8-K

                       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)      May 14, 1998
                                                 ---------------------------


                            MISSISSIPPI POWER COMPANY
- -----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Mississippi           0-6849              64-0205820
- -----------------------------------------------------------------------------
(State or other jurisdiction    (Commission File   (IRS Employer Identification
   of incorporation)            Number)                     No.)


            2992 West Beach, Gulfport, Mississippi                  39501
- -----------------------------------------------------------------------------
           (Address of principal executive offices)               (Zip Code)


Registrant's telephone number, including area code             (228) 864-1211
                                                  ---------------------------


                                       N/A
- -----------------------------------------------------------------------------
       (Former name or former address, if changed since last report.)







Item 5.         Other Events.

                On May 14, 1998, Mississippi Power Company (the "Company")
entered into (1) an Underwriting Agreement covering the issue and sale of
$55,000,000 aggregate principal amount of its Series A 6.75% Senior Insured
Quarterly Notes due June 30, 2038, and (2) a Purchase Contract covering the
issue and sale of $35,000,000 aggregate principal amount of its Series B 6.05%
Senior Notes due May 1, 2003. Said Notes were registered under the Securities
Act of 1933, as amended, pursuant to the shelf registration statement
(Registration Statement Nos. 333-45069, 333-45069-01 and 333-45069-02) of the
Company.

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

        (c) Exhibits.

          1(a)        Underwriting Agreement for the purchase of
                      $55,000,000 aggregate principal amount of Series A
                      6.75% Senior Insured Quarterly Notes due June 30,
                      2038, dated May 14, 1998, between the Company and
                      Edward D.
                      Jones & Co., L.P.

          1(b)        Form of Proposal for the purchase of $35,000,000
                      aggregate principal amount of Series B 6.05%
                      Senior Notes due May 1, 2003, dated May 14, 1998,
                      submitted by First Union Capital Markets, a
                      division of Wheat First Securities, Inc., with
                      Purchase Contract attached thereto.

          4.1         Senior Note Indenture dated as of May 1, 1998 between the
                      Company and Bankers Trust Company, as Trustee.

          4.2(a)      First Supplemental Indenture to Senior Note
                      Indenture dated as of May 19, 1998, providing for
                      the issuance of the Company's Series A 6.75%
                      Senior Insured Quarterly Notes due June 30, 2038.

          4.2(b)      Second Supplemental Indenture to Senior Note
                      Indenture dated as of May 20, 1998, providing for
                      the issuance of the Company's Series B 6.05%
                      Senior Notes due May 1, 2003.




          4.9(a)      Form of Series A 6.75% Senior Insured Quarterly Note
                      (included in Exhibit 4.2(a) above).

          4.9(b)      Form of Series B 6.05% Senior Note (included in Exhibit
                      4.2(b) above).

         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 thereunto duly authorized.


Date:   May 19, 1998                         MISSISSIPPI POWER COMPANY



                                              By     /s/ Wayne Boston
                                                      Wayne Boston
                                                      Assistant Secretary

EX-1

                                                                 EXHIBIT 1(b)

                                FORM OF PROPOSAL

                               For the Purchase of

                            MISSISSIPPI POWER COMPANY

                                                    $35,000,000

                   SERIES B ___% SENIOR NOTES DUE MAY 1, 2003


                                                   Dated:  May 14, 1998


MISSISSIPPI POWER COMPANY
c/o Southern Company Services, Inc.
270 Peachtree Street, N.W.
Atlanta, Georgia 30303

Ladies and Gentlemen:

         Referring to the terms and conditions dated May 8, 1998 (the "Terms and
Conditions"), relating to proposals for the purchase of Series B ___% Senior
Notes due May 1, 2003 (the "Series B Senior Notes") of Mississippi Power Company
(the "Company"), the persons, firms and corporations named in Exhibit A attached
hereto (the "Bidders") have submitted and confirm herewith the following
proposal for the purchase of $35,000,000 aggregate principal amount of the
Series B Senior Notes (the "Designated Principal Amount"):

                  1.  The interest rate of the Series B Senior Notes shall be
         6.05% per annum.

                  2. The price to be paid to the Company for the Series B Senior
         Notes shall be 99.835%* of the Designated Principal Amount thereof,
         each of the Bidders hereby offering, severally and not jointly, to
         purchase from the Company, at said price and upon the terms and
         conditions set forth in the form of purchase contract attached hereto
         as Exhibit B (the "Purchase Contract"), the principal amount of Series
         B Senior Notes set forth opposite its name in Exhibit A attached
         hereto, or the principal amount of Series B Senior Notes to be set
         forth opposite its name in Exhibit A attached hereto as provided in
         Section 3 of the Terms and Conditions, which together aggregate the
         Designated Principal Amount of the Series B Senior Notes. Exhibit A
         attached hereto, when completed, is hereinafter and in the Purchase
         Contract called "Exhibit A to the Form of Proposal".

                  3. In consideration of the agreement of the Company set forth
         in the Terms and Conditions that, subject to the provisions thereof,
         the Company will accept the proposal which results in the lowest
         "annual cost of money" to it for the Series B Senior Notes, each of the
         Bidders agrees (a) that the offer of such Bidder included in this
         proposal shall be irrevocable until three hours after the time fixed


* May not be less than 98.75%



         for the submission of proposals, unless sooner rejected by the Company;
         (b) that, if this proposal shall be accepted in writing by the Company,
         such Bidder, either in person or by the Representative(s) on its
         behalf, will forthwith furnish to the Company in writing the
         information referred to in Section 7 of the Terms and Conditions; and
         (c) that, if this proposal shall be so accepted by the Company, the
         Purchase Contract shall thereupon become effective without any separate
         execution thereof and shall constitute the agreement between the
         Company and the Bidders and, upon performance by the Bidders, and the
         Representative(s), of their obligations under Sections 3, 4 and 7 of
         the Terms and Conditions, all rights of the Company and of the Bidders
         shall be determined solely in accordance with the terms thereof,
         subject, however, to such modifications therein (including Exhibit A to
         the Form of Proposal) as may be necessary and as are contemplated by
         the Terms and Conditions.

                  4. This proposal must be accepted or rejected by the Company
         in its entirety within three hours after the time fixed for the
         submission thereof.

                  5. This proposal may be executed in any number of counterparts
         and by the parties hereto in separate counterparts, each of which when
         so executed shall be deemed to be an original and all of which taken
         together shall constitute one and the same instrument.

         Each of the Bidders acknowledges receipt of a copy of the prospectus in
respect of the Series B Senior Notes furnished by the Company to the Bidders
pursuant to the last paragraph of Section 5 of the Terms and Conditions.

                        Very truly yours,


                        First Union Capital Markets,
                            a division of Wheat First Securities, Inc.






                        Name(s) of Representative(s)
                        By:
                        Title:

                        On behalf of and as
                        Representative(s) of the
                        persons, firms and
                        corporations named in
                        Exhibit A hereto.




                                                         Address


Accepted:

         MISSISSIPPI POWER COMPANY

         By:

         Title:









                                    EXHIBIT A


         The names of the Bidders and the respective principal amounts of the
Series B Senior Notes which they severally offer to purchase are as follows:


                  Name                               Principal Amount








                                    EXHIBIT B

                            MISSISSIPPI POWER COMPANY

                                PURCHASE CONTRACT

              For Purchase of Series B Senior Notes of the Company


         AGREEMENT made between Mississippi Power Company, a corporation
organized and existing under the laws of the State of Mississippi ("Company"),
party of the first part, and the several persons, firms and corporations (the
"Purchasers") named as Bidders in Exhibit A to the Form of Proposal to which
this agreement is attached as Exhibit B (the "Form of Proposal"), parties of the
second part,

                              W I T N E S S E T H:

         WHEREAS, the Company proposes to issue and sell the Designated
Principal Amount (as defined in the Form of Proposal) of its Series B Senior
Notes due May 1, 2003 (the "Series B Senior Notes"), to be issued under the
Senior Note Indenture dated as of May 1, 1998, as supplemented and as to be
supplemented (the "Indenture"), between the Company and Bankers Trust Company,
as Trustee (the "Trustee"), and to bear interest at the rate per annum specified
in paragraph 1 of the Form of Proposal; and

         WHEREAS, the Purchasers have authorized the person or persons signing
the Form of Proposal (the "Representative") to execute the Form of Proposal on
behalf of the respective Purchasers and to act for the respective Purchasers in
the manner provided in this agreement; and

         WHEREAS, the Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended (the "Securities Act"),
with the Securities and Exchange Commission (the "Commission"), a registration
statement and prospectus relating to the Series B Senior Notes and certain other
securities, and such registration statement has become effective (such
registration statement, as it became effective, including the exhibits thereto
and all documents incorporated by reference in the prospectus at such time
pursuant to Item 12 of Form S-3, being herein called the "Registration
Statement"); and

         WHEREAS, the prospectus referred to in the last paragraph of the Form
of Proposal (such prospectus, including all documents incorporated therein by
reference pursuant to Item 12 of Form S-3 as of the time of the acceptance of
the Form of Proposal, being herein called the "Bidding Prospectus") is to be
supplemented by a prospectus supplement (the "Prospectus Supplement"), including
certain information relating to the Purchasers, the price and the terms of
offering, and the interest rate, maturity date and redemption provisions of the
Series B Senior Notes (the Bidding Prospectus as supplemented by the Prospectus
Supplement being herein called the "Prospectus").

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties as follows:

         1. Purchase and Sale: Upon the basis of the warranties and
representations and on the terms and subject to the conditions herein set forth,
the Company agrees to sell to the respective Purchasers, severally and not
jointly, and the respective Purchasers, severally and not jointly, agree to



purchase from the Company, at the price specified in paragraph 2 of the Form of
Proposal, the respective principal amounts of Series B Senior Notes set opposite
their names in Exhibit A to the Form of Proposal, which together aggregate the
Designated Principal Amount of the Series B Senior Notes.

         2. Payment and Delivery: Payment for the Series B Senior Notes shall be
made to the Company or its order by wire transfer of federal funds, upon the
delivery of the Series B Senior Notes as hereinafter provided to the
Representative for the respective accounts of the Purchasers, against receipt
therefor signed by the Representative on behalf of itself and as agent for the
other Purchasers. Such payment and delivery shall be made at the offices of
Troutman Sanders LLP, 600 Peachtree Street, N.E., Suite 5200, Atlanta, Georgia
30308-2216 (or at such other place as may be agreed upon by the Representative
and the Company) at 10 a.m. New York time on the sixth day (which shall be a
full business day) after this agreement becomes effective (or at such other time
or on such other day as may be agreed upon by the Representative and the
Company), unless postponed in accordance with the provisions of Section 7
hereof. The time at which payment and delivery are to be made is herein
sometimes called the "time of purchase."

         Delivery of definitive Series B Senior Notes is expected to be made in
registered form without coupons, registered in the name of Cede & Co. or other
nominee of The Depository Trust Company ("DTC"). One or more global Series B
Senior Notes certificates will be issued and deposited with DTC or its designee.
Such certificate or certificates will be made available for examination by the
Representative not later than 12:00 noon New York time on the last business day
prior to the time of purchase.

         3. Conditions of Purchasers' Obligations: The several obligations of
the Purchasers hereunder are subject to the accuracy of the warranties and
representations on the part of the Company herein contained and to the following
other conditions:

                  (a) That all legal proceedings to be taken by the Company in
         connection with the issue and sale of the Series B Senior Notes and the
         legal opinions provided for in Sections 3(b)(1) and (2) hereof shall be
         satisfactory in form and substance to Dewey Ballantine LLP, counsel to
         the Purchasers.

                  (b) That, at the time of purchase, the Representative shall be
         furnished the following opinions and letter and copies or signed
         counterparts thereof for each of the Purchasers, with such changes
         therein as may be agreed upon by the Company and the Representative
         with the approval of Dewey Ballantine LLP:

                           (1) Opinion of Eaton and Cottrell, P.A., of Gulfport,
                  Mississippi, general counsel for the Company, substantially in
                  the form attached hereto as Exhibit 1.

                           (2) Opinion of Troutman Sanders LLP, of Atlanta,
                  Georgia, counsel to the Company, substantially in the form
                  attached hereto as Exhibit 2.

                           (3) Opinion of Dewey Ballantine LLP, of New York, New
                  York, substantially in the form attached hereto as Exhibit 3.

                           (4) Letter dated the date of payment and delivery
                  from Arthur Andersen LLP to the effect that: (A) they are
                  independent public accountants with respect to the Company
                  within the meaning of the Securities Act and the applicable
                  published rules and regulations thereunder; (B) in their
                  opinion, the financial statements and schedules audited by
                  them and incorporated by reference in the Prospectus comply as
                  to form in all material respects with the applicable



                  accounting requirements of the Securities Act and the
                  Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), and the related published rules and regulations; (C)
                  they have performed certain limited procedures through a
                  specified date not more than five business days prior to the
                  date of such letter, namely (i) reading the minute books of
                  the Company; (ii) reading the unaudited financial statements,
                  if any, of the Company incorporated in the Prospectus and
                  agreeing the amounts therein with the Company's accounting
                  records; (iii) making inquiries of certain officials of the
                  Company who have responsibility for financial and accounting
                  matters regarding whether the unaudited financial statements,
                  if any, incorporated in the Prospectus (a) are in conformity
                  with generally accepted accounting principles applied on a
                  basis substantially consistent with that of the audited
                  financial statements incorporated in the Prospectus and (b)
                  comply as to form in all material respects with the applicable
                  accounting requirements of the Exchange Act and the related
                  published rules and regulations; (iv) reading the unaudited
                  amounts for Operating Revenues, Income Before Interest Charges
                  and Net Income After Dividends on Preferred Stock and the
                  unaudited Ratios of Earnings to Fixed Charges and Earnings to
                  Fixed Charges Plus Preferred Dividend Requirements (Pre-Income
                  Tax Basis) set forth in the Prospectus Supplement, which
                  amounts shall include such amounts for the latest calendar
                  quarter subsequent to that covered by the financial statements
                  incorporated by reference in the Prospectus for which such
                  amounts are available at the time this agreement becomes
                  effective; (v) reading the unaudited financial statements from
                  which the amounts and ratios described in (iv) were derived
                  and agreeing the amounts therein to the Company's accounting
                  records; (vi) making inquiries of certain officials of the
                  Company who have responsibility for financial and accounting
                  matters regarding whether (a) the unaudited amounts and ratios
                  referred to in (iv) above and the unaudited financial
                  statements referred to in (v) above are stated on a basis
                  substantially consistent with that of the corresponding
                  audited amounts or ratios included or incorporated by
                  reference in the Prospectus and (b) as of a specified date not
                  more than five business days prior to the date of delivery of
                  such letter, there has been any change in the capital stock or
                  long-term debt of the Company or any decrease in net assets as
                  compared with amounts shown in the latest audited balance
                  sheet incorporated in the Prospectus, except in each case for
                  changes or decreases which (I) the Prospectus discloses have
                  occurred or may occur, (II) are occasioned by the declaration
                  of dividends, (III) are occasioned by draw-downs under
                  existing pollution control financing arrangements, (IV) are
                  occasioned by draw-downs and regularly scheduled payments of
                  capitalized lease obligations, (V) are occasioned by the
                  purchase or redemption of bonds or stock to satisfy mandatory
                  or optional redemption provisions relating thereto, or (VI)
                  are disclosed in such letter; (vii) reading the unaudited
                  amounts for Operating Revenues, Income Before Interest Charges
                  and Net Income After Dividends on Preferred Stock and the
                  unaudited Ratios of Earnings to Fixed Charges and Earnings to
                  Fixed Charges Plus Preferred Dividend Requirements (Pre-Income
                  Tax Basis) for the latest calendar quarter subsequent to those
                  set forth in (iv) above, which if available shall be set forth
                  in such letter; (viii) reading the unaudited financial
                  statements from which the amounts and ratios described in
                  (vii) above were derived and which will be attached to such
                  letter and agreeing the amounts therein to the Company's
                  accounting records; and (ix) making inquiries of certain
                  officials of the Company who have responsibility for financial
                  and accounting matters regarding whether the unaudited amounts
                  and ratios referred to in (vii) above and the unaudited
                  financial statements referred to in (viii) above are stated on
                  a basis substantially consistent with that of the
                  corresponding audited amounts or ratios included or
                  incorporated by reference in the Prospectus; and (D) reporting
                  their findings as a result of performing the limited
                  procedures set forth in (C) above. It is understood that the



                  foregoing procedures do not constitute an audit performed in
                  accordance with generally accepted auditing standards and they
                  would not necessarily reveal matters of significance with
                  respect to the comments made in such letter, and accordingly
                  that Arthur Andersen LLP make no representations as to the
                  sufficiency of such procedures for the several Purchasers'
                  purposes.

                  (c) That no amendment or supplement (including the Prospectus
         Supplement) to the registration statement or prospectus filed
         subsequent to the time this agreement becomes effective (including any
         filing made by the Company pursuant to Section 13 or 14 of the Exchange
         Act) shall be unsatisfactory in form to Dewey Ballantine LLP or shall
         contain information (other than with respect to an amendment or
         supplement relating solely to the activity of any Purchaser or
         Purchasers) which, in the reasonable judgment of the Representative,
         shall materially impair the marketability of the Series B Senior Notes.

                  (d) That, at or before 8 p.m. New York time on the first
         business day after the date this agreement becomes effective, or at
         such later time and date as the Representative may from time to time
         consent to in writing or by telephone, confirmed in writing, an
         appropriate order or orders of the Commission under the Public Utility
         Holding Company Act of 1935, as amended, necessary to permit the issue
         and sale of the Series B Senior Notes shall be in effect; and that,
         prior to the time of purchase, no stop order with respect to the
         effectiveness of the Registration Statement shall have been issued
         under the Securities Act by the Commission or proceedings therefor
         initiated or threatened.

                  (e) That, prior to the time of purchase, there shall have been
         no material adverse change in the business, properties or financial
         condition of the Company (whether or not arising in the ordinary course
         of business) from that set forth in or contemplated by the Prospectus,
         and that the Company shall, at the time of purchase, have delivered to
         the Representative a certificate to such effect of an executive officer
         of the Company. For the purpose of this condition, the sale by the
         Company of, or its failure to sell, any issue of other securities shall
         not be deemed to be such a change.

                  (f) That the Company shall have performed such of its
         obligations under this agreement as are to be performed at or prior to
         the time of purchase by the terms hereof.

         4.  Certain Covenants of the Company:  In further consideration of the
agreements of the Purchasers herein contained, the Company covenants as follows:

                  (a) As soon as practicable after this agreement becomes
         effective, and in any event within the time prescribed by Rule 424
         under the Securities Act, to file the Prospectus Supplement with the
         Commission and to advise the Representative of such filing and to
         confirm such advice in writing.

                  (b) As soon as the Company is advised thereof, to advise the
         Representative and confirm the advice in writing of any request made by
         the Commission for amendments to the Registration Statement or
         Prospectus, including any amendment to any of the documents
         incorporated therein by reference pursuant to Item 12 of Form S-3, or
         of the issuance of a stop order suspending the effectiveness of the
         Registration Statement or of the initiation or threat of any
         proceedings for that purpose and, if such a stop order should be issued
         by the Commission, to make every reasonable effort to obtain the
         lifting or removal thereof as soon as possible.




                  (c) To deliver to the Purchasers, without charge, as soon as
         practicable on or after the date this agreement becomes effective, and
         from time to time thereafter during such period of time (not exceeding
         nine months) after this agreement becomes effective as the Purchasers
         are required by law to deliver a prospectus, as many copies of the
         Prospectus (as supplemented or amended if the Company shall have made
         any supplements or amendments thereto) as the Representative may
         reasonably request; and, in case any Purchaser is required by law to
         deliver a prospectus after the expiration of nine months after the date
         this agreement becomes effective, to furnish to such Purchaser, upon
         request of the Representative, at the expense of such Purchaser, a
         reasonable quantity of a supplemental prospectus or of supplements to
         the Prospectus complying with Section 10(a)(3) of the Securities Act.

                  (d) During such period of time after the date this agreement
         becomes effective as the Purchasers are required by law to deliver a
         prospectus, to file timely all documents required to be filed with the
         Commission pursuant to Section 13 or 14 of the Exchange Act.

                  (e) To furnish to the Representative, or if such
         Representative consists of two or more persons to one of such persons,
         one copy, certified by an officer of the Company, of the registration
         statement as initially filed with the Commission, all amendments
         thereto and all documents incorporated by reference in the Prospectus
         pursuant to Item 12 of Form S-3 as of the time of purchase (in each
         case, exclusive of exhibits), and to furnish to the Representative
         sufficient plain copies of said registration statement and all
         amendments thereto (exclusive of exhibits) for distribution of two
         each, and all said documents incorporated therein as of the time of
         purchase (exclusive of exhibits) for distribution of one each, to the
         other Purchasers.

                  (f) In the event that the Purchasers constitute "underwriters"
         within the meaning of Section 2(11) of the Securities Act, then, for
         such period of time (not exceeding nine months) after the date this
         agreement becomes effective as they are required by law to deliver a
         prospectus, if any event shall have occurred as a result of which it is
         necessary to amend or supplement the Prospectus in order to make the
         statements therein, in light of the circumstances when the Prospectus
         is delivered to a purchaser, not misleading, forthwith to amend or
         supplement the Prospectus by either (i) preparing and furnishing, at
         its own expense, to the Purchasers and to dealers (whose names and
         addresses are furnished to the Company by the Representative) to whom
         Series B Senior Notes may have been sold by the Representative on
         behalf of the Purchasers and, upon request, to any other dealers making
         such request, either amendments to the Prospectus or supplements
         thereto, or (ii) making an appropriate filing pursuant to Section 13 or
         14 of the Exchange Act which would supplement or amend the Prospectus,
         so that the statements in the Prospectus as so amended or supplemented
         will not, in the light of the circumstances when the Prospectus is
         delivered to a purchaser, be misleading.

                  (g) To make generally available to the Company's security
         holders, as soon as practicable, an earning statement (which need not
         be audited) covering a period of at least twelve months beginning not
         later than the first day of the Company's fiscal quarter next following
         the "effective date" of the Registration Statement as defined in Rule
         158(c) under the Securities Act, which earning statement shall satisfy
         the provisions of Section 11(a) of the Securities Act and Rule 158
         thereunder.

                  (h) To use its best efforts to qualify the Series B Senior
         Notes for offer and sale under the securities or blue sky laws of such
         jurisdictions as the Representative may designate within six months



         after the date this agreement becomes effective and to pay filing fees
         and disbursements in connection therewith in an amount not exceeding
         $3,500 in the aggregate (including filing fees and disbursements paid
         or incurred prior to the date this agreement becomes effective),
         provided, however, that the Company shall not be required to qualify as
         a foreign corporation or to file a consent to service of process or to
         file annual reports or to comply with any other requirements deemed by
         the Company to be unduly burdensome.

                  (i) To pay expenses, fees and taxes (other than transfer
         taxes) in connection with (1) the preparation and filing of the
         Registration Statement and Prospectus, (2) the preparation and
         execution of the new supplemental indenture pursuant to which the
         Series B Senior Notes are to be issued, (3) the issue and delivery of
         the Series B Senior Notes to the Purchasers, and (4) the furnishing of
         the opinions, letter and certificates referred to in Section 3 hereof,
         except that the Company shall be required to pay the fees and
         disbursements (other than filing fees and disbursements referred to in
         paragraph (h) of this Section 4) of Dewey Ballantine LLP only in an
         event provided in paragraph (j) of this Section 4, the Purchasers
         hereby agreeing to pay such fees and disbursements in any other event
         and, if such fees should be less than the amount stated by such counsel
         to the Representative, to repay the Company the amount of any
         reduction.

                  (j) If the Purchasers shall not take up and pay for the Series
         B Senior Notes due to the failure of the Company to comply with any of
         the conditions specified in Section 3 hereof, or if this agreement
         shall be terminated in accordance with the provisions of Section 7 or 8
         hereof, to pay the reasonable fees and disbursements of Dewey
         Ballantine LLP, and, if the Purchasers shall not take up and pay for
         the Series B Senior Notes due to the failure of the Company to comply
         with any of the conditions specified in Section 3 hereof, to reimburse
         the Purchasers for their reasonable out-of-pocket expenses, in an
         amount not exceeding a total of $10,000, incurred in connection with
         the financing contemplated by this agreement.

                  (k) During the period of 15 days from the date this agreement
         becomes effective, without the prior written consent of the
         Representative, not to issue or sell directly or indirectly any senior
         notes (other than the Series B Senior Notes and $55,000,000 aggregate
         principal amount of Series A Senior Insured Quarterly Notes due June
         30, 2038) or any other long-term debt of the Company having terms and
         provisions substantially similar to the Series B Senior Notes.

         5.  Warranties of and Indemnity by the Company:

                  (a)  The Company warrants and represents to each of the
                       Purchasers that:

                           (i) The Registration Statement, when it became
                  effective, did not contain any untrue statement of a material
                  fact or omit to state a material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading and the Bidding Prospectus, on said date, did not
                  contain any untrue statement of a material fact or omit to
                  state a material fact necessary to make the statements
                  therein, in the light of the circumstances under which they
                  were made, not misleading; when the Prospectus Supplement is
                  filed with the Commission, and at the time of purchase, the
                  Registration Statement and the Prospectus, as they may be
                  amended or supplemented, will comply, or be deemed to comply,
                  in all material respects with the provisions of the Securities
                  Act and the rules and regulations of the Commission
                  thereunder, the Registration Statement, as it may be amended
                  or supplemented, will not contain any untrue statement of a
                  material fact or omit to state a material fact required to be
                  stated therein or necessary to make the statements therein not



                  misleading, and the Prospectus, as it may be amended or
                  supplemented, will not contain any untrue statement of a
                  material fact or omit to state a material fact necessary to
                  make the statements therein, in the light of the circumstances
                  under which they were made, not misleading, and all documents
                  incorporated therein by reference pursuant to Item 12 of Form
                  S-3 as of such dates complied or will comply in all material
                  respects with the applicable provisions of the Exchange Act
                  and the rules and regulations of the Commission thereunder,
                  and, on said dates, when read together with the Prospectus, or
                  the Prospectus as it may be otherwise amended or supplemented,
                  will not contain an untrue statement of a material fact or
                  omit to state a material fact necessary to make the statements
                  therein, in the light of the circumstances under which they
                  were made, not misleading, except that the Company makes no
                  warranty or representation to any Purchaser with respect to
                  any statements or omissions made in reliance upon and in
                  conformity with information furnished in writing to the
                  Company by, or through the Representative on behalf of, any
                  Purchaser for use in the Registration Statement or the
                  Prospectus, or to any statements in or omissions from that
                  part of the Registration Statement that shall constitute the
                  Statement of Eligibility under the Trust Indenture Act of
                  1939, as amended, of the Trustee under the Indenture.

                           (ii) The consummation of the transactions herein
                  contemplated and the performance by the Company of the terms
                  of this agreement will not violate any of the terms,
                  conditions or provisions of, or constitute a default under,
                  any indenture or other contract or agreement to which the
                  Company is now a party or the charter or by-laws of the
                  Company or any order of any court or administrative agency
                  entered in any proceedings to which the Company is now a
                  party.

                  (b) The Company agrees to indemnify and hold harmless each of
         the Purchasers and each person, if any, who controls any such Purchaser
         within the meaning of Section 15 of the Securities Act against any and
         all losses, claims, damages or liabilities, joint or several, to which
         they or any of them may become subject under the Securities Act or
         otherwise, and to reimburse the Purchasers and such controlling person
         or persons, if any, for any legal or other expenses incurred by them in
         connection with defending any actions, insofar as such losses, claims,
         damages, liabilities or actions arise out of or are based upon any
         untrue statement or alleged untrue statement of a material fact
         contained in the Bidding Prospectus (if used prior to the date this
         agreement becomes effective), or in the Registration Statement, or in
         the Prospectus or, if the Company shall furnish to the Purchasers any
         amendments or any supplements to the Prospectus, or shall make any
         filings pursuant to Section 13 or 14 of the Exchange Act which are
         incorporated therein by reference, in the Prospectus as so amended or
         supplemented (provided that, if such Prospectus or such Prospectus as
         amended or supplemented is used after the expiration of the period of
         time specified in Section 4(f) hereof, it shall contain such amendments
         or supplements as the Company deems necessary to comply with Section
         10(a)(3) of the Securities Act), or arise out of or are based upon any
         omission or alleged omission to state therein a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading, except insofar as such losses, claims, damages, liabilities
         or actions arise out of or are based upon any such untrue statement or
         omission or alleged untrue statement or omission which was made in such
         Registration Statement or Prospectus in reliance upon and in conformity
         with information furnished in writing to the Company by, or through the
         Representative on behalf of, any Purchaser for use therein and except
         that this indemnity with respect to the Bidding Prospectus, and with
         respect to the Prospectus if the Company shall have furnished any
         amendment or supplement thereto, shall not inure to the benefit of any
         Purchaser (or of any person controlling such Purchaser) on account of



         any losses, claims, damages, liabilities or actions arising from the
         sale of Series B Senior Notes to any person if a copy of the Prospectus
         (exclusive of documents incorporated therein by reference pursuant to
         Item 12 of Form S-3), as the same may then be amended or supplemented,
         shall not have been sent or given by or on behalf of such Purchaser to
         such person with or prior to the written confirmation of the sale
         involved and the untrue statement or alleged untrue statement or
         omission or alleged omission was corrected in the Prospectus as amended
         or supplemented at the time of such confirmation. Each Purchaser
         agrees, within ten days after the receipt by it of notice of the
         commencement of any action in respect of which indemnity may be sought
         by it, or by any person controlling it, from the Company on account of
         its agreement contained in this Section 5(b), to notify the Company in
         writing of the commencement thereof, but the omission of such Purchaser
         so to notify the Company of any such action shall not release the
         Company from any liability which it may have to such Purchaser or to
         such controlling person otherwise than on account of the indemnity
         agreement contained in this Section 5(b). In case any such action shall
         be brought against any Purchaser or any such person controlling such
         Purchaser and such Purchaser shall notify the Company of the
         commencement thereof, as above provided, the Company shall be entitled
         to participate in (and, to the extent that it shall wish, including the
         selection of counsel, to direct) the defense thereof at its own
         expense. In case the Company elects to direct such defense and select
         such counsel, any Purchaser or controlling person shall have the right
         to employ its own counsel, but, in any such case, the fees and expenses
         of such counsel shall be at the expense of such Purchaser or
         controlling person unless the employment of such counsel has been
         authorized in writing by the Company in connection with defending such
         action. 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.

                  The Company's indemnity agreement contained in this Section
         5(b), and its covenants, warranties and representations contained in
         this agreement, shall remain in full force and effect regardless of any
         investigation made by or on behalf of any Purchaser or controlling
         person, and shall survive the delivery of and payment for the Series B
         Senior Notes hereunder.

         6.  Warranties of and Indemnity by Purchasers:

                  (a) Each Purchaser warrants and represents to the Company, its
         directors and such of its officers as shall have signed the
         Registration Statement, and to each other Purchaser that the
         information furnished in writing to the Company by, or through the
         Representative on behalf of, such Purchaser for use in the Registration
         Statement or the Prospectus does not contain an untrue statement of a
         material fact and does not omit to state a material fact in connection
         with such information required to be stated therein or necessary to
         make such information not misleading.

                  (b) Each Purchaser agrees to indemnify and hold harmless the
         Company, its directors and such of its officers as shall have signed
         the Registration Statement, and each other Purchaser and each person,
         if any, who controls the Company or any such other Purchaser within the
         


         meaning of Section 15 of the Securities Act, to the same extent and
         upon the same terms as the indemnity agreement of the Company set forth
         in Section 5(b) hereof, but only with respect to untrue statements or
         omissions or alleged untrue statements or omissions made in the
         Registration Statement or the Prospectus, or the Prospectus as amended
         or supplemented, in reliance upon and in conformity with information
         furnished in writing to the Company by, or through the Representative
         on behalf of, such Purchaser for use therein.

                  The indemnity agreement on the part of each Purchaser
         contained in this Section 6(b), and the warranties and representations
         of such Purchaser contained in this agreement, shall remain in full
         force and effect regardless of any investigation made by or on behalf
         of the Company or other Purchaser or controlling person, and shall
         survive the delivery of and payment for the Series B Senior Notes
         hereunder.

         7. Substitution of Purchasers: If any Purchaser under this agreement
shall fail or refuse (whether for some reason sufficient to justify, in
accordance with the terms hereof, the termination of its obligations to purchase
or otherwise) to purchase the principal amount of the Series B Senior Notes
which it has agreed to purchase, the Company shall immediately notify the
Representative, and the Representative may, within 24 hours of receipt of such
notice, procure some other responsible party or parties satisfactory to the
Company, who may include one or more of the remaining Purchasers, to purchase or
agree to purchase such principal amount of the Series B Senior Notes on the
terms herein set forth; and, if the Representative shall fail to procure a
satisfactory party or parties to purchase or agree to purchase such principal
amount of the Series B Senior Notes on such terms within such period after the
receipt of such notice, then the Company shall be entitled to an additional
period of 24 hours within which to procure another party or parties to purchase
or agree to purchase such principal amount of the Series B Senior Notes on the
terms herein set forth. In any such case, either the Representative or the
Company shall have the right to postpone the time of purchase for a period not
to exceed five full business days from the date determined as provided in
Section 2 hereof, in order that the necessary changes in the Registration
Statement and Prospectus and any other documents and arrangements may be
effected. If the Representative shall fail to procure a satisfactory party or
parties to purchase or agree to purchase such principal amount of the Series B
Senior Notes, and if the Company also does not procure another party or parties
to purchase or agree to purchase such principal amount of the Series B Senior
Notes, as above provided, then this agreement shall terminate. In the event of
any such termination, the Company shall not be under any liability to any
Purchaser (except to the extent, if any, provided in Section 4(j) hereof), nor
shall any Purchaser (other than a Purchaser who shall have failed or refused to
purchase Series B Senior Notes without some reason sufficient to justify, in
accordance with the terms hereof, its termination of its obligations hereunder)
be under any liability to the Company.

         8. Termination of Agreement: This agreement may be terminated at any
time prior to the time of purchase by the Representative with the consent of
Purchasers who have agreed to purchase in the aggregate 50% or more of the
Designated Principal Amount of the Series B Senior Notes, if, after this
agreement becomes effective and prior to the time of purchase, (i) trading in
securities on the New York Stock Exchange shall have been generally suspended,
(ii) minimum or maximum ranges for prices shall have been generally established
on the New York Stock Exchange by the Commission or by the New York Stock
Exchange, (iii) a general banking moratorium shall have been declared by federal
or New York State authorities or (iv) there shall have occurred any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by the United States Congress or any other substantial
national or international calamity or emergency affecting the United States, in
any such case provided for in clauses (i) through (iv) with the result that, in
the reasonable judgment of the Representative, the marketability of the Series B
Senior Notes shall have been materially impaired.





         If the Representative elects to terminate this agreement, as provided
in this Section 8, the Company and each other Purchaser shall be notified
promptly by the Representative by telephone, confirmed in writing. If this
agreement shall not be carried out by any Purchaser for any reason permitted
hereunder, or if the sale of the Series B Senior Notes to the Purchasers as
herein contemplated shall not be carried out because the Company is not able to
comply with the terms hereof, the Company shall not be under any obligation
under this agreement and shall not be liable to any Purchaser or to any member
of any selling group for the loss of anticipated profits from the transactions
contemplated by this agreement (except that the Company shall remain liable to
the extent provided in Section 4(j) hereof) and the Purchasers (other than a
defaulting Purchaser) shall be under no liability to the Company nor be under
any liability under this agreement to one another.

          9.   Notices:  All notices hereunder shall, unless otherwise expressly
 permitted,  be in writing  and be delivered at or mailed to the following
 addresses: if to the Purchasers or the Representative,  to the Representative
 at the address set forth following its signature in the Form of Proposal, and,
 if to the Company, to the Company at 2992 West Beach, Gulfport, Mississippi
 39501,  Attention: Michael W. Southern,  Vice President, Secretary, Treasurer
 and Chief Financial Officer, with a copy to Southern Company Services, Inc.,
 270 Peachtree Street, N.W., Atlanta, Georgia 30303, Attention: Charles N.
 Eldred.

         10. Parties in Interest: The agreement herein set forth has been and is
made solely for the benefit of the Purchasers and the Company, its directors and
such of its officers as shall have signed the Registration Statement, and the
controlling persons, if any, referred to in Sections 5 and 6 hereof, and their
respective successors, assigns, executors and administrators, and, subject to
the provisions of Section 7 hereof, no other person shall acquire or have any
right under or by virtue of this agreement.

         11. Definitions of Certain Terms: If there be two or more persons,
firms or corporations named in Exhibit A to the Form of Proposal, the term
"Purchasers", as used herein, shall be deemed to mean the several persons, firms
or corporations so named (including any substitute purchaser or purchasers
procured as provided by Section 7 hereof and the Representative hereinafter
mentioned, if so named), and the term "Representative", as used herein, shall be
deemed to mean the person or persons designated as representative or
representatives of the Purchasers by, or in the manner authorized by, the
Purchasers, who, by signing the Form of Proposal, represent that it or they have
been authorized by the Purchasers to execute the Form of Proposal on their
behalf and to act for them in the manner herein provided. In the event that all
the Purchasers execute the Form of Proposal and no one or more of them are
designated to act as representative or representatives, then the term
"Representative" shall be deemed to mean all the persons signing the Form of
Proposal. If the Representative consists of more than one person, the
Representative may act by any one thereof. All obligations of the Purchasers
hereunder are several and not joint. If there shall be only one person, firm or
corporation named in Exhibit A to the Form of Proposal, the term "Purchasers"
and the term "Representative", as used herein, shall mean such person, firm or
corporation.





                                                              EXHIBIT 1     

                    [Letterhead of Eaton and Cottrell, P.A.]






                                                                         
                                                             [Date]


as the several Purchasers under Purchase Contract effective May __, 1998,
between Mississippi Power Company and said Purchasers (the "Purchase Contract")
for the purchase of Mississippi Power Company Series B ___% Senior Notes due May
1, 2003 (the "Series B Senior Notes")

c/o




Ladies and Gentlemen:

         We have acted as counsel to Mississippi Power Company (the "Company")
in connection with the purchase by you pursuant to the Purchase Contract of
$35,000,000 aggregate principal amount of the Series B Senior Notes, issued
under the Senior Note Indenture dated as of May 1, 1998, between the Company and
Bankers Trust Company, as trustee (the "Trustee"), as heretofore supplemented
and as supplemented by the Second Supplemental Indenture dated as of May __,
1998 (said Indenture, as so supplemented and amended, being hereinafter called
the "Indenture").

         We have examined the Registration Statement on Form S-3 (File Nos.
333-45069, 333-45069-01 and 333-45069-02) filed by the Company under the
Securities Act of 1933, as amended (the "Act"), as it became effective under the
Act (the "Registration Statement"); the Company's prospectus dated February 9,
1998, as supplemented by the prospectus supplement dated May __, 1998 (the
"Prospectus"), filed by the Company pursuant to Rule 424 of the rules and
regulations of the Securities and Exchange Commission (the "Commission") under
the Act, which pursuant to Form S-3 incorporates by reference the Annual Report
on Form 10-K of the Company for the fiscal year ended December 31, 1997 and the
Current Reports on Form 8-K of the Company dated February 12, 1998, May __, 1998
and May __, 1998 (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
Indenture. In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the Series B Senior
Notes, of which we have examined a specimen), and we have made such other and
further investigations as we deemed necessary to enable us to express the
opinions hereinafter set forth.




         In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.

         We are of the opinion, relying as to matters relating to the laws
administered by the Commission, including the Act, the Exchange Act and the
Trust Indenture Act (as hereinafter defined), on the opinion dated the date
hereof rendered to you by Troutman Sanders LLP and relying as to matters of New
York law upon the opinion dated the date hereof rendered to you by Dewey
Ballantine LLP, that:

                  1. The Company has been duly incorporated and is validly
         existing and in good standing as a corporation under the laws of the
         State of Mississippi, is duly qualified to carry on its business as a
         foreign corporation in 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 Purchase
         Contract, the Indenture and the Series B Senior Notes.

                  2. The Indenture has been duly authorized, executed and
         delivered by the Company and duly qualified under the Trust Indenture
         Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
         authorization, execution and delivery thereof by the Trustee,
         constitutes a valid and legally binding instrument of the Company
         enforceable 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 Series B Senior Notes may be
         limited by bankruptcy, insolvency, reorganization, moratorium and other
         laws relating to or affecting creditors' rights generally and 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 Prospectus.

                  3. The Series B Senior Notes have been duly authorized,
         executed and issued by the Company and, assuming due authentication
         thereof by the Trustee and upon payment and delivery in accordance with
         the Purchase Contract and subject to the qualifications set forth in
         paragraph 2 above, will constitute valid and legally binding
         obligations of the Company enforceable against the Company in
         accordance with their terms; and the Series B Senior Notes conform as
         to legal matters in all material respects to the description thereof in
         the Prospectus.

                  4. All orders, consents or other authorizations or approvals
         of the Commission legally required for the issuance of the Series B
         Senior Notes have been obtained; and no other order, consent or other
         authorization or approval of any Mississippi 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 of
         the Series B Senior Notes by the Company in accordance with the terms
         of the Purchase Contract.

                  5.  The Purchase Contract 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
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except as and to the extent set forth in paragraphs 2 and 3 above and in the
Prospectus in the second paragraph under the caption "Experts". In the course of
the preparation by the Company of the Registration Statement, the Prospectus and
the Exchange Act Documents, we participated in conferences with certain officers
and employees of the Company, with other counsel for the Company and with
representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Prospectus and the Exchange Act Documents and our participation
in the conferences referred to above, (i) we are of the opinion that the
Registration Statement, as of its effective date, and the Prospectus, as of May
__, 1998, complied as to form in all material respects with the requirements of
the Act, the Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents, and (ii)
we have no reason to believe that the Registration Statement, as of the date of
filing of the Company's Annual Report on Form 10-K for the year ended December
31, 1997 (including the Exchange Act Documents on file with the Commission on
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 Prospectus (including
the Exchange Act Documents) contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents.

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

         This opinion is rendered to you in connection with the above described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without our prior written consent, except that Troutman Sanders LLP and Dewey
Ballantine LLP may rely on this opinion in giving their opinions pursuant to
Section 3(b) of the Purchase Contract insofar as such opinions relate to matters
of Mississippi and Alabama law.


                                                     Very truly yours,





                                                     EATON AND COTTRELL, P.A.






                                                            EXHIBIT 2

                      [Letterhead of Troutman Sanders LLP]






                                                                      [Date]


as the several Purchasers under Purchase Contract effective May __, 1998,
between Mississippi Power Company and said Purchasers (the "Purchase Contract")
for the purchase of Mississippi Power Company Series B ___% Senior Notes due May
1, 2003 (the "Series B Senior Notes")

c/o




Ladies and Gentlemen:

         We have acted as counsel to Mississippi Power Company (the "Company")
in connection with the purchase by you pursuant to the Purchase Contract of
$35,000,000 aggregate principal amount of the Series B Senior Notes, issued
under the Senior Note Indenture dated as of May 1, 1998, between the Company and
Bankers Trust Company, as trustee (the "Trustee"), as heretofore supplemented
and as supplemented by the Second Supplemental Indenture dated as of May __,
1998 (said Indenture, as so supplemented and amended, being hereinafter called
the "Indenture").

         We have examined the Registration Statement on Form S-3 (File Nos.
333-45069, 333-45069-01 and 333-45069-02) filed by the Company under the
Securities Act of 1933, as amended (the "Act"), as it became effective under the
Act (the "Registration Statement"); the Company's prospectus dated February 9,
1998, as supplemented by the prospectus supplement dated May __, 1998 (the
"Prospectus"), filed by the Company pursuant to Rule 424 of the rules and
regulations of the Securities and Exchange Commission (the "Commission") under
the Act, which pursuant to Form S-3 incorporates by reference the Annual Report
on Form 10-K of the Company for the fiscal year ended December 31, 1997 and the
Current Reports on Form 8-K of the Company dated February 12, 1998, May __, 1998
and May __, 1998 (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
Indenture. In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the Series B Senior
Notes, of which we have examined a specimen), and we have made such other and
further investigations as we deemed necessary to enable us to express the
opinions hereinafter set forth.




         In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.

         We are of the opinion, relying as to matters of Mississippi and Alabama
law upon the opinion of dated the date hereof rendered to you by Eaton and
Cottrell, P.A. and relying as to matters of New York law upon the opinion dated
the date hereof rendered to you by Dewey Ballantine LLP, that:

                  1. The Company has been duly incorporated and is validly
         existing and in good standing as a corporation under the laws of the
         State of Mississippi, is duly qualified to carry on its business as a
         foreign corporation in 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 Purchase
         Contract, the Indenture and the Series B Senior Notes.

                  2. The Indenture has been duly authorized, executed and
         delivered by the Company and duly qualified under the Trust Indenture
         Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
         authorization, execution and delivery thereof by the Trustee,
         constitutes a valid and legally binding instrument of the Company
         enforceable 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 Series B Senior Notes may be
         limited by (a) bankruptcy, insolvency, reorganization, moratorium and
         other laws relating to or affecting creditors' rights generally and (b)
         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 Prospectus.

                  3. The Series B Senior Notes have been duly authorized,
         executed and issued by the Company and, assuming due authentication
         thereof by the Trustee and upon payment and delivery in accordance with
         the Purchase Contract and subject to the qualifications set forth in
         paragraph 2 above, will constitute valid and legally binding
         obligations of the Company enforceable against the Company in
         accordance with their terms; and the Series B Senior Notes conform as
         to legal matters in all material respects to the description thereof in
         the Prospectus.

                  4. All orders, consents or other authorizations or approvals
         of the Commission legally required for the issuance of the Series B
         Senior Notes have been obtained; and no other order, consent or other
         authorization or approval of any Mississippi 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 of
         the Series B Senior Notes by the Company in accordance with the terms
         of the Purchase Contract.

                  5.  The Purchase Contract 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
Prospectus or the Exchange Act Documents and take no responsibility therefor,



except as and to the extent set forth in paragraphs 2 and 3 above. In the course
of the preparation by the Company of the Registration Statement, the Prospectus
and the Exchange Act Documents, we participated in conferences with certain
officers and employees of the Company, with other counsel for the Company and
with representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Prospectus and the Exchange Act Documents and our participation
in the conferences referred to above, (i) we are of the opinion that the
Registration Statement, as of its effective date, and the Prospectus, as of May
__, 1998, complied as to form in all material respects with the requirements of
the Act, the Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents, and (ii)
we have no reason to believe that the Registration Statement, as of the date of
filing of the Company's Annual Report on Form 10-K for the year ended December
31, 1997 (including the Exchange Act Documents on file with the Commission on
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 Prospectus (including
the Exchange Act Documents) contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents.

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

         This opinion is rendered to you in connection with the above described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without our prior written consent, except that Eaton and Cottrell, P.A. may rely
on this opinion in giving its opinion pursuant to Section 3(b) of the Purchase
Contract insofar as such opinion relates to matters of law administered by the
Commission, including the Act, the Exchange Act and the Trust Indenture Act.


                                                     Very truly yours,





                                                     TROUTMAN SANDERS LLP





                                                              EXHIBIT 3





                      [Letterhead of Dewey Ballantine LLP]


                                                           [Date]


as the several Purchasers under Purchase Contract effective May __, 1998,
between Mississippi Power Company and said Purchasers (the "Purchase Contract")
for the purchase of Mississippi Power Company Series B ___% Senior Notes due May
1, 2003 (the "Series B Senior Notes")

c/o




Ladies and Gentlemen:

         We have acted as your counsel in connection with the purchase by you
pursuant to the Purchase Contract of $35,000,000 aggregate principal amount of
the Series B Senior Notes, issued under the Indenture dated as of May 1, 1998,
between Mississippi Power Company (the "Company") and Bankers Trust Company, as
Trustee (the "Trustee"), as heretofore supplemented and as supplemented by the
Second Supplemental Indenture dated as of May __, 1998 (said Indenture, as so
supplemented and amended, being hereinafter called the "Indenture").

         We have examined the Registration Statement on Form S-3 (File Nos.
333-45069, 333-45069-01 and 333-45069-02) filed by the Company under the
Securities Act of 1933, as amended (the "Act"), as it became effective under the
Act (the "Registration Statement"); the Company's prospectus dated February 9,
1998, as supplemented by the prospectus supplement dated May __, 1998 (the
"Prospectus"), filed by the Company pursuant to Rule 424 of the rules and
regulations of the Securities and Exchange Commission (the "Commission") under
the Act, which pursuant to Form S-3 incorporates by reference the Annual Report
on Form 10-K of the Company for the fiscal year ended December 31, 1997 and the
Current Reports on Form 8-K of the Company dated February 12, 1998, May __, 1998
and May __, 1998 (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
Indenture. In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the Series B Senior
Notes, of which we have examined a specimen), and we have made such other and
further investigations as we deemed necessary to enable us to express the
opinions hereinafter set forth.




         In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.

         We are of the opinion, relying as to matters of Mississippi and Alabama
law upon the opinion of Eaton and Cottrell, P.A., referred to below, that:

                  1. The Company has been duly incorporated and is validly
         existing and in good standing as a corporation under the laws of the
         State of Mississippi, is duly qualified to carry on its business as a
         foreign corporation in 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 Purchase
         Contract, the Indenture and the Series B Senior Notes.

                  2. The Indenture has been duly authorized, executed and
         delivered by the Company and duly qualified under the Trust Indenture
         Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
         authorization, execution and delivery thereof by the Trustee,
         constitutes a valid and legally binding instrument of the Company
         enforceable 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 Series B Senior Notes may be
         limited by (a) bankruptcy, insolvency, reorganization, moratorium and
         other laws relating to or affecting creditors' rights generally and (b)
         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 Prospectus.

                  3. The Series B Senior Notes have been duly authorized,
         executed and issued by the Company and, assuming due authentication
         thereof by the Trustee and upon payment and delivery in accordance with
         the Purchase Contract and subject to the qualifications set forth in
         paragraph 2 above, will constitute valid and legally binding
         obligations of the Company enforceable against the Company in
         accordance with their terms; and the Series B Senior Notes conform as
         to legal matters in all material respects to the description thereof in
         the Prospectus.

                  4. All orders, consents or other authorizations or approvals
         of the Commission legally required for the issuance of the Series B
         Senior Notes have been obtained; and no other order, consent or other
         authorization or approval of any Mississippi 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 of
         the Series B Senior Notes by the Company in accordance with the terms
         of the Purchase Contract.

                  5.  The Purchase Contract has been duly authorized, executed
          nd delivered by the Company.

         All legal proceedings taken by the Company in connection with the
authorization and delivery of the Series B Senior Notes, and the legal opinions
dated the date hereof rendered to you by Eaton and Cottrell, P.A. and Troutman
Sanders LLP, counsel for the Company, pursuant to the Purchase Contract, are in
form satisfactory to us.





         We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except as and to the extent set forth in paragraphs 2 and 3 above. In the course
of the preparation by the Company of the Registration Statement, the Prospectus
and the Exchange Act Documents, we participated in conferences with certain
officers and employees of the Company, with representatives of Arthur Andersen
LLP and with counsel for the Company. Based upon our examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement and the Prospectus and our participation in the conferences referred
to above, (i) we are of the opinion that the Registration Statement, as of its
effective date, and the Prospectus, as of May __, 1998, complied as to form in
all material respects with the requirements of the Act, the Trust Indenture Act
and the applicable rules and regulations of the Commission thereunder and that
the Exchange Act Documents, as of their respective dates of filing with the
Commission, complied as to form in all material respects with the relevant
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder, except that in each case we express no opinion as to the
financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement, the Prospectus or the
Exchange Act Documents, and (ii) we have no reason to believe that the
Registration Statement, as of the date of filing of the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 (including the Exchange Act
Documents on file with the Commission on 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 Prospectus (including the Exchange Act Documents)
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case we express no opinion or belief with respect to the financial statements or
other financial or statistical data contained or incorporated by reference in
the Registration Statement, the Prospectus or the Exchange Act Documents.

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

         This opinion is rendered to you in connection with the above described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without our prior written consent, except that Eaton and Cottrell, P.A. and
Troutman Sanders LLP may rely on this opinion in giving their opinions pursuant
to Section 3(b) of the Purchase Contract insofar as such opinions relate to
matters of New York law.


                                                     Very truly yours,




                                                     DEWEY BALLANTINE LLP

EX-1

                                                                 EXHIBIT 1(b)

                                FORM OF PROPOSAL

                               For the Purchase of

                            MISSISSIPPI POWER COMPANY

                                                    $35,000,000

                   SERIES B ___% SENIOR NOTES DUE MAY 1, 2003


                                                   Dated:  May 14, 1998


MISSISSIPPI POWER COMPANY
c/o Southern Company Services, Inc.
270 Peachtree Street, N.W.
Atlanta, Georgia 30303

Ladies and Gentlemen:

         Referring to the terms and conditions dated May 8, 1998 (the "Terms and
Conditions"), relating to proposals for the purchase of Series B ___% Senior
Notes due May 1, 2003 (the "Series B Senior Notes") of Mississippi Power Company
(the "Company"), the persons, firms and corporations named in Exhibit A attached
hereto (the "Bidders") have submitted and confirm herewith the following
proposal for the purchase of $35,000,000 aggregate principal amount of the
Series B Senior Notes (the "Designated Principal Amount"):

                  1.  The interest rate of the Series B Senior Notes shall be
         6.05% per annum.

                  2. The price to be paid to the Company for the Series B Senior
         Notes shall be 99.835%* of the Designated Principal Amount thereof,
         each of the Bidders hereby offering, severally and not jointly, to
         purchase from the Company, at said price and upon the terms and
         conditions set forth in the form of purchase contract attached hereto
         as Exhibit B (the "Purchase Contract"), the principal amount of Series
         B Senior Notes set forth opposite its name in Exhibit A attached
         hereto, or the principal amount of Series B Senior Notes to be set
         forth opposite its name in Exhibit A attached hereto as provided in
         Section 3 of the Terms and Conditions, which together aggregate the
         Designated Principal Amount of the Series B Senior Notes. Exhibit A
         attached hereto, when completed, is hereinafter and in the Purchase
         Contract called "Exhibit A to the Form of Proposal".

                  3. In consideration of the agreement of the Company set forth
         in the Terms and Conditions that, subject to the provisions thereof,
         the Company will accept the proposal which results in the lowest
         "annual cost of money" to it for the Series B Senior Notes, each of the
         Bidders agrees (a) that the offer of such Bidder included in this
         proposal shall be irrevocable until three hours after the time fixed


* May not be less than 98.75%



         for the submission of proposals, unless sooner rejected by the Company;
         (b) that, if this proposal shall be accepted in writing by the Company,
         such Bidder, either in person or by the Representative(s) on its
         behalf, will forthwith furnish to the Company in writing the
         information referred to in Section 7 of the Terms and Conditions; and
         (c) that, if this proposal shall be so accepted by the Company, the
         Purchase Contract shall thereupon become effective without any separate
         execution thereof and shall constitute the agreement between the
         Company and the Bidders and, upon performance by the Bidders, and the
         Representative(s), of their obligations under Sections 3, 4 and 7 of
         the Terms and Conditions, all rights of the Company and of the Bidders
         shall be determined solely in accordance with the terms thereof,
         subject, however, to such modifications therein (including Exhibit A to
         the Form of Proposal) as may be necessary and as are contemplated by
         the Terms and Conditions.

                  4. This proposal must be accepted or rejected by the Company
         in its entirety within three hours after the time fixed for the
         submission thereof.

                  5. This proposal may be executed in any number of counterparts
         and by the parties hereto in separate counterparts, each of which when
         so executed shall be deemed to be an original and all of which taken
         together shall constitute one and the same instrument.

         Each of the Bidders acknowledges receipt of a copy of the prospectus in
respect of the Series B Senior Notes furnished by the Company to the Bidders
pursuant to the last paragraph of Section 5 of the Terms and Conditions.

                        Very truly yours,


                        First Union Capital Markets,
                            a division of Wheat First Securities, Inc.






                        Name(s) of Representative(s)
                        By:
                        Title:

                        On behalf of and as
                        Representative(s) of the
                        persons, firms and
                        corporations named in
                        Exhibit A hereto.




                                                         Address


Accepted:

         MISSISSIPPI POWER COMPANY

         By:

         Title:









                                    EXHIBIT A


         The names of the Bidders and the respective principal amounts of the
Series B Senior Notes which they severally offer to purchase are as follows:


                  Name                               Principal Amount








                                    EXHIBIT B

                            MISSISSIPPI POWER COMPANY

                                PURCHASE CONTRACT

              For Purchase of Series B Senior Notes of the Company


         AGREEMENT made between Mississippi Power Company, a corporation
organized and existing under the laws of the State of Mississippi ("Company"),
party of the first part, and the several persons, firms and corporations (the
"Purchasers") named as Bidders in Exhibit A to the Form of Proposal to which
this agreement is attached as Exhibit B (the "Form of Proposal"), parties of the
second part,

                              W I T N E S S E T H:

         WHEREAS, the Company proposes to issue and sell the Designated
Principal Amount (as defined in the Form of Proposal) of its Series B Senior
Notes due May 1, 2003 (the "Series B Senior Notes"), to be issued under the
Senior Note Indenture dated as of May 1, 1998, as supplemented and as to be
supplemented (the "Indenture"), between the Company and Bankers Trust Company,
as Trustee (the "Trustee"), and to bear interest at the rate per annum specified
in paragraph 1 of the Form of Proposal; and

         WHEREAS, the Purchasers have authorized the person or persons signing
the Form of Proposal (the "Representative") to execute the Form of Proposal on
behalf of the respective Purchasers and to act for the respective Purchasers in
the manner provided in this agreement; and

         WHEREAS, the Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended (the "Securities Act"),
with the Securities and Exchange Commission (the "Commission"), a registration
statement and prospectus relating to the Series B Senior Notes and certain other
securities, and such registration statement has become effective (such
registration statement, as it became effective, including the exhibits thereto
and all documents incorporated by reference in the prospectus at such time
pursuant to Item 12 of Form S-3, being herein called the "Registration
Statement"); and

         WHEREAS, the prospectus referred to in the last paragraph of the Form
of Proposal (such prospectus, including all documents incorporated therein by
reference pursuant to Item 12 of Form S-3 as of the time of the acceptance of
the Form of Proposal, being herein called the "Bidding Prospectus") is to be
supplemented by a prospectus supplement (the "Prospectus Supplement"), including
certain information relating to the Purchasers, the price and the terms of
offering, and the interest rate, maturity date and redemption provisions of the
Series B Senior Notes (the Bidding Prospectus as supplemented by the Prospectus
Supplement being herein called the "Prospectus").

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties as follows:

         1. Purchase and Sale: Upon the basis of the warranties and
representations and on the terms and subject to the conditions herein set forth,
the Company agrees to sell to the respective Purchasers, severally and not
jointly, and the respective Purchasers, severally and not jointly, agree to



purchase from the Company, at the price specified in paragraph 2 of the Form of
Proposal, the respective principal amounts of Series B Senior Notes set opposite
their names in Exhibit A to the Form of Proposal, which together aggregate the
Designated Principal Amount of the Series B Senior Notes.

         2. Payment and Delivery: Payment for the Series B Senior Notes shall be
made to the Company or its order by wire transfer of federal funds, upon the
delivery of the Series B Senior Notes as hereinafter provided to the
Representative for the respective accounts of the Purchasers, against receipt
therefor signed by the Representative on behalf of itself and as agent for the
other Purchasers. Such payment and delivery shall be made at the offices of
Troutman Sanders LLP, 600 Peachtree Street, N.E., Suite 5200, Atlanta, Georgia
30308-2216 (or at such other place as may be agreed upon by the Representative
and the Company) at 10 a.m. New York time on the sixth day (which shall be a
full business day) after this agreement becomes effective (or at such other time
or on such other day as may be agreed upon by the Representative and the
Company), unless postponed in accordance with the provisions of Section 7
hereof. The time at which payment and delivery are to be made is herein
sometimes called the "time of purchase."

         Delivery of definitive Series B Senior Notes is expected to be made in
registered form without coupons, registered in the name of Cede & Co. or other
nominee of The Depository Trust Company ("DTC"). One or more global Series B
Senior Notes certificates will be issued and deposited with DTC or its designee.
Such certificate or certificates will be made available for examination by the
Representative not later than 12:00 noon New York time on the last business day
prior to the time of purchase.

         3. Conditions of Purchasers' Obligations: The several obligations of
the Purchasers hereunder are subject to the accuracy of the warranties and
representations on the part of the Company herein contained and to the following
other conditions:

                  (a) That all legal proceedings to be taken by the Company in
         connection with the issue and sale of the Series B Senior Notes and the
         legal opinions provided for in Sections 3(b)(1) and (2) hereof shall be
         satisfactory in form and substance to Dewey Ballantine LLP, counsel to
         the Purchasers.

                  (b) That, at the time of purchase, the Representative shall be
         furnished the following opinions and letter and copies or signed
         counterparts thereof for each of the Purchasers, with such changes
         therein as may be agreed upon by the Company and the Representative
         with the approval of Dewey Ballantine LLP:

                           (1) Opinion of Eaton and Cottrell, P.A., of Gulfport,
                  Mississippi, general counsel for the Company, substantially in
                  the form attached hereto as Exhibit 1.

                           (2) Opinion of Troutman Sanders LLP, of Atlanta,
                  Georgia, counsel to the Company, substantially in the form
                  attached hereto as Exhibit 2.

                           (3) Opinion of Dewey Ballantine LLP, of New York, New
                  York, substantially in the form attached hereto as Exhibit 3.

                           (4) Letter dated the date of payment and delivery
                  from Arthur Andersen LLP to the effect that: (A) they are
                  independent public accountants with respect to the Company
                  within the meaning of the Securities Act and the applicable
                  published rules and regulations thereunder; (B) in their
                  opinion, the financial statements and schedules audited by
                  them and incorporated by reference in the Prospectus comply as
                  to form in all material respects with the applicable



                  accounting requirements of the Securities Act and the
                  Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), and the related published rules and regulations; (C)
                  they have performed certain limited procedures through a
                  specified date not more than five business days prior to the
                  date of such letter, namely (i) reading the minute books of
                  the Company; (ii) reading the unaudited financial statements,
                  if any, of the Company incorporated in the Prospectus and
                  agreeing the amounts therein with the Company's accounting
                  records; (iii) making inquiries of certain officials of the
                  Company who have responsibility for financial and accounting
                  matters regarding whether the unaudited financial statements,
                  if any, incorporated in the Prospectus (a) are in conformity
                  with generally accepted accounting principles applied on a
                  basis substantially consistent with that of the audited
                  financial statements incorporated in the Prospectus and (b)
                  comply as to form in all material respects with the applicable
                  accounting requirements of the Exchange Act and the related
                  published rules and regulations; (iv) reading the unaudited
                  amounts for Operating Revenues, Income Before Interest Charges
                  and Net Income After Dividends on Preferred Stock and the
                  unaudited Ratios of Earnings to Fixed Charges and Earnings to
                  Fixed Charges Plus Preferred Dividend Requirements (Pre-Income
                  Tax Basis) set forth in the Prospectus Supplement, which
                  amounts shall include such amounts for the latest calendar
                  quarter subsequent to that covered by the financial statements
                  incorporated by reference in the Prospectus for which such
                  amounts are available at the time this agreement becomes
                  effective; (v) reading the unaudited financial statements from
                  which the amounts and ratios described in (iv) were derived
                  and agreeing the amounts therein to the Company's accounting
                  records; (vi) making inquiries of certain officials of the
                  Company who have responsibility for financial and accounting
                  matters regarding whether (a) the unaudited amounts and ratios
                  referred to in (iv) above and the unaudited financial
                  statements referred to in (v) above are stated on a basis
                  substantially consistent with that of the corresponding
                  audited amounts or ratios included or incorporated by
                  reference in the Prospectus and (b) as of a specified date not
                  more than five business days prior to the date of delivery of
                  such letter, there has been any change in the capital stock or
                  long-term debt of the Company or any decrease in net assets as
                  compared with amounts shown in the latest audited balance
                  sheet incorporated in the Prospectus, except in each case for
                  changes or decreases which (I) the Prospectus discloses have
                  occurred or may occur, (II) are occasioned by the declaration
                  of dividends, (III) are occasioned by draw-downs under
                  existing pollution control financing arrangements, (IV) are
                  occasioned by draw-downs and regularly scheduled payments of
                  capitalized lease obligations, (V) are occasioned by the
                  purchase or redemption of bonds or stock to satisfy mandatory
                  or optional redemption provisions relating thereto, or (VI)
                  are disclosed in such letter; (vii) reading the unaudited
                  amounts for Operating Revenues, Income Before Interest Charges
                  and Net Income After Dividends on Preferred Stock and the
                  unaudited Ratios of Earnings to Fixed Charges and Earnings to
                  Fixed Charges Plus Preferred Dividend Requirements (Pre-Income
                  Tax Basis) for the latest calendar quarter subsequent to those
                  set forth in (iv) above, which if available shall be set forth
                  in such letter; (viii) reading the unaudited financial
                  statements from which the amounts and ratios described in
                  (vii) above were derived and which will be attached to such
                  letter and agreeing the amounts therein to the Company's
                  accounting records; and (ix) making inquiries of certain
                  officials of the Company who have responsibility for financial
                  and accounting matters regarding whether the unaudited amounts
                  and ratios referred to in (vii) above and the unaudited
                  financial statements referred to in (viii) above are stated on
                  a basis substantially consistent with that of the
                  corresponding audited amounts or ratios included or
                  incorporated by reference in the Prospectus; and (D) reporting
                  their findings as a result of performing the limited
                  procedures set forth in (C) above. It is understood that the



                  foregoing procedures do not constitute an audit performed in
                  accordance with generally accepted auditing standards and they
                  would not necessarily reveal matters of significance with
                  respect to the comments made in such letter, and accordingly
                  that Arthur Andersen LLP make no representations as to the
                  sufficiency of such procedures for the several Purchasers'
                  purposes.

                  (c) That no amendment or supplement (including the Prospectus
         Supplement) to the registration statement or prospectus filed
         subsequent to the time this agreement becomes effective (including any
         filing made by the Company pursuant to Section 13 or 14 of the Exchange
         Act) shall be unsatisfactory in form to Dewey Ballantine LLP or shall
         contain information (other than with respect to an amendment or
         supplement relating solely to the activity of any Purchaser or
         Purchasers) which, in the reasonable judgment of the Representative,
         shall materially impair the marketability of the Series B Senior Notes.

                  (d) That, at or before 8 p.m. New York time on the first
         business day after the date this agreement becomes effective, or at
         such later time and date as the Representative may from time to time
         consent to in writing or by telephone, confirmed in writing, an
         appropriate order or orders of the Commission under the Public Utility
         Holding Company Act of 1935, as amended, necessary to permit the issue
         and sale of the Series B Senior Notes shall be in effect; and that,
         prior to the time of purchase, no stop order with respect to the
         effectiveness of the Registration Statement shall have been issued
         under the Securities Act by the Commission or proceedings therefor
         initiated or threatened.

                  (e) That, prior to the time of purchase, there shall have been
         no material adverse change in the business, properties or financial
         condition of the Company (whether or not arising in the ordinary course
         of business) from that set forth in or contemplated by the Prospectus,
         and that the Company shall, at the time of purchase, have delivered to
         the Representative a certificate to such effect of an executive officer
         of the Company. For the purpose of this condition, the sale by the
         Company of, or its failure to sell, any issue of other securities shall
         not be deemed to be such a change.

                  (f) That the Company shall have performed such of its
         obligations under this agreement as are to be performed at or prior to
         the time of purchase by the terms hereof.

         4.  Certain Covenants of the Company:  In further consideration of the
agreements of the Purchasers herein contained, the Company covenants as follows:

                  (a) As soon as practicable after this agreement becomes
         effective, and in any event within the time prescribed by Rule 424
         under the Securities Act, to file the Prospectus Supplement with the
         Commission and to advise the Representative of such filing and to
         confirm such advice in writing.

                  (b) As soon as the Company is advised thereof, to advise the
         Representative and confirm the advice in writing of any request made by
         the Commission for amendments to the Registration Statement or
         Prospectus, including any amendment to any of the documents
         incorporated therein by reference pursuant to Item 12 of Form S-3, or
         of the issuance of a stop order suspending the effectiveness of the
         Registration Statement or of the initiation or threat of any
         proceedings for that purpose and, if such a stop order should be issued
         by the Commission, to make every reasonable effort to obtain the
         lifting or removal thereof as soon as possible.




                  (c) To deliver to the Purchasers, without charge, as soon as
         practicable on or after the date this agreement becomes effective, and
         from time to time thereafter during such period of time (not exceeding
         nine months) after this agreement becomes effective as the Purchasers
         are required by law to deliver a prospectus, as many copies of the
         Prospectus (as supplemented or amended if the Company shall have made
         any supplements or amendments thereto) as the Representative may
         reasonably request; and, in case any Purchaser is required by law to
         deliver a prospectus after the expiration of nine months after the date
         this agreement becomes effective, to furnish to such Purchaser, upon
         request of the Representative, at the expense of such Purchaser, a
         reasonable quantity of a supplemental prospectus or of supplements to
         the Prospectus complying with Section 10(a)(3) of the Securities Act.

                  (d) During such period of time after the date this agreement
         becomes effective as the Purchasers are required by law to deliver a
         prospectus, to file timely all documents required to be filed with the
         Commission pursuant to Section 13 or 14 of the Exchange Act.

                  (e) To furnish to the Representative, or if such
         Representative consists of two or more persons to one of such persons,
         one copy, certified by an officer of the Company, of the registration
         statement as initially filed with the Commission, all amendments
         thereto and all documents incorporated by reference in the Prospectus
         pursuant to Item 12 of Form S-3 as of the time of purchase (in each
         case, exclusive of exhibits), and to furnish to the Representative
         sufficient plain copies of said registration statement and all
         amendments thereto (exclusive of exhibits) for distribution of two
         each, and all said documents incorporated therein as of the time of
         purchase (exclusive of exhibits) for distribution of one each, to the
         other Purchasers.

                  (f) In the event that the Purchasers constitute "underwriters"
         within the meaning of Section 2(11) of the Securities Act, then, for
         such period of time (not exceeding nine months) after the date this
         agreement becomes effective as they are required by law to deliver a
         prospectus, if any event shall have occurred as a result of which it is
         necessary to amend or supplement the Prospectus in order to make the
         statements therein, in light of the circumstances when the Prospectus
         is delivered to a purchaser, not misleading, forthwith to amend or
         supplement the Prospectus by either (i) preparing and furnishing, at
         its own expense, to the Purchasers and to dealers (whose names and
         addresses are furnished to the Company by the Representative) to whom
         Series B Senior Notes may have been sold by the Representative on
         behalf of the Purchasers and, upon request, to any other dealers making
         such request, either amendments to the Prospectus or supplements
         thereto, or (ii) making an appropriate filing pursuant to Section 13 or
         14 of the Exchange Act which would supplement or amend the Prospectus,
         so that the statements in the Prospectus as so amended or supplemented
         will not, in the light of the circumstances when the Prospectus is
         delivered to a purchaser, be misleading.

                  (g) To make generally available to the Company's security
         holders, as soon as practicable, an earning statement (which need not
         be audited) covering a period of at least twelve months beginning not
         later than the first day of the Company's fiscal quarter next following
         the "effective date" of the Registration Statement as defined in Rule
         158(c) under the Securities Act, which earning statement shall satisfy
         the provisions of Section 11(a) of the Securities Act and Rule 158
         thereunder.

                  (h) To use its best efforts to qualify the Series B Senior
         Notes for offer and sale under the securities or blue sky laws of such
         jurisdictions as the Representative may designate within six months



         after the date this agreement becomes effective and to pay filing fees
         and disbursements in connection therewith in an amount not exceeding
         $3,500 in the aggregate (including filing fees and disbursements paid
         or incurred prior to the date this agreement becomes effective),
         provided, however, that the Company shall not be required to qualify as
         a foreign corporation or to file a consent to service of process or to
         file annual reports or to comply with any other requirements deemed by
         the Company to be unduly burdensome.

                  (i) To pay expenses, fees and taxes (other than transfer
         taxes) in connection with (1) the preparation and filing of the
         Registration Statement and Prospectus, (2) the preparation and
         execution of the new supplemental indenture pursuant to which the
         Series B Senior Notes are to be issued, (3) the issue and delivery of
         the Series B Senior Notes to the Purchasers, and (4) the furnishing of
         the opinions, letter and certificates referred to in Section 3 hereof,
         except that the Company shall be required to pay the fees and
         disbursements (other than filing fees and disbursements referred to in
         paragraph (h) of this Section 4) of Dewey Ballantine LLP only in an
         event provided in paragraph (j) of this Section 4, the Purchasers
         hereby agreeing to pay such fees and disbursements in any other event
         and, if such fees should be less than the amount stated by such counsel
         to the Representative, to repay the Company the amount of any
         reduction.

                  (j) If the Purchasers shall not take up and pay for the Series
         B Senior Notes due to the failure of the Company to comply with any of
         the conditions specified in Section 3 hereof, or if this agreement
         shall be terminated in accordance with the provisions of Section 7 or 8
         hereof, to pay the reasonable fees and disbursements of Dewey
         Ballantine LLP, and, if the Purchasers shall not take up and pay for
         the Series B Senior Notes due to the failure of the Company to comply
         with any of the conditions specified in Section 3 hereof, to reimburse
         the Purchasers for their reasonable out-of-pocket expenses, in an
         amount not exceeding a total of $10,000, incurred in connection with
         the financing contemplated by this agreement.

                  (k) During the period of 15 days from the date this agreement
         becomes effective, without the prior written consent of the
         Representative, not to issue or sell directly or indirectly any senior
         notes (other than the Series B Senior Notes and $55,000,000 aggregate
         principal amount of Series A Senior Insured Quarterly Notes due June
         30, 2038) or any other long-term debt of the Company having terms and
         provisions substantially similar to the Series B Senior Notes.

         5.  Warranties of and Indemnity by the Company:

                  (a)  The Company warrants and represents to each of the
                       Purchasers that:

                           (i) The Registration Statement, when it became
                  effective, did not contain any untrue statement of a material
                  fact or omit to state a material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading and the Bidding Prospectus, on said date, did not
                  contain any untrue statement of a material fact or omit to
                  state a material fact necessary to make the statements
                  therein, in the light of the circumstances under which they
                  were made, not misleading; when the Prospectus Supplement is
                  filed with the Commission, and at the time of purchase, the
                  Registration Statement and the Prospectus, as they may be
                  amended or supplemented, will comply, or be deemed to comply,
                  in all material respects with the provisions of the Securities
                  Act and the rules and regulations of the Commission
                  thereunder, the Registration Statement, as it may be amended
                  or supplemented, will not contain any untrue statement of a
                  material fact or omit to state a material fact required to be
                  stated therein or necessary to make the statements therein not



                  misleading, and the Prospectus, as it may be amended or
                  supplemented, will not contain any untrue statement of a
                  material fact or omit to state a material fact necessary to
                  make the statements therein, in the light of the circumstances
                  under which they were made, not misleading, and all documents
                  incorporated therein by reference pursuant to Item 12 of Form
                  S-3 as of such dates complied or will comply in all material
                  respects with the applicable provisions of the Exchange Act
                  and the rules and regulations of the Commission thereunder,
                  and, on said dates, when read together with the Prospectus, or
                  the Prospectus as it may be otherwise amended or supplemented,
                  will not contain an untrue statement of a material fact or
                  omit to state a material fact necessary to make the statements
                  therein, in the light of the circumstances under which they
                  were made, not misleading, except that the Company makes no
                  warranty or representation to any Purchaser with respect to
                  any statements or omissions made in reliance upon and in
                  conformity with information furnished in writing to the
                  Company by, or through the Representative on behalf of, any
                  Purchaser for use in the Registration Statement or the
                  Prospectus, or to any statements in or omissions from that
                  part of the Registration Statement that shall constitute the
                  Statement of Eligibility under the Trust Indenture Act of
                  1939, as amended, of the Trustee under the Indenture.

                           (ii) The consummation of the transactions herein
                  contemplated and the performance by the Company of the terms
                  of this agreement will not violate any of the terms,
                  conditions or provisions of, or constitute a default under,
                  any indenture or other contract or agreement to which the
                  Company is now a party or the charter or by-laws of the
                  Company or any order of any court or administrative agency
                  entered in any proceedings to which the Company is now a
                  party.

                  (b) The Company agrees to indemnify and hold harmless each of
         the Purchasers and each person, if any, who controls any such Purchaser
         within the meaning of Section 15 of the Securities Act against any and
         all losses, claims, damages or liabilities, joint or several, to which
         they or any of them may become subject under the Securities Act or
         otherwise, and to reimburse the Purchasers and such controlling person
         or persons, if any, for any legal or other expenses incurred by them in
         connection with defending any actions, insofar as such losses, claims,
         damages, liabilities or actions arise out of or are based upon any
         untrue statement or alleged untrue statement of a material fact
         contained in the Bidding Prospectus (if used prior to the date this
         agreement becomes effective), or in the Registration Statement, or in
         the Prospectus or, if the Company shall furnish to the Purchasers any
         amendments or any supplements to the Prospectus, or shall make any
         filings pursuant to Section 13 or 14 of the Exchange Act which are
         incorporated therein by reference, in the Prospectus as so amended or
         supplemented (provided that, if such Prospectus or such Prospectus as
         amended or supplemented is used after the expiration of the period of
         time specified in Section 4(f) hereof, it shall contain such amendments
         or supplements as the Company deems necessary to comply with Section
         10(a)(3) of the Securities Act), or arise out of or are based upon any
         omission or alleged omission to state therein a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading, except insofar as such losses, claims, damages, liabilities
         or actions arise out of or are based upon any such untrue statement or
         omission or alleged untrue statement or omission which was made in such
         Registration Statement or Prospectus in reliance upon and in conformity
         with information furnished in writing to the Company by, or through the
         Representative on behalf of, any Purchaser for use therein and except
         that this indemnity with respect to the Bidding Prospectus, and with
         respect to the Prospectus if the Company shall have furnished any
         amendment or supplement thereto, shall not inure to the benefit of any
         Purchaser (or of any person controlling such Purchaser) on account of



         any losses, claims, damages, liabilities or actions arising from the
         sale of Series B Senior Notes to any person if a copy of the Prospectus
         (exclusive of documents incorporated therein by reference pursuant to
         Item 12 of Form S-3), as the same may then be amended or supplemented,
         shall not have been sent or given by or on behalf of such Purchaser to
         such person with or prior to the written confirmation of the sale
         involved and the untrue statement or alleged untrue statement or
         omission or alleged omission was corrected in the Prospectus as amended
         or supplemented at the time of such confirmation. Each Purchaser
         agrees, within ten days after the receipt by it of notice of the
         commencement of any action in respect of which indemnity may be sought
         by it, or by any person controlling it, from the Company on account of
         its agreement contained in this Section 5(b), to notify the Company in
         writing of the commencement thereof, but the omission of such Purchaser
         so to notify the Company of any such action shall not release the
         Company from any liability which it may have to such Purchaser or to
         such controlling person otherwise than on account of the indemnity
         agreement contained in this Section 5(b). In case any such action shall
         be brought against any Purchaser or any such person controlling such
         Purchaser and such Purchaser shall notify the Company of the
         commencement thereof, as above provided, the Company shall be entitled
         to participate in (and, to the extent that it shall wish, including the
         selection of counsel, to direct) the defense thereof at its own
         expense. In case the Company elects to direct such defense and select
         such counsel, any Purchaser or controlling person shall have the right
         to employ its own counsel, but, in any such case, the fees and expenses
         of such counsel shall be at the expense of such Purchaser or
         controlling person unless the employment of such counsel has been
         authorized in writing by the Company in connection with defending such
         action. 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.

                  The Company's indemnity agreement contained in this Section
         5(b), and its covenants, warranties and representations contained in
         this agreement, shall remain in full force and effect regardless of any
         investigation made by or on behalf of any Purchaser or controlling
         person, and shall survive the delivery of and payment for the Series B
         Senior Notes hereunder.

         6.  Warranties of and Indemnity by Purchasers:

                  (a) Each Purchaser warrants and represents to the Company, its
         directors and such of its officers as shall have signed the
         Registration Statement, and to each other Purchaser that the
         information furnished in writing to the Company by, or through the
         Representative on behalf of, such Purchaser for use in the Registration
         Statement or the Prospectus does not contain an untrue statement of a
         material fact and does not omit to state a material fact in connection
         with such information required to be stated therein or necessary to
         make such information not misleading.

                  (b) Each Purchaser agrees to indemnify and hold harmless the
         Company, its directors and such of its officers as shall have signed
         the Registration Statement, and each other Purchaser and each person,
         if any, who controls the Company or any such other Purchaser within the
         


         meaning of Section 15 of the Securities Act, to the same extent and
         upon the same terms as the indemnity agreement of the Company set forth
         in Section 5(b) hereof, but only with respect to untrue statements or
         omissions or alleged untrue statements or omissions made in the
         Registration Statement or the Prospectus, or the Prospectus as amended
         or supplemented, in reliance upon and in conformity with information
         furnished in writing to the Company by, or through the Representative
         on behalf of, such Purchaser for use therein.

                  The indemnity agreement on the part of each Purchaser
         contained in this Section 6(b), and the warranties and representations
         of such Purchaser contained in this agreement, shall remain in full
         force and effect regardless of any investigation made by or on behalf
         of the Company or other Purchaser or controlling person, and shall
         survive the delivery of and payment for the Series B Senior Notes
         hereunder.

         7. Substitution of Purchasers: If any Purchaser under this agreement
shall fail or refuse (whether for some reason sufficient to justify, in
accordance with the terms hereof, the termination of its obligations to purchase
or otherwise) to purchase the principal amount of the Series B Senior Notes
which it has agreed to purchase, the Company shall immediately notify the
Representative, and the Representative may, within 24 hours of receipt of such
notice, procure some other responsible party or parties satisfactory to the
Company, who may include one or more of the remaining Purchasers, to purchase or
agree to purchase such principal amount of the Series B Senior Notes on the
terms herein set forth; and, if the Representative shall fail to procure a
satisfactory party or parties to purchase or agree to purchase such principal
amount of the Series B Senior Notes on such terms within such period after the
receipt of such notice, then the Company shall be entitled to an additional
period of 24 hours within which to procure another party or parties to purchase
or agree to purchase such principal amount of the Series B Senior Notes on the
terms herein set forth. In any such case, either the Representative or the
Company shall have the right to postpone the time of purchase for a period not
to exceed five full business days from the date determined as provided in
Section 2 hereof, in order that the necessary changes in the Registration
Statement and Prospectus and any other documents and arrangements may be
effected. If the Representative shall fail to procure a satisfactory party or
parties to purchase or agree to purchase such principal amount of the Series B
Senior Notes, and if the Company also does not procure another party or parties
to purchase or agree to purchase such principal amount of the Series B Senior
Notes, as above provided, then this agreement shall terminate. In the event of
any such termination, the Company shall not be under any liability to any
Purchaser (except to the extent, if any, provided in Section 4(j) hereof), nor
shall any Purchaser (other than a Purchaser who shall have failed or refused to
purchase Series B Senior Notes without some reason sufficient to justify, in
accordance with the terms hereof, its termination of its obligations hereunder)
be under any liability to the Company.

         8. Termination of Agreement: This agreement may be terminated at any
time prior to the time of purchase by the Representative with the consent of
Purchasers who have agreed to purchase in the aggregate 50% or more of the
Designated Principal Amount of the Series B Senior Notes, if, after this
agreement becomes effective and prior to the time of purchase, (i) trading in
securities on the New York Stock Exchange shall have been generally suspended,
(ii) minimum or maximum ranges for prices shall have been generally established
on the New York Stock Exchange by the Commission or by the New York Stock
Exchange, (iii) a general banking moratorium shall have been declared by federal
or New York State authorities or (iv) there shall have occurred any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by the United States Congress or any other substantial
national or international calamity or emergency affecting the United States, in
any such case provided for in clauses (i) through (iv) with the result that, in
the reasonable judgment of the Representative, the marketability of the Series B
Senior Notes shall have been materially impaired.





         If the Representative elects to terminate this agreement, as provided
in this Section 8, the Company and each other Purchaser shall be notified
promptly by the Representative by telephone, confirmed in writing. If this
agreement shall not be carried out by any Purchaser for any reason permitted
hereunder, or if the sale of the Series B Senior Notes to the Purchasers as
herein contemplated shall not be carried out because the Company is not able to
comply with the terms hereof, the Company shall not be under any obligation
under this agreement and shall not be liable to any Purchaser or to any member
of any selling group for the loss of anticipated profits from the transactions
contemplated by this agreement (except that the Company shall remain liable to
the extent provided in Section 4(j) hereof) and the Purchasers (other than a
defaulting Purchaser) shall be under no liability to the Company nor be under
any liability under this agreement to one another.

          9.   Notices:  All notices hereunder shall, unless otherwise expressly
 permitted,  be in writing  and be delivered at or mailed to the following
 addresses: if to the Purchasers or the Representative,  to the Representative
 at the address set forth following its signature in the Form of Proposal, and,
 if to the Company, to the Company at 2992 West Beach, Gulfport, Mississippi
 39501,  Attention: Michael W. Southern,  Vice President, Secretary, Treasurer
 and Chief Financial Officer, with a copy to Southern Company Services, Inc.,
 270 Peachtree Street, N.W., Atlanta, Georgia 30303, Attention: Charles N.
 Eldred.

         10. Parties in Interest: The agreement herein set forth has been and is
made solely for the benefit of the Purchasers and the Company, its directors and
such of its officers as shall have signed the Registration Statement, and the
controlling persons, if any, referred to in Sections 5 and 6 hereof, and their
respective successors, assigns, executors and administrators, and, subject to
the provisions of Section 7 hereof, no other person shall acquire or have any
right under or by virtue of this agreement.

         11. Definitions of Certain Terms: If there be two or more persons,
firms or corporations named in Exhibit A to the Form of Proposal, the term
"Purchasers", as used herein, shall be deemed to mean the several persons, firms
or corporations so named (including any substitute purchaser or purchasers
procured as provided by Section 7 hereof and the Representative hereinafter
mentioned, if so named), and the term "Representative", as used herein, shall be
deemed to mean the person or persons designated as representative or
representatives of the Purchasers by, or in the manner authorized by, the
Purchasers, who, by signing the Form of Proposal, represent that it or they have
been authorized by the Purchasers to execute the Form of Proposal on their
behalf and to act for them in the manner herein provided. In the event that all
the Purchasers execute the Form of Proposal and no one or more of them are
designated to act as representative or representatives, then the term
"Representative" shall be deemed to mean all the persons signing the Form of
Proposal. If the Representative consists of more than one person, the
Representative may act by any one thereof. All obligations of the Purchasers
hereunder are several and not joint. If there shall be only one person, firm or
corporation named in Exhibit A to the Form of Proposal, the term "Purchasers"
and the term "Representative", as used herein, shall mean such person, firm or
corporation.





                                                              EXHIBIT 1     

                    [Letterhead of Eaton and Cottrell, P.A.]






                                                                   [Date]


as the several Purchasers under Purchase Contract effective May __, 1998,
between Mississippi Power Company and said Purchasers (the "Purchase Contract")
for the purchase of Mississippi Power Company Series B ___% Senior Notes due May
1, 2003 (the "Series B Senior Notes")

c/o




Ladies and Gentlemen:

         We have acted as counsel to Mississippi Power Company (the "Company")
in connection with the purchase by you pursuant to the Purchase Contract of
$35,000,000 aggregate principal amount of the Series B Senior Notes, issued
under the Senior Note Indenture dated as of May 1, 1998, between the Company and
Bankers Trust Company, as trustee (the "Trustee"), as heretofore supplemented
and as supplemented by the Second Supplemental Indenture dated as of May __,
1998 (said Indenture, as so supplemented and amended, being hereinafter called
the "Indenture").

         We have examined the Registration Statement on Form S-3 (File Nos.
333-45069, 333-45069-01 and 333-45069-02) filed by the Company under the
Securities Act of 1933, as amended (the "Act"), as it became effective under the
Act (the "Registration Statement"); the Company's prospectus dated February 9,
1998, as supplemented by the prospectus supplement dated May __, 1998 (the
"Prospectus"), filed by the Company pursuant to Rule 424 of the rules and
regulations of the Securities and Exchange Commission (the "Commission") under
the Act, which pursuant to Form S-3 incorporates by reference the Annual Report
on Form 10-K of the Company for the fiscal year ended December 31, 1997 and the
Current Reports on Form 8-K of the Company dated February 12, 1998, May __, 1998
and May __, 1998 (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
Indenture. In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the Series B Senior
Notes, of which we have examined a specimen), and we have made such other and
further investigations as we deemed necessary to enable us to express the
opinions hereinafter set forth.




         In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.

         We are of the opinion, relying as to matters relating to the laws
administered by the Commission, including the Act, the Exchange Act and the
Trust Indenture Act (as hereinafter defined), on the opinion dated the date
hereof rendered to you by Troutman Sanders LLP and relying as to matters of New
York law upon the opinion dated the date hereof rendered to you by Dewey
Ballantine LLP, that:

                  1. The Company has been duly incorporated and is validly
         existing and in good standing as a corporation under the laws of the
         State of Mississippi, is duly qualified to carry on its business as a
         foreign corporation in 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 Purchase
         Contract, the Indenture and the Series B Senior Notes.

                  2. The Indenture has been duly authorized, executed and
         delivered by the Company and duly qualified under the Trust Indenture
         Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
         authorization, execution and delivery thereof by the Trustee,
         constitutes a valid and legally binding instrument of the Company
         enforceable 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 Series B Senior Notes may be
         limited by bankruptcy, insolvency, reorganization, moratorium and other
         laws relating to or affecting creditors' rights generally and 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 Prospectus.

                  3. The Series B Senior Notes have been duly authorized,
         executed and issued by the Company and, assuming due authentication
         thereof by the Trustee and upon payment and delivery in accordance with
         the Purchase Contract and subject to the qualifications set forth in
         paragraph 2 above, will constitute valid and legally binding
         obligations of the Company enforceable against the Company in
         accordance with their terms; and the Series B Senior Notes conform as
         to legal matters in all material respects to the description thereof in
         the Prospectus.

                  4. All orders, consents or other authorizations or approvals
         of the Commission legally required for the issuance of the Series B
         Senior Notes have been obtained; and no other order, consent or other
         authorization or approval of any Mississippi 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 of
         the Series B Senior Notes by the Company in accordance with the terms
         of the Purchase Contract.

                  5.  The Purchase Contract 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
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except as and to the extent set forth in paragraphs 2 and 3 above and in the
Prospectus in the second paragraph under the caption "Experts". In the course of
the preparation by the Company of the Registration Statement, the Prospectus and
the Exchange Act Documents, we participated in conferences with certain officers
and employees of the Company, with other counsel for the Company and with
representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Prospectus and the Exchange Act Documents and our participation
in the conferences referred to above, (i) we are of the opinion that the
Registration Statement, as of its effective date, and the Prospectus, as of May
__, 1998, complied as to form in all material respects with the requirements of
the Act, the Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents, and (ii)
we have no reason to believe that the Registration Statement, as of the date of
filing of the Company's Annual Report on Form 10-K for the year ended December
31, 1997 (including the Exchange Act Documents on file with the Commission on
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 Prospectus (including
the Exchange Act Documents) contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents.

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

         This opinion is rendered to you in connection with the above described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without our prior written consent, except that Troutman Sanders LLP and Dewey
Ballantine LLP may rely on this opinion in giving their opinions pursuant to
Section 3(b) of the Purchase Contract insofar as such opinions relate to matters
of Mississippi and Alabama law.


                                                     Very truly yours,





                                                     EATON AND COTTRELL, P.A.






                                                            EXHIBIT 2

                      [Letterhead of Troutman Sanders LLP]






                                                                       [Date]


as the several Purchasers under Purchase Contract effective May __, 1998,
between Mississippi Power Company and said Purchasers (the "Purchase Contract")
for the purchase of Mississippi Power Company Series B ___% Senior Notes due May
1, 2003 (the "Series B Senior Notes")

c/o




Ladies and Gentlemen:

         We have acted as counsel to Mississippi Power Company (the "Company")
in connection with the purchase by you pursuant to the Purchase Contract of
$35,000,000 aggregate principal amount of the Series B Senior Notes, issued
under the Senior Note Indenture dated as of May 1, 1998, between the Company and
Bankers Trust Company, as trustee (the "Trustee"), as heretofore supplemented
and as supplemented by the Second Supplemental Indenture dated as of May __,
1998 (said Indenture, as so supplemented and amended, being hereinafter called
the "Indenture").

         We have examined the Registration Statement on Form S-3 (File Nos.
333-45069, 333-45069-01 and 333-45069-02) filed by the Company under the
Securities Act of 1933, as amended (the "Act"), as it became effective under the
Act (the "Registration Statement"); the Company's prospectus dated February 9,
1998, as supplemented by the prospectus supplement dated May __, 1998 (the
"Prospectus"), filed by the Company pursuant to Rule 424 of the rules and
regulations of the Securities and Exchange Commission (the "Commission") under
the Act, which pursuant to Form S-3 incorporates by reference the Annual Report
on Form 10-K of the Company for the fiscal year ended December 31, 1997 and the
Current Reports on Form 8-K of the Company dated February 12, 1998, May __, 1998
and May __, 1998 (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
Indenture. In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the Series B Senior
Notes, of which we have examined a specimen), and we have made such other and
further investigations as we deemed necessary to enable us to express the
opinions hereinafter set forth.




         In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.

         We are of the opinion, relying as to matters of Mississippi and Alabama
law upon the opinion of dated the date hereof rendered to you by Eaton and
Cottrell, P.A. and relying as to matters of New York law upon the opinion dated
the date hereof rendered to you by Dewey Ballantine LLP, that:

                  1. The Company has been duly incorporated and is validly
         existing and in good standing as a corporation under the laws of the
         State of Mississippi, is duly qualified to carry on its business as a
         foreign corporation in 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 Purchase
         Contract, the Indenture and the Series B Senior Notes.

                  2. The Indenture has been duly authorized, executed and
         delivered by the Company and duly qualified under the Trust Indenture
         Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
         authorization, execution and delivery thereof by the Trustee,
         constitutes a valid and legally binding instrument of the Company
         enforceable 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 Series B Senior Notes may be
         limited by (a) bankruptcy, insolvency, reorganization, moratorium and
         other laws relating to or affecting creditors' rights generally and (b)
         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 Prospectus.

                  3. The Series B Senior Notes have been duly authorized,
         executed and issued by the Company and, assuming due authentication
         thereof by the Trustee and upon payment and delivery in accordance with
         the Purchase Contract and subject to the qualifications set forth in
         paragraph 2 above, will constitute valid and legally binding
         obligations of the Company enforceable against the Company in
         accordance with their terms; and the Series B Senior Notes conform as
         to legal matters in all material respects to the description thereof in
         the Prospectus.

                  4. All orders, consents or other authorizations or approvals
         of the Commission legally required for the issuance of the Series B
         Senior Notes have been obtained; and no other order, consent or other
         authorization or approval of any Mississippi 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 of
         the Series B Senior Notes by the Company in accordance with the terms
         of the Purchase Contract.

                  5.  The Purchase Contract 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
Prospectus or the Exchange Act Documents and take no responsibility therefor,



except as and to the extent set forth in paragraphs 2 and 3 above. In the course
of the preparation by the Company of the Registration Statement, the Prospectus
and the Exchange Act Documents, we participated in conferences with certain
officers and employees of the Company, with other counsel for the Company and
with representatives of Arthur Andersen LLP. Based upon our examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement, the Prospectus and the Exchange Act Documents and our participation
in the conferences referred to above, (i) we are of the opinion that the
Registration Statement, as of its effective date, and the Prospectus, as of May
__, 1998, complied as to form in all material respects with the requirements of
the Act, the Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents, and (ii)
we have no reason to believe that the Registration Statement, as of the date of
filing of the Company's Annual Report on Form 10-K for the year ended December
31, 1997 (including the Exchange Act Documents on file with the Commission on
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 Prospectus (including
the Exchange Act Documents) contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents.

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

         This opinion is rendered to you in connection with the above described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without our prior written consent, except that Eaton and Cottrell, P.A. may rely
on this opinion in giving its opinion pursuant to Section 3(b) of the Purchase
Contract insofar as such opinion relates to matters of law administered by the
Commission, including the Act, the Exchange Act and the Trust Indenture Act.


                                                     Very truly yours,





                                                     TROUTMAN SANDERS LLP





                                                              EXHIBIT 3





                      [Letterhead of Dewey Ballantine LLP]


                                                           [Date]


as the several Purchasers under Purchase Contract effective May __, 1998,
between Mississippi Power Company and said Purchasers (the "Purchase Contract")
for the purchase of Mississippi Power Company Series B ___% Senior Notes due May
1, 2003 (the "Series B Senior Notes")

c/o




Ladies and Gentlemen:

         We have acted as your counsel in connection with the purchase by you
pursuant to the Purchase Contract of $35,000,000 aggregate principal amount of
the Series B Senior Notes, issued under the Indenture dated as of May 1, 1998,
between Mississippi Power Company (the "Company") and Bankers Trust Company, as
Trustee (the "Trustee"), as heretofore supplemented and as supplemented by the
Second Supplemental Indenture dated as of May __, 1998 (said Indenture, as so
supplemented and amended, being hereinafter called the "Indenture").

         We have examined the Registration Statement on Form S-3 (File Nos.
333-45069, 333-45069-01 and 333-45069-02) filed by the Company under the
Securities Act of 1933, as amended (the "Act"), as it became effective under the
Act (the "Registration Statement"); the Company's prospectus dated February 9,
1998, as supplemented by the prospectus supplement dated May __, 1998 (the
"Prospectus"), filed by the Company pursuant to Rule 424 of the rules and
regulations of the Securities and Exchange Commission (the "Commission") under
the Act, which pursuant to Form S-3 incorporates by reference the Annual Report
on Form 10-K of the Company for the fiscal year ended December 31, 1997 and the
Current Reports on Form 8-K of the Company dated February 12, 1998, May __, 1998
and May __, 1998 (the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and the
Indenture. In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the Series B Senior
Notes, of which we have examined a specimen), and we have made such other and
further investigations as we deemed necessary to enable us to express the
opinions hereinafter set forth.




         In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.

         We are of the opinion, relying as to matters of Mississippi and Alabama
law upon the opinion of Eaton and Cottrell, P.A., referred to below, that:

                  1. The Company has been duly incorporated and is validly
         existing and in good standing as a corporation under the laws of the
         State of Mississippi, is duly qualified to carry on its business as a
         foreign corporation in 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 Purchase
         Contract, the Indenture and the Series B Senior Notes.

                  2. The Indenture has been duly authorized, executed and
         delivered by the Company and duly qualified under the Trust Indenture
         Act of 1939, as amended (the "Trust Indenture Act"), and, assuming due
         authorization, execution and delivery thereof by the Trustee,
         constitutes a valid and legally binding instrument of the Company
         enforceable 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 Series B Senior Notes may be
         limited by (a) bankruptcy, insolvency, reorganization, moratorium and
         other laws relating to or affecting creditors' rights generally and (b)
         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 Prospectus.

                  3. The Series B Senior Notes have been duly authorized,
         executed and issued by the Company and, assuming due authentication
         thereof by the Trustee and upon payment and delivery in accordance with
         the Purchase Contract and subject to the qualifications set forth in
         paragraph 2 above, will constitute valid and legally binding
         obligations of the Company enforceable against the Company in
         accordance with their terms; and the Series B Senior Notes conform as
         to legal matters in all material respects to the description thereof in
         the Prospectus.

                  4. All orders, consents or other authorizations or approvals
         of the Commission legally required for the issuance of the Series B
         Senior Notes have been obtained; and no other order, consent or other
         authorization or approval of any Mississippi 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 of
         the Series B Senior Notes by the Company in accordance with the terms
         of the Purchase Contract.

                  5.  The Purchase Contract has been duly authorized, executed
          nd delivered by the Company.

         All legal proceedings taken by the Company in connection with the
authorization and delivery of the Series B Senior Notes, and the legal opinions
dated the date hereof rendered to you by Eaton and Cottrell, P.A. and Troutman
Sanders LLP, counsel for the Company, pursuant to the Purchase Contract, are in
form satisfactory to us.





         We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except as and to the extent set forth in paragraphs 2 and 3 above. In the course
of the preparation by the Company of the Registration Statement, the Prospectus
and the Exchange Act Documents, we participated in conferences with certain
officers and employees of the Company, with representatives of Arthur Andersen
LLP and with counsel for the Company. Based upon our examination of the
Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement and the Prospectus and our participation in the conferences referred
to above, (i) we are of the opinion that the Registration Statement, as of its
effective date, and the Prospectus, as of May __, 1998, complied as to form in
all material respects with the requirements of the Act, the Trust Indenture Act
and the applicable rules and regulations of the Commission thereunder and that
the Exchange Act Documents, as of their respective dates of filing with the
Commission, complied as to form in all material respects with the relevant
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder, except that in each case we express no opinion as to the
financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement, the Prospectus or the
Exchange Act Documents, and (ii) we have no reason to believe that the
Registration Statement, as of the date of filing of the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 (including the Exchange Act
Documents on file with the Commission on 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 Prospectus (including the Exchange Act Documents)
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case we express no opinion or belief with respect to the financial statements or
other financial or statistical data contained or incorporated by reference in
the Registration Statement, the Prospectus or the Exchange Act Documents.

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

         This opinion is rendered to you in connection with the above described
transactions. This opinion may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation
without our prior written consent, except that Eaton and Cottrell, P.A. and
Troutman Sanders LLP may rely on this opinion in giving their opinions pursuant
to Section 3(b) of the Purchase Contract insofar as such opinions relate to
matters of New York law.


                                                     Very truly yours,




                                                     DEWEY BALLANTINE LLP

EX-4

                                                      EXHIBIT 4.1









                            MISSISSIPPI POWER COMPANY

                                       TO

                             BANKERS TRUST COMPANY,
                                    TRUSTEE.





                              SENIOR NOTE INDENTURE

                             DATED AS OF MAY 1, 1998





















                            MISSISSIPPI POWER COMPANY
         RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
                 SENIOR NOTE INDENTURE, DATED AS OF MAY 1, 1998
                                                                                

                     TRUST INDENTURE
                       ACT SECTION                                                   INDENTURE SECTION

(S)      310(a)(1)..............................................................................................609
            (a)(2)..............................................................................................609
            (a)(3)...................................................................................Not Applicable
            (a)(4)...................................................................................Not Applicable
            (b).................................................................................................608
                                                                                                                610
(S)         311(a)..............................................................................................613
         311(b)(4)...........................................................................................613(a)
            (b)(6)...........................................................................................613(b)
(S)      312(a).................................................................................................701
                                                                                                             702(a)
            (c)..............................................................................................702(b)
(S)      313(a)..............................................................................................703(a)
         313(b)..............................................................................................703(b)
         313(c)..............................................................................................703(c)
                                                                                                                704
            (d)..............................................................................................703(c)
(S)      314(a)...........................................................................................704, 1005
            (b)......................................................................................Not Applicable
            (c)(1)..............................................................................................102
            (c)(2)..............................................................................................102
            (c)(3)...................................................................................Not Applicable
            (d)......................................................................................Not Applicable
            (e).................................................................................................102
(S)      315(a)..............................................................................................601(a)
            (b).................................................................................................602
            (c)..............................................................................................601(b)
            (d)..............................................................................................601(c)
            (d)(1)........................................................................................601(a)(1)
            (d)(2)........................................................................................601(c)(2)
            (d)(3)........................................................................................601(c)(3)
            (e).................................................................................................514
(S)      316(a).................................................................................................101
            (a)(1)(A)...........................................................................................502
                                                                                                                512
            (a)(1)(B)...........................................................................................513
            (a)(2)...................................................................................Not Applicable
            (b).................................................................................................508
(S)      317(a)(1)..............................................................................................503
            (a)(2)..............................................................................................504
            (b)................................................................................................1003
(S)      318(a).................................................................................................107







                                TABLE OF CONTENTS
                                                                                


                                                                                                                             PAGE

Parties..........................................................................................................1
Recitals of the Company..........................................................................................1

ARTICLE ONE......................................................................................................1
         SECTION 101. DEFINITIONS................................................................................1
                  Act............................................................................................2
                  Affiliate......................................................................................2
                  Authenticating Agent...........................................................................2
                  Board of Directors.............................................................................2
                  Board Resolution...............................................................................2
                  Business Day...................................................................................2
                  Certificate of a Firm of Independent Public Accountants........................................2
                  Commission.....................................................................................2
                  Company........................................................................................2
                  Company Request or Company Order...............................................................3
                  Corporate Trust Office.........................................................................3
                  Corporation....................................................................................3
                  Defaulted Interest.............................................................................3
                  Depositary.....................................................................................3
                  Event of Default...............................................................................3
                  Global Security................................................................................3
                  Holder.........................................................................................3
                  Indenture......................................................................................3
                  Interest Payment Date..........................................................................3
                  Maturity.......................................................................................3
                  Officers' Certificate..........................................................................4
                  Opinion of Counsel.............................................................................4
                  Outstanding....................................................................................4
                  Paying Agent...................................................................................4
                  Person.........................................................................................5
                  Predecessor Security...........................................................................5
                  Redemption Date................................................................................5
                  Redemption Price...............................................................................5
                  Regular Record Date............................................................................5
                  Responsible Officer............................................................................5
                  Security Register and Security Registrar.......................................................5
                  Senior Note....................................................................................5
                  Special Record Date............................................................................5
                  Stated Maturity................................................................................5
                  Trust Indenture Act............................................................................5
                  Trustee........................................................................................6
                  Vice President.................................................................................6
       





                                                                                                          

         SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.......................................................6
         SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.....................................................6
         SECTION 104. ACTS OF HOLDERS............................................................................7
         SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY......................................................8
         SECTION 106. NOTICE TO HOLDERS OF SENIOR NOTES; WAIVER..................................................8
         SECTION 107. CONFLICT WITH TRUST INDENTURE ACT..........................................................9
         SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS...................................................9
         SECTION 109. SUCCESSORS AND ASSIGNS.....................................................................9
         SECTION 110. SEPARABILITY CLAUSE........................................................................9
         SECTION 111. BENEFITS OF INDENTURE......................................................................9
         SECTION 112. GOVERNING LAW..............................................................................9
         SECTION 113. LEGAL HOLIDAYS............................................................................10

ARTICLE TWO.....................................................................................................10
         SECTION 201. FORMS GENERALLY...........................................................................10
         SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION...........................................11
         SECTION 203. SENIOR NOTES ISSUABLE IN THE FORM OF A GLOBAL SECURITY....................................11

ARTICLE THREE...................................................................................................13
         SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES......................................................13
         SECTION 302. EXECUTION, AUTHENTICATION, DELIVERY AND DATING............................................14
         SECTION 303. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.......................................16
         SECTION 304. MUTILATED, DESTROYED, LOST AND STOLEN SENIOR NOTES........................................17
         SECTION 305. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED............................................18
         SECTION 306. PERSONS DEEMED OWNERS.....................................................................19
         SECTION 307. CANCELLATION..............................................................................19
         SECTION 308. COMPUTATION OF INTEREST...................................................................19

ARTICLE FOUR....................................................................................................19
         SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE...................................................19
         SECTION 402. APPLICATION OF TRUST......................................................................20

ARTICLE FIVE....................................................................................................21
         SECTION 501. EVENTS OF DEFAULT.........................................................................21
         SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT........................................22
         SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE...........................23
         SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM..........................................................23
         SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SENIOR NOTES.............................24
         SECTION 506. APPLICATION OF MONEY COLLECTED............................................................24
         SECTION 507. LIMITATION ON SUITS.......................................................................25
         SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST.................25
       






                                                                                                          
         SECTION 509. RESTORATION OF RIGHTS AND REMEDIES........................................................26
         SECTION 510. RIGHTS AND REMEDIES CUMULATIVE............................................................26
         SECTION 511. DELAY OR OMISSION NOT WAIVER..............................................................26
         SECTION 512. CONTROL BY HOLDERS OF SENIOR NOTES........................................................26
         SECTION 513. WAIVER OF PAST DEFAULTS...................................................................27
         SECTION 514. UNDERTAKING FOR COSTS.....................................................................27
         SECTION 515. WAIVER OF STAY OR EXTENSION LAWS..........................................................27

ARTICLE SIX.....................................................................................................28
         SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.......................................................28
         SECTION 602. NOTICE OF DEFAULTS........................................................................29
         SECTION 603. CERTAIN RIGHTS OF TRUSTEE.................................................................29
         SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SENIOR NOTES..................................30
         SECTION 605. MAY HOLD SENIOR NOTES.....................................................................30
         SECTION 606. MONEY HELD IN TRUST.......................................................................31
         SECTION 607. COMPENSATION AND REIMBURSEMENT............................................................31
         SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS...................................................31
         SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY...................................................32
         SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.........................................32
         SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR....................................................33
         SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...............................34
         SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........................................35
         SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.......................................................35

ARTICLE SEVEN...................................................................................................37
         SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.................................37
         SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS....................................37
         SECTION 703. REPORTS BY TRUSTEE........................................................................37
         SECTION 704. REPORTS BY COMPANY........................................................................38

ARTICLE EIGHT...................................................................................................38
         SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS......................................38
         SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED.........................................................39

ARTICLE NINE....................................................................................................39
         SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS........................................39
         SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS...........................................40
         SECTION 903. GENERAL PROVISIONS REGARDING SUPPLEMENTAL INDENTURE.......................................41
         SECTION 904. EXECUTION OF SUPPLEMENTAL INDENTURES......................................................41
         SECTION 905. EFFECT OF SUPPLEMENTAL INDENTURES.........................................................42
         SECTION 906. CONFORMITY WITH TRUST INDENTURE ACT.......................................................42
         SECTION 907. REFERENCE IN SENIOR NOTES TO SUPPLEMENTAL INDENTURES......................................42







                                                                                                           

ARTICLE TEN.....................................................................................................42
         SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST........................................................42
         SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY..........................................................42
         SECTION 1003. MONEY FOR SENIOR NOTES PAYMENTS TO BE HELD IN TRUST......................................43
         SECTION 1004. CORPORATE EXISTENCE......................................................................44
         SECTION 1005. STATEMENT AS TO COMPLIANCE...............................................................44
         SECTION 1006. WAIVER OF CERTAIN COVENANTS..............................................................44

ARTICLE ELEVEN..................................................................................................45
         SECTION 1101. APPLICABILITY OF ARTICLE.................................................................45
         SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE....................................................45
         SECTION 1103. SELECTION BY TRUSTEE OF SENIOR NOTES TO BE REDEEMED......................................45
         SECTION 1104. NOTICE OF REDEMPTION.....................................................................46
         SECTION 1105. DEPOSIT OF REDEMPTION PRICE..............................................................46
         SECTION 1106. SENIOR NOTES PAYABLE ON REDEMPTION DATE..................................................47
         SECTION 1107. SENIOR NOTES REDEEMED IN PART............................................................47

ARTICLE TWELVE..................................................................................................47
         SECTION 1201. APPLICABILITY OF ARTICLE.................................................................47
         SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SENIOR NOTES..................................48
         SECTION 1203. REDEMPTION OF SENIOR NOTES FOR SINKING FUND..............................................48

ARTICLE THIRTEEN................................................................................................48
         SECTION 1301. NO RECOURSE AGAINST OTHERS...............................................................48
         SECTION 1302. ASSIGNMENT; BINDING EFFECT...............................................................49








                              SENIOR NOTE INDENTURE

         THIS SENIOR NOTE INDENTURE is made as of May 1, 1998, between
MISSISSIPPI POWER COMPANY, a corporation duly organized and existing under the
laws of the State of Mississippi (herein called the "Company"), having its
principal office at 2992 West Beach, Gulfport, Mississippi 39501, and BANKERS
TRUST COMPANY, a banking corporation duly organized and existing under the laws
of the State of New York, having its principal corporate trust office at Four
Albany Street, New York, New York 10006, as Trustee (herein called the
"Trustee").

                              W I T N E S S E T H:

         WHEREAS, the Company has duly authorized the execution and delivery of
this Senior Note Indenture to provide for the issuance from time to time of its
unsecured senior debentures, notes or other evidences of indebtedness (herein
called the "Senior Notes"), to be issued in one or more series as in this Senior
Note Indenture provided; and

         WHEREAS, all things necessary to make this Senior Note Indenture a
valid agreement of the Company, in accordance with its terms, have been done.

         NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Senior Notes by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the Senior
Notes or of series thereof, as follows:


                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 101.......DEFINITIONS

         For all purposes of this Senior Note Indenture, except as otherwise
expressly provided or unless the context otherwise requires:

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

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

         (3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States of America
at the date of such computation; and





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

         Certain terms, used principally in Article Six, are defined in that
Article.

         "Act," when used with respect to any Holder of a Senior Note, has the
meaning specified in Section 104.

         "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.

         "Authenticating Agent" means any Person or Persons authorized by the
Trustee to authenticate one or more series of Senior Notes.

         "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of the officers and/or directors of the Company
appointed by that board.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

         "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, or (iii) a day on which the Trustee's
Corporate Trust Office is closed for business.

         "Certificate of a Firm of Independent Public Accountants" means a
certificate signed by an independent public accountant or a firm of independent
public accountants who may be the independent public accountants regularly
retained by the Company or who may be other independent public accountants. Such
accountant or firm shall be entitled to rely upon an Opinion of Counsel as to
the interpretation of any legal matters relating to such certificate.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, 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.


                                       2



         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Senior Note Indenture, and
thereafter "Company" shall mean such successor corporation.

         "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.

         "Corporate Trust Office" means the office of the Trustee in the Borough
of Manhattan, New York City, at which at any particular time its corporate trust
business shall be principally administered, which office at the date of
execution of this Senior Note Indenture is located at Four Albany Street, New
York, New York 10006.

         "Corporation" includes corporations, partnerships, limited liability
companies, associations, companies and business trusts.

         "Defaulted Interest" has the meaning specified in Section 305.

         "Depositary" means, unless otherwise specified by the Company pursuant
to either Section 203 or 301, with respect to Senior Notes of any series
issuable or issued as a Global Security, The Depository Trust Company, New York,
New York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.

         "Event of Default" has the meaning specified in Section 501.

         "Global Security" means, with respect to any series of Senior Notes
issued hereunder, a Senior Note that is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with Section 203 of this Indenture
and any indenture supplemental hereto.

         "Holder," when used with respect to any Senior Note, means the Person
in whose name the Senior Note is registered in the Security Register.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of the particular series of Senior Notes established
as contemplated by Section 301.

         "Interest Payment Date," when used with respect to any series of Senior
Notes, means the dates established for the payment of interest thereon, as
provided in the supplemental indenture for such series.


                                       3



         "Maturity," when used with respect to any Senior Note, means the date
on which the principal of such Senior Note or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.

         "Officers' Certificate" means a certificate signed by the 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 Company, and
delivered to the Trustee.

         "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.

         "Outstanding," when used with respect to Senior Notes, means, as of the
date of determination, all Senior Notes theretofore authenticated and delivered
under this Indenture, except:

      (i) Senior Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;

     (ii) Senior Notes for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Senior Notes; provided that if such Senior Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;

     (iii) Senior Notes that have been paid or in exchange for or
in lieu of which other Senior Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Senior Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Senior Notes are held by a bona fide purchaser in whose hands such Senior
Notes are valid obligations of the Company; and

    (iv)  Senior Notes, or portions thereof, converted into or exchanged for
another security if the terms of such Senior Notes provide for such conversion
or exchange;

provided, however, that in determining, during any period in which any Senior
Notes of a series are owned by any Person other than the Company or any
Affiliate thereof, whether the Holders of the requisite principal amount of
Outstanding Senior Notes of such series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Senior Notes of
such series owned by the Company or any Affiliate thereof shall be disregarded
and deemed not to be Outstanding. In determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Senior Notes that the Trustee knows to be so
owned by the Company or an Affiliate of the Company in the above circumstances
shall be so disregarded. Senior Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Senior Notes and that the pledgee is not the Company or any Affiliate of the
Company.


                                       4



         "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Senior Notes on behalf of
the Company.

         "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

         "Predecessor Security" of any particular Senior Note means every
previous Senior Note evidencing all or a portion of the same debt as that
evidenced by such particular Senior Note; and, for the purposes of this
definition, any Senior Note authenticated and delivered under Section 304 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Senior Note
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Senior Note.

         "Redemption Date," when used with respect to any Senior Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "Redemption Price," when used with respect to any Senior Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

         "Regular Record Date" for the interest payable on any Interest Payment
Date on the Senior Notes of any series means the date specified for that purpose
as contemplated by Section 301, whether or not a Business Day.

         "Responsible Officer," when used with respect to the Trustee, means any
managing director, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer or any other officer of the
Corporate Trust and Agency Group of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.

         "Security Register" and "Security Registrar" have the respective
meanings specified in Section 303.

         "Senior Note" has the meaning stated in the first recital of this
Indenture and more particularly means any Senior Notes authenticated and
delivered under this Indenture.

         "Special Record Date" for the payment of any Defaulted Interest on the
Senior Notes of any series means a date fixed by the Trustee pursuant to Section
305.

         "Stated Maturity," when used with respect to any Senior Note or any
installment of principal thereof or interest thereon, means the date specified
in such Senior Note as the fixed date on which the principal of such Senior Note
or such installment of principal or interest is due and payable.
 

                                      5




         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Trust Indenture Act or provision, as the case
may be, as amended or replaced from time to time.

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
with respect to one or more series of Senior Notes pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Senior Notes of any
series shall mean the Trustee with respect to Senior Notes of that series.

         "Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."

SECTION 102    COMPLIANCE CERTIFICATES AND OPINIONS

         Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include

         (i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;

         (ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;

        (iii) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and

       (iv)a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.


                                       6



SECTION 103    FORM OF DOCUMENTS DELIVERED TO TRUSTEE

         In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.

         Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

SECTION 104    ACTS OF HOLDERS

         (a)   Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders 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
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

         (b)   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 in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.

                                       7



         (c)   The principal amount and serial numbers of Senior Notes held
by any Person, and the date of holding the same, shall be proved by the Security
Register.

         (d)   Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of the Holder of any Senior Note shall
bind every future Holder of the same Senior Note and the Holder of every Senior
Note 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 Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Senior Note.

         (e)   The fact and date of execution of any such instrument or
writing and the authority of the Person executing the same may also be proved in
any other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section.

         (f)   If the Company shall solicit from the Holders of Senior Notes
of any series any Act, the Company may, at its option, by Board Resolution, fix
in advance a record date for the determination of Holders of Senior Notes
entitled to take such Act, but the Company shall have no obligation to do so.
Any such record date shall be fixed at the Company's discretion. If such a
record date is fixed, such Act may be sought or given before or after the record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders of Senior Notes for the purpose of
determining whether Holders of the requisite proportion of Senior Notes of such
series Outstanding have authorized or agreed or consented to such Act, and for
that purpose the Senior Notes of such series Outstanding shall be computed as of
such record date.

SECTION 105    NOTICES, ETC., TO TRUSTEE AND COMPANY

         Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

         (1)   the Trustee by any Holder of a Senior Note or by the Company
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust and Agency Group, or

         (2)   the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to the attention of its Treasurer, 2992 West Beach, Gulfport,
Mississippi 39501, with a copy to Southern Company Services, Inc., 270 Peachtree
Street, N.W., Atlanta, Georgia 30303, Attention: Corporate Finance Department,
or at any other address previously furnished in writing to the Trustee by the
Company.


                                       8


SECTION 106    NOTICE TO HOLDERS OF SENIOR NOTES; WAIVER

         Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Senior Notes of any event, such notice shall
be sufficiently given if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such Notice.

         In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Senior Notes shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

SECTION 107    CONFLICT WITH TRUST INDENTURE ACT

         If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required to be a part of and govern this
Indenture, such required provision shall control.

SECTION 108    EFFECT OF HEADINGS AND TABLE OF CONTENTS

         The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

SECTION 109    SUCCESSORS AND ASSIGNS

         All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

SECTION 110    SEPARABILITY CLAUSE

         In case any provision in this Indenture or the Senior Notes 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 111    BENEFITS OF INDENTURE

         Nothing in this Indenture or the Senior Notes, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders of Senior Notes any benefit or any legal or equitable
right, remedy or claim under this Indenture.



                                       9



SECTION 112    GOVERNING LAW

         THIS INDENTURE AND THE SENIOR NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE COMPANY
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS
INDENTURE OR THE TRANSACTIONS CONTEMPLATED THEREBY, AND TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THE COMPANY HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS INDENTURE OR
ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF
MAY NOT BE LITIGATED IN OR BY SUCH COURTS. THE COMPANY AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR
NOTICES SET FORTH IN THIS INDENTURE OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW
YORK.

SECTION 113    LEGAL HOLIDAYS

         In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Senior Note shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Senior Notes) payment of
interest or principal (and premium, if any) need not be made on such date, but
may be made on the next succeeding Business Day, except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.


                                   ARTICLE TWO

SECTION 201    FORMS GENERALLY

         The Senior Notes of each series shall be in substantially the form
appended to the supplemental indenture authorizing such series, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Senior Notes, as evidenced by their execution of the Senior Notes.

                                       10



         The Senior Notes of each series shall be issuable in registered form
without coupons.

         The definitive Senior Notes may be printed, typewritten, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Senior Notes, as evidenced by
their execution of such Senior Notes.

SECTION 202    FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         The form of the Trustee's Certificate of Authentication for a series of
Senior Notes shall be in substantially the form appended to the Supplemental
Indenture authorizing such series.

SECTION 203.   SENIOR NOTES ISSUABLE IN THE FORM OF A GLOBAL SECURITY

         (a)   If the Company shall establish pursuant to Section 301 that
the Senior Notes of a particular series are to be issued in whole or in part in
the form of one or more Global Securities, then the Company shall execute and
the Trustee shall, in accordance with Section 302 and the Company Order
delivered to the Trustee thereunder, authenticate and deliver such Global
Security or Securities, which (i) shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of the Outstanding Senior
Notes of such series to be represented by such Global Security or Securities,
(ii) may provide that the aggregate amount of Outstanding Senior Notes
represented thereby may from time to time be increased or reduced to reflect
exchanges, (iii) shall be registered in the name of the Depositary for such
Global Security or Securities or its nominee, (iv) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary's instruction and (v)
shall bear a legend in accordance with the requirements of the Depositary.

         (b)   Notwithstanding any other provision of this Section 203 or of
Section 303, subject to the provisions of paragraph (c) below, unless the terms
of a Global Security expressly permit such Global Security to be exchanged in
whole or in part for individual Senior Notes, a Global Security may be
transferred, in whole but not in part and in the manner provided in Section 303,
only to a nominee of the Depositary for such Global Security, or to the
Depositary, or to a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.

         (c)   (1) If at any time the Depositary for a Global Security
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary for the Senior Notes
for such series shall no longer be eligible or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, the Company shall appoint a successor Depositary with respect to
such Global Security. If a successor Depositary for such Global Security is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company will execute, and the
  

                                     11



Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Senior Notes of such series in exchange for such Global Security,
will authenticate and deliver individual Senior Notes of such series of like
tenor and terms in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security.

          (2) The Company may at any time and in its sole discretion
determine that the Senior Notes of any series issued or issuable in the form of
one or more Global Securities shall no longer be represented by such Global
Security or Securities. In such event the Company will execute, and the Trustee,
upon receipt of a Company Request for the authentication and delivery of
individual Senior Notes of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Senior Notes of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
representing such series in exchange for such Global Security or Securities.

          (3) If specified by the Company pursuant to Section 301 with
respect to Senior Notes issued or issuable in the form of a Global Security, the
Depositary for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Senior Notes of such series of like
tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee shall authenticate and deliver, without service charge, (A) to each
Person specified by such Depositary a new Senior Note or Notes of the same
series of like tenor and terms and of any authorized denomination as requested
by such Person in aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and (B) to such Depositary
a new Global Security of like tenor and terms and in an authorized denomination
equal to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Senior Notes delivered to
Holders thereof.

          (4)  In any  exchange  provided  for in  any  of the  preceding  three
paragraphs,  the  Company  will  execute  and  the  Trustee  will authenticate 
and deliver  individual  Senior Notes in definitive form in authorized
denominations. Upon the exchange of the entire principal amount of a Global 
Security for individual Senior Notes,  such Global  Security shall be
cancelled by the Trustee.  Except as  provided  in the  preceding  paragraph, 
Senior  Notes issued in exchange for a Global Security pursuant to this Section
shall  be  registered  in  such  names  and  in  such  authorized
denominations as the Depositary  for  such  Global  Security, pursuant to
instructions from its direct or indirect participants or  otherwise,  shall
instruct the Trustee.  Provided that the  Company and the Trustee have so
agreed, the Trustee shall deliver such Senior  Notes to the Persons in whose
names the Senior Notes are registered.

          (5) Any endorsement of a Global Security to reflect the
amount, or any increase or decrease in the amount, or changes in the rights of
Holders, of Outstanding Senior Notes represented thereby shall be made in such
manner and by such Person or Persons as shall be specified therein or in the
Company Order to be delivered pursuant to Section 302 with respect thereto.
Subject to the provisions of Section 302, the Trustee shall deliver and
redeliver any such Global Security in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Company Order. If a



                                       12


Company Order pursuant to Section 302 has been, or simultaneously is, delivered,
any instructions by the Company with respect to such Global Security shall be in
writing but need not be accompanied by or contained in an Officers' Certificate
and need not be accompanied by an Opinion of Counsel.


                                  ARTICLE THREE

                                THE SENIOR NOTES

SECTION 301    AMOUNT UNLIMITED; ISSUABLE IN SERIES

         The aggregate principal amount of Senior Notes which may be
authenticated and delivered under this Indenture is unlimited.

         The Senior Notes may be issued in one or more series. There may be
established, pursuant to one or more indentures supplemental hereto, prior to
the issuance of Senior Notes of any series,

         (1) the title of the Senior Notes of the series (which shall
distinguish the Senior Notes of the series from Senior Notes of all other
series);

         (2) any limit upon the aggregate principal amount of the
Senior Notes of the series which may be authenticated and delivered under this
Indenture (except for Senior Notes authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Senior Notes of the
series pursuant to Sections 203, 303, 304, 907 or 1107);

         (3) the Person to whom interest on a Senior Note of the series shall
be payable if other than the Person in whose name that Senior Note (or one or
more Predecessor Securities) is registered at the close of business on the 
Regular Record Date for such interest;

         (4) the date or dates on which the principal of the Senior Notes of the
series is payable;

         (5) the rate or rates at which the Senior Notes of the series
shall bear interest, if any, or any method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable, the Regular
Record Date for the interest payable on Senior Notes on any Interest Payment
Date and the basis upon which interest shall be calculated if other than that of
a 360-day year consisting of twelve 30-day months;

         (6) the place or places where the principal of (and premium, if any)
and interest, if any, on Senior Notes of the series shall be payable;
  
                                     13




         (7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Senior Notes of the series may be
redeemed, in whole or in part, at the option of the Company;

         (8) the obligation, if any, of the Company to redeem or
purchase Senior Notes of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof and the period or periods within
which, the price or prices at which, and the terms and conditions upon which,
Senior Notes of the series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;

        (9)  the  denominations  in which  Senior Notes of the series shall be
issuable;

       (10) if the amount of payments of principal of (and  premium,  if any)
 or interest on the Senior  Notes of the series may be  determined
 with reference to an index or formula,  the manner in which such
  amounts shall be determined;

      (11) if other than the principal  amount  thereof,  the portion of the
principal amount of Senior  Notes of the series  which  shall be
payable upon declaration of acceleration of the Maturity thereof
 pursuant to Section 502;

      (12) any deletions from,  modifications of or additions to the Events
of Default or  covenants of the Company  as provided  herein pertaining to
the Senior Notes of the series, and any change in the rights of the Trustee or
Holders of such series pursuant to Section 901 or 902;

     (13) any additions to the definitions currently set forth in this Indenture
with respect to such series;

    (14) whether the Senior Notes of the series shall be issued in
whole or in part in the form of a Global Security or Securities; the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for certificated Senior Notes of such series and
of like tenor of any authorized denomination and the circumstances under which
such exchange may occur, if other than in the manner provided for in Section
203; the Depositary for such Global Security or Securities; and the form of any
legend or legends to be borne by any such Global Security in addition to or in
lieu of the legend referred to in Section 203;

   (15) any restriction or condition on the transferability of such Senior
Notes; and

   (16) any other terms of the series.

         All Senior Notes of any one series shall be substantially identical
except as to the date or dates from which interest, if any, shall accrue and
denomination and except as may otherwise be provided in the terms of such Senior
Notes determined or established as provided above. All Senior Notes of any one
series need not be issued at the same time and, unless otherwise provided, a
series may be reopened for issuances of additional Senior Notes of such series.
                                       14




SECTION 302    EXECUTION, AUTHENTICATION, DELIVERY AND DATING

         The Senior Notes shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries.  The signature of any of these officers on the Senior
Notes may be manual or facsimile.

         Senior Notes bearing the manual or facsimile signatures of individuals
who were at the time relevant to the authorization thereof the proper officers
of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Senior Notes or did not hold such offices at the date of such
Senior Notes.

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Senior Notes of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Senior Notes, and the Trustee, in
accordance with the Company Order, shall authenticate and deliver such Senior
Notes. If all of the Senior Notes of any series are not to be issued at one time
and if the supplemental indenture establishing such series shall so permit, such
Company Order may set forth procedures acceptable to the Trustee for the
issuance of such Senior Notes and determining the terms of particular Senior
Notes of such series, such as interest rate, maturity date, date of issuance and
date from which interest shall accrue. In authenticating Senior Notes hereunder,
and accepting the additional responsibilities under this Indenture in relation
to such Senior Notes, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon:

      (1)      an Opinion of Counsel, to the effect that:

               (a)  the form and terms of such Senior Notes or the manner of
determining such terms have been established in conformity with the provisions
of this Indenture; and

               (b)  such Senior Notes,  when  authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute  valid and  legally
binding obligations of the Company, enforceable in accordance with their terms,
subject,  as  to  enforcement, to bankruptcy, insolvency, reorganization  and 
other laws of general applicability relating to or affecting the enforcement of
creditors'  rights and to general equity principles; and

     (2)  an Officers' Certificate stating, to the best knowledge of each signer
of such certificate,  that no event which is, or after notice or lapse
of time would  become,  an Event of Default with respect to any of the
Senior Notes shall have occurred and be continuing.

The Trustee shall not be required to authenticate such Senior Notes if the issue
of such Senior Notes pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Senior Notes and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
  

                                     15



         If all the Senior Notes of any series are not to be issued at one time,
it shall not be necessary to deliver an Opinion of Counsel and Officers'
Certificate at the time of issuance of each such Senior Note, but such opinion
and certificate shall be delivered at or before the time of issuance of the
first Senior Note of such series to be issued.

         Each Senior Note shall be dated the date of its authentication.

         No Senior Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Senior Note
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Senior Note shall be conclusive evidence, and the only evidence, that such
Senior Note has been duly authenticated and delivered hereunder and is entitled
to the benefits of this Indenture.

SECTION 303    REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE

         The Company shall cause to be kept at the office of the Security
Registrar designated pursuant to this Section 303 or Section 1002 a register
(referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Senior Notes and of transfers of Senior Notes. The Trustee is hereby
initially appointed as Security Registrar for the purpose of registering Senior
Notes and transfers of Senior Notes as herein provided.

         Subject to Section 203, upon surrender for registration of transfer of
any Senior Note of any series at the office or agency maintained for such
purpose for such series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Senior Notes of the same series, Stated Maturity
and original issue date, of any authorized denominations and of like tenor and
aggregate principal amount.

         Subject to Section 203, Senior Notes of any series may be exchanged, at
the option of the Holder, for Senior Notes of the same series, Stated Maturity
and original issue date, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Senior Notes to be exchanged
at any such office or agency.

         Whenever any Senior Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Senior Notes
that the Holder making the exchange is entitled to receive.

         All Senior Notes issued upon any registration of transfer or exchange
of Senior Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Senior
Notes surrendered upon such registration of transfer or exchange.
  

                                     16




         Every Senior Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

         No service charge shall be made for any registration of transfer or
exchange of Senior Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Senior Notes, other
than exchanges pursuant to Section 304, 907 or 1107 not involving any transfer.

         The Company shall not be required (i) to issue, to register the
transfer of or to exchange Senior Notes of any series during a period of 15 days
immediately preceding the date notice is given identifying the serial numbers of
the Senior Notes of that series called for redemption, or (ii) to issue, to
register the transfer of or to exchange any Senior Notes so selected for
redemption in whole or in part, except the unredeemed portion of any Senior Note
being redeemed in part.

         None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.

SECTION 304    MUTILATED, DESTROYED, LOST AND STOLEN SENIOR NOTES

         If any mutilated Senior Note is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Senior Note of the same series, Stated Maturity and original
issue date, and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

         If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Senior Note and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Senior Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Senior
Note, a new Senior Note of the same series, Stated Maturity and original issue
date, and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

         In case any such mutilated, destroyed, lost or stolen Senior Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Senior Note, pay such Senior Note.

         Upon the issuance of any new Senior Note under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                                       17



         Every new Senior Note of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Senior Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Senior Note shall be at any time enforceable by anyone, and any
such new Senior Note shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Senior Notes of that series
duly issued hereunder.

         The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Senior Notes.

SECTION 305    PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

         Unless otherwise provided as contemplated by Section 301 with respect
to any series of Senior Notes, interest on any Senior Note that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Senior Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

         Any interest on any Senior Note of any series that is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

         .........(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Senior Notes of such series (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Senior Note of
such series and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Senior Notes of such

                                       18



series at the address of such Holder as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Senior Notes of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following Clause (2).

         .........(2) The Company may make payment of any Defaulted Interest on
the Senior Notes of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Senior Notes may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the Trustee.

         Subject to the foregoing provisions of this Section, each Senior Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Senior Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Senior Note.

SECTION 306.......PERSONS DEEMED OWNERS

         Prior to due presentment of a Senior 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 such Senior Note is registered as the absolute owner of
such Senior Note for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 305) interest on such Senior Note and
for all other purposes whatsoever, whether or not such Senior Note be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

SECTION 307.......CANCELLATION

         All Senior Notes surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Senior Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Senior Notes so delivered shall be canceled by the
Trustee. No Senior Notes shall be authenticated in lieu of or in exchange for
any Senior Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Senior Notes held by the Trustee
shall be disposed of in accordance with a Company Order and the Trustee shall
promptly deliver a certificate of disposition to the Company.

                                       19



SECTION 308.......COMPUTATION OF INTEREST

         Except as otherwise specified as contemplated by Section 301 for Senior
Notes of any series, interest on the Senior Notes of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.


                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401.......SATISFACTION AND DISCHARGE OF INDENTURE

         This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Senior Notes herein expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

       (1)      either

               (A)  all Senior Notes  theretofore  authenticated  and  delivered
                    (other than (i) Senior Notes that have been destroyed,  lost
                    or stolen and that have been  replaced  as  provided  for in
                    Section 304 and (ii) Senior  Notes for whose  payment  money
                    has  theretofore  been  deposited in trust or segregated and
                    held in trust by the  Company and  thereafter  repaid to the
                    Company  or  discharged  from such  trust,  as  provided  in
                    Section  1003)  have  been  delivered  to  the  Trustee  for
                    cancellation; or

               (B)  all such  Senior  Notes  not  theretofore  delivered  to the
                    Trustee for  cancellation  have become due and  payable,  or
                    have been called for redemption,

         and the Company, in the case of (B) above, has deposited or caused to
be deposited with the Trustee as funds in trust for the purpose described above
an amount sufficient to pay and discharge the entire indebtedness on such Senior
Notes not theretofore delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest to the date of the Stated Maturity or
Redemption Date, as the case may be, or if later, the date of payment;

     (2)  the  Company  has paid or  caused to be paid all  other  sums  payable
          hereunder by the Company; and

     (3)  the Company has delivered to the Trustee an Officers'  Certificate and
          an Opinion of Counsel,  each  stating  that all  conditions  precedent
          herein provided for relating to the satisfaction and discharge of this
          Indenture have been complied with.

         In the event there are Senior Notes of two or more series hereunder,
the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Senior Notes of all series as to which it is Trustee and if the other
conditions thereto are met. In the event there are two or more Trustees
hereunder, then the effectiveness of any such instrument shall be conditioned
upon receipt of such instruments from all Trustees hereunder.
  

                                     20




         Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

SECTION 402.......APPLICATION OF TRUST

         Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Senior Notes, and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company or an Affiliate acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.


                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501.......EVENTS OF DEFAULT

         "Event of Default", wherever used herein with respect to Senior Notes
of any series, 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):

          (1)  default in the  payment of any  interest  upon any Senior Note of
               that  series  when it  becomes  due and  payable  on an  Interest
               Payment  Date  other than at  Maturity  and  continuance  of such
               default for a period of ten (10) days; or

          (2)  default in the payment of the principal of, (or premium,  if any)
               or interest on any Senior Note of that series at its Maturity; or

          (3)  default in the deposit of any sinking fund  payment,  when and as
               due by the terms of a Senior Note of that series and  continuance
               of such default for a period of 3 Business Days; or

          (4)  default in the  performance or breach of any covenant or warranty
               of the  Company  in this  Indenture  (other  than a  covenant  or
               warranty  a  default  in whose  performance  or whose  breach  is
               elsewhere  in this Section  specifically  dealt with or which has
               expressly been included in this Indenture  solely for the benefit
               of one or more series of Senior  Notes  other than that  series),




                                       21


               and continuance of such default or breach for a period of 90 days
               after there has been given,  by registered or certified  mail, to
               the Company by the Trustee,  or to the Company and the Trustee by
               the  Holders  of  at  least  25%  in  principal   amount  of  the
               Outstanding  Senior  Notes  of  that  series,  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

          (5)  the entry by a court having jurisdiction in the premises of (A) a
               decree  or order for  relief  in  respect  of the  Company  in an
               involuntary  case or proceeding  under any applicable  federal or
               state bankruptcy, insolvency, reorganization or other similar law
               or (B) a decree or order  adjudging  the  Company a  bankrupt  or
               insolvent,  or approving  as properly  filed a petition by one or
               more  Persons  other  than the  Company  seeking  reorganization,
               arrangement,  adjustment or  composition  of or in respect of the
               Company under any applicable  federal or state law, or appointing
               a   custodian,   receiver,    liquidator,    assignee,   trustee,
               sequestrator or other similar official for the Company or for any
               substantial  part of its property,  or ordering the winding up or
               liquidation  of its  affairs,  and the  continuance  of any  such
               decree or order  for  relief  or any such  other  decree or order
               unstayed and in effect for a period of 90 consecutive days; or

          (6)  the commencement by the Company of a case or proceeding under any
               applicable    federal    or   state    bankruptcy,    insolvency,
               reorganization  or  other  similar  law or of any  other  case or
               proceeding  to be  adjudicated  a bankrupt or  insolvent,  or the
               consent  by it to the entry of a decree  or order  for  relief in
               respect  of  the  Company  in a  case  or  proceeding  under  any
               applicable    federal    or   state    bankruptcy,    insolvency,
               reorganization or other similar law or to the commencement of any
               bankruptcy  or insolvency  case or proceeding  against it, or the
               filing  by  it  of  a  petition  or  answer  or  consent  seeking
               reorganization  or relief under any  applicable  federal or state
               law,  or the  consent by it to the filing of such  petition or to
               the appointment of or taking possession by a custodian, receiver,
               liquidator,  assignee, trustee,  sequestrator or similar official
               of the Company 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  corporate  action
               by the Company in furtherance of any such action; or

          (7)  any other Event of Default  provided with respect to Senior Notes
               of that series in the  supplemental  indenture  authorizing  such
               series.

SECTION 502.......ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

         If an Event of Default with respect to Senior Notes of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Senior Notes of that series may declare the principal amount (or
such portion of the principal amount as may be specified in the terms of that
series) of all of the Senior Notes of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
  

                                     22




         At any time after such a declaration of acceleration with respect to
Senior Notes of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of not less than a majority in principal amount of
the Outstanding Senior Notes of that series, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if

          (1)  the  Company  has  paid  or  deposited  with  the  Trustee  a sum
               sufficient to pay

             (A)  all overdue interest on all Senior Notes of that series,

             (B)  the principal of (and  premium,  if any) any Senior Notes of
                  that  series  which have become due  otherwise  than by such
                  declaration of acceleration and interest thereon at the rate
                  or rates prescribed therefor in such Senior Notes,

             (C)  to the  extent  that  payment  of such  interest  is lawful,
                  interest  upon  overdue   interest  at  the  rate  or  rates
                  prescribed therefor in such Senior Notes, and

             D)  all sums paid or advanced by the Trustee  hereunder  and the
                 reasonable   compensation,   expenses,   disbursements   and
                 advances of the  Trustee,  its agents and  counsel,  and any
                 other amounts due to the Trustee under Section 607; and

         (2) all Events of Default with respect to Senior Notes of that
series, other than the non-payment of the principal of Senior Notes of that
series which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

SECTION 503.  COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

         The Company covenants that if an Event of Default occurs under Section
501(1), (2) or (3) with respect to any Senior Notes the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such Senior
Notes, the whole amount then due and payable on such Senior Notes for principal
(and premium, if any) and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal (and
premium, if any) and on any overdue interest, at the rate or rates prescribed
therefor in such Senior Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due to the Trustee under Section
607.

         If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Senior Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Senior Notes,
wherever situated.

                                       23



         If an Event of Default with respect to Senior Notes of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Senior Notes of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 504.......TRUSTEE MAY FILE PROOFS OF CLAIM

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Senior
Notes or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Senior
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

       (1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in respect of the
Senior Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due to the Trustee under
Section 607) and of the Holders of Senior Notes allowed in such judicial
proceeding, and

       (2)  to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Senior Notes to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders of Senior Notes, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 607.

         Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Senior
Note any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Notes or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder of a Senior Note in
any such proceeding.

                                       24



SECTION 505.    TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
                SENIOR NOTES

         All rights of action and claims under this Indenture or the Senior
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Senior Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Senior Notes in respect of which such
judgment has been recovered.

SECTION 506    APPLICATION OF MONEY COLLECTED

         Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Senior Notes, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:

        First:  To the payment of all amounts due the Trustee under Section 
607; and

       Second:  To the  payment  of the  amounts  then  due  and  unpaid  for
principal  of (and  premium,  if any) and  interest on the Senior
Notes in respect of which or for the  benefit of which such money
has been collected,  ratably,  without  preference or priority of
any kind, according to the amounts due and payable on such Senior
Notes  for principal   (and  premium,   if  any)  and  interest,
respectively; and

         Third:  The balance, if any, to the Person or Persons entitled thereto.

SECTION 507    LIMITATION ON SUITS

         No Holder of any Senior Note of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

          (1)  such Holder has previously given written notice to the Trustee of
 a continuing Event of Default with respect to the Senior Notes of
 that series;

          (2)  the  Holders  of not less  than 25% in  principal  amount  of the
Outstanding  Senior  Notes of that series shall have made written
request to the  Trustee to  institute  proceedings  in respect of
such Event of Default in its own name as Trustee hereunder;

          (3)  such Holder or Holders  have  offered to the Trustee reasonable
indemnity  against  the costs,  expenses  and  liabilities  to be
incurred in compliance with such request;


                                       25



          (4)  the Trustee for 60 days after its receipt of such notice, request
 and  offer of indemnity   has  failed  to  institute  any  such
 proceeding; and

          (5)  no  direction  inconsistent  with such  written request has been
given to the Trustee  during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Senior Notes of
 that series;

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 Indenture 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 Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.

SECTION 508.   UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
               INTEREST

         Notwithstanding any other provision in this Indenture, the Holder of
any Senior Notes shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 305) interest on such Senior Note on the due dates expressed in such
Senior Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

SECTION 509.......RESTORATION OF RIGHTS AND REMEDIES

         If the Trustee or any Holder of a Senior Note has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Senior Notes shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.

SECTION 510.......RIGHTS AND REMEDIES CUMULATIVE

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Senior Notes in the last paragraph of
Section 304, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders of Senior Notes is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

                                       26



SECTION 511.......DELAY OR OMISSION NOT WAIVER

         No delay or omission of the Trustee or of any Holder of any Senior Note
to exercise any right or remedy upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders of Senior Notes may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders
of Senior Notes.

SECTION 512.......CONTROL BY HOLDERS OF SENIOR NOTES

         The Holders of not less than a majority in principal amount of the
Outstanding Senior Notes of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Senior Notes of such series, provided that

          (1)  such  direction  shall not be in conflict with any rule of law or
with this  Indenture,  and  could  not  involve  the  Trustee  in
personal  liability in circumstances  where reasonable  indemnity
would not be adequate, and

          (2)  the  Trustee  may take any  other  action  deemed  proper by the
Trustee which is not inconsistent with such direction.

SECTION 513.......WAIVER OF PAST DEFAULTS

         The Holders of not less than a majority in principal amount of the
Outstanding Senior Notes of any series may, on behalf of the Holders of all the
Senior Notes of such series, waive any past default hereunder with respect to
such series and its consequences, except a default

          (1)  in the  payment  of the principal  of (or  premium, if  any) or
interest on any Senior Note of such series, or

          (2)  in respect of a covenant or provision hereof which under Article
Nine  cannot be  modified  or amended  without the consent of the
Holder of each Outstanding Senior Note of such series affected.

         Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 514.......UNDERTAKING FOR COSTS

         All parties to this Indenture agree, and each Holder of any Senior Note
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
  

                                     27



suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Senior Notes of any series, or to any suit instituted
by any Holder of any Senior Note for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Senior Note on or after the
Stated Maturity or Maturities expressed in such Senior Note (or, in the case of
redemption, on or after the Redemption Date).

SECTION 515.......WAIVER OF STAY OR EXTENSION LAWS

         The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.


                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601.......CERTAIN DUTIES AND RESPONSIBILITIES

          (a)   Except during the continuance of an Event of Default with
respect to Senior Notes of any series,

          (1)  the Trustee  undertakes to perform,  with respect to Senior Notes
               of  such  series,  such  duties  and  only  such  duties  as  are
               specifically  set  forth  in  this  Indenture,   and  no  implied
               covenants  or  obligations  shall  be read  into  this  Indenture
               against the Trustee; and

          (2) in the absence of bad faith on its part, the Trustee may,
with respect to Senior Notes of such series, conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture.

         (b)......In case an Event of Default with respect to Senior Notes of
any series has occurred and is continuing, the Trustee shall exercise, with
  

                                     28



respect to Senior Notes of such series, such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.

         (c)......No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that

               (1)  this  Subsection  shall not be construed to limit the effect
of Subsection (a) of this Section;



               (2)  the  Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the
pertinent facts;

         .........(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Senior Notes of any series relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to the
Senior Notes of such series; and

         .........(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

         (d)......Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

SECTION 602.......NOTICE OF DEFAULTS

         Within 90 days after the occurrence of any default hereunder with
respect to the Senior Notes of any series, the Trustee shall transmit by mail to
all Holders of Senior Notes of such series entitled to receive reports pursuant
to Section 313(c) of the Trust Indenture Act, notice of all defaults hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Senior Note of such series
or in the payment of any sinking fund installment with respect to Senior Notes
of such series, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a trust committee
of directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Senior Notes
of such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Senior Notes of such
series, no such notice to Holders shall be given until at least 45 days after
the occurrence thereof. 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 with respect to Senior Notes of such series.
  

                                     29




SECTION 603.......CERTAIN RIGHTS OF TRUSTEE

         Subject to the provisions of Section 601:

         .........(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness 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) any request or direction of the Company mentioned herein shall
be sufficiently  evidenced by a Company Request or Company Order and a
resolution of the Board of Directors may be sufficiently  evidenced by
a Board Resolution;

         (c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;

        (d)  the Trustee may consult with counsel of its choice and the 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;

      (e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Senior Notes of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or
direction;

      (f) the 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, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney;

      (g)  the Trustee  may  execute  any of the trusts or powers hereunder or
perform any duties  hereunder  either directly or by or through agents
or attorneys  and  the  Trustee  shall  not be  responsible  for  any
misconduct  or  negligence  on the  part  of  any  agent  or  attorney
appointed with due care by it hereunder; and
  

                                     30




         .........(h) the Trustee shall not be charged with knowledge of any
Event of Default with respect to the Senior Notes of any series for which it is
acting as Trustee unless either (1) a Responsible Officer of the Trustee shall
have actual knowledge of the Event of Default or (2) written notice of such
Event of Default shall have been given to the Trustee by the Company, any other
obligor on such Senior Notes or by any Holder of such Senior Notes.

SECTION 604.  NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SENIOR NOTES

         The recitals contained herein and in the Senior Notes (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Senior Notes. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Senior Notes or the proceeds thereof.

SECTION 605.......MAY HOLD SENIOR NOTES

         The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Senior Notes and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

SECTION 606.......MONEY HELD IN TRUST

         Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.

SECTION 607.......COMPENSATION AND REIMBURSEMENT

         The Company agrees

         .........(1)      to pay to the Trustee from time to time reasonable 
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust);

         .........(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, willful
misconduct or bad faith; and
                                       31




         .........(3) to indemnify the Trustee and each of its officers,
directors, agents and employees for, and to hold it harmless against, any loss,
liability or expense incurred without negligence, willful misconduct or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.

         As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Senior Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of, premium, if any, or interest, if any,
on particular Senior Notes.

         The provisions of this Section 607 shall survive the termination of
this Indenture or the resignation or removal of the Trustee.

SECTION 608.......DISQUALIFICATION; CONFLICTING INTERESTS

         If the Trustee has or shall acquire any conflicting interest, within
the meaning of the Trust Indenture Act, it shall, within 90 days after
ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Indenture.

SECTION 609.......CORPORATE TRUSTEE REQUIRED; ELIGIBILITY

         There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and qualified and eligible under this Article and otherwise
permitted by the Trust Indenture Act to act as Trustee under an Indenture
qualified under the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital surplus as set forth in its most recent report of condition so
published. If at any time the Trustee 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.

SECTION 610.......RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

         (a)......No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
                                       32




         (b)......The Trustee may resign at any time with respect to the Senior
Notes of one or more series by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 611
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Senior Notes of such series.

         (c)......The Trustee may be removed at any time with respect to the
Senior Notes of any series by Act of the Holders of a majority in principal
amount of the Outstanding Senior Notes of such series delivered to the Trustee
and to the Company.

         (d)......If at any time:

                 (1)  the  Trustee  shall fail to comply  with  Section  608
after written request  therefor by the Company or by any Holder of a Senior
Note who has been a Holder of a Senior Note for at least six months, or 

                (2)  the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written  request  therefor by the Company or by
any such Holder, or

               (3)  the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a  receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the  Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Senior Notes, or (ii) subject to Section 514, any
Holder of a Senior Note who has been a bona fide Holder of a Senior Note for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Senior Notes and the appointment of a successor Trustee or
Trustees.

         (e)......If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Senior Notes of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Senior Notes of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Senior Notes of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Senior Notes of any particular series) and shall comply with
the applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Senior Notes of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Senior Notes of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 611, become the successor Trustee with respect to the Senior Notes of



                                       33



such series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Senior Notes of any series
shall have been so appointed by the Company or the Holders of Senior Notes and
accepted appointment in the manner required by Section 611, any Holder of a
Senior Note who has been a bona fide Holder of a Senior Note of such series 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
Trustee with respect to the Senior Notes of such series.

         (f)......The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Senior Notes of any series and each
appointment of a successor Trustee with respect to the Senior Notes of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of such series of Senior Notes as their names and
addresses appear in the Security Register.

SECTION 611.......ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

         (a)......In case of the appointment hereunder of a successor Trustee
with respect to all Senior Notes, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.

         (b)......In case of the appointment hereunder of a successor Trustee
with respect to the Senior Notes of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Senior Notes of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Senior Notes of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Senior Notes, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Senior Notes of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
  

                                     34



shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Senior Notes of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Senior Notes of that or those series to which the
appointment of such successor Trustee relates.

         (c)......Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.

         (d)......No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

SECTION 612.      MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation 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. In case any Senior Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Senior Notes so authenticated with the same
effect as if such successor Trustee had itself authenticated such Senior Notes.

SECTION 613.......PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

         If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Senior Notes), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (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
Company (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




                                       35


constituting the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the Company
(or any such obligor) arising from the making, drawing, negotiating or incurring
of the draft, bill of exchange, acceptance or obligation.

SECTION 614.......APPOINTMENT OF AUTHENTICATING AGENT

         At any time when any of the Senior Notes remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Senior Notes that shall be authorized to act on behalf of the Trustee to
authenticate Senior Notes of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 304, and Senior
Notes so authenticated shall be entitled to the benefits of this Indenture and
shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Senior Notes by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

         Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

         An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Senior
Notes, if any, of the series with respect to which such Authenticating Agent

                                       36



will serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

         The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

         The provisions of Sections 306, 604 and 605 shall be applicable to each
Authenticating Agent.

         If an appointment with respect to one or more series is made pursuant
to this Section, the Senior Notes of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:

         This is one of the Senior Notes of the series designated therein
referred to in the within-mentioned Indenture.

     
                                              As Trustee

               By:
                                    As Authenticating Agent

               By:
                                       Authorized Signatory


                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701.       COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS

         The Company will furnish or cause to be furnished to the Trustee

         .........(a) semi-annually, not later than June 1 and December 1, in
each year, a list, in such form as the Trustee may reasonably require,
containing all the information in the possession or control of the Company, or
any of its Paying Agents other than the Trustee, as to the names and addresses
of the Holders of Senior Notes as of the preceding May 15 or November 15, as the
case may be, and

                                       37




         .........(b)      at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of the most recent Regular Record Date;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

SECTION 702.           PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS

         (a)......The Trustee shall comply with the obligations imposed on it
pursuant to Section 312 of the Trust Indenture Act.

         (b)......Every Holder of Senior Notes, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders of Senior Notes in accordance with Section 312(b) of the Trust Indenture
Act, regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.

SECTION 703.......REPORTS BY TRUSTEE

         (a)......Within 60 days after May 15 of each year commencing with the
first May 15 after the first issuance of Senior Notes pursuant to this
Indenture, if required by Section 313(a) of the Trust Indenture Act, the 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 immediately preceding May 15 and the date of this Indenture.

         (b)......The Trustee shall transmit 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 704.......REPORTS BY COMPANY

         The Company, pursuant to Section 314(a) of the Trust Indenture Act,
shall:

         .........(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall file





                                       38


with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;

         .........(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations;

         .........(3) transmit, within 30 days after the filing thereof with the
Trustee, to the Holders of Senior Notes, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the Company pursuant
to paragraphs (1) and (2) of this Section 704 as may be required by rules and
regulations prescribed from time to time by the Commission; and

         ........(4)  notify the Trustee  when and as the Senior  Notes of any
               series  become  admitted  to trading on any  national securities
               exchange.


                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801.               COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS

         The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless

         .........(1) in case the Company shall consolidate with or merge into
another corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of (and premium,
if any) and interest on all the Senior Notes and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed;

          .........(2) immediately after giving effect to such transactions, no
Event of Default,  and no event  which,  after notice or lapse of
time or  both,  would  become  an Event of  Default,  shall  have
happened and be continuing; and
                                       39




          .........(3)  the Company has  delivered  to the Trustee an  Officers'
Certificate  and an Opinion of Counsel,  each  stating  that such
consolidation,  merger,  conveyance,  transfer or lease  complies
with  this Article and that  all  conditions  precedent  herein
provided for relating to such  transaction  have been  complied
with.

SECTION 802.......SUCCESSOR CORPORATION SUBSTITUTED

         Upon any consolidation by the Company with or merger by the Company
into any corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Senior Notes.


                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901.......SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS

         Without the consent of any Holders of Senior Notes, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

         .........(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the covenants of the
Company herein and in the Senior Notes; or

         .........(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Senior Notes (and if such covenants are to
be for the benefit of less than all series of Senior Notes, stating that such
covenants are expressly being included solely for the benefit of such series) or
to surrender any right or power herein conferred upon the Company; or

         .........(3) to add any additional Events of Default; or

         .........(4) to add to or change any of the provisions of this
Indenture, to change or eliminate any restrictions on the payment of principal
(or premium, if any) on Senior Notes or to permit the issuance of Senior Notes
in uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Senior Notes of any series in any material respect;
or

                                       40




         .........(5)  to change or eliminate any of the provisions of this
Indenture with respect to any series of Senior Notes theretofore unissued; or

         .........(6)  to secure the Senior Notes; or

         .........(7)  to establish the form or terms of Senior Notes of any
series as permitted by Sections 201 and 301; or

         .........(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Senior Notes of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
611(b); or

         .........(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make provisions with respect to matters or questions arising under this
indenture, provided such action shall not adversely affect the interests of the
Holders of Senior Notes of any series in any material respect; or

         .........(10) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act or under any similar federal
statute hereafter enacted, and to add to this Indenture such other provisions as
may be expressly required by the Trust Indenture Act.

SECTION 902.......SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS

         With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Senior Notes of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Senior Notes of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Senior Note affected thereby,

         .........(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Senior Note, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or change the method of calculating the rate of
interest thereon, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or

         .........(2) reduce the percentage in principal amount of the
Outstanding Senior Notes of any series, the consent of whose Holders is required
  

                                     41




for any such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or

         .........(3) modify any of the provisions of this Section 902, Section
513 or Section 1006, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Senior Note affected thereby,
provided, however, that this clause shall not be deemed to require the consent
of any Holder of a Senior Note with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1006, or the
deletion of this proviso, in accordance with the requirements of Sections 611(b)
and 901(8).

SECTION 903.               GENERAL PROVISIONS REGARDING SUPPLEMENTAL INDENTURE

         (a)......A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Senior Notes, or
which modifies the rights of the Holders of Senior Notes of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Senior Notes of any other series.

         (b)......It shall not be necessary for any Act of Holders of Senior
Notes under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act or action shall
approve the substance thereof.

SECTION 904.......EXECUTION OF SUPPLEMENTAL INDENTURES

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.

SECTION 905.......EFFECT OF SUPPLEMENTAL INDENTURES

         Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Senior Notes theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

SECTION 906.......CONFORMITY WITH TRUST INDENTURE ACT

         Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

                                       42




SECTION 907.......REFERENCE IN SENIOR NOTES TO SUPPLEMENTAL INDENTURES

         Senior Notes of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Senior Notes of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Senior Notes of such series.


                                   ARTICLE TEN

                                    COVENANTS

SECTION 1001......PAYMENT OF PRINCIPAL AND INTEREST

         The Company covenants and agrees for the benefit of each series of
Senior Notes that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Senior Notes of that series in accordance with the
terms of the Senior Notes and this Indenture.

SECTION 1002......MAINTENANCE OF OFFICE OR AGENCY

         The Company or its Affiliate will maintain an office or agency where
Senior Notes of each series may be presented or surrendered for payment, where
Senior Notes of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Senior Notes of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency in respect of any series of Senior
Notes or shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Senior Notes of that series may be made and
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive
such respective presentations, surrenders, notices and demands.

         The Company may also from time to time designate one or more other
offices or agencies where the Senior Notes of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.


                                       43



SECTION 1003......MONEY FOR SENIOR NOTES PAYMENTS TO BE HELD IN TRUST

         If the Company or one of its Affiliates shall at any time act as its
own Paying Agent with respect to any series of Senior Notes, it will, on or
before each due date of the principal of (and premium, if any) or interest on
any of the Senior Notes of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.

         Whenever the Company shall have one or more Paying Agents for any
series of Senior Notes, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Senior Notes of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.

         The Company will cause each Paying Agent for any series of Senior Notes
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:

          (1) hold all sums held by it for the payment of the principal
              of (and  premium,  if any) or  interest  on Senior  Notes of that
              series in trust for the benefit of the Persons  entitled  thereto
              until  such  sums  shall  be paid to such  Persons  or  otherwise
              disposed of as herein provided;

          (2) give the Trustee notice of any default by the Company (or
              any other  obligor  upon the Senior  Notes of that series) in the
              making of any payment of  principal of (and  premium,  if any) or
              interest on the Senior Notes of that series; and

         (3)  at any time during the  continuance  of any such default,
              upon the written  request of the  Trustee,  forthwith  pay to the
              Trustee all sums so held in trust by such Paying Agent.

         The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Senior Note of any series and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such Senior
Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper of general



                                       44


circulation in New York City notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

SECTION 1004......CORPORATE EXISTENCE

         Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) and franchises of the Company;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company, and that the loss thereof is not disadvantageous in any material
respect to the Holders.

SECTION 1005......STATEMENT AS TO COMPLIANCE

         (a)......The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, a written statement, which need not comply
with Section 102, signed by the principal executive officer, the principal
financial officer or the principal accounting officer of the Company, as to his
or her knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this Section 1005, such compliance shall
be determined without regard to any period of grace or requirement of notice
under this Indenture.

         (b)......The Company shall deliver to the Trustee, within five days
after the occurrence thereof, written notice of any event which after notice or
lapse of time or both would become an Event of Default pursuant to Section 501.

SECTION 1006......WAIVER OF CERTAIN COVENANTS

         The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1004 with respect to the
Senior Notes of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Senior Notes of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.


                                 ARTICLE ELEVEN

                           REDEMPTION OF SENIOR NOTES

SECTION 1101......APPLICABILITY OF ARTICLE
  

                                     45




         Senior Notes of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Senior Notes of any
series) in accordance with this Article.

SECTION 1102......ELECTION TO REDEEM; NOTICE TO TRUSTEE

         The election of the Company to redeem any Senior Notes shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of all of the Senior Notes of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date. In case of any redemption at the election of
the Company of less than all the Senior Notes of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of Senior Notes of
such series to be redeemed. In the case of any redemption of Senior Notes (i)
prior to the expiration of any restriction on such redemption provided in the
terms of such Senior Notes or elsewhere in this Indenture, or (ii) pursuant to
an election of the Company which is subject to a condition specified in the
terms of such Senior Notes, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction or condition.

SECTION 1103......SELECTION BY TRUSTEE OF SENIOR NOTES TO BE REDEEMED

         If the Senior Notes are registered in the name of only one Holder, any
partial redemptions shall be pro rata. If the Senior Notes are held in
definitive form by more than one Holder and if less than all the Senior Notes of
any series are to be redeemed, the particular Senior Notes to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Senior Notes of such series not previously called for
redemption, by lot or other such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Senior Notes of that series or
any integral multiple thereof) of the principal amount of Senior Notes of such
series of a denomination larger than the minimum authorized denomination for
Senior Notes of that series.

         The Trustee shall promptly notify the Company in writing of the Senior
Notes selected for redemption and, in the case of any Senior Notes selected for
partial redemption, the principal amount thereof to be redeemed.

         For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Senior Notes shall
relate, in the case of any Senior Notes redeemed or to be redeemed only in part,
to the portion of the principal amount of such Senior Notes which has been or is
to be redeemed.

SECTION 1104......NOTICE OF REDEMPTION

                                       46




         Notice of redemption shall be given in the manner provided in Section
106 to the Holders of Senior Notes to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.

         All notices of redemption shall state:

         .........(1)  the Redemption Date,

         .........(2)  the Redemption Price,

         .........(3)  if less  than all the  Outstanding  Senior  Notes of any
eries are to be redeemed,  the identification  (and, in the case
of partial  redemption,  the principal amounts) of the particular
 Senior Notes to be redeemed,

        .........(4) that on the  Redemption  Date the Redemption Price will
 become due and payable  upon each such Senior Note to be redeemed
 and, if applicable, that interest thereon will cease to accrue on
 and after said date,

        .........(5)  the place or places  where such Senior Notes are to be
surrendered for payment of the Redemption Price, and

         .........(6) that the redemption is for a sinking fund, if such is the
case.

         Notice of redemption of Senior Notes to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

SECTION 1105......DEPOSIT OF REDEMPTION PRICE

         Except as otherwise provided in a supplemental indenture pursuant to
Section 301, prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or its Affiliate is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money sufficient to pay the Redemption Price of and accrued
interest, if any, on all the Senior Notes which are to be redeemed on that date.
                                       47



SECTION 1106......SENIOR NOTES PAYABLE ON REDEMPTION DATE

         Notice of redemption having been given as aforesaid, the Senior Notes
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified together with any accrued interest thereon,
and from and after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Senior Notes shall cease to bear
interest. Upon surrender of any such Senior Note for redemption in accordance
with such notice, such Senior Note shall be paid by the Company at the
Redemption Price, together with accrued interest, if any; provided, however,
that, except as otherwise provided in a supplemental indenture pursuant to
Section 301, installments of interest on Senior Notes whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Senior Notes, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 305.

         If any Senior Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Senior Note.

SECTION 1107......SENIOR NOTES REDEEMED IN PART

         .........Any Senior Note that is to be redeemed only in part shall be
surrendered at an office or agency of the Company therefor (with, if the Company
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Senior Note without service charge, a new Senior Note of the same series,
Stated Maturity and original issue date of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Senior Note so surrendered.


                                 ARTICLE TWELVE

                                  SINKING FUNDS

SECTION 1201......APPLICABILITY OF ARTICLE

         The provisions of this Article shall be applicable to any sinking fund
for the retirement of Senior Notes of a series except as otherwise specified as
contemplated by Section 301 for Senior Notes of such series.

         The minimum amount of any sinking fund payment provided for by the
terms of Senior Notes of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Senior Notes of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Senior Notes of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Senior Notes of any series as provided for by the
terms of Senior Notes of such series.

                                       48



SECTION 1202.         SATISFACTION OF SINKING FUND PAYMENTS WITH SENIOR NOTES

         The Company (1) may deliver Outstanding Senior Notes of a series (other
than any previously called for redemption), and (2) may apply as a credit Senior
Notes of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Senior Notes or through the application of
permitted optional sinking fund payments pursuant to the terms of such Senior
Notes, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Senior Notes of such series required to be made
pursuant to the terms of such Senior Notes as provided for by the terms of such
series; provided that such Senior Notes have not been previously so credited.
Such Senior Notes shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Senior Notes for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

SECTION 1203......REDEMPTION OF SENIOR NOTES FOR SINKING FUND

         Not less than 60 days prior to each sinking fund payment date for any
series of Senior Notes, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Senior Notes of that series
pursuant to Section 1202 and stating the basis for such credit and that such
Senior Notes have not previously been so credited and will also deliver to the
Trustee any Senior Notes to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Senior Notes to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Senior Notes shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.


                                ARTICLE THIRTEEN

                            MISCELLANEOUS PROVISIONS

SECTION 1301......NO RECOURSE AGAINST OTHERS

         An incorporator or any past, present or future director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Senior Notes or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Senior Note, each Holder shall waive and release all
such liability. Such waiver and release shall be part of the consideration for
the issue of the Senior Notes.
                                       49




SECTION 1302......ASSIGNMENT; BINDING EFFECT

         The Company shall have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly-owned
subsidiary of the Company, provided that, in the event of any such assignment,
the Company shall remain primarily liable for the performance of all such
obligations. This Indenture may also be assigned by the Company in connection
with a transaction described in Article Eight. This Indenture shall be binding
upon and inure to the benefit of the Company, the Trustee, the Holders, any
Security Registrar, Paying Agent, and Authenticating Agent and their respective
successors and assigns.

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.











                                       50

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                              MISSISSIPPI POWER COMPANY


                              By:
                                     Name:
                                     Title:
Attest:




Name:
Title:

                              BANKERS TRUST COMPANY
                              Trustee


                              By:
                                      Name:
                                     Title:
Attest:



Name:
Title:

EX-4

                                                       EXHIBIT 4.2(a)


                            MISSISSIPPI POWER COMPANY

                                       TO

                             BANKERS TRUST COMPANY,
                                    TRUSTEE.






                          FIRST SUPPLEMENTAL INDENTURE

                            DATED AS OF MAY 19, 1998






                                   $55,000,000


                  SERIES A 6.75% SENIOR INSURED QUARTERLY NOTES

                                DUE JUNE 30, 2038











                               TABLE OF CONTENTS1
                                                                                                          
                                                                                                               PAGE



ARTICLE 1.........................................................................................................1


SECTION 101. Establishment........................................................................................1


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


SECTION 103. Payment of Principal and Interest....................................................................2


SECTION 104. Denominations........................................................................................3


SECTION 105. Global Securities....................................................................................3


SECTION 106. Transfer.............................................................................................4


SECTION 107.  Redemption at the Company's Option..................................................................4


SECTION 108.  Redemption at the Holder's Option...................................................................4


ARTICLE 2.........................................................................................................7


SECTION 201.  Supplemental Indentures.............................................................................7


SECTION 202.  Events of Default and Remedies......................................................................7


SECTION 203.  Insurance Policy Payment Procedures.................................................................7


SECTION 204.  Application of Term "Outstanding" to Series A Notes.................................................8

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








                                                                                                          

SECTION 205.  Insurer as Third Party Beneficiary..................................................................8


SECTION 206.  Concerning the Special Insurance Provisions.........................................................8


ARTICLE 3.........................................................................................................9


SECTION 301.  Recitals by Company.................................................................................9


SECTION 302.  Ratification and Incorporation of Original Indenture................................................9


SECTION 303.  Executed in Counterparts............................................................................9







THIS FIRST SUPPLEMENTAL INDENTURE is made as of the 19th day of May, 1998, by
and between MISSISSIPPI POWER COMPANY, a Mississippi corporation, 2992 West
Beach, Gulfport, Mississippi 39501 (the "Company"), and BANKERS TRUST COMPANY, a
banking corporation duly organized and existing under the laws of the State of
New York, having its principal corporate trust office at Four Albany Street, New
York, New York 10006 (the "Trustee").

                              W I T N E S S E T H:

                  WHEREAS, the Company has heretofore entered into a Senior Note
Indenture, dated as of May 1, 1998 (the "Original Indenture"), with Bankers
Trust Company;

                  WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by this First Supplemental
Indenture, is herein called the "Indenture";

                 WHEREAS, under the Original Indenture, a new series of Senior
Notes may at any time be established by the Board of Directors of the Company in
accordance with he 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 Senior Notes;

                 WHEREAS, additional Senior 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 First 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 A Senior Notes

          SECTION 101. Establishment. There is hereby established a new series
of Senior Notes to be issued under the Indenture, to be designated as the
Company's Series A 6.75% Senior Insured Quarterly Notes due June 30, 2038 (the
"Series A Notes").





         There are to be authenticated and delivered $55,000,000 principal
amount of Series A Notes, and no further Series A Notes shall be authenticated
and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the
Original Indenture. The Series A Notes shall be issued in definitive fully
registered form.

         The Series A Notes shall be issued in the form of one Global Security
in substantially the form set out in Exhibit A hereto. The Depositary with
respect to the Series A Notes shall be The Depository Trust Company.

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

         Each Series A 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.

         "Insurance Trustee" means the United States Trust Company of New York,
New York, New York, or any successor thereto, as the Insurance Trustee under the
Policy.

         "Insurer" means Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance corporation.

         "Interest Payment Dates" means March 31, June 30, September 30, and
December 31 of each year.

         "Original Issue Date" means May 19, 1998.

         "Policy" means the financial guaranty insurance policy issued by the
Insurer with respect to payments due for principal of and interest on the Series
A Notes as provided in such policy.

         "Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day preceding such Interest
Payment Date.

         "Stated Maturity" means June 30, 2038.

         SECTION 103. Payment of Principal and Interest. The unpaid principal
amount of the Series A Notes shall bear interest at the rate of 6.75% per annum
until paid or duly provided for. Interest shall be paid quarterly in arrears on
each Interest Payment Date to the Person in whose name the Series A Notes are
registered on the Regular 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.

                                       2



Any such interest that is not so punctually paid or duly provided for will
forthwith cease to be payable to the Holders on such Regular Record Date and may
either be paid to the Person or Persons in whose name the Series A 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, notice whereof shall be
given to Holders of the Series A 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 A 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.

         Payments of interest on the Series A Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series A Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series A Notes is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable.

         Payment of the principal and interest due at the Stated Maturity or
earlier redemption of the Series A Notes shall be made upon surrender of the
Series A 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.

         SECTION  104.  Denominations.  The Series A Notes may be issued in the
denominations  of  $1,000,  or any integral multiple thereof.

         SECTION 105. Global Securities. The Series A 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 A Notes represented by
the Global Security will not be exchangeable for, and will not otherwise be
issuable as, Series A 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 A 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.
                                       3




         A Global Security shall be exchangeable for Series A 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 by the Company, 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 by the
Company, in each case within 90 days after the Company receives such notice or
becomes aware of such cessation, (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 A Notes. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series A Notes registered in such names as the Depositary shall
direct.

         SECTION 106. Transfer. No service charge will be made for any transfer
or exchange of Series A 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 A Notes during a period beginning at the opening of business fifteen
(15) days before the day of the mailing of a notice identifying the serial
numbers of the Series A Notes to be called for redemption, and ending at the
close of business on the day of the mailing, or (b) to transfer or exchange any
Series A Notes theretofore selected for redemption in whole or in part, except
the unredeemed portion of any Series A Note redeemed in part.

         SECTION 107. Redemption at the Company's Option. The Series A Notes
shall be subject to redemption at the option of the Company, in whole or in
part, without premium or penalty, at any time or from time to time on or after
June 1, 2003, at a Redemption Price equal to 100% of the principal amount to be
redeemed plus accrued but unpaid interest to the Redemption Date.

         In the event of redemption of the Series A Notes in part only, a new
Series A Note or Notes for the unredeemed portion will be issued in the name or
names of the Holders thereof upon the surrender thereof.

         The Series A Notes will not have a sinking fund.

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

         Any redemption of less than all of the Series A Notes shall, with
respect to the principal thereof, be divisible by $1,000.

         SECTION 108. Redemption at the Holder's Option. For purposes of this
Section 108, a "Beneficial Owner" means the Person who has the right to sell,
transfer or otherwise dispose of an interest in a Series A Note and the right to
receive the proceeds therefrom, as well as the interest and principal payable to
 

                                      4



the Holder thereof. In general, a determination of beneficial ownership in the
Series A Notes will be subject to the rules, regulations and procedures
governing the Depositary and institutions that have accounts with the Depositary
or a nominee thereof ("Participants"). Participants may hold interests in the
Series A Notes as Beneficial Owners for their own accounts, or as nominees for
other Persons.

         Unless the Series A Notes have been declared due and payable prior to
their maturity by reason of an Event of Default, the Representative (as
hereinafter defined) of a deceased Beneficial Owner has the right to request
redemption of all or part of his interest, expressed in integral multiples of
$1,000 principal amount, in the Series A Notes for payment prior to its
maturity, and the Company will redeem the same subject to the limitations that
the Company will not be obligated to redeem, during the period from the Original
Issue Date through and including June 1, 1999 (the "Initial Period"), and during
any twelve-month period which ends on and includes each June 1 thereafter (each
such twelve-month period being hereinafter referred to as a "Subsequent
Period"), (i) on behalf of a deceased Beneficial Owner any interest in the
Series A Notes which exceeds an aggregate principal amount of $25,000 or (ii)
interests in the Series A Notes in an aggregate principal amount exceeding
$1,100,000. A request for redemption may be presented to the Trustee by the
Representative of a deceased Beneficial Owner at any time and in any principal
amount in integral multiples of $1,000. If the Company, although not obligated
to do so, chooses to redeem interests of any deceased Beneficial Owner in the
Series A Notes in the Initial Period or any Subsequent Period in excess of the
$25,000 limitation, such redemption, to the extent that it exceeds the $25,000
limitation for any deceased Beneficial Owner, shall not be included in the
computation of the $1,100,000 limitation for such Initial Period or such
Subsequent Period, as the case may be, or for any succeeding Subsequent Period.

         Subject to the $25,000 and $1,100,000 limitations, the Company will,
upon the death of any Beneficial Owner, redeem the interest of such Beneficial
Owner in the Series A Notes within 60 days following receipt by the Trustee of a
Redemption Request (as herein defined) from such Beneficial Owner's personal
representative or other Person authorized to represent the estate of the
Beneficial Owner or from a surviving joint tenant(s) or tenant(s) by the
entirety (each, a "Representative"). If Redemption Requests exceed the aggregate
principal amount of interests in Series A Notes required to be redeemed during
the Initial Period or during any Subsequent Period, then such excess Redemption
Requests will be applied to successive Subsequent Periods, regardless of the
number of Subsequent Periods required to redeem such interests.

         A request for redemption of an interest in the Series A Notes may be
made by delivering a request to the Depositary, in the case of a Participant
which is the Beneficial Owner of such interest, or to the Participant through
whom the deceased Beneficial Owner owned such interest, in form satisfactory to
the Participant, together with evidence of the death of the Beneficial Owner,
evidence of the authority of the Representative satisfactory to the Participant
and Trustee and such waivers, notices or certificates as may be required under
applicable state or federal law. A Representative of a deceased Beneficial Owner
may make the request for redemption and shall submit such other evidence of the
right to such redemption as the Participant or Trustee shall require. The
request shall specify the principal amount of the interest in the Series A Notes

                                       5



to be redeemed. A request for redemption in the form satisfactory to the
Participant and accompanied by the documents relevant to the request as above
provided, together with a certification by the Participant that it holds the
interest on behalf of the deceased Beneficial Owner with respect to whom the
request for redemption is being made (a "Redemption Request"), shall be provided
to the Depositary by a Participant and the Depositary will forward the request
to the Trustee. Redemption Requests shall be in form satisfactory to the
Trustee.

         The price to be paid by the Company for interests in the Series A Notes
to be redeemed pursuant to a Redemption Request from a deceased Beneficial
Owner's Representative is 100% of the principal amount thereof plus accrued but
unpaid interest to the date of payment. Subject to arrangements with the
Depositary, payment for interests in the Series A Notes which are to be redeemed
shall be made to the Depositary upon presentation of Series A Notes to the
Trustee for redemption in the aggregate principal amount specified in the
Redemption Requests submitted to the Trustee by the Depositary which are to be
fulfilled in connection with such payment. Any acquisition of Series A Notes by
the Company other than by redemption at the option of any Representative of a
deceased Beneficial Owner pursuant to this Section 108 shall not be included in
the computation of either the $25,000 or the $1,100,000 limitation for the
Initial Period or for any Subsequent Period.

         For purposes of this Section 108, an interest in a Series A Note held
in tenancy by the entirety, joint tenancy or by tenants in common will be deemed
to be held by a single Beneficial Owner and the death of a tenant by the
entirety, joint tenant or tenant in common will be deemed the death of a
Beneficial Owner. The death of a Person, who, during his lifetime, was entitled
to substantially all of the rights of a Beneficial Owner of an interest in the
Series A Notes will be deemed the death of the Beneficial Owner, regardless of
the recordation of such interest on the records of the Participant, if such
rights can be established to the satisfaction of the Participant and the
Trustee. Such interests shall be deemed to exist in typical cases of nominee
ownership, ownership under the Uniform Gifts to Minors Act or the Uniform
Transfers to Minors Act, community property or other similar joint ownership
arrangements, including individual retirement accounts or Keogh [H.R. 10] plans
maintained solely by or for the decedent or by or for the decedent and any
spouse, and trust and certain other arrangements where one Person has
substantially all of the rights of a Beneficial Owner during such Person's
lifetime.

         In the case of any Redemption Request which is presented pursuant to
this Section 108 and which has not been fulfilled at the time the Company gives
notice of its election to redeem Series A Notes pursuant to Section 107 hereof,
such interest or portion thereof shall not be subject to redemption pursuant to
such Section 107, but shall remain subject to redemption pursuant to this
Section 108.

         Subject to the provisions of the immediately preceding sentence, any
Redemption Request may be withdrawn by the Person(s) presenting the same upon
delivery of a written request for such withdrawal given by the Depositary to the
Trustee prior to payment of such Redemption Request.



                                       6


                                    ARTICLE 2

                          Special Insurance Provisions

        SECTION 201. Supplemental Indentures. The consent of the Insurer shall
be required with respect to any indenture or indentures supplemental to the
Original Indenture requiring the consent of the Holders of the Series A Notes
pursuant to Section 902 of the Original Indenture.

        SECTION 202. Events of Default and Remedies. If an Event of Default with
respect to the Series A Notes occurs and is continuing, the Insurer shall be
entitled to control and direct the enforcement of all rights and remedies
granted to the Holders of the Series A Notes or the Trustee for the benefit of
the Holders of the Series A Notes under the Indenture, including, without
limitation, (i) the right to accelerate the principal of the Series A Notes as
provided in Section 502 of the Original Indenture, and (ii) the right to annul
any such declaration of acceleration, and the Insurer shall also be entitled to
approve any waiver of an Event of Default with respect to the Series A Notes.

        SECTION 203. Insurance Policy Payment Procedures. (a) The Insurer will
make payments of principal or interest due on the Series A Notes in accordance
with the Policy on or before the first (1st) Business Day next following the
date on which the Insurer shall have received notice of Nonpayment (as defined
in the Policy) from the Trustee.

        (b) In the event of Nonpayment and notification thereof to the Insurer,
the Security Registrar shall make available to the Insurer and, at the Insurer's
direction, to the Insurance Trustee, the books kept by the Security Registrar
for the registration and for the registration of transfer of Series A Notes as
provided in the Indenture.

        (c) The Trustee shall, at the time it provides notice to the Insurer
pursuant to (a) above, notify Holders of Series A Notes entitled to receive the
payment of principal or interest thereon from the Insurer (i) as to the fact of
such entitlement, (ii) that the Insurer will remit to them all or a part of the
interest payments next coming due upon proof of Holder entitlement to interest
payments and delivery to the Insurance Trustee, in form satisfactory to the
Insurance Trustee, of an appropriate assignment of the Holder's right to
payment, (iii) that should they be entitled to receive full payment of principal
from the Insurer, they must surrender their Series A Notes (along with an
appropriate instrument of assignment in form satisfactory to the Insurance
Trustee to permit ownership of such Series A Notes to be registered in the name
of the Insurer) for payment to the Insurance Trustee, and not the Trustee or any
Paying Agent, and (iv) that should they be entitled to receive partial payment
of principal from the Insurer, they must surrender their Series A Notes for
payment thereon first to the Trustee, who shall note on such Series A Notes the
portion of the principal paid by the Trustee, and then, along with an
appropriate instrument of assignment in form satisfactory to the Insurance
Trustee, to the Insurance Trustee, which will then pay the unpaid portion of
principal.

        (d) In the event that the Trustee has notice that any payment of
principal of or interest on a Series A Note which has become Due for Payment (as



                                       7



defined in the Policy) and which is made to a Holder by or on behalf of the
Company has been deemed a preferential transfer and theretofore recovered from
its Holder owner pursuant to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with a final, nonappealable order of a court having
competent jurisdiction, the Trustee shall, at the time the Insurer is notified
pursuant to (a) above, notify all Holders of the Series A Notes that in the
event that any Holder's payment is so recovered, such Holder will be entitled to
payment from the Insurer to the extent of such recovery if sufficient funds are
not otherwise available, and the Trustee shall furnish to the Insurer its
records evidencing the payments of principal of and interest on the Series A
Notes which have been made by the Trustee and subsequently recovered from
Holders and the dates on which such payments were made.

        (e) In addition to those rights granted the Insurer under the Indenture,
the Insurer shall, to the extent it makes payment of principal of or interest on
Series A Notes, become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Policy, and to evidence such
subrogation (i) in the case of subrogation as to claims for past due interest,
the Trustee shall note the Insurer's rights as subrogee on the registration
books of the Company maintained by the Trustee upon receipt from the Insurer of
proof of the payment of interest thereon to the Holders of the Series A Notes,
and (ii) in the case of subrogation as to claims for past due principal, the
Trustee shall note the Insurer's rights as subrogee on the registration books of
the Company maintained by the Trustee upon surrender of the Series A Notes by
the Holders thereof together with proof of the payment of principal thereof.

        SECTION 204. Application of Term "Outstanding" to Series A Notes. In the
event that the principal and/or interest due on the Series A Notes shall be paid
by the Insurer pursuant to the Policy, the Series A Notes shall remain
Outstanding for all purposes of the Indenture, not be considered defeased or
otherwise satisfied and not be considered paid by the Company, and the
assignment and pledge of the Indenture and all covenants, agreements and other
obligations of the Company to the Holders of the Series A Notes shall continue
to exist and shall run to the benefit of the Insurer, and the Insurer shall be
subrogated to the rights of such Holders to the extent of each such payment.

        SECTION 205. Insurer as Third Party Beneficiary. To the extent that the
Indenture confers upon or gives or grants to the Insurer any right, remedy or
claim under or by reason of the Indenture, the Insurer is hereby explicitly
recognized as being a third-party beneficiary hereunder and may enforce any such
right, remedy or claim conferred, given or granted hereunder.

        SECTION 206. Concerning the Special Insurance Provisions. The provisions
of this Article 2 shall apply notwithstanding anything in the Indenture to the
contrary, but only so long as the Policy shall be in full force and effect and
the Insurer is not in default thereunder.


                                       8



                                    ARTICLE 3

                            Miscellaneous Provisions

         SECTION 301. Recitals by Company The recitals in this First
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 A Notes and of this First Supplemental Indenture
as fully and with like effect as if set forth herein in full.

         SECTION 302. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this First Supplemental Indenture
shall be read, taken and construed as one and the same instrument.

         SECTION 303. Executed in Counterparts This First 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:                                     MISSISSIPPI POWER COMPANY


By:                                         By:





ATTEST:                                     BANKERS TRUST COMPANY, as Trustee


By:                                         By:







                                    EXHIBIT A

                              FORM OF SERIES A NOTE







NO. 1                                                  CUSIP NO. 605417BJ2


                            MISSISSIPPI POWER COMPANY
                  SERIES A 6.75% SENIOR INSURED QUARTERLY NOTE
                                DUE JUNE 30, 2038



  Principal Amount:            $_____________

  Regular Record Date:         15th calendar day prior to Interest Payment Date

  Original Issue Date:         May 19, 1998

  Stated Maturity:             June 30, 2038

  Interest Payment Dates:      March 31, June 30, September 30 and December 31

  Interest Rate:               6.75% per annum

  Authorized Denomination:     $1,000

  Initial Redemption Date:     June 1, 2003


         Mississippi Power Company, a Mississippi 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, quarterly in arrears on
each Interest Payment Date as specified above, 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 rate per annum shown above
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 at the close of business on the
Regular 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
Regular Record Date and may either be paid to the Person in whose name this Note
is registered at the close of business 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 will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day, except that, if such
Business Day is in the next succeeding calendar year, payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee is closed for business.

         Payment of the principal of and interest due at the Stated Maturity or
earlier redemption of the Series A Notes shall be made upon surrender of the
Series A 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.

         Financial Guaranty Insurance Policy No. FG0356BE (the "Policy") with
respect to payments due for principal of and interest on this Note has been
issued by Ambac Assurance Corporation ("Ambac Assurance"). The Policy has been
delivered to the United States Trust Company of New York, New York, New York, as
the Insurance Trustee under said Policy and will be held by such Insurance
Trustee or any successor insurance trustee. The Policy is on file and available
for inspection at the principal office of the Insurance Trustee and a copy
thereof may be secured from Ambac Assurance or the Insurance Trustee. All
payments required to be made under the Policy shall be made in accordance with
the provisions thereof. The owner of this Note acknowledges and consents to the
subrogation rights of Ambac Assurance as more fully set forth in the Policy.

         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.


                                       2



         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.


                                       3



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

Dated:


                                                     MISSISSIPPI POWER COMPANY



                                                     By:
                                      Name:
                                     Title:

Attest:



Title:



                {Seal of MISSISSIPPI POWER COMPANY appears here}








                          CERTIFICATE OF AUTHENTICATION

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

                                   BANKERS TRUST COMPANY,
                                   as Trustee


                                   By:






                             (Reverse Side of Note)


         This Note is one of a duly authorized issue of Senior Notes of the
Company (the "Notes"), issued and issuable in one or more series under a Senior
Note Indenture, dated as of May 1, 1998, as supplemented (the "Indenture"),
between the Company and Bankers Trust Company, 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 A 6.75%
Senior Insured Quarterly Notes due June 30, 2038 (the "Series A Notes") in the
aggregate principal amount of up to $55,000,000. Capitalized terms used herein
for which no definition is provided herein shall have the meanings set forth in
the Indenture.

         The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note at any time on or after June 1, 2003 at
the option of the Company, without premium or penalty, in whole or in part, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest to the Redemption Date.

         In addition, at the option of any deceased Beneficial Owner's
Representative, interests in the Series A Notes are redeemable at 100% of their
principal amount, plus accrued interest, subject to certain limitations provided
in the Indenture.

         In the  event of redemption  of this  Note in part  only, a new Note
or  Notes of this series for the unredeemed  portion  hereof will be issued in
the name of the Holder  hereof upon the surrender  hereof.  The Notes
will not have a sinking fund.

         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.


                                       6



         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
         entireties                                     under Uniform Gifts to
 JT TEN- as joint tenants                               Minors Act
         with right of
         survivorship and                             ________________________
         not as tenants                                                 (State)
        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 Senior Notes referred to in the within-mentioned
Indenture.

                                   BANKERS TRUST COMPANY,
                                   as Trustee


                                   By:

EX-4

                                                        Exhibit 4.2(b)









                            MISSISSIPPI POWER COMPANY

                                       TO

                             BANKERS TRUST COMPANY,
                                    TRUSTEE.






                          SECOND SUPPLEMENTAL INDENTURE

                            DATED AS OF MAY 20, 1998






                                   $35,000,000


                           SERIES B 6.05% SENIOR NOTES

                                 DUE MAY 1, 2003















                               TABLE OF CONTENTS1


                                                                         PAGE



ARTICLE 1....................................................................1


SECTION 101. Establishment...................................................1


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


SECTION 103. Payment of Principal and Interest...............................2


SECTION 104. Denominations...................................................3


SECTION 105. Global Securities...............................................3


SECTION 106. Transfer........................................................4


ARTICLE 2....................................................................4


SECTION 201. Recitals by Company.............................................4


SECTION 202. Ratification and Incorporation of Original Indenture............4


SECTION 203. Executed in Counterparts........................................4


    1This 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 SECOND SUPPLEMENTAL INDENTURE is made as of the 20th day
of May, 1998, by and between MISSISSIPPI POWER COMPANY, a Mississippi
corporation, 2992 West Beach, Gulfport, Mississippi 39501 (the "Company"), and
BANKERS TRUST COMPANY, a banking corporation duly organized and existing under
the laws of the State of New York, having its principal corporate trust office
at Four Albany Street, New York, New York 10006 (the "Trustee").

                              W I T N E S S E T H:

                  WHEREAS, the Company has heretofore entered into a Senior Note
Indenture, dated as of May 1, 1998 (the "Original Indenture"), with Bankers
Trust Company, as supplemented by a First Supplemental Indenture, dated as of
May 19, 1998 (the "First Supplemental Indenture"), with Bankers Trust Company;

                  WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by the First Supplemental
Indenture and this Second Supplemental Indenture, is herein called the
"Indenture";

                  WHEREAS, under the Original Indenture, a new series of Senior
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 Senior Notes;

                  WHEREAS, additional Senior 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 Second 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 B Senior Notes

         SECTION 101. Establishment. There is hereby established a new series of
Senior Notes to be issued under the Indenture, to be designated as the Company's
Series B 6.05% Senior Notes due May 1, 2003 (the "Series B Notes").

         There are to be authenticated and delivered $35,000,000 principal
amount of Series B Notes, and no further Series B Notes shall be authenticated
and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the
Original Indenture. The Series B Notes shall be issued in definitive fully
registered form.

         The Series B Notes shall be issued in the form of one Global Security
in substantially the form set out in Exhibit A hereto. The Depositary with
respect to the Series B Notes shall be The Depository Trust Company.

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

         Each Series B 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.

         "Interest Payment Dates" means May 1 and November 1 of each year.

         "Original Issue Date" means May 20, 1998.

         "Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day preceding such Interest
Payment Date.

         "Stated Maturity" means May 1, 2003.

         SECTION 103. Payment of Principal and Interest. The unpaid principal
amount of the Series B Notes shall bear interest at the rate of 6.05% per annum
until paid or duly provided for. Interest shall be paid semi-annually in arrears
on each Interest Payment Date to the Person in whose name the Series B Notes are
registered on the Regular Record Date for such Interest Payment Date, provided
that interest payable at the Stated Maturity of principal will be paid to the
Person to whom principal is payable. Any such interest that is not so punctually
paid or duly provided for will forthwith cease to be payable to the Holders on
such Regular Record Date and may either be paid to the Person or Persons in
whose name the Series B 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, notice whereof shall be given to Holders of the Series B 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 B 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.




         Payments of interest on the Series B Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series B Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series B Notes is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day, with the same force and effect as if made on the date
the payment was originally payable.

         Payment of the principal and interest due at the Stated Maturity of the
Series B Notes shall be made upon surrender of the Series B 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.

         SECTION  104.  Denominations.  The Series B Notes may be issued in the
 denominations  of  $1,000,  or any integral multiple thereof.

         SECTION 105. Global Securities. The Series B 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 B Notes represented by
the Global Security will not be exchangeable for, and will not otherwise be
issuable as, Series B 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 B 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 B 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 by the Company, 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 by the
Company, in each case within 90 days after the Company receives such notice or



becomes aware of such cessation, (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 B Notes. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series B Notes registered in such names as the Depositary shall
direct.

         SECTION 106. Transfer. No service charge will be made for any transfer
or exchange of Series B 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.


                                    ARTICLE 2

                            Miscellaneous Provisions

         SECTION 201. Recitals by Company. The recitals in this Second
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 B Notes and of this Second Supplemental
Indenture as fully and with like effect as if set forth herein in full.

         SECTION 202. Ratification and Incorporation of Original Indenture. As
heretofore supplemented by the First Supplemental Indenture and as supplemented
hereby, the Original Indenture is in all respects ratified and confirmed, and
the Original Indenture, the First Supplemental Indenture and this Second
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.

         SECTION 203. Executed in Counterparts. This Second 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:                                     MISSISSIPPI POWER COMPANY


By:                                         By:





ATTEST:                                     BANKERS TRUST COMPANY, as Trustee


By:                                         By:







                                    EXHIBIT A

                              FORM OF SERIES B NOTE











NO. 1                                                  CUSIP NO. 605417BH6


                            MISSISSIPPI POWER COMPANY
                           SERIES B 6.05% SENIOR NOTE
                                 DUE MAY 1, 2003



    Principal Amount:          $_____________

    Regular Record Date:       15th calendar day prior to Interest Payment Date

    Original Issue Date:       May 20, 1998

    Stated Maturity:           May 1, 2003

    Interest Payment Dates:    May 1 and November 1

    Interest Rate:             6.05% per annum

    Authorized Denomination:   $1,000


         Mississippi Power Company, a Mississippi 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, 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, semi-annually in arrears on each Interest Payment Date as
specified above, commencing on the Interest Payment Date next succeeding the
Original Issue Date shown above and on the Stated Maturity at the rate per annum
shown above 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)
will, as provided in such Indenture, be paid to the Person in whose name this
Note (the "Note") is registered at the close of business on the Regular Record
Date as specified above next preceding such Interest Payment Date, provided that
any interest payable at Stated Maturity 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 Regular Record Date and may either be paid to the
Person in whose name this Note is registered at the close of business 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 will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day, with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee is closed for business.

         Payment of the principal of and interest due at the Stated Maturity of
the Series B Notes shall be made upon surrender of the Series B 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.

         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:


                                    MISSISSIPPI POWER COMPANY



                                    By:
                                      Name:
                                     Title:

Attest:



Title:



                {Seal of MISSISSIPPI POWER COMPANY appears here}












                          CERTIFICATE OF AUTHENTICATION

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

                                   BANKERS TRUST COMPANY,
                                   as Trustee


                                   By:






                             (Reverse Side of Note)


         This Note is one of a duly authorized issue of Senior Notes of the
Company (the "Notes"), issued and issuable in one or more series under a Senior
Note Indenture, dated as of May 1, 1998, as supplemented (the "Indenture"),
between the Company and Bankers Trust Company, 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 B 6.05%
Senior Notes due May 1, 2003 (the "Series B Notes") in the aggregate principal
amount of up to $35,000,000. Capitalized terms used herein for which no
definition is provided herein shall have the meanings set forth in the
Indenture.

         The Notes will not have a sinking fund.

         The Notes will not be redeemable at the option of the Company prior to
maturity.

         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                                      st)              (Minor)
TEN ENT- as tenants by the
         entireties                                   under Uniform Gifts to
 JT TEN- as joint tenants                             Minors Act
         with right of
         survivorship and                           ________________________
         not as tenants                                           (State)
        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 Senior Notes referred to in the within-mentioned
Indenture.

                                   BANKERS TRUST COMPANY,
                                   as Trustee

                                   By:

EX-12

                                                            EXHIBIT 12.1



                            MISSISSIPPI POWER COMPANY
            Computation of ratio of earnings to fixed charges for the
                     the five years ended December 31, 1997
                   and the twelve months ended March 31, 1998


                                                                                                        

                                                                                                                           Twelve
                                                                                                                           Months
                                                                                                                            Ended
                                                                      Year ended December 31,                             March 31,
                                                    ===================================================================
                                                         1993          1994          1995        1996         1997           1998
                                                    ----------------------------Thousands of Dollars-------------------------------
EARNINGS  AS DEFINED  IN ITEM 503 OF REGULATION S-K:
   Income  Before  Interest  Charges                $ 67,726      $  76,067    $  82,765    $   80,523    $  81,769      $  79,504
      Federal and state income taxes                  18,787         30,050       35,972        33,476       33,188         32,212
      Deferred  income taxes, net                      5,039          1,563         (480)           74       (1,808)        (2,620)
      Deferred  investment  tax credits                    -              -            -             -            -              -
      AFUDC - Debt funds                                 788          1,039          399           713            -             (8)
                                                    --------      ---------    ---------     ---------    ---------      ---------
         Earnings as defined                        $ 92,340      $ 108,719    $ 118,656     $ 114,786    $ 113,149      $ 109,088
                                                    ========      =========    =========     =========    =========      =========




FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
   Interest  on long-term  debt                   $  17,688       $ 19,725     $ 21,898     $  19,898     $  19,856      $ 19,758
   Interest on interim  obligations                   1,000          1,442        1,141         1,416           96            478
   Amort of debt disc, premium  and expense, net      1,262          1,479        1,510         1,547        1,577          1,578
   Other interest  charges                              728            404        1,185           753        2,943          3,372
                                                  ---------       --------      -------     ---------     --------       --------
         Fixed charges as defined                 $  20,678       $ 23,050     $ 25,734     $  23,614     $ 24,472       $ 25,186
                                                  =========       ========     ========     =========     ========       ========



RATIO OF EARNINGS TO FIXED CHARGES                    4.47           4.72         4.61          4.86         4.62           4.33

EX-12

                                                                  EXHIBIT 12.2


                            MISSISSIPPI POWER COMPANY
        Computation of ratio of earnings to fixed charges plus preferred
        dividend requirements for the five years ended December 31, 1997
                   and the twelve months ended March 31, 1998




                                                                                                        
                                                                                                                          Twelve
                                                                                                                          Months
                                                                                                                           Ended
                                                                   Year ended December 31,                                March 31,
                                                         =============================================================
                                                            1993          1994       1995          1996        1997        1998
                                                            ====          ====       ====          ====        ====        ====
                                                         ---------------------------Thousands of Dollars-------------------------
EARNINGS AS DEFINED IN ITEM 503 OF REGULATION S-K:
   Income Before Interest Charges                       $ 67,726    $  76,067    $  82,765    $  80,523     $  81,769   $  79,504
      Federal and state income taxes                      18,787       30,050       35,972       33,476        33,188      32,212
      Deferred income taxes, net                           5,039        1,563         (480)          74        (1,808)     (2,620)
      Deferred  investment  tax credits                        -            -            -            -             -           -
      AFUDC - Debt funds                                     788        1,039          399          713             -          (8)
                                                        ---------   ----------   ----------   ----------    ----------  ----------
         Earnings  as defined                           $ 92,340    $ 108,719    $ 118,656    $ 114,786     $ 113,149   $ 109,088
                                                        =========   ==========   ==========   ==========    ==========  ==========


FIXED CHARGES AS DEFINED IN ITEM 503 OF REGULATION S-K:
   Interest  on long-term  debt                         $  17,688   $   19,725   $   21,898   $   19,898    $   19,856  $   19,758
   Interest  on interim  obligations                        1,000        1,442        1,141        1,416            96         478
   Amort of debt disc, premium  and expense, net            1,262        1,479        1,510        1,547         1,577       1,578
   Other interest  charges                                    728          404        1,185          753         2,943       3,372
                                                        ---------   ----------   ----------   ----------    ----------  ----------
         Fixed charges as defined                          20,678       23,050       25,734       23,614        24,472      25,186
Tax  deductible   preferred  dividends                        330          261          261          261           261         261
                                                        ----------  -----------  -----------  -----------   ----------- -----------
                                                           21,008       23,311       25,995       23,875        24,733      25,447
                                                        ----------  -----------  -----------  -----------   ----------- -----------
Non-tax  deductible  preferred  dividends                   5,070        4,638        4,638        4,638         3,026       2,297
Ratio  of net income  before  taxes to net income       x   1.499   x    1.585    x   1.618   x    1.582    x    1.548  x    1.545
                                                        ----------  ----------   ----------   ----------    ----------  ----------
Pref  dividend  requirements  before  income  taxes         7,600        7,351        7,504        7,337         4,684       3,549
                                                        ----------  -----------  -----------  -----------   ----------- -----------
Fixed  charges  plus  pref  dividend  requirements      $  28,608   $   30,662   $   33,499   $   31,212    $    29,417 $   28,996
                                                        ==========  ===========  ===========  ===========   =========== ===========

RATIO OF EARNINGS TO FIXED CHARGES  PLUS
   PREFERRED  DIVIDEND  REQUIREMENTS                         3.23         3.55         3.54         3.68          3.85        3.76
                                                             ====         ====         ====         ====          ====        ====