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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 $28,375,000 Pollution Control
Revenue Bonds (Long Island Lighting Company Projects), Series A 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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                                    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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