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                                PROMISSORY NOTE

                                                                  May 28, 1998

         FOR VALUE RECEIVED, MARKETSPAN CORPORATION, MARKETSPAN GAS
CORPORATION (d/b/a BROOKLYN UNION), MARKETSPAN TRADING SERVICES LLC,
MARKETSPAN GENERATION LLC, MARKETSPAN CORPORATE SERVICES LLC, MARKETSPAN
UTILITY SERVICES LLC, and MARKETSPAN ELECTRIC SERVICES LLC, each a New York
corporation or limited liability company, with its principal place of business
at 175 East Old Country Road, Hicksville, New York 11801, and MARKETSPAN
FINANCE CORPORATION, a Vermont corporation (collectively, the "Obligors"),
hereby jointly and severally promise to pay, on or before the dates set forth
below, the amounts set forth below, to LONG ISLAND LIGHTING COMPANY, a New
York corporation, with its principal place of business at 333 Earle Ovington
Boulevard, Suite 403, Uniondale, New York 11553 (the "Obligee").

         This Promissory Note is one of a series of Promissory Notes issued
pursuant to the purchase price adjustment provisions of Section 2.1 of the
Agreement and Plan of Merger dated as of June 26, 1997 by and among MarketSpan
Corporation (formerly known as BL Holding Corp.), the Obligee, Long Island
Power Authority and LIPA Acquisition Corp., as amended and/or supplemented
through the date hereof (as so amended and/or supplemented, the "Merger
Agreement"), and is subject to the terms and provisions thereof relating
hereto. Upon the occurrence of a Material Decline in Parent's Credit Standing
(as such term is defined in Section 2.1(f)(ii) of the Merger Agreement) this
Promissory Note (i) shall be secured by a letter of credit provided by
MarketSpan Corporation, at its sole cost and expense, and (ii) may be
economically defeased by MarketSpan Corporation, in each case as provided
under Section 2.1(f) of the Merger Agreement.

         The terms and conditions of this Promissory Note shall be determined
by reference to the debt and other obligations of the Obligee under the
Participation Agreement dated as of December 1, 1976, between New York State
Energy Research and Development Authority ("NYSERDA") and the Obligee (the
"Participation Agreement"), relating to the $1,000,000 Industrial Development
Revenue Bonds (Long Island Lighting Company Projects), Series B issued by
NYSERDA, and the related Note issued by the Obligee thereunder (collectively,
the "NYSERDA Financing Documents"). The payment obligations of the Obligors
hereunder shall equal 100.000% of all such debt and other obligations of the
Obligee under the NYSERDA Financing Documents (the "Applicable Percentage").

         All provisions of the NYSERDA Financing Documents relating to the
payment by the Obligee of principal, interest, premium and any other amounts
payable thereunder, including, without limitation, all provisions relating to
any acceleration of any such payment obligations for any reason, are hereby
incorporated herein and made a part hereof, except that, for purposes of such
incorporation by reference, (i) all references to the "Corporation" shall be
deemed to be references to the Obligors (jointly and severally), (ii) all
references to the "Authority" or the


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"Trustee" shall be deemed to be references to the Obligee, (iii) all
references to the "Note" shall be deemed to be references to this Promissory
Note, (iv) all references to amounts payable shall be deemed to be references
to such amount multiplied by the Applicable Percentage, (v) all dates
specified therein for payments shall be deemed to be the respective dates
thirty (30) days prior thereto, (vi) the principal amount hereof shall bear
interest commencing on the date thirty (30) days prior to the immediately
preceding Interest Payment Date under the NYSERDA Financing Documents, (vii)
the initial Interest Payment Date hereunder shall be May 28, 1998 and (viii)
the obligation of the Obligors to make any payment of principal of premium, if
any, and interest on, this Promissory Note shall NOT be deemed satisfied and
discharged to the extent of any payment made by the Bank under the Letter of
Credit. In addition to the events and circumstances included in the definition
of the term "events of default" incorporated herein from the Participation
Agreement, such term, as used in this Promissory Note, shall include the
occurrence of any event of default under the Participation Agreement. In the
event that the amount of interest paid by the Obligors on any Interest Payment
Date hereunder differs from the amount of interest otherwise payable by the
Obligee on the immediately succeeding Interest Payment Date (the "Obligee
Payment Date") under the NYSERDA Financing Documents (whether or not any of
the obligations under the NYSERDA Financing Documents remain outstanding)
multiplied by the Applicable Percentage (the "NYSERDA Interest"), the amount
of such difference shall be paid by the appropriate party to the other, within
five (5) Business Days following the Obligee Payment Date, so that the total
interest paid hereunder shall equal the total NYSERDA Interest.

         Each of the Obligors hereby waives presentment for payment, demands,
notice of dishonor and protest of this Promissory Note and any right to assert
setoff of any of its obligations hereunder against any amounts owing by the
Obligee thereto. The Obligors further agree that none of the terms or
provisions of this Promissory Note may be waived, altered, modified or amended
except as the Obligee may consent in a writing duly signed for and on its
behalf. The Obligee agrees that it shall not agree to any alteration,
modification or amendment of any of the NYSERDA Financing Documents in any way
that would increase the payment obligations of the Obligees hereunder, without
the prior written consent of MarketSpan Corporation. No failure or delay on
the part of the Obligee in exercising any of its rights, powers or privileges
hereunder shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise of any right, power or
privilege. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.

         The Obligors agree to pay on demand any and all reasonable
out-of-pocket costs and expenses (including reasonable fees and expenses of
counsel) incurred by the Obligee and its successor and assigns in enforcing
this Promissory Note.

         This Promissory Note is binding upon the Obligors and their
successors and assigns and is for the benefit of the Obligee and its
successors and assigns. The Obligors may not, without the prior written
consent of the Obligee, assign or otherwise transfer their obligations under
this Promissory Note.


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         This Promissory Note has been delivered in the State of New York and
shall be construed and enforced in accordance with the internal and
substantive laws of such State without giving effect to the choice of law
rules.


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                                        MARKETSPAN CORPORATION


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


                                        MARKETSPAN GAS CORPORATION


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


                                        MARKETSPAN TRADING SERVICES LLC


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


                                        MARKETSPAN GENERATION LLC


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


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<PAGE>

                                        MARKETSPAN CORPORATE SERVICES LLC


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


                                        MARKETSPAN UTILITY SERVICES LLC


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


                                        MARKETSPAN ELECTRIC SERVICES LLC


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


                                        MARKETSPAN FINANCE CORPORATION


                                        By: /s/ Kathleen A. Marion
                                           -----------------------------
                                           Name:  Kathleen A. Marion
                                           Title: Secretary and Vice President


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