EXHIBIT 10-98.3

                                CREDIT AGREEMENT

                          dated as of December 23, 1999

                                      among

                          CENTRAL MAINE POWER COMPANY,

                                   as Borrower

                            The Lenders Party Hereto

                              FLEET NATIONAL BANK,

                              as Syndication Agent,

                                       and

                              THE BANK OF NEW YORK,

                             as Administrative Agent

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


                            BNY CAPITAL MARKETS, INC.

                        as Lead Arranger and Book Runner


<PAGE>



     CREDIT AGREEMENT,  dated as of December 23, 1999, among CENTRAL MAINE POWER
COMPANY,  the LENDERS party hereto,  FLEET NATIONAL BANK, as Syndication  Agent,
and THE BANK OF NEW YORK, as Administrative Agent.

     The parties hereto agree as follows:

ARTICLE 1. DEFINITIONS

         Section 1.1 Defined Terms

     As used in this Credit  Agreement,  the  following  terms have the meanings
specified below:

     "ABR",  when used in reference to any Loan or Borrowing,  refers to whether
such Loan, or the Loans  comprising  such Borrowing,  are bearing  interest at a
rate determined by reference to the Alternate Base Rate.

     "Adjusted LIBO Rate" means,  with respect to any  Eurodollar  Borrowing for
any Interest Period, an interest rate per annum (rounded upwards,  if necessary,
to the next  1/16 of 1%)  equal to (a) the LIBO  Rate for such  Interest  Period
multiplied by (b) the Statutory Reserve Rate.

     "Administrative  Agent" means BNY, in its capacity as administrative  agent
for the Lenders hereunder.

     "Administrative  Questionnaire" means an Administrative  Questionnaire in a
form supplied by the Administrative Agent.

     "Affiliate" means, with respect to a specified Person,  another Person that
directly,  or  indirectly  through  one or more  intermediaries,  Controls or is
Controlled by or is under common Control with the Person specified.

     "Alternate  Base Rate"  means,  for any day, a rate per annum  equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the  Federal  Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds  Effective Rate
shall be effective  from and including the effective  date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.

     "Applicable  Margin":  means,  at all times  during  which  the  applicable
Pricing  Level set forth  below is in effect,  (i) with  respect  to  Eurodollar
Borrowings,  the  percentage  set  forth  below  under the  heading  "Eurodollar
Margin",  (ii) with respect to facility fees payable under Section  3.3(a),  the
percentage  set forth below under the heading  "Facility Fee Margin",  and (iii)
with respect to utilization  fees payable under Section  3.3(b),  the percentage
set forth below under the heading "Utilization Fee Margin":

================================================================================
Pricing Level    Eurodollar Margin   Facility Fee Margin  Utilization Fee Margin
--------------------------------------------------------------------------------
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      I                 0.300%               0.100%                0.050%
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      II                0.375%               0.125%                0.100%
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     III                0.500%               0.150%                0.100%
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      IV                0.575%               0.175%                0.125%
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      V                 0.650%               0.225%                0.125%
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      VI                0.750%               0.250%                0.250%
================================================================================

     Pricing Level I will be  applicable  for so long as the  Borrower's  senior
unsecured  long-term  debt ratings (the "Senior Debt Rating") from either S&P or
Moody's is A+ or higher by S&P or A1 or higher by Moody's.

     Pricing Level II will be  applicable  for so long as the Senior Debt Rating
is A- or higher by S&P or A3 or higher by  Moody's  and  Pricing  Level I is not
applicable.

     Pricing Level III will be applicable  for so long as the Senior Debt Rating
is BBB+ or higher by S&P or Baa1 or higher by Moody's and neither  Pricing Level
I nor II is applicable.

     Pricing Level IV will be  applicable  for so long as the Senior Debt Rating
is BBB or higher by S&P or Baa2 or higher by Moody's  and  Pricing  Levels I, II
and III are not applicable.

     Pricing Level V will be applicable for so long as the Senior Debt Rating is
BBB- or higher by S&P or Baa3 or higher by Moody's and Pricing Levels I, II, III
and IV are not applicable.

     Pricing Level VI will be  applicable  for so long as the Senior Debt Rating
is less than or equal to BB+ by S&P or less than or equal to Ba1 by Moody's  and
Pricing Levels I, II, III, IV and V are not applicable.

     Changes in the  Applicable  Margin  resulting  from a change in the Pricing
Level shall become  effective on the effective  date of any change in the Senior
Debt Rating of the Borrower by S&P or Moody's.  Notwithstanding  anything herein
to the  contrary,  in the  event of a split in the  Senior  Debt  Rating  of the
Borrower from S&P and Moody's that would otherwise  result in the application of
more than one Pricing Level (had the provisions  regarding the  applicability of
other  Pricing  Levels  contained  in the  definitions  thereof  not been  given
effect),  then the Applicable Margin shall be determined using, in the case of a
split by one rating  category,  the higher Pricing  Level,  and in the case of a
split by more than one  rating  category,  the  Pricing  Level that is one level
lower  than  the  Pricing  Level  within  which  the  higher  of the two  rating
categories would otherwise fall.

     "Applicable  Percentage"  means, with respect to any Lender, the percentage
of the  total  Commitments  represented  by  such  Lender's  Commitment.  If the
Commitments  have  terminated or expired,  the Applicable  Percentages  shall be
determined based upon the Commitments most recently in effect,  giving effect to
any assignments.

     "Approved  Fund"  means,  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.

     "Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an  assignee  (with the  consent of any party  whose  consent is
required  by  Section  10.4),   and  accepted  by  the   Administrative   Agent,
substantially  in the  form of  Exhibit  A or any  other  form  approved  by the
Administrative Agent.

     "Availability  Period"  means the period from and  including  the Effective
Date  to but  excluding  the  earlier  of the  Maturity  Date  and  the  date of
termination of the Commitments.

     "BNY" means The Bank of New York and its successors.

     "Board" means the Board of Governors of the Federal  Reserve  System of the
United States of America.

     "Borrower" means Central Maine Power Company, a Maine corporation.

         "Borrowing  Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.3.

     "Borrowing"  means Loans of the same Type made,  converted  or continued on
the  same  date  and,  in the  case of  Eurodollar  Loans,  as to which a single
Interest Period is in effect.

     "Business Day" means any day that is not a Saturday, Sunday or other day on
which  commercial  banks in New York City are  authorized  or required by law to
remain closed,  provided that, when used in connection  with a Eurodollar  Loan,
the term  "Business  Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

     "Capitalization  Ratio"  means,  as  of  any  date,  the  quotient  of  (i)
Consolidated  Total Debt as of such date divided by (ii) the sum as of such date
of  Consolidated  Total  Debt  plus the  total of  stockholders'  equity  of the
Borrower  and  the  Subsidiaries   determined  in  accordance  with  GAAP  on  a
consolidated basis.

     "Capitalized  Lease" means any lease which is required to be capitalized on
the balance sheet of the lessee in accordance with GAAP, including to the extent
applicable Statement Nos. 13 and 98 of the Financial Accounting Standards Board.

     "Capitalized   Lease   Obligations"  means  the  amount  of  the  liability
reflecting  the  aggregate  discounted  amount  of  future  payments  under  all
Capitalized  Leases calculated in accordance with GAAP,  including to the extent
applicable Statement Nos. 13 and 98 of the Financial Accounting Standards Board.

     "CERCLA"   means  the   federal   Comprehensive   Environmental   Response,
Compensation and Liability Act of 1980.

     "Change  in  Control"  means (i) the  ownership,  directly  or  indirectly,
beneficially  or of record,  by any Person or group  (within  the meaning of the
Securities  Exchange  Act of 1934 and the rules of the  Securities  and Exchange
Commission  thereunder as in effect on the date hereof),  of shares representing
20% or more  of the  aggregate  ordinary  voting  power  or  economic  interests
represented by the issued and outstanding  equity  securities of the Borrower or
the Parent on a fully diluted  basis,  (ii) the  occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Borrower or the
Parent by Persons who were  neither (x)  nominated  by the board of directors of
the Borrower or the Parent,  as  applicable,  nor (y)  appointed by directors so
nominated, or (iii) the failure of the Parent to own directly,  beneficially and
of record, 100% of the aggregate ordinary voting power represented by the issued
and  outstanding  equity  securities  other than the 6%  preferred  stock of the
Borrower  on  a  fully  diluted  basis.   Notwithstanding  the  foregoing,   the
consummation of the Merger shall not constitute a Change in Control.

     "Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Credit Agreement, (b) any change in any law, rule or regulation
or in the  interpretation or application  thereof by any Governmental  Authority
after the date of this Credit  Agreement or (c)  compliance  by any Credit Party
(or, for purposes of Section 3.5(b),  by any lending office of such Credit Party
or by such Credit Party's holding company,  if any) with any request,  guideline
or  directive  (whether  or not  having  the  force of law) of any  Governmental
Authority made or issued after the date of this Credit Agreement.

     "CMP Group" means CMP Group, Inc., a Maine corporation.

     "Code" means the Internal Revenue Code of 1986.

     "Collateral"  means  any and  all  "Collateral",  as  defined  in  Security
Agreement.

     "Commitment"  means,  with respect to each Lender,  the  commitment of such
Lender to make Loans hereunder,  expressed as an amount representing the maximum
aggregate amount of such Lender's Credit Exposure hereunder,  as such commitment
may be reduced from time to time pursuant to Section 2.5 or reduced or increased
from time to time  pursuant  to  assignments  by or to such  Lender  pursuant to
Section 10.4.  The initial  amount of each  Lender's  Commitment is set forth on
Schedule 2.1, or in the Assignment and Acceptance  pursuant to which such Lender
shall have assumed its Commitment,  as applicable.  The initial aggregate amount
of the total Commitments is $75,000,000.

     "Consolidated EBIT" means, for any period, Consolidated Net Income for such
period, plus, without duplication and to the extent deducted in determining such
Consolidated Net Income,  the sum of (i) Consolidated  Interest Expense for such
period,  plus (ii) taxes based upon or  measured by net income for such  period,
plus (iii) dividends paid during such period on preferred stock.

     "Consolidated Interest Expense" means, for any period, the aggregate amount
of  interest,  including  commitment  fees,  facility  fees,  utilization  fees,
payments in the nature of interest  under  Capitalized  Leases and net  payments
under Hedging Agreements,  accrued by the Borrower and the Subsidiaries (whether
such interest is reflected as an item of expense or  capitalized)  in accordance
with GAAP on a consolidated basis.

     "Consolidated  Net Income" means, for any period,  the net income (or loss)
applicable to common stock of the Borrower and the  Subsidiaries,  determined in
accordance  with  GAAP  on  a  consolidated  basis.   provided,   however,  that
Consolidated Net Income shall not include (i)  extraordinary  and  non-recurring
gains or losses, and (ii) any after-tax gains or losses attributable to returned
surplus assets of any Plan or Multiemployer Plan.

     "Consolidated Operating Income" means, for any period, the Consolidated Net
Income for such period plus,  without  duplication and to the extent deducted in
determining  such  Consolidated  Net  Income,  the sum of (i)  depreciation  and
amortization,  plus (ii)  interest on, and  commitment  fees,  facility fees and
utilization  fees,  with  respect to,  Indebtedness  (including  payments in the
nature of interest under Capitalized Leases and Hedging Agreements),  plus (iii)
taxes based upon or measured by net income,  plus (iv)  dividends  on  preferred
stock.

     "Consolidated  Total  Debt"  means,  as of any  date,  the  sum of (i)  the
aggregate  principal  amount  of  all  Indebtedness  of  the  Borrower  and  the
Subsidiaries  that would be reflected as liabilities  on a consolidated  balance
sheet  of the  Borrower  and  the  Subsidiaries  as of  such  date  prepared  in
accordance with GAAP plus (ii) all obligations  (contingent or otherwise) of the
Borrower  or any  Subsidiary  in respect  of  Disqualified  Stock  valued at the
maximum fixed repurchase price plus accrued and unpaid dividends.

     "Control"  means the  possession,  directly or indirectly,  of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise  voting  power,  by contract or  otherwise.  The
terms "Controlling" and "Controlled" have meanings correlative thereto.

     "Credit Exposure" means, with respect to any Lender at any time, the sum of
the aggregate outstanding principal amount of such Lender's Loans at such time.

     "Credit Parties" means the Administrative Agent and the Lenders.

     "Default"  means  any  event or  condition  which  constitutes  an Event of
Default  or that  upon  notice,  lapse of time or both  would,  unless  cured or
waived, become an Event of Default.

     "Disclosed  Matters"  means  the  actions,  suits and  proceedings  and the
environmental  matters  disclosed in Schedule 4.6 or in the Pre-Closing 1934 Act
Reports.

     "Disqualified  Stock" means any capital  stock of any Person  that,  by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder  thereof),  or upon the happening
of any event, matures or is mandatorily  redeemable,  pursuant to a sinking fund
obligation or otherwise,  or is redeemable at the option of the holder  thereof,
in whole or in part.

     "Distribution Plant" means, with respect to the Borrower,  the distribution
assets of the  Borrower  as  reported  from time to time by the  Borrower to the
Federal Energy Regulatory Commission on F.E.R.C. Form 1.

     "dollars" or "$" refers to lawful money of the United States of America.

     "Energy East" means Energy East Corporation, a New York corporation.

     "Environmental  Claims"  means any and all  administrative,  regulatory  or
judicial actions,  suits, demands,  demand letters,  directives,  claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any  Environmental  Law or any permit issued,  or any approval given,
under any such  Environmental  Law  (hereafter,  "Claims"),  including,  without
limitation,  (i) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable  Environmental  Law,  and (ii) any and all Claims by any third  party
seeking damages, contribution,  indemnification,  cost recovery, compensation or
injunctive  relief  in  connection  with  alleged  injury or threat of injury to
health, safety or the environment due to the presence of Hazardous Materials.

     "Environmental  Law" means any Federal,  state,  foreign or local  statute,
law, rule, regulation,  ordinance,  code, guideline,  written policy and rule of
common  law now or  hereafter  in effect,  and any  judicial  or  administrative
interpretation thereof,  including any judicial or administrative order, consent
decree or judgment,  relating to the environment,  employee health and safety or
Hazardous Materials,  including,  without limitation,  CERCLA; RCRA; the Federal
Water  Pollution  Control Act, 33 U.S.C.ss.  1251 et seq.; the Toxic  Substances
Control Act, 15 U.S.C.ss.  2601 et seq.; the Clean Air Act, 42 U.S.C.ss. 7401 et
seq.; the Safe Drinking Water Act, 42 U.S.C.ss.  3803 et seq.; the Oil Pollution
Act of 1990, 33 U.S.C.ss. 2701 et seq.; the Emergency Planning and the Community
Right-to-Know  Act of 1986, 42 U.S.C.ss.  11001 et seq.; the Hazardous  Material
Transportation  Act, 49 U.S.C.ss.  1801 et seq. and the Occupational  Safety and
Health Act, 29 U.S.C.ss.  651 et seq.; and any state and local  counterparts  or
equivalents.

     "Effective Date" has the meaning assigned to such term in Section 10.13.

     "ERISA" means the Employee Retirement Income Security Act of 1974.

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower,  is treated as a single employer under Section
414(b) or (c) of the Code or,  solely for  purposes  of Section 302 of ERISA and
Section 412 of the Code,  is treated as a single  employer  under Section 414 of
the Code.

     "ERISA Event" means (i) any "reportable  event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived);  (ii) the existence with
respect  to any Plan of an  "accumulated  funding  deficiency"  (as  defined  in
Section 412 of the Code or Section 302 of ERISA),  whether or not waived;  (iii)
the filing  pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding  standard with respect to any
Plan;  (iv)  the  incurrence  by the  Borrower  or any  ERISA  Affiliate  of any
liability  under Title IV of ERISA with respect to the  termination of any Plan;
(v) the receipt by the Borrower or any ERISA  Affiliate  from the PBGC or a plan
administrator  of any notice  relating to an intention to terminate  any Plan or
Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by the
Borrower or any ERISA  Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer  Plan; or (vii) the receipt
by the Borrower or any ERISA  Affiliate of any notice  concerning the imposition
of Withdrawal  Liability or a determination  that a Multiemployer Plan is, or is
expected to be, insolvent or in  reorganization,  within the meaning of Title IV
of ERISA.

     "Eurodollar",  when used in reference to any Loan or  Borrowing,  refers to
whether such Loan, or the Loans comprising such Borrowing,  are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

     "Event of Default" has the meaning assigned to such term in Article 8.

     "Exchange Act" means the Securities and Exchange Act of 1934.

     "Existing Credit Agreement" means the Credit Agreement, dated as of October
23, 1996, by and among the Borrower, the lenders party thereto, BankBoston, N.A.
(formerly, The First National Bank of Boston) and BNY, as Managing Agents.

     "Excluded  Taxes"  means,  with  respect to any  Credit  Party or any other
recipient  of any payment to be made by or on account of any  obligation  of the
Borrower under any Loan Document,  (i) income or franchise  taxes imposed on (or
measured  by) its net income by the United  States of  America,  or by any other
jurisdiction,  (ii) any branch  profits  taxes  imposed by the United  States of
America  or any  similar  tax  imposed  by any other  jurisdiction  in which the
Borrower  is located  and (iii) in the case of a Foreign  Lender  (other than an
assignee  pursuant  to a request by the  Borrower  under  Section  3.8(b)),  any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Credit Agreement (or designates
a new lending  office) or is attributable  to such Foreign  Lender's  failure to
comply with Section  3.7(e),  except to the extent that such Foreign  Lender (or
its assignor,  if any) was entitled, at the time of designation of a new lending
office (or  assignment),  to receive  additional  amounts from the Borrower with
respect to such withholding tax pursuant to Section 3.7(a).

     "FAME Loan Agreement" means the Loan Agreement dated as of October 19, 1994
between Finance  Authority of Maine and the Borrower relating to the $79,300,000
Finance  Authority of Maine Taxable Electric Rate  Stabilization  Revenue Notes,
Series 1994A (Central Maine Power Company).

     "Federal  Funds  Effective  Rate"  means,  for any day,  a rate  per  annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100
of 1%) equal to the  weighted  average of the rates on overnight  federal  funds
transactions  with  members of the Federal  Reserve  System  arranged by federal
funds brokers on such day, as published by the Federal  Reserve Bank of New York
on the Business Day next succeeding  such day,  provided that (i) if the day for
which such rate is to be  determined  is not a Business  Day, the Federal  Funds
Effective Rate for such day shall be such rate on such  transactions on the next
preceding Business Day as so published on the next succeeding  Business Day, and
(ii) if such rate is not so published for any day, the Federal  Funds  Effective
Rate for such day shall be the  average of the  quotations  for such day on such
transactions  received  by the  Administrative  Agent from three  Federal  Funds
brokers of recognized standing selected by it.

     "Financial Officer" means the chief financial officer, principal accounting
officer,  treasurer or controller  of the Borrower or any vice  president of the
Borrower whose primary responsibility is for financial matters.

     "Foreign  Lender"  means any Lender that is  organized  under the laws of a
jurisdiction  other than that in which the Borrower is located.  For purposes of
this  definition,  the United  States of  America,  each State  thereof  and the
District of Columbia shall be deemed to constitute a single jurisdiction.

     "Foreign  Subsidiary"  means a Subsidiary  that is organized under the laws
of, and  conducting  its business  primarily in a  jurisdiction  outside of, the
United States of America.

     "GAAP" means generally accepted  accounting  principles in effect from time
to time in the United States of America.

     "Governmental  Authority"  means the  government  of the  United  States of
America, any other nation or any political subdivision thereof, whether state or
local,  and any agency,  authority,  instrumentality,  regulatory  body,  court,
central  bank or  other  entity  exercising  executive,  legislative,  judicial,
taxing,  regulatory  or  administrative  powers or functions of or pertaining to
government.

     "Guarantee"  of or by any Person (the  "guarantor")  means any  obligation,
contingent or otherwise,  of the guarantor  guaranteeing  or having the economic
effect of guaranteeing  any Indebtedness or other obligation of any other Person
(the  "primary  obligor") in any manner,  whether  directly or  indirectly,  and
including any obligation of the guarantor,  direct or indirect,  (i) to purchase
or pay (or  advance  or  supply  funds  for the  purchase  or  payment  of) such
Indebtedness  or other  obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment  thereof,  (ii) to purchase or
lease property,  securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof,  (iii) to maintain
working capital,  equity capital or any other financial  statement  condition or
liquidity  of the primary  obligor as to enable the primary  obligor to pay such
Indebtedness  or other  obligation or (iv) as an account party in respect of any
letter of credit or letter of guaranty  issued to support such  Indebtedness  or
obligation,  provided that the term "Guarantee"  shall not include  endorsements
for  collection  or  deposit  in the  ordinary  course  of  business.  The  term
"Guaranteed" has a meaning correlative thereto.

     "Hazardous  Materials"  means  (i) any  petroleum  or  petroleum  products,
radioactive  materials,  asbestos in any form that is friable, urea formaldehyde
foam insulation,  transformers or other equipment that contain  dielectric fluid
containing  levels  of  polychlorinated  biphenyls,  and  radon  gas;  (ii)  any
chemicals,  materials or substances  defined as or included in the definition of
"hazardous  substances,"  "hazardous waste," "hazardous  materials,"  "extremely
hazardous substances,"  "restricted hazardous waste," "toxic substances," "toxic
pollutants,"  "contaminants," or "pollutants," or words of similar import, under
any  applicable  Environmental  Law;  and (ii) any other  chemical,  material or
substance,  the Release of which is prohibited or regulated by any  Governmental
Authority as toxic or hazardous.

     "Hedging Agreement" means any interest rate protection agreement,  or other
interest swap, cap, collar, hedging or other like arrangement.

     "Indebtedness"  of  any  Person  means,   without   duplication,   (i)  all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind,  (ii) all  obligations of such Person  evidenced by bonds,
debentures,  notes or similar instruments,  (iii) all obligations of such Person
under conditional sale or other title retention  agreements relating to property
acquired by such Person,  (iv) all  obligations of such Person in respect of the
deferred  purchase  price of property or services  (excluding  current  accounts
payable within six months after the incurrence thereof in the ordinary course of
business), (v) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right,  contingent or otherwise, to be secured
by) any Lien on property  owned or acquired by such  Person,  whether or not the
Indebtedness  secured  thereby has been  assumed,  (vi) all  Guarantees  by such
Person of  Indebtedness of others,  (vii) all Capital Lease  Obligations of such
Person,  (viii) all obligations,  contingent or otherwise,  of such Person as an
account party in respect of letters of credit and letters of guaranty,  (ix) the
principal balance outstanding under any synthetic lease, tax retention operating
lease,  off-balance sheet Loan or similar off-balance sheet financing product of
the Borrower or any Subsidiary  where such  transaction  is considered  borrowed
money  indebtedness  for tax purposes but is  classified  as an operating  lease
under GAAP, (x) all obligations of such Person to pay a specified purchase price
for goods or services  whether or not delivered or accepted  (e.g.,  take-or-pay
obligations)  or similar  obligations  and (xi) all  obligations,  contingent or
otherwise,  of such Person in respect of bankers' acceptances.  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.

     "Indemnified Taxes" means Taxes other than Excluded Taxes.

     "Indemnitee" has the meaning assigned to such term in Section 10.3(b).

     "Interest  Coverage Ratio" means, as of the end of any fiscal quarter,  the
quotient  of (i)  Consolidated  EBIT for the period of four  consecutive  fiscal
quarters ending thereon divided by (ii)  Consolidated  Interest Expense for such
period.

     "Interest  Election  Request" means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 3.2.

     "Interest  Payment  Date" means (i) with respect to any ABR Loan,  the last
day of each  March,  June,  September  and  December,  (ii) with  respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which  such  Loan is a part  and,  in the case of a  Eurodollar  Loan with an
Interest Period of more than three months' duration,  each day prior to the last
day of such Interest  Period that occurs at intervals of three months'  duration
after the first day of such  Interest  Period,  and (iii) as to all  Loans,  the
Maturity Date.

     "Interest  Period"  means,  with respect to any Eurodollar  Borrowing,  the
period  commencing on the date of such  Borrowing and ending on the  numerically
corresponding  day in the calendar  month that is one, two,  three or six months
thereafter,  as the Borrower may elect, provided that (i) if any Interest Period
would end on a day other than a Business  Day,  such  Interest  Period  shall be
extended to the next  succeeding  Business  Day,  unless,  such next  succeeding
Business Day would fall in the next calendar  month, in which case such Interest
Period  shall end on the next  preceding  Business  Day,  and (ii) any  Interest
Period that  commences on the last Business Day of a calendar month (or on a day
for which there is no numerically  corresponding  day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such  Interest  Period.  For purposes  hereof,  the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the  effective  date of the most recent  conversion or  continuation  of such
Borrowing.

     "Investments" has the meaning assigned to such term in Section 7.4.

     "Lenders"  means the Persons  listed on Schedule  2.1 and any other  Person
that shall have become a party hereto  pursuant to an Assignment and Acceptance,
other than any such  Person  that  ceases to be a party  hereto  pursuant  to an
Assignment and Acceptance.

     "LIBO  Rate"  means,  with  respect  to any  Eurodollar  Borrowing  for any
Interest Period,  the rate appearing on Page 3750 of the Telerate Service (or on
any  successor  or  substitute  page of such  Service,  or any  successor  to or
substitute  for such  Service,  providing  rate  quotations  comparable to those
currently  provided  on  such  page  of  such  Service,  as  determined  by  the
Administrative  Agent from time to time for purposes of providing  quotations of
interest rates applicable to dollar deposits in the London interbank  market) at
approximately   11:00  a.m.,  London  time,  two  Business  Days  prior  to  the
commencement  of such Interest  Period,  as the rate for dollar  deposits with a
maturity  comparable to such Interest  Period.  In the event that such rate does
not appear on such Page 3750 (or on any such  successor or  substitute  page, or
any  successor to or  substitute  for such Service) at such time for any reason,
then the "LIBO Rate" with respect to such Eurodollar Borrowing for such Interest
Period  shall be the rate at  which  dollar  deposits  of  $5,000,000  and for a
maturity  comparable to such Interest Period are offered by the principal London
office of the Administrative Agent in immediately  available funds in the London
interbank  market at  approximately  11:00 a.m.,  London time, two Business Days
prior to the commencement of such Interest Period.

     "Lien" means,  with respect to any asset, (i) any mortgage,  deed of trust,
lien, pledge, hypothecation,  encumbrance, charge or security interest in, on or
of such asset,  (ii) the interest of a vendor or a lessor under any  conditional
sale  agreement,  capital lease or title  retention  agreement  relating to such
asset and (iii) in the case of securities,  any purchase option, call or similar
right of a third party with respect to such securities.

     "Loan"  means a Loan  referred  to in Section  2.1(a) and made  pursuant to
Section 2.4.

     "Loan  Documents" means this Credit  Agreement,  the Notes and the Security
Agreement.

     "Margin Stock" has the meaning assigned to such term in Regulation U.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (a) the
financial condition,  operations or properties of the Borrower (on an individual
basis) or the  Borrower  and the  Subsidiaries,  taken as a whole,  whether as a
result of (i) general economic conditions affecting the electric power industry,
(ii) difficulties in obtaining supplies and raw materials,  (iii) fire, flood or
other natural calamities,  (iv) environment  pollution,  (v) regulatory changes,
judicial decisions,  war or other governmental action or (vi) any other event or
development,  whether or not related to those enumerated  above, (b) the ability
of the  Borrower to perform any of its  obligations  under any Loan  Document or
(iii) the rights of or  benefits  available  to any Credit  Party under any Loan
Document.

     "Material  Agreements"  means,  collectively,  (i) the FAME Loan Agreement,
(ii) the  Unsecured  Medium Term Note  Indenture  and (iii) all other  financing
documents evidencing Material Indebtedness.

     "Material  Indebtedness"  means Indebtedness (other than Indebtedness under
the Loan Documents) or obligations in respect of one or more Hedging Agreements,
of any  one or  more  of the  Borrower  and  the  Subsidiaries  in an  aggregate
principal amount  exceeding  $10,000,000.  For purposes of determining  Material
Indebtedness,  the "principal  amount" of the obligations of the Borrower or any
Subsidiary in respect of any Hedging  Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting  agreements) that the Borrower or
such  Subsidiary,  as  applicable,  would  be  required  to pay if such  Hedging
Agreement were terminated at such time.

     "Maturity Date" means December 23, 2002.

     "Merger" means the merger of EE Merger Corp., a wholly-owned  subsidiary of
Energy East with and into CMP Group, with CMP Group as the survivor.

     "Merger Agreement" means the Agreement and Plan of Merger, dated as of June
14, 1999, among CMP Group, EE Merger Corp. and Energy East.

     "Merger  Corp."  means  EE  Merger  Corp.,  a  Maine   corporation   and  a
wholly-owned subsidiary of Energy East.

     "Moody's" means Moody's Investors Service, Inc., or any successor thereto.

     "More Favorable Provision" has the meaning set forth in Section 7.1(b).

     "Multiemployer Plan" means, at any time, a multiemployer plan as defined in
Section  4001(a)(3)  of ERISA  to  which  the  Borrower  or an  ERISA  Affiliate
contributed or was required to contribute within the six years prior to any date
of determination.

     "Notes" means,  with respect to each Lender,  a promissory  note evidencing
such Lender's Loans payable to the order of such Lender (or, if required by such
Lender, to such Lender and its registered assigns)  substantially in the form of
Exhibit C.

     "Obligations"  means (a) the due and punctual  payment of (i)  principal of
and premium,  if any,  and  interest  (including  interest  accruing  during the
pendency  of  any   bankruptcy,   insolvency,   receivership  or  other  similar
proceeding,  regardless of whether  allowed or allowable in such  proceeding) on
the Loans,  when and as due, whether at maturity,  by acceleration,  upon one or
more  dates  set for  prepayment  or  otherwise,  and  (ii) all  other  monetary
obligations,  including  fees,  commissions,  costs,  expenses and  indemnities,
whether primary,  secondary,  direct, contingent,  fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership  or other  similar  proceeding,  regardless  of whether  allowed or
allowable in such  proceeding),  of the Borrower to the Credit Parties,  or that
are otherwise  payable to any Credit Party,  under this Credit Agreement and the
other Loan Documents, and (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrower under or pursuant to the
Credit Agreement and the other Loan Documents.

     "Other  Taxes"  means any and all  current 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, the Loan Documents,  provided that in no event
shall "Other Taxes" include Excluded Taxes.

     "Parent"  means (i) prior to the Merger,  CMP Group,  and (ii) on and after
the Merger, Energy East.

     "Participant" has the meaning assigned to such term in Section 10.4(e).

     "PBGC"  means the  Pension  Benefit  Guaranty  Corporation  referred to and
defined in ERISA and any successor entity performing similar functions.

     "Perfection  Certificate" means a certificate in the form of Annex 1 to the
Security Agreement or any other form approved by the Administrative Agent.

     "Permitted Encumbrances" means:

          (a) Liens  for taxes or other  governmental  assessments,  charges  or
     levies if payment  shall not at the time be  required  to be made or if the
     Borrower, at its expense and in its name, shall be in good faith contesting
     its obligations to comply therewith;

          (b) Liens  incurred in the  ordinary  course of business in respect of
     pledges  or  deposits  (i) under  workman's  compensation  laws or  similar
     legislation,  and (ii) in connection with surety,  appeal and similar bonds
     incidental  to  the  conduct  of  litigation;   mechanics',   laborers'  or
     materialmen's  and similar  Liens which in the case of any Lien material to
     the Borrower or a Significant  Subsidiary,  as the case may be, is not then
     delinquent;  and Liens  incidental  to the  conduct of the  business of the
     Borrower  which were not incurred in  connection  the borrowing of money or
     the obtaining of advances or credit;

          (c) minor defects and  irregularities  in title (including  easements,
     rights of way,  restrictions and other similar non-monetary charges) to any
     real property of the Borrower or any Significant  Subsidiary  which have no
     material  adverse effect on the use or disposition  thereof by the Borrower
     or such Significant Subsidiary;

          (d) leases by the Borrower or a Significant Subsidiary,  as lessor, of
     any  property of the  Borrower or such  Significant  Subsidiary  to another
     Person as lessee;

          (e) Liens securing  obligations neither assumed by the Borrower nor on
     account of which it customarily pays interest, existing at the date hereof,
     or, as to property  hereafter  acquired,  at the time of acquisition by the
     Borrower,  upon real  property or rights in or  relating  to real  property
     acquired by the Borrower for right of way purposes;

          (f) party-wall agreements,  agreements for and obligations relating to
     the joint or common use of  property  owned  solely by the  Borrower  or of
     property  owned by the  Borrower  in  common  or  Jointly  with one or more
     persons;

          (g) attachment, judgment and other similar Liens arising in connection
     with court  proceedings,  provided,  however,  that the  execution or other
     enforcement  thereof is effectively  stayed and the claims secured  thereby
     are being contested at the time in good faith;

          (h)  the  burdens  of any law or  governmental  regulation  or  permit
     requiring the Borrower to maintain  certain  facilities or perform  certain
     acts as a condition  of the  construction,  occupancy  or use of any of its
     property,  or its interference with any public or private lands or highways
     or any river or stream or other waters;

          (i) any right which any municipal or  governmental  authority may have
     by virtue of any franchise,  grant, license, permit, contract or statute to
     purchase, or designate a purchaser of or order the sale of, any property of
     the Borrower or to terminate any franchise,  grant, license or other rights
     or to regulate the property and business of the Borrower;

          (j) zoning laws and ordinances;

          (k) any duties or  obligations  affecting any property of the Borrower
     to any municipal or  governmental  authority with respect to any franchise,
     grant, license or permit; and

          (l)  restrictions  under  federal  and  state  securities  laws on the
     transfer of securities.

     "Permitted  Investments"  means the types of Investments listed on Schedule
7.4(a)(i).

     "Person" means any natural person, corporation,  limited liability company,
trust, joint venture, association, company, partnership,  Governmental Authority
or other entity.

     "Plan" means any employee  pension benefit plan (other than a Multiemployer
Plan) subject to the  provisions of Title IV of ERISA or Section 412 of the Code
or  Section  302 of ERISA,  and in respect  of which the  Borrower  or any ERISA
Affiliate  is (or, if such plan were  terminated,  would under  Section  4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

     "Pre-Closing 1934 Act Reports" means,  collectively,  the Borrower's report
on Form 10-K for the fiscal year 1998,  its  Quarterly  Reports on Form 10-Q for
the quarters ended March 31, 1999,  June 30, 1999 and September  30,1999 and its
Reports on Form 8-K dated  January 19,  1999,  April 7, 1999 and June 14,  1999,
each as furnished to the Lenders prior to the date hereof.

     "Prime Rate" means the rate of interest per annum  publicly  announced from
time to time by BNY as its prime  commercial  lending  rate;  each change in the
Prime Rate being  effective  from and including the date such change is publicly
announced as being  effective.  The Prime Rate is not intended to be lowest rate
of interest charged by BNY in connection with extensions of credit to borrowers.

     "RCRA" means the federal Resource Conservation and Act, 42 U.S.C.ss.6901 et
seq.

     "Register" has the meaning assigned to such term in Section 10.4(c).

     "Regulation  T" means  Regulation  T of the  Board as from  time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation  U" means  Regulation  U of the  Board as from  time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation  X" means  Regulation  X of the  Board as from  time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Related  Parties"  means,  with  respect  to any  specified  Person,  such
Person's Affiliates and the respective directors,  officers,  employees,  agents
and advisors of such Person and such Person's Affiliates.

     "Release" means the disposing,  discharging,  injecting, spilling, pumping,
leaking, leaching, dumping, emitting,  escaping, emptying, pouring or migrating,
into  or  upon  any  land or  water  or air,  or  otherwise  entering  into  the
environment.

     "Required  Lenders" means, at any time, Lenders having Credit Exposures and
unused  Commitments  representing  more than 51% of the sum of the total  Credit
Exposures and unused Commitments at such time.

     "Restricted Payment" means, as to any Person:

          (a) the declaration or payment (in cash, securities or other property)
     of any  dividend or  distribution  on or in respect of any class of capital
     stock of or other equity interests in such Person;

          (b) the purchase,  redemption or other retirement of any shares of any
     class of capital stock of, or other equity interest in, such Person,  or of
     options,  warrants  or  other  rights  for the  purchase  of  such  shares,
     directly, indirectly through a Subsidiary or otherwise;

          (c) any other distribution on or in respect of any shares of any class
     of capital stock of or equity or other beneficial interest in such Person;

          (d) any  payment of  principal  or  interest  with  respect to, or any
     purchase, redemption or defeasance of any Indebtedness of such Person which
     by its terms or the terms of any agreement is  subordinated  to the payment
     of the Obligations; and

          (e) any  payment,  loan or  advance  by such  Person  to, or any other
     Investment  by such  Person  in,  the  holder of any shares of any class of
     capital  stock of or equity  interest in such Person,  or any  Affiliate of
     such holder  (including the payment of management and transaction  fees and
     expenses);

provided,  that the term  "Restricted  Payment"  shall not include (i) dividends
payable in perpetual common stock of, or other similar equity interests in, such
Person or (ii)  payments  in the  ordinary  course of business in respect of (A)
reasonable compensation paid to employees,  officers and directors, (B) advances
and  reimbursements  to  employees  for travel  expenses,  drawing  accounts and
similar  expenditures,  (C) rent  paid to,  or  accounts  payable  for  services
rendered or goods sold by,  non-Affiliates  that own  capital  stock of or other
equity interests in such Person or (D) payments of principal, interest and other
amounts required under the FAME Loan Agreement.

     "Sale  and  Leaseback  Transaction"  means  any  arrangement,  directly  or
indirectly, with any Person whereby the Borrower or any Subsidiary shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter  acquired,  and thereafter rent or lease such property or
other  property  that it intends to use for  substantially  the same  purpose or
purposes as the property being sold or transferred.

     "SEC" means the Securities and Exchange Commission and any successor entity
performing similar functions.

     "S&P" means Standard & Poor's Rating Group,  a division of The  McGraw-Hill
Companies, or any successor thereto.

     "Secured  Parties"  means the "Secured  Parties" as defined in the Security
Agreement.

     "Security  Agreement"  has the  meaning  assigned  to such term in  Section
5.1(g).

     "Significant Subsidiary" means, at the time any determination thereof is to
be made,  any Subsidiary  which (i) as of the end of the next preceding  quarter
had assets which  comprised not less than 10% of the aggregate book value of the
consolidated  assets  of  the  Borrower  and  the  Subsidiaries,  determined  in
accordance  with GAAP,  as of the end of such  quarter or (ii) for the period of
four consecutive  fiscal quarters most recently ended had operating income which
comprised not less than 10% of the Consolidated Operating Income of the Borrower
and the Subsidiaries for such period.

     "Statutory  Reserve Rate" means a fraction  (expressed  as a decimal),  the
numerator of which is the number one and the  denominator of which is the number
one minus the  aggregate  of the  maximum  reserve  percentages  (including  any
marginal,  special,  emergency or supplemental  reserves) expressed as a decimal
established  by the  Board to which  the  Administrative  Agent is  subject  for
eurocurrency  funding  (currently  referred to as "Eurocurrency  Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such  Regulation D.  Eurodollar  Loans shall be deemed to constitute
eurocurrency  funding  and to be subject to such  reserve  requirements  without
benefit of or credit for proration,  exemptions or offsets that may be available
from  time to time to any  Lender  under  such  Regulation  D or any  comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.

     "subsidiary"  means, with respect to any Person (the "parent") at any date,
any corporation,  limited liability company,  partnership,  association or other
entity the accounts of which would be  consolidated  with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared  in  accordance  with  GAAP as of  such  date,  as  well  as any  other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership  interests  representing more than 50% of
the equity or more than 50% of the  ordinary  voting  power or, in the case of a
partnership,  more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of the
parent.

     "Subsidiary" means any subsidiary of the Borrower.

     "Super  Majority  Lenders"  means,  at  any  time,  Lenders  having  Credit
Exposures and unused  Commitments  representing  more than 66-2/3% of the sum of
the total Credit Exposures and unused Commitments at such time.

     "Syndication   Agent"  means  Fleet  National  Bank,  in  its  capacity  as
syndication agent hereunder.

     "Taxes" means any and all current or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

     "Transactions"  means (i) the  execution,  delivery and  performance by the
Borrower of each Loan Document,  (ii) the borrowing of the Loans,  and (iii) the
use of the proceeds of the Loans and such Indebtedness.

     "Type", when used in reference to any Loan or Borrowing,  refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined  by reference in the case of a Borrowing,  the Adjusted  LIBO Rate or
the Alternate Base Rate.

     "Unsecured  Medium Term Note  Indenture"  means the Indenture,  dated as of
August 1, 1989, between the Borrower and BNY, as Trustee.

     "Unsecured Medium Term Notes" means unsecured  Indebtedness of the Borrower
denominated  "Medium  Term  Notes"  and issued or to be issued  pursuant  to the
Unsecured Medium Term Note Indenture.

     "Wholly  Owned  Subsidiary"  means  any  Subsidiary  of  which  all  of the
outstanding  capital stock (or other shares of beneficial  interest) entitled to
vote  generally  (other than  directors'  qualifying  shares and, in the case of
Foreign  Subsidiaries,  shares  required by applicable law to be held by foreign
nationals) is owned by the Borrower (or other  specified  Person)  directly,  or
indirectly through one or more Wholly Owned Subsidiaries.

     "Withdrawal  Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer  Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

     "Year 2000  Issue"  means the failure of computer  software,  hardware  and
firmware systems and equipment  containing  embedded  computer chips to properly
receive, transmit, process, manipulate,  store, retrieve,  re-transmit or in any
other way utilize data and information due to the occurrence of the year 2000 or
the inclusion of dates on or after January 1, 2000.

         Section 1.2 Classification of Loans and Borrowings

     For  purposes  of  this  Credit  Agreement,  Loans  and  Borrowings  may be
classified  and referred to by Type (e.g.,  a "Eurodollar  Loan" or  "Eurodollar
Borrowing").

         Section 1.3 Terms Generally

     The  definitions  of terms herein  shall apply  equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine,  feminine and neuter forms. The words
"include",  "includes"  and  "including"  shall be deemed to be  followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall".  Unless the context requires  otherwise,
(i) any  definition  of or  reference  to any  agreement,  instrument  or  other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended,  supplemented or otherwise modified
(subject to any  restrictions on such  amendments,  supplements or modifications
set forth  herein),  (ii) any  definition  of or  reference  to any law shall be
construed  as  referring  to such  law as from  time  to  time  amended  and any
successor  thereto and the rules and regulations  promulgated  from time to time
thereunder,  (iii) any  reference  herein to any Person  shall be  construed  to
include such Person's successors and assigns, (iv) the words "herein",  "hereof"
and  "hereunder",  and words of similar  import,  shall be construed to refer to
this  Credit  Agreement  in its  entirety  and not to any  particular  provision
hereof, (v) all references herein to Articles,  Sections, Exhibits and Schedules
shall be  construed  to refer to Articles  and  Sections  of, and  Exhibits  and
Schedules to, this Credit  Agreement  and (vi) 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,  securities,
accounts and contract rights.

         Section 1.4 Accounting Terms; GAAP

     Except as otherwise  expressly  provided herein, all terms of an accounting
or financial  nature shall be construed in  accordance  with GAAP,  as in effect
from time to time,  provided that, if the Borrower  notifies the  Administrative
Agent  that the  Borrower  requests  an  amendment  to any  provision  hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in
the  application  thereof  on  the  operation  of  such  provision  (or  if  the
Administrative  Agent notifies the Borrower that the Required Lenders request an
amendment to any provision  hereof for such purpose),  regardless of whether any
such notice is given  before or after such change in GAAP or in the  application
thereof,  then such  provision  shall be  interpreted on the basis of GAAP as in
effect and applied  immediately  before such change shall have become  effective
until  such  notice  shall  have been  withdrawn  or such  provision  amended in
accordance herewith.  Unless the context otherwise requires,  any reference to a
fiscal period shall refer to the relevant fiscal period of the Borrower.

ARTICLE 2. THE CREDITS

         Section 2.1 Commitments

                  Subject to the terms and  conditions  set forth  herein,  each
Lender  agrees to make Loans to the Borrower in dollars from time to time during
the Availability Period in an aggregate principal amount that will not result in
such Lender's Credit  Exposure  exceeding such Lender's  Commitment.  Within the
foregoing  limits and subject to the terms and conditions set forth herein,  the
Borrower may borrow, prepay and reborrow Loans.

         Section 2.2 Loans and Borrowings

     (a) Each Loan shall be made as part of a Borrowing consisting of Loans made
by the Lenders  ratably in accordance  with their  respective  Commitments.  The
failure  of any  Lender  to make any Loan  required  to be made by it shall  not
relieve  any  other  Lender  of its  obligations  hereunder,  provided  that the
Commitments of the Lenders are several,  and no Lender shall be responsible  for
any other Lender's failure to make Loans as required.

     (b) Subject to Section 3.4, each Borrowing  shall be comprised  entirely of
(i) Loans and (ii) ABR Loans or Eurodollar Loans, as applicable, in each case as
the Borrower may request in accordance  herewith.  Each Lender at its option may
make any Eurodollar  Loan by causing any domestic or foreign branch or Affiliate
of such  Lender to make such Loan,  provided  that any  exercise  of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Credit Agreement.

     (c)  At the  commencement  of  each  Interest  Period  for  any  Eurodollar
Borrowing,  such Borrowing  shall be in an aggregate  amount that is an integral
multiple of  $500,000  and not less than  $1,000,000.  At the time that each ABR
Borrowing is made,  such  Borrowing  shall be in an aggregate  amount that is an
integral multiple of $500,000 and not less than $1,000,000, provided that an ABR
Borrowing  may be in an  aggregate  amount  that is equal to the  entire  unused
balance  of the  total  Commitments.  Borrowings  of more  than  one Type may be
outstanding at the same time,  provided that there shall not at any time be more
than a total of ten Eurodollar Borrowings outstanding.

     (d)  Notwithstanding  any other  provision  of this Credit  Agreement,  the
Borrower  shall not be entitled to request,  or to elect to convert or continue,
any Borrowing if the Interest  Period  requested with respect  thereto would end
after the Maturity Date.

         Section 2.3 Requests for Borrowings

     (a) To request a Borrowing,  the Borrower  shall notify the  Administrative
Agent of such  request by telephone  (i) in the case of a Eurodollar  Borrowing,
not later than 10:30 a.m.,  New York City time,  three  Business Days before the
date of the  proposed  Borrowing  or (ii) in the case of an ABR  Borrowing,  not
later  than  10:30  a.m.,  New  York  City  time,  on the  date of the  proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the  Administrative  Agent
of a written  Borrowing Request in a form approved by the  Administrative  Agent
signed by the Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.2:

          (i) the aggregate amount of the requested Borrowing;

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

          (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
     Borrowing;

          (iv) in the  case of a  Eurodollar  Borrowing,  the  initial  Interest
     Period to be applicable  thereto,  which shall be a period  contemplated by
     the definition of the term "Interest Period"; and

          (v) the location and number of the  Borrower's  account to which funds
     are to be disbursed,  which shall comply with the  requirements  of Section
     2.4.

     (b) If no  election  as to the Type of  Borrowing  is  specified,  then the
requested  Borrowing  shall  be an  ABR  Borrowing.  If no  Interest  Period  is
specified with respect to any requested Eurodollar Borrowing,  then the Borrower
shall be deemed to have  selected  an Interest  Period of one month's  duration.
Promptly  following  receipt  of a  Borrowing  Request in  accordance  with this
Section,  the  Administrative  Agent  shall  advise  each  Lender of the details
thereof  and of the  amount  of  such  Lender's  Loan  to be made as part of the
requested Borrowing.

         Section 2.4 Funding of Borrowings

     (a) Each  Lender  shall  make each Loan to be made by it  hereunder  on the
proposed date thereof by wire transfer of immediately  available  funds by 12:30
p.m.,  New York City  time,  to the  account  of the  Administrative  Agent most
recently designated by it for such purpose by notice to the Lenders.  Subject to
Section  5.2,  the  Administrative  Agent will make such Loans  available to the
Borrower  by  promptly  crediting  or  otherwise  transferring  the  amounts  so
received,  in like  funds,  to an  account  of the  Borrower  designated  by the
Borrower in the applicable Borrowing Request.

     (b) Unless the  Administrative  Agent  shall have  received  notice  from a
Lender prior to the  proposed  date of any  Borrowing  that such Lender will not
make  available  to  the  Administrative  Agent  such  Lender's  share  of  such
Borrowing,  the  Administrative  Agent may assume that such Lender has made such
share  available on such date in accordance  with paragraph (a) of this Section,
and may, in reliance  upon such  assumption,  make  available  to the Borrower a
corresponding  amount. In such event, if a Lender has not in fact made its share
of the applicable  Borrowing  available to the  Administrative  Agent, then such
Lender  and the  Borrower  severally  agree to pay to the  Administrative  Agent
forthwith on demand such  corresponding  amount with interest thereon,  for each
day from and including the date such amount is made available to the Borrower to
but excluding  the date of payment to the  Administrative  Agent,  at (i) in the
case of such Lender,  the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
that would be otherwise  applicable to such Borrowing.  If such Lender pays such
amount to the  Administrative  Agent,  then such amount  shall  constitute  such
Lender's Loan included in such Borrowing.

     (c) If a Lender  makes a new Loan to the  Borrower on a  borrowing  date on
which the  Borrower is to repay a Loan of such  Lender,  such Lender shall apply
the proceeds of such new Loan to make such repayment, and only the excess of the
proceeds of such new Loan over the Loan being  repaid need be made  available to
the Administrative Agent.

         Section 2.5 Termination and Reduction of Commitments

     (a) Unless  previously  terminated,  the Commitments shall terminate on the
earlier of (i) the occurrence of a Change in Control or (ii) the Maturity Date.

     (b) The  Borrower may at any time  terminate,  or from time to time reduce,
the  Commitments,  provided that the Borrower  shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance  with Section 2.7, the sum of the Credit  Exposures  would exceed the
total Commitments, and (ii) each such reduction shall be in an amount that is an
integral multiple of $1,000,000 and not less than $2,000,000.

     (c) The Borrower shall notify the  Administrative  Agent of any election to
terminate or reduce the Commitments under paragraph (c) of this Section at least
three  Business  Days  prior  to the  effective  date  of  such  termination  or
reduction,  specifying  such election and the effective  date thereof.  Promptly
following  receipt of any notice,  the  Administrative  Agent  shall  advise the
Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant
to this Section shall be  irrevocable,  provided that a notice of termination of
the  Commitments  delivered  by the  Borrower  may  state  that  such  notice is
conditioned  upon the  effectiveness of other credit  facilities,  in which case
such  notice  may be revoked by the  Borrower  (by notice to the  Administrative
Agent on or prior to the  specified  effective  date) if such  condition  is not
satisfied.  Any termination or reduction of the  Commitments  hereunder shall be
permanent.  Each reduction of the  Commitments  hereunder  shall be made ratably
among the Lenders in accordance with their respective Commitments.

         Section 2.6 Repayment of Loans; Evidence of Debt

     (a)  The   Borrower   hereby   unconditionally   promises  to  pay  to  the
Administrative  Agent for the account of each  Lender the then unpaid  principal
amount of each Loan on the Maturity Date.

     (b) Each Lender shall  maintain in  accordance  with its usual  practice an
account or accounts evidencing the debt of the Borrower to such Lender resulting
from each Loan made by such  Lender,  including  the  amounts of  principal  and
interest payable and paid to such Lender from time to time hereunder.

     (c) The  Administrative  Agent  shall  maintain  accounts in which it shall
record  (i) the amount of each Loan made  hereunder,  the Type  thereof  and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and  payable or to become due and payable  from the  Borrower to each Lender
hereunder and (iii) the amount of any sum received by the  Administrative  Agent
hereunder for the account of the Lenders and each Lender's share thereof.

     (d) The entries made in the accounts  maintained pursuant to paragraphs (d)
or (e) of this Section shall,  to the extent not  inconsistent  with any entries
made in any  promissory  note,  be prima  facie  evidence of the  existence  and
amounts of the obligations  recorded  therein,  provided that the failure of any
Lender  or the  Administrative  Agent to  maintain  such  accounts  or any error
therein shall not in any manner  affect the  obligation of the Borrower to repay
the Loans in accordance with the terms of this Credit Agreement.

     (e) Any Lender may  request  that the Loans  made by it be  evidenced  by a
promissory note. In such event, the Borrower shall prepare,  execute and deliver
to such Lender, (i) a promissory note payable to the order of such Lender,  each
substantially  in the form of Exhibit C. In addition,  if requested by a Lender,
its  promissory  note or  notes  may be made  payable  to  such  Lender  and its
registered assigns in which case all Loans evidenced by such promissory note and
interest  thereon shall at all times  (including  after  assignment  pursuant to
Section  10.4) be  represented  by one or more  promissory  notes  in like  form
payable to the order of the payee named therein and its registered assigns.

         Section 2.7 Prepayment of Borrowings

     (a) The Borrower  shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part,  subject to the  requirements  of this
Section.

     (b)  In  the  event  of  any  partial   reduction  or  termination  of  the
Commitments,  then (i) at or prior to the date of such reduction or termination,
the Administrative Agent shall notify the Borrower and the Lenders of the sum of
the Credit  Exposures  after  giving  effect  thereto and (ii) if such sum would
exceed  the  total   Commitments  after  giving  effect  to  such  reduction  or
termination,  then  the  Borrower  shall,  on the  date  of  such  reduction  or
termination, prepay Borrowings in an amount sufficient to eliminate such excess.
Without  limiting the  foregoing,  on the  occurrence of a Change of Control the
Borrower  shall  repay  the  outstanding  principal  balance  of all  Borrowings
together with all accrued and unpaid interest,  fees and other amounts due under
the Loan Documents.

     (c) The  Borrower  shall  notify  the  Administrative  Agent  by  telephone
(confirmed  by  telecopy)  of  any  prepayment  hereunder  (i) in  the  case  of
prepayment of a Eurodollar  Borrowing,  not later than 10:30 a.m., New York City
time,  three  Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR  Borrowing,  not later than 10:30 a.m., New York City time,
on the date of  prepayment.  Each such  notice  shall be  irrevocable  and shall
specify  the  prepayment  date and the  principal  amount of each  Borrowing  or
portion thereof to be prepaid, provided that, if a notice of prepayment is given
in connection  with a conditional  notice of termination  of the  Commitments as
contemplated  by Section 2.5, then such notice of  prepayment  may be revoked if
such notice of termination is revoked in accordance  with Section 2.5.  Promptly
following receipt of any such notice relating to a Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof.  Each partial prepayment
of any Borrowing  under Section  2.7(a) shall,  when added to the amount of each
concurrent  reduction of the Commitments and prepayment of Borrowings under such
Sections,  be in an integral  multiple of $500,000 and not less than $1,000,000.
Prepayments  shall be accompanied by accrued  interest to the extent required by
Section 3.1.

         Section 2.8 Payments Generally; Pro Rata Treatment; Sharing of Setoffs

     (a)  The  Borrower  shall  make  each  payment  required  to be  made by it
hereunder  or under any other Loan  Document  (whether  of  principal  of Loans,
interest or fees, or of amounts payable under Sections 3.5, 3.6, 3.7 or 10.3, or
otherwise)  prior to 3:00  p.m.,  New York City time,  on the date when due,  in
immediately  available  funds,  without  setoff  or  counterclaim.  Any  amounts
received   after  such  time  on  any  date  may,  in  the   discretion  of  the
Administrative  Agent,  be deemed to have been  received on the next  succeeding
Business Day for purposes of  calculating  interest  thereon.  All such payments
shall be made to the Administrative  Agent at its office at One Wall Street, New
York,  New York, or such other  domestic  office as to which the  Administrative
Agent may notify the other parties hereto,  and except that payments pursuant to
Sections 3.5,  3.6, 3.7 and 10.3 shall be made directly to the Persons  entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for the account of any other  Person to the  appropriate  recipient  promptly
following  receipt thereof.  If any payment hereunder shall be due on a day that
is not a  Business  Day,  the date for  payment  shall be  extended  to the next
succeeding  Business  Day,  and, in the case of any payment  accruing  interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

     (b) If at any time insufficient  funds are received by and available to the
Administrative  Agent to pay fully all amounts of principal of Loans,  interest,
fees and commissions then due hereunder,  such funds shall be applied (i) first,
towards payment of interest,  fees and commissions  then due hereunder,  ratably
among the parties  entitled  thereto in accordance with the amounts of interest,
fees and commissions  then due to such parties and (ii) second,  towards payment
of principal of Loans then due  hereunder,  ratably  among the parties  entitled
thereto in  accordance  with the amounts of  principal of Loans then due to such
parties.

     (c) If any Lender shall,  by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of, or interest on, any
of its Loans resulting in such Lender receiving payment of a greater  proportion
of the  aggregate  amount of its Loans and  accrued  interest  thereon  than the
proportion  received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value)  participations  in the Loans
of  other  Lenders  to the  extent  necessary  so that the  benefit  of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of  principal  of, and  accrued  interest  on,  their  respective  Loans,
provided  that  (i) if any  such  participations  are  purchased  and all or any
portion of the payment  giving rise thereto is  recovered,  such  participations
shall be  rescinded  and the  purchase  price  restored  to the  extent  of such
recovery,  without interest, and (ii) the provisions of this paragraph shall not
be construed  to apply to any payment  made by the  Borrower  pursuant to and in
accordance  with the  express  terms of this  Credit  Agreement  or any  payment
obtained  by a  Lender  as  consideration  for  the  assignment  of or sale of a
participation in any of its Loans to any assignee or participant,  other than to
the Borrower or any Subsidiary or Affiliate  thereof (as to which the provisions
of this  paragraph  shall  apply).  The Borrower  consents to the  foregoing and
agrees,  to the extent it may  effectively do so under  applicable law, that any
Lender  acquiring a  participation  pursuant to the foregoing  arrangements  may
exercise against the Borrower rights of setoff and counterclaim  with respect to
such  participation  as fully as if such  Lender  were a direct  creditor of the
Borrower in the amount of such participation.

     (d) Unless the  Administrative  Agent shall have  received  notice from the
Borrower  prior to the date on which any  payment  is due to the  Administrative
Agent for the  account  of the  applicable  Credit  Parties  hereunder  that the
Borrower will not make such payment,  the  Administrative  Agent may assume that
the Borrower has made such payment on such date in accordance  herewith and may,
in reliance upon such  assumption,  distribute to such Credit Parties the amount
due. In such event, if the Borrower has not in fact made such payment, then each
such  Credit  Party  severally  agrees  to  repay  to the  Administrative  Agent
forthwith on demand the amount so distributed to such Credit Party with interest
thereon,  for each day from and including the date such amount is distributed to
it to but  excluding  the date of payment to the  Administrative  Agent,  at the
greater  of the  Federal  Funds  Effective  Rate  and a rate  determined  by the
Administrative  Agent in  accordance  with banking  industry  rules on interbank
compensation.

     (e) If any Credit Party shall fail to make any payment  required to be made
by it  pursuant  to Section  2.4(b)  then the  Administrative  Agent may, in its
discretion  (notwithstanding  any contrary provision hereof),  apply any amounts
thereafter  received by the Administrative  Agent for the account of such Credit
Party to satisfy such Credit Party's  obligations  under such Sections until all
such unsatisfied obligations are fully paid.

ARTICLE 3. INTEREST, FEES, YIELD PROTECTION, ETC.

         Section 3.1 Interest

     (a) The Loans  comprising  each ABR  Borrowing  shall bear  interest at the
Alternate Base Rate.

     (b) The Loans  comprising each Eurodollar  Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Margin.

     (c) Notwithstanding  the foregoing,  if any principal of or interest on any
Loan or any fee or other amount  payable by the  Borrower  hereunder is not paid
when due,  whether at stated  maturity,  upon  acceleration  or otherwise,  such
overdue amount shall bear interest,  after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise  applicable to such Loan as provided in the preceding  paragraphs
of this Section or (ii) in the case of any other  amount,  2% plus the Alternate
Base Rate plus the Applicable Margin.

     (d)  Accrued  interest  on each Loan  shall be  payable  in arrears on each
Interest Payment Date for such Loan, provided that (i) interest accrued pursuant
to paragraph (c) of this Section  shall be payable on demand,  (ii) in the event
of any repayment or prepayment of any Loan (other than the  prepayment of an ABR
Loan  prior to the end of the  Availability  Period),  accrued  interest  on the
principal  amount  repaid  or  prepaid  shall  be  payable  on the  date of such
repayment  or  prepayment,  and  (iii)  in the  event of any  conversion  of any
Eurodollar  Loan  prior  to the end of the  current  Interest  Period  therefor,
accrued  interest  on such Loan shall be payable on the  effective  date of such
conversion.

     (e) All interest  hereunder shall be computed on the basis of a year of 360
days,  except that interest  computed by reference to the Alternate Base Rate at
times when the Alternate  Base Rate is based on the Prime Rate shall be computed
on the  basis of a year of 365 days  (or 366 days in a leap  year),  and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).  The applicable  Alternate Base Rate,  Adjusted
LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent clearly demonstrable error.

         Section 3.2 Interest Elections

     (a)  Each  Borrowing  initially  shall  be of  the  Type  specified  in the
applicable Borrowing Request and, in the case of a Eurodollar  Borrowing,  shall
have  an  initial  Interest  Period  as  specified  in such  Borrowing  Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such  Borrowing and, in the case of a Eurodollar  Borrowing,  may
elect Interest Periods therefor,  all as provided in this Section.  The Borrower
may elect different  options with respect to different  portions of the affected
Borrowing,  in which case each such portion shall be allocated ratably among the
Lenders,  and the Loans  comprising  each such  portion  shall be  considered  a
separate Borrowing.

     (b) To make an election pursuant to this Section, the Borrower shall notify
the  Administrative  Agent of such  election  by  telephone  by the time  that a
Borrowing  Request  would be required  under  Section 2.3 if the  Borrower  were
requesting a Borrowing of the Type  resulting  from such  election to be made on
the effective  date of such election.  Each such  telephonic  Interest  Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.

     (c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.2:

          (i) the Borrowing to which such Interest Election Request applies and,
     if different  options are being elected with respect to different  portions
     thereof,  the portions thereof to be allocated to each resulting  Borrowing
     (in which case the  information  to be specified  pursuant to clauses (iii)
     and  (iv)  of  this  paragraph   shall  be  specified  for  each  resulting
     Borrowing);

          (ii) the effective date of the election made pursuant to such Interest
     Election Request, which shall be a Business Day;

          (iii) whether the  resulting  Borrowing is to be an ABR Borrowing or a
     Eurodollar Borrowing; and

          (iv)  if  the  resulting  Borrowing  is a  Eurodollar  Borrowing,  the
     Interest  Period  to be  applicable  thereto  after  giving  effect to such
     election,  which shall be a period  contemplated  by the  definition of the
     term "Interest Period".

If any such Interest  Election Request requests a Eurodollar  Borrowing but does
not  specify  an  Interest  Period,  then the  Borrower  shall be deemed to have
selected an Interest Period of one month's duration.

          (d) Promptly  following receipt of an Interest  Election Request,  the
     Administrative Agent shall advise each Lender of the details thereof and of
     such Lender's portion of each resulting Borrowing.

          (e) If the  Borrower  fails  to  deliver  a timely  Interest  Election
     Request prior to the end of the Interest Period applicable  thereto,  then,
     unless  such  Borrowing  is repaid as provided  herein,  at the end of such
     Interest  Period,  such  Borrowing  shall be converted to an ABR Borrowing.
     Notwithstanding  any contrary  provision hereof, if an Event of Default has
     occurred and is continuing and the Administrative  Agent, at the request of
     the Required Lenders,  so notifies the Borrower,  then, so long as an Event
     of Default is continuing,  (i) no outstanding Borrowing may be converted to
     or  continued  as a  Eurodollar  Borrowing  and (ii)  unless  repaid,  each
     Eurodollar  Borrowing  shall be converted to an ABR Borrowing at the end of
     the Interest Period applicable thereto.

         Section 3.3 Fees

          (a) The  Borrower  agrees to pay to the  Administrative  Agent for the
     account of each Lender,  a facility  fee,  which shall accrue at a rate per
     annum equal to the Applicable  Margin on the daily amount of the Commitment
     of such Lender  (regardless  of usage) during the period from and including
     the  Effective  Date to but  excluding  the date on which  such  Commitment
     terminates;  provided  that,  if such Lender  continues  to have any Credit
     Exposure  after its  Commitment  terminates,  then such  facility fee shall
     continue to accrue on the daily  amount of such  Lender's  Credit  Exposure
     from and including the date on which such Lender's Commitment terminates to
     but  excluding  the date on which  such  Lender  ceases to have any  Credit
     Exposure. Accrued facility fees shall be payable in arrears on the last day
     of March, June, September and December of each year, each date on which the
     Commitments  are  permanently   reduced  and  on  the  date  on  which  the
     Commitments terminate, commencing on the first such date to occur after the
     date hereof, provided that all unpaid facility fees shall be payable on the
     date on which the  Commitments  terminate.  All  commitment  fees  shall be
     computed  on the  basis of a year of 365 days (or 366 days in a leap  year)
     and shall be payable for the actual number of days elapsed  (including  the
     first day but excluding the last day).

          (b) The Borrower agrees to pay to the  Administrative  Agent,  for the
     pro rata  account  of the  Lenders  in  accordance  with  their  Applicable
     Percentages,  a utilization fee at a rate per annum equal to the Applicable
     Margin on the total Credit  Exposures for each day during the  Availability
     Period on which such Credit Exposure  exceeds 25% of the total  Commitments
     of all  Lenders.  The  utilization  fees shall be payable in arrears on the
     fifteenth  day of March,  June,  September and December of each year and on
     the date on which the Commitments  terminate,  commencing on the first such
     date to occur after the date hereof,  provided that all unpaid  utilization
     fees shall be payable on the date on which the Commitments  terminate.  All
     utilization  fees shall be  computed on the basis of a year of 360 days and
     shall be payable for the actual number of days elapsed (including the first
     day but excluding the last day).

          (c) The Borrower agrees to pay to the  Administrative  Agent,  for its
     own account, the administrative agency fee and other amounts payable in the
     amounts and at the times  separately  agreed upon  between the Borrower and
     the Administrative Agent.

          (d) All fees and other amounts payable  hereunder shall be paid on the
     dates due, in immediately  available funds, to the Administrative Agent for
     distribution, in the case of facility and utilization fees, to the Lenders.

         Section 3.4 Alternate Rate of Interest

                  If prior to the  commencement  of any  Interest  Period  for a
Eurodollar Borrowing:

               (a) the  Administrative  Agent  determines  (which  determination
          shall  be  conclusive   absent   manifest  error)  that  adequate  and
          reasonable  means do not exist for ascertaining the Adjusted LIBO Rate
          or the LIBO Rate, as applicable, for such Interest Period; or

               (b) the  Administrative  Agent is advised by any Lender  that the
          Adjusted LIBO Rate or the LIBO Rate, as applicable,  for such Interest
          Period will not  adequately and fairly reflect the cost to such Lender
          of making or maintaining  its Loan included in such Borrowing for such
          Interest Period;

then the Administrative  Agent shall give notice thereof to the Borrower and the
Lenders by  telephone  or telecopy as promptly as  practicable  thereafter  and,
until the  Administrative  Agent  notifies the Borrower and the Lenders that the
circumstances  giving  rise to such  notice no longer  exist,  (i) any  Interest
Election   Request  that  requests  the  conversion  of  any  Borrowing  to,  or
continuation  of any Borrowing as, a Eurodollar  Borrowing shall be ineffective,
and  (ii)  if any  Borrowing  Request  requests  a  Eurodollar  Borrowing,  such
Borrowing shall be made as an ABR Borrowing.

         Section 3.5 Increased Costs; Illegality

               (a) If any Change in Law shall:

                    (i) impose,  modify or deem applicable any reserve,  special
               deposit or similar  requirement  against assets of, deposits with
               or for the account of, or credit  extended  by, any Credit  Party
               (except any such  reserve  requirement  reflected in the Adjusted
               LIBO Rate);

                    (ii)  impose on any  Credit  Party or the  London  interbank
               market any other condition  affecting this Credit Agreement,  any
               Eurodollar  Loans made by such Credit Party or any  participation
               therein,

and the result of any of the  foregoing  shall be to  increase  the cost to such
Credit  Party of making or  maintaining  any  Eurodollar  Loan  hereunder  or to
increase  the cost to such  Credit  Party or to  reduce  the  amount  of any sum
received or  receivable  by such Credit Party  hereunder  (whether of principal,
interest or  otherwise),  then the  Borrower  will pay to such Credit Party such
additional  amount or  amounts as will  compensate  such  Credit  Party for such
additional costs incurred or reduction suffered.

     (b) If any Credit Party determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Credit Party's capital or on the capital of such Credit Party's holding company,
if any,  as a  consequence  of this Credit  Agreement  or the Loans made by such
Credit  Party to a level  below  that  which such  Credit  Party or such  Credit
Party's  holding  company could have achieved but for such Change in Law (taking
into  consideration such Credit Party's policies and the policies of such Credit
Party's  holding  company with respect to capital  adequacy),  then from time to
time the  Borrower  will pay to such  Credit  Party  such  additional  amount or
amounts as will  compensate  such Credit  Party or such Credit  Party's  holding
company for any such reduction suffered.

     (c) A  certificate  of a Credit Party  setting  forth the amount or amounts
necessary to compensate such Credit Party or its holding company, as applicable,
as specified in paragraph  (a) or (b) of this Section  shall be delivered to the
Borrower and shall be conclusive  absent manifest error.  The Borrower shall pay
such Credit Party the amount shown as due on any such certificate within 10 days
after receipt thereof.

     (d) Failure or delay on the part of any Credit Party to demand compensation
pursuant to this Section  shall not  constitute a waiver of such Credit  Party's
right to demand  such  compensation;  provided  that the  Borrower  shall not be
required to compensate a Credit Party pursuant to this Section for any increased
costs or  reductions  incurred  more  than 90 days  prior to the date  that such
Credit  Party  notifies  the  Borrower  of the Change in Law giving rise to such
increased  costs or  reductions  and of such Credit  Party's  intention to claim
compensation  therefor;  provided further that, if the Change in Law giving rise
to such  increased  costs or reductions is  retroactive,  then the 90-day period
referred to above shall be extended to include the period of retroactive  effect
thereof.

     (e) Notwithstanding any other provision of this Credit Agreement, if, after
the date of this Credit Agreement,  any Change in Law shall make it unlawful for
any Lender to make or  maintain  any  Eurodollar  Loan or to give  effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:

          (i) such Lender may declare that Eurodollar  Loans will not thereafter
     (for the duration of such  unlawfulness)  be made by such Lender  hereunder
     (or be continued  for  additional  Interest  Periods and ABR Loans will not
     thereafter  (for  such  duration)  be  converted  into  Eurodollar  Loans),
     whereupon  any  request  for a  Eurodollar  Borrowing  or to convert an ABR
     Borrowing to a Eurodollar Borrowing or to continue a Eurodollar  Borrowing,
     as applicable,  for an additional  Interest Period shall, as to such Lender
     only,  be deemed a request for an ABR Loan (or a request to continue an ABR
     Loan as such for an additional  Interest  Period or to convert a Eurodollar
     Loan into an ABR Loan, as  applicable),  unless such  declaration  shall be
     subsequently withdrawn; and

          (ii) such Lender may require  that all  outstanding  Eurodollar  Loans
     made by it be  converted to ABR Loans,  in which event all such  Eurodollar
     Loans shall be  automatically  converted to ABR Loans,  as of the effective
     date of such notice as provided in the last sentence of this paragraph.

In the event any Lender  shall  exercise  its  rights  under (i) or (ii) of this
paragraph,  all payments and  prepayments of principal that would otherwise have
been  applied  to repay the  Eurodollar  Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be applied
to repay the ABR Loans  made by such  Lender in lieu of, or  resulting  from the
conversion  of, such  Eurodollar  Loans,  as  applicable.  For  purposes of this
paragraph,  a notice to the Borrower by any Lender shall be effective as to each
Eurodollar Loan made by such Lender,  if lawful, on the last day of the Interest
Period  currently  applicable to such  Eurodollar  Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.

         Section 3.6 Break Funding Payments

          In the event of (a) the payment or prepayment (voluntary or otherwise)
     of any  principal of any  Eurodollar  Loan other than on the last day of an
     Interest Period  applicable  thereto  (including as a result of an Event of
     Default),  (b) the conversion of any Eurodollar Loan other than on the last
     day of the Interest Period applicable  thereto,  (c) the failure to borrow,
     convert,  continue or prepay any  Eurodollar  Loan on the date specified in
     any notice delivered pursuant hereto (regardless of whether such notice may
     be revoked under Section 2.7(d) and is revoked in accordance therewith), or
     (d) the assignment of any Eurodollar Loan other than on the last day of the
     Interest  Period  or  maturity  date  applicable  thereto  as a result of a
     request by any  Borrower  pursuant  to Section  3.8(b),  then,  in any such
     event,  the Borrower shall  compensate  each Lender for the loss,  cost and
     expense  attributable to such event. In the case of a Eurodollar Loan, such
     loss,  cost or expense  to any Lender  shall be deemed to include an amount
     determined  by such Lender to be the  excess,  if any, of (i) the amount of
     interest that would have accrued on the  principal  amount of such Loan had
     such event not  occurred,  at the  Adjusted  LIBO Rate that would have been
     applicable to such Loan,  for the period from the date of such event to the
     last day of the then current Interest Period therefor (or, in the case of a
     failure to borrow, convert or continue, for the period that would have been
     the Interest  Period for such Loan),  over (ii) the amount of interest that
     would accrue on such principal  amount for such period at the interest rate
     that such  Lender  would bid were it to bid,  at the  commencement  of such
     period,  for dollar  deposits of a comparable  amount and period from other
     banks in the eurodollar  market.  A certificate of any Lender setting forth
     any amount or amounts  that such Lender is entitled to receive  pursuant to
     this Section  shall be  delivered  to the Borrower and shall be  conclusive
     absent manifest error.  The Borrower shall pay such Lender the amount shown
     as due on any such certificate within 10 days after receipt thereof.

         Section 3.7 Taxes

     (a) Any and all payments by or on account of any obligation of the Borrower
hereunder and under any other Loan Document  shall be made free and clear of and
without  deduction for any Indemnified  Taxes or Other Taxes,  provided that, if
the Borrower  shall be required to deduct any  Indemnified  Taxes or Other Taxes
from such payments,  then (i) the sum payable shall be increased as necessary so
that, after making all required deductions  (including  deductions applicable to
additional  sums  payable  under this  Section),  the  applicable  Credit  Party
receives  an  amount  equal  to the  sum it  would  have  received  had no  such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower  shall  pay the  full  amount  deducted  to the  relevant  Governmental
Authority in accordance with applicable law.

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

     (c) The Borrower shall  indemnify each Credit Party,  within ten days after
written demand therefor,  for the full amount of any Indemnified  Taxes or Other
Taxes  paid by such  Credit  Party on or with  respect  to any  payment by or on
account of any obligation of the Borrower  under the Loan  Documents  (including
Indemnified  Taxes or Other  Taxes  imposed or asserted  on or  attributable  to
amounts  payable under this Section) and any penalties,  interest and reasonable
expenses  arising  therefrom  or  with  respect  thereto,  whether  or not  such
Indemnified  Taxes or Other Taxes were correctly or legally  imposed or asserted
by the relevant Governmental  Authority.  A certificate as to the amount of such
payment or  liability  delivered to the  Borrower by a Credit  Party,  or by the
Administrative  Agent on its own behalf or on behalf of a Credit Party, shall be
conclusive absent manifest error.

     (d) As soon as practicable  after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such  Governmental  Authority  evidencing  such  payment,  a copy of the  return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

     (e) Any Foreign  Lender that is entitled to an exemption  from or reduction
of 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 the Loan Documents  shall deliver to the Borrower (with a copy to
the  Administrative  Agent),  at the time or times prescribed by applicable law,
such properly completed and executed documentation  prescribed by applicable law
or reasonably  requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.

         Section 3.8 Mitigation Obligations

     (a) If any  Lender  requests  compensation  under  Section  3.5,  or if the
Borrower  is  required  to  pay  any  additional  amount  to any  Lender  or any
Governmental  Authority  for the account of any Lender  pursuant to Section 3.7,
then such Lender shall use reasonable  efforts to designate a different  lending
office for funding or booking its Loans (or any participation therein) hereunder
or to assign its rights and  obligations  hereunder  to another of its  offices,
branches or affiliates,  if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.5
or 3.7, as  applicable,  in the future and (ii) would not subject such Lender to
any unreimbursed cost or expense and would not otherwise be  disadvantageous  to
such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

     (b) If any  Lender  requests  compensation  under  Section  3.5,  or if the
Borrower  is  required  to  pay  any  additional  amount  to any  Lender  or any
Governmental Authority for the account of any Lender pursuant to Section 3.7, in
an aggregate  amount in excess of $25,000,  then the  Borrower  may, at its sole
option and  expense  (including  the fees  referred to in Section  10.4(b))  and
effort,  upon notice to such Lender and the Administrative  Agent,  require such
Lender to assign and delegate,  without recourse (in accordance with and subject
to the restrictions  contained in Section 10.4),  all its interests,  rights and
obligations  under the Loan  Documents  to an  assignee  that shall  assume such
obligations  (which  assignee may be another  Lender,  if a Lender  accepts such
assignment);  provided  that (i) the  Borrower  shall  have  received  the prior
written  consent  of  the   Administrative   Agent,   which  consent  shall  not
unreasonably  be withheld,  (ii) such Lender shall have  received  payment of an
amount  equal  to the  outstanding  principal  of its  Loans,  accrued  interest
thereon,  accrued fees and all other amounts  payable to it hereunder,  from the
assignee (to the extent of such  outstanding  principal and accrued interest and
fees) or the Borrower  (in the case of all other  amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section 3.5
or payments  required to be made pursuant to Section 3.7, such  assignment  will
result in a reduction in such  compensation  or payments.  A Lender shall not be
required to make any such  assignment and  delegation  if, prior  thereto,  as a
result of a waiver by such Lender or otherwise,  the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Credit Parties that:

         Section 4.1 Organization; Powers

     Each of the Borrower and the  Significant  Subsidiaries  is duly organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  has all requisite power and authority to carry on its business as
now conducted  and,  except where the failure to do so,  individually  or in the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect,  is  qualified  to do business  in, and is in good  standing  in,  every
jurisdiction where such qualification is required.

         Section 4.2 Authorization; Enforceability

     The  Transactions  are within the corporate powers of the Borrower and have
been duly authorized by all necessary  corporate and, if required,  equityholder
action.  Each Loan Document has been duly executed and delivered by the Borrower
and constitutes a legal,  valid and binding obligation  thereof,  enforceable in
accordance  with  its  terms,  subject  to  applicable  bankruptcy,  insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally.

         Section 4.3 Governmental Approvals; No Conflicts

     (a) On or prior to the date on which the Lenders are  obligated to make the
initial Loans  hereunder in accordance  with Section 5.1, (i) the State of Maine
Public Utilities  Commission and the Federal Energy  Regulatory  Commission have
each taken all action necessary to authorize the Borrower to enter into the Loan
Documents,  to  incur  the  Indebtedness  hereunder,  and to  take  all  actions
contemplated   thereby  or  in  connection  therewith  and  (ii)  the  State  of
Connecticut  Department of Public Utility Control shall have waived jurisdiction
over the  foregoing,  and such  authorizations  and waiver  shall remain in full
force  and  effect  in the  form  issued.  No  other  consent  or  approval  of,
registration or filing with, or any other action by, any Governmental Authority,
is required for the due execution,  delivery and  performance by the Borrower of
the Loan Documents.

     (b) The  execution  and  delivery  of this  Credit  Agreement  (i) will not
violate  any  applicable  law or  regulation  or the  charter,  by-laws or other
organizational  documents  of the  Borrower  or any  order  of any  Governmental
Authority,  (ii) will not  violate or result in a default  under any  indenture,
agreement  or  other  instrument  binding  upon  the  Borrower  or  any  of  the
Significant  Subsidiaries or its assets,  or give rise to a right  thereunder to
require  any  payment  to be  made  by the  Borrower  or any of the  Significant
Subsidiaries and (iii) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of the Significant  Subsidiaries (other than
Liens permitted by Section 7.2).

     (c) On and after the  receipt of the  authorizations,  waiver and  consents
referred to in Sections  5.1(j) and (m), the performance by the Borrower of each
Loan  Document,  the borrowing of the Loans,  and the use of the proceeds of the
Loans (i) will not violate any  applicable  law or  regulation  or the  charter,
by-laws or other  organizational  documents  of the Borrower or any order of any
Governmental  Authority,  (ii) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of the
Significant  Subsidiaries or its assets,  or give rise to a right  thereunder to
require  any  payment  to be  made  by the  Borrower  or any of the  Significant
Subsidiaries and (iii) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of the Significant  Subsidiaries (other than
Liens permitted by Section 7.2).

         Section 4.4 Financial Condition; No Material Adverse Change

     (a) The Borrower  has  heretofore  furnished to the Credit  Parties (i) the
combined Form 10-K for the fiscal year ended  December 31, 1998 of CMP Group and
the Borrower as filed with the SEC, containing the consolidated balance sheet of
the Borrower and the  consolidated  Subsidiaries  as of and for the fiscal years
ended  December  31,  1998 and  December  31,  1997,  the  related  consolidated
statement  of  earnings,   capitalization  and  interim  financing,  changes  in
stockholders'  equity  and  cash  flows  as of and for the  fiscal  years  ended
December  31, 1998,  December  31, 1997 and  December  31, 1996,  reported on by
PriceWaterhouseCoopers LLP independent public accountants, and (ii) the combined
Form 10-Q of CMP Group and the  Borrower  as filed with the SEC,  for the fiscal
year quarter ended September 30, 1999, containing the consolidated balance sheet
of the Borrower and the  consolidated  Subsidiaries  and statements of earnings,
stockholders'  equity and  liabilities  and cash flows as of and for such fiscal
quarter  and for the  portion of the fiscal  year then,  certified  by its chief
financial officer. The consolidated  financial statements referred to in clauses
(i) and (ii) above  present  fairly,  in all material  respects,  the  financial
position  and  results  of  operations  and cash flows of the  Borrower  and the
Subsidiaries  as of such dates and for the indicated  periods in accordance with
GAAP and are consistent  with the books and records of the Borrower (which books
and records are correct and complete), subject to year-end audit adjustments and
the absence of  footnotes  in the case of the  statements  referred to in clause
(ii) above.

     (b) Except as disclosed in the Pre-Closing 1934 Act Reports, since December
31, 1998, there has been no material adverse change in the financial  condition,
operations  or  properties  of the  Borrower  (on an  individual  basis)  or the
Borrower and the Subsidiaries, taken as a whole.

         Section 4.5 Properties

     (a) Each of the Borrower and the  Significant  Subsidiaries  has good title
to, or valid leasehold interests in, all its real and personal property material
to its business,  except for minor  defects in title that do not interfere  with
its ability to conduct its  business as  currently  conducted or to utilize such
properties for their intended purposes.

     (b) Each of the  Borrower  and the  Significant  Subsidiaries  owns,  or is
entitled  to use,  all  trademarks,  tradenames,  copyrights,  patents and other
intellectual  property  material  to its  business,  and the use  thereof by the
Borrower and the Significant  Subsidiaries  does not infringe upon the rights of
any other Person, except for any such infringements that, individually or in the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect.

         Section 4.6 Litigation and Environmental Matters

     (a) There are no actions,  suits or proceedings by or before any arbitrator
or Governmental  Authority pending against or, to the knowledge of the Borrower,
threatened  against  or  affecting  the  Borrower  or  any  of  the  Significant
Subsidiaries  (i) that could  reasonably  be  expected,  individually  or in the
aggregate,  to result in a Material  Adverse  Effect  (other than the  Disclosed
Matters) or (ii) that involve any Loan Document or the Transactions.

     (b) The Borrower and each of its  Significant  Subsidiaries  have  complied
with and are in  compliance  with,  all  applicable  Environmental  Laws and the
requirements of any permits issued under such Environmental Laws except for such
non-compliance  as could not  reasonably  be  expected  to result in a  Material
Adverse Effect.  Except for the Disclosed Matters and except with respect to any
other matters that,  individually  or in the aggregate,  could not reasonably be
expected to result in a Material Adverse Effect:

          (i) there are no pending or, to the Borrower's  knowledge,  threatened
     Environmental  Claims  against  the  Borrower  or any  of  its  Significant
     Subsidiaries (including any such claim arising out of the ownership,  lease
     or operation by the Borrower or any of its Significant  Subsidiaries of any
     real property no longer owned, leased or operated by the Borrower or any of
     its  Significant  Subsidiaries)  or any  real  property  owned,  leased  or
     operated by the Borrower or any of its Significant Subsidiaries, and

          (ii)  there are no facts,  circumstances,  conditions  or  occurrences
     known to the Borrower  with respect to the  business or  operations  of the
     Borrower  or any of its  Significant  Subsidiaries,  or any  real  property
     owned,  leased  or  operated  by the  Borrower  or  any of its  Significant
     Subsidiaries  (including  any  real  property  formerly  owned,  leased  or
     operated by the  Borrower  or any of its  Significant  Subsidiaries  but no
     longer owned,  leased or operated by the Borrower or any of its Significant
     Subsidiaries)  or any  property  adjoining  or  adjacent  to any such  real
     property  that could be expected (A) to form the basis of an  Environmental
     Claim against the Borrower or any of its  Significant  Subsidiaries  or any
     real  property  owned,  leased or  operated  by the  Borrower or any of its
     Significant Subsidiaries or (B) to cause any real property owned, leased or
     operated  by the  Borrower  or any of its  Significant  Subsidiaries  to be
     subject to any restrictions on the ownership,  occupancy or transferability
     of  such  real  property  by  the  Borrower  or  any  of  its   Significant
     Subsidiaries under any applicable Environmental Law; and

     (c) Hazardous Materials have not at any time been generated,  used, treated
or stored on, or  transported  to or from,  any real property  owned,  leased or
operated by the Borrower or any of its Subsidiaries where such generation,  use,
treatment or storage has violated any applicable Environmental Law and Hazardous
Materials have not at any time been Released on or from any real property owned,
leased or operated by Borrower or any of its Subsidiaries where such Release has
violated any applicable  Environmental  Law, except for such violations as could
not reasonably be expected,  individually  or in the  aggregate,  to result in a
Material Adverse Effect.

     (d) Since the date of this  Credit  Agreement,  there has been no change in
the status of the Disclosed  Matters or the  Pre-Closing  1934 Act Reports that,
individually or in the aggregate,  has resulted in, or materially  increased the
likelihood of, a Material Adverse Effect.

         Section 4.7 Compliance with Laws and Agreements

     Each of the Borrower and the Significant Subsidiaries is in compliance with
all laws,  regulations and orders of any Governmental Authority applicable to it
or its property and all  indentures,  agreements and other  instruments  binding
upon it or its property,  except where the failure to do so,  individually or in
the aggregate,  could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.

         Section 4.8 Investment and Holding Company Status

     Neither  the  Borrower  nor  any  of  the  Significant  Subsidiaries  is an
investment company as defined in, or subject to regulation under, the Investment
Company Act of 1940. The Borrower is a "holding company" for the purposes of the
Public  Utility  Holding  Company Act of 1935 by reason of its  ownership of the
stock of certain  corporations,  but is exempt  pursuant  to an order of the SEC
under the Public Utility  Holding Company Act of 1935 from all of the provisions
thereof  except  Section  9(a)(2)  relating to the  acquisition of securities of
public  utility  affiliates.  Neither the  Borrower  nor any of the  Significant
Subsidiaries  is  subject to any  statute  or  regulation  which  regulates  the
incurring by the Borrower of the  Obligations,  except for (i) regulation by the
State of Maine Public  Utilities  Commission and the Federal  Energy  Regulatory
Commission,  which on or before the date the Lenders are obligated to make Loans
to the  Borrower  pursuant to Article 5  hereunder  shall have taken all actions
necessary for the Borrower to incur the Obligations,  and (ii) regulation by the
State of Connecticut  Department of Public Utility  Control,  which on or before
the date the Lenders are  obligated  to make Loans to the  Borrower  pursuant to
Article 5 hereunder shall have waived jurisdiction over the Transactions.

         Section 4.9 Taxes

     Each of the Borrower and the Significant  Subsidiaries  has timely filed or
caused to be filed all Tax returns  and reports  required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate  proceedings and
for which the Borrower or such Subsidiary,  as applicable,  has set aside on its
books adequate  reserves to the extent such reserves are required by GAAP or (b)
to the extent  that the  failure to do so could not  reasonably  be  expected to
result in a Material Adverse Effect.

         Section 4.10 ERISA

     Each Plan and, to the knowledge of the Borrower  without  special  inquiry,
each  Multiemployer   Plan,  is  in  material  compliance  with  the  applicable
provisions  of ERISA and the Code.  Except to the extent that a failure to do so
has  resulted or could  reasonably  be expected to result in a Material  Adverse
Effect, the minimum funding standards of Section 412 of the Code and Section 302
of ERISA have been met in connection with all Plans and, to the knowledge of the
Borrower,  no  condition  exists  with  respect  to  which  the  institution  of
proceedings  to terminate any Plan under Section 4042 of ERISA could  reasonably
be expected.  To the  knowledge  of the Borrower  without  special  inquiry,  no
Multiemployer  Plan is  currently  insolvent  or in  reorganization  or has been
terminated  within the  meaning of ERISA,  pursuant  to which the  Borrower  has
incurred or could reasonably be expected to incur material liability.

         Section 4.11 Disclosure

     The  Borrower  has  disclosed  to  the  Credit   Parties  all   agreements,
instruments  and  corporate  or  other  restrictions  to  which it or any of the
Significant  Subsidiaries  is subject,  and all other matters known to it, that,
individually  or in the aggregate,  could  reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or  other  information  furnished  by  or on  behalf  of  the  Borrower  or  any
Significant Subsidiary to any Credit Party in connection with the negotiation of
the Loan Documents or delivered thereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements  therein,  in the light
of the circumstances under which they were made, not misleading,  provided that,
with respect to projected  financial  information,  the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.

         Section 4.12 Significant Subsidiaries

     Schedule 4.12 sets forth the name of, and the direct or indirect  ownership
interest of the Borrower in, each Subsidiary and identifies each Subsidiary that
is a Significant Subsidiary, in each case as of the Effective Date.

         Section 4.13 Labor Matters

     As of the  Effective  Date,  there are no strikes,  lockouts  or  slowdowns
against the Borrower or any Significant  Subsidiary pending or, to the knowledge
of the Borrower,  threatened. The consummation of the Transactions will not give
rise to any right of  termination or right of  renegotiation  on the part of any
union under any  collective  bargaining  agreement  to which the Borrower or any
Significant Subsidiary is bound.

         Section 4.14 Security Agreement

     The   Security   Agreement   is   effective  to  create  in  favor  of  the
Administrative  Agent, for the ratable benefit of the Secured Parties,  a legal,
valid and  enforceable  security  interest in the  Collateral (as defined in the
Security  Agreement) and when (i) the financing  statements in appropriate  form
are filed in the offices  specified on Schedule 6 to the Perfection  Certificate
and (ii) all other  applicable  filings  under the  Uniform  Commercial  Code or
otherwise  that are required  under the Loan Documents are made, in each case as
permitted by the Security  Agreement,  the Security Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the grantors  thereunder in such Collateral,  in each case prior and superior
in right to any  other  Person,  other  than  with  respect  to Liens  expressly
permitted by Section 7.2.

         Section 4.15 Federal Reserve Regulations

     (a)  Neither  the  Borrower  nor  any  of  the   Subsidiaries  are  engaged
principally,  or as one of  their  important  activities,  in  the  business  of
extending credit for the purpose of buying or carrying Margin Stock.

     (b) No part of the proceeds of any Loan will be used,  whether  directly or
indirectly,  and whether immediately,  incidentally or ultimately,  to purchase,
acquire or carry any Margin  Stock or for any purpose  that  entails a violation
of, or that is  inconsistent  with,  the  provisions of the  regulations  of the
Board, including Regulation T, U or X.

         Section 4.16 Year 2000 Issue

     Each of the Borrower and each of the Significant  Subsidiaries has reviewed
the  effect  of the Year  2000  Issue on the  computer  software,  hardware  and
firmware systems and equipment  containing embedded microchips owned or operated
by or for the Borrower and each Subsidiary or used or relied upon in the conduct
of their business  (including  systems and equipment  supplied by others or with
which such  computer  systems of the Borrower and the  Significant  Subsidiaries
interface).  The costs to the Borrower and the  Significant  Subsidiaries of any
reprogramming  required  as a result of the Year 2000 Issue to permit the proper
functioning of such systems and equipment and the proper processing of data, and
the  testing  of  such   reprogramming,   and  of  the  reasonably   foreseeable
consequences  of the Year 2000 Issue to the  Borrower or any of the  Significant
Subsidiaries  (including  reprogramming  errors  and the  failure  of systems or
equipment supplied by others) are not reasonably expected to result in a Default
or Event of Default or to have a Material Adverse Effect.

ARTICLE 5. CONDITIONS

         Section 5.1 First Loans

     In addition  to the  conditions  precedent  set forth in Section  5.2,  the
obligation  of each  Lender to make Loans on the first  borrowing  date shall be
subject to the fulfillment of the following conditions (or the waiver thereof in
accordance with Section 10.2):

     (a) This Credit  Agreement  shall have become  effective in accordance with
Section 10.13.

     (b) The  Administrative  Agent  shall have  received a Note for each Lender
signed on behalf of the Borrower.

     (c) The  Administrative  Agent  shall  have  received a  favorable  written
opinion  (addressed  to the Credit  Parties  and dated the  earlier of the first
borrowing  date and date on which the  conditions  set forth in this Section 5.1
are satisfied) from (i) LeBoeuf,  Lamb, Greene & MacRae, LLP, special counsel to
the Borrower, and (ii) William M. Finn, Corporate Counsel of the Borrower,  each
in form and substance  satisfactory to the  Administrative  Agent.  The Borrower
hereby requests such counsel to deliver such opinion.

     (d) The  Administrative  Agent  shall  have  received  such  documents  and
certificates as the  Administrative  Agent or its counsel may reasonably request
relating to the organization,  existence and good standing of the Borrower,  the
authorization  of the  Transactions  and any other legal matters relating to the
Borrower,  the Loan  Documents or the  Transactions,  all in form and  substance
satisfactory to the Administrative Agent and its counsel.

     (e) The Administrative Agent shall have received evidence that the Existing
Credit Agreement has been terminated, all amounts due thereunder have been paid,
all guarantees, if any, thereof have been terminated and all security interests,
if any, securing the obligations thereunder have been released.

     (f) The Administrative  Agent shall have received a certificate,  dated the
earlier of the first  borrowing  date and date on which the conditions set forth
in this Section 5.1 are satisfied and signed by the President,  a Vice President
or a Financial  Officer of the  Borrower,  (i)  confirming  compliance  with the
conditions  set  forth  in  paragraphs  (a) and  (b) of  Section  5.2  and  (ii)
certifying that except as disclosed in the Pre-Closing  1934 Act Reports,  since
December 31, 1998,  there has been no material  adverse  change in the financial
condition,  operations  or  properties  of the of the Borrower (on an individual
basis) or the Borrower and the Subsidiaries, taken as a whole.

     (g) The Administrative Agent shall have received counterparts of a security
agreement,  in form and substance  satisfactory to the Administrative Agent (the
"Security  Agreement")  signed  on  behalf of the  Borrower,  together  with the
following:

          (i) all instruments and other documents,  including Uniform Commercial
     Code financing  statements,  required by law or reasonably requested by the
     Administrative  Agent to be  filed,  registered  or  recorded  to create or
     perfect the Liens intended to be created under the Security Agreement; and

          (ii) a  completed  Perfection  Certificate,  dated the  earlier of the
     first  borrowing  date and date on which the  conditions  set forth in this
     Section 5.1 are satisfied and signed by the President,  a Vice President or
     a Financial  Officer and the chief legal officer of the Borrower,  together
     with all  attachments  contemplated  thereby,  including  the  results of a
     search of the Uniform  Commercial  Code (or  equivalent)  filings made with
     respect to the Borrower in the jurisdictions contemplated by the Perfection
     Certificate and copies of the financing  statements (or similar  documents)
     disclosed  by such  search  and  evidence  reasonably  satisfactory  to the
     Administrative  Agent that the Liens indicated by such financing statements
     (or similar documents) are permitted by Section 7.2 or have been released.

     (h) The  performance  by the  Borrower of its  obligations  under each Loan
Document shall not (i) violate any applicable law,  statute,  rule or regulation
or (ii)  conflict  with, or result in a default or event of default  under,  any
Material  Agreement,  and the  Administrative  Agent shall have received a legal
opinion  and/or  officer's  certificate  to  such  effect,  satisfactory  to the
Administrative Agent.

     (i) The Administrative  Agent shall have received an officer's  certificate
of the Borrower attaching a true and complete copy of each Material Agreement.

     (j) The Administrative Agent shall have received,  with copies and executed
counterparts for each Lender, true and correct copies (in each case certified as
to  authenticity on such date on behalf of the Borrower) of the order entered by
the State of Maine Public  Utilities  Commission,  the waiver of jurisdiction by
the  State  of  Connecticut  Department  of  Public  Utility  Control,  and  the
authorization  of the Federal  Energy  Regulatory  Commission  as referred to in
Section 4.3, and the foregoing  shall be  satisfactory  in form and substance to
the Administrative Agent and shall be in full force and effect.

     (k) After giving effect to the Transactions occurring on the earlier of the
first  borrowing date and date on which the conditions set forth in this Section
5.1 are satisfied,  none of the Borrower or any of the Significant  Subsidiaries
shall have outstanding any  Indebtedness,  other than (i) Indebtedness  incurred
under the Loan Documents and (ii) Indebtedness set forth on Schedule 7.1.

     (l) The Administrative  Agent shall have received a certificate,  dated the
earlier of the first  borrowing  date and date on which the conditions set forth
in this  Section  5.1 are  satisfied  and signed by a  Financial  Officer of the
Borrower,   setting  forth  reasonably   detailed   calculations   demonstrating
compliance  with Sections 7.11 and 7.12 on a pro forma basis  immediately  after
giving effect to the Transactions occurring on such date.

     (m) The  Administrative  Agent shall have received a consent of Energy East
and Merger  Corp.  to the extent  required  by the Merger  Agreement  and of the
Finance  Authority of Maine to the extent required by the Fame Loan Agreement to
the execution,  delivery and  performance of the Loan Documents by the Borrower,
including the  incurrence of the  Indebtedness  and the granting of the security
interest in the Collateral thereunder.

Notwithstanding  the  foregoing,  the  obligations  of the Lenders to make Loans
hereunder shall not become  effective  unless except as provided below,  each of
the foregoing conditions is satisfied (or waived pursuant to Section 10.2) at or
prior to 3:00 p.m.,  New York City time,  on January 31, 2000 (and, in the event
such conditions are not so satisfied or waived,  the Commitments shall terminate
at such time),  provided,  however,  that so long as the Borrower is  diligently
seeking  the  authorization  of the  Federal  Energy  Regulatory  Commission  as
referred  to in Section  4.3 in good faith,  the  Borrower  need not satisfy the
conditions   set  forth  in  Section  5.1(j)  to  the  extent  related  to  such
authorization until February 29, 2000.

         Section 5.2 Each Credit Event

     The  obligation  of  each  Lender  to make a Loan  on the  occasion  of any
Borrowing is subject to the satisfaction of the following conditions:

     (a) The  representations  and  warranties of the Borrower set forth in this
Credit  Agreement  shall  be  true  and  correct  on and as of the  date of such
Borrowing with the same effect as though such representations and warranties had
been made on such date, except to the extent such representations and warranties
specifically  relate to an earlier date, in which case such  representations and
warranties shall have been true and correct on and as of such earlier date.

     (b) At the time of and  immediately  after giving effect to such Borrowing,
no Default shall have occurred and be continuing.

     (c) The Administrative  Agent shall have received such other  documentation
and assurances as shall be reasonably required by it in connection therewith.

Each Borrowing  shall be deemed to constitute a  representation  and warranty by
the Borrower on the date thereof as to the matters  specified in paragraphs  (a)
and (b) of this Section.

ARTICLE 6. AFFIRMATIVE COVENANTS

     Until the Commitments  have expired or been terminated and the principal of
and interest on each Loan and all fees and other amounts  payable under the Loan
Documents  shall have been paid in full, the Borrower  covenants and agrees with
the Lenders that:

         Section 6.1 Financial Statements and Other Information

     The Borrower will furnish to the Administrative Agent and each Lender:

     (a)  within  100 days  after  the end of each  fiscal  year,  a copy of its
audited   consolidated   balance   sheet  and  related   statements  of  income,
stockholders'  equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all  reported  on  by   PriceWaterhouseCoopers   or  other  independent   public
accountants of recognized  national  standing (without a "going concern" or like
qualification or exception and without any  qualification or exception as to the
scope of such audit) to the effect that such consolidated  financial  statements
present fairly in all material  respects the financial  condition and results of
operations of the Borrower and its  consolidated  Subsidiaries on a consolidated
basis in accordance with GAAP consistently  applied,  provided that the Borrower
may satisfy the  requirements of this subsection (a) by the delivery of its Form
10-K filed with the SEC;

     (b) within 55 days after the end of each of the first three fiscal quarters
of each  fiscal  year,  a copy of its  consolidated  balance  sheet and  related
statements of earnings, stockholders' equity and cash flows as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding  period
or  periods  of (or,  in the case of the  balance  sheet,  as of the end of) the
previous  fiscal  year,  all  certified  by  one of its  Financial  Officers  as
presenting fairly in all material  respects the financial  condition and results
of  operations  of  the  Borrower  and  the   consolidated   Subsidiaries  on  a
consolidated  basis in accordance  with GAAP  consistently  applied,  subject to
normal year-end audit  adjustments  and the absence of footnotes,  provided that
the Borrower may satisfy the requirements of this subsection (b) by the delivery
of its Form 10-Q filed with the SEC;

     (c) concurrently with any delivery of financial statements under clause (a)
or (b) above, a certificate of a Financial  Officer (i) certifying as to whether
a Default has occurred  and, if a Default has occurred,  specifying  the details
thereof and any action taken or proposed to be taken with respect thereto,  (ii)
setting forth reasonably  detailed  calculations  demonstrating  compliance with
Sections 7.11 and 7.12, (iii) setting forth the name of each Subsidiary which is
a   Significant   Subsidiary   (including   reasonably   detailed   calculations
demonstrating  that other  Subsidiaries are not Significant  Subsidiaries),  and
(iv) stating whether any material  change in GAAP or in the application  thereof
in any  material  respect has occurred  since the date of the audited  financial
statements  referred to in Section  4.4 and,  if any such  change has  occurred,
specifying  the effect of such change on the financial  statements  accompanying
such certificate;

     (d) promptly upon request after the same become publicly available,  copies
of all periodic and other reports, proxy statements, registration statements and
other  materials filed by the Borrower or any Subsidiary with the Securities and
Exchange Commission, or with any national securities exchange, or distributed by
the Borrower to its public shareholders generally, as the case may be; and

     (e)  promptly  following  any  request  therefor,  such  other  information
regarding  the  operations,  business  affairs and  financial  condition  of the
Borrower or any Significant Subsidiary, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may reasonably request.

         Section 6.2 Notices of Material Events

     The  Borrower  will  furnish to the  Administrative  Agent and each  Lender
prompt written notice of the following:

     (a) the occurrence of any Default;

     (b) the filing or  commencement  of any action,  suit or  proceeding  by or
before  any  arbitrator  or  Governmental  Authority  against or  affecting  the
Borrower or any  Affiliate  thereof that could in the good faith  opinion of the
Borrower reasonably be expected to result in a Material Adverse Effect; and

     (c) any other  development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.

Each notice  delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or  development  requiring such notice and any action taken
or proposed to be taken with respect thereto.

         Section 6.3 Existence; Conduct of Business

     The Borrower will, and will cause each of the Significant  Subsidiaries to,
do or cause to be done all things necessary to preserve,  renew and keep in full
force  and  effect  its  legal  existence  and the  rights,  licenses,  permits,
privileges and franchises material to the conduct of its business, provided that
the  foregoing  shall  not  prohibit  any  merger,  consolidation,  liquidation,
dissolution, sale or disposition permitted under Section 7.3 and 7.5.

         Section 6.4 Payment of Obligations

     The Borrower will, and will cause each of the Significant  Subsidiaries to,
pay its obligations,  including Tax liabilities, that, if not paid, could result
in a Material  Adverse  Effect  before the same shall  become  delinquent  or in
default,  except where (a) the validity or amount thereof is being  contested in
good faith by  appropriate  proceedings,  (b) the  Borrower or such  Significant
Subsidiary has set aside on its books adequate  reserves with respect thereto to
the extent  required by GAAP and (c) the failure to make  payment  pending  such
contest could not reasonably be expected to result in a Material Adverse Effect.

         Section 6.5 Maintenance of Properties

     The Borrower will, and will cause each of the Significant  Subsidiaries to,
keep and maintain  all property  material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, provided, however,
that  the  foregoing   shall  not  prohibit  any  sale,   disposition,   merger,
consolidation, liquidation or dissolution permitted by Section 7.3 or 7.5.

         Section 6.6 Books and Records; Inspection Rights

     The Borrower will, and will cause each of the Significant  Subsidiaries to,
keep proper books of record and account in which full,  true and correct entries
are made of all  dealings  and  transactions  in  relation to its  business  and
activities.   The  Borrower  will,  and  will  cause  each  of  the  Significant
Subsidiaries  to, permit any  representatives  designated by the  Administrative
Agent or any Lender,  upon  reasonable  prior  notice,  to visit and inspect its
properties,  to examine and make  extracts  from its books and  records,  and to
discuss its affairs,  finances and condition  with its officers and  independent
accountants, all at such reasonable times and as often as reasonably requested.

         Section 6.7 Compliance with Laws

     The Borrower will, and will cause each of the Significant  Subsidiaries to,
comply  with  all  laws,  rules,  regulations  and  orders  of any  Governmental
Authority  applicable to it or its property,  except where the failure to do so,
individually or in the aggregate,  could not reasonably be expected to result in
a Material Adverse Effect.

         Section 6.8 Use of Proceeds

     The proceeds of the Loans will be used only for general corporate  purposes
not inconsistent  with the terms hereof,  including  commercial paper backup. No
part of the proceeds of any Loan will be used,  whether  directly or indirectly,
and whether  immediately,  incidentally or ultimately,  to purchase,  acquire or
carry any Margin Stock or for any purpose that entails a violation of any of the
regulations of the Board, including Regulations T, U and X.

         Section 6.9 Information Regarding Collateral

     (a) The Borrower will furnish to the  Administrative  Agent prompt  written
notice of any change in (i) the legal name of the  Borrower or in any trade name
used to identify it in the conduct of its  business or in the  ownership  of its
properties, (ii) the location of the chief executive office of the Borrower, its
principal  place of business,  any office in which it maintains books or records
relating to Collateral,  (iii) the identity or  organizational  structure of the
Borrower such that a filed financing  statement  becomes  misleading or (iv) the
Federal Taxpayer Identification Number of the Borrower. On and after the date on
which the Administrative  Agent elects to perfect its security interest pursuant
to the  Security  Agreement,  the  Borrower  agrees  not to effect or permit any
change  referred to in the preceding  sentence unless all filings have been made
under the Uniform  Commercial  Code or otherwise  that are required in order for
the Administrative  Agent to continue at all times following such change to have
a valid, legal and on perfected security interest in all the Collateral.

     (b) Each year, at the time of delivery of annual financial  statements with
respect to the  preceding  fiscal  year  pursuant to  paragraphs  (a) and (b) of
Section  6.1,  the  Borrower  shall  deliver  to  the  Administrative   Agent  a
certificate of a Financial  Officer and the chief legal officer of the Borrower,
(i) setting forth the information  required  pursuant to Sections 1 and 2 of the
Perfection  Certificate  or  confirming  that  there  has been no change in such
information since the date of the Perfection Certificate or the date of the most
recent certificate  delivered pursuant to this Section and (ii) on and after the
date on which the  Administrative  Agent elects to perfect its security interest
pursuant to the Security Agreement,  certifying that all Uniform Commercial Code
financing  statements or other  appropriate  filings,  including all  refilings,
containing a  description  of the  Collateral  have been filed of record in each
governmental,  municipal  or  other  appropriate  office  in  each  jurisdiction
identified  pursuant to clause (i) above, and all other actions have been taken,
to the extent necessary to protect and perfect the security  interests under the
Security  Agreement  for a period of not less  than 18 months  after the date of
such  certificate  (except as noted  therein  with  respect to any  continuation
statements to be filed within such period).

         Section 6.10 Insurance

     The Borrower will, and will cause each of the Significant  Subsidiaries to,
maintain,  with financially sound and reputable  insurance  companies,  adequate
insurance  for its  insurable  properties,  all to such extent and against  such
risks,  including fire, casualty,  business interruption and other risks insured
against by extended  coverage,  as is  customary  with  companies in the same or
similar businesses operating in the same or similar locations.

         Section 6.11 Further Assurances

     The  Borrower  will  execute  any  and  all  further  documents,  financing
statements,  agreements  and  instruments,  and take all  such  further  actions
(including   the  filing  and  recording  of  financing   statements  and  other
documents),  that may be  required  under  any  applicable  law,  or  which  the
Administrative  Agent  or  the  Required  Lenders  may  reasonably  request,  to
effectuate  the  transactions  contemplated  by the Loan  Documents or to grant,
preserve,  protect or, on and after the date on which the  Administrative  Agent
elects to perfect its  security  interest  pursuant to the  Security  Agreement,
perfect the Liens created or intended to be created by the Security Agreement or
the validity or priority of any such Lien,  all at the expense of the  Borrower.
The Borrower also agrees to provide to the  Administrative  Agent,  from time to
time upon request,  evidence reasonably satisfactory to the Administrative Agent
as to the perfection and priority of the Liens created or intended to be created
by the Security Agreement.

         Section 6.12 Environmental Compliance

     The Borrower shall,  and shall cause each of its  Significant  Subsidiaries
to, use and operate all of its  facilities  and property in compliance  with all
Environmental  Laws,  keep  all  necessary  permits,  approvals,   certificates,
licenses and other  authorizations  relating to environmental  matters in effect
and  remain in  compliance  therewith,  and handle all  Hazardous  Materials  in
compliance with all applicable  Environmental  Laws, except where  noncompliance
with any of the  foregoing  could not  reasonably be expected to have a Material
Adverse Effect.

ARTICLE 7. NEGATIVE COVENANTS

     Until the Commitments  have expired or been terminated and the principal of
and interest on each Loan and all fees and other amounts  payable under the Loan
Documents  shall have been paid in full, the Borrower  covenants and agrees with
the Lenders that:

         Section 7.1 Indebtedness

     (a) The Borrower will not, and will not permit any  Significant  Subsidiary
to, create, incur, assume or permit to exist any Indebtedness, except:

          (i) Indebtedness under the Loan Documents;

          (ii)  Indebtedness  existing  on the  date  hereof  and set  forth  in
     Schedule 7.1 and all renewals and extensions  thereof  (except with respect
     to Indebtedness in respect of the Existing Credit  Agreement which is being
     terminated  on or prior to the  Effective  Date) in an aggregate  principal
     amount not in excess of the aggregate  principal amount thereof outstanding
     immediately prior to such renewal or extension;

          (iii) Indebtedness  incurred to finance the acquisition,  construction
     or  improvement  of any fixed or capital  assets,  including  Capital Lease
     Obligations and any Indebtedness assumed in connection with the acquisition
     of any such  assets or  secured by a Lien on any such  assets  prior to the
     acquisition thereof, and extensions,  renewals and replacements of any such
     Indebtedness that do not increase the outstanding principal amount thereof,
     provided that (A) such Indebtedness is incurred prior to or within 120 days
     after  such   acquisition  or  the  completion  of  such   construction  or
     improvement  and  (B)  the  aggregate   principal  amount  of  Indebtedness
     permitted  by this clause  (iii) shall not exceed  $40,000,000  at any time
     outstanding;

          (iv)   Indebtedness,   provided   that  (A)  no  Default  shall  exist
     immediately  before  and  after  giving  effect  thereto  and  all  of  the
     representations  and  warranties  contained  in Article 4 shall be true and
     correct as if then made, (B) such Indebtedness shall be unsecured except to
     the extent  permitted by Section 7.2(j) and (C) in the case of Indebtedness
     of (1) the Borrower,  such Indebtedness is subordinated to the Indebtedness
     under the Loan  Documents  on terms  approved in writing by Super  Majority
     Lenders and (2) a Significant Subsidiary, the aggregate principal amount of
     such Indebtedness outstanding at any time shall not exceed $10,000,000;

          (v)  other  unsecured  Indebtedness  of the  Borrower,  including  the
     Indebtedness of the Borrower in respect of the Unsecured  Medium Term Notes
     and  commercial  paper,  provided  that  at no  time  shall  the sum of the
     aggregate  outstanding  principal amount of all  Indebtedness  permitted by
     this clause (v) plus the total Credit Exposure exceed $575,000,000; and

          (vi) Guarantees (A) of the Obligations,  (B) of Indebtedness permitted
     by Section 7.1(a) (other than this clause (vi), (C) given,  entered into or
     created in connection  with or as an inducement to (1) the purchase or sale
     of capacity  or energy  (including  support  arrangements  with  respect to
     generating  plants  and  transmission  and  distribution  facilities,   and
     contracts for the purchase of capacity  and/or  energy) or of fuel, (2) the
     installation  of  energy-saving  devices and taking of other  energy-saving
     measures,  and (3) other  operational  matters  in the  ordinary  course of
     business;  provided,  that no  individual  Guarantee  permitted  under this
     clause  (3) may  present a  liability  or  exposure  to the  Borrower  or a
     Subsidiary in an amount greater than  $10,000,000;  and provided,  further,
     that this Section  7.1(a)(v) shall not permit the giving,  entering into or
     creation,  after the date hereof,  of any Guarantee (other than as required
     under  contracts  existing on the date  hereof)  providing  support for the
     acquisition  by the Borrower or a Subsidiary  of  generating  capacity or a
     generating  plant (other than in connection with buyouts by the Borrower of
     non-utility  generating  operations,  in  connection  with power  purchases
     required  by law or in  connection  with  exchanges  of  capacity  or plant
     entitlements  within the  ordinary  course of ensuring  an  adequate  power
     supply to mitigate the  Borrower's  risk,  provided  that no such  exchange
     shall  exceed  three  years in  duration)  which  individually  presents  a
     liability or exposure to the Borrower or a Subsidiary in an amount  greater
     than $10,000,000.

     (b) In any transaction  providing for Indebtedness in excess of $1,000,000,
the  Borrower  will not enter into or become  bound by any credit  agreement  or
other document or instrument which (i) contains financial covenants or events of
default  that are  more  restrictive  or  onerous  on the  Borrower  than  those
covenants  or events of  default  contained  in this  Credit  Agreement  or (ii)
provides  for, or permits the exercise of,  remedies  upon the  occurrence of an
event of default  thereunder  which are not  provided for in, or permitted to be
exercised  under or in respect of, this Credit  Agreement  (each such  covenant,
event of default and provision  described in the preceding  clauses (i) and (ii)
being  herein  called  a  "More  Favorable  Provision"),  unless,  prior  to  or
simultaneously,  (x) the Borrower  executes  and delivers to the  Administrative
Agent an  amendment  to this  Credit  Agreement  and such  other  documents  and
instruments as the Administrative  Agent shall reasonably  request, in each case
reasonably satisfactory in form and substance to the Administrative Agent, which
modify the provisions of this Credit Agreement and the terms of the transactions
contemplated  hereby and by the Loan  Documents  so as to give the  Lenders  the
benefits of each More Favorable Provision, and (y) the Borrower furnishes to the
Administrative  Agent and the Lenders a copy of such credit agreement,  or other
document or instrument.

         Section 7.2 Liens

     The Borrower will not, and will not permit any Significant
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter  acquired by it, or assign or sell any income or
revenues  (including  accounts  receivable) or rights in respect of any thereof,
except:

     (a) Liens created under the Loan Documents;

     (b) Permitted Encumbrances;

     (c) any Lien on any  property or asset of the  Borrower  or any  Subsidiary
existing  on the date hereof and set forth in Schedule  7.2,  provided  that (i)
such Lien shall not apply to any other  property or asset of the Borrower or any
Subsidiary  and (ii) such Lien  shall  secure  only those  obligations  which it
secures on the date hereof and any extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;

     (d)  purchase  money  Liens  securing  Indebtedness  permitted  by  Section
7.1(a)(iii) incurred in connection with the acquisition after the date hereof of
any property by the Borrower or any Significant  Subsidiary,  provided that such
Indebtedness  shall not  exceed in any case 90% of the cost to the  Borrower  or
such  Significant  Subsidiary of the property  acquired and each such Lien shall
cover only such property  acquired (and renewals,  replacements and improvements
thereof and thereto);

     (e) Liens on nuclear fuel, or rights to purchase or use nuclear fuel, which
are created to secure, and only to secure, Indebtedness incurred for the purpose
of purchasing  or arising as a result of leasing  nuclear fuel for use in plants
in which the Borrower or a Significant Subsidiary as an interest;

     (f) Liens on coal and fuel oil and  proceeds  thereof  (excluding  accounts
receivable  arising from the sale of electrical  energy) to secure,  and only to
secure,  Indebtedness  incurred  for the purpose of  purchasing  or storing such
fuels for use in plants of the Borrower or a Significant Subsidiary;

     (g) Liens on computer and related equipment, vehicles, automotive equipment
and construction equipment, and the office and service buildings of the Borrower
or  a  Significant  Subsidiary  to  secure  Indebtedness  permitted  by  Section
7.1(a)(iii)  incurred for the  financing  or  refinancing  of the cost  thereof,
provided  that such  Indebtedness  shall not  exceed in any case the cost to the
Borrower or such Significant Subsidiary of such property;

     (h) any  Lien,  moneys  sufficient  for the  discharge  of which  have been
deposited in trust with the trustee or mortgagee under the instrument evidencing
such Lien, with irrevocable authority to such trustee or mortgagee to apply such
moneys to the discharge of such Lien to the extent required for such purpose;

     (i) rights  reserved  to or vested in others to take or receive any part of
the gas, by-products of gas or steam or electricity  generated or produced by or
from any  properties  of the Borrower or any  Subsidiary  or with respect to any
other rights concerning  supply,  transportation or storage of a commodity which
is used in the ordinary course of business; and

     (j) Liens in addition to those  permitted  by clauses (a) through (i) above
securing  Indebtedness in an aggregate  unpaid principal amount not in excess of
$15,000,000.

         Section 7.3 Fundamental Changes

     (a) The Borrower will not, and will not permit any  Significant  Subsidiary
to merge into or consolidate  with any other Person,  or permit any other Person
to merge into or  consolidate  with it, or sell,  transfer,  lease or  otherwise
dispose  of  (in  one  transaction  or  in a  series  of  transactions)  all  or
substantially  all of its  assets,  or all or  substantially  all of the  equity
securities of any of the  Significant  Subsidiaries  (in each case,  whether now
owned or hereafter acquired),  or liquidate or dissolve,  except that, if at the
time thereof and immediately after giving effect thereto,  no Default shall have
occurred and be continuing:

          (i) any  Significant  Subsidiary  may  merge  into the  Borrower  in a
     transaction in which the Borrower is the surviving entity,  any Significant
     Subsidiary may merge into any  Wholly-Owned  Subsidiary in a transaction in
     which such Wholly-Owned Subsidiary is the surviving entity;

          (ii)  any  Significant  Subsidiary  may  merge  with any  Person  in a
     transaction  that is not  permitted by clause (i) of this  Section  7.3(a),
     provided  that  such  merger  is  permitted  by  Sections  7.4 or  7.5,  as
     applicable;

          (iii)  any  Significant  Subsidiary  may  sell,  transfer,   lease  or
     otherwise  dispose of its  assets to the  Borrower  or to any  Wholly-Owned
     Subsidiary;

          (iv) the Borrower or any  Significant  Subsidiary may sell,  transfer,
     lease or  otherwise  dispose  of its  assets in a  transaction  that is not
     permitted by clause (iii) of this Section 7.3(a),  provided that such sale,
     transfer, lease or other disposition is also permitted by Section 7.5.; and

          (v) any  Significant  Subsidiary  may  liquidate  or  dissolve  if the
     Borrower  determines in good faith that such  liquidation or dissolution is
     in the best interests of the Borrower and is not materially disadvantageous
     to the Lenders.

     (b) The  Borrower  will not,  and will not  permit  any of the  Significant
Subsidiaries  to,  engage to any  material  extent in any  business  other  than
businesses  of  the  type   conducted  by  the  Borrower  and  the   Significant
Subsidiaries  on the date of execution of this Credit  Agreement and  businesses
directly related thereto.

         Section 7.4 Investments, Loans, Advances, Guarantees and Acquisitions

     (a) The  Borrower  will not,  and will not  permit  any of the  Significant
Subsidiaries to, purchase,  hold or acquire  (including  pursuant to any merger)
any capital stock,  evidences of indebtedness or other securities (including any
option,  warrant or other  right to acquire  any of the  foregoing)  of, make or
permit to exist any Loans or advances to, make or permit to exist any Guarantees
of any  obligations  of, or make or permit to exist any  investment or any other
interest  in,  any other  Person,  or  purchase  or  otherwise  acquire  (in one
transaction or a series of transactions  (including pursuant to any merger)) any
assets  of  any  other  Person   constituting  a  business  unit  (collectively,
"Investments"), except:

          (i) Permitted Investments;

          (ii) Investments existing on the date hereof and set forth in Schedule
     7.4(a)(ii);

          (iii) Guarantees permitted by Section 7.1(a)(v); and

          (iv) other Investments,  provided that immediately after giving effect
     thereto,  (A) no Default shall have  occurred or be continuing  and (B) the
     aggregate book value of the assets of the Subsidiaries shall not exceed 15%
     of  the  aggregate  book  value  of the  assets  of the  Borrower  and  the
     Subsidiaries on a consolidated  assets  determined in accordance with GAAP,
     provided,  further that after the date hereof, neither the Borrower nor any
     Subsidiary  shall  acquire any  ownership  interest  in any nuclear  energy
     generating plants.

     (b)  Notwithstanding  the foregoing,  the following shall not be considered
Investments  prohibited or limited by this Section 7.4(a): (i) current trade and
customer  accounts  receivable for property leased,  goods furnished or services
rendered in the  ordinary  course of business  and  payable in  accordance  with
customary trade terms,  (ii) deposits,  advances or prepayments to suppliers for
property  leased or  licensed,  goods  furnished  and  services  rendered in the
ordinary  course of business,  (iii)  advance to employees  for  relocation  and
travel expenses, drawing accounts and similar expenditures,  (iv) stock or other
securities  acquired in  connection  with the  satisfaction  or  enforcement  of
Indebtedness  or claim due to the Borrower or any  Subsidiary or as security for
any such  Indebtedness  or  claim or (v)  demand  deposits  in banks or  similar
financial institutions.

     (c) In determining the amount of outstanding Investments:

          (i) the amount of any Investments  shall be the cost thereof minus any
     returns of capital in cash on such  Investment  (determined  in  accordance
     with GAAP without regard to amounts realized as income on such Investment);

          (ii) the  amount  of  acquisition  shall  include  the  amount  of any
     Indebtedness  assumed in  connection  with such  purchase or secured by any
     asset  acquired  in  such  purchase  (whether  or not any  Indebtedness  is
     assumed) or for which any Person that becomes a Subsidiary is liable on the
     date on which the securities of such Person are acquired; and

          (iii) no Investment shall be increased as the result of an increase in
     the  undistributed  retained earnings of the Person in which the Investment
     was made or  decreased  as a result of an equity  interest in the losses of
     such Person.

         Section 7.5 Asset Sales

     The  Borrower  will  not,  and  will  not  permit  any of  the  Significant
Subsidiaries to, sell, transfer,  lease or otherwise dispose (including pursuant
to a merger) of any asset,  including any equity  securities,  or enter into any
Sale and Leaseback Transaction, except:

     (a) sales, transfers,  leases and other dispositions of inventory,  used or
surplus equipment and Permitted Investments, in each case in the ordinary course
of business;

     (b)  sales,  transfers,  leases and other  dispositions  of  inventory  and
Permitted Investments, in each case in the ordinary course of business;

     (c) sales,  transfers,  leases and other dispositions of tangible assets no
longer used or useful or  advantageous  to the conduct of the business which are
to be replaced in the  ordinary  course of business to the extent  necessary  by
other tangible assets of equal or greater value;

     (d) grants of licenses of products and intangible  assets for fair value in
the ordinary course of business;

     (e) grants of easements and other similar rights to use its real estate and
properties;

     (f) other  sales,  transfers,  leases and other  dispositions  and Sale and
Leaseback Transactions,  provided that at the time thereof and immediately after
giving effect  thereto,  (i) no Default  shall have occurred and be  continuing,
(ii) the aggregate fair market value of all assets, sold, transferred, leased or
otherwise  disposed of and all Sale and Leaseback  Transactions in reliance upon
this subsection (f) shall not exceed  $20,000,000 in the aggregate in any period
of 12  consecutive  months,  and (iii) all  sales,  transfers,  leases and other
dispositions  and  all  Sale  and  Leaseback   Transactions  permitted  by  this
subsection (f) shall be made for fair value;

     (g) sales, transfers,  leases and other dispositions of nuclear assets, any
generation assets, including contracts for the supply of generations; and

     (h) entitlements to the Hydro-Quebec tie line.

         Section 7.6 Hedging Agreements

     The  Borrower  will not,  and will not permit any of the  Subsidiaries  to,
enter into any Hedging Agreement,  other than Hedging Agreements entered into in
the ordinary course of business to hedge or mitigate risks to which the Borrower
or any Subsidiary is exposed in the conduct of its business or the management of
its liabilities, including an interest rate risk management program.

         Section 7.7 Restricted Payments

     The  Borrower  will  not  declare  or  make,  or  agree to pay for or make,
directly or  indirectly,  any Restricted  Payment,  except that the Borrower may
declare and make Restricted  Payments provided that immediately before and after
giving  effect to such  declaration  or payment,  no Event of Default shall have
occurred and be continuing.

         Section 7.8 Transactions with Affiliates

     The  Borrower  will not,  and will not permit any of the  Subsidiaries  to,
sell, transfer,  lease or otherwise dispose (including pursuant to a merger) any
property  or assets  to, or  purchase,  lease or  otherwise  acquire  (including
pursuant to a merger) any  property or assets from,  or otherwise  engage in any
other transactions  with, any of its Affiliates,  except on terms and conditions
not less favorable to the Borrower or such  Subsidiary than could be obtained on
an arms-length  basis from unrelated  third parties,  provided that this Section
shall not apply to any  transaction  that is permitted  under  Section 7.1, 7.3,
7.4,  7.5 or 7.8  between  or among the  Borrower  and not  involving  any other
Affiliate.

         Section 7.9 Restrictive Agreements

     The  Borrower  will  not,  and  will  not  permit  any of  the  Significant
Subsidiaries  to, directly or indirectly,  enter into,  incur or permit to exist
any  agreement or other  arrangement  that  prohibits,  restricts or imposes any
condition upon (a) the ability of the Borrower to perform its obligations  under
the Security  Agreement or (b) the ability of any Subsidiary to pay dividends or
other  distributions  with respect to any shares of its equity  securities or to
make or repay Loans or advances to the  Borrower or any other  Subsidiary  or to
Guarantee  Indebtedness of the Borrower or any other  Subsidiary,  provided that
the foregoing  shall not apply to  restrictions  and  conditions  imposed by (i)
applicable  law, (ii) the Loan Documents,  (iii) the FAME Loan  Agreement,  (iv)
covenants in documents  creating Liens  permitted by Section 7.2(d)  prohibiting
further Liens on the assets encumbered thereby,  and (v) immaterial  agreements,
instruments, deeds and leases.

         Section 7.10 Amendment of Material Documents

     The Borrower will not, and will not permit any  Significant  Subsidiary to,
amend,  modify or waive any of its rights  under any  Material  Agreement or its
certificate of incorporation,  by-laws or other organizational documents,  other
than amendments,  modifications or waivers that would not reasonably be expected
to adversely affect the Credit Parties.

         Section 7.11 Interest Coverage Ratio

     The Borrower will not permit the Interest  Coverage  Ratio as of the end of
any fiscal quarter to be less than 1.75:100.

         Section 7.12 Capitalization Ratio

     The  Borrower  will not permit the  Capitalization  Ratio at any time to be
greater than 0.65:1.00.  This covenant will be tested as of the last day of each
fiscal quarter.

ARTICLE 8. EVENTS OF DEFAULT

     If any of the following events ("Events of Default") shall occur:

     (a) the  Borrower  shall fail to pay any  principal of any Loan when and as
the same shall become due and  payable,  whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;

     (b) the  Borrower  shall fail to pay any  interest  on any Loan or any fee,
commission or any other amount  (other than an amount  referred to in clause (a)
of this  Article)  payable under any Loan  Document,  when and as the same shall
become due and payable,  and such failure shall continue unremedied for a period
of five days.

     (c) any  representation  or warranty made or deemed made by or on behalf of
the Borrower or by the Borrower on behalf of any  Subsidiary in or in connection
with any Loan  Document  or any  amendment  or  modification  hereof  or  waiver
thereunder, or in any report, certificate, financial statement or other document
furnished  pursuant to or in connection  with any Loan Document or any amendment
or modification hereof or waiver thereunder,  shall prove to have been incorrect
in any material respect when made or deemed made;

     (d) the Borrower  shall fail to observe or perform any covenant,  condition
or agreement contained in Sections, 6.3 or 6.8 or in Article 7;

     (e) the Borrower  shall fail to observe or perform any covenant,  condition
or agreement  contained in any Loan  Document to which it is a party (other than
those  specified  in clause (a), (b) or (d) of this  Article),  and such failure
shall  continue  unremedied  for a period of 30 days after the Borrower shall or
reasonably should, have obtained knowledge thereof;

     (f) the Borrower or any Subsidiary  shall fail to make any payment (whether
of principal or interest  and  regardless  of amount) in respect of any Material
Indebtedness,  when and as the same shall become due and payable  (after  giving
effect to any applicable grace period);

     (g) any event or condition occurs that results in any Material Indebtedness
becoming  due prior to its  scheduled  maturity  or that  enables or permits the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity,  provided that this clause (g) shall not apply to secured Indebtedness
that  becomes  due solely as a result of the  voluntary  sale or transfer of the
property or assets securing such Indebtedness;

     (h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed  seeking  (i)  liquidation,  reorganization  or other  relief  in
respect of the Borrower or any Subsidiary or its debts, or of a substantial part
of its  assets,  under any  Federal,  state or foreign  bankruptcy,  insolvency,
receivership  or similar law now or hereafter in effect or (ii) the  appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue  undismissed for 60
days or an order or decree  approving or ordering any of the foregoing  shall be
entered;

     (i) the  Borrower or any  Subsidiary  shall (i)  voluntarily  commence  any
proceeding or file any petition  seeking  liquidation,  reorganization  or other
relief under any Federal, state or foreign bankruptcy, insolvency,  receivership
or similar law now or hereafter in effect,  (ii) consent to the  institution of,
or fail to  contest  in a timely  and  appropriate  manner,  any  proceeding  or
petition described in clause (h) of this Article,  (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,  conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding,  (v) make a general  assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;

     (j) the Borrower or any Subsidiary  shall become  unable,  admit in writing
its inability or fail generally to pay its debts as they become due;

     (k) one or more  judgments for the payment of money in an aggregate  amount
in  excess  of  $10,000,000  shall  be  rendered  against  the  Borrower  or any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive  days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the  Borrower  or any  Subsidiary  to  enforce  any such
judgment;

     (l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders,  when taken  together  with all other ERISA Events that have  occurred,
could reasonably be expected to result in a Material Adverse Effect;

     (m) (i) any Loan Document shall cease, for any reason,  to be in full force
and effect,  or the Borrower  shall so assert in writing or shall disavow any of
its obligations  thereunder or (ii) any  representation,  warranty,  covenant or
other  obligation  for the  benefit  of the  Borrower  or any of its  Affiliates
contained in any Loan Document that, by its terms, survives for any period shall
cease, for any reason, to so survive; or

     (n) any Lien  purported to be created  under the Security  Agreement  shall
cease to be, or shall be asserted by the  Borrower  not to be, a valid and after
the Administrative  Agent has elected to perfect its security interest under the
Security Agreement, perfected Lien on any Collateral, with the priority required
by the Security  Agreement,  except as a result of the sale or other disposition
of  the  applicable  Collateral  in  a  transaction  permitted  under  the  Loan
Documents;

then,  and in every such event  (other than an event  described in clause (h) or
(i) of this Article),  and at any time thereafter during the continuance of such
event, the Administrative  Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower,  take either or both of the following actions,
at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments  shall  terminate  immediately  and  (ii)  declare  the  Loans  then
outstanding  to be due and  payable  in  whole  (or in part,  in which  case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and  payable,  together  with  accrued  interest  thereon and all fees and other
obligations of the Borrower  accrued under the Loan Documents,  shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind,  all of which are hereby  waived by the  Borrower;  and in case of any
event  described in clause (h) or (i) of this  Article,  the  Commitments  shall
automatically  terminate  and  the  principal  of the  Loans  then  outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued under the Loan Documents,  shall  automatically  become due and
payable,  without presentment,  demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower.

ARTICLE 9. THE ADMINISTRATIVE AGENT

     Each Credit Party hereby irrevocably  appoints the Administrative  Agent as
its agent and  authorizes the  Administrative  Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative  Agent
by the terms  hereof,  together  with such actions and powers as are  reasonably
incidental thereto.

     The Person serving as the  Administrative  Agent  hereunder  shall have the
same rights and powers in its  capacity as a Lender as any other  Lender and may
exercise  the same as  though  it were not the  Administrative  Agent,  and such
Person and its Affiliates may accept  deposits from, lend money to and generally
engage in any kind of  business  with the  Borrower or any  Subsidiary  or other
Affiliate thereof as if it were not the Administrative Agent hereunder.

     The  Administrative  Agent shall not have any duties or obligations  except
those  expressly  set forth  herein.  Without  limiting  the  generality  of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other  implied  duties,  regardless  of whether a Default  has  occurred  and is
continuing,  (b) the  Administrative  Agent  shall not have any duty to take any
discretionary action or exercise any discretionary  powers, except discretionary
rights  and  powers  expressly  contemplated  by the  Loan  Documents  that  the
Administrative  Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Credit  Parties as shall be necessary
under  the  circumstances  as  provided  in  Section  10.2),  and (c)  except as
expressly set forth herein, the Administrative  Agent shall not have any duty to
disclose,  and shall not be liable for the failure to disclose,  any information
relating to the Borrower or any of the  Subsidiaries  that is communicated to or
obtained by the Person serving as Administrative  Agent or any of its Affiliates
in any  capacity.  The  Administrative  Agent shall not be liable for any action
taken or not taken by it with the  consent  or at the  request  of the  Required
Lenders (or such other number or  percentage  of the Credit  Parties as shall be
necessary under the circumstances as provided in Section 10.2) or in the absence
of its own gross  negligence or willful  misconduct.  The  Administrative  Agent
shall be deemed not to have  knowledge of any Default  unless and until  written
notice thereof is given to the Administrative  Agent by the Borrower or a Credit
Party (and,  promptly  after its receipt of any such notice,  it shall give each
Credit Party and the Borrower  notice  thereof),  and the  Administrative  Agent
shall not be  responsible  for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document,  (ii) the  contents  of any  certificate,  report  or  other  document
delivered  thereunder  or in  connection  therewith,  (iii) the  performance  or
observance of any of the covenants,  agreements or other terms or conditions set
forth therein, (iv) the validity,  enforceability,  effectiveness or genuineness
thereof  or any  other  agreement,  instrument  or  other  document  or (v)  the
satisfaction of any condition set forth in Article 5 or elsewhere herein,  other
than to confirm  receipt of items  expressly  required  to be  delivered  to the
Administrative Agent.

     The  Administrative  Agent shall be  entitled  to rely upon,  and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement,  instrument,  document or other writing  believed by it to be genuine
and to have been signed or sent by the proper Person. The  Administrative  Agent
also may rely upon any statement  made to it orally or by telephone and believed
by it to be made by the proper  Person,  and shall not incur any  liability  for
relying thereon.  The  Administrative  Agent may consult with legal counsel (who
may be counsel for the  Borrower),  independent  accountants  and other  experts
selected by it, and shall not be liable for any action  taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

     The  Administrative  Agent may perform any and all its duties and  exercise
its rights and powers by or through any one or more sub-agents  appointed by the
Administrative  Agent, provided that no such delegation shall serve as a release
of the  Administrative  Agent or waiver by the Borrower of any rights hereunder.
The  Administrative  Agent and any such  sub-agent  may  perform any and all its
duties and  exercise  its rights and powers  through  their  respective  Related
Parties.  The exculpatory  provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related  Parties of the  Administrative  Agent and
any such sub-agent, and shall apply to their respective activities in connection
with the  syndication  of the credit  facilities  provided for herein as well as
activities as Administrative Agent.

     Subject to the  appointment  and  acceptance of a successor  Administrative
Agent as provided in this paragraph,  the Administrative Agent may resign at any
time  by  notifying  the  Credit  Parties  and  the  Borrower.   Upon  any  such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower,  to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment  within 30 days
after the retiring  Administrative  Agent gives notice of its resignation,  then
the retiring Administrative Agent may, on behalf of the Credit Parties,  appoint
a  successor  Administrative  Agent  which shall be a bank with an office in New
York,  New York,  or an Affiliate of any such bank.  Upon the  acceptance of its
appointment as  Administrative  Agent  hereunder by a successor,  such successor
shall succeed to and become vested with all the rights,  powers,  privileges and
duties of the retiring  Administrative  Agent,  and the retiring  Administrative
Agent shall be discharged  from its duties and obligations  hereunder.  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor  unless  otherwise  agreed between the Borrower
and such successor.  After the Administrative Agent's resignation hereunder, the
provisions  of this  Article and Section  10.3 shall  continue in effect for the
benefit  of  such  retiring  Administrative  Agent,  its  sub-agents  and  their
respective  Related  Parties in respect  of any  actions  taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

     Each  Credit  Party  acknowledges  that it has,  independently  and without
reliance  upon the  Administrative  Agent or any other Credit Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis  and  decision to enter into this Credit  Agreement.  Each Credit Party
also  acknowledges  that it will,  independently  and without  reliance upon the
Administrative  Agent or any other Credit Party and based on such  documents and
information as it shall from time to time deem appropriate, continue to make its
own  decisions  in  taking or not  taking  action  under or based  upon any Loan
Document, any related agreement or any document furnished thereunder.

     Notwithstanding  anything  in  any  Loan  Document  to  the  contrary,  the
Syndication  Agent in such capacity shall not have any right, duty or obligation
under the Loan Documents.

ARTICLE 10. MISCELLANEOUS

         Section 10.1 Notices

     Except in the case of notices and other communications  expressly permitted
to be given by  telephone,  all notices and other  communications  provided  for
herein shall be in writing and shall be  delivered by hand or overnight  courier
service, mailed by certified or registered mail or sent by telecopy, as follows:

     (a) if to the  Borrower,  to it at 83 Edison Drive,  Augusta,  Maine 04336,
Attention of Curtis Call, Treasurer (Telephone No. (207) 626-9755); Telecopy No.
(207) 626-9588);

     (b) if to the Administrative Agent, to it at One Wall Street, New York, New
York 10286,  Attention  of: Pina  Impeduglia  (Telephone  No.  (212)  635-4696);
Telecopy  No.  (212)  635-6365  or 6366 or 6367,  with a copy to The Bank of New
York, at One Wall Street,  New York, New York 10286,  Attention of: John W. Hall
(Telephone No. (212) 635-7581; Telecopy No. (212) 635-7923; and

     (c) if to any other Credit Party, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

     Any party hereto may change its address or telecopy  number for notices and
other  communications  hereunder  by  notice to the other  parties  hereto.  All
notices and other  communications  given to any party hereto in accordance  with
the  provisions of this Credit  Agreement  shall be deemed to have been given on
the date of receipt.

         Section 10.2 Waivers; Amendments

     (a) No  failure  or delay by any Credit  Party in  exercising  any right or
power under any Loan Document shall operate as a waiver  thereof,  nor shall any
single or partial  exercise of any such right or power,  or any  abandonment  or
discontinuance of steps to enforce such a right or power,  preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Credit  Parties under the Loan  Documents are cumulative and
are not exclusive of any rights or remedies that they would  otherwise  have. No
waiver of any  provision of any Loan Document or consent to any departure by the
Borrower  therefrom  shall in any event be  effective  unless  the same shall be
permitted  by  paragraph  (b) of this  Section,  and then such waiver or consent
shall be effective  only in the specific  instance and for the purpose for which
given.  Without  limiting the generality of the foregoing,  the making of a Loan
shall not be  construed as a waiver of any  Default,  regardless  of whether any
Credit Party may have had notice or knowledge of such Default at the time.

     (b) Neither this Credit  Agreement nor any provision  hereof may be waived,
amended or modified  except  pursuant to an agreement or  agreements  in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders,  provided that no
such  agreement  shall (i) increase  any  Commitment  of any Lender  without the
written consent of such Lender, (ii) reduce the principal amount of any Loan, or
reduce the rate of interest thereon, or reduce any fees or other amounts payable
under the Loan Documents, or reduce the amount of any scheduled reduction of the
Commitments,  without the written consent of each Credit Party affected thereby,
(iii)  postpone the  scheduled  date of payment of the  principal  amount of any
Loan, or any interest  thereon,  or any fees or other amounts  payable under the
Loan  Documents,  or reduce the amount of, waive or excuse any such payment,  or
postpone the scheduled  date of reduction or expiration of the  Commitments,  or
extend the final  expiration of date of any Letter of Credit beyond the Maturity
Date,  without the written consent of each Credit Party affected  thereby,  (iv)
change any provision hereof in a manner that would alter the pro rata sharing of
payments  required by any Loan  Document,  without  the written  consent of each
Credit Party, (v) change any of the provisions of this Section or the definition
of "Required  Lenders" or any other  provision  hereof  specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any  determination  or grant any  consent  hereunder,  without  the written
consent of each Lender,  (vii) release any of the  Collateral  from the Liens of
the Loan  Documents  (except as expressly  provided in the Security  Agreement),
without the consent of each  Lender,  and  provided,  further,  that (x) no such
agreement  shall amend,  modify or otherwise  affect the rights or duties of the
Administrative  Agent  hereunder  without  the  prior  written  consent  of  the
Administrative Agent.

         Section 10.3 Expenses; Indemnity; Damage Waiver

     (a)  The  Borrower  shall  pay (i) all  reasonable  out-of-pocket  expenses
incurred  by  the  Administrative  Agent  and  its  Affiliates,   including  the
reasonable fees,  charges and  disbursements  of counsel for the  Administrative
Agent, in connection with the syndication of the credit facilities  provided for
herein,  the  preparation  and  administration  of this Credit  Agreement or any
amendments,  modifications  or waivers of the  provisions  of any Loan  Document
(whether or not the transactions  contemplated thereby shall be consummated) and
(ii) all  out-of-pocket  expenses  incurred by any Credit  Party,  including the
fees,  charges  and  disbursements  of any  counsel  for any  Credit  Party,  in
connection  with the  enforcement or protection of its rights in connection with
the Loan  Documents,  including its rights under this Section,  or in connection
with  the  Loans  made  hereunder,  including  all such  out-of-pocket  expenses
incurred  during any workout,  restructuring  or negotiations in respect of such
Loans.

     (b) The Borrower  shall  indemnify each Credit Party and each Related Party
thereof (each such Person being called an "Indemnitee")  against,  and hold each
Indemnitee  harmless  from,  any  and  all  actual  losses,   claims,   damages,
liabilities and related  reasonable  expenses,  including the fees,  charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any  Indemnitee  arising out of, in  connection  with, or as a result of (i) the
execution  or  delivery  of any Loan  Document or any  agreement  or  instrument
contemplated  thereby,  the  performance by the parties to the Loan Documents of
their respective  obligations thereunder or the consummation of the Transactions
or any other transactions  contemplated thereby, (ii) any Loan or the use of the
proceeds  thereof,  (iii) any actual or alleged presence or release of Hazardous
Materials  on or from any  property  owned or operated by the Borrower or any of
the  Subsidiaries,  or any  Environmental  Liability  related  in any way to the
Borrower or any of the  Subsidiaries  or (iv) any actual or  prospective  claim,
litigation,  investigation  or  proceeding  relating  to any  of the  foregoing,
whether  based on contract,  tort or any other theory and  regardless of whether
any Indemnitee is a party thereto, provided that such indemnity shall not, as to
any Indemnitee,  be available to the extent that such losses,  claims,  damages,
liabilities  or  related  expenses  are  determined  by  a  court  of  competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

     (c) To the extent that the Borrower fails to pay any amount  required to be
paid  by it to the  Administrative  Agent  under  paragraph  (a) or (b) of  this
Section,  each Lender  severally  agrees to pay to the  Administrative  Agent an
amount equal to the product of such unpaid amount multiplied by a fraction,  the
numerator of which is such Lender's  Commitment and the  denominator of which is
the total of all Lenders'  Commitments  (in each case  determined as of the time
that the  applicable  unreimbursed  expense or indemnity  payment is sought) of,
provided that the  unreimbursed  expense or  indemnified  loss,  claim,  damage,
liability or related expense, as applicable, was incurred by or asserted against
the Administrative Agent in its capacity as such.

     (d) To the extent  permitted by  applicable  law,  the  Borrower  shall not
assert,  and hereby waives,  any claim against any Indemnitee,  on any theory of
liability, for special, indirect,  consequential or punitive damages (as opposed
to direct and actual damages) arising out of, in connection with, or as a result
of,  any  Loan  Document  or  any   agreement,   instrument  or  other  document
contemplated  thereby,  the  Transactions or any Loan or the use of the proceeds
thereof.

     (e) All amounts due under this Section shall be payable  promptly but in no
event later than ten days after written demand therefor.

         Section 10.4 Successors and Assigns

     (a) The provisions of this Credit Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby,  except that the Borrower may not assign or otherwise transfer
any of its rights or obligations  hereunder without the prior written consent of
each Credit  Party (and any  attempted  assignment  or transfer by the  Borrower
without such consent shall be null and void).  Nothing in this Credit Agreement,
expressed or implied,  shall be construed to confer upon any Person  (other than
the parties hereto,  their  respective  successors and assigns  permitted hereby
and, to the extent expressly  contemplated  hereby,  the Related Parties of each
Credit Party) any legal or equitable  right,  remedy or claim under or by reason
of any Loan Document.

     (b) Any Lender may assign to one or more  assignees all or a portion of its
rights and obligations  under this Credit Agreement  (including all or a portion
of its  Commitment  and the Loans at the time  owing to it),  provided  that (i)
except in the case of an  assignment  to a Lender or an Affiliate or an Approved
Fund of a Lender,  each of the Borrower and the  Administrative  Agent must give
its  prior  written  consent  to such  assignment  (which  consent  shall not be
unreasonably withheld),  (ii) except in the case of an assignment to a Lender or
an  Affiliate  or an Approved  Fund of a Lender or an  assignment  of the entire
remaining  amount  of the  assigning  Lender's  Commitment,  the  amount  of the
Commitment of the assigning  Lender subject to each such assignment  (determined
as of the date the Assignment and Acceptance  with respect to such assignment is
delivered to the Administrative  Agent) shall not be less than $5,000,000 unless
the Borrower and the Administrative  Agent otherwise consent,  (iii) the parties
to each  assignment  shall  execute and deliver to the  Administrative  Agent an
Assignment  and  Acceptance  together  with,  unless  otherwise  agreed  by  the
Administrative  Agent, a processing and recordation fee of $3,500,  and (iv) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative  Questionnaire,  and provided further, that any consent of the
Borrower  otherwise  required  under this  paragraph  shall not be required if a
Default has occurred and is  continuing.  Subject to  acceptance  and  recording
thereof pursuant to paragraph (d) of this Section,  from and after the effective
date specified in each Assignment and Acceptance,  the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and  Acceptance,  have the rights  and  obligations  of a Lender  under the Loan
Documents,  and the  assigning  Lender  thereunder  shall,  to the extent of the
interest  assigned by such  Assignment  and  Acceptance,  be  released  from its
obligations  under the Loan  Documents  (and, in the case of an  Assignment  and
Acceptance  covering all of the assigning  Lender's rights and obligations under
the Loan  Documents,  such  Lender  shall  cease to be a party  hereto but shall
continue to be entitled to the benefits of Sections 3.5, 3.6, 3.7 and 10.3). Any
assignment  or  transfer  by a Lender of rights  or  obligations  under the Loan
Documents that does not comply with this paragraph shall be treated for purposes
of the Loan Documents as a sale by such Lender of a participation in such rights
and obligations in accordance with paragraph (e) of this Section.

     (c) The  Administrative  Agent,  acting for this purpose as an agent of the
Borrower,  shall  maintain at one of its offices in New York City a copy of each
Assignment and Acceptance  delivered to it and a register for the recordation of
the names and  addresses of the Lenders,  and the  Commitment  of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall be conclusive absent
clearly  demonstrable  error,  and the  Borrower and each Credit Party may treat
each Person whose name is recorded in the Register  pursuant to the terms hereof
as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding
notice to the contrary.  The Register  shall be available for  inspection by the
Borrower and any Credit Party, at any reasonable time and from time to time upon
reasonable prior notice.

     (d) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee's completed  Administrative
Questionnaire  (unless the assignee  shall already be a Lender  hereunder),  the
processing and  recordation fee referred to in paragraph (b) of this Section and
any  written  consent  to such  assignment  required  by  paragraph  (b) of this
Section,  the  Administrative  Agent shall accept such Assignment and Acceptance
and record the  information  contained  therein in the  Register.  No assignment
shall be  effective  for  purposes of this Credit  Agreement  unless it has been
recorded in the Register as provided in this paragraph.

     (e) Any Lender  may,  without  the  consent of the  Borrower  or any Credit
Party,  sell  participations  to one or more banks or other  entities (each such
bank or other entity being called a  "Participant")  in all or a portion of such
Lender's  rights and  obligations  under the Loan Documents  (including all or a
portion of its  Commitment  and the Loans owing to it),  provided  that (i) such
Lender's obligations under the Loan Documents shall remain unchanged,  (ii) such
Lender shall  remain  solely  responsible  to the other  parties  hereto for the
performance  of such  obligations  and (iii) the Borrower and the Credit Parties
shall  continue to deal solely and directly with such Lender in connection  with
such Lender's rights and obligations under the Loan Documents.  Any agreement or
instrument  pursuant to which a Lender sells such a participation  shall provide
that such Lender shall retain the sole right to enforce the Loan  Documents  and
to approve any  amendment,  modification  or waiver of any provision of any Loan
Documents,  provided  that such  agreement or  instrument  may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification  or waiver  described in the first proviso to Section  10.2(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each  Participant  shall be entitled to the benefits of Sections 3.5
and 3.6 to the same extent as if it were a Lender and had  acquired its interest
by assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each  Participant also shall be entitled to the benefits of Section 10.8
as though it were a Lender,  provided that such Participant agrees to be subject
to Section 2.10(c) as though it were a Lender.

     (f) A  Participant  shall not be entitled  to receive  any greater  payment
under  Section  3.5 or 3.7 than the Lender  would have been  entitled to receive
with respect to the participation  sold to such Participant,  unless the sale of
the  participation to such Participant is made with the Borrower's prior written
consent.  A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the  benefits of Section 3.7 unless the  Borrower is notified
of the participation  sold to such Participant and such Participant  agrees, for
the benefit of the Borrower,  to comply with Section  3.7(e) as though it were a
Lender.

     (g) Any Lender may at any time pledge or assign a security  interest in all
or any portion of its rights under the Loan  Documents to secure  obligations of
such Lender,  including  any pledge or  assignment  to secure  obligations  to a
Federal  Reserve  Bank,  and this Section  shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations under the
Loan  Documents or substitute  any such pledgee or assignee for such Lender as a
party hereto.

         Section 10.5 Survival

     All  covenants,  agreements,  representations  and  warranties  made by the
Borrower  herein  and in the  certificates  or  other  instruments  prepared  or
delivered in connection  with or pursuant to this Credit  Agreement or any other
Loan Document  shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of any Loan Document and the
making of any  Loans,  regardless  of any  investigation  made by any such other
party or on its behalf and  notwithstanding  that any Credit  Party may have had
notice or knowledge of any Default or  incorrect  representation  or warranty at
the time any credit is extended hereunder,  and shall continue in full force and
effect as long as the  principal  of or any accrued  interest on any Loan or any
fee or any other amount  payable  under the Loan  Documents is  outstanding  and
unpaid  and so long as the  Commitments  have not  expired  or  terminated.  The
provisions  of Sections  3.5,  3.6, 3.7 and 10.3 and Article 9 shall survive and
remain  in  full  force  and  effect  regardless  of  the  consummation  of  the
transactions contemplated hereby, the repayment of the Loans and the termination
of the Commitments or the termination of this Credit  Agreement or any provision
hereof.

         Section 10.6 Counterparts; Integration

     This Agreement may be executed in  counterparts  (and by different  parties
hereto on different  counterparts),  each of which shall constitute an original,
but all of which, when taken together,  shall constitute but one contract.  This
Agreement and any separate letter agreements with respect to fees payable to any
Credit Party  constitute the entire  contract among the parties  relating to the
subject  matter  hereof  and  supersede  any and  all  previous  agreements  and
understandings, oral or written, relating to the subject matter hereof.

         Section 10.7 Severability

     In the event any one or more of the  provisions  contained  in this  Credit
Agreement should be held invalid,  illegal or unenforceable in any respect,  the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of  itself  affect  the  validity  of  such  provision  in any  other
jurisdiction).  The parties shall endeavor in good-faith negotiations to replace
the invalid,  illegal or  unenforceable  provisions  with valid  provisions  the
economic  effect of which  comes as close as  possible  to that of the  invalid,
illegal or unenforceable provisions.

         Section 10.8 Right of Setoff

     If an Event of Default shall have occurred and be  continuing,  each of the
Lenders and their  respective  Affiliates  is hereby  authorized at any time and
from time to time, to the fullest extent  permitted by applicable law, to setoff
and apply any and all deposits (general or special, time or demand,  provisional
or final) at any time held and other  obligations  at any time owing by it to or
for  the  credit  or the  account  of the  Borrower  against  any of and all the
obligations  of the  Borrower  now  or  hereafter  existing  under  this  Credit
Agreement  held by it,  irrespective  of  whether  or not it shall have made any
demand  under  this  Credit  Agreement  and  although  such  obligations  may be
unmatured.  The rights of each the Lenders and their respective Affiliates under
this  Section are in  addition to other  rights and  remedies  (including  other
rights of setoff) that it may have.

         Section 10.9 Governing Law; Jurisdiction; Consent to Service of Process

     (a) This Agreement shall be governed by, and construed in accordance  with,
the laws of the State of New York.

     (b) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property,  to the nonexclusive  jurisdiction of any New York State court
or Federal court of the United States of America  sitting in New York City,  and
any appellate court from any thereof, in any action or proceeding arising out of
or  relating  to this  Credit  Agreement  or the other  Loan  Documents,  or for
recognition  or  enforcement  of any  judgment,  and each of the parties  hereto
hereby irrevocably and  unconditionally  agrees that, to the extent permitted by
applicable  law, all claims in respect of any such action or  proceeding  may be
heard and  determined  in such New York  State or, to the  extent  permitted  by
applicable law, in such Federal court.  Each of the parties hereto agrees that a
final  judgment in any such action or proceeding  shall be conclusive and may be
enforced in other  jurisdictions  by suit on the judgment or in any other manner
provided by law.  Nothing in this Credit  Agreement  shall affect any right that
the  Administrative  Agent or any other Credit Party may otherwise have to bring
any action or  proceeding  relating to this Credit  Agreement  or the other Loan
Documents  against the Borrower,  or any of its  property,  in the courts of any
jurisdiction.

     (c) The Borrower hereby  irrevocably  and  unconditionally  waives,  to the
fullest  extent it may legally and  effectively do so, any objection that it may
now or hereafter  have to the laying of venue of any suit,  action or proceeding
arising out of or relating to this Credit  Agreement or the other Loan Documents
in any court  referred to in paragraph (b) of this Section.  Each of the parties
hereto hereby irrevocably  waives, to the fullest extent permitted by applicable
law, the defense of an  inconvenient  forum to the maintenance of such action or
proceeding in any such court.

     (d) Each party to this Credit Agreement  irrevocably consents to service of
process in the manner  provided  for  notices in Section  10.1.  Nothing in this
Credit  Agreement will affect the right of any party to this Credit Agreement to
serve process in any other manner permitted by law.

         Section 10.10 WAIVER OF JURY TRIAL

     EACH PARTY  HERETO  HEREBY  WAIVES,  TO THE  FULLEST  EXTENT  PERMITTED  BY
APPLICABLE  LAW,  ANY  RIGHT IT MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY
LITIGATION  DIRECTLY OR INDIRECTLY  ARISING OUT OF, UNDER OR IN CONNECTION  WITH
THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,  EXPRESSLY OR OTHERWISE,  THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER  AND (B)  ACKNOWLEDGES  THAT IT AND THE OTHER  PARTIES  HERETO  HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

         Section 10.11 Headings

     Article and Section  headings and the Table of Contents used herein are for
convenience of reference  only, are not part of this Credit  Agreement and shall
not affect the construction of, or be taken into  consideration in interpreting,
this Credit Agreement.

         Section 10.12 Interest Rate Limitation

     Notwithstanding  anything  herein  to  the  contrary,  if at any  time  the
interest rate applicable to any Loan,  together with all fees, charges and other
amounts  that  are  treated  as  interest  on such  Loan  under  applicable  law
(collectively the "charges"), shall exceed the maximum lawful rate (the "maximum
rate") that may be contracted for, charged,  taken,  received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in  respect of such Loan  hereunder,  together  with all of the  charges
payable in respect  thereof,  shall be limited to the  maximum  rate and, to the
extent  lawful,  the  interest  and the charges  that would have been payable in
respect of such Loan but were not payable as a result of the  operation  of this
Section  shall be  cumulated,  and the interest and the charges  payable to such
Lender in respect of other Loans or periods  shall be  increased  (but not above
the maximum rate therefor) until such cumulated  amount,  together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.

         Section 10.13 Effective Date

     This Agreement  shall be effective at such time (the  "Effective  Date") as
(i) executed  counterparts of this Credit Agreement shall have been delivered to
the Administrative  Agent by the Borrower and each Lender and the Administrative
Agent shall have delivered an executed  counterpart of this Credit  Agreement to
the  Borrower  and each Lender and (ii) all fees  payable to the  Administrative
Agent and the Lenders in connection  herewith on or prior to the Effective  Date
shall  have been  paid.  Delivery  of an  executed  counterpart  of this  Credit
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart of this Credit Agreement.

         Section 10.14 Treatment of Certain Information

     Each  Credit  Party   agrees  to  use   reasonable   precautions   to  keep
confidential,  in  accordance  with  their  customary  procedures  for  handling
confidential information of the same nature, all non-public information supplied
by the Borrower or any Subsidiary pursuant to this Credit Agreement which (a) is
clearly  identified by such Person as being confidential at the time the same is
delivered to such Credit Party,  or (b)  constitutes  any  financial  statement,
financial  projections  or  forecasts,  budget,  compliance  certificate,  audit
report,  management  letter or accountants'  certification  delivered  hereunder
("Information"),   provided,  however,  that  nothing  herein  shall  limit  the
disclosure  of any  such  Information  (i) to such of their  respective  Related
Parties  as need to know  such  Information,  (ii)  to the  extent  required  by
applicable  laws or regulations or by any subpoena or similar legal process,  or
requested by any bank regulatory  authority,  (iii) on a confidential  basis, to
prospective lenders or their counsel,  (iv) to auditors or accountants,  and any
analogous counterpart thereof, (v) to any other Credit Party, (vi) in connection
with any  litigation to which any one or more of the Credit  Parties is a party,
(vii) to the extent such Information (A) becomes  publicly  available other than
as a result of a breach of this Credit  Agreement,  (B) becomes available to any
of the Credit Parties on a  non-confidential  basis from a source other than the
Borrower or any  Subsidiary,  or (C) was  available  to the Credit  Parties on a
non-confidential basis prior to its disclosure to any of them by the Borrower or
any  Subsidiary;  and (viii) to the extent the Borrower  shall have consented to
such disclosure in writing.


<PAGE>


                            CENTRAL MAINE POWER COMPANY

                                CREDIT AGREEMENT

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

                                                     CENTRAL MAINE POWER COMPANY


                               By:
                                   ---------------------------------------------
                             Name:
                                   ---------------------------------------------
                            Title:
                                   ---------------------------------------------


<PAGE>

                          CENTRAL MAINE POWER COMPANY

                                CREDIT AGREEMENT



                                              THE BANK OF NEW YORK, individually
                                                     and as Administrative Agent


                               By:
                                   ---------------------------------------------
                             Name:
                                   ---------------------------------------------
                            Title:
                                   ---------------------------------------------


<PAGE>





                                           FLEET NATIONAL BANK, individually and
                                                            as Syndication Agent


                              By:
                                   ---------------------------------------------
                            Name:
                                   ---------------------------------------------
                           Title:
                                   ---------------------------------------------




<PAGE>




                                                           PEOPLES HERITAGE BANK


                               By:
                                   ---------------------------------------------
                             Name:
                                   ---------------------------------------------
                            Title:
                                   ---------------------------------------------




<PAGE>




                                       iii

                                TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS.......................................................1

   SECTION 1.1 DEFINED TERMS.................................................1
   SECTION 1.2 CLASSIFICATION OF LOANS AND BORROWINGS.......................18
   SECTION 1.3 TERMS GENERALLY..............................................18
   SECTION 1.4 ACCOUNTING TERMS; GAAP.......................................19

ARTICLE 2. THE CREDITS......................................................19

   SECTION 2.1 COMMITMENTS..................................................19
   SECTION 2.2 LOANS AND BORROWINGS.........................................19
   SECTION 2.3 REQUESTS FOR BORROWINGS......................................20
   SECTION 2.4 FUNDING OF BORROWINGS........................................21
   SECTION 2.5 TERMINATION AND REDUCTION OF COMMITMENTS.....................21
   SECTION 2.6 REPAYMENT OF LOANS; EVIDENCE OF DEBT.........................22
   SECTION 2.7 PREPAYMENT OF BORROWINGS.....................................23
   SECTION 2.8 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SETOFFS...23

ARTICLE 3. INTEREST, FEES, YIELD PROTECTION, ETC............................25

   SECTION 3.1 INTEREST.....................................................25
   SECTION 3.2 INTEREST ELECTIONS...........................................26
   SECTION 3.3 FEES27
   SECTION 3.4 ALTERNATE RATE OF INTEREST...................................28
   SECTION 3.5 INCREASED COSTS; ILLEGALITY..................................28
               ---------------------------
   SECTION 3.6 BREAK FUNDING PAYMENTS.......................................30
   SECTION 3.7 TAXES........................................................31
   SECTION 3.8 MITIGATION OBLIGATIONS.......................................31

ARTICLE 4. REPRESENTATIONS AND WARRANTIES...................................32

   SECTION 4.1 ORGANIZATION; POWERS.........................................32
   SECTION 4.2 AUTHORIZATION; ENFORCEABILITY................................33
   SECTION 4.3 GOVERNMENTAL APPROVALS; NO CONFLICTS.........................33
   SECTION 4.4 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE..............34
   SECTION 4.5 PROPERTIES...................................................34
   SECTION 4.6 LITIGATION AND ENVIRONMENTAL MATTERS.........................34
   SECTION 4.7 COMPLIANCE WITH LAWS AND AGREEMENTS..........................36
   SECTION 4.8 INVESTMENT AND HOLDING COMPANY STATUS........................36
   SECTION 4.9 TAXES........................................................36
   SECTION 4.10 ERISA.......................................................36
   SECTION 4.11 DISCLOSURE..................................................37
   SECTION 4.12 SIGNIFICANT SUBSIDIARIES....................................37
   SECTION 4.13 LABOR MATTERS...............................................37
   SECTION 4.14 SECURITY AGREEMENT..........................................37
   SECTION 4.15 FEDERAL RESERVE REGULATIONS.................................38
   SECTION 4.16 YEAR 2000 ISSUE.............................................38

ARTICLE 5. CONDITIONS.......................................................38

   SECTION 5.1 FIRST LOANS..................................................38
   SECTION 5.2 EACH CREDIT EVENT............................................41

ARTICLE 6. AFFIRMATIVE COVENANTS............................................41

   SECTION 6.1 FINANCIAL STATEMENTS AND OTHER INFORMATION...................41
   SECTION 6.2 NOTICES OF MATERIAL EVENTS...................................42
   SECTION 6.3 EXISTENCE; CONDUCT OF BUSINESS...............................43
   SECTION 6.4 PAYMENT OF OBLIGATIONS.......................................43
   SECTION 6.5 MAINTENANCE OF PROPERTIES....................................43
   SECTION 6.6 BOOKS AND RECORDS; INSPECTION RIGHTS.........................43
   SECTION 6.7 COMPLIANCE WITH LAWS.........................................44
   SECTION 6.8 USE OF PROCEEDS..............................................44
   SECTION 6.9 INFORMATION REGARDING COLLATERAL.............................44
   SECTION 6.10 INSURANCE...................................................45
   SECTION 6.11 FURTHER ASSURANCES..........................................45
   SECTION 6.12 ENVIRONMENTAL COMPLIANCE....................................45

ARTICLE 7. NEGATIVE COVENANTS...............................................45

   SECTION 7.1 INDEBTEDNESS.................................................46
   SECTION 7.2 LIENS........................................................47
   SECTION 7.3 FUNDAMENTAL CHANGES..........................................48
   SECTION 7.4 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS....49
   SECTION 7.5 ASSET SALES..................................................50
   SECTION 7.6 HEDGING AGREEMENTS...........................................51
   SECTION 7.7 RESTRICTED PAYMENTS..........................................51
   SECTION 7.8 TRANSACTIONS WITH AFFILIATES.................................52
   SECTION 7.9 RESTRICTIVE AGREEMENTS.......................................52
   SECTION 7.10 AMENDMENT OF MATERIAL DOCUMENTS.............................52
   SECTION 7.11 INTEREST COVERAGE RATIO.....................................52
   SECTION 7.12 CAPITALIZATION RATIO........................................52

ARTICLE 8. EVENTS OF DEFAULT................................................53

ARTICLE 9. THE ADMINISTRATIVE AGENT.........................................55

ARTICLE 10. MISCELLANEOUS...................................................57

   SECTION 10.1 NOTICES.....................................................57
   SECTION 10.2 WAIVERS; AMENDMENTS.........................................58
   SECTION 10.3 EXPENSES; INDEMNITY; DAMAGE WAIVER..........................59
   SECTION 10.4 SUCCESSORS AND ASSIGNS......................................60
   SECTION 10.5 SURVIVAL....................................................62
   SECTION 10.6 COUNTERPARTS; INTEGRATION...................................62
   SECTION 10.7 SEVERABILITY................................................63
   SECTION 10.8 RIGHT OF SETOFF.............................................63
   SECTION 10.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS..63
   SECTION 10.10 WAIVER OF JURY TRIAL.......................................64
   SECTION 10.11 HEADINGS...................................................64
   SECTION 10.12 INTEREST RATE LIMITATION...................................64
   SECTION 10.13 EFFECTIVE DATE.............................................65
   SECTION 10.14 TREATMENT OF CERTAIN INFORMATION...........................65

SCHEDULES:

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Schedule 2.1                   List of Commitments

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Schedule 4.6                   Disclosed Matters

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Schedule 4.12                  List of Subsidiaries

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Schedule 7.1                   List of Existing Indebtedness

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Schedule 7.2                   List of Existing Liens

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Schedule 7.4(a)(i)             List of Permitted Investments

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Schedule 7.4(a)(ii)            List of Existing Investments

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EXHIBITS:

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Exhibit A                      Form of Assignment and Acceptance

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Exhibit B                      Reserved

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Exhibit C                      Form of Note

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