ALABAMA POWER CO (Form: 8-K, Received: 10/02/2002 09:39:45)

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 26, 2002

ALABAMA POWER COMPANY

(Exact name of registrant as specified in its charter)

    Alabama                          1-3164                     63-0004250
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(State or other jurisdiction     (Commission File  (IRS Employer Identification
        of incorporation)             Number)                 No.)


          600 North 18th Street, Birmingham, Alabama               35291
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           (Address of principal executive offices)                Zip Code)


Registrant's telephone number, including area code           (205) 257-1000
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                                                    N/A
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              (Former name or former address, if changed since last report.)

Item 5. Other Events. On September 26, 2002, Alabama Power Company (the "Company") and Alabama Power Capital Trust IV ("Trust IV") entered into an Underwriting Agreement covering the issue and sale by Trust IV of 100,000 Flexible Trust Preferred Securities (Five Year Initial Fixed Rate Period)(liquidation amount $1,000 per Preferred Security). Also on September 26, 2002, the Company and Alabama Power Capital Trust V ("Trust V", and together with Trust IV the "Trusts") entered into an Underwriting Agreement covering the issue and sale by Trust V of 200,000 Flexible Trust Preferred Securities (Seven Year Initial Fixed Rate Period)(liquidation amount $1,000 per Preferred Security). Said Preferred Securities were registered under the Securities Act of 1933, as amended, pursuant to the shelf registration statement (Registration Statement Nos. 333-72784, 333-72784-01 and 333-72784-02) of the Company and the Trusts.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

 1.5-A    Underwriting Agreement, dated September 26, 2002, among
          the Company, Trust IV, Lehman Brothers Inc., Jackson
          Securities,  LLC and Wachovia Securities Inc.

1.5-B     Underwriting Agreement, dated September 26, 2002, among
          the Company, Trust V, Lehman Brothers Inc., ABN AMRO
          Incorporated, Banc One Capital Markets, Inc., Mizuho
          International plc and Scotia Capital (USA) Inc.

 4.9-A    Third Supplemental Indenture, dated as of October
          2, 2002, to Subordinated Note Indenture, providing
          for the issuance of the Company's Series D Junior
          Subordinated Notes due October 1, 2042.

 4.9-B    Fourth Supplemental Indenture, dated as of October
          2, 2002, to Subordinated Note Indenture, providing
          for the issuance of the Company's Series E Junior
          Subordinated Notes due October 1, 2042.

 4.12-A   Amended and Restated Trust Agreement of Alabama Power
          Capital Trust IV.

 4.12-B   Amended and Restated Trust Agreement of Alabama Power
          Capital Trust V.

 4.13-A   Form of Preferred Security of Alabama Power
          Capital Trust IV (included in Exhibit 4.12-A
          above).

 4.13-B   Form of Preferred Security of Alabama Power
          Capital Trust V (included in Exhibit 4.12-B
          above).

 4.15-A   Form of Series D Junior Subordinated Note (included in
          Exhibit 4.9-A above).

 4.15-B   Form of Series E Junior Subordinated Note (included in
          Exhibit 4.9-B above).

 4.16-A   Guarantee Agreement relating to Alabama Power Capital
          Trust IV.

 4.16-B   Guarantee Agreement relating to Alabama Power Capital
          Trust V.

 4.17-A   Agreement as to Expenses and Liabilities relating
          to Alabama Power Capital Trust IV (included in
          Exhibit 4.12-A above).

 4.17-B   Agreement as to Expenses and Liabilities relating
          to Alabama Power Capital Trust V (included in
          Exhibit 4.12-B above).

 5.1-A    Opinion of Balch & Bingham LLP

 5.1-B    Opinion of Balch & Bingham LLP

 5.2-A    Opinion of Richards, Layton & Finger, P.A. relating to
          Alabama Power Capital Trust IV.

 5.2-B    Opinion of Richards, Layton & Finger, P.A. relating to
          Alabama Power Capital Trust V.

 8.1-A    Tax Opinion of Balch & Bingham LLP.

 8.1-B    Tax Opinion of Balch & Bingham LLP.

 12.1     Computation of ratio of earnings to fixed charges.

 12.2     Computation of ratio of earnings to fixed charges plus
          preferred dividend requirements (pre-income tax basis).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:     October 2, 2002             ALABAMA POWER COMPANY



                                      By   /s/Wayne Boston
                                          Assistant Secretary

Exhibit 1.5-A

Alabama Power Capital Trust IV
(a Delaware Statutory Trust)

Flexible Trust Preferred Securities
(Five Year Initial Fixed Rate Period)

(Liquidation Amount $1,000 Per Preferred Security)

UNDERWRITING AGREEMENT

September 26, 2002

Lehman Brothers Inc.
745 7th Avenue
New York, NY 10019

Ladies and Gentlemen:

Alabama Power Capital Trust IV (the "Trust"), a statutory trust organized under the Statutory Trust Act (the "Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (ss.) 3801 et seq.), and Alabama Power Company, an Alabama corporation (the "Company" and, together with the Trust, the "Offerors"), confirm their agreement (the "Agreement") with you and each of the other Underwriters named in Schedule I hereto (collectively, the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom you are acting as representative (in such capacity, you shall hereinafter be referred to as the "Representative"), with respect to the sale by the Trust and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of Flexible Trust Preferred Securities (Five Year Initial Fixed Rate Period) (Liquidation Amount $1,000 per Preferred Security) of the Trust ("Preferred Securities") set forth in Schedule I. The Preferred Securities will be guaranteed by the Company with respect to distributions and payments

upon liquidation, redemption and otherwise (the "Guarantee") pursuant to the Guarantee Agreement (the "Guarantee Agreement"), to be dated as of October 1, 2002, between the Company and JPMorgan Chase Bank, as trustee (the "Guarantee Trustee"). The Preferred Securities and the related Guarantee are referred to herein as the "Securities".

The Offerors understand that the Underwriters propose to make a public offering of the Preferred Securities as soon as the Representative deems advisable after this Agreement has been executed and delivered. The entire proceeds from the sale of the Securities will be combined with the entire proceeds from the sale by the Trust to the Company of its common securities (the "Common Securities") and will be used by the Trust to purchase $103,093,000 aggregate principal amount of Series D Junior Subordinated Notes (the "Junior Subordinated Notes") to be issued by the Company. The Preferred Securities and the Common Securities will be issued pursuant to an Amended and Restated Trust Agreement, to be dated as of October 1, 2002 (the "Trust Agreement"), among the Company, as Depositor, William E. Zales, Jr. and J. Randy DeRieux (the "Administrative Trustees"), Chase Manhattan Bank USA, National Association, a national banking association (the "Delaware Trustee"), and JPMorgan Chase Bank, a New York banking corporation (the "Property Trustee" and, together with the Delaware Trustee and the Administrative Trustees, the "Trustees") and the holders from time to time of undivided beneficial interests in the assets of the Trust. The Junior Subordinated Notes will be issued pursuant to an indenture, dated as of January 1, 1997 (the "Base Indenture"), between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee (the "Debt Trustee"), and a third supplemental indenture to the Base Indenture, to be dated as of October 2, 2002 (the "Supplemental Indenture" and, together with the Base Indenture and any other amendments or supplements thereto, the "Indenture"), between the Company and the Debt Trustee.

The Company and the Trust will enter into an Agreement as to Expenses and Liabilities to be dated as of October 1, 2002 (the "Agreement as to Expenses and Liabilities") pursuant to which the Company will guarantee on a subordinated basis to each person or entity to whom the Trust may be indebted or liable, the full payment of such obligations. The Company and the Trust will enter into a Remarketing Agreement dated as of October 2, 2002 with Lehman Brothers Inc. (the "Remarketing Agreement"), as remarketing agent (the "Remarketing Agent"), providing, among other things, that the Remarketing Agent will follow certain remarketing procedures relating to the Preferred Securities. The Company and the Trust will enter into a Calculation Agent Agreement , to be dated as of October 2, 2002 with JPMorgan Chase Bank (the "Calculation Agent Agreement"), as calculation agent (the "Calculation Agent") providing, among other things that the Calculation Agent will follow certain procedures relating to the Preferred Securities.

SECTION 1. REPRESENTATIONS AND WARRANTIES. The Offerors jointly and severally represent and warrant to each Underwriter as follows:

(a) A registration statement on Form S-3 (File Nos. 333-72784, 333-72784-01 and 333-72784-02), in respect of the Preferred Securities, the Guarantee, the Junior Subordinated Notes and certain other securities (the "Registered Securities") has been prepared and filed in accordance with the provisions of the Securities Act of 1933, as amended (the "1933 Act"), with the Securities and Exchange Commission (the "Commission"); such registration statement, and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to you, and to you for each of the other Underwriters, has been declared effective by the Commission in such form (except that copies of the registration statement, and any post-effective amendment delivered to you for each of the other Underwriters need not include exhibits but shall include all documents incorporated by reference therein); and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or, to the best knowledge of the Company, threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the 1933 Act, being hereinafter called a "Preliminary Prospectus"); such registration statement, as it became effective, including the exhibits thereto and all documents incorporated by reference therein pursuant to Item 12 of Form S-3 at the time such registration statement became effective, being hereinafter called the "Registration Statement"; the prospectus relating to the Registered Securities, in the form in which it was included in the Registration Statement at the time it became effective, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; the Prospectus as supplemented by a preliminary prospectus supplement dated September 25, 2002 relating to the Preferred Securities, the Guarantee and the Junior Subordinated Notes, including any documents incorporated by reference therein as of such date, being hereinafter called the "Preliminary Supplemented Prospectus"; and the Prospectus as amended or supplemented in final form by a prospectus supplement relating to the Preferred Securities, the Guarantee and the Junior Subordinated Notes, in the form in which it is filed with the Commission, pursuant to Rule 424(b) under the 1933 Act in accordance with Section 3(f) hereof, including any documents incorporated by reference therein as of the date of such filing, being hereinafter called the "Final Supplemented Prospectus".

(b) The documents incorporated by reference in the Registration Statement or Prospectus, when they were filed with the Commission complied in all material respects with the applicable provisions of the 1934 Act and the rules and regulations of the Commission thereunder, and as of such time of filing, when read together with the Prospectus, none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents are filed with the Commission, will comply in all material respects with the applicable provisions of the 1934 Act and the rules and regulations of the Commission thereunder and, when read together with the Prospectus as it otherwise may be amended or supplemented, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that neither the Trust nor the Company makes any warranty or representation to any Underwriter with respect to: (A) any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Trust or the Company by an Underwriter through you expressly for use in the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus; or (B) any information set forth in the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus under the caption "Description of the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust Company".

(c) The Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the applicable provisions of the 1933 Act and the rules and regulations of the Commission thereunder and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d) The Registration Statement, the Prospectus and, to the extent not used to confirm sales of the Securities, the Preliminary Supplemented Prospectus, comply, and the Final Supplemented Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus, when any such post-effective amendments are declared effective or supplements are filed with the Commission, as the case may be, will comply, in all material respects with the applicable provisions of the 1933 Act, the 1934 Act, the Trust Indenture Act of 1939, as amended (the "1939 Act"), and the General Rules and Regulations of the Commission thereunder and do not and will not, (i) as of the applicable effective date as to the Registration Statement and any amendment thereto, (ii) as of the filing date thereof as to the Preliminary Supplemented Prospectus, and
(iii) as of the applicable filing date as to the Final Supplemented Prospectus and any Prospectus as further amended or supplemented, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the

circumstances under which they were made, not misleading; except that neither the Company nor the Trust makes any warranties or representations with respect to (A) that part of the Registration Statement which shall constitute the Statements of Eligibility (Form T-1) (collectively, the "Form T-1") under the 1939 Act, (B) statements or omissions made in the Registration Statement, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus in reliance upon and in conformity with information furnished in writing to the Trust or the Company by an Underwriter expressly for use therein or (C) any information set forth in the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus under the caption "Description of the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust Company".

(e) With respect to the Registration Statement, the conditions for use of Form S-3, as set forth in the General Instructions thereof, have been satisfied.

(f) Since the respective dates as of which information is given in the Registration Statement and the Final Supplemented Prospectus, except as otherwise stated therein, there has been no material adverse change in the business, properties or financial condition of the Company.

(g) Since the respective dates as of which information is given in the Registration Statement and the Final Supplemented Prospectus, except as otherwise stated therein, there has not been any material adverse change or, to the best of the Company's knowledge, any development involving a prospective material adverse change in or affecting the business, properties or financial condition of the Trust (it being understood that any such change involving only the Company shall not constitute such a change with respect to the Trust).

(h) The Company is a corporation duly organized and existing under the laws of the State of Alabama, and has due corporate authority to carry on the public utility business in which it is engaged and to own and operate the properties used by it in such business, to enter into and perform its obligations under this Agreement, the Trust Agreement, the Indenture and the Guarantee Agreement and to purchase, own, and hold the Common Securities issued by the Trust and to issue and deliver the Junior Subordinated Notes and the Guarantee.

(i) The Trust has been duly created and is validly existing and in good standing as a statutory trust under the Delaware Act with the power and authority to own property and to conduct its business as described in the Registration Statement and Final Supplemented Prospectus and to enter into and perform its obligations under this Agreement and the Trust Agreement; the Trust is duly qualified to transact business as a foreign company and is in good standing in any other jurisdiction in which such qualification is necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Trust; the Trust is not a party to or otherwise bound by any agreement other than those described in the Final Supplemented Prospectus; the Trust is and will be classified for United States federal income tax purposes as a grantor trust and not as an association taxable as a corporation; and the Trust is and will be treated as a consolidated subsidiary of the Company pursuant to generally accepted accounting principles.

(j) The Common Securities have been duly authorized by the Trust Agreement and, when issued and delivered by the Trust to the Company against payment therefor as described in the Registration Statement and Final Supplemented Prospectus, will be validly issued and (subject to the terms of the Trust Agreement) fully paid and non-assessable undivided beneficial interests in the Trust and will conform in all material respects to all statements relating thereto contained in the Final Supplemented Prospectus; the issuance of the Common Securities is not subject to preemptive or other similar rights; and, on the Closing Date (as defined herein), all of the issued and outstanding Common Securities of the Trust will be directly owned by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equitable right.

(k) This Agreement has been duly authorized, executed and delivered by each of the Offerors.

(l) The Trust Agreement has been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered by the Company and the Administrative Trustees, and assuming due authorization, execution and delivery of the Trust Agreement by the Delaware Trustee and the Property Trustee, the Trust Agreement will, on the Closing Date, be a valid and binding obligation of the Company and the Administrative Trustees, enforceable against the Company and the Administrative Trustees in accordance with its terms, except to the extent that enforcement thereof may be limited by (1) bankruptcy, insolvency, reorganization, receivership, liquidation, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights generally or (2) general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity) (the "Enforceability Exceptions") and will conform in all material respects to all statements relating thereto in the Final Supplemented Prospectus; and, on the Closing Date, the Trust Agreement will have been duly qualified under the 1939 Act.

(m) The Guarantee Agreement, the Remarketing Agreement, the Calculation Agent Agreement and the Agreement as to Expenses and Liabilities have been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered by the Company, and, assuming due authorization, execution and delivery of the Guarantee Agreement, the Remarketing Agreement, the Calculation Agent Agreement and the Agreement as to Expenses and Liabilities by the other respective parties thereto, the Guarantee Agreement, Remarketing Agreement, the Calculation Agent Agreement and the Agreement as to Expenses and Liabilities will, on the Closing Date, constitute a valid and binding

obligation of the Company, enforceable against the Company in accordance with their respective terms except to the extent that enforcement thereof may be limited by the Enforceability Exceptions, and each of the Guarantee, the Guarantee Agreement, Remarketing Agreement, the Calculation Agent Agreement and the Agreement as to Expenses and Liabilities will conform in all material respects to all statements relating thereto contained in the Final Supplemented Prospectus; and, on the Closing Date, the Guarantee Agreement will have been duly qualified under the 1939 Act.

(n) The Preferred Securities have been duly authorized by the Trust Agreement and, when issued and delivered by the Trust pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and (subject to the terms of the Trust Agreement) fully paid and non-assessable undivided beneficial interests in the assets of the Trust, will be entitled to the benefits of the Trust Agreement and will conform in all material respects to all statements relating thereto contained in the Final Supplemented Prospectus; the issuance of the Preferred Securities is not subject to preemptive or other similar rights; (subject to the terms of the Trust Agreement) holders of Preferred Securities will be entitled to the same limitation of personal liability under Delaware law as extended to stockholders of private corporations for profit.

(o) The Indenture has been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered by the Company, and, assuming due authorization, execution and delivery of the Indenture by the Debt Trustee, the Indenture will, on the Closing Date, constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms except to the extent that enforcement thereof may be limited by the Enforceability Exceptions; the Indenture will conform in all material respects to all statements relating thereto contained in the Final Supplemented Prospectus; and, on the Closing Date, the Indenture will have been duly qualified under the 1939 Act.

(p) The issuance and delivery of the Junior Subordinated Notes have been duly authorized by the Company and, on the Closing Date, the Junior Subordinated Notes will have been duly executed by the Company and, when authenticated in the manner provided for in the Indenture and delivered against payment therefor as described in the Final Supplemented Prospectus, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by the Enforceability Exceptions, will be in the form contemplated by, and entitled to the benefits of, the Indenture and will conform in all material respects to all statements relating thereto in the Final Supplemented Prospectus.

(q) The Company's obligations under the Guarantee (i) are subordinate and junior in right of payment to all liabilities of the Company, except those obligations or liabilities made pari passu or subordinate by their terms, (ii) are pari passu with the preferred stock issued by the

Company and (iii) are senior to all common stock of the Company.

(r) The Junior Subordinated Notes are subordinated and junior in right of payment to all "Senior Indebtedness" (as defined in the Indenture) of the Company.

(s) Each of the Administrative Trustees of the Trust is an employee of the Company and has been duly authorized by the Company to execute and deliver the Trust Agreement.

(t) Neither the Trust nor the Company nor any of the Company's other subsidiaries is nor, after giving effect to the offering and sale of the Preferred Securities, will be an "investment company" or an entity "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").

(u) The execution, delivery and performance by the Offerors of this Agreement, the Remarketing Agreement, the Calculation Agent Agreement, the Preferred Securities and the Common Securities, by the Company of the Indenture, the Junior Subordinated Notes, the Guarantee Agreement, the Trust Agreement, the Guarantee and the Agreement as to Expenses and Liabilities and the consummation by the Offerors of the transactions contemplated herein and therein and compliance by the Offerors with their respective obligations hereunder and thereunder shall have been duly authorized by all necessary action (corporate or otherwise) on the part of the Offerors and do not and will not result in any violation of the charter or bylaws of the Company, or the Trust Agreement or related Certificate of Trust and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Trust or the Company under (A) any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Trust or the Company is a party or by which either of them may be bound or to which any of their properties may be subject (except for conflicts, breaches or defaults which would not, individually or in the aggregate, be materially adverse to the Trust or the Company or materially adverse to the transactions contemplated by this Agreement), or (B) any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, or any regulatory body or administrative agency or other governmental body having jurisdiction over the Trust or the Company, or any of their respective properties.

(v) No authorization, approval, consent or order of any court or governmental authority or agency is necessary in connection with the issuance and sale of the Common Securities or the offering of the Preferred Securities, the Junior Subordinated Notes or the Guarantee or the transactions contemplated in this Agreement, except (A) such as may be required under the 1933 Act or the rules and regulations

thereunder; (B) such as may be required under the Public Utility Holding Company Act of 1935, as amended; (C) the qualification of the Trust Agreement, the Guarantee Agreement and the Indenture under the 1939 Act; (D) the approval of the Alabama Public Service Commission (the "Alabama Commission"); and (E) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or "blue sky" laws.

(w) The financial statements incorporated by reference in the Registration Statement, the Preliminary Supplemented Prospectus and the Final Supplemented Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial position, results of operations and cash flows of the Company as of and for the dates indicated; said financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP") applied on a consistent basis (except that the unaudited financial statements may be subject to normal year-end adjustments) throughout the periods involved and necessarily include amounts that are based on the best estimates and judgments of management. The selected financial data and the summary financial information included in the Registration Statement, the Preliminary Supplemented Prospectus and the Final Supplemented Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited and unaudited financial statements incorporated by reference in the Registration Statement.

SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.

(a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Trust agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Trust, at the price per security set forth in Schedule II hereto, the number of Preferred Securities set forth in Schedule I opposite the name of such Underwriter, plus any additional number of Preferred Securities that such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof.

The purchase price per security to be paid by the several Underwriters for the Preferred Securities shall be an amount equal to the initial public offering price set forth on Schedule II, which is a fixed price determined by agreement between the Representative and the Offerors. As compensation to the Underwriters for their commitments hereunder and in view of the fact that the proceeds of the sale of the Preferred Securities will be used to purchase the Junior Subordinated Notes of the Company, the Company hereby agrees to pay on the Closing Date (as defined below) to the Representative, for the accounts of the several Underwriters, a commission per Preferred Security as set forth on Schedule II for the Preferred Securities to be delivered by the Trust hereunder on the Closing Date.

(b) Payment of the purchase price for, and delivery of certificates for, the Preferred Securities shall be made at the offices of Balch & Bingham LLP, 1901

Sixth Avenue North, Birmingham, Alabama at 10:00 A.M., Eastern Standard Time, on October 2, 2002 (unless postponed in accordance with the provisions of Section 10) or such other time, place or date as shall be agreed upon by the Representative, the Trust and the Company (such time and date of payment and delivery being herein called the "Closing Date"). Payment shall be made to the Trust by wire transfer in federal funds at the Closing Date, against delivery to the Representative for the respective accounts of the Underwriters of certificates for the Preferred Securities to be purchased by them. Certificates for the Preferred Securities shall be in such denominations and registered in such names as the Representative may request in writing at least two business days before the Closing Date. It is understood that each Underwriter has authorized the Representative, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Preferred Securities which it has agreed to purchase. The Representative, individually and not as Representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Preferred Securities to be purchased by any Underwriter whose payment has not been received by the Closing Date, but such payment shall not relieve such Underwriter from its obligations hereunder.

The certificate(s) for the Preferred Securities will be made available for examination and packaging by the Representative not later than 12:00 Noon, New York time, on the last business day prior to the Closing Date.

On the Closing Date, the Company will pay, or cause to be paid, the commission payable at such time to the Underwriters under Section 2(a) hereof by wire transfer payable to the Representative in federal funds.

SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors jointly and severally covenants with each Underwriter as follows:

(a) The Offerors, on or prior to the Closing Date, will deliver to the Underwriters conformed copies of the Registration Statement as originally filed and of all amendments thereto, heretofore or hereafter made, including any post-effective amendment (in each case including all exhibits filed therewith, and including unsigned copies of each consent and certificate included therein or filed as an exhibit thereto, except exhibits incorporated by reference, unless specifically requested). As soon as the Company is advised thereof, it will advise the Representative orally of the issuance of any stop order under the 1933 Act with respect to the Registration Statement, or the institution of any proceedings therefor, of which the Company shall have received notice, and will use its best efforts to prevent the issuance of any such stop order and to secure the prompt removal thereof, if issued. The Offerors will deliver to the Underwriters sufficient conformed copies of the Registration Statement, the Prospectus, the Preliminary Supplemented Prospectus and the Final Supplemented Prospectus and of all supplements and amendments thereto (in each case without exhibits) for distribution to each Underwriter and, from time to time, as many copies of the Prospectus, the Preliminary Supplemented Prospectus and the Final Supplemented Prospectus as the Underwriters may reasonably request for the purposes contemplated by the 1933 Act or the 1934 Act.

(b) The Offerors will furnish the Underwriters with copies of each amendment and supplement to the Preliminary Supplemented Prospectus and Final Supplemented Prospectus relating to the offering of the Preferred Securities in such quantities as the Underwriters may from time to time reasonably request. If, during the period (not exceeding nine months) when the delivery of a prospectus shall be required by law in connection with the sale of any Preferred Securities by an Underwriter or dealer, any event relating to or affecting the Company, or of which the Company shall be advised in writing by the Underwriters, shall occur, which in the opinion of the Company or of Underwriters' counsel should be set forth in a supplement to or an amendment of the Preliminary Supplemented Prospectus or Final Supplemented Prospectus, as the case may be, in order to make the Preliminary Supplemented Prospectus or Final Supplemented Prospectus not misleading in the light of the circumstances when it is delivered, or if for any other reason it shall be necessary during such period to amend or supplement the Preliminary Supplemented Prospectus or Final Supplemented Prospectus or to file under the 1934 Act any document incorporated by reference in the Preliminary Prospectus or Prospectus in order to comply with the 1933 Act or the 1934 Act, the Company forthwith will (i) notify the Underwriters to suspend solicitation of purchases of the Preferred Securities and (ii) at its expense, make any such filing or prepare and furnish to the Underwriters a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Preliminary Supplemented Prospectus or Final Supplemented Prospectus which will supplement or amend the Preliminary Supplemented Prospectus or Final Supplemented Prospectus so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Preliminary Supplemented Prospectus or Final Supplemented Prospectus is delivered, not misleading or which will effect any other necessary compliance. In case any Underwriter is required to deliver a prospectus in connection with the sale of any Preferred Securities after the expiration of the period specified in the preceding sentence, the Company, upon the request of such Underwriter, will furnish to such Underwriter, at the expense of such Underwriter, a reasonable quantity of a supplemented or amended prospectus, or supplements or amendments to the Final Supplemented Prospectus, complying with Section 10(a) of the 1933 Act. During the period specified in the second sentence of this subsection, the Company will continue to prepare and file with the Commission on a timely basis all documents or amendments required under the 1934 Act and the rules and regulations thereunder; provided, that the Company shall not file such documents or amendments without also furnishing copies thereof prior to such filing to the Representative and Dewey Ballantine LLP.

(c) The Offerors will endeavor, in cooperation with the Underwriters, to qualify the Preferred Securities and, to the extent required or advisable, the Guarantee and the Junior Subordinated Notes, for offering and sale under the applicable securities laws of such states and the other jurisdictions of the United States as the Representative may designate; provided, however, that neither of the Offerors shall be obligated to

qualify as a foreign corporation in any jurisdiction in which it is not so qualified or to file a consent to service of process or to file annual reports or to comply with any other requirements in connection with such qualification deemed by the Company to be unduly burdensome.

(d) The Company will make generally available to its security holders as soon as practicable but not later than 45 days after the close of the period covered thereby, an earning statement of the Company (in form complying with the provisions of Rule 158 of the rules and regulations under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in Rule 158) of the Registration Statement.

(e) As soon as practicable after the date of this Agreement, and in any event within the time prescribed by Rule 424 under the 1933 Act, to file the Final Supplemented Prospectus with the Commission and to advise the Representative of such filing and to confirm such advice in writing.

SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses incident to the performance of each Offeror's obligations under this Agreement, including but not limited to, the expenses of (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, (ii) the preparation, issuance and delivery of the certificate(s) for the Preferred Securities to the Underwriters, (iii) the fees and disbursements of the Company's and the Trust's counsel and accountants, (iv) the qualification of the Preferred Securities and, to the extent required or advisable, the Guarantee and the Junior Subordinated Notes, under securities laws in accordance with the provisions of Section 3(c) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of any blue sky survey (such fees and disbursements of counsel shall not exceed $3,500), (v) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed and of each amendment thereto and of the Prospectus, the Preliminary Supplemented Prospectus, the Final Supplemented Prospectus, and any amendments or supplements thereto, (vi) the printing and delivery to the Underwriters of copies of any blue sky survey, (vii) the fee of the National Association of Securities Dealers, Inc. in connection with its review of the offering contemplated by this Agreement, if applicable, (viii) the fees and expenses of the Debt Trustee, including the fees and disbursements of counsel for the Debt Trustee in connection with the Indenture and the Junior Subordinated Notes, (ix) the fees and expenses of the Delaware Trustee, the Property Trustee and the Guarantee Trustee, including the fees and disbursements of counsel for the Delaware Trustee in connection with the Trust Agreement and the related Certificate of Trust, (x) the fees and disbursements of Delaware counsel to the Trust, (xi) any fees payable in connection with the rating of the Preferred Securities and Junior Subordinated Notes, (xii) the cost and charges of any transfer agent or registrar, (xiii) the fees and expenses incurred in connection with the listing, if applicable, of the Preferred Securities and the Junior Subordinated Notes on the New York Stock Exchange and (xv) the cost of qualifying the Preferred Securities with The Depository Trust Company.

Except as otherwise provided in Section 9 hereof, the Underwriters shall pay all other expenses incurred by them in connection with their offering of the Preferred Securities, including fees and disbursements of their counsel, Dewey Ballantine LLP.

SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters to purchase and pay for the Preferred Securities are subject to the following conditions:

(a) No stop order suspending the effectiveness of the Registration Statement shall be in effect on the Closing Date and no proceedings for that purpose shall be pending before, or to the knowledge of the Company threatened by, the Commission on such date. If filing of the Preliminary Supplemented Prospectus or Final Supplemented Prospectus, or any supplement thereto, is required pursuant to Rule 424, the Preliminary Supplemented Prospectus or Final Supplemented Prospectus, and any such supplement, shall have been filed in the manner and within the time period required by Rule 424.

(b) Orders of the Alabama Commission and the Commission permitting the transactions contemplated hereby substantially in accordance with the terms and conditions hereof shall be in full force and effect and shall contain no provision unacceptable to the Underwriters or the Company (but all provisions of such order or orders heretofore entered, copies of which have heretofore been delivered to the Representative, are deemed acceptable to the Underwriters and the Company and all provisions of such order or orders hereafter entered shall be deemed acceptable to the Underwriters and the Company unless within 24 hours after receiving a copy of any such order any party to this Agreement shall give notice to the other parties to the effect that such order contains an unacceptable provision).

(1) The opinion, dated the Closing Date, of Balch & Bingham LLP, general counsel for the Company, substantially in the form attached hereto as Schedule III-A.

(2) The opinion, dated the Closing Date, of Troutman Sanders LLP, counsel for the Company, substantially in the form attached hereto as Schedule III-B.

(3) The opinion, dated the Closing Date, of Richards, Layton & Finger, P.A., Delaware counsel to the Trust, substantially in the form attached hereto as Schedule IV.

(4) The opinion, dated the Closing Date, of Richards, Layton & Finger, P.A., Delaware counsel to the Delaware Trustee, substantially in the form attached hereto as Schedule V.

         (5) The opinion,  dated the Closing  Date, of Cravath, Swaine &
Moore,  counsel to the Property Trustee,  the Guarantee Trustee,  the
Debt  Trustee and the  Calculation  Agent, substantially in the form

attached hereto as Schedule VI.

(6) The favorable opinion, dated as of the Closing Date, of Dewey Ballantine LLP, counsel for the Underwriters, substantially in the form attached hereto as Schedule VII.

(7) At the Closing Date, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement and the Final Supplemented Prospectus, any material adverse change in the business, properties or financial condition of the Trust or the Company, whether or not arising in the ordinary course of business, and the Representative shall have received a certificate of the President or any Vice President of the Company and a certificate of the Administrative Trustees of the Trust, and dated as of the Closing Date, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Date, (iii) the Trust and the Company have complied with all agreements and satisfied all conditions on their respective parts to be performed or satisfied on or prior to the Closing Date, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the knowledge of the Company, threatened by the Commission.

(8) A letter dated the Closing Date from Deloitte & Touche LLP to the effect that: (A) they are independent public accountants with respect to the Company within the meaning of the 1933 Act and the applicable rules and regulations thereunder adopted by the Commission, (B) on the basis of certain limited procedures performed through a specified date not more than five business days prior to the date of such letter, namely (i) reading the minute books of the Company; (ii) performing the procedures specified by the American Institute of Certified Public Accountants ("AICPA") for a review of interim financial information as described in Statement on Auditing Standards No. 71, "Interim Financial Information", on the unaudited financial statements, if any, of the Company incorporated in the Prospectus and of the latest available unaudited financial statements of the Company, if any, for any calendar quarter subsequent to the date of those incorporated in the Prospectus; and (iii) making inquiries of certain officials of the Company who have responsibility for financial and accounting matters regarding such unaudited financial statements or any specified unaudited amounts derived therefrom (it being understood that the foregoing procedures do not constitute an audit performed in accordance with generally accepted auditing standards and they would not necessarily reveal matters of significance with respect to the comments made in such letter, and accordingly that Deloitte & Touche LLP make no representations as to the sufficiency of such procedures for the Underwriters' purposes),

nothing came to their attention that caused them to believe that: (1) any material modifications should be made to the unaudited condensed financial statements, if any, incorporated in the Final Supplemented Prospectus, for them to be in conformity with generally accepted accounting principles; (2) such unaudited condensed financial statements do not comply as to form in all material respects with the applicable accounting requirements of the 1934 Act as it applies to Form 10-Q and the related published rules and regulations thereunder; (3) the unaudited amounts for Operating Revenues, Earnings Before Interest and Income Taxes and Net Income After Dividends on Preferred Stock and the unaudited Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis) set forth in the Final Supplemented Prospectus do not agree with the amounts set forth in or derived from the unaudited financial statements for the same period; (4) as of a specified date not more than five business days prior to the date of delivery of such letter, there has been any change in the capital stock or long-term debt of the Company or any decrease in net assets as compared with amounts shown in the latest audited balance sheet incorporated in the Prospectus, except in each case for changes or decreases which (i) the Prospectus discloses have occurred or may occur, (ii) are occasioned by the declaration of dividends, (iii) are occasioned by draw-downs under existing pollution control financing arrangements, (iv) are occasioned by draw-downs and regularly scheduled payments of capitalized lease obligations, (v) are occasioned by the purchase or redemption of bonds or stock to satisfy mandatory or optional redemption provisions relating thereto, (vi) are occasioned by the reclassification of current maturities of long-term debt or (vii) are disclosed in such letter; and (5) the unaudited amounts for Operating Revenues, Earnings Before Interest and Income Taxes and Net Income After Dividends on Preferred Stock and the unaudited Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis) for any calendar quarter subsequent to those set forth in (3) above, which if available shall be set forth in such letter, do not agree with the amounts set forth in or derived from the unaudited financial statements for the same period or were not determined on a basis substantially consistent with that of the corresponding audited amounts or ratios included or incorporated by reference in the Prospectus.

(9) On the Closing Date, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Preferred Securities as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Offerors, in connection with the issuance and sale of the Preferred Securities as herein contemplated shall be satisfactory in form and substance to the Representative and Dewey Ballantine LLP, counsel for the Underwriters.

(10) On the Closing Date, the Representative shall have received a certificate of the Company certifying that a Special Event (as defined in the Final Supplemented Prospectus) shall not have occurred and be continuing.

(11) That no amendment or supplement to the Registration Statement, the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus filed subsequent to the date of this Agreement (including any filing made by the Company pursuant to Section 13 or 14 of the 1934 Act) shall be unsatisfactory in form to Dewey Ballantine LLP or shall contain information (other than with respect to an amendment or supplement relating solely to the activity of any Underwriter or Underwriters) which, in the reasonable judgment of the Representative, shall materially impair the marketability of the Preferred Securities.

(12) The Company and the Trust shall have performed their respective obligations when and as provided under this Agreement.

If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representative by notice to the Offerors at any time prior to the Closing Date, and such termination shall be without liability of any party to any other party except as provided in Sections 4, 7 and 9(b) hereof.

SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE OFFERORS.

The obligations of the Offerors shall be subject to the conditions set forth in the first sentence of Section 5(a) and in Section 5(b). In case such conditions shall not have been fulfilled, this Agreement may be terminated by the Company by mailing or delivering written notice thereof to the Underwriters. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 4, 7 and 9(b) hereof.

SECTION 7. INDEMNIFICATION.

incorporated therein by reference, in any Preliminary Prospectus, the Registration Statement, the Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus as so amended or supplemented, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any such untrue statement or alleged untrue statement or omission or alleged omission which was made in such Registration Statement, Preliminary Prospectus, Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representative on behalf of, any Underwriter for use therein and except that this indemnity with respect to the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus, if the Offerors shall have furnished any amendment or supplement thereto, shall not inure to the benefit of any Underwriter (or of any person controlling such Underwriter) on account of any losses, claims, damages, liabilities or actions arising from the sale of the Preferred Securities to any person if a copy of the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus (exclusive of documents incorporated therein by reference pursuant to Item 12 of Form S-3), as the same may then be amended or supplemented, shall not have been sent or given by or on behalf of such Underwriter to such person with or prior to the written confirmation of the sale involved and the untrue statement or alleged untrue statement or omission or alleged omission was corrected in the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus as supplemented or amended at the time of such confirmation. Each Underwriter agrees, within ten days after the receipt by it of notice of the commencement of any action in respect of which indemnity may be sought by it, or by any person controlling it, from the Offerors on account of its agreement contained in this Section 7, to notify the Offerors in writing of the commencement thereof but the omission of such Underwriter so to notify the Offerors of any such action shall not release the Offerors from any liability which it may have to such Underwriter or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 7. In case any such action shall be brought against the Underwriters or any such person controlling such Underwriters and such Underwriter shall notify the Offerors of the commencement thereof as above provided, the Offerors shall be entitled to participate in (and, to the extent that they shall wish, including the selection of counsel, to direct) the defense thereof, at their own expense. In case the Offerors elect to direct such defense and select such counsel, any Underwriter or controlling person shall have the right to employ its own counsel, but, in any such case, the fees and expenses of such counsel shall be at the expense of such Underwriter or controlling person unless the employment of such counsel has been authorized in writing by the Offerors in connection with defending such action. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include any statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. In no event shall any indemnifying party have any liability or responsibility in respect of the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim effected without its prior written consent.

(b) The Company agrees to indemnify the Trust against all loss, liability, claim, damage and expense whatsoever, as due from the Trust under Section 7(a) hereunder.

(c) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors and such of its officers who have signed the Registration Statement, the Trust and each other Underwriter and each person, if any, who controls the Offerors or any such other Underwriter within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act to the same extent and upon the same terms as the indemnity agreement of the Offerors set forth in Section 7(a) hereof, but only with respect to alleged untrue statements or omissions made in the Registration Statement, the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus, or such documents as amended or supplemented, in reliance upon and in conformity with information furnished in writing to the Offerors by, or through the Representative on behalf of, such Underwriter for use therein.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.

All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers or Trustees of the Offerors submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by, or on behalf of the Offerors and shall survive delivery of the Preferred Securities to the Underwriters.

SECTION 9. TERMINATION OF AGREEMENT.

(a) The Representative may terminate this Agreement, by notice to the Offerors, at any time at or prior to the Closing Date if (i) trading in securities on the New York Stock Exchange shall have been generally suspended, or there shall have been a material disruption in settlement of securities generally (ii) minimum or maximum ranges for prices shall have been generally established on the New York Stock Exchange by the Commission or by the New York Stock Exchange, (iii) a general banking moratorium shall have been declared by federal or New York State authorities, (iv) there shall have occurred any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by the United States Congress or any other substantial national or international calamity, crisis or emergency (including without limitation, acts of terrorism) affecting the United States, in any such case provided for in clauses (i) through (iv) with the result that, in the reasonable judgment of the Representative, the marketability of the Preferred Securities shall have been materially impaired.

(b) If this Agreement shall be terminated by the Underwriters pursuant to subsection (a) above or because of any failure or refusal on the part of the Offerors to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Offerors shall be unable to perform their obligations under this Agreement, then in any such case, the Company will reimburse the Underwriters, severally, for the reasonable fees and disbursements of Dewey Ballantine LLP and for the out of pocket expenses (in an amount not exceeding $10,000) reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Preferred Securities and, upon such reimbursement, the Offerors shall be absolved from any further liability hereunder, except as provided in Sections 4 and 7.

SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of the Underwriters shall fail on the Closing Date to purchase the Preferred Securities that it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Representative shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative shall not have completed such arrangements within such 24-hour period, then:

(a) if the number of Defaulted Securities does not exceed 10% of the Preferred Securities, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

(b) if the number of Defaulted Securities exceeds 10% of the Preferred Securities, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of this Agreement, either the Representative or the Offerors shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Final Supplemented Prospectus or in any other documents or arrangements.

SECTION 11. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representative at 745 7th Avenue, New York, New York 10019, Attention: Debt Capital Markets Power Group; notices to the Offerors shall be directed to the Company at 600 North 18th Street, Birmingham, Alabama 35291, Attention: Corporate Secretary.

SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Trust, the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Trust and the Company and their respective successors and the controlling persons and officers, directors and trustees referred to in
Section 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Trust and the Company and their respective successors, and said controlling persons and officers, directors and trustees and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Preferred Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. Except as otherwise set forth herein, specified times of day refer to New York City time.

SECTION 14. COUNTERPARTS. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Trust and the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Trust and the Company in accordance with its terms.

Very truly yours,

ALABAMA POWER COMPANY

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

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

ALABAMA POWER CAPITAL TRUST IV

By: Alabama Power Company, as Depositor

Name:
Title:

CONFIRMED AND ACCEPTED,
as of the date first above written

LEHMAN BROTHERS INC.

By:

Authorized Signatory

For itself and as Representative of the other Underwriters named in Schedule I hereto.

                                   SCHEDULE I

NAME OF UNDERWRITER                             NUMBER OF PREFERRED SECURITIES
-------------------                             ------------------------------
Lehman Brothers Inc.                                        80,000

Jackson Securities, LLC                                     10,000

Wachovia Securities Inc.                                    10,000

                                                            ------
TOTAL                                                      100,000
                                                           =======

SCHEDULE II

Initial public offering price per
Preferred Security (and purchase
price per security to be paid by
the several Underwriters): $994.95

Compensation per Preferred Security
to be paid by the Company to the
several Underwriters in respect of
their commitments: $10.00 per
Preferred Security

Schedule III-A

[Letterhead of BALCH & BINGHAM LLP]

___________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

ALABAMA POWER CAPITAL TRUST IV
FLEXIBLE TRUST PREFERRED SECURITIES
(Five Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as general counsel to Alabama Power Company (the "Company") in connection with (i) its formation of Alabama Power Capital Trust IV (the "Trust"), a Delaware statutory trust, pursuant to the Amended and Restated Trust Agreement dated as of __________ __, 200_ among the Company and the trustees named therein (the "Trust Agreement"); (ii) the Trust's issuance and sale of Flexible Trust Preferred Securities evidencing approximately a 97% undivided interest in the assets of the Trust (the "Preferred Securities");
(iii) the Trust's issuance and sale of Common Securities evidencing approximately a 3% undivided interest in the assets of the Trust; (iv) the Company's issuance and sale to the Trust of approximately $103,093,000 of its Series D Junior Subordinated Notes (the "Notes") due October 1, 2042 pursuant to a Subordinated Note Indenture dated as of ________, by and between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as

trustee, as supplemented by the Third Supplemental Indenture dated as of October _, 2002 (collectively, the "Indenture"); and (v) the Agreement as to Expenses and Liabilities dated as of October 1, 2002, between the Company and the Trust (the "Agreement as to Expenses and Liabilities"); (vi) the Remarketing Agreement, dated as of October _, 2002, among the Company, the Trust and Lehman Brothers Inc., as remarketing agent (the "Remarketing Agreement"); (vii) the Calculation Agent Agreement dated as of October _, 2002 among the Company, the Trust and JPMorgan Chase Bank (the "Calculation Agent Agreement"), as calculation agent (the "Calculation Agent"), and (viii) its issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant to a Guarantee Agreement dated as of October 1, 2002 (the "Guarantee Agreement") between the Company and JPMorgan Chase Bank, as trustee. The Preferred Securities are being sold to you today pursuant to the terms of an Underwriting Agreement dated September __, 2002, among the Company, the Trust and the underwriters named in Schedule I thereto (the "Underwriters") for whom you are acting as Representative (the "Underwriting Agreement"). This opinion is being delivered to you as Representative pursuant to Section 5(c)(1) thereof.

All capitalized terms not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

In rendering the opinions expressed below, we have examined the registration statement on Form S-3 (File Nos. 333-72784, 333-72784-01 and 333-72784-02) pertaining to the Preferred Securities (the "Registration Statement") filed under the Securities Act of 1933, as amended (the "Act"), and the prospectus dated November 15, 2001, as supplemented by a final prospectus supplement dated September 26, 2002 (the "Final Supplemented Prospectus"), which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2001 (the "Form 10-K"), the Quarterly Reports on Form 10-Q of the Company for the quarters ended and the Current Reports on Form 8-K of the Company dated (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The Trust Agreement, the Indenture, the Guarantee Agreement, the Remarketing Agreement, the Underwriting Agreement and the Calculation Agent Agreement are herein referred to as the "Agreements".

We are of the opinion, relying as to matters of New York law upon the opinion dated hereof rendered to you by Dewey Ballantine LLP and as to matters of Delaware law upon the opinion dated hereof rendered to you by Richards, Layton & Finger, P.A., that:

1. The Company has been duly organized and is validly existing and in good standing as a corporation under the laws of the State of Alabama and has due corporate authority to carry on the public utility business in which it is engaged and to own and operate the properties used by it in such business and to enter into and perform its obligations under the Agreements and the Notes.

2. The execution, delivery and performance by the Company of the Underwriting Agreement have been duly authorized by all necessary corporate action, and the Underwriting Agreement has been duly executed and delivered by the Company.

3. All orders, consents, or other authorizations or approvals of the Alabama Public Service Commission and the Commission legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities have been obtained; such orders are sufficient for the issuance and the delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities; the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities conform in all material respects with the terms of such orders; and no other order, consent or other authorization or approval of any Alabama or United States governmental body (other than in connection or in compliance with the provisions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) is legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities in accordance with the terms of the Underwriting Agreement.

4. Each of the Indenture and the Calculation Agent Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by JPMorgan Chase Bank, (the "Debt Trustee") and Calculation Agent, respectively, constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Calculation Agent Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Indenture conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

5. The Notes have been duly authorized and executed by the Company and, when authenticated by the Debt Trustee in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the qualifications that the enforceability of the Company's obligations under the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity; and the Notes conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

6. The Guarantee Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Guarantee Trustee constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Guarantee may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Guarantee Agreement conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

7. The Trust Agreement has been duly authorized, executed and delivered by the Company, and, assuming due authorization, execution and delivery by the trustees named therein, the Trust Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Trust Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditor's rights generally, and by general principles of equity.

8. Each of the Indenture, the Guarantee Agreement and the Trust Agreement has been duly qualified under the Trust Indenture Act of 1939, as amended.

9. Neither the Company nor the Trust is and, after giving effect to the offering and sale of the Preferred Securities, will be an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

10. The statements and legal conclusions contained in the Final Supplemented Prospectus under the caption "Certain Federal Income Tax Considerations" are correct in all material respects.

11. To the best of our knowledge, all of the issued and outstanding Common Securities of the Trust are directly owned by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equitable right.

12. The execution, delivery and performance by the Trust of the Underwriting Agreement, the Trust Agreement, the Remarketing Agreement and the Calculation Agent Agreement; the issuance by the Trust of the Preferred Securities and the Common Securities; the consummation by the Trust of the transactions contemplated thereby; and the compliance by the Trust with its obligations thereunder do not and will not result in any violation of the Trust Agreement or related Certificate of Trust, and do not and will not conflict with, or result in, a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Trust under (A) any contract, indenture, mortgage, loan agreement, note, lease or any other agreement or instrument known to us to which the Trust is a party or by which it may be bound or to which any of its properties may be subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), of the Trust, (B) any existing applicable law, rule or regulation applicable to the Trust (other than the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) or (C) any judgment, order or decree known to us of any government, governmental instrumentality, or court, domestic or foreign, or any regulatory body or administrative agency or other governmental body having jurisdiction over the Trust or any of its properties; and the Trust is not a party to or otherwise bound by any agreement other than those which are exhibits (or included in exhibits) to the Registration Statement.

13. The Common Securities have been duly authorized by the Trust Agreement and (subject to the terms of the Trust Agreement), when issued and delivered by the Trust to the Company against payment therefor as described in the Final Supplemented Prospectus, will be validly issued and (subject to the terms of the Trust Agreement) fully paid and non-assessable beneficial interests in the assets of the Trust; and the issuance of the Common Securities is not subject to preemptive or other similar rights.

14. The Preferred Securities have been duly authorized by the Trust Agreement and (subject to the terms of the Trust Agreement), when delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement, will be validly issued, fully paid and nonassessable beneficial interests in the assets of the Trust; the holders of the Preferred Securities will (subject to the terms of the Trust Agreement) be entitled to the same limitation of personal liability under Delaware law as is extended to stockholders of private corporations for profit organized under the general corporation law of the State of Delaware; the issuance of the Preferred Securities is not subject to preemptive or other similar rights; and the Preferred Securities conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

15. The Agreement as to Expenses and Liabilities has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Agreement as to Expenses and Liabilities may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principals of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Agreement as to Expenses and Liabilities conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

16. The Remarketing Agreement has been duly authorized, executed and delivered by the Company.

We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs 4, 5, 6, 10, 14 and 15 above. In the course of the preparation by the Company of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with other counsel for the Company and with representatives of Deloitte & Touche LLP. Based upon our examination of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Final Supplemented Prospectus, as of September __, 2002 complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents, as of their respective dates of filing with the Commission, complied as to form in all material respects with the relevant requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion as to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention which gives us reason to believe that the Registration Statement, as of the date of filing of the Form 10-K (including the Exchange Act Documents on file with the Commission as of such date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Final

Supplemented Prospectus (including the Exchange Act Documents) contained, as of its date, or contains, on the date hereof, any untrue statement therein of a material fact or omitted, as of its date, or omits, on the date hereof, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents and with respect to information set forth in the Final Supplemented Prospectus under the caption "Description of the Preferred Securities - Book-Entry Only Issuance - The Depository Trust Company."

We are members of the State Bar of Alabama and we do not express any opinion herein concerning any law other than the law of the State of Alabama and the federal law of the United States and, to the extent set forth herein, the laws of the States of Delaware and New York.

This opinion is rendered to you in connection with the above-described transaction. This opinion may not be relied upon by you for any other purpose, or relied upon by or furnished to any other person without our prior written consent, except that Troutman Sanders LLP and Dewey Ballantine LLP may rely on this opinion in giving their opinions pursuant to Section 5(c) of the Underwriting Agreement insofar as such opinion relates to matters of Alabama law.

Yours very truly,

BALCH & BINGHAM LLP

Schedule III-B

[Letterhead of TROUTMAN SANDERS LLP]

__________ __, 2002

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

ALABAMA POWER CAPITAL TRUST IV
FLEXIBLE TRUST PREFERRED SECURITIES
(Five Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as counsel to Alabama Power Company (the "Company") in connection with (i) its formation of Alabama Power Capital Trust IV, a Delaware statutory trust (the "Trust"), pursuant to the Amended and Restated Trust Agreement dated October 1, 2002 among the Company and the trustees named therein (the "Trust Agreement"); (ii) the Trust's issuance and sale of Flexible Trust Preferred Securities evidencing approximately a 97% undivided interest in the assets of the Trust (the "Preferred Securities");
(iii) the Trust's issuance and sale of Common Securities evidencing approximately a 3% undivided interest in the assets of the Trust; (iv) the Company's issuance and sale to the Trust of $103,093,000 aggregate principal amount of its Series D Junior Subordinated Notes due October 1, 2042 (the "Notes") pursuant to a Subordinated Note Indenture dated as of __________, 199_, by and between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee, as supplemented by the Third Supplemental Indenture dated as of October _, 2002 (collectively, the "Indenture"); (v) the Agreement as to Expenses and Liabilities dated as of October _, 2002, between the Company and the Trust (the "Agreement as to Expenses and Liabilities"); (vi) the Remarketing Agreement, dated as of October _. 2002, among the Company, the Trust and Lehman Brothers Inc., as remarketing agent (the "Remarketing Agreement"),
(vii) the Calculation Agent Agreement dated as of October _, 2002 among the Company, the Trust and JPMorgan Chase Bank "(Calculation Agent Agreement"), as calculation agent (the "Calculation Agent"); and (viii) its issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant to a Guarantee Agreement dated as of October _, 2002 (the "Guarantee Agreement") between the

Company and JPMorgan Chase Bank, as trustee (the "Guarantee Trustee"). The Preferred Securities are being sold to you today pursuant to the terms of an Underwriting Agreement dated September _ 2002 (the "Underwriting Agreement"), among the Company, the Trust and the underwriters named in Schedule I thereto (the "Underwriters") for whom you are acting as Representative. This opinion is being delivered to you as Representative pursuant to Section 5(c)(2) of the Underwriting Agreement thereof.

All capitalized terms not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

In rendering the opinions expressed below, we have examined the registration statement on Form S-3 (File Nos. 333-72784, 333-72784-01 and 333-72784-02) pertaining to the Company and the Preferred Securities (the "Registration Statement") filed under the Securities Act of 1933, as amended (the "Act"), as it became effective under the Act and the prospectus of the Company and the Trust dated _______ ___, 200_ as supplemented by a final prospectus supplement dated __________, 2002 (the "Final Supplemented Prospectus"), which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2001 (the "Form 10-K"), the Quarterly Reports on Form 10-Q of the Company for the quarters ended and the Current Reports on Form 8-K of the Company dated (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

In addition, we have examined, and have relied as to matters of fact upon, the documents delivered to you at the closing (except the certificates representing the Preferred Securities and the Notes, of which we have examined specimens), and we have made such other and further investigations as we deemed necessary to express the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents.

The Trust Agreement, the Indenture, the Guarantee Agreement, the Remarketing Agreement, the Underwriting Agreement and the Calculation Agent Agreement are herein referred to collectively as the "Agreements".

Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion, relying as to matters of Alabama law upon the opinion dated the date hereof rendered to you by Balch & Bingham LLP, relying as to matters of New York law upon the opinion dated the date hereof rendered to you by Dewey Ballantine LLP and relying as to matters of Delaware law upon the opinion dated the date hereof rendered to you by Richards, Layton & Finger, P.A., that:

1. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Alabama and has due corporate authority to carry on the public utility business in which it is engaged, to own and operate the properties used by it in such business and to enter into and perform its obligations under the Agreements and the Notes.

3. All orders, consents or other authorizations or approvals of the Alabama Public Service Commission and the Commission legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities have been obtained; such orders are sufficient for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities; the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities conform in all material respects with the terms of such orders; and no other order, consent or other authorization or approval of any Alabama or United States governmental body (other than in connection or in compliance with the provisions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) is legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities in accordance with the terms of the Underwriting Agreement.

4. Each of the Indenture and the Calculation Agent Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the JPMorgan Chase Bank (the "Debt Trustee") and the Calculation Agent, respectively, constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Calculation Agent Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Indenture conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

5. The Notes have been duly authorized and executed by the Company and, when authenticated by the Debt Trustee in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the qualifications that the enforceability of the Company's obligations under the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Notes conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

6. The Guarantee Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Guarantee Trustee, constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Guarantee Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Guarantee Agreement conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

7. Each of the Indenture, the Guarantee Agreement and the Trust Agreement has been duly qualified under the Trust Indenture Act of 1939, as amended.

8. Neither the Company nor the Trust is and, after giving effect to the offering and sale of the Preferred Securities, will be an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

9. The Preferred Securities have been duly authorized by the Trust Agreement and (subject to the terms of the Trust Agreement), when delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement, will be validly issued, fully paid and nonassessable undivided beneficial interests in the assets of the Trust; and the Preferred Securities conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

10. The Agreement as to Expenses and Liabilities has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Agreement as to Expenses and Liabilities may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principals of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Agreement as to Expenses and Liabilities conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

11. The Remarketing Agreement has been duly authorized, executed and delivered by the Company.

the Company, with other counsel for the Company, with representatives of Deloitte & Touche LLP and with your counsel. Based upon our examination of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Final Supplemented Prospectus, as of September _, 2002, complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents, as of their respective dates of filing with the Commission, complied as to form in all material respects with the relevant requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion as to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention which gives us reason to believe that the Registration Statement, as of the date of filing of the form 10-K (including the Exchange Act Documents on file with the Commission as of such date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Final Supplemented Prospectus (including the Exchange Act Documents) contained, as of its date, or contains, on the date hereof, any untrue statement therein of a material fact or omitted, as of its date, or omits, on the date hereof, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents and with respect to information set forth in the Final Supplemented Prospectus under the caption "Description of the Preferred Securities - Book-Entry Only Issuance - The Depository Trust Company."

We are members of the State Bar of Georgia and we do not express any opinion herein concerning any law other than the law of the State of Georgia and the federal law of the United States and, to the extent set forth herein, the laws of the States of Delaware and New York.

Yours very truly,

TROUTMAN SANDERS LLP

Schedule IV

[Letterhead of RICHARDS, LAYTON & FINGER, P.A.]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

Re: Alabama Power Capital Trust IV Flexible Trust Preferred Securities

(Five Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as special Delaware counsel for Alabama Power Company, an Alabama corporation (the "Company"), and Alabama Power Capital Trust IV, a Delaware statutory trust (the "Trust"), in connection with the matters set forth herein. This opinion is being furnished to you pursuant to Section 5(c)(3) of the Underwriting Agreement, dated __________, 2002 (the "Underwriting Agreement"), among the Company, the Trust, Lehman Brothers Inc. and the other Underwriters listed in Schedule I thereto.

For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following:

(a) The Certificate of Trust of the Trust, dated November 27, 1996 (the "Certificate"), as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on November 27, 1996;

(b) The Trust Agreement of the Trust, dated as of November 27, 1996, among the Company and the trustees of the Trust named therein, as amended and restated pursuant to an Amended and Restated Trust Agreement (including Exhibits A and B thereto), dated as of October _, 2002, among the Company, the trustees of the Trust named therein (the "Trustees"), and the holders, from time to time, of the undivided beneficial interests in the assets of the Trust (the "Trust Agreement");

(d) The Prospectus, dated November 15, 2001 (the "Prospectus"), as supplemented by the Prospectus Supplement dated September _, 2002 (the "Prospectus Supplement"), relating to the Flexible Trust Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust (each, a "Preferred Security" and collectively, the "Preferred Securities");

(e) A Certificate of Good Standing for the Trust, dated October _, 2002, obtained from the Secretary of State; and

(f) The Remarketing Agreement, dated October _, 2002, among the Trust, the Company and Lehman Brothers Inc. (the "Remarketing Agreement"), as remarketing agent (the "Remarketing Agent") and the Calculation Agent Agreement dated as of October _, 2002 among the Company, the Trust and JPMorgan Chase Bank "(Calculation Agent Agreement"), as calculation agent (the "Calculation Agent").

Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement.

For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (f) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (f) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects.

With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures.

For purposes of this opinion, we have assumed (i) the Trust Agreement constitutes the entire agreement among the parties thereto with respect to the subject matter thereof, including with respect to the creation, operation and termination of the Trust, and the Trust Agreement and the Certificate are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, the due organization or due formation or due creation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its organization or formation or creation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) except to the extent provided in paragraph 2 below, the power and authority of each of the parties to the documents examined by us to execute and deliver, and to perform its obligations under, such documents, (v) except to the extent provided in paragraph 4 below, the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Trust Security is to be issued by the Trust (collectively, the "Trust Security Holders") of a Trust Securities Certificate for such Trust Security and the payment for the Trust Security acquired by it, in accordance with the Trust Agreement, the Prospectus and the Prospectus Supplement, and (vii) the issuance and sale of the Trust Securities to the Trust Security Holders in accordance with the Trust Agreement, the Prospectus and the Prospectus Supplement. We have not participated in the preparation of the Prospectus or the Prospectus Supplement.

This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder which are currently in effect.

Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that:

1. The Trust has been duly created and is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C.ss.3801, et seq. (the "Statutory Trust Act"), and all filings required under the laws of the State of Delaware with respect to the creation and valid existence of the Trust as a statutory trust have been made.

2. Under the Statutory Trust Act and the Trust Agreement, the Trust has the trust power and authority to (i) own property and conduct its business, all as described in the Prospectus and the Prospectus Supplement, (ii) execute and deliver, and to perform its obligations under, the Underwriting Agreement and the Remarketing Agreement, (iii) issue and perform its obligations under the Trust Securities, (iv) perform its obligations under the Trust Agreement and Calculation Agent Agreement.

3. The Trust Securities have been duly authorized by the Trust Agreement and will be duly and validly issued undivided beneficial interests in the assets of the Trust. Subject to the qualifications set forth in paragraph 6 below, the Preferred Securities are fully paid and nonassessable undivided beneficial interests in the assets of the Trust. Under the Statutory Trust Act and the Trust Agreement, the Trust Securities are not subject to any preemptive or other similar rights.

4. Under the Statutory Trust Act and the Trust Agreement, the Underwriting Agreement, the Remarketing Agreement and the Calculation Agent Agreement have been duly authorized by all necessary trust action on the part of the Trust.

5. No authorization, approval, consent or order of any Delaware court or Delaware governmental authority or Delaware agency is required to be obtained by the Trust solely as a result of the issuance and sale of the Preferred Securities.

Corporation Law of the State of Delaware. We note that the Preferred Security Holders may be obligated, pursuant to the Trust Agreement, to (i) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of Preferred Securities Certificates and the issuance of replacement Preferred Securities Certificates and (ii) provide security or indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and powers under the Trust Agreement. We also note that the Company, in its capacity as Depositor and not in its capacity as a Holder, has undertaken certain payment obligations as set forth in the Trust Agreement.

7. The Trust Agreement constitutes a valid and binding obligation of the Company, and is enforceable against the Company, in accordance with its terms.

8. The issuance and sale by the Trust of the Trust Securities, the execution, delivery and performance by the Trust of the Underwriting Agreement, the consummation by the Trust of the transactions contemplated by the Underwriting Agreement, the Trust Agreement and the Remarketing Agreement and compliance by the Trust with its obligations thereunder do not violate (i) any of the provisions of the Certificate or the Trust Agreement or (ii) any applicable Delaware law or Delaware administrative regulation.

9. We have reviewed the statements in the Prospectus under the caption "The Trusts" and the statements in the Prospectus Supplement under the caption "Alabama Power Capital Trust IV" and, insofar as they contain statements of Delaware law, such statements are fairly presented.

The opinion expressed in paragraph 7 above is subject as to enforcement, to the effect upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation, fraudulent conveyance and other similar laws relating to or affecting the rights and remedies of creditors generally, (ii) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of applicable public policy on the enforceability of provisions related to indemnification. In addition, in connection with the opinion expressed in paragraph 7 above, to the extent that Section 11.05 of the Trust Agreement provides that the Trust Agreement is governed by New York law, we express no opinion concerning Section 11.05 of the Trust Agreement or the effect of Section 11.05 of the Trust Agreement on the Trust Agreement.

We consent to your relying as to matters of Delaware law upon this opinion in connection with the Underwriting Agreement. We consent to the law firms of Balch & Bingham LLP, Troutman Sanders LLP and Dewey Ballantine LLP relying as to matters of Delaware law upon this opinion in connection with opinions to be rendered by them pursuant to the Underwriting Agreement. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other Person for any purpose.

Very truly yours,

RICHARDS, LAYTON & FINGER, P.A.

Schedule V

[Letterhead of Richards, Layton & Finger, P.A.]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Alabama Power Capital Trust IV
c/o Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Re: Alabama Power Capital Trust IV Flexible Trust Preferred Securities

(Five Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as counsel to Chase Manhattan Bank USA, National Association, a national banking association ("Chase USA"), in connection with the formation of Alabama Power Capital Trust IV, a statutory trust existing under the laws of the State of Delaware (the "Trust") pursuant to the Trust Agreement, dated as of November 27, 1996, by and between Chase USA, not in its individual capacity but solely as trustee (the "Trustee"), and Alabama Power Company (the "Company"), as amended and restated pursuant to an Amended and Restated Trust Agreement dated as of October _, 2002, among the Company, the Trustee, the other trustees named therein and the holders from time to time of the undivided beneficial interests in the assets of the Trust (collectively, the "Trust Agreement"). This opinion is being delivered to you pursuant to Section 5(c)(4) of the Underwriting Agreement, dated ___________ __, 2002 (the "Underwriting Agreement"), among Lehman Brothers Inc., the several Underwriters named in Schedule I thereto, Alabama Power Company and the Trust, pursuant to which the $___,000,000 Flexible Trust Preferred Securities of the Trust will be sold. All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Underwriting Agreement.

We have examined an original or a copy of the Trust Agreement. We have also examined originals or copies of such other documents and such corporate records, certificates and other statements of governmental officials and corporate officers and other representatives of the corporations or entities referred to herein as we have deemed necessary or appropriate for the purposes of the opinions expressed herein. Moreover, as to certain facts material to the opinions expressed herein, we have relied upon the representations and warranties contained in the documents referred to in this paragraph.

Based upon the foregoing and upon an examination of such questions of law as we have deemed necessary or appropriate, and subject to the assumptions, exceptions and qualifications set forth below, we advise you that, in our opinion:

1. Chase USA is a national banking association with trust powers, duly formed, validly existing in good standing under the laws of the United States and has the power and authority to execute, deliver and perform its obligations under the Trust Agreement.

2. The Trust Agreement has been duly authorized, executed and delivered by Chase USA and constitutes a legal, valid and binding obligation of Chase USA, enforceable against Chase USA, in accordance with its terms.

3. The execution and delivery of, and performance of the terms of, the Trust Agreement by Chase USA, does not conflict with or constitute a breach of, or default under, the charter or by-laws of Chase USA.

4. No consent, approval or authorization of, or registration, declaration or filing with, any court or governmental agency or body having jurisdiction in the premises is required under Delaware law for the execution, delivery or performance by Chase USA of the Trust Agreement.

The foregoing opinions are subject to the following exceptions, qualifications and assumptions:

(A) We are admitted to practice law in the State of Delaware and we do not hold ourselves out as being experts on the law of any other jurisdiction. The foregoing opinions are limited to the laws of the State of Delaware and the federal laws of the United States of America governing the banking and trust powers of Chase USA (except that we express no opinion with respect to (i) state securities or "blue sky" laws and (ii) federal securities laws, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939, as amended, the Investment Company Act of 1940, as amended, and laws, rules and regulations relating to money laundering and terrorist groups, including any requirements under the USA Patriot Act of 2001, as amended), and we have not considered and express no opinion on the laws, rules and regulations of any other jurisdiction.

(B) The foregoing opinions regarding enforceability are subject to (i) applicable bankruptcy, insolvency, moratorium, receivership, reorganization, fraudulent conveyance and similar laws relating to and affecting the rights and remedies of creditors generally, (ii) principles of equity (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of federal or state securities laws on the enforceability of provisions relating to indemnification or contribution.

(C) We have assumed the due authorization, execution and delivery by each of the parties thereto, other than Chase USA, of the Trust Agreement, and that each of such parties has the full power, authority and legal right to execute, deliver and perform such document.

(D) We have assumed that all signatures (other than those of Chase USA) on documents examined by us are genuine, that all documents submitted to us as originals are authentic, and that all documents submitted to us as copies or specimens conform with the originals, which facts we have not independently verified.

This opinion may be relied upon by you in connection with the matters set forth herein, and without our prior written consent, may not be furnished or quoted to, or relied upon by, any other person or entity for any purpose.

Very truly yours,

RICHARDS, LAYTON & FINGER, P.A.

Schedule VI

[Letterhead of Cravath, Swaine & Moore]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Alabama Power Capital Trust II
c/o Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Alabama Power Capital Trust IV Flexible Trust Preferred Securities

(Five Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as counsel to JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) (the "Bank") in connection with (a) the Subordinated Note Indenture, dated as of ________ ______, 199_, as heretofore supplemented (the "Original Indenture"), between Alabama Power Company (the "Company") and the Bank, as Trustee, (b) the Third Supplemental Indenture dated as of October _, 2002 (together with the Original Indenture, herein called the "Indenture"), between the Company and the Bank, as Trustee, (c) the Guarantee Agreement dated as of October _, 2002 (the "Guarantee Agreement"), between the Company, as Guarantor and the Bank, as Trustee, (d) the Amended and Restated Trust Agreement, dated as of October 1, 2002 (the "Trust Agreement") among the Company, the Bank, as Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee, and William E. Zales, Jr. and J. Randy DeRieux, as Administrative Trustees and (d) the Calculation Agent Agreement dated as of October __, 2002 among the Company, the Trust and JPMorgan Chase Bank (the "Calculation Agent Agreement"), as calculation agent (the "Calculation Agent").

In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, records and other instruments as we have deemed necessary or appropriate for the purpose of this opinion, including copies of the Indenture, the Guarantee Agreement, the Trust Agreement and the Calculation Agent Agreement and certain resolutions adopted by the Board of Directors of the Bank.

Based upon the foregoing, we are of the opinion that:

i) the Bank has been duly incorporated and is validly existing as a banking corporation in good standing under the laws of the State of New York;

ii) the Bank has the corporate trust power and authority to execute, deliver and perform its duties under the Indenture, the Guarantee Agreement, the Trust Agreement and the Calculation Agent Agreement, has duly executed and delivered the Indenture, the Guarantee Agreement and the Trust Agreement, and, insofar as the laws governing the trust powers of the Bank are concerned and assuming due authorization, execution and delivery thereof by the other parties thereto, each of the Indenture, the Guarantee Agreement and the Trust Agreement constitutes a legal, valid and binding agreement of the Bank, enforceable against the Bank in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether such enforceability is considered in a proceeding in equity or at law.

iii) the execution, delivery and performance by the Bank of the Indenture, the Guarantee Agreement, the Trust Agreement and the Calculation Agent Agreement do not conflict with or constitute a breach of the charter or bylaws of the Bank.

iv) no approval, authorization or other action by, or filing with, any governmental authority of the United States of America or the State of New York having jurisdiction over the trust powers of the Bank is required in connection with the execution and delivery by the Bank of the Indenture, the Guarantee Agreement or the Trust Agreement or the performance by the Bank of its duties thereunder, except such as have been obtained, taken or made.

We are admitted to practice only in the State of New York, and we express no opinion as to matters governed by any laws other than the laws of the State of New York and the Federal law of the United States of America. We are furnishing this opinion to you solely for your benefit. This opinion is not to be relied upon by any other person or used, circulated, quoted or otherwise referred to for any other purpose.

Very truly yours,

CRAVATH, SWAINE & MOORE

Schedule VII

[Letterhead of DEWEY BALLANTINE]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

ALABAMA POWER CAPITAL TRUST IV
Flexible Trust Preferred Securities
(Five Year Initial Fixed Rate Period)

Ladies and Gentlemen:

In connection with (i) the formation by Alabama Power Company (the "Company") of Alabama Power Capital Trust IV (the "Trust"), a Delaware statutory trust, pursuant to the Amended and Restated Trust Agreement dated October _, 2002 among the Company and the trustees named therein (the "Trust Agreement"); (ii) the Trust's issuance and sale of Trust Preferred Securities (Five Year Initial Fixed Rate Period) evidencing approximately a 97% undivided interest in the assets of the Trust (the "Preferred Securities"); (iii) the Trust's issuance and sale of Common Securities evidencing approximately a 3% undivided interest in the assets of the Trust; (iv) the Company's issuance and sale to the Trust of $103,093,000 of its Series D Junior Subordinated Notes (the "Notes") pursuant to a Subordinated Note Indenture dated as of __________, 199_, by and between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, as heretofore supplemented and as further supplemented by the Third Supplemental Indenture dated as of __________ __, 200_ (collectively, the "Indenture"); (v) the Agreement as to Expenses and Liabilities dated as of October 1, 2002, between the Company and the Trust (the "Agreement as to Expenses and Liabilities); (vi) the Company's issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant to a Guarantee Agreement dated as of October _ 2002 (the "Guarantee Agreement") between the Company and JPMorgan Chase Bank, as trustee and (vii) the Calculation Agent Agreement dated as of October_, 2002 among the Company, the Trust and JPMorgan Chase Bank (the "Calculation Agent Agreement"), as calculation agent (the "Calculation Agent"), we have acted as counsel to you and the other underwriters named in the Schedule I (the "Underwriters") to the Underwriting Agreement dated September _, 2002, among the Company, the Trust and the Underwriters for whom you are acting as Representative (the "Underwriting Agreement"). This opinion is being delivered to you as Representative pursuant to Section 5(c)(6) thereof.

All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

In rendering the opinions expressed below, we have examined the registration statement on Form S-3 (No. 333- _______) pertaining to the Preferred Securities (the "Registration Statement"), filed under the Securities Act of 1933, as amended (the "Act"), and the prospectus dated , as supplemented by a final supplemental prospectus dated , which pursuant to Form S-3 incorporates by reference the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2001 (the "Form 10-K"), the Quarterly Reports on Form 10-Q of the Company for the quarters ended and the Current Reports on Form 8-K of the Company, dated (the "Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The Trust Agreement, the Indenture, the Guarantee Agreement, the Remarketing Agreement, the Underwriting Agreement and the Calculation Agent Agreement are herein referred to as the "Agreements".

Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion, relying as aforesaid and as to all matters covered hereby which are governed by or dependent upon the laws of the State of Alabama upon the opinion of Balch & Bingham LLP dated the date hereof and addressed to you and a form of which is attached as Schedule III-A to the Underwriting Agreement, and as to all matters covered hereby which are governed by or dependent upon the laws of the State of Delaware upon the opinion of Richards, Layton & Finger, P.A., dated the date hereof and addressed to you and a form of which is attached as Schedule IV to the Underwriting Agreement, that:

1. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Alabama and has due corporate authority to carry on the public utility business in which it is engaged and to own and operate the properties used by it in such business and to enter into and perform its obligations under the Agreements and the Notes.

3. All orders, consents, or other authorizations or approvals of the Alabama Public Service Commission and the Commission legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities have been obtained; such orders are sufficient for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities; the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities conform in all material respects with the terms of such orders; and no other order, consent or other authorization or approval of any Alabama or United States governmental body (other than in connection or in compliance with the provisions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) is legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities in accordance with the terms of the Underwriting Agreement.

4. Each of the Indenture and the Calculation Agent Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by JPMorgan Chase Bank (the "Debt Trustee") and the Calculation Agent, respectively constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Calculation Agent Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Indenture conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

5. The Notes have been duly authorized and executed by the Company and, when authenticated by the Debt Trustee in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the qualifications that the enforceability of the Company's obligations under the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); the Notes conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Guarantee Agreement conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

7. Each of the Indenture, the Guarantee Agreement and the Trust Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended.

8. The Preferred Securities have been duly authorized by the Trust Agreement and (subject to the terms of the Trust Agreement), when delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement, will be validly issued, fully paid and nonassessable beneficial interests in the assets of the Trust; and the Preferred Securities conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

9. The Agreement as to Expenses and Liabilities has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Agreement as to Expenses and Liabilities may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principals of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Agreement as to Expenses and Liabilities conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention which gives us reason to believe that the Registration Statement, as of the date of filing of the Form 10-K (including the Exchange Act Documents on file with the Commission as of such date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Final Supplemented Prospectus (including the Exchange Act Documents) contained, as of its date, or contains, on the date hereof, any untrue statement therein of a material fact or omitted, as of its date, or omits, on the date hereof, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents or with respect to information set forth in the Final Supplemented Prospectus under the caption "Description of the Preferred Securities - Book-Entry Only Issuance - The Depository Trust Company."

We are members of the State Bar of New York and we do not express any opinion herein concerning any law other than the law of the State of New York and the federal law of the United States, and to the extent set forth herein, the laws of the States of Delaware, Georgia and Alabama.

This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by or furnished to any other person without our prior written consent except that Balch & Bingham LLP and Troutman Sanders LLP may rely on this opinion in giving their opinions pursuant to Section 5(c) of the Underwriting Agreement and Balch & Bingham LLP may rely on this opinion in giving their opinion pursuant to Sections 102, 302 and 904 of the Indenture, insofar as such opinions relate to matters of New York law.

Very truly yours,

DEWEY BALLANTINE LLP

Exhibit 1.5-B

Alabama Power Capital Trust V
(a Delaware Statutory Trust)

Flexible Trust Preferred Securities
(Seven Year Initial Fixed Rate Period)

(Liquidation Amount $1,000 Per Preferred Security)

UNDERWRITING AGREEMENT

September 26, 2002

Lehman Brothers Inc.
745 7th Avenue
New York, NY 10019

Ladies and Gentlemen:

Alabama Power Capital Trust V (the "Trust"), a statutory trust organized under the Statutory Trust Act (the "Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (ss.) 3801 et seq.), and Alabama Power Company, an Alabama corporation (the "Company" and, together with the Trust, the "Offerors"), confirm their agreement (the "Agreement") with you and each of the other Underwriters named in Schedule I hereto (collectively, the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom you are acting as representative (in such capacity, you shall hereinafter be referred to as the "Representative"), with respect to the sale by the Trust and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of Flexible Trust Preferred Securities (Seven Year Initial Fixed Rate Period) (Liquidation Amount $1,000 per Preferred Security) of the Trust ("Preferred Securities") set forth in Schedule I. The Preferred Securities will be guaranteed by the Company with respect to distributions and payments upon liquidation, redemption and otherwise (the "Guarantee") pursuant to the Guarantee Agreement (the "Guarantee Agreement"), to be dated as of October 1, 2002, between the Company and JPMorgan Chase Bank, as trustee (the "Guarantee Trustee"). The Preferred Securities and the related Guarantee are referred to herein as the "Securities".

The Offerors understand that the Underwriters propose to make a public offering of the Preferred Securities as soon as the Representative deems advisable after this Agreement has been executed and delivered. The entire proceeds from the sale of the Securities will be combined with the entire proceeds from the sale by the Trust to the Company of its common securities (the "Common Securities") and will be used by the Trust to purchase $206,186,000 aggregate principal amount of Series E Junior Subordinated Notes (the "Junior Subordinated Notes") to be issued by the Company. The Preferred Securities and the Common Securities will be issued pursuant to an Amended and Restated Trust Agreement, to be dated as of October 1, 2002 (the "Trust Agreement"), among the Company, as Depositor, William E. Zales, Jr. and J. Randy DeRieux (the "Administrative Trustees"), Chase Manhattan Bank USA, National Association, a national banking association (the "Delaware Trustee"), and JPMorgan Chase Bank, a New York banking corporation (the "Property Trustee" and, together with the Delaware Trustee and the Administrative Trustees, the "Trustees") and the holders from time to time of undivided beneficial interests in the assets of the Trust. The Junior Subordinated Notes will be issued pursuant to an indenture, dated as of January 1, 1997 (the "Base Indenture"), between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee (the "Debt Trustee"), and a fourth supplemental indenture to the Base Indenture, to be dated as of October 2, 2002 (the "Supplemental Indenture" and, together with the Base Indenture and any other amendments or supplements thereto, the "Indenture"), between the Company and the Debt Trustee.

SECTION 1. REPRESENTATIONS AND WARRANTIES. The Offerors jointly and severally represent and warrant to each Underwriter as follows:

(a) A registration statement on Form S-3 (File Nos. 333-72784, 333-72784-01 and 333-72784-02), in respect of the Preferred Securities, the

Guarantee, the Junior Subordinated Notes and certain other securities (the "Registered Securities") has been prepared and filed in accordance with the provisions of the Securities Act of 1933, as amended (the "1933 Act"), with the Securities and Exchange Commission (the "Commission"); such registration statement, and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to you, and to you for each of the other Underwriters, has been declared effective by the Commission in such form (except that copies of the registration statement, and any post-effective amendment delivered to you for each of the other Underwriters need not include exhibits but shall include all documents incorporated by reference therein); and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or, to the best knowledge of the Company, threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the 1933 Act, being hereinafter called a "Preliminary Prospectus"); such registration statement, as it became effective, including the exhibits thereto and all documents incorporated by reference therein pursuant to Item 12 of Form S-3 at the time such registration statement became effective, being hereinafter called the "Registration Statement"; the prospectus relating to the Registered Securities, in the form in which it was included in the Registration Statement at the time it became effective, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; the Prospectus as supplemented by a preliminary prospectus supplement dated September 25, 2002 relating to the Preferred Securities, the Guarantee and the Junior Subordinated Notes, including any documents incorporated by reference therein as of such date, being hereinafter called the "Preliminary Supplemented Prospectus"; and the Prospectus as amended or supplemented in final form by a prospectus supplement relating to the Preferred Securities, the Guarantee and the Junior Subordinated Notes, in the form in which it is filed with the Commission, pursuant to Rule 424(b) under the 1933 Act in accordance with
Section 3(f) hereof, including any documents incorporated by reference therein as of the date of such filing, being hereinafter called the "Final Supplemented Prospectus".

(d) The Registration Statement, the Prospectus and, to the extent not used to confirm sales of the Securities, the Preliminary Supplemented Prospectus, comply, and the Final Supplemented Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus, when any such post-effective amendments are declared effective or supplements are filed with the Commission, as the case may be, will comply, in all material respects with the applicable provisions of the 1933 Act, the 1934 Act, the Trust Indenture Act of 1939, as amended (the "1939 Act"), and the General Rules and Regulations of the Commission thereunder and do not and will not, (i) as of the applicable effective date as to the Registration Statement and any amendment thereto, (ii) as of the filing date thereof as to the Preliminary Supplemented Prospectus, and (iii) as of the applicable filing date as to the Final Supplemented Prospectus and any Prospectus as further amended or supplemented, contain an untrue statement of a material fact or omit to state a material fact necessary in order to

make the statements therein, in the light of the circumstances under which they were made, not misleading; except that neither the Company nor the Trust makes any warranties or representations with respect to (A) that part of the Registration Statement which shall constitute the Statements of Eligibility (Form T-1) (collectively, the "Form T-1") under the 1939 Act, (B) statements or omissions made in the Registration Statement, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus in reliance upon and in conformity with information furnished in writing to the Trust or the Company by an Underwriter expressly for use therein or (C) any information set forth in the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus under the caption "Description of the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust Company".

(e) With respect to the Registration Statement, the conditions for use of Form S-3, as set forth in the General Instructions thereof, have been satisfied.

(k) This Agreement has been duly authorized, executed and delivered by each of the Offerors.

with their respective terms except to the extent that enforcement thereof may be limited by the Enforceability Exceptions, and each of the Guarantee, the Guarantee Agreement, Remarketing Agreement, the Calculation Agent Agreement and the Agreement as to Expenses and Liabilities will conform in all material respects to all statements relating thereto contained in the Final Supplemented Prospectus; and, on the Closing Date, the Guarantee Agreement will have been duly qualified under the 1939 Act.

(r) The Junior Subordinated Notes are subordinated and junior in right of payment to all "Senior Indebtedness" (as defined in the Indenture) of the Company.

(s) Each of the Administrative Trustees of the Trust is an employee of the Company and has been duly authorized by the Company to execute and deliver the Trust Agreement.

such as may be required under the Public Utility Holding Company Act of 1935, as amended; (C) the qualification of the Trust Agreement, the Guarantee Agreement and the Indenture under the 1939 Act; (D) the approval of the Alabama Public Service Commission (the "Alabama Commission"); and (E) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or "blue sky" laws.

(w) The financial statements incorporated by reference in the Registration Statement, the Preliminary Supplemented Prospectus and the Final Supplemented Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial position, results of operations and cash flows of the Company as of and for the dates indicated; said financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP") applied on a consistent basis (except that the unaudited financial statements may be subject to normal year-end adjustments) throughout the periods involved and necessarily include amounts that are ased on the best estimates and judgments of management. The selected financial data and the summary financial information included in the Registration Statement, the Preliminary Supplemented Prospectus and the Final Supplemented Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited and unaudited financial statements incorporated by reference in the Registration Statement.

SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.

(b) Payment of the purchase price for, and delivery of certificates for, the Preferred Securities shall be made at the offices of Balch & Bingham LLP, 1901

SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors jointly and severally covenants with each Underwriter as follows:

neither of the Offerors shall be obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or to file a consent to service of process or to file annual reports or to comply with any other requirements in connection with such qualification deemed by the Company to be unduly burdensome.

SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters to purchase and pay for the Preferred Securities are subject to the following conditions:

(1) The opinion, dated the Closing Date, of Balch & Bingham LLP, general counsel for the Company, substantially in the form attached hereto as Schedule III-A.

(2) The opinion, dated the Closing Date, of Troutman Sanders LLP, counsel for the Company, substantially in the form attached hereto as Schedule III-B.

(3) The opinion, dated the Closing Date, of Richards, Layton & Finger, P.A., Delaware counsel to the Trust, substantially in the form attached hereto as Schedule IV.

(4) The opinion, dated the Closing Date, of Richards, Layton & Finger, P.A., Delaware counsel to the Delaware Trustee, substantially in the form attached hereto as Schedule V.

(5) The opinion, dated the Closing Date, of Cravath, Swaine & Moore, counsel to the Property Trustee, the Guarantee Trustee, the Debt Trustee and the Calculation Agent, substantially in the form attached hereto as Schedule VI.

(6) The favorable opinion, dated as of the Closing Date, of Dewey Ballantine LLP, counsel for the Underwriters substantially in the form attached hereto as Schedule VII.

(12) The Company and the Trust shall have performed their respective obligations when and as provided under this Agreement.

SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE OFFERORS.

SECTION 7. INDEMNIFICATION.

(a) The Offerors jointly and severally agree to indemnify and hold harmless each of the Underwriters and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the 1933 Act, 1934 Act or otherwise, and to reimburse the Underwriters and such controlling person or persons, if any, for any legal or other expenses incurred by them in connection with defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus or, if the Offerors shall furnish to the Underwriters any amendments or any supplements thereto, or shall make any filings pursuant to Section 13 or 14 of the 1934 Act which are incorporated therein by reference, in any Preliminary Prospectus, the Registration Statement, the Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus as so amended or supplemented, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any such untrue statement or alleged untrue statement or omission or alleged omission which was made in such Registration Statement, Preliminary Prospectus, Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representative on behalf of, any Underwriter for use therein and except that this indemnity with respect to the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus, if the Offerors shall have furnished any amendment or supplement thereto, shall not inure to the benefit of any Underwriter (or of any person controlling such Underwriter) on account of any losses, claims, damages, liabilities or actions arising from the sale of the Preferred Securities to any person if a copy of the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus, or the Final Supplemented Prospectus (exclusive of documents incorporated therein by reference pursuant to Item 12 of Form S-3), as the same may then be amended or supplemented, shall not have been sent or given by or on behalf of such Underwriter to such person with or prior to the written confirmation of the sale involved and the untrue statement or alleged untrue statement or omission or alleged omission was corrected in the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus as supplemented or amended at the time of such confirmation. Each Underwriter agrees, within ten days after the receipt by it of notice of the commencement of any action in respect of which indemnity may be sought by it, or by any person controlling it, from the Offerors on account of its agreement contained in this Section 7, to notify the Offerors in writing of the commencement thereof but the omission of such Underwriter so to notify the Offerors of any such action shall not release the Offerors from any liability which it may have to such Underwriter or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 7. In case any such action shall be brought against the Underwriters or any such person controlling such Underwriters and such Underwriter shall notify the Offerors of the commencement thereof as above provided, the Offerors shall be entitled to participate in (and, to the extent that they shall wish, including the selection of counsel, to direct) the defense thereof, at their own expense. In case the Offerors elect to direct such defense and select such counsel, any Underwriter or controlling person shall have the right to employ its own counsel, but, in any such case, the fees and expenses of such counsel shall be at the expense of such Underwriter or controlling person unless the employment of such counsel has been authorized in writing by the Offerors in connection with defending such action. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include any statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. In no event shall any indemnifying party have any liability or responsibility in respect of the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim effected without its prior written consent.

(b) The Company agrees to indemnify the Trust against all loss, liability, claim, damage and expense whatsoever, as due from the Trust under Section 7(a) hereunder.

(c) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors and such of its officers who have signed the Registration Statement, the Trust and each other Underwriter and each person, if any, who controls the Offerors or any such other Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act to the same extent and upon the same terms as the indemnity agreement of the Offerors set forth in Section 7(a) hereof, but only with respect to alleged untrue statements or omissions made in the Registration Statement, the Preliminary Prospectus, the Prospectus, the Preliminary Supplemented Prospectus or the Final Supplemented Prospectus, or such documents as amended or supplemented, in reliance upon and in conformity with information furnished in writing to the Offerors by, or through the Representative on behalf of, such Underwriter for use therein.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.

SECTION 9. TERMINATION OF AGREEMENT.

(b) if the number of Defaulted Securities exceeds 10% of the Preferred Securities, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.

SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Trust, the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Trust and the Company and their respective successors and the controlling persons and officers, directors and trustees referred to in Section 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Trust and the Company and their respective successors, and said controlling persons and officers, directors and trustees and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Preferred Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

Very truly yours,

ALABAMA POWER COMPANY

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

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

ALABAMA POWER CAPITAL TRUST V

By: Alabama Power Company, as Depositor

Name:
Title:

CONFIRMED AND ACCEPTED,
as of the date first above written

LEHMAN BROTHERS INC.

By:

Authorized Signatory

For itself and as Representative of the other Underwriters named in Schedule I hereto.

                                   SCHEDULE I

NAME OF UNDERWRITER                          NUMBER OF PREFERRED SECURITIES
-------------------                          ------------------------------
Lehman Brothers Inc.                                    144,000

ABN AMRO Incorporated                                    14,000

Banc One Capital Markets, Inc.                           14,000
Mizuho International plc                                 14,000
Scotia Capital (USA) Inc.                                14,000


                                                         ------
TOTAL                                                   200,000
                                                        =======

SCHEDULE II

Initial public offering price per
Preferred Security (and purchase
price per security to be paid by
the several Underwriters): $997.77

Compensation per Preferred Security
to be paid by the Company to the
several Underwriters in respect of
their commitments: $10.00 per
Preferred Security

5
Schedule III-A

[Letterhead of BALCH & BINGHAM LLP]

___________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

ALABAMA POWER CAPITAL TRUST V
FLEXIBLE TRUST PREFERRED SECURITIES
(Seven Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as general counsel to Alabama Power Company (the "Company") in connection with (i) its formation of Alabama Power Capital Trust V (the "Trust"), a Delaware statutory trust, pursuant to the Amended and Restated Trust Agreement dated as of __________ __, 200_ among the Company and the trustees named therein (the "Trust Agreement"); (ii) the Trust's issuance and sale of Flexible Trust Preferred Securities evidencing approximately a 97% undivided interest in the assets of the Trust (the "Preferred Securities");
(iii) the Trust's issuance and sale of Common Securities evidencing approximately a 3% undivided interest in the assets of the Trust; (iv) the Company's issuance and sale to the Trust of approximately $206,186,000 of its Series E Junior Subordinated Notes (the "Notes") due October 1, 2042 pursuant to a Subordinated Note Indenture dated as of ________, by and between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, as supplemented by the Fourth supplemental indenture dated as of October _, 2002 (collectively, the "Indenture"); and (v) the Agreement as to Expenses and Liabilities dated as of October 1, 2002, between the Company and the Trust (the "Agreement as to Expenses and Liabilities"); (vi) the Remarketing Agreement, dated as of October _, 2002, among the Company, the Trust and Lehman Brothers Inc., as remarketing agent (the "Remarketing Agreement"); (vii) the Calculation Agent Agreement dated as of October _, 2002 among the Company, the Trust and JPMorgan Chase Bank (the "Calculation Agent Agreement"), as calculation agent (the "Calculation Agent"), and (viii) its issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant to a Guarantee Agreement dated as of October 1, 2002 (the "Guarantee Agreement") between the Company and JPMorgan Chase Bank, as trustee. The Preferred Securities are being sold to you today pursuant to the terms of an Underwriting Agreement dated September __, 2002, among the Company, the Trust and the underwriters named in Schedule I thereto (the "Underwriters") for whom you are acting as Representative (the "Underwriting Agreement"). This opinion is being delivered to you as Representative pursuant to Section 5(c)(1) thereof.

All capitalized terms not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

The Trust Agreement, the Indenture, the Guarantee Agreement, the Remarketing Agreement, the Underwriting Agreement and the Calculation Agent Agreement are herein referred to as the "Agreements".

8. Each of the Indenture, the Guarantee Agreement and the Trust Agreement has been duly qualified under the Trust Indenture Act of 1939, as amended.

10. The statements and legal conclusions contained in the Final Supplemented Prospectus under the caption "Certain Federal Income Tax Considerations" are correct in all material respects.

16. The Remarketing Agreement has been duly authorized, executed and delivered by the Company.

Yours very truly,

BALCH & BINGHAM LLP

Schedule III-B

[Letterhead of TROUTMAN SANDERS LLP]

__________ __, 2002

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

ALABAMA POWER CAPITAL TRUST V
FLEXIBLE TRUST PREFERRED SECURITIES
(Seven Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as counsel to Alabama Power Company (the "Company") in connection with (i) its formation of Alabama Power Capital Trust V, a Delaware statutory trust (the "Trust"), pursuant to the Amended and Restated Trust Agreement dated October 1, 2002 among the Company and the trustees named therein (the "Trust Agreement"); (ii) the Trust's issuance and sale of Flexible Trust Preferred Securities evidencing approximately a 97% undivided interest in the assets of the Trust (the "Preferred Securities");
(iii) the Trust's issuance and sale of Common Securities evidencing approximately a 3% undivided interest in the assets of the Trust; (iv) the Company's issuance and sale to the Trust of $206,186,000 aggregate principal amount of its Series E Junior Subordinated Notes due October 1, 2042 (the "Notes") pursuant to a Subordinated Note Indenture dated as of __________, 199_, by and between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee, as supplemented by the Fourth supplemental indenture dated as of October _, 2002 (collectively, the "Indenture"); (v) the Agreement as to Expenses and Liabilities dated as of October _, 2002, between the Company and the Trust (the "Agreement as to Expenses and Liabilities"); (vi) the Remarketing Agreement, dated as of October _. 2002, among the Company, the Trust and Lehman Brothers Inc., as remarketing agent (the "Remarketing Agreement"), (vii) the Calculation Agent Agreement dated as of October _, 2002 among the Company, the Trust and JPMorgan Chase Bank "(Calculation Agent Agreement"), as calculation agent (the "Calculation Agent"); and (viii) its issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant to a Guarantee Agreement dated as of October _, 2002 (the "Guarantee Agreement") between the Company and JPMorgan Chase Bank, as trustee (the "Guarantee Trustee"). The Preferred Securities are being sold to you today pursuant to the terms of an Underwriting Agreement dated September _ 2002 (the "Underwriting Agreement"), among the Company, the Trust and the underwriters named in Schedule I thereto (the "Underwriters") for whom you are acting as Representative. This opinion is being delivered to you as Representative pursuant to Section 5(c)(2) of the Underwriting Agreement thereof.

All capitalized terms not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

4. Each of the Indenture and the Calculation Agent Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the JPMorgan Chase Bank (the "Debt Trustee") and the Calculation Agent, respectively, constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Calculation Agent Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Indenture conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

5. The Notes have been duly authorized and executed by the Company and, when authenticated by the Debt Trustee in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the qualifications that the enforceability of the Company's obligations under the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Notes conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

6. The Guarantee Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Guarantee Trustee, constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Guarantee Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Guarantee Agreement conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

7. Each of the Indenture, the Guarantee Agreement and the Trust Agreement has been duly qualified under the Trust Indenture Act of 1939, as amended.

11. The Remarketing Agreement has been duly authorized, executed and delivered by the Company.

We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs 4, 5, 6, 9 and 10 above. In the course of the preparation by the Company of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with other counsel for the Company, with representatives of Deloitte & Touche LLP and with your counsel. Based upon our examination of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Final Supplemented Prospectus, as of September _, 2002, complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents, as of their respective dates of filing with the Commission, complied as to form in all material respects with the relevant requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion as to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention which gives us reason to believe that the Registration Statement, as of the date of filing of the form 10-K (including the Exchange Act Documents on file with the Commission as of such date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Final Supplemented Prospectus (including the Exchange Act Documents) contained, as of its date, or contains, on the date hereof, any untrue statement therein of a material fact or omitted, as of its date, or omits, on the date hereof, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents and with respect to information set forth in the Final Supplemented Prospectus under the caption "Description of the Preferred Securities - Book-Entry Only Issuance - The Depository Trust Company."

Yours very truly,

TROUTMAN SANDERS LLP

Schedule IV

[Letterhead of RICHARDS, LAYTON & FINGER, P.A.]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

Re: Alabama Power Capital Trust V Flexible Trust Preferred Securities

(Seven Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as special Delaware counsel for Alabama Power Company, an Alabama corporation (the "Company"), and Alabama Power Capital Trust V, a Delaware statutory trust (the "Trust"), in connection with the matters set forth herein. This opinion is being furnished to you pursuant to Section 5(c)(3) of the Underwriting Agreement, dated __________, 2002 (the "Underwriting Agreement"), among the Company, the Trust, Lehman Brothers Inc. and the other Underwriters listed in Schedule I thereto.

For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following:

(e) A Certificate of Good Standing for the Trust, dated October _, 2002, obtained from the Secretary of State; and

Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement.

2. Under the Statutory Trust Act and the Trust Agreement, the Trust has the trust power and authority to (i) own property and conduct its business, all as described in the Prospectus and the Prospectus Supplement,
(ii) execute and deliver, and to perform its obligations under, the Underwriting Agreement and the Remarketing Agreement, (iii) issue and perform its obligations under the Trust Securities, (iv) perform its obligations under the Trust Agreement and Calculation Agent Agreement.

4. Under the Statutory Trust Act and the Trust Agreement, the Underwriting Agreement, the Remarketing Agreement and the Calculation Agent

Agreement  have been duly  authorized by all necessary  trust action on the
part of the Trust.

     5. No authorization,  approval, consent or order of any Delaware court
or Delaware  governmental  authority  or Delaware  agency is required to be

obtained by the Trust solely as a result of the issuance and sale of the Preferred Securities.

6. The Persons to whom Preferred Securities are to be issued by the Trust (collectively, the "Preferred Security Holders"), as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Preferred Security Holders may be obligated, pursuant to the Trust Agreement, to (i) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of Preferred Securities Certificates and the issuance of replacement Preferred Securities Certificates and (ii) provide security or indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and powers under the Trust Agreement. We also note that the Company, in its capacity as Depositor and not in its capacity as a Holder, has undertaken certain payment obligations as set forth in the Trust Agreement.

7. The Trust Agreement constitutes a valid and binding obligation of the Company, and is enforceable against the Company, in accordance with its terms.

9. We have reviewed the statements in the Prospectus under the caption "The Trusts" and the statements in the Prospectus Supplement under the caption "Alabama Power Capital Trust V" and, insofar as they contain statements of Delaware law, such statements are fairly presented.

Very truly yours,

RICHARDS, LAYTON & FINGER, P.A.

Schedule V

[Letterhead of Richards, Layton & Finger, P.A.]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Alabama Power Capital Trust V
c/o Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Re: Alabama Power Capital Trust V Flexible Trust Preferred Securities

(Seven Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as counsel to Chase Manhattan Bank USA, National Association, a national banking association ("Chase USA"), in connection with the formation of Alabama Power Capital Trust V, a statutory trust existing under the laws of the State of Delaware (the "Trust") pursuant to the Trust Agreement, dated as of November 27, 1996, by and between Chase USA, not in its individual capacity but solely as trustee (the "Trustee"), and Alabama Power Company (the "Company"), as amended and restated pursuant to an Amended and Restated Trust Agreement dated as of October _, 2002, among the Company, the Trustee, the other trustees named therein and the holders from time to time of the undivided beneficial interests in the assets of the Trust (collectively, the "Trust Agreement"). This opinion is being delivered to you pursuant to Section 5(c)(4) of the Underwriting Agreement, dated ___________ __, 2002 (the "Underwriting Agreement"), among Lehman Brothers Inc., the several Underwriters named in Schedule I thereto, Alabama Power Company and the Trust, pursuant to which the $___,000,000 Flexible Trust Preferred Securities of the Trust will be sold. All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Underwriting Agreement.

The foregoing opinions are subject to the following exceptions, qualifications and assumptions:

Very truly yours,

RICHARDS, LAYTON & FINGER, P.A.

Schedule VI

[Letterhead of Cravath, Swaine & Moore]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Alabama Power Capital Trust II
c/o Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291

Alabama Power Capital Trust V Flexible Trust Preferred Securities

(Seven Year Initial Fixed Rate Period)

Ladies and Gentlemen:

We have acted as counsel to JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) (the "Bank") in connection with (a) the Subordinated Note Indenture, dated as of ________ ______, 199_, as heretofore supplemented (the "Original Indenture"), between Alabama Power Company (the "Company") and the Bank, as Trustee, (b) the Fourth supplemental indenture dated as of October _, 2002 (together with the Original Indenture, herein called the "Indenture"), between the Company and the Bank, as Trustee, (c) the Guarantee Agreement dated as of October _, 2002 (the "Guarantee Agreement"), between the Company, as Guarantor and the Bank, as Trustee, (d) the Amended and Restated Trust Agreement, dated as of October 1, 2002 (the "Trust Agreement") among the Company, the Bank, as Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee, and William E. Zales, Jr. and J. Randy DeRieux, as Administrative Trustees and (d) the Calculation Agent Agreement dated as of October __, 2002 among the Company, the Trust and JPMorgan Chase Bank (the "Calculation Agent Agreement"), as calculation agent (the "Calculation Agent").

Based upon the foregoing, we are of the opinion that:

i) the Bank has been duly incorporated and is validly existing as a banking corporation in good standing under the laws of the State of New York;

Very truly yours,

CRAVATH, SWAINE & MOORE

Schedule VII

[Letterhead of DEWEY BALLANTINE]

__________ __, 200_

Lehman Brothers Inc.,
as Representative
745 7th Avenue
New York, NY 10019

ALABAMA POWER CAPITAL TRUST V
Flexible Trust Preferred Securities
(Seven Year Initial Fixed Rate Period)

Ladies and Gentlemen:

In connection with (i) the formation by Alabama Power Company (the "Company") of Alabama Power Capital Trust V (the "Trust"), a Delaware statutory trust, pursuant to the Amended and Restated Trust Agreement dated October _, 2002 among the Company and the trustees named therein (the "Trust Agreement"); (ii) the Trust's issuance and sale of Trust Preferred Securities (Seven Year Initial Fixed Rate Period) evidencing approximately a 97% undivided interest in the assets of the Trust (the "Preferred Securities"); (iii) the Trust's issuance and sale of Common Securities evidencing approximately a 3% undivided interest in the assets of the Trust; (iv) the Company's issuance and sale to the Trust of $206,186,000 of its Series E Junior Subordinated Notes (the "Notes") pursuant to a Subordinated Note Indenture dated as of __________, 199_, by and between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, as heretofore supplemented and as further supplemented by the Fourth supplemental indenture dated as of __________ __, 200_ (collectively, the "Indenture"); (v) the Agreement as to Expenses and Liabilities dated as of October 1, 2002, between the Company and the Trust (the "Agreement as to Expenses and Liabilities); (vi) the Company's issuance of a guarantee (the "Guarantee") of the Preferred Securities pursuant to a Guarantee Agreement dated as of October _ 2002 (the "Guarantee Agreement") between the Company and JPMorgan Chase Bank, as trustee and (vii) the Calculation Agent Agreement dated as of October_, 2002 among the Company, the Trust and JPMorgan Chase Bank (the "Calculation Agent Agreement"), as calculation agent (the "Calculation Agent"), we have acted as counsel to you and the other underwriters named in the Schedule I (the "Underwriters") to the Underwriting Agreement dated September _, 2002, among the Company, the Trust and the Underwriters for whom you are acting as Representative (the "Underwriting Agreement"). This opinion is being delivered to you as Representative pursuant to Section 5(c)(6) thereof.

All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Underwriting Agreement.

The Trust Agreement, the Indenture, the Guarantee Agreement, the Remarketing Agreement, the Underwriting Agreement and the Calculation Agent Agreement are herein referred to as the "Agreements".

1. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Alabama and has due corporate authority to carry on the public utility business in which it is engaged and to own and operate the properties used by it in such business and to enter into and perform its obligations under the Agreements and the Notes.

3. All orders, consents, or other authorizations or approvals of the Alabama Public Service Commission and the Commission legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities have been obtained; such orders are sufficient for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities; the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities conform in all material respects with the terms of such orders; and no other order, consent or other authorization or approval of any Alabama or United States governmental body (other than in connection or in compliance with the provisions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) is legally required for the issuance and delivery of the Notes and the Guarantee and the issuance and sale of the Preferred Securities in accordance with the terms of the Underwriting Agreement.

4. Each of the Indenture and the Calculation Agent Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by JPMorgan Chase Bank (the "Debt Trustee") and the Calculation Agent, respectively constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Indenture and the Calculation Agent Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Indenture conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

5. The Notes have been duly authorized and executed by the Company and, when authenticated by the Debt Trustee in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the qualifications that the enforceability of the Company's obligations under the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); the Notes conform as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

6. The Guarantee Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company's obligations under the Guarantee Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and the Guarantee Agreement conforms as to legal matters in all material respects to the description thereof in the Final Supplemented Prospectus.

7. Each of the Indenture, the Guarantee Agreement and the Trust Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended.

We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs 4, 5, 6, 8 and 9 above. In the course of the preparation by the Company of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents, we participated in conferences with certain officers and employees of the Company, with representatives of Deloitte & Touche LLP and with counsel to the Company. Based upon our examination of the Registration Statement, the Final Supplemented Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement and the Final Supplemented Prospectus and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Final Supplemented Prospectus, as of September _, 2002 complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents, as of their respective dates of filing with the Commission, complied as to form in all material respects with the relevant requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion as to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents, and (ii) nothing came to our attention which gives us reason to believe that the Registration Statement, as of the date of filing of the Form 10-K (including the Exchange Act Documents on file with the Commission as of such date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Final Supplemented Prospectus (including the Exchange Act Documents) contained, as of its date, or contains, on the date hereof, any untrue statement therein of a material fact or omitted, as of its date, or omits, on the date hereof, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no opinion or belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Final Supplemented Prospectus or the Exchange Act Documents or with respect to information set forth in the Final Supplemented Prospectus under the caption "Description of the Preferred Securities - Book-Entry Only Issuance - The Depository Trust Company."

Very truly yours,

DEWEY BALLANTINE LLP

Exhibit 4.9-A

ALABAMA POWER COMPANY
TO
JPMORGAN CHASE BANK,
TRUSTEE

THIRD SUPPLEMENTAL INDENTURE

DATED AS OF OCTOBER 2, 2002

$103,093,000

SERIES D JUNIOR SUBORDINATED NOTES

DUE OCTOBER 1, 2042

                               TABLE OF CONTENTS1

                                                                                                               Page
ARTICLE 1 - Series D Junior Subordinated Notes....................................................................2

   SECTION 101    Establishment...................................................................................2

   SECTION 102    Definitions.....................................................................................2

   SECTION 103    Payment of Principal and Interest...............................................................8

   SECTION 104    Deferral of Interest Payments...................................................................9

   SECTION 105    Denominations..................................................................................10

   SECTION 106    Global Securities..............................................................................10

   SECTION 107    Transfer.......................................................................................11

   SECTION 108    Redemption.....................................................................................11


ARTICLE 2 - Distribution Procedures..............................................................................11

   SECTION 201    Distributions..................................................................................12

   SECTION 202    Distribution Rate..............................................................................13

   SECTION 203    Distribution Periods...........................................................................15


ARTICLE 3 - Remarketing Procedures...............................................................................15

   SECTION 301    Election to Remarket...........................................................................15

   SECTION 302    Notice of Election.............................................................................16

   SECTION 303    Determination of Distribution Rate.............................................................17

   SECTION 304.   Remarketing Agent..............................................................................18


ARTICLE 4 - Miscellaneous Provisions.............................................................................18

   SECTION 401    Recitals by Company............................................................................18

   SECTION 402    Ratification and Incorporation of Original Indenture...........................................18

   SECTION 403    Executed in Counterparts.......................................................................19


EXHIBIT A.........................................................................................................1

EXHIBIT B.........................................................................................................1

__________________
1  This table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of
   any of its terms and provisions.

THIS THIRD SUPPLEMENTAL INDENTURE is made as of the 2nd day of October, 2002, by and between ALABAMA POWER COMPANY, an Alabama corporation, 600 North 18th Street, Birmingham, Alabama 35291 (the "Company"), and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), a New York banking corporation, 450 West 33rd Street, New York, New York 10001 (the "Trustee").

W I T N E S S E T H:

WHEREAS, the Company has heretofore entered into a Subordinated Note Indenture, dated as of January 1, 1997 (the "Original Indenture") with JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank);

WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as supplemented by the First Supplemental Indenture dated as of January 1, 1997, the Second Supplemental Indenture dated as of February 25, 1999 and this Third Supplemental Indenture dated as of October 2, 2002, is herein called the "Indenture";

WHEREAS, under the Original Indenture, a new series of Junior Subordinated Notes may at any time be established by the Board of Directors of the Company in accordance with the provisions of the Original Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee;

WHEREAS, the Company proposes to create under the Indenture a new series of Junior Subordinated Notes;

WHEREAS, additional Junior Subordinated Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and

WHEREAS, all conditions necessary to authorize the execution and delivery of this Third Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.

NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

Series D Junior Subordinated Notes

SECTION 101. Establishment.

There is hereby established a new series of Junior Subordinated Notes to be issued under the Indenture, to be designated as the Company's Series D Junior Subordinated Notes due October 1, 2042 (the "Series D Notes").

There are to be authenticated and delivered $103,093,000 aggregate principal amount of Series D Notes, and no further Series D Notes shall be authenticated and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Series D Notes shall be issued in definitive fully registered form.

The Series D Notes shall be in substantially the form set out in Exhibit A hereto. The entire principal amount of the Series D Notes shall initially be evidenced by one certificate issued to the Property Trustee of Alabama Power Capital Trust IV.

The form of the Trustee's Certificate of Authentication for the Series D Notes shall be in substantially the form set forth in Exhibit B hereto.

Each Series D Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.

SECTION 102. Definitions.

The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.
"Additional Interest" with respect to the Series D Notes means
(i) such additional amounts as may be required so that the net amounts received and retained by the Holder (if the Holder is the Securities Trust) after paying taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority will not be less than the amounts the Holder would have received had no such taxes, duties, assessments, or other governmental charges been imposed; and (ii) any interest due and not paid on an Interest Payment Date, together with interest thereon from such Interest Payment Date to the date of payment on each Interest Payment Date.

"Administrative Trustee" means each of the individuals identified as an "Administrative Trustee" in the Trust Agreement.

"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under federal bankruptcy law or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Person or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of such decree or order unstayed and in effect for a period of 60 consecutive days; or

(ii) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under federal bankruptcy law or any other applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or similar official of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of action by such Person in furtherance of any such action.

"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banks in New York, New York are authorized or obligated by law or executive order to remain closed, (iii) a day on which the Corporate Trust Office or the Indenture Trustee's principal corporate trust office is closed for business or (iv) a day on which the New York Stock Exchange is closed.

"Calculation Agent" means JPMorgan Chase Bank, its successors and assigns, or such other bank or trust company appointed to such capacity by the Company and the Administrative Trustees.

"Calculation Agent Agreement" means the agreement among the Company, the Trust and JPMorgan Chase Bank, as calculation agent, dated as of October 2, 2002.

"Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. The Depository Trust Company will be the initial Clearing Agency.

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

"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

"Company" means Alabama Power Company.

"Deferred Interest" means each installment of interest not paid during any Extension Period, and interest thereon. Deferred installments of interest shall bear interest at the rate of the prevailing Interest Rate per annum from the applicable Interest Payment Date to the date of payment, compounded on each Interest Payment Date.

"Definitive Preferred Securities Certificates" means Preferred Securities Certificates issued in certificated, fully registered form as provided in the Trust Agreement.

"Distribution Payment Date" means each day on which Distributions are payable on the Preferred Securities determined based on the prevailing Distribution Rate.

"Distribution Period" means each semiannual period in a Fixed Rate Period and each quarterly period in a Floating Rate Period for which Distributions are payable on the Trust Securities.

"Distribution Rate" means the rate at which Distributions will accrue on the Trust Securities.

"Distributions" means amounts payable in respect of the Preferred Securities pursuant to Section 4.01 of the Trust Agreement.

"Election Date" means a date that is no later than the fifth Business Day prior to the proposed Remarketing Date.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Extension Period" means any period during which the Company has elected to defer payments of interest on the Series D Notes, which deferral may be for a period of up to five years.

"Fixed Rate" means the Distribution Rate during a Fixed Rate Period as determined by a Remarketing.

"Fixed Rate Period" means the Initial Fixed Rate Period and each period set by the Company and the Administrative Trustees during a Remarketing for which the Fixed Rate determined in such Remarketing will apply, provided, however, that a Fixed Rate Period must be for a duration of at least six months, may not extend beyond the stated maturity of the Series D Notes, shall begin on the first day of a calendar quarter upon the expiration of the preceding Fixed Rate Period or Distribution Period with respect to the current Floating Rate Period (except for the Initial Fixed Rate Period) and may not end on a day other than the last day of a calendar quarter.

"Floating Rate" means 3-month LIBOR plus 2.91%, reset quarterly.

"Floating Rate Determination Date" means the second London Business Day immediately preceding the first day of the relevant Distribution Period in the Floating Rate Period.

"Floating Rate Period" means any period during which a Floating Rate is in effect.

"Initial Fixed Rate Period" means the period from the Original Issue Date through September 30, 2007.

"Initial Distribution Rate" means 4.75% per annum.

"Interest Payment Dates" means the dates on which interest on the Series D Notes is payable.

"Interest Period" means the period for which interest on the Series D Notes is payable.

"Interest Rate" means the rate at which interest shall accrue on the Series D Notes.

"1940 Act" means the Investment Company Act of 1940, as amended.

"Investment Company Event" means that the Administrative Trustees and the Company shall have received an Opinion of Counsel to the effect that, as a result of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority after the Original Issue Date, there is more than an insubstantial risk that the Securities Trust is or will be considered an investment company under the 1940 Act.

"London Business Day" means a day that is a Business Day and a day on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.

"Original Issue Date" means October 2, 2002.

"Preferred Security" means an undivided beneficial ownership interest in the assets of the Securities Trust having a Liquidation Amount of $1,000 and having rights provided therefor in the Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein.

"Preferred Securities Certificate" means a certificate evidencing ownership of a Preferred Security or Securities, substantially in the form attached as Exhibit A to the Trust Agreement.

"Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the Trust Agreement solely in its capacity as Property Trustee of the Trust.

"Record Date" with respect to any Interest Payment Date means the opening of business on the Business Day immediately preceding an Interest Payment Date.

"Redemption Date" has the meaning set forth in Section 108.

"Remarketing" means the conduct by which a Fixed Rate shall be determined in accordance with the Remarketing Procedures.

"Remarketing Agent" means Lehman Brothers Inc., its successors or assigns, or such other remarketing agent appointed to such capacity by the Administrative Trustees.

"Remarketing Agreement" means the agreement among the Company, the Trust and Lehman Brothers Inc., as remarketing agent, dated October 2, 2002.

"Remarketing Date" means any Business Day no later than the third Business Day prior to any Remarketing Settlement Date.

"Remarketing Procedures" means those procedures set forth in Article 3.

"Remarketing Settlement Date" means the first Business Day of the next Distribution Period following the Distribution Period in which a Remarketing has occurred.

"Securities Trust" or "Trust" means Alabama Power Capital Trust IV, a statutory trust formed by the Company under Delaware law to issue Trust Securities, the proceeds of which will be used to purchase Series D Notes.

"Securityholder" or "Holder" when used with respect to a Trust Security means a Person in whose name a Trust Security or Securities is registered in the Securities Register for the Trust Securities; any such Person is a beneficial owner within the meaning of the Delaware Statutory Trust Act.

"Special Event" means an Investment Company Act Event or Tax Event.

"Stated Maturity" means October 1, 2042.

"Tax Event" means that the Administrative Trustees and the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Series D Notes, (ii) interest payable on the Series D Notes would not be deductible by the Company for United States federal income tax purposes, or (iii) the Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the Original Issue Date.

"Telerate Page 3750" means the display designated on page 3750 on Moneyline Telerate (or such other page as may replace the 3750 page on the service or such other service as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits).

"3-month LIBOR" means for any Floating Rate Determination Date, the offered rate in U.S. dollars having an index maturity of three months for a period commencing on the second London Business Day immediately following the Floating Rate Determination Date in amounts of not less than $1,000,000, as such rate appears on Telerate Page 3750 or a successor reporter of such rates selected by the Calculation Agent and acceptable to the Company, at approximately 11:00 a.m., London time, on the Floating Rate Determination Date.

"Trust Agreement" means the Alabama Power Capital Trust IV Amended and Restated Trust Agreement among the Company and the Trustees dated as of October 1, 2002.

"Trust Agreement Event of Default" means any one of the following events (whatever the reason for such Trust Agreement Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

                           (i) the occurrence of an Event of Default; or

                           (ii) default by the Securities Trust in the payment
                  of any Distribution when it becomes due and payable, and
                  continuation of such default for a period of 30 days; or

                           (iii) default by the Securities Trust in the payment
of any redemption  price of any Trust Security when it becomes due and payable;
or

                           (iv) default in the performance, or breach, of any
                  covenant or warranty of the Trustees in the Trust Agreement
                  (other than a covenant or warranty a default in whose
                  performance or breach is dealt with in clause (ii) or (iii)
                  above) and continuation of such default or breach for a period
                  of 60 days after there has been given, by registered or
                  certified mail, to the Trustees by the Holders of at least 10%
                  in liquidation amount of the Outstanding (as defined in the
                  Trust Agreement) Preferred Securities a written notice
                  specifying such default or breach and requiring it to be
                  remedied and stating that such notice is a "Notice of Default"
                  hereunder; or

                           (v) the occurrence of a Bankruptcy Event with respect

to the Securities Trust.

"Trustees" means the Persons identified as "Trustees" in the Trust Agreement.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

"Trust Security" means any one of the Common Securities (as defined in the Trust Agreement) or the Preferred Securities.

SECTION 103. Payment of Principal and Interest.

The unpaid principal amount of the Series D Notes shall bear interest at the Interest Rate per annum until paid or duly provided for. Interest shall be paid on each Interest Payment Date to the Person in whose name the Series D Notes are registered on the Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable. So long as an Extension Period is not occurring, any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Record Date and may either be paid to the Person or Persons in whose name the Series D Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee ("Special Record Date"), notice whereof shall be given to Holders of the Series D Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series D Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture.

While the Preferred Securities are outstanding (i) the Interest Rate will be equal to the Distribution Rate payable on the Preferred Securities, (ii) the Interest Periods will be the same as Distribution Periods for the Preferred Securities and (iii) the Interest Payment Dates will be the same as the Distribution Payment Dates for the Preferred Securities.

If the Securities Trust is terminated and the Series D Notes are distributed to the holders of the Preferred Securities, the interest payable, Interest Rate, Interest Periods and Interest Payment Dates will be determined in the same manner as the Distributions, Distribution Rate, Distribution Periods and Distribution Payment Dates for the Preferred Securities and the Remarketing Procedures shall remain the same except: (i) the effects of the Trust Agreement Events of Default shall be occasioned only by the Events of Default and (ii) the cure and waiver provisions relating to the Trust Agreement Events of Default shall be superceded by the cure and waiver provisions relating to the Events of Default.

Payment of the principal and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Series D Notes shall be made upon surrender of the Series D Notes at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto.

The Company shall pay, as additional interest on the Series D Notes, when due to the United States or any other taxing authority, the amounts set forth in clause (i) of the definition of Additional Interest.

SECTION 104. Deferral of Interest Payments.

The Company has the right to defer payments of interest on the Series D Notes by extending the interest payment period from time to time on the Series D Notes (an "Extension Period"). During an Extension Period, interest will continue to accrue on the Series D Notes.

If the Company decides to defer interest payments on the Series D Notes, the Extension Period shall not exceed five consecutive years. An Extension Period shall not extend beyond the stated maturity of the Series D Notes. Prior to the termination of any Extension Period, the Company may further defer payments of interest provided that the Extension Period, together with all previous and further extensions thereof, may not exceed five consecutive years. There could be multiple Extension Periods of varying lengths throughout the term of the Series D Notes. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above limitations and requirements. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name the Series D Notes are registered on the Record Date for such Interest Payment Date, provided that Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.

The Company shall give the Holder or Holders of the Series D Notes, the Trustee, the Remarketing Agent and the Calculation Agent, notice as provided in Sections 105 and 106, respectively, of the Original Indenture of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate, or (ii) the date the Company or the Securities Trust is required to give notice to any applicable self-regulatory organization of the record date or the date such distributions are payable. The Company shall cause the Securities Trust to give notice of the Company's selection of such Extension Period to Holders of the Trust Securities, the Calculation Agent and the Remarketing Agent.

At any time any of the foregoing notices are given to the Trustee, the Company shall give to the Paying Agent for the Series D Notes such information as said Paying Agent shall reasonably require in order to fulfill its tax reporting obligations with respect to such Series D Notes.

SECTION 105. Denominations.

The Series D Notes may be issued in the denominations of $1,000, or any integral multiple thereof.

SECTION 106. Global Securities.

If the Series D Notes are distributed to Holders of the Trust Securities of the Securities Trust in liquidation of such Holders' interests therein, the Series D Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series D Notes represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Series D Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.

Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series D Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary.

A Global Security shall be exchangeable for Series D Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series D Notes. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series D Notes registered in such names as the Depositary shall direct.

SECTION 107. Transfer.

No service charge will be made for any transfer or exchange of Series D Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

The Company shall not be required (a) to issue, transfer or exchange any Series D Notes during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice of redemption, and ending at the close of business on the day of the mailing, or (b) to transfer or exchange any Series D Notes called for redemption.

SECTION 108. Redemption.

The Series D Notes shall be subject to redemption at the option of the Company, in whole, but not in part, without premium or penalty, at any time or from time to time on the last Interest Payment Date relating to any Fixed Rate Period and on any Interest Payment Date relating to a Floating Rate Period, at a Redemption Price equal to 100% of the principal amount to be redeemed plus accrued but unpaid interest, including Additional Interest, if any, to the Redemption Date. In addition, upon the occurrence of a Special Event at any time, the Company may, within ninety (90) days following the occurrence thereof and subject to the terms and conditions of the Indenture, elect to redeem the Series D Notes, in whole, but not in part, at a price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including Additional Interest) to the date of redemption (any date of redemption as provided for in this paragraph herein called a "Redemption Date").

The Series D Notes will not have a sinking fund.

Notice of redemption shall be given as provided in Section 1104 of the Original Indenture.

ARTICLE 2

Distribution Procedures

Article 2 sets forth the procedures to determine the Distribution Rate, Distribution Periods and Distribution Payment Dates for the Preferred Securities. While the Preferred Securities are outstanding, the Interest Rate, Interest Periods, Interest Payment Dates and associated terms relating to the Series D Notes shall be the same as the Distribution Rate, Distribution Periods and Distribution Payment Dates and associated terms relating to the Preferred Securities. If the Securities Trust is terminated and the Series D Notes are distributed to the holders of the Preferred Securities, subject to Section 103 herein, the below described procedures will be directly applicable to the Series D Notes.

SECTION 201. Distributions.

Distributions shall accrue from the Original Issue Date until the Redemption Date (as defined in the Trust Agreement). During the Initial Fixed Rate Period, Distributions will be payable semiannually in arrears on April 1 and October 1 of each year, commencing on April 1, 2003. During any Fixed Rate Period, other than the Initial Fixed Rate Period, Distributions will be payable semiannually in arrears on the first day of the calendar quarter that begins six months after the first day of the Fixed Rate Period and on the first day of each second quarter thereafter during such Fixed Rate Period. During any Floating Rate Period, Distributions will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year.

If any Distribution Payment Date with respect to a Fixed Rate Period is not a Business Day, Distributions will be payable, without interest, on the immediately succeeding Business Day, with the same force and effect as if payment was made on the date such payment was originally payable. If any Distribution Payment Date with respect to a Floating Rate Period is not a Business Day, then Distributions will be payable on the immediately succeeding Business Day and Distributions (except for a Distribution Payment Date that coincides with the Redemption Date (as defined in the Trust Agreement)) shall accrue to the actual payment date.

The amount of Distributions payable on each Distribution Payment Date relating to a Fixed Rate Period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of Distributions payable on each Distribution Payment Date in respect of a Floating Rate Period will be computed by multiplying the per annum Distribution Rate in effect for such Distribution Period by a fraction, the numerator of which will be the actual number of days in such Distribution Period (or portion thereof) (determined by including the first day thereof and excluding the last thereof) and the denominator of which will be 360, and multiplying the rate so obtained by $1,000.

Distributions on the Preferred Securities will be deferred during any Extension Period but will continue to accrue. The payment of such Distributions, together with any interest thereon, will be distributed to the Holders of Trust Securities as received at the end of any Extension Period.

Distributions on the Trust Securities shall be made and shall be deemed payable on each Distribution Payment Date only to the extent that the Trust has legally and immediately available funds in the Payment Account (as defined in the Trust Agreement) for the payment of such Distributions.

Distributions, including Additional Amounts, if any, on the Trust Securities on each Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities on the Record Date.

Each Trust Security upon registration of transfer of or in exchange for or in lieu of any other Trust Security shall carry the rights of Distributions accrued (including Additional Amounts, if any) and unpaid, and to accrue (including Additional Amounts, if any), which were carried by such other Trust Security.

SECTION 202. Distribution Rate.

During the Initial Fixed Rate Period, the Distribution Rate shall be the Initial Distribution Rate.

Prior to the expiration of the Initial Fixed Rate Period and any subsequent Fixed Rate Period or Distribution Period with respect to a Floating Rate Period, the Company and the Administrative Trustees will have the option to remarket the Preferred Securities to establish a new Fixed Rate for a new Fixed Rate Period (to take effect upon expiration of such Fixed Rate Period or Distribution Period within the current Floating Rate Period, as the case may be). If the Company and the Administrative Trustees elect to conduct a Remarketing of the Preferred Securities for a new Fixed Rate Period, the Company and Administrative Trustees shall not less than 20 nor more than 35 Business Days prior to the related Election Date, notify the Clearing Agency, Property Trustee, Indenture Trustee, Calculation Agent and Remarketing Agent. If the Preferred Securities are not issued in global, fully registered form to the Clearing Agency, such notice shall be delivered to the Holders of the Preferred Securities instead of the Clearing Agency. Such notice shall indicate the length of the proposed new Fixed Rate Period and the proposed Remarketing Date. The Company and the Administrative Trustees shall have the right to terminate a Remarketing at any time prior to the Election Date by notice of such termination to the Clearing Agency, the Remarketing Agent, the Property Trustee, the Indenture Trustee and the Calculation Agent.

If the Remarketing Agent has determined that it will be able to remarket all Preferred Securities tendered or deemed tendered for purchase in the Remarketing at a Fixed Rate and at a price of $1,000 per Preferred Security, on such Remarketing Date, the Distribution Rate for the new Fixed Rate Period will be the Fixed Rate determined by the Remarketing Agent, which will be the rate per annum (rounded to the nearest one-thousandth (0.001) of one percent per annum) which the Remarketing Agent determines, in its sole judgment, to be the lowest Fixed Rate per annum, if any, that will enable it to remarket all Preferred Securities tendered or deemed tendered for Remarketing at a price of $1,000 per Preferred Security.

If the Company and the Administrative Trustees do not elect to remarket the Preferred Securities or have terminated a Remarketing or the Remarketing Agent is unable to remarket all of the Preferred Securities tendered or deemed tendered for a purchase price of $1,000 per Preferred Security, the Distribution Rate shall be the Floating Rate and the new Distribution Period shall be a Floating Rate Period.

The Calculation Agent shall calculate the Floating Rate as follows:

(1) The Calculation Agent shall calculate the Floating Rate with respect to each Distribution Period in a Floating Rate Period by determining 3-month LIBOR as of the Floating Rate Determination Date preceding such Distribution Period, in which case, the Floating Rate will be 3-month LIBOR plus 2.91%.

(2) In the event no 3-month LIBOR appears on Telerate Page 3750 as of approximately 11:00 a.m., London time, on a Floating Rate Determination Date, the Calculation Agent shall request the principal London offices of each of four major banks in the London interbank market selected by the Calculation Agent (after consultation with the Company) to provide a quotation of the rate (the "Rate Quotation") at which three-month deposits in amounts of not less than $1,000,000 are offered by it to prime banks in the London interbank market, as of approximately 11:00 a.m., London time, on such Floating Rate Determination Date, that is representative of single transactions at such time (the "Representative Amounts"). If at least two Rate Quotations are provided, the Floating Rate will be the arithmetic mean of the Rate Quotations obtained by the Calculation Agent, plus 2.91%.

(3) In the event no 3-month LIBOR appears on Telerate Page 3750 as of approximately 11:00 a.m., London time, on a Floating Rate Determination Date and there are fewer than two Rate Quotations, the Floating Rate will be the arithmetic mean of the rates quoted at approximately 11:00
a.m., New York City time, on such Floating Rate Determination Date, by three major banks in New York City selected by the Calculation Agent (after consultation with the Company), for loans in Representative Amounts in U.S. dollars to leading European banks, having an index maturity of three months for a period commencing on the second London Business Day immediately following such Floating Rate Determination Date, plus 2.91%; provided, however, that if fewer than three banks selected by the Calculation Agent are quoting such rates, the Floating Rate for the applicable Floating Rate Period will be the Floating Rate in effect for the preceding Floating Rate Period.

If the Company elects to defer interest during a Fixed Rate Period, Distributions will continue to accrue at the Fixed Rate until the expiration of the Fixed Rate Period. Prior to the expiration of such Fixed Rate Period and any Fixed Rate Period during the Extension Period, the Company and the Administrative Trustees will have the option to remarket the Preferred Securities for a new Fixed Rate Period (to take effect upon expiration of such Fixed Rate Period). If the Company and the Trust do not remarket the Preferred Securities, the Floating Rate during the Extension Period shall be determined as provided herein, but shall not be less than the Fixed Rate for the Fixed Rate Period just ended. If the Company elects to defer interest during a Floating Rate Period, Distributions will continue to accrue at the applicable Floating Rate, reset quarterly, subject to the right of the Company and the Administrative Trustees to remarket the Preferred Securities prior to any Distribution Payment Date in order to establish a new Fixed Rate for a new Fixed Rate Period in accordance with the procedures set forth herein.

SECTION 203. Distribution Periods.

In accordance with Section 202 and the Remarketing Procedures, the Company and the Trust may, prior to the expiration of a Fixed Rate Period or to a Distribution Payment Date with respect to a Floating Rate Period, elect to remarket the Preferred Securities to establish a new Fixed Rate for a new Fixed Rate Period. A Fixed Rate Period must be for a duration of at least six months, may not extend beyond the Stated Maturity of the Series D Notes, shall begin on the first day of a calendar quarter (other than the Initial Fixed Rate Period) and may not end on a day other than the last day of a calendar quarter. If a new Fixed Rate for a new Fixed Rate Period is set in a Remarketing, a new Fixed Rate Period shall commence following the expiration of the then current Fixed Rate Period or Distribution Period within the current Floating Rate Period, as the case may be. If a new Fixed Rate for a new Fixed Rate Period is not set, for any reason, a Floating Rate Period, and the Floating Rate, reset quarterly, shall be in effect until the Company and the Administrative Trustees remarket the Preferred Securities and set a new Fixed Rate for a new Fixed Rate Period in accordance with the procedures set forth herein.

ARTICLE 3

Remarketing Procedures

Article 3 sets forth the Remarketing Procedures as set forth in the Trust Agreement to determine the applicable Fixed Rate for the Preferred Securities. If the Securities Trust is terminated and the Series D Notes are distributed to the holders of the Preferred Securities subject to Section 103 herein, the below described procedures will be directly applicable to the Series D Notes.

SECTION 301. Election to Remarket.

If the Company and the Administrative Trustees elect to conduct a remarketing, the Trust, not less than 20 nor more than 35 Business Days prior to the related Election Date, is required to give the notice of remarketing of the Preferred Securities to the Clearing Agency, Property Trustee, Indenture Trustee, Calculation Agent and Remarketing Agent. If the Preferred Securities are not issued in global, fully registered form, such notice shall be delivered to the Holders of the Preferred Securities instead of the Clearing Agency. Such notice will describe the Remarketing and will indicate the length of the proposed new Fixed Rate Period and the proposed Remarketing Date. At any time prior to the Election Date, the Company and the Administrative Trustees may elect to terminate a Remarketing by giving the Clearing Agency, the Remarketing Agent, the Property Trustee, the Indenture Trustee and the Calculation Agent notice of such termination.

SECTION 302. Notice of Election

Not later than 4:00 P.M., New York City time, on an Election Date, each Holder of Preferred Securities may give (through the facilities of the Clearing Agency in the case of Book-Entry Preferred Securities Certificates (as defined in the Trust Agreement)), a notice to the Property Trustee of its election ("Notice of Election") (i) to retain and not to have all or any portion of the Preferred Securities owned by it remarketed in the Remarketing or (ii) to tender all or any portion of such Preferred Securities for purchase in the Remarketing (such portion, in either case, is required to be in the Liquidation Amount (as defined in the Trust Agreement) of $1,000 or any integral multiple thereof). Any Notice of Election given to the Property Trustee will be irrevocable and may not be conditioned upon the level at which the Fixed Rate is established in the Remarketing. Promptly after 4:30 P.M., New York City time, on such Election Date, the Property Trustee, based on the Notices of Election received by it through the Clearing Agency (or from the Holders if Definitive Preferred Securities Certificates have been issued) prior to such time, will notify the Trust, the Company and the Remarketing Agent of the number of Preferred Securities to be retained by holders of Preferred Securities and the number of Preferred Securities tendered for purchase in the Remarketing.

If any Holder of Preferred Securities gives a Notice of Election to tender Preferred Securities as described above, the Preferred Securities so subject to such Notice of Election will be deemed tendered for purchase in the Remarketing, notwithstanding any failure by such Holder to deliver or properly deliver such Preferred Securities to the Remarketing Agent for purchase. If any Holder of Preferred Securities fails timely to deliver a Notice of Election, as described above, such Preferred Securities will be deemed tendered for purchase in such Remarketing, notwithstanding such failure or the failure by such Holder to deliver or properly deliver such Preferred Securities to the Remarketing Agent for purchase.

The right of each Holder of Preferred Securities to have Preferred Securities tendered for purchase shall be limited to the extent that
(i) the Remarketing Agent conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) Preferred Securities tendered have not been called for redemption, (iii) the Remarketing Agent is able to find a purchaser or purchasers for tendered Preferred Securities at a Fixed Rate and (iv) such purchaser or purchasers deliver the purchase price therefor to the Remarketing Agent.

Any Holder of Preferred Securities that desires to continue to retain a number of Preferred Securities, but only if the Fixed Rate is not less than a specified rate per annum, should submit a Notice of Election to tender such Preferred Securities and separately notify the Remarketing Agent of its interest at the telephone number set forth in the notice of Remarketing. If such Holder so notifies the Remarketing Agent, the Remarketing Agent will give priority to such Holder's purchase of such number of Preferred Securities in the Remarketing, providing that the Fixed Rate is not less than such specified rate.

SECTION 303. Determination of Distribution Rate.

If Holders submit Notices of Election to retain all of the Preferred Securities then outstanding, the Fixed Rate will be the rate determined by the Remarketing Agent, in its sole discretion, as the rate that would have been established had a Remarketing been held on the related Remarketing Date.

On any Remarketing Date on which the remarketing is to be conducted, the Remarketing Agent will use commercially reasonable efforts to remarket, at a price equal to 100% of the Liquidation Amount thereof, Preferred Securities tendered or deemed tendered for purchase. Except as provided in the previous paragraph of this Section 303, if, as a result of such efforts, on any Remarketing Date, the Remarketing Agent has determined that it will be able to remarket all Preferred Securities tendered or deemed tendered for purchase in the Remarketing at a Fixed Rate and at a price of $1,000 per Preferred Security, prior to 4:00 P.M., New York City time, on such Remarketing Date, the Remarketing Agent will determine the Fixed Rate, which will be the rate per annum (rounded to the nearest one-thousandth (0.001) of one percent per annum) which the Remarketing Agent determines, in its sole judgment, to be the lowest Fixed Rate per annum, if any, that will enable it to remarket all Preferred Securities tendered or deemed tendered for remarketing at a price of $1,000 per Preferred Security.

If the Remarketing Agent is unable to remarket by 4:00 P.M., New York City time on the third Business Day prior to the Remarketing Settlement Date, all Preferred Securities tendered or deemed tendered for a purchase at a price of $1,000 per Preferred Security, the Distribution Rate for the next Distribution Period shall be the Floating Rate. In such case, no Preferred Securities will be sold in the Remarketing and each Holder will continue to hold its Preferred Securities at the Floating Rate.

All Preferred Securities tendered or deemed tendered in the Remarketing will be automatically delivered to the account of the Remarketing Agent through the facilities of the Clearing Agency against payment of the purchase price therefor on the Remarketing Settlement Date. The Remarketing Agent will make payment to the Clearing Agency Participant of each tendering holder of Preferred Securities in the Remarketing through the facilities of the Clearing Agency by the close of business on the Remarketing Settlement Date.

In accordance with the Clearing Agency's normal procedures, on the Remarketing Settlement Date, the transaction described above with respect to each Preferred Security tendered for purchase and sold in the Remarketing, will be executed through the Clearing Agency Participants, will be debited and credited and such Preferred Securities delivered by book entry as necessary to effect purchases and sales of such Preferred Securities. The Clearing Agency is expected to make payment in accordance with its normal procedures.

If any Holder selling Preferred Securities in the Remarketing fails to deliver such Preferred Securities, the Clearing Agency Participant of such selling Holder and of any other person that was to have purchased Preferred Securities in the Remarketing may deliver to any such other person a number of Preferred Securities that is less than the number of Preferred Securities that otherwise was to be purchased by such person. In such event, the number of Preferred Securities to be so delivered will be determined by such Clearing Agency Participant and delivery of such lesser number of Preferred Securities will constitute good delivery.

The previous three paragraphs shall not apply if Definitive Preferred Securities Certificates have been issued.

The Remarketing Agent is not obligated to purchase any Preferred Securities that would otherwise remain unsold in a Remarketing. Neither the Trust, any trustee of the Securities Trust, the Company nor the Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender of Preferred Securities for Remarketing.

SECTION 304. Remarketing Agent

Prior to the issuance of the Preferred Securities, the Company and the Securities Trust will enter into the Remarketing Agreement with the Remarketing Agent, providing, among other things, that the Remarketing Agent will follow the Remarketing Procedures for the purposes of determining the applicable Fixed Rate. The Company will pay the Remarketing Agent compensation for its services under the Remarketing Agreement.

ARTICLE 4

Miscellaneous Provisions

SECTION 401. Recitals by Company.

The recitals in this Third Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series D Notes and of this Third Supplemental Indenture as fully and with like effect as if set forth herein in full.

SECTION 402. Ratification and Incorporation of Original Indenture.

As heretofore supplemented and as supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as heretofore supplemented and modified, and this Third Supplemental Indenture shall be read, taken and construed as one and the same instrument.

SECTION 403. Executed in Counterparts.

This Third Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written.

ATTEST:                                ALABAMA POWER COMPANY


By:                                   By: ------------------------------
      Assistant Secretary                  Executive Vice President, Chief
                                             Financial Officer and Treasurer


ATTEST:                                 PMORGAN CHASE BANK


By:                                      By:  ----------------------------
   ---------------------------------
              Trust Officer                   Vice President

EXHIBIT A

NO. 1 CUSIP NO. __________

THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.

ALABAMA POWER COMPANY
SERIES D JUNIOR SUBORDINATED NOTE
DUE OCTOBER 1, 2042

Principal Amount:          $_________
Record Date:               Business Day immediately preceding the Interest
Payment Date
Original Issue Date:       October 2, 2002
Stated Maturity:           October 1, 2042
Interest Rate:             Determined by procedures set forth in the Indenture
Interest Payment Dates:    Determined by procedures set forth in the Indenture
Authorized Denomination:   $1,000

Alabama Power Company, an Alabama corporation (the "Company", which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to ________________, or registered assigns, the principal sum of ______________ DOLLARS ($_________) on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on each Interest Payment Date commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and on the Stated Maturity (or upon earlier redemption) at the prevailing Interest Rate until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the "Note") is registered on the Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Record Date and may either be paid to the Person in whose name this Note is registered on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.

Payments of interest on this Note in respect of a Floating Rate Period (or a portion thereof) will be computed by multiplying the per annum Interest Rate in effect for such Floating Rate Period by a fraction, the numerator of which will be the actual number of days in such Floating Rate Period (or portion thereof) (determined by including the first day thereof and excluding the last thereof) and the denominator of which will be 360, and multiplying the rate so obtained by the principal amount hereof. The amount of interest on this Note payable on each Interest Payment Date in respect of a Fixed Rate Period will be computed on the basis of a 360-day year consisting of twelve 30-day months.

The Company has the right to defer payments of interest on this Note by extending the interest payment period from time to time on this Note (an "Extension Period").

If the Company decides to defer interest payments on this Note, the Extension Period shall not exceed five consecutive years. An Extension Period shall not extend beyond the stated maturity of this Note. Prior to the termination of any Extension Period, the Company may further defer payments of interest provided that the Extension Period, together with all such previous and further extensions thereof, may not exceed five consecutive years. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may select a new Extension Period, subject to the above requirements. There could be multiple Extension Periods of varying lengths throughout the term of this Note.

During an Extension Period unpaid interest (together with interest thereon) will compound on each Interest Payment Date at the prevailing Interest Rate ("Deferred Interest"). Upon the termination of each Extension Period, which shall be an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name this Note is registered at the close of business on the Record Date for such Interest Payment Date, provided that any Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.

If the Company shall have given notice of its election to select any Extension Period, the Company shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, or make any guarantee payments with respect to the foregoing and (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees other than its guarantee of the Preferred Securities issued by the Securities Trust) issued by the Company that rank pari passu with or junior to this Note. The Company shall give the Holder of this Note, the Trustee, the Remarketing Agent and the Calculation Agent notice of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate or (ii) the date the Company or Securities Trust is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date distributions are payable.

The Company also shall be obligated to pay when due and without extension all additional amounts as may be required so that the net amount received and retained by the Holder of this Note (if the Holder is a Securities Trust) after paying taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority will not be less than the amounts such Holder would have received had no such taxes, duties, assessments, or other governmental charges been imposed.

Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Series D Notes shall be made upon surrender of the Series D Notes at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on an Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.

The indebtedness evidenced by this Note is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Note is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated: ______ __, ____.

ALABAMA POWER COMPANY

By:

William B. Hutchins, III Executive Vice President, Chief Financial Officer and Treasurer

Attest:

Assistant Secretary

{Seal of ALABAMA POWER COMPANY appears here}

CERTIFICATE OF AUTHENTICATION

This is one of the Notes referred to in the

within-mentioned Indenture.

JPMORGAN CHASE BANK,
as Trustee

By:
Authorized Officer

(Reverse Side of Note)

This Note is one of a duly authorized issue of Junior Subordinated Notes of the Company (the "Notes"), issued and issuable in one or more series under a Subordinated Note Indenture, dated as of January 1, 1997, as heretofore supplemented and as supplemented by the Third Supplemental Indenture (the "Third Supplement Indenture") dated as of October 2, 2002 (collectively, the "Indenture") between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof as Series D Junior Subordinated Notes due October 1, 2042 (the "Series D Notes") in the aggregate principal amount of up to $103,093,000. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.

While the Preferred Securities are outstanding, (i) the Interest Rate, Interest Periods, Interest Payment Dates and associated terms relating to this Note shall be the same as the Distribution Rate, Distribution Periods, Distribution Payment Dates and associated terms relating to the Preferred Securities, established in Article 2 of the Third Supplemental Indenture and (ii) the Remarketing Procedures relating to this Note shall be the same as those procedures relating to the Preferred Securities, established in Article 3 to the Third Supplemental Indenture.

If the Securities Trust is terminated and this Note is distributed to holders of Preferred Securities, subject to Section 103 of the Third Supplemental Indenture, the terms and procedures relating to the Preferred Securities established in Articles 2 and 3 of the Third Supplemental Indenture shall be directly applicable to this Note.

The Company shall have the right, subject to the terms and conditions of the Indenture, to redeem this Note on the last Interest Payment Date relating to a Fixed Rate Period and on any Interest Payment Date relating to a Floating Rate Period at the option of the Company, without premium or penalty, in whole, but not in part, at a Redemption Price equal to 100% of the principal amount to be redeemed plus accrued but unpaid interest, including any Additional Interest, if any, to the Redemption Date. Upon the occurrence of a Special Event (as defined below) at any time, the Company may, within 90 days following the occurrence thereof and subject to the terms and conditions of the Indenture, redeem this Note without premium or penalty, in whole, but not in part, at a Redemption Price equal to 100% of the principal amount thereof plus accrued but unpaid interest, including any Additional Interest, if any, to the Redemption Date. A Special Event may be a Tax Event or an Investment Company Act Event. "Tax Event" means that the Company and the Administrative Trustees shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or
(b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the related Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Series D Notes, (ii) interest payable on the Series D Notes would not be deductible by the Company for United States federal income tax purposes, or (iii) the related Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the Original Issue Date. "Investment Company Act Event" means that the Company shall have received an Opinion of Counsel to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the related Securities Trust is or will be considered an "investment company" which is required to be registered under the Investment Company Act of 1940, as amended, which change becomes effective on or after the Original Issue Date.

If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

The Notes of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company.

This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in UNIF GIFT MIN ACT - ____ Custodian ____ Common (Cust) (Minor)

TEN ENT -  as tenants by the                 Under Uniform Gifts to Minors Act
           Entireties


JT TEN -   as joints tenants with
           right of survivorship                      (State)
           and not as tenants in
           common

Additional abbreviations may also be used though not on the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto __________ (please insert Social Security or other identifying number of assignee)

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE the within Note and all rights thereunder, hereby irrevocably constituting and appointing agent to transfer said Note on the books of the Company, with full power of substitution in the premises.

Dated:  ________________        __________________________________

                                         -------------------------
                                NOTICE:  The signature to
                                         this assignment
                                         must correspond
                                         with the name as
                                         written upon the
                                         face of the within
                                         instrument in
                                         every particular
                                         without alteration
                                         or enlargement, or
                                         any change
                                         whatever.

EXHIBIT B

CERTIFICATE OF AUTHENTICATION

This is one of the Notes referred to in the within-mentioned Indenture.

JPMORGAN CHASE BANK,
as Trustee

By:
Authorized Officer

Exhibit 4.9-B

ALABAMA POWER COMPANY
TO
JPMORGAN CHASE BANK,
TRUSTEE

FOURTH SUPPLEMENTAL INDENTURE

DATED AS OF OCTOBER 2, 2002

$206,186,000

SERIES E JUNIOR SUBORDINATED NOTES

DUE OCTOBER 1, 2042

                               TABLE OF CONTENTS1

                                                                                                               Page
ARTICLE 1 - Series E Junior Subordinated Notes....................................................................2

   SECTION 101    Establishment...................................................................................2

   SECTION 102    Definitions.....................................................................................2

   SECTION 103    Payment of Principal and Interest...............................................................8

   SECTION 104    Deferral of Interest Payments...................................................................9

   SECTION 105    Denominations..................................................................................10

   SECTION 106    Global Securities..............................................................................10

   SECTION 107    Transfer.......................................................................................11

   SECTION 108    Redemption.....................................................................................11


ARTICLE 2 - Distribution Procedures..............................................................................11

   SECTION 201    Distributions..................................................................................12

   SECTION 202    Distribution Rate..............................................................................13

   SECTION 203    Distribution Periods...........................................................................15


ARTICLE 3 - Remarketing Procedures...............................................................................15

   SECTION 301    Election to Remarket...........................................................................15

   SECTION 302    Notice of Election.............................................................................16

   SECTION 303    Determination of Distribution Rate.............................................................17

   SECTION 304.   Remarketing Agent..............................................................................18


ARTICLE 4 - Miscellaneous Provisions.............................................................................18

   SECTION 401    Recitals by Company............................................................................18

   SECTION 402    Ratification and Incorporation of Original Indenture...........................................18

   SECTION 403    Executed in Counterparts.......................................................................19


EXHIBIT A.........................................................................................................1

EXHIBIT B.........................................................................................................1


__________
1    This table of Contents does not constitute part of the Indenture or
     have any bearing upon the interpretation of any of its terms and
     provisions.

THIS FOURTH SUPPLEMENTAL INDENTURE is made as of the 2nd day of October, 2002, by and between ALABAMA POWER COMPANY, an Alabama corporation, 600 North 18th Street, Birmingham, Alabama 35291 (the "Company"), and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), a New York banking corporation, 450 West 33rd Street, New York, New York 10001 (the "Trustee").

W I T N E S S E T H:

WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as supplemented by the First Supplemental Indenture dated as of January 1, 1997, the Second Supplemental Indenture dated as of February 25, 1999, the Third Supplemental Indenture dated as of October 2, 2002 and this Fourth Supplemental Indenture dated as of October 2, 2002, is herein called the "Indenture";

WHEREAS, the Company proposes to create under the Indenture a new series of Junior Subordinated Notes;

WHEREAS, all conditions necessary to authorize the execution and delivery of this Fourth Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.

ARTICLE 1

Series E Junior Subordinated Notes

SECTION 101. Establishment.

There is hereby established a new series of Junior Subordinated Notes to be issued under the Indenture, to be designated as the Company's Series E Junior Subordinated Notes due October 1, 2042 (the "Series E Notes").

There are to be authenticated and delivered $206,186,000 aggregate principal amount of Series E Notes, and no further Series E Notes shall be authenticated and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Series E Notes shall be issued in definitive fully registered form.

The Series E Notes shall be in substantially the form set out in Exhibit A hereto. The entire principal amount of the Series E Notes shall initially be evidenced by one certificate issued to the Property Trustee of Alabama Power Capital Trust V.

The form of the Trustee's Certificate of Authentication for the Series E Notes shall be in substantially the form set forth in Exhibit B hereto.

Each Series E Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.

SECTION 102. Definitions.

The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.
"Additional Interest" with respect to the Series E Notes means
(i) such additional amounts as may be required so that the net amounts received and retained by the Holder (if the Holder is the Securities Trust) after paying taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority will not be less than the amounts the Holder would have received had no such taxes, duties, assessments, or other governmental charges been imposed; and (ii) any interest due and not paid on an Interest Payment Date, together with interest thereon from such Interest Payment Date to the date of payment on each Interest Payment Date.

"Administrative Trustee" means each of the individuals identified as an "Administrative Trustee" in the Trust Agreement.

"Calculation Agent" means JPMorgan Chase Bank, its successors and assigns, or such other bank or trust company appointed to such capacity by the Company and the Administrative Trustees.

"Calculation Agent Agreement" means the agreement among the Company, the Trust and JPMorgan Chase Bank, as calculation agent, dated as of October 2, 2002.

"Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. The Depository Trust Company will be the initial Clearing Agency.

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

"Company" means Alabama Power Company.

"Definitive Preferred Securities Certificates" means Preferred Securities Certificates issued in certificated, fully registered form as provided in the Trust Agreement.

"Distribution Payment Date" means each day on which Distributions are payable on the Preferred Securities determined based on the prevailing Distribution Rate.

"Distribution Period" means each semiannual period in a Fixed Rate Period and each quarterly period in a Floating Rate Period for which Distributions are payable on the Trust Securities.

"Distribution Rate" means the rate at which Distributions will accrue on the Trust Securities.

"Distributions" means amounts payable in respect of the Preferred Securities pursuant to Section 4.01 of the Trust Agreement.

"Election Date" means a date that is no later than the fifth Business Day prior to the proposed Remarketing Date.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Extension Period" means any period during which the Company has elected to defer payments of interest on the Series E Notes, which deferral may be for a period of up to five years.

"Fixed Rate" means the Distribution Rate during a Fixed Rate Period as determined by a Remarketing.

"Fixed Rate Period" means the Initial Fixed Rate Period and each period set by the Company and the Administrative Trustees during a Remarketing for which the Fixed Rate determined in such Remarketing will apply, provided, however, that a Fixed Rate Period must be for a duration of at least six months, may not extend beyond the stated maturity of the Series E Notes, shall begin on the first day of a calendar quarter upon the expiration of the preceding Fixed Rate Period or Distribution Period with respect to the current Floating Rate Period (except for the Initial Fixed Rate Period) and may not end on a day other than the last day of a calendar quarter.

"Floating Rate" means 3-month LIBOR plus 3.10%, reset quarterly.

"Floating Rate Determination Date" means the second London Business Day immediately preceding the first day of the relevant Distribution Period in the Floating Rate Period.

"Floating Rate Period" means any period during which a Floating Rate is in effect.

"Initial Fixed Rate Period" means the period from the Original Issue Date through September 30, 2009.

"Initial Distribution Rate" means 5.50% per annum.

"Interest Payment Dates" means the dates on which interest on the Series E Notes is payable.

"Interest Period" means the period for which interest on the Series E Notes is payable.

"Interest Rate" means the rate at which interest shall accrue on the Series E Notes.

"1940 Act" means the Investment Company Act of 1940, as amended.

"Original Issue Date" means October 2, 2002.

"Preferred Securities Certificate" means a certificate evidencing ownership of a Preferred Security or Securities, substantially in the form attached as Exhibit A to the Trust Agreement.

"Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the Trust Agreement solely in its capacity as Property Trustee of the Trust.

"Record Date" with respect to any Interest Payment Date means the opening of business on the Business Day immediately preceding an Interest Payment Date.

"Redemption Date" has the meaning set forth in Section 108.

"Remarketing" means the conduct by which a Fixed Rate shall be determined in accordance with the Remarketing Procedures.

"Remarketing Agent" means Lehman Brothers Inc., its successors or assigns, or such other remarketing agent appointed to such capacity by the Administrative Trustees.

"Remarketing Agreement" means the agreement among the Company, the Trust and Lehman Brothers Inc., as remarketing agent, dated October 2, 2002.

"Remarketing Date" means any Business Day no later than the third Business Day prior to any Remarketing Settlement Date.

"Remarketing Procedures" means those procedures set forth in Article 3.

"Remarketing Settlement Date" means the first Business Day of the next Distribution Period following the Distribution Period in which a Remarketing has occurred.

"Securities Trust" or "Trust" means Alabama Power Capital Trust V, a statutory trust formed by the Company under Delaware law to issue Trust Securities, the proceeds of which will be used to purchase Series E Notes.

"Special Event" means an Investment Company Act Event or Tax Event.

"Stated Maturity" means October 1, 2042.

"Tax Event" means that the Administrative Trustees and the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Series E Notes, (ii) interest payable on the Series E Notes would not be deductible by the Company for United States federal income tax purposes, or (iii) the Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the Original Issue Date.

"Trust Agreement" means the Alabama Power Capital Trust V Amended and Restated Trust Agreement among the Company and the Trustees dated as of October 1, 2002.

(i) the occurrence of an Event of Default; or

(ii) default by the Securities Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or

                           (iii)  default by the  Securities  Trust in the
payment of any  redemption  price of any Trust Security when it becomes due and
payable; or

                           (iv) default in the performance, or breach, of any

covenant or warranty of the Trustees in the Trust Agreement (other than a covenant or warranty a default in whose performance or breach is dealt with in clause (ii) or (iii) above) and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Trustees by the Holders of at least 10% in liquidation amount of the Outstanding (as defined in the Trust Agreement) Preferred Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or

(v) the occurrence of a Bankruptcy Event with respect to the Securities Trust.

"Trustees" means the Persons identified as "Trustees" in the Trust Agreement.

"Trust Security" means any one of the Common Securities (as defined in the Trust Agreement) or the Preferred Securities.

SECTION 103. Payment of Principal and Interest.

The unpaid principal amount of the Series E Notes shall bear interest at the Interest Rate per annum until paid or duly provided for. Interest shall be paid on each Interest Payment Date to the Person in whose name the Series E Notes are registered on the Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable. So long as an Extension Period is not occurring, any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Record Date and may either be paid to the Person or Persons in whose name the Series E Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee ("Special Record Date"), notice whereof shall be given to Holders of the Series E Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series E Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture.

If the Securities Trust is terminated and the Series E Notes are distributed to the holders of the Preferred Securities, the interest payable, Interest Rate, Interest Periods and Interest Payment Dates will be determined in the same manner as the Distributions, Distribution Rate, Distribution Periods and Distribution Payment Dates for the Preferred Securities and the Remarketing Procedures shall remain the same except: (i) the effects of the Trust Agreement Events of Default shall be occasioned only by the Events of Default and (ii) the cure and waiver provisions relating to the Trust Agreement Events of Default shall be superceded by the cure and waiver provisions relating to the Events of Default.

Payment of the principal and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Series E Notes shall be made upon surrender of the Series E Notes at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto.

The Company shall pay, as additional interest on the Series E Notes, when due to the United States or any other taxing authority, the amounts set forth in clause (i) of the definition of Additional Interest.

SECTION 104. Deferral of Interest Payments.

The Company has the right to defer payments of interest on the Series E Notes by extending the interest payment period from time to time on the Series E Notes (an "Extension Period"). During an Extension Period, interest will continue to accrue on the Series E Notes.

If the Company decides to defer interest payments on the Series E Notes, the Extension Period shall not exceed five consecutive years. An Extension Period shall not extend beyond the stated maturity of the Series E Notes. Prior to the termination of any Extension Period, the Company may further defer payments of interest provided that the Extension Period, together with all previous and further extensions thereof, may not exceed five consecutive years. There could be multiple Extension Periods of varying lengths throughout the term of the Series E Notes. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Company may select a new Extension Period, subject to the above limitations and requirements. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Company shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name the Series E Notes are registered on the Record Date for such Interest Payment Date, provided that Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.

The Company shall give the Holder or Holders of the Series E Notes, the Trustee, the Remarketing Agent and the Calculation Agent, notice as provided in Sections 105 and 106, respectively, of the Original Indenture of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate, or (ii) the date the Company or the Securities Trust is required to give notice to any applicable self-regulatory organization of the record date or the date such distributions are payable. The Company shall cause the Securities Trust to give notice of the Company's selection of such Extension Period to Holders of the Trust Securities, the Calculation Agent and the Remarketing Agent.

At any time any of the foregoing notices are given to the Trustee, the Company shall give to the Paying Agent for the Series E Notes such information as said Paying Agent shall reasonably require in order to fulfill its tax reporting obligations with respect to such Series E Notes.

SECTION 105. Denominations.

The Series E Notes may be issued in the denominations of $1,000, or any integral multiple thereof.

SECTION 106. Global Securities.

If the Series E Notes are distributed to Holders of the Trust Securities of the Securities Trust in liquidation of such Holders' interests therein, the Series E Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series E Notes represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Series E Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.

Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series E Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary.

A Global Security shall be exchangeable for Series E Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series E Notes. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series E Notes registered in such names as the Depositary shall direct.

SECTION 107. Transfer.

No service charge will be made for any transfer or exchange of Series E Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

The Company shall not be required (a) to issue, transfer or exchange any Series E Notes during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice of redemption, and ending at the close of business on the day of the mailing, or (b) to transfer or exchange any Series E Notes called for redemption.

SECTION 108. Redemption.

The Series E Notes shall be subject to redemption at the option of the Company, in whole, but not in part, without premium or penalty, at any time or from time to time on the last Interest Payment Date relating to any Fixed Rate Period and on any Interest Payment Date relating to a Floating Rate Period, at a Redemption Price equal to 100% of the principal amount to be redeemed plus accrued but unpaid interest, including Additional Interest, if any, to the Redemption Date. In addition, upon the occurrence of a Special Event at any time, the Company may, within ninety (90) days following the occurrence thereof and subject to the terms and conditions of the Indenture, elect to redeem the Series E Notes, in whole, but not in part, at a price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including Additional Interest) to the date of redemption (any date of redemption as provided for in this paragraph herein called a "Redemption Date").

The Series E Notes will not have a sinking fund.

Notice of redemption shall be given as provided in Section 1104 of the Original Indenture.

ARTICLE 2

Distribution Procedures

Article 2 sets forth the procedures to determine the Distribution Rate, Distribution Periods and Distribution Payment Dates for the Preferred Securities. While the Preferred Securities are outstanding, the Interest Rate, Interest Periods, Interest Payment Dates and associated terms relating to the Series E Notes shall be the same as the Distribution Rate, Distribution Periods and Distribution Payment Dates and associated terms relating to the Preferred Securities. If the Securities Trust is terminated and the Series E Notes are distributed to the holders of the Preferred Securities, subject to Section 103 herein, the below described procedures will be directly applicable to the Series E Notes.

SECTION 201. Distributions.

SECTION 202. Distribution Rate.

During the Initial Fixed Rate Period, the Distribution Rate shall be the Initial Distribution Rate.

The Calculation Agent shall calculate the Floating Rate as follows:

(3) In the event no 3-month LIBOR appears on Telerate Page 3750 as of approximately 11:00 a.m., London time, on a Floating Rate Determination Date and there are fewer than two Rate Quotations, the Floating Rate will be the arithmetic mean of the rates quoted at approximately 11:00
a.m., New York City time, on such Floating Rate Determination Date, by three major banks in New York City selected by the Calculation Agent (after consultation with the Company), for loans in Representative Amounts in U.S. dollars to leading European banks, having an index maturity of three months for a period commencing on the second London Business Day immediately following such Floating Rate Determination Date, plus 3.10%; provided, however, that if fewer than three banks selected by the Calculation Agent are quoting such rates, the Floating Rate for the applicable Floating Rate Period will be the Floating Rate in effect for the preceding Floating Rate Period.

SECTION 203. Distribution Periods.

In accordance with Section 202 and the Remarketing Procedures, the Company and the Trust may, prior to the expiration of a Fixed Rate Period or to a Distribution Payment Date with respect to a Floating Rate Period, elect to remarket the Preferred Securities to establish a new Fixed Rate for a new Fixed Rate Period. A Fixed Rate Period must be for a duration of at least six months, may not extend beyond the Stated Maturity of the Series E Notes, shall begin on the first day of a calendar quarter (other than the Initial Fixed Rate Period) and may not end on a day other than the last day of a calendar quarter. If a new Fixed Rate for a new Fixed Rate Period is set in a Remarketing, a new Fixed Rate Period shall commence following the expiration of the then current Fixed Rate Period or Distribution Period within the current Floating Rate Period, as the case may be. If a new Fixed Rate for a new Fixed Rate Period is not set, for any reason, a Floating Rate Period, and the Floating Rate, reset quarterly, shall be in effect until the Company and the Administrative Trustees remarket the Preferred Securities and set a new Fixed Rate for a new Fixed Rate Period in accordance with the procedures set forth herein.

ARTICLE 3

Remarketing Procedures

Article 3 sets forth the Remarketing Procedures as set forth in the Trust Agreement to determine the applicable Fixed Rate for the Preferred Securities. If the Securities Trust is terminated and the Series E Notes are distributed to the holders of the Preferred Securities subject to Section 103 herein, the below described procedures will be directly applicable to the Series E Notes.

SECTION 301. Election to Remarket.

SECTION 302. Notice of Election

SECTION 303. Determination of Distribution Rate.

The previous three paragraphs shall not apply if Definitive Preferred Securities Certificates have been issued.

SECTION 304. Remarketing Agent

ARTICLE 4

Miscellaneous Provisions

SECTION 401. Recitals by Company.

The recitals in this Fourth Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series E Notes and of this Fourth Supplemental Indenture as fully and with like effect as if set forth herein in full.

SECTION 402. Ratification and Incorporation of Original Indenture.

As heretofore supplemented and as supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as heretofore supplemented and modified, and this Fourth Supplemental Indenture shall be read, taken and construed as one and the same instrument.

SECTION 403. Executed in Counterparts.

This Fourth Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written.

ATTEST:                                 ALABAMA POWER COMPANY

By:                                     By:
    ---------------------------
        Assistant Secretary            Executive Vice President, Chief
                                       Financial Officer and Treasurer


ATTEST:                                JPMORGAN CHASE BANK

By: By:
Trust Officer Vice President

EXHIBIT A

NO. 1 CUSIP NO. __________

ALABAMA POWER COMPANY
SERIES E JUNIOR SUBORDINATED NOTE
DUE OCTOBER 1, 2042

Principal Amount:          $_________
Record Date:           Business Day immediately preceding the Interest
Payment Date
Original Issue Date:       October 2, 2002
Stated Maturity:           October 1, 2042
Interest Rate:             Determined by procedures set forth in the Indenture
Interest Payment Dates:    Determined by procedures set forth in the Indenture

Authorized Denomination: $1,000

The Company has the right to defer payments of interest on this Note by extending the interest payment period from time to time on this Note (an "Extension Period").

Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of the Series E Notes shall be made upon surrender of the Series E Notes at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on an Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated: ______ __, ____.

ALABAMA POWER COMPANY

By:
William B. Hutchins, III Executive Vice President, Chief Financial Officer and Treasurer

Attest:

Assistant Secretary

{Seal of ALABAMA POWER COMPANY appears here}

CERTIFICATE OF AUTHENTICATION

This is one of the Notes referred to in the

within-mentioned Indenture.

JPMORGAN CHASE BANK,
as Trustee

By:
Authorized Officer

(Reverse Side of Note)

This Note is one of a duly authorized issue of Junior Subordinated Notes of the Company (the "Notes"), issued and issuable in one or more series under a Subordinated Note Indenture, dated as of January 1, 1997, as heretofore supplemented and as supplemented by the Fourth Supplemental Indenture (the "Fourth Supplement Indenture") dated as of October 2, 2002 (collectively, the "Indenture") between the Company and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof as Series E Junior Subordinated Notes due October 1, 2042 (the "Series E Notes") in the aggregate principal amount of up to $206,186,000. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.

While the Preferred Securities are outstanding, (i) the Interest Rate, Interest Periods, Interest Payment Dates and associated terms relating to this Note shall be the same as the Distribution Rate, Distribution Periods, Distribution Payment Dates and associated terms relating to the Preferred Securities, established in Article 2 of the Fourth Supplemental Indenture and (ii) the Remarketing Procedures relating to this Note shall be the same as those procedures relating to the Preferred Securities, established in Article 3 to the Fourth Supplemental Indenture.

If the Securities Trust is terminated and this Note is distributed to holders of Preferred Securities, subject to Section 103 of the Fourth Supplemental Indenture, the terms and procedures relating to the Preferred Securities established in Articles 2 and 3 of the Fourth Supplemental Indenture shall be directly applicable to this Note.

The Company shall have the right, subject to the terms and conditions of the Indenture, to redeem this Note on the last Interest Payment Date relating to a Fixed Rate Period and on any Interest Payment Date relating to a Floating Rate Period at the option of the Company, without premium or penalty, in whole, but not in part, at a Redemption Price equal to 100% of the principal amount to be redeemed plus accrued but unpaid interest, including any Additional Interest, if any, to the Redemption Date. Upon the occurrence of a Special Event (as defined below) at any time, the Company may, within 90 days following the occurrence thereof and subject to the terms and conditions of the Indenture, redeem this Note without premium or penalty, in whole, but not in part, at a Redemption Price equal to 100% of the principal amount thereof plus accrued but unpaid interest, including any Additional Interest, if any, to the Redemption Date. A Special Event may be a Tax Event or an Investment Company Act Event. "Tax Event" means that the Company and the Administrative Trustees shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or
(b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the related Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Series E Notes, (ii) interest payable on the Series E Notes would not be deductible by the Company for United States federal income tax purposes, or (iii) the related Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the Original Issue Date. "Investment Company Act Event" means that the Company shall have received an Opinion of Counsel to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the related Securities Trust is or will be considered an "investment company" which is required to be registered under the Investment Company Act of 1940, as amended, which change becomes effective on or after the Original Issue Date.

This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in UNIF GIFT MIN ACT - ____ Custodian ____ Common (Cust) (Minor)

TEN ENT -    as tenants by the             Under Uniform Gifts to Minors Act
             Entireties


JT TEN -     as joints tenants with
             right of survivorship                      (State)
             and not as tenants in
             common

Additional abbreviations may also be used though not on the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto __________ (please insert Social Security or other identifying number of assignee)

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE
the within Note and all rights thereunder, hereby irrevocably constituting and appointing agent to transfer said Note on the books of the Company, with full power of substitution in the premises.

Dated:  ________________       __________________________________


                               NOTICE:  The signature to
                                        this assignment
                                        must correspond
                                        with the name as
                                        written upon the
                                        face of the within
                                        instrument in
                                        every particular
                                        without alteration
                                        or enlargement, or
                                        any change
                                        whatever.

EXHIBIT B

CERTIFICATE OF AUTHENTICATION

This is one of the Notes referred to in the within-mentioned Indenture.

JPMORGAN CHASE BANK,
as Trustee

By:
Authorized Officer

Exhibit 4.12-A

ALABAMA POWER CAPITAL TRUST IV

AMENDED AND RESTATED

TRUST AGREEMENT

among

ALABAMA POWER COMPANY, as Depositor,

JPMORGAN CHASE BANK, as Property Trustee,

CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, as Delaware Trustee,

and

WILLIAM E. ZALES, JR. and J. RANDY DERIEUX,
as Administrative Trustees

Dated as of October 1, 2002

                         ALABAMA POWER CAPITAL TRUST IV

              Certain Sections of this Trust Agreement relating to
                         Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

Trust Indenture Act Section                                                            Trust Agreement Section
---------------------------                                                            ----------------------

Section 310(a)(1) ....................................................................................8.07
       (a)(2) ........................................................................................8.07
       (a)(3) ........................................................................................8.09
       (a)(4) ..............................................................................Not Applicable
       (b) ...........................................................................................8.08
Section 311(a) .......................................................................................8.13
       (b) ...........................................................................................8.13
Section 312(a) .......................................................................................5.07
       (b) ...........................................................................................5.07
       (c) ...........................................................................................5.07
Section 313(a) ....................................................................................8.14(a)
       (a)(4) .....................................................................................8.14(b)
       (b) ........................................................................................8.14(b)
       (c) ........................................................................................8.14(a)
       (d) ...............................................................................8.14(a), 8.14(b)
Section 314(a) .......................................................................................8.15
       (b) .................................................................................Not Applicable
       (c)(1) ..................................................................................8.15, 8.16
       (c)(2) ........................................................................................8.16
       (c)(3) ........................................................................................8.16
       (d) .................................................................................Not Applicable
       (e) ...........................................................................................8.16
Section 315(a) .......................................................................................8.01
       (b) ..................................................................................8.02, 8.14(b)
       (c) ........................................................................................8.01(a)
       (d) .....................................................................................8.01, 8.03
       (e) .................................................................................Not Applicable
Section 316(a) .............................................................................Not Applicable
       (a)(1)(A) .....................................................................................8.19
       (a)(1)(B) .....................................................................................8.19
       (a)(2) ..............................................................................Not Applicable
       (b) .................................................................................Not Applicable
       (c) .................................................................................Not Applicable
Section 317(a)(1) ..........................................................................Not Applicable
       (a)(2) ..............................................................................Not Applicable
       (b) ...........................................................................................5.09
Section 318(a) ......................................................................................11.10
--------------
Note:  This Cross Reference Table does not constitute part of the Trust Agreement and shall not affect the
interpretation of any of its terms and provisions.

TABLE OF CONTENTS
Page

Article I - Defined Terms.........................................................................................2

Section 1.01. Definitions...............................................................................2

Article II - Establishment of the Trust..........................................................................11

Section 2.01. Name.....................................................................................11

Section 2.02. Offices of the Trustees; Principal Place of Business.....................................11

Section 2.03. Initial Contribution of Trust Property; Organizational Expenses..........................11

Section 2.04. Issuance of the Preferred Securities.....................................................11

Section 2.05. Subscription and Purchase of Junior Subordinated Notes; Issuance of the
Common Securities........................................................................11

Section 2.06. Declaration of Trust.....................................................................12

Section 2.07. Authorization to Enter into Certain Transactions.........................................12

Section 2.08. Assets of Trust..........................................................................17

Section 2.09. Title to Trust Property..................................................................17

Section 2.10. Mergers and Consolidations of the Trust..................................................17

Article III - Payment Account....................................................................................18

Section 3.01. Payment Account..........................................................................18

Article IV - Distributions; Redemption...........................................................................19

Section 4.01. Distributions............................................................................19

Section 4.02. Distribution Rate........................................................................20

Section 4.03. Distribution Periods.....................................................................21

Section 4.04. Redemption...............................................................................22

Section 4.05. Subordination of Common Securities and Distributions.....................................23

Section 4.06. Payment Procedures.......................................................................24

Section 4.07. Tax Returns and Reports..................................................................24

Article V - Trust Securities Certificates........................................................................24

Section 5.01. Initial Ownership........................................................................24

Section 5.02. The Trust Securities Certificates........................................................24

Section 5.03. Authentication of Trust Securities Certificates..........................................25

Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates...............25

Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.......................26

Section 5.06. Persons Deemed Securityholders...........................................................26

Section 5.07. Access to List of Securityholders' Names and Addresses...................................26

Section 5.08. Maintenance of Office or Agency..........................................................27

Section 5.09. Appointment of Paying Agent..............................................................27

Section 5.10. Ownership of Common Securities by Depositor..............................................27

Section 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate.............28

Section 5.12. Notices to Clearing Agency...............................................................28

Section 5.13. Definitive Preferred Securities Certificates.............................................29

Section 5.14. Rights of Securityholders................................................................29

Article VI - Acts of Securityholders' Meetings; Voting...........................................................29

Section 6.01. Limitations on Voting Rights.............................................................29

Section 6.02. Notice of Meetings.......................................................................31

Section 6.03. Meetings of Preferred Securityholders....................................................31

Section 6.04. Voting Rights............................................................................32

Section 6.05. Proxies, etc.............................................................................32

Section 6.06. Securityholder Action by Written Consent.................................................32

Section 6.07. Record Date for Voting and Other Purposes................................................32

Section 6.08. Acts of Securityholders..................................................................32

Section 6.09. Inspection of Records....................................................................33

Article VII -Representations and Warranties of the Trustees......................................................34

Section 7.01. Representations and Warranties of the Trustees...........................................34

Article VIII - The Trustees......................................................................................35

Section 8.01. Certain Duties and Responsibilities......................................................35

Section 8.02. Notice of Defaults.......................................................................35

Section 8.03. Certain Rights of Property Trustee.......................................................35

Section 8.04. Not Responsible for Recitals or Issuance of Securities...................................36

Section 8.05. May Hold Securities......................................................................37

Section 8.06. Compensation; Fees; Indemnity............................................................37

Section 8.07. Trustees Required; Eligibility...........................................................37

Section 8.08. Conflicting Interests....................................................................38

Section 8.09. Co-Trustees and Separate Trustee.........................................................38

Section 8.10. Resignation and Removal; Appointment of Successor........................................40

Section 8.11. Acceptance of Appointment by Successor...................................................41

Section 8.12. Merger, Conversion, Consolidation or Succession to Business..............................41

Section 8.13. Preferential Collection of Claims Against Depositor or Trust.............................42

Section 8.14. Reports by Property Trustee..............................................................42

Section 8.15. Reports to the Property Trustee..........................................................42

Section 8.16. Evidence of Compliance with Conditions Precedent.........................................43

Section 8.17. Number of Trustees.......................................................................43

Section 8.18. Delegation of Power......................................................................43

Section 8.19. Enforcement of Rights of Property Trustee by Securityholders.............................43

Section 8.20. Delaware Trustee.........................................................................44

Article IX - Termination and Liquidation.........................................................................45

Section 9.01. Termination Upon Expiration Date.........................................................45

Section 9.02. Early Termination........................................................................45

Section 9.03. Termination..............................................................................45

Section 9.04. Liquidation..............................................................................45

Section 9.05. Bankruptcy...............................................................................46

Section 9.06. Certificate of Cancellation..............................................................47

Article X - Remarketing Procedures...............................................................................47

Section 10.01 Election of Remarket.....................................................................47

Section 10.02 Notice of Election.......................................................................47

Section 10.03 Determination of Distribution Rate.......................................................48

Article XI - Miscellaneous Provisions............................................................................49

Section 11.01. Guarantee by the Depositor...............................................................49

Section 11.02. Limitation of Rights of Securityholders..................................................50

Section 11.03. Amendment................................................................................50

Section 11.04. Separability.............................................................................51

Section 11.05. Governing Law............................................................................51

Section 11.06. Successors...............................................................................51

Section 11.07. Headings.................................................................................51

Section 11.08. Notice and Demand........................................................................51

Section 11.09. Agreement Not to Petition................................................................52

Section 11.10. Conflict with Trust Indenture Act........................................................53

EXHIBIT A - Form of Preferred Security............................................................................1

EXHIBIT B - Agreement as to Expenses and Liabilities..............................................................1

EXHIBIT C - Form of Common Security...............................................................................1

AMENDED AND RESTATED TRUST AGREEMENT

THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of October 1, 2002, by and among (i) Alabama Power Company, an Alabama corporation (the "Depositor" or the "Company"), (ii) JPMorgan Chase Bank, a banking corporation duly organized and existing under the laws of New York, as trustee (the "Property Trustee" and, in its separate corporate capacity and not in its capacity as Trustee, the "Bank"), (iii) Chase Manhattan Bank USA, National Association (successor to Chase Manhattan Bank Delaware), a national banking association duly organized under the laws of the United States of America, as Delaware trustee (the "Delaware Trustee" and, in its separate corporate capacity and not in its capacity as Delaware Trustee, the "Delaware Bank"), (iv) William E. Zales, Jr., an individual, and J. Randy DeRieux, an individual, as administrative trustees (each an "Administrative Trustee" and together the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and the Administrative Trustees referred to collectively as the "Trustees") and (v) the several Holders, as hereinafter defined.

WITNESSETH:

WHEREAS, the Depositor and the Delaware Trustee have heretofore duly declared and established a business trust pursuant to the Delaware Statutory Trust Act by the entering into that certain Trust Agreement, dated as of November 27, 1996 (the "Original Trust Agreement"), and by the execution and filing by the Delaware Trustee with the Secretary of State of the State of Delaware of the Certificate of Trust, dated November 27, 1996; and

WHEREAS, the parties hereto desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the addition of the Bank, William E. Zales, Jr. and J. Randy DeRieux as trustees of the Trust, (ii) the acquisition by the Trust from the Depositor of all of the right, title and interest in the Junior Subordinated Notes, (iii) the issuance of the Common Securities by the Trust to the Depositor, and (iv) the issuance and sale of the Preferred Securities by the Trust pursuant to the Underwriting Agreement.

NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Securityholders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows:

Article I

Defined Terms

Section 1.01. Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(c) unless the context therwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and

(d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision.

"Act" has the meaning specified in Section 6.08.

"Additional Amount" means, with respect to Trust Securities of a given Liquidation Amount and/or a given period, an amount equal to the Additional Interest (as defined in clause (ii) of the definition of "Additional Interest" in the Third Supplemental Indenture) paid by the Depositor on a Like Amount of Junior Subordinated Notes for such period.

"Administrative Trustee" means each of the individuals identified as an "Administrative Trustee" in the preamble to this Trust Agreement solely in their capacities as Administrative Trustees of the Trust formed and continued hereunder and not in their individual capacities, or such trustee's successor(s) in interest in such capacity, or any successor "Administrative Trustee" appointed as herein provided.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

"Bank" has the meaning specified in the preamble to this Trust Agreement.

"Bankruptcy Event" means, with respect to any Person:

(i) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under federal bankruptcy law or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Person or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of such decree or order unstayed and in effect for a period of 60 consecutive days; or

"Bankruptcy Laws" has the meaning specified in Section 11.09.

"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Depositor to have been duly adopted by the Depositor's Board of Directors or a duly authorized committee thereof and to be in full force and effect on the date of such certification, and delivered to the Trustees.

"Book-Entry Preferred Securities Certificates" means certificates representing Preferred Securities issued in global, fully registered form to the Clearing Agency as described in Section 5.11.

"Calculation Agent" means JPMorgan Chase Bank, its successor and assigns, or such other bank or trust company appointed to such capacity by the Company and the Administrative Trustees.

"Calculation Agent Agreement" means the agreement among the Company, the Trust and JPMorgan Chase Bank, as calculation agent, dated as of October 2, 2002.

"Certificate Depository Agreement" means the agreement among the Trust, the Property Trustee and The Depository Trust Company, as the initial Clearing Agency, dated as of October 1, 2002, relating to the Preferred Securities Certificates.

"Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The Depository Trust Company will be the initial Clearing Agency.

"Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

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

"Common Security" means an undivided beneficial ownership interest in the assets of the Trust having a Liquidation Amount of $1,000 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein.

"Common Securities Certificate" means a certificate evidencing ownership of a Common Security or Securities, substantially in the form attached as Exhibit C.

"Company" means Alabama Power Company.

"Corporate Trust Office" means the office of the Property Trustee at which its corporate trust business shall be principally administered.

"Definitive Preferred Securities Certificates" means either or both (as the context requires) of (i) Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 5.11(a) and (ii) Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 5.13.

"Delaware Bank" has the meaning specified in the preamble to this Trust Agreement.

"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time.

"Delaware Trustee" means the commercial bank or trust company or any other Person identified as the "Delaware Trustee" and has the meaning specified in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Trust formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor Delaware Trustee appointed as herein provided.

                  "Depositor" means Alabama Power Company, in its capacity as
"Depositor" under this Trust Agreement.

                  "Distribution Payment Date" means each day on which

Distributions are payable determined based on the prevailing Distribution Rate.

"Distribution Period" means each semiannual period in a Fixed Rate Period and each quarterly period in a Floating Rate Period for which Distributions are payable.

"Distribution Rate" means the rate at which Distributions will accrue in respect of any Distribution Period, as determined pursuant to the terms of this Trust Agreement whether by Remarketing or otherwise.

"Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.01.

"Election Date" means a date that is no later than the fifth Business Day prior to the proposed Remarketing Date.

"Event of Default" means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(i) the occurrence of an Indenture Event of Default; or

(ii) default by the Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or

                           (iii)     default  by the  Trust in the  payment of
any  Redemption  Price of any Trust Security when it becomes due and payable; or

                           (iv) default in the performance, or breach, of any
                  covenant or warranty of the Trustees in this Trust Agreement
                  (other than a covenant or warranty a default in whose
                  performance or breach is dealt with in clause (ii) or (iii)
                  above) and continuation of such default or breach for a period
                  of 60 days after there has been given, by registered or
                  certified mail, to the Trustees by the Holders of at least 10%
                  in Liquidation Amount of the Outstanding Preferred Securities
                  a written notice specifying such default or breach and
                  requiring it to be remedied and stating that such notice is a
                  "Notice of Default" hereunder; or

(v) the occurrence of a Bankruptcy Event with respect to the Trust.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Expense Agreement" means the Agreement as to Expenses and Liabilities between the Company and the Trust, substantially in the form attached as Exhibit B, as amended from time to time.

"Extension Period" has the meaning specified in Section 4.01(d).

"Fixed Rate" means the Distribution Rate during a Fixed Rate Period as determined by a Remarketing.

"Fixed Rate Period" means the Initial Fixed Rate Period and each period set by the Company and the Administrative Trustees during a Remarketing for which the Fixed Rate determined in such Remarketing will apply, provided, however, that a Fixed Rate Period must be for a duration of at least six months, may not extend beyond the stated maturity of the Junior Subordinated Notes, shall begin on the first day of a calendar quarter upon expiration of the preceding Fixed Rate Period or Distribution Period with respect to the current Floating Rate Period (except for the Initial Fixed Rate Period) and may not end on a day other than the last day of a calendar quarter.

"Floating Rate" means 3-month LIBOR plus 2.91% reset quarterly.

"Floating Rate Determination Date" means the second London Business Day immediately preceding the first day of the relevant Distribution Period in the Floating Rate Period.

"Floating Rate Period" means any period during which a Floating Rate is in effect.

"Guarantee" means the Guarantee Agreement executed and delivered by the Company and JPMorgan Chase Bank, as Guarantee Trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the Holders of the Preferred Securities, as amended from time to time.

"Indenture Event of Default" means an "Event of Default" as defined in the Subordinated Indenture.

"Indenture Redemption Date" means "Redemption Date," as defined in the Subordinated Indenture.

"Indenture Trustee" means the trustee under the Subordinated Indenture.

"Initial Distribution Rate" means 4.75% per annum.

"Initial Fixed Rate Period" means the Issue Date through September 30, 2007.

"Issue Date" means the date of the delivery of the Trust Securities.

"Junior Subordinated Notes" means the $103,093,000 aggregate principal amount of the Depositor's Series D Junior Subordinated Notes due October 1, 2042, issued pursuant to the Subordinated Indenture.

"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever.

"Like Amount" means (i) Trust Securities having a Liquidation Amount equal to the principal amount of Junior Subordinated Notes to be contemporaneously redeemed in accordance with the Subordinated Indenture and the proceeds of which will be used to pay the Redemption Price of such Trust Securities and (ii) Junior Subordinated Notes having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Junior Subordinated Notes are distributed.

"Liquidation Amount" means the stated amount of $1,000 per Trust Security.

"Liquidation Date" means the date on which Junior Subordinated Notes are to be distributed to Holders of Trust Securities in connection with a dissolution and liquidation of the Trust pursuant to Section 9.04.

"Liquidation Distribution" has the meaning specified in
Section 9.05.

"Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 8.16 shall be the principal executive, financial or accounting officer of the Depositor. An Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include:

(a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto;

(b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate;

(c) a statement that each such officer has made such examination or investigation as is necessary, in such officer's opinion, to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with.

"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the Trustees or the Depositor, but not an employee of the Trust or the Trustees, and who shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel pertaining to federal income tax matters may rely on published rulings of the Internal Revenue Service.

"Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement.

"Outstanding", when used with respect to Preferred Securities, means, as of the date of determination, all Preferred Securities theretofore authenticated and delivered under this Trust Agreement, except:

                           (i) Preferred Securities theretofore canceled by the
 Administrative  Trustees or delivered to the Administrative Trustees for
cancellation;

                           (ii) Preferred Securities for whose payment or
                  redemption money in the necessary amount has been theretofore
                  deposited with the Property Trustee or any Paying Agent for
                  the Holders of such Preferred Securities; provided that if
                  such Preferred Securities are to be redeemed, notice of such
                  redemption has been duly given pursuant to this Trust
                  Agreement; and

                           (iii) Preferred Securities in exchange for or in lieu
                  of which other Preferred Securities have been authenticated
                  and delivered pursuant to this Trust Agreement;

provided, however, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Securities owned by the Depositor, the Holder of the Common Securities, any Trustee or any Affiliate of the Depositor or any Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Securities which such Trustee knows to be so owned shall be so disregarded and (b) the foregoing shall not apply at any time when all of the outstanding Preferred Securities are owned by the Depositor, the Holder of the Common Securities, one or more Trustees and/or any such Affiliate. Preferred Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Preferred Securities and that the pledgee is not the Depositor or any Affiliate of the Depositor.

"Owner" means each Person who is the beneficial owner of a Book-Entry Preferred Securities Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly, in accordance with the rules of such Clearing Agency).

"Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.09 and shall initially be the Property Trustee.

"Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee for the benefit of the Securityholders in which all amounts paid in respect of the Junior Subordinated Notes will be held and from which the Property Trustee shall make payments to the Securityholders in accordance with Section 4.01.

"Person" means an individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof.

"Preferred Securities Certificate" means a certificate evidencing ownership of a Preferred Security or Securities, substantially in the form attached as Exhibit A.

"Preferred Security" means an undivided beneficial ownership interest in the assets of the Trust having a Liquidation Amount of $1,000 and having rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein.

"Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Trust formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor "Property Trustee" as herein provided.

"Record Date" means, with respect to any Distribution Payment Date, the opening of business on the Business Day immediately preceding such Distribution Payment Date.

"Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Indenture Redemption Date shall be a Redemption Date for a Like Amount of Trust Securities.

"Redemption Price" means, with respect to any date fixed for redemption of any Trust Security, the Liquidation Amount of such Trust Security, plus accrued and unpaid Distributions to such date.

"Relevant Trustee" shall have the meaning specified in Section 8.10.

"Remarketing" means the conduct by which a Fixed Rate shall be determined in accordance with the Remarketing Procedures.

"Remarketing Agent" means Lehman Brothers Inc., its successors or assigns, or such other remarketing agent appointed to such capacity by the Administrative Trustees.

"Remarketing Agreement" means the agreement among the Company, the Trust and Lehman Brothers Inc., as remarketing agent, dated as of October 2, 2002.

"Remarketing Date" means any Business Day no later than the third Business Day prior to any Remarketing Settlement Date.

"Remarketing Procedures" means those procedures set forth in Article X.

"Remarketing Settlement Date" means the first Business Day of the next Distribution Period with respect to which a Remarketing has occurred.

"Securities Register" and "Securities Registrar" are described in Section 5.04.

"Securityholder" or "Holder" means a Person in whose name a Trust Security or Securities is registered in the Securities Register; and any such Person who is a beneficial owner within the meaning of the Delaware Statutory Trust Act.

"Subordinated Indenture" means the Subordinated Note Indenture, dated as of January 1, 1997, between the Depositor and the Indenture Trustee, as supplemented by the First Supplemental Indenture dated as of January 1, 1997 by and between the Depositor and the Indenture Trustee, the Second Supplemental Indenture dated as of February 25, 1999 by and between the Depositor and the Indenture Trustee and the Supplemental Indenture.

"Supplemental Indenture" means the Third Supplemental Indenture, dated as of October 2, 2002, by and between the Depositor and the Indenture Trustee.

"Trust" means the Delaware statutory trust continued hereby and identified on the cover page to this Trust Agreement.

"Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including all exhibits hereto, including, for all purposes of this Amended and Restated Trust Agreement and any modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Amended and Restated Trust Agreement and any such modification, amendment or supplement, respectively.

"Trustees" means the Persons identified as "Trustees" in the preamble to this Trust Agreement solely in their capacities as Trustees of the Trust formed and continued hereunder and not in their individual capacities, or their successor in interest in such capacity, or any successor trustee appointed as herein provided.

"Trust Property" means (i) the Junior Subordinated Notes, (ii) any cash on deposit in, or owing to, the Payment Account, and (iii) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to this Trust Agreement.

"Trust Securities Certificate" means any one of the Common Securities Certificates or the Preferred Securities Certificates.

"Trust Security" means any one of the Common Securities or the Preferred Securities.

"Underwriting Agreement" means the Underwriting Agreement, dated September 26, 2002, among the Trust, the Depositor and the underwriters named therein.

Article II

Establishment of the Trust

Section 2.01. Name

The Trust continued hereby shall be known as "Alabama Power Capital Trust IV", in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. The Administrative Trustees may change the name of the Trust from time to time following written notice to the Holders.

Section 2.02. Offices of the Trustees; Principal Place of Business

The address of the Property Trustee is JPMorgan Chase Bank, 450 West 33rd Street, New York, New York 10001, or at such other address as the Property Trustee may designate by written notice to the Securityholders and the Depositor. The principal place of business of the Delaware Trustee is 500 Stanton Christiana Road, Building 4 (3rd Floor), Newark, Delaware 19713, or at such other address in Delaware as the Delaware Trustee may designate by notice to the Depositor. The address of the Administrative Trustees is c/o Alabama Power Company, 600 North 18th Street, Birmingham, Alabama 35291, Attention:
Treasurer. The principal place of business of the Trust is c/o Alabama Power Company, 600 North 18th Street, Birmingham, Alabama 35291. The Depositor may change the principal place of business of the Trust at any time by giving notice thereof to the Trustees.

Section 2.03. Initial Contribution of Trust Property; Organizational Expenses

The Delaware Trustee acknowledges receipt in trust from the Depositor in connection with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property. The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon request of the Trustees, promptly reimburse the Trustees for any such expenses paid by the Trustees. The Depositor shall make no claim upon the Trust Property for the payment of such expenses.

Section 2.04. Issuance of the Preferred Securities

Contemporaneously with the execution and delivery of this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall execute and deliver to the underwriters named in the Underwriting Agreement Preferred Securities Certificates, registered in the name of the nominee of the initial Clearing Agency, in an aggregate amount of 100,000 Preferred Securities having an aggregate Liquidation Amount of $100,000,000, against receipt of the aggregate purchase price of such Preferred Securities of $99,495,000, which amount the Administrative Trustees shall promptly deliver to the Property Trustee.

Section 2.05. Subscription and Purchase of Junior Subordinated Notes; Issuance of the Common Securities

Contemporaneously with the execution and delivery of this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall execute and deliver to the Depositor Common Securities Certificates, registered in the name of the Depositor, in an aggregate amount of 3,093 Common Securities having an aggregate Liquidation Amount of $3,093,000 against payment by the Depositor of such amount. Contemporaneously therewith, the Administrative Trustees, on behalf of the Trust, shall subscribe to and purchase from the Depositor Junior Subordinated Notes, registered in the name of the Property Trustee, on behalf of the Trust and the Holders, and having an aggregate principal amount equal to $103,093,000, and, in satisfaction of the purchase price for such Junior Subordinated Notes, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $102,588,000.

Section 2.06. Declaration of Trust

The exclusive purposes and functions of the Trust are (i) to issue and sell the Trust Securities and use the proceeds from such sale to acquire the Junior Subordinated Notes, and (ii) to engage in those activities necessary, incidental, appropriate or convenient thereto. The Depositor hereby appoints each of the Bank, the Delaware Bank, William E. Zales, Jr. and J. Randy DeRieux as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Trust and the Securityholders. The Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Trust. The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Property Trustee or the Administrative Trustees set forth herein. The Delaware Trustee shall be one of the Trustees for the sole and limited purpose of fulfilling the requirements of the Delaware Statutory Trust Act.

Section 2.07. Authorization to Enter into Certain Transactions

The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (c) of this Section, and in accordance with the following paragraphs (a) and (b), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following:

(a) As among the Trustees, the Administrative Trustees, acting singly or jointly, shall have the exclusive power, duty and authority to act on behalf of the Trust with respect to the following matters:

(i) to acquire the Junior Subordinated Notes with the proceeds of the sale of the Trust Securities; provided, however, the Administrative Trustees shall cause legal title to all of the Junior Subordinated Notes to be vested in, and the Junior Subordinated Notes to be held of record in the name of, the Property Trustee for the benefit of the Trust and Holders of the Trust Securities;

(ii) to give the Depositor and the Property Trustee prompt written notice of the occurrence of any Special Event (as defined in the Supplemental Indenture) and to take any ministerial actions in connection therewith; provided, that the Administrative Trustees shall consult with the Depositor and the Property Trustee before taking or refraining to take any ministerial action in relation to a Special Event;

(iii) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including for the purposes of ss. 316(c) of the Trust Indenture Act and with respect to Distributions, voting rights, redemptions, and exchanges, and to issue relevant notices to Holders of the Trust Securities as to such actions and applicable record dates;

(iv) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or otherwise adjust claims or demands of or against the Trust ("Legal Action"), unless pursuant to Section 2.07(b)(v), the Property Trustee has the power to bring such Legal Action;

(v) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for such services;

(vi) to cause the Trust to comply with the Trust's obligations under the Trust Indenture Act;

                           (vii) to give the certificate to the Property Trustee
                  required by ss. 314(a)(4) of the Trust Indenture Act, which
                  certificate may be executed by any Administrative Trustee;

                           (viii) to take all actions and perform such duties as
                  may be required of the Administrative Trustees pursuant to the
                  terms of this Trust Agreement, the Remarketing Agreement and
                  the Calculation Agent Agreement;

                           (ix) to take all action that may be necessary or
                  appropriate for the preservation and the continuation of the
                  Trust's valid existence, rights, franchises and privileges as
                  a statutory business trust under the laws of the State of
                  Delaware and of each other jurisdiction in which such
                  existence is necessary to protect the limited liability of the
                  Holders of the Trust Securities or to enable the Trust to
                  effect the purposes for which the Trust has been created;

                           (x) to take all action necessary to cause all
                  applicable tax returns and tax information reports that are
                  required to be filed with respect to the Trust to be duly
                  prepared and filed by the Administrative Trustees, on behalf
                  of the Trust;

                           (xi)     to issue and sell the Trust Securities;

                           (xii) to cause the Trust to enter into, and to
                  execute, deliver and perform on behalf of the Trust, the
                  Remarketing Agreement, the Calculation Agent Agreement, the
                  Expense Agreement and the Certificate Depository Agreement and
                  such other agreements as may be necessary or desirable in
                  connection with the consummation hereof;

                           (xiii) to assist in the registration of the Preferred
                  Securities under the Securities Act of 1933, as amended, and
                  under state securities or blue sky laws, and the qualification
                  of this Trust Agreement as a trust indenture under the Trust
                  Indenture Act;

                           (xiv) to assist in the listing of the Preferred
                  Securities upon such securities exchange or exchanges, if
                  necessary and, as shall be determined by the Depositor and the
                  registration of the Preferred Securities under the Exchange
                  Act, and the preparation and filing of all periodic and other
                  reports and other documents pursuant to the foregoing;

                           (xv) to send notices (other than notices of default)
                  and other information regarding the Trust Securities and the
                  Junior Subordinated Notes in accordance with this Trust
                  Agreement, the Remarketing Agreement and the Calculation Agent
                  Agreement;

                           (xvi) to appoint a Paying Agent (subject to Section
                  5.09), authenticating agent, Remarketing Agent, Calculation
                  Agent and Securities Registrar in accordance with this Trust
                  Agreement;

                           (xvii)   to elect to remarket the Preferred
Securities  and determine the length of any Fixed Rate Period;

                           (xviii)  to register  transfers of the Trust
Securities in  accordance  with this Trust Agreement;

                           (xix) to assist in, to the extent provided in this

Trust Agreement, the winding up of the affairs of and termination of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; and

(xx) to take any action incidental to the foregoing as the Administrative Trustees may from time to time determine is necessary, appropriate, convenient or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder).

(b) As among the Trustees, the Property Trustee shall have the exclusive power, duty and authority to act on behalf of the Trust with respect to the following matters:

(i) engage in such ministerial activities as shall be necessary or appropriate to effect promptly the redemption of the Trust Securities to the extent the Junior Subordinated Notes are redeemed or mature;

(ii) upon notice of a distribution issued by the Administrative Trustees in accordance with the terms of this Trust Agreement, engage in such ministerial activities as shall be necessary or appropriate to effect promptly the distribution pursuant to terms of this Trust Agreement of Junior Subordinated Notes to Holders of Trust Securities;

(iii) subject to the terms hereof, exercise all of the rights, powers and privileges of a holder of the Junior Subordinated Notes under the Subordinated Indenture and, if an Event of Default occurs and is continuing, shall enforce for the benefit of, and subject to the rights of, the Holders of the Trust Securities, its rights as holder of the Junior Subordinated Notes under the Subordinated Indenture;

(iv) take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of this Trust Agreement;

(v) take any Legal Action specifically required of the Property Trustee pursuant to the terms of this Trust Agreement which arises out of or in connection with an Event of Default or the Property Trustee's duties and obligations under this Trust Agreement, the Delaware Statutory Trust Act or the Trust Indenture Act;

(vi) the establishment and maintenance of the Payment Account;

(vii) the receipt of and holding of legal title to the Junior Subordinated Notes as described herein;

(viii) the collection of interest, principal and any other payments made in respect of the Junior Subordinated Notes in the

Payment Account;

                           (ix)     the  distribution of amounts owed to the
 Securityholders  in respect of the Trust Securities;

                           (x) the sending of notices of default and other
                  information regarding the Trust Securities and the Junior
                  Subordinated Notes to the Securityholders in accordance with
                  this Trust Agreement;

                           (xi)     the  distribution  of the Trust Property in
accordance  with the terms of this Trust Agreement;

                           (xii) as provided in this Trust Agreement, the
                  winding up of the affairs of and termination of the Trust and
                  the preparation, execution and filing of the certificate of
                  cancellation with the Secretary of State of Delaware; and

                           (xiii) the taking of any action incidental to the
                  foregoing as the Property Trustee may from time to time
                  determine is necessary, appropriate, convenient or advisable
                  to protect and conserve the Trust Property for the benefit of
                  the Securityholders (without consideration of the effect of
                  any such action on any particular Securityholder).

                  (c) So long as this Trust Agreement remains in effect, the

Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would cause the Trust to fail or cease to qualify as a grantor trust for United States federal income tax purposes, (iv) incur any indebtedness for borrowed money, (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property, (vi) issue any securities other than the Trust Securities, or
(vii) have any power to, or agree to any action by the Depositor that would, vary the investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of the Trust or of the Securityholders. The Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders.

(d) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects):

(i) to prepare for filing by the Trust with the Commission a registration statement on Form S-3 under the Securities Act of 1933, as amended, in relation to the Preferred Securities, including any amendments thereto;

(ii) to determine the states in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by or on behalf of the Trust, and advise the Trustees of actions they must take on behalf of the Trust, and prepare for execution and filing any documents to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such States;

(iii) to prepare for filing by the Trust an application to the New York Stock Exchange or any other national stock exchange or the NASDAQ National Market for listing upon notice of issuance of any Preferred Securities;

(iv) to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act, including any amendments thereto;

(v) to negotiate the terms of the Underwriting Agreement providing for the sale of the Preferred Securities and to execute, deliver and perform the Underwriting Agreement on behalf of the Trust;

(vi) to negotiate the terms of the Remarketing Agreement providing for the retention of the Remarketing Agent and the establishment of certain procedures relating to Remarketings;

(vii) to negotiate the terms of the Calculation Agent Agreement providing for the retention of the Calculation Agent;

(viii) to elect to remarket the Preferred Securities and determine the length of any Fixed Rate Period; and

(ix) any other actions necessary, incidental, appropriate or convenient to carry out any of the foregoing activities.

(e) Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act of 1940, as amended, or taxed as other than a grantor trust for United States federal income tax purposes and so that the Junior Subordinated Notes will be treated as indebtedness of the Depositor for United States federal income tax purposes. In this connection, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and the Administrative Trustees determines in its discretion to be necessary or desirable for such purposes, as long as such action does not materially and adversely affect the interests of the Holders of the Preferred Securities.

Section 2.08. Assets of Trust

The assets of the Trust shall consist of the Trust Property.

Section 2.09. Title to Trust Property

Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Securityholders and the Trust in accordance with this Trust Agreement. The right, title and interest of the Property Trustee to the Junior Subordinated Notes shall vest automatically in each Person who may thereafter be appointed as Property Trustee in accordance with the terms hereof. Such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered.

Section 2.10. Mergers and Consolidations of the Trust

The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other body, except as described below or otherwise provided in this Trust Agreement. The Trust may at the request of the Company, with the consent of the Administrative Trustees and without the consent of the Holders of the Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any state; provided, that (i) such successor entity either (x) expressly assumes all of the obligations of the Trust with respect to the Trust Securities or (y) substitutes for the Preferred Securities other securities having substantially the same terms as the Trust Securities (herein referred to as the "Successor Securities") so long as the Successor Securities rank the same as the Trust Securities rank in priority with respect to Distributions and payments upon liquidation, redemption and otherwise, (ii) the Company expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of legal title to the Junior Subordinated Notes, (iii) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Securities are then listed, (iv) such merger, consolidation, amalgamation or replacement does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Trust Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation, or replacement, the Company has received an Opinion of Counsel to the effect that (A) such merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Trust Securities (including any Successor Securities) in any material respect, and (B) following such merger, consolidation, amalgamation or replacement, neither the Trust nor such successor entity will be required to register as an investment company under the Investment Company Act of 1940, and
(viii) the Company guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of 100% in Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger or replacement would cause the Trust or the successor entity to be classified as other than a grantor trust for federal income tax purposes.

Article III

Payment Account

Section 3.01. Payment Account.

(a) On or prior to the Issue Date, the Property Trustee shall establish the Payment Account. The Property Trustee and an agent of the Property Trustee shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Securityholders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein.

(b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal or interest on, and any other payments or proceeds with respect to, the Junior Subordinated Notes. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof.

Article IV

Distributions; Redemption

Section 4.01. Distributions

(a) Distributions shall accrue from the Issue Date until the Redemption Date. During the Initial Fixed Rate Period, Distributions will be payable semiannually in arrears on April 1 and October 1 of each year, commencing on April 1, 2003. During any Fixed Rate Period, other than the Initial Fixed Rate Period, Distributions will be payable semiannually in arrears on the first day of the calendar quarter that begins six months after the first day of the Fixed Rate Period and on the first day of each second calendar quarter thereafter during such Fixed Rate Period. During a Floating Rate Period, Distributions will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year.

(b) If any Distribution Payment Date with respect to a Fixed Rate Period is not a Business Day, Distributions will be payable, without interest, on the immediately succeeding Business Day, with the same force and effect as if payment was made on the date such payment was originally payable. If any Distribution Payment Date with respect to a Floating Rate Period is not a Business Day, then Distributions will be payable on the immediately succeeding Business Day and Distributions (except for a Distribution Payment Date that coincides with the Redemption Date) shall accrue to the actual payment date.

(c) The amount of Distributions payable on each Distribution Payment Date relating to a Fixed Rate Period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of Distributions payable on each Distribution Payment Date in respect of a Floating Rate Period will be computed by multiplying the per annum Distribution Rate in effect for such Distribution Period by a fraction, the numerator of which will be the actual number of days in such Distribution Period (or portion thereof) (determined by including the first day thereof and excluding the last thereof) and the denominator of which will be 360, and multiplying the rate so obtained by $1,000.

(d) The Company has the right under the Subordinated Indenture to defer payments of interest on the Junior Subordinated Notes by extending the interest period from time to time on the Junior Subordinated Notes (an "Extension Period") which, if exercised, would defer Distributions on the Preferred Securities during any Extension Period. The payment of such Distributions, together with any interest thereon, will be distributed to the Holders of Trust Securities as received at the end of any Extension Period.

(e) Distributions on the Trust Securities shall be made and shall be deemed payable on each Distribution Payment Date only to the extent that the Trust has legally and immediately available funds in the Payment Account for the payment of such Distributions.

(f) Distributions, including Additional Amounts, if any, on the Trust Securities on each Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities on the Record Date.

Section 4.02. Distribution Rate.

(a) During the Initial Fixed Rate Period, the Distribution Rate shall be the Initial Distribution Rate.

(b) Prior to the expiration of the Initial Fixed Rate Period and any subsequent Fixed Rate Period or Distribution Period with respect to a Floating Rate Period, the Company and the Administrative Trustees will have the option to remarket the Preferred Securities to establish a new Fixed Rate for a new Fixed Rate Period (to take effect upon expiration of such Fixed Rate Period or Distribution Period within the current Floating Rate Period, as the case may be). If the Company and the Administrative Trustees elect to conduct a Remarketing of the Preferred Securities for a new Fixed Rate Period, the Trust shall, not less than 20 nor more than 35 Business Days prior to the related Election Date, notify the Clearing Agency, Property Trustee, Indenture Trustee, Calculation Agent and Remarketing Agent. If the Preferred Securities are not issued in global, fully registered form to the Clearing Agency, such notice shall be delivered to the Holders instead of the Clearing Agency. Such notice shall indicate the length of the proposed new Fixed Rate Period and the proposed Remarketing Date. The Company and the Administrative Trustees shall have the right to terminate a Remarketing at any time prior to the Election Date by notice of such termination to the Clearing Agency, the Remarketing Agent, the Property Trustee, the Indenture Trustee and the Calculation Agent.

(c) If the Remarketing Agent has determined that it will be able to remarket all Preferred Securities tendered or deemed tendered for purchase in the Remarketing at a Fixed Rate and at a price of $1,000 per Preferred Security, on such Remarketing Date, the Distribution Rate for the new Fixed Rate Period will be the Fixed Rate determined by the Remarketing Agent, which will be the rate per annum (rounded to the nearest one-thousandth (0.001) of one percent per annum) which the Remarketing Agent determines, in its sole judgment, to be the lowest Fixed Rate per annum, if any, that will enable it to remarket all Preferred Securities tendered or deemed tendered for Remarketing at a price of $1,000 per Preferred Security.

(d) If the Company and the Administrative Trustees do not elect to remarket the Preferred Securities or have terminated a Remarketing or the Remarketing Agent is unable to remarket all of the Preferred Securities tendered or deemed tendered for a purchase price of $1,000 per Preferred Security, the Distribution Rate shall be the Floating Rate and the new Distribution Period shall be a Floating Rate Period.

(e) The Calculation Agent shall calculate the Floating Rate as follows:

(3) In the event no 3-month LIBOR appears on Telerate Page 3750 as of approximately 11:00 a.m., London time, on a Floating Rate Determination Date and there are fewer than two Rate Quotations, the Floating Rate will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., New York City time, on such Floating Rate Determination Date, by three major banks in New York City selected by the Calculation Agent (after consultation with the Company), for loans in Representative Amounts in U.S. dollars to leading European banks, having an index maturity of three months for a period commencing on the second London Business Day immediately following such Floating Rate Determination Date, plus 2.91%; provided, however, that if fewer than three banks selected by the Calculation Agent are quoting such rates, the Floating Rate for the applicable Floating Rate Period will be the Floating Rate in effect for the preceding Floating Rate Period.

(f) If the Company elects to defer interest during a Fixed Rate Period, Distributions will continue to accrue at the Fixed Rate until the expiration of the Fixed Rate Period. Prior to the expiration of such Fixed Rate Period and any Fixed Rate Period during the Extension Period, the Company and the Administrative Trustees will have the option to remarket the Preferred Securities for a new Fixed Rate Period (to take effect upon expiration of such Fixed Rate Period). If the Company and the Trust do not remarket the Preferred Securities, the Floating Rate during the Extension Period shall be determined as provided herein, but shall not be less than the Fixed Rate for the Fixed Rate Period just ended. If the Company elects to defer interest during a Floating Rate Period, Distributions will continue to accrue at the applicable Floating Rate, reset quarterly, subject to the right of the Company and the Administrative Trustees to remarket the Preferred Securities prior to any Distribution Payment Date in order to establish a new Fixed Rate for a new Fixed Rate Period in accordance with the procedures set forth herein.

Section 4.03. Distribution Periods.

(a) In accordance with Section 4.02 and the Remarketing Procedures, the Company and the Trust may, prior to the expiration of a Fixed Rate Period or to a Distribution Payment Date with respect to a Floating Rate Period, elect to remarket the Preferred Securities to establish a new Fixed Rate for a new Fixed Rate Period. A Fixed Rate Period must be for a duration of at least six months, may not extend beyond the stated maturity of the Junior Subordinated Notes, shall begin on the first day of a calendar quarter (other than the Initial Fixed Rate Period) and may not end on a day other than the last day of a calendar quarter. If a new Fixed Rate for a new Fixed Rate Period is set in a Remarketing, a new Fixed Rate Period shall commence following the expiration of the then current Fixed Rate Period or Distribution Period within the current Floating Rate Period, as the case may be. If a new Fixed Rate for a new Fixed Rate Period is not set, for any reason, a Floating Rate Period and the Floating Rate reset quarterly shall be in effect until the Company and the Administrative Trustees remarket the Preferred Securities and set a new Fixed Rate for a new Fixed Rate Period in accordance with the procedures set forth herein.

Section 4.04. Redemption.

(a) On the Redemption Date with respect to the Junior Subordinated Notes, the Trust will be required to redeem the Trust Securities at the Redemption Price.

(b) Notice of redemption shall be given by the Property Trustee by first class mail. postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date to each holder of Trust Securities to be redeemed, at such Holder's address appearing in the Securities Registrar. All notices of redemption shall state:

(i) the Redemption Date;

(ii) the Redemption Price;

(iii) the CUSIP number; and

(iv) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that Distributions thereon will cease to accrue on and after such date.

(c) The Trust Securities redeemed on the Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of Junior Subordinated Notes. Redemptions of the Trust Securities shall be made and the Redemption Price shall be deemed payable on each Redemption Date only to the extent that the Trust has funds legally and immediately available in the Payment Account for the payment of such Redemption Price.

(d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then, by 2:00 p.m. New York time, on the Redemption Date, subject to Section 4.04(c), the Property Trustee will, so long as the Preferred Securities are in book-entry only form, irrevocably deposit with the Clearing Agency for the Preferred Securities funds sufficient to pay the applicable Redemption Price. If the Preferred Securities are no longer in book-entry only form, the Property Trustee, subject to Section 4.04(c), shall irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions to pay the Redemption Price to the Holders thereof upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register for the Trust Securities on the relevant Record Date for the related Distribution Payment Date. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price, but without interest, and such Securities will cease to be outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then payment of the Redemption Price payable on such date shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such Redemption Price shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of Trust Securities is improperly withheld or refused and not paid either by the Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust Securities will continue to accrue at the then applicable rate, from such Redemption Date originally established by the Trust for such Preferred Securities to the date such Redemption Price is actually paid.

(e) Payment of the Redemption Price on the Trust Securities shall be made to the recordholders thereof as they appear on the Securities Register for the Trust Securities on the relevant Record Date. In the event that the Redemption Date is not a Distribution Payment Date, the record date shall be the Redemption Date.

(f) Subject to the foregoing provisions of Section 4.04 and to applicable law (including, without limitation, United States federal securities laws), the Company or its Affiliates may, at any time and from time to time, purchase outstanding Preferred Securities by tender, in the open market or by private agreement.

Section 4.05. Subordination of Common Securities and Distributions.

(a) Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price of, the Trust Securities, as applicable, shall be made pro rata based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Payment Date or Redemption Date an Indenture Event of Default shall have occurred and be continuing, no payment of any Distribution (including Additional Amounts, if applicable) on, or Redemption Price of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including Additional Amounts, if applicable) on all Outstanding Preferred Securities for all Distribution Periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including Additional Amounts, if applicable) on, or Redemption Price of, Preferred Securities then due and payable.

(b) In the case of the occurrence of any Indenture Event of Default, the Holder of Common Securities will be deemed to have waived any such Event of Default under this Trust Agreement until the effect of all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until any such Events of Default under this Trust Agreement with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the Holders of the Preferred Securities and not the Holder of the Common Securities, and only the Holders of the Preferred Securities will have the right to direct the Property Trustee to act on their behalf.

(c) Distributions on the Common Securities shall be payable at the same Distribution Rates, on the same Distribution Payment Dates and for the same Distribution Periods and to holders as of the same Record Date as for the Preferred Securities.

Section 4.06. Payment Procedures

Payments in respect of the Preferred Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register or, if the Preferred Securities are held by a Clearing Agency, such Distributions shall be made to the Clearing Agency, which shall credit the relevant Persons' accounts at such Clearing Agency on the applicable Distribution Payment Dates. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Holder of the Common Securities.

Section 4.07. Tax Returns and Reports

The Administrative Trustee(s) shall prepare (or cause to be prepared), at the Depositor's expense, and file all United States federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. The Administrative Trustee(s) shall provide or cause to be provided on a timely basis to each Holder any Internal Revenue Service form required to be so provided in respect of the Trust Securities.

Article V

Trust Securities Certificates

Section 5.01. Initial Ownership

Upon the creation of the Trust by the contribution by the Depositor pursuant to Section 2.03 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the Trust.

Section 5.02. The Trust Securities Certificates

Each of the Preferred and Common Securities Certificates shall be issued in minimum denominations of $1,000 and integral multiples in excess thereof. The Trust Securities Certificates shall be executed on behalf of the Trust by manual or facsimile signature of at least one Administrative Trustee. Trust Securities Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Trust Securities Certificates or did not hold such offices at the date of authentication and delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee's name pursuant to Section 5.04.

Section 5.03. Authentication of Trust Securities Certificates

On the Issue Date, the Administrative Trustees shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be executed on behalf of the Trust, authenticated and delivered to or upon the written order of the Depositor signed by its Chairman of the Board, its President or any Vice President, without further corporate action by the Depositor, in authorized denominations. No Trust Securities Certificate shall entitle its holder to any benefit under this Trust Agreement, or shall be valid for any purpose, unless there shall appear on such Trust Securities Certificate a certificate of authentication substantially in the form set forth in Exhibit A or Exhibit C, as applicable, executed by at least one Administrative Trustee by manual signature; such authentication shall constitute conclusive evidence that such Trust Securities Certificate shall have been duly authenticated and delivered hereunder. All Trust Securities Certificates shall be dated the date of their authentication.

Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates

The Securities Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 5.08, a Securities Register in which, subject to such reasonable regulations as it may prescribe, the Securities Registrar shall provide for the registration of Preferred Securities Certificates and the Common Securities Certificates (subject to Section 5.10 in the case of the Common Securities Certificates) and registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Property Trustee shall be the initial Securities Registrar.

Upon surrender for registration of transfer of any Preferred Securities Certificate at the office or agency maintained pursuant to Section 5.08, the Administrative Trustees shall execute, authenticate and deliver in the name of the designated transferee or transferees one or more new Preferred Securities Certificates in authorized denominations of a like aggregate Liquidation Amount dated the date of authentication by the Administrative Trustee or Trustees. The Securities Registrar shall not be required to register the transfer of any Preferred Securities that have been called for redemption. At the option of a Holder, Preferred Securities Certificates may be exchanged for other Preferred Securities Certificates in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of the Preferred Securities Certificates to be exchanged at the office or agency maintained pursuant to Section 5.08.

Every Preferred Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Trustees and the Securities Registrar duly executed by the Holder or his attorney duly authorized in writing. Each Preferred Securities Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed of by the Securities Registrar in accordance with its customary practice.

No service charge shall be made for any registration of transfer or exchange of Preferred Securities Certificates, but the Securities Registrar or the Administrative Trustees may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Securities Certificates.

Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates

If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees or any one of them on behalf of the Trust shall execute and authenticate and make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time.

Section 5.06. Persons Deemed Securityholders

Prior to due presentation of a Trust Securities Certificate for registration of transfer, the Trustees or the Securities Registrar shall treat the Person in whose name any Trust Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities Certificate for the purpose of receiving Distributions (subject to Section 4.01(d)) and for all other purposes whatsoever, and neither the Trustees nor the Securities Registrar shall be bound by any notice to the contrary.

Section 5.07. Access to List of Securityholders' Names and Addresses

The Administrative Trustees shall furnish or cause to be furnished to (i) the Depositor and the Property Trustee semi-annually, not later than June 1 and December 1 in each year, and (ii) the Depositor or the Property Trustee, as the case may be, within 15 days after receipt by any Administrative Trustee of a request therefor from the Depositor or the Property Trustee, as the case may be, in writing, a list, in such form as the Depositor or the Property Trustee, as the case may be, may reasonably require, of the names and addresses of the Securityholders as of a date not more than 15 days prior to the time such list is furnished. If three or more Securityholders or one or more Holders of Trust Securities Certificates evidencing not less than 25% of the outstanding Liquidation Amount apply in writing to the Administrative Trustees, and such application states that the applicants desire to communicate with other Securityholders with respect to their rights under this Trust Agreement or under the Trust Securities Certificates and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Administrative Trustees shall, within five Business Days after the receipt of such application, afford such applicants access during normal business hours to the current list of Securityholders. Each Holder, by receiving and holding a Trust Securities Certificate, shall be deemed to have agreed not to hold either the Depositor or the Administrative Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.

Section 5.08. Maintenance of Office or Agency

The Administrative Trustees shall maintain in the Borough of Manhattan, New York, an office or offices or agency or agencies where Preferred Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Trustees in respect of the Trust Securities Certificates may be served. The Administrative Trustees initially designate JPMorgan Chase Bank, 450 West 33rd Street, New York, New York 10001, as its principal agency for such purposes. The Administrative Trustees shall give prompt written notice to the Depositor and to the Securityholders of any change in the location of the Securities Register or any such office or agency.

Section 5.09. Appointment of Paying Agent

The Paying Agent shall make Distributions and other payments provided hereby to Securityholders from the Payment Account and shall report the amounts of such Distributions and payments to the Property Trustee and the Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the Distributions and payments provided hereby. The Administrative Trustees may revoke such power and remove the Paying Agent if such Trustees determine in their sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect. The Paying Agent shall initially be the Property Trustee, and it may choose any co-paying agent that is acceptable to the Administrative Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees and the Depositor. In the event that a Paying Agent shall resign or be removed, the Administrative Trustees shall appoint a successor that is acceptable to the Depositor to act as Paying Agent (which shall be a bank or trust company). The Administrative Trustees shall cause such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Property Trustee also in its role as Paying Agent, for so long as the Property Trustee shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

Section 5.10. Ownership of Common Securities by Depositor

On the Issue Date, the Depositor shall acquire, and thereafter retain, beneficial and record ownership of the Common Securities. Any attempted transfer of the Common Securities, except for transfers by operation of law, shall be void. The Administrative Trustees shall cause each Common Securities Certificate issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".

Section 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate.

(a) The Preferred Securities Certificates, upon original issuance, will be issued in the form of a typewritten Preferred Securities Certificate or Certificates representing Book-Entry Preferred Securities Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such Preferred Securities Certificate or Certificates shall initially be registered on the Securities Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner will receive a definitive Preferred Securities Certificate representing such beneficial owner's interest in such Preferred Securities, except as provided in Section 5.13. Unless and until Definitive Preferred Securities Certificates have been issued to Owners pursuant to Section 5.13:

(i) the provisions of this Section 5.11(a) shall be in full force and effect;

(ii) the Securities Registrar and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities Certificates (including the payment of principal of and interest on the Book-Entry Preferred Securities and the giving of instructions or directions to Owners of Book-Entry Preferred Securities) as the sole Holder of Book-Entry Preferred Securities and shall have no obligations to the Owners thereof;

(iii) to the extent that the provisions of this Section conflict with any other provisions of this Trust Agreement, the provisions of this Section shall control; and

(iv) the rights of the Owners of the Book-Entry Preferred Securities Certificates shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are issued pursuant to Section 5.13, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such Clearing Agency Participants.

(b) A single Common Securities Certificate representing the Common Securities shall be issued to the Depositor in the form of a definitive Common Securities Certificate.

Section 5.12. Notices to Clearing Agency

To the extent a notice or other communication to the Owners is required under this Trust Agreement, unless and until Definitive Preferred Securities Certificates shall have been issued to Owners pursuant to Section 5.13, the Trustees shall give all such notices and communications specified herein to be given to Owners to the Clearing Agency, and shall have no obligations to the Owners.

Section 5.13. Definitive Preferred Securities Certificates

If (i) the Depositor advises the Trustees in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Preferred Securities Certificates, and the Depositor is unable to locate a qualified successor, or (ii) the Depositor at its option advises the Trustees in writing that it elects to terminate the book-entry system through the Clearing Agency, then the Administrative Trustees shall notify the Clearing Agency and Holders of the Preferred Securities. Upon surrender to the Administrative Trustees of the typewritten Preferred Securities Certificate or Certificates representing the Book-Entry Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the Administrative Trustees or any one of them shall execute and authenticate the Definitive Preferred Securities Certificates in accordance with the instructions of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities Certificates, the Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as Securityholders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees or any one of them.

Section 5.14. Rights of Securityholders

The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.09, and the Securityholders shall not have any right or title therein other than the beneficial ownership interest in the assets of the Trust conferred by their Trust Securities, and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or other similar rights and when issued and delivered to Securityholders against payment of the purchase price therefor, except as otherwise provided in the Expense Agreement and Section 11.01 hereof, will be fully paid and nonassessable by the Trust. Except as otherwise provided in the Expense Agreement and Section 11.01 hereof, the Holders of the Trust Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.

Article VI

Acts of Securityholders; Meetings; Voting

Section 6.01. Limitations on Voting Rights.

(a) Except as provided in this Section, in Section 8.10 or
Section 11.03 of this Trust Agreement, in the Subordinated Indenture, and as otherwise required by law, no Holder of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be construed so as to constitute the Securityholders from time to time as partners or members of an association.

(b) So long as any Junior Subordinated Notes are held by the Property Trustee, the Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or executing any trust or power conferred on the Indenture Trustee with respect to such Junior Subordinated Notes, (ii) waive any past default which is waivable under Section 513 of the Subordinated Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Junior Subordinated Notes shall be due and payable or (iv) consent to any amendment, modification or termination of the Subordinated Indenture or the Junior Subordinated Notes, where such consent shall be required, or to any other action, as holder of the Junior Subordinated Notes, under the Subordinated Indenture, without, in each case, obtaining the prior approval of the Holders of at least 66-2/3% in Liquidation Amount of the Preferred Securities; provided, however, that where a consent under the Subordinated Indenture would require the consent of each holder of Junior Subordinated Notes affected thereby, no such consent shall be given by the Trustees without the prior written consent of each Holder of Preferred Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the Holders of Preferred Securities, except pursuant to a subsequent vote of the Holders of Preferred Securities. The Property Trustee shall notify all Holders of the Preferred Securities of any notice of default received from the Indenture Trustee with respect to the Junior Subordinated Notes. In addition to obtaining the foregoing approvals of the Holders of the Preferred Securities, prior to taking any of the foregoing actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that the Trust will not be classified as other than a grantor trust for United States federal income tax purposes on account of such action.

(c) If any proposed amendment to this Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Preferred Securities, whether by way of amendment to this Trust Agreement or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Preferred Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least 66-2/3% in Liquidation Amount of the Outstanding Preferred Securities. In addition to obtaining the foregoing approvals of the Holders of the Preferred Securities, prior to taking any of the foregoing actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that the Trust will not be classified as other than a grantor trust for United States federal income tax purposes on account of such action.

(d) An Event of Default will be deemed to be cured or waived if, at any time, (i) after an Event of Default exists and payment of interest and principal on the Junior Subordinated Notes has been accelerated under the terms of the Subordinated Note Indenture or (ii) prior to a judgment or decree for the payment of the money due on the Preferred Securities has been obtained, the following events occur: (A) the holders of at least 66 2/3% in liquidation amount of the outstanding Preferred Securities give written notice to the Property Trustee, the Administrative Trustees and the Company to rescind and annul such declaration of acceleration of the Junior Subordinated Notes and its consequences, (B) the Trust pays and deposits with the Clearing Agency a sum sufficient to pay all Distributions (including any accrued interest) and the liquidation amount due on the Preferred Securities otherwise than caused by the acceleration of the Junior Subordinated Notes and (C) all other Events of Default are no longer continuing or have been waived.

(e) Subject to this Section, Section 11.03(c) and Section 8.19 of this Trust Agreement, the Holders of at least 66% in Liquidation Amount of the Outstanding Preferred Securities may, on behalf of the Holders of all the Preferred Securities, waive any past default hereunder and its consequences, except a default in the payment of any Distribution or redemption payment or in respect of a covenant or provision hereof which under Section 11.03(c) cannot be modified or amended without the consent of the Holder of each Preferred Security.

Any waiver by the Holders of the Preferred Securities of an Event of Default with respect to Preferred Securities shall also be deemed to constitute a waiver by the Holders of Common Securities for all purposes of the Trust Agreement without any further act, vote or consent of the Holders of Common Securities.

Section 6.02. Notice of Meetings

Notice of all meetings of the Preferred Securityholders, stating the time, place and purpose of the meeting, shall be given by the Administrative Trustees pursuant to Section 11.08 to each Preferred Securityholder of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice.

Section 6.03. Meetings of Preferred Securityholders

No annual meeting of Securityholders is required to be held. The Administrative Trustees, however, shall call a meeting of Securityholders to vote on any matter upon the written request of the Preferred Securityholders of record of 25% of the Preferred Securities (based upon their Liquidation Amount) and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of Preferred Securityholders to vote on any matters as to which Preferred Securityholders are entitled to vote.

Preferred Securityholders of record of 50% of the Preferred Securities (based upon their Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Securityholders.

If a quorum is present at a meeting, an affirmative vote by the Preferred Securityholders of record present, in person or by proxy, holding more than 66-2/3% of the Preferred Securities (based upon their Liquidation Amount) held by the Preferred Securityholders of record present, either in person or by proxy, at such meeting shall constitute the action of the Securityholders, unless this Trust Agreement requires a greater number of affirmative votes.

Section 6.04. Voting Rights

Securityholders shall be entitled to one vote for each $1,000 of Liquidation Amount represented by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote.

Section 6.05. Proxies, etc.

At any meeting of Securityholders, any Securityholder entitled to vote may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution.

Section 6.06. Securityholder Action by Written Consent

Any action which may be taken by Securityholders at a meeting may be taken without a meeting if Securityholders holding at least 66-2/3% of all outstanding Trust Securities entitled to vote in respect of such action (or such other proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing (based upon their Liquidation Amount).

Section 6.07. Record Date for Voting and Other Purposes

For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any Distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days prior to the date of any meeting of Securityholders or the payment of Distribution or other action, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes.

Section 6.08. Acts of Securityholders

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to the Administrative Trustees. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.01) conclusive in favor of the Trustees, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustees deem sufficient.

The ownership of Preferred Securities shall be proved by the Securities Register. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security.

Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount.

If any dispute shall arise between the Securityholders of Trust Securities and the Administrative Trustees or among such Securityholders or Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter.

Section 6.09. Inspection of Records

Upon reasonable notice to the Trustees, the records of the Trust shall be open to inspection by Securityholders during normal business hours for any purpose reasonably related to such Securityholder's interest as a Securityholder.

Article VII

Representations and Warranties of the Trustees

Section 7.01. Representations and Warranties of the Trustees

The Bank, the Delaware Bank, the Property Trustee and the Delaware Trustee, each on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and the Securityholders that:

(a) the Bank is a banking corporation or trust company duly organized, validly existing and in good standing under the laws of the State of New York, and the Delaware Trustee is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America;

(b) each of the Bank and the Delaware Bank has full corporate power, authority and legal right to execute, deliver and perform their obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement;

(c) this Trust Agreement has been duly authorized, executed and delivered by each of the Bank and the Delaware Bank and constitutes the valid and legally binding agreement of each of the Bank and the Delaware Bank, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles;

(d) the execution, delivery and performance by each of the Bank and the Delaware Bank of this Trust Agreement have been duly authorized by all necessary corporate action on the part of the Bank, the Property Trustee, the Delaware Bank and the Delaware Trustee and do not require any approval of stockholders of the Bank or the Delaware Bank and such execution, delivery and performance will not (i) violate the Bank's or the Delaware Bank's Charter or By-laws, or (ii) violate any law, governmental rule or regulation of the United States or the State of New York or Delaware, as the case may be, governing the banking or trust powers of the Bank and the Property Trustee or the Delaware Bank and the Delaware Trustee, or any order, judgment or decree applicable to the Bank, the Property Trustee, the Delaware Bank or the Delaware Trustee; and

(e) neither the authorization, execution or delivery by the Bank or the Delaware Bank of this Trust Agreement, nor the consummation of any of the transactions by the Bank, the Property Trustee, the Delaware Bank or the Delaware Trustee (as appropriate in context) contemplated herein or therein, nor the issuance of the Trust Securities Certificates pursuant to this Trust Agreement require the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing federal, New York or Delaware law governing the banking or trust powers of the Bank or the Delaware Bank.

Article VIII

The Trustees

Section 8.01. Certain Duties and Responsibilities.

(a) The rights, duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and, in the case of the Property Trustee, the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust Agreement shall require the Trustees to expend or risk their own funds or otherwise incur any financial liability in the performance of any of their duties hereunder, or in the exercise of any of their rights or powers, if they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to them. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section.
(b) All payments made by the Property Trustee in respect of the Trust Securities shall be made only from the income and proceeds from the Trust Property and only to the extent that there shall be sufficient income or proceeds from the Trust Property to enable the Property Trustee to make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely to the income and proceeds from the Trust Property to the extent available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.01(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.

Section 8.02. Notice of Defaults

Within 90 days after the occurrence of any default, the Property Trustee shall transmit, in the manner and to the extent provided in
Section 10.08, notice of any default known to the Property Trustee to the Securityholders, the Administrative Trustees and the Depositor, unless such default shall have been cured or waived. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default.

Section 8.03. Certain Rights of Property Trustee

Subject to the provisions of Section 8.01 and except as provided by law:

(a) the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action, or (ii) in construing any of the provisions in this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein, or (iii) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Preferred Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken. The Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct;

(c) the Property Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(d) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Securityholders pursuant to this Trust Agreement, unless such Securityholders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(e) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other document, unless requested in writing to do so by one or more Securityholders; and

(f) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys; provided that the Property Trustee shall be responsible for its own negligence or recklessness with respect to selection of any agent or attorney appointed by it hereunder.

Section 8.04. Not Responsible for Recitals or Issuance of Securities

The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Trust, and the Trustees do not assume any responsibility for their correctness. The Trustees shall not be accountable for the use or application by the Trust of the proceeds of the Trust Securities in accordance with Section 2.05.

The Property Trustee may conclusively assume that any funds held by it hereunder are legally available unless an officer of the Property Trustee assigned to its Corporate Trustee Administrative Department shall have received written notice from the Company, any Holder or any other Trustee that such funds are not legally available.

Section 8.05. May Hold Securities

Except as provided in the definition of the term "Outstanding" in Article I, any Trustee or any other agent of the Trustees or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent.

Section 8.06. Compensation; Fees; Indemnity.

The Depositor agrees:

(a) to pay to the Trustees from time to time reasonable compensation for all services rendered by the Trustees hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(b) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their willful misconduct, negligence or bad faith; and

(c) to indemnify the Trustees for, and to hold the Trustees harmless against, any and all loss, damage, claims, liability or expense incurred without willful misconduct, negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of this Trust Agreement, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder.

The provisions of this Section 8.06 shall survive the termination of this Trust Agreement.

Section 8.07. Trustees Required; Eligibility.

(a) There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that has a combined capital and surplus of at least $100,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

(b) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind such entity.

(c) There shall at all times be a Delaware Trustee with respect to the Trust Securities. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity authorized to conduct a trust business and with its principal place of business in the State of Delaware that shall act through one or more persons authorized to bind such entity.

Section 8.08. Conflicting Interests

If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. To the extent permitted by the Trust Indenture Act, the Property Trustee shall not be deemed to have a conflicting interest by virtue of being trustee under (i) the Guarantee, (ii) the amended and restated trust agreement dated as of January 1, 1996, among the Company, as Depositor, Chase Manhattan Bank USA, National Association (formerly known as Chase Manhattan Bank Delaware), as Delaware Trustee, the Administrative Trustees named therein and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Property Trustee, relating to Alabama Power Capital Trust I, (iii) the amended and restated trust agreement dated as of January 1, 1997, among the Company, as Depositor, Chase Manhattan Bank USA, National Association (formerly known as Chase Manhattan Bank Delaware), as Delaware Trustee, the Administrative Trustees named therein and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Property Trustee, relating to Alabama Power Capital Trust II, (iv) the amended and restated trust agreement dated as of February 1, 1999, among the Company, as Depositor, Chase Manhattan Bank USA, National Association (formerly known as Chase Manhattan Bank Delaware), as Delaware Trustee, the Administrative Trustees named therein and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) as Property Trustee, relating to Alabama Power Capital Trust III, (v) the amended and restated trust agreement dated as of October 1, 2002, among the Company, as Depositor, Chase Manhattan Bank USA, National Association, as Delaware trustee, the Administrative Trustees named therein and JPMorgan Chase Bank, as Property Trustee, relating to Alabama Power Capital Trust V, (vi) the guarantee agreement dated as of January 1, 1996, between the Company, as Guarantor, and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, relating to Alabama Power Capital Trust I, (vii) the guarantee agreement dated as of January 1, 1997, between the Company, as Guarantor, and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, relating to Alabama Power Capital Trust II, (viii) the guarantee agreement dated February 1, 1999 between the Company, as Guarantor, and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, relating to Alabama Power Capital Trust III, and (ix) the guarantee agreement dated as of October 1, 2002 between the Company, as Guarantor, and JPMorgan Chase Bank, as trustee, relating to Alabama Power Capital Trust V.

Section 8.09. Co-Trustees and Separate Trustee

At any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Holder of the Common Securities and the Property Trustee shall have power to appoint, and upon the written request of the Property Trustee, the Depositor shall for such purpose join with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such Trust Property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case an Indenture Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall satisfy the requirements of Section 8.07.

Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged, and delivered by the Depositor.

Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely:

(i) The Trust Securities shall be executed, authenticated and delivered and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees hereunder, shall be exercised, solely by the Trustees.

(ii) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties, and obligations shall be exercised and performed by such co-trustee or separate trustee.

(iii) The Property Trustee, at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case an Indenture Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery, and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section.

(iv) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee, or any other such trustee hereunder.

(v) The Trustees shall not be liable by reason of any act of a co-trustee or separate trustee.

(vi) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

Section 8.10. Resignation and Removal; Appointment of Successor

No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a successor Relevant Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Relevant Trustee in accordance with the applicable requirements of
Section 8.11.

The Relevant Trustee may resign at any time by giving written notice thereof to the Securityholders. If the instrument of acceptance by a successor Relevant Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within 30 days after the giving of such notice of resignation, the resigning Relevant Trustee may petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee.

Unless an Indenture Event of Default shall have occurred and be continuing, the Relevant Trustee may be removed at any time by Act of the Holder of the Common Securities. If an Indenture Event of Default shall have occurred and be continuing, the Relevant Trustee may be removed at such time by Act of the Securityholders of a majority in Liquidation Amount of the Preferred Securities Certificates, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust).

If the Relevant Trustee shall resign, be removed or become incapable of continuing to act as Trustee at a time when no Indenture Event of Default shall have occurred and be continuing, the Holder of the Common Securities, by Act of the Holder of the Common Securities delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and the retiring Relevant Trustee shall comply with the applicable requirements of Section 8.11. If the Relevant Trustee shall resign, be removed or become incapable of continuing to act as the Relevant Trustee at a time when an Indenture Event of Default shall have occurred and be continuing, the Holders of Preferred Securities, by Act of the Securityholders of a majority in Liquidation Amount of the Preferred Securities then outstanding delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and the Relevant Trustee shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed in accordance with this Section 8.10 and accepted appointment in the manner required by Section 8.11, any Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee.

The retiring Relevant Trustee shall give notice of each resignation and each removal of the Relevant Trustee, and each appointment of a successor Trustee to all Securityholders in the manner provided in Section 11.08 and shall give notice to the Depositor. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee.

Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (i) the act of the remaining Administrative Trustee or (ii) otherwise by the Depositor (with the successor in each case being an individual who satisfies the eligibility requirement for Administrative Trustees set forth in Section 8.07). Additionally, notwithstanding the foregoing or any other provision of this Trust Agreement, in the event the Depositor believes that any Administrative Trustee has become incompetent or incapacitated, the Depositor, by notice to the remaining Trustees, may terminate the status of such Person as an Administrative Trustee (in which case the vacancy so created will be filled in accordance with the preceding sentence).

Section 8.11. Acceptance of Appointment by Successor

In case of the appointment hereunder of a successor Relevant Trustee, every such successor Relevant Trustee so appointed shall execute, acknowledge and deliver to the Trust and to the retiring Relevant Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Relevant Trustee shall become effective and such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on the request of the Depositor or the successor Relevant Trustee, such retiring Relevant Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Relevant Trustee all the rights, powers and trusts of the retiring Relevant Trustee and shall duly assign, transfer and deliver to such successor Relevant Trustee all property and money held by such retiring Relevant Trustee hereunder.

Upon request of any such successor Relevant Trustee, the Trust shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article.

Section 8.12. Merger, Conversion, Consolidation or Succession to Business

Any Person into which the Property Trustee, Delaware Trustee or any Administrative Trustee which is not a natural person may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder; provided such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

Section 8.13. Preferential Collection of Claims Against Depositor or Trust

If and when the Property Trustee shall be or become a creditor of the Depositor or the Trust (or any other obligor upon the Junior Subordinated Notes or the Trust Securities), the Property Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or Trust (or any such other obligor). For purposes of Section 311(b)(4) and (6) of the Trust Indenture Act:

(a) "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and

(b) "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Depositor or the Trust (or any such obligor) for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security; provided the security is received by the Property Trustee simultaneously with the creation of the creditor relationship with the Depositor or the Trust (or any such obligor) arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

Section 8.14. Reports by Property Trustee.

(a) Within 60 days after May 15 of each year commencing with May 15, 2003, if required by Section 313(a) of the Trust Indenture Act, the Property Trustee shall transmit a brief report dated as of such May 15 with respect to any of the events specified in such Section 313(a) that may have occurred since the later of the date of this Trust Agreement or the preceding May 15.

(b) The Property Trustee shall transmit to Securityholders the reports required by Section 313(b) of the Trust Indenture Act at the times specified therein.

(c) Reports pursuant to this Section shall be transmitted in the manner and to the Persons required by Sections 313(c) and (d) of the Trust Indenture Act.

Section 8.15. Reports to the Property Trustee

The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and, within 120 days after the end of each fiscal year of the Depositor, the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form and in the manner required by Section 314 of the Trust Indenture Act.

Section 8.16. Evidence of Compliance with Conditions Precedent

Each of the Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given pursuant to
Section 314(c)(1) of the Trust Indenture Act shall comply with Section 314(e) of the Trust Indenture Act.

Section 8.17. Number of Trustees.

(a) The number of Trustees shall initially be four; provided that the Depositor by written instrument may increase or decrease the number of Administrative Trustees.

(b) If a Trustee ceases to hold office for any reason and the number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with Section 8.10.

(c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.10, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Trust Agreement), shall have all powers granted to the Administrative Trustees and shall discharge the duties imposed upon the Administrative Trustees by this Trust Agreement.

Section 8.18. Delegation of Power.

(a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 2.07(A), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and

(b) The Administrative Trustees shall have power to delegate from time to time to such of their number the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein.

Section 8.19. Enforcement of Rights of Property Trustee by Securityholders

If (i) the Trust fails to pay Distributions in full on the Preferred Securities for more than five consecutive years at any one time, or
(ii) an Event of Default occurs and is continuing, then the Holders of Preferred Securities will rely on the enforcement by the Property Trustee of its rights against the Company as the holder of the Junior Subordinated Notes. In addition, the Holders of a majority in aggregate Liquidation Amount of the Preferred Securities will have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under this Trust Agreement, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Junior Subordinated Notes; provided that such direction shall not be in conflict with any rule of law or with this Trust Agreement, and could not involve the Property Trustee in personal liability in circumstances where reasonable indemnity would not be adequate. If the Property Trustee fails to enforce its rights under the Junior Subordinated Notes, a Holder of Preferred Securities may, to the fullest extent permitted by applicable law, institute a legal proceeding against the Company to enforce its rights under this Trust Agreement without first instituting any legal proceeding against the Property Trustee or any other Person, including the Trust; it being understood and intended that no one or more of such Holders shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Trust Agreement to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Trust Agreement, except in the manner herein provided and for the equal and ratable benefit of all such Holders. Notwithstanding the foregoing, a Holder of Preferred Securities may institute a legal proceeding directly against the Company, without first instituting a legal proceeding against or requesting or directing that action be taken by the Property Trustee or any other Person, for enforcement of payment to such Holder of principal of or interest on the Junior Subordinated Notes having a principal amount equal to the aggregate stated liquidation amount of the Preferred Securities of such Holder on or after the due dates therefor specified or provided for in the Junior Subordinated Notes. The Company shall be subrogated to all rights of the Holders of Preferred Securities in respect of any amounts paid to such Holders by the Company pursuant to this Section.

Section 8.20. Delaware Trustee.

(a) Notwithstanding any other provision of this Trust Agreement, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Administrative Trustees or the Property Trustee described in this Trust Agreement. The Delaware Trustee shall be a trustee for the sole and limited purpose of fulfilling the requirements of ss.3807 of the Delaware Statutory Trust Act.

(b) It is expressly understood and agreed by the parties hereto that in fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust (i) any agreements or instruments executed and delivered by Chase Manhattan Bank USA, National Association are executed and delivered not in its individual capacity but solely as Delaware Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by Chase Manhattan Bank USA, National Association in its individual capacity but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances shall Chase Manhattan Bank Delaware in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement, except if such breach or failure is due to any gross negligence or willful misconduct of the Delaware Trustee.

Article IX

Termination and Liquidation

Section 9.01. Termination Upon Expiration Date

The Trust shall automatically terminate on December 31, 2042 (the "Expiration Date") or earlier pursuant to Section 9.02.

Section 9.02. Early Termination

Upon the first to occur of any of the following events (such first occurrence, an "Early Termination Event"), the Trust shall be dissolved and terminated in accordance with the terms hereof:

(i) the occurrence of a Bankruptcy Event in respect of the Depositor, dissolution or liquidation of the Depositor, or the dissolution of the Trust pursuant to judicial decree;

(ii) the delivery of written direction to the Property Trustee by the Depositor at any time (which direction is optional and wholly within the discretion of the Depositor) to terminate the Trust and distribute the Junior Subordinated Notes to Securityholders as provided in Section 9.04; and

(iii) the payment at maturity or redemption of all of the Junior Subordinated Notes, and the consequent payment of the Preferred Securities.

Section 9.03. Termination

The respective obligations and responsibilities of the Trust and the Trustees created hereby shall terminate upon the latest to occur of the following: (a) the distribution by the Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.04, or upon the redemption of all of the Trust Securities pursuant to Section 4.04, of all amounts or instruments required to be distributed hereunder upon the final payment of the Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Securityholders.

Section 9.04. Liquidation.

(a) If any Early Termination Event specified in clause (ii) of
Section 9.02 occurs, the Trust shall be liquidated and the Property Trustee shall distribute the Junior Subordinated Notes to the Securityholders as provided in this Section 9.04.

(b) In connection with a distribution of the Junior Subordinated Notes, each Holder of Trust Securities shall be entitled to receive, after the satisfaction of liabilities to creditors of the Trust (as evidenced by a certificate of the Administrative Trustees), a Like Amount of Junior Subordinated Notes. Notice of liquidation shall be given by the Trustees by first-class mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. All notices of liquidation shall:

(i) state the Liquidation Date;

(ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Junior Subordinated Notes; and

(iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Junior Subordinated Notes as the Administrative Trustees or the Property Trustee shall deem appropriate.

(c) In order to effect the liquidation of the Trust and distribution of the Junior Subordinated Notes to Securityholders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 45 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Junior Subordinated Notes in exchange for the Outstanding Trust Securities Certificates.

(d) After the Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Junior Subordinated Notes will be issued to Holders of Trust Securities Certificates, upon surrender of such certificates to the Administrative Trustees or their agent for exchange, (iii) any Trust Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Junior Subordinated Notes, accruing interest at the rate provided for in the Junior Subordinated Notes from the last Distribution Date on which a Distribution was made on such Trust Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Trust Securities Certificates with respect to such Junior Subordinated Notes) and (iv) all rights of Securityholders holding Trust Securities will cease, except the right of such Securityholders to receive Junior Subordinated Notes upon surrender of Trust Securities Certificates.

(e) The Depositor will use its best efforts to have the Junior Subordinated Notes that are distributed in exchange for the Preferred Securities to be listed on such securities exchange as the Preferred Securities are then listed. The Depositor may elect to have the Junior Subordinated Notes issued in book-entry form to the Clearing Agency or its nominee pursuant to a Certificate Depository Agreement.

Section 9.05. Bankruptcy

If an Early Termination Event specified in clause (i) of
Section 9.02 has occurred, the Trust shall be liquidated. The Property Trustee shall distribute the Junior Subordinated Notes to the Securityholders as provided in Section 9.04, unless such distribution is determined by the Administrative Trustees not to be practical, in which event the Holders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors, an amount equal to the Liquidation Amount per Trust Security plus accrued and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If such Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution, winding-up or termination pro rata (determined as aforesaid) with Holders of Preferred Securities, except that, if an Indenture Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities.

Section 9.06. Certificate of Cancellation.

A Certificate of Cancellation ("Certificate") to terminate and dissolve the Trust (as permitted hereby) may be signed by any Administrative Trustee, individually, in such capacity so long as such Certificate fully complies with all legal requirements.

Article X

Remarketing Procedures

Section 10.01 Election to Remarket.

If the Company and the Administrative Trustees elect to conduct a Remarketing, the Trust, not less than 20 nor more than 35 Business Days prior to the related Election Date, is required to give the notice of proposed Remarketing of the Preferred Securities to the Clearing Agency, Property Trustee, Indenture Trustee, Remarketing Agent and Calculation Agent. If the Preferred Securities are not issued in global, fully registered form to the Clearing Agency, such notice shall be delivered to the Holders instead of the Clearing Agency. Such notice will describe the Remarketing and will indicate the length of the proposed new Fixed Rate Period and the proposed Remarketing Date. At any time prior to the Election Date, the Company and the Administrative Trustees may elect to terminate a Remarketing by giving the Clearing Agency, the Remarketing Agent, the Property Trustee, the Indenture Trustee and the Calculation Agent notice of such termination.

Section 10.02 Notice of Election

(a) Not later than 4:00 P.M., New York City time, on an Election Date, each Holder of Preferred Securities may give, through the facilities of the Clearing Agency in the case of Book-Entry Preferred Securities Certificates, a notice to the Property Trustee of its election ("Notice of Election") (i) to retain and not to have all or any portion of the Preferred Securities owned by it remarketed in the Remarketing or (ii) to tender all or any portion of such Preferred Securities for purchase in the Remarketing (such portion, in either case, is to be in the Liquidation Amount of $1,000 or any integral multiple thereof). Any Notice of Election given to the Property Trustee will be irrevocable and may not be conditioned upon the level at which the Fixed Rate is established in the Remarketing. Promptly after 4:30 P.M., New York City time, on such Election Date, the Property Trustee, based on the Notices of Election received by it through the Clearing Agency (or from the Holders, if Definitive Preferred Securities Certificates have been issued) prior to such time, will notify the Trust, the Company and the Remarketing Agent of the number of Preferred Securities to be retained by holders of Preferred Securities and the number of Preferred Securities tendered for purchase in the Remarketing.

(b) If any Holder of Preferred Securities gives a Notice of Election to tender Preferred Securities as described in 10.02(a), the Preferred Securities so subject to such Notice of Election will be deemed tendered for purchase in the Remarketing, notwithstanding any failure by such Holder to deliver or properly deliver such Preferred Securities to the Remarketing Agent for purchase. If any Holder of Preferred Securities fails timely to deliver a Notice of Election, as described above, such Preferred Securities will be deemed tendered for purchase in such Remarketing, notwithstanding such failure or the failure by such Holder to deliver or properly deliver such Preferred Securities to the Remarketing Agent for purchase.

(c) The right of each Holder of Preferred Securities to have Preferred Securities tendered for purchase shall be limited to the extent that
(i) the Remarketing Agent conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) Preferred Securities tendered have not been called for redemption, (iii) the Remarketing Agent is able to find a purchaser or purchasers for tendered Preferred Securities at a Fixed Rate and (iv) such purchaser or purchasers deliver the purchase price therefor to the Remarketing Agent.

(d) Any Holder of Preferred Securities that desires to continue to retain a number of Preferred Securities, but only if the Fixed Rate is not less than a specified rate per annum, should submit a Notice of Election to tender such Preferred Securities and separately notify the Remarketing Agent of its interest at the telephone number set forth in the notice of Remarketing. If such Holder so notifies the Remarketing Agent, the Remarketing Agent will give priority to such Holder's purchase of such number of Preferred Securities in the Remarketing providing that the Fixed Rate is not less than such specified rate.

Section 10.03 Determination of Distribution Rate.

(a) If Holders submit Notices of Election to retain all of the Preferred Securities then outstanding, the Fixed Rate will be the rate determined by the Remarketing Agent, in its sole discretion, as the rate that would have been established had a Remarketing been held on the related Remarketing Date.

(b) On any Remarketing Date on which the Remarketing is to be conducted, the Remarketing Agent will use commercially reasonable efforts to remarket, at a price equal to 100% of the Liquidation Amount thereof, Preferred Securities tendered or deemed tendered for purchase. Except as provided in
Section 10.03(a), if, as a result of such efforts, on any Remarketing Date, the Remarketing Agent has determined that it will be able to remarket all Preferred Securities tendered or deemed tendered for purchase in the Remarketing at a Fixed Rate and at a price of $1,000 per Preferred Security, prior to 4:00 P.M., New York City time, on such Remarketing Date, the Remarketing Agent will determine the Fixed Rate, which will be the rate per annum (rounded to the nearest one-thousandth (0.001) of one percent per annum) which the Remarketing Agent determines, in its sole judgment, to be the lowest Fixed Rate per annum, if any, that will enable it to remarket all Preferred Securities tendered or deemed tendered for remarketing at a price of $1,000 per Preferred Security.

(c) If the Remarketing Agent is unable to remarket by 4:00 P.M., New York City time on the third Business Day prior to the Remarketing Settlement Date, all Preferred Securities tendered or deemed tendered for a purchase at a price of $1,000 per Preferred Security, the Distribution Rate for the next Distribution Period shall be the Floating Rate. In such case, no Preferred Securities will be sold in the Remarketing and each Holder will continue to hold its Preferred Securities at the Floating Rate.

(d) All Preferred Securities tendered or deemed tendered in the Remarketing will be automatically delivered to the account of the Remarketing Agent through the facilities of the Clearing Agency against payment of the purchase price therefor on the Remarketing Settlement Date. The Remarketing Agent will make payment to the Clearing Agency Participant of each tendering holder of Preferred Securities in the Remarketing through the facilities of the Clearing Agency by the close of business on the Remarketing Settlement Date.

In accordance with the Clearing Agency's normal procedures, on the Remarketing Settlement Date, the transaction described above with respect to each Preferred Security tendered for purchase and sold in the Remarketing will be executed through the Clearing Agency Participants, will be debited and credited and such Preferred Securities delivered by book entry as necessary to effect purchases and sales of such Preferred Securities. The Clearing Agency is expected to make payment in accordance with its normal procedures.

This Section 10.03(d) shall not apply if Definitive Preferred Securities Certificates have been issued.

(e) If any Holder selling Preferred Securities in the Remarketing fails to deliver such Preferred Securities, the Clearing Agency Participant of such selling Holder and of any other person that was to have purchased Preferred Securities in the Remarketing may deliver to any such other person a number of Preferred Securities that is less than the number of Preferred Securities that otherwise was to be purchased by such person. In such event, the number of Preferred Securities to be so delivered will be determined by such Clearing Agency Participant and delivery of such lesser number of Preferred Securities will constitute good delivery. This paragraph shall not apply if Definitive Preferred Securities Certificates have been issued.

The Remarketing Agent is not obligated to purchase any Preferred Securities that would otherwise remain unsold in a Remarketing. Neither the Trust, any Securities Trustee, the Company nor the Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender of Preferred Securities for Remarketing.

Article XI

Miscellaneous Provisions

Section 11.01. Guarantee by the Depositor

Subject to the terms and conditions hereof, the Depositor irrevocably and unconditionally guarantees to each Person to whom the Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any indebtedness, expenses or liabilities of the Trust, other than obligations of the Trust to pay to Holders of any Preferred Securities or other similar interests in the Trust the amounts due such Holders pursuant to the terms of the Preferred Securities or such other similar interests, as the case may be. This guarantee is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof.

Section 11.02. Limitation of Rights of Securityholders

The death or incapacity of any Person having an interest, beneficial or otherwise, in a Trust Security shall not operate to terminate this Trust Agreement, nor entitle the legal representatives or heirs of such Person or any Securityholder for such Person, to claim an accounting, take any action or bring any proceeding in and for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

Section 11.03. Amendment.

(a) This Trust Agreement may be amended from time to time by the Trustees and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement; provided, however, that any such amendment shall not adversely affect in any material respect the interests of any Securityholder or (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will not be classified as other than a grantor trust for United States federal income tax purposes at any time that any Trust Securities are outstanding; provided, however, that, except in the case of clause (ii), such action shall not adversely affect in any material respect the interests of any Securityholder and, in the case of clause (i), any amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders.

(b) Except as provided in Section 11.03(c) hereof, any provision in this Trust Agreement may be amended by the Trust or the Trustees with (i) the consent of Trust Securityholders representing not less than 66-2/3% (based upon Liquidation Amounts) of the Trust Securities then Outstanding and
(ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United States federal income tax purposes or the Trust's exemption from status of an "investment company" under the Investment Company Act of 1940, as amended.

(c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder (such consent being obtained in accordance with Section 6.03 or 6.06 hereof), this Trust Agreement may not be amended to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date, (ii) restrict the right of a Securityholder to institute suit for the enforcement of any such payment on or after such date, or (iii) change the consent required pursuant to Section 11.03.

(d) Notwithstanding any other provisions of this Trust Agreement, the Trustees shall not enter into or consent to any amendment to this Trust Agreement which would cause the Trust to fail or cease to qualify for the exemption from status of an "investment company" under the Investment Company Act of 1940, as amended, afforded by Rule 3a-5 thereunder.

(e) Without the consent of the Depositor, Calculation Agent or the Remarketing Agent, this Trust Agreement may not be amended in a manner which imposes any additional obligation on the Depositor, Calculation Agent or the Remarketing Agent. In executing any amendment permitted by this Trust Agreement, the Trustees shall be entitled to receive, and (subject to Section 8.01) shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Trust Agreement. Any Trustee may, but shall not be obligated to, enter into any such amendment which affects such Trustee's own rights, duties, immunities or liabilities under this Trust Agreement or otherwise.

(f) In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment.

Section 11.04. Separability

In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 11.05. Governing Law

THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE; PROVIDED THAT THE IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE SHALL BE GOVERNED BY NEW YORK LAW.

Section 11.06. Successors

This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to both the Trust and the Trustees, including any successor by operation of law.

Section 11.07. Headings

The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement.

Section 11.08. Notice and Demand

Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (i) in the case of a Preferred Securityholder, to such Preferred Securityholder as such Securityholder's name and address appear on the Securities Register and (ii) in the case of the Common Securityholder or the Depositor, to Alabama Power Company, 600 North 18th Street, Birmingham, Alabama 35291, Attention: Treasurer, Facsimile No. (205) 257-2445, with a copy to Southern Company Services, Inc., 270 Peachtree Street, NW, Suite 2000, Atlanta, Georgia 30303, Attention:
Corporate Finance Department, Facsimile No. (404) 506-0674. Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission.

Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust or the Trustees shall be given in writing addressed (until another address is published by the Trust) as follows: (i) with respect to the Property Trustee and the Delaware Trustee, JPMorgan Chase Bank, 450 West 33rd Street, New York, New York, 10001, Attention: Institutional Trust Services; Chase Manhattan Bank USA, National Association, c/o JPMorgan Chase Bank, 500 Stanton Christiana Road, Building 41 (3rd Floor) Newark, Delaware 19713, Attention: Institutional Trust Services, as the case may be; and (ii) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor, marked Attention: Administrative Trustees of Alabama Power Capital Trust IV c/o Treasurer. Such notice, demand or other communication to or upon the Trust or the Trustees shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the applicable Trustee.

Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be served upon the Calculation Agent or Remarketing Agreement shall be given in accordance with the Calculation Agent Agreement or Remarketing Agreement, respectively.

Section 11.09. Agreement Not to Petition

Each of the Trustees and the Depositor agrees for the benefit of the Securityholders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, it shall not file, or join in the filing of, a petition against the Trust under any bankruptcy, reorganization, arrangement, insolvency, liquidation or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 11.09, the Property Trustee agrees, for the benefit of Securityholders, that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be stopped and precluded therefrom and such other defenses, if any, as counsel for the Trustees or the Trust may assert. The provisions of this Section 11.09 shall survive the termination of this Trust Agreement.

Section 11.10. Conflict with Trust Indenture Act.

(a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Trustee Agreement and shall, to the extent applicable, be governed by such provisions.

(b) The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the Trust Indenture Act.

(c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Trust Agreement by any of the provisions of the Trust Indenture Act, such required provision shall control.

(d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Trust Securities as equity securities representing undivided beneficial interests in the assets of the Trust.

THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE SUBORDINATED INDENTURE AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.

IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement or have caused this Trust Agreement to be executed on their behalf, all as of the day and year first above written.

ALABAMA POWER COMPANY,
as Depositor

By:
     -----------------------------------------------
         William B. Hutchins, III
         Title:   Executive Vice President, Chief
                 Financial Officer and Treasurer

JPMORGAN CHASE BANK,
as Property Trustee

By:

Larry O'Brien Title: Vice President

CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION,
as Delaware Trustee

By:        --------------------
              John J. Cashin
              Title:   Vice President


        William E. Zales, Jr.,
         as Administrative Trustee


             J. Randy DeRieux,
            as Administrative Trustee

EXHIBIT A

Certificate Number                               Number of Preferred Securities

                                                CUSIP NO. 010391AA8

                   Certificate Evidencing Preferred Securities
                                       of
                         Alabama Power Capital Trust IV

                       Flexible Trust Preferred Securities
                      (Five Year Initial Fixed Rate Period)
               (Liquidation amount $1,000 per Preferred Security)

                  Alabama Power Capital Trust IV, a statutory trust created

under the laws of the State of Delaware (the "Trust"), hereby certifies that ______________ (the "Holder") is the registered owner of _____ (_______) preferred securities of the Trust representing undivided beneficial interests in the assets of the Trust and designated the Alabama Power Capital Trust IV Flexible Trust Preferred Securities (Five Year Initial Fixed Rate Period) (liquidation amount $1,000 per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.04 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust, dated as of October 1 2002, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of Preferred Securities as set forth therein. The holder of this certificate is entitled to the benefits of a guarantee by Alabama Power Company, an Alabama corporation (the "Company"), pursuant to a Guarantee Agreement between the Company and JPMorgan Chase Bank, as guarantee trustee, dated as of October 1, 2002, as the same may be amended from time to time (the "Guarantee"), to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the holder of this certificate without charge upon written request to the Trust at its principal place of business or registered office.

Upon receipt of this certificate, the holder of this certificate is bound by the Trust Agreement and is entitled to the benefits thereunder.

IN WITNESS WHEREOF, the Administrative Trustees of the Trust have executed this certificate this ____ day of -------, ----.

ALABAMA POWER CAPITAL TRUST IV

By:

William E. Zales, Jr., as Administrative Trustee

By:
J. Randy DeRieux, as Administrative Trustee

CERTIFICATE OF AUTHENTICATION

This is one of the Preferred Securities referred to in the within-mentioned Trust Agreement.

as Administrative Trustee

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security to:

(Insert assignee's social security or tax identification number)

(Insert address and zip code of assignee)and irrevocably appoints agent to transfer this Preferred Securities Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:
Signature:

(Sign exactly as your name appears on the other side of this Preferred Securities Certificate)

599853.4

B-4

EXHIBIT B

AGREEMENT AS TO EXPENSES AND LIABILITIES

THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is made as of October 1, 2002, between Alabama Power Company, an Alabama corporation (the "Company"), and Alabama Power Capital Trust IV, a Delaware statutory trust (the "Trust").

WHEREAS, the Trust intends to issue its Common Securities (the "Common Securities") to and receive Junior Subordinated Notes from the Company and to issue and sell Alabama Power Capital Trust IV Preferred Securities (the "Preferred Securities") with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust Agreement of the Trust dated as of October 1, 2002, as the same may be amended from time to time (the "Trust Agreement"); and

WHEREAS, the Company is the issuer of the Junior Subordinated Notes.

NOW, THEREFORE, in consideration of the purchase by each holder of the Preferred Securities, which purchase the Company hereby agrees shall benefit the Company and which purchase the Company acknowledges will be made in reliance upon the execution and delivery of this Agreement, the Company and the Trust hereby agree as follows:

ARTICLE I

Section 1.01. Guarantee by the Company. Subject to the terms and conditions hereof, the Company hereby irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any indebtedness, expenses or liabilities of the Trust (including obligations under the Calculation Agent Agreement by and among the Trust, the Company and JPMorgan Chase Bank, as calculation agent, to be dated as of October 2, 2002 and the Remarketing Agreement by and among the Trust, the Company and Lehman Brothers Inc. as remarketing agent dated October 2, 2002), other than obligations of the Trust to pay to holders of any Preferred Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the Preferred Securities or such other similar interests, as the case may be. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof.

Section 1.02. Term of Agreement. This Agreement shall terminate and be of no further force and effect upon the date on which there are no Beneficiaries remaining; provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any holder of Preferred Securities or any Beneficiary must restore payment of any sums paid under the Preferred Securities, under any Obligation, under the Guarantee Agreement dated the date hereof by the Company and JPMorgan Chase Bank, as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute.

Section 1.03. Waiver of Notice. The Company hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and the Company hereby waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

Section 1.04. No Impairment. The obligations, covenants, agreements and duties of the Company under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following:

(a) the extension of time for the payment by the Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations;

(b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or

(c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the assets of the Trust.

There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of, the Company with respect to the happening of any of the foregoing.

Section 1.05. Enforcement. A Beneficiary may enforce this Agreement directly against the Company and the Company waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against the Company.

ARTICLE II

Section 2.01. Binding Effect. All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Company and shall inure to the benefit of the Beneficiaries.

Section 2.02. Amendment. So long as there remains any Beneficiary or any Preferred Securities of any series are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Preferred Securities.

Section 2.03. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by mail), telex or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of an answer-back, if sent by telex), to wit:

Alabama Power Capital Trust IV c/o JPMorgan Chase Bank 450 West 33rd Street
New York, New York 10001 Facsimile No.: (212) 946-8159 Attention: Institutional Trust Services

Alabama Power Company
600 North 18th Street
Birmingham, Alabama 35291 Facsimile No.: (205) 250-2905 Attention: Treasurer

Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ALABAMA.

THIS AGREEMENT is executed as of the date and year first above written.

ALABAMA POWER COMPANY

By:

William B. Hutchins, III Executive Vice President, Chief Financial Officer and Treasurer

ALABAMA POWER CAPITAL TRUST IV

By:

J. Randy DeRieux, as Administrative Trustee

EXHIBIT C

THIS CERTIFICATE IS NOT TRANSFERABLE

Certificate Number C- Number of Common Securities

Certificate Evidencing Common Securities
of
Alabama Power Capital Trust IV

Common Securities
(liquidation amount $1,000 per Common Security)

Alabama Power Capital Trust IV, a statutory trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Alabama Power Company (the "Holder") is the registered owner of _____________ (_______) common securities of the Trust representing undivided beneficial interests in the assets of the Trust and designated the Common Securities (liquidation amount $1,000 per Common Security) (the "Common Securities"). In accordance with Section 5.10 of the Trust Agreement (as defined below) the Common Securities are not transferable, except by operation of law, and any attempted transfer hereof shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of October 1, 2002, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of the Common Securities as set forth therein. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Trust at its principal place of business or registered office.

Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.

IN WITNESS WHEREOF, the Administrative Trustees of the Trust have executed this certificate this ____ day of ______, ____.

Alabama Power Capital Trust IV

By: --------------------------------------
William E. Zales, Jr.,
as Administrative Trustee

By: --------------------------------------
J. Randy DeRieux,
as Administrative Trustee

CERTIFICATE OF AUTHENTICATION

This is one of the Common Securities referred to in the within-mentioned Trust Agreement.

as Administrative Trustee

Exhibit 4.12-B

ALABAMA POWER CAPITAL TRUST V

AMENDED AND RESTATED

TRUST AGREEMENT

among

ALABAMA POWER COMPANY, as Depositor,

JPMORGAN CHASE BANK, as Property Trustee,

CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, as Delaware Trustee,

and

WILLIAM E. ZALES, JR. and J. RANDY DERIEUX,
as Administrative Trustees

Dated as of October 1, 2002

                          ALABAMA POWER CAPITAL TRUST V

              Certain Sections of this Trust Agreement relating to
                         Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

Trust Indenture Act Section                                                            Trust Agreement Section

Section 310(a)(1) ....................................................................................8.07
       (a)(2) ........................................................................................8.07
       (a)(3) ........................................................................................8.09
       (a)(4) ..............................................................................Not Applicable
       (b) ...........................................................................................8.08
Section 311(a) .......................................................................................8.13
       (b) ...........................................................................................8.13
Section 312(a) .......................................................................................5.07
       (b) ...........................................................................................5.07
       (c) ...........................................................................................5.07
Section 313(a) ....................................................................................8.14(a)
       (a)(4) .....................................................................................8.14(b)
       (b) ........................................................................................8.14(b)
       (c) ........................................................................................8.14(a)
       (d) ...............................................................................8.14(a), 8.14(b)
Section 314(a) .......................................................................................8.15
       (b) .................................................................................Not Applicable
       (c)(1) ..................................................................................8.15, 8.16
       (c)(2) ........................................................................................8.16
       (c)(3) ........................................................................................8.16
       (d) .................................................................................Not Applicable
       (e) ...........................................................................................8.16
Section 315(a) .......................................................................................8.01
       (b) ..................................................................................8.02, 8.14(b)
       (c) ........................................................................................8.01(a)
       (d) .....................................................................................8.01, 8.03
       (e) .................................................................................Not Applicable
Section 316(a) .............................................................................Not Applicable
       (a)(1)(A) .....................................................................................8.19
       (a)(1)(B) .....................................................................................8.19
       (a)(2) ..............................................................................Not Applicable
       (b) .................................................................................Not Applicable
       (c) .................................................................................Not Applicable
Section 317(a)(1) ..........................................................................Not Applicable
       (a)(2) ..............................................................................Not Applicable
       (b) ...........................................................................................5.09
Section 318(a) ......................................................................................11.10
--------------
Note:  This Cross Reference Table does not constitute part of the Trust Agreement and shall not affect the
interpretation of any of its terms and provisions.

                                TABLE OF CONTENTS
                                                                                                               Page

Article I - Defined Terms.........................................................................................2
-------------------------
   Section 1.01.        Definitions...............................................................................2
   --------------       -----------

Article II - Establishment of the Trust..........................................................................11
---------------------------------------
   Section 2.01.        Name.....................................................................................11
   --------------       ----
   Section 2.02.        Offices of the Trustees; Principal Place of Business.....................................11
   --------------       ----------------------------------------------------
   Section 2.03.        Initial Contribution of Trust Property; Organizational Expenses..........................11
   --------------       ---------------------------------------------------------------
   Section 2.04.        Issuance of the Preferred Securities.....................................................11
   --------------       ------------------------------------
   Section 2.05.        Subscription and Purchase of Junior Subordinated Notes; Issuance of the
                        Common Securities........................................................................12

   Section 2.06.        Declaration of Trust.....................................................................12
   --------------       --------------------
   Section 2.07.        Authorization to Enter into Certain Transactions.........................................12
   --------------       ------------------------------------------------
   Section 2.08.        Assets of Trust..........................................................................17
   --------------       ---------------
   Section 2.09.        Title to Trust Property..................................................................17
   --------------       -----------------------
   Section 2.10.        Mergers and Consolidations of the Trust..................................................17
   --------------       ---------------------------------------

Article III - Payment Account....................................................................................18
-----------------------------
   Section 3.01.        Payment Account..........................................................................18
   --------------       ---------------

Article IV - Distributions; Redemption...........................................................................19
--------------------------------------
   Section 4.01.        Distributions............................................................................19
   -------------        -------------
   Section 4.02.        Distribution Rate........................................................................20
   --------------       -----------------
   Section 4.03.        Distribution Periods.....................................................................21
   --------------       --------------------
   Section 4.04.        Redemption...............................................................................22
   --------------       ----------
   Section 4.05.        Subordination of Common Securities and Distributions.....................................23
   --------------       ----------------------------------------------------
   Section 4.06.        Payment Procedures.......................................................................24
   --------------       ------------------
   Section 4.07.        Tax Returns and Reports..................................................................24
   -------------        -----------------------

Article V - Trust Securities Certificates........................................................................24
-----------------------------------------
   Section 5.01.        Initial Ownership........................................................................24
   -------------        -----------------
   Section 5.02.        The Trust Securities Certificates........................................................24
   -------------        ---------------------------------
   Section 5.03.        Authentication of Trust Securities Certificates..........................................25
   --------------       -----------------------------------------------
   Section 5.04.        Registration of Transfer and Exchange of Preferred Securities Certificates...............25
   --------------       --------------------------------------------------------------------------
   Section 5.05.        Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.......................26
   --------------       ------------------------------------------------------------------
   Section 5.06.        Persons Deemed Securityholders...........................................................26
   --------------       ------------------------------
   Section 5.07.        Access to List of Securityholders' Names and Addresses...................................26
   --------------       ------------------------------------------------------
   Section 5.08.        Maintenance of Office or Agency..........................................................27
   --------------       -------------------------------
   Section 5.09.        Appointment of Paying Agent..............................................................27
   --------------       ---------------------------
   Section 5.10.        Ownership of Common Securities by Depositor..............................................27
   --------------       -------------------------------------------
   Section 5.11.        Book-Entry Preferred Securities  Certificates; Common Securities Certificate.............28
   --------------       -----------------------------------------------------------------------------
   Section 5.12.        Notices to Clearing Agency...............................................................28
   --------------       --------------------------
   Section 5.13.        Definitive Preferred Securities Certificates.............................................29
   --------------       --------------------------------------------
   Section 5.14.        Rights of Securityholders................................................................29
   --------------       -------------------------

Article VI - Acts of Securityholders' Meetings; Voting...........................................................29
------------------------------------------------------
   Section 6.01.        Limitations on Voting Rights.............................................................29
   --------------       ----------------------------
   Section 6.02.        Notice of Meetings.......................................................................31
   --------------       ------------------
   Section 6.03.        Meetings of Preferred Securityholders....................................................31
   --------------       -------------------------------------
   Section 6.04.        Voting Rights............................................................................32
   --------------       -------------
   Section 6.05.        Proxies, etc.............................................................................32
   --------------       -------------
   Section 6.06.        Securityholder Action by Written Consent.................................................32
   --------------       ----------------------------------------
   Section 6.07.        Record Date for Voting and Other Purposes................................................32
   --------------       -----------------------------------------
   Section 6.08.        Acts of Securityholders..................................................................32
   --------------       -----------------------
   Section 6.09.        Inspection of Records....................................................................33
   --------------       ---------------------

Article VII -Representations and Warranties of the Trustees......................................................34
-----------------------------------------------------------
   Section 7.01.        Representations and Warranties of the Trustees...........................................34
   --------------       ----------------------------------------------

Article VIII - The Trustees......................................................................................35
---------------------------
   Section 8.01.        Certain Duties and Responsibilities......................................................35
   --------------       ------------------------------------
   Section 8.02.        Notice of Defaults.......................................................................35
   --------------       ------------------
   Section 8.03.        Certain Rights of Property Trustee.......................................................35
   --------------       ----------------------------------
   Section 8.04.        Not Responsible for Recitals or Issuance of Securities...................................36
   --------------       ------------------------------------------------------
   Section 8.05.        May Hold Securities......................................................................37
   --------------       -------------------
   Section 8.06.        Compensation; Fees; Indemnity............................................................37
   --------------       ------------------------------
   Section 8.07.        Trustees Required; Eligibility...........................................................37
   --------------       -------------------------------
   Section 8.08.        Conflicting Interests....................................................................38
   --------------       ---------------------
   Section 8.09.        Co-Trustees and Separate Trustee.........................................................38
   --------------       --------------------------------
   Section 8.10.        Resignation and Removal; Appointment of Successor........................................40
   --------------       -------------------------------------------------
   Section 8.11.        Acceptance of Appointment by Successor...................................................41
   --------------       --------------------------------------
   Section 8.12.        Merger, Conversion, Consolidation or Succession to Business..............................41
   --------------       -----------------------------------------------------------
   Section 8.13.        Preferential Collection of Claims Against Depositor or Trust.............................42
   --------------       ------------------------------------------------------------
   Section 8.14.        Reports by Property Trustee..............................................................42
   --------------       ----------------------------
   Section 8.15.        Reports to the Property Trustee..........................................................42
   --------------       -------------------------------
   Section 8.16.        Evidence of Compliance with Conditions Precedent.........................................43
   --------------       ------------------------------------------------
   Section 8.17.        Number of Trustees.......................................................................43
   --------------       -------------------
   Section 8.18.        Delegation of Power......................................................................43
   --------------       --------------------
   Section 8.19.        Enforcement of Rights of Property Trustee by Securityholders.............................43
   --------------       ------------------------------------------------------------
   Section 8.20.        Delaware Trustee.........................................................................44
   --------------       -----------------

Article IX - Termination and Liquidation.........................................................................45
----------------------------------------
   Section 9.01.        Termination Upon Expiration Date.........................................................45
   --------------       --------------------------------
   Section 9.02.        Early Termination........................................................................45
   --------------       -----------------
   Section 9.03.        Termination..............................................................................45
   --------------       -----------
   Section 9.04.        Liquidation..............................................................................45
   --------------       ------------
   Section 9.05.        Bankruptcy...............................................................................46
   --------------       ----------
   Section 9.06.        Certificate of Cancellation..............................................................47
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Article X - Remarketing Procedures...............................................................................47
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   Section 10.01        Election of Remarket.....................................................................47
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   Section 10.02        Notice of Election.......................................................................47
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   Section 10.03        Determination of Distribution Rate.......................................................48
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Article XI - Miscellaneous Provisions............................................................................49
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   Section 11.01.       Guarantee by the Depositor...............................................................49
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   Section 11.02.       Limitation of Rights of Securityholders..................................................50
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   Section 11.03.       Amendment................................................................................50
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   Section 11.04.       Separability.............................................................................51
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   Section 11.05.       Governing Law............................................................................51
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   Section 11.06.       Successors...............................................................................51
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   Section 11.07.       Headings.................................................................................51
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   Section 11.08.       Notice and Demand........................................................................51
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   Section 11.09.       Agreement Not to Petition................................................................52
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   Section 11.10.       Conflict with Trust Indenture Act........................................................53
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EXHIBIT A - Form of Preferred Security............................................................................1
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EXHIBIT B - Agreement as to Expenses and Liabilities..............................................................1
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EXHIBIT C - Form of Common Security...............................................................................1
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AMENDED AND RESTATED TRUST AGREEMENT

WITNESSETH:

WHEREAS, the Depositor and the Delaware Trustee have heretofore duly declared and established a business trust pursuant to the Delaware Statutory Trust Act by the entering into that certain Trust Agreement, dated as of November 18, 1997 (the "Original Trust Agreement"), and by the execution and filing by the Delaware Trustee with the Secretary of State of the State of Delaware of the Certificate of Trust, dated November 18, 1997; and

Article I

Defined Terms

Section 1.01. Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and

(d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision.

"Act" has the meaning specified in Section 6.08.

"Bank" has the meaning specified in the preamble to this Trust Agreement.

"Bankruptcy Event" means, with respect to any Person:

"Bankruptcy Laws" has the meaning specified in Section 11.09.

"Book-Entry Preferred Securities Certificates" means certificates representing Preferred Securities issued in global, fully registered form to the Clearing Agency as described in Section 5.11.

"Calculation Agent" means JPMorgan Chase Bank, its successor and assigns, or such other bank or trust company appointed to such capacity by the Company and the Administrative Trustees.

"Calculation Agent Agreement" means the agreement among the Company, the Trust and JPMorgan Chase Bank, as calculation agent, dated as of October 2, 2002.

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

"Common Securities Certificate" means a certificate evidencing ownership of a Common Security or Securities, substantially in the form attached as Exhibit C.

"Company" means Alabama Power Company.

"Corporate Trust Office" means the office of the Property Trustee at which its corporate trust business shall be principally administered.

"Delaware Bank" has the meaning specified in the preamble to this Trust Agreement.

"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time.

                  "Depositor" means Alabama Power Company, in its capacity as
"Depositor" under this Trust Agreement.

                  "Distribution Payment Date" means each day on which

Distributions are payable determined based on the prevailing Distribution Rate.

"Distribution Period" means each semiannual period in a Fixed Rate Period and each quarterly period in a Floating Rate Period for which Distributions are payable.

"Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.01.

"Election Date" means a date that is no later than the fifth Business Day prior to the proposed Remarketing Date.

(i) the occurrence of an Indenture Event of Default; or

(ii) default by the Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or

                           (iii)     default  by the  Trust in the  payment of
any  Redemption  Price of any Trust Security when it becomes due and payable; or

                           (iv) default in the performance, or breach, of any
                  covenant or warranty of the Trustees in this Trust Agreement
                  (other than a covenant or warranty a default in whose
                  performance or breach is dealt with in clause (ii) or (iii)
                  above) and continuation of such default or breach for a period
                  of 60 days after there has been given, by registered or
                  certified mail, to the Trustees by the Holders of at least 10%
                  in Liquidation Amount of the Outstanding Preferred Securities
                  a written notice specifying such default or breach and
                  requiring it to be remedied and stating that such notice is a
                  "Notice of Default" hereunder; or

(v) the occurrence of a Bankruptcy Event with respect to the Trust.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Expense Agreement" means the Agreement as to Expenses and Liabilities between the Company and the Trust, substantially in the form attached as Exhibit B, as amended from time to time.

"Extension Period" has the meaning specified in Section 4.01(d).

"Fixed Rate" means the Distribution Rate during a Fixed Rate Period as determined by a Remarketing.

"Fixed Rate Period" means the Initial Fixed Rate Period and each period set by the Company and the Administrative Trustees during a Remarketing for which the Fixed Rate determined in such Remarketing will apply, provided, however, that a Fixed Rate Period must be for a duration of at least six months, may not extend beyond the stated maturity of the Junior Subordinated Notes, shall begin on the first day of a calendar quarter upon expiration of the preceding Fixed Rate Period or Distribution Period with respect to the current Floating Rate Period (except for the Initial Fixed Rate Period) and may not end on a day other than the last day of a calendar quarter.

"Floating Rate" means 3-month LIBOR plus 3.10% reset quarterly.

"Floating Rate Determination Date" means the second London Business Day immediately preceding the first day of the relevant Distribution Period in the Floating Rate Period.

"Floating Rate Period" means any period during which a Floating Rate is in effect.

"Indenture Event of Default" means an "Event of Default" as defined in the Subordinated Indenture.

"Indenture Redemption Date" means "Redemption Date," as defined in the Subordinated Indenture.

"Indenture Trustee" means the trustee under the Subordinated Indenture.

"Initial Distribution Rate" means 5.50% per annum.

"Initial Fixed Rate Period" means the Issue Date through September 30, 2009.

"Issue Date" means the date of the delivery of the Trust Securities.

"Junior Subordinated Notes" means the $206,186,000 aggregate principal amount of the Depositor's Series E Junior Subordinated Notes due October 1, 2042, issued pursuant to the Subordinated Indenture.

"Liquidation Amount" means the stated amount of $1,000 per Trust Security.

"Liquidation Distribution" has the meaning specified in
Section 9.05.

(a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto;

(b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate;

(d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with.

"Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement.

                           (i)      Preferred Securities theretofore  canceled
by the Administrative  Trustees or delivered to the Administrative Trustees for
cancellation;

                           (ii) Preferred Securities for whose payment or

redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Preferred Securities; provided that if such Preferred Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and

(iii) Preferred Securities in exchange for or in lieu of which other Preferred Securities have been authenticated and delivered pursuant to this Trust Agreement;