**Exhibit 10(a)**

 

 

LOAN AGREEMENT

by and between

MAINE & MARITIMES CORPORATION

as Borrower,

and

BANK OF AMERICA, N.A.

as Lender,

with respect to

Loan of up to $1,700,000

Dated as of June 13, 2006

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**LOAN AGREEMENT**

This Agreement dated asof June 13, 2006, is between Bank of America, N.A. (the “Bank”) and Maine &Maritimes Corporation (the “Borrower”).

# 1.                                       FACILITY NO. 1:  LINE OF CREDIT AMOUNT AND TERMS

## 1.1                                 Line of Credit Amount.

(a)                                  Duringthe availability period described below, the Bank will provide a line of creditto the Borrower.  The amount of the lineof credit (the “Facility No. 1 Commitment”) is One Million Seven HundredThousand Dollars ($1,700,000).

(b)                                 Thisis a non-revolving line of credit.  Anyamount borrowed, even if repaid before the expiration date of the line ofcredit, permanently reduces the remaining available line of credit.

(c)                                  TheBorrower agrees not to permit the principal balance outstanding to exceed theFacility No. 1 Commitment.  If theBorrower exceeds this limit, the Borrower will immediately pay the excess tothe Bank upon the Bank’s demand.

## 1.2                                 Availability Period.

The line of credit isavailable between the date of this Agreement and December 31, 2006, or suchearlier date as the availability may terminate as provided in this Agreement(the “Facility No. 1 Expiration Date”). The principal amount outstanding as of the Facility No. 1 ExpirationDate shall then be repaid, together with interest, as set forth in Section 1.3below.

## 1.3           RepaymentTerms.

(a)                                  TheBorrower will pay interest on June 30, 2006, and then on the last day of eachmonth thereafter until payment in full of any principal outstanding under thisfacility.

(b)                                 TheBorrower will repay the principal amount outstanding on the Facility No. 1Expiration Date in equal installments of One Hundred Forty Thousand Dollars($140,000) each, beginning on January 31, 2007, and on the last day of eachmonth thereafter, and ending on December 31, 2007 (the “Repayment Period”).  In any event, on the last day of theRepayment Period, the Borrower will repay the remaining principal balance plusany interest then due.

(c)                                  TheBorrower may prepay the loan in full or in part at any time.  The prepayment will be applied to the most remotepayment of principal due under this Agreement.

## 1.4                                 Interest Rate.

(a)                                  The interestrate is a rate per year equal to the Bank’s Prime Rate plus One percent (1%).

(b)                                 The PrimeRate is the rate of interest publicly announced from time to time by the Bankas its Prime Rate.  The Prime Rate is setby the Bank based on various factors, including the Bank’s costs and desiredreturn, general economic conditions and other factors, and is used as areference point for pricing some loans. The Bank may price loans to its customers at, above, or below the PrimeRate.  Any change in the Prime Rate shalltake effect at the opening of business on the day specified in the publicannouncement of a change in the Bank’s Prime Rate.

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# 2.                                       FEES AND EXPENSES

## 2.1                                 Fees.

(a)                                  LoanFee.  The Borrower agrees to pay aloan fee in the amount of Seventy Five Thousand Dollars ($75,000).  Twenty Five Thousand Dollars of such fee waspaid upon acceptance of the term sheet; the remainder is due on the date ofthis Agreement.

(b)                                 WaiverFee.  If the Bank, at its discretion,agrees to waive or amend any terms of this Agreement, the Borrower will, at theBank’s option, pay the Bank a fee for each waiver or amendment in an amountadvised by the Bank at the time the Borrower requests the waiver oramendment.  Nothing in this paragraphshall imply that the Bank is obligated to agree to any waiver or amendmentrequested by the Borrower.  The Bank mayimpose additional requirements as a condition to any waiver or amendment.

(c)                                  LateFee.  To the extent permitted by law,the Borrower agrees to pay a late fee in an amount not to exceed four percent(4%) of any payment that is more than fifteen (15) days late.  The imposition and payment of a late feeshall not constitute a waiver of the Bank’s rights with respect to the default.

## 2.2                                 Expenses.

The Borrower agrees toimmediately repay the Bank for expenses that include, but are not limited to,filing, recording and search fees, appraisal fees, title report fees, anddocumentation fees.

## 2.3                                 Reimbursement Costs.

(a)                                  TheBorrower agrees to reimburse the Bank for any expenses it incurs in thepreparation of this Agreement and any agreement or instrument required by thisAgreement.  Expenses include, but are notlimited to, reasonable attorneys’ fees, including any allocated costs of theBank’s in-house counsel to the extent permitted by applicable law.

(b)                                 TheBorrower agrees to reimburse the Bank for the cost of periodic fieldexaminations of the Borrower’s books, records and collateral, and appraisals ofthe collateral, at such intervals as the Bank may reasonably require.  The actions described in this paragraph maybe performed by employees of the Bank or by independent appraisers.

# 3.                                       COLLATERAL

## 3.1                                 Personal Property.

The personal propertylisted below now owned or owned in the future by the parties listed below willsecure the Borrower’s obligations to the Bank under this Agreement or, if thecollateral is owned by a guarantor, will secure the guaranty, if so indicatedin the security agreement.  The collateralis further defined in security agreement(s) executed by the owners of thecollateral. In addition, all personal property collateral owned by the Borrowersecuring this Agreement shall also secure all other present and futureobligations of the Borrower to the Bank (excluding any consumer credit coveredby the federal Truth in Lending law, unless the Borrower has otherwise agreedin writing or received written notice thereof). All personal property collateral securing any other present or futureobligations of the Borrower to the Bank shall also secure this Agreement.

(a)           Equipment andfixtures owned by (i) Borrower and (ii) Maricor Technologies, Inc.

(b)           Inventory owned by(i) Borrower and (ii) Maricor Technologies, Inc.

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(c)           Receivablesowned by (i) Borrower and (ii) Maricor Technologies, Inc.

# 4.                                      DISBURSEMENTS, PAYMENTS AND COSTS

## 4.1                                Disbursements and Payments.

(a)                                  Each paymentby the Borrower will be made in U.S. Dollars and immediately available funds bydirect debit to a deposit account as specified below or, for payments notrequired to be made by direct debit, by mail to the address shown on theBorrower’s statement or at one of the Bank’s banking centers in the UnitedStates.

(b)                                 Eachdisbursement by the Bank and each payment by the Borrower will be evidenced byrecords kept by the Bank.  In addition,the Bank may, at its discretion, require the Borrower to sign one or morepromissory notes.

## 4.2                                Telephone and Telefax Authorization.

(a)                                  TheBank may honor telephone or telefax instructions for advances or repayments orfor the designation of optional interest rates given, or purported to be given,by any one of the individuals authorized to sign loan agreements on behalf ofthe Borrower, or any other individual designated by any one of such authorizedsigners.

(b)                                 Advanceswill be deposited in and repayments will be withdrawn from account number9429289418 owned by the Borrower, or such other of the Borrower’s accounts withthe Bank as designated in writing by the Borrower.

(c)                                  TheBorrower will indemnify and hold the Bank harmless from all liability, loss,and costs in connection with any act resulting from telephone or telefaxinstructions the Bank reasonably believes are made by any individual authorizedby the Borrower to give such instructions. This paragraph will survive this Agreement’s termination, and willbenefit the Bank and its officers, employees, and agents.

## 4.3                                Direct Debit (Pre-Billing).

(a)                                  The Borroweragrees that the Bank will debit deposit account number 9429289418 owned by theBorrower, or such other of the Borrower’s accounts with the Bank as designatedin writing by the Borrower (the “Designated Account”) on the date eachpayment of principal and interest and any fees from the Borrower becomes due(the “Due Date”).

(b)                                 Priorto each Due Date, the Bank will mail to the Borrower a statement of the amountsthat will be due on that Due Date (the “Billed Amount”).  The bill will be mailed a specified number ofcalendar days prior to the Due Date, which number of days will be mutually agreedfrom time to time by the Bank and the Borrower. The calculations in the bill will be made on the assumption that no newextensions of credit or payments will be made between the date of the billingstatement and the Due Date, and that there will be no changes in the applicableinterest rate.

(c)                                  TheBank will debit the Designated Account for the Billed Amount, regardless of theactual amount due on that date (the “Accrued Amount”).  If the Billed Amount debited to theDesignated Account differs from the Accrued Amount, the discrepancy will betreated as follows:

(i)                                     Ifthe Billed Amount is less than the Accrued Amount, the Billed Amount for thefollowing Due Date will be increased by the amount of the discrepancy.  The Borrower will not be in default by reasonof any such discrepancy.

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(ii)                                  Ifthe Billed Amount is more than the Accrued Amount, the Billed Amount for thefollowing Due Date will be decreased by the amount of the discrepancy.

Regardless of any such discrepancy, interest will continue to accruebased on the actual amount of principal outstanding without compounding.  The Bank will not pay the Borrower intereston any overpayment.

(d)                                 TheBorrower will maintain sufficient funds in the Designated Account to cover eachdebit.  If there are insufficient fundsin the Designated Account on the date the Bank enters any debit authorized bythis Agreement, the Bank may reverse the debit.

## 4.4                                Banking Days.

Unlessotherwise provided in this Agreement, a banking day is a day other than aSaturday, Sunday or other day on which commercial banks are authorized toclose, or are in fact closed, in the state where the Bank’s lending office islocated, and, if such day relates to amounts bearing interest at an offshorerate (if any), means any such day on which dealings in dollar deposits areconducted among banks in the offshore dollar interbank market.  All payments and disbursements which would bedue on a day which is not a banking day will be due on the next banking day.  All payments received on a day which is not abanking day will be applied to the credit on the next banking day.

## 4.5                                Interest Calculation.

Except as otherwise stated in this Agreement, allinterest and fees, if any, will be computed on the basis of a 360-day year andthe actual number of days elapsed.  Thisresults in more interest or a higher fee than if a 365-day year is used.  Installments of principal which are not paidwhen due under this Agreement shall continue to bear interest until paid.

## 4.6                                Default Rate.

Uponthe occurrence of any default or after maturity or after judgment has beenrendered on any obligation under this Agreement, all amounts outstanding underthis Agreement, including any interest, fees, or costs which are not paid whendue, will at the option of the Bank bear interest at a rate which is 4.0percentage point(s) higher than the rate of interest otherwise provided underthis Agreement.  This may result incompounding of interest.  This will notconstitute a waiver of any default.

# 5.                                      CONDITIONS

Before the Bank is required to extend any credit tothe Borrower under this Agreement, it must receive any documents and otheritems it may reasonably require, in form and content acceptable to the Bank,including any items specifically listed below.

## 5.1                                Authorizations.

If the Borrower orany guarantor is anything other than a natural person, evidence that theexecution, delivery and performance by the Borrower and/or such guarantor ofthis Agreement and any instrument or agreement required under this Agreementhave been duly authorized.

## 5.2                                Governing Documents.

Ifrequired by the Bank, a copy of the Borrower’s organizational documents.

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## 5.3                                Security Agreements; Guarantees.

Signed originalsecurity agreements covering the personal property collateral which the Bankrequires and duly authorized and executed Guaranties from each Loan Partyproviding a Guaranty.

## 5.4                                Perfection and Evidence of Priority.

Evidence that thesecurity interests and liens in favor of the Bank are valid, enforceable,properly perfected in a manner acceptable to the Bank and prior to all others’rights and interests, except those the Bank consents to in writing.  All title documents for motor vehicles whichare part of the collateral must show the Bank’s interest.

## 5.5                                Payment of Fees.

Paymentof all fees and other amounts due and owing to the Bank, including withoutlimitation payment of all accrued and unpaid expenses incurred by the Bank asrequired by the paragraph entitled “Reimbursement Costs.”

## 5.6                                Repayment of Other Credit Agreement.

Evidence that the existingloan agreement with Katahdin Trust Company with respect to a bridge loan in theprincipal amount of $400,000 has been or will be repaid and cancelled on orbefore the first disbursement under this Agreement.

## 5.7                                Good Standing.

Certificatesof good standing for the Borrower and each guarantor from its state offormation and from any other state in which the Borrower or such guarantor isrequired to qualify to conduct its business.

## 5.8                                Legal Opinion.

Awritten opinion from the Borrower’s legal counsel, covering such matters as theBank may require.  The legal counsel andthe terms of the opinion must be acceptable to the Bank.

## 5.9                                Insurance.

Evidenceof insurance coverage, as required in the “Covenants” section of thisAgreement.

# 6.                                      REPRESENTATIONS AND WARRANTIES

Whenthe Borrower signs this Agreement, and until the Bank is repaid in full, theBorrower makes the following representations and warranties.  Each request for an extension of creditconstitutes a renewal of these representations and warranties as of the date ofthe request:

## 6.1                                Formation.

Ifthe Borrower is anything other than a natural person, it is duly formed andexisting under the laws of the state or other jurisdiction where organized.

## 6.2                                Authorization.

This Agreement, and anyinstrument or agreement required hereunder, are within the Borrower’s powers,have been duly authorized, and do not conflict with any of its organizationalpapers.

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## 6.3                                Enforceable Agreement.

ThisAgreement is a legal, valid and binding agreement of the Borrower, enforceableagainst the Borrower in accordance with its terms, and any instrument oragreement required hereunder, when executed and delivered, will be similarlylegal, valid, binding and enforceable.

## 6.4                                Good Standing.

Ineach state in which the Borrower does business, it is properly licensed, ingood standing, and, where required, in compliance with fictitious namestatutes.

## 6.5                                No Conflicts.

ThisAgreement does not conflict with any law, agreement, or obligation by which theBorrower is bound.

## 6.6                                Financial Information.

Allfinancial and other information that has been or will be supplied to the Bankfairly presents the Borrower’s (and any guarantor’s) financial condition in allmaterial respects, including all material contingent liabilities.  Since the date of the most recent financialstatement provided to the Bank, there has been no material adverse change inthe business condition (financial or otherwise), operations, properties orprospects of the Borrower (or any guarantor). If the Borrower is comprised of the trustees of a trust, the foregoingrepresentations shall also pertain to the trustor(s) of the trust.

## 6.7                                Lawsuits.

Thereis no lawsuit, tax claim or other dispute pending or threatened against theBorrower which, if lost, would reasonably be expected to have a MaterialAdverse Effect , except as have been disclosed in writing to the Bank.

## 6.8                                Collateral.

Allcollateral required in this Agreement is owned by the grantor of the securityinterest free of any title defects or any liens or interests of others, exceptthose which have been approved by the Bank in writing and except for thefollowing:

(a)  Liens pursuant to this Agreement or anyagreement relating hereto;

(b)  Liens existing on the date hereof and listedon Schedule 6.8 and any renewals or extensions thereof, provided that (i) theproperty covered thereby is not changed, (ii) the amount secured or benefitedthereby is not increased, and (iii) the direct or any contingent obligor withrespect thereto is not changed;

(c)  Liens for taxes not yet due or which arebeing contested in good faith and by appropriate proceedings diligentlyconducted, if adequate reserves with respect thereto are maintained on thebooks of the applicable Person in accordance with GAAP;

(d)  carriers’, warehousemen’s, mechanics’,materialmen’s, repairmen’s or other like Liens arising in the ordinary courseof business which are not overdue for a period of more than 30 days or whichare being contested in good faith and by appropriate proceedings diligentlyconducted, if adequate reserves with respect thereto are maintained on thebooks of the applicable Person;

(e)  pledges or deposits in the ordinary course ofbusiness in connection with workers’ compensation, unemployment insurance andother social security legislation, other than any Lien imposed by ERISA;

(f)  deposits to secure the performance of bids,trade contracts and leases (other than Indebtedness), statutory obligations,surety and appeal bonds, performance bonds and other obligations of a likenature incurred in the ordinary course of business;

(g)  easements, rights-of-way, restrictions andother similar encumbrances affecting real property which, in the aggregate, arenot substantial in amount, and which do not in any case materially detract fromthe value of the property subject thereto or materially interfere with theordinary conduct of the business of the applicable Person;

(h)  Liens securing judgments for the payment ofmoney not constituting an Event of Default under Section 9.7; and

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(i)  Liens securing Indebtedness in respect ofcapital leases, Synthetic Lease Obligations and purchase money obligations forfixed or capital assets; provided, however, that the aggregate amount of allsuch Indebtedness at any one time outstanding shall not exceed $500,000; andfurther provided that (i) such Liens do not at any time encumber any propertyother than the property financed by such Indebtedness and (ii) the Indebtednesssecured thereby does not exceed the cost or fair market value, whichever islower, of the property being acquired on the date of acquisition.

## 6.9                                Permits, Franchises.

TheBorrower possesses all permits, memberships, franchises, contracts and licensesrequired and all trademark rights, trade name rights, patent rights,copyrights, and fictitious name rights necessary to enable it to conduct thebusiness in which it is now engaged.

## 6.10                          Other Obligations.

TheBorrower is not in default on any obligation for borrowed money, any purchasemoney obligation or any other material lease, commitment, contract, instrumentor obligation, except as have been disclosed in writing to the Bank.

## 6.11                          Tax Matters.

TheBorrower has no knowledge of any pending assessments or adjustments of itsincome tax for any year and all taxes due have been paid, except those which arebeing contested in good faith by appropriate proceedings diligently conductedand for which adequate reserves have been provided in accordance withGAAP.  There is no proposed taxassessment against Borrower or any Subsidiary that would, if made, have aMaterial Adverse Effect.

## 6.12                          No Event of Default.

Thereis no event which is, or with notice or lapse of time or both would be, adefault under this Agreement.

## 6.13                          Insurance.

TheBorrower has obtained, and maintained in effect, the insurance coverage requiredin the “Covenants” section of this Agreement.

## 6.14                          ERISA Plans.

(a)                                  Each Plan(other than a multiemployer plan) is in compliance in all material respectswith the applicable provisions of ERISA, the Code and other federal or statelaw.  Each Plan has received a favorabledetermination letter from the IRS and to the best knowledge of the Borrower,nothing has occurred which would cause the loss of such qualification.  The Borrower has fulfilled its obligations,if any, under the minimum funding standards of ERISA and the Code with respectto each Plan, and has not incurred any liability with respect to any Plan underTitle IV of ERISA.

(b)                                 Thereare no claims, lawsuits or actions (including by any governmental authority),and there has been no prohibited transaction or violation of the fiduciaryresponsibility rules, with respect to any Plan which has resulted or couldreasonably be expected to result in a material adverse effect.

(c)                                  Withrespect to any Plan subject to Title IV of ERISA:

(i)                                     Noreportable event has occurred under Section 4043(c) of ERISA for which the PBGCrequires 30-day notice.

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(ii)                                  Noaction by the Borrower or any ERISA Affiliate to terminate or withdraw from anyPlan has been taken and no notice of intent to terminate a Plan has been filedunder Section 4041 of ERISA.

(iii)                               No terminationproceeding has been commenced with respect to a Plan under Section 4042 ofERISA, and no event has occurred or condition exists which might constitutegrounds for the commencement of such a proceeding.

(d)                                 Thefollowing terms have the meanings indicated for purposes of this Agreement:

(i)                                     “Code”means the Internal Revenue Code of 1986, as amended from time to time.

(ii)                                  “ERISA”means the Employee Retirement Income Security Act of 1974, as amended from timeto time.

(iii)                               “ERISA Affiliate”means any trade or business (whether or not incorporated) under common controlwith the Borrower within the meaning of Section 414(b) or (c) of the Code.

(iv)                              “PBGC”means the Pension Benefit Guaranty Corporation.

(v)                                 “Plan”means a pension, profit-sharing, or stock bonus plan intended to qualify underSection 401(a) of the Code, maintained or contributed to by the Borrower or anyERISA Affiliate, including any multiemployer plan within the meaning of Section4001(a)(3) of ERISA.

# 7.                                      COVENANTS

TheBorrower agrees, so long as credit is available under this Agreement and untilthe Bank is repaid in full:

## 7.1                                Use of Proceeds.

(a)           To use the proceeds of Facility No. 1only (a) to repay the loan from Katahdin Trust Company referenced in Section5.6, and (b) for working capital and other general corporate purposes.

(b)           The proceeds of the credit extendedunder this Loan Agreement may not be used directly or indirectly to purchase orcarry any “margin stock” as that term is defined in Regulation U of the Boardof Governors of the Federal Reserve System, or extend credit to or invest inother parties for the purpose of purchasing or carrying any such “margin stock,”or to reduce or retire any indebtedness incurred for such purpose.

## 7.2                                Financial Information.

Toprovide the following financial information and statements in form and contentacceptable to the Bank, and such additional information as requested by theBank from time to time (provided, however, that any such information providedto Bank pursuant to any other loan documents to which Bank is party shall bedeemed to be a submission of such information under this Agreement and Borrowerneed not provide duplicate copies of such materials to Bank for each such loanagreement):

(a)                                  assoon as available, but in any event within 120 days after the end of eachfiscal year of Borrower, a consolidated and consolidating balance sheet ofBorrower and its Subsidiaries as at the end of such fiscal year, and therelated consolidated and consolidating statements of income or operations,shareholders’ equity and cash flows for such fiscal year, setting forth in eachcase in comparative form the figures for the previous fiscal year, all inreasonable detail and prepared 

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in accordance with GAAP, such consolidated statements to be audited andaccompanied by (i) a report and opinion of Vitale, Caturano and Co., Ltd., oranother Registered Public Accounting Firm of nationally recognized standingreasonably acceptable to the Bank, which report and opinion shall be preparedin accordance with generally accepted auditing standards and applicableSecurities Laws and shall not be subject to any “going concern” or likequalification or exception or any qualification or exception as to the scope ofsuch audit and (ii) when and to the extent required by the SEC, an attestationreport of such Registered Public Accounting Firm as to the Borrower’s internalcontrols pursuant to Section 404 of Sarbanes-Oxley expressing a conclusion towhich the Bank does not object and such consolidating statements to becertified by a Responsible Officer of Borrower to the effect that suchstatements are fairly stated in all material respects when considered inrelation to the consolidated financial statements of Borrower and itsSubsidiaries, provided, however, that so long as Borrower is subject to section13 of the Securities Exchange Act of 1934, as amended, the requirement as toconsolidated financial statements (but not the other requirements) shall besatisfied with respect to Borrower by delivery within such 120-day period ofthe annual report of Borrower on Form 10-K for such fiscal year, together withall documents from the preceding fiscal year which are incorporated therein byreference, and have theretofore not been delivered, as filed by Borrower withthe SEC;

(b)                                 assoon as available, but in any event within 60 days after the end of each of thefirst three fiscal quarters of each fiscal year of Borrower, a consolidated andconsolidating balance sheet of Borrower and its Subsidiaries as at the end ofsuch fiscal quarter, and the related consolidated and consolidating statementsof income or operations, shareholders’ equity and cash flows for such fiscalquarter and for the portion of Borrower’s fiscal year then ended, setting forthin each case in comparative form the figures for the corresponding fiscalquarter of the previous fiscal year and the corresponding portion of theprevious fiscal year, all in reasonable detail, such consolidated statements tobe certified by a Responsible Officer of Borrower as fairly presenting thefinancial condition, results of operations, shareholders’ equity and cash flowsof Borrower and its Subsidiaries in accordance with GAAP, subject only tonormal year-end audit adjustments and the absence of footnotes and suchconsolidating statements to be certified by a Responsible Officer of Borrowerto the effect that such statements are fairly stated in all material respectswhen considered in relation to the consolidated financial statements of theBorrower and its Subsidiaries, provided, however, that so long as Borrower issubject to section 13 of the Securities Exchange Act of 1934, as amended, therequirement with respect to consolidated financial statements (but not theother requirements) shall be satisfied with respect to Borrower by deliverywithin such 60-day period of the report of Borrower on Form 10-Q for suchquarter, as filed by Borrower with the SEC; and

(c)                                  assoon as available, but in any event at least 60 days after the end of eachfiscal year of Borrower, forecasts prepared by management of Borrower, in formsatisfactory to the Bank, of consolidated balance sheets and statements ofincome or operations and cash flows of Borrower and its Subsidiaries on amonthly basis for the immediately following fiscal year.

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(d)           (i) concurrently with the delivery of the financial statements referred toin Section 7.2(a), a certificate of its independent certified publicaccountants certifying such financial statements and stating that in making theexamination necessary therefor no knowledge was obtained of any Default or, ifany such Default shall exist, stating the nature and status of such event;

(ii) concurrently with the delivery of the financial statements referred toin Sections 7.2(a) and (b), a duly completed Compliance Certificate signed by aResponsible Officer of Borrower;

(iii)  promptlyafter any request by Bank, copies of any detailed audit reports, managementletters or recommendations submitted to the board of directors (or the auditcommittee of the board of directors) of Borrower by independent accountants inconnection with the accounts or books of Borrower or any Subsidiary, or anyaudit of any of them;

(iv)  promptlyafter the same are available, copies of each annual report, proxy or financialstatement or other report or communication sent to the stockholders ofBorrower, and copies of all annual, regular, periodic and special reports andregistration statements which Borrower may file or be required to file with theSecurities and Exchange Commission under Section 13 or 15(d) of the SecuritiesExchange Act of 1934, and not otherwise required to be delivered to Bankpursuant hereto;

(v)  promptlyafter the furnishing thereof, copies of any statement or report furnished toany holder of debt securities of any Loan Party or any Subsidiary thereofpursuant to the terms of any indenture, loan or credit or similar agreement andnot otherwise required to be furnished to the Bank pursuant to any other clauseof this Section 7.2; and

(vi)  promptly,and in any event within five Business Days after receipt thereof by any LoanParty or any Subsidiary thereof, copies of each notice or other correspondencereceived from the Securities and Exchange Commission  (or comparable agency in any applicablenon-U.S. jurisdiction) concerning any investigation or possible investigationor other inquiry by such agency regarding financial or other operationalresults of any Loan Party or any Subsidiary thereof.

(e)                                  Promptly,such additional information regarding the business, financial or corporateaffairs of Borrower or any Subsidiary, or compliance with the terms of the LoanDocuments, as Bank may from time to time reasonably request.

## 7.3                                Debt to Capital Ratio.

Not allow ConsolidatedTotal Indebtedness for Borrowed Money to exceed the percentage of ConsolidatedTotal Capital indicated for each period specified below:

| Period                                                  | ** ** | **Maximum Percentage** | ** ** |
|---------------------------------------------------------|------------|-----------------------------|------------|
| Quarter ending  03/31/06 through quarter ending 3/31/07 |       | 57                          | %          |
| Thereafter                                              |       | 55                          | %          |

This ratio will be calculated at the end of eachquarter, commencing with the quarter ending March 31, 2006, using the resultsof the twelve-month period ending with that reporting period.

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## 7.4                                Interest Coverage Ratio.

Maintain on aconsolidated basis an Interest Coverage Ratio of at least the ratio indicatedfor each period specified below:
| Period                                                                                                | ** ** | **Ratio** | ** ** |
|-------------------------------------------------------------------------------------------------------|------------|-----------|------------|
| Three months  ending 3/31/06                                                                          |       | 2.00:1.0  |       |
| Six months  ending 6/30/06                                                                            |       | 1.00:1.0  |       |
| Nine months  ending 9/30/06                                                                           |       | 1.00:1.0  |       |
| Twelve months  ending 12/31/06                                                                        |       | 2.00:1.0  |       |
| Twelve months  ending 3/31/07                                                                         |       | 1.75:1.0  |       |
| Twelve months ending  6/30/07 and Each trailing twelve month period thereafter, On a quarterly  basis |       | 2.50:1.0  |       |

 

This ratio will becalculated at the end of each quarter, commencing with the quarter ending March31, 2006.

## 7.5                                Financial Covenant Definitions.

“***Capital Lease***” means a lease whichhas been or should be capitalized on the books of the lessee in accordance withGAAP.

“***Consolidated EBIT***”means, for the Borrower and its Subsidiaries, net income, less income or plusloss from discontinued operations and extraordinary items, plus income taxes,plus interest expense.

***“ConsolidatedInterest Expense”*** means, for any specified period, thetotal consolidated interest charges of the Borrower and its Subsidiaries forsuch period, determined in accordance with GAAP, plus (i) the allowance forborrowed funds used during construction for such period, minus (ii) interest oncustomer deposits for such period.

***“ConsolidatedTotal Capital”*** means, at a particular date, the total ofthe amounts that, in conformity with GAAP, would be included on a consolidatedbalance sheet of the Borrower and its Subsidiaries as of such date in respectof (i) Consolidated Total Indebtedness for Borrowed Money (excluding Debt ofother Persons guaranteed by the Borrower or a Subsidiary), and (ii) (iii)Common Shareholders’ Equity.

“***Consolidated Total Indebtedness forBorrowed Money***” means at any particular date, the total amountof (i) Debt of the Borrower and its Subsidiaries, excluding intercompany items,that, in conformity with GAAP, would be included on a consolidated balancesheet of the Borrower and its Subsidiaries (a) in respect of money borrowed,(b) in respect of obligations evidenced by a note, bond, debenture or otherlike written obligation to pay money, (c) in respect of obligations underCapital Leases, and (d) in respect of obligations under conditional sales orother title retention agreements, and (ii) Debt of other Persons of the naturedescribed in clauses (a) through (d) above which is guaranteed by the Borroweror a Subsidiary or with respect to which the Borrower or a Subsidiary iscontingently liable.  In no event shallthe term include preferred stock.

“***Interest Coverage Ratio***”means the ratio of Consolidated EBIT to (Consolidated Interest Expense pluspreferred dividends).

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## 7.6                                Maintenance of Assets.

(a)                                  Maintain,preserve and protect all of its material properties and equipment necessary inthe operation of its business in good working order and condition, ordinarywear and tear excepted; provided that in the event of any conflict with theterms of Section 7.8, the latter shall prevail.

(b)                                 Make allnecessary repairs thereto and renewals and replacements thereof except wherethe failure to do so could not reasonably be expected to have a MaterialAdverse Effect.

(c)                                  Usethe standard of care typical in the industry in the operation and maintenanceof its facilities.

(d)                                 Tomaintain and preserve all rights, privileges, and franchises the Borrower nowhas.

## 7.7                                Loans.

Notto make any loans, advances or other extensions of credit to any individual orentity, except for:

(a)                                  Existingextensions of credit disclosed to the Bank in writing.

(b)                                 Extensionsof credit to the Borrower’s current subsidiaries on terms that are fair andreasonable,  substantially as favorableto Borrower or such subsidiary as would be obtainable by Borrower or suchsubsidiary at the time in a comparable arm’s length transaction with a Personother than an Affiliate (provided, however, that Bank acknowledges that suchintra-company loans may bear low or no interest).

(c)                                  Extensionsof credit in the nature of accounts receivable or notes receivable arising fromthe sale or lease of goods or services in the ordinary course of business tonon-affiliated entities.

## 7.8                                Additional Negative Covenants.

Notto, without the Bank’s written consent, such consent not to be unreasonablywithheld or delayed:

(a)                                  (thisapplies to Borrower and its Subsidiary Maine Public Service Company) merge,dissolve, liquidate, consolidate with or into another Person, or Dispose of(whether in one transaction or in a series of transactions) all orsubstantially all of its assets (whether now owned or hereafter acquired) to orin favor of any Person, except that, so long as no Default exists or wouldresult therefrom:  (a)  Maine Public Service Company may merge with(i) Borrower, provided that Borrower shall be the continuing or survivingPerson, or (ii) any one or more other Subsidiaries of Borrower, provided that awholly-owned Subsidiary of Borrower shall be the continuing or survivingPerson; and  (b)  Maine Public Service Company may Dispose ofall or substantially all of its assets (upon voluntary liquidation orotherwise) to Borrower or to a wholly-owned Subsidiary of Borrower.

(b)                                 Acquireor purchase a business or its assets where either of the following conditionsapplies: (a) the acquisition is for a consideration, including assumption ofdirect or contingent debt, in excess of One Hundred Thousand Dollars ($100,000)in the aggregate; or (b) the Borrower has not obtained the prior, effectivewritten consent or approval to such acquisition of the board of directors orequivalent governing body of the business being acquired.

(c)                                  Engagein any business activities substantially different from the Borrower’s presentbusiness.

(d)                                 (thisapplies to Borrower and its Subsidiary Maine Public Service Company) make anyDisposition or enter into any agreement to make any Disposition, except:

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(i)  Dispositions of obsolete orworn out property, whether now owned or hereafter acquired, in the ordinarycourse of business;

(ii)  Dispositions of inventoryin the ordinary course of business;

(iii)  Dispositions of equipmentor real property to the extent that (i) such property is exchanged for creditagainst the purchase price of similar replacement property or (ii) the proceedsof such Disposition are reasonably promptly applied to the purchase price ofsuch replacement property;

(iv)  Dispositions of property byMaine Public Service Company to Borrower or to a wholly-owned Subsidiary ofBorrower; and

(v)  Dispositions permitted bySection 7.8(a).

Any Disposition pursuant to clauses (i) through (v) shall be for fairmarket value.

(e)                                  Voluntarilysuspend its business.

## 7.9                                Notices to Bank.

Topromptly notify the Bank in writing of:

(a)                                  Anymatter that has resulted or could reasonably be expected to result in aMaterial Adverse Effect, including (i) breach or non-performance of, or anydefault under, a Contractual Obligation of Borrower or any Subsidiary; (ii) anydispute, litigation, investigation, proceeding or suspension between Borroweror any Subsidiary and any Governmental Authority; or (iii) the commencement of,or any material development in, any litigation or proceeding affecting Borroweror any Subsidiary, including pursuant to any applicable Environmental Laws;

(b)                             Theoccurrence of any ERISA Event.

(c)                              Theoccurrence of any Internal Control Event.

(d)                                 Anyevent of default under this Agreement, or any event which, with notice or lapseof time or both, would constitute an event of default.

(e)                                  Anychange in the Borrower’s name, legal structure, place of business, or chiefexecutive office if the Borrower has more than one place of business.

(f)                                    Anyactual contingent liabilities of the Borrower (or any Guarantor) arising on orafter December 31, 2005, and any such contingent liabilities which arereasonably foreseeable, where such liabilities are in excess of the ThresholdAmount in the aggregate.

Each notice pursuant tothis Section shall be accompanied by a statement of a Responsible Officer ofBorrower setting forth details of the occurrence referred to therein andstating what action Borrower has taken and proposes to take with respectthereto.  Each notice pursuant to Section7.9(e) shall describe with particularity any and all provisions of thisAgreement and any other Loan Document that have been breached.

## 7.10                          Insurance.

(a)                                  Insurance.  To maintain with financially sound andreputable insurance companies not Affiliates of Borrower, insurance withrespect to its properties and business against loss or damage of the kindscustomarily insured against by Persons engaged in the same or similar business,of such types and in such amounts (after giving effect to any self-insurancecompatible with the following 

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standards) as are customarily carried under similar circumstances bysuch other Persons and providing for not less than 30 days’ prior notice toBank of termination, lapse or cancellation of such insurance.

(b)                                 Evidenceof Insurance.  Upon the request ofthe Bank, to deliver to the Bank a copy of each insurance policy, or, ifpermitted by the Bank, a certificate of insurance listing all insurance inforce.

## 7.11                          Compliance with Laws.

Tocomply in all material respects with the requirements of all Laws and allorders, writs, injunctions and decrees applicable to it or to its business orproperty, except in such instances in which (a) such requirement of Law ororder, write, injunction or decree is being contested in good faith byappropriate proceedings diligently conducted; or (b) the failure to complytherewith could not reasonably be expected to have a Material AdverseEffect.  The Bank shall have noobligation to make any advance to the Borrower except in compliance with allapplicable laws and regulations and the Borrower shall fully cooperate with theBank in complying with all such applicable laws and regulations.

## 7.12                          ERISA Plans.

Promptlyduring each year, to pay and cause any subsidiaries to pay contributionsadequate to meet at least the minimum funding standards under ERISA withrespect to each and every Plan; file each annual report required to be filedpursuant to ERISA in connection with each Plan for each year; and notify theBank within ten (10) days of the occurrence of any Reportable Event that mightconstitute grounds for termination of any capital Plan by the Pension BenefitGuaranty Corporation or for the appointment by the appropriate United StatesDistrict Court of a trustee to administer any Plan.  Capitalized terms in this paragraph, that arenot otherwise defined herein,  shall havethe meanings defined within ERISA.

## 7.13                          ERISA Plans - Notices.

Withrespect to a Plan subject to Title IV of ERISA, to give prompt written noticeto the Bank of:

(a)                                  Theoccurrence of any reportable event under Section 4043(c) of ERISA for which thePBGC requires 30-day notice.

(b)                                 Any actionby the Borrower or any ERISA Affiliate to terminate or withdraw from a Plan orthe filing of any notice of intent to terminate under Section 4041 of ERISA.

(c)                                  Thecommencement of any proceeding with respect to a Plan under Section 4042 ofERISA.

## 7.14                          Books and Records.

To(a) maintain proper books of record and account, in which full, true andcorrect entries in conformity with GAAP consistently applied shall be made ofall financial transactions and matters involving the assets and business ofBorrower or such Subsidiary, as the case may be; and (b) maintain such books ofrecord and account in material conformity with all applicable requirements ofany Governmental Authority having regulatory jurisdiction over Borrower or suchSubsidiary, as the case may be.  Borrowershall maintain at all times books and records pertaining to the Collateral insuch detail, form and scope as Bank shall reasonably require.

## 7.15                          Audits.

Toallow the Bank and its agents to visit and inspect any of its properties, toexamine its corporate, financial and operating records, and make copies thereofor abstracts therefrom, and to discuss its affairs, finances and accounts withits directors, officers, and independent public accountants, all at the expense

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ofBorrower and at such reasonable times during normal business hours and as oftenas may be reasonably desired, upon reasonable advance notice to Borrower;provided, however, that when an Event of Default exists Bank or its agents maydo any of the foregoing at the expense of Borrower at any time during normalbusiness hours and without advance notice. If any of the Borrower’s properties, books or records are in thepossession of a third party, the Borrower authorizes that third party to permitthe Bank or its agents to have access to perform inspections or audits and torespond to the Bank’s requests for information concerning such properties,books and records.

## 7.16                          Perfection of Liens.

Tohelp the Bank perfect and protect its security interests and liens, andreimburse it for related costs it reasonably incurs to protect its securityinterests and liens.

## 7.17                          Cooperation.

Totake any action reasonably requested by the Bank to carry out the intent ofthis Agreement.

# 8.                                      HAZARDOUS SUBSTANCES

## 8.1                                Indemnity Regarding Hazardous Substances.

TheBorrower will indemnify and hold harmless the Bank from any loss or liabilitythe Bank incurs in connection with or as a result of this Agreement, whichdirectly or indirectly arises out of the use, generation, manufacture,production, storage, release, threatened release, discharge, disposal orpresence of a hazardous substance.  Thisindemnity will apply whether the hazardous substance is on, under or about theBorrower’s property or operations or property leased to the Borrower.  The indemnity includes but is not limited toreasonable attorneys’ fees (including the reasonable estimate of the allocatedcost of in-house counsel and staff).  Theindemnity extends to the Bank, its parent, subsidiaries and all of theirdirectors, officers, employees, agents, successors, attorneys and assigns.

## 8.2                                Compliance Regarding Hazardous Substances.

TheBorrower represents and warrants that the Borrower has complied and will complyin the future with all  Laws,  or other requirements of any GovernmentalAuthority relating to or imposing liability or standards of conduct concerningprotection of health or the environment or hazardous substances, except to theextent that the failure so to comply does not have, and could not reasonably beexpected to have, a Material Adverse Effect.

## 8.3                                Notices Regarding Hazardous Substances.

Untilfull repayment of the loan, the Borrower will promptly notify the Bank inwriting of any threatened or pending investigation of the Borrower or itsoperations by any governmental agency under any current or future law,regulation or ordinance pertaining to any hazardous substance.

## 8.4                                Site Visits, Observations and Testing.

TheBank and its agents and representatives will have the right at any reasonabletime, after giving reasonable notice to the Borrower, to enter and visit anylocations where the collateral securing this Agreement (the “Collateral”) islocated for the purposes of observing the Collateral, taking and removingenvironmental samples, and conducting tests. The Borrower shall reimburse the Bank on demand for the costs of anysuch environmental investigation and testing. The Bank will make reasonable efforts during any site visit, observationor testing conducted pursuant this paragraph to avoid interfering with theBorrower’s use of the Collateral.  TheBank is under no duty to observe the Collateral or to conduct tests, and anysuch acts by the Bank will be solely for the purposes of protecting the Bank’ssecurity and 

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preservingthe Bank’s rights under this Agreement. No site visit, observation or testing or any report or findings made asa result thereof (“Environmental Report”) (i) will result in a waiver of anydefault of the Borrower; (ii) impose any liability on the Bank; or (iii) be arepresentation or warranty of any kind regarding the Collateral (including itscondition or value or compliance with any laws) or the Environmental Report (includingits accuracy or completeness).  In theevent the Bank has a duty or obligation under applicable laws, regulations orother requirements to disclose an Environmental Report to the Borrower or anyother party, the Borrower authorizes the Bank to make such a disclosure.  The Bank may also disclose an EnvironmentalReport to any regulatory authority, and to any other parties as necessary orappropriate in the Bank’s judgment.  TheBorrower further understands and agrees that any Environmental Report or otherinformation regarding a site visit, observation or testing that is disclosed tothe Borrower by the Bank or its agents and representatives is to be evaluated(including any reporting or other disclosure obligations of the Borrower) bythe Borrower without advice or assistance from the Bank.

## 8.5                                Definition of Hazardous Substances.

“Hazardoussubstances” means any substance, material or waste that is or becomesdesignated or regulated as “toxic,” “hazardous,” “pollutant,” or “contaminant”or a similar designation or regulation under any current or future federal,state or local law (whether under common law, statute, regulation or otherwise)or judicial or administrative interpretation of such, including withoutlimitation petroleum or natural gas.

## 8.6                                Continuing Obligation.

The Borrower’sobligations to the Bank under this Article, except the obligation to givenotices to the Bank, shall survive termination of this Agreement and repaymentof the Borrower’s obligations to the Bank under this Agreement.

# 9.                                      DEFAULT AND REMEDIES

Ifany of the following events of default (each an “Event of Default” or “eventof default”) occurs, the Bank may do one or more of the following: declarethe Borrower in default, stop making any additional credit available to theBorrower, and require the Borrower to repay its entire debt immediately andwithout prior notice.  If an event which,with notice or the passage of time, will constitute an event of default hasoccurred and is continuing, the Bank has no obligation to make advances orextend additional credit under this Agreement. In addition, if any event of default occurs, the Bank shall have allrights, powers and remedies available under any instruments and agreementsrequired by or executed in connection with this Agreement, as well as allrights and remedies available at law or in equity.  If an event of default occurs under theparagraph entitled “Insolvency; Receiver,” below, with respect to the Borrower,then the entire debt outstanding under this Agreement will automatically be dueimmediately.

## 9.1                                Failure to Pay.

TheBorrower fails to pay (i) when and as required to be paid, any amount ofprincipal due hereunder, or (ii) within three days after the same becomes due,any interest due hereunder, or any fee due hereunder, or (iii) within five daysafter the same becomes due, any other amount payable hereunder.

## 9.2                                Other Bank Agreements.

## Any default occurs under any other agreementthe Borrower (or any Obligor) or any of the Borrower’s related entities orAffiliates has with the Bank or any Affiliate of the Bank , and such defaultremains uncured beyond any applicable cure period.  For purposes of this Agreement, “Obligor”shall mean any guarantor, any party pledging collateral to the Bank, or, if theBorrower is comprised of the trustees of a trust, any trustor.

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## 9.3                                Cross-default.

Borrower, its SubsidiaryMaine Public Service Company, any Guarantor or any Subsidiary with respect toan obligation of such Subsidiary that has been guaranteed by Borrower (but noother Subsidiaries) (A) fails to make any payment when due (whether byscheduled maturity, required prepayment, acceleration, demand, or otherwise) inrespect of any Indebtedness, preferred stock or Guarantee (other thanIndebtedness hereunder) having an aggregate principal amount (including undrawncommitted or available amounts and including amounts owing to all creditorsunder any combined or syndicated credit arrangement) of more than the ThresholdAmount, or (B) fails to observe or perform any other agreement or conditionrelating to any such Indebtedness, preferred stock or Guarantee or contained inany instrument or agreement evidencing, securing or relating thereto, or anyother event occurs, the effect of which default or other event is to cause, orto permit the holder or holders of such Indebtedness or preferred stock or thebeneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalfof such holder or holders or beneficiary or beneficiaries) to cause, with thegiving of notice if required, such Indebtedness or preferred stock to be demandedor to become due or to be repurchased, prepaid, defeased or redeemed(automatically or otherwise), or an offer to repurchase, prepay, defease orredeem such Indebtedness or preferred stock to be made, prior to its statedmaturity, or such Guarantee to become payable or cash collateral in respectthereof to be demanded.

## 9.4                                False Information.

Any representation,warranty, certification or statement of fact made or deemed made by or onbehalf of the Borrower or any Obligor herein, or in any document delivered inconnection herewith shall be incorrect, false or misleading in any materialrespect when made or deemed made.

## 9.5                                Insolvency; Receiver.

AnyLoan Party or any of its Subsidiaries institutes or consents to the institutionof any proceeding under any Debtor Relief Law, or makes an assignment for thebenefit of creditors; or applies for or consents to the appointment of anyreceiver, trustee, custodian, conservator, liquidator, rehabilitator or similarofficer for it or for all or any material part of its property; or anyreceiver, trustee, custodian, conservator, liquidator, rehabilitator or similarofficer is appointed without the application or consent of such Person and theappointment continues undischarged or unstayed for 60 calendar days; or anyproceeding under any Debtor Relief Law relating to any such Person or to all orany material part of its property is instituted without the consent of suchPerson and continues undismissed or unstayed for 60 calendar days, or an orderfor relief is entered in any such proceeding; or  (i) Borrower or any Subsidiary becomes unableor admits in writing its inability or fails generally to pay its debts as theybecome due, or (ii) any writ or warrant of attachment or execution or similarprocess is issued or levied against all or any material part of the property ofany such Person and is not released, vacated or fully bonded within 30 daysafter its issue or levy.

## 9.6                                Termination; Dissolution.

Allor a substantial portion of the Borrower’s or any Obligor’s business isterminated, or, Borrower or any Obligor is liquidated or dissolved.

## 9.7                                Lien Priority.

TheBank fails to have an enforceable first lien (except for any prior liens towhich the Bank has consented in writing) on or security interest in any propertygiven as security for this Agreement (or any Guaranty).

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## 9.8                                Lawsuits.

Anylawsuit or lawsuits are filed on behalf of one or more trade creditors againstthe Borrower or any Obligor in an aggregate amount of the Threshold Amount ormore in excess of any insurance coverage.

## 9.9                                Judgments.

Thereis entered against Borrower or any Subsidiary (i) a final judgment or order forthe payment of money in an aggregate amount exceeding the Threshold Amount (tothe extent not covered by independent third-party insurance as to which theinsurer does not dispute coverage), or (ii) any one or more non-monetary finaljudgments that have, or could reasonably be expected to have, individually orin the aggregate, a Material Adverse Effect and, in either case, (A) enforcementproceedings are commenced by any creditor upon such judgment or order, or (B)there is a period of 10 consecutive days during which a stay of enforcement ofsuch judgment, by reason of a pending appeal or otherwise, is not in effect.

## 9.10                          Material Adverse Effect.

There occurs any event orcircumstance that has a Material Adverse Effect.

## 9.11                          Government Action.

AnyGovernment Authority takes action that the Bank believes would have aMaterially Adverse Effect.

## 9.12                          Default under Related Documents.

Anydefault occurs under any Guaranty, subordination agreement, security agreement,deed of trust, mortgage, or other document required by or delivered inconnection with this Agreement or any such document becomes no longer in effectwithout Bank’s consent, or any Guarantor purports to revoke or disavow theguaranty.

## 9.13                          ERISA Plans.

Any one or more of thefollowing events occurs with respect to a Plan of the Borrower subject to TitleIV of ERISA, provided such event or events could reasonably be expected, in thejudgment of the Bank, to subject the Borrower to any tax, penalty or liability(or any combination of the foregoing) which, in the aggregate, could have amaterial adverse effect on the financial condition of the Borrower:

(a)                                  Areportable event shall occur under Section 4043(c) of ERISA with respect to aPlan.

(b)                                 Any Plantermination (or commencement of proceedings to terminate a Plan) or the full orpartial withdrawal from a Plan by the Borrower or any ERISA Affiliate.

## 9.14                          Other Breach Under Agreement.

Adefault occurs under any other term or condition of this Agreement notspecifically referred to in this Article. This includes any failure by the Borrower (or any other party named inthe Covenants section) to comply with any financial covenants set forth in thisAgreement, whether such failure is evidenced by financial statements deliveredto the Bank or is otherwise known to the Borrower or the Bank.  If, in the Bank’s opinion, the breach iscapable of being remedied, the breach will not be considered an event ofdefault under this Agreement for a period of thirty (30) days after the date onwhich the Bank gives written notice of the breach to the Borrower.

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# 10.                                ENFORCING THIS AGREEMENT; MISCELLANEOUS

## 10.1                          GAAP.

Exceptas otherwise stated in this Agreement, all financial information provided tothe Bank and all financial covenants will be made under generally acceptedaccounting principles, consistently applied.

## 10.2                          Governing Law; Jurisdiction; Etc. 

## (a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF MAINE.

## (b)           SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER LOAN PARTYIRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THENONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF MAINE SITTING INCUMBERLAND COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE STATE OFMAINE, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDINGARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FORRECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETOIRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCHACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH MAINE STATE COURT OR,TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT AFINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BEENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNERPROVIDED BY LAW.  NOTHING IN THISAGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE BANKMAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENTOR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITSPROPERTIES IN THE COURTS OF ANY JURISDICTION.

## (c)           WAIVER OF VENUE.  THE BORROWER AND EACH OTHER LOAN PARTYIRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYINGOF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THISAGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B)OF THIS SECTION.  EACH OF THE PARTIES HERETOHEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION ORPROCEEDING IN ANY SUCH COURT.

(d)           SERVICEOF PROCESS.  EACH PARTY HERETOIRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICESIN SECTION 10.11.  NOTHING IN THISAGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANYOTHER MANNER PERMITTED BY APPLICABLE LAW.

10.3         Waiver of Right to Trial by Jury.    EACH PARTY HERETO HEREBY IRREVOCABLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAYHAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISINGOUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THETRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT ORANY OTHER THEORY).  EACH PARTY HERETO (A)CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HASREPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THEEVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGESTHAT IT AND THE OTHER PARTIES HERETO 

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HAVE BEEN INDUCED TOENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.4         USA PATRIOT Act Notice.    The Bank hereby notifies Borrower thatpursuant to the requirements of the USA Patriot Act (Title III of Pub. L.107-56 (signed into law October 26, 2001)) (the “Act”), it is required toobtain, verify and record information that identifies Borrower, whichinformation includes the name and address of Borrower and other informationthat will allow the Bank to identify Borrower in accordance with the Act.

10.5         Treatment of Certain Information;Confidentiality.  The Bank agrees tomaintain the confidentiality of the Information (as defined below), except thatInformation may be disclosed (a) to its Affiliates and to its and itsAffiliates’ respective partners, directors, officers, employees, agents,advisors and representatives (it being understood that the Persons to whom suchdisclosure is made will be informed of the confidential nature of suchInformation and instructed to keep such Information confidential), (b) to theextent requested by any regulatory authority, purporting to have jurisdictionover it  (including any self-regulatoryauthority, such as the National Association of Insurance Commissioners), (c) tothe extent required by applicable laws or regulations or by any subpoena orsimilar legal process, (d) to any other party hereto, (e) in connection withthe exercise of any remedies hereunder or under any other Loan Document or anyaction or proceeding relating to this Agreement or any other Loan Document orthe enforcement of rights hereunder or thereunder, (f) subject to an agreementcontaining provisions substantially the same as those of this Section, to (i)any assignee of or participant in, or any prospective assignee of orparticipant in, any of its rights or obligations under this Agreement or (ii)any actual or prospective counterparty (or its advisors) to any swap orderivative transaction relating to Borrower and its obligations, (g) with theconsent of Borrower or (h) to the extent such Information (x) becomes publiclyavailable other than as a result of a breach of this Section or (y) becomesavailable to the bank or its Affiliates on a nonconfidential basis from asource other than Borrower.  For purposesof this Section, “Information” means all information received from Borrower orany Subsidiary relating to Borrower or any Subsidiary or any of theirrespective businesses, other than any such information that is available to theBank on a nonconfidential basis prior to disclosure by Borrower or anySubsidiary, provided that, in the case of information received from Borrower orany Subsidiary after the date hereof, such information is clearly identified atthe time of delivery as confidential. Any Person required to maintain the confidentiality of Information asprovided in this Section shall be considered to have complied with itsobligation to do so if such Person has exercised the same degree of care tomaintain the confidentiality of such Information as such Person would accord toits own confidential information.    TheBank acknowledges that (a) the Information may include material non-publicinformation concerning the Borrower or a Subsidiary, as the case may be, (b) ithas developed compliance procedures regarding the use of material non-publicinformation and (c) it will handle such material non-public information inaccordance with applicable Law, including Federal and state securities Laws.

## 10.6         Successors andAssigns.

This Agreement is bindingon the Borrower’s and the Bank’s successors and assignees.  The Borrower agrees that it may not assignthis Agreement without the Bank’s prior consent.  The Bank may sell participations in or assignthis loan, and may exchange information about the Borrower (including, withoutlimitation, any information regarding any hazardous substances) with actual orpotential participants or assignees.  Ifa participation is sold or the loan is assigned, the purchaser will have theright of set-off against the Borrower.

## 10.7         Severability;Waivers.

Ifany part of this Agreement is not enforceable, the rest of the Agreement may beenforced.  The Bank retains all rights,even if it makes a loan after default. If the Bank waives a default, it may enforce a later default.  Any consent or waiver under this Agreementmust be in writing.

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## 10.8         Attorneys’ Fees.

TheBorrower shall reimburse the Bank for any reasonable costs and attorneys’ feesincurred by the Bank in connection with the enforcement or preservation of anyrights or remedies under this Agreement and any other documents executed inconnection with this Agreement, and in connection with any amendment, waiver, “workout”or restructuring under this Agreement. In the event of a lawsuit or arbitration proceeding, the prevailingparty is entitled to recover costs and reasonable attorneys’ fees incurred inconnection with the lawsuit or arbitration proceeding, as determined by thecourt or arbitrator.  In the event thatany case is commenced by or against the Borrower under the Bankruptcy Code(Title 11, United States Code) or any similar or successor statute, the Bank isentitled to recover costs and reasonable attorneys’ fees incurred by the Bankrelated to the preservation, protection, or enforcement of any rights of theBank in such a case.  As used in thisparagraph, “attorneys’ fees” includes the allocated costs of the Bank’s in-housecounsel.

## 10.9         One Agreement.

ThisAgreement and any related security or other agreements required by thisAgreement, collectively:

(a)                                  representthe sum of the understandings and agreements between the Bank and the Borrowerconcerning this credit;

(b)                                 replaceany prior oral or written agreements between the Bank and the Borrowerconcerning this credit; and

(c)                                  areintended by the Bank and the Borrower as the final, complete and exclusivestatement of the terms agreed to by them.

Inthe event of any conflict between this Agreement and any other agreementsrequired by this Agreement, this Agreement will prevail.  Any reference in any related document to a “promissorynote” or a “note” executed by the Borrower and dated as of the date of thisAgreement shall be deemed to refer to this Agreement, as now in effect or ashereafter amended, renewed, or restated.

## 10.10       Indemnification.

TheBorrower will indemnify and hold the Bank harmless from any loss, liability,damages, judgments, and costs of any kind relating to or arising directly orindirectly out of (a) this Agreement or any document required hereunder, (b)any credit extended or committed by the Bank to the Borrower hereunder, and (c)any litigation or proceeding related to or arising out of this Agreement, anysuch document, or any such credit.  Thisindemnity includes but is not limited to reasonable attorneys’ fees (includingthe allocated cost of in-house counsel). This indemnity extends to the Bank, its parent, subsidiaries and all oftheir directors, officers, employees, agents, successors, attorneys, andassigns.  This indemnity will surviverepayment of the Borrower’s obligations to the Bank.  All sums due to the Bank hereunder shall beobligations of the Borrower, due and payable immediately without demand.

## 10.11       Notices.

Unless otherwise providedin this Agreement or in another agreement between the Bank and the Borrower,all notices required under this Agreement shall be personally delivered or sentby first class mail, postage prepaid, or by overnight courier, to the addresseson the signature page of this Agreement, or sent by facsimile to the faxnumbers listed on the signature page, or to such other addresses as the Bankand the Borrower may specify from time to time in writing.  Notices and other communications shall be effective (i) if mailed, upon the earlierof receipt or five (5) days after deposit in the U.S. mail, first class,postage prepaid, (ii) if telecopied, when transmitted, or (iii) ifhand-delivered, by courier or otherwise (including telegram, lettergram ormailgram), when delivered.

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## 10.12       Headings.

Articleand paragraph headings are for reference only and shall not affect theinterpretation or meaning of any provisions of this Agreement.

## 10.13       Counterparts.

ThisAgreement may be executed in as many counterparts as necessary or convenient,and by the different parties on separate counterparts each of which, when soexecuted, shall be deemed an original but all such counterparts shallconstitute but one and the same agreement.

## 10.14       Limitation of Interest and OtherCharges.

If, at any time, the rate of interest, togetherwith all amounts which constitute interest and which are reserved, charged ortaken by the Bank as compensation for fees, services or expenses incidental tothe making, negotiating or collection of the loan evidenced hereby, shall bedeemed by any competent court of law, governmental agency or tribunal to exceedthe maximum rate of interest permitted to be charged by the Bank to theBorrower under applicable law, then, during such time as such rate of interestwould be deemed excessive, that portion of each sum paid attributable to thatportion of such interest rate that exceeds the maximum rate of interest sopermitted shall be deemed a voluntary prepayment of principal.  As used herein, the term “applicable law”shall mean the law in effect as of the date hereof; provided, however, that inthe event there is a change in the law which results in a higher permissiblerate of interest, then this Agreement shall be governed by such new law as ofits effective date.

10.15       Definitions.

As used in this Agreement, the following terms shallhave the following meanings:

“Affiliate” means, with respect to any Person, another Personthat directly, or indirectly through one or more intermediaries, Controls or isControlled by or is under common Control with the Person specified.

“Business Day” means any day other than a Saturday, Sunday orother day on which commercial banks are authorized to close under the Laws of,or are in fact closed in, the state where Bank’s office is located and, if suchday relates to any Eurodollar Rate Loan, means any such day on which dealingsin Dollar deposits are conducted by and between banks in the London interbankeurodollar market.

“Collateral” shall mean any and all assets and rights andinterests in or to property of Borrower and each of the other Loan Parties,whether real or personal, tangible or intangible, in which a Lien is granted orpurported to be granted pursuant to the Collateral Documents.

“Collateral Documents” means the Security Agreement of even dateherewith from Borrower to Bank, and all other agreements, instruments anddocuments  hereafter executed anddelivered in connection with this Agreement pursuant to which Liens are grantedor purported to be granted to Bank in Collateral securing all or part of theObligations, and including also any negative pledge agreements from any LoanParty in favor of Bank.

“Compliance Certificate” means a certificate substantially inthe form of Exhibit A.

“Debtor Relief Laws” means the Bankruptcy Code of the UnitedStates, and all other liquidation, conservatorship, bankruptcy, assignment forthe benefit of creditors, moratorium, rearrangement, receivership, insolvency,reorganization, or similar debtor relief Laws of the United States or otherapplicable jurisdictions from time to time in effect and affecting the rightsof creditors generally.

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“Default” or “default” means any event or condition thatconstitutes an Event of Default or that upon notice, lapse of time or bothwould, unless cured or waived, become an Event of Default.

“Disposition” or “Dispose” means the sale, transfer,license, lease or other disposition (including any sale and leasebacktransaction) of any property by any Person, including any sale, assignment,transfer or other disposal, with or without recourse, of any notes or accountsreceivable or any rights and claims associated therewith.

“ERISA” means the Employee Retirement Income Security Act of1974.

“ERISA Affiliate” means any trade or business (whether or notincorporated) under common control with Borrower within the meaning of Section414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposesof provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to aPension Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from aPension Plan subject to Section 4063 of ERISA during a plan year in which itwas a substantial employer (as defined in Section 4001(a)(2) of ERISA) or acessation of operations that is treated as such a withdrawal under Section4062(e) of ERISA; (c) a complete or partial withdrawal by Borrower or any ERISAAffiliate from a Multiemployer Plan or notification that a Multiemployer Planis in reorganization; (d) the filing of a notice of intent to terminate, thetreatment of a Plan amendment as a termination under Sections 4041 or 4041A ofERISA, or the commencement of proceedings by the PBGC to terminate a PensionPlan or Multiemployer Plan; (e) an event or condition which constitutes groundsunder Section 4042 of ERISA for the termination of, or the appointment of atrustee to administer, any Pension Plan or Multiemployer Plan; or (f) theimposition of any liability under Title IV of ERISA, other than for PBGCpremiums due but not delinquent under Section 4007 of ERISA, upon Borrower orany ERISA Affiliate.

“GAAP” means generally acceptedaccounting principles in the United States set forth in the opinions andpronouncements of the Accounting Principles Board and the American Institute ofCertified Public Accountants and statements and pronouncements of the FinancialAccounting Standards Board or such other principles as may be approved by asignificant segment of the accounting profession in the United States, that areapplicable to the circumstances as of the date of determination, consistentlyapplied.

“Governmental Authority” means the government of the UnitedStates or  any other nation, or of anypolitical subdivision thereof, whether state or local, and any agency,authority, instrumentality, regulatory body, court, central bank or otherentity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government (includingany supra-national bodies such as the European Union or the European CentralBank).

“Guarantor”  means each ofMaricor Technologies, Inc.,a Maine corporation, The Maricor Group, a Mainecorporation, and Mecel Properties Limited,a Nova Scotia corporation, and theirrespective successors.

“Guarantee” means, as to any Person, any (a) any obligation,contingent or otherwise, of such Person guaranteeing or having the economiceffect of guaranteeing any Indebtedness or other obligation payable orperformable by another Person (the “primary obligor”) in any manner, whetherdirectly or indirectly, and including any obligation of such Person, direct orindirect, (i) to purchase or pay (or advance or supply funds for the purchaseor payment of) such Indebtedness or other obligation, (ii) to purchase or leaseproperty, securities or services for the purpose of assuring the obligee inrespect of such Indebtedness or other obligation of the payment or performanceof such Indebtedness or other obligation, (iii) to maintain working capital,equity capital or any other financial statement condition or liquidity or levelof income or cash flow of the primary obligor so as to enable the primaryobligor to pay such Indebtedness or other obligation, or (iv) entered into forthe purpose of assuring in any other manner the obligee in respect of such 

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Indebtedness or other obligation of the payment or performance thereofor to protect such obligee against loss in respect thereof (in whole or inpart), or (b) any Lien on any assets of such Person securing any Indebtednessor other obligation of any other Person, whether or not such Indebtedness orother obligation is assumed by such Person (or any right, contingent orotherwise, of any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemedto be an amount equal to the stated or determinable amount of the relatedprimary obligation, or portion thereof, in respect of which such Guarantee ismade or, if not stated or determinable, the maximum reasonably anticipatedliability in respect thereof as determined by the guaranteeing Person in goodfaith.  The term “Guarantee” as a verbhas a corresponding meaning.

“Guaranty”  means eachguaranty given by a Guarantor to Bank in connection with the Obligations.

“Indebtedness” means, as to any Person at a particular time,without duplication (for example, Borrower’s letters of credit securing otherIndebtedness shall not count as Indebtedness independent of the Indebtednessbeing secured), all of the following, whether or not included as indebtednessor liabilities in accordance with GAAP:

(a)           all obligations ofsuch Person for borrowed money and all obligations of such Person evidenced bybonds, debentures, notes, loan agreements or other similar instruments;

(b)           all direct orcontingent obligations of such Person arising under letters of credit(including standby and commercial), bankers’ acceptances, bank guaranties,surety bonds and similar instruments;

(c)           net obligations ofsuch Person under any Swap Contract;

(d)           all obligations ofsuch Person to pay the deferred purchase price of property or services (otherthan trade accounts payable in the ordinary course of business and, in eachcase, not past due for more than 60 days after the date on which such tradeaccount payable was created);

(e)           indebtedness(excluding prepaid interest thereon) secured by a Lien on property owned orbeing purchased by such Person (including indebtedness arising underconditional sales or other title retention agreements), whether or not suchindebtedness shall have been assumed by such Person or is limited in recourse;

(f)            capital leases andSynthetic Lease Obligations;

(g)           all obligations ofsuch Person to purchase, redeem, retire, defease or otherwise make any paymentin respect of any Equity Interest in such Person or any other Person, providedthat the term “Indebtedness” shall not include preferred stock ; and

(h)           all Guarantees ofsuch Person in respect of any of the foregoing.

“Internal Control Event” means a material weakness in, or fraudthat involves management or other employees who have a significant role in,Borrower’s internal controls over financial reporting, in each case asdescribed in the Securities Laws, in each case as described in the SecuritiesLaws and when relevant requirements become effective as to Borrower underregulations promulgated under the Securities Laws.

“Laws” means, collectively, all international, foreign, Federal,state and local statutes, treaties, rules, guidelines, regulations, ordinances,codes and administrative or judicial precedents or 

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authorities, including the interpretation or administration thereof byany Governmental Authority charged with the enforcement, interpretation oradministration thereof, and all applicable administrative orders, directedduties, requests, licenses, authorizations and permits of, and agreements with,any Governmental Authority, in each case whether or not having the force oflaw.

“Lien” means any mortgage, pledge, hypothecation, assignment,deposit arrangement, encumbrance, lien (statutory or other), charge, orpreference, priority or other security interest or preferential arrangement inthe nature of a security interest of any kind or nature whatsoever (includingany conditional sale or other title retention agreement, any easement, right ofway or other encumbrance on title to real property, and any financing leasehaving substantially the same economic effect as any of the foregoing).

“Loan Documents” means this Agreement, any promissory notesexecuted pursuant to Section 4.1(b), each Guaranty and each CollateralDocument.

“Loan Parties” means, collectively, Borrower and each Personexecuting a Loan Document.

“Material Adverse Effect” means (a) a material adverse changein, or a material adverse effect upon, the operations, business, properties,liabilities (actual or contingent), condition (financial or otherwise) orprospects of Borrower or Borrower and its Subsidiaries taken as a whole; (b) amaterial impairment of the ability of any Loan Party to perform its obligationsunder any Loan Document to which it is a party; or (c) a material adverseeffect upon the legality, validity, binding effect or enforceability againstany Loan Party of any Loan Document to which it is a party.

“Obligations” means all advances to, and debts, liabilities,obligations, covenants and duties of, any Loan Party arising under any LoanDocument, Swap Contract or otherwise with respect to any Loan, whether director indirect (including those acquired by assumption), absolute or contingent,due or to become due, now existing or hereafter arising and including interestand fees that accrue after the commencement by or against any Loan Party or anyAffiliate thereof of any proceeding under any Debtor Relief Laws naming suchPerson as the debtor in such proceeding, regardless of whether such interestand fees are allowed claims in such proceeding.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (assuch term is defined in Section 3(2) of ERISA), other than a MultiemployerPlan, that is subject to Title IV of ERISA and is sponsored or maintained byBorrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliatecontributes or has an obligation to contribute, or in the case of a multipleemployer or other plan described in Section 4064(a) of ERISA, has madecontributions at any time during the immediately preceding five plan years.

“Person” means any natural person, corporation, limitedliability company, trust, joint venture, association, company, partnership,Governmental Authority or other entity.

“Registered Public Accounting Firm” has the meaning specified inthe Securities Laws and shall be independent of Borrower as prescribed by theSecurities Laws.

“Reportable Event” means any of the events set forth in Section4043(c) of ERISA, other than events for which the 30 day notice period has beenwaived.

“Responsible Officer” means the chief executive officer,president, chief financial officer, chief accounting officer, treasurer orassistant treasurer of a Loan Party.  Anydocument delivered hereunder that is signed by a Responsible Officer of a LoanParty shall be conclusively presumed to have been authorized by all necessarycorporate, partnership and/or other action on the part of 

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such Loan Party and such Responsible Officer shall be conclusivelypresumed to have acted on behalf of such Loan Party.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“SEC” means the Securities and Exchange Commission, or anyGovernmental Authority succeeding to any of its principal functions.

“Securities Laws” means the Securities Act of 1933, theSecurities Exchange Act of 1934, Sarbanes-Oxley and the applicable accountingand auditing principles, rules, standards and practices promulgated, approvedor incorporated by the SEC or the Public Company Accounting Oversight Board, aseach of the foregoing may be amended and in effect on any applicable datehereunder.

“Subsidiary” of a Person means a corporation, partnership, jointventure, limited liability company or other business entity of which a majorityof the shares of securities or other interests having ordinary voting power forthe election of directors or other governing body (other than securities orinterests having such power only by reason of the happening of a contingency)are at the time beneficially owned, or the management of which is otherwisecontrolled, directly, or indirectly through one or more intermediaries, orboth, by such Person.  Unless otherwisespecified, all references herein to a “Subsidiary” or to “Subsidiaries” shallrefer to a Subsidiary or Subsidiaries of Borrower.

“Swap Contract” means (a) any and all rate swap transactions,basis swaps, credit derivative transactions, forward rate transactions,commodity swaps, commodity options, forward commodity contracts, equity orequity index swaps or options, bond or bond price or bond index swaps oroptions or forward bond or forward bond price or forward bond indextransactions, interest rate options, forward foreign exchange transactions, captransactions, floor transactions, collar transactions, currency swaptransactions, cross-currency rate swap transactions, currency options, spotcontracts, or any other similar transactions or any combination of any of theforegoing (including any options to enter into any of the foregoing), whetheror not any such transaction is governed by or subject to any master agreement,and (b) any and all transactions of any kind, and the related confirmations, whichare subject to the terms and conditions of, or governed by, any form of masteragreement published by the International Swaps and Derivatives Association,Inc., any International Foreign Exchange Master Agreement, or any other masteragreement (any such master agreement, together with any related schedules, a “MasterAgreement”), including any such obligations or liabilities under any MasterAgreement.

“Synthetic Lease Obligation” means the monetary obligation of aPerson under (a) a so-called synthetic, off-balance sheet or tax retentionlease, or (b) an agreement for the use or possession of property creatingobligations that do not appear on the balance sheet of such Person but which,upon the insolvency or bankruptcy of such Person, would be characterized as theindebtedness of such Person (without regard to accounting treatment).

“Threshold Amount”means Five Hundred Thousand Dollars ($500,000) for Borrower, One MillionDollars ($1,000,000) for Maine Public Service Company and Two Hundred FiftyThousand Dollars ($250,000) for any of the Subsidiary.

10.16       Maine Notice.       By signing below, the Borrower agrees andacknowledges that, under Maine law, no promise, contract, or agreement to lendmoney, extend credit, forbear from collection of debt or make any otheraccommodation for the repayment of a debt for more than Two Hundred FiftyThousand Dollars ($250,000) may be enforced against the Bank unless thepromise, contract, or agreement (or some memorandum or note thereof) is inwriting and signed by the Bank.  TheBorrower executed this Agreement as of the date stated at the top of the firstpage, intending to create an instrument executed under seal.

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| Attested To:                         |   |   | Maine & Maritimes Corporation                         |
|--------------------------------------|--------|--------|-----------------------------------------------------------|
|                                 |   |   |                                                      |
|                                 |   |   |                                                      |
|                                 |   | By     |                                                      |  (Seal) |
| Typed Name                           |   |   | Typed Name: J. Nicholas Bayne                             |
|                                 |   |   | Title: President and CEO                                  |
|                                 |   |   |                                                      |
|                                 |   |   | Address where notices to                                  |
|                                 |   |   | the Borrower are to be sent:                              |
|                                 |   |   |                                                      |
|                                 |   |   | 209 State Street                                          |
|                                 |   |   | Presque Isle, ME 04769                                    |
|                                 |   |   | Attention: Patrick Cannon, General Counsel and  Secretary |
|                                 |   |   | Telephone: 207-760-2422                                   |
|                                 |   |   | Telecopier: 207-760-2423                                  |
|                                 |   |   | Electronic Mail: pcannon@maineandmaritimes.com            |
|                                 |   |   | Website Address: www.maineandmaritimes.com                |
| Bank of America, N.A.                |   |   |
|                                 |   |
| By                                   |   |   |                                                      |
| Typed Name                           |   |   |                                                      |
| Title                                |   |   |                                                      |
|                                 |   |   |                                                      |
|                                 |   |   |
| Address where notices to             |   |   |
| the Bank are to be sent:             |   |   |
| Bank of America, N.A.                |   |   |
| One Hundred Middle Street, Suite 329 |   |   |
| Portland, Maine 04101-4673           |   |   |
| Attention: Ms. Jane Parker           |   |   |
| Facsimile: 207-874-5167              |   |   |
|                                      |        |        |                                                           |  |  |  |  |  |  |  |

 

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***Exhibit A***

**FORM OFCOMPLIANCE CERTIFICATE**

Financial Statement Date:              ,

To:                              Bank of America, N.A.

Ladiesand Gentlemen:

Reference is made to that certainLoan Agreement, dated as of           ,2006 (as amended, restated, extended, supplemented or otherwise modified inwriting from time to time, the “Agreement;” the terms defined thereinbeing used herein as therein defined), among Maine & Maritimes Corporation(“Borrower”), the Lenders from time to time party thereto, and Bank ofAmerica, N.A., as Bank.

The undersigned Responsible Officerhereby certifies as of the date hereof that he/she is the                                                                    of Borrower, and that, as such, he/she is authorized to execute and deliverthis Certificate to Agent on the behalf of Borrower, and that:

***(use the following paragraph for fiscal year-endfinancial statements)***

**1.****             ****Attached hereto as Schedule 1 are the year-endaudited financial statements and other reporting and certifications as requiredby Section 7.2(a) of the Agreement for the fiscal year ended as of the abovedate.**

***(use the following paragraph for quarter year-endfinancial statements)***

**1.****             ****Attached hereto as Schedule 1 are the unauditedfinancial statements and other reporting and certifications as required bySection 7.2(b) of the Agreement for the fiscal quarter ended as of the abovedate.**

**2.****             ****The undersigned has reviewed and is familiar withthe terms of the Agreement and has made, or has caused to be made under his/hersupervision, a detailed review of the transactions and condition (financial orotherwise) of Borrower during the accounting period covered by the attachedfinancial statements.**

**3.****             ****A review of the activities of Borrower during suchfiscal period has been made under the supervision of the undersigned with aview to determining whether during such fiscal period Borrower performed andobserved all its Obligations under the Loan Documents and**

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(select one)

**(to the best knowledge of the undersigned during such fiscal period,Borrower performed and observed each covenant and condition of the LoanDocuments applicable to it, and no Default has occurred and it continuing.)**

-or-

(the following covenants or conditions have notbeen performed or observed and the following is a list of each such Default andits nature and status:)

4.             Therepresentations and warranties of Borrower contained in Article VI ofthe Agreement, and/or any representations and warranties of Borrower or anyother Loan Party that are contained in any document furnished at any time underor in connection with the Loan Documents, are true and correct on and as of thedate hereof, except to the extent that such representations and warrantiesspecifically refer to an earlier date, in which case they are true and correctas of such earlier date.

5.             Thefinancial covenant analyses and information set forth on Schedule 2attached hereto are true and accurate on and as of the date of thisCertificate.

*IN WITNESS WHEREOF,* the undersigned has executed this Certificate as of                                 ,                 .
| ** ** | **MAINE & MARITIMES  CORPORATION** |
|------------|----------------------------------------|
|       |
|       | By:                                    |   |
|       | Name:                                  |   |
|       | Title:                                 |   |
|            |                                        |  |  |  |

 

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|  | For the Quarter/Year ended | (“Statement Date”) |
|--|----------------------------|------------------------------|

 

**SCHEDULE 2**to the Compliance Certificate($ in 000’s)
| I.         | Section 7.3 Debt to Capital Ratio   |                                                |
|------------|-------------------------------------|-----------------------------------------------------|
|       |                                |                                                |   |
|       | A.                                  | Consolidated Total Indebtedness for Borrowed Money: | $ |
|       |                                |                                                |   |
|       | B.                                  | Common Shareholder’s Equity                    | $ |
|       |                                |                                                |   |
|       | C.                                  | Consolidated Total Capital (Line IA + IB)           | $ |
|       |                                |                                                |   |
|       | D.                                  | Percentage (Line I A  ̧  Line I C)              |    % |
|       |                                |                                                | ** ** |
|       | E.                                  | Maximum Allowed                                     | **57%  [55%]** |
|       |                                |                                                |
| II.        | Section 7.4 Interest Coverage Ratio |                                                |
|       |                                |                                                |   |
|       | A.                                  | Consolidated EBIT:                                  | $ |
|       |                                |                                                |   |
|       | B.                                  | Consolidated Interest Expense                       | $ |
|       |                                |                                                |   |
|       | C.                                  | Preferred Dividend Paid                             | $ |
|       |                                |                                                |   |
|       | D.                                  | Ratio (Line II A)  ̧  (Line II B + II C)        |            to 1.0 |
|       |                                |                                                |   |
|       | E.                                  | Minimum Required                                    | 1.0 : 1.0 |
| ** ** |                                | ** **                                          |
| ** ** |                                | **[Use  applicable Ratio]**                         |

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***Schedule 6.8***

***Liens.***

***1. Liens in favor of Bank of America, N.A., as Administrative Agent, underor relating to the Credit Agreement dated as of October  21, 2005, among the Borrower, each lender fromtime to time party thereto (initially Bank of America, N.A. and Katahdin TrustCompany), and Bank of America, N.A., as Administrative Agent and L/C Issuer, asamended from time to time.***

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