EXECUTION COPY



                                 $1,400,000,000

                                CREDIT AGREEMENT

                                      among


                               KEYSPAN CORPORATION,
                                  as Borrower,


                               The Several Lenders
                        from Time to Time Parties Hereto,


                                  ABN AMRO BANK, N.V.
                                       and
                                    CITIBANK, N.A.,
                            as Co-Syndication Agents,


                               FLEET NATIONAL BANK
                                       and
                         THE ROYAL BANK OF SCOTLAND PLC,
                           as Co-Documentation Agents,


                                       and


                             THE CHASE MANHATTAN BANK,
                             as Administrative Agent


                         Dated as of September 19, 2001





                           J.P. MORGAN SECURITIES INC.,
                         Lead Arranger and Book Manager


<PAGE>


<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                -----------------

                                                                                                               Page
                                                                                                               ----
<S>     <C>       <C>                                                                                           <C>
Section 1         DEFINITIONS.....................................................................................1
---------         -----------

         1.1      Defined Terms...................................................................................1
         ---      --------------

         1.2      Other Definitional Provisions..................................................................14
         ---      ------------------------------

Section 2         AMOUNT AND TERMS OF COMMITMENTS................................................................14
---------         -------------------------------

         2.1      Commitments....................................................................................14
         ---      ------------

         2.2      Competitive Bid Procedure......................................................................15
         ---      --------------------------

         2.3      Procedure for Loan Borrowing...................................................................16
         ---      -----------------------------

         2.4      Facility Fees, etc.............................................................................17
         ---      -------------------

         2.5      Termination or Reduction of Commitments........................................................17
         ---      ----------------------------------------

         2.6      Optional Prepayments...........................................................................17
         ---      ---------------------

         2.7      Conversion and Continuation Options............................................................17
         ---      ------------------------------------

         2.8      Limitations on Eurodollar Tranches.............................................................18
         ---      -----------------------------------

         2.9      Interest Rates and Payment Dates...............................................................18
         ---      --------------------------------

         2.10     Computation of Interest and Fees...............................................................18
         ----     ---------------------------------

         2.11     Inability to Determine Interest Rate...........................................................19
         ----     -------------------------------------

         2.12     Pro Rata Treatment and Payments................................................................19
         ----     --------------------------------

         2.13     Requirements of Law............................................................................20
         ----     --------------------

         2.14     Taxes..........................................................................................21
         ----     ------

         2.15     Indemnity......................................................................................23
         ----     ----------

         2.16     Change of Lending Office.......................................................................23
         ----     -------------------------

         2.17     Replacement of Lenders.........................................................................23
         ----     -----------------------

Section 3         REPRESENTATIONS AND WARRANTIES.................................................................24
---------         ------------------------------

         3.1      Financial Condition............................................................................24
         ---      --------------------

         3.2      No Change......................................................................................24
         ---      ----------

         3.3      Corporate Existence; Compliance with Law.......................................................24
         ---      -----------------------------------------

         3.4      Corporate Power; Authorization; Enforceable Obligations........................................25
         ---      --------------------------------------------------------

         3.5      No Legal Bar...................................................................................25
         ---      -------------

         3.6      Litigation.....................................................................................25
         ---      -----------

         3.7      No Default.....................................................................................25
         ---      -----------

         3.8      Ownership of Property; Liens...................................................................25
         ---      -----------------------------

         3.9      Intellectual Property..........................................................................25
         ---      ----------------------

         3.10     Taxes..........................................................................................26
         ----     ------

         3.11     Federal Regulations............................................................................26
         ----     --------------------

         3.12     Labor Matters..................................................................................26
         ----     --------------

         3.13     ERISA..........................................................................................26
         ----     ------

         3.14     Investment Company Act; Other Regulations......................................................27
         ----     ------------------------------------------

         3.15     Subsidiaries...................................................................................27
         ----     -------------

         3.16     Use of Proceeds................................................................................27
         ----     ----------------

         3.17     Environmental Matters..........................................................................27
         ----     ----------------------

         3.18     Accuracy of Information, etc...................................................................28
         ----     -----------------------------

Section 4         CONDITIONS PRECEDENT...........................................................................28
---------         --------------------

         4.1      Conditions to Closing Date.....................................................................28
         ---      ---------------------------

         4.2      Conditions to Initial Extension of Credit......................................................29
         ---      ------------------------------------------

         4.3      Conditions to Each Extension of Credit.........................................................29
         ---      ---------------------------------------

Section 5         AFFIRMATIVE COVENANTS..........................................................................29
---------         ---------------------

         5.1      Financial Statements...........................................................................29
         ---      ---------------------

         5.2      Certificates; Other Information................................................................30
         ---      --------------------------------

         5.3      Payment of Obligations.........................................................................30
         ---      -----------------------

         5.4      Maintenance of Existence; Compliance...........................................................30
         ---      -------------------------------------

         5.5      Maintenance of Property; Insurance.............................................................31
         ---      -----------------------------------

         5.6      Inspection of Property; Books and Records; Discussions.........................................31
         ---      -------------------------------------------------------

         5.7      Notices........................................................................................31
         ---      --------

         5.8      Environmental Laws.............................................................................32
         ---      -------------------

         5.9      Transaction with Affiliates....................................................................32
         ---      ----------------------------

Section 6         NEGATIVE COVENANTS.............................................................................32
---------         ------------------

         6.1      Financial Condition Covenant...................................................................32
         ---      -----------------------------

         6.2      Liens..........................................................................................32
         ---      ------

         6.3      Fundamental Changes............................................................................33
         ---      --------------------

         6.4      Disposition of Property........................................................................33
         ---      ------------------------

         6.5      Negative Pledge Clauses........................................................................34
         ---      ------------------------

         6.6      Limitation on Restrictions on Distributions from Subsidiaries..................................34
         ---      --------------------------------------------------------------

Section 7         EVENTS OF DEFAULT..............................................................................34
---------         -----------------

Section 8         THE ADMINISTRATIVE AGENT.......................................................................36
---------         ------------------------

         8.1      Appointment....................................................................................36
         ---      ------------

         8.2      Delegation of Duties...........................................................................36
         ---      ---------------------

         8.3      Exculpatory Provisions.........................................................................37
         ---      -----------------------

         8.4      Reliance by Administrative Agent...............................................................37
         ---      ---------------------------------

         8.5      Notice of Default..............................................................................37
         ---      ------------------

         8.6      Non-Reliance on Administrative Agent and Other Lenders.........................................38
         ---      -------------------------------------------------------

         8.7      Indemnification................................................................................38
         ---      ----------------

         8.8      Administrative Agent in Its Individual Capacity................................................38
         ---      ------------------------------------------------

         8.9      Successor Administrative Agent.................................................................39
         ---      -------------------------------

Section 9         MISCELLANEOUS..................................................................................39
---------         -------------

         9.1      Amendments and Waivers.........................................................................39
         ---      -----------------------

         9.2      Notices........................................................................................39
         ---      --------

         9.3      No Waiver; Cumulative Remedies.................................................................40
         ---      -------------------------------

         9.4      Survival of Representations and Warranties.....................................................40
         ---      -------------------------------------------

         9.5      Payment of Expenses and Taxes..................................................................40
         ---      ------------------------------

         9.6      Successors and Assigns; Participations and Assignments.........................................41
         ---      -------------------------------------------------------

         9.7      Adjustments; Set-off...........................................................................43
         ---      ---------------------

         9.8      Counterparts...................................................................................43
         ---      -------------

         9.9      Severability...................................................................................44
         ---      -------------

         9.10     Integration....................................................................................44
         ----     ------------

         9.11     GOVERNING LAW..................................................................................44
         ----     --------------

         9.12     Submission To Jurisdiction; Waivers............................................................44
         ----     ------------------------------------

         9.13     Acknowledgements...............................................................................44
         ----     -----------------

         9.14     Confidentiality................................................................................45
         ----     ----------------

         9.15     WAIVERS OF JURY TRIAL..........................................................................45
         ----     ----------------------
</TABLE>




<PAGE>






SCHEDULES:

1.1      Commitments
3.4      Consents, Authorizations, Filings and Notices
3.15     Subsidiaries
6.2(f)   Existing Liens
6.5      Existing Negative Pledge Clauses
6.6      Existing Limitations on Restrictions on Distributions from Subsidiaries

EXHIBITS:

A        Form of Closing Certificate
B        Form of Assignment and Acceptance
C        Form of Legal Opinion of Richard A. Rapp, Jr.
D        Form of Exemption Certificate


<PAGE>






                  CREDIT AGREEMENT, dated as of September 19, 2001, among
KEYSPAN CORPORATION, a New York corporation (the "Borrower"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), ABN AMRO BANK, N.V., and CITIBANK, N.A., as
co-syndication agents, FLEET NATIONAL BANK and THE ROYAL BANK OF SCOTLAND PLC,
as co-documentation agents, and THE CHASE MANHATTAN BANK, as administrative
agent.

                  The parties hereto hereby agree as follows:

                             Section 1     DEFINITIONS

1.1 Defined Terms.As used in this Agreement, the terms listed in this Section
1.1 shall have the respective meanings set forth in this Section 1.1.

                  "ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Reference Lender as its prime rate in effect
at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by the Reference Lender in connection
with extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month Secondary
CD Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business Day) by the
Reference Lender from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.

                  "ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.

                  "Administrative Agent": The Chase Manhattan Bank, together
with its affiliates, as the administrative agent for the Lenders under this
Agreement and the other Loan Documents, together with any of its successors.

                  "Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

          "Aggregate  Exposure":  with  respect to any  Lender at any time,  the
     amount of such Lender's  Commitments  then in effect or, if the Commitments
     have been terminated, the amount of such Lender's Loans then outstanding.

          "Aggregate  Exposure  Percentage":  with  respect to any Lender at any
     time,  the ratio  (expressed  as a percentage)  of such Lender's  Aggregate
     Exposure  at such time to the  Aggregate  Exposure  of all  Lenders at such
     time.

          "Agreement":  this  Credit  Agreement,  as  amended,  supplemented  or
     otherwise modified from time to time.

                  "Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below which corresponds with the
most current rating of the Borrower's senior unsecured long-term debt issued by
S&P, Moody's and/or Fitch respectively; provided that, through the Termination
Date, for each day the aggregate principal amount of Loans outstanding is
greater than the amount equal to 33% of the Total Commitments, the Applicable
Margin then in effect on all borrowings will be increased by 0.125% per annum.
After the Termination Date, the Applicable Margin then in effect will be
increased by 0.125% per annum.

======================= ============================ ===========================

                             Applicable Margin            Applicable Margin
       Ratings             For Eurodollar Loans             for ABR Loans

======================= ============================ ===========================

         A/A2                     0.305%                        0.000%

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

        A-/A3                     0.425%                        0.000%

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

      BBB+/Baa1                   0.525%                        0.000%

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

       BBB/Baa2                   0.625%                        0.000%

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

      <BBB-/Baa3                  0.975%                        0.000%
      -

======================= ============================ ===========================

     Changes in the  Applicable  Margin  shall  become  effective on the date on
which  S&P,  Moody's  and/or  Fitch  changes  the  rating it has  issued for the
Borrower's  senior unsecured  long-term debt. In the event of split ratings,  if
all three  agencies  issue a rating and if the ratings  from two agencies are at
the same level and the rating  from the third  agency is at a lower  level,  the
higher  rating  shall  apply;  if the ratings  from two agencies are at the same
level and the  rating  from the third  agency  is at a higher  level,  the lower
rating shall apply;  if all three  ratings are at different  levels,  the rating
next  below the  highest  of the three  shall  apply;  if only two of such three
agencies issue a rating,  the lower of such ratings shall apply;  if only one of
such three agencies issues a rating, such rating shall apply.

                  "Approved Fund": with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.

                  "Asset Sale": any Disposition of property or series of related
Dispositions of property that yields gross proceeds to the Borrower or any of
its Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$50,000,000.

          "Assignee": as defined in Section 9.6(c).

          "Assignment   and   Acceptance":   an   Assignment   and   Acceptance,
     substantially in the form of Exhibit B.

          "Assignor": as defined in Section 9.6(c).

          "Available Commitment":  as to any Lender at any time, an amount equal
     to the excess, if any, of (a) such Lender's  Commitment then in effect over
     (b) such Lender's Loans then outstanding.

          "Benefitted Lender": as defined in Section 9.7(a).

          "Board":  the Board of Governors of the Federal  Reserve System of the
     United States (or any successor).

          "Borrower": as defined in the preamble hereto.

          "Borrowing Date": any Business Day specified by the Borrower as a date
     on  which  the  Borrower  requests  the  relevant  Lenders  to  make  Loans
     hereunder.

          "Business": as defined in Section 3.17(b).

          "Business  Day":  a day other than a Saturday,  Sunday or other day on
     which  commercial  banks in New York City are authorized or required by law
     to close,  provided,  that with  respect to notices and  determinations  in
     connection  with,  and  payments of principal  and interest on,  Eurodollar
     Loans,  such day is also a day for trading by and  between  banks in Dollar
     deposits in the interbank eurodollar market.

          "Capital Lease Obligations": as to any Person, the obligations of such
     Person  to pay  rent  or  other  amounts  under  any  lease  of  (or  other
     arrangement  conveying  the right to use) real or personal  property,  or a
     combination  thereof,  which  obligations are required to be classified and
     accounted  for as capital  leases on a balance  sheet of such Person  under
     GAAP  and,  for  the  purposes  of  this  Agreement,  the  amount  of  such
     obligations  at any time shall be the  capitalized  amount  thereof at such
     time determined in accordance with GAAP.

          "Capital  Stock":  any and all shares,  interests,  participations  or
     other equivalents  (however  designated) of capital stock of a corporation,
     any and all  equivalent  ownership  interests  in a  Person  (other  than a
     corporation) and any and all warrants, rights or options to purchase any of
     the foregoing.

          "Cash  Equivalents":  (a) marketable direct  obligations issued by, or
     unconditionally  guaranteed  by, the United States  Government or issued by
     any  agency  thereof  and backed by the full faith and credit of the United
     States, in each case maturing within one year from the date of acquisition;
     (b)  certificates  of deposit,  time deposits,  eurodollar time deposits or
     overnight  bank deposits  having  maturities of six months or less from the
     date  of  acquisition  issued  by  any  Lender  or by any  commercial  bank
     organized  under the laws of the United States or any state thereof  having
     combined capital and surplus of not less than $500,000,000;  (c) commercial
     paper of an issuer rated at least A-1 by Standard & Poor's Ratings Services
     ("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's"),  or carrying
     an equivalent  rating by a nationally  recognized rating agency, if both of
     the two named rating agencies cease publishing  ratings of commercial paper
     issuers  generally,  and  maturing  within  six  months  from  the  date of
     acquisition;  (d) repurchase obligations of any Lender or of any commercial
     bank satisfying the requirements of clause (b) of this definition, having a
     term of not more than 30 days,  with respect to securities  issued or fully
     guaranteed or insured by the United States government;  (e) securities with
     maturities of one year or less from the date of acquisition issued or fully
     guaranteed by any state, commonwealth or territory of the United States, by
     any  political   subdivision  or  taxing   authority  of  any  such  state,
     commonwealth or territory or by any foreign  government,  the securities of
     which  state,  commonwealth,   territory,  political  subdivision,   taxing
     authority or foreign  government  (as the case may be) are rated at least A
     by S&P or A by Moody's;  (f)  securities  with  maturities of six months or
     less from the date of  acquisition  backed  by  standby  letters  of credit
     issued by any Lender or any commercial bank satisfying the  requirements of
     clause  (b) of this  definition;  or (g) shares of money  market  mutual or
     similar  funds  which  invest   exclusively   in  assets   satisfying   the
     requirements of clauses (a) through (f) of this definition.

          "C/D  Assessment  Rate":  for any day as applied to any ABR Loan,  the
     annual assessment rate in effect on such day that is payable by a member of
     the  Bank  Insurance  Fund  maintained  by the  Federal  Deposit  Insurance
     Corporation  (the  "FDIC")  classified  as   well-capitalized   and  within
     supervisory  subgroup  "B"  (or  a  comparable  successor  assessment  risk
     classification) within the meaning of 12 C.F.R. ss. 327.4 (or any successor
     provision)  to the  FDIC  (or  any  successor)  for  the  FDIC's  (or  such
     successor's)  insuring time deposits at offices of such  institution in the
     United States.

          "C/D Reserve Percentage": for any day as applied to any ABR Loan, that
     percentage  (expressed  as a  decimal)  which is in effect on such day,  as
     prescribed by the Board,  for determining  the maximum reserve  requirement
     for a Depositary Institution (as defined in Regulation D of the Board as in
     effect from time to time) in respect of new  non-personal  time deposits in
     Dollars having a maturity of 30 days or more.

          "Closing Date":  the date on which the conditions  precedent set forth
     in Section  4.1 shall  have been  satisfied,  which date shall  occur on or
     before September 19, 2001.

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

          "Commitment": as to any Lender, the obligation of such Lender, if any,
     to make Loans in an aggregate principal amount not to exceed the amount set
     forth  under  the  heading  "Commitment"  opposite  such  Lender's  name on
     Schedule 1.1 or in the  Assignment  and  Acceptance  pursuant to which such
     Lender became a party hereto,  as the same may be changed from time to time
     pursuant to the terms hereof.  The original amount of the Total Commitments
     is $1,400,000,000.

          "Commitment  Period": the period from and including the Effective Date
     to the Termination Date.

          "Commonly Controlled Entity": an entity,  whether or not incorporated,
     that is under  common  control  with the  Borrower  within  the  meaning of
     Section 4001 of ERISA or is part of a group that  includes the Borrower and
     that is treated as a single employer under Section 414 of the Code.

          "Competitive Loans": a loan made pursuant to Section 2.2.

          "Competitive  Bid":  means an offer by a Lender to make a  Competitive
     Loan in accordance with Section 2.2.

          "Competitive  Bid Rate":  means,  with respect to any Competitive Bid,
     the Margin or Fixed Rate, as applicable,  offered by the Lender making such
     Competitive Bid.

          "Competitive  Bid  Request":  means  a  request  by the  Borrower  for
     Competitive Bids in accordance with Section.2.2.

          "Confidential  Information  Memorandum":  the Confidential Information
     Memorandum dated August 2001 and furnished to the Lenders.

          "Consolidated  Capitalization":  at any date, the sum of  Consolidated
     Net Worth and Consolidated Indebtedness.

          "Consolidated  Indebtedness":  at any date,  all  Indebtedness  of the
     Borrower and its  Subsidiaries  at such date,  determined on a consolidated
     basis in accordance with GAAP, as reflected on the balance sheet.

          "Consolidated  Net Worth":  at any date,  all amounts  that would,  in
     conformity  with GAAP, be included on a  consolidated  balance sheet of the
     Borrower and its Subsidiaries under stockholders' equity at such date.

          "Contractual  Obligation":  as to any  Person,  any  provision  of any
     security  issued by such Person or of any  agreement,  instrument  or other
     undertaking  to which  such  Person is a party or by which it or any of its
     property is bound.

          "Core Gas Distribution Business":  the distribution and sale at retail
     to  customers  of natural gas in the New York City  boroughs  of  Brooklyn,
     Queens and Staten Island,  the Long Island  counties of Nassau and Suffolk,
     in  Massachusetts  and in New  Hampshire,  as such business is conducted by
     KeySpan Energy  Delivery New York,  KeySpan Energy Delivery Long Island and
     KeySpan Energy Delivery New England on the Effective Date.

          "Default":  any of the events  specified  in Section 7, whether or not
     any requirement  for the giving of notice,  the lapse of time, or both, has
     been satisfied.

          "Disposition": with respect to any property, any sale, lease, sale and
     leaseback,  assignment,  conveyance, transfer or other disposition thereof,
     including the sale of Capital Stock of any Subsidiary owned by the Borrower
     or any of its  Subsidiaries.  The terms  "Dispose"  and "Disposed of" shall
     have correlative meanings.

          "Dollars" and "$": dollars in lawful currency of the United States.

          "Effective Date": the date on which the conditions precedent set forth
     in Section 4.1 and Section 4.2 shall have been satisfied,  which date shall
     be September 20, 2001.

          "Environmental  Laws": any and all foreign,  Federal,  state, local or
     municipal laws, rules, orders, regulations,  statutes,  ordinances,  codes,
     decrees,  requirements of any Governmental  Authority or other Requirements
     of Law (including common law) regulating, relating to or imposing liability
     or  standards  of  conduct  concerning  protection  of human  health or the
     environment, as now or may at any time hereafter be in effect.

          "ERISA":  the Employee  Retirement  Income  Security  Act of 1974,  as
     amended from time to time.

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

          "Eurodollar Base Rate":  with respect to each day during each Interest
     Period  pertaining to a Eurodollar  Loan, the rate per annum  determined on
     the basis of the rate for  deposits in Dollars  for a period  equal to such
     Interest  Period  commencing  on the  first  day of  such  Interest  Period
     appearing  on Page 3750 of the  Telerate  screen as of 11:00  A.M.,  London
     time, two Business Days prior to the beginning of such Interest Period.  In
     the  event  that such  rate  does not  appear on Page 3750 of the  Telerate
     screen (or otherwise on such screen),  the "Eurodollar  Base Rate" shall be
     determined by reference to such other comparable publicly available service
     for displaying  eurodollar  rates as may be selected by the  Administrative
     Agent or, in the absence of such availability,  by reference to the rate at
     which the Administrative Agent is offered Dollar deposits at or about 11:00
     A.M.,  New York City time, two Business Days prior to the beginning of such
     Interest Period in the interbank eurodollar market where its eurodollar and
     foreign  currency  and exchange  operations  are then being  conducted  for
     delivery  on the first day of such  Interest  Period for the number of days
     comprised therein.

          "Eurodollar Competitive Loan": a Competitive Loan which bears interest
     based upon the Eurodollar Rate.

          "Eurodollar Loans":  Loans the rate of interest applicable to which is
     based upon the Eurodollar Rate.

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

                                       Eurodollar Base Rate
                              -----------------------------------
                           1.00 - Eurocurrency Reserve Requirements

          "Eurodollar Tranche": the collective reference to Eurodollar Loans the
     then  current  Interest  Periods  with respect to all of which begin on the
     same date and end on the same later date  (whether  or not such Loans shall
     originally have been made on the same day).

          "Event of Default": any of the events specified in Section 7, provided
     that any requirement for the giving of notice,  the lapse of time, or both,
     has been satisfied.

          "Existing  Credit  Agreements":  the  collective  reference to (i) the
     credit agreement,  dated as of September 22, 2000, among the Borrower,  the
     several  banks and other  financial  institutions  or entities from time to
     time  parties  thereto,  Citibank,  N.A.,  and  ABN  Amro  Bank,  N.V.,  as
     co-documentation agents, J.P. Morgan Securities Inc., as syndication agent,
     and the  Administrative  Agent and (ii) the credit  agreement,  dated as of
     October 30, 2000, among the Borrower, the several banks and other financial
     institutions or entities from time to time parties thereto, Citibank, N.A.,
     as syndication agent,  European American Bank, as documentation  agent, and
     the Administrative Agent.

                  "Facility Fee Rate": the rate per annum set forth below which
corresponds with the most current rating of the Borrower's senior unsecured
long-term debt issued by S&P, Moody's and/or Fitch, respectively.

=========================== =========================
         Ratings                  Facility Fee
=========================== =========================
           A/A2                      0.070%

--------------------------- -------------------------
          A-/A3                      0.075%

--------------------------- -------------------------
        BBB+/Baa1                    0.100%

--------------------------- -------------------------
         BBB/Baa2                    0.125%

--------------------------- -------------------------
       <=BBB-/Baa3                   0.150%
       -
=========================== =========================

          Changes in the  Facility  Fee shall  become  effective  on the date on
     which S&P,  Moody's  and/or Fitch  changes the rating it has issued for the
     Borrower's senior unsecured  long-term debt. In the event of split ratings,
     if all three  agencies  issue a rating and if the ratings from two agencies
     are at the same  level and the rating  from the third  agency is at a lower
     level,  the higher rating shall apply; if the ratings from two agencies are
     at the same  level  and the  rating  from the  third  agency is at a higher
     level,  the lower rating shall apply; if all three ratings are at different
     levels, the rating next below the highest of the three shall apply; if only
     two of such three agencies issue a rating,  the lower of such ratings shall
     apply;  if only one of such three  agencies  issues a rating,  such  rating
     shall apply.

          "Federal Funds Effective  Rate":  for any day, the weighted average of
     the rates on  overnight  federal  funds  transactions  with  members of the
     Federal Reserve System  arranged by federal funds brokers,  as published on
     the next  succeeding  Business Day by the Federal Reserve Bank of New York,
     or, if such rate is not so  published  for any day that is a Business  Day,
     the average of the quotations for the day of such transactions  received by
     the  Reference  Lender  from three  federal  funds  brokers  of  recognized
     standing selected by it.

          "Final Maturity Date":  the date which is the one year  anniversary of
     the Termination Date.

          "Fitch": Fitch Investor Services, Inc. (or any successor thereto).

          "Fixed Rate":  with respect to a Competitive  Loan,  the fixed rate of
     interest per annum specified by the Lender making such  Competitive Loan in
     its related Competitive Bid.

          "Fixed Rate Competitive Loan":  Competitive Loans which bear a rate of
     interest equal to the Fixed Rate.

          "Funding Office":  the office of the Administrative Agent specified in
     Section 9.2 or such other office as may be  specified  from time to time by
     the  Administrative  Agent as its funding  office by written  notice to the
     Borrower and the Lenders.

          "GAAP":  generally accepted accounting principles in the United States
     as in effect from time to time,  except that for  purposes of Section  6.1,
     GAAP shall be determined  on the basis of such  principles in effect on the
     date hereof and consistent  with those used in the  preparation of the most
     recent audited financial  statements  delivered pursuant to Section 5.1(a).
     In the event that any  "Accounting  Change" (as defined  below) shall occur
     and such  change  results  in a change  in the  method  of  calculation  of
     financial  covenants,  standards  or  terms  in this  Agreement,  then  the
     Borrower and the  Administrative  Agent agree to enter into negotiations in
     order to amend such provisions of this Agreement so as to equitably reflect
     such  Accounting  Changes  with the desired  result that the  criteria  for
     evaluating the Borrower's  financial condition shall be the same after such
     Accounting  Changes as if such Accounting  Changes had not been made. Until
     such time as such an amendment  shall have been  executed and  delivered by
     the  Borrower,  the  Administrative  Agent and the  Required  Lenders,  all
     financial  covenants,  standards and terms in this Agreement shall continue
     to be  calculated  or  construed  as if  such  Accounting  Changes  had not
     occurred.  "Accounting Changes" refers to changes in accounting  principles
     required by the  promulgation  of any rule,  regulation,  pronouncement  or
     opinion  by the  Financial  Accounting  Standards  Board  of  the  American
     Institute of Certified Public Accountants or, if applicable, the SEC.

          "Governmental Authority": any nation or government, any state or other
     political  subdivision  thereof,  any agency,  authority,  instrumentality,
     regulatory body, court, central bank or other entity exercising  executive,
     legislative, judicial, taxing, regulatory or administrative functions of or
     pertaining to government,  any securities  exchange and any self-regulatory
     organization    (including   the   National    Association   of   Insurance
     Commissioners).

          "Guarantee Obligation":  as to any Person (the "guaranteeing person"),
     any  obligation  of (a)  the  guaranteeing  person  or (b)  another  Person
     (including  any bank under any letter of credit) to induce the  creation of
     which the guaranteeing person has issued a reimbursement,  counterindemnity
     or  similar   obligation,   in  either  case   guaranteeing  or  in  effect
     guaranteeing any Indebtedness,  leases, dividends or other obligations (the
     "primary obligations") of any other third Person (the "primary obligor") in
     any manner, whether directly or indirectly, including any obligation of the
     guaranteeing  person,  whether or not contingent,  (i) to purchase any such
     primary obligation or any property constituting direct or indirect security
     therefor,  (ii) to advance or supply  funds (1) for the purchase or payment
     of any such primary obligation or (2) to maintain working capital or equity
     capital of the primary  obligor or  otherwise  to maintain the net worth or
     solvency of the primary obligor, (iii) to purchase property,  securities or
     services  primarily  for the  purpose  of  assuring  the  owner of any such
     primary obligation of the ability of the primary obligor to make payment of
     such primary  obligation  or (iv)  otherwise to assure or hold harmless the
     owner of any such  primary  obligation  against  loss in  respect  thereof;
     provided,  however,  that the term Guarantee  Obligation  shall not include
     endorsements  of  instruments  for deposit or  collection  in the  ordinary
     course  of  business.  The  amount  of  any  Guarantee  Obligation  of  any
     guaranteeing  person shall be deemed to be the lower of (a) an amount equal
     to the stated or determinable  amount of the primary  obligation in respect
     of which such  Guarantee  Obligation is made and (b) the maximum amount for
     which such  guaranteeing  person may be liable pursuant to the terms of the
     instrument  embodying  such  Guarantee  Obligation,   unless  such  primary
     obligation and the maximum amount for which such guaranteeing person may be
     liable  are not  stated or  determinable,  in which case the amount of such
     Guarantee Obligation shall be such guaranteeing person's maximum reasonably
     anticipated  liability in respect  thereof as determined by the Borrower in
     good faith.

          "Hedge Agreements": all interest rate swaps, caps or collar agreements
     or similar  arrangements  dealing with interest rates or currency  exchange
     rates or the exchange of nominal interest obligations,  either generally or
     under specific contingencies.

          "Indebtedness":  of any Person at any date, without  duplication,  (a)
     all  indebtedness of such Person for borrowed money, (b) all obligations of
     such Person for the deferred  purchase price of property or services (other
     than  current  trade  payables  incurred  in the  ordinary  course  of such
     Person's business),  (c) all obligations of such Person evidenced by notes,
     bonds,  debentures  or  other  similar  instruments,  (d) all  indebtedness
     created or arising  under any  conditional  sale or other  title  retention
     agreement with respect to property acquired by such Person (even though the
     rights and  remedies of the seller or lender  under such  agreement  in the
     event of default are limited to repossession or sale of such property), (e)
     all Capital Lease  Obligations of such Person,  (f) all obligations of such
     Person,  contingent  or otherwise,  as an account party under  acceptances,
     letters  of  credit,  surety  bonds  or  similar   arrangements,   (g)  the
     liquidation  value of all  preferred  Capital  Stock of such Person that is
     redeemable  at the option of the holder  thereof or that has any  mandatory
     dividend,  redemption  or other  required  payment  that could be  required
     thereunder  prior to the date that is one year  after  the  Final  Maturity
     Date,  (h)  all  Guarantee   Obligations  of  such  Person  in  respect  of
     obligations  of the kind referred to in clauses (a) through (g) above,  (i)
     all  obligations  of the kind  referred to in clauses (a) through (h) above
     secured  by (or for which the  holder of such  obligation  has an  existing
     right,  contingent  or  otherwise,  to be secured  by) any Lien on property
     (including  accounts and contract rights) owned by such Person,  whether or
     not such  Person  has  assumed  or become  liable  for the  payment of such
     obligation,  and (j) for the purposes of Section 7(e) only, all obligations
     of such  Person in respect of Hedge  Agreements.  The  Indebtedness  of any
     Person shall include the  Indebtedness  of any other entity  (including any
     partnership  in which such Person is a general  partner) to the extent such
     Person is liable therefor as a result of such Person's  ownership  interest
     in or other  relationship with such entity,  except to the extent the terms
     of such  Indebtedness  expressly  provide  that such  Person is not  liable
     therefor.

          "Insolvency":  with respect to any  Multiemployer  Plan, the condition
     that such Plan is insolvent within the meaning of Section 4245 of ERISA.

          "Insolvent": pertaining to a condition of Insolvency.

          "Intellectual  Property":  the  collective  reference  to all  rights,
     priorities  and  privileges  relating  to  intellectual  property,  whether
     arising under United  States,  multinational  or foreign laws or otherwise,
     including  copyrights,   copyright  licenses,   patents,  patent  licenses,
     trademarks, trademark licenses, technology, know-how and processes, and all
     rights to sue at law or in equity for any  infringement or other impairment
     thereof, including the right to receive all proceeds and damages therefrom.

          "Interest  Payment Date": (a) as to any ABR Loan, the last day of each
     March, June, September and December to occur while such Loan is outstanding
     and the final  maturity date of such Loan,  (b) as to any  Eurodollar  Loan
     having an  Interest  Period of three  months or less,  the last day of such
     Interest  Period,  (c) as to any Eurodollar  Loan having an Interest Period
     longer  than  three  months,  each  day that is  three  months,  or a whole
     multiple thereof,  after the first day of such Interest Period and the last
     day of such Interest Period (d) as to any Eurodollar  Loan, the date of any
     repayment  or  prepayment  made in respect  thereof and (e) as to any Fixed
     Rate  Competitive  Loan,  the  last  Business  Day of the  Interest  Period
     applicable  to such  Loan  as  specified  and  accepted  in the  applicable
     Competitive Bid Request and, in the case of a Fixed Rate  Competitive  Loan
     with an Interest  Period of more than 90 days' duration  (unless  otherwise
     specified in the  applicable  Competitive  Bid Request),  each Business Day
     prior to the last  Business  Day of such  Interest  Period  that  occurs at
     intervals  of 90  days'  duration  after  the  first  Business  Day of such
     Interest  Period,  and any other dates that are specified in the applicable
     Competitive  Bid Request as  interest  payment  dates with  respect to such
     borrowing.

          "Interest Period":  (a) as to any Eurodollar Loan, (i) initially,  the
     period  commencing on the borrowing or conversion date, as the case may be,
     with  respect to such  Eurodollar  Loan and ending one,  two,  three or six
     months  thereafter,  as selected by the Borrower in its notice of borrowing
     or notice of  conversion,  as the case may be, given with respect  thereto;
     and (ii)  thereafter,  each period  commencing  on the last day of the next
     preceding  Interest  Period  applicable to such  Eurodollar Loan and ending
     one, two,  three or six months  thereafter,  as selected by the Borrower by
     irrevocable notice to the Administrative Agent not less than three Business
     Days prior to the last day of the then current Interest Period with respect
     thereto;  provided  that,  all  of the  foregoing  provisions  relating  to
     Interest Periods are subject to the following:

               (A) if any Interest  Period would  otherwise end on a day that is
          not a Business Day, such Interest Period shall be extended to the next
          succeeding  Business Day unless the result of such extension  would be
          to carry such  Interest  Period into another  calendar  month in which
          event such  Interest  Period  shall end on the  immediately  preceding
          Business Day;

               (B) the  Borrower  may not select an  Interest  Period that would
          extend beyond the Termination Date;

               (C) any Interest Period that begins on the last Business Day of a
          calendar  month  (or  on a day  for  which  there  is  no  numerically
          corresponding  day in the calendar  month at the end of such  Interest
          Period) shall end on the last Business Day of a calendar month; and

               (D) the  Borrower  shall  select  Interest  Periods  so as not to
          require a payment  or  prepayment  of any  Eurodollar  Loan  during an
          Interest Period for such Loan; and

               (b) with respect to any Fixed Rate  Competitive  Loan, the period
          (which shall not be less than 7 days or more than 360 days) commencing
          on the date of such  borrowing and ending on the date specified in the
          applicable Competitive Bid Request;  provided that (i) if any Interest
          Period would  otherwise  end on a day that is not a Business Day, such
          Interest Period shall extend to the next  succeeding  Business Day and
          (ii) the Borrower may not select an Interest  Period that would extend
          beyond the Termination Date.

          "Lenders": as defined in the preamble hereto.

          "Lien":  any  mortgage,  pledge,  hypothecation,  assignment,  deposit
     arrangement,  encumbrance,  lien  (statutory  or  other),  charge  or other
     security interest or any preference,  priority or other security  agreement
     or preferential arrangement of any kind or nature whatsoever (including any
     conditional  sale or other title retention  agreement and any capital lease
     having substantially the same economic effect as any of the foregoing).

          "Loans": as defined in Section 2.1(a).

          "Loan Documents": this Agreement and the Notes.

          "Margin" means,  with respect to any Competitive Loan bearing interest
     at a rate based on the Eurodollar  Rate, the marginal rate of interest,  if
     any, to be added to or subtracted from the Eurodollar Rate to determine the
     rate of interest applicable to such Loan, as specified by the Lender making
     such Loan in its related Competitive Bid.

          "Material Adverse Effect":  a material adverse effect on the business,
     property,  operations,  condition  (financial or otherwise) or prospects of
     the  Borrower  and its  Subsidiaries  taken as a whole or the  validity  or
     enforceability  of this Agreement or any of the other Loan Documents or the
     rights or remedies of the Administrative  Agent or the Lenders hereunder or
     thereunder.

          "Materials  of  Environmental  Concern":  any  gasoline  or  petroleum
     (including crude oil or any fraction thereof) or petroleum  products or any
     hazardous or toxic substances, materials or wastes, defined or regulated as
     such in or under any Environmental Law, including asbestos, polychlorinated
     biphenyls and urea-formaldehyde insulation.

          "Multiemployer  Plan": a Plan that is a multiemployer  plan as defined
     in Section 4001(a)(3) of ERISA.

          "Moody's": Moody's Investors Service, Inc. (or any successor thereto).

          "Net  Cash  Proceeds":  (a) in  connection  with any Asset  Sale,  the
     proceeds  thereof in the form of cash and Cash  Equivalents  (including any
     such proceeds received by way of deferred payment of principal  pursuant to
     a note or installment receivable or purchase price adjustment receivable or
     otherwise,  but only as and  when  received)  of such  Asset  Sale,  net of
     attorneys'  fees,  accountants'  fees,  investment  banking  fees,  amounts
     required to be applied to the repayment of  Indebtedness  secured by a Lien
     expressly  permitted  hereunder  on any asset  that is the  subject of such
     Asset Sale and other  customary  fees and  expenses  actually  incurred  in
     connection  therewith and net of taxes paid or  reasonably  estimated to be
     payable as a result  thereof  (after  taking into account any available tax
     credits  or  deductions  and  any  tax  sharing  arrangements)  and  (b) in
     connection with any sale of Capital Stock, the cash proceeds  received from
     such sale, net of attorneys' fees,  investment  banking fees,  accountants'
     fees,  underwriting  discounts and commissions and other customary fees and
     expenses actually incurred in connection therewith.

          "Non-Excluded Taxes": as defined in Section 2.14(a).

          "Non-U.S. Lender": as defined in Section 2.14(d).

          "Notes":  the collective  reference to any promissory  note evidencing
     Loans.

          "Obligations":  the unpaid  principal  of and  interest on  (including
     interest  accruing  after the maturity of the Loans and  interest  accruing
     after the filing of any petition in bankruptcy,  or the commencement of any
     insolvency,  reorganization  or like proceeding,  relating to the Borrower,
     whether or not a claim for post-filing or post-petition interest is allowed
     in such proceeding) the Loans and all other  obligations and liabilities of
     the Borrower to the Administrative  Agent or to any Lender,  whether direct
     or indirect,  absolute or contingent, due or to become due, or now existing
     or  hereafter  incurred,  which may arise under,  out of, or in  connection
     with, this  Agreement,  any other Loan Document or any other document made,
     delivered or given in connection herewith or therewith,  whether on account
     of  principal,  interest,  reimbursement  obligations,  fees,  indemnities,
     costs,  expenses  (including all fees, charges and disbursements of counsel
     to the  Administrative  Agent or to any Lender that are required to be paid
     by the Borrower pursuant hereto) or otherwise.

          "Other  Taxes":  any and all  present or future  stamp or  documentary
     taxes or any other  excise or  property  taxes,  charges or similar  levies
     arising from any payment made hereunder or from the execution,  delivery or
     enforcement  of, or otherwise  with respect to, this Agreement or any other
     Loan Document.

          "Participant": as defined in Section 9.6(b).

          "PBGC": the Pension Benefit Guaranty Corporation  established pursuant
     to Subtitle A of Title IV of ERISA (or any successor).

          "Person": an individual,  partnership,  corporation, limited liability
     company,  business  trust,  joint  stock  company,  trust,   unincorporated
     association,  joint  venture,  Governmental  Authority  or other  entity of
     whatever nature.

          "Plan":  at a  particular  time,  any  employee  benefit  plan that is
     covered  by ERISA  and in  respect  of which  the  Borrower  or a  Commonly
     Controlled  Entity is (or, if such plan were terminated at such time, would
     under  Section 4069 of ERISA be deemed to be) an  "employer"  as defined in
     Section 3(5) of ERISA.

          "Properties": as defined in Section 3.17(a).

          "Reference Lender": The Chase Manhattan Bank.

          "Register": as defined in Section 9.6(d).

          "Regulation  U":  Regulation  U of the Board as in effect from time to
     time.

          "Reorganization":   with  respect  to  any  Multiemployer   Plan,  the
     condition that such plan is in reorganization within the meaning of Section
     4241 of ERISA.

          "Reportable  Event": any of the events set forth in Section 4043(b) of
     ERISA,  other than those events as to which the thirty day notice period is
     waived under  subsections  .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
     Reg.ss.4043.

          "Required  Lenders":  at any time, the holders of more than 50% of the
     sum of the  Commitments  then in effect,  provided that (i) for purposes of
     declaring  the Loans to be due and payable,  and/or the  Commitments  to be
     terminated  pursuant  to  Section  7, and (ii) for all  purposes  after the
     Commitments have been terminated,  such term shall mean the holders of more
     than 50% of the Loans outstanding.

          "Requirement   of  Law":  as  to  any  Person,   the   Certificate  of
     Incorporation and By-Laws or other organizational or governing documents of
     such Person, and any law, treaty, rule or regulation or determination of an
     arbitrator  or a court  or  other  Governmental  Authority,  in  each  case
     applicable  to or binding  upon such  Person or any of its  property  or to
     which such Person or any of its property is subject.

          "Responsible  Officer":   the  chief  executive  officer,   president,
     treasurer, secretary or chief financial officer of the Borrower, but in any
     event, with respect to financial matters,  the treasurer or chief financial
     officer of the Borrower.

          "Revolving Facility": the Commitments and the Loans made hereunder.

          "Revolving  Percentage":  as to any Lender at any time, the percentage
     which such Lender's  Commitment then  constitutes of the Total  Commitments
     (or, at any time after the  Commitments  shall have expired or  terminated,
     the percentage which the aggregate  principal amount of such Lender's Loans
     then outstanding constitutes of the aggregate principal amount of the Loans
     then outstanding.)

          "S&P":   Standard  &  Poor's  Rating  Services,   a  division  of  The
     McGraw-Hill Companies, Inc. (or any successor thereto).

          "SEC": the Securities and Exchange  Commission,  any successor thereto
     and any analogous Governmental Authority.

          "Significant  Subsidiary":  at any particular time, any Subsidiary and
     any  other  Affiliate  of the  Borrower  which is  engaged  in the Core Gas
     Distribution Business.

          "Single Employer Plan": any Plan that is covered by Title IV of ERISA,
     but that is not a Multiemployer Plan.

          "Solvent": when used with respect to any Person, means that, as of any
     date of determination,  (a) the amount of the "present fair saleable value"
     of the assets of such Person  will,  as of such date,  exceed the amount of
     all "liabilities of such Person, contingent or otherwise", as of such date,
     as such quoted terms are determined in accordance with  applicable  federal
     and state laws governing  determinations of the insolvency of debtors,  (b)
     the present fair  saleable  value of the assets of such Person will,  as of
     such date,  be greater  than the amount  that will be  required  to pay the
     liability  of such Person on its debts as such debts  become  absolute  and
     matured,  (c) such Person will not have, as of such date,  an  unreasonably
     small  amount of capital with which to conduct its  business,  and (d) such
     Person will be able to pay its debts as they  mature.  For purposes of this
     definition, (i) "debt" means liability on a "claim", and (ii) "claim" means
     any (x)  right  to  payment,  whether  or not such a right  is  reduced  to
     judgment, liquidated,  unliquidated, fixed, contingent, matured, unmatured,
     disputed,  undisputed,  legal, equitable, secured or unsecured or (y) right
     to an equitable  remedy for breach of performance if such breach gives rise
     to a right to payment,  whether or not such right to an equitable remedy is
     reduced to judgment,  fixed,  contingent,  matured or unmatured,  disputed,
     undisputed, secured or unsecured.

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

          "Termination Date": September 19, 2002.

          "Total  Commitments":  at  any  time,  the  aggregate  amount  of  the
     Commitments then in effect.

          "Transferee": any Assignee or Participant.

          "Type":  as to any Loan,  its  nature  as an ABR Loan or a  Eurodollar
     Loan.

          "United States": the United States of America.

1.2  Other Definitional Provisions.  (a) Unless otherwise specified therein, all
     terms defined in this Agreement  shall have the defined  meanings when used
     in the other Loan  Documents or any  certificate  or other document made or
     delivered pursuant hereto or thereto.

     (b)  As used herein and in the other Loan Documents, and any certificate or
          other  document  made or  delivered  pursuant  hereto or thereto,  (i)
          accounting  terms  relating to the Borrower and its  Subsidiaries  not
          defined in Section 1.1 and accounting  terms partly defined in Section
          1.1, to the extent not  defined,  shall have the  respective  meanings
          given to them under GAAP,  (ii) the words  "include",  "includes"  and
          "including"  shall be deemed to be  followed  by the  phrase  "without
          limitation",  (iii) the word "incur" shall be construed to mean incur,
          create,  issue, assume, become liable in respect of or suffer to exist
          (and the words  "incurred"  and  "incurrence"  shall have  correlative
          meanings),  and  (iv)  the  words  "asset"  and  "property"  shall  be
          construed  to have the same meaning and effect and to refer to any and
          all tangible and intangible  assets and  properties,  including  cash,
          Capital Stock, securities, revenues, accounts, leasehold interests and
          contract rights.

     (c)  The words  "hereof",  "herein"  and  "hereunder"  and words of similar
          import when used in this Agreement  shall refer to this Agreement as a
          whole  and not to any  particular  provision  of this  Agreement,  and
          Section,  Schedule and Exhibit references are to this Agreement unless
          otherwise specified.

     (d)  The meanings given to terms defined herein shall be equally applicable
          to both the singular and plural forms of such terms.

Section 2                    AMOUNT AND TERMS OF COMMITMENTS

2.1  Commitments.  (a) Subject to the terms and conditions  hereof,  each Lender
     severally  agrees to make revolving  credit loans ("Loans") to the Borrower
     from time to time during the  Commitment  Period in an aggregate  principal
     amount at any one time outstanding which does not exceed the amount of such
     Lender's Commitment.  During the Commitment Period the Borrower may use the
     Commitments  by  borrowing,  prepaying  the Loans in whole or in part,  and
     reborrowing,  all in accordance with the terms and conditions  hereof.  The
     Loans may from time to time be Eurodollar  Loans,  ABR Loans or Competitive
     Loans,  as  determined  by the Borrower and notified to the  Administrative
     Agent in accordance with Sections 2.3 and 2.7.

     (b)  Any Loans  outstanding  on the  Termination  Date will  mature  and be
          payable on the Final Maturity Date.

2.2  Competitive  Bid  Procedure.  (a) Subject to the terms and  conditions  set
     forth herein,  from time to time the Borrower may request  Competitive Bids
     and may (but shall not have any obligation to) accept  Competitive Bids and
     borrow  Competitive  Loans;  provided  that  while  Competitive  Loans  are
     outstanding,  the Available  Commitments  shall be reduced by the aggregate
     amount of such Competitive Loans. To request Competitive Bids, the Borrower
     shall notify the Administrative Agent of such request by telephone,  in the
     case of a Eurodollar  Loan,  not later than 11:00 a.m., New York City time,
     four  Business Days before the date of the proposed  borrowing  and, in the
     case of an ABR Loan,  not later than 10:00  a.m.,  New York City time,  one
     Business Day before the date of the proposed  borrowing;  provided that the
     Borrower  may  submit  up to (but  not more  than)  three  Competitive  Bid
     Requests on the same day, but a  Competitive  Bid Request shall not be made
     within five  Business Days after the date of any previous  Competitive  Bid
     Request,  unless any and all such previous  Competitive  Bid Requests shall
     have been withdrawn or all  Competitive  Bids received in response  thereto
     rejected.  Each such telephonic  Competitive Bid Request shall be confirmed
     promptly by hand  delivery or  telecopy  to the  Administrative  Agent of a
     written  Competitive  Bid Request in a form approved by the  Administrative
     Agent  and  signed  by the  Borrower.  Each  such  telephonic  and  written
     Competitive Bid Request shall specify the following information:

          (i)  the aggregate amount of the requested Loan;

          (ii) the date of such Loan, which shall be a Business Day;

          (iii)whether  such  Loan is to be a  Eurodollar  Loan or a Fixed  Rate
               Competitive Loan;

          (iv) the maturity for such Loan,  which shall range from 7 to 360 days
               (but not to extend past the Termination Date; and

          (v)  the Interest Period, if applicable, for such Loan, which shall be
               a period  contemplated  by the  definition of the term  "Interest
               Period".

Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.

     (b)  Each  Lender  may (but shall not have any  obligation  to) make one or
          more Competitive Bids to the Borrower in response to a Competitive Bid
          Request.  Each  Competitive Bid by a Lender must be in a form approved
          by the Administrative Agent and must be received by the Administrative
          Agent by telecopy,  in the case of a Eurodollar  Loan,  not later than
          9:30 a.m., New York City time, three Business Days before the proposed
          date of such  Competitive  Loan,  and in the case of an ABR Loan,  not
          later than 9:30 a.m., New York City time, on the proposed date of such
          Competitive Loan.  Competitive Bids that do not conform  substantially
          to the form  approved by the  Administrative  Agent may be rejected by
          the Administrative  Agent, and the  Administrative  Agent shall notify
          the applicable Lender as promptly as practicable. Each Competitive Bid
          shall  specify (i) the  principal  amount (which shall be a minimum of
          $5,000,000 and an integral  multiple of $1,000,000 and which may equal
          the entire  principal  amount of the Competitive Loan requested by the
          Borrower) of the Competitive  Loan or Loans that the Lender is willing
          to make, (ii) the Competitive Bid Rate or Rates at which the Lender is
          prepared to make such Loan or Loans  (expressed  as a percentage  rate
          per  annum in the  form of a  decimal  to no more  than  four  decimal
          places) and (iii) the Interest Period applicable to each such Loan and
          the last day thereof.

     (c)  The  Administrative  Agent  shall  promptly  notify  the  Borrower  by
          telecopy  of  the  Competitive  Bid  Rate  and  the  principal  amount
          specified in each  Competitive Bid and the identity of the Lender that
          shall have made such Competitive Bid.

     (d)  Subject only to the  provisions  of this  paragraph,  the Borrower may
          accept or reject any  Competitive  Bid. The Borrower  shall notify the
          Administrative  Agent by  telephone,  confirmed  by telecopy in a form
          approved by the  Administrative  Agent,  whether and to what extent it
          has decided to accept or reject each Competitive Bid, in the case of a
          Eurodollar  Loan, not later than 10:30a.m.,  New York City time, three
          Business Days before the proposed date of the Competitive Loan, and in
          the case of an ABR Loan, not later than 10:30a.m., New York City time,
          on the proposed date of the  Competitive  Loan;  provided that (i) the
          failure of the  Borrower to give such  notice  shall be deemed to be a
          rejection of each  Competitive Bid, (ii) the Borrower shall not accept
          a  Competitive  Bid made at a particular  Competitive  Bid Rate if the
          Borrower  rejects a Competitive  Bid made at a lower  Competitive  Bid
          Rate,  (iii) the aggregate  amount of the Competitive Bids accepted by
          the Borrower  shall not exceed the  aggregate  amount of the requested
          Competitive  Loan  specified in the related  Competitive  Bid Request,
          (iv) to the extent  necessary to comply with clause  (iii) above,  the
          Borrower may accept  Competitive Bids at the same Competitive Bid Rate
          in part, which acceptance, in the case of multiple Competitive Bids at
          such  Competitive Bid Rate,  shall be made pro rata in accordance with
          the amount of each such  Competitive  Bid, and (v) except  pursuant to
          clause  (iv)  above,  no  Competitive  Bid  shall  be  accepted  for a
          Competitive  Loan  unless  such  Competitive  Loan  is  in  a  minimum
          principal amount of $5,000,000 and an integral multiple of $1,000,000;
          provided  further that if a Competitive Loan must be in an amount less
          than $5,000,000  because of the provisions of clause (iv) above,  such
          Competitive  Loan may be for a minimum of  $1,000,000  or any integral
          multiple  thereof,  and in  calculating  the pro  rata  allocation  of
          acceptances of portions of multiple  Competitive  Bids at a particular
          Competitive  Bid Rate  pursuant to clause  (iv) the  amounts  shall be
          rounded to integral  multiples of $1,000,000 in a manner determined by
          the  Borrower.  A  notice  given  by the  Borrower  pursuant  to  this
          paragraph shall be irrevocable.

     (e)  The Administrative  Agent shall promptly notify each bidding Lender by
          telecopy whether or not its Competitive Bid has been accepted (and, if
          so,  the  amount  and  Competitive  Bid  Rate so  accepted),  and each
          successful  bidder will thereupon  become bound,  subject to the terms
          and  conditions  hereof,  to make the  Competitive  Loan in respect of
          which its Competitive Bid has been accepted.

     (f)  If the Administrative Agent shall elect to submit a Competitive Bid in
          its  capacity  as a  Lender,  it shall  submit  such  Competitive  Bid
          directly to the  Borrower at least one quarter of an hour earlier than
          the time by which the  other  Lenders  are  required  to submit  their
          Competitive Bids to the Administrative Agent pursuant to paragraph (b)
          of this Section.

2.3  Procedure for Loan Borrowing. The Borrower may borrow under the Commitments
     during  the  Commitment  Period  on any  Business  Day,  provided  that the
     Borrower  shall give the  Administrative  Agent  irrevocable  notice (which
     notice must be received  by the  Administrative  Agent prior to 12:00 Noon,
     New York  City  time,  (a)  three  Business  Days  prior  to the  requested
     Borrowing  Date, in the case of Eurodollar  Loans,  or (b) one Business Day
     prior  to the  requested  Borrowing  Date,  in  the  case  of  ABR  Loans),
     specifying  (i) the  amount  and  Type of Loans  to be  borrowed,  (ii) the
     requested  Borrowing  Date and (iii) in the case of Eurodollar  Loans,  the
     respective  amounts of each such Type of Loan and the respective lengths of
     the initial Interest Period therefor.  Any Loans made on the Effective Date
     shall initially be ABR Loans. Each borrowing under the Commitments shall be
     in an amount equal to (x) in the case of ABR Loans,  $1,000,000  or a whole
     multiple thereof (or, if the then aggregate Available  Commitments are less
     than  $1,000,000,  such lesser  amount)  and (y) in the case of  Eurodollar
     Loans,  $10,000,000  or a whole  multiple of $1,000,000 in excess  thereof.
     Upon receipt of any such notice from the Borrower, the Administrative Agent
     shall promptly notify each Lender thereof. Each Lender will make the amount
     of its pro rata share of each  borrowing  available  to the  Administrative
     Agent for the account of the Borrower at the Funding  Office prior to 12:00
     Noon,  New York City time, on the Borrowing  Date requested by the Borrower
     in funds immediately  available to the Administrative Agent. Such borrowing
     will then be made  available  to the Borrower by the  Administrative  Agent
     crediting  the account of the Borrower on the books of such office with the
     aggregate of the amounts made available to the Administrative  Agent by the
     Lenders and in like funds as received by the Administrative Agent.

2.4  Facility  Fees,  etc.(a) The Borrower  agrees to pay to the  Administrative
     Agent for the account of each Lender a facility fee for the period from and
     including  the Closing Date until all of the  Obligations  have been repaid
     and the Commitments have been terminated, computed at the Facility Fee Rate
     on the  Revolving  Percentage  of such  Lender of the  total  amount of the
     Revolving Facility (drawn or undrawn),  payable quarterly in arrears on the
     last day of each  March,  June,  September  and  December  and on the Final
     Maturity  Date,  commencing  on the first of such dates to occur  after the
     date hereof.

     (b)  The Borrower agrees to pay to the Administrative Agent the fees in the
          amounts  and on the  dates  previously  agreed  to in  writing  by the
          Borrower and the Administrative Agent.

2.5  Termination or Reduction of Commitments. The Borrower shall have the right,
     upon not less than three Business Days' notice to the Administrative Agent,
     to terminate the Commitments or, from time to time, to reduce the amount of
     the  Commitments;  provided  that  no  such  termination  or  reduction  of
     Commitments  shall be permitted if, after giving effect  thereto and to any
     prepayments of the Loans made on the effective date thereof,  the aggregate
     principal  amount of (i) the  Loans  outstanding  and (ii) any  Competitive
     Loans outstanding,  would exceed the Total Commitments.  Any such reduction
     shall be in an amount equal to $1,000,000, or a whole multiple thereof, and
     shall reduce permanently the Commitments then in effect. The Administrative
     Agent will, in accordance  with its usual  practice,  notify the Lenders of
     each such termination or reduction.

2.6  Optional  Prepayments.  The  Borrower may at any time and from time to time
     prepay the Loans,  in whole or in part,  without  premium or penalty,  upon
     irrevocable  notice  delivered to the  Administrative  Agent at least three
     Business Days prior  thereto in the case of  Eurodollar  Loans and at least
     one Business Day prior thereto in the case of ABR Loans, which notice shall
     specify the date and amount of prepayment  and whether the prepayment is of
     Eurodollar  Loans or ABR  Loans;  provided,  that if a  Eurodollar  Loan is
     prepaid  on any  day  other  than  the  last  day of  the  Interest  Period
     applicable thereto,  the Borrower shall also pay any amounts owing pursuant
     to Section 2.15. Upon receipt of any such notice, the Administrative  Agent
     shall promptly notify each Lender thereof. If any such notice is given, the
     amount  specified  in such  notice  shall  be due and  payable  on the date
     specified therein,  together with (except in the case of Loans that are ABR
     Loans)  accrued  interest  to such  date  on the  amount  prepaid.  Partial
     prepayments  of  Loans  shall  be  in  an  aggregate  principal  amount  of
     $1,000,000  or a  whole  multiple  thereof.  Competitive  Loans  may not be
     prepaid without the consent of the relevant Lender.

2.7  Conversion and Continuation  Options.  (a) The Borrower may elect from time
     to  time  to  convert   Eurodollar   Loans  to  ABR  Loans  by  giving  the
     Administrative  Agent at least two Business Days' prior irrevocable  notice
     of such election, provided that any such conversion of Eurodollar Loans may
     only be made on the last day of an Interest  Period with  respect  thereto.
     The Borrower may elect from time to time to convert ABR Loans to Eurodollar
     Loans by giving the  Administrative  Agent at least  three  Business  Days'
     prior  irrevocable  notice of such election (which notice shall specify the
     length of the initial Interest Period therefor),  provided that no ABR Loan
     may be  converted  into a  Eurodollar  Loan when any Event of  Default  has
     occurred and is  continuing  and the  Administrative  Agent or the Required
     Lenders have  determined in its or their sole discretion not to permit such
     conversions. Upon receipt of any such notice the Administrative Agent shall
     promptly notify each relevant Lender thereof.

     (b)  Any  Eurodollar  Loan may be continued as such upon the  expiration of
          the then current  Interest Period with respect thereto by the Borrower
          giving irrevocable  notice to the Administrative  Agent, in accordance
          with the applicable provisions of the term "Interest Period" set forth
          in  Section  1.1,  of the  length  of the next  Interest  Period to be
          applicable  to such Loans,  provided  that no  Eurodollar  Loan may be
          continued  as such  when any  Event of  Default  has  occurred  and is
          continuing and the  Administrative  Agent has or the Required  Lenders
          have  determined  in its or their sole  discretion  not to permit such
          continuations,  and provided, further, that if the Borrower shall fail
          to give any required notice as described above in this paragraph or if
          such  continuation is not permitted  pursuant to the preceding proviso
          such Loans shall be  automatically  converted to ABR Loans on the last
          day of such then expiring  Interest  Period.  Upon receipt of any such
          notice the  Administrative  Agent shall promptly  notify each relevant
          Lender thereof.

2.8  Limitations  on  Eurodollar  Tranches.   Notwithstanding  anything  to  the
     contrary in this Agreement,  all borrowings,  conversions and continuations
     of  Eurodollar  Loans  hereunder  and all  selections  of Interest  Periods
     hereunder  shall be in such amounts and be made pursuant to such  elections
     so that, (a) after giving effect thereto, the aggregate principal amount of
     the Eurodollar Loans  comprising each Eurodollar  Tranche shall be equal to
     $5,000,000 or a whole  multiple of $1,000,000 in excess  thereof and (b) no
     more than ten Eurodollar Tranches shall be outstanding at any one time.

2.9  Interest  Rates and  Payment  Dates.  (a) Each  Eurodollar  Loan shall bear
     interest for each day during each Interest Period with respect thereto at a
     rate per annum equal to the  Eurodollar  Rate  determined for such day plus
     the Applicable Margin.

     (b)  Each ABR Loan shall bear interest at a rate per annum equal to the ABR
          plus the Applicable Margin.

     (c)  Each  Competitive  Loan shall bear  interest  in  accordance  with the
          applicable Competitive Bid Rate.

     (d)  (i) If all or a portion of the principal  amount of any Loan shall not
          be paid when due (whether at the stated  maturity,  by acceleration or
          otherwise),  such  overdue  amount  shall bear  interest at a rate per
          annum equal to the rate that would  otherwise  be  applicable  thereto
          pursuant to the foregoing provisions of this Section plus 2%, and (ii)
          if all or a  portion  of  any  interest  payable  on any  Loan  or any
          facility fee or other amount payable  hereunder shall not be paid when
          due (whether at the stated  maturity,  by  acceleration or otherwise),
          such overdue  amount shall bear  interest at a rate per annum equal to
          the rate then  applicable  to ABR Loans  plus 2%, in each  case,  with
          respect  to  clauses  (i)  and  (ii)  above,  from  the  date  of such
          non-payment until such amount is paid in full.

     (e)  Interest  shall be payable in arrears on each  Interest  Payment Date,
          provided  that  interest  accruing  pursuant to paragraph  (d) of this
          Section shall be payable from time to time on demand.

2.10 Computation  of Interest and Fees.  (a) Interest and fees payable  pursuant
     hereto  shall be  calculated  on the basis of a 360-day year for the actual
     days elapsed,  except that,  with respect to ABR Loans the rate of interest
     on which is calculated on the basis of the Prime Rate, the interest thereon
     shall be  calculated  on the basis of a 365- (or 366-,  as the case may be)
     day year for the actual days  elapsed.  The  Administrative  Agent shall as
     soon as  practicable  notify the Borrower and the relevant  Lenders of each
     determination  of a Eurodollar  Rate.  Any change in the interest rate on a
     Loan  resulting  from a  change  in the  ABR  or the  Eurocurrency  Reserve
     Requirements  shall  become  effective as of the opening of business on the
     day on which such change becomes effective.  The Administrative Agent shall
     as soon as practicable  notify the Borrower and the relevant Lenders of the
     effective date and the amount of each such change in interest rate.

(b)  Each determination of an interest rate by the Administrative Agent pursuant
     to any provision of this  Agreement  shall be conclusive and binding on the
     Borrower   and  the  Lenders  in  the  absence  of  manifest   error.   The
     Administrative Agent shall, at the request of the Borrower,  deliver to the
     Borrower a statement  showing  the  quotations  used by the  Administrative
     Agent in determining any interest rate pursuant to Section 2.9.

2.11 Inability  to  Determine  Interest  Rate.  If prior to the first day of any
     Interest Period:

     (a)  the  Administrative  Agent shall have determined (which  determination
          shall be conclusive and binding upon the Borrower)  that, by reason of
          circumstances  affecting the relevant market,  adequate and reasonable
          means do not  exist  for  ascertaining  the  Eurodollar  Rate for such
          Interest Period, or that such Eurodollar rate is not available; or

     (b)  the Administrative  Agent shall have received notice from the Required
          Lenders (or, in the case of a Eurodollar  Competitive Loan, the Lender
          that  is  required  to  make  such  Loan)  that  the  Eurodollar  Rate
          determined  or to be  determined  for such  Interest  Period  will not
          adequately and fairly  reflect the cost to such Lenders or Lender,  as
          the case may be (as conclusively  certified by such Lenders, or Lender
          as the case may be) of  making or  maintaining  their  affected  Loans
          during such Interest Period,

          the  Administrative  Agent shall give  telecopy or  telephonic  notice
          thereof  to  the  Borrower  and  the  relevant   Lenders  as  soon  as
          practicable  thereafter.  If such  notice is given (w) any  Eurodollar
          Loans  requested to be made on the first day of such  Interest  Period
          shall be made as ABR  Loans,  (x) any  Loans  that  were to have  been
          converted on the first day of such Interest Period to Eurodollar Loans
          shall be continued as ABR Loans, (y) any outstanding  Eurodollar Loans
          shall  be  converted,  on the last  day of the  then-current  Interest
          Period,  to ABR  Loans  and  (z) any  request  by the  Borrower  for a
          Eurodollar  Competitive  Loan shall be ineffective.  Until such notice
          has been withdrawn by the Administrative  Agent, no further Eurodollar
          Loans shall be made or continued as such,  nor shall the Borrower have
          the right to convert Loans to Eurodollar Loans.

2.12 Pro Rata  Treatment and Payments.  (a) Each  borrowing by the Borrower from
     the  Lenders  hereunder,  each  payment by the  Borrower  on account of any
     facility fee and any reduction of the  Commitments  of the Lenders shall be
     made pro rata according to the respective  Revolving Percentage as the case
     may be, of the relevant Lenders.

     (b)  Each payment (including each prepayment) by the Borrower on account of
          principal  of and  interest  on the  Loans  shall  be  made  pro  rata
          according to the respective outstanding principal amounts of the Loans
          then held by the Lenders.

     (c)  All  payments  (including  prepayments)  to be  made  by the  Borrower
          hereunder,  whether  on  account  of  principal,   interest,  fees  or
          otherwise,  shall be made without setoff or counterclaim  and shall be
          made prior to 12:00 Noon,  New York City time, on the due date thereof
          to the  Administrative  Agent, for the account of the Lenders,  at the
          Funding Office,  in Dollars and in immediately  available  funds.  The
          Administrative  Agent shall  distribute  such  payments to the Lenders
          promptly  upon  receipt  in like  funds as  received.  If any  payment
          hereunder  (other than payments on the  Eurodollar  Loans) becomes due
          and payable on a day other than a Business  Day, such payment shall be
          extended  to the next  succeeding  Business  Day.  If any payment on a
          Eurodollar Loan becomes due and payable on a day other than a Business
          Day, the  maturity  thereof  shall be extended to the next  succeeding
          Business  Day unless the result of such  extension  would be to extend
          such payment into another  calendar month, in which event such payment
          shall be made on the immediately  preceding  Business Day. In the case
          of any extension of any payment of principal pursuant to the preceding
          two  sentences,   interest  thereon  shall  be  payable  at  the  then
          applicable rate during such extension.

     (d)  Unless the Administrative Agent shall have been notified in writing by
          any Lender  prior to a  borrowing  that such  Lender will not make the
          amount that would constitute its share of such borrowing  available to
          the  Administrative  Agent, the  Administrative  Agent may assume that
          such  Lender is making  such amount  available  to the  Administrative
          Agent,  and the  Administrative  Agent  may,  in  reliance  upon  such
          assumption,  make available to the Borrower a corresponding amount. If
          such amount is not made available to the  Administrative  Agent by the
          required time on the Borrowing Date therefor, such Lender shall pay to
          the Administrative Agent, on demand, such amount with interest thereon
          at a rate equal to the daily average  Federal Funds Effective Rate for
          the period until such Lender makes such amount  immediately  available
          to the Administrative Agent. A certificate of the Administrative Agent
          submitted to any Lender with  respect to any amounts  owing under this
          paragraph  shall be  conclusive in the absence of manifest  error.  If
          such  Lender's  share of such  borrowing is not made  available to the
          Administrative Agent by such Lender within three Business Days of such
          Borrowing  Date,  the  Administrative  Agent shall also be entitled to
          recover  such  amount  with  interest  thereon  at the rate per  annum
          applicable to ABR Loans, on demand, from the Borrower.

     (e)  Unless the Administrative Agent shall have been notified in writing by
          the  Borrower  prior to the date of any payment  being made  hereunder
          that the  Borrower  will not make such  payment to the  Administrative
          Agent, the Administrative Agent may assume that the Borrower is making
          such  payment,  and the  Administrative  Agent  may,  but shall not be
          required to, in reliance upon such  assumption,  make available to the
          Lenders their respective pro rata shares of a corresponding amount. If
          such payment is not made to the  Administrative  Agent by the Borrower
          within three Business Days of such required  date, the  Administrative
          Agent shall be entitled  to  recover,  on demand,  from each Lender to
          which any amount which was made  available  pursuant to the  preceding
          sentence,  such  amount  with  interest  thereon at the rate per annum
          equal to the daily  average  Federal  Funds  Effective  Rate.  Nothing
          herein shall be deemed to limit the rights of the Administrative Agent
          or any Lender against the Borrower.

2.13 Requirements  of  Law.  (a)  If  the  adoption  of or  any  change  in  any
     Requirement  of Law or in the  interpretation  or  application  thereof  or
     compliance  by any Lender  with any  request or  directive  (whether or not
     having  the  force of law)  from  any  central  bank or other  Governmental
     Authority made subsequent to the date hereof:

     (i)  shall  subject  any  Lender  to any tax of any  kind  whatsoever  with
          respect to this Agreement or any Eurodollar Loan made by it, or change
          the basis of taxation  of  payments to such Lender in respect  thereof
          (except for Non-Excluded  Taxes covered by Section 2.14 and changes in
          the rate of tax on the overall net income of such Lender);

     (ii) shall impose, modify or hold applicable any reserve,  special deposit,
          compulsory  loan  or  similar  requirement  against  assets  held  by,
          deposits or other  liabilities  in or for the  account  of,  advances,
          loans or other  extensions of credit by, or any other  acquisition  of
          funds by, any office of such Lender that is not otherwise  included in
          the determination of the Eurodollar Rate hereunder; or

     (iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
paragraph, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.

     (b)  If any Lender shall have determined that the adoption of or any change
          in  any  Requirement  of  Law  regarding  capital  adequacy  or in the
          interpretation or application  thereof or compliance by such Lender or
          any corporation  controlling such Lender with any request or directive
          regarding  capital  adequacy  (whether or not having the force of law)
          from any  Governmental  Authority  made  subsequent to the date hereof
          shall have the effect of reducing the rate of return on such  Lender's
          or such  corporation's  capital as a  consequence  of its  obligations
          hereunder to a level below that which such Lender or such  corporation
          could  have  achieved  but for such  adoption,  change  or  compliance
          (taking  into   consideration  such  Lender's  or  such  corporation's
          policies with respect to capital adequacy) by an amount deemed by such
          Lender to be material,  then from time to time,  after  submission  by
          such Lender to the Borrower (with a copy to the Administrative  Agent)
          of a written request  therefor,  the Borrower shall pay to such Lender
          such  additional  amount or amounts as will compensate such Lender for
          such  reduction;  provided that the Borrower  shall not be required to
          compensate  a  Lender  pursuant  to this  paragraph  for  any  amounts
          incurred  more than six  months  prior to the date  that  such  Lender
          notifies the Borrower of such Lender's intention to claim compensation
          therefor;  and provided further that, if the circumstances giving rise
          to such claim have a retroactive  effect,  then such six-month  period
          shall be extended to include the period of such retroactive effect.

     (c)  Notwithstanding  the foregoing  provisions  of this Section,  a Lender
          shall not be entitled  to  compensation  pursuant  to this  Section in
          respect of any  Competitive  Loan if the Requirement of Law that would
          otherwise  entitle it to such  compensation  shall have been  publicly
          announced prior to submission of the Competitive Bid pursuant to which
          such Loan was made.

     (d)  A certificate as to any additional  amounts  payable  pursuant to this
          Section  submitted by any Lender to the  Borrower  (with a copy to the
          Administrative  Agent) shall be  conclusive in the absence of manifest
          error. The obligations of the Borrower  pursuant to this Section shall
          survive the termination of this Agreement and the payment of the Loans
          and all other amounts payable hereunder.

2.14 Taxes.  (a) All payments made by the Borrower under this Agreement shall be
     made free and clear of, and  without  deduction  or  withholding  for or on
     account of, any present or future  income,  stamp or other  taxes,  levies,
     imposts,  duties,  charges,  fees,  deductions  or  withholdings,   now  or
     hereafter  imposed,  levied,   collected,   withheld  or  assessed  by  any
     Governmental  Authority,  excluding  net income taxes and  franchise  taxes
     (imposed in lieu of net income taxes) imposed on the  Administrative  Agent
     or any Lender as a result of a present  or former  connection  between  the
     Administrative   Agent  or  such  Lender  and  the   jurisdiction   of  the
     Governmental  Authority  imposing such tax or any political  subdivision or
     taxing authority thereof or therein (other than any such connection arising
     solely  from the  Administrative  Agent  or such  Lender  having  executed,
     delivered or performed  its  obligations  or received a payment  under,  or
     enforced,  this  Agreement  or  any  other  Loan  Document).  If  any  such
     non-excluded taxes, levies,  imposts,  duties, charges, fees, deductions or
     withholdings  ("Non-Excluded  Taxes")  or Other  Taxes are  required  to be
     withheld from any amounts payable to the Administrative Agent or any Lender
     hereunder,  the  amounts  so payable  to the  Administrative  Agent or such
     Lender  shall  be  increased  to  the  extent  necessary  to  yield  to the
     Administrative  Agent or such  Lender  (after  payment of all  Non-Excluded
     Taxes and Other Taxes) interest or any such other amounts payable hereunder
     at the  rates or in the  amounts  specified  in this  Agreement,  provided,
     however,  that the  Borrower  shall not be required  to  increase  any such
     amounts  payable to any Lender with respect to any  Non-Excluded  Taxes (i)
     that  are  attributable  to  such  Lender's  failure  to  comply  with  the
     requirements  of  paragraph  (d) or (e) of this  Section  or (ii)  that are
     United States  withholding  taxes imposed on amounts payable to such Lender
     at the time the  Lender  becomes a party to this  Agreement,  except to the
     extent that such Lender's  assignor (if any) was  entitled,  at the time of
     assignment, to receive additional amounts from the Borrower with respect to
     such Non-Excluded Taxes pursuant to this paragraph.

     (b)  In addition,  the  Borrower  shall pay any Other Taxes to the relevant
          Governmental Authority in accordance with applicable law.

     (c)  Whenever  any  Non-Excluded  Taxes or Other  Taxes are  payable by the
          Borrower,  as promptly as possible  thereafter the Borrower shall send
          to the Administrative  Agent for its own account or for the account of
          the  relevant  Lender,  as the  case may be,  a  certified  copy of an
          original  official  receipt  received by the Borrower  showing payment
          thereof.  If the Borrower fails to pay any Non-Excluded Taxes or Other
          Taxes when due to the appropriate  taxing  authority or fails to remit
          to the  Administrative  Agent the required  receipts or other required
          documentary evidence,  the Borrower shall indemnify the Administrative
          Agent and the Lenders for any incremental taxes, interest or penalties
          that may become payable by the Administrative Agent or any Lender as a
          result of any such failure.

     (d)  Each Lender (or  Transferee)  that is not a citizen or resident of the
          United States of America,  a corporation,  partnership or other entity
          created  or  organized  in or under the laws of the  United  States of
          America (or any jurisdiction  thereof), or any estate or trust that is
          subject to federal  income  taxation  regardless  of the source of its
          income (a  "Non-U.S.  Lender")  shall  deliver to the Borrower and the
          Administrative Agent (or, in the case of a Participant,  to the Lender
          from which the related  participation  shall have been  purchased) two
          copies of either U.S.  Internal  Revenue  Service  Form W-8BEN or Form
          W-8ECI,  or, in the case of a Non-U.S.  Lender claiming exemption from
          U.S.  federal  withholding  tax under Section  871(h) or 881(c) of the
          Code with  respect to payments of  "portfolio  interest",  a statement
          substantially  in the  form of  Exhibit  D and a Form  W-8BEN,  or any
          subsequent versions thereof or successors thereto,  properly completed
          and duly executed by such Non-U.S.  Lender claiming complete exemption
          from,  or a  reduced  rate of,  U.S.  federal  withholding  tax on all
          payments  by the  Borrower  under  this  Agreement  and the other Loan
          Documents. Such forms shall be delivered by each Non-U.S. Lender on or
          before the date it becomes a party to this  Agreement (or, in the case
          of any Participant,  on or before the date such Participant  purchases
          the related  participation).  In addition,  each Non-U.S. Lender shall
          deliver such forms promptly upon the obsolescence or invalidity of any
          form  previously  delivered by such  Non-U.S.  Lender.  Each  Non-U.S.
          Lender shall  promptly  notify the Borrower at any time it  determines
          that it is no longer in a position to provide any previously delivered
          certificate  to the  Borrower  (or any  other  form  of  certification
          adopted   by  the  U.S.   taxing   authorities   for  such   purpose).
          Notwithstanding  any other  provision  of this  paragraph,  a Non-U.S.
          Lender  shall not be  required  to deliver  any form  pursuant to this
          paragraph that such Non-U.S. Lender is not legally able to deliver.

     (e)  A  Lender  that is  entitled  to an  exemption  from or  reduction  of
          non-U.S.  withholding  tax under the law of the  jurisdiction in which
          the Borrower is located, or any treaty to which such jurisdiction is a
          party,  with respect to payments under this Agreement shall deliver to
          the Borrower (with a copy to the Administrative Agent), at the time or
          times  prescribed  by applicable  law or  reasonably  requested by the
          Borrower,   such  properly   completed   and  executed   documentation
          prescribed by  applicable  law as will permit such payments to be made
          without withholding or at a reduced rate, provided that such Lender is
          legally entitled to complete,  execute and deliver such  documentation
          and in such Lender's judgment such completion, execution or submission
          would not materially prejudice the legal position of such Lender.

     (f)  The  agreements in this Section shall survive the  termination of this
          Agreement and the payment of the Loans and all other  amounts  payable
          hereunder.

2.15 Indemnity.  The Borrower  agrees to indemnify  each Lender and to hold each
     Lender  harmless  from any loss or expense  that such Lender may sustain or
     incur as a consequence of (a) default by the Borrower in making a borrowing
     of,  conversion into or continuation of Eurodollar Loans after the Borrower
     has given a notice requesting the same in accordance with the provisions of
     this Agreement,  (b) default by the Borrower in making any prepayment of or
     conversion  from  Eurodollar  Loans after the  Borrower  has given a notice
     thereof in accordance with the provisions of this Agreement, (c) the making
     of a prepayment of Eurodollar Loans on a day that is not the last day of an
     Interest Period with respect thereto or (d) the making of a prepayment of a
     Competitive Loan. Such  indemnification  may include an amount equal to the
     excess,  if any, of (i) the amount of interest  that would have  accrued on
     the amount so prepaid, or not so borrowed,  converted or continued, for the
     period  from the date of such  prepayment  or of such  failure  to  borrow,
     convert or  continue  to the last day of such  Interest  Period (or, in the
     case of a failure to borrow,  convert or continue, the Interest Period that
     would  have  commenced  on the date of such  failure)  in each  case at the
     applicable rate of interest for such Loans provided for herein  (excluding,
     however,  the Applicable  Margin  included  therein,  if any) over (ii) the
     amount of interest  (as  reasonably  determined  by such Lender) that would
     have  accrued  to such  Lender on such  amount by  placing  such  amount on
     deposit  for a  comparable  period  with  leading  banks  in the  interbank
     eurodollar market. A certificate as to any amounts payable pursuant to this
     Section  submitted to the Borrower by any Lender shall be conclusive in the
     absence of manifest  error.  This covenant shall survive the termination of
     this  Agreement and the payment of the Loans and all other amounts  payable
     hereunder.

2.16 Change of Lending  Office.  Each Lender agrees that, upon the occurrence of
     any event  giving rise to the  operation  of Section  2.13 or 2.14(a)  with
     respect  to such  Lender,  it  will,  if  requested  by the  Borrower,  use
     reasonable  efforts  (subject  to  overall  policy  considerations  of such
     Lender) to designate  another lending office for any Loans affected by such
     event with the object of avoiding the consequences of such event; provided,
     that such  designation  is made on terms that, in the sole judgment of such
     Lender,  cause such Lender and its lending office(s) to suffer no economic,
     legal or regulatory  disadvantage,  and provided,  further, that nothing in
     this  Section  shall  affect  or  postpone  any of the  obligations  of any
     Borrower or the rights of any Lender pursuant to Section 2.13 or 2.14(a).

2.17 Replacement  of Lenders.  The  Borrower  shall be  permitted to replace any
     Lender  that (a)  requests  reimbursement  for  amounts  owing  pursuant to
     Section  2.13 or 2.14(a) or (b)  defaults in its  obligation  to make Loans
     hereunder, with a replacement financial institution; provided that (i) such
     replacement does not conflict with any Requirement of Law, (ii) no Event of
     Default  shall  have  occurred  and be  continuing  at  the  time  of  such
     replacement,  (iii) prior to any such  replacement,  such Lender shall have
     taken no action under Section 2.16 so as to eliminate  the  continued  need
     for payment of amounts owing pursuant to Section 2.13 or 2.14(a),  (iv) the
     replacement  financial  institution  shall purchase,  at par, all Loans and
     other  amounts  owing to such  replaced  Lender  on or prior to the date of
     replacement, (v) the Borrower shall be liable to such replaced Lender under
     Section 2.15 if any Eurodollar Loan or Eurodollar Competitive Loan owing to
     such replaced  Lender shall be purchased  other than on the last day of the
     Interest  Period   relating   thereto,   (vi)  the  replacement   financial
     institution,  if not already a Lender, shall be reasonably  satisfactory to
     the  Administrative  Agent, (vii) the replaced Lender shall be obligated to
     make such  replacement  in  accordance  with the  provisions of Section 9.6
     (provided that the Borrower shall be obligated to pay the  registration and
     processing  fee  referred  to  therein),  (viii)  until  such  time as such
     replacement  shall be  consummated,  the Borrower  shall pay all additional
     amounts (if any) required pursuant to Section 2.13 or 2.14(a),  as the case
     may be, and (ix) any such replacement shall not be deemed to be a waiver of
     any rights that the Borrower,  the Administrative Agent or any other Lender
     shall have against the replaced Lender.

Section 3                    REPRESENTATIONS AND WARRANTIES

     To induce  the  Administrative  Agent and the  Lenders  to enter  into this
Agreement and to make the Loans the Borrower  hereby  represents and warrants to
the Administrative Agent and each Lender that:

3.1  Financial  Condition.  The  audited  consolidated  balance  sheets  of  the
     Borrower  at December  31,  1999 and  December  31,  2000,  and the related
     consolidated  statements  of income and of cash  flows for the fiscal  year
     ended on December  31, 1999 and the fiscal year ended on December 31, 2000,
     reported  on by  and  accompanied  by an  unqualified  report  from  Arthur
     Andersen L.P., present fairly the consolidated  financial  condition of the
     Borrower as at such date,  and the  consolidated  results of its operations
     and its consolidated cash flows for the respective fiscal years then ended.
     The  unaudited  consolidated  balance  sheet of the Borrower as at June 30,
     2001 and the related unaudited  consolidated  statements of income and cash
     flows for the  six-month  period  ended on such  date,  present  fairly the
     consolidated  financial  condition of the Borrower as at such date, and the
     consolidated  results of its operations and its consolidated cash flows for
     the  six-month   period  then  ended  (subject  to  normal  year-end  audit
     adjustments).   All  such  financial  statements,   including  the  related
     schedules and notes  thereto,  have been  prepared in accordance  with GAAP
     applied consistently throughout the periods involved (except as approved by
     the aforementioned firm of accountants and disclosed therein). The Borrower
     and its  Subsidiaries  do not  have  any  material  Guarantee  Obligations,
     contingent  liabilities and liabilities for taxes, or any long-term  leases
     or unusual forward or long-term commitments, including any interest rate or
     foreign  currency  swap or  exchange  transaction  or other  obligation  in
     respect of derivatives, that are not reflected in the most recent financial
     statements referred to in this paragraph,  except Guarantee  Obligations of
     Indebtedness of the Borrower and/or any of its  Subsidiaries so long as the
     Indebtedness  in  respect  of which  such  Guarantee  Obligations  arise is
     reflected in such financial statements. During the period from July 1, 2001
     to and  including  the date  hereof  there has been no  Disposition  by the
     Borrower of any material part of its business or property.

3.2  No Change.  Since  December 31, 2000 there has been no development or event
     that has had or could  reasonably  be expected  to have a Material  Adverse
     Effect.

3.3  Corporate  Existence;  Compliance  with Law.  Each of the  Borrower and its
     Significant  Subsidiaries  (a) is duly organized,  validly  existing and in
     good standing under the laws of the jurisdiction of its  organization,  (b)
     has the  corporate  power and  authority,  and the legal right,  to own and
     operate its  property,  to lease the  property it operates as lessee and to
     conduct  the  business  in  which  it is  currently  engaged,  (c) is  duly
     qualified as a foreign  corporation  and in good standing under the laws of
     each  jurisdiction  where its ownership,  lease or operation of property or
     the  conduct of its  business  requires  such  qualification  and (d) is in
     compliance  with all  Requirements  of Law  except to the  extent  that the
     failure to comply  therewith  could not, in the  aggregate,  reasonably  be
     expected to have a Material Adverse Effect.

3.4  Corporate Power; Authorization;  Enforceable Obligations.  The Borrower has
     the corporate power and authority,  and the legal right,  to make,  deliver
     and perform the Loan  Documents and to borrow  hereunder.  The Borrower has
     taken all necessary  corporate action to authorize the execution,  delivery
     and  performance  of the Loan  Documents and to authorize the borrowings on
     the terms and conditions of this Agreement. No consent or authorization of,
     filing with,  notice to or other act by or in respect of, any  Governmental
     Authority or any other Person is required in connection with the borrowings
     hereunder  or  with  the  execution,  delivery,  performance,  validity  or
     enforceability  of this  Agreement  or any of the  Loan  Documents,  except
     consents,  authorizations,  filings and notices  described in Schedule 3.4,
     which consents,  authorizations,  filings and notices have been obtained or
     made and are in full force and  effect.  Each Loan  Document  has been duly
     executed  and  delivered  on  behalf  of  the  Borrower.   This   Agreement
     constitutes, and each other Loan Document upon execution will constitute, a
     legal,  valid and binding obligation of the Borrower,  enforceable  against
     the Borrower in accordance with its terms,  except as enforceability may be
     limited by applicable bankruptcy, insolvency, reorganization, moratorium or
     similar laws affecting the enforcement of creditors'  rights  generally and
     by  general  equitable   principles  (whether   enforcement  is  sought  by
     proceedings in equity or at law).

3.5  No Legal Bar. The execution, delivery and performance of this Agreement and
     the other  Loan  Documents,  the  borrowings  hereunder  and the use of the
     proceeds thereof will not violate any Requirement of Law or any Contractual
     Obligation of the Borrower or any of its  Subsidiaries  and will not result
     in, or  require,  the  creation or  imposition  of any Lien on any of their
     respective properties or revenues pursuant to any Requirement of Law or any
     such  Contractual   Obligation.   No  Requirement  of  Law  or  Contractual
     Obligation  applicable  to the  Borrower or any of its  Subsidiaries  could
     reasonably be expected to have a Material Adverse Effect.

3.6  Litigation.  No  litigation,  investigation  or proceeding of or before any
     arbitrator or Governmental Authority is pending or, to the knowledge of the
     Borrower,  threatened by or against the Borrower or any of its Subsidiaries
     or against any of their respective  properties or revenues (a) with respect
     to any of the Loan Documents or any of the transactions contemplated hereby
     or  thereby,  or (b) that could  reasonably  be expected to have a Material
     Adverse Effect.

3.7  No Default.  Neither the Borrower nor any of its Subsidiaries is in default
     under or with respect to any of its Contractual  Obligations in any respect
     that could  reasonably be expected to have a Material  Adverse  Effect.  No
     Default or Event of Default has occurred and is continuing.

3.8  Ownership of Property; Liens. Each of the Borrower and its Subsidiaries has
     title in fee  simple  to, or a valid  leasehold  interest  in, all its real
     property,  and good  title to, or a valid  leasehold  interest  in, all its
     other  property,  except to the extent failure to have such title could not
     reasonably be expected to have a Material Adverse Effect,  and none of such
     property is subject to any Lien except as permitted by Section 6.2.

3.9  Intellectual  Property.  The Borrower and each of its Subsidiaries owns, or
     is licensed to use, all Intellectual  Property necessary for the conduct of
     its business as currently  conducted,  except to the extent failure to have
     such  ownership  or license  could not  reasonably  be  expected  to have a
     Material Adverse Effect. No material claim has been asserted and is pending
     by any  Person  challenging  or  questioning  the  use of any  Intellectual
     Property or the validity or  effectiveness  of any  Intellectual  Property,
     except to the extent any such claim  could not  reasonably  be  expected to
     have a Material  Adverse  Effect,  nor does the Borrower  know of any valid
     basis for any such claim. The use of Intellectual  Property by the Borrower
     and its  Subsidiaries  does not infringe on the rights of any Person in any
     material  respect,  except to the  extent any such  infringement  could not
     reasonably be expected to have a Material Adverse Effect.

3.10 Taxes.  Each of the  Borrower  and each of its  Subsidiaries  has  filed or
     caused to be filed all Federal,  state and other  material tax returns that
     are required to be filed and has paid all taxes shown to be due and payable
     on  said  returns  or on  any  assessments  made  against  it or any of its
     property and all other taxes, fees or other charges imposed on it or any of
     its property by any  Governmental  Authority  (other than any the amount or
     validity of that are currently being contested in good faith by appropriate
     proceedings and with respect to which reserves in conformity with GAAP have
     been provided on the books of the Borrower or its Subsidiaries, as the case
     may be); no material tax Lien has been filed,  and, to the knowledge of the
     Borrower,  no material  claim is being  asserted,  with respect to any such
     tax, fee or other charge.

3.11 Federal Regulations.  No part of the proceeds of any Loans will be used for
     "buying" or "carrying" any "margin stock" within the respective meanings of
     each of the quoted  terms under  Regulation  U as now and from time to time
     hereafter in effect or for any purpose that violates the  provisions of the
     Regulations of the Board.

3.12 Labor  Matters.  Except  as,  in the  aggregate,  could not  reasonably  be
     expected  to have a Material  Adverse  Effect:  (a) there are no strikes or
     other  labor  disputes  against  the  Borrower  or any of its  Subsidiaries
     pending or, to the knowledge of the Borrower,  threatened; (b) hours worked
     by and payment made to employees of the Borrower and its Subsidiaries  have
     not  been  in  violation  of the  Fair  Labor  Standards  Act or any  other
     applicable  Requirement  of Law  dealing  with  such  matters;  and (c) all
     payments  due from the  Borrower or any of its  Subsidiaries  on account of
     employee  health  and  welfare  insurance  have been paid or  accrued  as a
     liability on the books of the Borrower or the relevant Subsidiary.

3.13 ERISA.  Neither a Reportable Event nor an "accumulated  funding deficiency"
     (within the meaning of Section 412 of the Code or Section 302 of ERISA) has
     occurred  during  the  five-year  period  prior to the  date on which  this
     representation  is made or deemed made with  respect to any Plan,  and each
     Plan has complied in all material  respects with the applicable  provisions
     of ERISA and the Code. No termination of a Single Employer Plan which could
     reasonably be expected to result in a Material Adverse Effect has occurred,
     and no  Lien in  favor  of the  PBGC  or a Plan  has  arisen,  during  such
     five-year  period.  The present  value of all accrued  benefits  under each
     Single Employer Plan (based on those  assumptions  used to fund such Plans)
     did not,  as of the last annual  valuation  date prior to the date on which
     this  representation is made or deemed made, exceed the value of the assets
     of such Plan  allocable  to such  accrued  benefits  by a material  amount.
     Neither the Borrower nor any Commonly  Controlled Entity has had a complete
     or partial  withdrawal  from any  Multiemployer  Plan that has  resulted or
     could reasonably be expected to result in a material liability under ERISA,
     and neither the Borrower nor any  Commonly  Controlled  Entity would become
     subject to any material  liability  under ERISA if the Borrower or any such
     Commonly   Controlled   Entity  were  to  withdraw   completely   from  all
     Multiemployer  Plans as of the  valuation  date most closely  preceding the
     date  on  which  this  representation  is  made  or  deemed  made.  No such
     Multiemployer Plan is in Reorganization or Insolvent.

3.14 Investment Company Act; Other Regulations.  Neither the Borrower nor any of
     its Subsidiaries is (i) an "investment  company", or a company "controlled"
     by an "investment  company",  within the meaning of the Investment  Company
     Act of 1940.  The  Borrower is a  registered  "holding  company"  under the
     Public Utility Holding Company Act of 1935, as amended, and will be subject
     to  regulation  by the  Securities  and  Exchange  Commission.  Neither the
     Borrower nor any of its  Subsidiaries  is subject to  regulation  under any
     Requirement  of Law (other than  Regulation X of the Board) that limits its
     ability to incur Indebtedness.

3.15 Subsidiaries.  Except  as  disclosed  to the  Administrative  Agent  by the
     Borrower in writing from time to time after the Closing Date,  (a) Schedule
     3.15  sets  forth  the  name  and  jurisdiction  of  incorporation  of each
     Significant  Subsidiary and, as to each such Subsidiary,  the percentage of
     each  class of Capital  Stock  owned by the  Borrower  and (b) there are no
     outstanding  subscriptions,  options,  warrants,  calls,  rights  or  other
     agreements or commitments (other than stock options granted to employees or
     directors and directors'  qualifying  shares) of any nature relating to any
     Capital  Stock of the  Borrower or any  Significant  Subsidiary,  except as
     created by the Loan Documents.

3.16 Use of  Proceeds.  The  proceeds  of the  Loans  shall be used for  general
     corporate  purposes  (including  commercial paper back-up liquidity) of the
     Borrower and its Subsidiaries in the ordinary course of business.

3.17 Environmental Matters. Except as, in the aggregate, could not reasonably be
     expected to have a Material Adverse Effect:

     (a)  the facilities or properties owned, leased or operated by the Borrower
          and any of its Subsidiaries  (the  "Properties")  do not contain,  and
          have not previously contained,  any Materials of Environmental Concern
          in amounts or concentrations or under circumstances that constitute or
          constituted a violation of, or could give rise to liability under, any
          Environmental Law;

     (b)  neither the  Borrower nor any of its  Subsidiaries  has received or is
          aware of any notice of violation,  alleged violation,  non-compliance,
          liability or potential  liability regarding  environmental  matters or
          compliance  with   Environmental  Laws  with  regard  to  any  of  the
          Properties  or the  business  operated  by the  Borrower or any of its
          Subsidiaries (the "Business"), nor does the Borrower have knowledge or
          reason to believe  that any such  notice  will be received or is being
          threatened;

     (c)  Materials  of  Environmental  Concern  have  not been  transported  or
          disposed of from the  Properties in violation of, or in a manner or to
          a location that could give rise to liability under, any  Environmental
          Law, nor have any Materials of  Environmental  Concern been generated,
          treated,  stored or disposed of at, on or under any of the  Properties
          in  violation  of, or in a manner  that could  give rise to  liability
          under, any applicable Environmental Law;

     (d)  no judicial  proceeding or  governmental or  administrative  action is
          pending or, to the  knowledge of the Borrower,  threatened,  under any
          Environmental  Law to which the Borrower or any  Subsidiary is or will
          be named as a party with respect to the  Properties  or the  Business,
          nor are there any consent  decrees or other decrees,  consent  orders,
          administrative  orders or other  orders,  or other  administrative  or
          judicial  requirements  outstanding  under any  Environmental Law with
          respect to the Properties or the Business;

     (e)  there has been no  release  or  threat  of  release  of  Materials  of
          Environmental  Concern at or from the  Properties,  or arising from or
          related  to the  operations  of the  Borrower  or  any  Subsidiary  in
          connection  with the  Properties or otherwise in  connection  with the
          Business, in violation of or in amounts or in a manner that could give
          rise to liability under Environmental Laws;

     (f)  the Properties and all operations at the Properties are in compliance,
          and  have  in the  last  five  years  been  in  compliance,  with  all
          applicable Environmental Laws, and there is no contamination at, under
          or about the  Properties  or violation of any  Environmental  Law with
          respect to the Properties or the Business; and

     (g)  neither  the  Borrower  nor any of its  Subsidiaries  has  assumed any
          liability of any other Person under Environmental Laws.

3.18 Accuracy of Information, etc. No statement or information contained in this
     Agreement,  the Notes, the Confidential Information Memorandum or any other
     document,  certificate  or  statement  furnished  by or on  behalf  of  the
     Borrower to the  Administrative  Agent or the Lenders,  or any of them, for
     use in connection  with the  transactions  contemplated  by this Agreement,
     contained  as  of  the  date  such  statement,   information,  document  or
     certificate  was  so  furnished  (or,  in  the  case  of  the  Confidential
     Information  Memorandum,  as of the  date of this  Agreement),  any  untrue
     statement of a material fact or omitted to state a material fact  necessary
     to make the statements contained herein or therein not misleading. There is
     no fact known to the Borrower  that could  reasonably be expected to have a
     Material Adverse Effect that has not been expressly  disclosed  herein,  in
     the  Confidential   Information  Memorandum  or  in  any  other  documents,
     certificates and statements  furnished to the Administrative  Agent and the
     Lenders for use in connection with the transactions contemplated hereby.

Section 4                               CONDITIONS PRECEDENT

4.1  Conditions to Closing  Date.  The Closing Date shall be the date upon which
     the following conditions precedent shall have been fulfilled:

     (a)  Credit Agreement.  The  Administrative  Agent shall have received this
          Agreement,  executed and delivered by the  Administrative  Agent,  the
          Borrower and each Person listed on Schedule 1.1.

     (b)  Financial  Statements.  The Lenders  shall have  received  (i) audited
          consolidated  financial statements of the Borrower for the fiscal year
          ended  December  31,  1999  and for the  2000  fiscal  year  and  (ii)
          unaudited interim  consolidated  financial  statements of the Borrower
          for each quarterly  period ended  subsequent to the date of the latest
          applicable  financial  statements  delivered pursuant to clause (i) of
          this  paragraph as to which such  financial  statements are available,
          and such financial statements shall not, in the reasonable judgment of
          the Lenders,  reflect any material  adverse change in the consolidated
          financial  condition of the  Borrower,  as reflected in the  financial
          statements or projections  contained in the  Confidential  Information
          Memorandum.

     (c)  Approvals.  All  governmental  and third party approvals  necessary in
          connection  with the  continuing  operations  of the  Borrower and its
          Subsidiaries and the transactions  contemplated hereby shall have been
          obtained and be in full force and effect.

     (d)  Fees. The Lenders and the Administrative Agent shall have received all
          fees  required to be paid,  and all expenses for which  invoices  have
          been presented  (including  the reasonable  fees and expenses of legal
          counsel), on or before the Closing Date.

     (e)  Closing  Certificate.  The  Administrative  Agent shall have received,
          with a counterpart  for each Lender,  a  certificate  of the Borrower,
          dated the Closing Date,  substantially  in the form of Exhibit A, with
          appropriate insertions and attachments.

     (f)  Legal  Opinions.  The  Administrative  Agent shall have  received  the
          executed legal opinion of Richard A. Rapp, Jr., vice president, deputy
          general  counsel and  secretary of the Borrower and its  Subsidiaries,
          substantially in the form of Exhibit C. Such legal opinion shall cover
          such other matters incident to the  transactions  contemplated by this
          Agreement as the Administrative Agent may reasonably require.

     (g)  Reaffirmation  of Commercial  Paper  Ratings.  The Borrower shall have
          maintained the rating of its commercial  paper of at least A2 from S&P
          and P2 from Moody's.

4.2  Conditions to Initial Extension of Credit.  The agreement of each Lender to
     make the initial  extension of credit  requested to be made by it hereunder
     is subject to the satisfaction, prior to or concurrently with the making of
     such extension of credit, of the conditions contained in Section 4.1 and of
     the following condition precedent:

     (a)  Termination  of  Existing  Credit  Agreements.   The  Existing  Credit
          Agreements  shall have been terminated and all amounts owed thereunder
          shall have been paid.

4.3  Conditions to Each Extension of Credit.The agreement of each Lender to make
     any extension of credit  requested to be made by it on any date  (including
     its  initial  extension  of credit) is subject to the  satisfaction  of the
     following conditions precedent:

     (a)  Representations   and   Warranties.Each  of  the  representations  and
          warranties made by the Borrower in or pursuant to this Agreement shall
          be true  and  correct  on and as of such  date as if made on and as of
          such date.  (b) No Default.  No Default or Event of Default shall have
          occurred and be  continuing on such date or after giving effect to the
          extensions of credit requested to be made on such date.

Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in this Section 4.3 have been satisfied.

Section 5                        AFFIRMATIVE COVENANTS

     The Borrower  hereby  agrees  that,  so long as the  Commitments  remain in
effect or any Loan or other amount is owing to any Lender or the  Administrative
Agent hereunder, the Borrower shall and shall cause each of its Subsidiaries to:

5.1  Financial Statements. Furnish to the Administrative Agent and each Lender:

     (a)  as soon as  available,  but in any event within 120 days after the end
          of  each  fiscal  year  of  the  Borrower,   a  copy  of  the  audited
          consolidated  balance  sheet  of the  Borrower  and  its  consolidated
          Subsidiaries as at the end of such fiscal year and the related audited
          consolidated  statements  of income and of cash flows for such  fiscal
          year,  setting forth in each case in comparative  form the figures for
          the  previous  fiscal year,  reported on without a "going  concern" or
          like qualification or exception,  or qualification  arising out of the
          scope of the  audit,  by Arthur  Andersen  L.P.  or other  independent
          certified public accountants of nationally recognized standing; and

     (b)  as soon as  available,  but in any event not later  than 60 days after
          the end of each of the first  three  quarterly  periods of each fiscal
          year of the Borrower,  the unaudited consolidated balance sheet of the
          Borrower  and  its  consolidated  Subsidiaries  as at the  end of such
          quarter and the related  unaudited  consolidated  statements of income
          and of cash flows for such  quarter and the portion of the fiscal year
          through  the end of  such  quarter,  setting  forth  in  each  case in
          comparative  form the figures for the  previous  year,  certified by a
          Responsible  Officer as being fairly  stated in all material  respects
          (subject to normal year-end audit adjustments).

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).

5.2  Certificates;  Other Information.  Furnish to the Administrative  Agent and
     each Lender (or, in the case of clause (c), to the relevant Lender):

     (a)  concurrently with the delivery of any financial statements pursuant to
          Section 5.1, (i) a certificate of a Responsible  Officer stating that,
          to the best of such  Responsible  Officer's  knowledge,  the  Borrower
          during such period has observed or performed  all of its covenants and
          other  agreements,  and satisfied every  condition,  contained in this
          Agreement to be observed,  performed or satisfied by it, and that such
          Responsible  Officer has obtained no knowledge of any Default or Event
          of Default  except as  specified in such  certificate  and (ii) in the
          case  of  quarterly  or  annual  financial  statements,  a  compliance
          certificate  containing all information and calculations necessary for
          determining  compliance  with the  provisions  of Section  6.1 of this
          Agreement referred to therein as of the last day of the fiscal quarter
          or fiscal year of the Borrower, as the case may be;

     (b)  within  five days  after the same are  sent,  copies of all  financial
          statements  and reports that the Borrower  sends to the holders of any
          class of its debt  securities or public equity  securities and, within
          five days after the same are filed, copies of all financial statements
          and reports that the Borrower may make to, or file with, the SEC; and

     (c)  promptly,  such  additional  financial  and other  information  as any
          Lender may from time to time reasonably request.

5.3  Payment of Obligations.  Pay,  discharge or otherwise  satisfy at or before
     maturity  or before  they  become  delinquent,  as the case may be, all its
     material  obligations  of whatever  nature,  except where (i) the amount or
     validity  thereof is currently being contested in good faith by appropriate
     proceedings  and reserves in conformity with GAAP with respect thereto have
     been provided on the books of the Borrower or its Subsidiaries, as the case
     may be or (ii) the  failure to do so could not  reasonably  be  expected to
     have a Material Adverse Effect.

5.4  Maintenance of Existence;  Compliance.  (a) In the case of the Borrower and
     each of its Significant Subsidiaries,  (i) preserve, renew and keep in full
     force and  effect  its  corporate  existence  and (ii) take all  reasonable
     action to maintain  all rights,  privileges  and  franchises  necessary  or
     desirable in the normal conduct of its business,  except,  in each case, as
     otherwise  permitted by Section 5.4 and except,  in the case of clause (ii)
     above, to the extent that failure to do so could not reasonably be expected
     to have a Material  Adverse  Effect;  and (b) comply  with all  Contractual
     Obligations  and  Requirements  of Law except to the extent that failure to
     comply  therewith  could not, in the  aggregate,  reasonably be expected to
     have a Material Adverse Effect.

5.5  Maintenance  of  Property;  Insurance.  (a) Keep all  property  useful  and
     necessary  in its business in good working  order and  condition,  ordinary
     wear  and  tear  excepted  and (b)  maintain  with  financially  sound  and
     reputable  insurance  companies  insurance  on all its property in at least
     such amounts and against at least such risks (but including,  in any event,
     public  liability,  product  liability  and business  interruption)  as are
     usually  insured  against in the same general area by companies  engaged in
     the same or a similar business.

5.6  Inspection  of Property;  Books and Records;  Discussions.  (a) Keep proper
     books of records  and account in which  full,  true and correct  entries in
     conformity  with  GAAP  and all  Requirements  of Law  shall be made of all
     dealings and  transactions  in relation to its business and  activities and
     (b) permit  representatives  of any Lender to visit and  inspect any of its
     properties and examine and make abstracts from any of its books and records
     at any  reasonable  time and as often as may  reasonably  be desired and to
     discuss  the  business,  operations,  properties  and  financial  and other
     condition of the Borrower and its Subsidiaries  with officers and employees
     of the Borrower and its  Subsidiaries  and with its  independent  certified
     public accountants.

5.7  Notices.  Promptly give notice to the Administrative  Agent and each Lender
     of:

     (a)  the occurrence of any Default or Event of Default;

     (b)  any (i) default or event of default under any  Contractual  Obligation
          of  the  Borrower  or  any of its  Subsidiaries  or  (ii)  litigation,
          investigation  or  proceeding  that may exist at any time  between the
          Borrower or any of its Subsidiaries  and any  Governmental  Authority,
          that, in either case, if not cured or if adversely determined,  as the
          case may be, could  reasonably be expected to have a Material  Adverse
          Effect;

     (c)  any  litigation  or  proceeding  affecting  the Borrower or any of its
          Subsidiaries  in which the amount  involved is $25,000,000 or more and
          not covered by insurance or in which  injunctive or similar  relief is
          sought;

     (d)  the following  events,  as soon as possible and in any event within 30
          days after the Borrower  knows or has reason to know thereof:  (i) the
          occurrence of any Reportable Event with respect to any Plan, a failure
          to make any required  contribution to a Plan, the creation of any Lien
          in  favor  of the  PBGC  or a  Plan  or any  withdrawal  from,  or the
          termination,  Reorganization or Insolvency of, any Multiemployer  Plan
          or (ii) the  institution  of  proceedings  or the  taking of any other
          action by the PBGC or the Borrower or any Commonly  Controlled  Entity
          or any Multiemployer  Plan with respect to the withdrawal from, or the
          termination, Reorganization or Insolvency of, any Plan; and

     (e)  any development or event that has had or could  reasonably be expected
          to have a Material Adverse Effect.

Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.

5.8  Environmental  Laws.  (a) Comply in all material  respects with, and ensure
     compliance in all material respects by all tenants and subtenants,  if any,
     with,  all  applicable  Environmental  Laws,  and  obtain and comply in all
     material  respects  with and  maintain,  and ensure  that all  tenants  and
     subtenants  obtain and comply in all material  respects  with and maintain,
     any and all licenses,  approvals,  notifications,  registrations or permits
     required by applicable Environmental Laws.

     (b)  Conduct  and  complete  all  investigations,   studies,  sampling  and
          testing,  and all remedial,  removal and other actions  required under
          Environmental  Laws and promptly comply in all material  respects with
          all  lawful  orders and  directives  of all  Governmental  Authorities
          regarding Environmental Laws.

5.9  Transaction  with  Affiliates.  Enter into any  transaction,  including any
     purchase, sale, lease or exchange of property, the rendering of any service
     or the  payment  of any  management,  advisory  or similar  fees,  with any
     Affiliates (other than the Borrower) upon fair and reasonable terms no less
     favorable to the Borrower or such  Subsidiary,  as the case may be, than it
     would obtain in a comparable arm's length transaction with a Person that is
     not an  Affiliate,  subject to any  requirement  under the  Public  Utility
     Holding Company Act of 1935, as amended.

Section 6                    NEGATIVE COVENANTS

     The Borrower  hereby  agrees  that,  so long as the  Commitments  remain in
effect or any Loan or other amount is owing to any Lender or the  Administrative
Agent  hereunder,  the  Borrower  shall  not,  and shall not  permit  any of its
Subsidiaries to, directly or indirectly:

6.1  Financial Condition Covenant. Permit the ratio of Consolidated Indebtedness
     to Consolidated  Capitalization as at the last day of any fiscal quarter to
     exceed 0.68:1.0.

6.2  Liens.  Create,  incur,  assume or suffer to exist any Lien upon any of its
     property, whether now owned or hereafter acquired, except for:

     (a)  Liens for taxes not yet due or that are being  contested in good faith
          by  appropriate  proceedings,  provided  that  adequate  reserves with
          respect  thereto are  maintained  on the books of the  Borrower or its
          Subsidiaries, as the case may be, in conformity with GAAP;

     (b)  carriers', warehousemen's,  mechanics', materialmen's,  repairmen's or
          other like Liens  arising in the ordinary  course of business that are
          not  overdue  for a  period  of more  than 30 days or that  are  being
          contested in good faith by appropriate proceedings;

     (c)  pledges  or  deposits  in  connection   with  workers'   compensation,
          unemployment insurance and other social security legislation;

     (d)  deposits to secure the  performance of bids,  trade  contracts  (other
          than for borrowed money), leases,  statutory  obligations,  surety and
          appeal bonds, performance bonds and other obligations of a like nature
          incurred in the ordinary course of business;

     (e)  easements, rights-of-way,  restrictions and other similar encumbrances
          incurred in the ordinary  course of business  that, in the  aggregate,
          are not  substantial in amount and that do not in any case  materially
          detract from the value of the property  subject  thereto or materially
          interfere with the ordinary conduct of the business of the Borrower or
          any of its Subsidiaries;

     (f)  Liens in  existence  on the date  hereof  listed on  Schedule  6.2(f),
          securing Indebtedness outstanding on the date hereof, provided that no
          such Lien is spread to cover any additional property after the Closing
          Date  and that the  amount  of  Indebtedness  secured  thereby  is not
          increased;

     (g)  Liens securing  Indebtedness  of the Borrower or any other  Subsidiary
          incurred to finance or  refinance  the  acquisition,  construction  or
          improvement of fixed or capital assets (including, without limitation,
          Capital  Lease  Obligations),  provided  that (i) such Liens  shall be
          created (A) substantially  simultaneously with the acquisition of such
          fixed or  capital  assets  or (B)  subsequent  thereto  to the  extent
          securing financing that replaces or refinances the previous funding or
          financing for such acquisition, construction or improvement, (ii) such
          Liens do not at any time encumber any property other than the property
          financed by such  Indebtedness  and (iii) the aggregate amount secured
          by any  such  Liens is in  customary  proportion  to the  value of the
          assets subject to such lien, as reasonably determined in good faith by
          the Borrower;

     (h)  any interest or title of a lessor under any lease  entered into by the
          Borrower  or any  other  Subsidiary  in  the  ordinary  course  of its
          business and covering only the assets so leased; and

     (i)  Liens not  otherwise  permitted by this Section so long as neither (i)
          the aggregate  outstanding principal amount of the obligations secured
          thereby nor (ii) the aggregate fair market value (determined as of the
          date such Lien is incurred) of the assets subject  thereto exceeds (as
          to the Borrower and all Subsidiaries) $25,000,000 at any one time.

6.3  Fundamental  Changes.  In the  case of the  Borrower  and  any  Significant
     Subsidiary,  enter  into any  merger,  consolidation  or  amalgamation,  or
     liquidate,  wind up or  dissolve  itself  (or  suffer  any  liquidation  or
     dissolution),  or Dispose of, all or  substantially  all of its property or
     business, except that:

     (a)  any Subsidiary of the Borrower may be merged or  consolidated  with or
          into  the  Borrower  or  a  Significant  Subsidiary  of  the  Borrower
          (provided  that the Borrower,  the  Significant  Subsidiary or another
          Significant Subsidiary, as the case may be, shall be the continuing or
          surviving corporation);

     (b)  any  Significant  Subsidiary of the Borrower may Dispose of any or all
          of  its  assets  (upon  voluntary  liquidation  or  otherwise)  to the
          Borrower; and

     (c)  any Disposition permitted under Section 6.4.

6.4  Disposition  of  Property.  (a)  Dispose  of any of the  Borrower's  or any
     Significant   Subsidiaries'  property,   whether  now  owned  or  hereafter
     acquired, or, in the case of any Significant Subsidiary,  issue or sell any
     shares  of such  Significant  Subsidiary's  Capital  Stock  to any  Person,
     except:

     (i)  the  Disposition  of  obsolete or worn out  property  in the  ordinary
          course of business;

     (ii) the sale of inventory in the ordinary course of business;

     (iii) Dispositions permitted by Section 6.3 (b); and

     (iv) the sale or issuance of any Significant  Subsidiary's Capital Stock to
          the Borrower or any other Significant Subsidiary; and

     (b)  Permit any Asset Sale,  other than any  permitted  under clause 6.4(a)
          above,  except  to the  extent  that  the Net  Cash  Proceeds  thereof
          received by the Borrower or any of its  Subsidiaries  shall be applied
          on the date of receipt thereof (or as soon as reasonably  possible) to
          reduce  Consolidated  Indebtedness by an amount equal to such Net Cash
          Proceeds.

6.5  Negative Pledge Clauses.  Enter into or suffer to exist or become effective
     any agreement  that  prohibits or limits the ability of the Borrower or any
     of its  Subsidiaries to create,  incur,  assume or suffer to exist any Lien
     upon any of its  property  or  revenues,  whether  now  owned or  hereafter
     acquired,  other than (a) this Agreement,  (b) any agreements governing any
     purchase  money  Liens or Capital  Lease  Obligations  otherwise  permitted
     hereby  (in  which  case,  any  prohibition  or  limitation  shall  only be
     effective  against  the assets  financed  thereby)  and (c) any  agreements
     listed on Schedule 6.5 and any extensions, renewals or replacements thereof
     having substantially similar provisions with respect thereto.

6.6  Limitation on Restrictions on Distributions  from  Subsidiaries.  Create or
     otherwise  cause or  permit  to exist or become  effective  any  consensual
     encumbrance  or consensual  restriction on the ability of any Subsidiary to
     pay dividends or make any other  distribution  on its Capital Stock,  other
     than any  encumbrance or restriction  pursuant to an agreement in effect on
     the  Closing  Date  as  set  forth  on  Schedule  6.6,  or  imposed  by any
     Governmental Authority.

Section 7                       EVENTS OF DEFAULT

          If   any of the following events shall occur and be continuing:

     (a)  the Borrower  shall fail to pay any  principal of any Loan when due in
          accordance  with the terms hereof;  or the Borrower  shall fail to pay
          any  interest on any Loan,  or any other amount  payable  hereunder or
          under  any  other  Loan  Document,  within  five  days  after any such
          interest  or other  amount  becomes due in  accordance  with the terms
          hereof; or

     (b)  any  representation  or warranty  made or deemed made by the  Borrower
          herein or that is contained in any certificate,  document or financial
          or other statement  furnished by it at any time under or in connection
          with  this  Agreement  shall  prove  to have  been  inaccurate  in any
          material respect on or as of the date made or deemed made; or

     (c)  the Borrower  shall default in the  observance or  performance  of any
          agreement  contained in clause (i) or (ii) of Section 5.4(a),  Section
          5.7(a) or Section 6 of this Agreement; or

     (d)  the Borrower  shall default in the  observance or  performance  of any
          other agreement contained in this Agreement or any other Loan Document
          (other  than  as  provided  in  paragraphs  (a)  through  (c) of  this
          Section),  and such default shall continue  unremedied for a period of
          30 days after notice to the Borrower from the Administrative  Agent or
          any Lender; or

     (e)  the  Borrower or any of its  Subsidiaries  shall (i) default in making
          any  payment  of any  principal  of any  Indebtedness  (including  any
          Guarantee  Obligation,  but  excluding  the Loans) on the scheduled or
          original due date with respect thereto;  or (ii) default in making any
          payment of any interest on any such Indebtedness  beyond the period of
          grace,  if any,  provided in the  instrument or agreement  under which
          such  Indebtedness was created;  or (iii) default in the observance or
          performance of any other  agreement or condition  relating to any such
          Indebtedness  or contained in any instrument or agreement  evidencing,
          securing  or  relating  thereto,  or any other  event  shall  occur or
          condition  exist,  the  effect  of such  default  or  other  event  or
          condition is to cause,  or to permit the holder or beneficiary of such
          Indebtedness  (or a  trustee  or agent on  behalf  of such  holder  or
          beneficiary)  to cause,  with the giving of notice if  required,  such
          Indebtedness  to become  due prior to its stated  maturity  or (in the
          case of any such Indebtedness  constituting a Guarantee Obligation) to
          become payable; provided, that a default, event or condition described
          in clause (i),  (ii) or (iii) of this  paragraph  (e) shall not at any
          time constitute an Event of Default unless,  at such time, one or more
          defaults,  events or conditions of the type  described in clauses (i),
          (ii) and  (iii) of this  paragraph  (e)  shall  have  occurred  and be
          continuing  with respect to  Indebtedness  the  outstanding  principal
          amount of which exceeds in the aggregate $25,000,000; or

     (f)  (i) the Borrower, any of its Significant  Subsidiaries or, should such
          commencement have or reasonably be expected to have a Material Adverse
          Effect,  any of its  other  Subsidiaries,  shall  commence  any  case,
          proceeding or other action (A) under any existing or future law of any
          jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
          reorganization  or relief  of  debtors,  seeking  to have an order for
          relief  entered  with  respect  to it, or  seeking  to  adjudicate  it
          bankrupt  or  insolvent,  or  seeking   reorganization,   arrangement,
          adjustment, winding-up, liquidation, dissolution, composition or other
          relief with respect to it or its debts, or (B) seeking  appointment of
          a receiver, trustee, custodian,  conservator or other similar official
          for  it or for  all or any  substantial  part  of its  assets,  or the
          Borrower,  any  of  its  Significant   Subsidiaries  or,  should  such
          assignment have or be reasonably  expected to have a Material  Adverse
          Effect, any of its other Subsidiaries, shall make a general assignment
          for the benefit of its  creditors;  or (ii) there  shall be  commenced
          against the Borrower, any of its Significant Subsidiaries,  or, should
          such  commencement  have or be reasonably  expected to have a Material
          Adverse Effect, any of its other Subsidiaries, any case, proceeding or
          other  action of a nature  referred  to in clause  (i) above  that (A)
          results in the entry of an order for  relief or any such  adjudication
          or appointment or (B) remains  undismissed,  undischarged  or unbonded
          for a period of 60 days; or (iii) there shall be commenced against the
          Borrower,  any  of  its  Significant  Subsidiaries,  or,  should  such
          commencement have or be reasonably expected to have a Material Adverse
          Effect, any of its other Subsidiaries,  any case,  proceeding or other
          action  seeking  issuance  of  a  warrant  of  attachment,  execution,
          distraint or similar process  against all or any  substantial  part of
          its assets  that  results in the entry of an order for any such relief
          that  shall not have  been  vacated,  discharged,  or stayed or bonded
          pending  appeal  within 60 days from the  entry  thereof;  or (iv) the
          Borrower,  any of its  Significant  Subsidiaries,  or, should any such
          action  have or be  reasonably  expected  to have a  Material  Adverse
          Effect,  any of its  other  Subsidiaries,  shall  take any  action  in
          furtherance  of,  or  indicating  its  consent  to,  approval  of,  or
          acquiescence  in, any of the acts set forth in clause  (i),  (ii),  or
          (iii) above; or (v) the Borrower, any of its Significant Subsidiaries,
          or,  should  any  such  failure  or  inability  have or be  reasonably
          expected  to  have  a  Material  Adverse  Effect,  any  of  its  other
          Subsidiaries,  shall  generally  not,  or shall be unable to, or shall
          admit in writing its  inability  to, pay its debts as they become due;
          or

     (g)  (i) any  Person  shall  engage  in any  "prohibited  transaction"  (as
          defined in Section 406 of ERISA or Section 4975 of the Code) involving
          any Plan,  (ii) any  "accumulated  funding  deficiency" (as defined in
          Section 302 of ERISA), whether or not waived, shall exist with respect
          to any Plan or any Lien in favor of the PBGC or a Plan shall  arise on
          the assets of the Borrower or any Commonly Controlled Entity,  (iii) a
          Reportable  Event shall occur with  respect to, or  proceedings  shall
          commence to have a trustee appointed, or a trustee shall be appointed,
          to  administer  or to  terminate,  any  Single  Employer  Plan,  which
          Reportable  Event or  commencement  of proceedings or appointment of a
          trustee is, in the reasonable opinion of the Required Lenders,  likely
          to result in the  termination of such Plan for purposes of Title IV of
          ERISA,  (iv) any Single  Employer Plan shall terminate for purposes of
          Title IV of ERISA, (v) the Borrower or any Commonly  Controlled Entity
          shall, or in the reasonable  opinion of the Required Lenders is likely
          to, incur any liability in connection  with a withdrawal  from, or the
          Insolvency  or  Reorganization  of, a  Multiemployer  Plan or (vi) any
          other event or condition  shall occur or exist with respect to a Plan;
          and in each case in clauses  (i)  through  (vi)  above,  such event or
          condition,  together with all other such events or conditions, if any,
          could,  in the sole  judgment of the Required  Lenders,  reasonably be
          expected to have a Material Adverse Effect; or

     (h)  one or more judgments or decrees shall be entered against the Borrower
          or any of its Subsidiaries involving in the aggregate a liability (not
          paid or fully covered by insurance as to which the relevant  insurance
          company has  acknowledged  coverage) of  $25,000,000  or more, and all
          such  judgments or decrees  shall not have been  vacated,  discharged,
          stayed or bonded pending appeal within 30 days from the entry thereof;
          or

     (i)  any "person" or "group" (as such terms are used in Sections  13(d) and
          14(d)  of  the  Securities  Exchange  Act of  1934,  as  amended  (the
          "Exchange  Act")) shall become,  or obtain rights (whether by means or
          warrants,  options or otherwise) to become, the "beneficial owner" (as
          defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly
          or indirectly, of more than 20% of the outstanding common stock of the
          Borrower;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.

Section 8              THE ADMINISTRATIVE AGENT

8.1  Appointment.  Each Lender hereby  irrevocably  designates  and appoints the
     Administrative  Agent as the agent of such Lender under this  Agreement and
     the other Loan Documents,  and each such Lender irrevocably  authorizes the
     Administrative  Agent, in such capacity,  to take such action on its behalf
     under the  provisions of this Agreement and the other Loan Documents and to
     exercise such powers and perform such duties as are expressly  delegated to
     the Administrative  Agent by the terms of this Agreement and the other Loan
     Documents,  together  with such other powers as are  reasonably  incidental
     thereto.  Notwithstanding  any provision to the contrary  elsewhere in this
     Agreement,   the  Administrative   Agent  shall  not  have  any  duties  or
     responsibilities, except those expressly set forth herein, or any fiduciary
     relationship  with  any  Lender,  and  no  implied  covenants,   functions,
     responsibilities,  duties,  obligations or  liabilities  shall be read into
     this  Agreement or any other Loan  Document or otherwise  exist against the
     Administrative Agent.

8.2  Delegation  of Duties.  The  Administrative  Agent may  execute  any of its
     duties  under this  Agreement  and the other Loan  Documents  by or through
     agents or  attorneys-in-fact  and shall be  entitled  to advice of  counsel
     concerning all matters pertaining to such duties. The Administrative  Agent
     shall not be responsible  for the negligence or misconduct of any agents or
     attorneys in-fact selected by it with reasonable care.

8.3  Exculpatory  Provisions.  Neither the  Administrative  Agent nor any of its
     officers,  directors,  employees,  agents,  attorneys-in-fact or affiliates
     shall be (i) liable for any action lawfully taken or omitted to be taken by
     it or such Person under or in connection  with this  Agreement or any other
     Loan Document  (except to the extent that any of the foregoing are found by
     a final and nonappealable  decision of a court of competent jurisdiction to
     have  resulted  from its or such  Person's own gross  negligence or willful
     misconduct) or (ii) responsible in any manner to any of the Lenders for any
     recitals, statements, representations or warranties made by the Borrower or
     any officer thereof  contained in this Agreement or any other Loan Document
     or in any certificate,  report,  statement or other document referred to or
     provided  for in,  or  received  by the  Administrative  Agent  under or in
     connection  with,  this  Agreement  or any other Loan  Document  or for the
     value, validity, effectiveness,  genuineness, enforceability or sufficiency
     of this  Agreement  or any other Loan  Document  or for any  failure of the
     Borrower  to  perform  its   obligations   hereunder  or  thereunder.   The
     Administrative  Agent  shall not be under any  obligation  to any Lender to
     ascertain or to inquire as to the  observance or  performance of any of the
     agreements contained in, or conditions of, this Agreement or any other Loan
     Document, or to inspect the properties, books or records of the Borrower.

8.4  Reliance  by  Administrative  Agent.  The  Administrative  Agent  shall  be
     entitled  to rely,  and  shall  be fully  protected  in  relying,  upon any
     instrument,  writing, resolution, notice, consent, certificate,  affidavit,
     letter,  telecopy,  telex or teletype  message,  statement,  order or other
     document  or  conversation  believed by it to be genuine and correct and to
     have been  signed,  sent or made by the proper  Person or Persons  and upon
     advice and statements of legal counsel (including counsel to the Borrower),
     independent  accountants and other experts  selected by the  Administrative
     Agent. The Administrative Agent may deem and treat the payee of any Note as
     the owner thereof for all purposes  unless a written  notice of assignment,
     negotiation   or   transfer   thereof   shall  have  been  filed  with  the
     Administrative  Agent. The Administrative Agent shall be fully justified in
     failing or refusing to take any action  under this  Agreement  or any other
     Loan Document  unless it shall first receive such advice or  concurrence of
     the Required  Lenders (or, if so specified by this Agreement,  all Lenders)
     as  it  deems   appropriate  or  it  shall  first  be  indemnified  to  its
     satisfaction  by the Lenders against any and all liability and expense that
     may be  incurred by it by reason of taking or  continuing  to take any such
     action. The  Administrative  Agent shall in all cases be fully protected in
     acting,  or in refraining  from acting,  under this Agreement and the other
     Loan Documents in accordance with a request of the Required Lenders (or, if
     so  specified by this  Agreement,  all  Lenders),  and such request and any
     action taken or failure to act pursuant  thereto  shall be binding upon all
     the Lenders and all future holders of the Loans.

8.5  Notice of  Default.  The  Administrative  Agent shall not be deemed to have
     knowledge  or notice of the  occurrence  of any Default or Event of Default
     hereunder unless the Administrative Agent has received notice from a Lender
     or the Borrower  referring to this  Agreement,  describing  such Default or
     Event of Default and stating that such notice is a "notice of default".  In
     the  event  that the  Administrative  Agent  receives  such a  notice,  the
     Administrative  Agent  shall  give  notice  thereof  to  the  Lenders.  The
     Administrative Agent shall take such action with respect to such Default or
     Event of Default as shall be  reasonably  directed by the Required  Lenders
     (or, if so specified by this Agreement, all Lenders);  provided that unless
     and until the Administrative Agent shall have received such directions, the
     Administrative  Agent may (but shall not be obligated to) take such action,
     or refrain from taking such  action,  with respect to such Default or Event
     of Default as it shall deem advisable in the best interests of the Lenders.

8.6  Non-Reliance  on  Administrative  Agent  and  Other  Lenders.  Each  Lender
     expressly acknowledges that neither the Administrative Agent nor any of its
     officers,  directors,  employees,  agents,  attorneys-in-fact or affiliates
     have made any  representations  or  warranties to it and that no act by the
     Administrative Agent hereinafter taken, including any review of the affairs
     of the  Borrower  or any  affiliate  of the  Borrower,  shall be  deemed to
     constitute any  representation or warranty by the  Administrative  Agent to
     any Lender. Each Lender represents to the Administrative Agent that it has,
     independently  and without  reliance upon the  Administrative  Agent or any
     other Lender,  and based on such documents and information as it has deemed
     appropriate, made its own appraisal of and investigation into the business,
     operations, property, financial and other condition and creditworthiness of
     the Borrower and its affiliates and made its own decision to make its Loans
     hereunder and enter into this  Agreement.  Each Lender also represents that
     it will,  independently and without reliance upon the Administrative  Agent
     or any other  Lender,  and based on such  documents and  information  as it
     shall  deem  appropriate  at the  time,  continue  to make  its own  credit
     analysis,  appraisals  and  decisions in taking or not taking  action under
     this Agreement and the other Loan Documents, and to make such investigation
     as it deems  necessary  to inform  itself as to the  business,  operations,
     property,  financial  and  other  condition  and  creditworthiness  of  the
     Borrower  and  its  affiliates.  Except  for  notices,  reports  and  other
     documents  expressly  required  to be  furnished  to  the  Lenders  by  the
     Administrative Agent hereunder, the Administrative Agent shall not have any
     duty or  responsibility  to  provide  any  Lender  with any credit or other
     information  concerning  the  business,  operations,   property,  condition
     (financial or otherwise),  prospects or creditworthiness of the Borrower or
     any  affiliate of the  Borrower  that may come into the  possession  of the
     Administrative Agent or any of its officers, directors,  employees, agents,
     attorneys-in-fact or affiliates.

8.7  Indemnification. The Lenders agree to indemnify the Administrative Agent in
     its  capacity as such (to the extent not  reimbursed  by the  Borrower  and
     without  limiting  the  obligation  of  the  Borrower  to do  so),  ratably
     according to their respective  Aggregate Exposure  Percentages in effect on
     the date on which  indemnification  is sought  under this  Section  (or, if
     indemnification  is sought after the date upon which the Commitments  shall
     have  terminated  and the Loans  shall  have been paid in full,  ratably in
     accordance with such Aggregate  Exposure  Percentages  immediately prior to
     such date), from and against any and all liabilities,  obligations, losses,
     damages,   penalties,   actions,   judgments,  suits,  costs,  expenses  or
     disbursements  of any kind  whatsoever that may at any time (whether before
     or after the payment of the Loans) be imposed  on,  incurred by or asserted
     against the Administrative  Agent in any way relating to or arising out of,
     the  Commitments,  this  Agreement,  any of the other Loan Documents or any
     documents  contemplated  by  or  referred  to  herein  or  therein  or  the
     transactions  contemplated hereby or thereby or any action taken or omitted
     by  the  Administrative  Agent  under  or in  connection  with  any  of the
     foregoing;  provided  that no Lender shall be liable for the payment of any
     portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
     actions,  judgments, suits, costs, expenses or disbursements that are found
     by a final and nonappealable  decision of a court of competent jurisdiction
     to have  resulted  from the  Administrative  Agent's  gross  negligence  or
     willful  misconduct.  The  agreements  in this  Section  shall  survive the
     payment of the Loans and all other amounts payable hereunder.

8.8  Administrative Agent in Its Individual  Capacity.  The Administrative Agent
     and its  affiliates  may make loans to, accept  deposits from and generally
     engage  in  any  kind  of  business   with  the   Borrower  as  though  the
     Administrative Agent was not the Administrative  Agent. With respect to its
     Loans made or renewed by it, the  Administrative  Agent shall have the same
     rights and powers under this  Agreement and the other Loan Documents as any
     Lender and may exercise  the same as though it were not the  Administrative
     Agent,   and  the  terms   "Lender"  and   "Lenders"   shall   include  the
     Administrative Agent in its individual capacity.

8.9  Successor  Administrative  Agent.  The  Administrative  Agent may resign as
     Administrative  Agent upon 30 days' notice to the Lenders and the Borrower.
     If the Administrative Agent shall resign as Administrative Agent under this
     Agreement, then the Required Lenders shall appoint from among the Lenders a
     successor  agent for the Lenders,  which  successor  agent shall (unless an
     Event of Default  under  Section  7(a) or Section  7(f) with respect to the
     Borrower  shall have occurred and be  continuing) be subject to approval by
     the  Borrower  (which  approval  shall  not  be  unreasonably  withheld  or
     delayed),  whereupon  such  successor  agent  shall  succeed to the rights,
     powers and duties of the Administrative Agent, and the term "Administrative
     Agent" shall mean such successor agent effective upon such  appointment and
     approval,  and the former Administrative  Agent's rights, powers and duties
     as Administrative  Agent shall be terminated,  without any other or further
     act or deed on the part of such former  Administrative  Agent or any of the
     parties to this  Agreement  or any  holders of the Loans.  If no  successor
     agent has accepted  appointment as Administrative Agent by the date that is
     30 days following a retiring  Administrative Agent's notice of resignation,
     the  retiring   Administrative   Agent's   resignation  shall  nevertheless
     thereupon  become effective and the Lenders shall assume and perform all of
     the duties of the  Administrative  Agent hereunder until such time, if any,
     as the Required  Lenders  appoint a successor  agent as provided for above.
     After any retiring  Administrative  Agent's  resignation as  Administrative
     Agent,  the  provisions  of this Section 8 shall inure to its benefit as to
     any actions taken or omitted to be taken by it while it was  Administrative
     Agent under this Agreement and the other Loan Documents.

Section 9                        MISCELLANEOUS

9.1  Amendments and Waivers.  Neither this  Agreement,  any other Loan Document,
     nor any terms  hereof or thereof may be amended,  supplemented  or modified
     except in accordance  with the provisions of this Section 9.1. The Required
     Lenders and the Borrower may, or, with the written  consent of the Required
     Lenders,  the Administrative Agent and the Borrower may, from time to time,
     (a) enter into written amendments,  supplements or modifications hereto for
     the purpose of adding any  provisions to this  Agreement or changing in any
     manner the rights of the Lenders or of the Borrower hereunder or (b) waive,
     on such terms and conditions as the Required Lenders or the  Administrative
     Agent,  as the case may be,  may  specify  in such  instrument,  any of the
     requirements  of this  Agreement or any Default or Event of Default and its
     consequences; provided, however, that no such waiver and no such amendment,
     supplement or modification  shall (i) eliminate or reduce any voting rights
     under this Section 9.1,  forgive the  principal  amount or extend the final
     scheduled  date of  maturity  of any Loan,  reduce the  stated  rate of any
     interest  or fee  payable  hereunder  or extend the  scheduled  date of any
     payment  thereof,  or increase the amount or extend the expiration  date of
     any Lender's  Commitments,  in each case without the consent of each Lender
     directly  affected  thereby;  (ii) reduce any  percentage  specified in the
     definition of Required  Lenders,  consent to the  assignment or transfer by
     the Borrower of any of its rights and obligations  under this Agreement and
     the other Loan Documents,  in each case without the consent of all Lenders;
     (iii) amend, modify or waive any provision of Section 8 without the consent
     of the  Administrative  Agent.  Any such  waiver  and any  such  amendment,
     supplement or  modification  shall apply equally to each of the Lenders and
     shall be binding upon the Borrower,  the Lenders,  the Administrative Agent
     and all  future  holders  of the  Loans.  In the  case of any  waiver,  the
     Borrower,  the  Lenders and the  Administrative  Agent shall be restored to
     their  former  position  and  rights  hereunder  and under  the other  Loan
     Documents, and any Default or Event of Default waived shall be deemed to be
     cured and not continuing; but no such waiver shall extend to any subsequent
     or other  Default  or Event of  Default,  or impair  any  right  consequent
     thereon.

9.2  Notices.  All  notices,  requests  and  demands  to or upon the  respective
     parties hereto to be effective shall be in writing (including by telecopy),
     and, unless otherwise  expressly  provided herein,  shall be deemed to have
     been duly given or made when delivered,  or three Business Days after being
     deposited in the mail, postage prepaid, or, in the case of telecopy notice,
     when  received,  addressed  as follows in the case of the  Borrower and the
     Administrative  Agent, and as set forth in an administrative  questionnaire
     delivered to the  Administrative  Agent in the case of the  Lenders,  or to
     such other address as may be hereafter  notified by the respective  parties
     hereto:

         The Borrower:                        KeySpan Corporation
                                              One MetroTech Center
                                              Brooklyn, New York  11201
                                              Attention:  Treasurer
                                              Telecopy:  (718) 246-9798

         The Administrative Agent:            The Chase Manhattan Bank
                                              Brooklyn Middle Market Bank Group
                                              Four MetroTech Center
                                              Brooklyn, New York  11245
                                              Attention:  Peter D'Agostino
                                              Telecopy:  (718) 242-3837

         with a copy to:                      The Chase Manhattan Bank
                                              Agency Bank Services
                                              One Chase Manhattan Plaza
                                              New York, New York
                                              Telecopy: (212) 552-7400

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

9.3  No Waiver;  Cumulative  Remedies.  No failure to  exercise  and no delay in
     exercising,  on the part of the  Administrative  Agent or any  Lender,  any
     right,  remedy,  power or  privilege  hereunder  or under  the  other  Loan
     Documents  shall  operate  as a waiver  thereof;  nor shall  any  single or
     partial  exercise  of any  right,  remedy,  power  or  privilege  hereunder
     preclude any other or further exercise thereof or the exercise of any other
     right,  remedy,  power or  privilege.  The  rights,  remedies,  powers  and
     privileges  herein provided are cumulative and not exclusive of any rights,
     remedies, powers and privileges provided by law.

9.4  Survival  of  Representations  and  Warranties.   All  representations  and
     warranties  made  hereunder and in any document,  certificate  or statement
     delivered  pursuant  hereto or in  connection  herewith  shall  survive the
     execution  and delivery of this  Agreement  and the making of the Loans and
     other extensions of credit hereunder.

9.5  Payment of Expenses and Taxes.  The Borrower agrees (a) to pay or reimburse
     the  Administrative  Agent for all its reasonable  out-of-pocket  costs and
     expenses  incurred in  connection  with the  development,  preparation  and
     execution  of, and any  amendment,  supplement  or  modification  to,  this
     Agreement and the other Loan Documents and any other documents  prepared in
     connection  herewith or therewith,  and the consummation and administration
     of  the  transactions  contemplated  hereby  and  thereby,   including  the
     reasonable fees and  disbursements of counsel to the  Administrative  Agent
     and filing and recording fees and expenses, with statements with respect to
     the foregoing to be submitted to the Borrower prior to the Closing Date (in
     the case of amounts to be paid on the  Closing  Date) and from time to time
     thereafter  on a  quarterly  basis  or such  other  periodic  basis  as the
     Administrative  Agent shall deem appropriate,  (b) to pay or reimburse each
     Lender and the Administrative Agent for all its costs and expenses incurred
     in connection with the enforcement or preservation of any rights under this
     Agreement, the other Loan Documents and any such other documents, including
     the fees and  disbursements  of counsel  (including  the allocated fees and
     expenses  of  in-house  counsel)  to  each  Lender  and of  counsel  to the
     Administrative  Agent, (c) to pay, indemnify,  and hold each Lender and the
     Administrative  Agent  harmless from, any and all recording and filing fees
     and any and all liabilities with respect to, or resulting from any delay in
     paying,  stamp,  excise  and other  taxes,  if any,  that may be payable or
     determined to be payable in connection  with the execution and delivery of,
     or consummation or administration  of any of the transactions  contemplated
     by, or any  amendment,  supplement  or  modification  of, or any  waiver or
     consent under or in respect of, this  Agreement,  the other Loan  Documents
     and any such  other  documents,  and (d) to pay,  indemnify,  and hold each
     Lender  and  the  Administrative   Agent  and  their  respective  officers,
     directors, employees,  affiliates, agents and controlling persons (each, an
     "Indemnitee")  harmless  from and  against  any and all other  liabilities,
     obligations,  losses, damages, penalties, actions, judgments, suits, costs,
     expenses or disbursements of any kind or nature  whatsoever with respect to
     the execution,  delivery,  enforcement,  performance and  administration of
     this  Agreement,  the other Loan  Documents  and any such other  documents,
     including any of the foregoing relating to the use of proceeds of the Loans
     or  the  violation  of,   noncompliance   with  or  liability   under,  any
     Environmental  Law  applicable to the operations of the Borrower any of its
     Subsidiaries  or any of the Properties and the reasonable fees and expenses
     of legal counsel in connection  with claims,  actions or proceedings by any
     Indemnitee  against the Borrower under any Loan Document (all the foregoing
     in this clause (d), collectively, the "Indemnified Liabilities"), provided,
     that the Borrower shall have no obligation hereunder to any Indemnitee with
     respect  to  Indemnified   Liabilities  to  the  extent  such   Indemnified
     Liabilities are found by a final and  nonappealable  decision of a court of
     competent  jurisdiction  to have  resulted  from the  gross  negligence  or
     willful misconduct of such Indemnitee.  Without limiting the foregoing, and
     to the extent  permitted by  applicable  law,  the  Borrower  agrees not to
     assert and to cause its Subsidiaries  not to assert,  and hereby waives and
     agrees to cause its  Subsidiaries to so waive,  all rights for contribution
     or any other  rights of  recovery  with  respect  to all  claims,  demands,
     penalties, fines, liabilities,  settlements, damages, costs and expenses of
     whatever kind or nature,  under or related to Environmental  Laws, that any
     of them might have by statute or  otherwise  against  any  Indemnitee.  All
     amounts due under this Section 9.5 shall be payable  promptly after written
     demand therefor. The agreements in this Section 9.5 shall survive repayment
     of the Loans and all other amounts payable hereunder.

9.6  Successors and Assigns;  Participations and Assignments.(a)  This Agreement
     shall  be  binding  upon and  inure to the  benefit  of the  Borrower,  the
     Lenders,  the  Administrative  Agent,  all future  holders of the Loans and
     their respective  successors and assigns,  except that the Borrower may not
     assign or transfer any of its rights or  obligations  under this  Agreement
     without the prior written consent of each Lender.

(b)  Any Lender may,  without the consent of the Borrower,  in  accordance  with
     applicable  law,  at  any  time  sell  to  one  or  more  banks,  financial
     institutions  or  other  entities  (each,  a  "Participant")  participating
     interests in any Loan owing to such Lender,  any Commitments of such Lender
     or any other  interest  of such Lender  hereunder  and under the other Loan
     Documents.  In the event of any such  sale by a Lender  of a  participating
     interest to a Participant,  such Lender's  obligations under this Agreement
     to the other parties to this Agreement shall remain unchanged,  such Lender
     shall remain solely  responsible for the performance  thereof,  such Lender
     shall  remain  the  holder of any such  Loan for all  purposes  under  this
     Agreement  and  the  other  Loan  Documents,   and  the  Borrower  and  the
     Administrative  Agent shall  continue to deal solely and directly with such
     Lender in connection with such Lender's  rights and obligations  under this
     Agreement and the other Loan  Documents.  In no event shall any Participant
     under any such  participation  have any right to approve any  amendment  or
     waiver  of any  provision  of any  Loan  Document,  or any  consent  to any
     departure  by the  Borrower  therefrom,  except  to the  extent  that  such
     amendment, waiver or consent would reduce the principal of, or interest on,
     the Loans or any fees payable hereunder,  or postpone the date of the final
     maturity  of the  Loans,  in  each  case  to the  extent  subject  to  such
     participation.  The Borrower agrees that if amounts  outstanding under this
     Agreement  and the Loans are due or unpaid,  or shall have been declared or
     shall  have  become  due and  payable  upon the  occurrence  of an Event of
     Default,  each  Participant  shall,  to the  maximum  extent  permitted  by
     applicable  law,  be deemed to have the right of setoff in  respect  of its
     participating  interest in amounts  owing under this  Agreement to the same
     extent as if the amount of its  participating  interest were owing directly
     to it as a Lender under this  Agreement,  provided that, in purchasing such
     participating  interest, such Participant shall be deemed to have agreed to
     share with the Lenders the proceeds  thereof as provided in Section  9.7(a)
     as fully as if it were a Lender  hereunder.  The Borrower  also agrees that
     each  Participant  shall be entitled to the benefits of Sections 2.13, 2.14
     and 2.15 with respect to its participation in the Commitments and the Loans
     outstanding from time to time as if it was a Lender;  provided that, in the
     case of  Section  2.14,  such  Participant  shall  have  complied  with the
     requirements  of said Section and provided,  further,  that no  Participant
     shall be  entitled  to receive  any  greater  amount  pursuant  to any such
     Section than the  transferor  Lender would have been entitled to receive in
     respect of the amount of the  participation  transferred by such transferor
     Lender to such Participant had no such transfer occurred.

(c)  Any Lender (an  "Assignor")  may, in accordance with applicable law, at any
     time and from  time to time  assign to any  Lender,  any  affiliate  of any
     Lender or any  Approved  Fund or, with the consent of the  Borrower and the
     Administrative  Agent  (which,  in each  case,  shall  not be  unreasonably
     withheld or delayed), to an additional bank, financial institution or other
     entity  (an  "Assignee")  all or,  except  in the  case  of an  outstanding
     Competitive  Loan,  any  part  of its  rights  or  obligations  under  this
     Agreement  pursuant  to an  Assignment  and  Acceptance,  executed  by such
     Assignee,  such  Assignor and any other  Person  whose  consent is required
     pursuant to this paragraph,  and delivered to the Administrative  Agent for
     its  acceptance  and  recording  in the  Register;  provided  that  no such
     assignment  to an Assignee  (other than any Lender,  any  affiliate  of any
     Lender or any Approved Fund) shall be in an aggregate  principal  amount of
     less than  $1,000,000  (other than in the case of an assignment of all of a
     Lender's  interests under this  Agreement),  unless otherwise agreed by the
     Borrower  and  the  Administrative  Agent.  For  purposes  of  the  proviso
     contained in the preceding sentence,  the amount described therein shall be
     aggregated  in respect of each Lender and its related  Approved  Funds,  if
     any. Upon such  execution,  delivery,  acceptance and  recording,  from and
     after  the  effective  date  determined  pursuant  to such  Assignment  and
     Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
     extent  provided in such  Assignment  and  Acceptance,  have the rights and
     obligations  of a Lender  hereunder  with  Commitments  and/or Loans as set
     forth  therein,  and (y)  the  Assignor  thereunder  shall,  to the  extent
     provided  in  such  Assignment  and   Acceptance,   be  released  from  its
     obligations  under this  Agreement  (and, in the case of an Assignment  and
     Acceptance  covering all of an Assignor's rights and obligations under this
     Agreement, such Assignor shall cease to be a party hereto). Notwithstanding
     any provision of this Section 9.6, the consent of the Borrower shall not be
     required for any assignment  that occurs when an Event of Default  pursuant
     to Section 7(f) shall have occurred and be  continuing  with respect to the
     Borrower.

(d)  The Administrative Agent shall, on behalf of the Borrower,  maintain at its
     address referred to in Section 9.2 a copy of each Assignment and Acceptance
     delivered to it and a register (the  "Register") for the recordation of the
     names  and  addresses  of the  Lenders  and  the  Commitments  of,  and the
     principal  amount of the Loans owing to, each Lender from time to time. The
     entries in the  Register  shall be  conclusive,  in the absence of manifest
     error,  and the Borrower,  the  Administrative  Agent and the Lenders shall
     treat each Person  whose name is  recorded in the  Register as the owner of
     the Loans and any Notes  evidencing  the  Loans  recorded  therein  for all
     purposes of this  Agreement.  Any  assignment  of any Loan,  whether or not
     evidenced by a Note, shall be effective only upon appropriate  entries with
     respect  thereto being made in the Register (and each Note shall  expressly
     so provide).  Any assignment or transfer of all or part of a Loan evidenced
     by a Note shall be  registered  on the  Register  only upon  surrender  for
     registration  of assignment or transfer of the Note  evidencing  such Loan,
     accompanied by a duly executed Assignment and Acceptance, and thereupon one
     or more new Notes shall be issued to the designated Assignee.

(e)  Upon its receipt of an Assignment and  Acceptance  executed by an Assignor,
     an  Assignee  and any other  Person  whose  consent is  required by Section
     9.6(c), together with payment to the Administrative Agent of a registration
     and processing fee of $3,500, the  Administrative  Agent shall (i) promptly
     accept such  Assignment  and  Acceptance  and (ii)  record the  information
     contained therein in the Register on the effective date determined pursuant
     thereto.

(f)  For avoidance of doubt, the parties to this Agreement  acknowledge that the
     provisions of this Section 9.6  concerning  assignments  of Loans and Notes
     relate  only to  absolute  assignments  and  that  such  provisions  do not
     prohibit assignments  creating security interests,  including any pledge or
     assignment  by a Lender of any Loan or Note to any Federal  Reserve Bank in
     accordance with applicable law.

(g)  The  Borrower,  upon receipt of written  notice from the  relevant  Lender,
     agrees  to  issue  Notes  to  any  Lender  requiring  Notes  to  facilitate
     transactions of the type described in paragraph (f) above.

9.7  Adjustments;  Set-off.  (a)  Except  to  the  extent  that  this  Agreement
     expressly  provides for payments to be allocated to a particular Lender, if
     any Lender (a "Benefitted  Lender")  shall, at any time after the Loans and
     other amounts payable  hereunder shall  immediately  become due and payable
     pursuant  to  Section  7,  receive  any  payment  of  all  or  part  of the
     Obligations owing to it (whether voluntarily or involuntarily,  by set-off,
     pursuant  to events or  proceedings  of the nature  referred  to in Section
     7(f), or otherwise),  in a greater  proportion than any such payment to any
     other  Lender,  if any, in respect of the  Obligations  owing to such other
     Lender,  such  Benefitted  Lender  shall  purchase  for cash from the other
     Lenders a participating  interest in such portion of the Obligations  owing
     to each such other Lender,  as shall be necessary to cause such  Benefitted
     Lender to share  the  excess  payment  ratably  with  each of the  Lenders;
     provided,  however,  that if all or any portion of such  excess  payment is
     thereafter  recovered from such Benefitted  Lender,  such purchase shall be
     rescinded, and the purchase price returned, to the extent of such recovery,
     but without interest.

     (b)  In addition to any rights and remedies of the Lenders provided by law,
          each  Lender  shall  have  the  right,  without  prior  notice  to the
          Borrower,  any such notice being  expressly  waived by the Borrower to
          the extent  permitted by applicable  law, upon any amount becoming due
          and payable by the Borrower hereunder (whether at the stated maturity,
          by  acceleration  or otherwise),  to set off and appropriate and apply
          against such amount any and all deposits (general or special,  time or
          demand, provisional or final), in any currency, and any other credits,
          indebtedness or claims,  in any currency,  in each case whether direct
          or indirect, absolute or contingent, matured or unmatured, at any time
          held or owing by such Lender or any branch or agency thereof to or for
          the credit or the  account of the  Borrower,  as the case may be. Each
          Lender agrees  promptly to notify the Borrower and the  Administrative
          Agent  after any such  setoff  and  application  made by such  Lender,
          provided  that the  failure to give such  notice  shall not affect the
          validity of such setoff and application.

9.8  Counterparts.  This Agreement may be executed by one or more of the parties
     to this Agreement on any number of separate  counterparts,  and all of said
     counterparts  taken together shall be deemed to constitute one and the same
     instrument.  Delivery of an executed  signature  page of this  Agreement by
     facsimile  transmission  shall  be  effective  as  delivery  of a  manually
     executed  counterpart  hereof. A set of the copies of this Agreement signed
     by all the parties shall be lodged with the Borrower and the Administrative
     Agent.

9.9  Severability.  Any  provision  of  this  Agreement  that is  prohibited  or
     unenforceable  in any  jurisdiction  shall,  as to  such  jurisdiction,  be
     ineffective to the extent of such prohibition or  unenforceability  without
     invalidating the remaining  provisions  hereof, and any such prohibition or
     unenforceability  in  any  jurisdiction  shall  not  invalidate  or  render
     unenforceable such provision in any other jurisdiction.

9.10 Integration.  This  Agreement  and the other Loan  Documents  represent the
     agreement of the Borrower,  the  Administrative  Agent and the Lenders with
     respect  to  the  subject  matter  hereof,   and  there  are  no  promises,
     undertakings,  representations or warranties by the Administrative Agent or
     any Lender  relative to subject  matter  hereof not  expressly set forth or
     referred to herein or in the other Loan Documents.

9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
     UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
     ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

9.12 Submission To Jurisdiction;  Waivers.  The Borrower hereby  irrevocably and
     unconditionally:

     (a)  submits for itself and its property in any legal action or  proceeding
          relating  to this  Agreement  and the  other  Loan  Documents,  or for
          recognition and enforcement of any judgment in respect thereof, to the
          non-exclusive  general  jurisdiction of the courts of the State of New
          York, the courts of the United States for the Southern District of New
          York, and appellate courts from any thereof;

     (b)  consents  that any such  action or  proceeding  may be brought in such
          courts and waives any objection  that it may now or hereafter  have to
          the venue of any such action or  proceeding  in any such court or that
          such action or  proceeding  was brought in an  inconvenient  court and
          agrees not to plead or claim the same;

     (c)  agrees that service of process in any such action or proceeding may be
          effected by mailing a copy thereof by registered or certified mail (or
          any  substantially  similar  form of mail),  postage  prepaid,  to the
          Borrower,  as the case may be at its  address set forth in Section 9.2
          or at such other address of which the Administrative  Agent shall have
          been notified pursuant thereto;

     (d)  agrees that nothing herein shall affect the right to effect service of
          process in any other manner  permitted by law or shall limit the right
          to sue in any other jurisdiction; and

     (e)  waives,  to the maximum extent not prohibited by law, any right it may
          have to claim or recover in any legal action or proceeding referred to
          in this  Section any  special,  exemplary,  punitive or  consequential
          damages.

9.13 Acknowledgements. The Borrower hereby acknowledges that:

     (a)  it has been  advised  by  counsel in the  negotiation,  execution  and
          delivery of this Agreement and the other Loan Documents;

     (b)  neither  the  Administrative  Agent nor any Lender  has any  fiduciary
          relationship  with  or  duty  to  the  Borrower  arising  out of or in
          connection with this Agreement or any of the other Loan Documents, and
          the relationship  between the Administrative Agent and the Lenders, on
          one hand, and the Borrower,  on the other hand, in connection herewith
          or therewith is solely that of debtor and creditor; and

     (c)  no joint venture is created  hereby or by the other Loan  Documents or
          otherwise  exists by virtue of the  transactions  contemplated  hereby
          among the Lenders or among the Borrower and the Lenders.

9.14 Confidentiality. Each of the Administrative Agent and each Lender agrees to
     keep confidential all non-public information provided to it by the Borrower
     pursuant  to  this   Agreement  that  is  designated  by  the  Borrower  as
     confidential; provided that nothing herein shall prevent the Administrative
     Agent  or any  Lender  from  disclosing  any  such  information  (a) to the
     Administrative  Agent, any other Lender, any affiliate of any Lender or any
     Approved Fund, (b) to any Transferee or prospective  Transferee that agrees
     to  comply  with the  provisions  of this  Section,  (c) to its  employees,
     directors,  agents, attorneys,  accountants and other professional advisors
     or those of any of its  affiliates,  (d) upon the  request or demand of any
     Governmental Authority,  (e) in response to any order of any court or other
     Governmental  Authority  or as may  otherwise  be required  pursuant to any
     Requirement  of Law, (f) if  requested  or required to do so in  connection
     with any  litigation  or  similar  proceeding,  (g) that has been  publicly
     disclosed,  (h) to the National  Association of Insurance  Commissioners or
     any similar  organization or any nationally  recognized  rating agency that
     requires  access to information  about a Lender's  investment  portfolio in
     connection  with  ratings  issued with  respect to such  Lender,  or (i) in
     connection  with the  exercise of any remedy  hereunder  or under any other
     Loan Document.

9.15 WAIVERS OF JURY  TRIAL.  THE  BORROWER,  THE  ADMINISTRATIVE  AGENT AND THE
     LENDERS HEREBY IRREVOCABLY AND  UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY
     LEGAL  ACTION OR  PROCEEDING  RELATING TO THIS  AGREEMENT OR ANY OTHER LOAN
     DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                                  (End of Page)


<PAGE>





                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.


                                    KEYSPAN CORPORATION


                                    By:  /s/  Michael J. Taunton
                                    ----------------------------
                                    Name: Michael J. Taunton
                                    Title:   Treasurer


                                    THE CHASE MANHATTAN BANK, as Administrative
                                    Agent and as a Lender

                                    By:  /s/ Peter J. D'Agostino
                                    ----------------------------
                                    Name: Peter J. D'Agostino
                                    Title:  Vice-President