Execution Copy

                              
                              
                 REVOLVING CREDIT AGREEMENT
                              
                              
                        by and among
                              
                    COLONIAL GAS COMPANY
                      (the "Company"),
                              
                FLEET NATIONAL BANK, as Agent
                       (the "Agent"),
                              
              THE BANK OF NEW YORK, as co-agent
                      (the "Co-Agent")
                              
                             and
                              
                    THE BANK OF NEW YORK,
               UNION BANK OF CALIFORNIA, N.A.,
                   CORESTATES BANK, N.A.,
                  FIRST UNION NATIONAL BANK
                             and
                     FLEET NATIONAL BANK
                (collectively, the "Banks"),
                              
                              
                              
                         $75,000,000
                              
                              
                              
                     September 12, 1997

                      TABLE OF CONTENTS
                              

Section                                                 Page

1.  DEFINITIONS                                         

2.  THE REVOLVING CREDIT ADVANCES                      

     2.1. The Revolving Credit Advances                
     2.2. Making the Advances                          
     
3.  COMPETITIVE BID ADVANCES                           

     3.1. Competitive Bid Borrowings                   
     3.2. Interest on Competitive Bid Advances         
     3.3. Competitive Bid Notes                        
     
4.   CONVERSION, INTEREST, PAYMENTS AND COSTS           

     4.1.  Conversion of Advances                       
     4.2.  Interest                                     
     4.3.  Overdue Principal and Interest               
     4.4.  Limitation on Interest                       
     4.5.  Interest Period and Rate Determination and
              Protection                               
     4.6.  Increased Costs, Etc.                        
     4.7.  Illegality or Impossibility                  
     4.8.  Payment on Any Day Other Than The Last Day of an
              Interest Period                          
     4.9.  Prepayments                                  
     4.10. Payments and Computations                          
     4.11. Payment on Non-Business Days                       
     4.12. Sharing of Payments, Etc.                          
     
5.   COMMITMENTS                                        

     5.1.  Amount of Commitment                         
     5.2.  Extension of Commitments                     
     5.3.  Commitment Fees                              
     5.4.  Reduction and Termination by the Company     
     
6.  CONDITIONS OF FIRST LENDING                        

     6.1.  Documentation                                
     6.2.  Financial Statements                         
     6.3.  Representations and Warranties               
     6.4.  Performance; No Default                      
     6.5.  Trust Credit Agreement                       
     6.6.  Proceedings and Documents                    
     6.7.  Notice of Borrowing                          

7.   CONDITIONS OF SUBSEQUENT BORROWINGS                

     7.1.  Representations and Warranties               
     7.2.  Performance; No Default                      
     7.3.  Notes in Full Force and Effect               
     
8.   REPRESENTATIONS AND WARRANTIES                     

     8.1.  Corporate Existence and Good Standing, Etc.  
     8.2.  Corporate Power; Consents; Absence of Conflict
              with Other Agreements, Etc.              
     8.3.  Title to Properties; Leases                  
     8.4.  Financial Statements                         
     8.5.  No Material Changes, Etc.                    
     8.6.  Franchises, Patents, Copyrights, Etc.        
     8.7.  Litigation                                   
     8.8.  No Material Adverse Contracts, Etc.          
     8.9.  Compliance  with Other Instruments,  
             Laws,  Etc.
     8.10. Tax Status                                             
     8.11. Absence of Security Interests, Etc.                
     8.12. Use of Proceeds                                        
     8.13. Pension Plan                                       
     8.14. Subsidiaries                                       
     8.15. Disclosure                                         
     8.16. Investment Company; Public Utility Holding
              Company                                  
     8.17. Environmental Matters                 

9.   EXEMPT CHARACTER OF TRANSACTION                    

10.  AFFIRMATIVE COVENANTS                             

     10.1.  Punctual Payment                                   
     10.2.  Maintenance of Office                              
     10.3.  Reports, Certificates and Other Information        
     10.4.  Existence and Franchises                           
     10.5.  Payments of Taxes                                  
     10.6.  Maintenance of Property                            
     10.7.  Books, Records and Inspections                     
     10.8.  Employee Benefit Plans                             
     10.9.  Copies of Employee Benefit Plan Reports            
     10.10. Further Assurances                                 
     10.11. Securities Law, Etc. Compliance                    
     10.12. Insurance                                          
     10.13. Payment  of Indebtedness and Performance of Obligations
     10.14. Change of Corporate Name                           
     
11.  CERTAIN NEGATIVE COVENANTS                        

     11.1.  Debt
     11.2.  Liens
     11.3.  Guaranties, Loans or Advances                      
     11.4.  Investments                                        
     11.5.  Subsidiaries                                       
     11.6.  Other Agreements                                   
     11.7.  Merger, Consolidation, or Sale of Assets           
     11.8.  Debt to Capitalization Ratio                      
     11.9.  Interest Coverage Ratio                            
     11.10. Terminate Pension Plan                             
     11.11. Pension Plan Distribution                          
     11.12. Indenture                                          
     11.13. Leases                                             
     11.14. Debt Payments                                           
     11.15. Dividends; Distributions                           
     11.16. Alterations to Fuel Purchase Contract              
     
12.  EVENTS OF DEFAULT; ACCELERATION                    

13.  NOTICE AND WAIVERS OF DEFAULT                      

     13.1.  Notice of Default                                  
     13.2.  Waivers of Default                                 
     
14.  REMEDIES ON DEFAULT, ETC.                          

     14.1.  Rights of Banks                                    
     14.2.  Setoff                                             
     
15.  THE AGENT                                          

15A. THE CO-AGENT                                                

16. CONSENT TO JURISDICTION                            

17. BINDING EFFECT AND ASSIGNMENT                      

18. EXECUTION IN COUNTERPARTS                          

19. SURVIVAL OF COVENANTS, ETC.                        

20. NOTICE, ETC.                                       

21. GOVERNING LAW                                      

22. MISCELLANEOUS                                      

23. ENTIRE AGREEMENT, ETC.                             

24. CONSENTS, AMENDMENTS, WAIVERS, ETC.                

25. PARTICIPATIONS                                     

26. EXPENSES; INDEMNIFICATION                          

27. HEADINGS                                           

28. WAIVER OF JURY TRIAL                               



                                                            
                 REVOLVING CREDIT AGREEMENT


     REVOLVING  CREDIT AGREEMENT dated as of  September  12,
1997,  by  and  among COLONIAL GAS COMPANY, a  Massachusetts
corporation  (the "Company"), THE BANK OF  NEW  YORK,  UNION
BANK OF CALIFORNIA, N.A., CORESTATES BANK, N.A., FIRST UNION
NATIONAL  BANK  and  FLEET NATIONAL BANK  (collectively  the
"Banks"),  THE BANK OF NEW YORK, as co-agent for  the  Banks
(the  "Co-Agent"), and FLEET NATIONAL BANK, as agent of  the
Banks (the "Agent").
     
     1.   DEFINITIONS.  The following terms shall have  the
meanings  assigned  to  them below in  this  1  or  in  the
provisions  of  this  Agreement  and  the  Exhibits   hereto
referred to below:
     
     Absolute  Rate  -  a fixed rate of interest  per  annum
(computed  on  the basis of a 360-day year  for  the  actual
number of days elapsed and expressed in decimals to 1/10,000
of 1%).
     
     Acquisition  -  any transaction consummated  after  the
date of this Agreement by which the Company (i) acquires any
going business or all or substantially all of the assets  of
any  firm, corporation or division thereof which is  in  the
gas  distribution,  gas  pipeline,  cogeneration,  alternate
energy  or trucking businesses, whether through purchase  of
assets, merger, consolidation or otherwise, or (ii) acquires
(in  one transaction or as the most recent transaction in  a
series   of  transactions)  at  least  a  majority  of   the
securities (having ordinary voting power for the election of
directors)  of  a  corporation  which  is  in  one  of   the
businesses described in clause (i) above.
     
     Advance  -  an  advance by a Bank to  the  Company  (i)
pursuant  to  2, whether a Base Rate Advance or  Eurodollar
Rate  Advance  or  (ii) pursuant to 3,  a  Competitive  Bid
Advance (each of which shall be a Type of Advance).
     
     Agent - has the meaning specified in the preamble.
     
     Agent's Fee - has the meaning specified in 5.3(b).
     
     Agent's  Special  Counsel -  Gadsby  &  Hannah  LLP  of
Boston,  Massachusetts,  or such other  counsel  as  may  be
approved by the Agent.
     
     Alternate Base Rate - for any day, will be the  greater
of  (i)  the Base Rate announced from time to time by  Fleet
National Bank at its head office in Boston as its base  rate
or  (ii)  1/2%  per annum above the Federal Funds  Effective
Rate in effect from time to time.
     
     Applicable  Eurodollar Rate Margin -  on  any  date  of
determination,  the  percentage per annum  set  forth  below
opposite the Company's Standard & Poors Rating on such date;
provided, that if no Standard & Poors Rating is in effect on
any  such date, the Applicable Eurodollar Rate Margin  shall
be  the highest Applicable Eurodollar Rate Margin set  forth
below  (and  in  the event the Company wishes  to  designate
another nationally recognized rating service in addition  to
or other than Standard & Poors Rating Group, the Company and
the Banks will negotiate in good faith to amend the schedule
set  forth  below to take account of such new or  additional
rating; provided, that until agreement on such amendment  is
reached, the last effective rating of Standard & Poors shall
be  deemed to continue in effect for purposes of determining
the Applicable Eurodollar Rate Margin):
     
        Standard & Poors        Applicable Eurodollar
            Rating                 Rate Margin
                 
           A                         0.180%
           A-                        0.200%
           BBB+                      0.250%
           BBB                       0.335%
           less than BBB             0.425%
     
     Applicable  Facility  Fee  Rate  -  on  any   date   of
determination,  the  percentage per annum  set  forth  below
opposite the Company's Standard & Poors Rating on such date;
provided, that if no Standard & Poors Rating is in effect on
any such date, the Applicable Facility Fee Rate shall be the
highest Applicable Facility Fee Rate set forth below (and in
the event the Company wishes to designate another nationally
recognized  rating  service in addition  to  or  other  than
Standard  & Poors, the Company and the Banks will  negotiate
in  good faith to amend the schedule set forth below to take
account  of  such new or additional rating;  provided,  that
until  agreement  on  such amendment is  reached,  the  last
effective  rating  of Standard & Poors shall  be  deemed  to
continue   in   effect  for  purposes  of  determining   the
Applicable Facility Fee Rate):
     
        Standard & Poors         Applicable Facility
           Rating                     Fee Rate
                
           A                           0.075%
           A-                          0.080%
           BBB+                        0.950%
           BBB                         0.120%
           less than BBB               0.200%
     
     Applicable Lending Office - with respect to each  Bank,
such  Bank's Domestic Lending office in the case of  a  Base
Rate  Advance  or Competitive Bid Advance, and  such  Bank's
Eurodollar  Lending Office(s) in the case  of  a  Eurodollar
Advance.
     
     Assessment  Rate  - for any Interest  Period,  the  net
annual  assessment rate (rounded upwards, if  necessary,  to
the  next higher 1/100 of 1%) applicable to the Agent on its
insured  deposits under the Federal Deposit  Insurance  Act,
determined by annualizing the most recent assessment  levied
on  the  Agent by the Federal Deposit Insurance  Corporation
(the "FDIC") with respect to such deposits.
     
     Assignee - has the meaning set forth in 17.
     
     Available Commitment - as of any date of determination,
the  excess  of  (a)  the Maximum Commitment  over  (b)  the
aggregate  principal amount of Advances outstanding  to  the
Trust under the Trust Credit Agreement.
     
     Banks - has the meaning specified in the preamble.
     
     Base Rate Advance - an Advance which bears interest  at
the Alternate Base Rate.
     
     Borrowing - simultaneous Advances made hereunder to the
Company by the Banks.
     
     Boston  -  the  City of Boston in The  Commonwealth  of
Massachusetts in the United States of America.
     
     Business Day - (i) in the case of a Business Day  which
relates  to  a Eurodollar Advance, any day of  the  year  on
which banks are open for business in Boston, London, and New
York  and  on which dealings are carried on in the interbank
market and in the country where payment is to be made in the
currency of such Advances and (ii) in the case of a Business
Day  which relates to a Base Rate Advance or Competitive Bid
Advance,  any  day of the year on which banks are  open  for
business in New York and Boston.
     
     Capitalized Leases - leases in which the Company  or  a
Subsidiary  is the lessee and the future rental  obligations
of  which  are  reflected as a liability  on  the  Company's
consolidated balance sheet in accordance with GAAP.
     
     Closing Date - the date of the First Lending.
     
     Co-Agent - has the meaning specified in the preamble.
     
     Collateral - has the meaning set forth in 29.
     
     Commitment   -  as  to  each  Bank  on  any   date   of
determination, the Maximum Commitment then in  effect  times
the Commitment Percentage.
     
     Commitment Percentage - as to each Bank on any date  of
determination,  the  percentage  figure  set  opposite  such
Bank's name in 5.1.
     
     Company - has the meaning specified in the preamble.
     
     Competitive  Bid Advance - an Advance made pursuant  to
3 hereof by a Bank pursuant to a Competitive Bid Auction.
     
     Competitive Bid Auction - a solicitation of Competitive
Bids setting forth Competitive Bid Rates pursuant to 3.
     
     Competitive  Bid Notes - has the meaning set  forth  in
3.3.
     
     Competitive Bid Quote - an offer by a Bank  to  make  a
Competitive Bid Advance in accordance with 3.1(d)
     
     Competitive  Bid Rate - has the meaning  set  forth  in
3.1(d)(ii)(C).
     
     Compliance  Certificate - has the meaning specified  in
10.3(c).
     
     Consent  and Agreement - has the meaning specified  for
such term in the Security Agreement.
     
     Consolidated Capitalization - an amount determined on a
consolidated basis in accordance with GAAP equal to the  sum
of  Consolidated Common Equity plus preferred stock  of  the
Company plus Debt.
     
     Consolidated Common Equity - an amount determined on  a
consolidated basis in accordance with GAAP, equal to the sum
of  (a) the capital accounts, excluding preferred stock,  of
the Company and its Subsidiaries plus (b) the earned surplus
(or  deficit)  and capital surplus of the  Company  and  its
Subsidiaries, after eliminating intercompany items.
     
     Consolidated   Net  Income  -  for  any   period,   the
consolidated net income (or net loss) of the Company and its
Subsidiaries,  after  deduction of all expenses,  taxes  and
other  proper  charges and after eliminating  therefrom  all
extraordinary  items of income and expenses, all  determined
in accordance with GAAP.
     
     Convert,   Conversion,  and  Converted  -   refers   to
Conversion of Base Rate Advances or Eurodollar Rate Advances
into any other Type of Advance pursuant to 4.1.
     
     Debt  - means at any time obligations under Capitalized
Leases  and  all  obligations of the  Company  evidenced  by
bonds, debentures, letters of credit, notes or other similar
instruments and all other evidences of indebtedness  of  the
Company  (including, without limitation,  indebtedness  with
maturities  of  less than one year and the  Mortgage  Debt),
created,  issued, guaranteed, incurred or assumed for  money
borrowed  or  for the deferred (for a period  materially  in
excess  of  the  Company's present  customary  practices  in
similar transactions) purchase price of property or services
purchased,  and  any other instrument or  arrangement  which
would  be  treated  as indebtedness under  GAAP,  excluding,
however,  accounts payable (other than for  borrowed  money)
and  accrued  costs and expenses incurred  in  the  ordinary
course  of business, provided that the same are not  overdue
for  90 days or more in a material amount or, if overdue for
90 days or more in a material amount, are being contested in
good  faith  and  by appropriate proceedings  and  reserves,
which  are adequate in accordance with GAAP, have  been  set
aside therefor.
     
     Default(s) - has the meaning specified in 12.
     
     Domestic Lending Office - with respect to any Bank, the
office  of  such  Bank  specified as its  "Domestic  Lending
Office" below its name on the signature pages hereof or such
other office or affiliate of such Bank as such Bank may from
time to time specify to the Borrowers and the Agent.
     
     DPU  - means the Department or Public Utilities of  The
Commonwealth of Massachusetts.
     
     EBIT  -  means  for any period an amount equal  to  the
Consolidated  Net  Income plus, to the  extent  deducted  in
computing Consolidated Net Income, (a) interest, (b) Federal
and state income taxes and (c) extraordinary items.
     
      Environmental  Law  -  any federal,  state,  or  local
statutory  or common law, ordinance, rule or regulation,  in
existence  on  the  applicable date, relating  to  Hazardous
Materials  (as  defined herein), pollution or protection  of
public  health, safety or the environment, including without
limitation, any common law of nuisance or trespass; any law,
rule   or  regulation  relating  to  emissions,  discharges,
releases  or threatened releases of pollutants, contaminants
or  chemicals, or industrial, toxic or hazardous  substances
or waste into the environment (including without limitation,
ambient  air, surface water, ground water, land  surface  or
subsurface  strata) or otherwise relating to  the  presence,
generation,  manufacture,  processing,  distribution,   use,
treatment,  storage,  disposal,  transport  or  handling  of
pollutants,  contaminants or chemicals or industrial,  toxic
or  hazardous  substances or wastes; and any  law,  rule  or
regulation  relating  to  solid waste,  water  quality,  air
quality,  wetlands protection, sanitary waste  disposal,  or
environmental impact review.

       Environmental   Notice  -  any   summons,   citation,
directive,   information  request,   notice   of   potential
responsibility,  notice of violation or  deficiency,  order,
claim,   complaint,  investigation,  proceeding,   judgment,
letter  or  other communication, written or oral, actual  or
threatened, from the United States Environmental  Protection
Agency or other federal, state or local agency or authority,
or  any  other  entity  or individual,  public  or  private,
concerning any intentional or unintentional act or  omission
which involves Management of Hazardous Substances on or  off
any  property owned or leased by the Company, any  affiliate
of  the  Company  or any guarantor of the  Obligations;  the
imposition of any lien on such property, including  but  not
limited   to  liens  asserted  by  government  entities   in
connection  with  Responses to the presence  or  Release  of
Hazardous  Substances;  and  any  alleged  violation  of  or
responsibility under Environmental Laws;

     ERISA  -  means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
     
     Eurodollar Advance - shall mean any Advance which bears
interest at a rate determined by reference to the Eurodollar
Rate (Reserve Adjusted).
     
     Eurodollar Lending Office - shall mean with respect  to
any  Bank  the office of such Bank designated as such  below
its  name on the signature pages hereof or such other office
or  offices of such Bank (as designated from time to time by
notice  from  such Bank to the Company and the Agent)  which
shall  be  making or maintaining the Eurodollar Advances  of
such  Bank hereunder or such other office or offices through
which   such  Bank  determines  its  Eurodollar   Rate.    A
Eurodollar Office of any Bank may be, at the option of  such
Bank,  either  a  domestic office or foreign office  located
within Europe, the Caribbean or the Bahamas.
     
     Eurodollar  Rate  -  with  respect  to  any  Eurodollar
Advance for any Interest Period, the rate per annum equal to
the average of the respective rates notified to the Agent by
the  Reference  Bank  as  the rate at  which  United  States
dollars  in immediately available funds are offered  to  the
Eurodollar Lending Office of the Reference Bank two Business
Days prior to the beginning of such Interest Period by prime
banks in any interbank market selected by the Reference Bank
at  or  about  the  relevant local time of  such  Eurodollar
Lending  Office,  for  delivery on the  first  day  of  such
Interest  Period,  for the number of days comprised  therein
and  in  an amount equal or comparable to the amount of  the
Eurodollar Advance of the  Reference Bank for such  Interest
Period.   As used herein, "relevant local time"  as  to  any
Eurodollar  Office shall mean 11:00 A.M., London time,  when
such  Eurodollar  Lending Office is located  in  Europe,  or
10:00 A.M., Boston time, when such Eurodollar Lending Office
is located in North America, the Caribbean or the Bahamas.
     
     Eurodollar  Rate (Reserve Adjusted) - with  respect  to
any  Eurodollar Advance for any Interest Period, a rate  per
annum  equal  to the sum of (i) the rate per annum  (rounded
upwards,  if  necessary,  to  the  nearest  1/100   of   1%)
determined pursuant to the following formula:
     
Eurodollar Rate*    =   Eurodollar Rate +   Applicable Eurodollar 
(Reserve Adjusted)                   Rate Margin
                        _________________________________________
                           1 - Eurodollar Reserve Percentage

     *To  be  rounded  upwards, if necessary,  to  the  next
higher 1/16 of 1%.
     
     Eurodollar  Reserve  Percentage  -  shall  mean,   with
respect  to  each Interest Period, the percentage (expressed
as  a  decimal)  equal  to  the daily  average  during  such
Interest Period of the percentages in effect on each day  of
such Interest Period as prescribed by the Board of Governors
of  the  Federal  Reserve  System  (or  any  successor)  for
determining  reserve requirements applicable to  "Eurodollar
Liabilities"  pursuant to Regulation D  or  any  other  then
applicable  regulation  of  the  Board  of  Governors  which
prescribes  reserve requirements applicable  to  "Eurodollar
Liabilities" as presently defined in Regulation D.
     
     Event(s) of Default - has the meaning specified in 12.
     
     Facility Fee - has the meaning specified in 5.3(a).
     
     Federal Funds Effective Rate - 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 for the prior day by
the Federal Reserve Bank of Boston.
     
     First  Lending - the first Advance made to the  Company
hereunder.
     
     Fuel  Purchase Contract - the Purchase Contract,  dated
as  of June 27, 1990, between the Trust and the Company,  as
amended and in effect on the Closing Date.
     
     GAAP  - in general, principles which are (a) consistent
with  the principles promulgated or adopted by the Financial
Accounting   Standards  Board  and  its   predecessors   (or
successor organizations), in effect for the fiscal  year  of
the  Company  ended  December 31, 1996  and  (b)  such  that
certified  public accountants would, insofar as the  use  of
accounting  principles is pertinent, be  in  a  position  to
deliver an unqualified opinion as to financial statements in
which  such principles have been properly applied; provided,
however, that for purposes of the financial statements to be
delivered by the Company pursuant to 11 hereof, GAAP  shall
mean such principles as in effect for the periods covered by
such financial statements.
     
     Guaranteed  Pension  Plan  -  means  any  pension  plan
maintained by the Company or any Subsidiary or to which  any
of them contributes, the benefits under which are guaranteed
in  whole  or  in  part  by  the  Pension  Benefit  Guaranty
Corporation.
     
      Hazardous  Substance - any substance or  material  (i)
identified  in Section 101(14) of CERCLA, 42 USC   9601(14)
and  as  set forth in Title 40, Code of Federal Regulations,
Part  302, as the same may be amended from time to time,  or
(ii) determined to be or identified as toxic, a pollutant or
contaminant,  or regulated as such under federal,  state  or
local  statute,  law,  ordinance,  rule,  or  regulation  or
judicial or administrative order or decision, as same may be
amended  from time to time.  The term "Hazardous  Substance"
as  used herein shall also include any substance or material
presently  or  hereafter identified defined  or  treated  as
toxic   or  hazardous  in  any  manner  according   to   any
Environmental  Law  or, including, without  limitation,  any
oil,   lead   paint,   herbicides,   pesticides,   asbestos,
polychlorinated  biphenyls,  radon,  radioactive  substance,
methane,  volatile hydrocarbons, acids, pesticides,  paints,
petroleum-based  products, liquefied  natural  gas,  gas  in
vapor form, propane, lead, cyanide, DDT, printing inks,  and
industrial solvents.

     Indemnified Party - has the meaning specified in 26.
     
     Indenture  -  the  Second Amended  and  Restated  First
Mortgage  Indenture, dated as of June 15, 1992, between  the
Company  and  State  Street  Bank  and  Trust  Company,   as
successor  trustee, as supplemented by the First and  Second
Supplemental   Indentures,   the   Amendment    to    Second
Supplemental Indenture and the Third Supplemental  Indenture
and  as  amended  from time to time in accordance  with  its
terms.
     
     Independent  Accountant - a firm of independent  public
accountants  selected  by  the Board  of  Directors  of  the
Company,  which is "independent" as that term is defined  in
Rule  2-01  of Regulation S-X promulgated by the  Securities
and  Exchange Commission and is reasonably acceptable to the
Agent.
     
     Interest Charges - for any period, the expenses of  the
Company and its Subsidiaries for such period for interest on
Debt (including the current portion thereof), determined  in
accordance  with GAAP, including Facility Fees, Agent's  Fee
and  similar  expenses in connection with the  borrowing  of
money  but excluding the interest component of the Company's
obligations  under the Fuel Purchase Contract,  and  net  of
regulatory interest.
     
     Interest  Coverage Ratio - means the ratio of  EBIT  to
Interest   Charges  calculated  quarterly   based   on   the
immediately preceding four quarters.
     
     Interest Payment Date - (a) for any Eurodollar Advance,
the  last day of each Interest Period for such Advance,  (b)
for  any Base Rate Advance any date when interest is due and
payable   as  provided  in  4.2(a)  hereof,  and  (c)   for
Competitive Bid Advances, any date when interest is due  and
payable as provided under 3.2 hereof.
     
     Interest Period -
     
          (a)   with  respect  to  each  Eurodollar  Advance
comprising the same Borrowing:
          
          (i)   initially, the period (A) commencing on  the
     date  of such Borrowing or, in the case of a Conversion
     into  Eurodollar Advances pursuant to 4.1,  commencing
     on  the date of such Conversion and (B) ending one (1),
     two  (2),  three (3), or six (6), months thereafter  as
     determined  in accordance with the provisions  of  this
     Agreement; and
          
          (ii)  thereafter, each subsequent Interest  Period
     for Eurodollar Advances shall begin on the last day  of
     the  immediately  preceding Interest  Period  for  such
     Advances and shall end one (1), two (2), three (3),  or
     six  (6),  months thereafter as the Company may  select
     pursuant  to 4.5; provided that (A) any such  Interest
     Period which would otherwise end on a day which is  not
     a Business Day shall be extended to the next succeeding
     Business Day unless such Business Day occurs in  a  new
     calendar  month,  in  which case such  Interest  Period
     shall  end on the next preceding Business Day  and  (B)
     any  such  Interest Period which begins on  a  day  for
     which there is no numerically corresponding day in  the
     calendar month during which such Interest Period is  to
     end shall end on the last Business Day of such calendar
     month.
          
          (b)   With respect to each Base Rate Advance,  the
period  commencing on the date of such Advance and  expiring
on  the date when the Base Rate Advance is repaid or, as the
case may be, Converted to another Type of Advance.
          
          (c)  With respect to each Competitive Bid Advance,
the period commencing on the date of such Advance and ending
not  less than 7 days and not more than 180 days thereafter,
as the Company may elect in accordance with 3 hereof.
          
     No Interest Period may be selected in respect to all or
any  portion  of  any Advance (other than a Competitive  Bid
Advance) which would expire on a date which occurs after the
Maturity  Date  for  the then Outstanding  Revolving  Credit
Notes  of the Company and no Interest Period may be selected
in  respect of all or any portion of any Advance which would
expire after the Termination Date or on a date which is  not
a Business Day.
     
     Loan  Documents  -  collectively, this  Agreement,  the
Notes,  the  Security Documents and any other  documents  or
instruments required to be delivered by the Company pursuant
hereto or thereto.
     
     London - the City of London in England.
     
     Majority Banks - at any time, the Bank or Banks holding
at least 66 2/3% of the aggregate unpaid principal amount of
the Advances (excluding Competitive Bid Advances), or, if no
Advances  (excluding Competitive Bid Advances)  are  at  the
time  outstanding, having at least 66 2/3% of the  aggregate
amount of the Commitments then in effect.

       Manage   or   Management  -  to   generate,   handle,
manufacture,  process, treat, store,  use,  re-use,  refine,
recycle,   reclaim,  blend  or  burn  for  energy  recovery,
incinerate,  accumulate speculatively, transport,  transfer,
dispose   of,  Release,  threaten  to  Release  or   abandon
Hazardous Substances;

      "Material Adverse Change" - a material adverse  change
in  the  business, assets, liabilities, condition (financial
or  otherwise), results of operations or business  prospects
of (a) the Trust, (b) the Company or (c) the Company and its
Subsidiaries  "taken as a whole" which would  reasonably  be
expected  to  render  the  Company  unable  to  perform  its
obligations  under the Loan Documents.  The  term  "Material
Adverse  Change"  shall  include,  without  limitation,  any
change in any law, regulation, treaty or directive or in the
interpretation  or application thereof by  any  Governmental
Body  charged with the administration thereof or  compliance
by  the  Borrowers  with any request or directive  from  any
Governmental Body the result of which would have a  Material
Adverse Effect.

      "Material  Adverse Effect" - (a) with respect  to  any
Person (including, without limitation, the Borrowers and the
Subsidiaries),  any  materially  adverse  effect   on   such
Person's business, assets, liabilities, condition (financial
or  otherwise), results of operations or business prospects,
(b)  with  respect to a group of Persons "taken as a  whole"
(including,  without  limitation,  the  Borrowers  and   the
Subsidiaries),  any  materially  adverse  effect   on   such
Persons'    business,    assets,   liabilities,    financial
conditions,  results  of operations  or  business  prospects
taken as a whole on, where appropriate, a consolidated basis
in  accordance with GAAP and (c) with respect to any of this
Agreement, the Notes or the Security Documents, any  adverse
effect,  WHETHER  OR  NOT MATERIAL, on the  binding  nature,
validity or enforceability thereof as an obligation  of  the
Borrowers.
     
     Maturity Date - has the meaning specified in 2.2(h).
     
     Maximum  Commitment - as of any date of  determination,
the lesser of (a) $75,000,000 or (b) the amount to which the
Maximum  Commitment may have been reduced pursuant to  5.4;
provided,  that  if  the obligations of the  Banks  to  make
further advances are terminated pursuant to 12, the Maximum
Commitment as of any date of determination thereafter  shall
be deemed to be zero.
     
     Mortgage  Debt  - all bonds now outstanding  under  the
Indenture as shown on the financial statements delivered  to
the  Banks as contemplated by 6.2 and any additional  bonds
which may from time to time be issued in accordance with the
terms of the Indenture.
     
     Notes  -  collectively, the Revolving Credit Notes  and
the Competitive Bid Notes.
     
     Notice  of  Borrowing  - has the meaning  specified  in
2.2(a).
     
     Obligations   -   all  indebtedness,  obligations   and
liabilities  to  the  Banks, individually  or  collectively,
existing   on  the  date  of  this  Agreement   or   arising
thereafter,  direct or indirect, joint or several,  absolute
or   contingent,   matured  or  unmatured,   liquidated   or
unliquidated,  secured or unsecured,  arising  by  contract,
operation  of  law  or otherwise of the Company  arising  or
incurred under this Agreement or in respect of Advances made
or instruments at any time evidencing any of the foregoing.
     
     Officer's  Certificate - a certificate  signed  by  the
President,   Executive  Vice  President,  any  Senior   Vice
President,  the Vice President-Finance or Treasurer  of  the
corporation on whose behalf the certificate is executed.
     
     Outstanding - when used with reference to the aggregate
balance  of Advances, means and includes, as at any date  of
determination, the unpaid principal amount of the Advances.
     
     Pension  Benefit  Guaranty Corporation  -  the  Pension
Benefit  Guaranty Corporation created by 4002 of ERISA  and
any successor entities having similar responsibilities.
     
     Person  -  any  individual,  corporation  (including  a
business    trust),   partnership,   trust,   unincorporated
association, joint stock company, limited liability company,
limited  liability  partnership or  other  legal  entity  or
organization  and  any  governmental  agency  or   political
subdivision thereof.
     
     Reference Bank - Fleet National Bank.
     
      Release  - any actual or threatened spilling, leaking,
pumping,    pouring,   emitting,   emptying,    discharging,
injection,  escaping,  leaching,  dumping  or  disposing  of
Hazardous   Substances   into  the  environment,   as   that
"environment" is defined in CERCLA; and

     Reserve  Requirement - with respect  to  each  Interest
Period, a percentage (expressed as a decimal) equal  to  the
daily  average during such Interest Period of the  aggregate
reserve  requirement  (including  all  basic,  supplemental,
marginal  and  other reserves and taking  into  account  any
transitional  adjustments  or  other  scheduled  changes  in
reserve  requirements during such Interest Period) specified
under  Regulation D of the Board of Governors of the Federal
Reserve  System,  or any other regulation of  the  Board  of
Governors  which prescribes reserve requirements  applicable
to   nonpersonal  time  deposits  as  presently  defined  in
Regulation D, as then in effect, as applicable to the  class
of  banks  of  which Fleet National Bank  is  a  member,  on
deposits  having  a  maturity approximately  equal  to  such
Interest Period.
     
      Respond  or  Response - any action taken  pursuant  to
Environmental Laws to correct, remove, remediate, clean  up,
prevent, mitigate, monitor, evaluate, investigate or  assess
the Release of a Hazardous Substance.

     Revolving  Credit Notes - has the meaning specified  in
2.2(h).
     
     Security   Agreement  -  the  Security  Agreement   and
Assignment  of Contracts of even date herewith, between  the
Trust  and the Agent in substantially the form of Exhibit  H
hereto.
     
     Security  Documents  -  the  Security  Agreement,   the
Consent and Agreement (as defined therein) and any documents
or  instruments  delivered pursuant thereto to  perfect  the
security interest of the Agent created thereby.
     
     Standard  &  Poors Rating - the rating  announced  from
time  to  time  by Standard & Poors for the Company's  bonds
issued under the Indenture.
     
     Subsidiary  -  any  corporation, association  or  other
business  entity,  a majority (by number of  votes)  of  the
outstanding  Voting Stock of which is at the time  owned  or
controlled by the Company or by one or more Subsidiaries  of
the  Company  or by the Company and one or more Subsidiaries
of  the  Company  or in any event which is included  in  the
Company's consolidated balance sheet.
     
     Termination  Date  - the earlier of (a)  September  11,
2000, or such later date to which the date of termination of
the  Banks' obligations to make Advances hereunder shall  be
extended in accordance with 5.2 hereof and (b) the date  of
termination of this Agreement pursuant to 12.
     
     Trust  -  Massachusetts Fuel Inventory Trust,  a  trust
established under the Trust Agreement.

     Trust  Agreement  - the Trust Agreement,  dated  as  of
June  22,  1990, between the Company, as Trustor, and  State
Street  Bank  and  Trust Company (as  successor  trustee  to
Shawmut  Bank,  N.A.), as Trustee, as amended in  accordance
with its terms and in effect from time to time.
     
     Trust Credit Agreement - the Revolving Credit Agreement
of  even  date herewith, among the Trust, the Banks and  the
Agent, as amended and in effect from time to time.
     
     Trustee  -  State  Street Bank and Trust  Company,  the
successor trustee under the Trust Agreement.
     
     Type  of  Advances - any one of the types  of  Advances
under this Agreement.
     
     Voting  Stock  - capital stock or similar interests  of
any  class  or classes (however designated), the holders  of
which are at the time entitled, as such holders, to vote for
the election of the directors (or persons performing similar
functions) of the corporation, association or other business
entity  involved, whether or not the right so to vote exists
by reason of the happening of a contingency.
     
     Wholly  Owned Subsidiary - any Subsidiary  all  of  the
outstanding capital stock or other interest of which,  other
than  directors' qualifying shares and shares issued  solely
for  the purpose of satisfying local requirements concerning
the minimum number of shareholders, is owned by the Company,
directly or indirectly through a Wholly Owned Subsidiary.
     
     All  terms  of an accounting character not specifically
defined  herein shall have the meanings assigned thereto  by
GAAP.
     
     2.  THE REVOLVING CREDIT ADVANCES.
     
     2.1.   The  Revolving  Credit  Advances.   Each   Bank
severally  agrees,  on the terms and conditions  hereinafter
set forth, to make Advances to the Company from time to time
on  any  Business Day during the period from the date hereof
to  the  Termination Date in an aggregate amount (i) in  the
case of each Bank, not to exceed at any time the Outstanding
amount of such Bank's Commitment and (ii) in the case of all
of  the  Banks,  not to exceed at any time  the  Outstanding
amount  of the Available Commitment, in each case,  as  such
amount  may be reduced pursuant to 5.4.  In no event  shall
the  aggregate  outstanding principal  balance  of  (i)  all
Advances to the Company exceed $75,000,000 or (ii)  the  sum
of  all Advances to the Company hereunder and all "Advances"
(as  defined  in the Trust Credit Agreement)  to  the  Trust
under  the  Trust Credit Agreement exceed at  any  one  time
$75,000,000.   In  no event shall any Bank be  obligated  to
fund   or  maintain  Advances  in  excess  of  such   Bank's
Commitment.     Anything    to    the    contrary     herein
notwithstanding,  at no time shall the aggregate  number  of
Outstanding  Advances to the Company hereunder  and  to  the
Trust under the Trust Credit Agreement exceed the number six
(6).
     
     Each Borrowing made by the Company shall:  (i) be in an
aggregate amount of not less than $500,000 (unless otherwise
specified herein) and (ii) consist of Advances of  the  same
Type  made  to  the  Company on the same day  by  the  Banks
ratably according to their respective Commitments.  There is
no limit on the number of Borrowings that may be made on any
Business Day.  Within the limits of the provisions  of  this
2.1,  the Company may borrow, prepay pursuant to  4.9  and
reborrow under this 2.1.
     
     2.2.  Making the Advances.
          
          (a)   Each  Advance  (other than  Competitive  Bid
Advances)  shall  be  made on notice given  not  later  than
10:00  A.M.  (Boston time), (i) in the case of a  Base  Rate
Advance on the date of the proposed Borrowing or (ii) in the
case of a Eurodollar Rate Advance on the third Business  Day
prior  to the date of the proposed Borrowing, given  to  the
Agent from the Company (a "Notice of Borrowing").  The Agent
shall  give  the  Banks  prompt notice  of  each  Notice  of
Borrowing and of each other notice received from the Company
hereunder.   Each  such  Notice of  Borrowing  shall  be  by
telephone, telecopy, telex or cable, in each case  confirmed
immediately  in writing by the Company in substantially  the
form  of  Exhibit  B  hereto,  specifying  therein  (A)  the
requested date of such Borrowing, (B) the requested Type  of
Advances  comprising such Borrowing, (C) in the  case  of  a
Borrowing comprised of Eurodollar Rate Advances, the initial
Interest  Period for such Advances, and (D)  the  amount  of
such Borrowing (which must be a minimum of $1,000,000 in the
case   of   a  Notice  of  Borrowing  requesting  Eurodollar
Advances).
          
          (b)   Each  Bank shall, before 12:00 Noon  (Boston
time)  on  the date of such Borrowing, subject to the  terms
and  conditions  of this Agreement, make available  for  the
account of its Applicable Lending Office to the Agent at the
Agent's  address  referred  to in  20  and  in  immediately
available  funds  such  Bank's  ratable  portion   of   such
Borrowing.  After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in 6  or
7, as the case may be, the Agent will credit such funds  to
the Company at such address or office.
          
          (c)   A  Notice  of Borrowing with  respect  to  a
Eurodollar Advance shall be irrevocable and binding  on  the
Company  and,  in  respect  of any  Borrowing  comprised  of
Eurodollar Advances, the Company shall indemnify  each  Bank
against  any  loss or expense incurred by  such  Bank  as  a
result  of any failure of the Company to borrow the  amounts
requested   on   the   date  requested,  including   without
limitation,  any  loss, including lost profits,  or  expense
incurred  by  reason of the liquidation or re-employment  of
deposits  or  other funds acquired by any Bank  to  fund  or
maintain a Eurodollar Advance to be made by such Bank.
          
          (d)   Unless the Agent shall have received  notice
from  a  Bank prior to the date of any Borrowing  that  such
Bank  will  not  make  available to the  Agent  such  Bank's
ratable portion of such Borrowing, the Agent may assume that
such  Bank has made such portion available to the  Agent  on
the  date  of  such  Borrowing in  accordance  with  and  as
provided  in  this 2.2 and the Agent may, in reliance  upon
such assumption, make available on such date a corresponding
amount to the Company.  If and to the extent such Bank shall
not have so made such ratable portion available to the Agent
and  the  Agent shall have made available such corresponding
amount to the Company, such Bank agrees to pay to the  Agent
forthwith on demand, and the Company agree to repay  to  the
Agent  within two Business Days after demand (but only after
demand for payment has first been made to such Bank and such
Bank  has  failed to make such payment), an amount equal  to
such corresponding amount together with interest thereon for
each  day  from  the date the Agent shall make  such  amount
available to the Company until the date such amount is  paid
or  repaid  to the Agent, at an interest rate for the  first
day of such period equal to the interest rate applicable  at
the  time to Advances comprising such Borrowing and for  all
subsequent  days of such period equal to the Alternate  Base
Rate.    If   such  Bank  shall  pay  to  the   Agent   such
corresponding  amount, such amount so paid shall  constitute
such  Bank's Advance as part of such Borrowing for  purposes
of this Agreement.  If the Company make a repayment required
by  the  foregoing provisions of this 2.2(d) and thereafter
the  applicable Bank or Banks make the payments to the Agent
required  by  this 2.2(d), the Agent shall promptly  refund
the amount of the Borrowers' payment.
          
          (e)   The  failure of any Bank to make the Advance
to  be made by it as part of any Borrowing shall not relieve
any  other Bank of its obligation, if any, hereunder to make
its Advance on the date of such Borrowing, but no Bank shall
be responsible for the failure of any other Bank to make the
Advance  to  be made by such other Bank on the date  of  any
Borrowing.
          
          (f)   In the case of Eurodollar Advances requested
in a Notice of Borrowing, the Agent shall notify the Company
and  each  Bank of the  Eurodollar Rate applicable  to  such
Eurodollar Advances not later than 11:00 A.M. (Boston  time)
on  the Business Day of the proposed Borrowing specified  in
the applicable Notice of Borrowing.
          
          (g)     The   Company   hereby   absolutely    and
unconditionally promises to pay to the Agent for the account
of each of the Banks on the Termination Date all Outstanding
Advances.
          
          (h)  Revolving Credit Notes.  The Indebtedness  of
the  Company resulting from the Advances made and to be made
to the Company under this 2 shall be evidenced by Revolving
Credit  Notes executed and delivered by the Company to  each
Bank in substantially the form of Exhibit A-1 hereto on  (i)
the  date of the First Lending and (ii) on the date of  each
Borrowing  made  by the Company hereunder on  or  after  the
Maturity  Date of any previously delivered Revolving  Credit
Note.   Each  such  Revolving Credit Note and  the  Advances
evidenced  thereby will be due and payable on the date  (the
"Maturity Date") which is the earlier of (A) 364 days  after
the   date  thereof  or  (B)  the  Termination  Date.   (The
revolving  credit  notes  of the  Company  are  collectively
referred to herein as the "Revolving Credit Notes").
          
     All  Advances  made to the Company by a Bank  shall  be
recorded  by  the Bank and all payments made on  account  of
principal thereof shall be similarly recorded.  Any  failure
of  a Bank to record a transaction in a timely fashion shall
not affect or impair the validity of any Obligation.
     
     3.  COMPETITIVE BID ADVANCES.
     
     3.1.  Competitive Bid Borrowings.
     
          (a)   Competitive Bid Advance Option.  In addition
to the Advances permitted pursuant to 2 hereof, the Company
may,  pursuant to the terms of this 3, cause the  Agent  to
request that the Banks make offers to fund Advances  to  the
Company  from  time  to time prior to the Termination  Date.
The  Banks  may, but shall have no obligation to, make  such
offers and the Company may, but shall have no obligation to,
accept such offers in the manner set forth in this 3.
          
          (b)   Competitive Bid Request.  When  the  Company
wishes  to  request offers to make Competitive Bid  Advances
under  this 3, it shall transmit to the Agent by  telex  or
telecopier  a  bid  request substantially  in  the  form  of
Exhibit C hereto to be received no later than 10:00 A.M.  on
the first Business Day prior to the requested Borrowing date
with  respect to Absolute Rate Advances specifying  (A)  the
requested Borrowing date (which must be a Business Day)  and
the amount of such Competitive Bid Advance (which must be  a
minimum  of  $2,500,000)  and may  not,  together  with  the
aggregate  amount of all other Advances then Outstanding  to
the  Borrowers, exceed the Available Commitment and (B)  the
Interest  Period for such Advance.  The Company may  request
offers to make Advances for more than one Interest Period in
a  single bid request.  The Company may submit a request for
offers  to  make Competitive Bid Advances no more than  that
number of times in any period of 12 consecutive months which
does  not exceed the difference between forty (40)  and  the
number   of  times  the  Trust  requests  "Competitive   Bid
Advances" under and as defined in the Trust Credit Agreement
during the same 12 month period.
          
          (c)   Invitation for Competitive Bids.  Subsequent
to  receipt  of a bid request, the Agent shall send  to  the
Banks  by  telex or telecopier an invitation  for  bids  not
later  than 4:00 P.M. (Boston time) on the Business  Day  on
which  the  Company delivers its request in accordance  with
3.1(b),  substantially in the form  of  Exhibit  D  hereto,
which   shall  constitute  an  invitation  by  the   Company
requesting  each  Bank  to  submit  bids  offering  to  make
Competitive Bid Advances in accordance with this 3.
          
          (d)  Submission and Contents of Competitive Bids.
          
          (i)   Each Bank may submit a Competitive Bid Quote
     containing  an offer or offers to make Competitive  Bid
     Advances in response to any invitation for bids.   Each
     Competitive Bid Quote must comply with the requirements
     of  this  subsection (d) and, except  in  the  case  of
     Competitive Bid Quotes by Fleet National Bank, must  be
     submitted to the Agent by telex or telecopier not later
     than 9:15 A.M. (Boston time) on the requested Borrowing
     Date.    Competitive  Bid  Quotes  submitted  by  Fleet
     National Bank must be submitted directly to the Company
     by telex or telecopier not later than 9:00 A.M. (Boston
     time) on the requested Borrowing Date.  Any Competitive
     Bid  Quote so made shall be irrevocable except with the
     written  consent of the Agent given on the instructions
     of the Company.
          
          (ii)  Each  Competitive  Bid  Quote  shall  be  in
     substantially the form of Exhibit E hereto and shall in
     any case specify:
          
               (A)  the proposed Borrowing Date,
               
               (B)   the principal amount of the Advance for
          which  each offer is made, which principal  amount
          (x)  may  be  greater than the Commitment  of  the
          quoting  Bank  but  may  not  exceed  the  Maximum
          Commitment,  (y) must be $2,500,000  or  a  larger
          multiple  of  $1,000 and (z) may  not  exceed  the
          principal  amount of Competitive Bid Advances  for
          which offers were requested,
               
               (C)   the rate of interest per annum (rounded
          to the nearest 1/10,000th of 1%) (the "Competitive
          Bid  Rate") offered for each such Competitive  Bid
          Advance,
               
               (D)    the  proposed  maturity  date  of  the
          proposed Advance (which date must be no less  than
          7  days  and  no  longer than 180  days  from  the
          Borrowing Date specified in subsection (A) above),
          and
               
               (E)  the identity of the quoting Bank.
               
          (iii)       Any  Competitive  Bid  Quote   for   a
     Competitive Bid Advance shall be disregarded if it:
          
               (A)   is  not  substantially in the  form  of
          Exhibit  E hereto or does not specify all  of  the
          information required by subsection (d)(ii);
               
               (B)   contains  qualifying,  conditional   or
          similar language;
               
               (C)  proposes terms other than or in addition
          to  those  set forth in the applicable  invitation
          for Competitive Bids; or
               
               (D)   arrives  after the time  set  forth  in
          subsection (d)(i).
               
          (e)  Notice to Company.  Not later than 10:00 A.M.
(Boston  time)  on the requested Borrowing Date,  the  Agent
shall notify the Company of the terms of any Competitive Bid
Quote  submitted  by a Bank that is in accordance  with  the
preceding  subsection  (d).   The  Agent's  notice  to   the
Borrower shall specify (i) the aggregate principal amount of
Advances  for  which  offers have  been  received  for  each
Interest  Period  specified in the related  Competitive  Bid
Request  and  (ii)  the  respective  principal  amounts  and
Competitive  Bid Rates, as the case may be, so  offered,  as
well  as the terms of the Competitive Bid Quotes which  were
received but disregarded by the Agent.
          
          (f)   Acceptance and Notice By Company.  Not later
than  10:30  A.M.  (Boston time) on the requested  Borrowing
Date,  the Company shall notify, by telephone, confirmed  by
telecopy,  the Agent of its acceptance or non-acceptance  of
the  offers  so  notified to it pursuant  to  the  preceding
subsection  3.1(e).   In  the case of  an  acceptance,  such
notice (a "Notice of Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are
accepted.  The Company may accept any Competitive Bid  Quote
in whole or in part; provided that:
          
          (i)    the  aggregate  principal  amount  of  each
     Borrowing  may  not  exceed the applicable  amount  set
     forth in the related Competitive Bid Request,
          
          (ii)  subject to the provisions of 3.1(h) hereof,
     the principal amount of each Advance must be $2,500,000
     or a larger multiple of $1,000,
          
          (iii)      offers  quoting lower  Competitive  Bid
     Rates  must be accepted prior to offers quoting  higher
     Competitive Bid Rates, and
          
          (iv)  the Company shall not accept any offer  that
     is  described in subsection (d)(iii) or that  otherwise
     fails   to  comply  with  the  requirements   of   this
     Agreement.
          
          (g)   Notice by the Agent to the Banks.  After the
Company    notifies   the  Agent  of   its   acceptance   or
non-acceptance of the offers pursuant to subsection (f), the
Agent  shall  notify, by telephone and confirm by  telecopy,
such Banks that made such offers pursuant to subsection  (d)
of the Company's acceptance or non-acceptance of such offers
not  later  than 11:00 A.M. (Boston time) on  the  requested
Borrowing Date.
          
          (h)   Allocation  by Agent; Usage of  Commitments.
If  offers  are  made  by two or more Banks  with  the  same
Competitive  Bid  Rates  for a greater  aggregate  principal
amount  than  the  amount in respect  of  which  offers  are
accepted  for  the  related Interest Period,  the  principal
amount  of  Advances  in respect of which  such  offers  are
accepted shall be allocated by the Agent among such Banks as
nearly  as  possible (in such multiples,  not  smaller  than
$1,000, as the Agent may deem appropriate) in proportion  to
the    aggregate   principal   amount   of   such    offers.
Determinations  by the Agent of the amounts  of  Competitive
Bid  Advances shall be conclusive in the absence of manifest
error.
          
     Upon  each  occasion that a Competitive Bid Advance  is
made,  and during the period for which such Competitive  Bid
Advance  is  outstanding, each Bank's  Commitment  shall  be
deemed  automatically utilized by an  amount  equal  to  the
amount  of such Competitive Bid Advance multiplied  by  such
Bank's  Commitment Percentage, regardless of the  extent  to
which such Bank makes such Competitive Bid Advance.
     
     3.2.   Interest  on  Competitive Bid  Advances.   Each
Competitive   Bid  Advance  shall  bear  interest   on   the
outstanding principal amount thereof for the Interest Period
applicable  thereto,  at  a rate  per  annum  equal  to  the
Competitive Bid Rate quoted by the Bank making such  Advance
in  accordance with 3.1(d).  Such interest shall be payable
for each Interest Period on the last day thereof or, if such
Interest  Period  is longer than three months,  every  three
months  after  the first day thereof and  on  the  last  day
thereof.
     
     Notwithstanding  any  other  provision  herein  to  the
contrary,  at  no  time  shall  the  sum  of  the  aggregate
principal amount of Competitive Bid Advances Outstanding  to
the  Company   plus the aggregate principal  amount  of  all
other  Advances  Outstanding  to  the  Company  exceed   the
Available Commitment.
     
     3.3.  Competitive Bid Notes.  The Indebtedness of  the
Company resulting from the Competitive Bid Advances made and
to  be  made to the Company hereunder shall be evidenced  by
promissory  notes executed and delivered by the  Company  to
the  Banks making such Competitive Bid Advances on the  date
each such Competitive Bid Advance is made, substantially  in
the form of Exhibit A-2 hereto.
     
     4.  CONVERSION, INTEREST, PAYMENTS AND COSTS.
     
     4.1.   Conversion of Advances.  The Company may,  upon
notice  given to the Agent not later than 10:00 A.M. (Boston
time) on the Business Day of the proposed Conversion in  the
case  of Conversion into Base Rate Advances and on the third
Business Day prior to the proposed Conversion in the case of
Conversion  into  Eurodollar  Advances,  Convert,   on   any
Business  Day,  all  Base Rate Advances or  Eurodollar  Rate
Advances comprising the same Borrowing made to such Borrower
into  Advances of one or more Types, provided, however, that
any  Conversion of Eurodollar Advances may be made  on,  and
only  on,  the  last  day  of an Interest  Period  for  such
Advances  and any Conversion into Eurodollar Advances  shall
be  in a minimum amount of $1,000,000.  Each such notice  of
Conversion  shall, within the restrictions specified  above,
specify  (i) the date of such Conversion, (ii) the  Advances
to  be  Converted,  and  (iii) if such  Conversion  is  into
Eurodollar  Advances, the duration of the  initial  Interest
Period for such Advances.
     
     4.2.  Interest.  Except as otherwise provided in 4.3,
the  Company  shall  pay interest on  the  unpaid  principal
amount  of each Advance made by each Bank from the  date  of
such Advance until such principal amount is paid in full, at
such interest rates, and payable at such times as follows:
     
          (a)  during such periods as such Advance shall  be
a  Base  Rate  Advance, at the Alternate Base Rate,  payable
quarterly  in  arrears on the last day of each March,  June,
September and December during such periods and on  the  date
such Base Rate Advance shall be paid in full; and
          
          (b)  during such periods as such Advance shall  be
a  Eurodollar  Advance,  at  the  Eurodollar  Rate  (Reserve
Adjusted),  payable  (i)  with respect  to  each  Eurodollar
Advance for which the Interest Period is either one (1), two
(2)  or  three (3) months on the Interest Payment  Date  and
(ii)  with respect to each Eurodollar Advance for which  the
Interest  Period is six (6) months, the amount  of  interest
accrued shall be payable on the last day of the third  month
of  such  Interest Period and the remaining portion of  such
interest shall be payable on the Interest Payment Date.
          
     4.3.   Overdue Principal and Interest.  Any amount  of
principal of any and all Advances which is not paid when due
(whether  at stated maturity, by acceleration or  otherwise)
and,  to the extent permitted by law, any amount of interest
on  any such Advances which is not paid when due, shall bear
interest,  from  the date on which such  amount  shall  have
become  due and payable by the Company to the date on  which
such   amount  shall  be  paid  (whether  before  or   after
judgment),  payable on demand, at a rate  equal  to  2%  per
annum above the rate of interest otherwise applicable to the
relevant Advances.
     
     4.4.   Limitation on Interest.  No provision  of  this
Agreement  or any Note shall require the payment  or  permit
the  collection  of  interest in excess  of  the  rate  then
permitted by applicable law.
     
     4.5.   Interest  Period  and  Rate  Determination  and
Protection.
     
          (a)  The Company shall have the option to elect  a
duration of one (1) month, two (2) months, three (3)  months
or  six (6) months in the case of Eurodollar Advances,  made
to  it,  for  each  Interest Period.  Such option  shall  be
exercised  as provided in 2.2 with respect to  the  initial
Interest  Period for any Eurodollar Advances  and  shall  be
exercised  as provided in 4.1 with respect to  the  initial
Interest  Period for any Eurodollar Advances  commencing  on
the  date  of a Conversion into such Advances, and  in  each
such  case, may be exercised as to each subsequent  Interest
Period  applicable to such Advances by giving notice to  the
Agent three Business Days in the case of Eurodollar Advances
prior  to the first day of such subsequent Interest  Period.
Each  such notice shall be by telephone, telex, telecopy  or
cable, in each case confirmed immediately in writing by  the
Company.  If no such notice is received with respect to  the
Advances,  the Company shall be deemed to have  elected  the
same  Interest Period duration as the immediately  preceding
Interest Period applicable to such Advances.
          
          (b)   In the event the Agent shall determine  that
adequate   and   reasonable  methods  do   not   exist   for
ascertaining  the Eurodollar Rate which would  otherwise  be
applicable  during  any  Interest Period,  the  Agent  shall
forthwith   give   telex   or  telecopy   notice   of   such
determination (which shall be conclusive and binding on  the
Company),  to the Company at least two Business Days  before
the  first day of such Interest Period.  In such event:  (i)
any Notice of Borrowing or Notice of Conversion pursuant  to
4.1  requesting  a  Eurodollar Advance shall  be  deemed  a
request  for  a  Base  Rate Advance;  (ii)  each  Eurodollar
Advance  will  automatically, on the last day  of  the  then
current  Interest Period thereof, Convert into a  Base  Rate
Advance;  and  (iii) the obligations of the  Banks  to  make
Eurodollar  Advances  shall  be suspended  until  the  Agent
determines  that  the  circumstances  giving  rise  to  such
suspension  no  longer exist, whereupon the Agent  shall  so
notify the Company and the Banks.
          
     4.6.  Increased Costs, Etc.
     
          (a)     Anything    herein   to    the    contrary
notwithstanding,  if  any  changes  in  present  or   future
applicable law (which term "applicable law", as used in this
Agreement,  includes  statutes  and  rules  and  regulations
thereunder  and  interpretations thereof  by  any  competent
court  or  by any governmental or other regulatory  body  or
official   charged   with   the   administration   or    the
interpretation    thereof    and    requests,    directives,
instructions  and notices at any time or from time  to  time
heretofore or hereafter made upon or otherwise issued to the
Agent  or  any  Bank by any central bank  or  other  fiscal,
monetary or other authority, whether or not having the force
of  law) shall (i) subject the Agent or any Bank to any tax,
levy, impost, duty, charge, fee, deduction or withholding of
any nature with respect to this Agreement, the amount of the
Commitments or the payment to the Agent or any Bank  of  any
amounts  due to it hereunder, or (ii) materially change  the
basis  of taxation of payments to the Agent or any  Bank  of
the  principal  of or the interest on the  Advances  or  any
other amounts payable to the Agent or any Bank hereunder, or
(iii) impose or increase or render applicable any special or
supplemental  deposit or reserve or similar requirements  or
assessment against assets held by, or deposits in or for the
account of, or any liabilities of, or loans by an office  of
the  Agent  or  any  Bank  in respect  of  the  transactions
contemplated herein, or (iv) impose on the Agent or any Bank
any  other  condition or requirement with  respect  to  this
Agreement, the Commitments or any Advance, and the result of
any of the foregoing is (A) to increase the cost to any Bank
of  making,  funding or maintaining all or any part  of  the
Advances, or (B) to reduce the amount of principal, interest
or  other  amount payable to any Bank hereunder, or  (C)  to
require  the  Agent or any Bank to make any  payment  or  to
forego  any  interest  or other sum payable  hereunder,  the
amount of which payment or foregone interest or other sum is
calculated  by  reference to the gross  amount  of  any  sum
receivable or deemed received by the Agent or any Bank  from
the  Company  hereunder, then, and in  each  such  case  not
otherwise  provided  for hereunder, the Company  will,  upon
demand  made  by  the Agent promptly following  the  Agent's
receipt  of notification of such event (or made by any  Bank
with respect to any of the matters described in clause (iii)
above  promptly  following  the  Bank's  receipt  of  notice
pertaining  to  such  matters) accompanied  by  calculations
thereof  in  reasonable detail, pay to  the  Agent  for  its
account or for the account of such Bank, as the case may be,
such  additional amounts as will be sufficient to compensate
them  for  such  additional  cost,  reduction,  payment   or
foregone  interest or other sum, provided that the foregoing
provisions of this sentence shall not apply in the  case  of
any additional cost, reduction, payment or foregone interest
or  other  sum resulting from any taxes charged upon  or  by
reference to the overall net income, profits or gains of the
Agent or any Bank.
          
          (b)   If  any Bank shall have determined that  any
present   or   future  applicable  law,  rule,   regulation,
guideline, directive or request (whether or not having force
of  law)  regarding capital requirements for banks  or  bank
holding  companies,  or  any  change  therein  or   in   the
interpretation or administration thereof by any governmental
authority,  central bank or comparable agency  charged  with
the  interpretation or administration thereof, or compliance
by  such  Bank with any of the foregoing, either  imposes  a
requirement  upon  such Bank to allocate additional  capital
resources  or increases such Bank's requirement to  allocate
capital resources to such Bank's commitment to make,  or  to
such Bank's maintenance of, Advances hereunder, which has or
would  have the effect of reducing the return on such Bank's
capital  to  a level below that which such Bank  could  have
achieved   (taking  into  consideration  such  Bank's   then
existing  policies  with  respect to  capital  adequacy  and
assuming  full utilization of such Bank's capital)  but  for
such  applicability, change, interpretation,  administration
or  compliance,  by any amount deemed by  such  Bank  to  be
material,  such Bank shall promptly after its  determination
of  such occurrence give notice thereof to the Company.  The
Company  and such Bank shall thereafter attempt to negotiate
in  good  faith  an  adjustment to the compensation  payable
hereunder which will adequately compensate the Bank for such
reduction.  If the Company and any such Bank are  unable  to
agree to such adjustment within thirty days after the day on
which  the Company received such notice, then commencing  on
the  date of such notice (but not earlier than the effective
date  of  any  such  applicability, change,  interpretation,
administration  or  compliance), the fees payable  hereunder
shall  increase  by  an amount which will,  in  such  Bank's
reasonable  determination,  evidenced  by  calculations   in
reasonable detail furnished to the Company, compensate  such
Bank  for such reduction, such Bank's determination of  such
amount to be conclusive and binding upon the Company, absent
manifest error.  In determining such amount, a Bank may  use
any   reasonable   methods  of  averaging,   allocating   or
attributing such reduction among its customers.
          
     4.7.   Illegality  or Impossibility.   Notwithstanding
any  other  provision of this Agreement, if the introduction
of  or any change in or in the interpretation of any law  or
regulation applicable to any Bank or its Eurodollar  Lending
Office shall make it unlawful, or any central bank or  other
governmental authority having jurisdiction over such Bank or
its  Eurodollar  Lending  Office shall  assert  that  it  is
unlawful,  for  such Bank or Eurodollar  Lending  Office  to
perform   its  obligations  hereunder  to  make   Eurodollar
Advances  to the Company or to continue to fund or  maintain
Eurodollar Advances to the Company hereunder, or if any Bank
determines   after  making  reasonable  efforts,   including
consultations with the Agent, that deposits of the  relevant
amount  for  the  relevant Interest  Period  for  Eurodollar
Advances  to  the Company, are not available  to  such  Bank
after  making  reasonable attempts to obtain such  deposits,
then, on notice thereof and demand therefor by such Bank  to
the  Company and the Agent, (i) the obligation of such  Bank
to  the  Company to make Eurodollar Advances and to  Convert
Base  Rate  Advances and into Eurodollar  Advances  in  such
currency  shall  be  suspended and (ii)  the  Company  shall
forthwith  prepay  in full all Eurodollar Advances  to  such
Bank  with  interest accrued thereon.   If  the  Company  so
notifies the Agent within five Business Days after any  Bank
notifies the Company pursuant to the foregoing provisions of
this  4.7,  the Company may, instead of prepaying,  Convert
all  Eurodollar Advances of all Banks then outstanding  into
Base Rate Advances.
     
     4.8.  Payment on Any Day Other Than The Last Day of an
Interest Period.  If, due to payments or Conversions made by
the   Company  pursuant  to  this  Agreement   or   due   to
acceleration of the maturity of any Advances pursuant to 12
or  due  to any other reason, any Bank receives payments  of
principal or is subject to a Conversion to another  Type  of
Advance  of a Eurodollar Advance other than on the last  day
of  an Interest Period relating to the applicable Eurodollar
Advance the Company shall, upon demand by such Bank (with  a
copy of such demand to the Agent), pay to the Agent for  the
account of such Bank any amounts required to compensate such
Bank  for any additional losses, costs or expenses which  it
may  reasonably  incur  as  a  result  of  such  payment  or
Conversion,   including,  without  limitation,   any   loss,
including lost profits, costs or expenses incurred by reason
of   the  liquidation,  reutilization  or  reemployment   of
deposits  or other funds acquired by such Bank  to  fund  or
maintain  such  Advances.   Such compensation  may  include,
without  limitation, an amount equal to (a)  the  amount  of
interest  which  would have accrued on the amount  so  paid,
prepaid  or Converted or not borrowed, Converted or  prepaid
for the period from the date of such payment, prepayment  or
Conversion  or failure to borrow, Convert or prepay  to  the
last  day  of  the  then current Interest  Period  for  such
Advance (or, in the case of a failure to borrow, Convert  or
prepay,  to  the  last day of the Interest Period  for  such
Advance  which  would have commenced on  the  date  of  such
failure to borrow, Convert or prepay) at the applicable rate
of  interest for such Advances provided for herein minus (b)
the  amount  of  interest (as reasonably determined  by  the
Agent  in  consultation with such Bank), which would  accrue
and  become payable to such Bank during such period  on  the
principal  repaid,  prepaid or not borrowed  if  such  Bank,
following  such repayment, prepayment or failure to  borrow,
were to reinvest such principal in U. S. Treasury securities
selected by such Bank in an amount equal (as nearly  as  may
be)  to the principal so repaid, prepaid or not borrowed and
having a term equal (as near as may be) to such period.
     
     4.9.    Prepayments.   The  Company  may  not   prepay
Competitive  Bid  Advances prior to  the  last  day  of  the
Interest Period relating thereto.  The Company may, upon  at
least  five  Business Days notice to the Agent  stating  the
proposed  date  and  aggregate  principal  amount   of   the
prepayment,  and if such notice is given the Company  shall,
prepay  the  outstanding aggregate principal amount  of  all
other  types of Advances made to the Company as part of  the
same  Borrowing,  in whole at any time, or ratably  in  part
from time to time, with accrued interest to the date of such
prepayment  on  the  principal  amount  prepaid;   provided,
however, that:  (i) each partial prepayment shall be  in  an
aggregate  principal amount of not less than $1,000,000  and
(ii) all such prepayments shall be made to the Agent for the
account   of  the  Banks  ratably  according  to  the   then
outstanding  principal amount of the  Notes;  and  provided,
that if any such prepayment of Eurodollar Advances shall  be
made  on  any  day other than the last day of  the  Interest
Period  applicable  to  such Advance,  such  Borrower  shall
indemnify  the Banks (i) as provided in 4.8  and  (ii)  for
amounts  required to compensate each Bank for any additional
losses,  including lost profits, costs or expenses which  it
may  reasonably  incur  as  a  result  of  such  prepayment,
including  without  limitation any loss, costs  or  expenses
incurred  by  reason  of the liquidation  reutilization,  or
reemployment of deposits or other funds.
     
     4.10.  Payments and Computations.
     
          (a)   The  Company shall make each payment  to  be
made by it hereunder not later than 12:00 noon (Boston time)
on  the day when due in lawful money of the United States to
the  Agent  at  its address set forth in 20 in  immediately
available funds.  The Agent will, promptly after its receipt
thereof,  distribute like funds relating to the  payment  of
principal  or  interest or Commitment Fees or other  amounts
payable  hereunder ratably to the Banks for the  account  of
their  respective  Advances  and  their  Applicable  Lending
Offices   in  like  funds.   All  payments  by  the  Company
hereunder and under any of the other Loan Documents shall be
made  without setoff or counterclaim and free and  clear  of
and  without  deduction  for  any  taxes,  levies,  imposts,
duties,  charges, fees, deductions, withholdings, compulsory
loans,  restrictions  or conditions of  any  nature  now  or
hereafter  imposed  or  levied by any  jurisdiction  or  any
political  subdivision thereof or taxing or other  authority
therein unless the Company is compelled by law to make  such
deduction or withholding.  If any such obligation is imposed
hereafter  upon  the  Company with  respect  to  any  amount
payable  by  it  hereunder or under any of  the  other  Loan
Documents,  the  Company will pay  to  the  Agent,  for  the
account  of the Banks or (as the case may be) the Agent,  on
the  date  on which such amount is due and payable hereunder
or under such other Loan Document, such additional amount in
dollars  as  shall be necessary to enable the Banks  or  the
Agent to receive the same net amount which the Banks or  the
Agent  would  have  received on such due date  had  no  such
obligation been imposed upon the Company, provided that  the
foregoing  obligation to pay such additional  amounts  shall
not apply:
          
          (i)  to any payment to a Bank if such Bank is not,
     on  the  date hereof (or on the date it becomes a  Bank
     under this Agreement) and on the date of any change  in
     the  lending office of such Bank identified  after  its
     execution,  entitled  by virtue  of  its  status  as  a
     non-resident  alien  to  submit  either  a  Form   1001
     (relating  to such Bank and entitling it to a  complete
     exemption  from  withholding  on  all  interest  to  be
     received by it hereunder in respect of the Advances) or
     Form  4224 (relating to all interest to be received  by
     such Bank hereunder in respect of Advances) of the U.S.
     Department of Treasury, or
          
          (ii)  to  any  item referred to in  the  preceding
     sentence that would not have been imposed but  for  the
     failure   by   such  Bank  to  comply  with  applicable
     certification,  information,  documentation  or   other
     reporting   requirements  concerning  the  nationality,
     residence,  identity or connections of such  Bank  with
     the  United  States if such compliance is  required  by
     statute  or  regulation  of  the  United  States  as  a
     precondition to relief or exemption from such item.
          
     The   Company  will  deliver  promptly  to  the   Agent
certificates or other valid vouchers for all taxes or  other
charges deducted from or paid with respect to payments  made
by  the Company hereunder or under such other Loan Document.
Promptly  after  receipt  of all payments  with  respect  to
Competitive  Bid Advances, the Agent shall  pay  the  proper
portion  of  such  payment  to each  Bank  which  made  such
Competitive Bid Advance.
     
          (b)  All computations of interest, Commitment Fees
and  Facility Fees hereunder shall be made by the  Agent  on
the  basis  of a year of 360 days for the actual  number  of
days  (including the first day but excluding the  last  day)
elapsed.    The  outstanding  amount  of  the  Advances   as
reflected on the Agent's records from time to time shall  be
considered correct and binding on the Company and the  Banks
unless  within thirty (30) days after receipt of any  notice
by  the Agent of such outstanding amount, the Company or any
of  the  Banks, as the case may be, notify the Agent to  the
contrary.
          
          (c)  Any change in the rate of interest payable on
any  Advance  resulting from a change in the Alternate  Base
Rate shall become effective as of the opening of business on
the  day  on  which such change in the Alternate  Base  Rate
becomes effective.
          
     4.11.   Payment  on Non-Business Days.   Whenever  any
payment to be made hereunder shall be stated to be due on  a
day other than a Business Day, such payment shall be made on
the next succeeding Business Day, (except as provided in the
definition  of Interest Period in 1) and such extension  of
time  shall  in such case be included in the computation  of
payment of interest or Commitment Fees, or Facility Fees, as
the case may be.
     
     4.12.   Sharing of Payments, Etc.  If any  Bank  shall
obtain  any payment (whether voluntary, involuntary, through
the  exercise  of  any right of set-off,  or  otherwise)  on
account  of the Advances made by it in excess of its ratable
share (according to the then outstanding principal amount of
the  Advances)  of  payments  on  account  of  the  Advances
obtained by all the Banks, such Bank shall purchase from the
other Banks such participations in the Advances held by such
other  Banks  as shall cause such purchasing Bank  to  share
such  payment  ratably  according to  the  then  outstanding
principal  amount of the Advances with each  of  such  other
Banks; provided, however, that if all or any portion of such
payment  is thereafter recovered from such purchasing  Bank,
the  purchase  shall  be rescinded and  the  purchase  price
restored to the extent of such recovery, with interest at an
interest  rate per annum equal to the Alternate  Base  Rate.
The   Company   agree  that  any  Bank   so   purchasing   a
participation  in  the Company's Advance from  another  Bank
pursuant  to this 4.12 may, to the fullest extent permitted
by  law, exercise all its rights of payment with respect  to
such  participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation.
     
     5.  COMMITMENTS.
     
     5.1.  Amount of Commitment.  The respective amount  of
each Bank's Commitment on the date hereof and its respective
Commitment Percentage shall be as follows (except as may  be
modified pursuant to Section 17):
     
                              Amount of    Commitment
            Lender           Commitment    Percentage

     The Bank of New York    $20,000,000    26.67%
     Union Bank of           $10,000,000    13.33%
       California, N.A.
     CoreStates Bank,        $10,000,000    13.33%
       N.A.
     First Union National    $10,000,000    13.33%
       Bank
     Fleet National Bank     $25,000,000    33.33%
     
     5.2.   Extension of Commitments.  The Company may,  by
written  notice  to the Banks and the Agent  not  less  than
sixty (60) days and not more than ninety (90) days prior  to
the  Termination  Date  then in  effect,  request  that  the
Termination  Date be extended to a later date  specified  in
such  notice.   The  Agent shall notify the  Company  as  to
whether all of the Banks have agreed to the extension of the
Termination  Date to such later date not later  than  thirty
(30) days prior to the Termination Date then in effect.   An
extension to which all of the Banks have agreed shall become
effective  upon the receipt by the Banks not less than  five
(5)  Business  Days prior to the Termination  Date  then  in
effect of (a) executed promissory notes substantially in the
form  of Exhibit A hereto, and (b) an opinion of counsel  to
the Company, satisfactory to the Banks and their counsel, as
to  the  due  authorization, execution and delivery  by  the
Company  of  such  notice of extension and  such  promissory
notes,  the  validity  and binding  effect  as  regards  the
Company  of  this  Agreement and  the  promissory  notes  so
delivered,   and   there   being  no   necessity   for   any
authorization or approval by, or any filing or  registration
with,  any  public regulatory body (including,  but  without
limitation, approval of the DPU) for such extension and  for
the  performance of this Agreement and the promissory  notes
so  delivered  (or,  if  any such  action  is  necessary  or
required,  stating that the same has been duly  obtained  or
effected, and is valid and sufficient for the purpose and  a
true copy thereof is attached to such opinion).
     
     5.3.  Commitment Fees.
     
          (a)   Facility Fee.  The Company agree to  pay  to
the  Agent  for  the  account of  each  Bank,  pro  rata  in
accordance  with  its  Commitment,  a  Facility   Fee   (the
"Facility  Fee") calculated at the Applicable  Facility  Fee
Rate  on  the amount equal to the excess of (i) such  Bank's
Commitment over (ii) such Bank's "Commitment" under  and  as
defined  in  the Trust Credit Agreement.  The  Facility  Fee
shall  be  payable quarterly in arrears on the last  day  of
each calendar quarter and on the Termination Date.
          
          (b)   Agent's Fees.  The Company has agreed to pay
to  the Agent a fee for arranging the Advances hereunder and
an   agent's  administration  fee  (the  "Agent's  Fee")  in
accordance  with a letter agreement dated  as  of  the  date
hereof, between the Company and the Agent.
          
     5.4.   Reduction and Termination by the Company.   The
Company  at  its option may, at any time and  from  time  to
time,  reduce  ratably  in part (in  integral  multiples  of
$5,000,000) or terminate in whole the unused portion of  the
Commitments  of the Banks provided for in 5.1 on  not  less
than  five Business Days' notice in writing, telegraphic  or
telephonic  notice  confirmed  in  writing  to  the   Agent.
Promptly after receiving any notice of the Company delivered
pursuant  to this 5.4, the Agent will notify the  Banks  of
the  substance  thereof.  After any  such  termination,  the
Company   may   not   reinstate  the   portion   terminated.
Notwithstanding the foregoing, the Company  may  not  reduce
the Commitments of the Banks provided for in 5.1 to amounts
that  are less than the "Commitments" of the Banks from time
to time provided for in 5.1 of the Trust Credit Agreement.
     
     6.   CONDITIONS OF FIRST LENDING.  The  obligation  of
each  Bank to make its Advance on the occasion of the  First
Lending is subject to the following conditions precedent:
     
     6.1.   Documentation.  The Agent shall  have  received
before  the day of the First Lending, in form and  substance
satisfactory to the Agent and in sufficient copies for  each
Bank:
          
          (a)   Certified copies of the resolutions  of  the
     Board  of  Directors  of  the  Company  approving  this
     Agreement and the other Loan Documents;
          
          (b)   Signed copies of a certificate of the  Clerk
     or  an  Assistant Clerk of the Company  certifying  the
     names  and  true  signatures of  the  officers  of  the
     Company authorized to sign this Agreement and the other
     Loan Documents and any other documents delivered or  to
     be delivered by the Company hereunder;
          
          (c)  A certificate from the Secretary of State  of
     The  Commonwealth of Massachusetts as to the  Company's
     corporate existence and good standing;
          
          (d)    A   certificate   from  the   Massachusetts
     Department  of  Revenue as to the  Company's  tax  good
     standing  or,  if such certificate cannot  be  obtained
     prior  to  the  First  Lending, a  certificate  of  the
     Treasurer of the Company certifying as to the Company's
     tax compliance; and
          
          (e)    A  favorable  opinion  of  counsel  to  the
     Borrowers in substantially the form of Exhibit F hereto
     and  as  to such other matters as any Bank through  the
     Agent may reasonably request; and
          
          (f)   Certified copies of the charter and  by-laws
     of the Company as in effect on the Closing Date; and
          
          (g)   Copies  of any authorization or approval  of
     any   public   regulatory  body   (including,   without
     limitation,  the  DPU)  required  for  the   execution,
     delivery  and  performance  by  the  Company  of   this
     Agreement  and the other documents to be  delivered  by
     the Company hereunder.
          
     6.2.   Financial  Statements.  The  Banks  shall  have
received  not less than five (5) days prior to  the  Closing
Date  audited consolidated and consolidating balance  sheets
of the Company and its Subsidiaries as at December 31, 1996,
and  related  consolidated and consolidating  statements  of
income  and  retained  earnings  of  the  Company  and   its
Subsidiaries for the twelve months then ended, in each  case
prepared  in  accordance with GAAP and  certified  by  Grant
Thornton or other Independent Accountant.
     
     6.3.     Representations    and    Warranties.     The
representations and warranties contained in  8  shall  have
been correct as of the date on which made and shall also  be
correct at and as of the date of the First Lending with  the
same effect as if made at and as of such time, except to the
extent  that  the facts upon which such representations  and
warranties  are based may in the ordinary course be  changed
by  the  transactions permitted or contemplated hereby,  and
the Company shall deliver a certificate to the Agent to such
effect.
     
     6.4.  Performance; No Default.  The Company shall have
performed and complied with all terms and conditions  herein
required to be performed or complied with by it prior to  or
at  the  time  of the First Lending and at the time  of  the
First  Lending  there  shall exist no Default  or  Event  of
Default  or condition which would, with either or  both  the
giving  of notice or the lapse of time, result in a  Default
or Event of Default upon consummation of the First Lending.
     
     6.5.  Security Documents Trust Credit Agreement.   The
Trust  Credit  Agreement shall have been duly  executed  and
delivered  by the parties thereto and all of the  conditions
to the "First Lending" thereunder shall have been satisfied.
     
     6.6.   Proceedings and Documents.  All proceedings  in
connection  with  the  transactions  contemplated  by   this
Agreement  and  all  documents  incident  thereto  shall  be
reasonably  satisfactory in substance and  in  form  to  the
Agent and to the Agent's Special Counsel, and the Agent  and
such  counsel shall have received all information  and  such
counterpart originals or certified or other copies  of  such
documents and such other approvals, opinions or documents as
the Agent or such counsel may reasonably request.
     
     6.7.   Notice  of  Borrowing.  The  Agent  shall  have
received  a Notice of Borrowing from the Company as required
by 2.2.
     
     7.    CONDITIONS   OF  SUBSEQUENT   BORROWINGS.    The
obligation  of the Banks to make any Advances subsequent  to
the  Closing  Date  is  subject to the following  conditions
precedent:
     
     7.1.     Representations    and    Warranties.     The
representations and warranties contained in 8  (other  than
those  representations and warranties  contained  in  8.1,
8.3,  8.4, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, and 8.13  to  the
extent that such representations and warranties pertain to a
Subsidiary as of a date after the date of the First  Lending
and  other than the representations and warranties contained
in   8.5  to  the  extent  that  such  representations  and
warranties  pertain  to Advances employed  solely  to  repay
outstanding  Advances as of the end of the  Interest  Period
pertaining  to  such  Advances) and otherwise  made  by  the
Company in connection with the transactions contemplated  by
this Agreement subsequent to the date hereof shall have been
correct  as  of  the date on which made and  shall  also  be
correct at and as of the date of the Advances, with the same
effect  as  if  made at and as of such time, except  to  the
extent  that  the facts upon which such representations  and
warranties  are  based  may be changed  by  the  actions  or
transactions permitted or contemplated hereby.
     
     7.2.  Performance; No Default.  The Company shall have
performed and complied with all terms and conditions  herein
required to be performed or complied with by it prior to  or
at  the  time  of  the Advances, and there  shall  exist  no
Default  or Event of Default or condition which would,  with
either  or both the giving of notice or the lapse  of  time,
result in a Default or Event of Default upon consummation of
the Advance.
     
     In  the  case of any Advance, the giving of each Notice
of  Borrowing  made subsequent to the Closing Date,  as  the
case  may  be,  by  the Company shall  be  deemed  to  be  a
representation and warranty by the Company on the  dates  of
such  Notice  of  Borrowing and of such Borrowing  that  the
statements in 8 are correct in all material respects.
     
     7.3.  Notes in Full Force and Effect.  The Notes shall
be  in  full  force and effect, and the Company  shall  have
delivered  to the Banks contemporaneously with its  delivery
of  such  Notes an opinion of counsel, satisfactory  to  the
Banks,  regarding  the  due  authorization,  execution   and
delivery  of such Notes, the validity and binding effect  of
such   Notes,   and  there  being  no  necessity   for   any
authorization or approval by, or any filing or  registration
with,  any  public regulatory body (including,  but  without
limitation,  approval of the DPU) for the delivery  of  such
Notes or the performance of such Notes.
     
     8.    REPRESENTATIONS  AND  WARRANTIES.   The  Company
represent and warrant to the Agent and the Banks that:
     
     8.1.  Corporate Existence and Good Standing, Etc.
     
          (a)   The Company and each of its Subsidiaries (i)
are  corporations duly organized, validly  existing  and  in
good standing under the laws of the respective jurisdictions
in which they are incorporated, (ii) have corporate power to
own  their  property and conduct their respective businesses
as  now  and as presently contemplated, and (iii)  are  duly
qualified  to  do business and in good standing  as  foreign
corporations in each jurisdiction where the conduct of their
business  or  the  nature  of  their  assets  require   such
qualification except where failure to so qualify would  have
no material adverse effect.  The Company has no Subsidiaries
except for Transgas Inc. and CGI Transport Ltd.
          
          (b)   The  Company has its chief executive offices
at  40  Market Street, Lowell, MA 01852 at which  place  its
principal books and records are kept.
          
     8.2.   Corporate Power; Consents; Absence of  Conflict
with  Other  Agreements, Etc.  The execution,  delivery  and
performance  of this Agreement and the other Loan  Documents
by   the   Company  and  the  Borrowings  and   transactions
contemplated hereby and thereby:
     
          (a)   are  within  the  corporate  powers  of  the
Company,   have  been  duly  authorized  by  all   necessary
corporate  action  and do not and will  not  contravene  any
provision  of law or any contractual restriction binding  on
or affecting it;
          
          (b)  do not require any approval or consent of, or
filing with, any governmental agency or authority bearing on
the  validity  of such instruments and Borrowings  which  is
required  by  law or the regulation of any  such  agency  or
authority which have not been obtained and delivered to  the
Agent prior to the Closing Date and are not in contravention
of  the  terms of the Company's Certificate of Incorporation
or by-laws, or any amendment thereof;
          
          (c)   will  not  conflict with or  result  in  any
breach  or  contravention of or the  creation  of  any  lien
under,  any  indenture,  agreement,  lease,  instrument   or
undertaking to which the Company is a party or by  which  it
is bound; and
          
          (d)   in  all  material respects are and  will  be
valid and legally binding obligations of the Company and are
and  will be enforceable in accordance with their respective
terms,   except   as  limited  by  bankruptcy,   insolvency,
reorganization, moratorium or similar laws  relating  to  or
affecting generally the enforcement of creditors' rights.
          
     8.3.    Title  to  Properties;  Leases.    Except   as
indicated  on  Schedule  8.3 hereto,  the  Company  and  its
Subsidiaries own all of their respective assets reflected in
the balance sheet as at December 31, 1996 described in 6.2,
or acquired since that date (except property and assets sold
or  otherwise disposed of in the ordinary course of business
since that date), subject to no mortgages, leases, liens  or
other  encumbrances except for (i) current  taxes  or  taxes
being contested in good faith by appropriate proceedings and
then only to the extent that adequate reserves have been set
aside  therefor or its books in accordance with  GAAP,  (ii)
liens  arising  in the ordinary course of business  or  sums
being contested in good faith by appropriate proceedings and
then only to the extent that adequate reserves have been set
aside therefor or its books in accordance with GAAP, but not
involving  Debt, (iii) liens existing on the date hereof  to
the  extent shown on Schedule 8.3 or (iv) hereafter incurred
and permitted under 11.2.
     
     8.4.   Financial Statements.  The financial statements
delivered  to the Banks pursuant to 6.2 fairly present  the
financial  condition of the Company and its Subsidiaries  as
at  the close of business on the date thereof.  There are no
contingent  liabilities of the Company and its  Subsidiaries
as  of  such date involving material amounts, which are  not
disclosed  in  said  balance sheets and  the  related  notes
thereto.
     
     8.5.   No  Material Changes, Etc.  Since December  31,
1996,  there  have occurred no Material Adverse  Changes  as
shown  on or reflected in the financial statements delivered
to the Bank pursuant to 6.2 hereof.
     
     8.6.   Franchises, Patents, Copyrights, Etc.  Each  of
the  Company  and  its  Subsidiaries  possesses  franchises,
patents,  copyrights, trademarks, tradenames,  licenses  and
permits,  and  rights in respect of the foregoing,  adequate
for  the  conduct  of  its  business  substantially  as  now
conducted and without any conflict with any rights of others
(other than for conflicts that would not either individually
or collectively have a Material Adverse Effect).
     
     8.7.    Litigation.    Except   as   set   forth    on
Schedule  8.7,  there are no actions, suits, proceedings  or
investigations of any kind pending or threatened against the
Company  or  any  Subsidiary before any court,  tribunal  or
administrative   agency  or  board   which,   if   adversely
determined,  might, either in any case or in the  aggregate,
have  a  Material  Adverse Effect or materially  impair  the
right  of the Company and its Subsidiaries taken as a whole,
to  carry  on  business substantially as now  conducted,  or
result  in any substantial liability not adequately  covered
by  insurance,  or  which  question  the  validity  of  this
Agreement or the Notes, or any action taken or to  be  taken
pursuant hereto or thereto.
     
     8.8.   No Materially Adverse Contracts, Etc.   Neither
the  Company nor any of its Subsidiaries is subject  to  any
indenture,  agreement or charter, corporate or  other  legal
restriction,  or  any  judgment,  decree,  order,  rule   or
regulation which has or is expected in the future to have  a
Material Adverse Effect.  Neither the Company nor any of its
Subsidiaries  is a party to any contract or agreement  which
has or is expected to have any Material Adverse Effect.
     
     8.9.   Compliance with Other Instruments,  Laws,  Etc.
Neither  the  Company  nor any of  its  Subsidiaries  is  in
violation  of  any  provision of its  charter  documents  or
by-laws or any other agreement or instrument by which it  or
any  of  its  properties may be bound or any decree,  order,
judgment,  any  statute, license, rule or regulation,  in  a
manner  which could result in the imposition of  substantial
penalties or have a Material Adverse Effect.
     
     8.10.   Tax  Status.   Each of  the  Company  and  its
Subsidiaries has made or filed all federal and state  income
all other tax returns, reports and declarations required  by
any  jurisdiction to which it is subject; and has  paid  all
taxes  and other governmental assessments and charges  shown
or  determined  to  be  due  on such  returns,  reports  and
declarations, except those being contested in good faith  by
appropriate  proceedings and then only to  the  extent  that
adequate reserves have been set aside therefor or its  books
in accordance with GAAP, but not involving any Debt; and has
set  aside  on its books provisions reasonably adequate  for
the  payment  of  all taxes for periods  subsequent  to  the
periods  to  which  such  returns, reports  or  declarations
apply.   There  are no unpaid taxes in any  material  amount
claimed   to  be  due  by  the  taxing  authority   of   any
jurisdiction, and the Company knows of no basis for any such
claim.
     
     8.11.  Absence of Security Interests, Etc.  Except (i)
for current taxes or taxes being contested in good faith  by
appropriate proceedings and for which any adequate  reserves
required  by GAAP have been established, (ii) liens  arising
in  the  ordinary course of business or sums being contested
in  good  faith,  but not involving any  Debt,  (iii)  liens
existing  on  the  date hereof to the extent  shown  in  the
financial statements referred to in 6.2 or Schedule 8.3  or
(iv)  liens  hereafter incurred and permitted  under  11.2,
there   is  no  significant  financing  statement,  security
agreement, chattel mortgage, real estate mortgage  or  other
document   filed  or  recorded  with  any  filing   records,
registry, or other public office of any jurisdiction,  which
purports  to cover, affect or give notice of any present  or
possible future lien on, or security interest in, any assets
or  property of the Company, any of its Subsidiaries or  any
rights thereunder.
     
     8.12.   Use of Proceeds.  The proceeds of the Advances
shall  be  used  for general corporate purposes,  which  may
include  the  financing  of  gas  inventory  purchases.   No
portion  of  any  Advance is to be used for the  purpose  of
purchasing  or  carrying any "margin  security"  or  "margin
stock" as such terms are used in Regulations G and U of  the
Board  of Governors of the Federal Reserve System, 12 C.F.R.
207 and 221.
     
     8.13.   Pension  Plan.  The funding of any  Guaranteed
Pension Plan of the Company and its Subsidiaries, or any  of
them, complies with the minimum funding standards of 412 of
the Internal Revenue Code of 1986, as amended.
     
     8.14.   Subsidiaries.  The Company  owns  directly  or
beneficially  through one or more of its Subsidiaries,  free
and  clear of all material liens and encumbrances, at  least
one  hundred  percent (100%) of the issued  and  outstanding
Voting  Stock of each of its Subsidiaries.  The Company  has
no  Subsidiaries  other  than those  Subsidiaries  named  in
8.1(a)  hereof.  All shares of such stock have been validly
issued  and are fully paid and non-assessable, and no rights
to subscribe to additional shares have been granted.
     
     8.15.   Disclosure.  Neither this  Agreement  nor  any
document delivered to the Agent or any Bank by or on  behalf
of  the  Company  to  induce such Bank to  enter  into  this
Agreement  contains any untrue statement of a material  fact
or  omits to state a material fact which omission would make
the statements herein or therein misleading.
     
     8.16.   Investment  Company;  Public  Utility  Holding
Company.   Neither  the  Company nor any  Subsidiary  is  an
"investment  company"  or  a  "company  controlled"  by   an
"investment  company" or an "affiliate"  of  an  "investment
company" within the meaning of the Investment Company Act of
1940, as amended.  Neither the Company nor any Subsidiary is
a "holding company", or a "subsidiary company" of a "holding
company", or an affiliate" of a "holding company"  or  of  a
"subsidiary company" of a "holding company", as  such  terms
are  defined  in the Public Utility Holding Company  Act  of
1935, as amended.
     
     8.17.   Environmental  Matters.   The  Company  is  in
compliance  in  all  material respects with  all  applicable
Environmental  Laws (as defined herein), including,  without
limitation,  the  Clean Water Act of 1977,  as  amended,  33
U.S.C.  1251  et  seq.,  the  Resource  Conservation   and
Recovery Act of 1976, 42 U.S.C. 6901 et seq. ("RCRA"), the
Massachusetts  Hazardous Waste Management Act, Massachusetts
General   Laws   Annotated  ch.   21C   (West   1992)   (the
"Massachusetts  Hazardous  Waste  Act"),  the  Comprehensive
Environmental  Response, Compensation and Liability  Act  of
1980,   as   amended   by  the  Superfund   Amendments   and
Reauthorization  Act  of  1986, 42  U.S.C.  9601  et  seq.
("CERCLA"), and the Massachusetts Oil and Hazardous Material
Release Prevention Act, Massachusetts General Laws Annotated
ch.  21E  (West 1992) (the "Massachusetts Oil and  Hazardous
Material Act"), except for such noncompliance which, in  the
judgment  of the Company, would not have a Material  Adverse
Effect and, to its knowledge, has not acquired, incurred  or
assumed, directly or indirectly, any contingent liability in
connection  with the release of any Hazardous Substance  (as
defined  herein) into the environment which, in the judgment
of  the  Company, would have a Material Adverse Effect.   To
the  best of the Company's knowledge, the Company is not the
subject   of  any  evaluation,  administrative  proceedings,
administrative  consent  orders,  judicial  proceedings   or
demand  orders under CERCLA, or under the Massachusetts  Oil
and  Hazardous Material Act, or any similar statute  in  any
other  jurisdiction which, in the judgment of  the  Company,
would have a Material Adverse Effect.
     
     9.   EXEMPT CHARACTER OF TRANSACTION.  This  Agreement
is  made  with  the  Banks in reliance  upon  their  several
representations to the Company, which by their execution  of
this  Agreement  they hereby confirm,  that  each  Bank  for
itself  and not for any other Bank has no present  intention
of  selling  or otherwise disposing of any interest  in  the
Advances other than for participations contemplated  by  25
and  assignments  contemplated by 17 hereof.   The  Company
represents to the Banks that it has not, either directly  or
through any agent, offered any interest in the Advances  for
sale to, or solicited any offers to buy any interest therein
from,  or  otherwise approached or negotiated in respect  of
any  interest therein with, any Person or Persons other than
the  Banks.  Each Bank agrees that it will not, directly  or
indirectly,  sell or offer, or attempt to offer  to  dispose
of,  any  interest in the Advances or solicit any offers  to
buy  any  interest  therein from, or otherwise  approach  or
negotiate  with respect thereto with, any Person  whatsoever
so  as to bring the execution and delivery of this Agreement
within  the provisions of 5 of the Securities Act of  1933,
as now in effect or as later amended.
     
     10.   AFFIRMATIVE  COVENANTS.   Until  expiration   or
termination  of  the  Commitments and thereafter  until  all
obligations of the Company hereunder and under the Notes are
paid in full, the Company agrees that it will:
     
     10.1.   Punctual Payment.  Duly and punctually pay  or
cause to be paid the principal and interest on the Advances,
and the Commitment Fees, the Facility Fees, the Agent's Fees
and  all other fees and expenses payable as provided  herein
or in the other Loan Documents as the same shall become due,
whether  at  maturity or at any date fixed  for  payment  or
prepayment or by declaration or otherwise, all in accordance
with the terms of this Agreement.
     
     10.2.   Maintenance of Office.  Maintain an office  at
40  Market  Street, Lowell, Massachusetts or at  such  other
place in Massachusetts as the Company shall designate within
30  days  of  any  change of such office by written  notice,
addressed  as  provided in 20 where notices,  presentations
and  demands  to  or  upon the Company  in  respect  of  the
Advances may be given or made.
     
     10.3.   Reports,  Certificates and Other  Information.
Furnish  to  the Agent (in sufficient number  of  copies  to
provide one to each Bank):
     
          (a)   Annual Report.  As soon as practicable  and,
in  any  event, within 90 days after the end of each  fiscal
year of the Company a consolidated and consolidating balance
sheet of each of the Company and its Subsidiaries as at  the
end  of  such fiscal year and consolidated and consolidating
statements of earnings and cash flow of the Company and  its
Subsidiaries  for the fiscal year then ended,  each  setting
forth  in  comparative  form the figures  for  the  previous
fiscal year, all in reasonable detail prepared in accordance
with  GAAP,  such  consolidated financial statements  to  be
accompanied  by  a report and opinion of Grant  Thornton  or
other  Independent  Accountants, to  the  effect  that  such
consolidated  financial statements  have  been  prepared  in
accordance  with  GAAP  applied on a basis  consistent  with
prior   years  (except  as  to  changes  with   which   such
accountants  concur)  and present fairly,  in  all  material
respects, the consolidated financial position of the Company
and  its  Subsidiaries  as  of the  date  thereof,  and  the
consolidated   results   of  their  operations   and   their
consolidated cash flows for each of the three years  in  the
period ended at the date thereof.
          
          (b)  Interim Reports.  Within forty-five (45) days
after  each quarter (except the last quarter) of each fiscal
year  of  the Company, a copy of the report on Form 10-Q  of
the  Securities and Exchange Commission filed by the Company
and its Subsidiaries with respect to such quarter or, if  no
such  report  has  been  timely filed,  unaudited  financial
statements  of the Company and its Subsidiaries prepared  in
the  same  manner  as  the  annual  report  referred  to  in
10.3(a),  signed  by a proper officer of  the  Company  and
consisting  of at least a balance sheet as at the  close  of
such  quarter and statements of earnings and cash flows  for
such  quarter and for the period from the beginning of  such
fiscal year to the close of such quarter.
          
          (c)   Certificates.   Contemporaneously  with  the
furnishing of a copy of each annual report provided  for  in
subsection  (a)  and  of  each set of  quarterly  statements
provided  for  in  subsection (b), a Compliance  Certificate
from  the  Company substantially in the form  of  Exhibit  G
hereto (the "Compliance Certificate") dated the date of such
annual  report  or such quarterly statements and  signed  on
behalf of the Company, by the President, the chief financial
officer,  the  chief accounting officer or the Treasurer  of
the  Company  to  the  effect that no Default  or  Event  of
Default has occurred and is continuing, or, if there is  any
such event, describing it and the steps, if any, being taken
to  cure  it  and containing a computation of,  and  showing
compliance   with,   each  of  the  financial   ratios   and
restrictions contained in 11.8 and 11.9 of this Agreement.
          
          (d)   Reports to SEC and to Shareholders.   Copies
of  each  material filing and report made by the Company  or
any  Subsidiary  with  or  to the  Securities  and  Exchange
Commission,  and  of  each material communication  from  the
Company   or   any  Subsidiary  to  shareholders  generally,
promptly upon the filing or making thereof.
          
          (e)   Notice of Default, Litigation, ERISA Matters
and  Environmental Matters.  Forthwith upon learning of  the
occurrence of any of the following, written notice  thereof,
describing the same and the steps being taken by the Company
with  respect thereto:  (i) the occurrence of a  Default  or
Event  of Default or any event which, but for the waiver  of
such  event, would be a Default or Event of Default, or (ii)
the  institution  of, or any adverse determination  in,  any
litigation,    arbitration   proceeding   or    governmental
proceeding  which  is,  or  could have  a  Material  Adverse
Effect, or (iii) the occurrence of a Reportable Event  under
ERISA  for  which the 30-day notice requirement under  ERISA
Regulation  2615.3(a) is not waived, or the institution  of
steps by the Company or any Subsidiary to withdraw from,  or
the  institution  of  any steps to terminate,  any  employee
benefit  plan  as  to  which  the  Company  or  any  of  its
Subsidiaries may have any material unfunded liability.   The
Company  will promptly give notice to the Agent and each  of
the  Banks  (i)  of any violation of any federal,  state  or
local   statute,  regulation,  ordinance,  order  or  decree
relating  to  health,  safety or the  environment  that  the
Company report in writing or is reportable by such Person in
writing (or for which any written report supplemental to any
oral  report  is  made)  to  any  federal,  state  or  local
environmental  agency  and that,  in  the  judgment  of  the
Company, would have a Material Adverse Effect, and (ii) upon
becoming   aware   thereof,  of  any  inquiry,   proceeding,
investigation or other action, including a notice  from  any
agency of potential environmental liability, or any federal,
state  or local environmental agency or board that,  in  the
judgment  of  the  Company, would have  a  Material  Adverse
Effect.
          
          (f)  Financial Forecast.  Prior to the end of each
fiscal   year,  beginning  with  the  fiscal   year   ending
December  31, 1997, the Company's annual financial forecast,
on a quarterly basis, for the next following fiscal year, in
such form and with such detail as the Banks may request.
          
          (g)   Other  Information.  From time to time  such
other   information   concerning   the   Company   and   its
Subsidiaries  as  any  Bank  or  the  Agent  may  reasonably
request.
          
     10.4.   Existence and Franchises.  Except as otherwise
expressly  permitted in this Agreement, maintain, and  cause
each  of  its  Subsidiaries to maintain in  full  force  and
effect,  its  separate existence and all  rights,  licenses,
leases and franchises reasonably necessary to the conduct of
its  business  and comply with (i) the applicable  laws  and
regulations  wherever its business is  conducted,  (ii)  the
provisions of its charter documents or by-laws and (iii) all
agreements  and  instruments by  which  it  or  any  of  its
properties  may be bound and all applicable decrees,  orders
and judgments.
     
     10.5.  Payments of Taxes.  Promptly pay when due,  and
cause  each of its Subsidiaries to do the same, all material
taxes,  assessments  or  other governmental  charges  owing,
unless the same shall be diligently contested in good  faith
and  reserves, which are adequate in accordance  with  GAAP,
have been set aside therefor.

     10.6.  Maintenance of Property.  Maintain all material
assets  or  property in good repair and  working  order  and
condition, normal wear and tear excepted, and cause each  of
the  Subsidiaries  to  do the same,  and  make  all  needful
repairs, replacements, additions and improvements thereto.
     
     10.7.  Books, Records and Inspections.  Maintain,  and
cause  each  of its Subsidiaries to maintain,  complete  and
accurate books and records; permit reasonable access  during
normal business hours by any Bank or the Agent to the  books
and records of the Company and of any Subsidiary; and permit
any  Bank  or  the  Agent  to  inspect  the  properties  and
operations of the Company and of any Subsidiary and promptly
respond  to all reasonable requests for information  by  any
Bank or the Agent.
     
     10.8.   Employee Benefit Plans.  Maintain,  and  cause
each  of its Subsidiaries to maintain, each employee benefit
plan  as  to  which it may have any material  liability,  in
material compliance with all applicable requirements of  law
and regulations.
     
     10.9.   Copies of Employee Benefit Plan  Reports.   If
requested  by any Bank, send to each of the Banks copies  of
all  Forms  5500 and/or Forms 5500C relating to a Guaranteed
Pension   Plan   together  with  all  attachments   thereto,
including any actuarial statement required to be made  under
103(d)  of ERISA, promptly following the date on which  any
such form is filed with the Department of Labor, except,  in
the case of any multi-employer plans, the Company will cause
such  Forms and all such attachments thereto to be  sent  to
the  Banks  within a reasonable time after  such  Forms  are
filed with the Department of Labor.
     
     10.10.  Further Assurances.  Cooperate with the  Banks
and  execute, acknowledge (if appropriate) and deliver  such
further  instruments  and documents,  and  take  such  other
action as the Banks shall reasonably request to carry out to
their  satisfaction  the transactions contemplated  by  this
Agreement.
     
     10.11.   Securities Law, Etc. Compliance.   Comply  in
all material respects with all valid applicable laws and any
rules  and  regulations thereunder in  connection  with  all
transactions  contemplated  by  this  Agreement,   including
(without limitation) takeover, disclosure and other  Federal
and  State securities laws and Regulations G, T, U and X  of
the Board of Governors of the Federal Reserve System.
     
     10.12.   Insurance.  Maintain, and cause each  of  its
Subsidiaries  to  maintain,  with  financially   sound   and
reputable  insurers insurance with respect to its properties
and  business  against such casualties and contingencies  in
amounts,  containing such terms, in such forms and for  such
periods as shall be in accordance with the general practices
of  businesses  engaged  in similar  activities  in  similar
geographic   areas  (which  may  include   reasonable   self
insurance)  and  as  may be reasonably satisfactory  to  the
Banks.   Without limiting the foregoing, the  Company  will,
and  will cause each of its Subsidiaries to (i) keep all  of
its  physical  property  insured  against  fire,  flood  and
extended  coverage  risks in amounts  and  with  deductibles
equal to those generally maintained by businesses engaged in
similar  activities in similar geographic areas,  which  may
include  reasonable self insurance (ii)  maintain  all  such
workers'  compensation  or  similar  insurance  as  may   be
required  by  law, and (iii) maintain, in amounts  and  with
deductibles   equal   to  those  generally   maintained   by
businesses   engaged  in  similar  activities   in   similar
geographic   areas  (which  may  include   reasonable   self
insurance),  general  public  liability  insurance   against
claims for bodily injury, death or property damage occurring
on,  in  or  about  its  properties,  business  interruption
insurance  and product liability insurance.  At  least  five
(5)  days  before  the expiration of any  such  policy,  the
Company will (except as aforesaid) obtain a renewal  of  any
policy about to expire or a new policy or policies operating
as  a  renewal  thereof, to the satisfaction of  the  Banks;
provided,  however, that the Company will notify  the  Banks
that a policy is being canceled by an insurer not later than
ten   (10)  days  prior  to  the  effective  date  of   such
cancellation.   In  the  event of  failure  to  provide  and
maintain  insurance as herein provided, the  Banks  may,  at
their option, after giving notice to and consulting with the
Company,  provide  such  insurance  and  charge  the  amount
thereof  to  the Company and the Company hereby promises  to
pay  to  the Banks on demand the amount of any disbursements
made  by  the  Banks  for such purpose.  The  Company  shall
furnish   to  the  Banks  certificates  or  other   evidence
satisfactory  to the Banks of compliance with the  foregoing
insurance provision.

      10.13.    Payment of Indebtedness and Performance  of
Obligations.  Pay and discharge promptly as and when due all
lawful  indebtedness,  obligations  and  claims  for  labor,
materials  and  supplies  or otherwise  (including,  without
limitation,  Debt)  which,  if  unpaid,  would  (a)  have  a
Material  Adverse Effect, or (b) become a lien not permitted
by  paragraph 11.2, provided that the Company shall  not  be
required  to  pay  and discharge or cause  to  be  paid  and
discharged  any such indebtedness, obligation  or  claim  so
long  as  the  validity thereof shall be contested  in  good
faith and by appropriate proceedings diligently conducted by
the Company, and further provided that such reserve or other
appropriate  provision  as shall be required  in  accordance
with GAAP shall have been made therefor.
     
     10.14.   Change of Corporate Name.  Notify  the  Agent
within ten (10) days of any change in its corporate name and
duly  execute  and deliver appropriate financing  statements
and  other  documents  necessary  to  enable  the  Agent  to
maintain   continuously  perfected  the  security  interests
granted under the Security Documents.
     
     11.  CERTAIN  NEGATIVE COVENANTS.  The Company  agrees
that,  so  long  as  any portion of the  Commitments  remain
outstanding or until such date as the Advances and all other
Obligations have been paid and satisfied in full,  whichever
shall later occur, it will not:
     
     11.1.   Debt.  Incur or permit to exist, with  respect
to  it  or any of its Subsidiaries, any Debt except (i)  the
Advances,  (ii)  in the case of the Company, purchase  money
debt incurred in connection with the acquisition of real  or
personal property after the date hereof not to exceed in the
aggregate $500,000, (iii) the Mortgage Debt, (iv) other Debt
reflected  on  the audited balance sheets delivered  to  the
Bank  pursuant  to 6.2 hereof and extensions,  renewals  or
refinancings  of  such  Debt; provided  that  the  aggregate
principal  amount  of such Debt is not increased,  (v)  Debt
arising  under  the Fuel Purchase Contract, (vi)  additional
Debt,  provided  that  all Debt incurred  pursuant  to  this
clause  (vi) shall be unsecured and shall either require  no
amortization  of  principal on or prior to  the  Termination
Date  or  shall  be subordinated to the obligations  of  the
Company  hereunder on terms and conditions  satisfactory  to
the Banks, and (vii) any Company Subsidiaries may incur Debt
so long as such debt is non-recourse to both the Company and
the  Trust  and the aggregate amount of such debt  does  not
exceed $10,000,000 at any time.
     
     11.2.  Liens.  Create or permit to exist any mortgage,
pledge, title retention lien, or other lien, encumbrance  or
security  interest with respect to any assets now  owned  or
hereafter acquired, except
     
          (i)   liens existing on the date of this Agreement
     and described on Schedule 8.3 hereto;
          
          (ii)  liens  securing Debt permitted under  clause
     (ii)  of  11.1  and  attached  only  to  the  property
     acquired;
          
          (iii)      mechanic's, materialmen's,  suppliers',
     tax and other like liens arising in the ordinary course
     of  business securing obligations which are not overdue
     or,  if  overdue, are being contested in good faith  by
     appropriate  proceedings; liens arising  in  connection
     with workmen's compensation, unemployment insurance and
     appeal  and release bonds; and other liens incident  to
     the  conduct  of business or the operation of  property
     and  assets  and  not incurred in connection  with  the
     obtaining of any advance or credit;
          
          (iv)  Liens  arising under the Indenture  as  from
     time to time amended or supplemented;
          
          (v)   Liens securing the Advances or arising under
     the Fuel Purchase Contract;
          
          (vi) Liens which constitute "permitted liens,"  as
     defined in the Indenture;
          
          (vii)     Liens arising out of judgments or awards
     against the Company  with respect to which at the  time
     an  appeal or proceeding for review is being prosecuted
     in  good  faith and with respect to which  there  shall
     have  been  secured  a stay of execution  pending  such
     appeal or proceedings for review; and
          
          (viii)     Liens on appliances and gas utilization
     equipment held for resale, securing the purchase  price
     of  such  appliances  and  gas  utilization  equipment,
     provided  that the aggregate amount of Debt secured  by
     such Liens shall not exceed at any time $500,000.
          
     Notwithstanding the foregoing, the Company will not  in
any  event pledge or assign as security to any Person  other
than  the Agent (A) the gas inventory or accounts receivable
of the Trust or (B) the gas inventory or accounts receivable
of the Company relating to such gas inventory.
     
     11.3.  Guaranties, Loans or Advances.  With respect to
it  or any of its Subsidiaries, become or be a guarantor  or
surety  of,  or  otherwise become or be responsible  in  any
manner  (whether  by agreement to purchase any  obligations,
stock,  assets, goods or services, or to supply  or  advance
any  funds,  assets, goods or services, or  otherwise)  with
respect  to, any undertaking of any other person or  entity,
or  make  or  permit to exist any loans or advances  to  any
other  person or entity, except for (i) the endorsement,  in
the ordinary course of collection, of instruments payable to
it  or  to  its order, (ii) in the case of the Company,  its
monetary  obligations under the Fuel Purchase Contract,  and
(iii)  in  the case of the Company, guaranties made  in  the
ordinary  course  of  business in an amount  not  to  exceed
$2,500,000  and  not guaranteeing obligations  for  borrowed
money.
     
     11.4.   Investments.   With respect  to  the  Company,
purchase  or otherwise acquire any security or Debt  of  any
Person,   whether   directly  or  indirectly,   except   (i)
marketable unconditional obligations of or guaranteed by the
government of the United States of America maturing not more
than  five (5) years after original issue, or participations
in such obligations acquired from any Bank or other domestic
bank  having total assets in excess of $1,000,000,000,  (ii)
certificates  of  deposit and eligible bankers'  acceptances
for  the  Banks or such other domestic banks and demand  and
time  deposits in any bank, (iii) commercial paper rated  at
the  time  of  acquisition thereof not less  than  "P-1"  by
Moody's Investors Service Inc. or "A-1" by Standard &  Poors
Corporation,   and   (iv)  the  Company's   investments   in
Acquisitions or existing Subsidiaries.
     
     11.5.   Subsidiaries.   (i)  Directly  or  indirectly,
enter  into  any transaction with any Subsidiary  except  on
terms  which  are  fair and reasonable to  the  Company  and
which,  taken as a whole, are at least as favorable  to  the
Company as it would obtain in a comparable transaction  with
an   unrelated  person,  or  (ii)  sell  the  stock  of  any
Subsidiary,  or  permit a Subsidiary to  sell  or  otherwise
dispose of its property, other than at a fair value,  unless
such sale or disposition is not detrimental to the interests
of  the Banks hereunder and the difference between the  fair
value and the proceeds of such sale or disposition is either
less  than $25,000 or, in the aggregate with the differences
from  all  other  such  sales  or  dispositions  during  the
preceding  24  consecutive months, less than 3/4  of  1%  of
tangible net worth as shown in the most recent report of the
Company.
     
     11.6.  Other Agreements.  With respect to it or any of
its  Subsidiaries, enter into any agreement  containing  any
provision  which  would  be  violated  or  breached  by  the
performance  of  its  obligations  hereunder  or  under  any
instrument  or document delivered or to be delivered  by  it
hereunder or in connection herewith.
     
     11.7.  Merger, Consolidation, or Sale of Assets.  With
respect to it or any of its Subsidiaries, become a party  to
any merger, consolidation, or disposition of any substantial
assets,   except  mergers  of  a  Subsidiary  into   another
Subsidiary, or the merger of the Trust into the  Company  so
long as the Company is the survivor of such merger.
     
     11.8.    Debt to Capitalization Ratio.  Permit the
total amount of Debt to exceed sixty-five percent (65%) of
Consolidated Capitalization.

     11.9.    Interest Coverage Ratio.  Permit the Interest
Coverage Ratio to be less than 1.75 to 1.00.

     11.10.  Terminate Pension Plan.  With respect to it or
any of its Subsidiaries, terminate, withdraw from, or permit
termination of any Guaranteed Pension Plan unless the  asset
value  of  such Plan is then at least equal to the value  of
the  benefits  guaranteed  by the Pension  Benefit  Guaranty
Corporation  or unless such termination will not  result  in
any   significant   liability  to   the   Company   or   any
Subsidiaries.
     
     11.11.  Pension Plan Distribution.  With respect to it
or   any   of  its  Subsidiaries,  permit  any  distribution
described  in  4043(b)(7) of ERISA  to  be  made  from  any
Guaranteed Pension Plan.
     
     11.12.   Indenture.  Amend, modify or  supplement  the
Indenture as in effect on the date of this Agreement in  any
way  that would directly or indirectly (i) subject the  lien
of the Indenture to the gas inventory or accounts receivable
of  the Company or the Trust, (ii) cause the scheduled  date
of  payments of principal, interest and expenses of Mortgage
Debt  to  occur at dates earlier than the allowed  dates  in
effect on the Closing Date, (iii) amend in any material  way
the  definitions of "additional property" or "net amount  of
additional   property"   or   "permitted   liens"   in   the
definitional section of the Indenture, or (iv) amend in  any
material way Section 3.02 of the Indenture.
     
     11.13.  Leases.  Acquire any real or personal property
by lease or similar agreement (whether or not the respective
property shall have theretofore been owned and sold  by  the
Company)  if,  by reason of such transaction, the  aggregate
amount of rentals or similar payments (excluding payments in
respect  of  Capitalized Lease Obligations) payable  by  the
Company  during  the then current or any  subsequent  fiscal
year of the Company in respect of all leases at the time  in
effect  (excluding any thereof to the extent  cancelable  at
the  option of the Company but including for the purpose any
renewal terms of any thereof to the extent renewable at  the
option  of  the  lessors) would exceed  3%  of  Consolidated
Capitalization as at the date of determination.
     
     11.14.   Debt Payments.  Directly or indirectly,  make
any  payments in reduction of any Debt of the Company (other
than  Debt  in respect of the Advances) prior to  the  final
maturity thereof, other than payments required by the  terms
of any sinking fund, serial maturity or mandatory prepayment
provision  contained  in  any  instrument  evidencing   Debt
permitted by 11.1 and other than payments made pursuant  to
the  Fuel Purchase Contract, unless (i) such payment is made
out of the proceeds of a concurrent (and in any event within
twelve  (12)  months  of such payment)  refunding  operation
involving  the  incurring by the Company of additional  Debt
which  is  at least equal in aggregate principal amount  to,
and  which  has  a  weighted average life  to  maturity  (as
determined   in  accordance  with  any  accepted   financial
practice)  no  shorter  than  the  remaining  life  of  this
Agreement and (ii) after giving effect to such payment,  the
aggregate amount of all such Debt prepaid by the Company and
not  refinanced on a long-term basis with funds  other  than
Company  funds  or  the funds provided hereunder  since  the
Closing Date shall not exceed $25,000,000.
     
      11.15.     Dividends; Distributions.  Declare  or  pay
any  dividends (other than dividends payable  in  shares  of
common  stock  of  the  Company)  on,  or  make  any   other
distribution  in  respect of, any shares  of  any  class  of
capital  stock of the Company, or apply any of its  property
or  assets  to,  or  set  aside any sum  for,  the  payment,
purchase, redemption or other acquisition or retirement  of,
any shares of any class of capital stock of the Company, if,
after  giving effect to such dividend or other distribution,
the  result  of  such  dividend or other distribution  would
cause  a violation of 11.8 or any other provision contained
herein.
     
     11.16.  Alterations to Fuel Purchase Contract.   Until
expiration or termination of the Commitments under the Trust
Credit Agreement and thereafter until all obligations of the
Trust thereunder and under the Notes issued pursuant thereto
are  paid in full, amend, alter, modify or waive any of  the
provisions of the Fuel Purchase Contract in any manner  that
would  materially  affect  the  absolute  and  unconditional
obligations of the Company to take and pay for any  and  all
Fuel pursuant to the terms of the Fuel Purchase Contract  or
otherwise  adversely affect or impair the  security  of  the
Banks  therein  without the prior written  consent  of  such
Banks as hold 100% of the aggregate principal amount of  the
Maximum Commitment.
     
     12.  EVENTS OF DEFAULT; ACCELERATION.  If any  of  the
following events ("Events of Default" or, if notice or lapse
of time or notice and lapse of time is required, then, prior
to  such  notice  and/or  lapse of time,  "Defaults")  shall
occur:
     
          (a)   if  the Company shall default in the payment
of  principal  on any of the Advances when  the  same  shall
become  due and payable, whether at maturity or at any  date
fixed for payment or prepayment or by declaration;
          
          (b)   if  the Company shall default in the payment
of  any  interest  on  the Advances, or  the  Facility  Fee,
Agent's Fee or any other fee or expense payable hereunder or
under  the  other  Loan Documents, and  such  Default  shall
continue for more than one Business Day, when the same shall
become due and payable;
          
          (c)    if   the  Company  shall  default  in   the
performance of or compliance with any term contained in  any
of  10.3(e),  11.1, 11.2, 11.3, 11.4,  11.5,  11.7,  11.8,
11.9,  11.10,  11.11, 11.12, 11.13, 11.14,  11.15  or  11.16
hereof;
          
          (d)    if   the  Company  shall  default  in   the
performance of or compliance with any term contained in this
Agreement  other than those referred to above in  this  12,
and such default shall not have been remedied within 30 days
after  written notice thereof shall have been given  to  the
Company by the Agent;
          
          (e)   if  any representation or warranty  made  or
deemed made by the Company herein or in connection with  any
of  the transactions contemplated hereby shall prove to have
been  false or incorrect in any material respect on the date
as of which made;
          
          (f)   if  the  Company  or  any  Subsidiary  shall
default (as principal or guarantor or other surety)  in  the
payment of any principal of, or premium, if any, or interest
on any indebtedness (other than the Obligations to the Banks
hereunder),  or  with respect to any of  the  terms  of  any
evidence  of such indebtedness or of any agreement  relating
thereto, and such default shall entitle the holder  of  such
indebtedness  to  accelerate the maturity  thereof  and  the
unpaid  balance of any such defaulted indebtedness is  equal
to or exceeds $1,000,000 unless, in the case of any default,
such  default has been affirmatively waived by or on  behalf
of the holder of such indebtedness;
          
          (g)   if  the Company or any Subsidiary  makes  an
assignment  for  the benefit of creditors, or  petitions  or
applies  for the appointment of a liquidator or receiver  or
custodian  (or  similar  official) of  the  Company  or  any
Subsidiary, or of any substantial part of the assets of  the
Company  or  any Subsidiary or commences any  proceeding  or
case  relating  to the Company or any Subsidiary  under  any
bankruptcy,    reorganization,   arrangements,   insolvency,
readjustment of debt, dissolution or liquidation or  similar
law of any jurisdiction, now or hereafter in effect;
          
          (h)   if any such petition or application is filed
or  any  such  proceeding or case is commenced  against  the
Company or any Subsidiary and the Company or such Subsidiary
indicates   its   approval  thereof,  consent   thereto   or
acquiescence  therein or an order is entered appointing  any
such   liquidator  or  receiver  or  custodian  (or  similar
official),  or  adjudicating the Company or  any  Subsidiary
bankrupt  or insolvent, or approving a petition in any  such
proceeding  or  a decree or order for relief is  entered  in
respect  of  the Company or any Subsidiary in an involuntary
case  under  any bankruptcy or reorganization,  arrangement,
insolvency, readjustment of debt, dissolution or liquidation
or  similar  laws  of any jurisdiction as now  or  hereafter
constituted;
          
          (i)  if any order is entered in any proceeding  by
or   against  the  Company,  any  Subsidiary  decreeing   or
permitting the dissolution or split-up of the Company or any
Subsidiary or the winding up of its affairs;
          
          (j)  if there shall remain in force, undischarged,
unsatisfied and unstayed, for more than 30 days, whether  or
not  consecutive,  any  final judgment  or  judgments  which
exceed,  either individually or in the aggregate, more  than
$1,000,000 against the Company or any Subsidiary;
          
          (k)   if  any governmental authority or any person
purporting  to act under governmental authority  shall  have
taken  any  action  to condemn, seize or appropriate  or  to
assume custody or control of, all or any substantial part of
the property of the Company and its Subsidiaries taken as  a
whole;
          
          (l)   if  an Event of Default under and as defined
in the Trust Credit Agreement shall occur and be continuing;
          
          (m)   if  the Company shall fail to obtain, renew,
maintain  or  comply with all such government  approvals  as
shall  now  or hereafter be necessary or, in the opinion  of
special  counsel  to  the  Banks,  desirable  (i)  for   the
execution, delivery or performance by the Company of its, or
the  exercise by the Banks of their, rights under  the  Loan
Documents  or  (ii)  for  the grant  by  the  Trust  of  the
assignments  and security interests granted by the  Security
Documents or for the validity and enforceability or for  the
perfection of or the exercise by the Agent of its rights and
remedies  thereunder; or any such government approval  shall
be  revoked,  terminated, withdrawn, suspended, modified  or
withheld or shall cease to be in full force and effect,  and
such   revocation,   termination,  withdrawal,   suspension,
modification, withholding or cessation may adversely  affect
the  Banks  or the security provided to the Banks under  the
Loan  Documents, or any proceeding shall be commenced by  or
before  any  governmental authority for the  purpose  of  so
revoking, terminating, withdrawing, suspending, modifying or
withholding any such government approval and such proceeding
is not dismissed within 30 days;
          
          (n)   if,  without  the consent  of  the  Majority
Banks, the Fuel Purchase Contract or any Loan Document shall
be  amended, supplemented, terminated or otherwise  modified
or  become of no force or effect or the obligations  of  any
party  thereto  shall be modified, suspended, discharged  or
terminated  (in  any  such case, whether  by  the  voluntary
action  of any party to such Loan Document, by operation  of
law,  or  otherwise and other than by the expiration thereof
in accordance with its terms), or the Company shall give any
consent,  waiver  or  approval thereunder  (other  than  any
consent,  waiver  or approval which cannot adversely  affect
the  Banks  or the security provided to the Banks under  the
Loan Documents);
          
          (o)   if  any judicial decision, law or regulation
or   interpretation  of  any  judicial  decision,   law   or
regulation  shall be adopted or enforced  by  any  court  or
governmental  or  regulatory authority  (including,  without
limitation,  the DPU or similar agency of any  other  state,
the SEC, the Department of Energy and FERC), and as a result
of  such  adoption or enforcement any Loan Document  or  any
transaction contemplated thereby shall be or become, or with
the  passage  of  a  specific period of time  would  become,
unlawful  or  the  performance of any Loan Document  or  any
material   term  thereof  shall  be  rendered  unlawful   or
unenforceable  unless  within 10 days  thereof  the  Company
shall  have  obtained a stay of such action, and  such  stay
shall remain in full force and effect, or taken other action
which eliminates the adverse consequence of such action; or
          
          (p)   if  the  Company's franchise or  license  to
distribute gas is revoked or suspended;
          
  then and in any such event (unless all Defaults and Events
of  Default shall theretofore have been remedied) the  Agent
may   and,   upon  the  written,  telecopied  or  telephonic
(confirmed  in writing) request of the Majority Banks  shall
by  notice  to  the Company declare:  (i) the obligation  of
each  Bank to make Advances to the Company to be terminated,
whereupon the same shall terminate, and/or (ii) the Advances
to  the  Company, all interest thereon and all other amounts
payable  under  this  Agreement  to  be  forthwith  due  and
payable, whereupon such Advances, all such interest and  all
such  amounts shall become and be forthwith due and  payable
without presentment, demand, protest or notice, all of which
are hereby expressly waived by the Company.  Notwithstanding
the  foregoing,  upon any Event of Default  contemplated  by
subsections (g), (h), or (i) above, all amounts specified in
clause  (ii) above shall become immediately due and  payable
automatically  without any requirement of  notice  from  the
Agent or any Bank.

     13. NOTICE AND WAIVERS OF DEFAULT.
     
     13.1.   Notice of Default.  If any Person  shall  give
any  notice or take any other action in respect of a claimed
Default  (whether or not constituting an Event  of  Default)
under  this  Agreement  or  any  other  note,  evidence   of
indebtedness, indenture or other obligation as to which  the
Company, any of its Subsidiaries or the Trust is a party, or
obligor,  whether as principal or surety, the Company  shall
forthwith give written notice thereof to each of the  Banks,
describing  the  notice  or action and  the  nature  of  the
claimed Default.
     
     13.2.   Waivers of Default.  Any Default or  Event  of
Default  may  be  waived as provided  in  24  hereof.   Any
Default  or  Event of Default so waived shall be  deemed  to
have been cured and to be not continuing; but no such waiver
shall  extend  to or affect any subsequent like  default  or
impair any rights arising therefrom.
     
     14. REMEDIES ON DEFAULT, ETC.
     
     14.1.   Rights of Banks.  In case any one or  more  of
the  Events of Default specified in 12 shall have  occurred
and be continuing, and whether or not all amounts owing with
respect  to the Advances have been declared due and  payable
pursuant  to  12, (i) each Bank, if owed  any  amount  with
respect to such Advances, may proceed to protect and enforce
its  rights  by suit in equity, action at law  and/or  other
appropriate proceeding, whether for the specific performance
of  any  covenant or agreement contained in this  Agreement,
including  the  obtaining of the ex parte appointment  of  a
receiver,  and,  if such amount shall have  become  due,  by
declaration  or  otherwise, proceed to enforce  the  payment
thereof  or any other legal or equitable right of the  Bank;
and  (ii)  to the extent any Bank holds Advances  (excluding
Competitive   Bid  Advances)  exceeding  in  the   aggregate
principal  amount such Bank's Commitment Percentage  of  the
then  outstanding  aggregate principal amount  of  all  such
Advances  held  by  all  the Banks, the  other  Banks  shall
purchase such participations in such Bank's Advances  so  as
to  result in the outstanding aggregate principal amount  of
such  Advances held by each Bank to equal each  such  Bank's
Commitment  Percentage  of  the then  outstanding  aggregate
principal  amount of all such Advances.  The Company  hereby
agrees  that  any  Bank so purchasing a  participation  from
another  Bank  pursuant to this 14.1 may,  to  the  fullest
extent  permitted by law, exercise all its right of  payment
(including  the  right  of set-off)  with  respect  to  such
participation  as  fully as if such  Bank  were  the  direct
creditor of the Company in the amount of such participation.
     
     14.2.   Setoff.   Upon the occurrence and  during  the
continuance  of  any Event of Default, each Bank  is  hereby
authorized at any time and from time to time, without notice
(any  such notice being expressly waived hereby) and to  the
fullest  extent permitted by law, to set off and  apply  any
and  all  deposits  (general or specific,  time  or  demand,
provisional  or final, and in whatever currency denominated)
at  any time held or other sums credited by or due from  any
of the Banks to the Company against any and all liabilities,
direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising of the Company to the
Banks.   Each of the Banks agrees with the other Banks  that
(i)  if  an  amount  to  be set off  is  to  be  applied  to
Indebtedness  of  the  Company to a  Bank,  other  than  the
Advances  held  by all of the Banks, such  amount  shall  be
applied  ratably  to  such  other Indebtedness  and  to  the
Advances  and (ii) if a Bank shall receive from the  Company
any  payment whether by voluntary payment, exercise  of  the
right of setoff, counterclaim, cross action, enforcement  of
the  Advances  held  by  a Bank by proceedings  against  the
Company  at  law  or  in  equity  or  by  proof  thereof  in
bankruptcy,  reorganization,  liquidation,  receivership  or
similar  proceedings,  or otherwise, such  payment  received
under  this  14.2  shall be shared in  proportion  to  each
Bank's Commitment Percentage.
     
     15. THE AGENT.  (a) Each Bank by its own execution  of
this  Agreement  does hereby appoint,  and  consent  to  the
appointment  of, the Agent as agent for the ratable  benefit
of  the  Banks hereunder.  The Agent is authorized  to  take
such  action on behalf of each of the Banks and to  exercise
all  such  powers as are hereunder and in related  documents
delegated  to  the Agent, together with such powers  as  are
reasonably incidental thereto.
     
          (b)  The Agent may exercise its powers and execute
its  duties by or through employees or agents and  shall  be
entitled  to  take,  and  to  rely  on,  advice  of  counsel
concerning  all matters pertaining to its rights and  duties
under this Agreement.  The Agent may utilize the services of
such  Persons  as  the  Agent in  its  sole  discretion  may
reasonably  determine, and all reasonable fees and  expenses
of any such Persons shall be paid by the Company.
          
          (c)    Neither   the  Agent   nor   any   of   its
shareholders, directors, officers or employees nor any other
Person  assisting  them in their duties  nor  any  agent  or
employee thereof, shall be liable for any waiver, consent or
approval given or any action taken, or omitted to be  taken,
in  good  faith  by it or them hereunder, or  in  connection
herewith   or   therewith,  or  be   responsible   for   the
consequences   of  any  oversight  or  error   of   judgment
whatsoever, except that the Agent or such other  Person,  as
the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
          
          (d)   The  Agent shall not be responsible for  the
execution  or validity or enforceability of this  Agreement,
or  any instrument at any time constituting, or intended  to
constitute, collateral security for the Advances, or for the
value  of  any such collateral security or for the validity,
enforceability or collectability of any such  amounts  owing
with  respect  to  the  Advances, or  for  any  recitals  or
statements, warranties or representations herein or made  in
any  certificate or instrument hereafter furnished to it  by
or  on  behalf  of the Company or be bound to  ascertain  or
inquire  as to the performance or observance of any  of  the
terms, conditions, covenants or agreements herein or in  any
instrument   at  any  time  constituting,  or  intended   to
constitute, collateral security for the Advances.  The Agent
shall not be bound to ascertain whether any notice, consent,
waiver  or  request delivered to it by the  Company  or  any
holder  of  any  of  the  Advances  shall  have  been   duly
authorized or is true, accurate and complete.  The Agent has
not  made  nor  does  it  now make  any  representations  or
warranties,  express  or implied, nor  does  it  assume  any
liability  to the Banks with respect to the creditworthiness
or  financial  condition  of  the  Company  or  any  of  its
Subsidiaries  and each Bank represents and warrants  to  the
Agent that it has made its own independent evaluation of the
creditworthiness of the Company and its Subsidiaries and has
not  relied  upon the Agent or any material  or  information
furnished by the Agent in making such evaluation.
          
          (e)    If   in  the  opinion  of  the  Agent   the
distribution  of any amount received by it in such  capacity
hereunder might involve it in liability, it may refrain from
making  distribution  until its right to  make  distribution
shall   have  been  adjudicated  by  a  court  of  competent
jurisdiction.   If  a court of competent jurisdiction  shall
adjudge  that  any  amount received and distributed  by  the
Agent  is  to  be  repaid,  each Person  to  whom  any  such
distribution shall have been made shall either repay to  the
Agent  its proportionate share of the amount so adjudged  to
be  repaid or shall pay over the same in such manner and  to
such  Persons  as shall be determined by such  court.   With
respect  to obligations of the Company hereunder, a  payment
to the Agent shall be deemed to be a payment to the Banks.
          
          (f)  The Agent may deem and treat the payee of any
Note  as the absolute owner thereof for all purposes  hereof
until  it  shall  have  been furnished  in  writing  with  a
different name by such payee or by a subsequent holder.
          
          (g)   In  its individual capacity, Fleet  National
Bank  shall  have the same obligations and the same  rights,
powers  and privileges in respect to its Commitment and  the
Advances made by it hereunder, as it would have were it  not
also the Agent.
          
     15A.      THE  CO-AGENT.  Notwithstanding anything  to
the  contrary set forth herein, the Co-Agent shall be deemed
to  be the agent of the Banks in name only, and the Co-Agent
shall  not  have  any  right, power, obligation,  liability,
responsibility or duty under this Agreement other  than  (a)
those applicable to all Banks as such or (b) those otherwise
applicable  to  The  Bank  of New  York  in  its  individual
capacity.   Each Bank acknowledges that it has  not  relied,
and will not rely, on the Co-Agent in deciding to enter into
this Agreement or in taking or not taking action hereunder.
     
     16. CONSENT TO JURISDICTION.
     
          (a)  The Company hereby irrevocably submits to the
jurisdiction  of  any Massachusetts State or  Federal  court
sitting in Boston over any action or proceeding arising  out
of  or relating to this Agreement or any Note issued by  the
Company,  and the Company hereby irrevocably agree that  all
claims in respect of such action or proceeding may be  heard
and determined in such Massachusetts State or Federal Court.
Service of process may be made to the Company by mailing  or
delivering  a  copy of such process to the  Company  at  the
Company's  address as specified in 20 hereof.  The  Company
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.
          
          (b)  Nothing in this 16 shall affect the right of
any  Bank  to  serve  legal  process  in  any  other  manner
permitted  by law or affect the right of any Bank  to  bring
any action or proceeding against the Company or its property
in the courts of any other jurisdictions.
          
     17.  BINDING  EFFECT AND ASSIGNMENT.   This  Agreement
shall  become effective when it shall have been executed  by
the  Company, the Agent and each Bank and shall  be  binding
upon and inure to the benefit of the Company, the Agent  and
each  Bank  and  their  respective successors  and  assigns,
except  that the Company shall have no right to  assign  its
rights  hereunder or any interest herein without  the  prior
written  consent  of  the  Banks.  Any  Bank  or  subsequent
assignee  of  any Bank may with the written consent  of  the
Company (which consent shall not be unreasonably withheld so
long as the assignment, if the Company so request, has first
been  offered  to one or more of the other  Banks)  and  the
Agent assign, pursuant to documentation satisfactory to  the
Agent  and  its  counsel, to any financial  institution  (an
"Assignee")  all or any part of, such Bank's  or  Assignee's
obligations, rights and benefits hereunder and to the extent
of  such  assignment any such Assignee shall have  the  same
obligations, rights and benefits with respect to Company  as
it  would  have  had  if it were one of the  original  Banks
hereunder; provided, that each such assignment shall be in a
minimum amount of $5,000,000 and, provided further, that  no
such  assignment shall become effective unless the assigning
bank shall have paid a $3,500 assignment fee to the Agent in
consideration of the Agent's recordation of such assignment.
Notwithstanding anything in this 17 to the  contrary,  each
Bank  shall be permitted to assign any or all of its  rights
hereunder to any of its "bank" affiliates or to any  of  the
twelve (12) Federal Reserve Banks organized under 4 of  the
Federal  Reserve  Act  12  U.S.C. 341,  without  the  prior
written  consent of the Company or the Agent, provided  that
such  "bank" affiliate shall have total capital of not  less
than $100,000,000.  If any assignee Bank is not incorporated
under  the laws of the United States of America or any state
thereof,  it shall, prior to the date on which any  interest
or fees are payable hereunder or under any of the other Loan
Documents  for its account, deliver to the Company  and  the
Agent a certification as to its exemption from deduction  or
withholding of any United States Federal income taxes.
     
     18. EXECUTION IN COUNTERPARTS.  This Agreement may  be
executed  in  any  number of counterparts and  by  different
parties hereto in separate counterparts, each of which  when
so  executed shall be deemed to be an original  and  all  of
which  taken  together shall constitute  one  and  the  same
agreement.
     
     19.   SURVIVAL  OF  COVENANTS,  ETC.   All  covenants,
agreements, representations and warranties made  herein  and
in  any  certificates or other papers  delivered  by  or  on
behalf of the Company pursuant hereto are material and shall
be   deemed   to  have  been  relied  upon  by  the   Banks,
notwithstanding  any investigation heretofore  or  hereafter
made by it, and shall survive the making by the Banks of the
Advances, as herein contemplated and shall continue in  full
force   and  effect  so  long  as  any  Commitment   remains
outstanding or as long as any Advances or other  amount  due
under  this  Agreement or the Notes remain  outstanding  and
unpaid.   All  statements contained in  any  certificate  or
other  paper  delivered to the Banks at any time  by  or  on
behalf of the Company pursuant hereto or in connection  with
the   transaction   contemplated  hereby  shall   constitute
representations and warranties by the Company hereunder.
     
     20.   NOTICE,  ETC.   Except  as  otherwise  specified
herein,  all  notices  and  other  communications  made   or
required to be given pursuant to this Agreement shall be  in
writing  and shall be either delivered by hand or mailed  by
United  States of America first-class mail, postage prepaid,
or  sent  by  telecopier confirmed by letter,  addressed  as
follows:
     
          (a)   If to the Company, at: Colonial Gas Company,
40   Market   Street,  Lowell,  MA  01853   Attn:   Nickolas
Stravropoulos,     Vice     President-Finance,     Telecopy:
(508)  459-2314, or at such other address for notice as  the
Company  shall last have furnished in writing to the  Person
giving the notice with a copy to:
          
               Stanley Keller, Esq.
               Palmer & Dodge LLP
               One Beacon Street
               Boston, MA 02108
          
          (b)   if to the Agent, at Fleet National Bank, One
Federal Street, Boston, Massachusetts 02211, Attn: Thomas L.
Rose,  Vice  President, National Utilities Group,  Telecopy:
(617)  346-0580,  or such other address for  notice  as  the
Agent  shall  last have furnished in writing to  the  Person
giving the notice; with a copy to:
          
               Peter S. Johnson, Esq.
               Gadsby & Hannah LLP
               225 Franklin Street
               Boston, MA  02110
               Telecopy:  (617) 345-7050
               
          (c)   if to any Bank, at the address set forth for
such  Bank  on  the  signature page hereof,  or  such  other
address for notice as the Bank shall last have furnished  in
writing to the Person giving the notice.
          
     All  such notices and communication shall, when mailed,
telexed,  telecopied or cabled, be effective when  deposited
in  the  mails or delivered to the telex, telecopy or  cable
system, respectively.
     
     21. GOVERNING LAW.  This Agreement shall be deemed  to
be   contracts  under  the  laws  of  The  Commonwealth   of
Massachusetts  and shall for all purposes  be  construed  in
accordance   with  and  governed  by  the   laws   of   said
Commonwealth, without regard to principles of  conflicts  of
law.
     
     22.  MISCELLANEOUS.   The rights and  remedies  herein
expressed  are  cumulative and not exclusive  of  any  other
rights which any Bank would otherwise have.  Any instruments
required  by any of the provisions hereof to be in the  form
annexed hereto as an exhibit shall be substantially in  such
form with such changes therefrom, if any, as may be approved
by  the  Banks  and  the  Company.   The  captions  in  this
Agreement  are for convenience of reference only  and  shall
not  define or limit the provisions hereof.  This  Agreement
or  any  amendment may be executed in separate counterparts,
each  of  which when so executed and delivered shall  be  an
original,  but  all of which together shall  constitute  one
instrument.   In  proving this Agreement, it  shall  not  be
necessary  to  produce or account for  more  than  one  such
counterpart.
     
     23.  ENTIRE  AGREEMENT, ETC.  This Agreement  and  any
other documents executed in connection herewith or therewith
express the entire understanding of the parties with respect
to  the  transactions  contemplated  hereby.   Neither  this
Agreement  nor  any  term  hereof may  be  changed,  waived,
discharged  or  terminated orally or in writing,  except  as
provided in 24.
     
     24.  CONSENTS,  AMENDMENTS, WAIVERS, ETC.   Except  as
otherwise expressly set forth in any particular provision of
this   Agreement,  any  consent  or  approval  required   or
permitted by this Agreement to be given by the Banks may  be
given,  and  any  term of this Agreement  or  of  any  other
instrument  related  hereto  or  mentioned  herein  may   be
amended, and the performance or observance by the Company of
any  term  of this Agreement may be waived (either generally
or  in  a  particular instance and either  retroactively  or
prospectively) with, but only with, the written  consent  of
the Company and the Majority Banks, provided, however, that:
     
          (a)  Without the written consent of such Banks  as
hold  100% of the aggregate principal amount of the  Maximum
Commitment,
          
          (i)   no  reduction  in the principal  amount  of,
     interest  rate  on, or Facility Fee or  any  other  fee
     relating  to the Commitments or the Advances  shall  be
     made;
          
          (ii)  no  extension or postponement of the  stated
     time  of  payment of the principal amount of,  interest
     on,  or  Facility Fee or any other fee relating to  the
     Commitments or the Advances shall be made;
          
          (iii)      no increase in the amount, or extension
     of  the  term, of the Commitment beyond those  provided
     for hereunder shall be made;
          
          (iv)  no  change  in the definition  of  the  term
     "Majority Banks" shall be made; and
          
          (v)   no change in the language of this 24  shall
     be made.
          
No  waiver  shall  extend to or affect  any  obligation  not
expressly waived or impair any right consequent thereon.  No
course  of dealing or delay or omission on the part  of  any
Bank  in  exercising  any right shall operate  as  a  waiver
thereof  or otherwise be prejudicial thereto.  No notice  to
or  demand  upon  the Company shall entitle the  Company  to
other  or  further  notice or demand  in  similar  or  other
circumstances.

     25. PARTICIPATIONS.  Any Bank may, without the consent
of any other party, sell participations to one or more banks
or other entities (each a "Participant") in all or a portion
of   its   rights  and  obligations  under  this   Agreement
(including,  without limitation, all or  a  portion  of  its
Commitment and its Advances); provided that (i) such  Bank's
obligations  under  this Agreement shall  remain  unchanged,
(ii)  such Bank shall remain solely responsible to the other
parties  hereto  for  the performance of  such  obligations,
(iii)  the Company, the Agent, and the Banks shall  continue
to  deal solely and directly with such Bank, as the case may
be,  in  connection with such Bank's rights and  obligations
under this Agreement and (iv) each participation shall be in
a  minimum  amount of $5,000,000.  No Bank shall  grant  any
Participant the right to vote or otherwise act in respect to
any matter related to this Agreement except that such rights
may be granted with respect to amendments or waivers related
to  the reduction of principal or the reduction of the  rate
of   interest  or  a  change  in   Facility  Fees   or   the
postponement of the date fixed for any payment of  principal
or  interest,  if such right to vote or otherwise  act  with
respect to such amendments or waivers is provided for by the
terms   of   the   agreement  governing  such  participation
interest; provided, however, that the Company shall  not  be
obligated  to  communicate directly or indirectly  with  any
Participant   with   respect  to  this  Agreement   or   the
transactions contemplated hereby.
     
     26.  EXPENSES; INDEMNIFICATION.  Whether  or  not  the
transactions  contemplated hereby shall be consummated,  the
Company  will pay (a) the reasonable cost of (i) reproducing
this  Agreement and other instruments mentioned  herein  and
(ii)  any  taxes payable by any Bank (including any interest
and  penalties in respect thereof but other than taxes based
upon  such Bank's net income or profits) and any filing fees
payable by the Agent, on or with respect to the transactions
contemplated by this Agreement (the Company hereby  agreeing
to  indemnify  each  Bank  with respect  thereto);  (b)  the
reasonable  fees, expenses and disbursements of the  Agent's
special  counsel (Gadsby & Hannah LLP incurred in connection
with the preparation of this Agreement and other instruments
mentioned   herein,  each  closing  hereunder,   amendments,
modifications,  approvals, consents  or  waivers  hereto  or
hereunder;   (c)   all  reasonable  out-of-pocket   expenses
(including reasonable attorneys' fees and costs) incurred by
Fleet  National  Bank in connection with the syndication  of
the  loan  and  by  the  Banks in connection  with  (i)  the
enforcement of this Agreement, the Notes and the other  Loan
Documents against the Company or the administration  thereof
after  the  occurrence of an Event of Default  and  (ii)  in
connection  with  any  litigation,  proceeding  or   dispute
whether  arising hereunder or otherwise, in any way  related
to  any Bank's relationship with the Company hereunder.  The
Company  further  agree to indemnify and hold  harmless  any
Bank as well as each Bank's shareholders, directors, agents,
officers,    subsidiaries   and   affiliates   ("Indemnified
Parties"), from and against all claims, actions or causes of
action ("Claims") (including without limitation all damages,
losses,  settlement payments, liabilities, reasonable  costs
and  expenses  related to such Claims), incurred,  suffered,
sustained or required to be paid by an Indemnified Party  by
reason  of  or  resulting from the transactions contemplated
hereby, except any of the foregoing which result from  gross
negligence  or willful misconduct of the indemnified  party;
provided, that each Bank agrees not to settle any litigation
in  connection with any claim or liability with  respect  to
which  such Bank may seek indemnification hereunder  without
the  prior  written  consent of the Company,  which  consent
shall  not  be  unreasonably withheld or  delayed.   In  any
investigation, proceeding or litigation, or the  preparation
therefor,  the Banks shall be entitled to select  their  own
counsel  and,  in addition to the foregoing  indemnity,  the
Company  agrees  to  pay promptly the  reasonable  fees  and
expenses  of  such  counsel,  provided,  however,  that  the
Company  shall be required to bear the expense of  only  one
counsel  for  all  of the Banks unless (i)  in  the  written
opinion  of  counsel to the Agent, use of only  one  counsel
could  reasonably be expected to give rise to a conflict  of
interest  or (ii) the Company authorize any Bank  to  employ
separate  counsel  (including the in-house  counsel  of  the
applicable Bank) at the Company's expense.  The covenants of
this 26 shall survive payment or satisfaction of payment of
amounts owing with respect to the Notes.
     
     27.  HEADINGS; CONSTRUCTION.  Headings of the sections
have been inserted as a matter of convenience only and shall
not control or affect the meaning or construction of any  of
the terms and provisions hereof.
     
     28.   WAIVER OF JURY TRIAL.  THE COMPANY HEREBY WAIVES
ITS  RIGHT  TO  A JURY TRIAL WITH RESPECT TO ANY  ACTION  OR
CLAIM  ARISING  OUT OF ANY DISPUTE IN CONNECTION  WITH  THIS
AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY
RIGHTS  OR  OBLIGATIONS  HEREUNDER  OR  THEREUNDER  OR   THE
PERFORMANCE  OF  WHICH  RIGHTS AND OBLIGATIONS.   EXCEPT  AS
PROHIBITED BY LAW AND EXCEPT IN THE CASE OF GROSS NEGLIGENCE
OR  WILLFUL MISCONDUCT, THE COMPANY HEREBY WAIVES ANY  RIGHT
IT  MAY  HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED
TO   IN  THE  PRECEDING  SENTENCE  ANY  SPECIAL,  EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR   IN  ADDITION  TO,  ACTUAL  DAMAGES.   THE  COMPANY  (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY  OF  ANY
BANK  OR  THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT  SUCH  BANK  OR THE AGENT WOULD NOT, IN  THE  EVENT  OF
LITIGATION,  SEEK TO ENFORCE THE FOREGOING WAIVERS  AND  (B)
ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE ENTERED  INTO
THIS  AGREEMENT,  THE  OTHER LOAN  DOCUMENTS  TO  WHICH  THE
COMPANY  IS A PARTY IN RELIANCE ON, AMONG OTHER THINGS,  THE
WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
                              
        [remainder of page intentionally left blank]
     
     
     Signed, sealed and delivered, as of the date set  forth
at  the beginning of this Agreement, by the Company and each
of the Banks.

THE COMPANY:
                              COLONIAL GAS COMPANY


[Corporate Seal]              By:  s/Dennis W. Carroll
                                     Vice  President and Treasurer

Attest:

THE BANKS:
                              THE BANK OF NEW YORK
                              
                              
                              By:     s/John W. Hall
                              Title:  Vice President
                              
                              The Bank of New York
                              One Wall Street, 19th Floor
                              New York, NY 10286
                              Attention: John Hall
                              
                              UNION BANK OF CALIFORNIA, N.A.
                              
                              
                              By:     s/Karyssa M. Britton
                              Title:  Vice President
                              
                              Union Bank of California, N.A.
                              445 S. Figueroa Street
                              Los Angeles, CA 90071
                              Attention: Karyssa M. Britton
                              
                              CORESTATES BANK, N.A.
                              
                              
                              By:    s/Tony Braxton
                              Title: Vice President
                              
                              CoreStates Bank, N.A.
                              1339 Chestnut Street
                              Philadelphia, PA 19107
                              Attention: Tony Braxton
                              
                              FIRST UNION NATIONAL BANK
                              
                              
                              By:    s/Michael J. Kolosowsky
                              Title: Vice President
                              
                              First Union National Bank
                              301  S.  College Street,  31st
                              Floor
                              Charlotte, NC 28288
                              Attention: Legal Division
                              
                              FLEET NATIONAL BANK
                              
                              
                              By:     s/Thomas L. Rose
                                      Title:  Vice President
                              
                              Fleet National Bank
                              One Federal Street
                              Boston, Massachusetts 02211
                              Attention:   Thomas  L.  Rose,
                              Vice President
                              
THE CO-AGENT:
                              THE BANK OF NEW YORK
                              
                              
                              By:     s/John W. Hall
                              Title:  Vice President
                              
                              The Bank of New York
                              One Wall Street, 19th Floor
                              New York, NY 10286
                              Attention: John Hall
                              
THE AGENT:
                              FLEET NATIONAL BANK, as Agent
                              
                              
                              By:     s/Thomas L. Rose
                              Title:  Vice President
                              
                              Fleet National Bank
                              One Federal Street
                              Boston, Massachusetts 02211
                              Attention:   Thomas  L.  Rose,
                              Vice President


                                                 EXHIBIT A-1


                    REVOLVING CREDIT NOTE


[$________]                            September ___, 1997


      FOR  VALUE  RECEIVED,  the  undersigned  Colonial  Gas
Company, a Massachusetts corporation (the "Company"), hereby
absolutely and unconditionally promises to pay to the  order
of [                              ] (the "Bank") at the head
office  of Fleet National Bank, as Agent  (the "Agent"),  at
One Federal Street, Boston, Massachusetts 02211:

           (a)   on September___, 1998, the principal amount
     of   [____________  ($_________)]  or,  if  less,   the
     aggregate unpaid principal amount of Advances  made  by
     the   Bank  to  the  Company  pursuant  to  the  Credit
     Agreement (as hereinafter defined); and

           (b)   interest on the principal from time to time
     outstanding from the date hereof through and  including
     the  date  on which such principal amount  is  paid  in
     full,  at  the times and at the rates provided  in  the
     Revolving  Credit  Agreement dated as of  September___,
     1997, as amended or supplemented from time to time (the
     "Credit Agreement"), by and among the Company, the Bank
     and such other banks or financial institutions that are
     or may become parties to the Credit Agreement from time
     to  time in accordance with the provisions thereof (the
     Bank  and  such other banks being collectively referred
     to  as  the  "Banks") and the Agent, as agent  for  the
     Banks.

     This Note evidences borrowings under, is subject to the
terms  and conditions of, and has been issued by the Company
in accordance with the terms of the Credit Agreement, and is
one  of the Revolving Credit Notes referred to therein.  The
Bank  and  any holder hereof is entitled to the benefits  of
the  Credit Agreement and may enforce the agreements of  the
Company  contained  therein,  and  any  holder  hereof   may
exercise  the  respective remedies provided for  thereby  or
otherwise  available in respect thereof, all  in  accordance
with  the  respective terms thereof.  All capitalized  terms
used  in  this  Note and not otherwise defined herein  shall
have the same meanings herein as in the Credit Agreement.

     The Bank shall, and is hereby irrevocably authorized by
the  Company  to, endorse on the schedule attached  to  this
Note or a continuation of such schedule attached hereto  and
made  a  part  hereof,  an appropriate  notation  evidencing
advances  and repayments of principal of this Note, provided
that  failure  by the Bank to make any such notations  shall
not  affect any of the Company's obligations or the validity
of  any  repayments made by the Company in respect  of  this
Note.

      The Company has the right in certain circumstances and
the  obligation under certain other circumstances to  prepay
the whole or part of the principal of this Note on the terms
and conditions specified in the Credit Agreement.

      If  any  one  or more of the Events of  Default  shall
occur,  the entire unpaid principal amount of this Note  and
all of the unpaid interest accrued thereon may become or  be
declared  due and payable in the manner and with the  effect
provided in the Credit Agreement.

      The  Company and every endorser and guarantor of  this
Note or the obligation represented hereby waive presentment,
demand, notice, protest and all other demands and notices in
connection   with  the  delivery,  acceptance,  performance,
default or enforcement of this Note, assent to any extension
or  postponement  of  the  time  of  payment  or  any  other
indulgence,  to  any substitution, exchange  or  release  of
collateral and to the addition or release of any other party
or person primarily or secondarily liable.

      This  Note shall be deemed to take effect as a  sealed
instrument   under   the  laws  of   the   Commonwealth   of
Massachusetts  and for all purposes shall  be  construed  in
accordance with such laws.

      IN  WITNESS WHEREOF, Colonial Gas Company  has  caused
this Note to be signed by its duly authorized officer as  of
the day and year first above written.


                              COLONIAL GAS COMPANY

[Corporate Seal]

                              By:
                              Title:

                              Amount of
                              Principal    Balance of
               Amount of      Paid or      Principal    Notation
     Date      Loan           Prepaid      Unpaid       Made By



                                                 EXHIBIT A-2


                    COMPETITIVE BID NOTE


[$           ]                          [        , 199 ]

      FOR  VALUE  RECEIVED,  the undersigned,  Colonial  Gas
Company, a Massachusetts corporation (the "Company"), hereby
promises  to  pay  to  the  order of [_______________]  (the
"Bank"), at the office of Fleet National Bank, as Agent (the
"Agent") at One Federal Street, Boston, Massachusetts 02211,
on  [        , 199 ], pursuant to 3 of the Credit Agreement
dated  as  of  September  __, 1997, as  amended,  among  the
Company, the Banks named therein and the Agent (the  "Credit
Agreement"), the principal sum of                    Dollars
($        )  and  to  pay  interest on the unpaid  principal
amount outstanding from time to time at the rate of   %  per
annum,  payable on the last day of      and on the  Maturity
Date,  at said office, in lawful money of the United  States
of America in immediately available funds.

     The Company promises to pay interest, on demand, on any
overdue  principal  and,  to the extent  permitted  by  law,
overdue interest at a rate or rates determined as set  forth
in the Credit Agreement.

      This  Competitive Bid Note evidences borrowings under,
is  subject  to the terms and conditions of,  and  has  been
issued  by the Company in accordance with the terms  of  the
Credit  Agreement, and is one of the Competitive  Bid  Notes
referred  to  therein.  The Bank and any  holder  hereof  is
entitled  to  the benefits of the Credit Agreement  and  may
enforce the agreements of the Company contained therein, and
any  holder  hereof  may  exercise the  respective  remedies
provided  for  thereby  or otherwise  available  in  respect
thereof,  all  in  accordance  with  the  respective   terms
thereof.  All capitalized terms used in this Competitive Bid
Note  and  not otherwise defined herein shall have the  same
meanings herein as in the Credit Agreement.

      The Company has the right in certain circumstances and
the  obligation under certain other circumstances to  prepay
the  whole or part of the principal of this Competitive  Bid
Note  on  the terms and conditions specified in  the  Credit
Agreement.

      If  any  one  or more of the Events of  Default  shall
occur,   the   entire  unpaid  principal  amount   of   this
Competitive Bid Note and all of the unpaid interest  accrued
thereon  may  become or be declared due and payable  in  the
manner and with the effect provided in the Credit Agreement.

      The  Company and every endorser and guarantor of  this
Competitive  Bid  Note or the obligation represented  hereby
waive  presentment, demand, notice, protest  and  all  other
demands   and  notices  in  connection  with  the  delivery,
acceptance,  performance, default  or  enforcement  of  this
Competitive   Bid   Note,  assent  to   any   extension   or
postponement of the time of payment or any other indulgence,
to  any substitution, exchange or release of collateral  and
to  the  addition  or release of any other party  or  person
primarily or secondarily liable.

      This  Competitive  Bid Note shall be  deemed  to  take
effect  as  a  sealed  instrument  under  the  laws  of  the
Commonwealth of Massachusetts and for all purposes shall  be
construed in accordance with such laws.

      IN  WITNESS WHEREOF, Colonial Gas Company  has  caused
this   Competitive  Bid  Note  to  be  signed  by  its  duly
authorized  officer  as  of the day  and  year  first  above
written.


                         COLONIAL GAS COMPANY

[Corporate Seal]

                         By:
                         Title:

                                                  EXHIBIT B

                     NOTICE OF BORROWING

FLEET NATIONAL BANK
As Agent for the Banks which are parties
to the Revolving Credit Agreement
referred to below
One Federal Street
Boston, MA 02211

Attention:  Thomas L. Rose
            Vice President, National Utilities Group

Ladies and Gentlemen:

      The  undersigned Colonial Gas Company (the  "Company")
refers  to  the  Revolving Credit  Agreement,  dated  as  of
September  __,  1997  (the  "Credit  Agreement",  the  terms
defined therein being used herein as therein defined), among
the  Company,  certain  Banks  parties  thereto,  and  FLEET
NATIONAL BANK, as Agent for said Banks, and hereby gives you
notice  pursuant  to 2.2 of the Credit Agreement  that  the
undersigned  hereby requests a Borrowing  under  the  Credit
Agreement,  and  in  that connection sets  forth  below  the
information  relating  to  such  Borrowing  (the   "Proposed
Borrowing") as required by 2.2 of the Credit Agreement:

      (i)   The  requested  Business  Day  of  the  Proposed
Borrowing is           , 19  ;

      (ii)  The  requested Type of Advances  comprising  the
Proposed  Borrowing  is  [Base  Rate  Advances]  [Eurodollar
Advances];

      (iii)      [In the case of Eurodollar Advances:]  such
Advances  shall  have a [one (1) month], [two  (2)  months],
[three  (3)  months],  [six  (6) months],  initial  Interest
Period therefor;] and

      (iv) The aggregate amount of the Proposed Borrowing is
[$                 ].

                              Very truly yours,
                              
                              COLONIAL GAS COMPANY
                              
                              
                              By
                              Title:

                                               EXHIBIT C


            FORM OF COMPETITIVE BID QUOTE REQUEST


                           [Date]


To:     Fleet National Bank, as Agent (the "Agent")

From:   Colonial Gas Company (the "Borrower")

Re:     Revolving  Credit  Agreement (the  "Credit  Agreement")
        dated  as  of  September __, 1997  among  Colonial  Gas
        Company, the Banks party thereto and the Agent.


     We hereby give notice pursuant to 3.1(b) of the Credit
Agreement  that  we request Competitive Bid Quotes  for  the
following proposed Competitive Bid Borrowing(s):

Date of Borrowing:

Principal Amount*       Interest Period**      Maturity Date

$

      Such Competitive Bid Quotes should offer a Competitive
Bid Rate.

     Terms used herein have the meanings assigned to them in
the Credit Agreement.

                              COLONIAL GAS COMPANY
                              
                              By
                              Title:



*    Amount  must be a minimum of $2,500,000 or  any  larger
     multiple of $500,000.

**   7  to  180  days,  subject to  the  provisions  of  the
     definition of Interest Period.

                                                      EXHIBIT D


        FORM OF INVITATION FOR COMPETITIVE BID QUOTES


To:  [Name of Bank]

Re:  Invitation for Competitive Bid Quotes to
     Colonial Gas Company (the "Borrower")


      Pursuant  to 3.1(c) of the Revolving Credit Agreement
(the  "Credit  Agreement") dated as of  September  __,  1997
among  Colonial Gas Company, the Banks parties  thereto  and
Fleet  National Bank, as Agent, we are pleased on behalf  of
the  Borrower to invite you to submit Competitive Bid Quotes
to  the Borrower for the following proposed Competitive  Bid
Borrowing(s):

Date of Borrowing:

Principal Amount    Interest Period          Maturity Date

$

      Such Competitive Bid Quotes should offer a Competitive
Bid Rate.

      Please  respond to this invitation by  no  later  than
* a.m. (Boston time) on [date].


                                   FLEET  NATIONAL BANK,  as
                                   Agent
                                   
                                   
                                   By:
                                     Authorized Officer



*     The  time specified in Section 3.1(d)(i) of the Credit
Agreement.

                                                   EXHIBIT E


                FORM OF COMPETITIVE BID QUOTE


FLEET NATIONAL BANK, as Agent
One Federal Street
Boston, Massachusetts  02211

Attention:

Re:   Competitive  Bid Quote to Colonial  Gas  Company  (the
      "Borrower")

      In  response  to  your invitation  on  behalf  of  the
Borrower  dated                   , 19    , we  hereby  make
the following Competitive Bid Quote on the following terms:

1.   Quoting Bank:

2.   Person to contact at Quoting Bank:

3.   Date of Borrowing:            *

4.   We  hereby offer to make Competitive Bid Advance(s)  in
     the  following  principal amounts,  for  the  following
     Interest Periods and at the following rates:

Principal      Interest       Competitive Bid     Maturity
Amount**       Period***         Rate****           Date

$
$

      We  understand and agree that the offer(s)  set  forth
above,   subject  to  the  satisfaction  of  the  applicable
conditions set forth in the Revolving Credit Agreement dated




*    As specified in the related Invitation.
**   Principal amount bid for each Interest Period  may  not
     exceed  principal amount requested.  Bids must be  made
     for $2,500,000 or any larger multiple of $1,000.
***  7 to 180 days, as specified in the related Invitation.
**** Specify rate of interest per annum (each rounded to the
     nearest 1/10,000th of 1%).

as  of  September __, 1997 among Colonial Gas  Company,  the
Banks,  the  parties thereto, and Fleet  National  Bank,  as
Agent, irrevocably obligates us to make the Competitive  Bid
Advance(s) for which any offer(s) are accepted in  whole  or
in part by the Borrower.

                                   Very truly yours,
                                   
                                   [NAME OF BANK]


Dated:                             By:
                                     Authorized Officer


                                                   EXHIBIT F


               [BORROWERS' COUNSEL LETTERHEAD]


                     September __, 1997


To:  The Banks party to the credit agreements
     referred to below (the "Credit Agreements")
     and Fleet National Bank, as Agent for such Banks

Ladies & Gentlemen:

      We  have acted as counsel to Colonial Gas Company (the
"Utility"),  a corporation organized under the laws  of  The
Commonwealth   of  Massachusetts,  and  Massachusetts   Fuel
Inventory  Trust (the "Trust"), a trust organized under  the
laws  of  The  Commonwealth of Massachusetts, in  connection
with   the  preparation,  execution  and  delivery  of   the
following   documents  and  the  transactions   contemplated
thereby:

          (i)  The Trust Agreement dated as of June 26, 1990
     (the  "Trust Agreement") between State Street Bank  and
     Trust Company, as successor trustee, and the Utility.

           (ii)  The Revolving Credit Agreement dated as  of
     September  __,  1997 (the "Credit Agreement"),  by  and
     among the Utility, The Bank of New York, Union Bank  of
     California,  N.A., CoreStates Bank, N.A.,  First  Union
     National Bank and Fleet National Bank (the "Banks") and
     Fleet  National  Bank  as  Agent  for  the  Banks  (the
     "Agent") and The Bank of New York as Co-Agent  for  the
     Banks.

           (iii)     The Revolving Credit Agreement dated as
     of  June 26, 1990 (the "Trust Credit Agreement") by and
     among Massachusetts Fuel Inventory Trust acting by  and
     through its trustee Shawmut Bank, N.A. (the "Trustee"),
     the Banks and the Agent.

           (iv)  The  Security Agreement and  Assignment  of
     Contracts dated as of September __, 1997 (the "Security
     Agreement"), between the Trustee and the Agent.

           (v)   The Purchase Contract dated as of June  26,
     1990  (the  "Purchase Contract") between the Trust  and
     the Utility.

           (vi)  The  Consent  and  Agreement  dated  as  of
     September __, 1997 (the "Consent"), by the Utility.

           (vii)      The  Notes dated the date hereof  (the
     "Notes"),  executed by the Utility under  the  Colonial
     Credit  Agreement or the Trust under the  Trust  Credit
     Agreement and each payable to the order of one  of  the
     Banks.

      This  opinion  is  given pursuant to  6.1(c)  of  the
Colonial  Credit Agreement and 7.1(c) of the  Trust  Credit
Agreement.   Except as otherwise defined herein,  all  terms
defined  in  the Credit Agreement shall have the  respective
meanings ascribed to them therein.

      In connection with our preparation of this opinion, we
have  examined  and are familiar with originals  or  copies,
certified  or  otherwise identified to our satisfaction,  of
the Loan Documents, the charter documents and by-laws of the
Utility,  resolutions  of  the Board  of  Directors  of  the
Utility  (certified copies of which have been  furnished  to
you),  the  Trust Agreement and such other documents  as  we
have  deemed  necessary  in  connection  with  the  opinions
hereinafter  set  forth.   We  have  relied  as  to  various
questions of fact upon the representations and warranties of
the  Utility contained in the above-mentioned documents  and
the  certificates of public officials and  officers  of  the
Utility delivered thereunder.

      We have assumed due authorization and execution of all
agreements  referred to herein by the parties thereto  other
than  the  Utility and the Trust.  We have also assumed  the
genuineness of all signatures (other than those on behalf of
the  Utility and the Trust), the conformity to the originals
of   all  documents  reviewed  by  us  as  copies,  and  the
authenticity  and  completeness of  all  original  documents
reviewed by us in original or copy form.

      Our  opinions expressed in paragraphs 5 and 11  hereof
are  qualified by the fact that if the Agent or one or  more
of  the  Banks  should  acquire gas which  is  part  of  the
Collateral  (as  defined  in  the  Security  Agreement)   by
foreclosure or otherwise and intends to dispose of such  gas
in  The  Commonwealth  of  Massachusetts,  any  contract  or
contracts  for the sale of such gas might have to  be  filed
and  might be subject to action by the DPU relative  to  the
rates,  prices,  charges  and  practices  covered  by   such
contract.   Additionally,  if  such  Collateral  should   be
purchased  by a Massachusetts gas company under  a  contract
covering  a  period in excess of more than one year,  either
DPU  approval or a provision in the contract subjecting  the
price  of  the  Collateral  to future  DPU  review  will  be
required.

       Based   upon  the  foregoing,  and  subject  to   the
limitations and qualifications set forth below,  we  are  of
the opinion that:

      1.    The  Utility  is a corporation  duly  organized,
validly existing and in good standing under the laws of  The
Commonwealth of Massachusetts; has not failed to qualify  to
transact  business  in  any jurisdiction  where  failure  to
qualify  would  materially adversely affect its  ability  to
perform  its obligations under any of the Loan Documents  to
which it is a party; and has corporate power to execute  and
deliver  each of the Loan Documents to which it is  a  party
and to incur and perform its obligations thereunder.

      2.   The making and performance by the Utility of each
of  the Loan Documents to which it is a party have been duly
authorized by all necessary corporate action and do not  and
will  not violate any provision of law or of its charter  or
by-laws  or result in the breach of or constitute a  default
under  or  require any consent under any indenture or  other
agreement or instrument of which we are aware (after  having
made  a  reasonable investigation with respect  thereto)  to
which the Utility is a party or by which the Utility or  its
properties and assets may be bound or affected.

      3.    Except for matters described or referred  to  in
Schedule  8.7 of the Colonial Credit Agreement  or  Schedule
9.7  of  the  Trust Credit Agreement, there are no  actions,
suits  or  proceedings at law or in equity by or before  any
governmental agency or authority or arbitrator  now  pending
or,  to  the  best  of our knowledge (after  having  made  a
reasonable  investigation with respect thereto),  threatened
against  or  affecting the Utility or the  Trust  which,  if
adversely determined, could materially adversely affect  the
obligations  of the Utility or the Trust to  carry  out  the
transactions   contemplated  by  the  Loan  Documents.    In
rendering  the opinion expressed in this paragraph  3,  with
your  permission we have made no independent review  of  any
court's docket.

     4.   Each Loan Document to which the Utility is a party
constitutes  a  legal, valid and binding obligation  of  the
Utility, enforceable against the Utility in accordance  with
its  terms  subject,  as  to enforceability,  to  applicable
bankruptcy,  insolvency, moratorium and other  similar  laws
affecting   creditors  rights  generally  and   to   general
principals of equity.

      5.    No  government approval is required for the  due
execution, delivery and performance by the Utility  and  the
Trust  of their respective obligations, and the exercise  of
their respective rights, under the Loan Documents or for the
grant by the Utility and the Trust of the security interests
and  assignments granted by the Loan Documents  or  for  the
validity and enforceability thereof or for the perfection or
the  exercise  by  the  Agent of  its  rights  and  remedies
thereunder except the order of the DPU dated June   ,  1990,
which  order has been duly obtained.  There is no proceeding
pending, or to the best of our knowledge (after having  made
a reasonable investigation with respect thereto) threatened,
which  seeks,  or  may reasonably be expected,  to  rescind,
terminate, modify or suspend the aforesaid order.

      6.    The  security interest granted to you under  the
Security  Agreement in the Collateral, as  defined  therein,
has  been duly created with respect to those items and types
of  Collateral in which a security interest may  be  created
under  Article  9 of the Uniform Commercial  Code  of  those
jurisdictions  in which the Collateral is located  (in  each
case, the "UCC"), and financing statements relating to  such
security interest have been duly filed pursuant to  the  UCC
with  the  Massachusetts Secretary of State and  the  Boston
City  Clerk;  the  New  York Department  of  State  and  the
Allegheny   County  Registry  of  Deeds;  the   Pennsylvania
Secretary  of State and the Potter County Prothonotary;  and
the West Virginia Secretary of State and the ________ County
Clerk, which are the only actions necessary to perfect  such
security  interest in the right, title and interest  of  the
Trust  in  those items and types of Collateral  in  which  a
security  interest  may be perfected by filing  a  financing
statement  under the UCC.  We call your attention,  however,
to  the  necessity  of  filing  continuation  statements  or
amendments  from time to time or under certain circumstances
under  the  applicable provisions of the  UCC  in  order  to
maintain  such  perfection.  At the time of  a  search  made
within               (    ) days of the date hereof  in  the
offices of  [recite locations searched], the Collateral  was
subject  to no liens or security interests properly recorded
or  filed  in such filing offices showing the Trust  or  the
Utility as debtor, except .  Capitalized terms used in  this
paragraph  6  have  the meanings ascribed  to  them  in  the
Security Agreement.

      7.    The Trust is a trust validly existing under  the
laws  of The Commonwealth of Massachusetts and has the legal
capacity  to  enter  into,  and to perform  its  obligations
under,  each  of the Loan Documents to which  it  is  or  is
intended  to  be  a  party  and all  other  instruments  and
agreements to be executed and delivered by it thereunder.

      8.    Each of the Trust Credit Agreement, the Security
Agreement and the Trust Agreement constitutes, and  each  of
the other Loan Documents to which the Trust is a party or to
which the Trust is contemplated to become a party from  time
to  time  pursuant  to  the  Trust  Credit  Agreement,  when
executed and delivered, will constitute the legal, valid and
binding  obligation  of the Trust, enforceable  against  the
Trust  in accordance with its respective terms, subject,  as
to  enforceability,  to  applicable bankruptcy,  insolvency,
moratorium  and  other  similar  laws  affecting  creditors'
rights generally and to general principals of equity.

     9.   All capitalized terms in this paragraph 9 have the
meanings  ascribed to them in the Security  Agreement.   The
Storage Facility Agreements pursuant to which Fuel is or  is
to  be  stored  in facilities under the control  of  Persons
(other  than the Utility) which have agreed with the Utility
to  store  such  Fuel constitute legal,  valid  and  binding
obligations  of  the  Utility,  and  such  Storage  Facility
Agreements do not restrict the performance by the  Trust  or
the  Utility of each Loan Document to which they are parties
or prohibit the authorization by the Utility of the Trust or
its  designee  to give instructions, and take  other  action
pursuant  to  such agreements, contained  in  3(d)  of  the
Purchase Contract.

      10.  By reason of the transactions contemplated by the
Loan  Documents, neither the Trust, the Trustee,  the  Agent
nor any Bank will become, or will be declared by the SEC  to
be,  or  with the passage of a specific period of time  will
become, a "public utility company" as defined in the  Public
Utility  Holding  Company Act of 1935, as  amended,  or  any
successor  provision  thereto, and neither  the  Trust,  the
Trustee, the Agent nor any Bank or the shareholders  of  any
of the Trust, the Agent or any Bank, or any partner, officer
or employee of any of them, will become, or with the passage
of  a  specific  period  of  time will  become,  subject  to
regulation under said Act.

     11.  Under existing law neither the Trust, the Trustee,
the  Agent  nor  any  Bank will become,  by  reason  of  the
transaction  contemplated  by the  Loan  Documents,  a  "gas
company"  as  defined in section 1 of  Chapter  164  of  the
Massachusetts General Laws as now in effect, nor will any of
them  or  the shareholders of any of them become subject  to
regulation   under   the  laws  of   the   Commonwealth   of
Massachusetts  governing public utilities or public  service
companies.

      We  do  not  herein express any opinion as to  matters
governed by any laws other than the laws of The Commonwealth
of  Massachusetts and the Federal Law of the United  States.
To  the  extent  the  laws of the State  of  New  York,  the
Commonwealth  of Pennsylvania and the State of Rhode  Island
are  relevant  to  our opinions herein  expressed,  we  have
relied on the following opinions rendered to us of even date
herewith, a copy of which has been furnished to you:  [LIST]

      With  respect to the Natural Gas Act and  the  Federal
Power  Act,  we  have  relied on the opinion  of  even  date
herewith of ________________


                                   Very truly yours,

                                                   EXHIBIT G


                    COLONIAL GAS COMPANY

                Compliance Certificate Under
                 Revolving Credit Agreement
                  Dated September __, 1997


      On  behalf  of  Colonial Gas Company, a  Massachusetts
corporation (the "Company"), the undersigned [Insert  Name],
the  duly  elected and qualified [Insert appropriate  title:
any one of the (a) President (b) Chief Financial Officer (c)
Chief  Accounting  Officer  (d) Treasurer]  of  the  Company
hereby certifies as of the date hereof the following:

      1.   No Defaults.  I have read a copy of the Revolving
Credit  Agreement dated September __, 1997 (the "Agreement")
among  the Company and the Banks named therein and,  to  the
best  of  my  knowledge and belief, the Company  is  not  in
default  in  the performance or observance  of  any  of  the
covenants,  terms  or  provisions of the  Agreement  or  the
covenants, terms or provisions of the Notes issued  pursuant
thereto.  [If the Company shall be in default, the signer of
this  certificate  shall specify all such Defaults  and  the
nature  thereof,  of  which he or she may  have  knowledge.]
Attached  hereto is Schedule A, on which are set  forth  all
relevant  calculations  needed  to  determine  whether   the
Company  is  in  compliance with 11.8  and  11.9  of  the
Agreement,  which  calculations are based on  the  financial
statements  of  the  Company's most  recent  fiscal  quarter
required  to  be supplied under the Agreement.   I  have  no
knowledge of the occurrence of any event since the  date  of
such   financial   statements  which   would   render   this
Certificate incorrect as of the date hereof.

      2.    No  Material Changes, Etc.  Since [December  31,
1996]  [or  insert  the date of the last certificate  issued
pursuant  to 10.3(c) of the Agreement], there have occurred
no  Material  Adverse Changes in the financial condition  or
business of the Company and its Subsidiaries as shown on  or
reflected  in the consolidated balance sheet of the  Company
and  its  Subsidiaries as of [December 31, 1996] [or  insert
the  date  of  the  most recent audited  financials  of  the
Company], other than changes disclosed in writing and  shown
on  Schedule B hereto, and changes in the ordinary course of
business  which have not had any material adverse effect  on
the  business or financial  condition of the Company and its
Subsidiaries taken as a whole.

      3.    Litigation.  Except as set forth on  Schedule  C
hereto,   there  are  no  actions,  suits,  proceedings   or
investigations  of any kind pending against the  Company  or
any  Subsidiary before any court, tribunal or administrative
agency  or  board  which,  if adversely  determined,  might,
either in any case or in the aggregate, materially adversely
affect  the  properties,  assets,  financial  condition   or
business of the Company and its Subsidiaries considered as a
whole or materially impair the right of the Company and  its
Subsidiaries  considered as a whole  to  carry  on  business
substantially as now conducted, or result in any substantial
liability  not  adequately covered by  insurance,  or  which
question the validity of the Agreement or the Notes, or  any
action taken or to be taken pursuant hereto or thereto.

      4.   No Materially Adverse Contracts, Etc.  Except  as
set  forth on Schedule D hereto, neither the Company nor any
of its Subsidiaries is (i) subject to any charter, corporate
or  other legal restriction or any judgment, decree,  order,
rule or regulation which in the judgment of the Company  has
or  is  expected in the future to have a materially  adverse
effect on the business, assets or financial condition of the
Company and its Subsidiaries as a whole, or (ii) a party  to
any  contract  or  agreement which in the  judgment  of  the
Company  has  or is expected to have any materially  adverse
effect  on  the business of the Company and its Subsidiaries
as  a  whole,  except  as  otherwise reflected  in  adequate
reserves.

     5.   Tax Status.  The Company and its Subsidiaries have
made  or filed all federal and state income and, to the best
of   my  knowledge,  all  other  tax  returns,  reports  and
declarations  required by any jurisdiction to which  any  of
them  are  subject;  and  have  paid  all  taxes  and  other
governmental  assessments and charges that are  material  in
amount,  shown  or  determined to be due  on  such  returns,
reports  and  declarations, except those being contested  in
good  faith;  and  have set aside on their books  provisions
reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports  or
declarations apply.  There are no unpaid taxes, except those
being  contested  in  good faith,  in  any  material  amount
claimed   to  be  due  by  the  taxing  authority   of   any
jurisdiction, and I know of no basis for any such claim.


                              COLONIAL GAS COMPANY
                              
                              By
                              Title