<PAGE>

                                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 January 1, 1991, between New York State
Energy Research and Development Authority ("NYSERDA") and the Obligee (the
"Participation Agreement"), relating to the Electric Facilities Revenue Bonds
(Long Island Lighting Company Project), 1991 Series A issued by NYSERDA, and
the related Corporation Note issued by the Obligee thereunder (collectively,
the "NYSERDA Financing Documents"). The payment obligations of the Obligors
hereunder shall equal 29.2000% of all such debt and other obligations of the
Obligee under the NYSERDA Financing Documents, or such other percentage as may
be finally determined in accordance with Section 2.1(e) of the Merger Agreement
(the "Applicable Percentage"). In the event that the Applicable Percentage
changes, as provided above, following the date hereof, the appropriate party
shall pay to the other, within five (5) Business Days (as defined in the
NYSERDA Financing Documents) following such change, all such amounts as shall
be due upon the application of the Applicable Percentage retroactively to the
date hereof.


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         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 "Trustee" shall be deemed to be references
to the Obligee, (iii) all references to the "Corporation 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.

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<PAGE>

         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.

         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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<PAGE>

                                        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


                                            4




<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


                                        5