Exhibit B-6(b)



            MISSISSIPPI BUSINESS FINANCE CORPORATION

                              and

                 SYSTEM ENERGY RESOURCES, INC.,
               formerly Middle South Energy, Inc.






                         LOAN AGREEMENT





                  Dated as of October 15, 1998






           Relating to $216,000,000 Pollution Control
                    Revenue Refunding Bonds
            (System Energy Resources, Inc. Project)
                          Series 1998




<PAGE>

     THIS  LOAN AGREEMENT, dated as of October 15, 1998,  by  and
between  the MISSISSIPPI BUSINESS FINANCE CORPORATION,  a  public
corporation  duly created and validly existing  pursuant  to  the
Constitution and laws of the State of Mississippi (the "Issuer"),
authorized to exercise the powers conferred by Sections 57-10-201
et  seq.,Mississippi  Code of 1972, as amended  and  supplemented
(the  "Act"), and SYSTEM ENERGY RESOURCES, INC., formerly  Middle
South  Energy,  Inc., a corporation organized and existing  under
the  laws  of  the  State  of Arkansas and  qualified  and  doing
business  as  a  foreign corporation in the State of  Mississippi
(the "Company"), evidencing the agreement of the parties hereto.

     In  consideration  of  the  respective  representations  and
agreements  hereinafter contained, the parties  hereto  agree  as
follows  (provided that in the performance of the  agreements  of
the  Issuer herein contained, any obligation it may thereby incur
for  the  payment of money shall not be a general debt, liability
or  obligation  of the Issuer, or of the State of Mississippi  or
any political subdivision thereof but shall be payable solely out
of  the revenue and proceeds derived from this Agreement and  the
Notes (hereinafter defined) and the sale of the Bonds referred to
herein).

                           ARTICLE I

                          DEFINITIONS

     SECTION 1.1. Definitions.  "Additional Bonds", "Bond  Fund",
"Bondholder",  "Bonds", "Code", "Government  Obligations",  "1954
Code", "Project", "Rebate Agreement" and "Trustee" have the  same
meanings  given and assigned to such words in Article  I  of  the
Indenture (hereinafter defined).

Agreement

     "Agreement" means this Loan Agreement and any amendments and
supplements hereto.

Event of Default

     "Event  of  Default" means any of the occurrences enumerated
in Section 5.1 of this Agreement.

Indenture

     "Indenture"   means  the  Trust  Indenture,  dated   as   of
October  15, 1998, relating to the Bonds, between the Issuer  and
the  Trustee  pursuant to which the Bonds are  authorized  to  be
issued, and including any indenture supplemental thereto.

Loan

     "Loan"  means  the  loan to be made by  the  Issuer  to  the
Company  of  the proceeds (which shall be deemed to  include  the
underwriting  discount, if any, and original issue  discount,  if
any)  of the sale of the Bonds, exclusive of any accrued interest
paid  by  the  initial purchasers of the Bonds upon the  delivery
thereof.

Notes

     "Notes"  means the non-negotiable promissory  notes  of  the
Company  issued pursuant to Section 3.2 hereof, in the  form  set
forth in Exhibit A hereto.

Series A Bonds

     "Series  A  Bonds"  means the $49,500,000 Claiborne  County,
Mississippi Adjustable/Fixed Rate Pollution Control Revenue Bonds
(Middle  South  Energy,  Inc. Project)  Series  A,  dated  as  of
December 1, 1983.

Series C Bonds

     "Series  C  Bonds" means the $206,000,000 Claiborne  County,
Mississippi Adjustable/Fixed Rate Pollution Control Revenue Bonds
(Middle  South  Energy,  Inc. Project)  Series  C,  dated  as  of
December 1, 1984.

Series 1998 Bonds

     "Series 1998 Bonds" means the bonds authorized to be  issued
under Section 2.02 of the Indenture.


                           ARTICLE II

           ACQUISITION AND COMPLETION OF THE PROJECT;
                     ISSUANCE OF THE BONDS


     SECTION 2.1. Acquisition and Completion of the Project.  The
Company   represents  that  the  acquisition,  installation   and
construction of the Project have been completed.

     SECTION  2.2.  Issuance  of Series  1998  Bonds;  Additional
Bonds.   In order to provide funds to currently refund a  portion
of  the  Series A Bonds and all of the Series C Bonds, the Issuer
agrees  that it will initially issue and deliver the Series  1998
Bonds  to  the  purchasers thereof at a price to be  approved  in
advance by the Company and apply and deposit the proceeds thereof
in  accordance  with the terms of the Indenture.   The  Indenture
shall  be  satisfactory in form and substance to the Company  and
shall  provide the manner in which, and the purposes  for  which,
proceeds of Bonds may be used and invested.

     If   no  Event  of  Default  shall  have  occurred  and   be
continuing,  the Issuer will authorize the sale of  and  use  its
best  efforts to sell from time to time, to the extent  permitted
by law, Additional Bonds, in amounts specified by the Company and
upon the terms and conditions provided in the Indenture, for  any
purpose permitted by the Indenture and the Act.  The Issuer  will
deposit  the  proceeds  of  any such Additional  Bonds  with  the
Trustee in accordance with the terms of the Indenture.


                          ARTICLE III

             LOAN BY ISSUER; PROVISIONS FOR PAYMENT

     SECTION  3.1. Loan by Issuer.  The Issuer hereby  agrees  to
make the Loan to the Company for the purpose, in the case of  the
proceeds  of  the  Series 1998 Bonds, of currently  redeeming   a
portion  of  the  Series A Bonds and all of the  Series  C  Bonds
within  90 days after the date of initial issuance of the  Series
1998  Bonds.  The Company hereby agrees to cause the proceeds  of
the  Series 1998 Bonds to be applied exclusively to the foregoing
purpose and to cause such Series A Bonds and Series C Bonds to be
redeemed within 90 days after the date of initial issuance of the
Series  1998 Bonds.  In addition, the Company agrees to  pay  any
and  all  amounts  required in addition to the  proceeds  of  the
Series  1998 Bonds to currently redeem a portion of the Series  A
Bonds and all of the Series C Bonds.

     SECTION  3.2.  Delivery of Notes by Company;  Other  Amounts
Payable.   In  order  to  evidence the  Loan  and  the  repayment
obligation of the Company, the Company shall execute and  deliver
for  each  series of Bonds a Note in a principal amount equal  to
the  aggregate  principal amount of, and having the  same  stated
rate  or  rates of interest as, such series of Bonds.  Each  Note
shall be dated the date of the initial issuance of, and mature on
the  same  maturity date or dates as, the series of Bonds  issued
concurrently therewith.

     Pursuant to the Notes, the Company agrees to pay or cause to
be  paid  to  the Issuer, in immediately available funds,  a  sum
equal  to the aggregate principal amount of each series of  Bonds
issued  under  the  Indenture, redemption premium,  if  any,  and
interest  on the unpaid balances thereof at the rates payable  by
the  Issuer on such Bonds at the times such principal, redemption
premium,   if  any,  and  interest  is  payable  by  the   Issuer
irrespective of any original issue discount with respect to  such
Bonds.   If, at the date any payment on such Bonds is due,  there
are  any available moneys in the Bond Fund, such moneys shall  be
credited  against said payment, first in respect of interest  and
then, to the extent of remaining moneys, in respect of principal.

     The  Company  shall  also pay  (a)  the  fees,  charges  and
reasonable  expenses of the Trustee and any paying  agents  under
the  Indenture, such fees, charges and reasonable expenses to  be
paid   directly  to  the  Trustee  or  paying  agents  for  their
respective accounts as and when such fees, charges and reasonable
expenses  become  due  and payable, (b) any  expenses  and  costs
incurred or to be incurred by virtue of the issuance and sale  of
the Bonds, (c) any expenses in connection with any redemption  of
the Bonds, (d) any expenses in connection with the redemption  of
the  aforementioned  Series A Bonds and the Series  C  Bonds  and
(e) any amounts owed under the Rebate Agreement.

     SECTION  3.3. Obligation of the Company Unconditional.   The
obligation  of  the Company to make the payments as  provided  in
this Agreement and the Notes and to perform and observe the other
agreements  on  its part contained herein shall be  absolute  and
unconditional notwithstanding failure of the title to the Project
or  any  part  thereof, loss of title to (or  the  temporary  use
of)  the Project by virtue of the exercise by others of the power
of  eminent domain, any acts or circumstances that may constitute
failure  of  consideration,  destruction  of  or  damage  to  the
Project, commercial frustration of purpose, any change in the tax
or  other laws of the United States of America or of the State of
Mississippi or any political subdivision of either thereof or any
failure  of  the  Issuer  to perform and observe  any  agreement,
whether  express or implied, or any duty, liability or obligation
arising  out  of  or  connected  with  this  Agreement.   Nothing
contained  in this Section 3.3 shall be construed to release  the
Issuer from the performance of any of the agreements on its  part
herein  contained; and, in the event the Issuer  should  fail  to
perform any such agreement on its part, the Company may institute
such  action against the Issuer as the Company may deem necessary
to  compel  performance or recover its damages for nonperformance
so  long as such action shall not violate the agreements  on  the
part  of the Company contained in the preceding sentence, but  in
no  event  shall  the Company be entitled to reduce  the  amounts
payable under the Notes and Section 3.2 hereof.  The Company may,
however,  at its own cost and expense and in its own name  or  in
the  name  of  the  Issuer, prosecute or  defend  any  action  or
proceeding or take any other action involving third persons which
the  Company  deems reasonably necessary in order  to  secure  or
protect its right of possession, occupancy and use hereunder, and
in  such  event the Issuer hereby agrees to cooperate fully  with
the  Company  and  to  take all action necessary  to  effect  the
substitution of the Company for the Issuer in any such action  or
proceeding if the Company shall so request.

     SECTION  3.4. Assignment and Pledge of Payments  and  Rights
Under  the Notes and the Agreement.  The Issuer shall assign  and
pledge to the Trustee as security under the Indenture all rights,
title and interests of the Issuer in and to (a) the Notes and all
payments  thereunder  and  (b)  this  Agreement  and  all  moneys
receivable hereunder (except for payments under Sections 4.3  and
5.3  hereof).  The Company assents to such assignment and  hereby
agrees  that,  as to the Trustee, its obligations  to  make  such
payments  shall  be  absolute and shall not  be  subject  to  any
defense  or  any  right  of set-off, counterclaim  or  recoupment
arising  out  of any breach by the Issuer or the Trustee  of  any
obligation to the Company, whether hereunder or otherwise, or out
of any indebtedness or liability at any time owing to the Company
by the Issuer or the Trustee.


                           ARTICLE IV

                       SPECIAL COVENANTS

     SECTION 4.1. No Warranty of Suitability by the Issuer.   The
Issuer  makes  no warranty either express or implied  as  to  the
Project, including its suitability for the Company's purposes  or
needs.

     SECTION  4.2.  Use  of  Project.   The  Issuer  does  hereby
covenant  and agree that it will not take any action, other  than
pursuant to the exercise of its rights under Section 5.2 of  this
Agreement,  to  prevent  the Company from having  possession  and
enjoyment  of  the Project during the term of this Agreement  and
will,  at  the request of the Company and at the Company's  cost,
reasonably  cooperate with the Company in order that the  Company
may  have  possession and enjoyment of the Project.   The  Issuer
hereby  acknowledges that it shall have no rights to the  use  or
possession   of   the   Project.   The  Issuer   hereby   further
acknowledges that the Project will not constitute any part of the
security for the Bonds.

     SECTION  4.3.  Indemnity Against Claims.  The Company  shall
pay  and  discharge  and shall indemnify and  hold  harmless  the
Issuer  and the Trustee from (a) any lien or charge upon payments
by  the  Company  to  the Issuer under the  Notes  or  hereunder,
(b)  any  taxes, assessments, impositions and other charges  upon
payments  by  the  Company  to the  Issuer  under  the  Notes  or
hereunder  and  (c)  any and all liability,  damages,  costs  and
expenses  arising  out  of  or resulting  from  the  transactions
contemplated by this Agreement and the Indenture or  in  any  way
related  to  the  Project,  including  the  reasonable  fees  and
expenses of counsel.  If any such lien or charge is sought to  be
imposed   upon   payments,  or  any  such   taxes,   assessments,
impositions  or  other charges are sought to be imposed,  or  any
such  liability,  damages, costs and expenses are  sought  to  be
imposed, the Issuer and/or the Trustee shall give prompt  written
notice to the Company, and the Company shall have the sole  right
and  duty  to assume, and will assume, the defense thereof,  with
full power to litigate, compromise or settle the same in its sole
discretion.

     SECTION 4.4. Inspection of the Project.  The Company  agrees
that  the Issuer and its duly authorized agents may at reasonable
times  enter  upon  the  Project site  and  examine  and  inspect
the Project and the books and records of the Company with respect
to the Project.

     SECTION   4.5.   The  Company  to  Maintain  Its   Corporate
Existence;  Conditions  Under Which  Exceptions  Permitted.   The
Company  agrees  that during the term of this Agreement  it  will
maintain  its  corporate existence in the State of  Arkansas  and
qualification  to  do business in the State of Mississippi,  will
not dissolve or otherwise dispose of all or substantially all  of
its  assets  and will not consolidate with or merge into  another
corporation   or  permit  one  or  more  other  corporations   to
consolidate  with  or merge into it; provided, that  the  Company
may,   without  violating  the  agreements  contained   in   this
Section  4.5,  consolidate with or merge  into  another  domestic
corporation (i.e., a corporation incorporated and existing  under
the laws of one of the states of the United States of America  or
under the laws of the United States of America) or permit one  or
more other corporations to consolidate with or merge into it,  or
sell or otherwise transfer to another domestic corporation all or
substantially  all  of its assets as an entirety  and  thereafter
dissolve,  provided  that  (i) both  immediately  prior  to  such
consolidation or merger and after giving effect thereto, no Event
of  Default  (or event which, with the giving of  notice  or  the
passage of time, or both, would become an Event of Default) shall
have occurred and be continuing, (ii) in the event the Company is
not  the surviving, resulting or transferee corporation,  as  the
case  may  be, the surviving, resulting or transferee corporation
assumes, accepts and agrees in writing to pay and perform all  of
the obligations of the Company herein and under the Notes and  is
a  Mississippi corporation or is qualified to do business in  the
State  of Mississippi as a foreign corporation and (iii)  whether
or  not  the  Company is the surviving, resulting  or  transferee
corporation, such consolidation or merger does not result in  the
loss  of  the exclusion from gross income for federal income  tax
purposes of interest on the outstanding Bonds.

     SECTION  4.6. Annual Statement.  The Company agrees to  have
an   annual   audit  made  by  its  regular  independent   public
accountants  and within 180 days after the close of  each  fiscal
year to furnish the Trustee and any Bondholder who may so request
a  balance sheet and statement of income and surplus showing  the
financial   condition  of  the  Company  and   its   consolidated
subsidiaries, if any, at the close of such fiscal  year  and  the
results  of  operations  of  the  Company  and  its  consolidated
subsidiaries,  if  any, for such fiscal year,  accompanied  by  a
certificate or opinion of said accountants.  The requirements  of
the  Company pursuant to this Section 4.6 may be satisfied by the
submission  to  the Trustee and each Bondholder who  may  request
such   information  of  the  Company's  annual  report   to   its
shareholders,  so  long as the Company prepares  such  an  annual
report or its Annual Report on Form 10-K.

     SECTION  4.7. Further Assurances and Corrective Instruments.
The  Issuer  and the Company agree that they will, from  time  to
time,  execute, acknowledge and deliver, or cause to be executed,
acknowledged  and  delivered, such supplements  hereto  and  such
further  instruments as may reasonably be required for correcting
any  inadequate or incorrect description of the Project  and  for
carrying  out  the intention or facilitating the  performance  of
this Agreement.

     SECTION 4.8. Maintenance of Project by Company.  The Company
agrees  that  during the term of this Agreement it will  pay  all
costs  of  operating,  maintaining  and  repairing  the  Project;
provided,  however,  that the Company  shall  not  be  under  any
obligation to renew, repair or replace any inadequate,  obsolete,
worn-out, unsuitable, undesirable or unnecessary portion  of  the
Project.   In any instance where the Company determines that  any
portion of the Project has become inadequate, obsolete, worn-out,
unsuitable,  undesirable or unnecessary, the Company  may  remove
such  portion  of  the  Project and sell, trade-in,  exchange  or
otherwise   dispose   of  such  removed   portion   without   any
responsibility  or accountability to the Issuer, the  Trustee  or
the Bondholders therefor.

     SECTION  4.9. Redemption or Purchase of Bonds.   The  Issuer
shall   take  all  steps  then  necessary  under  the  applicable
provisions of the Indenture and then applicable federal and state
laws and regulations for the redemption or purchase of Bonds upon
receipt  by  the  Issuer and the Trustee from the  Company  of  a
written notice specifying:

     (a)   the  principal  amount of  Bonds  to  be  redeemed  or
purchased and the section of the Indenture pursuant to which such
Bonds are being redeemed or purchased;

     (b)  the date of such redemption or purchase, which date, in
the  case  of a redemption of Bonds, shall be at least forty-five
(45)  days but not more than ninety (90) days subsequent  to  the
receipt by the Trustee of such notice; and

     (c)   in  the  case of a redemption of Bonds, directions  to
mail  a  notice  of redemption pursuant to Section  3.04  of  the
Indenture.

     In  the  case of a purchase of Bonds, the written notice  to
the  Trustee  shall, if available moneys in  the  Bond  Fund  are
insufficient to purchase the principal amount of Bonds  specified
in  (a) above, be accompanied by a deposit into the Bond Fund  of
cash  or  Government Obligations sufficient, together with  other
moneys  then  available in the Bond Fund, to  make  the  directed
purchase of Bonds.

     SECTION  4.10.  Tax  Covenants.  The Company  covenants  and
agrees  that it will not use or permit the use by any  person  of
any of the funds provided by the Issuer hereunder or any other of
its  funds,  directly  or indirectly, or direct  the  Trustee  to
invest  any  funds  held  by  it  under  the  Indenture  or  this
Agreement, in such manner as would, or enter into, or  allow  any
"related  person" (as defined in Section 103(b)(13) of  the  1954
Code)  to  enter into, any arrangement, formal or informal,  that
would, or take or omit to take any other action that would, cause
any  Bond to be an "arbitrage bond" within the meaning of Section
148(a)  of  the Code or result in the loss of the exclusion  from
gross income for federal income tax purposes of the interest paid
on the Bonds to the extent afforded under Section 103 of the 1954
Code.  The Company acknowledges Section 6.02 of the Indenture and
agrees  to  perform all duties imposed upon it  by  such  Section
including  but  not limited to its obligations under  the  Rebate
Agreement.    Insofar   as  said  section  imposes   duties   and
responsibilities on the Company, it is specifically  incorporated
herein  by  reference.   The  Issuer  and  the  Company  mutually
covenant  and agree that neither of them shall take or  authorize
or  permit  any  action  to  be taken,  and  have  not  taken  or
authorized  or  permitted any action to be taken,  which  has  or
would  result  in  the interest on any Bonds  theretofore  issued
under the Indenture being included in gross income of the holders
thereof  for  federal income tax purposes.  This  covenant  shall
survive the termination of this Agreement.

     SECTION  4.11.  Ad  Valorem Taxes.   The  Project  shall  be
subject to assessment thereof for ad valorem taxes in the  manner
provided  by  law and the Company agrees to timely pay  all  such
taxes.

     SECTION  4.12.  Continuing Disclosure.   It  is  understood,
acknowledged   and  agreed  that  the  Issuer   shall   have   no
responsibility  for  compliance with  the  continuing  disclosure
requirements  set  forth  in  Rule 15c-2-12  promulgated  by  the
Securities and Exchange Commission under the Securities  Exchange
Act  of  1934,  as in effect on the date of this  Agreement,  and
shall  have  no liability to the underwriters of the  Bonds,  the
holders  of  the Bonds or any other person with respect  to  such
disclosure matters.  To the extent applicable to the Company, the
Company  agrees  to  comply fully with the continuing  disclosure
requirements of said Rule 15c-2-12.

     SECTION  4.13.   Series A Bonds and  Series  C  Bonds.   The
Company represents that the interest rates on the Series A  Bonds
and the Series C Bonds were converted to a fixed rate to maturity
commencing December 1, 1988.

     SECTION   4.14.   Assignment,  Leasing  and  Selling.    The
Company's interest in this Agreement may be assigned in whole  or
in  part, and the Project may be leased or sold as a whole or  in
part  (whether  a  specific  element  or  unit  or  an  undivided
interest), by the Company, without the consent of the  Issuer  or
the   Trustee,  subject,  however,  to  the  condition  that   no
assignment, lease or sale (other than as described in Section 4.8
hereof) shall relieve the Company from primary liability for  its
obligations under Section 3.2 hereof to pay the payments required
thereunder, or for any other of its obligations hereunder,  other
than those obligations relating to the operation, maintenance and
insurance of the Project, which obligations (to the extent of the
interest  assigned, leased or sold and to the extent  assumed  by
the  assignee,  lessee  or  purchaser)  shall  be  deemed  to  be
satisfied and discharged.  Further, upon any such lease or  sale,
the  Company  shall comply with the requirements of Section  4.10
hereof,   the   1954  Code  and  the  Code  and  the  regulations
promulgated thereunder (including, without limitation, the taking
of  remedial  action with respect to the Bonds) as the  same  may
then be applicable.

     The  Company  shall,  within fifteen  (15)  days  after  the
delivery  thereof, furnish to the Issuer and the Trustee  a  true
and   complete   copy  of  the  agreements  or  other   documents
effectuating any such assignment, lease or sale.

                           ARTICLE V

                 EVENTS OF DEFAULT AND REMEDIES

     SECTION 5.1. Events of Default.  Each of the following shall
be an "Event of Default" under this Agreement:

     (a)  Failure by the Company to pay when due the principal or
redemption premium, if any, required to be paid in respect of the
Bonds  pursuant to the Notes, failure by the Company  to  pay  an
installment  of  interest required to be paid in respect  of  the
Bonds  pursuant  to  this Agreement and  the  Notes,  after  such
interest has become due for a period of sixty (60) days,  or  the
failure by the Company to pay within 30 days of the date due  any
other amounts required to be paid pursuant to this Agreement.

     (b)   Failure  by  the Company to observe  and  perform  any
covenant,  condition or agreement on its part to be  observed  or
performed  hereunder,  other than as referred  to  in  subsection
(a)  of  this Section 5.1, for a period of 60 days after  written
notice,  specifying  such  failure  and  requesting  that  it  be
remedied,  is given to the Company by the Issuer or the  Trustee,
unless  the Issuer and the Trustee shall agree in writing  to  an
extension  of  such  period  prior to its  expiration;  provided,
however,  if the failure stated in the notice cannot be corrected
within the applicable period, the Issuer and the Trustee will not
unreasonably  withhold  their consent to  an  extension  of  such
period  if corrective action is instituted by the Company  within
the applicable period and diligently pursued until the failure is
remedied.

     (c)   The  expiration  of  a  period  of  ninety  (90)  days
following:

          (1)   the adjudication of the Company as an involuntary
     bankrupt by any court of competent jurisdiction;

          (2)   the  entry  of an order approving an  involuntary
     petition  seeking  reorganization  or  arrangement  of   the
     Company  under  the  federal bankruptcy laws  or  any  other
     applicable  law or statute of the United States of  America,
     or of any state thereof; or

          (3)  the appointment in an involuntary proceeding of  a
     trustee  or  a receiver of all or substantially all  of  the
     property of the Company;

unless during such period such adjudication, order or appointment
of  a trustee or receiver shall be vacated or shall be stayed  on
appeal or otherwise or shall have otherwise ceased to continue in
effect.

     (d)   The  filing by the Company of a voluntary petition  in
bankruptcy  or  the making of an assignment for  the  benefit  of
creditors; the consenting by the Company to the appointment of  a
receiver  or  trustee  of all or any part of  its  property;  the
filing   by   the  Company  of  a  petition  or  answer   seeking
reorganization, adjustment, composition or arrangement under  the
federal  bankruptcy laws, or any other applicable law or  statute
of  the United States of America, or of any state thereof; or the
filing  by  the  Company of a petition to take advantage  of  any
insolvency act.

     The  foregoing provisions of Section 5.1(b) are  subject  to
the limitation that, if by reason of force majeure the Company is
unable  in  whole  or in part to carry out its agreements  herein
contained  other than those set forth in Sections  4.5  and  4.10
hereof,  an Event of Default shall not be deemed to have occurred
during  the  continuance  of  such inability.   The  term  "force
majeure"  as used herein shall mean the following: acts  of  God;
strikes;  lockouts  or  other industrial  disturbances;  acts  of
public  enemies;  orders of any kind of  the  government  of  the
United  States  of  America  or of any  state  or  any  of  their
departments,  agencies or officials or of any civil  or  military
authority;    insurrections;   riots;   epidemics;    landslides;
lightning;  earthquakes;  fire;  hurricanes;  tornadoes;  storms;
floods; washouts; droughts; arrests; restraints of government and
people;  civil disturbances; explosions; breakage or accident  to
machinery, transmission lines, pipes or canals; partial or entire
failure  of utilities; or any other cause or event not reasonably
within  the control of the Company.  The Company agrees, however,
to  remedy to the extent practicable with all reasonable dispatch
the  effects  of  any force majeure preventing the  Company  from
carrying  out  its  agreements; provided that the  settlement  of
strikes,  lockouts  and  other industrial disturbances  shall  be
entirely  within the discretion of the Company, and  the  Company
shall not be required to make settlement of strikes, lockouts and
other  industrial disturbances by acceding to the demands of  the
opposing party or parties when such course is in the judgment  of
the Company unfavorable to the Company.

     SECTION  5.2.  Remedies on Default.  Whenever any  Event  of
Default shall have occurred and be continuing, the Issuer may, in
addition to any other remedy now or hereafter existing at law, in
equity  or  by  statute,  take either or both  of  the  following
remedial steps:

     (a)   By  written  notice  to the Company,  the  Issuer  may
declare  all  amounts  payable  pursuant  to  the  Notes  to   be
immediately  due  and payable, whereupon the  same  shall  become
immediately due and payable.

     (b)  The Issuer may take whatever action at law or in equity
may appear necessary or desirable to collect the amounts referred
to  in  (a)  above then due and thereafter to become due,  or  to
enforce  performance and observance of any obligation,  agreement
or covenant of the Company under this Agreement.

     Any  amounts collected pursuant to action taken  under  this
Section  5.2  shall  be paid into the Bond Fund  and  applied  in
accordance with the provisions of the Indenture or, if the  Bonds
have  been fully paid (or provision for payment thereof has  been
made in accordance with the provisions of the Indenture) and  the
fees  and  expenses  of the Issuer, the Trustee  and  the  paying
agents  and  all  other amounts required to  be  paid  under  the
Indenture and hereunder shall have been paid, to the Company.

     SECTION 5.3.  Agreement to Pay Attorneys' Fees and Expenses.
In  the event the Company should breach any of the provisions  of
the  Notes or this Agreement and the Issuer or the Trustee should
employ  attorneys or incur other expenses for the  collection  of
amounts  payable hereunder or the enforcement of  performance  or
observance  of  any obligation or agreement on the  part  of  the
Company  herein  contained, the Company agrees that  it  will  on
demand  therefor pay to the Issuer or the Trustee the  reasonable
fees  of  such  attorneys and such other reasonable  expenses  so
incurred by the Issuer or the Trustee.

     SECTION 5.4. No Additional Waiver Implied by One Waiver.  In
the  event  any provision contained in this Agreement  should  be
breached  by  either  party and thereafter waived  by  the  other
party,  such waiver shall be limited to the particular breach  so
waived  and  shall  not  be  deemed to  waive  any  other  breach
hereunder.


                           ARTICLE VI

                         MISCELLANEOUS

     SECTION  6.1. Term of this Agreement.  This Agreement  shall
remain  in full force and effect from the date hereof until  such
time  as all of the outstanding Bonds shall have been fully  paid
or  provision made therefor in accordance with the provisions  of
the  Indenture,  whichever shall first occur, and  the  fees  and
expenses of the Issuer, the Trustee and any paying agents and all
other amounts payable by the Company under this Agreement and the
Notes shall have been paid.

     SECTION  6.2. Notices.  All notices, certificates  or  other
communications hereunder shall be sufficiently given and shall be
deemed  given when delivered or mailed by registered or certified
mail, postage prepaid, addressed as follows: if to the Issuer, at
1306   Walter   Sillers  Building,  550  High  Street,   Jackson,
Mississippi  39205,  Attention: Executive  Director;  if  to  the
Company,  at  639  Loyola Avenue, New Orleans,  Louisiana  70113;
Attention:  Treasurer;  and if to the  Trustee,  at   Tower  Marc
Plaza,  10161  Centurion  Parkway, Jacksonville,  Florida  32256,
Attention:  Corporate Trust Division.  A duplicate copy  of  each
notice,  certificate or other communication  given  hereunder  by
either the Issuer or the Company to the other shall also be given
to  the Trustee.  The Issuer, the Company and the Trustee may, by
notice  given  hereunder,  designate  any  further  or  different
addresses  to  which  subsequent notices, certificates  or  other
communications shall be sent.

     SECTION 6.3.  Binding Effect.  This Agreement shall inure to
the  benefit of and shall be binding upon the Issuer, the Company
and their respective successors and assigns, subject, however, to
the limitations contained in Section 4.5 hereof.

     SECTION  6.4.  Severability.  In the event any provision  of
this  Agreement  shall  be held invalid or unenforceable  by  any
court  of  competent jurisdiction, such holding shall  not  inval
idate or render unenforceable any other provision hereof.

     SECTION  6.5.  Amounts  Remaining in  the  Bond  Fund.   Any
amounts  remaining  in  the Bond Fund upon  termination  of  this
Agreement  shall, to the extent provided by Section 5.08  of  the
Indenture, belong to and be paid to the Company by the Trustee.

     SECTION  6.6.  Amendments.   This  Agreement  may   not   be
effectively  terminated except in accordance with the  provisions
hereof  and  may not be effectively amended except by  a  written
agreement  in  accordance with Article XI of  the  Indenture  and
signed by the parties hereto.

     SECTION 6.7. Execution in Counterparts.  This Agreement  may
be  executed in several counterparts, each of which shall  be  an
original  and all of which shall constitute but one and the  same
instrument.

     SECTION  6.8.   Applicable  Law.  This  Agreement  shall  be
governed  by  and construed in accordance with the  laws  of  the
State of Mississippi.

     SECTION  6.9.  Captions.  The captions or headings  in  this
Agreement are for convenience only and in no way define, limit or
describe  the  scope or intent of any provisions or  sections  of
this Agreement.

     SECTION 6.10. Other Financing.  Notwithstanding anything  in
this  Agreement to the contrary, the Issuer and the  Company  may
hereafter  enter into agreements to provide for the financing  or
refinancing  of  costs of the Project or any portion  thereof  in
lieu  of  or  in addition to the provisions herein for Additional
Bonds.

     IN  WITNESS WHEREOF, the Issuer and the Company have  caused
this Agreement to be executed in their respective corporate names
and  their respective corporate seals to be hereunto affixed  and
attested  by their duly authorized officers, all as of  the  date
first above written.

                                   MISSISSIPPI BUSINESS FINANCE
                                   CORPORATION

                                   By
                                     Executive Director
ATTEST:

                    
Secretary

                                   SYSTEM ENERGY RESOURCES, INC.
(SEAL)
                                   By
                                     Vice President and Treasurer
                                   
ATTEST:

                    
Assistant Secretary

<PAGE>
STATE OF LOUISIANA

PARISH OF ORLEANS

     Personally appeared before me, the undersigned authority  in
and  for  the said parish and state, on this 3rd day of November,
1998,  within my jurisdiction, the within named William T.  Barry
and  James Vernon Smith, Sr., who acknowledged that they are  the
Executive  Director  and  Secretary of the  Mississippi  Business
Finance  Corporation, and that in said representative  capacities
they  executed  the above and foregoing instrument,  after  first
having been duly authorized so to do.

                                   
                                   Notary Public
My Commission Expires:

                    


<PAGE>

STATE OF LOUISIANA

PARISH OF ORLEANS

     Personally appeared before me, the undersigned authority  in
and  for the said parish and state, on this               day  of
November,  1998, within my jurisdiction, the within named  Steven
C.  McNeal and Christopher T. Screen, who acknowledged that  they
are  the Vice President and Treasurer and Assistant Secretary  of
System Energy Resources, Inc., an Arkansas corporation, and  that
for and on behalf of the said corporation and as its act and deed
they  executed  the above and foregoing instrument,  after  first
having been duly authorized by said corporation so to do.

                                   
                                   Notary Public
My Commission Expires:

<PAGE>                    

                                                        EXHIBIT A

                 SYSTEM ENERGY RESOURCES, INC.
                        PROMISSORY NOTE

$                                                          [DATE]


     SYSTEM  ENERGY RESOURCES, INC., a corporation organized  and
existing under the laws of the State of Arkansas (the "Company"),
acknowledges  itself  indebted  and  for  value  received  hereby
promises to pay to the order of the Mississippi Business  Finance
Corporation  (the "Issuer"), and its successors and assigns,  the
principal                         sum                          of
Dollars  ($                     ) together with interest  on  the
unpaid  principal balance thereof from the date hereof until  the
Company's  obligation with respect to the  payment  of  such  sum
shall  be  discharged at the rate borne by the Bonds referred  to
below.  As additional interest hereon there shall be payable, and
the  Company promises to pay when due, amounts which shall  equal
the  redemption premium, if any, due on such Bonds in  connection
with the redemption thereof.

     This Note is issued to evidence the Loan (as defined in  the
Agreement  hereinafter referred to) of the Issuer to the  Company
and the obligation of the Company to repay the same and shall  be
governed  by  and  be payable in accordance with  the  terms  and
conditions  of a loan agreement (the "Agreement") by and  between
the  Issuer  and  the  Company, dated as  of  October  15,  1998,
pursuant  to  which  the Issuer has loaned  to  the  Company  the
proceeds     of     the     sale    of     the     Issuer's     $
Pollution   Control  Revenue  Refunding  Bonds   (System   Energy
Resources,  Inc. Project) Series       (the "Bonds").  Additional
similar  Notes  may be issued by the Company as provided  in  the
Agreement.   This  Note (together with the  Agreement)  has  been
assigned  to The Bank of New York Trust Company of Florida,  N.A.
(the  "Trustee"), acting pursuant to a trust indenture, dated  as
of  October 15, 1998 (the "Indenture") by and between the  Issuer
and the Trustee, and may not be assigned by the Trustee except to
a successor Trustee pursuant to the terms of the Indenture.  Such
assignment is made as security for the Bonds, and any other bonds
which are or may at any time be issued and outstanding under  the
Indenture.   The Bonds are dated and bear interest in  accordance
with    the    provisions   of   the   Indenture,   payable    on
and                                 in   each   year   commencing
at the rate of                             percent (       %) per
annum,  and  mature on                        .   The  Bonds  are
subject to redemption prior to maturity as provided therein.

     Subject to the provisions of the Agreement, payments  hereon
are  to  be  made  by paying to the Trustee, as assignee  of  the
Issuer, in funds which will be immediately available on the  date
payment  is  due,  amounts which, and at or before  times  which,
shall correspond to the payments with respect to the principal of
and  redemption  premium,  if any,  and  interest  on  the  Bonds
whenever  and  in  whatever manner the  same  shall  become  due,
whether  at  stated maturity, upon redemption or  declaration  or
otherwise.   If  at the date any payments on the  Bonds  are  due
there are any available moneys in the Bond Fund established under
the  Indenture, such moneys shall be credited against the payment
then due hereunder, first in respect of interest and then, to the
extent  of remaining moneys, in respect of principal.   Upon  the
occurrence  of an Event of Default, as defined in the  Agreement,
the  principal  of  and  interest on this Note  may  be  declared
immediately due and payable as provided in the Agreement.

     Neither   the  officers  of  the  Company  nor  any  persons
executing  this  Note  shall be liable  personally  or  shall  be
subject to any personal liability or accountability by reason  of
the issuance hereof.

     IN WITNESS WHEREOF, System Energy Resources, Inc. has caused
this  Note to be executed in its corporate name and on its behalf
by its President, its Treasurer or a Vice President by his or her
manual  signature, and its corporate seal to be impressed  hereon
and  attested  by  the manual signature of its  Secretary  or  an
Assistant Secretary, all as of the date first above written.

                                   SYSTEM ENERGY RESOURCES, INC.
(SEAL)
                                   By

                                   Title
ATTEST:

By

Title


                           ASSIGNMENT


     Pay  to  the order of The Bank of New York Trust Company  of
Florida,  N.A.,  as assignee of the Mississippi Business  Finance
Corporation, under the Trust Indenture, dated as of  October  15,
1998,  between  the Mississippi Business Finance Corporation  and
The  Bank of New York Trust Company of Florida, N.A., as Trustee,
securing  the payment of Mississippi Business Finance Corporation
Pollution   Control  Revenue  Refunding  Bonds   (System   Energy
Resources,   Inc.  Project)  Series         ,  in  the   original
principal amount of $                     .

Dated:

                                   MISSISSIPPI BUSINESS FINANCE
                                   CORPORATION

                                   By
                                     Executive Director