to any Taxes or Other Taxes  which would not have been  payable had such form or
document (or  information  required  thereby)  been so provided;  provided  that
should a Lender,  which is otherwise exempt from or subject to a reduced rate of
withholding  tax,  become  subject to Taxes  because of its failure to deliver a
form or document (or  information  required  thereby),  required  under  Section
2.13(c),  the  Borrower  shall take such  reasonable  steps as the Lender  shall
request  to  assist  the  Lender to  recover  such  Taxes (it being  understood,
however,  that the Borrower shall have no liability to such Lender in respect of
such Taxes).

     (e) If the Borrower is required to indemnify or pay  additional  amounts to
or for the account of any Lender pursuant to this Section 2.13, then such Lender
will take such action  (including  changing the  jurisdiction  of its Applicable
Lending Office) as in the reasonable  judgment of such Lender (i) will eliminate
or reduce any such additional  payment which may thereafter  accrue; and (ii) is
not otherwise commercially unreasonable.

     (f) Each Lender and the Agent shall use its reasonable efforts to obtain in
a timely  fashion any refund,  deduction  or credit of any Taxes and Other Taxes
paid or reimbursed by the Borrower  pursuant to this Section 2.13. If any Lender
or the Agent  receives a benefit in the nature of a refund,  deduction or credit
(including a refund in the form of a deduction from or credit against taxes that
are  otherwise  payable by the Lender or the Agent) of any Taxes or Other  Taxes
with respect to which the Borrower has made a payment under  Section  2.13(a) or
(b),  such  Lender  or the Agent (as the case may be)  agrees to  reimburse  the
Borrower  to the  extent of the  benefit  of such  refund,  deduction  or credit
promptly after the Agent or such Lender reasonably  determines that such refund,
deduction or credit has become final;  provided  that nothing  contained in this
subsection  (f) shall  require  any  Lender or the Agent (as the case may be) to
make available its tax returns (or any other  information  relating to its taxes
which it deems to be  confidential)  or to attempt  to obtain  any such  refund,
deduction or credit,  which  attempt  would be  inconsistent  with any reporting
position  otherwise  taken by the  Agent or such  Lender on its  applicable  tax
returns.

          SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any
     payment (whether voluntary,  involuntary, through the exercise of any right
     of set-off, or otherwise) on account of the Advances of any Nature owing to
     it (other than pursuant to Section 2.02(c), 2.03, 2.10, 2.11, 2.13 or 8.04)
     in excess of its  ratable  share of  payments on account of Advances of the
     same  Nature  obtained by all the  Lenders,  such  Lender  shall  forthwith
     purchase from the other Lenders such participations in the Advances of such
     Nature owing to them as shall be necessary to cause such purchasing  Lender
     to share the excess payment ratably with each of them; provided that if all
     or any portion of such excess  payment is  thereafter  recovered  from such
     purchasing  Lender,  such  purchase from each Lender shall be rescinded and
     each Lender shall repay to the purchasing Lender such purchase price to the
     extent of such  recovery  together  with an amount  equal to such  Lender's
     ratable  share  (according  to the  proportion  of (i) the  amount  of such
     Lender's required  repayment to (ii) the total amount so recovered from the
     purchasing  Lender) of any  interest or other amount paid or payable by the
     purchasing Lender in respect of the total amount so recovered. The Borrower
     agrees that any Lender so purchasing a  participation  from another  Lender
     pursuant to this Section 2.14 may, to the fullest extent  permitted by law,
     exercise all its rights of payment  (including  the right of set-off)  with
     respect to such  participation  as fully as if such  Lender were the direct
     creditor of the Borrower in the amount of such participation.

          SECTION  2.15.  Reservation  of  CP  Commitments.  On  the  terms  and
     conditions  set forth in this  Agreement,  each Lender shall  allocate from
     time to time  all or any  portion  of its  Commitment (such  Lender's  "CP
     Commitment") to provide liquidity support for Commercial Paper issued or to
     be issued by the Borrower with respect to any Project;  provided that such
     CP Commitment shall be automatically reduced if and to the extent of all CP
     Advances made with respect to such CP  Commitment  and if and to the extent
     the  Commercial  Paper  with  respect  to  which such CP Commitment  was
     established  is not refinanced on its maturity by the issuance of Rollover
     Commercial  Paper.  The Borrower  may make  more than  one CP  Commitment
     Reservation  on the  same  day;  provided  that  (a) no  more  than two CP
     Commitment  Reservations  of each Kind may be made during any one calendar
     month;  and (b) only one CP Commitment (Original CP) Reservation  shall be
     permitted  with respect to any Project which is a Completed  Project as of
     the Funds  Availability  Date or, if later, the date of acquisition of such
     Project by a Borrower Group Member. Each CP Commitment Reservation shall be
     made during the Availability  Period, in an aggregate amount of $10,000,000
     or an integral  multiple of $1,000,000 in excess thereof and shall be made
     pro rata among all  Lenders  (according  to their  respective Commitments)
     following  notice by the Borrower,  given not later than the third Business
     Day prior to the date of a proposed CP Commitment Reservation, to the Agent
     (which  shall  give to each  Lender  prompt  notice thereof),  and upon a
     Utilization  by  way  of CP  Commitment  Reservation with  respect  to any
     Project, and to the extent it is still outstanding,  (A) the unused portion
     of the Commitments available to the Borrower for Project Advances, Working
     Capital Advances and other CP Commitment  Reservations  shall be reduced by
     the outstanding  amount of such Utilization;  and (B) the Project Limit for
     such  Project shall  be  reduced  by  the   outstanding  amount  of  such
     Utilization.  Each such notice of a CP Commitment  Reservation  shall be by
     telephone, confirmed immediately by telecopier in substantially the form of
     Exhibit  B,  (a)  specifying  therein  (i)  the requested  date of such CP
     Commitment  Reservation  and  aggregate   amount  of  such  CP  Commitment
     Reservation;  (ii) in the case of Original  Commercial Paper, the aggregate
     principal amount of the Commercial Paper issued, or to be issued, for which
     such CP Commitment Reservation is requested (the amount of which Commercial
     Paper shall equal the CP Commitment  Reservation  requested) and specifying
     the relevant  Project with respect to which such Commercial Paper is, or is
     to be, issued;  and (iii) in the case of Refinancing Commercial Paper, the
     Project Advances to be repaid with proceeds from such Commercial Paper; (b)
     containing a representation  that proceeds of such Commercial Paper will be
     used to  finance  Project  Costs  (including,  in the case of any  Project,
     repayment of any  Affiliate  Subordinated  Debt incurred by the Borrower to
     fund the costs of acquiring  such Project and Project Costs paid in respect
     of such Project prior to the initial Advances  hereunder in respect of such
     Project)  incurred  for  such  Project  (in  the  case  of a CP  Commitment
     (Original CP)  Reservation)  and/or to repay  outstanding  Project Advances
     made  with  respect  to  such  Project  (in  the  case  of a CP  Commitment
     (Refinancing CP) Reservation);  and (c) specifying the aggregate  principal
     amount  of  all  outstanding  Advances,  the  unused  Commitments  and  all
     outstanding  CP  Commitments,  in each  case,  after  giving  effect to the
     proposed CP Commitment  Reservation,  issuance of such Commercial Paper and
     application of proceeds therefrom.

     SECTION 2.16.  Use of Proceeds.  The proceeds of Advances shall be used (a)
to finance Project Costs or to repay any Affiliate Subordinated Debt incurred by
the Borrower to fund the  acquisition  and  construction of any Project prior to
the date of the initial  Advances  hereunder  with respect to such Project (such
Advances, "Project Advances"); (b) for the Borrower's general corporate purposes
or to provide working capital for the Borrower (such Advances,  "Working Capital
Advances");  or (c) to pay  amounts  due under  Commercial  Paper  issued by the
Borrower to finance or refinance Project Costs with respect to any Project up to
the CP  Commitment  Reservation  previously  established  for such Project (such
Advances, "CP Advances").

                                  Article III

                     CONDITIONS TO EFFECTIVENESS AND LENDING

     SECTION 3.01.  Conditions  Precedent to  Effectiveness of Sections 2.01 and
2.15.  Sections 2.01 and 2.15 shall become effective on and as of the first date
(the "Funds Availability Date") on which the following conditions precedent have
been satisfied:

          (a) The Borrower  shall have paid all accrued fees and expenses of the
     Agent and the Lenders  (including  the accrued fees and expenses of each of
     special New York counsel and regulatory counsel to the Agent) that are then
     due and payable.

          (b) On the Funds Availability Date, the representations and warranties
     contained  in  Section  4.01  and  in  Sections  4  and 2 of  the  Southern
     Completion Guarantee and the Southern Equity Agreement, respectively, shall
     be true and  correct  as though  made on and as of the  Funds  Availability
     Date,  and the Agent shall have  received  for the account of each Lender a
     certificate to such effect signed by a duly  authorized  officer of each of
     the Borrower  (with respect to Section 4.01) and Southern  (with respect to
     Sections 4 and 2 of the  Southern  Completion  Guarantee  and the  Southern
     Equity Agreement, respectively).

          (c) The Agent shall have received on or before the Funds  Availability
     Date the  following,  each  dated  such day and  (except  for the Notes) in
     sufficient  copies for each  Lender:  (i) Each of the  Southern  Completion
     Guarantee  and the Southern  Equity  Agreement,  duly  executed by the Loan
     Parties.

               (ii) A Note payable to the order of each Lender, duly executed by
          the Borrower.

               (iii) Certified  copies of the certificate of incorporation  and
          the bylaws of each Loan Party.
               (iv)  Certified  copies  of  the  resolutions  of  the  board of
          directors of each Loan Party  authorizing each Loan Document to which
          it is or is to be a  party,  and of  all  documents  evidencing  other
          necessary  corporate action and governmental  approvals,  if any, with
          respect to each Loan Document to which it is or is to be a party.

               (v) A certificate  of the secretary or an assistant secretary of
          each  Loan  Party  certifying  the names  and true signatures  of the
          officers of each Loan Party  authorized  to sign each Loan Document to
          which  it is  or  is to be a  party  and  the  other  documents  to be
          delivered under each such Loan Document.

               (vi)  Certificate of the Independent Engineer and Environmental
          Consultant substantially in the form of Exhibit I-1.

               (vii)  Certificate  of  the  Independent Insurance Consultant
          substantially in the form of Exhibit J-1.

               (viii)   Certificate  of  the Independent Market Consultant
          substantially in the form of Exhibit K-1.

               (ix) Certificate of the Borrower attaching:

               (A) the Initial  Project  Budget for each Initial  Project (other
          than the Dahlberg Project), in form and substance  satisfactory to the
          Lenders  (after   consultation  with  the  Independent   Engineer  and
          Environmental  Consultant),  together  with a  calculation  showing  a
          determination of the Initial Project Limit for each Initial Project;

               (B) Base Case Projections reflecting the Initial Projects through
          December  31,  2023,  together  with a  statement  of the  assumptions
          underlying such projections;

               (C) a list of all  Assets of the  Borrower and its  Subsidiaries
          which,  as of the Funds Availability  Date,  are subject to any Lien,
          together with reasonable details concerning all such Liens, if any;

               (D) if available at the Funds Availability Date, a certified copy
          of each  executed or draft PPA Document (or a detailed term sheet with
          respect to each PPA Document to be entered  into) with respect to each
          Initial Project;

               (E) an unaudited consolidated balance sheet of the Borrower as of
          September 30, 2001; and

               (F) if any  Initial  Project or the entire  legal and  beneficial
          ownership  of any  Initial  Project is not  acquired  on or before the
          Funds  Availability  Date,  evidence that the Borrower has, subject to
          required regulatory  approvals,  the right to acquire and develop each
          such Initial Project.

               (x) A Notice of Utilization, duly executed by the Borrower, dated
          the Funds Availability Date.

               (xi) Opinions of counsel for the Loan Parties,  substantially  in
          the respective forms of Exhibit E.

               (xii) An opinion of Shearman & Sterling, counsel for the Agent.

     SECTION 3.02. Conditions Precedent to the Initial Advances for Each Initial
Project. The obligation of each Lender to make a Project Advance on the occasion
of the first  Borrowing with respect to any Initial  Project shall be subject to
the following conditions precedent:

               (a) The Funds Availability Date shall have occurred.

               (b) On  the  date  of  such  Borrowing  the  representations  and
          warranties  contained  in  Section  4.01 and  Sections  4 and 2 of the
          Southern  Completion  Guarantee  and the  Southern  Equity  Agreement,
          respectively,  are true and correct in all material respects on and as
          of the date of such Borrowing,  before and after giving effect to such
          Borrowing and to the application of the proceeds therefrom,  as though
          made on and as of such date (and each of the giving of the  applicable
          Notice  of  Utilization  and the  acceptance  by the  Borrower  of the
          proceeds of such  Borrowing  shall  constitute  a  representation  and
          warranty made herein, with respect to Section 4.01, by the Borrower to
          such effect).

               (c) The Agent  shall  have received,  together  with or prior to
          delivery of the Notice of Utilization  with respect to such Borrowing,
          a certificate of the Borrower:

               (i)   certifying  the Project Costs and/or  net  book  value
          acquisition  costs  incurred by the  Borrower or an  Affiliate  of the
          Borrower prior to such Borrowing in connection with such Project;

               (ii) attaching certified copies of the executed PPA Documents for
          such Project (if not  previously  provided to the Lenders  pursuant to
          Section  3.01(c)(ix)(D)),  and certifying  that such PPA Documents (A)
          either (1)  conform  to the  relevant  form  provided  to the  Lenders
          pursuant  to  Section   3.01(c)(ix)(D);   or  (2)   substantially  and
          accurately  reflect the term sheet provided to the Lenders pursuant to
          Section  3.01(c)(ix)(D) or comply with all of the PPA Parameters,  and
          do not contain any  additional  terms not set forth in such term sheet
          or the PPA Parameters (as applicable) which impose additional material
          obligations  outside the  ordinary  course of business of the industry
          generally  on, or  otherwise  materially  reduce the  benefit  to, any
          Borrower  Group Member under such PPA  Documents;  and (B) are in full
          force and effect, and that all necessary regulatory approvals required
          to be obtained  with respect to such PPA  Documents  under all Federal
          and State Energy Laws and  Regulations by the Borrower and each of its
          Affiliates  (if any) party thereto,  have been  obtained,  are in full
          force and effect and are final and  non-appealable  but for any Filing
          Conditions,  and  do  not  contain  any  restrictions,  conditions  or
          requirements which are then required to be satisfied and have not been
          satisfied, other than any Filing Conditions;

               (iii)  certifying that proceeds of the Borrowing shall be used to
          fund,  pro rata  with  Equity  Contributions,  Project  Costs for such
          Project so that the ratio of outstanding Debt to Equity Contributions,
          in each  case,  with  respect  to such  Project  does not  exceed  the
          Debt/Equity  Ratio applicable to such Project,  as at the date of such
          Borrowing  and after giving  effect to such  Borrowing and such Equity
          Contributions, and the application of proceeds therefrom; and

               (iv) in the case of the first Borrowing only, certifying that the
          PPA  Documents  for the  Dahlberg  Project  have been  assigned to the
          Borrower.

               (d) If the first Borrowing with respect to any Initial Project is
          not made within six (6) months after the Funds  Availability Date, the
          Agent shall have  received  each of the  following  documents at least
          thirty (30) days before such Borrowing:

               (i) A certificate of the Independent  Engineer and  Environmental
          Consultant, substantially in the form of I-3.

               (ii) A  certificate  of  the  Independent  Insurance Consultant,
          substantially in the form of J-3.

               (iii)  A  certificate  of  the  Independent   Market  Consultant,
          substantially in the form of K-3.

               (iv) A certificate of the Borrower:

               (A) Confirming  that the Initial Project Budget for such Project
          has not changed since it was delivered pursuant to Section 3.01 or, if
          it has changed,  a revised and updated Initial Project Budget for such
          Project in form and substance  satisfactory  to the Required  Lenders;
          and

               (B)  Base  Case  Projections  for the  Initial  Projects through
          December  31,  2023,  together  with a  statement  of the  assumptions
          underlying such  projections,  updated,  if necessary,  to reflect the
          contents  of the  certificates  referred to in clauses  (i),  (ii) and
          (iii) above and of the Initial  Project  Budget  referred to in clause
          (A) above,  in each case,  in form and substance  satisfactory  to the
          Required Lenders.

               (e) in the  case  of the  first  Borrowing  with respect  to the
          Wansley  Project only, a support  letter from  Southern  regarding the
          Development  Authority  Sale/Leaseback  for the Wansley Project in the
          form of Exhibit M.

     SECTION 3.03.  Conditions  Precedent to Subsequent Advances for an Initial
Project. The obligation of each Lender to make a Project Advance on the occasion
of each Borrowing after the first Borrowing,  in each case, with respect to any
Initial Project shall be subject to the following conditions precedent:

          (a) All  representations  and  warranties  contained in Section  4.01
     (other   than  those   listed  in   Sections  4.01(h)  and  (j)) and  all
     representations  and  warranties  contained in  Sections 4 and  2 of  the
     Southern Completion Guarantee and the Southern Equity Agreement (other than
     Sections 4(f) and (h) and 2(f) and (h), respectively), are true and correct
     in all material  respects on and as of the date of such  Borrowing,  before
     and after giving  effect to such  Borrowing and to the  application of the
     proceeds therefrom,  as though made on and as of such date (and each of the
     giving of the applicable  Notice of  Utilization  and the acceptance by the
     Borrower  of  the   proceeds  of  such Borrowing shall constitute  a
     representation  and warranty made herein,  with respect to Section 4.01 and
     to Sections 4 and 2 of the Southern  Completion  Guarantee and the Southern
     Equity Agreement, respectively, by the Borrower to such effect).

          (b) The Agent shall have received,  together with or prior to delivery
     of the Notice of Utilization with respect to such Borrowing,  a certificate
     of the Borrower:

               (i)  certifying  the Project Costs,  including  construction  and
          related costs,  interest and commitment  fees, that have been incurred
          in  connection  with  such  Project  since the  immediately  preceding
          Borrowing related to it;

               (ii) confirming  that (A) except as otherwise  provided in clause
          (B) below,  all  Borrowings  previously  made to the Borrower for such
          Project were applied to pay Project  Costs for, or to repay  Affiliate
          Subordinated Debt incurred with respect to, such Project in accordance
          with this Agreement;  and (B) the proceeds of such  Borrowing,  and of
          the  immediately  preceding  Borrowing  (but  only to the  extent  not
          previously  applied in  accordance  with  clause (A)  above),  will be
          applied to Project  Costs for such Project  which have been paid,  are
          then due or will  become due within  three (3) months from the date of
          such  Borrowing (or, in the case of the last Borrowing with respect to
          such  Project  only,  then due or to become due after the date of such
          Borrowing), in each case, in accordance with this Agreement; and

               (iii)  certifying that proceeds of the Borrowing shall be used to
          fund,  pro rata  with  Equity  Contributions,  Project  Costs for such
          Project so that the ratio of outstanding Debt to Equity Contributions,
          in each  case,  with  respect  to such  Project  does not  exceed  the
          Debt/Equity  Ratio applicable to such Project,  as at the date of such
          Borrowing  and after giving  effect to such  Borrowing and such Equity
          Contributions, and the application of proceeds therefrom.

     SECTION  3.04.  Conditions  Precedent  to the  Initial  Advances  for  Each
Subsequent  Project.  The obligation of each Lender to make a Project Advance on
the occasion of the first Borrowing with respect to any Subsequent Project shall
be subject to the following conditions precedent:

               (a) If, at the time of such Borrowing, the Borrower does not have
          an Investment Grade Rating:

               (i) All  representations and warranties of the Borrower contained
          in Section 4.01 and all  representations  and  warranties  of Southern
          contained in Sections 4 and 2 of the Southern Completion Guarantee and
          the Southern Equity Agreement,  respectively,  are true and correct in
          all material respects on and as of the date of such Borrowing,  before
          and after giving effect to such  Borrowing and to the  application  of
          the  proceeds  therefrom,  as though  made on and as of such date (and
          each of the giving of the  applicable  Notice of  Utilization  and the
          acceptance  by the  Borrower of the proceeds of such  Borrowing  shall
          constitute a representation and warranty made herein,  with respect to
          Section 4.01, by the Borrower to such effect).

               (ii) The Agent shall have received no later than thirty (30) days
          before such Borrowing a certificate of the Borrower:

     (A)  certifying  that such Project will not cause the number of  Subsequent
Projects  (including  such  Project)  to be  greater  than two (2) or cause  the
projected aggregate amount of Utilizations made or to be made under the Facility
related to  Subsequent  Projects,  including  such Project (in each case, as set
forth in their respective Project Budgets), to exceed $500,000,000;

     (B) attaching an Initial Project Budget (together with a calculation by the
Borrower,  and agreed to by the Agent,  showing a  determination  of the Initial
Project Limit for such Project) and a Project Schedule for such Project;

     (C) attaching Project Base Case Projections for such Project, together with
a statement of the assumptions  underlying such  projections  demonstrating  the
Required Project DSCR applicable to such Project;

     (D) certifying that, including such Project, Peakers represent no more than
25% of the  total  megawatt  capacity  owned by the  Borrower  and all  Relevant
Subsidiaries; and

     (E) certifying the Project Costs, including construction and related costs,
acquisition cost, construction interest and commitment fees, as the case may be,
incurred in connection with such Project prior to such Borrowing.

               (iii) The Agent shall have  received,  together  with or prior to
          delivery of the Notice of Utilization  with respect to such Borrowing,
          a certificate of the Borrower:

     (A)  certifying  that proceeds of the Borrowing shall be used to fund, pro
rata with Equity Contributions, Project Costs for such Project so that the ratio
of outstanding Debt to Equity Contributions, in each case, with respect to such
Project does not exceed the Debt/Equity Ratio applicable to such Project, as at
the date of such  Borrowing and after giving effect to such  Borrowing and such
Equity Contributions, and the application of proceeds therefrom;

     (B) attaching resolutions of the Borrower authorizing such Project; and

     (C) if such Project is a Peaker only, attaching details (as agreed with the
Independent  Engineer  and  Environmental   Consultant)  of  testing  procedures
applicable to, and a seven day reliability run to be successfully completed as a
condition for, Substantial Completion of such Project.

          (iv) The Agent  shall have  received  no later than  thirty (30) days
     before such Borrowing:

     (A) If such Project is an  Uncompleted  Project,  a certificate of Southern
certifying  that each of the  Southern  Completion  Guarantee  and the  Southern
Equity  Agreement  is still in full force and  effect  and has not been  amended
since the Funds Availability Date except to apply to Subsequent Projects.

     (B) If such Project is an  Uncompleted  Project,  the  Southern  Completion
Guarantee and the Southern Equity Agreement, in each case, amended in accordance
with the terms thereof to extend its terms to apply to such Project.

     (C) A certificate of the Independent Engineer and Environmental  Consultant
with respect to such Project, substantially in the form of Exhibit I-2.

     (D) A certificate of the Independent  Insurance  Consultant with respect to
such Project, substantially in the form of Exhibit J-2.

(E) A certificate of the Independent Market Consultant with respect to such
Project, substantially in the form of Exhibit K-2.

               (v) If such  Project  is not  wholly  owned by a  Borrower  Group
          Member,  each  other  owner  shall,  on or  before  the  date  of such
          Borrowing,  have contributed its pro rata share of Project Costs or in
          the event that any such third party owner fails to contribute  its pro
          rata share of Project  Costs,  the  Borrower  shall have  funded  such
          Project Costs through Equity Contributions.

               (b) If,  at the  time  of such  Borrowing,  the  Borrower  has an
          Investment Grade Rating:

                    (i) All representations and warranties  contained in Section
               4.01 and all representations and warranties contained in Sections
               4 and 2 of the  Southern  Completion  Guarantee  and the Southern
               Equity  Agreement,  respectively,  are  true and  correct  in all
               material respects on and as of the date of such Borrowing, before
               and after giving effect to such Borrowing and to the  application
               of the proceeds therefrom,  as though made on and as of such date
               (and each of the giving of the  applicable  Notice of Utilization
               and  the  acceptance  by the  Borrower  of the  proceeds  of such
               Borrowing  shall  constitute a  representation  and warranty made
               herein,  with  respect to Section  4.01,  by the Borrower to such
               effect).

                    (ii) The Agent shall have  received,  together with or prior
               to delivery  of the Notice of  Utilization  with  respect to such
               Borrowing,  an  affirmation  by  Moody's,  Fitch  and  S&P of the
               Investment  Grade  Rating for the  Borrower,  taking into account
               such Project and the Debt to be incurred with respect thereto.

                    (iii) The Agent  shall have  received  no later than  thirty
               (30) days before such Borrowing a certificate of the Borrower:

     (A) attaching an Initial Project Budget (together with a calculation by the
Borrower,  and agreed to by the Agent,  showing a  determination  of the Initial
Project Limit for such Project) and a Project Schedule for such Project;

     (B) attaching Project Base Case Projections for such Project, together with
a statement of the assumptions  underlying such  projections  demonstrating  the
Required  Project DSCR  applicable to such  Project;  provided that the Required
Project  DSCR need not be  satisfied  during any Stub Period for such Project if
(1) such Stub Period does not exceed one year in duration;  (2) the relevant PPA
Documents  for such  Project are executed on or before such  Borrowing;  and (3)
Stub Periods shall apply to no more than two Subsequent Projects (including such
Project,  and no more  than one of which  may be a  Peaker),  at any  time,  the
aggregate Project Costs of which does not exceed $400,000,000;

     (C) certifying that, including such Project, Peakers represent no more than
25% of the  total  megawatt  capacity  owned by the  Borrower  and all  Relevant
Subsidiaries; and

     (D) certifying the Project Costs, including construction and related costs,
acquisition cost, construction interest and commitment fees, as the case may be,
incurred in connection with such Project prior to such Borrowing.

          (iv) The Agent shall have received, together with or prior to delivery
     of the Notice of Utilization with respect to such Borrowing,  a certificate
     of the Borrower:

     (A)  certifying  that proceeds of such Borrowing are used to fund, pro rata
with Equity  Contributions,  Project Costs for such Project so that the ratio of
outstanding  Debt to Equity  Contributions,  in each case,  with respect to such
Project does not exceed the Debt/Equity Ratio applicable to such Project,  as at
the date of such  Borrowing and after giving  effect to such  Borrowing and such
Equity Contributions, and the application of proceeds therefrom;

     (B) attaching resolutions of the Borrower authorizing such Project; and

     (C) if such Project is a Peaker only, attaching details (as agreed with the
Independent  Engineer  and  Environmental   Consultant)  of  testing  procedures
applicable to, and a seven day reliability run to be successfully completed as a
condition for, Substantial Completion of such Project.

          (v) The Agent  shall  have  received  no later than  thirty  (30) days
     before such Borrowing:

     (A) If such Project is an  Uncompleted  Project,  a certificate of Southern
certifying  that each of the  Southern  Completion  Guarantee  and the  Southern
Equity  Agreement  are still in full force and  effect and has not been  amended
since the Funds Availability Date except to apply to Subsequent Projects.

     (B) If such Project is an  Uncompleted  Project,  the  Southern  Completion
Guarantee and the Southern Equity Agreement, in each case, amended in accordance
with the terms thereof to extend its terms to apply to such Project.

     (C) A certificate of the Independent Engineer and Environmental  Consultant
with respect to such Project, substantially in the form of Exhibit I-2.

     (D) A certificate of the Independent  Insurance  Consultant with respect to
such Project, substantially in the form of Exhibit J-2.

     (E) A certificate of the Independent Market Consultant with respect to such
Project, substantially in the form of Exhibit K-2.

               (vi) If such Project is not wholly  owned by any  Borrower  Group
          Member,  each  other  owner  shall,  on or  before  the  date  of such
          Borrowing,  have contributed its pro rata share of Project Costs or in
          the event that any such third party owner so fails to  contribute  its
          pro rata share of Project  Costs,  the Borrower shall have funded such
          Project Costs through Equity Contributions.

               (c) The Agent shall have  received no later than thirty (30) days
          before  such  Borrowing,  a  certificate  of  the  Borrower  attaching
          certified  copies of the executed PPA  Documents  for such Project (if
          any, and if not previously  provided to the Lenders in satisfaction of
          Section  3.01(c)(ix)(D),  and  certifying  that such PPA Documents (i)
          either (A)  conform to the  relevant  form  provided to the Lenders in
          satisfaction  of  Section  3.01(c)(ix)(D);  or (B)  substantially  and
          accurately   reflect  the  term  sheet  provided  to  the  Lenders  in
          satisfaction of Section  3.01(c)(ix)(D)  or comply with all of the PPA
          Parameters,  and do not contain any additional  terms not set forth in
          such term sheet or the PPA  Parameters  (as  applicable)  which impose
          additional  material   obligations  outside  the  ordinary  course  of
          business of the industry generally on, or otherwise  materially reduce
          the benefit to, any Borrower  Group  Member under such PPA  Documents;
          and  (ii)  are in full  force  and  effect,  and  that  all  necessary
          regulatory  approvals required to be obtained with respect to such PPA
          Documents under all Federal and State Energy Laws and Regulations have
          been  obtained,  are in  full  force  and  effect  and are  final  and
          non-appealable but for any Filing  Conditions,  and do not contain any
          restrictions, conditions or requirements which are then required to be
          satisfied  and  have  not  been  satisfied,   other  than  any  Filing
          Conditions.

     SECTION 3.05.  Conditions Precedent to Subsequent Advances for a Subsequent
Project. The obligation of each Lender to make a Project Advance on the occasion
of each Borrowing after the first  Borrowing,  in each case, with respect to any
Subsequent Project shall be subject to the following conditions precedent:

          (a) All  representations  and  warranties contained  in Section  4.01
     (other   than  those   listed  in   Sections   4.01(h)  and (j))  and  all
     representations  and  warranties  contained  in  Sections  4 and 2 of  the
     Southern Completion Guarantee and the Southern Equity Agreement (other than
     Sections 4(f) and (h) and 2(f) and (h), respectively), are true and correct
     in all material  respects on and as of the date of such  Borrowing,  before
     and after giving  effect to such  Borrowing and to the  application  of the
     proceeds therefrom,  as though made on and as of such date (and each of the
     giving of the applicable  Notice of  Utilization  and the acceptance by the
     Borrower  of  the   proceeds  of  such   Borrowing shall constitute  a
     representation  and warranty made herein,  with respect to Section 4.01 and
     to Sections 4 and 2 of the Southern  Completion  Guarantee and the Southern
     Equity Agreement, respectively, by the Borrower to such effect).

          (b) The Agent shall have received,  together with or prior to delivery
     of the Notice of Utilization with respect to such Borrowing,  a certificate
     of the Borrower:

               (i)  certifying  the Project Costs,  including  construction  and
          related costs,  construction  interest and commitment  fees, that have
          been  incurred in connection  with such Project since the  immediately
          preceding Borrowing related to it;

               (ii) confirming  that (A) except as otherwise  provided in clause
          (B) below,  all  Borrowings  previously  made to the Borrower for such
          Project  were  applied  to pay  Project  Costs  for  such  Project  in
          accordance  with  this  Agreement;   and  (B)  the  proceeds  of  such
          Borrowing, and of the immediately preceding Borrowing (but only to the
          extent not  previously  applied in accordance  with clause (A) above),
          will be  applied  to Project  Costs for such  Project  which have been
          paid, are then due or will become due within three (3) months from the
          date of such  Borrowing  (or, in the case of the last  Borrowing  with
          respect to such Project only, then due or to become due after the date
          of such  Borrowing),  in each case, in accordance with this Agreement;
          and

               (iii)  certifying that proceeds of the Borrowing shall be used to
          fund,  pro rata  with  Equity  Contributions, Project Costs for such
          Project so that the ratio of outstanding Debt to Equity Contributions,
          in each  case,  with  respect  to such Project does not exceed  the
          Debt/Equity  Ratio applicable to such Project, as at the date of such
          Borrowing  and after giving  effect to such Borrowing and such Equity
          Contributions, and the application of proceeds therefrom.

     SECTION  3.06.  Conditions  Precedent to CP  Commitment  Reservations.  The
obligation  of each Lender to establish a CP  Commitment on the occasion of each
CP  Commitment   Reservation  shall  be  subject  to  the  following  conditions
precedent:

     (a) In the case of the first CP Commitment  (Original CP)  Reservation  for
any Initial Project  requested prior to the first Borrowing with respect to such
Initial  Project,  the  satisfaction  of all conditions  referred to in Sections
3.02(a)  through (e) inclusive,  with all references  therein to "Borrowing" and
proceeds of any Borrowing  thereunder  being read and construed as references to
"CP  Commitment  (Original CP)  Reservation"  and the proceeds of the Commercial
Paper with respect to which such CP  Commitment  (Original  CP)  Reservation  is
being requested, where appropriate.

     (b) In the case of any CP Commitment  (Original CP)  Reservation  requested
after the first Borrowing or the first CP Commitment  Reservation,  in each case
with respect to an Initial Project,  the satisfaction of all conditions referred
to in Section  3.03(a) and (b), with all references  therein to "Borrowing"  and
proceeds of any Borrowing  thereunder  being read and construed as references to
"CP  Commitment  (Original CP)  Reservation"  and the proceeds of the Commercial
Paper for which such CP Commitment (Original CP) Reservation is being requested,
where appropriate.

     (c) In the case of any CP Commitment (Refinancing CP) Reservation requested
with respect to any Initial Project,  the satisfaction of the condition referred
to in Section 3.03(a),  with all references  therein to "Borrowing" and proceeds
of any  Borrowing  thereunder  being read and  construed  as  references  to "CP
Commitment  (Refinancing  CP)  Reservation"  and  the  proceeds  of the  Project
Advances being refinanced by the Refinancing  Commercial Paper for which such CP
Commitment (Refinancing CP) Reservation is being requested, where appropriate.

     (d) In the case of the first CP Commitment  (Original CP)  Reservation  for
any Subsequent  Project  requested  prior to the first Borrowing with respect to
such  Subsequent  Project,  the  satisfaction  of all conditions  referred to in
Sections  3.04(a)  through  (c)  inclusive,   with  all  references  therein  to
"Borrowing" and proceeds of any Borrowing thereunder being read and construed as
references to "CP Commitment  (Original CP) Reservation" and the proceeds of the
Commercial  Paper  with  respect  to  which  such CP  Commitment  (Original  CP)
Reservation is being requested, where appropriate.

     (e) In the case of any CP Commitment  (Original CP)  Reservation  requested
after the first Borrowing or the first CP Commitment Reservation,  in each case,
with  respect  to a  Subsequent  Project,  the  satisfaction  of all  conditions
referred  to in  Section  3.05(a)  and  (b),  with  all  references  therein  to
"Borrowing" and proceeds of any Borrowing thereunder being read and construed as
references to "CP Commitment  (Original CP) Reservation" and the proceeds of the
Commercial Paper for which such CP Commitment (Original CP) Reservation is being
requested, where appropriate.

     (f) In the case of any CP Commitment (Refinancing CP) Reservation requested
with  respect to any  Subsequent  Project,  the  satisfaction  of the  condition
referred to in Section 3.05(a),  with all references  therein to "Borrowing" and
proceeds of any Borrowing  thereunder  being read and construed as references to
"CP Commitment  (Refinancing  CP)  Reservation"  and the proceeds of the Project
Advances being refinanced by the Refinancing  Commercial Paper for which such CP
Commitment (Refinancing CP) Reservation is being requested, where appropriate.

     SECTION 3.07.  Conditions Precedent to the Working Capital and CP Advances.
The obligation of each Lender to make a Working  Capital Advance or a CP Advance
with  respect to an  existing  CP  Commitment  Reservation  relating to the same
Project,  on the occasion of the related Borrowing thereto,  shall be subject to
the following conditions precedent:

     (a) All  representations  and  warranties  contained in Section 4.01 (other
than those  listed in  Sections  4.01(h)  and (j)) and all  representations  and
warranties  contained in Sections 4 and 2 of the Southern  Completion  Guarantee
and the Southern Equity Agreement (other than Sections 4(f) and (h) and 2(f) and
(h),  respectively),  are true and correct in all material respects on and as of
the date of such Borrowing, before and after giving effect to such Borrowing and
to the application of the proceeds  therefrom,  as though made on and as of such
date (and each of the giving of the  applicable  Notice of  Utilization  and the
acceptance by the Borrower of the proceeds of such Borrowing shall  constitute a
representation  and warranty  made  herein,  with respect to Section 4.01 and to
Sections 4 and 2 of the Southern  Completion  Guarantee and the Southern  Equity
Agreement, respectively, by the Borrower to such effect).

     (b) The Agent shall have received a certificate of the Borrower  certifying
that  the  proceeds  of  such  Borrowings  shall  be used  (i) in the  case of a
Borrowing  comprising of Working Capital  Advances,  for the Borrower's  working
capital  or  general  corporate  purposes;  and (ii) in the case of a  Borrowing
comprising  of CP  Advances,  for payment of  obligations  owing with respect to
Commercial Paper for which such CP Commitment Reservation was established.

     (c) In the case of a Borrowing comprising of Working Capital Advances,  the
Agent shall have  received a  certificate  of the Borrower  certifying  that the
aggregate  outstanding amount of all Working Capital Advances,  before and after
giving effect to such Advance and to the application of the proceeds  therefrom,
does not exceed $25,000,000.

     SECTION 3.08.  Determinations Under Sections 3.01 Through 3.07,  Inclusive.
For purposes of determining compliance with the conditions specified in Sections
3.01 through 3.07, inclusive,  each Lender shall be deemed to have consented to,
approved or  accepted  or to be  satisfied  with each  document or other  matter
required  thereunder  to  be  consented  to or  approved  by  or  acceptable  or
satisfactory  to the Lenders unless an officer of the Agent  responsible for the
transactions contemplated by this Agreement shall have received notice from such
Lender prior to the Funds Availability Date (in the case of Section 3.01) or the
date of the relevant Borrowing or CP Commitment  Reservation,  as applicable (in
all other cases),  specifying  its objection  thereto.  The Agent shall promptly
notify the Lenders of the occurrence of the Funds Availability Date.

                                   Article IV

                         REPRESENTATIONS AND WARRANTIES

SECTION 4.01.     Representations and Warranties of the Borrower.  The Borrower
                  represents and warrants as follows:

     (a)  Organization.  The Borrower is a corporation  duly organized,  validly
existing  and in good  standing  under the laws of the State of  Delaware.  Each
Relevant  Subsidiary  is a  limited  liability  company  or a  corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its  organization.  Each Borrower Group Member is duly qualified
or licensed and in good standing in each other  jurisdiction in which it owns or
leases  property  or in which the  conduct  of its  business  requires  it to so
qualify or be licensed.

     (b)  Power and  Authority.  Each  Borrower  Group  Member  has the power to
execute,  deliver and perform its  obligations  under each Material  Document to
which it is or is to be a party and to take all action  necessary to  consummate
the transactions contemplated by each such Material Document.

     (c) Due  Authorization.  The  execution,  delivery and  performance by each
Borrower  Group  Member of each  Material  Document to which it is or is to be a
party (including, with respect to any applicable PPA Document, the assignment of
rights to, and the  assumption of  liabilities  by, such  Borrower  Group Member
thereunder) and the transactions  contemplated thereby have been duly authorized
by  all  necessary   action  and  do  not  (i)  contravene  its  certificate  of
incorporation  or bylaws (or similar  constitutive or governing  documents);  or
(ii) conflict  with or  contravene  any Law to which it or any of its Assets are
subject which has had or would reasonably be expected to have a Material Adverse
Effect as to the Borrower.

     (d) Governmental Approval. No authorization or approval or other action by,
and no notice to or filing with, any Governmental  Authority is required for the
due execution,  delivery and  performance by the Borrower of the Loan Documents,
or the transactions  contemplated thereby, except for those which have been duly
obtained or made and are in full force and effect.  With respect to each Project
for which a Utilization is then  outstanding or a Notice of Utilization has been
issued by the Borrower,  no authorization or approval or other action by, and no
notice to or filing with,  any  Governmental  Authority is then required for the
due execution, delivery and performance by each Borrower Group Member of the PPA
Documents  relating to such  Project and to which it is or is to be a party,  or
the  transactions  contemplated  thereby,  except for those which have been duly
obtained or made and are in full force and effect.

     (e) Binding and Enforceable.  The Material Documents  constitute the legal,
valid and binding  obligation  of each  Borrower  Group  Member  party  thereto,
enforceable  against the Borrower Group Member party thereto in accordance  with
their respective terms,  subject to Laws affecting the enforcement of creditors'
rights generally and to general principles of equity.

     (f) No Violation. The execution,  delivery and performance by each Borrower
Group Member of each Material Document to which it is a party do not violate, in
a manner  which  has had or would  reasonably  be  expected  to have a  Material
Adverse Effect as to the Borrower, any agreement binding on it.

     (g) No  Default.  No  Default  or  Event of  Default  has  occurred  and is
continuing, other than any Default or Event of Default which has been waived.

     (h) Litigation. No litigation,  arbitration or administrative proceeding is
currently  pending  or, to the  Borrower's  knowledge,  threatened  against  any
Borrower  Group Member (i) to restrain the entry by such  Borrower  Group Member
into, the  enforcement of, or exercise of any rights by the Lenders or the Agent
under,  or the  performance or compliance by such Borrower Group Member with any
obligations  under, any Material Document to which it is a party; (ii) which has
had or would reasonably be expected to have a Material Adverse Effect;  or (iii)
which purports to affect the legality,  validity or  enforceability  of any such
Material Document or the transactions contemplated thereby.

     (i) Financial  Condition.  The unaudited  consolidated balance sheet of the
Borrower and its consolidated  Subsidiaries as at September 30, 2001, heretofore
furnished  to  the  Lenders,  fairly  presents  in  all  material  respects  the
consolidated   financial   condition  of  the  Borrower  and  its   consolidated
Subsidiaries as at such date in accordance with GAAP.

     (j)  Material  Adverse  Change.  There has been no change in the  business,
condition  (financial  or otherwise) or results of operations of the Borrower or
its  consolidated  Subsidiaries  since September 30, 2001 which has had or would
reasonably be expected to have a Material Adverse Effect as to the Borrower.

     (k)  Taxes.  There has been no matter  with  respect to payment of taxes or
filing of tax returns  which has had or would  reasonably  be expected to have a
Material Adverse Effect as to the Borrower.

     (l)  Investment   Company  Act.   Neither  the Borrower nor  any  of its
Subsidiaries is an "investment  company" registered or required to be registered
under  the  Investment  Company  Act  of  1940,  as amended,  or  is a  company
"controlled" by an "investment company", in each case, as such terms are defined
in such Act.

     (m) Environmental Matters. To the knowledge of the Borrower, there has been
no  matter  with  respect  to  environmental  compliance  which has had or would
reasonably be expected to have a Material Adverse Effect as to the Borrower.

     (n)  Accuracy of  Information.  To the  knowledge of the  Borrower (i) the
Information  Memorandum  (other  than  the  projections  included  therein)  was
complete and correct in all material respects on and as of the date thereof; and
(ii) all financial  projections  contained in the  Information  Memorandum  were
prepared  in good  faith and based  upon  assumptions  which  management  of the
Borrower  believed  to be not  unreasonable  at the  time the  projections  were
prepared  (it  being  understood  that  (A)  such  projections  are  subject  to
significant  uncertainties  and  contingencies,  many of which  are  beyond  the
Borrower's  control;  (B) no assurance can be given that the projections will be
realized;  and (C) no  representation or warranty can be made as to the accuracy
of such projections).

     (o)  Affiliate  Transactions.  All  transactions  between a Borrower Group
Member and an Affiliate  thereof are on arm's-length  terms or are "at cost", in
each case, in accordance with PUHCA or applicable  rules and regulations  issued
pursuant thereto.

     (p) ERISA.  (i) No  Reportable  Event has occurred and is  continuing  with
respect  to any  Plan;  (ii)  no  Plan  has an  accumulated  funding  deficiency
determined  under  Section  412 of the  Code;  (iii) no  proceedings  have  been
instituted or, to the knowledge of the Borrower,  planned to terminate any Plan;
(iv) neither the Borrower,  nor any member of a Controlled  Group,  nor any duly
appointed  administrator  of a Plan  has  instituted  or  intends  to  institute
proceedings  to  withdraw  from any  Multiemployer  Pension  Plan (as defined in
Section 3(37) of ERISA); and (v) each Plan has been maintained and funded in all
material  respects in accordance with its terms and with the provisions of ERISA
applicable thereto.

     (q) PUHCA and FPA.  The  Borrower  is an  "electric  utility  company"  (as
defined in PUHCA). No authorization or approval by, or notice to or filing with,
any  Governmental  Authority is required for (i) the acquisition of each Project
by a Borrower  Group  Member,  other than those which,  on or prior to the first
Utilization  with respect to such  Project,  have been duly obtained or made and
are in full force and effect;  or (ii) the issuance of the Notes, the incurrence
of the Debt contemplated  under this Agreement and the borrowing,  repayment and
reborrowing  of the Advances,  other than those which have been duly obtained or
made and are in full force and effect.  All necessary rate schedules are on file
and effective  with the Federal  Energy  Regulatory  Commission for the Borrower
Group Members to sell power at wholesale.  The Borrower reasonably believes that
timely  interconnection  agreements  for the  Projects  will be available in the
ordinary course.

     (r) No Subsidiary. The Borrower has not had any Subsidiaries on or prior to
the Funds Availability Date other than Southern Company-Florida LLC.

     (s) Title to Property. Except for the Permitted Encumbrances,  with respect
to all real property necessary for, or material to, the development,  ownership,
operation  and  maintenance  of the Projects and which is not leased by it, each
Borrower Group Member has such title as a reputable title company doing business
in the state in which such real  property is located  would  insure,  subject to
such  exceptions as would not  materially  affect the  contemplated  use of such
property  by such  Borrower  Group  Member,  and with  respect  to all such real
property  which is leased by a Borrower  Group Member,  such lease is the legal,
valid and binding  obligation of the lessor  thereof,  enforceable in accordance
with its terms.

                                   Article V

                            COVENANTS OF THE BORROWER

     SECTION 5.01.  Affirmative  Covenants.  So long as any Advance shall remain
unpaid or any  Lender  shall  have any  Commitment  under  this  Agreement,  the
Borrower will:

     (a) Ratio of Recourse Debt to Recourse  Capital.  At the end of each fiscal
quarter  (including  the  fourth  fiscal  quarter)  of the  Borrower for  which
financial  statements  have most  recently  been  delivered  to the Agent by the
Borrower pursuant to Section 5.01(d) or (e), cause the ratio of Recourse Debt to
Total  Capitalization to be not more than 0.60:1:00 (60%), calculated as of the
date of such financial statements; provided that at the Borrower's election, (i)
capital contributions or Affiliate Subordinated Debt made to the Borrower within
forty-five  (45) days after the end of such fiscal  quarter,  net of Restricted
Payments  made by the Borrower  during such 45-day  period,  shall be taken into
account  in  calculating  Total  Capitalization  as at the  end of  such  fiscal
quarter;  and (ii) if any such capital  contribution  or Affiliate Subordinated
Debt is made to the Borrower and included for such  calculation,  the incurrence
or  repayment,  if any, of Debt during such 45-day  period,  shall also be taken
into account in calculating Recourse Debt as at the end of such fiscal quarter.

     (b)  Compliance  with Law.  Comply,  and cause each Relevant Subsidiary to
comply, with the requirements of all Laws applicable to it in the conduct of its
business, where failure to do so would reasonably be expected to have a Material
Adverse Effect.

     (c)  Maintenance  of  Existence.  Preserve  and maintain,  and cause each
Relevant  Subsidiary  to  preserve  and  maintain,  its  legal  existence as  a
corporation  or limited  liability  company and the rights,  licenses, permits,
privileges,  properties and franchises material to its business, except that (i)
the Borrower may be merged or consolidated  with or into another  Person if the
continuing or surviving Person is the Borrower or is organized under the laws of
any State of the United  States;  and (ii) the Borrower may be converted  into a
limited  liability  company  upon giving  notice to the Agent at least ten (10)
Business  Days  prior  to such  conversion  if such  limited  liability  company
expressly  assumes all of the  obligations  of the Borrower under each Material
Document  to which it is a party;  provided  that in each  case (A) immediately
before  the  consummation  of such  transaction  there is no Default or Event of
Default;  (B) such  consummation  shall  not  result  in a  Default  or Event of
Default;  and (C) the resulting Person shall have delivered  evidence of its due
organization,  incumbency  of  officers  or  managers,  and  unless  all  of the
Borrower's  obligations under the Material  Documents to which the Borrower is a
party  have  been  assumed  by  operation  of law by such  resulting  Person,  a
certified copy of the agreement  pursuant to which such resulting Person assumes
all  such  obligations,  and an  opinion  of  counsel,  in  each  case,  in form
reasonably  satisfactory  to the Agent,  and  certified  copies of such Person's
constitutive and other governing documents.

     (d) Annual Financial  Statements,  Etc. Within one hundred and twenty (120)
days  after the end of each  fiscal  year of the  Borrower  (beginning  with the
fiscal  year  2001),  deliver  to  the  Agent  copies  for  the  Lenders  of its
consolidated financial statements as of the end of and for such fiscal year duly
certified  by the  independent  accountants  of  the  Borrower.  Such  financial
statements shall be prepared in accordance with GAAP and shall be accompanied by
a certificate of the chief financial officer or the treasurer of the Borrower as
to compliance  with the terms of this  Agreement and setting forth in reasonable
detail  the  calculations  necessary  to  demonstrate  compliance  with  Section
5.01(a).

     (e) Interim Financial Statements, Etc. Within sixty (60) days after the end
of each of the first three  fiscal  quarters of each fiscal year of the Borrower
(beginning  with the first such fiscal quarter to end after September 30, 2001),
deliver  to the Agent  copies  for the  Lenders  of its  unaudited  consolidated
financial statements as of the end of and for such fiscal quarter duly certified
(subject  to  year-end  adjustments)  by  the  chief  financial  officer  or the
treasurer  of the  Borrower as having  been  prepared  in  accordance  with GAAP
(except as to the omission of  footnotes).  Such financial  statements  shall be
accompanied by a certificate of the chief financial  officer or the treasurer of
the Borrower as to compliance with the terms of this Agreement and setting forth
in reasonable detail the calculations  necessary to demonstrate  compliance with
Section 5.01(a).

     (f)  Other  Information.  Deliver  to  the  Agent  as  soon  as  reasonably
practicable  such other  information  relating  to the then  existing  financial
condition  of the Borrower and its  consolidated  Subsidiaries  as the Agent may
from time to time reasonably request,  except such information the disclosure of
which  is  prohibited  by Law or by  regulatory  requirement  applicable  to the
Borrower.

     (g) Notice of Default.  Promptly, and in any event within ten (10) Business
Days,  notify the Agent of the  occurrence of any Default or Event of Default of
which the chief  financial  officer  or  treasurer  of the  Borrower  has actual
knowledge.

     (h) Notice  Concerning PPA Documents.  Promptly notify the Agent of (i) the
entry by any  Borrower  Group  Member into a PPA  Document  and any  issuance of
Acceptable  Credit  Support in favor of a Borrower  Group  Member;  and (ii) the
termination of any PPA Document prior to its stated expiration.

     (i)  Project  Information.  Promptly,  and in any event  within  ten  (10)
Business Days,  after delivery of a cash basis financial  statement to the Agent
pursuant  to  Section  5.01(d)  or (e),  notify the Agent if the ratio of Cash
Available for Corporate Debt Service to Corporate Interest is 2.00:1.00 or less
or, if the Borrower does not have at least an Investment Grade Rating, 2.25:1.00
or less, in each case, as calculated on a rolling four (4) fiscal quarter basis
commencing  from  the  first  fiscal  quarter to commence  after ubstantial
Completion is achieved for any Project  which, as of the date of this Agreement
or the date of the first  Utilization  with respect  thereto, is an Uncompleted
Project and ending on the date of such financial statement (or, if at such time
less than four (4), but at least two (2), such fiscal  quarters  have ended,  as
calculated  for the  fiscal  quarters  ending  on the  date of  such financial
statement),  and  deliver to the Agent as soon as  reasonably  practicable  such
information  relating to the completion  testing,  operations and maintenance of
any Completed  Project for review by the Independent  Engineer and Environmental
Consultant as the Agent (acting upon the  instructions of the Majority  Lenders)
may from time to time thereafter reasonably request, except such information the
disclosure of which is prohibited by Law or by regulatory requirement applicable
to the Borrower.

     (j) Inspection Rights, Etc. Permit the Agent or any Lender or any agents or
representatives thereof to examine and make copies of and abstracts from records
and books of, and visit the  properties of, any Borrower Group Member to discuss
the affairs, finances and accounts of, any Borrower Group Member with any of its
officers or directors and with its independent certified public accountants from
time to time during normal  business hours upon reasonable  notice.  The Lenders
and the Agent agree that the Agent shall  coordinate and  consolidate  visits by
Lenders and their  agents and  representatives  (including  the  examination  of
records and books and the making of copies and  abstracts  of records and books)
at  mutually  convenient  times  and in  such a  manner  so as to  minimize  the
disruption  to the  operations  of the  Borrower  Group  Members  and the  costs
associated with such visits.

     (k) PPA Documents.  Obtain the consent of the Majority Lenders prior to any
material  amendment  to, or  termination  prior to its stated  expiration by any
Borrower  Group  Member  of,  any PPA  Document,  which  in the case of any such
termination,  is not  replaced  by  another  PPA  Document  satisfying  the  PPA
Parameters.

     (l) Insurance.  (i) Insurance.  (A) At all times maintain in full force and
effect  insurance   (including  worker's   compensation   insurance,   liability
insurance,  casualty  insurance  and business  interruption  insurance)  in such
amounts,  covering  such  risks and  liabilities  and with such  deductibles  or
self-insurance  retentions as are in accordance with normal  industry  practice;
provided that such  coverages (and limits and  deductibles)  may be modified due
to,  but  only  to the  extent  of,  the  unavailability  of such  coverages  at
commercially reasonable rates or on commercially reasonable terms.

                  (B) Review its insurance program at least annually, on each
anniversary of the Funds Availability Date.

               (ii) Insurance Account. Upon the occurrence of any Loss which may
          reasonably   be  expected  to  result  in  payment of  Loss  proceeds
          exceeding,  in the  aggregate,  $1,000,000,  and in any event prior to
          receipt by any Borrower  Group Member of such  proceeds, establish an
          account  with  the  Agent  to  hold  and  disburse  such  proceeds in
          accordance with this Section 5.01(l).

               (iii)  Total  Loss.  Except  as  otherwise provided  in the last
          sentence of this sub-clause (iii), in the event of a total Loss of any
          Completed  Project (with respect to which there are Utilizations  then
          outstanding  or  Commitments   then  available  under  the  Facility),
          promptly  apply  all  proceeds  of  insurance   (other  than  business
          interruption  insurance),  condemnation  awards or other recoveries to
          prepay all  outstanding  Project Debt  associated with such Project in
          accordance with Section 2.09(c),  unless the Borrower certifies to the
          Agent,  within  sixty (60) days after  receipt of such  proceeds in an
          aggregate  amount equal to at least 30% of the Total Project Costs for
          such  Completed  Project that:  (1) all such  insurance  proceeds have
          been,  or upon receipt shall be  immediately,  deposited by a Borrower
          Group Member into the Insurance  Account;  (2) it will  reinstate such
          Project  or  replace  it with a  Similar  Asset;  (3)  all  conditions
          precedent  specified in Sections  3.04(a)  through (c) inclusive  (but
          with  (x)  all  references  to  "Borrowing"  therein  being  read  and
          construed as references to the first  disbursement  from the Insurance
          Account  and all  references  therein  to  "Project"  being  read  and
          construed   as   references   to  such  Project  (in  the  case  of  a
          reinstatement)  or such Similar Asset (in the case of a  replacement);
          and (y)  the  certification  referred  to in  Section  3.04(a)(iii)(A)
          certifying  instead  that the  ratio  of  outstanding  Debt to  Equity
          Contributions  for such Project or Similar  Asset (as the case may be)
          does not exceed the Debt/Equity  Ratio applicable  thereto,  as at the
          date of the first disbursement from the Insurance  Account,  and after
          giving effect to such disbursement and any Equity  Contributions as of
          the date thereof,  and the application of proceeds therefrom) are then
          satisfied  with respect to the  reinstatement  or  replacement of such
          Project;  (4) there are sufficient funds to do so (taking into account
          all  undisputed   proceeds  to  be  paid  and  all  committed   equity
          contributions  into  the  Borrower);  and (5)  such  reinstatement  or
          replacement is technically  feasible,  then, such proceeds may be held
          in the  Insurance  Account  and  disbursed  from  time  to time to pay
          Project  Costs for  reinstating  such Project or for such  replacement
          Similar  Asset (x) if all  conditions  precedent  specified in Section
          3.05(a) and (b) (but with (AA) all references to  "Borrowing"  therein
          being read and  construed as  references  to a  disbursement  from the
          Insurance  Account and all references  therein to "Project" being read
          and  construed  as  references  to  such  Project  (in  the  case of a
          reinstatement)  or such Similar Asset (in the case of a  replacement);
          and  (BB)  the  certification  referred  to  in  Section  3.05(b)(iii)
          certifying  instead  that the  ratio  of  outstanding  Debt to  Equity
          Contributions  for such Project or Similar  Asset (as the case may be)
          does not exceed the Debt/Equity  Ratio applicable  thereto,  as at the
          date of the relevant  disbursement  from the  Insurance  Account,  and
          after giving effect to such disbursement and any Equity  Contributions
          as of the date thereof, and the application of proceeds therefrom) are
          then  satisfied;  and (y) where the  aggregate of all such proceeds is
          less than the Project Costs for such  reinstatement or replacement (as
          the case  may be),  if  Project  Costs  are  funded  pro rata  between
          disbursements  from the Insurance Account and Equity  Contributions to
          be paid with  respect to such  reinstatement  or  replacement.  To the
          extent any such proceeds in excess of $1,000,000 are not used for such
          reinstatement  or  replacement,  they shall,  upon  completion of such
          reinstatement  or replacement (as applicable) be applied to prepay the
          outstanding  Project  Debt  made  with  respect  to  such  Project  in
          accordance with Section 2.09(c).

               (iv)  Partial  Loss.  In  the  event  of a  partial  Loss of any
          Completed  Project (with respect to which there are Utilizations then
          outstanding or Commitments  then available  under the Facility), deal
          with such proceeds of insurance  (other than  business  interruption),
          condemnation  awards or other recoveries in the following  manner: if
          such  proceeds  (A) do not exceed  $1,000,000  in the  aggregate with
          respect to such Loss,  apply them at the Borrower's  sole discretion;
          (B) exceed $1,000,000 but not $5,000,000 in the aggregate with respect
          to such Loss, use such proceeds to prepay the outstanding Project Debt
          made with respect to such Project in accordance  with Section  2.09(c)
          to the extent such  proceeds (in excess of $1,000,000 in the aggregate
          with  respect to such Loss) are not used to repair or reinstate such
          Project,  upon completion of such repair or reinstatement; (C) exceed
          $5,000,000  but not 10% of the Total  Project  Costs for such  Project
          with respect to such Loss,  apply such proceeds to repair or reinstate
          the affected  Project if the Borrower  certifies to the Agent, within
          sixty (60) days after receipt of proceeds equal to at least $5,000,000
          (but with all such proceeds to be reserved by the Borrower until such
          certification is made or until prepayment is required pursuant to this
          Section  5.01(l)(iv))  that  (1) it  will  repair  or  reinstate such
          Project;  (2) there are sufficient funds to do so (taking into account
          all undisputed proceeds to be paid and committed equity  contributions
          into  the  Borrower);  and (3)  such  repairs  or  reinstatements are
          technically  feasible;  otherwise,  all such  proceeds  in  excess of
          $1,000,000  not used for such  repair  or reinstatement  shall, upon
          completion  of such repair or  reinstatement,  be promptly applied to
          prepay the outstanding  Project Debt made with respect to such Project
          in accordance  with Section  2.09(c); and (D) exceed 10% of the Total
          Project  Costs for such  Completed  Project, apply such  proceeds  to
          repair or reinstate the affected  Project if consent from the Majority
          Lenders shall have been obtained;  otherwise, all such proceeds shall
          be used  promptly  to prepay the  outstanding Project Debt made with
          respect to such Project in accordance with Section 2.09(c).

               (m) Asset Sales.  To the extent the  Borrower has not reinvested
          Sale Proceeds  arising from any Sale in a Similar Asset, by way of the
          purchase or lease (pursuant to a Development Authority Sale/Leaseback)
          of such Similar Asset, within six (6) months after such Sale (any such
          reinvestment being subject to satisfaction of all conditions precedent
          specified in Sections  3.04(a) through (c) inclusive as of the date of
          the Borrower's  initial investment in such Similar Asset (but (i) with
          all  references  to  "Borrowing"  therein being read and construed as
          references to such investment and all references  therein to "Project"
          being read and construed as references to such Similar Asset; and (ii)
          the certification  referred to in Section  3.04(a)(iii)(A)  certifying
          instead that the ratio of outstanding Debt to Equity Contributions for
          such Similar Asset does not exceed the  Debt/Equity  Ratio  applicable
          thereto, as at the date of such investment, and after giving effect to
          such investment and any Equity  Contributions  as of the date thereof,
          and the application of proceeds therefrom)), the Borrower shall prepay
          the  outstanding  Debt under the Facility to the extent required under
          Section 2.09(b)(iii); provided that the Borrower shall be permitted to
          apply  all  Sale  Proceeds  remaining  thereafter,  if any,  to make a
          Restricted Payment in accordance with Section 5.02(b).

               (n)  Regulatory  Approvals.  Obtain and maintain,  and cause each
          Relevant  Subsidiary to obtain and maintain,  in full force and effect
          all  necessary  authorizations  and  approvals  by,  and  deliver  all
          necessary  notices to and undertake all necessary  filings with,  each
          Governmental  Authority  which are  required,  in each  case,  for the
          Borrower and such Subsidiary to sell, at wholesale,  the entire output
          of each electric  generation  plant  (including the Projects) owned by
          the Borrower or such Subsidiary, as the case may be.

               (o)  Initial  Projects.  As long as an Initial  Project is owned,
          directly or indirectly, by the Borrower, own, or procure that a wholly
          owned   Subsidiary  of  the  Borrower   (other  than  an  Unrestricted
          Subsidiary) will own, such Project.

               (p)  Granting  of Benefits  under  Certain  Circumstances.  If in
          connection  with  obtaining  a waiver  or a  curative  amendment  of a
          "default"  or an "event of default"  under a document  under which any
          Debt of the Borrower in a principal or notional  amount equal to or in
          excess of $50,000,000 is outstanding or which evidences any such Debt,
          any  creditor  in  respect  of  such  Debt  will  obtain  any  benefit
          (including  collateral  security,  a  guarantee  or other  third-party
          support and improved  financial terms),  offer to the Lenders the same
          benefit  (including  ratable  collateral  security and  guarantees and
          third-party  support and  comparably  improved  terms)  and,  upon the
          acceptance by the Majority  Lenders of such offer,  cause such benefit
          to be made  available  to the  Lenders  concurrently  with making such
          benefit  available,  and on substantially the same terms as it is made
          available, to such other creditor.

               (q) Notice of Change of Investment Grade Rating. Promptly, and in
          any event within ten (10) days, after the Borrower is notified thereof
          in writing  by S&P,  Fitch or Moody's  (as  applicable),  or the chief
          financial  officer or the  treasurer of the Borrower  becomes aware of
          the  public  announcement   thereof  by  S&P,  Fitch  or  Moody's  (as
          applicable),  notify  the Agent of  either  (i) any  downgrade  in the
          Borrower's  Investment  Grade Rating by S&P, Fitch or Moody's,  as the
          case may be; or (ii) mention of the Borrower with negative implication
          in "Credit Watch", or the equivalent thereof by any of S&P, Moody's or
          Fitch.

               (r) Updated  Documents.  Upon (i) the earlier of the Non-Recourse
          Date and the Refinancing Date for any Project, deliver to the Agent an
          Adjusted  Project Budget setting forth Project Costs  incurred,  as of
          such date, with respect to such Project; and (ii) each Relevant Event,
          deliver to the Agent an updated  Independent  Market Consultant report
          with  respect to all  Relevant  Completed  Plants as at such  Relevant
          Event  (including  where such  Relevant  Event is a Southern  Event of
          Default or a Buydown Event, all Substantially  Completed  Projects for
          which a  Buydown  Amount  is to be paid as a result  of such  Relevant
          Event)  based,  in the case of each Plant which has then  achieved (A)
          Final  Completion,  on the  performance of such Plant, as certified by
          Southern to the Agent for  purposes of its Final  Completion;  and (B)
          Substantial Completion but not Final Completion, on the performance of
          such Plant,  as certified by Southern to the Agent for purposes of its
          Substantial  Completion,  and, in each case,  which is verified by the
          Independent Engineer and Environmental  Consultant as being consistent
          with the  performance  (output,  heat rate,  environmental and permit
          compliance and availability) of such Plant.

               (s)  Project  Bonds.  As  long  as  any  Project is owned  by a
          development authority created and existing under the laws of the State
          of Georgia and is leased by a Borrower Group Member,  hold, or procure
          that a wholly owned  Subsidiary of the Borrower  shall hold, free and
          clear of any  Liens,  all legal and  beneficial  title to all Project
          Bonds issued with respect to a Development Authority Sale/Leaseback of
          such Project.

     SECTION  5.02.  Negative  Covenants.  So long as any Advance shall remain
unpaid or any  Lender  shall  have any  Commitment under this Agreement,  the
Borrower will not:

     (a) Debt.  Incur,  and will not permit any  Subsidiary  of the  Borrower to
incur,  any Debt other than (i) Recourse Debt under the Facility;  (ii) Recourse
Debt the  proceeds of which  (after  customary  transaction  fees and costs) are
applied to the concurrent  repayment of Debt; (iii) if the Borrower has at least
an Investment  Grade Rating and such rating of the Borrower is reaffirmed  after
incurrence  of  such  other  Debt,  Recourse  Debt  or,  in the  case  of  Lease
Obligations,  Debt of the related lessor, that has been rated at least "Baa3" by
Moody's and "BBB-" by S&P;  (iv) Recourse Debt the repayment in full of which is
guaranteed  by Southern or another  Affiliate  which has at least an  Investment
Grade Rating; (v) Debt that is incurred by an Unrestricted Subsidiary on a basis
that is  without  recourse  to the  Borrower  other  than  with  respect  to the
Borrower's  ownership  interest in such  Unrestricted  Subsidiary;  or (vi) Debt
which is  secured by Liens  referred  to in Section  5.02(c)(iv),  (vi),  (vii),
(viii), (ix), (x), (xvi) or (xvii). Notwithstanding the above, the Borrower will
ensure that no Relevant  Subsidiary  which owns or leases a Project with respect
to which  Advances  are then  outstanding,  or for  which  Commitments  are then
available,  shall  incur any Debt,  other than Debt  referred  to in clause (vi)
above.

     (b) Restricted Payments.  (i) Declare or make any Restricted Payment;  (ii)
make any payments  with respect to Affiliate  Subordinated  Debt (other than any
Affiliate  Subordinated Debt loaned, prior to the initial Utilization  hereunder
in respect of any  Project,  to the  Borrower to fund its  acquisitions  of such
Project) or make any redemption or repurchase of any Affiliate Subordinated Debt
(except for any payment, redemption or repurchase of Affiliate Subordinated Debt
from  insurance  proceeds  for  casualties  which  have been  restored  with the
proceeds of such Affiliate  Subordinated  Debt);  or (iii)  purchase,  redeem or
otherwise  acquire  for value any  shares of any class of  capital  stock of the
Borrower or any warrants,  rights or options to acquire any such shares,  now or
hereafter  outstanding,  or  reduce  the  Borrower's  capital  (except  for  any
purchase,  redemption  or  acquisition  of such  shares  held by Southern or any
reduction  of  capital  paid to an  Affiliate  of the  Borrower  from  insurance
proceeds  for  casualties  which have been  restored  with the  proceeds of such
shares or such capital,  as the case may be); provided that the Borrower may (A)
declare and make any Restricted Payment payable in common stock of the Borrower;
(B)  purchase,  redeem  or  otherwise  acquire  shares  of its  common  stock or
warrants,  rights or  options  to  acquire  any such  shares  with the  proceeds
received  from  the  substantially  concurrent  contribution  to the  Borrower's
capital or the issue of new shares of the Borrower's  common stock; and (C) make
any payments with respect to Affiliate Subordinated Debt, make any redemption or
repurchase of Affiliate Subordinated Debt and take any other action specified in
clauses (i), (ii) and (iii) above if, in any such case,  (x) no Default or Event
of Default  shall have  occurred  and is  continuing;  and (y) at the end of the
fiscal quarter (including the fourth fiscal quarter) of the Borrower for which a
cash basis  financial  statement  has been  delivered  to the Agent  pursuant to
Section  5.01(d) or (e) most  recently  preceding the date on which the Borrower
takes such action,  the ratio of Cash  Available for  Corporate  Debt Service to
Corporate  Interest was at least  2.00:1.00 or, if the Borrower does not have at
least an  Investment  Grade  Rating,  2.25:1.00,  in each case,  calculated on a
rolling  four (4)  fiscal  quarter  basis  ending on the date of such  financial
statement  (or, if at such time less than four (4) fiscal  quarters  have ended,
such  lesser  number of fiscal  quarters  and with  effect from the date of such
delivery of such financial  statement).  Any such cash basis financial statement
shall be  certified  by the chief  financial  officer  or the  treasurer  of the
Borrower as having been prepared in accordance with the books and records of the
Borrower.

     (c) Liens.  Without the  consent of the  Majority  Lenders,  create or have
outstanding,  or permit the  creation  of, any Lien on or over any Assets of the
Borrower or any of its Subsidiaries except for:

          (i) Liens arising solely by operation of law or by order of a court or
     tribunal or other  Governmental  Authority  (or by an  agreement of similar
     effect);

          (ii) Liens arising in the ordinary  course of business or  operations,
     in respect of overdue  amounts  which  either (A) have not been overdue for
     more than thirty (30) days;  or (B) are being  contested  in good faith and
     for which adequate reserves have been set aside in accordance with GAAP;

          (iii)  Liens  created  for  the  sole  purpose  of   refinancing   all
     outstanding Advances; provided that the Advances are simultaneously prepaid
     in full, all Commitments cancelled and no amounts are then owing under this
     Agreement;

          (iv)  Liens  arising  out of title  retention  or like  provisions  in
     relation to the acquisition of goods or equipment  acquired in the ordinary
     course of business or operations;

          (v) Liens  created or arising on  ownership  interests  and  documents
     evidencing  ownership interests in (A) an Unrestricted  Subsidiary which is
     the primary obligor in respect of Project Finance Debt; or (B) a Subsidiary
     all  the  Assets  of  which  consist  of  ownership  interests  in  (x)  an
     Unrestricted  Subsidiary which is the primary obligor in respect of Project
     Finance Debt;  or (y) another  Person  described in this clause (B),  which
     Liens secure such Project Finance Debt only;

          (vi) Liens on deposits to secure, or any Lien otherwise securing,  the
     performance  of bids,  trade  contracts  (other than for  borrowed  money),
     operating leases other than Synthetic Leases, statutory obligations, surety
     bonds,  appeal bonds,  performance  bonds and other  obligations  of a like
     nature incurred in the ordinary course of business;

          (vii) Liens,  other than Liens on a Project or the Assets comprising a
     Project or the  ownership  interests in all Persons  directly or indirectly
     owning such Project,  securing  reimbursement  obligations under letters of
     credit,  guarantees  and  other  forms of credit  enhancement given in the
     ordinary course of business;

          (viii)  Liens  created or arising  over any Asset which is  acquired,
     constructed or created by the Borrower  (excluding  any Assets  acquired or
     constructed with the use of a Synthetic  Lease),  but only if (A) such Lien
     secures only principal amounts (not exceeding the cost of such acquisition,
     construction  or  creation)  raised for the  purposes of such  acquisition,
     construction or creation, together with any costs, expenses,  interest and
     fees incurred in relation thereto or a guarantee given in respect thereof;
     (B) such Lien is created or arises on or before  ninety (90) days after the
     completion of such acquisition,  construction or creation; (C) such Lien is
     confined  solely to the propertyso acquired,  constructed or created;  and
     (D) the aggregate  principal  amount secured by all such Liens and by Liens
     (if  any)  under  subparagraphs (ix) and  (xvii)  below,  does not  exceed
     $75,000,000;

          (ix) Liens (A)  outstanding on or over any Asset acquired  after the
     date of this Agreement;  (B) in existence at the date of such  acquisition;
     (C) where the  Borrower  does not take any step to increase  the  principal
     amount secured  thereby from that so secured and outstanding at the time of
     such acquisition (other than in the case of Liens for a fluctuating balance
     facility,  by way  of  utilization  of  that facility  within  the limits
     applicable  thereto  at the  time of  acquisition);  and (D) the aggregate
     principal  amount  secured  under such  Liens,  and by Liens (if any) under
     subparagraphs (viii) above and (xvii) below, does not exceed $75,000,000;

          (x) Liens  created  or arising  over any Asset  which is  acquired  or
     constructed  by the  Borrower  with  the use of a  synthetic  financing  or
     Synthetic Lease,  but only if (A) such Lien secures only principal  amounts
     (not exceeding the cost of such acquisition or construction  (including any
     contingency  amount relating to such acquisition or  construction))  raised
     for the purposes of such acquisition or construction through such synthetic
     financing or Synthetic Lease, together with any costs,  expenses,  interest
     and fees and indemnities  incurred in relation thereto or a guarantee given
     in respect thereof;  (B) such Lien is created or arises on or before ninety
     (90) days after the completion of such acquisition or construction; and (C)
     such Lien is confined solely to the property so acquired or constructed;

          (xi) Liens constituted by a right of set-off (including a bank's right
     of set-off with  respect to deposit  accounts) or rights over a margin call
     account  or any form of cash  collateral  or any  similar  arrangement  for
     obligations incurred in respect of any currency, commodity or interest rate
     swap,  option,  forward rate, or futures contracts or any other arrangement
     for the hedging or management of risks entered into on commercial terms;

          (xii) Liens in favor of a plaintiff or defendant in any action  before
     a court or tribunal as security for costs or expenses  where such action is
     being prosecuted or defended in the bona fide interest of the Borrower;

          (xiii) Liens described in any of subparagraphs (iv) through (xi) above
     or (xiv)  through  (xvii) below and renewed or extended upon the renewal or
     extension  or  refinancing  or  replacement  of  the  indebtedness  secured
     thereby;  provided that there is no increase in the principal amount of the
     indebtedness secured thereby over the principal,  capital or nominal amount
     thereof outstanding immediately prior to such refinancing;

          (xiv) Liens existing on the date of this Agreement;

          (xv)  Liens on the  property  of a Person  existing  at the time  such
     Person is  merged  into or  consolidated  with the  Borrower  or any of its
     Subsidiaries  and  not  incurred  in  contemplation  with  such  merger  or
     consolidation;

          (xvi) Liens  created or arising over any land which is acquired by the
     Borrower or any of its Subsidiaries, but only if (A) such Lien secures only
     principal amounts (not exceeding the cost of such  acquisition)  raised for
     the  purpose of such  acquisition  or which are secured by such land at the
     time of its acquisition,  together with any costs,  expenses,  interest and
     fees incurred in relation  thereto or a guarantee given in respect thereof;
     (B) such Lien is created or arises on or before  ninety (90) days after the
     completion  of such  acquisition;  (C) such Lien is confined  solely to the
     land so acquired;  and (D) the aggregate  principal  amount  secured by all
     such Liens does not exceed $25,000,000; and

          (xvii) Liens created or  outstanding on or over Assets of the Borrower
     or  any  Relevant  Subsidiary;  provided  that  the  aggregate  outstanding
     principal,  capital  or  nominal  amount  secured  by all Liens  created or
     outstanding  under  this  subparagraph  (xvii)  on or  over  Assets  of the
     Borrower  and  all  Relevant  Subsidiaries  shall  not at any  time  exceed
     $25,000,000.

         Notwithstanding anything else contained herein, an Unrestricted
         Subsidiary may create or have outstanding any Lien on or over its
         Assets to secure the payment of such Unrestricted Subsidiary's Debt.

          (d) Activities. Engage in, and will not permit any of its Subsidiaries
     to engage in, any  business  activities  other  than  activities  which the
     Borrower and its  Subsidiaries  may undertake  under PUHCA  (whether or not
     such law is repealed);  provided  that in the event PUHCA is repealed,  any
     Unrestricted Subsidiary shall not be so restricted.

          (e) Acquisitions. Acquire, and will ensure that no Relevant Subsidiary
     will  acquire,  from a  non-Affiliate  of the Borrower any Project that has
     achieved  Final  Completion  without  first  obtaining  the  consent of the
     Majority Lenders.

          (f) Affiliate Transactions. Except as otherwise required by Law, enter
     into, or permit any Relevant  Subsidiary to enter into, any  transaction or
     series of transactions,  whether or not in the ordinary course of business,
     with any of its Affiliates other than on terms and conditions substantially
     as  favorable  as  would  be  obtainable   in  a  comparable   arm's-length
     transaction with a Person other than an Affiliate.

                                   Article VI

                                EVENTS OF DEFAULT

     SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:

     (a)  Payments.  The  Borrower  shall fail to pay (i) any  principal  of any
Advance  when the same  becomes  due and  payable;  or (ii) any  interest on any
Advance or any fees or other amounts  payable under this  Agreement  within five
(5) Business Days after the same becomes due and payable;  provided that failure
to  pay  any  principal,  interest  or  other  amounts  required  under  Section
2.09(b)(i) shall not constitute a default by the Borrower or an Event of Default
unless such failure is still continuing as of the Final Maturity Date, whereupon
it shall, on such date, become an Event of Default; or

     (b) Representations and Warranties.  Any representation or warranty made by
the Borrower in this  Agreement  shall prove to have been  materially  incorrect
when  made  and,  if  the  underlying   facts  or   circumstances   making  such
representation or warranty  incorrect are susceptible of cure, it shall not have
been cured within thirty (30) days after written  notice  thereof has been given
by the Agent to the Borrower (or such longer period as the Majority  Lenders may
permit); or

     (c)  Covenants.  The  Borrower  shall fail to  perform  or comply  with (i)
Section  5.01(g);  or (ii)  any  other  material  term,  covenant  or  agreement
contained  in this  Agreement  on its part to be  performed or observed and such
failure  under  clause (ii) shall remain  unremedied  for thirty (30) days after
written  notice  thereof  has been given by the Agent to the  Borrower  (or such
longer period as the Majority Lenders may permit); or

     (d)  Cross-default.  The Borrower or any Relevant Subsidiary shall fail to
pay any  principal  of,  or  premium  or  interest on,  any of its Debt that is
outstanding  in a  principal  or  notional amount  equal  to  or in  excess of
$50,000,000,  in the  aggregate,  for all such unpaid Debt (but  excluding  Debt
outstanding  under the Facility) when such Debt becomes due and payable (whether
by scheduled maturity, required prepayment,  acceleration, demand or otherwise),
and such failure shall  continue  after the  applicable  grace  period,  if any,
specified in the  agreement or  instrument  relating to such Debt;  or any other
event shall occur or condition  shall exist under the  agreement or instrument
relating to any such Debt and shall continue after the applicable grace period,
if any,  specified in such agreement or instrument,  if the effect of such event
or condition is to accelerate the maturity of such Debt by reason of default; or
any such Debt shall be declared due and payable, or be required to be prepaid or
redeemed  (other  than  by  a  regularly   scheduled   required  prepayment  or
redemption),  purchased or defeased, or an offer to prepay, redeem,  purchase or
defease  such Debt shall be  required  to be made,  in each  case,  prior to the
scheduled maturity thereof by reason of default; or

     (e)  Judgment.  Any judgment or order for the payment of money in excess of
$50,000,000,  in the aggregate,  shall be rendered  against the Borrower and the
Relevant  Subsidiaries  and there shall be any period of thirty (30) consecutive
days during which a stay of enforcement of such judgment or order,  by reason of
a pending appeal or otherwise, shall not be in effect; or

     (f)  Bankruptcy,  Etc. The Borrower or any  Relevant Subsidiary shall (i)
apply for or consent to the  appointment of, or the taking of possession  by, a
receiver,  custodian, trustee or liquidator of itself or of all or a substantial
part of its  property;  (ii) make a general assignment  for the  benefit of its
creditors;  (iii) commence a voluntary case under the U.S.  Bankruptcy  Code (as
now or hereafter in effect) or any similar law of any applicable  jurisdiction;
(iv) file a petition  seeking to take  advantage  of any other law  relating  to
bankruptcy,   insolvency,   reorganization,  winding-up,  or composition  or
readjustment  of debts;  or (v) fail to controvert  in a timely and appropriate
manner,  or  acquiesce  in  writing  to,  any  petition  filed  against it in an
involuntary  case  under  the U.S.  Bankruptcy  Code or any  similar  law of any
applicable jurisdiction; or a proceeding or case shall be comenced, without the
application or consent of the Borrower or any of its Relevant Subsidiaries, in
any   court   of   competent   jurisdiction,   seeking  (A)  its liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
its debts; (B) the appointment of a trustee, receiver, custodian, liquidator or
the like of the Borrower or such Relevant  Subsidiary (as  applicable) or of all
or any substantial  part of its assets;  or (C) similar relief in respect of the
Borrower or such Relevant  Subsidiary (as applicable)  under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts, and such proceeding or case shall continue  unstayed and in effect for
a period of ninety (90) or more days; or

     (g) Change of  Control.  Southern  shall at any time cease to  beneficially
own,  directly or indirectly,  (i) at least a majority of each of the non-voting
common  stock (if any) and the  voting  common  stock of the  Borrower;  or (ii)
sufficient  shares of the capital  stock of the  Borrower to elect a majority of
the board of directors of the Borrower; or

     (h) Credit Agreement.  Any material  provision of this Agreement shall fail
to be in full force and effect, or the Borrower so asserts in writing;

     then,  and in any such event,  the Agent (i) shall at the  request,  or may
with the consent,  of the Majority Lenders,  by notice to the Borrower,  declare
the obligation of each Lender to make Advances or establish CP Commitments to be
terminated,  whereupon the same shall forthwith terminate;  and/or (ii) shall at
the request,  or may with the consent, of the Majority Lenders, by notice to the
Borrower, declare the Advances and the Notes, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable,  whereupon
the Advances and the Notes,  all such interest and all such amounts shall become
and be  forthwith  due and  payable,  without  presentment,  demand,  protest or
further  notice of any kind,  all of which are  hereby  expressly  waived by the
Borrower;  provided  that in the event of an actual or deemed  entry of an order
for relief with respect to the Borrower under the Federal  Bankruptcy  Code, (A)
the obligation of each Lender to make Advances or establish CP Commitments shall
automatically  be  terminated;  and (B) the  Advances  and the  Notes,  all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.

                  Any Default or Event of Default which has been waived in the
manner required by the applicable provisions of this Agreement shall not be
considered to be continuing from and after the time as of which such waiver has
become effective.

                                  Article VII

                                    THE AGENT

     SECTION 7.01.  Authorization  and Action.  Each Lender hereby  appoints and
authorizes  the Agent to take such action as agent on its behalf and to exercise
such powers and discretion  under this Agreement and the other Loan Documents as
are delegated to the Agent by their respective terms,  together with such powers
and  discretion  as are  reasonably  incidental  thereto.  As to any matters not
expressly  provided for by this Agreement or any other Loan Document  (including
enforcement  or  collection  of the  Notes),  the Agent shall not be required to
exercise any  discretion or take any action,  but shall be required to act or to
refrain  from acting (and shall be fully  protected  in so acting or  refraining
from  acting)  upon  the  instructions  of  the  Majority   Lenders,   and  such
instructions  shall be  binding  upon all  Lenders  and all  holders  of  Notes;
provided  that the Agent shall not be  required to take any action that  exposes
the Agent to personal liability or that is contrary to this Agreement, the other
Loan Documents or applicable Law. The Agent agrees to give to each Lender prompt
notice of each notice given to it by any Loan Party pursuant to the terms of the
relevant Loan Document.

     SECTION  7.02.  Agent's  Reliance,  Etc.  Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection  with this Agreement or
any other Loan Document, except for its or their own gross negligence or willful
misconduct.  Without limitation to the generality of the foregoing, the Agent:
(a) may  treat  the  payee of any Note as the  holder thereof  until  the Agent
receives and accepts an  Assignment  and  Acceptance entered into by the Lender
that is the payee of such  Note,  as  assignor,  and an Eligible  Assignee,  as
assignee,  as  provided in Section  8.07;  (b) may  consult  with legal counsel
(including  counsel for the Borrower),  independent public accountants and other
experts  selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in  accordance  with the advice of such counsel,
accountants or experts;  (c) makes no warranty or  representation to any Lender
and shall not be  responsible  to any Lender for any  statements, warranties or
representations  (whether  written or oral) made in or in connection  with this
Agreement,  any other Loan Document or any PPA Document; (d) shall not have any
duty to ascertain or to inquire as to the  performance  or  observance of any of
the terms,  covenants or  conditions  of this  Agreement  or any other  Material
Document on the part of the Borrower or Southern or any other party thereto,  or
to inspect the  property  (including  the books and  records) of the Borrower or
Southern;  (e) shall not be  responsible  to any Lender  for the due  execution,
legality, validity,  enforceability,  genuineness,  sufficiency or value of this
Agreement or any other  Material  Document or any other  instrument  or document
furnished pursuant hereto or thereto;  and (f) shall incur no liability under or
in  respect of this  Agreement  or any other Loan  Document  by acting  upon any
notice,  consent,  certificate  or other  instrument or writing (which may be by
telecopier,  telegram or telex)  believed by it to be genuine and signed or sent
by the proper party or parties.

     SECTION 7.03. Citibank and Affiliates.  With respect to its Commitment, the
Advances  made by it and the Note  issued to it,  Citibank  shall  have the same
rights and powers under this Agreement as any other Lender and may exercise such
rights  and  powers as though it were not the Agent;  and the term  "Lender"  or
"Lenders" shall, unless otherwise expressly  indicated,  include Citibank in its
individual capacity.  Citibank and its Affiliates may accept deposits from, lend
money  to,  act as  trustee  under  indentures  of,  accept  investment  banking
engagements  from,  and  generally  engage  in any kind of  business  with,  the
Borrower,  Southern, any of their respective Subsidiaries and any Person who may
do business  with,  or own  securities  of, the  Borrower,  Southern or any such
Subsidiary,  all as if  Citibank  were not the  Agent  and  without  any duty to
account therefor to the Lenders.

     SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently  and without  reliance  upon the Agent,  any Arranger or any other
Lender and based on the  financial  statements  referred to in Section  4.01 and
such other documents and information as it has deemed appropriate,  made its own
credit  analysis  and decision to enter into this  Agreement  and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance  upon the Agent,  any  Arranger  or any other  Lender and based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own  credit  decisions  in  taking  or not  taking  action  under  this
Agreement or any other Loan Document.

     SECTION 7.05. Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Borrower),  ratably according to the respective
principal  amounts of the Notes then held by each of them (or if no Notes are at
the time  outstanding  or if any Notes are held by Persons that are not Lenders,
ratably  according to the  respective  amounts of their  Commitments),  from and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits,  costs,  expenses or  disbursements  of any kind or
nature  whatsoever that may be imposed on, incurred by, or asserted  against the
Agent in any way relating to or arising out of this  Agreement or any other Loan
Document or any action taken or omitted by the Agent under this Agreement or any
other Loan Document  (collectively,  the "Indemnified Costs");  provided that no
Lender shall be liable for any portion of the  Indemnified  Costs resulting from
the Agent's gross  negligence or willful  misconduct;  provided  further that no
Designated  Lender  shall be liable for any payment  under this  Section 7.05 so
long as, and to the extent that,  its  Designating  Lender  makes such  payment.
Without  limitation to the  generality of the  foregoing,  each Lender agrees to
reimburse  the  Agent  promptly  upon  demand  for  its  ratable  share  of  any
out-of-pocket  expenses  (including  counsel  fees)  incurred  by the  Agent  in
connection   with  the   preparation,   execution,   delivery,   administration,
modification,  amendment or enforcement  (whether  through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities under, this Agreement, any other Material Document or any other
instrument or agreement furnished pursuant hereto or thereto, to the extent that
the Agent is not  reimbursed  for such expenses by the Borrower.  In the case of
any  investigation,  litigation  or  proceeding  giving rise to any  Indemnified
Costs, this Section 7.05 applies whether any such  investigation,  litigation or
proceeding is brought by the Agent, any Lender or a third party.

     SECTION 7.06.  Successor  Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Majority Lenders. Upon any such resignation or
removal, the Borrower shall have the right to appoint a successor Agent, subject
to the approval of the Majority  Lenders, such approval not to be unreasonably
withheld or delayed.  If no successor  Agent shall have been so appointed by the
Borrower and  approved by the Majority  Lenders, and shall have  accepted such
appointment, within thirty (30) days after the retiring Agent's giving of notice
of resignation or the Majority  Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent subject
to the approval of the Borrower and the Majority  Lenders,  such approval not to
be unreasonably withheld or delayed,  which shall be a commercial bank organized
under  the laws of the  United  States  or of any  State  thereof and  having a
combined  capital and surplus of at least  $500,000,000.  Upon the acceptance of
any  appointment  as Agent under this  Section 7.06 by a successor  Agent, such
successor  Agent  shall  thereupon  succeed  to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged  from its duties and  obligations under this
Agreement and the other Loan Documents.  After any retiring Agent's  resignation
or removal under this Section 7.06 as Agent,  the provisions of this Article VII
shall inure to its benefit as to any actions  taken or omitted to be taken by it
while it was Agent under this Agreement and the other Loan Documents.

                                  Article VIII

                                  MISCELLANEOUS

SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement, the Notes or any other Loan Document, nor consent to any departure by
the Borrower or Southern therefrom, shall in any event be effective unless the
same shall be in writing and signed by or on behalf of the Borrower (and, in the
case only of the Southern Completion Guarantee and the Southern Equity
Agreement, Southern) and the Majority Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided that:

          (a) no  amendment,  waiver or consent  shall,  unless in  writing  and
     signed  by or on  behalf  of the  Borrower  (and,  in the case  only of the
     Southern Completion Guarantee and the Southern Equity Agreement,  Southern)
     and all the Lenders, do any of the following:  (i) increase the Commitments
     of the Lenders or subject the Lenders to any additional  obligations;  (ii)
     reduce the  principal  of, or  interest  on, the Notes or any fees  payable
     under this Agreement or the other Loan  Documents;  (iii) postpone any date
     fixed for, or change the place or currency of, any payment of principal of,
     or interest on, the Notes or any fees payable  under this  Agreement or the
     other Loan  Documents;  (iv) change the percentage of the Commitments or of
     the  aggregate  unpaid  principal  amount of the  Notes,  or the  number of
     Lenders,  that shall be required for the Lenders or any of them to take any
     action  under  this  Agreement  or any other Loan  Document;  (v) amend the
     definition of "Majority Lenders" or "Required Lenders";  or (vi) amend this
     Section 8.01;

          (b) no  amendment  or waiver  of any of the  conditions  specified  in
     Section 3.02, 3.04, 3.06(a) or 3.06(d) shall be effective unless in writing
     and signed by or on behalf of the Borrower and the Required Lenders;

          (c) no amendment (other than an amendment to extend its provisions, in
     accordance  with the terms  thereof,  to a Subsequent  Project),  waiver or
     consent  shall,  unless  in  writing  and  signed  by or on  behalf  of the
     Borrower,  Southern and the  Required  Lenders (or, all of the Lenders with
     respect to any matters relating to those matters  expressly  referred to in
     subsection  (a) above),  be made to or given under the Southern  Completion
     Guarantee or the Southern Equity Agreement; and

          (d) no  amendment,  waiver or consent  shall,  unless in  writing  and
     signed by or on behalf of the Agent in  addition  to the  Persons  required
     pursuant to subsection  (a), (b) or (c) above,  as the case may be, to take
     such action, affect the rights or duties of the Agent under this Agreement,
     any Note or any other Loan Document.

Each Designating Lender may act on behalf of its Designated Lender with respect
to any rights of its Designated Lender to grant or withhold any amendment,
waiver or consent under this Agreement and the other Loan Documents or with
respect to the Notes.

          SECTION  8.02.  Notices,  Etc.  All notices  and other communications
     provided  for  under  this  Agreement   shall  be  in  writing   (including
     telecopier) and mailed, telecopied, or delivered,

          (a) if to the  Borrower,  at its address at 270  Peachtree  Street NW,
     Suite  2000,  Atlanta,  GA 30303,  Attention:  Allen  Leverett,  Treasurer,
     facsimile:  (404) 506-0708;  with a copy to Chris J. Kysar,  Southern Power
     Company, 270 Peachtree Street NW, Suite 2000, Atlanta, GA 30303, facsimile:
     (404) 506-0708, and Richard H. Brody, Troutman Sanders LLP, Bank of America
     Plaza, Suite 5200, 600 Peachtree Street NE, Atlanta,  GA 30308,  facsimile:
     (404) 962-6514;

          (b) if to an Initial Lender,  at its Domestic Lending Office specified
     opposite its name on Schedule I;

          (c) if to any other Lender,  at its Domestic  Lending Office specified
     in the Assignment and Acceptance pursuant to which it
         became a Lender;

          (d)  if to  any  Designated  Lender,  to  its  Designating  Lender  in
     accordance with subsection (c) above; and

          (e) if to the Agent,  at its  address at 2 Penns Way,  Suite 200,  New
     Castle,  DE 19720,  Attention:  Dave  Graber,  telephone:  (302)  894-6034,
     facsimile:  (302)  894-6120;  with a copy to Citibank,  N.A., 388 Greenwich
     Street, 20th Floor, New York, NY 10013, Attention: John Maguire, telephone:
     (212) 816-1081, facsimile: (212) 816-0584;

or, as to the Borrower or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed or telecopied, be effective when deposited in
the mails or telecopied, respectively, except that notices and communications to
the Agent pursuant to Article II, III or VII shall not be effective until
received by the Agent. Delivery by telecopier of an executed counterpart of this
Agreement or of any amendment or waiver of any provision of this Agreement or
the Notes or any other Loan Document or of any Exhibit to be executed and
delivered under this Agreement shall be effective as delivery of a manually
executed counterpart thereof.

          SECTION  8.03.  No  Waiver;  Remedies.  No  failure on the part of any
     Lender  or the Agent to  exercise,  and no delay in  exercising,  any right
     under this  Agreement or under any Note shall operate as a waiver  thereof;
     nor shall any single or partial  exercise  of any such right  preclude  any
     other or further  exercise  thereof or the exercise of any other right. The
     remedies  provided under this Agreement are cumulative and not exclusive of
     any remedies provided by Law.

          SECTION 8.04. Costs and Expenses, Etc. (a) The Borrower agrees to pay,
     upon demand and presentation to the Borrower of a statement of account, all
     reasonable and documented  third-party  out-of-pocket costs and expenses of
     the  Agent  in  connection  with  the  preparation,   execution, delivery,
     syndication, administration,  modification and amendment of this Agreement,
     the Notes, the other Loan Documents and the other documents to be delivered
     hereunder or thereunder (including (i) all costs and expenses in connection
     with  due   diligence  and   syndication   (including   printing,  travel,
     communication,  document  preparation,  printing and  distribution and bank
     meetings);  (ii)  the  reasonable  fees  and  expenses  of each of New York
     special  counsel and  regulatory  counsel for the Agent (but  excluding the
     Agent's in-house counsel) with respect thereto and with respect to advising
     the Agent as to its rights and  responsibilities  under this Agreement and
     the other Loan  Documents;  and (iii) the fees and  expenses of each of the
     Independent   Engineer  and  Environmental   Consultant,  the  Independent
     Insurance  Consultant and the Independent Market Consultant). The Borrower
     further  agrees to pay, upon demand and  presentation  to the Borrower of a
     statement  of  account,   all   reasonable   and   documented  third-party
     out-of-pocket  costs and  expenses  of the Agent  and the  Lenders, if any
     (including,  without limitation,  reasonable fees and expenses of counsel),
     in connection with the enforcement  (whether  through  negotiations, legal
     proceedings  or otherwise)  of this  Agreement,  the Notes, the other Loan
     Documents and the other documents to be delivered hereunder and thereunder,
     including  reasonable fees and  expenses  of counsel for the Agent and the
     Lenders in  connection  with the enforcement  of rights under this Section
     8.04(a); provided that the Borrower shall be required to pay the reasonable
     fees and  expenses of only one special counsel  and,  if  applicable, one
     regulatory   counsel   selected  by  the  Indemnified   Parties  under the
     circumstances contemplated by the proviso to Section 8.04(b)(iii).

          (b) (i) The Borrower  agrees to indemnify each of the  Arrangers, the
     Agent, the Lenders and their respective  Affiliates, officers,  directors,
     employees and agents (each, an "Indemnified  Party") from, and hold each of
     them harmless against, any and all losses, liabilities, claims, damages and
     expenses  incurred  by any of them  relating  to, or  arising out of or in
     connection  with, this Agreement,  the Notes,  the other Loan Documents and
     the  actual  or  proposed  use  of the  proceeds  of  the  Advances or the
     consummation of any matter contemplated by this Agreement or the other Loan
     Documents,  including any investigation,  litigation  or other  proceeding
     (whether or not any of the Indemnified Parties is a party thereto) related
     to the entering into of any Loan  Document  and, to the extent provided in
     this  subsection  (b), the  reasonable  fees and  disbursements of counsel
     incurred in connection  with any such claim,  investigation, litigation or
     other  proceeding; provided that the Borrower shall not be responsible for
     any  such  losses,  liabilities,  claims,  damages  or  expenses  of  any
     Indemnified  Party to the extent incurred by reason of gross negligence or
     willful misconduct on the part of such Indemnified Party.

          (ii) The Borrower  shall be entitled to  participate  in any action or
     proceeding  of which it has been notified by any  Indemnified  Party except
     any action or  proceeding  brought by or for the  benefit of the  Borrower,
     Southern  or  any  Subsidiary  of  the  Borrower  or  Southern  against  an
     Indemnified Party.

          (iii) Promptly after receipt by an Indemnified Party of written notice
     of  any  investigation,  litigation  or  proceeding  in  respect  of  which
     indemnity  is sought by it under this  Agreement,  such  Indemnified  Party
     will,  if a claim is to be made against the  Borrower,  notify the Borrower
     thereof in writing,  but the  omission so to notify the  Borrower  will not
     relieve the Borrower from (A) any liability under this Section which it may
     have to such  Indemnified  Party  except to the  extent  the  Borrower  was
     prejudiced by such  omission;  or (B) any  liability  other than under this
     Section.  Thereafter, the Indemnified Party and the Borrower shall consult,
     to the  extent  appropriate,  with a view  to  minimizing  the  cost to the
     Borrower of its obligations  under this Agreement.  In case any Indemnified
     Party  receives  written  notice  of  any   investigation,   litigation  or
     proceeding  in  respect of which  indemnity  may be sought by it under this
     Agreement  and it notifies  the  Borrower  thereof,  the  Borrower  will be
     entitled  to  participate  therein,  and to the extent that it may elect by
     written notice delivered to the Indemnified  Party promptly after receiving
     the  aforesaid  notice from the  Indemnified  Party,  to assume the defense
     thereof with counsel  reasonably  satisfactory to the  Indemnified  Parties
     (and, if the Agent or one or more Lenders are the Indemnified  Parties, the
     Agent and such Lenders  shall be entitled  jointly to direct the conduct of
     their defense); provided that if the parties against which any loss, claim,
     damage,  expense  or  liability  may arise  under  any such  investigation,
     litigation  or  proceeding  include  both  an  Indemnified  Party  and  the
     Borrower,  Southern or any Subsidiary of the Borrower or Southern, and such
     Indemnified  Party shall have  reasonably  concluded  that (1) there may be
     legal  defenses  available  to it or other  Indemnified  Parties  which are
     different from or additional to those  available to the Borrower,  Southern
     or any Subsidiary of the Borrower or Southern,  and may conflict therewith;
     or (2) if any  liability,  loss,  claim,  damage or  expense  arises out of
     actions  brought by or for the  benefit of the  Borrower,  Southern  or any
     Subsidiary   of  the  Borrower  or  Southern,   the   Indemnified   Parties
     collectively  shall have the right to select one separate counsel to assume
     such legal  defenses and  otherwise to  participate  in the defense of such
     investigation,  litigation  or  proceeding  on  behalf  of the  Indemnified
     Parties.  Upon receipt by the Indemnified Party of notice from the Borrower
     of its election to assume the defense of such investigation,  litigation or
     proceeding and approval by the Indemnified  Party of counsel,  the Borrower
     shall  not be  liable  to the  Indemnified  Party  for any  legal  or other
     expenses  subsequently incurred by the Indemnified Party in connection with
     the defense  thereof unless (x) the  Indemnified  Party shall have employed
     such  counsel  in  connection  with the  assumption  of legal  defenses  in
     accordance  with the proviso to the  preceding  sentence;  (y) the Borrower
     shall  not  have  employed  and  continued  to  employ  counsel  reasonably
     satisfactory  to the Indemnified  Party to represent the Indemnified  Party
     within a reasonable time after notice of commencement of the action; or (z)
     the Borrower  shall have  authorized in writing the  employment of separate
     counsel for the  Indemnified  Party at the expense of the Borrower.  At the
     Borrower's request, an Indemnified Party will settle, compromise or consent
     to the entry of any order adjudicating or otherwise  disposing of any loss,
     claim, damage or liability resulting from such investigation, litigation or
     proceeding  for which the Borrower is liable  under this  Agreement if such
     settlement,  compromise  or consent  to entry of any order (AA)  includes a
     provision unconditionally releasing each Indemnified Party from and holding
     each Indemnified  Party harmless against all liability in respect of claims
     by any releasing  party relating to or arising out of this  Agreement,  the
     Notes  and the  matters  contemplated  herein;  (BB) does not  require  any
     admission  or   acknowledgment   of   culpability  or  wrongdoing  by  such
     Indemnified Party; and (CC) does not involve performance by, or the payment
     of money  damages by, such  Indemnified  Party.  The Borrower  shall not be
     liable for any settlement,  compromise or consent to the entry of any order
     adjudicating  or otherwise  disposing of any  investigation,  litigation or
     proceeding effected without its consent.

          (c) The Borrower  agrees to  indemnify  each Lender for its actual and
     documented losses  (excluding any loss of profit and/or margin),  costs and
     expenses reasonably incurred by it resulting from any payment or prepayment
     of principal of, or  Conversion  of, any  Eurodollar  Rate Advance which is
     made on a day other than the last day of the relevant Interest Period or in
     an amount  other than  given in the  Borrower's  notice of such  payment or
     prepayment,  excluding,  however,  any  such  losses,  costs  and  expenses
     resulting  from a payment or  prepayment  made more than  ninety  (90) days
     prior  to  demand   being  made  to  the   Borrower   by  such  Lender  for
     indemnification.  The payment of such  indemnity  to a Lender shall be made
     within thirty (30) days of a demand by such Lender  complying  with Section
     8.04(d).

          (d) Any demand by a Lender for payment  under Section  2.02(c),  2.10,
     2.13,  8.04(b) or 8.04(c) or under any other indemnity made by the Borrower
     under this Agreement  shall be made in writing to the Borrower (with a copy
     to the Agent) and shall be  accompanied  by a certificate  of an officer of
     the Agent or the relevant Lender,  as may be appropriate,  setting forth in
     reasonable detail the calculation of the amount demanded.

          (e) To the  extent  permitted  by  Law,  if any  Lender  notifies  the
     Borrower that additional amounts will be due under Section 2.10 or that any
     of the events outlined in Section 2.11 have occurred,  such Lender will, if
     it determines that such change is not commercially unreasonable, change its
     Applicable  Lending  Office if as a result of such  change  such  increased
     costs  would not be  required  to be so paid or it would not be illegal for
     such Lender to make,  fund or maintain its Eurodollar  Rate  Advances.  The
     Borrower  will  reimburse  such Lender for all  reasonable  expenses it may
     incur as a result of complying with this Section 8.04(e).

          (f) If any  circumstances  arise which result, or such Lender becomes
     aware of any  circumstances  which might result,  in the Borrower having to
     make such  compensation or  indemnification  or in it becoming  illegal for
     such  Lender  to make,  fund or  maintain  such  Lender's  Eurodollar  Rate
     Advances,  such Lender will  promptly  notify the Borrower  thereof and, in
     consultation  with the Borrower,  such Lender shall take all such steps, if
     any, as it  determines  are  reasonable  and the  Borrower  determines  are
     acceptable to mitigate the effect of those circumstances.

          (g) Without  prejudice to the  survival of any other  agreement of the
     Borrower  or of the  Lenders  under  this  Agreement,  the  agreements  and
     obligations of the Borrower  contained in Sections 2.10,  2.13 and 8.04 and
     the obligations of the Lenders  contained in Sections 2.13,  8.04,  8.07(g)
     and 8.08 shall survive the payment in full of  principal,  interest and all
     other amounts payable under this Agreement and under the Notes.

     SECTION  8.05.  Right of Set-off.  Upon  declaration  by the Agent that the
Advances and the Notes are due and payable pursuant to the provisions of Section
6.01, each Lender is hereby authorized at any time and from time to time, to the
fullest  extent  permitted  by Law,  to set off and apply  any and all  deposits
(general or special,  time or demand,  provisional or final) at any time held by
such Lender to, or for the credit or the account  of, the  Borrower  against any
and all of the obligations of the Borrower now or hereafter  existing under this
Agreement,  the Notes held by such Lender and the other Loan Documents,  whether
or not such Lender shall have made any demand under this  Agreement,  such Notes
or any other Loan Document and although such obligations may be unmatured.  Each
Lender  agrees  promptly  to notify  the  Borrower  after any such  set-off  and
application;  provided that the failure to give such notice shall not affect the
validity of such set-off and  application.  The rights of each Lender under this
Section are in addition to other rights and remedies  (including other rights of
set-off) that such Lender may have.

     SECTION 8.06. Binding Effect.  This Agreement shall become effective (other
than  Section  2.01 and 2.15,  each of which  shall only become  effective  upon
satisfaction  of the  conditions  precedent  set forth in Section  3.01) when it
shall have been  executed by the Borrower and the Agent and when the Agent shall
have been  notified  by the  Initial  Lenders  that such  Initial  Lenders  have
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.

     SECTION 8.07. Assignments and Participations. (a) Each Lender may assign to
(i) one or more Eligible  Assignees  without the approval of the Borrower or the
Agent  in the case of any  Eligible  Assignee  that is  already  a Lender or an
Affiliate of a Lender, and with the approval of the Borrower (unless an Event of
Default or Default has occurred and is then  continuing) and the Agent,  in the
case of any  other  Eligible  Assignee  (such  approval  not to be unreasonably
withheld or delayed);  and (ii) one or more other  entities with the approval of
the Agent and the Borrower, all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment, the Advances owing
to it and the Note or Notes held by it);  provided that (A) each such assignment
shall be of a pro rata share of each outstanding Advance made by such Lender and
the Commitment and CP Commitment of such Lender;  (B) each such assignment shall
be of a constant,  and not a varying,  percentage of all rights and obligations
under this Agreement;  (C) except in the case of an assignment to a Person that,
immediately prior to such assignment,  was a Lender or an assignment of all of a
Lender's  rights  and  obligations  under  this  Agreement,  the  amount of the
Commitment  of the  assigning  Lender  being  assigned  pursuant  to  each such
assignment  (determined as of the date of the  Assignment  and  Acceptance  with
respect to such assignment)  shall be $10,000,000 or a larger integral  multiple
of  $1,000,000;  and (D) the parties to each such  assignment  shall execute and
deliver to the Agent,  for  recording  in the  Register,  and,  if the  relevant
assignee is not a Lender or an Affiliate  of a Lender,  to each of the Agent and
the Borrower for its acceptance  (provided  that no such  acceptance is required
(1) from the Borrower or the Agent with respect to an assignee  that is a Lender
or an Affiliate of a Lender;  or (2) from the Borrower with respect to any other
Eligible  Assignee  while an Event of  Default or Default  has  occurred  and is
continuing),  an appropriate  Assignment and Acceptance,  together with any Note
subject to such assignment and a processing and recordation fee of $3,000 (which
shall not be payable by the Borrower). Upon such execution, delivery, acceptance
(if  applicable)  and recording,  from and after the effective date specified in
each Assignment and Acceptance,  (x) the assignee thereunder shall be a party to
this  Agreement  and,  to the  extent  that  rights and  obligations  under this
Agreement have been assigned to it pursuant to such  Assignment and  Acceptance,
have the rights and  obligations of a Lender under this  Agreement;  and (y) the
Lender  assignor  thereunder  shall,  to the extent that rights and obligations
under this  Agreement  have been assigned by it pursuant to such  Assignment and
Acceptance,  relinquish  its rights and be released from its  obligations  under
this Agreement  (other than under Sections  2.13(f),  8.07(g) and 8.08) (and, in
the case of an Assignment and Acceptance  covering all or the remaining  portion
of an assigning  Lender's  rights and  obligations  under this  Agreement, such
Lender shall cease to be a party to this Agreement).

(b) If any Lender shall make a demand under Section 8.04(d) for payment in
respect of a claim under Section 2.10 or shall give a notice under Section 2.11
of any unlawfulness or assertion of unlawfulness contemplated by such Section or
any demand shall be made or any amount shall be payable with respect to any
Lender under Section 2.13, the Borrower may, by written notice given to such
Lender within forty-five (45) days of the making by such Lender of such demand
or the giving by such Lender of such notice, require by written notice to such
Lender that such Lender assign, by executing and delivering an Acceptance and
Assignment, within fifteen (15) days of the giving by the Borrower of such
notice but on at least three (3) Business Days' notice to one or more Persons in
accordance with Section 8.07(a) such Lender's Commitment and its Advances
against payment to such Lender in immediately available funds of the principal
amount of such Advances, all interest accrued thereon to the date of payment,
all fees accrued by such Lender to the date of payment, any amounts payable to
such Lender under Section 8.04(c) and all other amounts payable hereunder to
such Lender.

(c) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties to this Agreement as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Material Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Material Document or any other instrument or document furnished pursuant hereto
or thereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower, Southern or any Subsidiary of the Borrower or Southern, or the
performance or observance by the Borrower or Southern or any other party of any
of its obligations under any Material Document to which it is a party or any
other instrument or document furnished pursuant thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (v) such
assignee confirms that it is an Eligible Assignee or that it is an entity that
has been approved by the Borrower and the Agent to the extent any such approval
is required under Section 8.07(a); (vi) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
and discretion under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement and the other Loan Documents are
required to be performed by it as a Lender.

(d) The Agent shall maintain at its address referred to in Section 8.02 a copy
of each Assignment and Acceptance and each Designation Agreement delivered to
and (if applicable) accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal amount
of the Advances owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender under this Agreement
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee representing that it is an existing Lender or Affiliate
of a Lender or that it is an entity that has been approved by the Borrower and
the Agent under Section 8.07(a), together with any Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C, (i) accept such
Assignment and Acceptance; (ii) record the information contained therein in the
Register; and (iii) promptly give notice and a copy thereof to the Borrower.
Within five (5) Business Days after its receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Agent in exchange for the
surrendered Note a new Note to such Eligible Assignee or other entity in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment under this
Agreement, a new Note to the assigning Lender in an amount equal to the
Commitment retained by it under this Agreement. Such new Note or Notes shall be
in an aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit A.

(f) Each Lender may sell participations to one or more banks or other entities
(other than the Borrower or any of its Affiliates) in or to all or a portion of
its rights and/or obligations under this Agreement (including all or a portion
of its Commitment, the Advances owing to it and/or the Note or Notes held by
it); provided that (i) such Lender's obligations under this Agreement and the
other Loan Documents (including its Commitment) shall remain unchanged; (ii)
such Lender shall remain solely responsible to the other parties to this
Agreement and the other Loan Documents for the performance of such obligations;
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement and the other Loan Documents; (iv) the Borrower, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents; and (v) no participant under any such participation
shall have any right to approve any amendment or waiver of any provision of this
Agreement, any Note or any other Loan Document, or any consent to any departure
by the Borrower or Southern therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable under this Agreement, the Notes or any other
Loan Document, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable under this
Agreement, the Notes or any other Loan Document, in each case to the extent
subject to such participation, or any other matter for which unanimous consent
of the Lenders is required pursuant to this Agreement or any other Loan
Document.

(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any
Confidential Information; provided that prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall (if it is not
an existing Lender or Participant) have executed and delivered to such Lender
and to the Borrower a duly authorized confidentiality agreement substantially in
the form of Exhibit D.

(h) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement (including the Advances owing to it and the Note held by
it) in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.

(i) Any Lender may at any time, without the consent of the Borrower, designate
not more than one Designated Lender to fund Advances on behalf of such
Designating Lender subject to the terms of this Section 8.07(i), and the
provisions of Sections 8.07(a) through (h) shall not apply to such designation.
No Lender may have more than one Designated Lender at any time. Such designation
may occur either by the execution before the Funds Availability Date of the
signature pages of an Assignment and Acceptance by such Lender and Designated
Lender next to the appropriate "Designating Lender" and "Designated Lender"
captions, or by execution by such parties of a Designation Agreement on or after
the Funds Availability Date; provided that any Lender and its Designated Lender
executing the signature pages of any Assignment and Acceptance as "Designating
Lender" and "Designated Lender", respectively, before the Funds Availability
Date shall be deemed to have executed a Designation Agreement, and shall be
bound by the respective representations, warranties and covenants contained
therein. The parties to each such designation occurring on or after the Funds
Availability Date shall execute and deliver to the Agent and the Borrower a
Designation Agreement. Upon receipt of an appropriately completed Designation
Agreement executed by a Designating Lender and a designee representing that it
is a Designated Lender, the Agent will accept such Designation Agreement and
will give prompt notice thereof to the Borrower and the other Lenders, whereupon
(i) the Borrower shall execute and deliver to the Designating Lender a
Designated Lender Note payable to the order of the Designated Lender; (ii) from
and after the effective date specified in the Designation Agreement, the
Designated Lender shall become a party to this Agreement with a right to make
Advances on behalf of its Designating Lender pursuant to Section 2.01(c); and
(iii) the Designated Lender shall not be required to make payments with respect
to any obligations in this Agreement except to the extent of excess cash flow of
such Designated Lender which is not otherwise required to repay obligations of
such Designated Lender which are then due and payable; provided that regardless
of such designation and assumption by the Designated Lender, the Designating
Lender shall be and remain obligated to the Borrower, the Agent and the Lenders
for each and every of the obligations of the Designating Lender and its related
Designated Lender with respect to this Agreement and the other Loan Documents,
including any indemnification obligations under Section 7.05, and any sums
otherwise payable to the Borrower by the Designated Lender. Each Designating
Lender, or specified branch or affiliate thereof, shall serve as the
administrative agent of its Designated Lender and shall on behalf of its
Designated Lender: (A) receive any and all payments made for the benefit of such
Designated Lender; and (B) give and receive all communications and notices and
take all actions under this Agreement and the other Loan Documents, including
votes, approvals, waivers, consents and amendments under or relating to this
Agreement and the other Loan Documents. Any such notice, communication, vote,
approval, waiver, consent or amendment shall be signed by a Designating Lender,
or specified branch or affiliate thereof, as administrative agent for its
Designated Lender and need not be signed by such Designated Lender on its own
behalf. The Borrower, the Agent and the Lenders may rely thereon without any
requirement that the Designated Lender sign or acknowledge the same. No
Designated Lender may assign or transfer all or any portion of its interest
under this Agreement, other than via an assignment to its Designating Lender or
Liquidity Lender, if any, or otherwise in accordance with the provisions of
Sections 8.07(a) through (h).

(j) Notwithstanding anything in this Agreement to the contrary (including any
other provision regarding assignments, participations, transfers or novations),
any Lender (a "Granting Lender") may, without the consent of any other party
hereto, grant to a special purpose vehicle (whether a corporation, partnership,
limited liability company, trust or otherwise, an "SPV") sponsored or managed by
the Granting Lender or any Affiliate thereof, a participation in all or any part
of any existing or future Advances hereunder (including Commitments therefor)
that such Granting Lender has made or will make pursuant to this Agreement;
provided that (i) such Granting Lender's obligations under this Agreement
(including its Commitments) shall remain unchanged; (ii) such Granting Lender
shall remain the holder of the Notes for all purposes under this Agreement; and
(iii) the Borrower, Agent and other Lenders shall continue to deal solely and
directly with such Granting Lender in connection with such Granting Lender's
rights and obligations under this Agreement. Each party hereto hereby agrees
that (A) no SPV will be entitled to any rights or benefits that a Participant
would not otherwise be entitled to under this Agreement; and (B) an SPV may
assign its interest in any existing or future Advances under this Agreement to
any Person that would constitute a Participant. Notwithstanding anything in this
Agreement to the contrary, the Granting Lender and any SPV may, without the
consent of any other party to this Agreement, and without limiting any other
rights of disclosure of the Granting Lender under this Agreement, disclose on a
confidential basis any non-public information relating to its funding of
Advances to (1) (in the case of the Granting Lender) any actual or prospective
SPV, (2) (in the case of an SPV) its lenders, sureties, reinsurers, guarantors
or credit liquidity enhancers, (3) their respective directors, officers, and
advisors, and (4) any rating agency.

     SECTION 8.08. Confidentiality.  (a) Neither the Agent, any Arranger nor any
Lender shall,  without the prior written  consent of the Borrower,  (i) disclose
Confidential Information to any Person except as permitted by Section 8.07(g) or
(j) or this Section 8.08; or (ii) use, either directly or indirectly, any of the
Confidential  Information  except in concert with the Borrower and in connection
with  this  Agreement  and  the  other  Loan  Documents  and  the   transactions
contemplated hereby and thereby.

(b) The Agent, each Arranger and each Lender may disclose the Confidential
Information (i) to their respective Representatives who need to know the
Confidential Information for the purpose of administering or enforcing its
rights under this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby or for the discharge of their duties, who are
informed by the Agent, such Arranger or such Lender of the confidential nature
of the Confidential Information, and who agree to be bound by the terms and
conditions of this Agreement to the same extent as the Agent, such Arranger or
such Lender; and (ii) to any party to this Agreement.

(c) Each of the Agent, each Arranger and each Lender agrees that, without the
Borrower's prior written consent, it shall not disclose to any Person (except as
otherwise expressly permitted in this Agreement) the fact that the Confidential
Information has been made available or any of the terms, conditions or other
facts with respect to the Confidential Information.

(d) The provisions contained in this Section 8.08 shall be inoperative as to any
portion of the Confidential Information that (i) is or becomes generally
available to the public on a nonconfidential basis through no fault or action by
the Agent, any Arranger, any Lender or their respective Representatives; or (ii)
is or becomes available to the Agent, any Arranger or any Lender on a
nonconfidential basis from a source other than the Borrower, its Affiliates or
Representatives or the Agent or any Arranger or their Representatives, which
source, to the best knowledge of the Agent, any Arranger or any Lender, as may
be appropriate, is not prohibited from disclosing such Confidential Information
to the Agent, any Arranger or such Lender by a contractual, legal or fiduciary
obligation to the Borrower, the Agent, any Arranger or any Lender.

(e) The Agent, each Arranger and each Lender may disclose the Confidential
Information at the request of any regulatory or supervisory authority having
jurisdiction over it or to the extent necessary for purposes of enforcing this
Agreement or any other Loan Document.

(f) In the event that the Agent, any Arranger or any Lender becomes legally
compelled to disclose any of the Confidential Information otherwise than as
contemplated by Section 8.08(e), the Agent, such Arranger or such Lender shall
provide the Borrower with notice of such event promptly upon its obtaining
knowledge thereof (provided that it is not otherwise prohibited by Law from
giving such notice) so that the Borrower may seek a protective order or other
appropriate remedy. In the event that such protective order or other remedy is
not obtained, the Agent, such Arranger or such Lender shall furnish only that
portion of the Confidential Information that it is legally required to furnish
and shall cooperate with the Borrower's counsel to enable the Borrower to obtain
a protective order or other reliable assurance that confidential treatment will
be accorded the Confidential Information.

(g) In the event of any breach of this Section 8.08, the Borrower shall be
entitled to equitable relief (including injunction and specific performance) in
addition to all other remedies available to it at Law or in equity.

(h) Neither the Agent, any Arranger nor any Lender shall make any public
announcement, advertisement, statement or communication regarding the Borrower,
its Affiliates (insofar as such announcement, advertisement, statement or
communication relates to the Borrower or the transactions contemplated hereby)
or this Agreement or the transactions contemplated hereby without the prior
written consent of the Borrower (such consent not to be unreasonably withheld or
delayed).

(i) Any Designated Lender may disclose any Confidential Information to any
rating agency, commercial paper dealer, Liquidity Lender, sureties, reinsurers,
guarantors or credit liquidity enhancers for or to such Designated Lender, and
their respective directors, officers and advisors; provided that each of such
Persons is informed by the Designated Lender of the confidential nature of the
Confidential Information and each such commercial paper dealer, Liquidity
Lender, surety, reinsurer, guarantor or credit liquidity enhancer agrees to be
bound by the terms and conditions of this Section 8.08 to the same extent as the
Designated Lender.

(j) The obligations of the Agent, each Arranger and each Lender under this
Section 8.08 shall survive the termination or expiration of this Agreement.

     SECTION 8.09. Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the Laws of the State of New York.

     SECTION 8.10. Execution in Counterparts.  This Agreement may be executed in
any  number of  counterparts  and by  different  parties  to this  Agreement  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
agreement.

     SECTION 8.11. Jurisdiction,  Etc. (a) Each of the parties to this Agreement
hereby irrevocably and unconditionally  submits, for itself and its property, to
the  nonexclusive  jurisdiction  of the Supreme Court,  New York County,  United
States  District Court for the Southern  District of New York, and any appellate
court from any thereof,  in any action or proceeding  arising out of or relating
to this  Agreement  or the  Notes,  or for  recognition  or  enforcement  of any
judgment,  and each of the  parties to this  Agreement  hereby  irrevocably  and
unconditionally  agrees  that  all  claims  in  respect  of any such  action  or
proceeding  may be heard and  determined in such New York State court or, to the
extent  permitted  by Law, in such  federal  court.  Each of the parties to this
Agreement agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by Law.  Nothing in this Agreement shall affect any
right  that any  party may  otherwise  have to bring  any  action or  proceeding
relating to this Agreement or the Notes in the courts of any  jurisdiction.  (b)
Each of the parties to this Agreement irrevocably and unconditionally waives, to
the fullest  extent it may legally and  effectively do so, any objection that it
may now or  hereafter  have to the  laying  of  venue  of any  suit,  action  or
proceeding  arising out of or relating to this Agreement or the Notes in any New
York State or  federal  court.  Each of the  parties  to this  Agreement  hereby
irrevocably  waives,  to the fullest extent  permitted by Law, the defense of an
inconvenient  forum to the  maintenance of such action or proceeding in any such
court.

     SECTION 8.12. No Bankruptcy Proceedings.  Each of the Borrower, the Lenders
and the Agent agrees that it will not institute against any Designated Lender or
join  any  other  Person  in  instituting  against  any  Designated  Lender  any
bankruptcy,  reorganization,  arrangement,  insolvency or liquidation proceeding
under any federal or state  bankruptcy  or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued by
such Designated Lender.

     SECTION 8.13. Waiver of Jury Trial. Each of the Borrower, the Agent and the
Lenders  hereby  irrevocably  waives  all right to trial by jury in any  action,
proceeding  or  counterclaim  (whether  based on  contract,  tort or  otherwise)
arising  out of or  relating  to this  Agreement,  the Notes or any  other  Loan
Document  or  the  actions  of  the  Agent  or any  Lender  in the  negotiation,
administration, performance or enforcement of any such document.

<PAGE>

                  IN WITNESS WHEREOF, the parties to this Agreement have caused
this Agreement to be executed by their respective officers duly authorized for
such purpose, as of the date first above written.

                                 The Borrower

                                 SOUTHERN POWER COMPANY

                                 By: _________________________________________
                                       Name:
                                       Title:

<PAGE>

                                The Agent

                               CITIBANK, N.A.,
                                as Agent

                               By: __________________________________________
                                      Name:
                                      Title:

<PAGE>

                            The Initial Lenders

                            CITIBANK, N.A.

                            By: ______________________________________________
                                  Name:
                                  Title:

<PAGE>

                          THE BANK OF TOKYO-MITSUBISHI, LTD., NY BRANCH

                          By: ------------------------------------------------
                                Name:
                                Title:

                          By: ------------------------------------------------
                                Name:
                                Title:

<PAGE>

                         BAYERISCHE LANDESBANK
                         GIROZENTRALE, CAYMAN ISLANDS
                         BRANCH

                          By: ______________________________________________
                               Name:
                               Title:

                         By:  _____________________________________________
                              Name:
                              Title:

<PAGE>

                         COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES

                         By:_______________________________________________
                              Name:
                              Title:

                         By:_______________________________________________
                              Name:
                              Title:

<PAGE>

                         THE INDUSTRIAL BANK OF JAPAN, LIMITED

                         By: _____________________________________________
                              Name:
                              Title:

                         By: _____________________________________________
                              Name:
                              Title:

<PAGE>

<TABLE>
<CAPTION>

                                   SCHEDULE I
                             SOUTHERN POWER COMPANY
                                CREDIT AGREEMENT

                   COMMITMENTS AND APPLICABLE LENDING OFFICES

------------------------------------------------------------------------------------------------------------------------------
Initial Lenders                 Commitments           Domestic Lending Offices            Eurodollar Lending Offices
------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                   <C>                               <C>
Citibank, N.A.                  $75,000,000           Citibank, N.A.                      Citibank, N.A.
                                                      2 Penns Way, Suite 200              2 Penns Way, Suite 200
                                                      New Castle, DE 19720                New Castle, DE 19720
                                                      Attention:  Tony Neville            Attention:  Tony Neville
                                                      Tel: (302) 894-6057                 Tel: (302) 894-6057
                                                      Fax: (302) 894-6120                 Fax: (302) 894-6120

                                                      Copy to:                            Copy to:
                                                      Citibank, N.A.                      Citibank, N.A.
                                                      388 Greenwich Street, 20th Floor,   388 Greenwich Street, 20th Floor
                                                      New York, NY 10013                  New York, NY 10013
                                                      Attention:  John Maguire            Attention:  John Maguire
                                                      Tel:  (212) 816-1081                Tel:  (212) 816-1081
                                                      Fax: (212) 816-0584                 Fax: (212) 816-0584

------------------------------------------------------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi,   $65,000,000           The Bank of Tokyo-Mitsubishi        The Bank of Tokyo-Mitsubishi Ltd.,
Ltd., NY Branch                                       Ltd., NY Branch                     NY Branch
                                                      1251 Avenue of the Americas         1251 Avenue of the Americas
                                                      New York, NY 10020-1104             New York, NY 10020-1104
                                                      Attention:  Mr. Rolando Uy, AVP,    Attention:  Mr. Rolando Uy, AVP,
                                                      Loan Operations Dept.               Loan Operations Dept.
                                                      BTM Information Services, Inc.      BTM Information Services, Inc.
                                                      Tel: (201) 413-8570                 Tel: (201) 413-8570
                                                      Fax: (201) 521-2304/2305            Fax: (201) 521-2304/2305

------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank           $65,000,000           Bayerische Landesbank Girozentrale  Bayerische Landesbank Girozentrale
Girozentrale, Cayman Islands                          560 Lexington Avenue                560 Lexington Avenue
Branch                                                New York, NY 10022                  New York, NY 10022
                                                      Attention:  Sean                    Attention:  Sean
                                                      O'Sullivan/Patricia Sanchez         O'Sullivan/Patricia Sanchez
                                                      Tel: (212) 310-9913/9810            Tel: (212) 310-9913/9810
                                                      Fax: (212) 310-9868/9930            Fax: (212) 310-9868/9930

------------------------------------------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------------------------------------------
Commerzbank AG, New York and    $65,000,000           Commerzbank AG, Atlanta Agency      Commerzbank AG, Atlanta Agency
Grand Cayman Branches                                 1230 Peachtree St., N.E.            1230 Peachtree St., N.E.
                                                      Suite 3500                          Suite 3500
                                                      Atlanta, GA 30309                   Atlanta, GA 30309
                                                      Attention: Brian Campbell, Senior   Attention: Brian Campbell, Senior
                                                      Vice President                      Vice President
                                                      Tel: (404) 888-6518                 Tel: (404) 888-6518
                                                      Fax: (404) 888-6539                 Fax: (404) 888-6539

                                                      Copy to:  Commerzbank AG,           Copy to:  Commerzbank AG,
                                                      555 Theodore Fremd Ave - Suite      555 Theodore Fremd Ave - Suite
                                                      B-200,                              B-200,
                                                      Rye, NY 10580                       Rye, NY 10580
                                                      Attention: Monica Aguirre           Attention: Monica Aguirre
                                                      Tel: (914) 925-2097                 Tel: (914) 925-2097
                                                      Fax: (914) 925-2001                 Fax: (914) 925-2001

------------------------------------------------------------------------------------------------------------------------------
The Industrial Bank of Japan,   $65,000,000           The Industrial Bank of Japan,       The Industrial Bank of Japan,
Limited                                               Limited                             Limited
                                                      1251 Avenue of the Americas         1251 Avenue of the Americas
                                                      New York, NY 10020-1104             New York, NY 10020-1104
                                                      Attention: Juan A. Almodoval        Attention: Juan A. Almodoval
                                                      Tel: (212) 282-4072                 Tel: (212) 282-4072
                                                      Fax: (212) 282-4480                 Fax: (212) 282-4480

------------------------------------------------------------------------------------------------------------------------------
Bank of America, N.A.           $45,000,000           Bank of America, N.A.               Bank of America, N.A.
                                                      901 Main St. 14th FL                901 Main St. 14th FL
                                                      Dallas, TX 75202                    Dallas, TX 75202
                                                      Attention: Nora Taylor              Attention: Nora Taylor
                                                      Tel: (214) 209-0175                 Tel: (214) 209-0175
                                                      Fax: (214) 290-9440                 Fax: (214) 290-9440

------------------------------------------------------------------------------------------------------------------------------
The Bank of Nova Scotia         $45,000,000           The Bank of Nova Scotia             The Bank of Nova Scotia
                                                      Suite 2700, 600 Peachtree St. N.E.  Suite 2700, 600 Peachtree St. N.E.
                                                      Atlanta, GA 30308                   Atlanta, GA 30308
                                                      Attention:  Anthony                 Attention:  Anthony
                                                      Millington/Twala Johnson            Millington/Twala Johnson
                                                      Tel:  (404) 877-1579/1565           Tel:  (404) 877-1579/1565
                                                      Fax: (404) 888-8998                 Fax: (404) 888-8998

------------------------------------------------------------------------------------------------------------------------------
Barclays Bank PLC               $45,000,000           Barclays Bank PLC                   Barclays Bank PLC
                                                      222 Broadway - 11th Floor           222 Broadway - 11th Floor
                                                      New York, NY 10038                  New York, NY 10038
                                                      Attention:  Jesse Adams/Jeff        Attention:  Jesse Adams/Jeff
                                                      Pannullo                            Pannullo
                                                      Tel: (212) 412-4081/3724            Tel: (212) 412-4081/3724
                                                      Fax: (212) 412-5306                 Fax: (212) 412-5306

------------------------------------------------------------------------------------------------------------------------------

<PAGE>

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KBC Bank N.V., New York Branch  $45,000,000           KBC Bank N.V.,                      KBC Bank N.V.,
                                                      New York Branch                     New York Branch
                                                      125 West 55th Street                125 West 55th Street
                                                      New York, NY 10019                  New York, NY 10019
                                                      Attention: Rose Pagan, Loan         Attention: Rose Pagan, Loan
                                                      Administration                      Administration
                                                      Tel: (212) 541-0657                 Tel: (212) 541-0657
                                                      Fax: (212) 956-5581                 Fax: (212) 956-5581

------------------------------------------------------------------------------------------------------------------------------
Australia and New Zealand       $32,500,000           Australia and New Zealand Banking   Australia and New Zealand Banking
Banking Group Limited                                 Group Limited                       Group Limited
                                                      1177 Avenue of the Americas         1177 Avenue of the Americas
                                                      New York, NY 10036                  New York, NY 10036
                                                      Attention:  Arlene Esin/Ben         Attention:  Arlene Esin/Ben
                                                      Velazquez                           Velazquez
                                                      Tel: (212) 801-9827/9100            Tel: (212) 801-9827/9100
                                                      Fax: (212) 536-9278/556-4829        Fax: (212) 536-9278/556-4829

------------------------------------------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------------------------------------------
Bayerische Hypo- und            $32,500,000           Bayerische Hypo- und Vereinsbank    Bayerische Hypo-  und Vereinsbank
Vereinsbank AG, New York                              AG, New York Branch                 AG, Grand Cayman Branch
Branch                                                150 East 42nd Street                c/o Bayerische Hypo- und
                                                      New York, NY 10017                  Vereinsbank AG
                                                      Attention:  Tina Chung              150 East 42nd Street
                                                      Tel: (212) 672-5688                 New York, NY 10017
                                                      Fax: (212) 672-5691                 Attention:  Tina Chung
                                                                                          Tel: (212) 672-5688
                                                                                          Fax: (212) 672-5691

------------------------------------------------------------------------------------------------------------------------------
Credit Lyonnais New York        $32,500,000           Credit Lyonnais New York Branch     Credit Lyonnais New York Branch
Branch                                                1301 Avenue of the Americas         1301 Avenue of the Americas
                                                      New York, NY 10019                  New York, NY 10019
                                                      Attention:  Bindu Menon             Attention:  Bindu Menon
                                                      Tel: (212) 261-7633                 Tel: (212) 261-7633
                                                      Fax: (917) 849-5440                 Fax: (917) 849-5440

------------------------------------------------------------------------------------------------------------------------------
First Union National Bank       $32,500,000           First Union National Bank           First Union National Bank
                                                      201 South College Street NC1183     201 South College Street NC1183
                                                      Charlotte, NC 28288-1183            Charlotte, NC 28288-1183
                                                      Attention: Chanue Michael           Attention: Chanue Michael
                                                      Tel: (704) 715-1195                 Tel: (704) 715-1195
                                                      Fax: (704) 383-7201                 Fax: (704) 383-7201

------------------------------------------------------------------------------------------------------------------------------
Fleet National Bank             $32,500,000           Fleet National Bank                 Fleet National Bank
                                                      Global Energy MA DE 10008A          Global Energy MA DE 10008A
                                                      100 Federal Street                  100 Federal Street
                                                      Boston, MA 02110                    Boston, MA 02110
                                                      Attention:  Cassandra Roberson      Attention:  Cassandra Roberson
                                                      Tel: (617) 434-3936                 Tel: (617) 434-3936
                                                      Fax: (617) 434-0201                 Fax: (617) 434-0201

------------------------------------------------------------------------------------------------------------------------------
ING (U.S.) Capital LLC          $32,500,000           ING (U.S.) Capital LLC              ING (U.S.) Capital LLC
                                                      c/o ING Barings                     c/o ING Barings
                                                      135 East 57th Street                135 East 57th Street
                                                      New York, NY 10022                  New York, NY 10022
                                                      Attention: Charmen Smith,           Attention: Charmen Smith, Associate
                                                      Associate                           Tel: (212) 409-1516
                                                      Tel: (212) 409-1516                 Fax: (212) 409-1091
                                                      Fax: (212) 409-1091

------------------------------------------------------------------------------------------------------------------------------
JP Morgan Chase Bank            $20,000,000           JP Morgan Chase Bank                JP Morgan Chase Bank
                                                      ICMP - 8th Floor                    ICMP - 8th Floor
                                                      New York, NY 10081                  New York, NY 10081
                                                      Attention:  Lynette Lang            Attention:  Lynette Lang
                                                      Tel: (212) 552-7692                 Tel: (212) 552-7692
                                                      Fax: (212) 552-5777                 Fax: (212) 552-5777

------------------------------------------------------------------------------------------------------------------------------
Lehman Commercial Paper Inc.    $20,000,000           Lehman Commercial Paper Inc.        Lehman Commercial Paper Inc.
                                                      101 Hudson Street                   101 Hudson Street
                                                      Jersey City, NJ 07302               Jersey City, NJ 07302
                                                      Attention:  Nancy Wong              Attention:  Nancy Wong
                                                      Tel: (201) 524-4204                 Tel: (201) 524-4204
                                                      Fax: (201) 524-4298                 Fax: (201) 524-4298

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Morgan Stanley Senior           $20,000,000           Morgan Stanley Senior Funding,      Morgan Stanley Senior Funding, Inc.
Funding, Inc.                                         Inc.                                1585 Broadway
                                                      1585 Broadway                       New York NY 10036
                                                      New York NY 10036                   Attention:  Larry Benison/Will
                                                      Attention:  Larry Benison/Will      Pope/Theresa Amato
                                                      Pope/Theresa Amato                  Tel: (212) 537-1439/1366/1384
                                                      Tel: (212) 537-1439/1366/1384       Fax: (212) 537-1867/1866
                            Fax: (212) 537-1867/1866

------------------------------------------------------------------------------------------------------------------------------
Norddeutsche Landesbank         $20,000,000           NORD/LB New York Branch             NORD/LB New York Branch
Girozentrale                                          1114 Avenue of the Americas, 37th   1114 Avenue of the Americas, 37th
                                                      Floor                               Floor
                                                      New York, NY 10036                  New York, NY 10036
                                                      Attention: Andrea Johann, Loan      Attention: Andrea Johann, Loan
                                                      Administration Group                Administration Group
                                                      Tel: (212) 812-6830                 Tel: (212) 812-6830
                                                      Fax: (212) 812-6930                 Fax: (212) 812-6930

------------------------------------------------------------------------------------------------------------------------------
Sanpaolo IMI S.p.A.             $20,000,000           Sanpaolo IMI S.p.A.                 Sanpaolo IMI S.p.A.
                                                      245 Park Avenue, 35th Floor         245 Park Avenue, 35th Floor
                                                      New York, NY 10167                  New York, NY 10167
                                                      Attention:  Glen Binder             Attention:  Glen Binder
                                                      Tel: (212) 692-3016                 Tel: (212) 692-3016
                                                      Fax: (212) 692-3178                 Fax: (212) 692-3178

------------------------------------------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------------------------------------------
Toronto Dominion (Texas), Inc.  $20,000,000           Toronto Dominion (Texas), Inc.      Toronto Dominion (Texas), Inc.
                                                      909 Fannin Street, 17th Floor       909 Fannin Street, 17th Floor
                                                      Houston, TX 77010                   Houston, TX 77010
                                                      Attention:  Jean Pettit             Attention:  Jean Pettit
                                                      Tel: (713) 653-8234                 Tel: (713) 653-8234
                                                      Fax: (713) 951-9921                 Fax: (713) 951-9921

------------------------------------------------------------------------------------------------------------------------------
Westdeutsche Landesbank         $20,000,000           Westdeutsche Landesbank             Westdeutsche Landesbank
Girozentrale, New York Branch                         Girozentrale, New York Branch       Girozentrale, New York Branch
                                                      1211 Avenue of the Americas         1211 Avenue of the Americas
                                                      New York, NY 10036                  New York, NY 10036
                                                      Attention:  Felicia La Forgia       Attention:  Felicia La Forgia
                                                      Tel: (212) 852-6096                 Tel: (212) 852-6096
                                                      Fax: (212) 852-6307                 Fax: (212) 852-6307

------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

2/570773
                                   SCHEDULE II
                             SOUTHERN POWER COMPANY
                                CREDIT AGREEMENT

                             TERMS OF SUBORDINATION

                  Terms defined in the Credit Agreement referred to below are
used in these Terms of Subordination with their defined meanings except as
otherwise defined herein.

                  SECTION 1. "Affiliate Subordinated Debt" Defined. "Affiliate
Subordinated Debt" means, for purposes of these Terms of Subordination (the
"Agreement"), [describe the specific Affiliate Subordinated Debt that is being
subordinated hereby -- to include all amounts payable in connection therewith],
which constitutes debt of the Borrower originally issued to a Person that is an
Affiliate of the Borrower and which is subordinated on the terms set forth
below. Debt of the Borrower payable to any entity that is formed by the Borrower
or an Affiliate of the Borrower for the purpose of issuing securities in the
public or capital markets, or in a private placement, shall not constitute
"Affiliate Subordinated Debt" for all purposes hereof.

                  SECTION 2. Agreement to Subordinate. The holder hereof (the
"Subordinated Creditor") and the Borrower each agree that the Affiliate
Subordinated Debt is and shall be subordinate and subject in right of payment,
to the extent and in the manner hereinafter set forth, to the prior payment in
full of all obligations of the Borrower now or hereafter existing under (a) the
Credit Agreement, dated as of November 15, 2001, as from time to time in effect
(the "Credit Agreement"), among the Borrower, the financial institution(s) party
thereto and Citibank, N.A., as Agent for such financial institution(s), and any
promissory notes (the "Notes") issued pursuant thereto and (b) such documents as
may be listed on Schedule I hereto on the date of execution hereof or from time
to time added to said Schedule I (other than any such document which the Senior
Creditors (as hereinafter defined) thereunder have agreed may be deleted from
said Schedule I from time to time) by a writing signed by the Borrower and the
Subordinated Creditor (such documents being referred to herein collectively as
the "Senior Debt Documents"), whether for principal, interest (including,
without limitation, interest, as provided in the Notes and in the debt
instruments included in the Senior Debt Documents (such debt instruments
included in the Senior Debt Documents being referred to herein collectively as
the "Senior Debt Instruments"), accruing after the filing of a petition
initiating any proceeding referred to in Section 3(a), whether or not such
interest accrues after the filing of such petition for purposes of the Federal
Bankruptcy Code or is an allowed claim in such proceeding), fees, expenses,
indemnity or other amounts due thereunder (such obligations of the Borrower
under the Credit Agreement and the Senior Debt Documents being the
"Obligations"). For the purposes of this Agreement, the Obligations shall not be
deemed to have been paid in full until (i) with respect to the Lenders, the
earlier of (A) the Final Maturity Date, and (B) the date of termination in whole
of each Lender's commitment (the "Termination Date") under the Credit Agreement
shall have occurred and (ii) with respect to each Senior Creditor, the
obligation under each of its respective Senior Debt Documents to extend credit,
disburse funds or acquire a debt instrument shall have terminated and unless the
Lenders, the creditors under the Senior Debt Documents and the holders (other
than the Lenders) of the Senior Debt Instruments (such creditors and holders
being referred to collectively herein as the "Senior Creditors") shall have
received payment of their respective Obligations in full in cash. The Borrower
and the Subordinated Creditor shall endorse on any instrument evidencing
Affiliate Subordinated Debt a statement to the effect that it is subject to
these terms of subordination.

                  SECTION 3. Events of Subordination. (a) In the event of any
dissolution, winding up, liquidation, arrangement, reorganization, adjustment,
protection, relief or composition of the Borrower or its debts, whether
voluntary or involuntary, in any bankruptcy, insolvency, arrangement,
reorganization, receivership, relief or other similar case or proceeding under
any federal or state bankruptcy or similar law or upon an assignment for the
benefit of creditors or any other marshaling of the assets and liabilities of
the Borrower or otherwise, the Lenders and the Senior Creditors shall be
entitled to receive payment in full of their respective Obligations before the
Subordinated Creditor is entitled to receive any payment of all or any of the
Affiliate Subordinated Debt, and any payment or distribution of any kind
(whether in cash, property or securities) that otherwise would be payable or
deliverable upon or with respect to the Affiliate Subordinated Debt in any such
case, proceeding, assignment or marshaling (including any payment that may be
payable by reason of any other Debt of the Borrower being subordinated to
payment of the Affiliate Subordinated Debt) shall be paid or delivered directly
to Citibank, as Agent under the Credit Agreement, for the account of the
Lenders, and to the Senior Creditors or to a trustee or other agent for the
Senior Creditors or for any group of the Senior Creditors (any such trustee or
agent being referred to herein as a "Representative") which may be listed on
Schedule I hereto, pro rata according to the principal amount of the Obligations
then owed by the Borrower to each of the Lenders and the Senior Creditors, for
application (in the case of cash) to, or as collateral (in the case of non-cash
property or securities) for, the payment or prepayment of the Obligations until
the Obligations shall have been paid in full.

                  (b) In the event that (i) any Default or Event of Default
described in Section 6.01 of the Credit Agreement or any payment default by the
Borrower under a Senior Debt Document shall have occurred and be continuing,
(ii) any Event of Default or any "event of default" under a Senior Debt Document
that would entitle the creditors under such Senior Debt Document to accelerate
the maturity of indebtedness evidenced by such Senior Debt Document (a "Senior
Event of Default") (other than as referred to in the preceding clause (i)) shall
have occurred and be continuing or (iii) any judicial proceeding shall be
pending with respect to any Event of Default or Senior Event of Default, then no
payment (including any payment that may be payable by reason of any other Debt
of the Borrower being subordinated to payment of the Affiliate Subordinated
Debt) or distribution of any kind, whether in cash, property or securities,
shall be made by or on behalf of the Borrower for or on account of any Affiliate
Subordinated Debt, and the Subordinated Creditor shall not take or receive from
the Borrower, directly or indirectly, in cash or other property or by set-off in
any other manner, including, without limitation, from or by way of collateral,
payment of all or any of the Affiliate Subordinated Debt until the Obligations
shall have been paid in full.

                  (c) Notwithstanding anything to the contrary in Section 3(b)
and regardless of whether any Default or Event of Default shall have occurred
and be continuing, until the Termination Date under the Credit Agreement shall
have occurred and the Obligations thereunder then owned by the Borrower to the
Lenders shall have been paid in full in cash, no payment (including any payment
that may be payable by reason of any other Debt of the Borrower being
subordinated to the payment of the Affiliate Subordinated Debt) or distribution
of any kind, whether in cash, property or securities, shall be made by or on
behalf of the Borrower for or on account of any Affiliate Subordinated Debt, and
the Subordinated Creditor shall not take or receive from the Borrower, directly
or indirectly, in cash, property or securities or by set-off or in any other
manner, including, without limitation, from or by way of collateral, payment of
all or any of the Affiliate Subordinated Debt at any time unless at the end of
the fiscal quarter (including the fourth fiscal quarter) of the Borrower for
which financial statements have most recently been delivered to the Agent by the
Borrower pursuant to Section 5.01(d) or (e) of the Credit Agreement on or
preceding the date on which the Borrower takes such action, the ratio of Cash
Available for Corporate Debt Service to Corporate Interest was at least
2.00:1.00 or, if the Borrower does not have at least an Investment Grade Rating,
2.25:1.00, in each case, for the period comprised of the four fiscal quarters
ending on the date of such financial statements and with effect from the date of
delivery of such financial statements.

                  SECTION 4.        In Furtherance of Subordination.  The
 Subordinated Creditor agrees as follows:

                  (a)      If any proceeding referred to in Section 3(a) above
                  is commenced by or against the Borrower,

                           (i) Citibank, as Agent for the Lenders, and the
                  Senior Creditors, acting directly or through one or more
                  Representatives, are hereby irrevocably authorized and
                  empowered (in their own names or in the name of the
                  Subordinated Creditor or otherwise), but shall have no
                  obligation, to demand, sue for, collect and receive every
                  payment or distribution referred to in Section 3(a) to which
                  they are entitled thereunder and give acquittance therefor and
                  to file claims and proofs of claim and take such other action
                  (including, without limitation, voting the Affiliate
                  Subordinated Debt pro rata according to the principal amount
                  of the Obligations then owed by the Borrower to each of the
                  Lenders and the Senior Creditors or enforcing any security
                  interest or other lien securing payment of the Affiliate
                  Subordinated Debt) as it may deem necessary or advisable for
                  the exercise or enforcement of any of the rights or interests
                  of the Agent, the Lenders, the Representatives and the Senior
                  Creditors hereunder; and

                           (ii) the Subordinated Creditor shall duly and
                  promptly take such reasonable actions as Citibank, as Agent
                  for the Lenders and the Senior Creditors or the
                  Representatives may request (A) to permit Citibank, as Agent
                  of the Lenders, and the Senior Creditors or the
                  Representatives to collect the Subordinated Debt for the
                  account of the Lenders and the Senior Creditors and to file
                  appropriate claims or proofs of claim in respect of the
                  Subordinated Debt, (B) to execute and deliver to Citibank, as
                  Agent for the Lenders, and to the Senior Creditors or their
                  Representatives such documents as Citibank, as Agents for the
                  Lenders and the Senior Creditors or the Representatives may
                  reasonably request in order to enable Citibank, as Agent for
                  the Lenders, and the Senior Creditors or the Representatives
                  to enforce any and all claims with respect to, and any
                  security interest and other liens securing payment of, the
                  Subordinated Debt, and (C) to collect and receive any and all
                  payments or distributions which may be payable or deliverable
                  upon or with respect to the Subordinated Debt, which payments
                  and distributions shall be distributed pro rata according to
                  the principal amount of the Obligations then owed by the
                  Borrower to each of the Lenders and the Senior Creditors.

                  (b) All payments or distributions upon or with respect to the
         Affiliate Subordinated Debt which are received by the Subordinated
         Creditor contrary to the provisions of this Agreement shall be received
         in trust for the benefit of the Lenders and the Senior Creditors pro
         rata according to the principal amount of the Obligations then owed by
         the Borrower to each of the Lenders and the Senior Creditors, shall be
         segregated from other funds and property held by the Subordinated
         Creditor and shall be forthwith paid over to Citibank, as Agent for the
         Lenders, for the account of the Lenders, and to the Senior Creditors or
         their Representatives pro rata according to the principal amount of the
         Obligations then owed by the Borrower to each of the Lenders and the
         Senior Creditors, in the same form as so received (with any necessary
         indorsement) to be applied (in the case of cash) to, or held as
         collateral (in the case of non-cash property or securities) for, the
         payment or prepayment of the Obligations in accordance with the terms
         of the Credit Agreement and the Senior Debt Documents. Any portion of a
         payment or distribution received by a Lender or Senior Creditor (or by
         the Agent or a Representative) which is in excess of its pro rata
         portion of such payment or distribution shall be held in trust by such
         Lender or Senior Creditor (or Agent or Representative) for the benefit
         of the other Lenders and Senior Creditors to be paid promptly to the
         other Lenders and Senior Creditors (or to the Agent and the
         Representatives on behalf of such Lenders and Senior Creditors) pro
         rata according to the principal amount of the Obligations then owed by
         the Borrower to each of such Lenders and Senior Creditors.

                  (c) Citibank, as Agent for the Lenders, and the Senior
         Creditors or their Representatives are hereby authorized to seek
         specific performance of this Agreement, whether or not the Borrower
         shall have complied with any of the provisions hereof applicable to it,
         at any time when the Subordinated Creditor shall have failed to comply
         with any of the provisions of this Agreement applicable to it.

                  SECTION 5. No Commencement of Any Proceeding. The Subordinated
Creditor agrees that, so long as the Obligations shall not have been paid in
full in cash, the Subordinated Creditor will not sue for payment of all or any
of the Affiliate Subordinated Debt, or commence, or join with any creditor other
than the Lenders, Citibank, as Agent for the Lenders, the Senior Creditors and
the Representatives, in commencing any proceeding referred to in Section 3(a);
provided, however, that the foregoing provisions shall not prevent the
Subordinated Creditor from commencing and prosecuting to judgment any action
necessary to enforce such Affiliate Subordinated Debt during the period
commencing one year prior to the expiration of the limitation period governing
such Affiliate Subordinated Debt under any applicable statute of limitations.

                  SECTION 6. Rights of Subrogation. The Subordinated Creditor
agrees that no payment or distribution to Citibank, as Agent for the Lenders,
the Lenders, the Senior Creditors or the Representatives pursuant to the
provisions of this Agreement shall entitle the Subordinated Creditor to exercise
any right of subrogation in respect thereof until the Obligations shall have
been paid in full. From and after the payment in full of the Obligations, the
Subordinated Creditor shall be subrogated to all rights of the Agent, the
Lenders, the Senior Creditors and the Representatives to receive any further
payments or distributions applicable to the Obligations until the Affiliate
Subordinated Debt shall have been paid in full, in addition to all other rights
of subrogation that the Subordinated Creditor may have. For purposes of any such
subrogation, no payments or distributions on the Obligations pursuant to this
Agreement shall, as between the Borrower, its creditors other than the Lenders
and the Senior Creditors, and the Subordinated Creditor, be deemed to be a
payment by the Borrower to or on account of the Obligations, and no payments or
distributions to the Subordinated Creditor of assets by virtue of the
subrogation herein provided for shall, as between the Borrower, its creditors
other than the Lenders and the Senior Creditors, and the Subordinated Creditor,
be deemed to be a payment by the Borrower to or on account of the Obligations,
and no payments or distributions to the Subordinated Creditor of assets by
virtue of the subrogation herein provided for shall, as between the Borrower,
its creditors other than the Lenders and the Senior Creditors, and the
Subordinated Creditor, be deemed to be a payment to or on account of the
Affiliate Subordinated Debt. The provisions of this Agreement are and are
intended solely for the purpose of defining the relative rights of the
Subordinated Creditor, on the one hand, and the Lenders, the Agent for the
benefit of the Lenders, the Senior Creditors and the Representatives, on the
other hand, and nothing contained in this Agreement is intended to or shall
impair the obligation of the Borrower, which is unconditional and absolute, to
pay the principal of (and premium, if any) and interest on the Affiliate
Subordinated Debt as and when the same shall become due and payable in
accordance with its terms, or, except as provided in Section 10 below, to affect
the relative rights of the Subordinated Creditor and the creditors of the
Borrower other than the Lenders and the Senior Creditors, nor shall anything
herein prevent the Subordinated Creditor from exercising all remedies otherwise
permitted by applicable law upon default under the Affiliate Subordinated Debt,
subject to the rights, if any, under this Agreement, of the Lenders, the Agent
for the benefit of the Lenders, the Senior Creditor and the Representatives in
respect of cash, property or securities of the Borrower otherwise payable or
delivered to the Subordinated Creditor upon the exercise of any such remedy.

                  SECTION 7. Agreements in Respect of Affiliate Subordinated
Debt. The Subordinated Creditor will not sell, assign, pledge, encumber or
otherwise dispose of any of the Affiliate Subordinated Debt unless such sale,
assignment, pledge, encumbrance or disposition (i) is to a person or entity
other than the Borrower and (ii) is made expressly subject to this Agreement.

                  SECTION 8. Obligations Hereunder Not Affected. All rights and
interest of Citibank, as Agent for the Lenders, the Lenders, the Senior
Creditors and the Representatives hereunder, and all agreements and obligations
of the Subordinated Creditor and the Borrower under this Agreement, shall remain
in full force and effect irrespective of:

                  (i)      any lack of validity or enforceability of the Credit
         Agreement, a Note, a Senior Debt Document or any other
         agreement or instrument relating thereto;

                  (ii) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Obligations, or any other
         amendment or waiver of or any consent to any departure from the Credit
         Agreement, a Note or a Senior Debt Document, including, without
         limitation, any increase in the Obligations resulting from the
         extension of additional credit to the Borrower or otherwise;

                  (iii) any taking, exchange, release or non-perfection of any
         collateral, or any taking, release or amendment or waiver of or consent
         to departure from any guaranty, for all or any of the Obligations;

                  (iv) any manner of application of collateral, or proceeds
         thereof, to all or any of the Obligations, or any manner of sale or
         other disposition of any collateral for all or any of the Obligations
         or any other assets of the Borrower or any of its subsidiaries;

                  (v)      any change, restructuring or termination of the
         corporate structure or existence of the Borrower; or

                 (vi) any other circumstance which might otherwise constitute a
        defense available to, or a discharge of, the Borrower or a subordinated
        creditor.

This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by Citibank, as Agent for the Lenders, any Lender, any
Senior Creditor or any Representative upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.

                  SECTION 9. Waiver. The Subordinated Creditor and the Borrower
each hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Obligations and this Agreement and any
requirement that Citibank, as Agent for the Lenders, any Lender, any Senior
Creditor or any Representative protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against the Borrower or any other person or entity or any collateral.

                  SECTION 10. Extension of Subordination. The Borrower and the
Subordinated Creditor shall not subordinate the Affiliate Subordinated Debt for
the benefit of any one or more other creditors of the Borrower, now or hereafter
existing, upon any terms other than those set forth in this Agreement. The
Borrower and the Subordinated Creditor shall have the right to subordinate the
Affiliate Subordinated Debt for the benefit of any one or more other creditors
of the Borrower, now or hereafter existing, upon the same terms as are set forth
in this Agreement.

<PAGE>

                                   SCHEDULE I
                              Senior Debt Documents

Title and Date                     Party(ies)             Representative

<PAGE>
<TABLE>
<CAPTION>

                                  SCHEDULE III
                             SOUTHERN POWER COMPANY
                                CREDIT AGREEMENT

                       PROJECT LIMITS FOR INITIAL PROJECTS

           Initial Project                 Total Project Costs (Estimated if an               Project Limit
           ---------------                 -------------------------------------              -------------
                                          Uncompleted Project, and actual, if a
                                                    Completed Project)

<S>               <C>                                  <C>                                    <C>
     Autaugaville 1 Project                            $270,512,613                           $162,307,568
     Autaugaville 2 Project                            $242,292,211                           $145,375,327
     Dahlberg                                          $265,341,836                           $159,205,102
     Goat Rock 1 Project                               $229,183,570                           $137,510,142
     Goat Rock 2 Project                               $246,205,077                           $147,723,046
     Wansley                                           $451,387,132                           $270,832,279

</TABLE>

<PAGE>

                                   SCHEDULE IV
                             SOUTHERN POWER COMPANY
                                CREDIT AGREEMENT

                 SCHEDULED COMPLETION DATE, GUARANTEED HEAT RATE
                 AND GUARANTEED OUTPUT FOR EACH INITIAL PROJECT

1.       Scheduled Completion Dates

          ----------------------------------------------------------
          Initial Project               Scheduled Completion Date
          ----------------------------------------------------------
          Autaugaville 1 Project        June 1, 2003
          ----------------------------------------------------------
          Autaugaville 2 Project        June 1, 2003
          ----------------------------------------------------------
          Dahlberg                      June 1, 2001 (Completed)
          ----------------------------------------------------------
          Goat Rock 1 Project           April 1, 2002
          ----------------------------------------------------------
          Goat Rock 2 Project           June 1, 2003
          ----------------------------------------------------------
           Wansley Project               June 1, 2002
          ----------------------------------------------------------

<PAGE>

2.       Guaranteed Heat Rates

Guaranteed Heat Rate with respect to the following Initial Projects, at the
relevant average ambient rated conditions for such Project, are set forth below:
<TABLE>
<CAPTION>

              ---------------------------------------------------------------------------------------------------------------------
                                                                           Power   Power     HP          IP   Condenser  Condenser
 Average       Base Mode   Dry Bulb    Relative                 Fuel       Factor  Factor  Blowdown   Blowdown  Makeup    Makeup
 Annual       Heat Rate * Temperature  Humidity  Elevation   Temperature** (GT)    (ST)    Flow       Flow      Flow        Temp.
 Ambient              -------------------------------------------------------------------------------------------------------------
                Btu/kWh        F           %        Ft.      F         -     -        %        %        Lb/Hr     F
              ---------------------------------------------------------------------------------------------------------------------
<S>              <C>        <C>         <C>        <C>    <C>      <C>    <C>      <C>       <C>      <C>           <C>
Goat Rock 1      6,711       64.0        74.5       560    25.0     0.85   0.85     0.5       1.0      1169          65
Goat Rock 2      6,728       64.0        74.5       560    25.0     0.85   0.90     0.5       1.0      1049          65
Autaugaville 1   6,730       64.8        73.8       200    25.0     0.85   0.90     0.5       1.0      1068          65
Autaugaville 2   6,730       64.8        73.8       200    25.0     0.85   0.90     0.5       1.0      1068          65
Wansley          6,706       61.0        69.0       740    25.0     0.85   0.85     0.5       1.0      1172          63

              -------------------------------------------------------------------------------------------------------------------

*        All to the high side of the generator step-up transformer
**       25F is as of the gas is delivered to each combustion turbine.  The gas is then heated by the Project's process before
         entry  to the combustion turbine burner

</TABLE>

<PAGE>

3.       Guaranteed Output

Guaranteed Output with respect to the following Initial Project, at the relevant
rated summer conditions for such Project, are set forth below:
<TABLE>
<CAPTION>

                 ------------------------------------------------------------------------------------------------------------------
Summer           Summer      Dry                                              Power   Power  HP         IP     Condenser  Condenser
                 Peak        Bulb         Relative                 Fuel       Factor Factor Blowdown   Blowdown  Makeup    Makeup
                 Capacity *  Temperature  Humidity  Elevation   Temperature**  (GT)   (ST)   Flow        Flow   Flow      Temp.
                 ------------------------------------------------------------------------------------------------------------------
                     MW         F           %        Ft.           F             -      -       %           %     Lb/Hr        F
                 ------------------------------------------------------------------------------------------------------------------
<S>                  <C>       <C>        <C>        <C>         <C>          <C>     <C>     <C>          <C>   <C>          <C>
Goat Rock 1          571       95.0       40.0       560         25.0         0.82    0.98    0.5          1.0   224,005      83
Goat Rock 2          615       95.0       39.8       560         25.0         0.82    0.95    0.5          1.0   226,689      83
Autaugaville 1       618       95.0       44.3       200         25.0         0.82    0.95    0.5          1.0   229,045      83
Autaugaville 2       618       95.0       44.3       200         25.0         0.82    0.95    0.5          1.0   229,045      83
Wansley             1134       95.0       42.5       740         25.0         0.83    0.98    0.5          1.0   221,913      80
                 ------------------------------------------------------------------------------------------------------------------

*        All to the high side of the generator step-up transformer
**       25F is as of the gas is delivered to each combustion turbine.  The gas is then heated by the Project's process before entry
         to the combustion turbine burner
</TABLE>

<PAGE>

                                                            SCHEDULE V
                                                SOUTHERN POWER COMPANY
                                                      CREDIT AGREEMENT

                               TESTING PROCEDURES

A.       COMBINED-CYCLE PROJECTS

Introduction:
------------

The procedures and required tests which must be completed prior to Southern's
certification of Substantial Completion and Final Completion with respect to an
Uncompleted Project which is a combined-cycle electric generation plant are set
forth below. The capacity and heat rate tests for such Project may be conducted
independently; provided that if the Guaranteed Heat Rate and Guaranteed Output
for such Project are based upon the same ambient conditions and operating mode
(e.g., base mode, full pressure and power augmentation), the capacity and heat
rate tests for such Project shall be conducted simultaneously.

The tests will be conducted by the owner according to a test procedure
(incorporating the relevant matters set forth herein) provided by the owner and
approved by Southern Company Services, Inc. ("SCS") and the purchaser of energy
from such Project under each Power Purchase Agreement, if any, applicable
thereto. The test procedure will be based on ASME PTC 46-1996 ("PTC 46"). This
code determines the net electrical output and heat rate of the Project,
corrected to design operating conditions.

The Uncompleted Project shall demonstrate compliance with the air permit limits
during the tests (using certified plant continuous emissions monitoring system
("CEMS"), calibrated portable CEMS, or by certified emissions testing
contractor) and all applicable laws and other permits, with no waivers or
variances for construction, start-up, testing or otherwise.

The tests will encompass a control volume including the cooling tower as shown
in Figure 5.1 of PTC 46. The only essential data required are those parameters
which cross the test boundary. Correction curves will be utilized to correct net
unit performance from test conditions to design conditions.

The tests will be conducted after all required systems are fully commissioned
and at actual ambient and operating conditions as close as practical to design
conditions. Heat recovery steam generator ("HRSG") blowdown will be isolated
during the tests since these flows are unmetered; however, corrections to
account for design flows will be applied. All auxiliary components must be
operated in a normal manner consistent with Prudent Utility Practices. "Prudent
Utility Practices" shall mean at a particular time, any of the practices,
methods and acts engaged in or approved by a significant portion of the United
States electric utility industry as at such time, or any of the practices,
methods and acts which, in the exercise of reasonable judgment in light of the
facts known at the time the decision was made, could have been expected to
accomplish the desired results at a reasonable cost consistent with good
business practices, reliability, safety and expedition. Prudent Utility
Practices is not intended to be limited to the optimum practice, method or act
to the exclusion of all others, but rather to be a spectrum of possible
practices, methods or acts expected to accomplish the desired results, having
due regard for, among other things, manufacturers' warranties and the
requirements of governmental authorities of competent jurisdiction.

Capacity Testing:
----------------

Capacity test results will be corrected to the rated conditions (the "Output
Rated Conditions") applicable to the Guaranteed Output for such Project, as set
forth, (a) in the case of an Initial Project, in Schedule IV to the Credit
Agreement; or (b) in the case of a Subsequent Project, in the Project Schedule
delivered pursuant to Section 3.04 of the Credit Agreement for such Project. The
demonstrated net output of the Project will be as measured by the test metering
system and corrected to such Project's Output Rated Conditions. PTC 46
correction curves will be produced by SCS using a GateCycle computer model,
created from design input provided by the equipment vendors. Combustion turbine
evaporative coolers, HRSG ductburners and power augmentation steam injection
will be in service.

Net unit capacity will be corrected from test to design conditions for the
following parameters as required by PTC 46:

Ambient Dry Bulb Temperature Ambient Humidity (or wet bulb temperature)
Barometric Pressure (or elevation) HRSG Blowdown Flow Condenser Makeup Flow and
Temperature Fuel Temperature (upstream of fuel heaters) Power Factor (each
generator) Abnormal Auxiliary Power Loads Abnormal Fuel Properties Abnormal Unit
Operating Conditions

Heat Rate Testing:
-----------------

Heat rate test results will be corrected to the rated operating conditions (the
"Heat Rate Rated Conditions") applicable to the Guaranteed Heat Rate for such
Project, as set forth, (a) in the case of an Initial Project, in Schedule IV to
the Credit Agreement; or (b) in the case of a Subsequent Project, in the Project
Schedule delivered pursuant to Section 3.04 of the Credit Agreement for such
Project. The demonstrated net heat rate of the Project will be as measured by
the test metering system and corrected to such Project's Heat Rate Rated
Conditions. PTC 46 heat rate correction curves will be produced by SCS using a
GateCycle computer model, created from design input provided by the equipment
vendors. Combustion turbine evaporative coolers will be in service or
appropriate corrections will be applied. HRSG ductburners and power augmentation
will be out of service.

Net unit heat rate will be corrected from test to design conditions for the
following parameters, as required by PTC 46:

Ambient Dry Bulb Temperature
Ambient Humidity (or wet bulb temperature)
HRSG Blowdown Flow
                  -
Condenser Makeup Flow and Temperature
                                     -
Fuel Temperature (Upstream of fuel heaters)
Power Factor (each generator)
Abnormal Aux. Power Loads
Abnormal Fuel Properties
Abnormal Unit Operating Conditions

Essential Data Requirements:
---------------------------

Test data will be obtained using test instruments which meet the requirements of
PTC 46. Specific methods which will be employed for significant data points are
as follows:

1.       Net power will be determined from the sum of gross combustion turbine
         output and steam turbine output, less station service and main
         transformer losses.

2.       Combustion turbine gross output will be measured using temporary test
         watt meters installed in parallel with station watt meters.

3.       Steam turbine gross output will be measured using temporary test watt
         meters installed in parallel with station watt meters.

4.       Station service will be measured using installed station watt hour
         meters.

5.       Main transformer losses will be calculated from transformer shop test
         data.

6.       Net fuel consumption will be the sum of fuel flow to each combustion
         turbine and the ductburners.

7.       Natural gas flows to each combustion turbine and ductburner will be
         determined using test differential pressure transmitters installed in
         parallel with station instruments across the existing plant orifice
         meter tubes. Test instruments also will be used to measure gas pressure
         and temperatures.

8.       Natural gas flowrates will be calculated using the formulas provided
         in ASME MFC-3M.

9.       Fuel properties will be determined from gas samples taken during each
         test and analyzed by an independent analysis laboratory.

10.      Ambient pressure will be measured using an electronic test barometer
         meeting ASME PTC 22 requirements.

11.      Combustion turbine inlet dry bulb temperatures will be determined by a
         test temperature grid installed in the inlet of each combustion turbine
         unit.

12.      Combustion turbine inlet wet bulb temperature and relative humidity
         will be determined using a test psychrometer in the inlet of each
         combustion turbine unit.

13.      Substitute or temporary plant equipment shall not be used during
         testing, and the Uncompleted Project shall be tested while in an
         "automatic mode" to an extent consistent with normal operating
         practice.

14.      Cooling tower inlet dry and wet bulb temperatures will be determined
         based on dedicated temperature readings near the cooling tower(s).

Test Conditions:
---------------

At least two test runs of one hour each will be conducted and compared for
repeatability. The tests will be conducted after all required systems are fully
commissioned and at actual ambient and operating conditions as close as
practical to Output Rated Conditions (in the case of capacity tests) or Heat
Rate Rated Conditions (in the case of heat rate tests). HRSG blowdown will be
isolated during the tests since these flows are unmetered; however, corrections
back to design flows will be applied. If the corrected results of the two test
runs do not agree within 0.25%, then the cause of the discrepancy will be
investigated, eliminated if possible, and a third test performed. If the results
of all tests vary by more than 0.25% from the mean of all tests, then the
results of all three tests will be averaged. If one test varies by more than
0.25% from the mean of the other two tests, then its results will be discarded
and the results of the other two will be averaged.

B.       PEAKER PROJECTS
         ------------------

To be agreed between the Borrower and the Independent Engineer and Environmental
Consultant (acting on the instructions of the Majority Lenders) with respect to
each Subsequent Project which is a Peaker on or prior to the first Utilization
relating thereto.

                                RELIABILITY TEST

A.       COMBINED-CYCLE PROJECTS

The Borrower will conduct a 7-day reliability test which is intended to
demonstrate that each of the Autaugaville 1 Project, the Autaugaville 2 Project,
the Goat Rock 1 Project, the Goat Rock 2 Project and the Wansley Project (and
any other Subsequent Project which is a combined-cycle electric generation
plant) are capable of continuous, reliable operation at various load points. The
reliability test shall be conducted during a continuous 168-hour period during
which the relevant Project shall demonstrate the following requirements:

o        Achieve an Equivalent Availability Factor (as calculated by the North
         American Electric Reliability Council) of at least 97 percent;

o        During such test, the Project shall operate for 124 or more hours at
         the mode of operation applicable to either the Guaranteed Output or the
         Guaranteed Heat Rate for such Project, provided that the Project shall
         operate (a) for at least 24 hours in the mode of operation applicable
         to the Guaranteed Output for such Project, if ambient conditions allow;
         and (b) for at least 6 continuous hours in the mode of operation
         applicable to the Guaranteed Output for such Project;

o        During the reliability test, data will be recorded from plant
         instrumentation at one-hour intervals (ambient conditions recorded
         manually if necessary);

o        All plant emissions shall be recorded by the plant CEMS during the
         reliability test;

o        During the reliability test, the Project shall be operated in
         accordance with prudent utility practice and all laws, permits and
         regulations applicable to such Project (including, without limitation,
         all emissions requirements imposed by the Project's air permit); and

o        The facility controls shall be placed in an "automatic mode" to an
         extent consistent with normal operating practice, and manual control of
         facility equipment and systems shall be minimized. Operating personnel
         shall be staffed consistent with normal operating plans.

B.       PEAKER PROJECTS
         ------------------

To be agreed between the Borrower and the Independent Engineer and Environmental
Consultant (acting on the instructions of the Majority Lenders) with respect to
each Subsequent Project which is a Peaker on or prior to the first Utilization
relating thereto.

<PAGE>

                                                            EXHIBIT A
                                               SOUTHERN POWER COMPANY
                                                     CREDIT AGREEMENT

                                  FORM OF NOTE

                                 PROMISSORY NOTE

U.S.$_______________                       Dated:  _______________, _____

                 FOR VALUE RECEIVED, the undersigned, SOUTHERN POWER COMPANY, a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to
_________________________ (the "Lender") for the account of its Applicable
Lending Office on the Final Maturity Date (each as defined in the Credit
Agreement referred to below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate outstanding principal amount
of the Advances made by the Lender to the Borrower pursuant to the Credit
Agreement dated as of [ ], 2001 among the Borrower, the Lender and certain other
financial institutions parties thereto and Citibank, N.A., as Agent for the
Lender and such other financial institutions (as amended or modified from time
to time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined) outstanding on the Final Maturity Date.

                  The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.

                  Both principal and interest are payable in lawful money of the
United States of America to Citibank, N.A., as Agent, at 2 Penns Way, Suite 200,
New Castle, DE 19720, Attention: Dave Graber, in same day funds. Each Advance
owing to the Lender by the Borrower pursuant to the Credit Agreement, and all
payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto which is
part of this Promissory Note.

                  This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the Dollar amount first above mentioned, the debt of the Borrower
resulting from each such Advance being evidenced by this Promissory

<PAGE>

                  Note; and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.

                                    SOUTHERN POWER COMPANY

                                    By: _____________________________________
                                         Title:

<PAGE>

NYDOCS02/570773
                       ADVANCES AND PAYMENTS OF PRINCIPAL

------------------------------------------------------------------------------
                                           Amount of
          Amount  Category   Project       Principal     Unpaid
 Date     of          of        (if         Paid         Principal   Notation
         Advance   Advance   applicable)1  or Prepaid    Balance       Made By

----------------------------------------------------------------------------

1    Insert name of Project, unless Working Capital Advance.

<PAGE>

                                                       EXHIBIT B
                                                    SOUTHERN POWER COMPANY
                                                          CREDIT AGREEMENT

                          FORM OF NOTICE OF UTILIZATION

Citibank, N.A., as Agent
  for the Lenders parties
  to the Credit Agreement
  referred to below
2 Penns Way
Suite 200
New Castle, DE  19720
Attention: Dave Graber
                                     [Date]

                  Attention:  ____________________

Ladies and Gentlemen:

                  The undersigned, SOUTHERN POWER COMPANY, refers to the Credit
Agreement, dated as of [ ], 2001 (as amended or modified from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the undersigned, certain financial institutions parties thereto
and CITIBANK, N.A., as Agent for said financial institutions, and hereby gives
you notice, irrevocably, pursuant to Article II of the Credit Agreement that the
undersigned hereby requests a Utilization under the Credit Agreement, and in
that connection sets forth below the information relating to such Utilization
(the "Proposed Utilization") as required by Section 2.02(a) (if the Proposed
Utilization is to be a Borrowing) or 2.15 (if the Proposed Utilization is to be
a CP Commitment Reservation) of the Credit Agreement, as the case may be:

                  (a) The Proposed Utilization shall consist of a [Borrowing in
         the aggregate amount of $_______________] / [CP Commitment Reservation
         in the aggregate amount of $_______________, and is being made with
         respect to Commercial Paper in an aggregate principal amount equal to
         such amount which will be issued on the date of the Proposed
         Utilization]*.

                  (b)  The Business Day of the Proposed Utilization is
        _______________, ____.

                  [(c) [The Type of Advances comprising the Proposed Utilization
         is [Base Rate Advances] / [Eurodollar Rate Advances].] The initial
         Interest Period for each Eurodollar Rate Advance made as part of the
         Proposed Utilization is __________ month[s].]**

                  (d) The aggregate principal amount of all outstanding Advances
         and the unused Commitments and CP Commitments, in each case, with
         respect to the Project(s) relating to the Proposed Utilization, before
         and after giving effect to the Proposed Utilization, are as follows:
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------
                                          Outstanding Utilizations     Outstanding Utilizations After
                                        Before Proposed Utilization         Proposed Utilization
<S>     <C>           <C>       <C>        <C>           <C>            <C>
          Estimated
          Aggregate   Project  Aggregate    Aggregate      Aggregate    Aggregate
Project   Project     Limit    Borrowings   CP             Borrowings   CP
           Costs                           Commitments                  Commitments
-----------------------------------------------------------------------------------------------------
</TABLE>

                  [(e) The Advances comprising the Proposed Utilization are
         Project Advances, the proceeds of which are to finance Project Costs in
         the following amounts with respect to the following Project(s):

       ----------------------------------------------------------------------
        Project(s)   Aggregate
                     Project      Project Costs to be    Project Costs to be
                      Costs       Funded by Proposed     Funded with Equity
                                    Utilization           Contributions
       ----------------------------------------------------------------------

                                      ]; OR

                  [(e) The Advances comprising the Proposed Utilization are CP
         Advances in the following amounts, the proceeds of which are to repay
         Commercial Paper issued with respect to the following Project(s) in
         connection with the CP Commitment Reservation(s) established on the
         following dates for such Project(s):

-------------------------------------------------------------------------------
       Project(s)  Aggregate  Aggregate
                    Project   Amount      Amount(s) and    Project Costs Funded
                    Costs     of  CP      Date(s) of CP        with Equity
                              Advances    Commitment         Contributions
                                          Reservation
-------------------------------------------------------------------------------

                                      ]; OR

                  [(e)     The Advances comprising the Proposed Utilization are
               Working Capital Advances.

                                      ]; OR

                  [(e) The Proposed Utilization is a CP Commitment (Refinancing
         CP) Reservation which is to be made with respect to Refinancing
         Commercial Paper the proceeds of which are to be used to repay Project
         Advances in the following amounts with respect to the following
         Project(s):

-------------------------------------------------------------------------------
    Project(s)                             Aggregate Amount(s) and Date(s) of
                                             Project Advances
-------------------------------------------------------------------------------

                                      ]; OR

                 [(e) The Proposed Utilization is a CP Commitment (Original CP)
         Reservation which is to be made with respect to Original Commercial
         Paper, the proceeds of which are to finance Project Costs in the
         following amounts with respect to the following Project(s):

-------------------------------------------------------------------------------
   Project(s)      Aggregate Project    Project Costs         Project Costs
                     Costs              to be Funded            to be Funded
                                     by Commercial Paper        with Equity
                                                               Contributions

------------------------------------------------------------------------------

                 (f) The Proposed Utilization will not result in the applicable
         Borrowing Limit(s) to be exceeded or in the aggregate principal amount
         of all outstanding Advances and CP Commitment Reservations (including
         the Proposed Utilization) to exceed $850,000,000.

                  The undersigned hereby certifies that on the date hereof and
on the date of the Proposed Utilization the representations and warranties
contained in Section 4.01 of the Credit Agreement [(except those contained in
Sections 4.01(h) and (j)) and all representations and warranties contained in
Sections 4 and 2 of the Southern Completion Guarantee and the Southern Equity
Agreement (other than Sections 4(f) and (h) and 2(f) and (h), respectively)]*
are or will be, as the case may be, correct [in all material respects]**, before
and after giving effect to the Proposed Utilization and to the application of
the proceeds therefrom (or, if the Proposed Utilization is a CP Commitment
Reservation, after giving effect to the application of the proceeds of the
Commercial Paper for which such CP Commitment Reservation is being requested),
as though made on and as of such date.

                                             Very truly yours,

                                             SOUTHERN POWER COMPANY

                                             By:  ___________________________
                                                  Title:

<PAGE>

                                                EXHIBIT C
                                            SOUTHERN POWER COMPANY
                                                  CREDIT AGREEMENT

                        FORM OF ASSIGNMENT AND ACCEPTANCE

                  Reference is made to the Credit Agreement dated as of [ ],
2001 (as amended or modified from time to time, the "Credit Agreement") among
SOUTHERN POWER COMPANY, a Delaware corporation (the "Borrower"), certain
financial institutions parties thereto and CITIBANK, N.A., as agent for said
financial institutions (the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.

                  The "Assignor" and the "Assignee" referred to on Schedule 1
hereto agree as follows:

     1. The Assignor hereby sells and assigns to the Assignee,  and the Assignee
hereby  purchases  and  assumes  from the  Assignor,  an  interest in and to the
Assignor's  rights and  obligations  under the Credit  Agreement  as of the date
hereof equal to the percentage  interest  specified on Schedule 1 hereto.  After
giving  effect  to such  sale and  assignment,  the  Assignee's  Commitment,  CP
Commitment and the amount of the Advances (and Categories  thereof) owing to the
Assignee will be as set forth on Schedule 1 hereto.

     2. The  Assignor  (i)  represents  and  warrants  that it is the  legal and
beneficial  owner of the interest  being  assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty  and  assumes  no  responsibility   with  respect  to  any  statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability,  genuineness,  sufficiency
or value of the Credit Agreement or any other  instrument or document  furnished
pursuant  thereto;  (iii) makes no  representation  or  warranty  and assumes no
responsibility with respect to the financial condition of the Borrower, Southern
or any Subsidiary of the Borrower or Southern,  or the performance or observance
by any of the Borrower,  Southern or any Subsidiary of the Borrower or Southern,
or any other party, of any of its obligations under the Credit Agreement and the
other  Material  Documents to which it is a party,  or any other  instrument  or
document  furnished  pursuant  thereto;  and (iv)  attaches the Note held by the
Assignor and requests  that the Agent  exchange such Note for a new Note payable
to the  Assignee in an amount  equal to the  Commitment  assumed by the Assignee
pursuant  hereto or new Notes  payable to the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto and the Assignor in an amount
equal to the  Commitment  retained by the Assignor  under the Credit  Agreement,
respectively, as specified on Schedule 1 hereto.

     3. The  Assignee  (i)  confirms  that it has  received a copy of the Credit
Agreement,  together  with  copies of the  financial  statements  referred to in
Section 4.01 thereof and such other  documents and  information as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into this
Assignment and Acceptance;  (ii) agrees that it will,  independently and without
reliance  upon the Agent,  the  Assignor  or any other  Lender and based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own credit  decisions  in taking or not taking  action under the Credit
Agreement and the other Loan  Documents;  (iii)  confirms that it is an Eligible
Assignee or that it is an entity that has been  approved by the Borrower and the
Agent to the extent any such approval is required  under Section  8.07(a) of the
Credit Agreement;  (iv) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion  under the Credit
Agreement  and the other Loan  Documents  as are  delegated  to the Agent by the
terms  thereof,  together  with such  powers and  discretion  as are  reasonably
incidental  thereto;  (v) agrees that it will perform in  accordance  with their
terms all of the obligations  that by the terms of the Credit  Agreement and the
other Loan  Documents  are required to be performed by it as a Lender;  and (vi)
attaches any U.S.  Internal Revenue Service forms required under Section 2.13 of
the Credit Agreement.

     4. Following the execution of this  Assignment and  Acceptance,  it will be
delivered to the Agent for acceptance and recording by the Agent.  The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of  acceptance  hereof by the Agent,  unless  otherwise  specified on Schedule 1
hereto.

     5. Upon such  acceptance  and  recording by the Agent,  as of the Effective
Date,  (i) the  Assignee  shall be a party to the Credit  Agreement  and, to the
extent  provided  in  this  Assignment  and  Acceptance,  have  the  rights  and
obligations of a Lender  thereunder and (ii) the Assignor  shall,  to the extent
provided  in this  Assignment  and  Acceptance,  relinquish  its  rights  and be
released from its obligations  (other than under Sections  2.13(f),  8.07(g) and
8.08) under the Credit Agreement.

     6. Upon such  acceptance  and  recording  by the Agent,  from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest  assigned hereby (including all payments of
principal,  interest and commitment fees with respect  thereto) to the Assignee.
The Assignor and Assignee  shall make all  appropriate  adjustments  in payments
under the Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.

     7. This  Assignment and  Acceptance  shall be governed by, and construed in
accordance with, the Laws of the State of New York.

     8.  This  Assignment  and  Acceptance  may be  executed  in any  number  of
counterparts and by different 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  agreement.  Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier  shall
be effective as delivery of a manually  executed  counterpart of this Assignment
and Acceptance.

                  IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
duly authorized for such purpose, as of the date specified thereon.

<PAGE>

                                   Schedule 1
                                       to
                            Assignment and Acceptance

1.   Percentage interest assigned:                         _____%
2.   Commitments

     (a)   Assignee's Commitment:                          $_______________
     (b)   Assignee's CP Commitment                        $_______________
3.   Outstanding Advances

     (a)    Aggregate outstanding principal amount of
             Project
            Advances assigned:                             $_______________
     (b)    Aggregate outstanding principal amount of CP
            Advances assigned:                             $_______________
     (c)    Aggregate outstanding principal amount of
            Working Capital Advances assigned:             $_______________
4.   Principal amount of Note payable to Assignee:         $_______________
5.   Principal amount of Note payable to Assignor:         $_______________
6.   Effective Date*:   _______________, _____
                                                           [NAME OF ASSIGNOR],
                                                            as Assignor

                            By: --------------------------------------------
                                Title:

                            Dated:  _______________, ____

                            [NAME OF ASSIGNEE], as Assignee

                            By: --------------------------------------------
                                 Title:

                            Domestic Lending Office:
                                     [Address]

                                                 Eurodollar Lending Office:
                                                          [Address]

<PAGE>

Accepted this __________ day of _______________, ____

CITIBANK, N.A., as Agent

By:  _____________________
      Title:

By:  _____________________
      Title:

**Agreed this ___ day of ________, ____

SOUTHERN POWER COMPANY

By:  _____________________
      Title:

<PAGE>

                                                  EXHIBIT D
                                                  SOUTHERN POWER COMPANY
                                                        CREDIT AGREEMENT

                            CONFIDENTIALITY AGREEMENT

Memorandum To:    Proposed Assignee or Participant

From:                      Lender

Date:                      [___________]

Subject:          Credit Agreement for Southern Power Company

                  In connection with your possible interest in becoming a Lender
or participant under the Credit Agreement dated as of [ ], 2001 (as from time to
time in effect, the "Credit Agreement") among Southern Power Company (the
"Company"), certain financial institution(s) party thereto and Citibank, N.A.,
as Agent for such financial institution(s) (the "Agent"), you will receive
certain information which is non-public, confidential or proprietary in nature.
That information and any other information concerning the Company and its
affiliates or the Credit Agreement furnished to you at any time on, before or
after the date of this Confidentiality Agreement (this "Agreement") by the
Company and its affiliates, the Agent, Salomon Smith Barney Inc. (the "Lead
Arranger") or any Co-Arranger or Lender in connection with the Credit Agreement,
together with analyses, compilations or other materials prepared by you or your
directors, officers, employees, agents, auditors, attorneys, consultants or
advisors (collectively, "Representatives") which contain or otherwise reflect
such information or your review of or interest in the Credit Agreement is
hereinafter referred to as the "Information". In consideration of your receipt
of the Information, you agree that:

1.       You will not, without the prior written consent of the Company, use,
         either directly or indirectly, any of the Information except in concert
         with the Company or in connection with the Credit Agreement.

2.       You agree to reveal the Information only to your Representatives who
         need to know the Information for the purpose of evaluating the Credit
         Agreement, who are informed by you of the confidential nature of the
         Information, and who agree to be bound by the terms and conditions of
         this Agreement. You agree to be responsible for any breach of this
         Agreement by any of your Representatives.

3.       Without the Company's prior written consent, you shall not disclose to
         any person (except as otherwise expressly permitted herein) the fact
         that the Information has been made available, or any of the terms,
         conditions or other facts with respect to the Credit Agreement.

4.       This Agreement shall be inoperative as to any portion of the
         Information that (i) is or becomes generally available to the public on
         a nonconfidential basis through no fault or action by you or your
         Representatives, or (ii) is or becomes available to you on a
         nonconfidential basis from a source other than the Company or its
         affiliates, the Lead Arranger, any Co-Arranger, the Agent or any Lender
         or their Representatives, which source, to the best of your knowledge,
         is not prohibited from disclosing such Information to you by a
         contractual, legal or fiduciary obligation to the Company, the Lead
         Arranger, any Co-Arranger, the Agent or any Lender.

5.       You may disclose the Information at the request of any regulatory or
         supervisory authority having jurisdiction over you.

6.       In the event that you become legally compelled to disclose any of the
         Information or the existence of the Credit Agreement, you shall provide
         the Company with notice of such event promptly upon your obtaining
         knowledge thereof (provided that you are not otherwise prohibited by
         law from giving such notice) so that the Company may seek a protective
         order or other appropriate remedy. In the event that such protective
         order or other remedy is not obtained, you shall furnish only that
         portion of the Information that is legally required and shall cooperate
         with the Company's counsel to enable either the Company to obtain a
         protective order or other reliable assurance that confidential
         treatment will be accorded the Information.

7.       In the event that discussions with you concerning the Credit Agreement
         are discontinued, you shall redeliver to the Company the copies of the
         Information that were furnished to you by or on behalf of the Company
         and represent to the Company that you have destroyed all other copies
         thereof. All of your obligations hereunder and all of the Company's
         rights and remedies hereunder shall survive any return or destruction
         of the Information.

8.       You acknowledge that disclosure of the Information in violation of the
         terms of this Agreement could have serious consequences, and agree
         that, in the event of any breach by you or your Representatives of this
         Agreement, the Company may be entitled to equitable relief (including
         injunction and specific performance) in addition to all other remedies
         available to it at law or in equity.

9.       You will not make any public announcement, advertisement, statement or
         communication regarding the Company, its affiliates or the Credit
         Agreement without the prior written consent of the Company.

10.      This Agreement shall be governed in all respects, whether as to
         validity, construction, capacity, performance or otherwise, by and
         under the laws of the State of New York.

11.      All provisions of this Agreement are severable, and the
         unenforceability or invalidity of any of the provisions of this
         Agreement shall not affect the validity or enforceability of the
         remaining provisions of this Agreement.

12.      No waiver of any provision of this Agreement, or of a breach hereof,
         shall be effective unless it is in writing, signed by the party waiving
         the provision, or the breach hereof. No waiver of a breach of this
         Agreement (whether express or implied) shall constitute a waiver of a
         subsequent breach hereof.

13.      The Company is a party to and an intended beneficiary of this
         Agreement.

                  If you are prepared to accept the Information on this basis,
please sign and return this Confidentiality Agreement to us at [ ] and to the
Company at [ ], Attention:
[                   ].

By:
                  --------------------------------------------

Name:
                  --------------------------------------------

Title:
                  --------------------------------------------

Institution:
                  --------------------------------------------

<PAGE>

                                                          EXHIBIT E
                                             SOUTHERN POWER COMPANY
                                                  CREDIT AGREEMENT

                FORM OF OPINIONS OF COUNSEL FOR THE LOAN PARTIES

<PAGE>

                                                            EXHIBIT F
                                               SOUTHERN POWER COMPANY
                                                     CREDIT AGREEMENT

                              DESIGNATION AGREEMENT

                                                           Dated
                                                                 ----------

                  Reference is made to that certain Credit Agreement dated as of
[ ], 2001 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and among SOUTHERN POWER COMPANY, the Lenders parties
thereto and CITIBANK, N.A., as Agent. Terms defined in the Credit Agreement are
used herein with the same meaning.

                  [NAME OF DESIGNATING LENDER] (the "Designating Lender"),
[NAME OF DESIGNEE] (the "Designee") and the Agent agree as follows:

                  1. Pursuant to Section 8.07(i) of the Credit Agreement, the
         Designating Lender hereby designates the Designee, and the Designee
         hereby accepts such designation, to have a right to make Advances
         pursuant to Article II of the Credit Agreement. Any delegation by
         Designating Lender to Designee of its rights to make an Advance
         pursuant to such Article II shall be effective at the time of the
         funding of such Advance and not before such time.

                  2. Except as set forth in Section 7 below, the Designating
         Lender makes no representation or warranty and assumes no
         responsibility pursuant to this Designation Agreement with respect to
         (a) any statements, warranties or representations made in or in
         connection with the Credit Agreement or any document related thereto
         (each, a "Loan Document") or the execution, legality, validity,
         enforceability, genuineness, sufficiency or value of any Loan Document
         or any other instrument and document furnished pursuant thereto; and
         (b) the financial condition of the Borrower or Southern or any other
         party or the performance or observance by the Borrower or Southern or
         any other party of any of its obligations under any Loan Document or
         other Material Document to which it is a party or any other instrument
         or document furnished pursuant thereto.

                  3. The Designee (a) confirms that it has received a copy of
         each Loan Document, together with copies of the financial statements
         referred to in Article IV of the Credit Agreement and such other
         documents and information as it has deemed appropriate to make its own
         credit analysis and decision to enter into this Designation Agreement;
         (b) agrees that it will independently and without reliance upon the
         Agent, any Arranger, the Designating Lender or any other Lender and,
         based on such documents and information as it shall deem appropriate at
         the time, continue to make its own credit decisions in taking or not
         taking action under any Loan Document; (c) confirms that it is a
         Designated Lender; (d) appoints and authorizes the Agent to take such
         action as Agent on its behalf and to exercise such powers and
         discretion under any Loan Document as are delegated to the Agent by the
         terms thereof, together with such powers and discretion as are
         reasonably incidental thereto; and (e) agrees that it will perform in
         accordance with their terms all of the obligations which by the terms
         of any Loan Document are required to be performed by it as a Lender.

                  4. The Designee hereby appoints Designating Lender or a
         specified branch or affiliate of Designating Lender as Designee's agent
         and attorney in fact and grants to Designating Lender or a specified
         branch or affiliate of Designating Lender an irrevocable power of
         attorney to receive payments made for the benefit of Designee under the
         Loan Documents, to deliver and receive all communications and notices
         under the Credit Agreement and other Loan Documents and to exercise on
         Designee's behalf all rights to vote and to grant and make approvals,
         waivers, consents and amendments to or under the Credit Agreement or
         other Loan Documents. Designee shall not have any right to approve any
         waiver or amendment of the Credit Agreement, any Note or any other Loan
         Document, or any consent to any departure by the Borrower or Southern
         therefrom, except to the extent that such waiver, amendment or consent
         would reduce the principal of, or interest on, the Notes or any fees or
         any other amounts payable under any Loan Document or postpone any date
         fixed for any payment of principal of, or interest on, the Notes or any
         fees or any other amounts payable under any Loan Document. Any document
         executed by such agent on the Designee's behalf in connection with the
         Credit Agreement or other Loan Documents shall be binding on the
         Designee. The Borrower, the Agent and each of the Lenders may rely on
         and are beneficiaries of the preceding provisions.

                  5. Following the execution of this Designation Agreement by
         the Designating Lender and its Designee, it will be delivered to the
         Agent for acceptance and recording by the Agent. The effective date for
         this Designation Agreement (the "Effective Date") shall be the date of
         acceptance hereof by the Agent, unless otherwise specified on the
         signature page of this Designation Agreement.

                  6. Each of the Designating Lender and the Agent hereby (a)
         acknowledges that the Designee is relying on the non-petition
         provisions of Section 8.12 of the Credit Agreement as agreed to by all
         signatories thereto; and (b) reaffirms that it will not institute
         against the Designee or join any other Person in instituting against
         the Designee any bankruptcy, reorganization, arrangement, insolvency or
         liquidation proceedings under any federal or state bankruptcy or
         similar law for one year and one day after the payment in full of the
         latest maturing commercial paper note issued by the Designee.

                  7. The Designating Lender unconditionally agrees to pay or
         reimburse the Designee and save the Designee harmless against all
         liabilities, obligations, losses, damages, penalties, actions,
         judgments, suits, costs, expenses, or disbursements of any kind or
         nature whatsoever which may be imposed or asserted by any of the
         parties to the Loan Documents against the Designee, in its capacity as
         such, in any way relating to or arising out of this Designation
         Agreement or any Loan Documents or any action taken or omitted by the
         Designee hereunder or thereunder; provided that the Designating Lender
         shall not be liable for any portion of such liabilities, obligations,
         losses, damages, penalties, actions, judgments, suits, costs, expenses
         or disbursements if the same results from the Designee's gross
         negligence or willful misconduct.

                  8. Upon such acceptance and recording by the Agent, as of the
         Effective Date, the Designee shall be a party to the Credit Agreement
         with a right to make Advances as a Designated Lender pursuant to
         Article II of the Credit Agreement and the rights and obligations of a
         Designated Lender related thereto; provided that the Designee shall not
         be required to make payments with respect to such obligations except to
         the extent of excess cash flow of the Designee which is not otherwise
         required to repay obligations of the Designee Lender which are then due
         and payable. Notwithstanding the foregoing, the Designating Lender or a
         specified branch or affiliate of Designating Lender, as administrative
         agent for the Designee, shall be and remain obligated to the Borrower,
         the Agent and the Lenders for each and every of the obligations of the
         Designee and the Designating Lender with respect to the Credit
         Agreement, including any indemnification obligations under Section 7.05
         of the Credit Agreement and any sums otherwise payable to any Loan
         Party by the Designee.

                  9.       This Designation Agreement shall be governed by and
         construed in accordance with the Laws of the State of  New York.

                  10. This Designation Agreement may be executed in any number
         of counterparts and by different 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 agreement. Delivery of an executed counterpart of a signature page
         to this Designation Agreement by facsimile transmission shall be
         effective as delivery of a manually executed counterpart of this
         Designation Agreement.

<PAGE>

                  IN WITNESS WHEREOF, the Designating Lender and the Designee
intending to be legally bound, have caused this Designation Agreement to be
executed by their officers duly authorized for such purpose, as of the date
first above written.

                  [NAME OF DESIGNATING LENDER],
                      as Designating Lender

                  By:
                       --------------------------------------------------
                       Name:
                       Title:

                  [NAME OF DESIGNEE], as Designee

                  By:
                       --------------------------------------------------
                       Name:
                       Title:

                                                              Lending Office
(and address for notices):

Accepted this __ day of ________, ____               Effective Date:

CITIBANK, N.A.
  as Agent

By:
     -----------------------------------------------
      Name:
      Title:

<PAGE>

                                                      EXHIBIT I-1
                                           SOUTHERN POWER COMPANY
                                                 CREDIT AGREEMENT

                         [Letterhead of R.W. Beck, Inc.]

[Funds Availability Date]

Citibank, N.A.
388 Greenwich Street, 20th Floor
New York, New York 10013
     (as Agent for the Lenders)

Subject: Independent Engineer's Report
                  Southern Power Company Initial Projects

Ladies and Gentlemen:

                  This letter is furnished pursuant to Section 3.01(c)(vi) of
the Credit Agreement dated as of ____________ ___, 2001 (the "Credit Agreement")
by and among Southern Power Company (the "Borrower"), Citibank, N.A. (the
"Agent"), Salomon Smith Barney Inc., as Lead Arranger and Syndication Agent, the
Co-Arrangers and the financial institutions named therein (the "Lenders").
Capitalized terms used in this letter and not otherwise defined herein shall
have the respective meanings specified in the Credit Agreement.

          R. W. Beck, Inc. (the "Independent Engineer") has been retained by the
     Agent,  on behalf of the Lenders,  as the  Independent  Engineer and it has
     prepared  an  Independent  Engineer's  Report  dated  October 16, 2001 (the
     "Report")  relating to the combustion  turbine power generation  facilities
     located in Autauga  County,  Alabama  (the  "Autaugaville  Facility");  Lee
     County, Alabama (the "Goat Rock Facility");  Athens, Georgia (the "Dahlberg
     Facility");   and  near  Atlanta,  Georgia  (the  "Wansley  Facility"  and,
     collectively, the "Initial Projects"), a copy of which is attached as Annex
     A.

                  The Report was prepared pursuant to the scope of services
under our Professional Services Agreement with the Agent on behalf of the
Lenders and those services were provided in accordance with generally accepted
engineering practices.

                  In connection with the preparation of the Report, personnel of
the Independent Engineer have participated in meetings or telephone discussions
with representatives of the Borrower, counsel to the Borrower, the Agent, and
counsel to the Agent in regard to the Initial Projects.

                  Based on our review of the information made available to us by
the Borrower on the Initial Projects as of the date of the Report, we have
noted, among other things as set forth in the Report, certain observations and
have arrived at certain conclusions regarding the design, technical provisions
of the agreements and other aspects of the Initial Projects as set forth below.
The Agent and the Lenders are encouraged to read the Report in its entirety for
the purpose of understanding the following observations and conclusions:

     1.  Each  of  the  Initial  Projects,  from  a  technical  and  engineering
perspective,  appears to have been,  or is expected to be,  designed by Southern
Company Services, Inc. ("SCS") in accordance with prudent industry standards and
practices for similar plants.

     2. SCS has demonstrated experience in the design, engineering, procurement,
and  construction  of power  plants  similar  to each of the  Initial  Projects.
Alabama Power Company and Georgia Power Company have demonstrated  experience in
the operation of power plants similar to each of the Initial Projects.

     3. Based on GE's  previously  demonstrated  capability  to  address  issues
similar to those related to the Frame 7F/FA described in the Report, each of the
Initial  Projects  utilizes  sound  technology  and proven  methods of  electric
generation in accordance with generally accepted industry practice.  If operated
and maintained  consistent with generally accepted industry  practices,  each of
the Initial  Projects should be capable of meeting:  (1) the heat rate,  output,
and availabilities  assumed in the Initial Base Case Projections as set forth in
Section 8 of the Report;  (2) the  requirements set forth in each Power Purchase
Agreement  (if any)  entered  into with  respect  to such  Initial  Project  and
referred  to in  Section 5 of the  Report  (collectively,  the  "Relevant  Power
Purchase  Agreements");  and (3)  the  requirements  of the  major  permits  and
approvals  required for the  construction  and  operation of each of the Initial
Projects (the "Project Permits").

     4. The performance  tests used, or to be used, to determine whether each of
Substantial  Completion and Final Completion with respect to each of the Initial
Projects has been achieved are (a)  consistent  with the testing  procedures set
forth in, or determined  pursuant to,  Schedule V of the Credit  Agreement;  (b)
similar to performance test programs conducted for electric generating plants of
the  type and size of such  Initial  Project  with  which we are  familiar;  (c)
adequate for  demonstrating  the capability of the Initial  Projects to meet the
Guaranteed  Heat Rate,  Guaranteed  Output,  and the air emissions  requirements
under the Project Permits, in each case,  applicable thereto; and (d) consistent
with the testing procedures set forth in the Relevant Power Purchase Agreements.

     5. The construction  schedule  applicable to each of the Initial  Projects,
other than the Dahlberg Project,  as determined  pursuant to the major equipment
supply contracts and major  construction  contracts,  is consistent with (a) the
Scheduled Completion Date, as set forth in the Project Schedule for that Initial
Project;  and (b) the requirements under all Relevant Power Purchase  Agreements
entered into with respect to such Initial  Project.  The performance  guarantees
applicable to each of the Initial Projects,  as contained in the major equipment
supply  contracts and major  construction  contracts are consistent with (i) the
Guaranteed Output and Guaranteed Heat Rate applicable thereto, each as set forth
in the Project  Schedule for that Initial  Project;  and (ii) all  corresponding
performance  guarantees in all Relevant Power Purchase  Agreements  entered into
with respect to such Initial Project.

     6.  The  Dahlberg   Project  has  and,  upon   achievement  of  Substantial
Completion,  the proposed  design of each of the other Initial  Projects will be
consistent with the obligations  relating to performance of such Initial Project
under the Relevant Power Purchase Agreements applicable thereto.

                  For purposes of this letter, the Independent Engineer has, at
the request of the Agent, carried out certain limited procedures for the period
commencing October 17, 2001 and ending on____________ ___, ___ [Insert the date
of this certificate], consisting solely of the making of inquiries of the
Borrower as to whether there has been any material change in the information
provided by them, and upon which the Independent Engineer relied, for purposes
of the Report. These procedures would not be sufficient under generally accepted
engineering practices to enable the Independent Engineer to express an opinion
as to the matters covered by the Report and would not necessarily reveal matters
of significance with respect to the statement in the last sentence of this
paragraph. The Independent Engineer, therefore, expresses no opinion as to the
matters covered by the Report as of any date subsequent to the date of the
Report and makes no representations as to the sufficiency of the foregoing
procedures for the Agent's purposes. Nothing has come to the attention of the
Independent Engineer as a result of the foregoing procedures, however, that
caused the Independent Engineer to believe that, as of the date to which the
procedures were carried out, the opinions of the Independent Engineer set forth
in the Report were not correct. The Borrower did inform us of a matter which it
believed did not represent a material change in the information provided by them
which is described in Attachment A to this letter.

                  This letter is solely for the information of, and assistance
to, the Agent and the Lenders in conducting and documenting their investigation
of the matters covered by the Report in connection with the Initial Projects and
is not to be used, circulated, quoted, or otherwise referred to within or
without the lending group for any purpose, nor is it to be referred to in whole
or in part in any other document, except that reference may be made to it in the
above-mentioned Credit Agreement or in any list of closing documents pertaining
to the Initial Projects.

                  The Independent Engineer disclaims any obligation to update
this letter. This letter is not intended to, and may not, be relied upon by any
party other than the Agent and the Lenders.

Very truly yours,

R. W. BECK, INC.

[Name]
Principal and Senior Director

<PAGE>

                                                 EXHIBIT I-2
                                                SOUTHERN POWER COMPANY
                                                      CREDIT AGREEMENT

                         [Letterhead of R.W. Beck, Inc.]

[Date of Initial Borrowing
for relevant Subsequent Project]

Citibank, N.A.
388 Greenwich Street, 20th Floor
New York, New York 10013
     (as Agent for the Lenders)

Subject: Independent Engineer's Report
                  Southern Power Company Subsequent Project(s)

Ladies and Gentlemen:

                  This letter is furnished pursuant to Section [3.04(a)(iv)(C)]
/ [3.04(b)(v)(C)] / [3.06(d)] of the Credit Agreement dated as of ____________
___, 2001 (the "Credit Agreement") by and among Southern Power Company (the
"Borrower"), Citibank, N.A. (the "Agent"), Salomon Smith Barney Inc., as Lead
Arranger and Syndication Agent, the Co-Arrangers and the financial institutions
named therein (the "Lenders"). Capitalized terms used in this letter and not
otherwise defined herein shall have the respective meanings specified in the
Credit Agreement.

                  R. W. Beck,  Inc.  (the  "Independent  Engineer")  has been
retained by the Agent,  on behalf of the Lenders,  as the Independent  Engineer
and it has prepared an  Independent  Engineer's  Report dated  _______ __, ____
the  "Report")  relating to the [insert name(s) of Subsequent Project(s)](the
"Subsequent Project(s)"), a copy of which is attached as Annex A.

                  The Report was prepared pursuant to the scope of services
under our Professional Services Agreement with the Agent on behalf of the
Lenders and those services were provided in accordance with generally accepted
engineering practices.

                  In connection with the preparation of the Report, personnel of
the Independent Engineer have participated in meetings or telephone discussions
with representatives of the Borrower[, counsel to the Borrower, the Agent, and
counsel to the Agent] in regard to the Subsequent Project(s).

                  Based on our review of the information made available to us by
the Borrower on the Subsequent Project(s) as of the date of the Report, we have
noted, among other things as set forth in the Report, certain observations and
have arrived at certain conclusions regarding the design, technical provisions
of the agreements and other aspects of the Subsequent Project(s) as set forth
below. The Agent and the Lenders are encouraged to read the Report in its
entirety for the purpose of understanding the following observations and
conclusions:

     1.  Each of the  Subsequent  Projects,  from a  technical  and  engineering
perspective,  appears to have been,  or is expected to be,  designed by Southern
Company Services, Inc. ("SCS") in accordance with prudent industry standards and
practices for similar plants.

     2. SCS has demonstrated experience in the design, engineering, procurement,
and construction of power plants similar to each of the Subsequent Projects. [An
affiliate of Southern  Company] has demonstrated  experience in the operation of
power plants similar to each of the Subsequent Projects.

     3. The major  components  of each of the  Subsequent  Projects  (including,
without  limitation,   the  turbines,   generators,   and  heat  recovery  steam
generators)  are identical to the components  incorporated in one or more of the
Initial Projects.

     4. Each of the Subsequent  Projects  utilizes  sound  technology and proven
methods of electric  generation in accordance with generally  accepted industry
practice. If operated and maintained consistent with generally accepted industry
practices, each of the Subsequent Projects should be capable of meeting: (1) the
heat  rate,  output,  and  availabilities  assumed  in  its  Project  Base Case
Projections as set forth in Section [ ] of the Report;  (2) the requirements set
forth in each Power  Purchase  Agreement  (if any)  entered into with respect to
such  Subsequent  Project  and  referred  to  in  Section  [  ]  of  the Report
(collectively,   the  "Relevant  Power  Purchase   Agreements");   and  (3) the
requirements  of the major permits and approvals  required for the  construction
and operation of each of the Subsequent Projects (the "Project Permits").

     5. The performance  tests used, or to be used, to determine whether each of
Substantial  Completion  and  Final  Completion  with  respect to  each  of the
Subsequent  Projects  has been  achieved  are (a)  consistent  with the testing
procedures  set forth in, or  determined  pursuant to,  Schedule V of the Credit
Agreement;  (b) similar to  performance  test  programs  conducted  for electric
generating plants of the type and size of such Subsequent  Project with which we
are familiar;  (c) adequate for  demonstrating  the capability of the Subsequent
Project(s) to meet the  Guaranteed  Heat Rate,  Guaranteed  Output,  and the air
emissions  requirements  under the  Project  Permits,  in each case,  applicable
thereto;  and (d)  consistent  with  the  testing  procedures  set forth in the
Relevant Power Purchase Agreements.

     6. The construction schedule applicable to each of the Subsequent Projects,
as  determined  pursuant  to the  major  equipment  supply  contracts  and major
construction contracts, is consistent with (a) the Scheduled Completion Date, as
set forth in the  Project  Schedule  for that  Subsequent  Project;  and (b) the
requirements  under all Relevant Power Purchase  Agreements  entered into with
respect to such Subsequent  Project.  The performance  guarantees  applicable to
each of the  Subsequent  Projects,  as contained in the major equipment  supply
contracts  and  major  construction   contracts  are  consistent  with (i)  the
Guaranteed Output and Guaranteed Heat Rate applicable thereto, each as set forth
in the Project Schedule for hat Subsequent  Project;  and (ii) all corresponding
performance  guarantees in all Relevant Power Purchase  Agreements  entered into
with respect to such Subsequent Project.

     7. Upon  achievement of Substantial  Completion,  the [proposed]  design of
each of the Subsequent Projects was, or will be, consistent with the obligations
relating to  performance  of such  Subsequent  Project under the Relevant  Power
Purchase Agreements applicable thereto.

     8. Set out in Sections [ ] and [ ] of the Report is a  description  of each
material project  contract for the  construction (if applicable),  operation and
maintenance of each of the Subsequent Projects,  including,  without limitation,
all equipment supply contracts with respect to major components and construction
contracts   (if  such   Subsequent   Project  is  not  a   Completed   Project),
interconnection  contracts,  contracts for the supply and transportation of fuel
(unless one or more of the Relevant Power Purchase  Agreements have been entered
into with  respect  to the entire  output of such  Subsequent  Project,  and the
purchaser(s)   thereunder   are   solely   responsible   for  fuel   supply  and
transportation),  the  supply  and  discharge  of water  and the  operation  and
maintenance of such Subsequent  Project,  and long term service contract(s) with
respect to turbines and  generators,  in each case,  in existence as of the date
hereof  (with  respect  to  each  of  the  Subsequent  Projects,   the  "Project
Contracts").  The term and  technical  and  pricing  provisions  of the  Project
Contracts with respect to each of the  Subsequent  Projects have been taken into
consideration in the preparation of the Project Base Case Projections.

     9. Set out in Section [ ] of the Report is a list and brief  description of
the Project  Permits.  Although all Project  Permits  have not been  obtained to
date,  some of which cannot be obtained  until a respective  project is ready to
operate,  we are not aware of any technical or  engineering  circumstances  that
would  prevent the issuance of the  remaining  Project  Permits.  The  technical
provisions  of the  Project  Permits  with  respect  to each  of the  Subsequent
Projects have been taken into  consideration  in the  preparation of the Project
Base Case Projections.

     10. The Initial Project Budget for each of the Subsequent Projects includes
all Project  Costs  anticipated  to be incurred up to Final  Completion  of such
Subsequent  Project (including  contingency).  The construction cost included in
the Initial  Project  Budget has been  developed in  accordance  with  generally
accepted  estimating  practices  and is  comparable  to the like  costs of other
projects similar in size and technology with which we are familiar.

     11. The Project Base Case  Projections for each of the Subsequent  Projects
(a) incorporate the forecasted prices for electricity and fuel provided to us by
the Independent  Market Consultant  applicable to such Subsequent  Project;  (b)
incorporate assumptions regarding heat rates, outputs and availabilities that we
believe to be achievable;  and (c) include the assumption (as agreed between the
Borrower  and the Lenders)  that the debt  referred to in such Project Base Case
Projections  has a term of 20 years and that such debt will bear interest at the
rate of 8.25% per annum throughout its term.

     12.  Environmental  site  assessments  for each of the Subsequent  Projects
performed by [Insert name of environmental consultant that performed assessment]
were conducted in a manner consistent with industry standards,  using comparable
industry  protocols for similar studies with which we are familiar.  The results
of the  environmental  site  assessments  with respect to each of the Subsequent
Projects have been taken into  consideration  in the  preparation of the Project
Base Case Projections.

                  For purposes of this letter, the Independent Engineer has, at
the request of the Agent, carried out certain limited procedures for the period
commencing ____________ ___, ___ [Insert the date one day after the date of the
Report] and ending on____________ ___, ___ [Insert the date of this
certificate], consisting solely of the making of inquiries of the Borrower as to
whether there has been any material change in the information provided by them,
and upon which the Independent Engineer relied, for purposes of the Report.
These procedures would not be sufficient under generally accepted engineering
practices to enable the Independent Engineer to express an opinion as to the
matters covered by the Report and would not necessarily reveal matters of
significance with respect to the statement in the last sentence of this
paragraph. The Independent Engineer, therefore, expresses no opinion as to the
matters covered by the Report as of any date subsequent to the date of the
Report and makes no representations as to the sufficiency of the foregoing
procedures for the Agent's purposes. Nothing has come to the attention of the
Independent Engineer as a result of the foregoing procedures, however, that
caused the Independent Engineer to believe that, as of the date to which the
procedures were carried out, the opinions of the Independent Engineer set forth
in the Report were not correct.

                  This letter is solely for the information of, and assistance
to, the Agent and the Lenders in conducting and documenting their investigation
of the matters covered by the Report in connection with the Subsequent
Project(s) and is not to be used, circulated, quoted, or otherwise referred to
within or without the lending group for any purpose, nor is it to be referred to
in whole or in part in any other document, except that reference may be made to
it in the above-mentioned Credit Agreement or in any list of closing documents
pertaining to the Subsequent Project(s).

                  The Independent Engineer disclaims any obligation to update
this letter. This letter is not intended to, and may not, be relied upon by any
party other than the Agent and the Lenders.

Very truly yours,

R. W. BECK, INC.

[Name]
Principal and Senior Director

<PAGE>

                                                                   EXHIBIT I-3
                                                        SOUTHERN POWER COMPANY
                                                              CREDIT AGREEMENT

                         [Letterhead of R.W. Beck, Inc.]

[Date of Initial Borrowing
for relevant Initial Project]

[Date of Initial Borrowing
for relevant Initial Project]

Citibank, N.A.
388 Greenwich Street, 20th Floor
New York, New York 10013
     (as Agent for the Lenders)

Subject: Independent Engineer's Report
                  Southern Power Company Initial Project(s)

Ladies and Gentlemen:

     This  letter is  furnished  pursuant  to Section  3.02(d)(i)  of the Credit
Agreement  dated as of  ___________  ___, 2001 (the "Credit  Agreement")  by and
among Southern  Power Company (the  "Borrower"),  Citibank,  N.A. (the "Agent"),
Salomon  Smith  Barney  Inc.,  as  Lead  Arranger  and  Syndication  Agent,  the
Co-Arrangers  and the  financial  institutions  named  therein (the  "Lenders").
Capitalized  terms used in this letter and not  otherwise  defined  herein shall
have the respective meanings specified in the Credit Agreement.

     R. W. Beck, Inc. (the "Independent Engineer") was retained by the Agent, on
behalf  of  the  Lenders,  as  the  Independent  Engineer  and  it  prepared  an
Independent  Engineer's Report dated October 16, 2001 (the "Report") relating to
the [insert name(s) of Initial Project(s)](the "Initial Project(s)"),  a copy of
which is attached as Annex A.

     The  Report  was  prepared  pursuant  to the  scope of  services  under our
Professional  Services  Agreement  with the Agent on behalf of the  Lenders  and
those services were provided in accordance with generally  accepted  engineering
practices.

     In  connection  with  the  preparation  of  the  Report,  personnel  of the
Independent Engineer have participated in meetings or telephone discussions with
representatives of the Borrower, counsel to the Borrower, the Agent, and counsel
to the Agent in regard to the Initial Project(s).

     For purposes of this letter,  the Independent  Engineer has, at the request
of the Agent,  carried out certain limited  procedures for the period commencing
October 17,  2001 and ending  on____________  ___,  ___ [Insert the date of this
certificate], consisting solely of the making of inquiries of the Borrower as to
whether there has been any material change in the information  provided by them,
and upon which the  Independent  Engineer  relied,  for  purposes of the Report.
These procedures would not be sufficient  under generally  accepted  engineering
practices  to enable the  Independent  Engineer  to express an opinion as to the
matters  covered  by the  Report  and would not  necessarily  reveal  matters of
significance  with  respect  to the  statement  in the  last  sentence  of  this
paragraph. The Independent Engineer,  therefore,  expresses no opinion as to the
matters  covered  by the  Report  as of any date  subsequent  to the date of the
Report  and makes no  representations  as to the  sufficiency  of the  foregoing
procedures  for the Agent's  purposes.  Nothing has come to the attention of the
Independent  Engineer as a result of the  foregoing  procedures,  however,  that
caused the  Independent  Engineer to believe  that,  as of the date to which the
procedures were carried out, the opinions of the Independent  Engineer set forth
in the Report were not correct.

     This letter is solely for the  information of, and assistance to, the Agent
and the Lenders in conducting and documenting their investigation of the matters
covered by the Report in connection with the Initial Project(s) and is not to be
used, circulated, quoted, or otherwise referred to within or without the lending
group for any  purpose,  nor is it to be  referred to in whole or in part in any
other document,  except that reference may be made to it in the  above-mentioned
Credit Agreement or in any list of closing  documents  pertaining to the Initial
Project(s).

                  The Independent Engineer disclaims any obligation to update
this letter. This letter is not intended to, and may not, be relied upon by any
party other than the Agent and the Lenders.

Very truly yours,

R. W. BECK, INC.

[Name]
Principal and Senior Director

<PAGE>

                                                        EXHIBIT J-1
                                             SOUTHERN POWER COMPANY
                                                   CREDIT AGREEMENT

                         [Letterhead of Marsh USA Inc.]

[Funds Availability Date]

The Lenders referred to below and
Citibank, N.A. (as Agent for such Lenders)

Ladies and Gentlemen:

We refer to the Credit Agreement dated as of [_____], 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Southern Power Company (the "Borrower"), Salomon Smith
Barney Inc., as Lead Arranger and Syndication Agent, the Co-Arrangers and
Lenders party thereto and Citibank, N.A., as administrative agent (the "Agent")
for the Lenders. Defined terms used in this certificate and not otherwise
defined herein shall have the respective meanings specified in the Credit
Agreement.

The undersigned, a duly authorized representative of Marsh USA Inc. (the
"Insurance Consultant"), hereby certifies that:

1.       This certificate is delivered pursuant to Section 3.01(c)(vii) of the
         Credit Agreement.

2.       In connection with the Credit Agreement, the Insurance Consultant has
         been retained to prepare the Independent Insurance Consultant's Report
         dated [________], 2001 (the "Report") relating to the Initial Projects,
         a true and correct copy of which is attached hereto as Annex A. The
         Report represents the Insurance Consultant's professional opinion as of
         the date thereof and was prepared in accordance with generally accepted
         practices for independent insurance consulting and with the standards
         of care practiced by leading independent insurance consultants in
         performing similar tasks on like projects and financings.

3.       The Insurance Consultant acknowledges that pursuant to the Credit
         Agreement, the Lenders will be providing financing to the Borrower for
         the acquisition, development, construction, operation and/or
         maintenance of the Initial Projects.

4.       After due inquiry, we hereby confirm that since the date of the
         Report, no event or circumstance has occurred which:

         (a)      makes, as of the date hereof, any material information or
                  material statement contained in the Report, read as a
                  whole, untrue or incorrect; or

         (b)      should be reflected in the Report in order to make the
                  statements and information contained therein, read as a whole
                  and in light of the circumstances under which they were made,
                  not misleading; or

         (c)      results, as of the date hereof, in the Report, read as a
                  whole, omitting to state any material matter relevant to the
                  insurance program for, or insurable events, losses or
                  casualties relating to, the Initial Projects.

5.       This certificate is solely for the information of, and assistance to,
         Citibank, N.A. as Agent and the Lenders from time to time under the
         Credit Agreement, and is not to be otherwise used, circulated, quoted
         or referred to within any document, unless specifically consented to in
         writing by the Insurance Consultant.

Marsh USA Inc.

By:
   ---------------------------------
Name:
Title:

<PAGE>

                                                       EXHIBIT J-2
                                                     SOUTHERN POWER COMPANY
                                                           CREDIT AGREEMENT

                         [Letterhead of Marsh USA Inc.]

[Date of initial Borrowing
for relevant Subsequent Project]

The Lenders referred to below and
Citibank, N.A. (as Agent for such Lenders)

Ladies and Gentlemen:

We refer to the Credit Agreement dated as of [_____], 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Southern Power Company (the "Borrower"), Salomon Smith
Barney Inc., as Lead Arranger and Syndication Agent, the Co-Arrangers and
Lenders party thereto and Citibank, N.A., as administrative agent (the "Agent")
for the Lenders. Defined terms used in this certificate and not otherwise
defined herein shall have the respective meanings specified in the Credit
Agreement.

The undersigned, a duly authorized representative of Marsh USA Inc. (the
"Insurance Consultant"), hereby certifies that:

1.       This certificate is delivered pursuant to Section [3.04(a)(iv)(D)]
          / [3.04(b)(v)(D)] / [3.06(d)] of the Credit Agreement.

2.       In connection with the Credit Agreement, the Insurance Consultant has
         been retained to prepare the Independent Insurance Consultant's Report
         dated [________] (the "Report") relating to [insert name(s) of
         Subsequent Project(s)] (each a "Subsequent Project"), a true and
         correct copy of which is attached hereto as Annex A. The Report
         represents the Insurance Consultant's professional opinion as of the
         date thereof and was prepared in accordance with generally accepted
         practices for independent insurance consulting and with the standards
         of care practiced by leading independent insurance consultants in
         performing similar tasks on like projects and financings.

3.       The Insurance Consultant acknowledges that pursuant to the Credit
         Agreement, the Lenders will be providing financing to the Borrower for
         the acquisition, development, construction, operation and/or
         maintenance of each Subsequent Project.

4.       After due inquiry, we hereby confirm that since the date of the
         Report, no event or circumstance has occurred which:

         (a)      makes, as of the date hereof, any material information or
                   material statement contained in the Report, read as a
                  whole, untrue or incorrect; or

         (b)      should be reflected in the Report in order to make the
                  statements and information contained therein, read as a whole
                  and in light of the circumstances under which they were made,
                  not misleading; or

         (c)      results, as of the date hereof, in the Report, read as a
                  whole, omitting to state any material matter relevant to the
                  insurance program for, or insurable events, losses or
                  casualties relating to, the Subsequent Projects.

5.       We have reviewed the insurance program put in place by the Borrower to
         insure the Subsequent Projects and conclude that (a) the insurance
         coverages (including, without limitation, the types and amounts of
         insurances, the risks insured against, and the limits, deductibles,
         exclusions and excesses applicable to such insurances) are consistent
         with the customs and practices of the utility power industry in the
         United States, and (b) such insurance program is maintained with
         insurance companies and underwriters which are customarily used by the
         utility power industry in the United States to insure against the
         relevant risks, and the use of all such insurance companies and
         underwriters in accordance with such insurance program is appropriate
         (taking into account all applicable coverages under the relevant
         policies).

6.       This certificate is solely for the information of, and assistance to,
         Citibank, N.A. as Agent and the Lenders from time to time under the
         Credit Agreement, and is not to be otherwise used, circulated, quoted
         or referred to within any document, unless specifically consented to in
         writing by the Insurance Consultant.

Marsh USA Inc.

By:
   ---------------------------------
Name:
Title:

<PAGE>

                                               EXHIBIT J-3
                                              SOUTHERN POWER COMPANY
                                                    CREDIT AGREEMENT

                         [Letterhead of Marsh USA Inc.]

[Date of initial Borrowing
for relevant Initial Project]

The Lenders referred to below and
Citibank, N.A. (as Agent for such Lenders)

Ladies and Gentlemen:

We refer to the Credit Agreement dated as of [_____], 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Southern Power Company (the "Borrower"), Salomon Smith
Barney Inc., as Lead Arranger and Syndication Agent, the Co-Arrangers and
Lenders party thereto and Citibank, N.A., as administrative agent (the "Agent")
for the Lenders, and to our certificate dated [Funds Availability Date] provided
pursuant to Section 3.01(c)(vii) of the Credit Agreement (the "Closing
Certificate") and to the report attached to the Closing Certificate (the
"Report"). Defined terms used in this certificate and not otherwise defined
herein shall have the respective meanings specified in the Credit Agreement.

The undersigned, a duly authorized representative of Marsh USA Inc. (the
"Insurance Consultant"), hereby certifies that:

1.       This certificate is delivered pursuant to Section [3.02(d)(ii)]
         / [3.06(a)] of the Credit Agreement.

2.       The Insurance Consultant acknowledges that pursuant to the Credit
         Agreement, the Lenders will be providing financing to the Borrower for
         the acquisition, development, construction, operation and/or
         maintenance of the Initial Projects.

3.       After due inquiry, we hereby confirm that since the date of the
         Report, no event or circumstance has occurred which:

         (a)      makes, as of the date hereof, any material information or
                  material statement contained in the Report, read as a
                  whole, untrue or incorrect; or

         (b)      should be reflected in the Report in order to make the
                  statements and information contained therein, read as a whole
                  and in light of the circumstances under which they were made,
                  not misleading; or

         (c)      results, as of the date hereof, in the Report, read as a
                  whole, omitting to state any material matter relevant to the
                  insurance program for, or insurable events, losses or
                  casualties relating to, the Relevant Initial Projects.

4.       This certificate is solely for the information of, and assistance to,
         Citibank, N.A. as Agent and the Lenders from time to time under the
         Credit Agreement, and is not to be otherwise used, circulated, quoted
         or referred to within any document, unless specifically consented to in
         writing by the Insurance Consultant.

Marsh USA Inc.

By:
   ---------------------------------
Name:
Title:

<PAGE>

                                                          EXHIBIT K-1
                                               SOUTHERN POWER COMPANY
                                                     CREDIT AGREEMENT

                       [Letterhead of PA Consulting, Inc.]

[Funds Availability Date]

The Lenders referred to below and
Citibank, N.A. (as Agent for such Lenders)

Ladies and Gentlemen:

We refer to the Credit Agreement dated as of [_____], 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Southern Power Company (the "Borrower"), Salomon Smith
Barney Inc., as Lead Arranger and Syndication Agent, the Co-Arrangers and
Lenders party thereto and Citibank, N.A., as administrative agent (the "Agent")
for the Lenders. Defined terms used in this certificate and not otherwise
defined herein shall have the respective meanings specified in the Credit
Agreement.

The undersigned, a duly authorized representative of PA Consulting, Inc. (the
"Independent Market Consultant"), hereby certifies that:

1.       This certificate is delivered pursuant to Section 3.01(c)(viii) of the
         Credit Agreement.

2.       In connection with the Credit Agreement, the Independent Market
         Consultant has been retained to prepare the Independent Market
         Consultant's Report dated [________], 2001 (the "Report") relating to
         the Initial Projects, a true and correct copy of which is attached
         hereto as Annex A. The Report represents the Independent Market
         Consultant's professional opinion as of the date thereof and was
         prepared in accordance with generally accepted practices for
         independent market consulting and with the standards of care practiced
         by leading independent market consultants in performing similar tasks
         on like projects and financings.

3.       The Independent Market Consultant acknowledges that pursuant to the
         Credit Agreement, the Lenders will be providing financing to the
         Borrower for the acquisition, development, construction, operation
         and/or maintenance of the Initial Projects.

4.       After due inquiry, we hereby confirm that since the date of the
         Report, no event or circumstance has occurred which:

         (a)      makes, as of the date hereof, any material information or
                  material statement contained in the Report, read as a
                  whole, untrue or incorrect; or

         (b)      should be reflected in the Report in order to make the
                  statements and information contained therein, read as a whole
                  and in light of the circumstances under which they were made,
                  not misleading; or

         (c)      results, as of the date hereof, in the Report, read as a
                  whole, omitting to state any material matter relevant to each
                  electric power market relevant to the Initial Projects.

5.       This certificate is solely for the information of, and assistance to,
         Citibank, N.A. as Agent and the Lenders from time to time under the
         Credit Agreement, and is not to be otherwise used, circulated, quoted
         or referred to within any document, unless specifically consented to in
         writing by the Independent Market Consultant.

PA Consulting, Inc.

By:
   ---------------------------------
Name:
Title:

<PAGE>

                                             EXHIBIT K-2
                                            SOUTHERN POWER COMPANY
                                                  CREDIT AGREEMENT

                       [Letterhead of PA Consulting, Inc.]

[Date of initial Borrowing
for relevant Subsequent Project]

The Lenders referred to below and
Citibank, N.A. (as Agent for such Lenders)

Ladies and Gentlemen:

We refer to the Credit Agreement dated as of [_____], 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Southern Power Company (the "Borrower"), Salomon Smith
Barney Inc., as Lead Arranger and Syndication Agent, the Co-Arrangers and
Lenders party thereto and Citibank, N.A., as administrative agent (the "Agent")
for the Lenders. Defined terms used in this certificate and not otherwise
defined herein shall have the respective meanings specified in the Credit
Agreement.

The undersigned, a duly authorized representative of PA Consulting, Inc. (the
"Independent Market Consultant"), hereby certifies that:

1.       This certificate is delivered pursuant to section [3.04(a)(iv)(E)]
          / [3.04(b)(v)(E)] / [3.06(d)] of the Credit Agreement.

2.       In connection with the Credit Agreement, the Independent Market
         Consultant has been retained to prepare the Independent Market
         Consultant's Report dated [________] (the "Report") relating to [insert
         name(s) of Subsequent Project(s)] (each a "Subsequent Project"), a true
         and correct copy of which is attached hereto as Exhibit A. The Report
         represents the Independent Market Consultant's professional opinion as
         of the date thereof and was prepared in accordance with generally
         accepted practices for independent market consulting and with the
         standards of care practiced by leading independent market consultants
         in performing similar tasks on like projects and financings.

3.       The Independent Market Consultant acknowledges that pursuant to the
         Credit Agreement, the Lenders will be providing financing to the
         Borrower for the acquisition, development, construction, operation
         and/or maintenance of each Subsequent Project.

4.       After due inquiry, we hereby confirm that since the date of the
         Report, no event or circumstance has occurred which:

         (a)      makes, as of the date hereof, any material information or
                  material statement contained in the Report, read as a
                  whole, untrue or incorrect; or

         (b)      should be reflected in the Report in order to make the
                  statements and information contained therein, read as a whole
                  and in light of the circumstances under which they were made,
                  not misleading; or

         (c)      results, as of the date hereof, in the Report, read as a
                  whole, omitting to state any material matter relevant to each
                  electric power market relevant to the Subsequent Projects.

5.       This certificate is solely for the information of, and assistance to,
         Citibank, N.A. as Agent and the Lenders from time to time under the
         Credit Agreement, and is not to be otherwise used, circulated, quoted
         or referred to within any document, unless specifically consented to in
         writing by the Independent Market Consultant.

PA Consulting, Inc.

By:
   ---------------------------------
Name:
Title:

<PAGE>

                          EXHIBIT K-3
                         SOUTHERN POWER COMPANY
                               CREDIT AGREEMENT

                       [Letterhead of PA Consulting, Inc.]

[Date of initial Borrowing
for relevant Initial Project]

The Lenders referred to below and
Citibank, N.A. (as Agent for such Lenders)

Ladies and Gentlemen:

We refer to the Credit Agreement dated as of [_____], 2001 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Southern Power Company (the "Borrower"), Salomon Smith
Barney Inc., as Lead Arranger and Syndication Agent, the Co-Arrangers and
Lenders party thereto and Citibank, N.A., as administrative agent (the "Agent")
for the Lenders, and to our certificate dated [Funds Availability Date] provided
pursuant to Section 3.01(c)(viii) of the Credit Agreement (the "Closing
Certificate") and to the report attached to the Closing Certificate (the
"Report"). Defined terms used in this certificate and not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement.

The undersigned, a duly authorized representative of PA Consulting, Inc. (the
"Independent Market Consultant"), hereby certifies that:

1.       This certificate is delivered pursuant to Section [3.02(d)(iii)] /
         [3.06(a)] of the Credit Agreement.

2.       The Independent Market Consultant acknowledges that pursuant to the
         Credit Agreement, the Lenders will be providing financing to the
         Borrower for the acquisition, development, construction, operation
         and/or maintenance of the Initial Projects.

3.       After due inquiry, we hereby confirm that since the date of the
         Report, no event or circumstance has occurred which:

         (a)      makes, as of the date hereof, any material information or
                  material statement contained in the Report, read as a
                  whole, untrue or incorrect; or

         (b)      should be reflected in the Report in order to make the
                  statements and information contained therein, read as a whole
                  and in light of the circumstances under which they were made,
                  not misleading; or

         (c)      results, as of the date hereof, in the Report, read as a
                  whole, omitting to state any material matter relevant to each
                  electric power market relevant to the Initial Projects.

4.       This certificate is solely for the information of, and assistance to,
         Citibank, N.A. as Agent and the Lenders from time to time under the
         Credit Agreement, and is not to be otherwise used, circulated, quoted
         or referred to within any document, unless specifically consented to in
         writing by the Independent Market Consultant.

PA Consulting, Inc.

By:
   ---------------------------------
Name:
Title:

<PAGE>

                           EXHIBIT L-1
                          SOUTHERN POWER COMPANY
                                CREDIT AGREEMENT

                      CERTIFICATE OF SUBSTANTIAL COMPLETION

         Pursuant to that certain Credit Agreement, dated as of _________, 2001
(as amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the "Credit Agreement"), by and among Southern Power
Company (the "Borrower"), Salomon Smith Barney Inc., as Lead Arranger and
Syndication Agent, the Co-Arrangers and Lenders party thereto, and Citibank,
N.A., as administrative agent for the Lenders (the "Agent"), The Southern
Company ("Southern") hereby delivers this Certificate to the Agent. Except as
otherwise defined herein, capitalized terms used herein but not defined shall
have the respective meanings given to them in Exhibit A attached hereto.

         Southern hereby certifies as follows:

         (i)      the [relevant] Project has achieved Mechanical Completion;

         (ii)     the [relevant] Project has passed an emissions test
                  demonstrating that it can operate in accordance with its
                  permits;

         (iii) the [relevant] Project has achieved at least 95% of its
         Guaranteed Output as set forth in Schedule I hereto, has achieved a
         heat rate not greater than 105% of its Guaranteed Heat Rate as set
         forth in Schedule I hereto, in each case, pursuant to tests conducted
         in accordance with Schedule V to the Credit Agreement;

         (iv)     the [relevant] Project has successfully completed the
                  reliability run required pursuant to Schedule V to the Credit
                   Agreement;

         (v)      the [relevant] Project has obtained final, non-appealable
                  permits required to operate as designed as of the date
                  hereof;

         (vi) all necessary facilities for the transportation of natural gas to,
         the necessary electric interconnect facilities for, and all necessary
         facilities for the procurement, transportation and discharge of water
         to and from, the [relevant] Project have been completed; and

         (vii) based upon the foregoing, the [relevant] Project has achieved
Substantial Completion as of the date hereof.

<PAGE>

         Southern has caused this Certificate to be executed and delivered by
its duly authorized officer as of the _____ day of ___________, 200__.

                                THE SOUTHERN COMPANY

                                By:
                                         -------------------------------------
                                Name:
                                         -------------------------------------
                                Title:
                                         -------------------------------------

<PAGE>

                                    EXHIBIT A

                                   Definitions

"[Relevant] Project" means the [Project description].

"Guaranteed Heat Rate" means the average heat rate associated with the
[relevant] Project while operating in [base mode (namely, at 100% combustion
turbine load)] / [ specify mode of operation applicable to Guaranteed Heat Rate
] at the rated conditions for the [relevant] Project, as set forth in Schedule I
hereto.

"Guaranteed Output" means the capability of the [relevant] Project with [all
possible modes of operation in use] / [ specify mode of operation applicable to
Guaranteed Output ] at the rated conditions for the [relevant] Project, as set
forth in Schedule I hereto.

"Mechanical Completion" means (a) all construction work for the [relevant]
Project has been completed according to the proper scope of work and the
[relevant] Project is ready for performance testing with the exception of Punch
List Items; (b) satisfactory completion of the materials and equipment
associated with individual turnover packages (with all items within the turnover
package completed to the satisfaction of the Borrower's start-up or testing
manager, all equipment capable of operation in a safe and proper manner without
voiding warranties, all equipment systems installed associated with the turnover
package, including remote control systems, ready to commence start-up and
testing) and the satisfactory completion and documentation of the construction
completion testing; and (c) all construction, temporary facilities that may
interfere with or disrupt the Borrower's start-up and plant testing activities,
waste material and rubbish have been removed from the work area.

"Punch List Items" means those incomplete work items that do not have a material
effect on the operations and maintenance of the [relevant] Project, including
painting, platforms, and damaged instrument glass.

"Substantial Completion" means (a) achievement of Mechanical Completion; (b) the
[relevant] Project has passed an emissions test demonstrating that it can
operate in accordance with its permits; (c) the [relevant] Project has achieved
at least 95% of its Guaranteed Output, has achieved a heat rate not greater than
105% of its Guaranteed Heat Rate, in each case, as set forth in Schedule I
hereto and as tested in accordance with the testing procedures applicable to the
[relevant] Project set forth in, or determined in accordance with, Schedule V to
the Credit Agreement; (d) the [relevant] Project has successfully completed the
reliability run applicable thereto, as set forth in, or determined in accordance
with, Schedule V to the Credit Agreement; (e) the [relevant] Project has
obtained final, non-appealable permits required to operate as designed as of the
date hereof; and (f) all necessary facilities for the transportation of natural
gas to, the necessary electric interconnect facilities for, and all necessary
facilities for the procurement, transportation and discharge of water to and
from, the [relevant] Project have been completed.

<PAGE>

                                   Schedule I

                                Rated Conditions

<PAGE>

                                    EXHIBIT L-2
                                   SOUTHERN POWER COMPANY
                                         CREDIT AGREEMENT

                         CERTIFICATE OF FINAL COMPLETION

         Pursuant to that certain Credit Agreement, dated as of _________, 2001
(as amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the "Credit Agreement"), by and among Southern Power
Company (the "Borrower"), Salomon Smith Barney Inc., as Lead Arranger and
Syndication Agent, the Co-Arrangers and Lenders party thereto, and Citibank,
N.A., as administrative agent for the Lenders (the "Agent"), The Southern
Company ("Southern") hereby delivers this Certificate to the Agent. Except as
otherwise defined herein, capitalized terms used herein but not defined shall
have the respective meanings given to them in Exhibit A attached hereto.

         Southern hereby certifies as follows:

         (i)      the [relevant] Project has achieved Substantial Completion;

         (ii) the tested output in megawatts for the [relevant] Project has
         achieved 100% of its Guaranteed Output and the [relevant] Project has
         achieved an average tested heat rate not greater than 100% of its
         Guaranteed Heat Rate, in each case, as set forth in Schedule I hereto
         and pursuant to tests conducted in accordance with Schedule V to the
         Credit Agreement; and

         (iii) based upon the foregoing, the [relevant] Project has achieved
Final Completion as of the date hereof.

         Southern has caused this Certificate to be executed and delivered by
its duly authorized officer as of the _____ day of ___________, 200__.

                                           THE SOUTHERN COMPANY

                                           By:
                                                    --------------------------
                                           Name:
                                                    --------------------------
                                           Title:
                                                    --------------------------

<PAGE>

                                    EXHIBIT A

                                   Definitions

"[Relevant] Project" means the [Project description].

"Final Completion" means (a) the [relevant] Project has achieved Substantial
Completion; (b) the tested output in megawatts for the [relevant] Project has
achieved 100% of its Guaranteed Output pursuant to tests conducted in accordance
with Schedule V to the Credit Agreement; and (c) the [relevant] Project has
achieved a tested heat rate not greater than 100% of its Guaranteed Heat Rate
pursuant to tests conducted in accordance with Schedule V to the Credit
Agreement.

"Guaranteed Heat Rate" means the average heat rate associated with the
[relevant] Project while operating in [base mode (namely, at 100% combustion
turbine load)] / [ specify mode of operation applicable to Guaranteed Heat Rate
] at the rated conditions for the [relevant] Project, as set forth in Schedule I
hereto.

"Guaranteed Output" means the capability of the [relevant] Project with [all
possible modes of operation in use] / [ specify mode of operation applicable to
Guaranteed Output ] at the rated conditions for the [relevant] Project, as set
forth in Schedule I hereto.

"Mechanical Completion" means (a) all construction work for the [relevant]
Project has been completed according to the proper scope of work and the
[relevant] Project is ready for performance testing with the exception of Punch
List Items; (b) satisfactory completion of the materials and equipment
associated with individual turnover packages (with all items within the turnover
package completed to the satisfaction of the Borrower's start-up or testing
manager, all equipment capable of operation in a safe and proper manner without
voiding warranties, all equipment systems installed associated with the turnover
package, including remote control systems, ready to commence start-up and
testing) and the satisfactory completion and documentation of the construction
completion testing; and (c) all construction, temporary facilities that may
interfere with or disrupt the Borrower's start-up and plant testing activities,
waste material and rubbish have been removed from the work area.

"Punch List Items" means those incomplete work items that do not have a material
effect on the operations and maintenance of the [relevant] Project, including
painting, platforms, and damaged instrument glass.

"Substantial Completion" means (a) achievement of Mechanical Completion; (b) the
[relevant] Project has passed an emissions test demonstrating that it can
operate in accordance with its permits; (c) the [relevant] Project has achieved
at least 95% of its Guaranteed Output, has achieved a heat rate not greater than
105% of its Guaranteed Heat Rate, in each case, as set forth in Schedule I
hereto and as tested in accordance with the testing procedures applicable to the
[relevant] Project set forth in, or determined in accordance with, Schedule V to
the Credit Agreement; (d) the [relevant] Project has successfully completed the
reliability run applicable thereto, as set forth in, or determined in accordance
with, Schedule V to the Credit Agreement; (e) the [relevant] Project has
obtained final, non-appealable permits required to operate as designed as of the
date hereof; and (f) all necessary facilities for the transportation of natural
gas to, the necessary electric interconnect facilities for, and all necessary
facilities for the procurement, transportation and discharge of water to and
from, the [relevant] Project have been completed.

<PAGE>

                                   Schedule I

                                Rated Conditions

<PAGE>

                                                                EXHIBIT M
                                                     SOUTHERN POWER COMPANY
                                                           CREDIT AGREEMENT

                          [SOUTHERN COMPANY LETTERHEAD]

                               ____________, 2001

Citibank, N.A., as Agent for
the Lenders under, and as defined in,
the Credit Agreement referred to below

Ladies and Gentlemen:

         The Southern Company ("Southern") hereby refers to that certain Credit
Agreement, dated as of the date hereof (the "Credit Agreement"), among Southern
Power Company (the "Borrower"), the Initial Lenders named therein, Citibank,
N.A., as Agent, Salomon Smith Barney Inc., as Lead Arranger and Syndication
Agent, and the Co-Arrangers. Except as otherwise defined in this letter
agreement (the "Agreement"), capitalized terms used herein but not defined shall
have the respective meanings given to them in the Credit Agreement. Southern
owns all of the outstanding stock of the Borrower and acknowledges that it will
benefit from the Credit Agreement.

         Southern, therefore, hereby agrees as follows:

                  (a) if (1) the [name of development authority] (including its
successors and permitted assigns, the "Development Authority") shall: (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or substantially
all of its property; (ii) make a general assignment for the benefit of its
creditors; (iii) commence a voluntary case under the U.S. Bankruptcy Code (as
now or hereafter in effect) or any similar law of any applicable jurisdiction;
(iv) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts; or (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the U.S. Bankruptcy Code or any similar law of any
applicable jurisdiction; or (2) a proceeding or case shall be commenced, without
the application or consent of the Development Authority, in any court of
competent jurisdiction, seeking (A) its liquidation, reorganization, dissolution
or winding-up, or the composition or readjustment of its debts; (B) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Development Authority or of all or substantially all of its assets; or (C)
similar relief in respect of the Development Authority under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts, and such proceeding or case shall continue unstayed and in effect for
a period of ninety (90) or more days (each a "Bankruptcy Event");

                  (b) if, as a result of such Bankruptcy Event, the Borrower's
leasehold interest with the Development Authority in respect of the [name of
leased project], or any of the Borrower's rights, powers and remedies under or
in connection with the lease of the [name of leased project] with the
Development Authority, or any documents related thereto, is materially and
adversely affected; and

                  (c) if revenues of the Borrower (after payment of (i) all
operating expenses; and (ii) all Recourse Debt of the Borrower (other than the
Project Debt relating to the [name of leased project]) then due and payable, and
accrued interest thereon) are insufficient to repay any or all of the principal
amount of the Project Debt outstanding with respect to the [name of leased
project], and accrued interest thereon, in each case, as and when due;

then, Southern shall (A) on the Final Maturity Date (or, if required to be
prepaid prior to the Final Maturity Date pursuant to the Credit Agreement, on
such earlier date), pay to the Agent, for the account of the Lenders and on
behalf of the Borrower, such amount as may be required to pay in full the
outstanding principal of all Advances then outstanding with respect to the [name
of leased project] and all accrued and unpaid interest related thereto; (B) pay
all interest due and payable, from time to time, on the outstanding Advances
made with respect to the [name of leased project]; and (C) upon the maturity
thereof, pay to the holders of all Commercial Paper then outstanding with
respect to the [name of leased project] and for which there are one or more CP
Commitment Reservations then outstanding (or a trustee on behalf of such
holders), for the account of the Borrower, such amount as may be required to pay
in full the outstanding principal of all such Commercial Paper and all accrued
and unpaid interest related thereto.

         This Agreement has been duly executed and delivered by Southern and
constitutes the legal, valid and binding obligation of Southern enforceable
against Southern in accordance with its terms, subject to laws affecting the
enforcement of creditors' rights generally and to general principles of equity.

         This Agreement is intended to be solely for the benefit of the
Borrower, the Agent and the Lenders and is not intended to and shall not confer
any rights or benefits on any other party.

                                                     Very truly yours,

                                                     The Southern Company

                                                     By:
                                                        ----------------------
                                                     Name:
                                                          --------------------
                                                     Title:
                                                           -------------------

<PAGE>

Agreed and accepted by

Citibank, N.A.,
As Agent for and on behalf of
the Lenders

By:
   -----------------------------------------------------------
Name:
     ---------------------------------------------------------
Title:
      --------------------------------------------------------

* Include only if Utilization is CP Commitment Reservation.

** Include only if Utilization is Borrowing.

* Include only if Utilization is under Section 3.03, 3.05, 3.06(b), (c), (e) or
(f) or 3.07.

** Include unless Utilization is on Funds Availability Date.

*    This date should be no earlier than five (5) Business Days after the
     delivery of this Assignment and Acceptance to the Agent.

** Include if Borrower's consent is required.Exhibit 10.2(b)
                              COMPLETION GUARANTEE

         THIS COMPLETION GUARANTEE, dated as of November __, 2001 (this
"Guarantee"), is made and entered into by and among THE SOUTHERN COMPANY, a
Delaware corporation ("Guarantor"), in favor of SOUTHERN POWER COMPANY, a
Delaware corporation (the "Borrower"), and CITIBANK, N.A., in its capacity as
agent for the benefit of the Lenders under, and as defined in, the Credit
Agreement (the "Credit Agreement") referred to below (in such capacity, the
"Agent"). Except as otherwise defined herein, capitalized terms used herein but
not defined shall have the respective meanings given to them in the Credit
Agreement.

                              W I T N E S S E T H:

         WHEREAS, Guarantor owns all the outstanding stock of the Borrower;

         WHEREAS, the Agent and the Lenders have agreed to enter into the Credit
Agreement of even date herewith (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement") with the Borrower, Salomon
Smith Barney Inc. as Lead Arranger and Syndication Agent, the Co-Arrangers and
Lenders party thereto, and Citibank, N.A., as agent for the Lenders, on the
condition that Guarantor provide this Guarantee;

         WHEREAS, Guarantor acknowledges that it will benefit, directly and
indirectly, from the Credit Agreement.

         NOW, THEREFORE, in consideration of the provisions set forth above and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and as an inducement to the Agent and the Lenders to enter
into the Credit Agreement, Guarantor hereby consents and agrees as follows:

         1. Guarantee. Guarantor hereby irrevocably guarantees and covenants in
favor of each of the Borrower and the Lenders, with respect to each of the
Projects listed in Schedule 1 hereto, as such Schedule 1 may be amended,
modified, supplemented, replaced and/or superceded from time to time by a
Completion Guarantee Supplement in the form of Exhibit A hereto (each, a
"Project"), as follows:

                  (a) if the aggregate principal amount of all Advances and CP
         Commitment Reservations outstanding with respect to such Project equals
         or exceeds the Project Limit for such Project and if the Borrower's
         cash flow from operations is insufficient, the Guarantor will, from
         time to time, (A) pay to the Agent, for the account of the Lenders and
         on behalf of the Borrower, such amount as may be required to pay in
         full the current interest due and payable under the Credit Agreement
         attributable to such Project; and (B) make equity contributions or
         loans, in the form of Affiliate Subordinated Debt, in cash or by wire
         transfer of immediately available funds to the Borrower to enable the
         Borrower to pay all remaining Project Costs related to such Project, in
         the case of sub-clauses (A) and (B) above, until the earlier of the
         date on which Final Completion has been achieved with respect to such
         Project and the Refinancing Date with respect to such Project; and

                  (b) subject to clause (c) below, if Final Completion for such
         Project has not been achieved by the earliest to occur of (i) the
         Buydown Date for such Project as set forth on Schedule 1 hereto, (ii)
         the Final Maturity Date, and (iii) the occurrence of a "Guarantor Event
         of Default" (as defined herein), the Guarantor shall, (A) on the
         earliest of such dates, pay to the Agent, for the account of the
         Lenders and on behalf of the Borrower, such amount as may be required
         to pay in full the outstanding principal of all Advances then
         outstanding with respect to such Project and all accrued and unpaid
         interest related thereto; and (B) upon the maturity thereof, pay to the
         holder of all Commercial Paper then outstanding with respect to such
         Project and for which one or more CP Commitment Reservations are then
         outstanding (or a trustee on behalf of such holders), for the account
         of the Borrower, such amount as may be required to pay in full the
         outstanding principal of all such Commercial Paper and all accrued and
         unpaid interest related thereto;

                  (c) if Substantial Completion has then been achieved for such
         Project, Guarantor shall not be obligated to pay any of the amounts
         specified in clause (b) above, but shall instead be required to (i) on
         the applicable date determined under clause (b) above, pay to the
         Agent, for the account of the Lenders and on behalf of the Borrower,
         such amount of the Advances then outstanding related to such Project,
         if any, and (ii) pay, upon the maturity thereof, to the holder of all
         Commercial Paper then outstanding with respect to such Project and for
         which one or more CP Commitment Reservations are then outstanding (or a
         trustee on behalf of such holders), for the account of the Borrower,
         such amount as may be required to pay in full the outstanding principal
         of all such Commercial Paper and all accrued and unpaid interest
         related thereto, as is required, in the aggregate, to achieve the
         minimum and average Portfolio Adjusted Base Case Projections,
         calculated on the assumption that all Recourse Debt of the Borrower
         Group Members, other than Recourse Debt related to Uncompleted Plants,
         outstanding immediately following such repayment of Project Debt is
         repaid in full on or before the end of the then Remaining Base Case
         Period (each, a "Buydown Amount").

The Borrower hereby consents to and acknowledges any such payments by the
Guarantor on its behalf, and irrevocably and unconditionally instructs the
Guarantor to make, and the Guarantor hereby agrees that it will make, all
payments (whether on account of a loan (in the form of Affiliate Subordinated
Debt), cash equity contribution or otherwise) which are to be paid to the Agent
pursuant to Section 1(a), (b) and (c) above directly into the Agent's Account.

         2.       Guarantee  Absolute.  The liability of Guarantor  under this
             Guarantee  shall be irrevocable  and  absolute irrespective of:

                  (a)      any lack of  validity  or  enforceability  of or
         defect  or deficiency  in the  Credit Agreement or any other
         documents executed in connection with the Credit Agreement;

                  (b)      any modification, extension or waiver of any of the
         terms of the Credit Agreement;

                  (c) any change in the time, manner, terms of payment of or in
         any other term of, all or any of Guarantor's obligations under Section
         1 hereof (the "Guaranteed Obligations"), or any other amendment or
         waiver of or any consent to departure from any agreement or instrument
         executed in connection therewith;

                  (d) failure, omission, delay, waiver or refusal by the Lenders
         to exercise, in whole or in part, any right or remedy held by the
         Lenders with respect to the Credit Agreement or any transaction under
         the Credit Agreement;

                  (e) any change in the existence, structure or ownership of
         Guarantor or the Borrower, or any insolvency, bankruptcy,
         reorganization or other similar proceeding affecting the Borrower or
         its assets (including, without limitation, any unenforceability,
         invalidity or disallowance of any of the Borrower's obligations under
         the Credit Agreement as a result thereof); or

                  (f) any other circumstance or any existence of or reliance on
         any representation by the Borrower or any other Person that might
         otherwise constitute a defense available to, or a discharge of, a
         guarantor or surety (other than the defense of payment).

                  The obligations of Guarantor hereunder are several from the
         Borrower or any other Person, and are primary obligations concerning
         which Guarantor is the principal obligor. There are no conditions
         precedent to the enforcement of this Guarantee, except as expressly
         contained herein.

                  This Guarantee is a continuing guarantee and shall remain in
         full force and effect with respect to any Project until the earliest to
         occur of (i) the payment in full in cash or by wire transfer of
         immediately available funds of the Guaranteed Obligations with respect
         to such Project; (ii) the occurrence of the Non-Recourse Date with
         respect to such Project; and (iii) the termination of the Commitments
         and the payment in full in cash or by wire transfer of immediately
         available funds of all Project Debt attributable to Uncompleted
         Projects and accrued and unpaid interest thereon.

                  This Guarantee shall continue to be effective or be
         reinstated, as the case may be, if at any time any payment of any of
         the Guaranteed Obligations are annulled, set aside, invalidated,
         declared to be fraudulent or preferential, rescinded or must otherwise
         be returned, refunded or repaid by the Lenders upon the insolvency,
         bankruptcy, dissolution, liquidation or reorganization of the Borrower,
         the Guarantor, or any other guarantor, or upon or as a result of the
         appointment of a receiver, intervenor or conservator of, or trustee or
         similar officer for, the Borrower, the Guarantor, or any other
         guarantor or any substantial part of its property or otherwise, or upon
         the entry of an order by a bankruptcy court avoiding the payment of any
         such amounts, all as though such payment or payments had not been made.

         3.       Waiver.  This is a  Guarantee  of payment and not of
         collection.  Guarantor  hereby irrevocably and unconditionally waives:

                  (a)      notice of  acceptance  of this  Guarantee,  of the
          creation or  existence of any of the Guaranteed Obligations and of
          any action by the Lenders in reliance hereon or in connection
          herewith;

                  (b) except as expressly set forth herein, presentment, demand
         for payment, notice of dishonor or nonpayment, protest and notice of
         protest with respect to the Guaranteed Obligations; and

                  (c) any requirement that suit be brought against the Borrower
         or any other person as a condition to Guarantor's liability for the
         Guaranteed Obligations under this Guarantee or as a condition to the
         enforcement of this Guarantee against Guarantor.

         4.       Representations and Warranties.  Guarantor hereby represents
         and warrants that:

                  (a)      Organization and Good Standing.  Guarantor is a
          corporation duly  incorporated,  validly  existing and in good
          standing under the laws of the State of Delaware.

                  (b) Power, Authority and Due Authorization. Guarantor (i) has
         the requisite corporate power and authority to execute, deliver and
         perform this Guarantee and to take all action necessary to consummate
         the transactions contemplated hereunder, and (ii) is duly authorized,
         and has been authorized by all necessary corporate action, to execute,
         deliver and perform this Guarantee.

                  (c) No Conflicts. Neither the execution and delivery of this
         Guarantee, nor the consummation of the transactions contemplated
         herein, nor performance of and compliance with the terms and provisions
         hereof by Guarantor will (i) violate or conflict with any provision of
         its certificate or articles of incorporation or bylaws, (ii) conflict
         with or contravene any Law to which it or its properties are subject
         which has had or would reasonably be expected to have a Material
         Adverse Effect as to Guarantor, or (iii) violate any agreement to which
         it is a party or by which it may be bound, the violation of which has
         had or would reasonably be expected to have a Material Adverse Effect
         as to Guarantor.

                  (d) Consents. No approval or authorization or other action by,
         or filing, registration or qualification with, any governmental
         authority is required for the due execution, delivery or performance by
         Guarantor of this Guarantee and the transactions contemplated hereby,
         except for those which have been duly obtained or made and are in full
         force and effect.

                  (e) Enforceable Obligations. This Guarantee has been duly
         executed and delivered by Guarantor and constitutes the legal, valid
         and binding obligation of Guarantor enforceable against Guarantor in
         accordance with its terms, subject to laws affecting the enforcement of
         creditors' rights generally and to general principles of equity.

                  (f) Litigation. No litigation, arbitration, or administrative
         proceeding is currently pending or, to Guarantor's knowledge,
         threatened against Guarantor (i) to restrain the entry by Guarantor
         into, the enforcement of or exercise of any rights by the Lenders or
         the Agent under, or the performance or compliance by Guarantor with any
         obligations under, this Guarantee, or (ii) which has had or would
         reasonably be expected to have a Material Adverse Effect.

                  (g) Financial Condition. The consolidated balance sheet of
         Guarantor as at December 31, 2000 and the related consolidated
         statements of income, retained earnings and cash flow for the fiscal
         year then ended, heretofore furnished to the Lenders, fairly present
         the consolidated financial condition and results of operations of
         Guarantor as of the date thereof and the consolidated results of its
         operations for such fiscal year in accordance with GAAP.

                  (h)      Material Adverse  Change.  There  has been no
          change  in the  financial condition  or results of operations of
          Guarantor  since December 31, 2000 which has had or would
          reasonably be expected to have a Material Adverse Effect as to
          Guarantor.

                  (i)      No Guarantor Event of Default. No Guarantor Event of
         Default (as defined  herein) has

         5.       Guarantor  Events  of  Default.  A "Guarantor  Event of
          Default"  shall  mean  that any of the following events has occurred
          and is continuing:

                  (a) Guarantor fails to (i) pay or prepay any principal of any
         Project Debt required to be paid by it pursuant to Section 1 hereof
         when due; or (ii) pay any interest with respect to any Project Debt
         required to be paid by it pursuant to Section 1 hereof, make any equity
         contribution or loan required to be made by it pursuant to Section 1
         hereof, or pay any other amounts payable under this Guarantee, in the
         case of sub-clause (ii) only, within five (5) Business Days after the
         same shall become due and payable; or

                  (b) Any one or more of the representations and warranties made
         in this Guarantee, the Southern Equity Agreement or any certificate
         delivered by Guarantor or Borrower (with respect only to
         representations and warranties set forth in Section 4 of this Guarantee
         or Section 2 of the Southern Equity Agreement) in connection with the
         Credit Agreement proves to have been materially incorrect when made
         and, if the events giving rise to such representation or warranty are
         susceptible of cure, it shall not have been cured within 30 days after
         written notice of such default has been given to Guarantor by the Agent
         (or such longer period as the Majority Lenders may permit); or

                  (c) Guarantor shall fail to pay any principal of or premium or
         interest on any of its Debt that is outstanding in a principal or
         notional amount equal to or in excess of $100,000,000 in the aggregate
         for all such unpaid Debt when the same becomes due and payable (whether
         by scheduled maturity, required prepayment, acceleration, demand or
         otherwise), and such failure shall continue after the applicable grace
         period, if any, specified in the agreement or instrument relating to
         such Debt; or any other event shall occur or condition shall exist
         under the agreement or instrument relating to any such Debt and shall
         continue after the applicable grace period, if any, specified in such
         agreement or instrument, if the effect of such event or condition is to
         accelerate the maturity of such Debt; or any such Debt shall be
         declared due and payable, or be required to be prepaid or redeemed
         (other than by a regularly scheduled required prepayment or
         redemption), purchased or defeased, or an offer to prepay, redeem,
         purchase or defease such Debt shall be required to be made, in each
         case prior to the scheduled maturity thereof; or

                  (d) Guarantor or any Subsidiary of Guarantor which represents
         more than 25% of Guarantor's assets on a consolidated basis (each such
         Subsidiary, a "Significant Subsidiary") shall (1) apply for or consent
         to the appointment of, or the taking of possession by, a receiver,
         custodian, trustee or liquidator of itself or of all or a substantial
         part of its property, (2) make a general assignment for the benefit of
         its creditors, (3) commence a voluntary case under the U.S. Bankruptcy
         Code (as now or hereafter in effect) or any similar law of any
         applicable jurisdiction, (4) file a petition seeking to take advantage
         of any other law relating to bankruptcy, insolvency, reorganization,
         winding-up, or composition or readjustment of debts, or (5) fail to
         controvert in a timely and appropriate manner, or acquiesce in writing
         to, any petition filed against it in an involuntary case under the U.S.
         Bankruptcy Code or any similar law of any applicable jurisdiction; or a
         proceeding or case shall be commenced, without the application or
         consent of Guarantor or any Significant Subsidiary, in any court of
         competent jurisdiction, seeking (x) its liquidation, reorganization,
         dissolution or winding up, or the composition or readjustment of its
         debts, (y) the appointment of a trustee, receiver, custodian,
         liquidator or the like of Guarantor or the relevant Significant
         Subsidiary, as the case may be (as applicable), or of all or any
         substantial part of its assets, or (z) similar relief in respect of
         Guarantor or the relevant Significant Subsidiary (as the case may be)
         under any law relating to bankruptcy, insolvency, reorganization,
         winding-up, or composition or adjustment of debts, and such proceeding
         or case shall continue unstayed and in effect for a period of 90 or
         more days; or a court or governmental agency having jurisdiction in the
         premises shall enter a decree or order for relief in respect of
         Guarantor or any Significant Subsidiary in an involuntary case under
         any applicable bankruptcy, insolvency or other similar law now or
         hereafter in effect, or appoint a receiver, liquidator, assignee,
         custodian, trustee, sequestrator or similar official of Guarantor or
         any Significant Subsidiary or for any substantial part of its property
         or ordering the winding up or liquidation of its affairs, and such
         decree or order shall continue unstayed and in effect for a period of
         90 or more days; or Guarantor or any Significant Subsidiary shall admit
         in writing its inability to pay its debts generally as they become due
         or any action shall be taken by Guarantor or any Significant Subsidiary
         in furtherance of any of the aforesaid purposes; or

                  (e) There has been a Change of Control (as defined herein) in
         Guarantor. For purposes of this Guarantee, "Change of Control" shall
         mean the direct or indirect acquisition by any person (as such term is
         defined in Section 13(d) of the Securities Exchange Act of 1934, as
         amended) of beneficial ownership of more than 51% of the outstanding
         shares of the capital stock of Guarantor entitled to vote generally for
         the election of directors of Guarantor; or

                  (f) This Guarantee or the Southern Equity Agreement shall fail
         to be in full force and effect, or Guarantor so asserts in writing.

                  The occurrence of a Guarantor Event of Default will not result
         in the acceleration of any Advances but, instead, will result in: (A)
         with respect to those Projects which have not achieved Substantial
         Completion, acceleration of those Advances outstanding with respect to
         such Projects and Guarantor shall be obligated to pay (i) to the Agent
         for the account of the Lenders and on behalf of the Borrower, an amount
         equal to the principal amount of such Advances, together with interest
         related thereto, and (ii) all Commercial Paper with respect to such
         Projects and for which one or more CP Commitment Reservations are then
         outstanding, upon the maturity thereof, together with interest related
         thereto, and (B) with respect to those Projects which have achieved
         Substantial Completion but not Final Completion, an obligation on the
         part of the Borrower (and an obligation on the part of Guarantor to
         pay, on behalf of the Borrower) to (i) immediately prepay such amount
         of the Advances then outstanding and (ii) pay, on the maturity date
         thereof, all Commercial Paper for which one or more CP Commitment
         Reservations are then outstanding, with respect to such Projects, in
         each case, together with interested related thereto, as is equal, in
         the aggregate, to the applicable Buydown Amounts for such Projects;
         provided, that, failure to pay such amounts shall not cross-default any
         other Advances (although the default rate of interest under the Credit
         Agreement will be applicable thereto if any such Advances (or part
         thereof) are not paid in full when due).

         6. Enforcement. Guarantor hereby agrees that the Agent shall have the
right to directly enforce the provisions hereof which are binding upon Guarantor
against Guarantor and Guarantor hereby agrees to pay within 30 days of demand
all costs, including reasonable attorneys' fees, incurred with respect to the
enforcement of such provisions of this Guarantee against Guarantor.

         7. No Subrogation. Notwithstanding any payment or payments made or
caused to be made by Guarantor hereunder, Guarantor shall not be entitled to be
subrogated to any of the rights of the Lenders, nor shall Guarantor seek any
reimbursement or indemnification from the Borrower in respect of payments made
or caused to be made by Guarantor hereunder prior to the date when (a) all of
the Guaranteed Obligations and all other amounts payable under this Guarantee
shall have been paid in full in cash or by wire transfer of immediately
available funds; and (b) the Commitments shall have been terminated and all
Advances, interest thereon and all other amounts owing by the Borrower under the
Credit Agreement shall have been paid in full in cash or by wire transfer of
immediately available funds. If any amount shall be paid to Guarantor as a
result of such subrogation rights at any time prior to the date when (i) all of
the Guaranteed Obligations and all other amounts payable under this Guarantee
shall have been paid in full in cash or by wire transfer of immediately
available funds; and (ii) the Commitments shall have been terminated and all
Advances, interest thereon and all other amounts owing by the Borrower under the
Credit Agreement shall have been paid in full in cash or by wire transfer of
immediately available funds, such amount shall be held by Guarantor in trust for
the Lenders, segregated from other funds of Guarantor, and shall be turned over
to the Agent for the benefit of the Lenders, in the exact form received by
Guarantor (duly endorsed by Guarantor to the Agent for the benefit of itself and
the other Lenders, if required), to be applied against obligations of the
Borrower under the Credit Agreement in such order as the Agent acting pursuant
to the Credit Agreement may elect.

         8.       No Setoff.  Guarantor  shall not have the right to  withhold
  or offset  against  any payment due for any reason including, without
  limitation, any dispute between the Borrower and Guarantor.

         9.       Third Party  Beneficiaries.  The  agreements  of the parties
  hereto are  intended to benefit the Lenders and their respective permitted
  successors and assigns.

         10. Counterparts. This Guarantee may be executed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. Delivery of an
executed counterpart of this Guarantee by telecopier shall be effective as
delivery of an original executed counterpart of this Guarantee.

         11. Notices. Except as otherwise expressly provided herein, (a) all
notices and other communications provided for hereunder shall be provided in
writing and shall be sent by personal delivery, telecopy, overnight courier or,
if such courier service is not available, by certified mail with postage prepaid
to any party at the address set forth below its signature on this Guarantee, or
at such other address as shall be designated by a party in a written notice to
the other parties hereto and (b) all such notices and communications shall be
effective seven (7) days after being deposited in the mails in the manner as
aforesaid, when delivered if sent by personal delivery, one (1) day after
delivery to the courier if sent by overnight courier, or when sent by
telecopier, upon confirmation of receipt.

         12. Successors and Assigns. This Agreement shall inure to the benefit
of the parties hereto, the Agent and each of the Lenders, as third party
beneficiaries, and their successors and assigns permitted under the terms of the
Credit Agreement, and shall bind the heirs, executors, administrators, personal
representatives, successors and assigns of such Persons. Guarantor shall not
assign or otherwise transfer all or any of its obligations hereunder. Any
assignment by the Agent or the Lenders shall be in accordance with the terms and
conditions of Section 8.07 of the Credit Agreement.

         13. Amendments. This Guarantee or any provision hereof may not be
amended, canceled, modified, changed or waived by any party hereto without the
prior written consent of the Agent (acting upon the instructions of those
Lenders holding at least 75% of the outstanding Advances or, if none, 75% of the
Commitments; provided, that, no amendment, waiver or consent shall, unless in
writing and signed by the Agent with the consent of all of the Lenders (a)
reduce or limit the obligations of the Guarantor hereunder, release the
Guarantor hereunder or otherwise limit the Guarantor's liability with respect to
the Guaranteed Obligations; (b) postpone any date fixed for payment hereunder in
respect of Guaranteed Obligations; or (c) change the number of Lenders or the
percentage of the Commitments that, in each case, shall be required for the
Lenders or any of them to take any action hereunder; provided, further that the
Guarantor, the Borrower and the Agent may, from time to time, amend this
Guarantee by way of one or more Completion Guarantee Supplements in the form of
Exhibit A hereto. Any such amendment, cancellation, modification, change or
waiver must be by a written instrument signed by Guarantor, the Borrower and the
Agent.

         14.      Governing  Law.  This  Guarantee  is a  contract  made under
 the Laws of the State of New York of  the United  States and shall for all
 purposes be governed by and  construed  in  accordance with the Laws of such
State.

         15. Waiver of Jury Trial. Each of the Guarantor and the Lenders and the
Agent hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Guarantee or the actions of the Agent or any
Lender in the negotiation, administration, performance or enforcement thereof.

         16. No Waiver. No failure to exercise and no delay in exercise, on the
part of the Agent or any Lender, of any right, remedy, power or privilege
provided herein or by statute or at Law or in equity shall operate as a waiver
thereof; nor shall any single or partial exercise of any thereof preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The remedies herein provided are cumulative and not
exclusive of any remedies provided by Law.

<PAGE>

        IN WITNESS WHEREOF, Guarantor has executed this Completion Guarantee as
of the date first above written.

                        The Southern Company

                        By:____________________________________________
                        Name: Gale E. Klappa
                       Title:   Executive Vice President,
                                Chief Financial Officer and
                                Treasurer

                                            Address for Notices:
                                            270 Peachtree Street, N.W.
                                            Bin 931A / 20th Floor
                                            Atlanta, Georgia  30303
                                            Facsimile:  (404) 506-0708
                                            Attention:  Allen L. Leverett

Agreed and accepted:

Southern Power Company

By:
   -----------------------------------------
Name:    Allen L. Leverett
Title:   Treasurer

Address for Notices:
270 Peachtree Street, N.W.
Bin 931A / 20th Floor
Atlanta, Georgia  30303
Facsimile:  (404) 506-0708
Attention:  Allen L. Leverett

Citibank, N.A. (as Agent)

By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

Address for Notices:
2 Penns Way
Suite 200
New Castle, DE 19720
Facsimile: (302)-894-6120
Attention: Dave Graber

<PAGE>

                       Schedule I to Completion Guarantee
                                  Schedule 1 to
                              Completion Guarantee

                                List of Projects

Autaugaville 1 Project
Autaugaville 2 Project
Goat Rock 1 Project
Goat Rock 2 Project
Wansley Project

<PAGE>

                                               Exhibit A
                 Form of Completion Guarantee Supplement

Citibank, N.A.,
as Agent
under the Credit Agreement referred to below
2 Penns Way
Suite 200
New Castle, DE 19720
Attention: Dave Graber

[date]

Ladies and Gentlemen:

         Reference is made to (a) the Credit Agreement, dated as of [ ], 2001
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and among Southern Power Company (the "Borrower"), the
Lenders and the Co-Arrangers party thereto, Citibank, N.A., as administrative
agent for the Lenders (the "Agent"), and Salomon Smith Barney Inc., as lead
arranger and syndication agent; and (b) the Completion Guarantee, dated as of [
], 2001 (as amended, restated, supplemented or otherwise modified from time to
time, the " Completion Guarantee") between The Southern Company ("Southern"),
the Borrower and the Agent. Terms defined in the Completion Guarantee, including
by reference to the Credit Agreement, are used herein with the same meaning.

         Each of the Borrower and Southern hereby agrees in favor of the Agent
that, with effect on and from the date hereof, the following Subsequent Project
shall be a "Project" for all purposes under the Completion Guarantee:

                              [ Describe Project ],

and Schedule 1 to the Completion Guarantee shall be supplemented with Schedule I
to this Completion Guarantee Supplement.

         Southern hereby confirms that each of the representations and
warranties set forth in Section 4 of the Completion Guarantee are true and
correct in all material respects as of the date hereof and, if different from
the date hereof, as of the date of the first Utilization with respect to the
Project set forth in Schedule I to this Completion Guarantee Supplement, before
and after giving effect to such Utilization and to the application of the
proceeds therefrom (or, if such Utilization is a CP Commitment Reservation,
after giving effect to the application of the proceeds of the Commercial Paper
for which such CP Commitment Reservation was requested), as though made on and
as of such date (and each of the giving of this Completion Guarantee Supplement
and the acceptance by the Borrower of such proceeds shall constitute a
representation and warranty made herein, with respect to Section 4 of the
Completion Guarantee, by Southern to such effect).

         Southern hereby confirms, in favor of each of the Borrower and the
Agent that its obligations under the Completion Guarantee shall, on and from the
date hereof, extend in all respects, in accordance with the terms thereof, to
the Project set forth in Schedule I hereto.

         Except as expressly amended hereby, all of the provisions of the
Completion Guarantee shall continue to be, and shall remain, in full force and
effect in accordance with its terms.

         This Completion Guarantee Supplement shall be construed as
supplementing and forming part of the Completion Guarantee and shall be read
accordingly.

         This Completion Guarantee Supplement may be executed in any number of
counterparts and by different 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 but one and the same agreement. Delivery of an
executed counterpart of this Completion Guarantee Supplement by telecopier shall
be effective as delivery of an original executed counterpart of this Completion
Guarantee Supplement.

         This Completion Guarantee Supplement shall be governed by, and
construed in accordance with, the Laws of the State of New York.

                                                     THE SOUTHERN COMPANY

                                                     By:
                                                        ----------------------
                                      Name:
                                     Title:

                                                     SOUTHERN POWER COMPANY

                                                     By:
                                                        ----------------------
                                      Name:
                                     Title:

Accepted by:

CITIBANK, N.A., as Agent

By:
   ---------------------------------
Name:
Title:

<PAGE>

                       Schedule I to Completion Guarantee Supplement

                                                               Schedule I to
                                              Completion Guarantee Supplement

                               Subsequent Project

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